UNITED STATES
SECURITIES AND 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 June 30, 2004.
or
[ ] 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: 0-19212
JEFFERSONVILLE BANCORP
(Exact name of registrant as specified in its charter)
New York 22-2385448
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P.O. Box 398, Jeffersonville New York 12748
(Address of principal executive offices) (Zip Code)
(845) 482-4000
(Registrant's telephone number, including area code)
_______________________________________________________________
(Former name, former address and former 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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
[X] Yes [ ] No
Indicate by checkmark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No
Indicate the number of shares outstanding for each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock (par value $ .50) 4,434,321
- ------------------------------ ------------------------------
Class Outstanding at August 13, 2004
INDEX TO FORM 10-Q
Page
Part 1
Item 1 Consolidated Interim Financial Statements (Unaudited)
Consolidated Balance Sheets at
June 30, 2004 and December 31, 2003 1
Consolidated Statements of Income for the Three
Months Ended June 30, 2004 and 2003 2
Consolidated Statements of Income for the Six
Months Ended June 30, 2004 and 2003 3
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 2004 and 2003 4
Notes to Consolidated Interim Financial Statements 5-7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-19
Item 3 Quantitative and Qualitative Disclosures
about Market Risk 19
Item 4 Controls and Procedures 20
Part 2
Item 1 Legal Proceedings
Item 2 Changes in Securities, Use of Proceeds and Issuer Purchases
of Equity Securities
Item 3 Defaults upon Senior Securities
Item 4 Submission of Matters to a Vote of Security Holders
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K 22
Signatures 23
Jeffersonville Bancorp and Subsidiary
Consolidated Balance Sheets
(Unaudited)
June 30, December 31,
2004 2003
------------ ------------
ASSETS
Cash and due from banks $ 14,332,000 $ 15,992,000
Federal funds sold 1,500,000 --
Securities available for sale, at fair value 107,424,000 115,564,000
Securities held to maturity, estimated fair value of $5,860,000
at June 30, 2004 and $5,947,000 at December 31, 2003 5,824,000 5,916,000
Loans, net of allowance for loan losses of $3,578,000
at June 30, 2004 and $3,569,000 at December 31, 2003 209,386,000 193,106,000
Accrued interest receivable 2,152,000 2,301,000
Premises and equipment, net 3,062,000 3,063,000
Federal Home Loan Bank stock 1,350,000 1,600,000
Other real estate owned 43,000 43,000
Cash surrender value of bank-owned life insurance 12,526,000 12,268,000
Other assets 3,555,000 2,351,000
------------ ------------
TOTAL ASSETS $361,154,000 $352,204,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Demand deposits $ 65,758,000 $ 59,189,000
NOW and super NOW accounts 37,969,000 38,290,000
Savings and money market deposits 85,505,000 80,768,000
Time deposits 103,881,000 101,980,000
------------ ------------
TOTAL DEPOSITS 293,113,000 280,227,000
Federal Home Loan Bank borrowings 27,000,000 27,000,000
Short-term borrowings 416,000 5,521,000
Accrued expenses and other liabilities 4,287,000 3,670,000
------------ ------------
TOTAL LIABILITIES 324,816,000 316,418,000
------------ ------------
Stockholders' equity:
Series A preferred stock, no par value;
2,000,000 shares authorized, none issued -- --
Common stock, $0.50 par value; 11,250,000 shares
authorized ; 4,767,786 shares
issued at June 30, 2004 and December 31, 2003 2,384,000 2,384,000
Paid-in capital 6,483,000 6,483,000
Treasury stock, at cost; 333,465 shares at June 30, 2004
and December 31, 2003 (1,108,000) (1,108,000)
Retained earnings 30,201,000 27,947,000
Accumulated other comprehensive (loss) income (1,622,000) 80,000
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 36,338,000 35,786,000
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $361,154,000 $352,204,000
============ ============
See accompanying notes to unaudited consolidated interim financial
statements.
1
Jeffersonville Bancorp and Subsidiary
Consolidated Statements of Income
(Unaudited)
For the Three Months
Ended June 30,
2004 2003
----------- -----------
INTEREST INCOME
Loan interest and fees $ 3,738,000 $ 3,591,000
Securities:
Taxable 863,000 839,000
Nontaxable 503,000 494,000
Federal funds sold 5,000 9,000
----------- -----------
TOTAL INTEREST INCOME 5,109,000 4,933,000
----------- -----------
INTEREST EXPENSE
Deposits 691,000 693,000
Federal Home Loan Bank borrowings 281,000 326,000
Other 3,000 4,000
----------- -----------
TOTAL INTEREST EXPENSE 975,000 1,023,000
----------- -----------
NET INTEREST INCOME 4,134,000 3,910,000
Provision for loan losses 90,000 110,000
----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,044,000 3,800,000
----------- -----------
NON-INTEREST INCOME
Service charges 571,000 497,000
Earnings from cash surrender value
of bank-owned life insurance 139,000 139,000
Net security gains 6,000 5,000
Other non-interest income 323,000 279,000
----------- -----------
TOTAL NON-INTEREST INCOME 1,039,000 920,000
----------- -----------
NON-INTEREST EXPENSES
Salaries and employee benefits 1,825,000 1,685,000
Occupancy and equipment expenses 443,000 506,000
Other real estate owned (income) expenses, net (11,000) --
Other non-interest expenses 807,000 712,000
----------- -----------
TOTAL NON-INTEREST EXPENSES 3,064,000 2,903,000
----------- -----------
Income before income tax expense 2,019,000 1,817,000
Income tax expense 525,000 422,000
----------- -----------
NET INCOME $ 1,494,000 $ 1,395,000
=========== ===========
Basic earnings per common share $ 0.34 $ 0.31
=========== ===========
Weighted average common shares outstanding 4,434,000 4,434,000
=========== ===========
See accompanying notes to unaudited consolidated interim financial
statements.
