SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 2001.
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 0-25929
THOMASVILLE BANCSHARES, INC.
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(Exact name of small business issuer as specified in its charter)
Georgia 58-2175800
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(State of Incorporation) (I.R.S. Employer Identification No.)
301 North Broad Street, Thomasville, Georgia 31792
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(Address of Principal Executive Offices)
(229) 226-3300
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(Issuer's Telephone Number, Including Area Code)
Not Applicable
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(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 1,395,000 shares issued and
outstanding as of May 10, 2001.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT: (Check one):
Yes No x
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2001 2000
ASSETS (Unaudited) (Unaudited)
------ ----------- -----------
Cash and due from banks $ 4,974,578 $ 8,493,734
Federal funds sold 3,863,783 8,622,079
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Total cash and cash equivalents $ 8,838,361 $ 17,115,813
Investment securities:
Securities available-for-sale,
at market value 11,572,421 11,636,063
Loans, net 111,742,761 107,118,466
Property & equipment, net 3,405,876 3,434,425
Other real estate owned 133,506 137,844
Other assets 1,605,015 1,665,053
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Total Assets $137,297,940 $141,107,664
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits
Non-interest bearing deposits $ 13,886,544 $ 15,330,627
Interest bearing deposits 107,377,770 110,563,168
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Total deposits $121,264,314 $125,893,795
Borrowings 2,000,000 2,000,000
Other liabilities 945,003 633,621
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Total Liabilities $124,209,317 $128,527,416
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Commitments and contingencies
Shareholders' Equity:
Common stock, $1.00 par value, 10
million shares authorized, 1,395,000
shares issued & outstanding $ 1,395,000 $ 1,395,000
Paid-in-capital 8,128,636 8,112,061
Retained earnings 3,534,124 3,071,334
Accumulated other
comprehensive income 30,863 1,853
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Total Shareholders' Equity $ 13,088,623 $ 12,580,248
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Total Liabilities and
Shareholders' Equity $137,297,940 $141,107,664
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Refer to notes to the financial statements.
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the three months
ended March 31,
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2001 2000
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Interest income $2,734,105 $2,256,643
Interest expense 1,369,534 1,006,982
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Net interest income $1,364,571 $1,249,661
Provision for possible loan losses 75,000 75,000
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Net interest income after provision
for possible loan losses $1,289,571 $1,174,661
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Other income
Gain on sale of mortgage loans $ 3,039 $ 1,183
Service charges 32,808 27,925
Other fees 149,366 121,903
Rental income - - 4,600
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Total other income $ 185,213 $ 155,611
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Operating expenses
Salaries and benefits $ 392,440 $ 357,386
Advertising and public relations 36,342 34,803
Depreciation 67,986 69,758
Regulatory fees and assessments 17,398 15,332
Other operating expenses 240,328 198,906
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Total operating expenses $ 754,494 $ 676,185
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Net income before taxes $ 720,290 $ 654,087
Income taxes 257,500 251,000
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Net income $ 462,790 $ 403,087
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Basic income per share $ .33 $ .29
========= =========
Diluted income per share $ .32 $ .28
========= =========
Refer to notes to the financial statements.
