Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended March 31, 1997 Commission File Number: 0-19212
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JEFFERSONVILLE BANCORP
(Exact name of Registrant as specified in its charter)
New York 22-2385448
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(State or other jurisdiction of (I.R.S. Employer identification No.)
incorporation or organization)
P. O. Box 398, Jeffersonville, New York 12748
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 482-4000
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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 proceeding 12 months (or for such shorter period that the Registrant was
required to file such report(s), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
- --- - --
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date:
Number of Shares Outstanding
Class of Common Stock as of April 17, 1997
- --------------------- --------------------
$0.50 par value 1,182,727
INDEX TO FORM 10-Q
Page
Part 1
Item 1 Consolidated Interim Financial Statements (Unaudited)
Consolidated Balance Sheets at
March 31, 1997 and December 31, 1996 1
Consolidated Statements of Income for the Three
Months ended March 31, 1997 and 1996 2
Consolidated Statements of Cash Flows for the Three
Months ended March 31, 1997 and 1996 3-4
Notes to Consolidated Interim Financial Statements 5
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-8
Part 2
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 on Form 8-K NONE
Signatures 9
Jeffersonville Bancorp
Consolidated Balance Sheets
March 31, December 31,
1997 1996
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(Unaudited)
ASSETS
Cash and due from banks $ 6,342,000 $ 4,723,000
Federal funds sold 0 1,300,000
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CASH AND CASH EQUIVALENTS 6,342,000 6,023,000
----------------- -----------------
Securities available for sale,
at fair value 71,868,000 64,842,000
Investment securities, estimated fair
value of $3,518,000
in 1997 and $3,518,000 in 1996 3,603,000 3,401,000
Loans, less allowance for loan
losses of $1,700,000
in 1997 and $1,711,000 in 1996 119,525,000 115,605,000
Accrued interest receivable 1,455,000 1,168,000
Federal Home Loan Bank stock 753,000 717,000
Premises and equipment 2,597,000 2,602,000
Other real estate owned 893,000 831,000
Other assets 1,259,000 924,000
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----------------- -----------------
TOTAL ASSETS $ 208,295,000 $ 196,113,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Demand deposits
(non-interest bearing) $ 23,006,000 $ 22,044,000
Now and super now deposits 27,216,000 26,541,000
Savings and insured
money market deposits 50,584,000 53,665,000
Time deposits 76,445,000 70,680,000
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TOTAL DEPOSITS 177,251,000 172,930,000
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Short- term debt 3,438,000 529,000
Federal Home Loan Bank advance 5,000,000 0
Accrued expenses and other liabilities 1,553,000 1,679,000
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TOTAL LIABILITIES 187,242,000 175,138,000
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Stockholders' equity:
Series A preferred stock:
no par value:
2,000,000 shares authorized,
none issued: -
Common stock; $.50 par value;
2,225,000 shares authorized;
1,234,711 shares issued and
1,182,727 shares outstanding 617,000 617,000
Paid-in capital 447,000 447,000
Treasury stock, 51,984 shares (206,000) (206,000)
Undivided profits 20,296,000 19,795,000
Net unrealized gain (loss) on
securities available for
sale, net of tax (101,000) 322,000
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TOTAL STOCKHOLDERS' EQUITY 21,053,000 20,975,000
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 208,295,000 $ 196,113,000
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-------------------- -------------------
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See accompanying notes to consolidated interim financial statements
Jeffersonville Bancorp
Consolidated Statements of Income
For the Three Months
Ended March 31,
1997 1996
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(Unaudited) (Unaudited)
INTEREST INCOME
Loan interest and fees $ 2,683,000 $ 2,558,000
Federal funds sold 28,000 53,000
Investment securities and securities
available for sale
Taxable 640,000 658,000
Non-taxable 398,000 388,000
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TOTAL INTEREST INCOME 3,749,000 3,657,000
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INTEREST EXPENSE
Deposits 1,581,000 1,510,000
Federal funds purchased and
other short-term debt 6,000 3,000
Federal Home Loan Bank advance 23,000 23,000
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TOTAL INTEREST EXPENSE 1,610,000 1,536,000
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NET INTEREST INCOME 2,139,000 2,121,000
Provision for loan losses (90,000) 0