2
Jeffersonville Bancorp and Subsidiary
Consolidated Statements of Income
(Unaudited)
For the Six Months
Ended June 30,
2004 2003
----------- -----------
INTEREST INCOME
Loan interest and fees $ 7,418,000 $ 7,041,000
Securities:
Taxable 1,809,000 1,870,000
Nontaxable 1,012,000 932,000
Federal funds sold 7,000 20,000
----------- -----------
TOTAL INTEREST INCOME 10,246,000 9,863,000
----------- -----------
INTEREST EXPENSE
Deposits 1,380,000 1,425,000
Federal Home Loan Bank borrowings 577,000 649,000
Other 8,000 7,000
----------- -----------
TOTAL INTEREST EXPENSE 1,965,000 2,081,000
----------- -----------
NET INTEREST INCOME 8,281,000 7,782,000
Provision for loan losses 180,000 260,000
----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 8,101,000 7,522,000
----------- -----------
NON-INTEREST INCOME
Service charges 1,112,000 983,000
Earnings from cash surrender value
of bank-owned life insurance 258,000 290,000
Net security gains 6,000 154,000
Other non-interest income 523,000 487,000
----------- -----------
TOTAL NON-INTEREST INCOME 1,899,000 1,914,000
----------- -----------
NON-INTEREST EXPENSES
Salaries and employee benefits 3,470,000 3,169,000
Occupancy and equipment expenses 893,000 973,000
Other real estate owned (income) expenses, net (20,000) 36,000
Other non-interest expenses 1,505,000 1,414,000
----------- -----------
TOTAL NON-INTEREST EXPENSES 5,848,000 5,592,000
----------- -----------
Income before income tax expense 4,152,000 3,844,000
Income tax expense 1,098,000 1,023,000
----------- -----------
NET INCOME $ 3,054,000 $ 2,821,000
=========== ===========
Basic earnings per common share $ 0.69 $ 0.64
=========== ===========
Weighted average common shares outstanding 4,434,000 4,434,000
=========== ===========
See accompanying notes to unaudited consolidated interim financial
statements.
3
Jeffersonville Bancorp and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months
Ended June 30,
2004 2003
----------- -----------
OPERATING ACTIVITIES
Net income $ 3,054,000 $ 2,821,000
Adjustments to reconcile net income
to net cash provided by
operating activities:
Provision for loan losses 180,000 260,000
Gain on sales of other real estate owned (67,000) (56,000)
Depreciation and amortization 305,000 330,000
Earnings from in cash surrender value
of bank-owned life insurance (258,000) (290,000)
Net security gains (6,000) (154,000)
Decrease in accrued interest receivable 149,000 347,000
(Increase) decrease in other assets (29,000) 702,000
Increase (decrease) in accrued
expenses and other liabilities 617,000 (260,000)
----------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 3,945,000 3,700,000
----------- -----------
INVESTING ACTIVITIES
Proceeds from maturities and calls:
Securities available for sale 11,344,000 31,453,000
Securities held to maturity 405,000 773,000
Proceeds from sales of securities available for sale -- 11,900,000
Purchases:
Securities available for sale (6,075,000) (40,024,000)
Securities held to maturity (313,000) (125,000)
Disbursements for loan originations, net of
principal collections (16,460,000) (12,503,000)
Purchases of FHLB stock (425,000) --
Proceeds from sale of FHLB stock 675,000 --
Net purchases of premises and equipment (304,000) (217,000)
Proceeds from sales of other real estate owned 67,000 116,000
----------- -----------
NET CASH USED IN
INVESTING ACTIVITIES (11,086,000) (8,627,000)
----------- -----------
FINANCING ACTIVITIES
Net increase in deposits 12,886,000 10,888,000
Net decrease in short-term borrowings (5,105,000) (6,006,000)
Cash dividends paid (800,000) (649,000)
----------- -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 6,981,000 4,233,000
----------- -----------
NET DECREASE IN
CASH AND CASH EQUIVALENTS (160,000) (694,000)
Cash and cash equivalents at beginning of period 15,992,000 12,874,000
----------- -----------
Cash and cash equivalents at end of period $15,832,000 $12,180,000
=========== ===========
Supplemental imformation:
Cash paid for:
Interest $ 1,972,000 $ 2,139,000
Income taxes 821,000 581,000
Transfer of loans to other real estate owned -- 110,000
See accompanying notes to unaudited consolidated interim
financial statements.
4
JEFFERSONVILLE BANCORP
AND SUBSIDIARY
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
June 30, 2004
(Unaudited)
A. Financial Statement Basis of Presentation
The accompanying unaudited interim consolidated statements include the
accounts of Jeffersonville Bancorp (the "Company") and its wholly owned
subsidiary, The First National Bank of Jeffersonville (collectively, the
Company and its subsidiary are referred to herein as the Company). In
the opinion of Management of the Company, the accompanying unaudited
consolidated interim financial statements contain all adjustments
necessary to present the financial position as of June 30, 2004 and
December 31, 2003, the results of operations for the three and six month
periods ended June 30, 2004 and 2003, and the cash flows for the six
month periods ended June 30, 2004 and 2003. All adjustments are normal
and recurring. The accompanying unaudited consolidated interim financial
statements have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X and should be read in conjunction with the Company's
consolidated year-end financial statements, including notes thereto,
which are included in the 2003 Annual Report on Form 10-K.
