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, 1998
_____ 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 748,187 shares outstanding at March 31, 1998. The
Registrant holds 51,813 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, 1998 and 1997 and December 31, 1997............... 3
Consolidated Statement of Income
Three months ended March 31, 1998 and 1997.................. 4
Consolidated Statement of Cash Flows
Three months ended March 31, 1998 and 1997................. 5
Consolidated Statement of Changes in Shareholders' Equity
Three months ended March 31, 1998 and 1997.................. 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) 1998 1997 1997
____________________________________________________________________________
ASSETS:
Cash and due from banks 4,446 5,324 4,474
Federal funds sold 4,055 5,300 900
Total cash and cash equivalents 8,501 10,624 5,374
Interest bearing deposits in other banks 78 0 94
Investment securities, available for
sale (carried at market value) 33,433 47,385 38,621
Loans
Loans, net of unearned interest 140,570 125,781 140,604
Allowance for loan losses (1,463) (1,357) (1,402)
Net loans 139,107 124,424 139,202
Buildings and equipment 4,979 4,998 5,033
Other real estate 0 16 0
Interest receivable 1,286 1,268 1,139
Deferred income taxes 0 0 0
Other assets 770 934 761
Total Assets 188,154 189,649 190,404
Liabilities:
Deposits
Non-interest bearing demand 10,592 11,964 13,293
Interest bearing 156,549 158,854 152,579
Total Deposits 167,141 170,818 165,872
Federal Funds Purchased 0 0 0
Other Short Term Borrowings 0 0 4,000
Interest payable 824 754 824
Deferred income taxes 342 75 305
Other liabilities 566 606 688
Total Liabilities 168,873 172,253 171,689
SHAREHOLDERS' EQUITY:
Common stock 200 200 200
Capital surplus 6,124 6,094 6,094
Retained earnings 13,718 12,302 13,274
Net unrealized gain (loss) on
investment securities 16 (387) (40)
Treasury stock at cost (51,813 shares) (777) (813) (813)
Total Shareholders' Equity 19,281 17,396 18,715
Total Liabilities and
Shareholders' Equity 188,154 189,649 190,404
(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) 1998 1997
____________________________________________________________________________
INTEREST INCOME:
Loans and fees on loans 3,101 2,674
Investment securities:
Taxable 453 648
Non-taxable 95 105
Federal funds sold and securities
purchased under agreements to resell 23 60
Deposits with banks 0 0
Total Interest Income 3,672 3,487
INTEREST EXPENSE:
Deposits 1,867 1,797
Other Short Term Funds Borrowed 14 35
Total interest expense 1,881 1,832
Net interest income 1,791 1,655
Provision for loan losses 120 90
Net interest income after
provision for loan losses 1,671 1,565
NON-INTEREST INCOME:
Trust fees 189 165
Service charges on deposit accounts 132 112
Insurance and claims processing 48 50
Securities gains (losses), net 0 3
Other Income 46 62
Total Non-interest Income 415 392
NON-INTEREST EXPENSE:
Salaries and employee benefits 804 800
Premise and equipment expense 319 313
Other real estate expense 0 11
FDIC Deposit expense 5 4
Telephone expense 33 32
Postage expense 33 30
Other expenses 203 214
Total non-interest expense 1,397 1,404
Income before income taxes 689 553
Provision for income tax 245 144
Net Income 444 409
NET INCOME PER COMMON SHARE:
Primary .59 .55
Weighted average common shares
outstanding 748,187 745,800
DIVIDENDS DECLARED:
Cash dividends 0.15 0.12
(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) 1998 1997
____________________________________________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 444 410
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH
PROVIDED FROM OPERATING ACTIVITIES:
Directors Stock Option Compensation 5 0
Depreciation 95 99
Net premium amortization (discount accretion)
of investment securities 5 0
Provision of loan losses 120 90
Decrease(increase) in interest receivable 33 89
(Increase) decrease in other assets (9) (58)
Increase (decrease) in accrued expenses and
other liabilities (122) 34
Net cash flows provided by operating
activities 571 664
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase of interest bearing deposits
in other banks 16 0
Purchase of investment securities available
for sale (4,541) (443)
Proceeds from maturities and paydowns of
investment securities available for sale 9,817 3,151
Net (increase) decrease in loans (25) (2,984)
Purchase of premises and equipment (41) (56)
Net cash flows used in investing
activities 5,226 (332)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits and
short-term borrowings
Non-interest bearing demand (2,701) (591)
Total interest-bearing deposits 3,970 19,813
Federal Funds Purchased 0 (8,870)
Other Short-Term Borrowings (4,000) (5,000)
Cash dividends paid 0 (89)
Treasury Stock Sold 61 0
Net cash flows provided by (used in)
financing activities (2,670) 5,263
Net increase (decrease) in cash equivalents 3,127 5,595
Cash and cash equivalents at beginning of
period 5,374 5,029
Cash and cash equivalents at end of period 8,501 10,624
Total interest paid 1,881 1,833
Total taxes paid 152 85
(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) 1998 1997
__________________________________________________________________________
Balance, beginning of period 18,715 17,330
Net income 444 409
Cash dividends 0 (89)
Net unrealized gain (loss) on investment
securities 56 (254)
Sales of Treasury Stock 66 0
Balance, end of period 19,281 17,396
(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, 1998 is not necessarily indicative of
those expected for the remainder of the year.
