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 September 30,1997 Commission File Number: 0-19212
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JEFFERSONVILLE BANCORP
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(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 October 17, 1997
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$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
September 30, 1997 and December 31, 1996 1
Consolidated Statements of Income for the Nine
Months ended September 30, 1997 and 1996 2
Consolidated Statements of Income for the Three
Months ended September 30, 1997 and 1996 3
Consolidated Statements of Cash Flows for the Nine
Months ended September 30, 1997 and 1996 4-5
Notes to Consolidated Interim Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
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 10
Jeffersonville Bancorp and Subsidiary
Consolidated Balance Sheets
September 30, December 31,
1997 1996
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(Unaudited)
ASSETS
Cash and due from banks ................................ $ 7,772,000 $ 4,723,000
Federal funds sold ...................................... 1,000,000 1,300,000
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CASH AND CASH EQUIVALENTS ....................... 8,772,000 6,023,000
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Securities available for sale, at fair value ............ 74,863,000 64,842,000
Investment securities, estimated fair value of $3,781,000
in 1997 and $3,518,000 in 1996 ................... 3,726,000 3,401,000
Loans, less allowance for loan losses of $1,727,000
in 1997 and $1,711,000 in 1996 ..................... 122,350,000 115,605,000
Accrued interest receivable ............................. 1,448,000 1,168,000
Federal Home Loan Bank stock ............................ 753,000 717,000
Premises and equipment .................................. 2,696,000 2,602,000
Other real estate owned ................................. 387,000 831,000
Other assets ............................................ 1,091,000 924,000
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TOTAL ASSETS .................................. $ 216,086,000 $ 196,113,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Demand deposits (non-interest bearing) ......... $ 25,065,000 $ 22,044,000
NOW and super NOW deposits ...................... 28,312,000 26,541,000
Savings and insured money market deposits ....... 55,612,000 53,665,000
Time deposits ................................... 72,407,000 70,680,000
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TOTAL DEPOSITS ............................... 181,396,000 172,930,000
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Short-term debt ................................. 575,000 529,000
Federal Home Loan Bank advances ................. 10,000,000 --
Accrued expenses and other liabilities .......... 1,960,000 1,679,000
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TOTAL LIABILITIES ............................ 193,931,000 175,138,000
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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 ................................. 446,000 447,000
Treasury stock, 51,984 shares ................... (206,000) (206,000
Undivided profits ............................... 20,904,000 19,795,000
Net unrealized gain on securities available for
sale, net of tax ............................ 394,000 322,000
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TOTAL STOCKHOLDERS' EQUITY .................. 22,155,000 20,975,000
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY ...................................... $ 216,086,000 $ 196,113,000
============= =============
See accompanying notes to consolidated interim financial statements.
Jeffersonville Bancorp and Subsidiar
Consolidated Statements of Income
For the Nine Months
Ended September 30,
1997 1996
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(Unaudited)
INTEREST INCOME
Loan interest and fees ............... $ 8,278,000 $ 7,803,000
Federal funds sold ................... 84,000 71,000
Investment securities and securities
available for sale
Taxable ......................... 2,205,000 2,051,000
Non-taxable ..................... 1,141,000 1,211,000
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TOTAL INTEREST INCOME ................ 11,708,000 11,136,000
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INTEREST EXPENSE
Deposits ............................. 4,855,000 4,552,000
Short-term debt ...................... 33,000 43,000
Federal Home Loan Bank advances ...... 199,000 71,000
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TOTAL INTEREST EXPENSE ............... 5,087,000 4,666,000
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NET INTEREST INCOME .................. 6,621,000 6,470,000
Provision for loan losses ............ (696,000) (120,000)
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NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES ....... 5,925,000 6,350,000
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OPERATING INCOME
Service charges ...................... 539,000 488,000
Other non-interest income ............ 337,000 242,000
Security gains ....................... 89,000 11,000
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965,000 741,000
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OPERATING EXPENSES
Salaries and wages ................... 2,092,000 2,077,000
Employee benefits .................... 614,000 631,000
Occupancy and equipment expenses ..... 935,000 696,000
Other real estate owned expense, net . 109,000 204,000
Other operating expenses ............. 1,301,000 1,327,000
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5,051,000 4,935,000
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Income before income taxes ........... 1,839,000 2,156,000
Income taxes ......................... (352,000) (450,000)
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NET INCOME ........................... $ 1,487,000 1,706,000
============ ============
Net income per share ................. $ 1.26 1.42
============ ============
Shares outstanding ................... 1,182,730 1,205,338
============ ============
See accompanying notes to consolidated interim financial statements.
