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 June 30, 2000
_____ 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 745,028 shares outstanding at August 14, 2000. The
Registrant holds 54,972 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
June 30, 2000 and 1999 and December 31, 1999................ 3
Consolidated Statement of Income
Three and six months ended June 30, 2000 and 1999........... 4
Consolidated Statement of Cash Flows
Six months ended June 30, 2000 and 1999..................... 5
Consolidated Statement of Changes in Shareholders' Equity
Six months ended June 30, 2000 and 1999..................... 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
June 30, June 30, December 31,
(unaudited) 2000 1999 1999
ASSETS:
Cash and due from banks 6,600 5,071 5,472
Federal funds sold 2,015 12,070 5,275
Total cash and cash equivalents 8,615 17,141 10,747
Interest bearing deposits in other banks 51 48 18
Investment securities, available for
sale (carried at market value) 26,622 25,153 24,898
Investment securities, held to maturity,
at cost 1,805 705 1,205
Loans
Loans, net of unearned interest 191,181 159,634 175,119
Allowance for loan losses (1,636) (1,529) (1,627)
Net loans 189,545 158,105 173,492
Buildings and equipment 4,540 4,638 4,523
Other real estate 40 0 0
Interest receivable 1,833 1,374 1,464
Deferred income taxes 190 0 165
Other assets 1,818 776 882
Total Assets 235,074 207,940 217,394
LIABILITIES:
Deposits
Non-interest bearing demand 12,229 12,257 22,102
Interest bearing 163,816 159,894 159,174
Total Deposits 176,045 172,151 181,276
Federal Funds Purchased 0 0 0
Other Short Term Borrowings 5,000 5,000 5,000
Long-Term Borrowings 31,100 9,100 9,100
Interest payable 814 775 784
Deferred income taxes 0 292 0
Other liabilities 911 596 865
Total Liabilities 213,870 187,914 197,025
SHAREHOLDERS' EQUITY:
Common stock 200 200 200
Capital surplus 6,211 6,165 6,170
Retained earnings 16,350 14,847 15,545
Net unrealized gain (loss) on
investment securities (582) (302) (544)
Treasury stock at cost (53,867 shares ) (975) (884) (1,002)
Total Shareholders' Equity 21,204 20,026 20,369
Total Liabilities and
Shareholders' Equity 235,074 207,940 217,394
The accompanying notes are an integral part of this statement.
SVB&T CORPORATION CONSOLIDATED STATEMENT OF INCOME
Three Months Six Months
Ended June 30, Ended June 30,
(unaudited) 2000 1999 2000 1999
________________________________________________________________________
INTEREST INCOME:
Loans and fees on loans 4,082 3,248 8,028 6,292
Investment securities:
Taxable 292 243 563 485
Non-taxable 125 117 242 220
Federal funds sold and
securities purchased under
agreements to resell 21 37 23 55
Deposits with banks 2 1 2 1
Total Interest Income 4,522 3,646 8,858 7,053
INTEREST EXPENSE:
Deposits 1,908 1,651 3,792 3,216
Other Short term Funds Borrowed 100 (22) 246 5
Long-term Borrowings 390 118 534 131
Total interest expense 2,398 1,747 4,572 3,352
Net interest income 2,124 1,899 4,286 3,701
Provision for loan losses 75 565 150 700
Net interest income after
provision for loan losses 2,049 1,334 4,136 3,001
NON-INTEREST INCOME:
Trust fees 172 172 345 345
Service charges on
deposit accounts 136 250 259 373
Securities gains (losses), net (8) (3) (4) (3)
Other Income 112 (71) 193 (25)
Total Non-interest Income 412 389 793 772
NON-INTEREST EXPENSE:
Salaries and employee benefits 962 990 1,887 1,877
Premise and equipment expense 175 228 523 445
FDIC Deposit expense 9 7 18 10
Other expenses 452 499 879 850
Total non-interest expense 1,598 1,724 3,307 3,182
Income before income taxes 863 (1) 1,622 591
Provision for income tax 265 (43) 549 152
Net Income 598 42 1,073 439
NET INCOME PER COMMON SHARE:
Primary .80 .06 1.44 .59
Weighted average common shares
outstanding 745,028 746,133 745,028 746,133
DIVIDENDS DECLARED:
Cash dividends 0.15 0.15 0.30 0.30
The accompanying notes are an integral part of this statement.
SVB&T CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS
Six Months Ended June 30,
(unaudited) 2000 1999
___________________________________________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 1,073 439
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH
PROVIDED FROM OPERATING ACTIVITIES:
Directors Stock Option Compensation 0 4
Depreciation 120 220
Net premium amortization (discount
accretion)
of investment securities 18 12
Provision of loan losses 150 700
Decrease(increase) in interest receivable (369) (178)
(Increase) decrease in other assets (951) 186
Increase (decrease) in accrued expenses and
other liabilities 76 (413)
Net cash flows provided by operating
activities 117 970
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase of interest bearing deposits
in other banks (33) (31)
Purchase investment held to maturity (600) 0
Purchase of investment securities available
for sale (3,367) (5,501)
Proceeds from maturities and paydowns of
investment securities available for sale 1,563 4,976
Net (increase) decrease in loans (16,243) (15,956)
Purchase of premises and equipment (138) (37)
Net cash flows used in investing
activities (18,818) (16,549)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits and
short-term borrowings
Non-interest bearing demand (9,873) (491)
Total interest-bearing deposits 4,642 13,310
Other Short-Term Borrowings 0 5,000
Long-Term Borrowings 22,000 8,100
Cash dividends paid (268) (247)
Treasury Stock Sold 138 41
Treasure Stock Purchased (70) (48)
Net cash flows provided by (used in)
financing activities 16,569 25,665
Net increase in cash equivalents (2,132) 10,086
Cash and cash equivalents at beginning of
period 10,747 7,055
Cash and cash equivalents at end of period 8,615 17,141
Total interest paid 4,542 3,290
Total taxes paid 850 266
The accompanying notes are an integral part of this statement.
