SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000.
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
- --- SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------- ------------
Commission File No. 0-25929
THOMASVILLE BANCSHARES, INC.
- -----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Georgia 58-2175800
- ------------------------ ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS: 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 per share 1,380,000 shares issued and
outstanding as of May 12, 2000.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
- -----------------------------
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2000 1999
ASSETS (Unaudited) (Unaudited)
- ------ ----------- -----------
Cash and due from banks $ 4,487,995 $ 7,064,353
Federal funds sold 1,471,866 518,757
----------- -----------
Total cash and cash equivalents $ 5,959,861 $ 7,583,110
Investment securities:
Securities available-for-sale,
at market value 6,676,605 9,036,737
Loans, net 97,279,160 90,122,900
Property & equipment, net 3,516,181 3,581,025
Other real estate owned 620,243 787,229
Other assets 1,246,350 1,142,118
----------- -----------
Total Assets $115,298,400 $112,253,119
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Deposits
Non-interest bearing deposits $ 15,018,848 $ 13,460,400
Interest bearing deposits 85,629,976 84,690,886
----------- -----------
Total deposits $100,648,824 $ 98,151,286
Borrowings 2,280,451 2,395,136
Other liabilities 657,010 394,949
----------- -----------
Total Liabilities $103,586,285 $100,941,371
----------- -----------
Commitments and contingencies
Shareholders' Equity:
Common stock, $1.00 par value, 10
million shares authorized, 1,380,000
shares issued & outstanding $ 1,380,000 $ 1,380,000
Paid-in-capital 8,016,261 8,002,961
Retained earnings 2,369,852 1,966,766
Unrealized gain securities
available-for-sale (53,998) (37,979)
----------- -----------
Total Shareholders' Equity $ 11,712,115 $ 11,311,748
----------- -----------
Total Liabilities and
Shareholders' Equity $115,298,400 $112,253,119
=========== ===========
Refer to notes to the financial statements.
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED STATEMENTS OF INCOME
For the three months
ended March 31,
--------------------
2000 1999
---- ----
Interest income $2,256,643 $1,747,661
Interest expense 1,006,982 794,789
--------- ---------
Net interest income $1,249,661 $ 952,872
Provision for possible loan losses 75,000 60,000
--------- ---------
Net interest income after provision
for possible loan losses $1,174,661 $ 892,872
--------- ---------
Other income
Gain on sale of mortgage loans $ 1,183 $ 841
Service charges 27,925 23,250
Other fees 121,903 106,448
Rental income 4,600 6,900
--------- ---------
Total other income $ 155,611 $ 137,439
--------- ---------
Salaries and benefits $ 357,386 $ 310,398
Advertising 34,803 26,010
Depreciation 69,758 52,990
Amortization 1,421 6,856
Data processing 2,111 18,505
Regulatory fees and assessments 15,332 11,056
Other operating expenses 195,374 181,896
--------- ---------
Total operating expenses $ 676,185 $ 607,711
--------- ---------
Net income before taxes $ 654,087 $ 422,600
Income taxes 251,000 167,000
--------- ---------
Net income $ 403,087 $ 255,600
========= =========
Basic income per share $ .29 $ .19
========= =========
Diluted income per share $ .28 $ .18
========= =========
Refer to notes to the financial statements.
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
--------------------
2000 1999
---- ----
Cash flows from operating activities: $ 720,820 $ 536,344
---------- ----------
Cash flows from investing activities:
Decrease in other real estate owned $ 166,986 $ - -
Purchase of fixed assets (4,914) (24,435)
(Increase) in loans (7,231,260) (8,088,829)
Purchase of securities, AFS - - (1,000,000)
Maturities, calls, paydowns, AFS 2,328,966 1,486,088
---------- ----------
Net cash used in investing activities $(4,740,222) $(7,627,176)
---------- ----------
Cash flows from financing activities:
Reduction in borrowings $ (114,685) $ - -
Increase in deposits 2,497,538 3,295,507
Options, restricted stock 13,300 11,700
---------- ----------
Cash (used by) financing activities $ 2,396,153 $ 3,307,207
---------- ----------
Net (decrease) in cash
and cash equivalents $(1,623,249) $(3,783,625)
Cash and cash equivalents,
beginning of period 7,583,110 8,410,920
---------- ----------
Cash and cash equivalents,
end of period $ 5,959,861 $ 4,627,295
========== ==========
Refer to notes to the financial statements.