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
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2001 2000
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Cash flows from operating activities: $ 886,004 $ 720,820
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Cash flows from Investing Activities:
Decrease in other real estate owned $ 4,338 $ 166,986
Purchase of fixed assets (39,437) (4,914)
(Increase) in loans (4,699,295) (7,231,260)
Purchase of securities, AFS (7,316,156) - -
Maturities, calls, paydowns, AFS 7,500,000 2,328,966
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Net cash used by investing activities $(4,550,550) $(4,740,222)
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Cash flows from Financing Activities:
Reduction in borrowings $ - - $ (114,685)
Increase (decrease) in deposits (4,629,481) 2,497,538
Options, restricted stock 16,575 13,300
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Net cash used by financing activities $(4,612,906) $ 2,396,153
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Net (decrease) in cash
and cash equivalents $(8,277,452) $(1,623,249)
Cash and cash equivalents,
beginning of period 17,115,813 7,583,110
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Cash and cash equivalents,
end of period $ 8,838,361 $ 5,959,861
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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, 2000 AND 2001
Accumulated
Common Stock Other
------------------ Paid in Retained Comprehensive
Shares Par Value Capital Earnings Income Total
------ --------- ------- -------- ------ -----
Balance,
Dec 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
Mar. 31, 2000 - - - - - - 403,087 - - 403,087
Net unrealized
(losses) on
securities,
three-month
period ended
Mar. 31, 2000 - - - - - - - - (16,019) (16,019)
--------- ---------- ---------- --------- -------- ----------
Total comprehensive
income - - - - - - 403,087 (16,019) 387,068
Stock options,
restricted
stock - - - - 13,300 - - - - 13,300
--------- ---------- ---------- --------- -------- ----------
Balance,
Mar. 31,
2000 1,380,000 $ 1,380,000 $ 8,016,261 $2,369,852 $ (53,998) $11,712,115
========= ========== ========== ========= ======== ==========
Balance,
December 31,
2000 1,395,000 $ 1,395,000 $ 8,112,061 $3,071,334 $ 1,853 $12,580,248
--------- ---------- ---------- --------- -------- ----------
Comprehensive Income:
---------------------
Net income,
three-month
period ended
Mar. 31,
2001 - - - - - - 462,790 - - 462,790
Net unrealized
gains on
securities, three-
month period
ended Mar. 31,
2001 - - - - - - - - 29,010 29,010
--------- ---------- ---------- --------- -------- ----------
Total comprehensive
income - - - - - - 462,790 29,010 491,800
Stock options,
restricted
stock - - - - 16,575 - - - - 16,575
--------- ---------- ---------- --------- -------- ----------
Balance,
Mar. 31,
2001 1,395,000 $ 1,395,000 $ 8,128,636 $3,534,124 $ 30,863 $13,088,623
========= ========== ========== ========= ======== ==========
Refer to notes to the consolidated financial statements.
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2001
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, 2001 are not necessarily
indicative of the results that may be expected for the year ending December
31, 2001. 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, 2000.
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 June, 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities." Statement No. 133 establishes
accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts) be
recorded in the balance sheet as either an asset or a liability measured at
its fair value. The Statement requires that changes in the derivative
instrument's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Statement No. 133, as amended, is
effective for fiscal years beginning after June 15, 2000. The Company adopted
Statement No. 133 as of September 30, 2000. The adoption of Statement No. 133
did not have a material impact on the financial position or results of
operations of the Company.
In September, 2000, FASB issued Statement No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities." This new Statement replaces Statement No. 125, issued in June,
1996. Statement No. 140 resolves certain implementation and other issues that
have arisen since the initial adoption of Statement No. 125, but it carries
over most of Statement No. 125's provisions without change. Statement No. 140
is effective for transfers occurring after March 31, 2001 and for disclosures
relating to securitization transactions and collateral for fiscal years ending
after December 15, 2000. The adoption of Statement No. 140 will not have a
significant impact on the financial position or results of operations of the
Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS
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Total consolidated assets decreased by $3.8 million to $137.3 million
during the three-month period ended March 31, 2001. Cash and cash equivalents
declined by $8.3 million to $8.8 million, investment securities declined by
$.1 million to $11.6 million, and loans increased by $4.6 million to $111.7
million. For the three-month period ended March 31, 2001, total deposits
decreased by $4.6 million to $121.3 million, other liabilities increased by
$.3 million to $.9 million, and the capital accounts increased by $.5 million
to $13.1 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, 2001 financial statements evidence a satisfactory liquidity position
as total cash and cash equivalents amounted to $8.8 million, representing 6.4%
of total assets. Investment securities, which amounted to $11.6 million or
8.4% of total assets, provide a secondary source of liquidity because they can
be converted into cash in a timely manner. 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. The
Company is not aware of any 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, 2001 by regulator
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Leverage ratio 9.2% 4.0%
Risk weighted ratio 13.2% 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, 2001 and 2000, net income
amounted to $462,790 and $403,087, respectively. On a per share basis, basic
and diluted income for the three-month period ended March 31, 2001 amounted to
$.33 and $.32, respectively. For the three-month period ended March 31, 2000,
basic and diluted income per share amounted to $.29 and $.28, respectively.