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NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,049,000 2,121,000
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OPERATING INCOME
Service charges 171,000 163,000
Other non-interest income 94,000 57,000
265,000 220,000
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Salaries and wages 676,000 658,000
Employee benefits 197,000 190,000
Occupancy and equipment expenses 291,000 223,000
Other real estate owned expense, net 103,000 54,000
Other operating expense 425,000 393,000
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1,692,000 1,518,000
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Income before income taxes 622,000 823,000
Income taxes (121,000) (201,000)
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NET INCOME $ 501,000 $ 622,000
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Net income per share 0.42 $ 0.51
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Shares outstanding 1,182,746 1,226,441
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See accompanying notes to consolidated interim financial statements
Jeffersonville Bancorp
Statements of Cash Flows
Three months ending March 31
1997 1996
OPERATING ACTIVITIES (Unaudited) (Unaudited)
Net income $ 501,000 $ 622,000
Adjustments to reconcile net income
to net cash provided by operating activities:
Write down of other real estate owned 54,000 12,000
Provision for loan losses 90,000 -
Depreciation and amortization 88,000 75,000
Loss on sale of securities available
for sale , net 4,000 -
Increase in accrued interest receivable (287,000) (279,000)
Decrease in other assets (44,000) (12,000)
Increase (decrease) in accrued expenses
and other liabilities (126,000) 224,000
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TOTAL ADJUSTMENTS (221,000) 20,000
NET CASH PROVIDED BY
OPERATING ACTIVITIES 280,000 642,000
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INVESTING ACTIVITIES
Proceeds from maturity and calls of securities
available for sale 1,836,000 5,323,000
Proceeds from sales of securities
available for sale - -
Purchase of securities available for sale (9,580,000) (16,421,000)
Purchase of Federal Home Loan Bank stock (36,000)
Proceeds from maturity and calls of investment
securities 197,000 180,000
Purchase of investment securities (399,000) (173,000)
Net increase in loans (4,126,000) (1,206,000)
Purchases of premises and equipment (83,000) (75,000)
Cash proceeds from sale of other real estate owned 0 94,000
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NET CASH USED BY INVESTING ACTIVITIES (12,191,000) (12,278,000)
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FINANCING ACTIVITIES
Net increase in deposits accounts 4,321,000 3,696,000
Increase in short-term debt 2,909,000 3,776,000
Purchase and retirement of common stock 0 (427,000)
Increase in long-term debt 5,000,000 23,000
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NET CASH PROVIDED BY
FINANCING ACTIVITIES 12,230,000 7,068,000
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NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 319,000 (4,568,000)
Cash and cash equivalents at beginning of period 6,023,000 10,038,000
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Cash and cash equivalents at end of period $ 6,342,000 $ 5,470,000
============= ============
Supplemental disclosure of cash flow
information-cash paid during the year for:
Interest $ 1,605,000 $ 1,427,000
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Taxes $ 99,000 $ 18,000
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Transfer of loans to other real estate owned $ 116,000 $ 142,000
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Supplemental schedule of noncash investing
activities:
Change in net unrealized (gain)
loss on securities
available for sale,net of tax $ (423,000) $ 2,107,000
Change in deferred tax (benefit) on unrealized
gain (loss) on securities available for sale $ (291,000) $ 865,000
See accompanying notes to consolidated interim financial statements
JEFFERSONVILLE BANCORP
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
A. Financial Statement Presentation
In the opinion of Management of Jeffersonville Bancorp, the
accompanying unaudited interim Consolidated Financial Statements
contain all adjustments necessary to present the financial
position as of March 31, 1997 and December 31, 1996, the Results
of Operations for three month periods ended March 31, 1997 and
1996, and Cash Flows for the three month periods ended March 31,
1997 and 1996. All adjustments are normal and recurring. The
accompanying unaudited consolidated interim financial statements
should be read in conjunction with Jeffersonville Bancorp's
consolidated year-end financial statements, including notes
thereto, which are included in Jeffersonville Bancorp's 1996
Annual Report.
B. Earnings per share
Earnings per share was calculated for the three month periods
ended March 31, 1997 and 1996 based on weighted average shares
outstanding of 1,182,746 and 1,226,441, respectively.
