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, 2001
_____ 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 747,100 shares outstanding at August 6, 2001. The
Registrant holds 52,900 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, 2001 and 2000 and December 31, 2000................ 3
Consolidated Statement of Income
Three and six months ended June 30, 2001 and 2000........... 4
Consolidated Statement of Cash Flows
Six months ended June 30, 2001 and 2000..................... 5
Consolidated Statement of Changes in Shareholders' Equity
Six months ended June 30, 2001 and 2000..................... 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) 2001 2000 2000
ASSETS:
Cash and due from banks 7,311 6,600 5,824
Federal funds sold 866 2,015 0
Interest bearing deposits in other banks 611 51 49
Total cash and cash equivalents 8,788 8,666 5,873
Investment securities, available for
sale (carried at market value) 20,554 26,622 28,592
Loans
Loans, net of unearned interest 214,935 191,181 204,672
Allowance for loan losses (1,729) (1,636) (1,671)
Net loans 213,206 189,545 203,001
Buildings and equipment 4,531 4,540 4,607
Other real estate 302 40 0
Interest receivable 1,707 1,833 1,886
Deferred income taxes 0 190 0
Other assets 2,991 1,818 3,268
Total Assets 252,133 235,074 247,227
LIABILITIES:
Deposits
Non-interest bearing demand 15,596 12,229 13,800
Interest bearing 181,577 163,816 172,560
Total Deposits 197,173 176,045 186,360
Federal Funds Purchased 0 0 2,765
Other Short Term Borrowings 0 5,000 2,500
Interest payable 1,324 814 964
Deferred income taxes 267 0 134
Other liabilities 869 911 935
Long-Term Borrowings 29,100 31,100 31,100
Total Liabilities 228,787 213,870 224,758
SHAREHOLDERS' EQUITY:
Common stock 200 200 200
Capital surplus 6,263 6,211 6,211
Retained earnings 17,617 16,350 17,048
Net unrealized gain (loss) on
investment securities 210 (582) (15)
Treasury stock at cost (53,867 shares ) (944) (975) (975)
Total Shareholders' Equity 23,346 21,204 22,469
Total Liabilities and
Shareholders' Equity 252,133 235,074 247,227
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) 2001 2000 2001 2000
________________________________________________________________________
INTEREST INCOME:
Loans and fees on loans 4,493 4,082 8,973 8,028
Investment securities:
Taxable 103 292 266 563
Non-taxable 197 125 380 242
Federal funds sold and
securities purchased under
agreements to resell 11 21 53 23
Deposits with banks 2 2 3 2
Other Interst Income 36 0 72 0
Total Interest Income 4,842 4,522 9,747 8,858
INTEREST EXPENSE:
Deposits 2,132 1,908 4,402 3,792
Other Short term Funds Borrowed 6 100 8 246
Long-term Borrowings 455 390 926 534
Total interest expense 2,593 2,398 5,336 4,572
Net interest income 2,249 2,124 4,411 4,286
Provision for loan losses 130 75 310 150
Net interest income after
provision for loan losses 2,119 2,049 4,101 4,136
NON-INTEREST INCOME:
Trust fees 122 172 295 345
Service charges on
deposit accounts 140 136 268 259
Securities gains (losses), net 0 (8) 0 (4)
Other Income 121 112 184 193
Total Non-interest Income 383 412 747 793
NON-INTEREST EXPENSE:
Salaries and employee benefits 973 962 1,997 1,887
Premise and equipment expense 265 175 531 523
FDIC Deposit expense 15 9 20 18
Other expenses 541 452 1,056 879
Total non-interest expense 1,794 1,598 3,604 3,307
Income before income taxes 708 863 1,244 1,622
Provision for income tax 239 265 406 549
Net Income 469 598 838 1,073
NET INCOME PER COMMON SHARE:
Primary .63 .80 1.12 1.44
Weighted average common shares
outstanding 747,100 745,028 747,100 745,028
DIVIDENDS DECLARED:
Cash dividends 0.18 0.15 0.36 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) 2001 2000
___________________________________________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 838 1,073
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH
PROVIDED FROM OPERATING ACTIVITIES:
Deferred Income Tax (14) 0
Depreciation 218 120
Net premium amortization (discount
accretion)
of investment securities 12 18
Provision of loan losses 310 150
Decrease(increase) in interest receivable 179 (369)
(Increase) decrease in other assets 277 (951)
Increase (decrease) in accrued expenses and
other liabilities 294 76
Net cash flows provided by operating
activities 2,114 117
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase of interest bearing deposits
in other banks 0 (33)
Purchase investment held to maturity 0 (600)
Purchase of investment securities available
for sale (1,959) (3,367)
Proceeds from maturities and paydowns of
investment securities available for sale 10,357 1,563
Proceeds Sale of Loans 722 0
Net (increase) decrease in loans (11,539) (16,243)
Purchase of premises and equipment (142) (138)
Net cash flows used in investing
activities (2,501) (18,818)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits and
short-term borrowings and Fed Funds Purchased
Non-interest bearing demand 1,796 (9,873)
Total interest-bearing deposits 9,017 4,642
Other Short-Term Borrowings and Fed
Funds Purchased (5,266) 0
Long-Term Borrowings (2,000) 22,000
Cash dividends paid (267) (268)
Treasury Stock Sold 82 138
Treasure Stock Purchased 0 (70)
Net cash flows provided by (used in)
financing activities 3,362 16,569
Net increase in cash equivalents 2,915 (2,132)
Cash and cash equivalents at beginning of
period 5,873 10,747
Cash and cash equivalents at end of period 8,788 8,615
Total interest paid 4,976 4,542
Total taxes paid 539 850
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) 2001 2000
______________________________________________________________________________
Balance, beginning of period 22,469 20,369
Net income 838 1,073
Cash dividends (267) (268)
Net unrealized gain (loss) on investment
securities 224 (38)
Sale of Treasury Stock 82 138
Purchase of Treasury stock 0 (70)
Balance, end of period 23,346 21,204
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, 2001 is not necessarily
indicative of those expected for the remainder of the year.