B. Earnings per Share
Basic earnings per share amounts were calculated for the three and six
month periods ended June 30, 2004 and 2003 based on weighted average
common shares outstanding of 4,434,000. There were no dilutive
securities during any of the periods. Earnings per share were $0.34 for
the quarter ended June 30, 2004, as compared to $0.31 per share for the
same period in 2003. Earnings per share were $0.69 for the six months
ended June 30, 2004, as compared to $0.64 for the same period in 2003.
C. Comprehensive Income
Comprehensive income (loss) for the three-month periods ended June 30,
2004 and 2003 was $(894,000) and $1,866,000, respectively. Comprehensive
income for the six-month periods ended June 30, 2004 and 2003 was
$1,352,000 and $2,884,000, respectively.
The following summarizes the components of the Company's other
comprehensive income (loss) for the six-month periods:
Six Months Ended June 30, 2004
Net unrealized holding losses arising
during the period, net of tax
(pre-tax amount of $2,871,000) $ (1,698,000)
Reclassification adjustment for net gains
realized in net income during the period,
net of tax (pre-tax amount of $6,000) $ (4,000)
------------
Other comprehensive loss $ (1,702,000)
============
Six Months Ended June 30, 2003
Net unrealized holding gains arising
during the period, net of tax
(pre-tax amount of $261,000) $ 154,000
Reclassification adjustment for net gains
realized in net income during the period,
net of tax (pre-tax amount of $154,000) $ (91,000)
------------
Other comprehensive income $ 63,000
============
5
D. Pension and Other Postretirement Benefits
The Company has a noncontributory defined benefit pension plan covering
substantially all of its employees. The Company also sponsors
postretirement medical and life insurance benefit plans for retirees in
the pension plan.
The components of the net periodic benefit cost for these plans were as
follows for the six month periods ended June 30:
Pension benefits Postretirement benefits
---------------------- -----------------------
2004 2003 2004 2003
-------- -------- -------- --------
Service cost $134,000 $126,000 $122,000 $ 76,000
Interest cost 188,000 170,000 104,000 74,000
Expected return on plan assets (160,000) (138,000) -- --
Amortization of prior service cost 12,000 12,000 -- --
Amortization of transition
(asset) obligation (2,000) (2,000) 8,000 8,000
Recognized net actuarial loss 66,000 54,000 30,000 4,000
-------- -------- -------- --------
Net periodic benefit cost $238,000 $222,000 $264,000 $162,000
======== ======== ======== ========
The components of the net periodic benefit cost for these plans were as
follows for the three month periods ended June 30:
Pension benefits Postretirement benefits
---------------------- -----------------------
2004 2003 2004 2003
-------- -------- -------- --------
Service cost $ 67,000 $ 63,000 $ 61,000 $ 38,000
Interest cost 94,000 85,000 52,000 37,000
Expected return on plan assets (80,000) (69,000) -- --
Amortization of prior service cost 6,000 6,000 -- --
Amortization of transition
(asset) obligation (1,000) (1,000) 4,000 4,000
Recognized net actuarial loss 33,000 27,000 15,000 2,000
-------- -------- -------- --------
Net periodic benefit cost $119,000 $111,000 $132,000 $ 81,000
======== ======== ======== ========
The Company previously disclosed in its consolidated financial
statements for the year ended December 31, 2003, that it expected to
contribute $488,000 to its pension plan and $80,000 to its other
postretirement benefits plan in 2004. As of June 30, 2004, no
contributions have been made to the pension plan and $20,000 of
contributions have been made to the other postretirement benefits plan.
6
E. Guarantees
FASB Interpretation No. 45 (FIN No. 45), "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others; an interpretation of FASB Statements No. 5, 57,
and 107 and rescission of FASB Interpretation No. 34" requires certain
disclosures and liability recognition for the fair value at issuance of
guarantees that fall within its scope. Under FIN No. 45, the Company
does not issue any guarantees that would require liability recognition
or disclosure, other than its standby letters of credit. Standby letters
of credit are conditional commitments issued by the Company to guarantee
the performance of a customer to a third party. Standby letters of
credit generally arise in connection with lending relationships. The
credit risk involved in issuing these instruments is essentially the
same as that involved in extending loans to customers. Contingent
obligations under standby letters of credit totaled approximately
$784,000 at June 30, 2004 and represent the maximum potential future
payments the Company could be required to make. Typically, these
instruments have terms of twelve months or less and expire unused;
therefore, the total amounts do not necessarily represent future cash
requirements. Each customer is evaluated individually for
creditworthiness under the same underwriting standards used for
commitments to extend credit and on-balance sheet instruments. Company
policies governing loan collateral apply to standby letters of credit at
the time of credit extension. Loan-to-value ratios are generally
consistent with loan-to-value requirements for other commercial loans
secured by similar types of collateral. The fair value of the Company's
standby letters of credit at June 30, 2004 was insignificant.
7
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward Looking Statements
In addition to historical information, this report includes certain
forward-looking statements with respect to the financial condition,
results of operations and business of the Company and the Bank based on
current management's expectations. The Company's ability to predict
results or the effect of future plans and strategies is inherently
uncertain and actual results, performance or achievements could differ
materially from those management expectations. Factors that could cause
future results to vary from current management expectations include, but
are not limited to, general economic conditions, legislative and
regulatory changes, monetary and fiscal policies of the federal
government, changes in tax policies, rates and regulations, changes in
interest rates, deposit flows, the cost of funds, demand for loan
products, demand for financial services, competition, changes in the
quality or composition of the Bank's loan and securities portfolios,
changes in accounting principles, and other economic, competitive,
governmental, and technological factors affecting the Company's
operations, markets, products, services and prices.
