<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended Commission File Number
MARCH 31, 1996 33-36512
THOMASVILLE BANCSHARES, INC.
- - --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
GEORGIA 58-2175800
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
301 NORTH BROAD STREET, THOMASVILLE, GEORGIA 31792
- - --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
(912) 226-3300
- - --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Not Applicable
- - --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
----------- -------------
Indicate the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date.
Common Stock, $1.00 Par Value 600,000
- - ----------------------------- -------------------------------
Class Outstanding as of May 10, 1996
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
ASSETS (Unaudited) (Audited)
- - ------ ----------- -----------
<S> <C> <C>
Cash and due from banks $ 2,355,489 $ 1,243,244
Federal funds sold 3,645,000 5,525,000
----------- -----------
Total cash and cash equivalents $ 6,000,489 $ 6,768,244
Investment securities:
Securities available-for-sale,
at market value 2,629,875 2,654,406
Loans, net 18,440,607 10,832,537
Property & equipment, net 914,001 643,727
Other assets 305,451 189,914
----------- -----------
Total Assets $28,290,423 $21,088,828
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- - ------------------------------------
Liabilities:
Deposits
Non-interest bearing deposits $ 4,960,964 $ 4,379,633
Interest bearing deposits 17,591,758 11,028,833
----------- -----------
Total deposits $22,552,722 $15,408,466
Other liabilities 101,394 58,522
----------- -----------
Total Liabilities $22,654,116 $15,466,988
----------- -----------
Commitments and contingencies
Shareholders' Equity:
Common stock, $1.00 par value,
10,000,000 shares authorized,
600,000 shares issued & outstanding $ 600,000 $ 600,000
Paid-in capital 5,372,407 5,372,407
Retained deficit (324,065) (361,193)
Unrealized gain/(loss) on
securities available-for-sale (12,035) 10,626
----------- -----------
Total Shareholders' Equity $ 5,636,307 $ 5,621,840
----------- -----------
Total Liabilities and
Shareholders' Equity $28,290,423 $21,088,828
=========== ===========
</TABLE>
Refer to notes to the financial statements.
2
<PAGE> 3
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
For the three months
ended March 31,
-----------------------
1996 1995
-------- --------
<S> <C> <C>
Interest income $444,668 $ 29
Interest expense 146,156 473
-------- -------
Net interest income $298,512 $ (444)
Provision for possible loan losses 30,000 --
-------- -------
Net interest income after provision
for possible loan losses $268,512 $ (444)
-------- -------
Other income
Gain on sale of mortgage loans $ 1,758 --
Service charges 5,072 --
Other fees 18,494 --
Rental income 2,048 --
-------- -------
Total other income $ 27,372 $ --
-------- -------
Salaries and benefits $123,183 $ --
Rent 8,489 900
Depreciation 20,520 --
Amortization 2,806 --
Data processing 5,718 --
Regulatory fees and assessments 3,940 --
Other operating expenses 94,100 38
-------- -------
Total operating expenses $258,756 $ 938
-------- -------
Net income (loss) before taxes $ 37,128 $(1,382)
Income taxes -- --
-------- -------
Net income (loss) $ 37,128 $(1,382)
======== =======
Income per share $ .06 N/A
======== =======
</TABLE>
3
Refer to notes to the financial statements.
<PAGE> 4
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1996 1995
----------- --------
<S> <C> <C>
Cash flows from operating activities: $ 126,853 $(55,706)
----------- --------
Cash flows from Investing Activities:
Purchase of fixed assets $ (290,794) $(10,000)
(Increase) in loans (7,748,070) --
----------- --------
Net cash used in investing activities $(8,038,864) $(10,000)
----------- --------
Cash flows from Financing Activities:
Proceeds from borrowings $ -- $ 70,000
Increase in deposits 7,144,256 --
----------- --------
Cash (used by) financing activities $ 7,144,256 $ 70,000
----------- --------
Net increase in cash
and cash equivalents $ (767,755) $ 4,294
Cash and cash equivalents,
beginning of period 6,768,244 --
----------- --------
Cash and cash equivalents,
end of period $ 6,000,489 $ 4,294
=========== ========
</TABLE>
4
Refer to notes to the financial statements.