June 30,2001 June 30, 2000 Dec. 31, 2000
______________________________________________________________________________
INVESTMENT SECURITIES:
U.S. treasury securities 0 0 0
U.S. Government corporations
& agencies 5,072 14,460 14,923
States and political subdivisions 14,535 11,251 12,742
Mortgage - backed securities 73 79 75
Other domestic securities 874 832 852
Equity Securities 50 1,805 0
Total Investment Securities 20,604 28,427 28,592
June 30, 2001 June 30, 2000 Dec. 31, 2000
______________________________________________________________________________
LOANS:
Commercial and industrial loans 43,583 37,367 40,868
Real estate loans 111,970 94,803 103,100
Construction loans 17,220 15,990 17,173
Agricultural production financing
and other loans to farmers 2,559 2,220 1,751
Individual loans for household
and other personal expense 38,474 40,209 41,319
Economic development revenue bonds 258 0 0
Lease Financing Receivable 692 334 585
Other Loans Excluding Consumer 282 397 0
Less: Unearned income on loans (103) (139) (124)
Total Loans 214,935 191,181 204,672
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 $838,000 represents a decrease of
$235,000 or 22% from the $1,073,000 reported for the same period last year. The
second quarter earnings of $469,000 represents a decrease of $129,000 from the
$598,000 reported for the second quarter of 2000. The reduced income in 2001
is a direct result of Reserve for Bad Debts allocations to covered charge-offs
and future considerations. As well as, increased overhead expenses for
personnel expenses for additional staffing.
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 2001, net
interest income increased by $125,000 or 3% for the same period in 2000. The
second quarter net interest income for 2001 increased by $125,000 or 6%
compared to the second quarter of 2000. 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 $747,000 for the first two quarters of 2001 is $46,000 or 6%
less than the same period for 2000. The decrease is due to the reduction of
trust income due to the loss of a large trust account. 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 2001 other expenses increased by $297,000 or 9%
compared to the same period of 2000. The three months ended June 30, 2001
total other expense increase was $196,000 or 12% over that same period for
2000. This increase is due to additional staffing of departments and
upgrades in electronic banking services.
ANALYSIS OF FINANCIAL CONDITION
ALLOWANCE FOR POSSIBLE LOAN LOSSES
The Corporation's allowance for loan losses was $1,729,000 at June 30, 2001
compared to $1,636,000 at June 30, 2000 and $1,671,000 as of December 31,
2000.
At June 30, 2001 the allowance for possible loan losses was .81% of total
loans, net for unearned interest. This compares to an allowance of .88%
at June 30, 2000. Net charge offs for the first six months of 2001
were $252,000 compared to $142,000 for the same period last year. Management
reviews the loan portfolio and assess the risk and believes that the allowance
of $1,729,000 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 60% of rate-sensitive of
liabilities in the 1-180 day maturity category and 76% 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, 2001 was $23,346,000 compared to
$21,204,000 for the same period last year. The shareholder's equity has
increased by $2,142,000 or 10% from June 30, 2000 to June 30, 2001. This
increase is attributed to profits and securities appreciation.
(ANALYSIS OF FINANCIAL CONDITIONS CONTINUED)
As of June 30, 2001 the bank's leverage capital ratio was 9.31% which
compared to 8.37% at June 30, 2000.
As of June 30, 2001 the bank's total risk-based capital ratio was 13.17%
compared to 12.01% at June 30, 2000.
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 15, 2001.
(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 2000 annual meeting of shareholders. A
total of 251,502 shares were voted in person and 366,351 shares
voted by proxy. This totals 617,853 shares voted in approval of
the 747,100 shares outstanding.
Item 5 - OTHER INFORMATION
The company has agreed to purchase approximately 19% of its
outstanding common stock from a related party shareholder at $40 per
share (total price approximately 5,960,000. The decision to purchase
this stock is contingent on the approval of various regulatory
agencies. The purchase of the stock will not result in capital ratios
which are less than well capitalized.
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 8, 2001