A. Overview - Financial Condition
During the period from December 31, 2003 to June 30, 2004, total assets
increased $8,950,000 or 2.5%. Securities available for sale decreased by
$8,140,000 or 7.0% primarily due to maturities and calls. Net loans
increased from $193,106,000 at year end 2003 to $209,386,000 at June 30,
2004, an increase of $16,280,000 or 8.4%. The strong loan activity is
the result of increased economic activity in Sullivan County during the
past year.
Deposits increased from $280,227,000 at December 31, 2003 to
$293,113,000 at June 30, 2004, an increase of $12,886,000 or 4.6%.
Growth occurred in all deposit categories except NOW and super NOW
accounts. Demand deposits increased from $59,189,000 at December 31,
2003 to $65,758,000 at June 30, 2004, an increase of $6,569,000 or
11.1%. Savings and money market deposits increased from $80,768,000 at
December 31, 2003 to $85,505,000 at June 30, 2004, an increase of
$4,737,000 or 5.9%
Total stockholders' equity increased $552,000 or 1.5% from $35,786,000
at December 31, 2003 to $36,338,000 at June 30, 2004. This increase was
the result of net income of $3,054,000, less a decrease of $1,702,000 in
accumulated other comprehensive income or loss, less cash dividends of
$800,000.
8
Loan Portfolio Composition
June 30, 2004 December 31, 2003
Amount Percent Amount Percent
(in thousands) (in thousands)
REAL ESTATE LOANS
Residential $ 82,195 38.4% $ 78,339 39.6%
Commercial 69,994 32.7 59,799 30.2
Home Equity 19,971 9.3 18,337 9.3
Farm Land 2,817 1.3 2,872 1.4
Construction 4,173 2.0 4,102 2.1
-------- ----- -------- -----
$179,150 83.7% $163,449 82.6%
-------- ----- -------- -----
OTHER LOANS
Commercial Loans $ 18,649 8.7 $ 17,157 8.7
Consumer Installment Loans 14,703 6.9 15,350 7.7
Other Consumer Loans 1,173 0.6 1,488 0.8
Agriculture 293 0.1 403 0.2
-------- ----- -------- -----
34,818 16.3 34,398 17.4
-------- ----- -------- -----
Total Loans $213,968 100.0% $197,847 100.0%
-------- ----- -------- -----
Unearned Discounts (1,004) (1,172)
Allowance for Loan Losses (3,578) (3,569)
-------- --------
Total Loans, Net $209,386 $193,106
======== ========
B. Allowance for Loan Losses
The allowance for loan losses reflects management's assessment of the
risk inherent in the loan portfolio, which includes factors such as the
general state of the economy and past loan experience. The provision for
loan losses was $180,000 for the six months ended June 30, 2004 and
$260,000 for the six months ended June 30, 2003. Total charge offs for
the six month period ended June 30, 2004 were $254,000 compared to
$255,000 for the same period in the prior year, while recoveries
increased from $71,000 for the 2003 period to $83,000 for the 2004
period. The amounts represent a net charge-off of $171,000 in the first
six months of 2004 versus a net charge-off of $184,000 for the same
period in the prior year. Based on management's analysis of the loan
portfolio, management believes the current level of the allowance for
loan losses is adequate.
Changes in the allowance for loan losses are summarized as follows for
the six month periods ended June 30:
2004 2003
---------- ----------
Balance at beginning of period $3,569,000 $3,068,000
Provision for loan losses 180,000 260,000
Loans charged off (254,000) (255,000)
Recoveries 83,000 71,000
---------- ----------
Balance at end of period $3,578,000 $3,144,000
========== ==========
Annualized net charge-offs as a
percentage of average outstanding loans 0.17% 0.20%
Allowance for loan losses to:
Total loans 1.68% 1.71%
Total non-performing loans 274.0% 152.6%
9
C. Non Accrual and Past Due Loans
The Company places a loan on nonaccrual status when collectibility of
principal or interest is doubtful, or when either principal or interest
is 90 days or more past due, and collectibility is in doubt. Interest
payments received on nonaccrual loans are applied as a reduction of the
principal balance when concern exists as to the ultimate collection of
principal.
Non-performing loans are summarized as follows at June 30:
2004 2003
---------- ----------
Non-accrual loans $1,076,000 $ 957,000
Loans past due 90 days or more
and still accruing interest 230,000 1,103,000
---------- ----------
Total non-performing loans $1,306,000 $2,060,000
---------- ----------
Non-performing loans as a
percentage of total loans 0.61% 1.12%
---------- ----------
As of June 30, 2004 and 2003, the recorded investment in loans
considered to be impaired under Statement of Financial Accounting
Standards ("SFAS") No.114 totaled $708,000 and $896,000, respectively.
There was no allowance for loan impairment under Statement No.114 at
either date, primarily due to prior charge offs and the adequacy of
collateral values on these loans.
In addition to the non-performing loans, we have identified through
normal internal credit review procedures, $8,692,000 in loans that
warrant increased attention as of June 30, 2004. These loans are
classified as substandard as they exhibit certain risk factors, which
have the potential to cause them to become non-performing. Accordingly,
these credits are reviewed on at least a quarterly basis and were
considered in our evaluation of the allowance for loan losses at June
30, 2004. None of these loans were considered impaired and, as such, no
specific impairment allowance was established for these.