SVB&T CORPORATION CONSOLIDATED STATEMENT
OF CHANGES IN SHAREHOLDERS' EQUITY
Six Months Ended June 30,
(unaudited) 2000 1999
______________________________________________________________________________
Balance, beginning of period 20,369 20,333
Net income 1,073 439
Cash dividends (268) (247)
Net unrealized gain (loss) on investment
securities (38) (492)
Sale of Treasury Stock 138 41
Purchase of Treasury stock (70) (48)
Balance, end of period 21,204 20,026
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
six month period ended June 30, 1999 is not necessarily indicative of those
expected for the remainder of the year.
June 30,2000 June 30, 1999 Dec. 31, 1999
______________________________________________________________________________
INVESTMENT SECURITIES:
U.S. treasury securities 0 0 0
U.S. Government corporations
& agencies 14,460 13,743 13,256
States and political subdivisions 11,251 10,378 10,405
Mortgage - backed securities 79 186 132
Other domestic securities 832 846 835
Equity Securities 1,805 705 1,205
Total Investment Securities 28,427 25,858 26,103
June 30, 2000 June 30, 1999 Dec. 31, 1999
______________________________________________________________________________
LOANS:
Commercial and industrial loans 37,367 14,571 21,945
Real estate loans 94,803 93,484 98,851
Construction loans 15,990 1,781 6,490
Agricultural production financing
and other loans to farmers 2,220 1,644 1,316
Individual loans for household
and other personal expense 40,209 48,242 46,295
Economic development revenue bonds 0 0 0
Lease Financing Receivable 334 390 336
Other Loans Excluding Consumer 397 0 0
Less: Unearned income on loans (139) (148) (141)
Total Loans 191,181 159,964 175,119
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 six months of $1,073,000 represents an increase of
$634,000 or 52% from the $439,000 reported for the same period last year. The
second quarter earnings of $598,000 represents an increase of $556,000 from
the $42,000 reported for the second quarter of 1999. The reduced income in
1999 is a direct result of Reserve for Bad Debts allocations to covered
charge-offs and future considerations.
NET INTEREST INCOME
Springs Valley Bank & Trust Company is a slightly liability sensitive bank.
Interest bearing deposits reprice faster than interest bearing loans and
investments. In a rising environment, the bank's income increased because
of a widening interest spread. Thus, our interest spreads have become larger
and income has returned to a more acceptable position. The interest spread is
improving. This subject is reviewed in greater detail in the following
management comments.
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. In the first six months of 2000, net
interest income increased by $585,000 or 16% for the same period in 1999. The
second quarter net interest income for 2000 increased by $225,000 or 12%
compared to the second quarter of 1999. The improvement in the net interest
income is due to assets being deployed into higher yielding loans rather than
investments.
OTHER INCOME
Other income of $849,000 for the first two quarters of 2000 is $21,000 or 3%
higher than the same period for 1999. The increase is due to an increase in
Alternative investments Income and adjustments made in 1999 that reduced other
income. Other non-interest income is an important part of the profitability of
the bank and all avenues of additional income are reviewed.
NON-INTEREST EXPENSES
For the first six months of 2000, other expenses increased by $125,000 or 4%
compared to the same period of 1999. The three months ended June 30, 2000
total other expense decrease was $126,000 or 7% over that same period for
1999. This decrease is principally the effect of adjustment for credit card
rebates in 1999.
ANALYSIS OF FINANCIAL CONDITION
ALLOWANCE FOR POSSIBLE LOAN LOSSES
The Corporation's allowance for loan losses was $1,636,000 at June 30, 2000
compared to $1,529,000 at June 30, 1999 and $1,627,000 as of December 31,
1999.
At June 30, 2000 the allowance for possible loan losses was .88% of total
loans, net for unearned interest. This compares to an allowance of .96%
at June 30, 1999. Net charge offs for the first six months of 2000
were $142,000 compared to $277,000 for the same period last year. Management
reviews the loan portfolio and assess the risk and believes that the allowance
of $1,636,000 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 June 30, 2000 the rate-sensitive assets were 72% of rate-sensitive of
liabilities in the 1-180 day maturity category and 80% 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 June 30, 2000 was $21,204,000 compared to
$20,026,000 for the same period last year. The shareholder's equity has
increased by $1,178,000 or 6% from June 30, 1999 to June 30, 2000. This
increase is attributed to profits.
(ANALYSIS OF FINANCIAL CONDITIONS CONTINUED)
As of June 30, 2000 the bank's leverage capital ratio was 8.37% which
compared to 10.09% at June 30, 1999.
As of June 30, 2000 the bank's total risk-based capital ratio was 12.01%
compared to 12.27% at June 30, 1999.
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
(a) The annual meeting of shareholders of the corporation was held on
May 18, 2000.
(b) The following were elected directors of the corporation for a
term of one year and until their successors are elected and
qualified: Brian K. Habig, Douglas A. Habig, John B. Habig,
Thomas L. Habig, Hilbert Lindsey, Ronald G. Seals, R.J.
Sermersheim, Ronald J. Thyen, James C. Tucker, and Gary P.
Critser.
(c) The shareholders unanimously approved the action of the directors
and officers since the 1999 annual meeting of shareholders. A
total of 380,346 shares were voted in person and 246,120 shares
voted by proxy. This totals 626,466 shares voted in approval of
the 745,028 shares outstanding.
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: August 10, 2000