The improvement in net income for the three-month period ended March 31, 2001
as compared to the three-month period ended March 31, 2000, is primarily due
to the following:
a. Average total earning assets have increased from $104.0 million at
March 31, 2000 to $125.5 million at March 31, 2001. The net
increase of $21.5 million represents a 20.7% increase over a
twelve-month period. There can be no assurances, however, that
this level of growth can be maintained.
b. As a consequence of the increase in earning assets, interest income,
the most significant revenue item, increased from $2,256,643 for
the three-month period ended March 31, 2000 to $2,734,105 for the
three-month period ended March 31, 2001. The increase of $477,462
represents a 21.2% increase over a twelve-month period. Again,
there can be no assurances that the Company can continue to
maintain this level of growth. The yield on earning assets
increased from 8.68% at March 31, 2000 to 8.71% at March 31, 2001,
while the cost of funds over the two periods increased from 4.59%
to 5.12%.
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 for the
three-month period ended March 31, 2001.
(Dollars in 000's)
Interest Interest
Earning Assets/ Average Income/ Yield/
Bearing Liabilities Balance Cost Cost
------------------- ------- -------- ------
Federal funds sold $ 4,177 $ 60 5.75%
Securities 10,728 213 7.94%
Loans 110,626 2,461 8.90%
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Total $ 125,531 $ 2,734 8.71%
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Deposits and borrowings $ 106,926 $ 1,369 5.12%
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Net interest income $ 1,365
=======
Net yield on earning assets 4.35%
====
Net interest income increased from $1,249,661 for the three-month period
ended March 31, 2000 to $1,364,571 for the three-month period ended
March 31, 2001, a net increase of $114,910, or 9.2%. As evidenced by the
table above, net yield on earning assets decreased from 4.81% for the
three-month period ended March 31, 2000 to 4.35% for the three-month
period ended March 31, 2001. The primary reason for the above decline is
the 53 basis-point increase in the cost of funds. The cost of funds
increased during the three-month period ended March 31, 2001 when compared
to the three-month period ended March 31, 2000 in response to local
competitive conditions.
d. Other income increased from $155,611 for the three-month period ended
March 31, 2000 to $185,213 for the three-month period ended March
31, 2001. This increase is primarily due to the increase in
volume of transaction accounts. As a percentage of average total
assets, other income remained constant at .54% for both of the
three-month periods.
e. Total operating expenses increased from $676,185 for the three-month
period ended March 31, 2000 to $754,494 for the three-month period
ended March 31, 2001. As a percentage of average total assets,
total operating expenses declined from 2.35% for the three-month
period ended March 31, 2000 to 2.20% for the three-month period
ended March 31, 2001. The decline in the above ratio is due
primarily to the attainment of economies of scale.
At December 31, 2000, the allowance for loan losses amounted to
$1,365,057. By March 31, 2001, the allowance had grown to $1,412,557. The
allowance for loan losses, as a percentage of gross loans, increased from 1.26%
to 1.28% during the three-month period ended March 31, 2001. 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 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
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(a) Exhibits. None.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during
the quarter ended March 31, 2001.
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.
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(Registrant)
Date: May 10, 2001 By: /s/ Stephen H. Cheney
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Stephen H. Cheney
President and Chief Executive Officer
(Principal Executive, Financial and
Accounting Officer)