10
D. Capital
Under the Federal Reserve Bank's risk-based capital rules, the Company's
Tier I risk-based capital was 17.0% and total risk-based capital was
18.3% of risk-weighted assets at June 30, 2004. These risk-based capital
ratios are well above the minimum regulatory requirements of 4.0% for
Tier I capital and 8.0% for total capital. The Company's leverage ratio
(Tier I capital to average assets) of 10.7% at June 30, 2004 is well
above the 4.0% minimum regulatory requirement.
The following table shows the Company's actual capital measurements
compared to the minimum regulatory requirements at June 30, 2004.
TIER I CAPITAL
Stockholders' equity, excluding accumulated
other comprehensive income $ 37,960,000
TIER II CAPITAL
Allowance for loan losses (1) 2,788,000
------------
Total risk-based capital $ 40,748,000
------------
Risk-weighted assets (2) $223,009,000
------------
Average assets $354,555,000
------------
RATIOS
Tier I risk-based capital (minimum 4.0%) 17.0%
Total risk-based capital (minimum 8.0%) 18.3%
Leverage (minimum 4.0%) 10.7%
(1) The allowance for loan losses is limited to 1.25% of
risk-weighted assets for the purpose of this calculation.
(2) Risk-weighted assets have been reduced for excess allowance
for loan losses excluded from total risk-based capital
11
Consolidated Average Balance Sheet for the six months ended June 30, 2004
(Dollars in Thousands, Fully Taxable Equivalent)
AVERAGE % OF INTEREST AVERAGE
CONSOLIDATED AVERAGE BALANCE SHEET BALANCE ASSETS PAID YIELD
ASSETS:
INVESTMENT SECURITIES <F1>
TAXABLE SECURITIES 69,214 19.52% 1,809 5.23%
TAX EXEMPT SECURITIES 49,883 14.07% 1,533 6.15%
-------- -------- --------
TOTAL SECURITIES 119,097 33.59% 3,342 5.61%
-------- -------- --------
SHORT TERM INVESTMENTS 1,764 0.50% 7 0.79%
LOANS (NET UNEARNED DISCOUNT)
REAL ESTATE MORTGAGES 147,939 41.72% 5,276 7.13%
HOME EQUITY LOANS 18,890 5.33% 585 6.19%
TIME AND DEMAND LOANS 17,090 4.82% 531 6.21%
INSTALLMENT LOANS 17,208 4.85% 874 10.16%
OTHER LOANS 3,178 0.90% 152 9.57%
-------- -------- --------
TOTAL LOANS <F3> 204,305 57.62% 7,418 7.26%
-------- -------- --------
TOTAL INTEREST EARNING ASSETS 325,166 91.71% 10,767 6.62%
-------- -------- --------
ALLOWANCE FOR LOAN LOSSES (3,512) (0.99)%
NET UNREALIZED GAINS AND LOSSES ON PORTFOLIO 679 0.19%
CASH AND DUE FROM BANKS (DEMAND) 12,643 3.57%
FIXED ASSETS (NET) 3,080 0.87%
BANK OWNED LIFE INSURANCE 12,379 3.49%
OTHER ASSETS 4,120 1.16%
======== ========
TOTAL ASSETS $354,555 100.00%
======== ========
LIABILITIES AND EQUITY:
NOW AND SUPER NOW ACCOUNTS $ 40,046 11.29% 55 0.27%
SAVINGS AND MONEY MARKET 82,559 23.29% 239 0.58%
TIME DEPOSITS 103,327 29.14% 1,086 2.10%
-------- -------- --------
TOTAL INTEREST BEARING DEPOSITS 225,932 63.72% 1,380 1.22%
FEDERAL FUNDS PURCHASED AND
OTHER SHORT TERM DEBT 1,364 0.38% 8 1.17%
LONG TERM DEBT 27,000 7.62% 577 4.27%
-------- -------- --------
TOTAL INTEREST BEARING LIABILITIES 254,296 71.72% 1,965 1.55%
-------- -------- --------
DEMAND DEPOSITS 59,772 16.86%
OTHER LIABILITIES 4,513 1.27%
-------- --------
TOTAL LIABILITIES 318,581 89.85%
STOCKHOLDERS' EQUITY 35,974 10.15%
======== ========
TOTAL LIABILITIES AND EQUITY $354,555 100.00%
======== ========
========
NET INTEREST INCOME $ 8,802
========
NET INTEREST SPREAD 5.07%
========
NET INTEREST MARGIN <F2> 5.41%
========
<FN>
<F1> Yields on securities available for sale are based on amortized costs.
<F2> Computed by dividing net interest income by average interest earning assets.
<F3> For purpose of this schedule, interest in nonaccruing loans has been
included only to the extent reflected in the consolidated income
statement. However, the nonaccrual loan balances are included in the
average amount outstanding.
