SECURITIES & EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
__X__ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
_____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to _________
COMMISSION FILE NUMBER 33-10149
SVB&T Corporation
1500 Main Street
Jasper, IN 47546
Telephone (812) 634-1010
State of Incorporation - Indiana
I.R.S. Employer Identification No. 35-1539978
NOT APPLICABLE
Former name, former address and fiscal year, if changed since last report.
Indicate by check mark whether the registrant (1) has 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, and (2) has been subject to the
filing requirements for at least the past 90 days. Yes _X__ No ____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock. The Registrant has one class of common stock (no par value)
with approximately 372,900 shares outstanding at March 31, 1996. The
Registrant holds 27,100 shares in the form of Treasury Stock.
SVB&T CORPORATION
FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements Page No.
Consolidated Balance Sheet
March 31, 1996 and 1995 and December 31, 1995............... 3
Consolidated Statement of Income
Three months ended March 31, 1996 and 1995.................. 4
Consolidated Statement of Cash Flows
Three months ended March 31, 1996 and 1995................. 5
Consolidated Statement of Changes in Shareholders' Equity
Three months ended March 31, 1996 and 1995.................. 6
Notes to Consolidated Financial Statements................... 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 8-10
PART II. OTHER INFORMATION............................................ 11
SIGNATURES............................................................ 12
SVB&T CORPORATION CONSOLIDATED BALANCE SHEET
March 31, March 31, December 31,
(unaudited) 1996 1995 1995
_______________________________________________________________________________
ASSETS:
Cash and due from banks 4,258,785 3,433,799 4,087,658
Federal funds sold 5,110,000 2,950,000 9,550,000
Total cash and cash equivalents 9,368,785 6,383,799 13,637,658
Interest bearing deposits in other banks 0 0 0
Investment securities, available for
sale (carried at market value) 55,542,430 56,383,334 56,908,873
Loans
Loans, net of unearned interest 113,269,481 109,239,246 112,498,492
Allowance for loan losses (1,364,025) (1,351,747) (1,348,927)
Net loans 111,905,456 107,887,499 111,149,565
Buildings and equipment 5,007,799 5,174,343 5,077,140
Other real estate 385,415 457,813 295,720
Interest receivable 1,480,596 1,493,366 1,537,370
Deferred income taxes 41,183 112,427 0
Other assets 1,099,471 1,454,277 1,270,449
Total Assets 184,831,135 179,346,858 189,876,775
Liabilities:
Deposits
Non-interest bearing demand 12,821,800 11,013,935 12,501,765
Interest bearing 154,036,865 152,062,468 159,262,811
Total Deposits 66,858,665 163,076,403 171,764,576
Long-term debt 0 0 0
Interest payable 782,528 888,576 865,352
Deferred income taxes 292,820 0 434,439
Other liabilities 481,307 467,210 440,281
Total Liabilities 1,556,655 164,432,189 173,504,648
SHAREHOLDERS' EQUITY:
Common stock 200,000 200,000 200,000
Capital surplus 6,094,233 6,094,233 6,094,233
Retained earnings 10,997,370 9,965,335 10,674,978
Net unrealized gain (loss) on
investment securities (62,788) (531,899) (215,916)
Treasury stock at cost (27,100 shares) (813,000) (813,000) (813,000)
Total Shareholders' Equity 16,415,815 14,914,669 16,372,127
Total Liabilities and
Shareholders' Equity 184,831,135 179,346,858 189,876,775
The accompanying notes are an integral part of this statement.
SVB&T CORPORATION CONSOLIDATED STATEMENT OF INCOME
Three Months Ended March 31,
(unaudited) 1996 1995
________________________________________________________________________
INTEREST INCOME:
Loans and fees on loans 2,484,705 2,292,912
Investment securities:
Taxable 731,654 529,516
Non-taxable 135,769 260,407
Federal funds sold and securities
purchased under agreements to resell 151,790 122,958
Deposits with banks 0 0
Total Interest Income 3,503,918 3,205,793
INTEREST EXPENSE:
Deposits 1,923,168 1,758,316
Long-term debt 0 0
Total interest expense 1,923,168 1,758,316
Net interest income 1,580,750 1,447,477
Provision for loan losses 75,000 80,000
Net interest income after
provision for loan losses 1,505,750 1,367,477
NON-INTEREST INCOME:
Trust fees 153,978 151,275
Service charges on deposit accounts 73,423 71,721
Insurance and claims processing 42,401 121,080
Securities gains (losses), net 0 0
Other Income 54,507 14,262
Total Non-interest Income 324,309 358,338
NON-INTEREST EXPENSE:
Salaries and employee benefits 784,389 737,130
Premise and equipment expense 262,134 269,825
Other real estate expense 4,987 6,053
FDIC Deposit expense 500 93,765
Telephone expense 27,412 43,259
Postage expense 34,894 42,961
Other expenses 195,584 210,071
Total non-interest expense 1,309,900 1,403,064
Income before income taxes 520,159 322,751
Provision for income tax 112,000 77,000
Net Income 408,159 245,751
NET INCOME PER COMMON SHARE:
Primary 1.09 0.66
Weighted average common shares
outstanding 372,900 372,900
DIVIDENDS DECLARED:
Cash dividends 0.23 0.23
The accompanying notes are an integral part of this statement.