Item 2: Management's discussion and analysis of Financial Conditions and
Results of Operations
A. Overview - Financial Conditions
During the period from December 31, 1996 to March 31, 1997,
total assets increased $12,182,000 or 6.21%. Investment securities
available for sale increased $7,026,000 or 10.84%. This increase
was the result of increased funds available after loan demand was
satisfied, and a $5,000,000 deployment of funds borrowed and
invested in U.S. Government Agency Securities. The balance of the
increase in funds was invested in tax exempt securities as well as
short to intermediate term taxable securities. Federal funds sold,
a short term investment, was reduced from $1,300,000 to zero as
part of the funds redeployment. Net loans increased from
$115,605,000 at year end 1996 to $119,525,000 at March 31, 1997,
an increase of $3,920,000 or 3.39%. The new Home Equity Loan
product which was successfully launched during the first quarter
of 1996 now stands at $5,139,000, an increase of $809,000 from
December 31,1996
Deposits increased from $172,930,000 at December 31, 1996 to
$177,251,000 at March 31, 1997, an increase of $4,321,000 or
2.50%. Growth in deposits occurred in Time Deposits as funds
flowed from savings accounts to benefit from higher rates. The 18
month Escalator, an account that allows one rate modification
during its term, was a popular option. Deposit growth was also
favorably affected by the opening of two new supermarket branches
in the summer of 1996 and one new supermarket branch in February
1997.
Total shareholders' equity of $20,975,000 at December 31, 1996
and $21,053,000 at March 31, 1997 increased $78,000 or .37%. This
increase was the result of net current earnings of $501,000 and a
decrease in net unrealized gain/loss on securities available for
sale, net of tax, of $423,000 from a $322,000 gain at December 31,
1996 to a $101,000 loss at March 31, 1997. In January, the board
of directors allocated $1,000,000 for the repurchase and
retirement of common stock on the open market. No shares have been
repurchased as of March 31, 1997 from this allocation.
B. Results of Operations
Net income for the first three months of 1997 was $501,000
compared to $622,000 for the same period in 1996, a decrease of
19.45%. The Company's annualized return on average assets was .99%
compared to 1.28% in the same period last year. The return on
average shareholders' equity was 9.51% and 11.73% for the first
three months of 1997 and 1996, respectively.
Net Interest Income
Tax equivalent interest income was increased $85,000 or 2.20%
in the first three months of 1997 compared to the same period in
1996. The yield on investment securities decreased 24 basis points
from 7.28% in 1996 to 7.04% in 1997. Commercial loan and
installment loan rates declined and real estate mortgages loans,
the major portion of the loan portfolio also declined 20 basis
points to 8.46% from 8.66% for the three month period. The overall
yield on interest earning assets was down 21 basis points from
8.43% for the three months ended March 31, 1996 to 8.22% for the
same period in 1997. The decline in the yield on interest earning
assets was offset by an increase in average earning assets. The
average balance for earning assets was $191,873,000 for the three
month period ended March 31, 1997 compared to $182,990,000 for the
same three month period in 1996.
The yield on interest bearing liabilities held steady at 4.12.
The overall net interest margin decreased 21 basis points from
5.07% in 1996 to 4.86% in 1997.
Provision for Loan Losses
The provision for loan losses reflects management's assessment
of the risk inherent in the loan portfolio, the general state of
the economy and past loan experience. The provision for loan
losses was $90,000 for the three months ended March 31, 1997 (none
in 1996). The net charge off for the 1997 three month period was
$101,000 compared to $12,000 the same period the prior year.
Delinquency rates are increasing in the face of a difficult local
economy as evidenced by an increase in nonaccrual loans from 1.88%
of total loans at December 31, 1996 to 2.60% at March 31, 1997.
However , based on management analysis of the loan portfolio,
management believes the current level of the allowance is
adequate.
Operating Income and Expense
Operating income for the first three months of 1997 increased
$45,000 or 20.45% compared to the same period in 1996. ATM
transaction fees instituted in November 1996 accounted for 22,000
of the increase.
Operating expenses were at $1,692,000 for the first three
months of 1997 compared to 1,518,000 for the same period in 1996,
an increase of $174,000 or 11.46%. This increase was the result of
increased occupancy expense at the three new branch facilities, a
new computer main frame and increased other real estate owned
expense to maintain and liquidate foreclosed properties. Other
operating expense increased 8.14% to reach $425,000 for the three
months ended March 31, 1997. This increase is spread over many
types of expense that increased as the result of growth and
expansion.
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.
JEFFERSONVILLE BANCORP
Date: 4/22/97
K. Dwayne Rhodes
Treasurer and Chief Accounting Officer