</FN>
12
Consolidated Average Balance Sheet for the six months ended June 30, 2003
(Dollars in Thousands, Fully Taxable Equivalent)
AVERAGE % OF INTEREST AVERAGE
CONSOLIDATED AVERAGE BALANCE SHEET BALANCE ASSETS PAID YIELD
ASSETS:
INVESTMENT SECURITIES <F1>
TAXABLE SECURITIES 71,884 21.83% 1,870 5.20%
TAX EXEMPT SECURITIES 41,384 12.57% 1,412 6.82%
-------- -------- --------
TOTAL SECURITIES 113,268 34.40% 3,282 5.80%
-------- -------- --------
SHORT TERM INVESTMENTS 3,525 1.07% 20 1.13%
LOANS (NET OF UNEARNED DISCOUNT)
REAL ESTATE MORTGAGES 132,813 40.33% 5,020 7.56%
HOME EQUITY LOANS 15,891 4.83% 483 6.08%
TIME AND DEMAND LOANS 14,436 4.38% 438 6.07%
INSTALLMENT LOANS 17,287 5.25% 956 11.06%
OTHER LOANS 2,519 0.76% 144 11.43%
-------- -------- --------
TOTAL LOANS <F3> 182,946 55.56% 7,041 7.70%
-------- -------- --------
TOTAL INTEREST EARNING ASSETS 299,739 91.03% 10,343 6.90%
-------- -------- --------
ALLOWANCE FOR LOAN LOSSES (3,129) (0.95)%
NET UNREALIZED GAINS AND LOSSES ON PORTFOLIO 3,185 0.97%
CASH AND DUE FROM BANKS(DEMAND) 11,473 3.48%
FIXED ASSETS(NET) 3,198 0.97%
BANK OWNED LIFE INSURANCE 11,872 3.61%
OTHER ASSETS 2,947 0.89%
======== ========
TOTAL ASSETS $329,285 100.00%
======== ========
LIABILITIES AND EQUITY:
NOW AND SUPER NOW ACCOUNTS $ 36,897 11.21% 84 0.46%
SAVINGS AND MONEY MARKET 84,435 25.64% 2 0.67%
TIME DEPOSITS 87,742 26.65% 1,057 2.41%
-------- -------- --------
TOTAL INTEREST BEARING DEPOSITS 209,074 63.49% 1,425 1.36%
FEDERAL FUNDS PURCHASED AND
OTHER SHORT TERM DEBT 1,261 0.38% 7 1.11%
LONG TERM DEBT 30,000 9.11% 649 4.33%
-------- -------- --------
TOTAL INTEREST BEARING LIABILITIES 240,335 72.99% 2,081 1.73%
-------- -------- --------
DEMAND DEPOSITS 52,375 15.91%
OTHER LIABILITIES 3,243 0.98%
--------
TOTAL LIABILITIES 295,953 89.88%
STOCKHOLDERS' EQUITY 33,332 10.12%
======== ========
TOTAL LIABILITIES AND EQUITY $329,285 100.00%
======== ========
========
NET INTEREST INCOME $ 8,262
========
NET INTEREST SPREAD 5.17%
========
NET INTEREST MARGIN <F2> 5.51%
========
<FN>
<F1> Yields on securities available for sale are based on amortized
costs.
<F2> Computed by dividing net interest income by average interest
earning assets.
<F3> For purpose of this schedule, interest in nonaccruing loans has been
included only to the extent reflected in the consolidated income
statement. However, the nonaccrual loan balances are included in the
average amount outstanding.
</FN>
13
Consolidated Average Balance Sheet for the three months ended June 30, 2004
(Dollars in Thousands, Fully Taxable Equivalent)
AVERAGE % OF INTEREST AVERAGE
CONSOLIDATED AVERAGE BALANCE SHEET BALANCE ASSETS PAID YIELD
ASSETS:
INVESTMENT SECURITIES
TAXABLE SECURITIES 68,362 18.91% 863 5.05%
TAX EXEMPT SECURITIES 50,181 13.88% 762 6.07%
-------- -------- --------
TOTAL SECURITIES 118,543 32.79% 1,625 5.48%
-------- -------- --------
SHORT TERM INVESTMENTS 2,876 0.80% 0.70%
LOANS (NET UNEARNED DISCOUNT)
REAL ESTATE MORTGAGES 152,354 42.14% 2,657 6.98%
HOME EQUITY LOANS 19,605 5.42% 300 6.12%
TIME AND DEMAND LOANS 17,307 4.79% 264 6.10%
INSTALLMENT LOANS 17,621 4.87% 443 10.06%
OTHER LOANS 3,442 0.95% 74 8.60%
-------- -------- --------
TOTAL LOANS 210,329 58.17% 3,738 7.11%
-------- -------- --------
TOTAL INTEREST EARNING ASSETS 331,748 91.75% 5,368 6.47%
-------- -------- --------
ALLOWANCE FOR LOAN LOSSES (3,577) (0.99)%
NET UNREALIZED GAINS AND LOSSES ON PORTFOLIO (136) (0.04)%
CASH AND DUE FROM BANKS (DEMAND) 12,570 3.48%
FIXED ASSETS (NET) 3,130 0.87%
BANK OWNED LIFE INSURANCE 12,579 3.48%
OTHER ASSETS 5,257 1.45%
======== ========
TOTAL ASSETS $361,571 100.00%
======== ========
LIABILITIES AND EQUITY:
NOW AND SUPER NOW ACCOUNTS $ 38,095 10.54% 23 0.24%
SAVINGS AND IMONEY MARKET 86,198 23.84% 119 0.55%
TIME DEPOSITS 105,480 29.17% 549 2.08%
-------- -------- --------
TOTAL INTEREST BEARING DEPOSITS 229,773 63.55% 691 1.20%
FEDERAL FUNDS PURCHASED AND
OTHER SHORT TERM DEBT 702 0.19% 3 1.71%
LONG TERM DEBT 27,000 7.47% 281 4.16%
-------- -------- --------
TOTAL INTEREST BEARING LIABILITIES 257,475 71.21% 975 1.51%
-------- -------- --------
DEMAND DEPOSITS 62,492 17.28%
OTHER LIABILITIES 5,987 1.66%
-------- --------
TOTAL LIABILITIES 325,954 90.15%
STOCKHOLDERS' EQUITY 35,617 9.85%
======== ========
TOTAL LIABILITIES AND EQUITY $361,571 100.00%
======== ========
========
NET INTEREST INCOME $ 4,393
========
NET INTEREST SPREAD 4.96%
========
NET INTEREST MARGIN 5.30%
========
<FN>
<F1> Yields on securities available for sale are based on amortized costs.