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1999 AND 2000
Accumulated
Common Stock Other
------------------ Paid in Retained Comprehensive
Shares Par Value Capital Earnings Income Total
------ --------- ------- -------- ------ -----
Balance,
Dec 31,
1998 1,380,000 $ 1,380,000 $ 7,955,261 $ 744,224 $ 29,739 $10,109,224
--------- ---------- ---------- --------- -------- ----------
Comprehensive Income:
- --------------------
Net income,
three-month
period ended
March 31, 1999 - - - - - - 255,600 - - 255,600
Net unrealized
(losses) on
securities,
three- month
period ended
March 31, 1999 - - - - - - - - (12,595) (12,595)
--------- ---------- ---------- --------- -------- ----------
Stock options,
restricted
stock - - - - 11,700 - - - - 11,700
--------- ---------- ---------- --------- -------- ----------
Balance,
March 31,
1999 1,380,000 $ 1,380,000 $ 7,966,961 $ 999,824 $ 17,144 $10,363,929
========= ========== ========== ========= ======== ==========
Balance,
December 31,
1999 1,380,000 $ 1,380,000 $ 8,002,961 $1,966,766 $ (37,979) $11,311,748
--------- ---------- ---------- --------- -------- ----------
Comprehensive Income:
- ---------------------
Net income,
three-month
period ended
March 31,
2000 - - - - - - 403,087 - - 403,087
Net unrealized
(losses) on
securities,three-
month period
ended March 31,
2000 - - - - - - - - (16,019) (16,019)
--------- ---------- ---------- --------- -------- ----------
Stock options,
restricted
stock - - - - 13,300 - - - - 13,300
--------- ---------- ---------- --------- -------- ----------
Balance,
March 31,
2000 1,380,000 $ 1,380,000 $ 8,016,261 $2,369,852 $ (53,998) $11,712,115
========= ========== ========== ========= ======== ==========
Refer to notes to the consolidated financial statements.
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2000
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB.
Accordingly, they do not include all the information and footnotes required
by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three-month period ended
March 31, 2000 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2000. These statements should be
read in conjunction with the consolidated financial statements and
footnotes thereto included in Form 10-KSB for the year ended December 31,
1999.
NOTE 2 - SUMMARY OF ORGANIZATION
Thomasville Bancshares, Inc., Thomasville, Georgia (the "Company"),
was incorporated under the laws of the State of Georgia on March 30, 1995,
for the purpose of becoming a bank holding company for a proposed national
bank, Thomasville National Bank (the "Bank") to be located in Thomasville,
Georgia. In an initial 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 offering amounted to $5,972,407, net of selling
expenses. The Company commenced banking operations on October 2, 1995.
During the first calendar quarter of 1998, the Company declared a two-for-
one stock split, effected in the form a 100% stock dividend, thus
increasing the then total number of outstanding shares to 1,200,000.
During 1998, the Company conducted a secondary public offering and sold
180,000 shares of its $1.00 par value common stock for $2,676,366, net of
selling expenses, thus increasing the number of outstanding shares to
1,380,000. The Bank is primarily engaged in the business of obtaining
deposits and providing commercial, consumer and real estate loans to the
general public. The Bank's deposits are each insured up to $100,000 by the
Federal Deposit Insurance Corporation (the "FDIC"), subject to certain
limitations imposed by the FDIC.
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
In March, 1998, the American Institute of Certified Public
Accountants issued Statement of Position ("SOP") 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use. SOP 98-
1 provides guidance for capitalizing and expensing the costs of computer
software developed or obtained for internal use. SOP 98-1 is effective for
financial statements for fiscal years beginning after December 15, 1998.
The adoption of SOP 98-1 did not have a material impact on the accompanying
consolidated financial statements.
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities" was issued in June, 1998 and is effective for all calendar-year
entities beginning in January, 2000. This Statement applies to all
entities and requires that all derivatives be recognized as assets or
liabilities in the balance sheet, at fair values. Gains and losses of
derivative instruments not designated as hedges will be recognized in the
income statement. As the Company does not invest in derivative
instruments, the adoption of SFAS No. 133 is not expected to have a material
impact on the Company's financial statements.
SFAS No. 134, "Accounting for Mortgage-Backed Securities Retained
after the Securitization of Mortgage Loans Held for Sale by a Mortgage
Banking Enterprise" amends prior accounting standards, primarily SFAS 65,
with respect to the classification of retained interests, such as mortgage-
backed securities, following a securitization of mortgage loans held for
sale. This statement became effective in the first quarter of 1999. Since
the Company does not securitize mortgage loans, no financial statement
impact has resulted from adopting this statement.
