CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 3, 2004
PAVILION BANCORP, INC.
(Exact Name of Registrant as Specified in Charter)
| Michigan (State or Other Jurisdiction of Incorporation) 135 East Maumee Street Adrian, Michigan (Address of principal executive office) | 000-30521 (Commission File Number) | 38-3088340 (IRS Employer Identification No.) 49221 (Zip Code) |
Registrant’s telephone number, including area code:(517) 265-5144
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Section Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)).
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
On December 3, 2004, Pavilion Bancorp, Inc. sent a third quarter report to shareholders. A copy of that report is attached as Exhibit 99.1.
The information in this Form 8-K and the attached Exhibit shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
(c) Exhibit
Third Quarter Report to Shareholders Sent to Shareholders on December 3, 2004.
SIGNATURE
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.
| Dated: December 3, 2004 | PAVILION BANCORP, INC. (Registrant) By: /s/ Pamela S. Fisher —————————————— Pamela S. Fisher Corporate Secretary |
| 99.1 | Third Quarter Report to Shareholders sent December 3, 2004. |
Pavilion Bancorp, Inc.
World Class, Community Driven.
Third Quarter Statement
September 30, 2004
Pavilion Bancorp, Inc.
World Class, Community Driven.
135 East Maumee Street
Adrian, MI 49221
(517) 265-5144 or (800) 508-8346
pavilionbancorp.com
bankoflenawee.com
Third Quarter Statement
To Our Shareholders:
Pavilion Bancorp, Inc. stock performed extremely well in the third quarter of 2004 rising 9.2% or $4.99 per share over the peak price observed last quarter and a 14.7% increase over the highest price at which it traded in 2003. Although trading in our stock is fairly limited, we are very pleased to see the market reaction to your corporation’s continued growth, and with it the investment value for our shareholders.
On October 29, the sale of the Bank of Washtenaw for $15,000,000 to the Community Bank of Dearborn was officially completed. This transaction was pending throughout most of the third quarter. Accordingly, the assets and liabilities and results of operations of Bank of Washtenaw have been segregated in the accompanying financial statement as ‘discontinued operations’.
Just like many other banks, increasing interest rates over the last several months negatively impacted our mortgage originations in the third quarter of 2004 and our earnings softened. We ended the first nine months of the year with net income of $2,310,070 as compared to $2,589,650 at the end of the same period in 2003. Excluding Bank of Washtenaw, our income from continuing operations over the same periods declined from $2,660,000 to $2,120,000. While our total expenses, primarily those related to mortgage lending, also declined, these savings did not offset the significant decline in sold mortgage loan income.
Despite these contrary market conditions, we are very optimistic about the future of Pavilion Bancorp. The Board of Directors is working closely with the Bank of Lenawee management team on a plan to deploy the proceeds from the sale of Bank of Washtenaw. Throughout this process, our goal is to identify and implement the initiatives that will maximize long-term return on investment for you, our shareholders.
On behalf of the Board of Directors, Management and Staff, I thank you for your continued support. As we enter the final quarter of 2004 and look to maximize opportunities for growth in 2005, we are steadfast in our commitment to increasing the value of your investment in Pavilion Bancorp, Inc.
/s/ Douglas L. Kapnick
Douglas L. Kapnick
Chairman of the Board and
President and Chief Executive Officer
This letter contains certain forward-looking statements that involve risks and uncertainties. When used in this letter, the words “believe”, “expect”, or “anticipate” and similar expressions identify forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including but not limited to, economic, competitive, governmental and technological factors affecting the company’s operations, markets, products, services, interest rates and fees for services. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this letter.
Pavilion Bancorp, Inc.