Jeffersonville Bancorp and Subsidiary
Consolidated Statements of Income
For the Three Months
Ended September 30,
1997 1996
------------ -----------
(Unaudited) (Unaudited)
INTEREST INCOME
Loan interest and fees ............. $ 2,888,000 $ 2,604,000
Federal funds sold ................. 45,000 18,000
Investment securities and securities
available for sale
Taxable ....................... 812,000 691,000
Non-taxable ................... 333,000 414,000
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TOTAL INTEREST INCOME .............. 4,078,000 3,727,000
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INTEREST EXPENSE
Deposits ........................... 1,620,000 1,541,000
Short-term debt .................... 4,000 6,000
Federal Home Loan Bank advances .... 105,000 26,000
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TOTAL INTEREST EXPENSE ............. 1,729,000 1,573,000
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NET INTEREST INCOME ................ 2,349,000 2,154,000
Provision for loan losses .......... (256,000) (60,000)
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NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES ..... 2,093,000 2,094,000
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OPERATING INCOME
Service charges .................... 180,000 162,000
Other non-interest income .......... 75,000 38,000
Security gains ..................... 36,000 11,000
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291,000 211,000
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Salaries and wages ................. 762,000 771,000
Employee benefits .................. 186,000 214,000
Occupancy and equipment expenses ... 350,000 237,000
Other real estate owned expense, net 7,000 (21,000)
Other operating expenses ........... 423,000 479,000
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1,728,000 1,680,000
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Income before income taxes ......... 656,000 625,000
Income taxes ....................... (141,000) (130,000)
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NET INCOME ......................... $ 515,000 $ 495,000
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Net income per share ............... $ 0.44 0.42
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Shares outstanding ................. 1,182,727 1,192,401
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See accompanying notes to consolidated interim financial statements.
Jeffersonville Bancorp and Subsidiary
Consolidated Statements of Cash Flows
For the nine months
ended September 30,
1997 1996
OPERATING ACTIVITIES (Unaudited) (Unaudited)
Net income .......................................$ 1,487,000 $ 1,706,000
Adjustments to reconcile net income
to net cash provided by operating activities:
Write down of other real estate owned ...... 98,000 12,000
Provision for loan losses ................... 696,000 120,000
Depreciation and amortization ............... 365,000 260,000
Gain on sales of securities available
for sale , net .......................... (89,000) (12,000)
Increase in accrued interest receivable ..... (280,000) (231,000)
( Increase) decrease in other assets ......... 60,000 (73,000)
Increase in accrued expenses
and other liabilities .................. 3,000 325,000
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TOTAL ADJUSTMENTS ................................ 853,000 401,000
NET CASH PROVIDED BY
OPERATING ACTIVITIES ....................... 2,340,000 2,107,000
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INVESTING ACTIVITIES
Proceeds from maturities and calls of securities
available for sale ........................ 6,038,000 9,220,000
Proceeds from sales of securities
available for sale ......................... 12,123,000 500,000
Purchases of securities available for sale ....... (27,970,000) (17,871,000)
Purchases of Federal Home Loan Bank stock ........ (36,000) --
Proceeds from maturities and calls of investment
securities ................................ 654,000 876,000
Purchases of investment securities ............... (979,000) (1,852,000)
Net increase in loans ............................ (7,669,000) (5,211,000)
Purchases of premises and equipment .............. (459,000) (639,000)
Cash proceeds from sale of other real estate owned 574,000 357,000
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NET CASH USED BY INVESTING ACTIVITIES ............ (17,724,000) (14,620,000)
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FINANCING ACTIVITIES
Net increase in deposit accounts ................. 8,466,000 12,189,000
Net increase in short-term debt .................. 46,000 324,000
Repayment of Federal Home Loan Bank advances ..... -- (885,000)
Dividends paid ................................... (378,000) (382,000)
Purchase and retirement of common stock .......... (1,000) (865,000)
Proceeds from Federal Home Loan Bank advances .... 10,000,000 --
------------ ------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES ........................ 18,133,000 10,381,000
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NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ............................ 2,749,000 (2,132,000)
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 .......$ 8,772,000 $ 7,906,000
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Jeffersonville Bancorp and Subsidiary
Consolidated Statements of Cash Flows,Continued
For the nine months
ended September 30,
1997 1996
Supplemental information cash paid for:
Interest $ 5,108,000 $ 4,609,000
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Taxes $ 419,000 $ 426,000
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Transfers of loans to other real estate owned $ 228,000 $ 399,000
============ =============
Increase(decrease) in stockholder equity for
change in net unrealized gain or loss on
securities available for sale,net of tax $ 72,000 $ (659,000)
============ =============
Change in deferred tax (benefit) on unrealized
gain (loss) on securities available for sale $ (51,000) $ (453,000)
============ ==============
See accompanying notes to consolidated interim financial statements.
