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, 2002
_____ 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 602,505 shares outstanding at May 10, 2002. The
Registrant holds 197,495 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, 2002 and 2001 and December 31, 2001............... 3
Consolidated Statement of Income
Three months ended March 31, 2002 and 2001.................. 4
Consolidated Statement of Cash Flows
Three months ended March 31, 2002 and 2001................. 5
Consolidated Statement of Changes in Shareholders' Equity
Three months ended March 31, 2002 and 2001.................. 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) 2002 2001 2001
____________________________________________________________________________
ASSETS:
Cash and due from banks 3,059 4,338 4,811
Federal funds sold 6,145 4,240 0
Interest bearing deposits in other banks 1,152 52 40
Total cash and cash equivalents 10,356 8,630 4,851
Investment securities, available for
sale (carried at market value) 26,268 23,741 20,072
Loans, held for resale 3,095 0 2,359
Loans, net of unearned interest 197,691 207,155 205,804
Allowance for loan losses (2,123) (1,679) (2,097)
Net loans 195,568 205,476 203,707
Buildings and equipment 4,264 4,538 4,282
Other real estate 659 337 397
Interest receivable 1,396 1,626 1,500
Deferred income taxes 258 0 279
Other assets 3,256 3,032 3,003
Total Assets 245,120 247,380 240,450
Liabilities:
Deposits
Non-interest bearing demand 10,793 12,832 10,969
Interest bearing 173,571 180,087 170,770
Total Deposits 184,364 192,919 181,739
Federal Funds Purchased 0 0 4,100
Interest payable 1,209 1,125 1,006
Deferred income taxes 0 299 0
Other liabilities 1,031 898 852
Long-Term Borrowings 40,400 29,100 29,100
Total Liabilities 227,004 224,341 216,797
SHAREHOLDERS' EQUITY:
Common stock 200 200 200
Capital surplus 6,309 6,263 6,253
Retained earnings 18,386 17,282 18,107
Net unrealized gain (loss) on
investment securities 156 238 123
Treasury stock at cost (197,495 shares) (6,935) (944) (1,030)
Total Shareholders' Equity 18,116 23,039 23,653
Total Liabilities and
Shareholders' Equity 245,120 247,380 240,450
(Dollar amounts in thousands)
The accompanying notes are an integral part of this statement.
SVB&T CORPORATION CONSOLIDATED STATEMENT OF INCOME
Three Months Ended March 31,
(unaudited) 2002 2001
____________________________________________________________________________
INTEREST INCOME:
Loans and fees on loans 3,650 4,480
Investment securities:
Taxable 103 199
Non-taxable 205 183
Federal funds sold and securities
purchased under agreements to resell 25 42
Deposits with banks 2 1
Total Interest Income 3,985 4,905
INTEREST EXPENSE:
Deposits 1,453 2,270
Other Short Term Funds Borrowed 0 2
Long-Term Borrowings 550 471
Total interest expense 2,003 2,743
Net interest income 1,982 2,162
Provision for loan losses 70 180
Net interest income after
provision for loan losses 1,912 1,982
NON-INTEREST INCOME:
Trust fees 98 173
Service charges on deposit accounts 125 128
Insurance and claims processing 47 55
Securities gains (losses), net 0 0
Other Income 144 8
Total Non-interest Income 414 364
NON-INTEREST EXPENSE:
Salaries and employee benefits 1,013 1,024
Premise and equipment expense 314 266
FDIC Deposit expense 11 5
Other expenses 403 515
Total non-interest expense 1,741 1,810
Income before income taxes 585 536
Provision for income tax 198 167
Net Income 387 369
NET INCOME PER COMMON SHARE:
Primary .64 .49
Weighted average common shares
outstanding 602,505 747,100
DIVIDENDS DECLARED:
Cash dividends 0.15 0.15
(Dollars amounts in thousands)
The accompanying notes are an integral part of this statement.
