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, 1997
_____ 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, 1997. 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, 1997 and 1996 and December 31, 1996............... 3
Consolidated Statement of Income
Three months ended March 31, 1997 and 1996.................. 4
Consolidated Statement of Cash Flows
Three months ended March 31, 1997 and 1996................. 5
Consolidated Statement of Changes in Shareholders' Equity
Three months ended March 31, 1997 and 1996.................. 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) 1997 1996 1996
_____________________________________________________________________________
ASSETS:
Cash and due from banks 5,324,236 4,258,785 5,029,136
Federal funds sold 5,300,000 5,110,000 0
Total cash and cash equivalents 10,624,236 9,368,785 5,029,136
Interest bearing deposits in other banks 0 0 0
Investment securities, available for
sale (carried at market value) 47,385,187 55,542,430 50,512,660
Loans
Loans, net of unearned interest 125,780,780 113,269,481 122,859,789
Allowance for loan losses (1,356,853) (1,364,025) (1,329,295)
Net loans 124,423,927 111,905,456 121,530,494
Buildings and equipment 4,997,681 5,007,799 5,040,585
Other real estate 15,750 385,415 53,200
Interest receivable 1,267,977 1,480,596 1,357,380
Deferred income taxes 0 41,183 0
Other assets 933,721 1,099,471 838,639
Total Assets 189,648,479 184,831,135 184,362,094
Liabilities:
Deposits
Non-interest bearing demand 11,963,814 12,821,800 12,554,733
Interest bearing 158,853,846 154,036,865 139,040,316
Total Deposits 170,817,630 166,858,665 151,595,049
Federal Funds Purchased 0 0 8,870,000
Other Short Term Borrowings 0 0 5,000,000
Interest payable 753,831 782,528 750,028
Deferred income taxes 74,829 292,820 241,324
Other liabilities 606,654 481,307 576,177
Total Liabilities 172,252,944 1,556,655 167,032,578
SHAREHOLDERS' EQUITY:
Common stock 200,000 200,000 200,000
Capital surplus 6,094,233 6,094,233 6,094,233
Retained earnings 12,301,657 10,997,370 11,981,683
Net unrealized gain (loss) on
investment securities (387,355) (62,788) (133,400)
Treasury stock at cost (27,100 shares) (813,000) (813,000) (813,000)
Total Shareholders' Equity 17,395,535 16,415,815 17,329,516
Total Liabilities and
Shareholders' Equity 189,648,479 184,831,135 184,362,094
The accompanying notes are an integral part of this statement.
SVB&T CORPORATION CONSOLIDATED STATEMENT OF INCOME
Three Months Ended March 31,
(unaudited) 1997 1996
____________________________________________________________________________
INTEREST INCOME:
Loans and fees on loans 2,674,388 2,484,705
Investment securities:
Taxable 648,275 731,654
Non-taxable 104,811 135,769
Federal funds sold and securities
purchased under agreements to resell 59,504 151,790
Deposits with banks 0 0
Total Interest Income 3,486,978 3,503,918
INTEREST EXPENSE:
Deposits 1,797,120 1,923,168
Other Short Term Funds Borrowed 35,417 0
Long-term debt 0 0
Total interest expense 1,832,537 1,923,168
Net interest income 1,654,441 1,580,750
Provision for loan losses 90,000 75,000
Net interest income after
provision for loan losses 1,564,441 1,505,750
NON-INTEREST INCOME:
Trust fees 165,000 153,978
Service charges on deposit accounts 112,106 73,423
Insurance and claims processing 49,911 42,401
Securities gains (losses), net 3,118 0
Other Income 61,699 54,507
Total Non-interest Income 391,833 324,309
NON-INTEREST EXPENSE:
Salaries and employee benefits 800,382 784,389
Premise and equipment expense 312,530 262,134
Other real estate expense 10,645 4,987
FDIC Deposit expense 3,693 500
Telephone expense 32,129 27,412
Postage expense 29,652 34,894
Other expenses 213,774 195,584
Total non-interest expense 1,402,805 1,309,900
Income before income taxes 553,469 520,159
Provision for income tax 144,000 112,000
Net Income 409,469 408,159
NET INCOME PER COMMON SHARE:
Primary 1.09 1.09
Weighted average common shares
outstanding 372,900 372,900
DIVIDENDS DECLARED:
Cash dividends 0.24 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) 1997 1996
____________________________________________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 409,469 408,159
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH
PROVIDED FROM OPERATING ACTIVITIES:
Depreciation 98,845 104,940
Net premium amortization (discount accretion)
of investment securities (588) (10,137)
Provision of loan losses 90,000 75,000
Decrease(increase) in interest receivable 89,403 56,774
(Increase) decrease in other assets (57,632) 170,978
Increase (decrease) in accrued expenses and
other liabilities 34,280 (41,798)
Net cash flows provided by operating
activities 663,777 763,916
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase of interest bearing deposits
in other banks 0 0
Purchase of investment securities available
for sale (443,000) 2,603,725
Proceeds from maturities and paydowns of
investment securities available for sale 3,150,611 3,518,799
Net (increase) decrease in loans (2,983,433) (920,586)
Purchase of premises and equipment (55,941) (35,599)
Net cash flows used in investing
activities (331,763) (41,111)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits and
short-term borrowings
Non-interest bearing demand (590,919) 320,035
Total interest-bearing deposits 19,813,500 (5,225,946)
Federal Funds Purchased 0 (8,870,000)
Other Short-Term Borrowings 0 (5,000,000)
Cash dividends paid (89,495) (85,767)
Net cash flows provided by (used in)
financing activities 5,263,086 (4,991,678)
Net decrease in cash equivalents 5,595,100 (4,268,873)
Cash and cash equivalents at beginning of
period 5,029,136 13,637,658
Cash and cash equivalents at end of period 10,624,236 9,368,785
Total interest paid 1,832,537 1,950,831
Total taxes paid 85,260 57,298
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) 1997 1996
__________________________________________________________________________
Balance, beginning of period 17,329,516 16,372,127
Net income 409,469 408,159
Cash dividends (89,495) (85,767)
Net unrealized gain (loss) on investment
securities (253,955) (278,704)
Balance, end of period 17,395,535 16,415,815
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, 1997 is not necessarily indicative of
those expected for the remainder of the year.