<PAGE> 5
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1996
NOTE 1 - SUMMARY OF ORGANIZATION
Thomasville Bancshares, Inc., Thomasville, Georgia (the "Company"),
was organized in January 1995 to serve as a bank holding company for a proposed
de novo bank, Thomasville National Bank (the "Bank"). In a public offering
conducted during 1995, the Company sold and issued 600,000 shares of its $1.00
par value common stock. Proceeds from the above stock sale amounted to
$5,972,407, net of selling expenses. The Company obtained a national bank
charter from the Office of the Comptroller of the Currency (the "OCC"), the
Bank's primary regulator. The Company purchased 100% of the Bank's shares by
injecting $4.8 million into the Bank's capital accounts immediately prior to
commencement of banking operations on October 2, 1995. The Bank's deposits are
each insured up to $100,000 by the Federal Deposit Insurance Corporation.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Reclassification. The consolidated
statements include the accounts of the Company and the Bank. All
significant intercompany accounts and transactions have been eliminated in
consolidation. Certain prior year amounts have been reclassified to conform to
the current year presentation.
Basis of Accounting. The accounting and reporting policies of the
Company conform to generally accepted accounting principles and to general
practices in the banking industry. The Company uses the accrual basis of
accounting by recognizing revenues when earned and expenses when incurred,
without regarding the time of receipt or payment of cash.
Organizational Costs. In accordance with the Financial Accounting
Standards Board ("FASB") Statement No. 7, the Company and the Bank capitalized
all direct organizational costs that were incurred in the expectation that they
would generate future revenues or otherwise be of benefit after the Bank opened
for business. These capitalized costs are amortized over a sixty-month period
using the straight line method. As of March 31, 1996, total organizational
costs, net of accumulated amortization, were $50,509.
Investment Securities. The Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investment in Debt and
Equity Securities" ("SFAS 115") on January 15, 1995. SFAS 115 requires
investments in equity and debt securities to be classified into three
categories:
1. Held-to-maturity securities: These are securities
which the Company has the ability and intent to hold until
maturity. These securities are stated at cost, adjusted for
amortization of premiums and the accretion of discounts.
5
<PAGE> 6
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1996
2. Trading securities: These are securities which are bought and
held principally for the purpose of selling in the near future.
Trading securities are reported at fair market value, and related
unrealized gains and losses are recognized in the income
statement.
3. Available-for-sale securities: These are securities which are
not classified as either held- to-maturity or as trading
securities. These securities are reported at fair market value.
Unrealized gains and losses are reported, net of tax, as separate
components of shareholders' equity. Unrealized gains and losses
are excluded from the income statement.
Loans, Interest and Fee Income on Loans. Loans are stated at the
principal balance outstanding. Unearned discount, unamortized loan fees and
the allowance for possible loan losses are deducted from total loans in the
statement of condition. Interest income is recognized over the term of the
loan based on the principal amount outstanding. Points on real estate loans
are taken into income to the extent they represent the direct cost of
initiating a loan. The amount in excess of direct costs is deferred and
amortized over the expected life of the loan.
Loans are generally placed on non-accrual status when principal or
interest becomes ninety days past due, or when payment in full is not
anticipated. When a loan is placed on non-accrual status, interest accrued but
not received is generally reversed against interest income. If collectibility
is in doubt, cash receipts on non-accrual loans are not recorded as interest
income, but are used to reduce principal.
Allowance for Possible Loan Losses. The provisions for loan losses
charged to operating expense reflect the amount deemed appropriate by
management to establish an adequate reserve to meet the present and foreseeable
risk characteristics of the current loan portfolio. Management's judgement is
based on periodic and regular evaluation of individual loans, the overall risk
characteristics of the various portfolio segments, past experience with losses
and prevailing and anticipated economic conditions. Loans which are determined
to be uncollectible are charged against the allowance. Provisions for loan
losses and recoveries on loans previously charged off are added to the
allowance.
The Company adopted Statement of Financial Accounting Standards No.
114, "Accounting by Creditors for Impairment of a Loan" ("SFAS 114"), on
January 15, 1995. Under the new standard, a loan is considered impaired, based
on current information and events, if it is probable that the Company will be
unable to collect the scheduled payments of principal or interest when due
according to the contractual terms of the loan agreement. The measurement of
impaired loans is generally based on the present value of expected future cash
flows discounted at the historical effective interest rate, except that all
collateral-dependent loans are measured for impairment based on the fair value
of the collateral.