Third Quarter Statement
CONSOLIDATED BALANCE SHEET
(In thousands of dollars)
| 2004 | 2003 | |||||||
|---|---|---|---|---|---|---|---|---|
| Assets | ||||||||
| Cash and due from banks | $ | 3,870 | $ | 2,165 | ||||
| Federal funds sold | - | 6,340 | ||||||
| Total cash and cash equivalents | $ | 3,870 | $ | 8,505 | ||||
| Market value of securities available for sale | 25,077 | 26,589 | ||||||
| Total loans | 218,219 | 201,387 | ||||||
| Loans held for sale | 1,507 | 651 | ||||||
| Deferred loan origination (fees) costs, net | (2 | ) | (1 | ) | ||||
| Allowance for loan losses | (2,396 | ) | (2,299 | ) | ||||
| Net loans | 217,328 | 199,738 | ||||||
| Premises and equipment, net | 5,805 | 5,159 | ||||||
| Accrued interest receivable | 1,800 | 1,690 | ||||||
| Mortgage servicing assets | 2,810 | 2,806 | ||||||
| Other assets | 1,764 | 889 | ||||||
| Assets of discontinued operation | 76,147 | 66,115 | ||||||
| Total assets | $ | 334,601 | $ | 311,491 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Liabilities | ||||||||
| Deposits: | ||||||||
| Noninterest - bearing | $ | 45,521 | 42,715 | |||||
| Interest - bearing | 170,785 | 162,098 | ||||||
| Total deposits | 216,306 | 204,813 | ||||||
| Other borrowings | 14,540 | 13,520 | ||||||
| Accrued interest payable | 328 | 372 | ||||||
| Other liabilities | 2,652 | 2,289 | ||||||
| Liabilities of discontinued operation | 68,882 | 60,443 | ||||||
| Total liabilities | 302,708 | 281,437 | ||||||
| Shareholders' equity | ||||||||
| Common stock and paid-in capital, No par value: | ||||||||
| 3,000,000 shares authorized; shares issued and | ||||||||
| outstanding 845,420 - 2004; 847,762 - 2003 | 14,607 | 12,621 | ||||||
| Retained earnings | 17,221 | 17,286 | ||||||
| Unrealized gain (loss) on securities available for sale | 65 | 147 | ||||||
| Total shareholders' equity | 31,893 | 30,054 | ||||||
| Total liabilities and shareholders' equity | $ | 334,601 | $ | 311,491 | ||||
Pavilion Bancorp, Inc.
CONSOLIDATED STATEMENT OF INCOME
(In thousands of dollars)
| Nine Months Ending September 30 (unaudited) | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2004 | 2003 | |||||||
| Interest Income | ||||||||
| Loans, including fees | $ | 10,465 | $ | 10,557 | ||||
| Securities | 666 | 724 | ||||||
| Federal funds sold and other | 9 | 26 | ||||||
| Total interest income | 11,140 | 11,307 | ||||||
| Interest Expense | ||||||||
| Deposits | 1,608 | 2,051 | ||||||
| Borrowed funds | 489 | 459 | ||||||
| Total interest expense | 2,097 | 2,510 | ||||||
| Net Interest Income | 9,043 | 8,797 | ||||||
| Provision for loan losses | 215 | 455 | ||||||
| Net Interest Income After | ||||||||
| Provision For Loan Losses | 8,828 | 8,342 | ||||||
| Noninterest income | ||||||||
| Service charges on deposit accounts | 1,083 | 1,011 | ||||||
| Gains on sales of loans | 1,166 | 5,428 | ||||||
| Loan Servicing fees, net of amortization | 369 | (1,575 | ) | |||||
| Other | 225 | 86 | ||||||
| Total other income | 2,843 | 4,950 | ||||||
| Noninterest expense | ||||||||
| Salaries and employee benefits | 5,162 | 5,940 | ||||||
| Premises and equipment | 1,215 | 1,182 | ||||||
| Other | 2,262 | 2,253 | ||||||
| Total other expenses | 8,639 | 9,375 | ||||||
| Income Before Income Taxes | 3,032 | 3,917 | ||||||
| Federal income tax expense | 912 | 1,257 | ||||||
| Net Income from continuing operations | $ | 2,120 | $ | 2,660 | ||||
| Discontinued operations: | ||||||||
| Income (loss) from operation of discontinued component | 291 | (106 | ) | |||||
| Provision (benefit) for income taxes | 101 | (36 | ) | |||||
| Income (loss) from operation | 190 | (70 | ) | |||||
| Net Income | $ | 2,310 | $ | 2,590 | ||||
| Earnings per common share: | ||||||||
| From continuing operation | $ | 2.51 | $ | 3.25 | ||||
Pavilion Bancorp, Inc.
Allan F. Brittain
Chairman of the Board
Bank of Lenawee
Fred R. Duncan
Retired
Edward J. Engle, Jr.
President
Rima Manufacturing Company
William R. Gentner
President
Gentner, Inc.
Douglas L. Kapnick
President
Kapnick and Company, Inc.
Margaret M.S. Noe
Attorney
Dennis Pearsall
President and
Chief Executive Officer
ReMax Community Associates
Emory M. Schmidt
Vice President
Brazeway, Inc.
Terence R. Sheehan
Vice President and
Chief Financial Officer
Brazeway, Inc.
J. David Stutzman
General Manager
Raymond and Stutzman LLC
Dr. Marcus VanOoyen
Chief of Radiology
Lenawee Health Alliance
Douglas L. Kapnick
Chairman of the Board
President and Chief Executive Officer
Richard J. DeVries
Vice President
William A. Kirsten
Chief Financial Officer
Pamela S. Fisher
Corporate Secretary