<F2> Computed by dividing net interest income by average interest earning assets.
<F3> For purpose of this schedule, interest in nonaccruing loans has been
included only to the extent reflected in the consolidated income
statement. However, the nonaccrual loan balances are included in the
average amount outstanding.
</FN>
14
Consolidated Average Balance Sheet for the three months ended June 30, 2003
(Dollars in Thousands, Fully Taxable Equivalent)
AVERAGE % OF INTEREST AVERAGE
CONSOLIDATED AVERAGE BALANCE SHEET BALANCE ASSETS PAID YIELD
ASSETS:
INVESTMENT SECURITIES
TAXABLE SECURITIES 69,077 20.35% 839 4.86%
TAX EXEMPT SECURITIES 45,251 13.33% 682 6.03%
-------- -------- --------
TOTAL SECURITIES 114,328 33.69% 1,521 5.32%
-------- -------- --------
SHORT TERM INVESTMENTS 2,378 0.70% 9 1.51%
LOANS (NET OF UNEARNED DISCOUNT)
REAL ESTATE MORTGAGES 142,391 41.95% 2,548 7.16%
HOME EQUITY LOANS 16,763 4.94% 236 5.63%
TIME AND DEMAND LOANS 14,604 4.30% 229 6.27%
INSTALLMENT LOANS 17,547 5.17% 507 11.56%
OTHER LOANS 2,411 0.71% 71 11.78%
-------- -------- --------
TOTAL LOANS 193,716 57.08% 3,591 7.41%
-------- -------- --------
TOTAL INTEREST EARNING ASSETS 310,422 91.46% 5,121 6.60%
-------- -------- --------
ALLOWANCE FOR LOAN LOSSES (3,196) (0.94)%
NET UNREALIZED GAINS AND LOSSES ON PORTFOLIO 3,200 0.94%
CASH AND DUE FROM BANKS(DEMAND) 11,231 3.31%
FIXED ASSETS (NET) 3,098 0.91%
BANK OWNED LIFE INSURANCE 12,074 3.56%
OTHER ASSETS 2,568 0.76%
======== ========
TOTAL ASSETS $339,397 100.00%
======== ========
LIABILITIES AND EQUITY:
NOW AND SUPER NOW ACCOUNTS $ 36,214 10.67% 40 0.44%
SAVINGS AND MONEY MARKET 90,911 26.79% 139 0.61%
TIME DEPOSITS 88,953 26.21% 51 2.31%
-------- -------- --------
TOTAL INTEREST BEARING DEPOSITS 216,078 63.67% 693 1.28%
FEDERAL FUNDS PURCHASED AND
OTHER SHORT TERM DEBT 1,521 0.45% 4 1.05%
LONG TERM DEBT 30,333 8.94% 326 4.30%
-------- -------- --------
TOTAL INTEREST BEARING LIABILITIES 247,932 73.05% 1,023 1.65%
-------- -------- --------
DEMAND DEPOSITS 53,610 15.80%
OTHER LIABILITIES 3,422 1.01%
--------
TOTAL LIABILITIES 304,964 89.85%
STOCKHOLDERS' EQUITY 34,433 10.15%
======== ========
TOTAL LIABILITIES AND EQUITY $339,397 100.00%
======== ========
========
NET INTEREST INCOME $ 4,098
========
NET INTEREST SPREAD 4.95%
========
NET INTEREST MARGIN 5.28%
========
<FN>
<F1> Yields on securities available for sale are based on amortized costs.
<F2> Computed by dividing net interest income by average interest earning assets.
<F3> For purpose of this schedule, interest in nonaccruing loans has been
included only to the extent reflected in the consolidated income
statement. However, the nonaccrual loan balances are included in the
average amount outstanding.
</FN>
15
Liquidity
Liquidity is the ability to provide sufficient cash flow to meet
financial commitments such as additional loan demand and withdrawals of
existing deposits. The Company's primary sources of liquidity are
dividends from the Bank, its deposit base; FHLB borrowings; repayments
and maturities on loans; short-term assets such as federal funds and
short-term interest bearing deposits in banks; and maturities and sales
of securities available for sale. These sources are available in amounts
sufficient to provide liquidity to meet the Company's ongoing funding
requirements. The ability of the Bank to pay dividends is subject to
various regulatory limitations. The Bank's membership in the FHLB of New
York enhances liquidity in the form of overnight and 30 day lines of
credit of approximately $31.9 million, which may be used to meet
unforeseen liquidity demands. Five separate FHLB term advances totaling
$27.0 million at June 30, 2004 were being used to fund securities
leverage transactions.
In 2004, cash generated from operating activities amounted to $4.0
million and cash provided by financing activities amounted to $7.0
million. These amounts were offset by amounts used in investing
activities of $11.2 million, resulting in a net decrease in cash and
cash equivalents of $160,000. See the Consolidated Statements of Cash
Flows for additional information.