Item 2. Management's Discussion and Analysis of Financial Condition and
- ---------------------------------------------------------------------------
Results of Operations
- ---------------------
Total consolidated assets increased by $3.0 million to $115.3 million
during the three-month period ended March 31, 2000. The increase was
generated through a $2.5 million increase in deposits, a $400,000
increase in retained earnings and a $100,000 increase in liabilities.
The Bank utilized the additional funds as follows: Cash and cash
equivalents declined by $1.6 million to $6.0 million, investment securities
declined by $2.4 million to $6.7 million, and loans increased by $7.0
million to $97.3 million.
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, 2000 financial statements evidence a satisfactory liquidity
position as total cash and cash equivalents amounted to $6.0 million,
representing 5.2% of total assets. Investment securities, which amounted
to $6.7 million, or 5.8%, of total assets, provide a secondary source of
liquidity because they can be converted into cash in a timely manner. In
addition, 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, 2000, total deposits increased from $98.1 million to
$100.6 million, representing an annualized increase of 10.2%. The Company
can make no assurances, however, that this level of growth can be maintained
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 known 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 Office of the Comptroller of the Currency
("OCC").
Bank's Minimum required
March 31, 2000 by regulator
-------------- ------------
Leverage ratio 9.9% 4.0%
Risk weighted ratio 13.6% 8.0%
As evidenced above, the Bank's capital ratios are well above the OCC's
required minimums.
Results of Operations
- ---------------------
For the three-month periods ended March 31, 2000 and 1999, net income
amounted to $403,087 and $255,600, respectively. On a per share basis,
basic and diluted income for the three-month period ended March 31, 2000
amounted to $.29 and $.28, respectively. For the three-month period ended
March 31, 1999, basic and diluted income per share amounted to $.19 and
$.18, respectively. The improvement in net income for the three-month
period ended March 31, 2000 as compared to the three-month period ended
March 31, 1999, is primarily due to the following:
a. Average total earning assets have increased from $81.6 million at
March 31, 1999 to $104.0 million at March 31, 2000. The net
increase of $22.4 million represents a 27.4% increase over a
twelve-month period. The Company can make no assurances,
however, that this level of growth can be maintained.
b. As a consequence to the increase in earning assets, interest
income, the most significant of all revenue items, increased
from $1,747,661 for the three-month period ended March 31, 1999
to $2,256,643 for the three-month period ended March 31, 2000.
The increase of $508,982 represents a 29.1% increase over a
twelve-month period. Again, the Company can make no assurances
that it will be able to continue to maintain this level of growth.
Note that the yield on earning assets increased from 8.56%
for the three-month period ended March 31, 1999 to 8.68% for the
three-month period ended March 31, 2000.
c. 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.
(Dollars in 000's )
Interest Interest
Earning Assets/ Average Income/ Yield/
Bearing Liabilities Balance Cost Cost
- ------------------- ------- ---- ----
Federal funds sold $ 1,880 $ 26 5.42%
Securities 7,682 113 5.88%
Loans 94,394 2,118 8.97%
-------- ------- ----
Total $ 103,956 $ 2,257 8.68%
-------- ------- ----
Deposits and borrowings $ 87,662 $ 1,007 4.59%
-------- ------- ----
Net interest income $ 1,250
=======
Net yield on earning assets 4.81%
====
Net interest income has increased from $952,872 for the three-month period
ended March 31, 1999 to $1,249,661 for the three-month period ended March
31, 2000, a net increase of $296,789, or 31.1%.
d. Other income increased from $137,439 for the three-month period
ended March 31, 1999 to $155,611 for the three-month period
ended March 31, 2000. This increase is primarily due to the
increase in volume of transaction accounts. Other income as a
percentage of total assets declined from .60% to .54% for the
three-month periods ended March 31, 1999 and 2000,
respectively.
e. Total operating expenses increased from $607,711 for the
three-month period ended March 31, 1999 to $676,185 for the
three-month period ended March 31, 2000. Total operating
expenses as a percentage of total assets declined from 2.66%
at March 31, 1999 to 2.35% at March 31, 2000. The decline in
the above ratio is due primarily to the attainment of economies
of scale.
At December 31, 1999, the allowance for loan losses amounted to $1,109,707.
By March 31, 2000, the allowance had grown to $1,114,292. The allowance
for loan losses, as a percentage of gross loans, declined from 1.22% to
1.13% during the three-month period ended March 31, 2000. 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
adverse effect on the Company's liquidity, capital resources, or results of
operations.