March 31, 1997 March 31, 1996 Dec. 31, 1996
_____________________________________________________________________________
INVESTMENT SECURITIES:
U.S. treasury securities 0 0 0
U.S. Government corporations
& agencies 37,062,180 42,581,552 39,468,326
States and political subdivisions 8,893,478 12,062,872 9,610,273
Mortgage - backed securities 362,129 398,006 366,661
Other domestic securities 500,000 500,000 500,000
Equity Securities 567,400 0 567,400
Total Investment Securities 47,385,187 55,542,430 50,512,600
March 31, 1997 March 31, 1996 Dec. 31, 1996
_____________________________________________________________________________
LOANS:
Commercial and industrial loans 16,310,224 14,423,264 15,133,405
Real estate loans 69,456,522 63,229,021 67,859,219
Construction loans 204,845 49,123 64,737
Agricultural production financing
and other loans to farmers 912,694 604,884 1,094,039
Individual loans for household
and other personal expense 38,093,478 35,263,691 38,451,555
Economic development revenue bonds 12,330 0 23,909
Lease Financing Receivable 510,581 0 538,007
Other Loans Excluding Consumer 461,269 0 0
Less: Unearned income on loans 172,162 300,502 305,082
Total Loans 125,780,780 113,269,481 122,859,789
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 $409,469 represents an increase of
$1,310.00 or .3% from the $408,159 reported for the same period last year.
This resulted from continued increase in the net interest income.
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 1997, net interest income increased by $73,691 or 5% for the
same period in 1996. The net interest margin increase compared to the same
period last was primarily a result of average interest cost leveling off.
Rates of return on loans and investments have increased. The loan volume has
increased $12,511,299 comparing 1997 to 1996. Loan yields are higher than
investment yields which increase the net interest income.
OTHER INCOME
Other income of $391,833 for the first quarter of 1997 is $67,524 or 21%
higher than the same period for 1996. This difference is due to the increase
in the service changes on deposit accounts and Trust Fee Income.
OTHER EXPENSES
For the first three months of 1997, other expenses increased by $92,905 or 7%
compared to the same period of 1996. This increase is principally the
effects of employee benefit programs and premise and equipment costs.
ANALYSIS OF FINANCIAL CONDITION
ALLOWANCE FOR POSSIBLE LOAN LOSSES
The Corporation's allowance for loan losses was $1,356,853 at March 31, 1997
compared to $1,364,025 at March 31, 1996. The decrease reflects improved
loan quality.
At March 31, 1997 the allowance for possible loan losses was 1.08% of total
loans, net for unearned interest. This compares to an allowance of 1.19%
at March 31, 1996. Net charge offs for the first three months of 1997 were
$62,000, compared to $60,000 for the same period last year. Based on
management's review of the portfolio, management believes the allowance of
$1,356,853 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, 1997 the rate-sensitive assets were 60% of rate-sensitive
liabilities in the 1-180 day maturity category and 81% 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, 1997 was $17,395,535 compared to
$16,415,815 for the same period last year. This increase is attributed to
the increase in Net Income for 1996 with some reduction due to the net
unrealized loss on investment securities.
(ANALYSIS OF FINANCIAL CONDITIONS CONTINUED)
As of March 31, 1997 the bank's leverage capital ratio was 9.01% which
compared to 8.12% at March 31, 1996.
As of March 31, 1997 the bank's total risk-based capital ratio was 15.82%
compared to 15.91% at March 31, 1996.
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, 1997