6
<PAGE> 7
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1996
In October 1994, FASB issued Statement of Financial Accounting
Standards No. 118, "Accounting by Creditors for Impairment of a Loan--Income
Recognition and Disclosure" ("SFAS 118"). SFAS 118 amends SFAS 114 to allow a
creditor to use existing methods for recognizing interest income on an impaired
loan, rather than the methods prescribed in SFAS 114.
Property and Equipment. Furniture and equipment are stated at cost,
net of accumulated depreciation. Depreciation is computed using the
straight line method over the estimated useful lives of the related assets.
Maintenance and repairs are charged to operations, while major improvements are
capitalized. Upon retirement, sale or other disposition of property and
equipment, the cost and accumulated depreciation are eliminated from the
accounts, and gain or loss is included in income from operations.
Income Taxes. The consolidated financial statements have been
prepared on the accrual basis. When income and expenses are recognized in
different periods for financial reporting purposes and for purposes of
computing income taxes currently payable, deferred taxes are provided on such
temporary differences.
Effective January 15, 1995, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109").
Under SFAS 109, deferred tax assets and liabilities are recognized for the
expected future tax consequences of events that have been recognized in the
financial statements or tax return. Deferred tax assets and liabilities are
measured using the enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be realized or
settled.
Statement of Cash Flows. For purposes of reporting cash flows, cash
and cash equivalents include cash on hand, amounts due from banks and
federal funds sold. Generally, federal funds are purchased or sold for one day
periods.
Net Income Per Share. Net income per share was calculated using
600,000 as the average number of shares outstanding for the period ended March
31, 1996. For the three-month period ended March 31, 1996, net income per
share was $.06.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company was incorporated in Georgia on March 30, 1995 to become
a bank holding company and to own and control all of the outstanding shares of
a de novo bank, Thomasville National Bank, Thomasville, Georgia ("Bank"). In a
public offering conducted during 1995, the Company sold and issued 600,000
shares of its own $1.00 par value common stock. Proceeds from the above stock
offering amounted to $5,972,407, net of selling expenses. The Company
purchased 100% of the Bank's common stock by injecting $4.8 million into the
Bank's capital accounts immediately prior to commencement of banking operations
on October 2, 1995.
Total consolidated assets increased by $7.2 million to $28.3 million
during the three-month period ended March 31, 1996. The increase was generated
primarily through a $7.1 million increase in deposits. The new funds, in their
entirety were used to increase the loan portfolio.
Liquidity and Sources of Capital
Liquidity is the Company's ability to meet all deposit withdrawals
immediately, while also providing for the credit needs of customers. The March
31, 1996 financial statements evidence a satisfactory liquidity position as
total cash and cash equivalents amounted to $6.0 million, representing 21.2% of
total assets. Investment securities amounted to $2.6 million, representing
9.3% of total assets; these securities provide a secondary source of liquidity
since they can be converted into cash in a timely manner. Note that the
Company's ability to maintain and expand its deposit base and borrowing
capabilities are a source of liquidity. For the three-month period ended March
31, 1996, total deposits increased from $15.4 million to $22.5 million,
representing an annualized increase of 185.5%. Note, however, that the Company
does not expect to maintain or duplicate this growth rate. The Company's
management closely monitors and maintains appropriate levels of interest
earning assets and interest bearing liabilities so that maturities of assets
are such that adequate funds are provided to meet customer withdrawals and loan
demand. There are no trends, demands, commitments, events or uncertainties
that will result in or are reasonably likely to result in the Company's
liquidity increasing or decreasing in any material way.
The Bank maintains an adequate level of capitalization as measured
by the following capital ratios and the respective minimum capital requirements
by the Bank's primary regulator, the OCC.
Minimum
Bank's required
March 31, 1996 by regulator
-------------- ------------
Leverage ratio 16.0% 4.0%
Risk weighted ratio 24.3% 8.0%
8
<PAGE> 9
Note that with respect to the leverage ratio, the OCC expects a
minimum of 5.0% to 6.0% ratio for banks that are not rated CAMEL 1. Although
the Bank is not rated CAMEL 1, its leverage ratio of 24.3% is well above the
required minimum.