March 31, 1998 March 31, 1997 Dec. 31, 1997
_____________________________________________________________________________
INVESTMENT SECURITIES:
U.S. treasury securities 0 0 0
U.S. Government corporations
& agencies 23,604 37,062 28,395
States and political subdivisions 8,553 8,893 8,837
Mortgage - backed securities 306 362 311
Other domestic securities 392 500 500
Equity Securities 578 567 578
Total Investment Securities 33,433 47,384 38,621
March 31, 1998 March 31, 1997 Dec. 31, 1997
_____________________________________________________________________________
LOANS:
Commercial and industrial loans 16,598 16,301 17,636
Real estate loans 79,136 69,457 79,491
Construction loans 1,450 205 1,322
Agricultural production financing
and other loans to farmers 1,212 913 1,086
Individual loans for household
and other personal expense 41,450 38,093 40,859
Economic development revenue bonds 0 12 0
Lease Financing Receivable 410 511 437
Other Loans Excluding Consumer 457 461 0
Less: Unearned income on loans 143 172 227
Total Loans 140,570 125,781 140,604
(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 $444,000 represents an increase of
$35,000 or 9% from the $409,000 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 1998, net interest income increased by $136,000 or 8% for the
same period in 1997. The net interest margin increase compared to the same
period last year was primarily a result of average interest cost leveling
off. Rates of return on loans and investments have increased. The loan
volume has increased $14,789,000 comparing 1998 to 1997. Loan yields are
higher than investment yields which increase the net interest income.
OTHER INCOME
Other income of $415,000 for the first quarter of 1998 is $23,000 or 6%
higher than the same period for 1997. 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 1998, other expenses decreased by $7,000 to
$1,397,000 compared to $1,404,000 for the same period of 1997. This is due
to a continuing program to reduce overhead expenses.
ANALYSIS OF FINANCIAL CONDITION
ALLOWANCE FOR POSSIBLE LOAN LOSSES
The Corporation's allowance for loan losses was $1,463,000 at March 31, 1998
compared to $1,357,000 at March 31, 1997. This reflects improved loan
quality.
At March 31, 1998 the allowance for possible loan losses was 1.04% of total
loans, net for unearned interest. This compares to an allowance of 1.08%
at March 31, 1997. Net charge offs for the first three months of 1998 were
$60,000, compared to $62,000 for the same period last year. Based on
management's review of the portfolio, management believes the allowance of
$1,463,000 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 March 31, 1998 the rate-sensitive assets were 64% of rate-sensitive
liabilities in the 1-180 day maturity category and 82% 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, 1998 was $19,281,000 compared to
$17,396,000 for the same period last year. This increase is attributed to
the increase in Net Income for 1997 and the reduction of the net unrealized
loss on investment securities.
(ANALYSIS OF FINANCIAL CONDITIONS CONTINUED)
As of March 31, 1998 the bank's leverage capital ratio was 9.70% which
compared to 9.01% at March 31, 1997.
As of March 31, 1998 the bank's total risk-based capital ratio was 14.56%
compared to 15.82% at March 31, 1997.
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, 1998