SVB&T CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS
Three Months Ended March 31,
(unaudited) 1996 1995
___________________________________________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 408,159 245,751
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH
PROVIDED FROM OPERATING ACTIVITIES:
Depreciation 104,940 106,473
Net premium amortization (discount
accretion) of investment securities (10,137) 183,830
Provision of loan losses 75,000 80,000
Decrease(increase) in interest receivable 56,774 43,383
(Increase) decrease in other assets 170,978 (360,140)
Increase (decrease) in accrued expenses and
other liabilities (41,798) 302,173
Net cash flows provided by operating
activities 763,916 601,470
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase of interest bearing deposits
in other banks 0 0
Purchase of investment securities available
for sale 2,603,725 (3,930,781)
Proceeds from maturities and paydowns of
investment securities available for sale 3,518,799 1,595,000
Net (increase) decrease in loans (920,586) (2,719,398)
Purchase of premises and equipment (35,599) (78,803)
Net cash flows used in investing
activities (41,111) (5,133,982)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits and
short-term borrowings
Non-interest bearing demand 320,035 (1,181,591)
Total interest-bearing deposits (5,225,946) (3,855,331)
Principal payment on long-term debt 0 0
Cash dividends paid (85,767) (85,767)
Net cash flows provided by (used in)
financing activities (4,991,678) (5,122,689)
Net decrease in cash equivalents (4,268,873) (9,655,201)
Cash and cash equivalents at beginning of
period 13,637,658 16,039,000
Cash and cash equivalents at end of period 9,368,785 6,383,799
Total interest paid 1,950,831 1,603,623
Total taxes paid 57,298 26,000
The accompanying notes are an integral part of this statement.
SVB&T CORPORATION CONSOLIDATED STATEMENT
OF CHANGES IN SHAREHOLDERS' EQUITY
Three Months Ended March 31,
_______________________________________________________________________________
(unaudited) 1996 1995
Balance, beginning of period 16,372,127 14,034,021
Net income 408,159 245,751
Cash dividends (85,767) (85,767)
Net unrealized gain (loss) on investment
securities (278,704) 720,664
Balance, end of period 16,415,815 14,914,669
The accompanying notes are an integral part of this statement.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Principles of Consolidation - The consolidated financial statements include the
accounts of SVB&T Corporation and its wholly owned subsidiary, Springs Valley
Bank & Trust Company. All significant intercompany balances and transactions
have been eliminated.
All adjustments which are, in the opinion of management, necessary for a fair
presentation of the results for the periods reported, consisting only of normal
adjustments, have been included in the accompanying unaudited consolidated
condensed financial statements. The results of operations for three month
period ended March 31, 1996 is not necessarily indicative of those expected for
the remainder of the year.
March 31, 1996 March 31, 1995 Dec. 31, 1995
________________________________________________________________________________
INVESTMENT SECURITIES:
U.S. treasury securities 0 0 0
U.S. Government corporations
& agencies 42,581,552 35,341,491 42,852,928
States and political subdivisions 12,062,872 20,349,671 13,635,404
Mortgage - backed securities 398,006 692,172 420,541
Other domestic securities 500,000 0 0
Total Investment Securities 55,542,430 56,383,334 56,908,873
March 31, 1996 March 31, 1995 Dec. 31, 1995
________________________________________________________________________________
LOANS:
Commercial and industrial loans 14,423,264 5,884,436 12,267,206
Real estate loans 63,229,021 68,384,874 64,584,906
Construction loans 49,123 218,290 131,197
Agricultural production financing
and other loans to farmers 604,884 536,809 476,747
Individual loans for household
and other personal expense 35,263,691 33,377,229 35,340,970
Economic development revenue bonds 0 0 40,551
Securities purchased under reverse
repurchase agreement on
a term basis 0 1,060,000 0
Less: Unearned income on loans (300,502) (222,392) (343,085)
Total Loans 113,269,481 109,239,246 112,498,492
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SUMMARY OF OPERATING RESULTS
EARNINGS ANALYSIS
Net income for the first three months of $408,159 represents an increase of
$162,408 or 66% from the $245,751 reported for the same period last year.