JEFFERSONVILLE BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 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 fairly, in conformity
with generally accepted accounting principles, the financial
position as of September 30, 1997 and December 31, 1996, the
Results of Operations for the nine month periods and three month
periods ended September 30, 1997 and 1996, and the Cash Flows for
the nine month periods ended September 30, 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 nine month periods ended
September 30, 1997 and 1996 based on weighted average shares
outstanding of 1,182,730 and 1,205,338, respectively, and for the
three month periods ended September 30, 1997 and 1996 based on
weighted average shares outstanding of 1,182,727 and 1,192,401,
respectively.
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
A. Financial Condition
During the period from December 31, 1996 to September 30,
1997, total assets increased $19,973,000 or 10.18%. Investment
securities available for sale increased $10,021,000 or 15.45%.
This increase was the result a $10,000,000 deployment of funds
borrowed and invested in U.S. Government Agency Securities. During
the period, $12,114,000 of tax exempt securities were sold and
reinvested in taxable issues in order to improve yields, provide
liquidity and reduce the impact of the alternative minimum tax.
Federal funds sold, a short term investment, was reduced from
$1,300,000 to $1,000,000 as part of the funds redeployment. Net
loans increased from $115,605,000 at year end 1996 to $122,350,000
at September 30, 1997, an increase of $6,745,000 or 5.83%. The
Home Equity Loan product launched during the first quarter of 1996
now stands at $6,808,000, an increase of $2,477,000 from December
31,1996
Deposits increased from $172,930,000 at December 31, 1996 to
$181,396,000 at September 30, 1997, an increase of $8,466,000 or
4.90%. Growth in deposits occurred in all deposit categories. 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 stockholders' equity of $20,975,000 at December 31, 1996
increased $1,180,000 or 5.63% to $22,155,000 at September 30,
1997. This increase was the result of net current earnings of
$1,487,000, and an increase in the net unrealized gain on
securities available for sale, net of tax, of $72,000 less
dividends paid of $378,000. 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
September 30, 1997 from this allocation.
B. Results of Operations
Net income for the first nine months of 1997 was $1,487,000
compared to $1,706,000 for the same period in 1996, a decrease of
12.84%. The Company's annualized return on average assets was .95%
compared to 1.15% in the same period last year. The annualized
return on average stockholders' equity was 9.30% and 11.01% for
the first nine months of 1997 and 1996, respectively.
Net Interest Income
Tax equivalent net interest income was increased $116,000 or
1.64% in the first nine months of 1997 compared to the same period
in 1996. The yield on investment securities decreased 8 basis
points from 7.22% in 1996 to 7.14% in 1997. The average yield on
real estate mortgages loans, the major portion of the loan
portfolio, declined 23 basis points to 8.59% from 8.82% for the
nine month period. The installment loan yield increased 40 basis
points to 11.0%. The overall yield on interest earning assets was
down 10 basis points from 8.41% for the nine months ended
September 30, 1996 to 8.31% for the same period in 1997. The
average balance for earning assets was $197,350,000 for the nine
month period ended September 30, 1997 compared to $186,486,000 for
the same period in 1996. The higher average balances more than
offset the effect of lower yields.
The yield on interest bearing liabilities increased 12 basis
points from 4.11% for the first nine months of 1996 to 4.23% for
the same period in 1997. The overall net interest margin decreased
20 basis points from 5.07% in 1996 to 4.87% 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 $696,000 for the nine months ended September 30, 1997
compared to $120,000 for the same period in 1996. The net loan
charge offs for the 1997 nine month period were $680,000 compared
to $137,000 for the same period last year. This increase in the
1997 provision for loan loss was necessary primarily to compensate
for two commercial loans that were charged off in the second
quarter of 1997. Management is not presently aware of any other
probable loan losses of this magnitude which could be incurred
during the remainder of 1997. Based on management's analysis of
the loan portfolio, management believes the current level of the
allowance at $1,727,000 is adequate.
Operating Income and Expense
Operating income for the first nine months of 1997 increased
$224,000 or 30.2% compared to the same period in 1996. ATM
transaction fees instituted in November 1996 and security gains
accounted for the majority of the increase.
Operating expenses were $5,051,000 for the first nine months
of 1997 compared to 4,935,000 for the same period in 1996, an
increase of $116,000 or 2.35%. The 1997 amount reflects increased
occupancy expense at the three new supermarket branch facilities
and a new computer main frame. The cost to maintain and liquidate
foreclosed properties was partially offset by gains realized on
property sales, resulting in a lower net loss in the nine months
ended September 30, 1997.
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:October 17, 1997
By: /s/ K DWAYNE RHODES
________________________________
K. Dwayne Rhodes
Treasurer and Chief Accounting Officer