Safe Harbor Statement Under the Private Securities Litigation Reform Act
- ------------------------------------------------------------------------
of 1995
- -------
Certain statements in this Form 10-QSB contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995,
which statements generally can be identified by the use of forward-looking
terminology, such as "may," "will," "expect," "estimate," "anticipate,"
"believe," "target," "plan," "project," or "continue" or the negatives thereof
or other variations thereon or similar terminology, and are made on the basis of
management's plans and current analyses of the Company, its business and the
industry as a whole. These forward-looking statements are subject to risk and
uncertainties , including, but not limited to, economic conditions, competition,
interest rate sensitivity and exposure to regulatory and legislative changes.
The above factors, in some cases, have affected, and in the future could affect,
the Company's financial performance and could cause actual results for fiscal
2000 and beyond to differ materially from those expressed or implied in such
forward-looking statements. The Company does not undertake to publicly update
or revise its forward-looking statements even if experience or future changes
make it clear than any projected results expressed or implied therein will not
be recognized.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits.
-27.1 - Financial data schedule (for SEC use only).
(b) Reports on Form 8-K. There were no reports on Form 8-K filed
during the quarter ended March 31, 2000.
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.
THOMASVILLE BANCSHARES, INC.
-------------------------------------
(Registrant)
Date: May 12, 2000 BY: /s/ Stephen H. Cheney
--------------- ------------------------------
Stephen H. Cheney
President and Chief Executive Officer
(Principal Executive, Financial and
Accounting Officer)
Financial Data Schedule Submitted Under Item 601(a)(27) of Regulation S-B
This schedule contains summary financial information extracted from
Thomasville Bancshares, Inc. unaudited consolidated financial statements
for the period ended March 31, 2000 and 1999 and is qualified in its
entirety by reference to such financial statements.
Item Number Item Description Amount
- ----------- ---------------- March 31,
2000
----
9-03(1) Cash and due from banks $ 4,487,995
9-03(2) Interest bearing deposits 0
9-03(3) Federal funds sold - purchased
securities for sale 1,471,866
9-03(4) Trading account assets 0
9-03(6) Investment and mortgage backed
securities held for sale 6,676,605
9-03(6) Investment and mortgage backed
securities held to maturity -
carrying value 0
9-03(6) Investment and mortgage backed
securities held to maturity -
market value 0
9-03(7) Loans 98,393,452
9-03(7)(2) Allowance for losses 1,114,292
9-03(11) Total assets 115,298,400
9-03(12) Deposits 100,648,824
9-03(13) Short-term borrowings 2,280,451
9-03(15) Other liabilities 657,010
9-03(16) Long-term debt 0
9-03(19) Preferred stock -
mandatory redemption 0
9-03(20) Preferred stock -
no mandatory redemption 0
9-03(21) Common stocks 1,380,000
9-03(22) Other stockholders' equity 10,332,115
9-03(23) Total liabilities and
stockholders' equity 115,298,400
9-04(1) Interest and fees on loans 2,117,425
9-04(2) Interest and dividends
on investments 139,218
9-04(4) Other interest income 0
9-04(5) Total interest income 2,256,643
9-04(6) Interest on deposits 971,430
9-04(9) Total interest expense 1,006,982
9-04(10) Net interest income 1,249,661
9-04(11) Provision for loan losses 75,000
9-04(13)(h) Investment securities gains/losses 0
9-04(14) Other expenses 676,185
9-04(15) Income/loss before income tax 654,087
9-04(17) Income/loss before
extraordinary items $ 654,087
9-04(18) Extraordinary items, less tax 0
9-04(19) Cumulative change in
accounting principles 0
9-04(20) Net income or loss 403,087
9-04(21) Earnings per share - basic .29
9-04(21) Earnings per share - diluted .28
I.B.5. Net yield - interest earning
assets - actual 4.81%
III.C.1(a) Loans on non-accrual 148,252
III.C.1(b) Accruing loans past due
90 days or more 1,490
III.C.1(c) Troubled debt restructuring 723,906
III.C.2. Potential problem loans 1,748,960
IV.A.1 Allowance for loan losses -
beginning of period 1,109,707
IV.A.2 Total chargeoffs 73,024
IV.A.3 Total recoveries 2,609
IV.A.4 Allowance for loan losses -
end of period 1,114,292
IV.B.1 Loan loss allowance allocated to
domestic loans 1,100,000
IV.B.2 Loan loss allowance allocated to
foreign loans 0
IV.B.3 Loan loss allowance - unallocated 14,292