Results of Operations
Since principal banking operations only commenced on October 2,
1995, a comparison of the March 31, 1996 results (when banking operations were
in progress) to those of March 31, 1995 are not meaningful. This discussion
will therefore concentrate on the March 31, 1996 results.
Net income for the three-month period ended March 31, 1996 amounted
to $37,128, or $.06 per share. This compares favorably with the loss of $1,382
for the period ended March 31, 1995. The following is a brief discussion of
the more significant components of net income:
a. Net interest income represents the difference between interest
received on interest earning assets and interest paid on
interest bearing liabilities. The following presents, in a
tabular form, the main components of interest earning assets and
interest bearing liabilities.
<TABLE>
<CAPTION>
Interest Interest
Earning Assets/ Average Income/ Yield/
Bearing Liabilities Balance Cost Cost
------------------- ------------- ------------ --------
<S> <C> <C> <C>
Federal funds sold $ 4,462,143 $ 60,758 5.45%
Securities 2,663,431 39,841 5.98%
Loans 14,089,740 344,069 9.77%
---------- ------- ----
Total $21,215,314 $ 444,668 8.38%
---------- ------- ----
Deposits $18,908,896 $ 146,156 3.09%
---------- ------- ----
Net interest income $ 298,512
=======
Net yield on earning assets 5.63%
====
</TABLE>
b. Other income for the three-month period ended March 31, 1996
amounted to $27,372. On an annualized basis, this represents
.39% of total assets. This figure is relatively low because in
order to attract new banking relationships, the Bank's fee
structure and charges are low when compared to other banks. The
above fees and charges may increase in the future.
c. Operating expenses for the three-month period ended March 31,
1996 amounted to $258,756. On an annualized basis, this
represents 3.66% of total assets. In the future this percentage
may increase due to costs and expenses associated with the new
facility.
9
<PAGE> 10
At December 31, 1995, the allowance for loan losses amounted to
$110,000. By March 31, 1996, the allowance had grown to $140,000. Despite the
increase, however, the allowance for loan losses, as a percentage of gross
loans, declined from 1.00% to .75% during the three-month period ended March
31, 1996. Management considers the allowance for loan losses to be adequate
and sufficient to absorb possible future losses; however, there can be no
assurance that charge-offs in future periods will not exceed the allowance for
loan losses or that additional provisions to the allowance will not be
required.
The Company is not aware of any current recommendation by the
regulatory authorities which, if they were to be implemented, would have a
material effect on the Company's liquidity, capital resources, or results of
operations.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following exhibit is filed with this report.
27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K. The following report on Form 8-K was
filed during the quarter ended March 31, 1996: Current Report
on Form 8-K dated August 25, 1995 (reporting change in
accountants).
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
THOMASVILLE BANCSHARES, INC.
Dated: May 13, 1996 By: /s/ Stephen H. Cheney
-------------------------------------------------------
Stephen H. Cheney
President and Chief Executive Officer
(Principal Executive, Financial and Accounting Officer)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THOMASVILLE
BANCSHARES, INC. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD
ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,355,489
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,645,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,629,875
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 18,580,607
<ALLOWANCE> 140,000
<TOTAL-ASSETS> 28,290,423
<DEPOSITS> 22,552,722
<SHORT-TERM> 0
<LIABILITIES-OTHER> 101,394
<LONG-TERM> 0
0
0
<COMMON> 600,000
<OTHER-SE> 5,036,307
<TOTAL-LIABILITIES-AND-EQUITY> 28,290,423
<INTEREST-LOAN> 344,069
<INTEREST-INVEST> 100,599
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 444,668
<INTEREST-DEPOSIT> 146,156
<INTEREST-EXPENSE> 146,156
<INTEREST-INCOME-NET> 298,512
<LOAN-LOSSES> 30,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 258,756
<INCOME-PRETAX> 37,128
<INCOME-PRE-EXTRAORDINARY> 37,128
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,128
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
<YIELD-ACTUAL> 5.63
<LOANS-NON> 3,615
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 110,000
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 140,000
<ALLOWANCE-DOMESTIC> 138,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,000
</TABLE>