SVB&T CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS
Three Months Ended March 31,
(unaudited) 2002 2001
____________________________________________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 387 369
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH
PROVIDED FROM OPERATING ACTIVITIES:
Depreciation 105 94
Net premium amortization (discount accretion)
of investment securities 11 4
Provision of loan losses 70 180
Proceeds from sale of loans 4,465 0
Decrease(increase) in interest receivable 104 260
(Increase) decrease in other assets (515) (153)
Increase (decrease) in accrued expenses and
other liabilities 382 124
Net cash flows provided by operating
activities 5,009 878
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment securities available
for sale (6,489) (1,868)
Proceeds from maturities and paydowns of
investment securities available for sale 337 7,184
Net (increase) decrease in loans 2,868 (2,655)
Purchase of premises and equipment (87) (24)
Net cash flows used in investing
activities (3,371) 2,637
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits
Non-interest bearing demand 2,801 (968)
Interest-bearing deposits (176) 7,527
Federal Funds Purchased (4,100) (2,765)
Other Short-Term Borrowings 0 (2,500)
Long-Term Borrowings 11,300 (2,000)
Cash dividends paid (108) (134)
Treasury Stock Sold 92 82
Treasury Stock Purchased (5,942) 0
Net cash flows provided by (used in)
financing activities 3,867 (758)
Net increase (decrease) in cash equivalents 5,505 2,757
Cash and cash equivalents at beginning of
period 4,851 5,873
Cash and cash equivalents at end of period 10,356 8,630
Total interest paid 1,800 2,904
Total taxes paid 112 273
(Dollars amounts in thousands)
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) 2002 2001
__________________________________________________________________________
Balance, beginning of period 23,653 22,469
Net income 387 369
Cash dividends (108) (133)
Net unrealized gain (loss) on investment
securities 34 252
Sales of Treasury Stock 92 82
Purchase of Treasury Stock (5,942) 0
Balance, end of period 18,116 23,039
(Dollar amounts in thousands)
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, 2002 is not necessarily indicative of those
expected for the remainder of the year.
March 31, 2002 March 31, 2001 Dec. 31, 2001
_____________________________________________________________________________
INVESTMENT SECURITIES:
U.S. treasury securities 0 0 0
U.S. Government corporations
& agencies 9,005 8,197 4,089
States and political subdivisions 17,193 14,550 15,912
Mortgage - backed securities 70 75 71
Other domestic securities 0 869 0
Equity Securities 0 50 0
Total Investment Securities 26,268 23,741 20,072
March 31, 2002 March 31, 2001 Dec. 31, 2001
_____________________________________________________________________________
LOANS:
Commercial and industrial loans 44,349 41,850 44,632
Real estate loans 105,963 105,460 107,283
Construction loans 13,704 17,323 14,727
Agricultural production financing
and other loans to farmers 2,549 2,190 2,580
Individual loans for household
and other personal expense 29,852 39,381 36,312
Economic development revenue bonds 0 259 0
Lease Financing Receivable 488 718 631
Other Loans Excluding Consumer 3,962 53 2,083
Less: Unearned income on loans 81 119 85
Total Loans 200,786 207,115 208,163
(Dollars amounts in thousands)
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 $387,000 represents a increase of
$18,000 or 5% from the $369,000 reported for the same period last year.
This increase resulted from a decrease in the provision for bad debts, offset by
an increase in interest expense due to the additional borrowings by the Holding
Company to purchase treasury stock.
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 2002, net interest income of 1,982,000, decreased $180,000
compared to first quarter in 2001. The decreasing interest rates have shrunk
the interest margins due to earning assets repricing more frequently than
interest-bearing deposits. Additional borrowings by the Holding Company have
increased interest expense.
OTHER INCOME
Other income of $414,000 for the first quarter of 2002 is $50,000 or 14% more
than the same period for 2001. Several fixed rate mortgage loans have been sold
for a gain and servicing rights have been retained. This income more than makes
up for the reduction in trust income due to the loss of a large trust customer.
OTHER EXPENSES
For the first three months of 2002, other expenses decreased by $69,000 to
$1,741,000 compared to $1,810,000 for the same period of 2001. This is due to
a reduction in employee benefits and an overall expense reduction effort by
all departments within the Bank.
ANALYSIS OF FINANCIAL CONDITION
ALLOWANCE FOR POSSIBLE LOAN LOSSES
The Corporation's allowance for loan losses is $2,123,000 at March 31, 2002
compared to $1,679,000 at March 31, 2001.
At March 31, 2002 the allowance for possible loan losses was 1.06% of total
loans, net for unearned interest. This compares to an allowance of .86%
at March 31, 2001. Net charge offs for the first three months of 2002 were
$44,000, compared to $172,000 for the same period last year. Based on
management's review of the portfolio, management believes the allowance of
$2,123,000 is adequate.
LIQUIDITY AND ASSET/LIABILITY MANAGEMENT
The Corporation's objective in liquidity management is to meet the needs of
borrowers while allowing for the possibility of deposit withdrawals; 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, 2002 the rate-sensitive assets were 71% of rate-sensitive
liabilities in the 1-180 day maturity category and 91% 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, 2002 was $18,116,000 compared to
$23,039,000 for the same period last year. This decrease is attributed to the
purchase of 144,920 shares of Holding Company Stock which is being held as
Treasury Stock. After this transaction, the bank and Holding Company remain
highly capitalized.
(ANALYSIS OF FINANCIAL CONDITIONS CONTINUED)
As of March 31, 2002 the corporation's leverage capital ratio was 7.33% which
compared to 8.63% at March 31, 2001.
As of March 31, 2002 the corporation's total risk-based capital ratio was
11.28% compared to 12.44% at March 31, 2001.
These ratios are in excess of regulatory requirements of 4% for leverage
capital and 8% for total 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 12, 2002