This resulted from increased net interest income and reduction of
non-interest expenses.
NET INTEREST INCOME
SVB&T Corporation's primary source of earnings is net interest income, which
is the difference between interest earned on loans and other investments
and the interest incurred for deposits and other sources of funds. In the
first three months of 1996, net interest income increased by $133,273 or 9%
for the same period in 1995. The net interest margin increase compared to
the same period last was primarily a result of average interest cost leveling
off with an average cost of 4.60%. Rates of return on loans and investments
have increased. The loan volume has increased $4,030,235 comparing 1996 to
1995. Loan yields are higher than investment yields which increase the net
interest income.
OTHER INCOME
Other income of $324,309 for the first quarter of 1996 is $34,029 or 9% less
than the same period for 1995. This difference is due to the claims processing
department closing and this has resulted in a reduction of other income by
$73,750 per quarter.
OTHER EXPENSES
For the first three months of 1996, other expenses decreased by $93,164 or 7%
compared to the same period of 1995. This decrease is principally the effects
of the reduction of the FDIC Deposit expense and telephone expenses.
ANALYSIS OF FINANCIAL CONDITION
ALLOWANCE FOR POSSIBLE LOAN LOSSES
The Corporation's allowance for loan losses was $1,364,025 at March 31, 1996
compared to $1,351,747 at March 31, 1995. The increase reflects the growth of
the loan portfolio during the last twelve months and improved loan quality.
At March 31, 1996 the allowance for possible loan losses was 1.19% of total
loans, net for unearned interest. This compares to an allowance of 1.24%
at March 31, 1995. Net charge offs for the first three months of 1996
were $60,000, compared to $50,000 for the same period last year. Based on
management's review of the portfolio, management believes the allowance of
$1,364,025 is adequate.
LIQUIDITY AND ASSET/LIABILITY MANAGEMENT
The Corporation's objective in liquidity management is to manage the assets and
liabilities to meet the needs of borrowers while allowing for the possibility
of deposit withdrawals. The primary purpose of asset/liability management is
to minimize the effect on net income of changes in interest rates and to
maintain a prudent match within specified time periods of rate-sensitive
assets and rate-sensitive liabilities.
As of March 31, 1996 the rate-sensitive assets were 68% of rate-sensitive
liabilities in the 1-180 day maturity category and 74% in the 181-365
day range. These positions are within acceptable ranges as determined
by funds management policy. The Corporation's Funds Management Committee
meets weekly to monitor and effect changes necessary in the liquidity and
rate-sensitivity positions.
CAPITAL
Total shareholders' equity as of March 31, 1996 was $16,415,815 compared to
$14,914,669 for the same period last year. This increase is attributed to
the net unrealized gain on investment securities, which is a loss of $62,788 for
March 31, 1996 compared to a $531,899 loss for the same period of 1995.
(ANALYSIS OF FINANCIAL CONDITIONS CONTINUED)
As of March 31, 1996 the bank's leverage capital ratio was 8.12% which compared
to 8.32% at March 31, 1995.
As of March 31, 1996 the bank's tier II risk-based capital ratio was 15.91%
compared to 15.75% at March 31, 1995.
These ratios are in excess of regulatory requirements of 3% for leverage capital
and 8% for tier II risk-based capital.
PART II
OTHER INFORMATION
Item 1 - LEGAL PROCEEDINGS
None
Item 2 - CHANGES IN SECURITIES
None
Item 3 - DEFAULTS UPON SENIOR SECURITIES
None
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5 - OTHER INFORMATION
None
Item 6 - EXHIBITS AND REPORTS OF FORM 8-K
None
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.
SVB&T Corporation
(Registrant)
By: Ronald G. Seals
President and Chief Executive Officer
By: David Rees
Principal Financial Officer
Date: May 14, 1996