Maturity Schedule of Time Deposits of $100,000 or More
Deposits
Due three months or less $ 8,901,000
Over three months through six months 1,519,000
Over six months through twelve months 8,865,000
Over twelve months 4,762,000
-----------
$24,047,000
===========
Management anticipates much of these maturing deposits to rollover at
maturity, and that liquidity will be adequate to meet funding
requirements.
16
E. Result of Operations
Net income for the quarter ended June 30, 2004 increased by $99,000 to
$1,494,000 compared to $1,395,000 for the corresponding period in 2003.
The Company's annualized return on average assets was 1.7% and 1.6% for
the quarters ended June 30, 2004 and 2003, respectively. The annualized
return on average stockholders' equity was 16.8% and 16.2% for the
second quarter of 2004 and 2003, respectively.
Total interest income for the second quarter of 2004 increased $176,000
or 3.6% from the corresponding period in 2003 and total interest expense
decreased $48,000 or 4.7% from the corresponding period in 2003. Net
interest income increased $99,000 or 7.1% from the prior year period.
Non-interest income for the second quarter of 2004 increased $119,000 or
12.9% from the corresponding period in 2003, while total non-interest
expenses increased $161,000 or 5.5% from the second quarter of 2003.
Total interest income increased despite a decrease in the overall yield
on interest earning assets due to an increase in interest earning
assets. Total average interest earning assets were $331,748,000 for the
three month period ended June 30, 2004 compared to $310,422,000 for the
corresponding period in 2003, an increase of $21,326,000 or 6.9%. There
was an increase in all earning asset categories, the largest being loans
which increased $16,613,000. The yield on interest earning assets
decreased by 13 basis points from 6.60% for the three month period ended
June 30, 2003 to 6.47% for the three month period ended June 30, 2004.
This decrease was primarily due to a 18 basis point decrease in the
yield on real estate mortgage loans from 7.16% for the quarter ended
June 30, 2003 to 6.98% for the quarter ended June 30, 2004 partially
offset by a 16 basis point increase in the yield on investment
securities from 5.32% for the quarter ended June 30, 2003 to 5.48% for
the quarter ended June 30, 2004.
Total interest expense decreased as a result of a decrease in the
overall yield on interest bearing liabilities. The total average balance
for interest bearing liabilities was $257,475,000 for the three month
period ended June 30, 2004 compared to $247,932,000 for the
corresponding period in 2003, an increase of $9,543,000 or 3.8%. The
yield on interest bearing liabilities decreased by 14 basis points from
1.65% for the three month period ended June 30, 2003 to 1.51% for the
three month period ended June 30, 2004.
The provision for loan losses was $90,000 for the three months ended
June 30, 2004, a decrease of $20,000 compared to $110,000 for the three
months ended June 30, 2003. This decrease was primarily due to improved
asset quality and lower delinquency rates.
Non-interest income was $1,039,000 for the three month period ended June
30, 2004 compared to $920,000 for the corresponding period in 2003, an
increase of $119,000 or 12.9%. This increase was primarily due to an
increase in deposit account service charges and ATM related fees.
Non-interest expenses were $3,064,000 for the three month period ended
June 30, 2004 compared to $2,903,000 for the corresponding period in
2003, an increase of $161,000 or 5.5%. Salaries and employee benefits
increased $140,000 or 8.3% from last year. This was the result of normal
salary increases and increased costs for health care benefits. Occupancy
and equipment expense decreased $63,000 from last year. There was an
increase of $95,000 or 13.3% in other non-interest expenses primarily
due to increases in legal fees and advertising expenditures.
Income tax expense was $525,000 for the three month period ended June
30, 2004 compared to $422,000 for the corresponding period in 2003, an
increase of $103,000 or 24.4%. This increase was primarily due to an
increase in taxable income. The Company's effective tax rates were 26.0%
and 23.2% for the three month periods ended June 30, 2004 and 2003,
respectively. This increase was primarily due to an increase in the
percentage of taxable income total income during the three month period
ended June 30, 2004 compared to the corresponding period in 2003.
17
Comparison of the six month periods June 30, 2003 and 2004
Net income for the first six months of 2004 increased by $233,000 to
$3,054,000 compared to $2,821,000 for the same period in 2003. The
Company's annualized return on average assets was 1.7% in the first six
month period of 2004 and 2003. The return on average stockholders'
equity was 17.0% and 16.9% for the first six months of 2004 and 2003,
respectively.
Total interest income increased despite a decrease in the overall yield
on interest earning assets due to an increase in interest earning
assets. Total average interest earning assets were $325,166,000 for the
six month period ended June 30, 2004 compared to $299,739,000 for the
same six month period in 2003, an increase of $25,427,000 or 8.5%. An
increase in average loans of $21,359,000 and an increase in average
investments of $5,829,000 partially offset by a $1,761,000 decrease in
average short term investments accounted for this net increase. The
yield on investment securities decreased 19 basis points from 5.80% in
2003 to 5.61% in 2004. The yield on the total loan portfolio decreased
by 44 basis points in the six months ended June 30, 2004 compared to the
first six months of 2003. The average yield on real estate mortgage
loans, the major portion of the loan portfolio, decreased 43 basis
points to 7.13% from 7.56% during the six months ended June 30, 2004
compared to the first six months of 2003. The overall yield on interest
earning assets decreased 28 basis points from 6.90% for the six months
ended June 30, 2003 to 6.62% for the same period in 2004.
The yield on interest bearing liabilities decreased by 18 basis points
for the six month period from 1.73% in 2003 to 1.55% in 2004. The
overall net interest margin decreased 10 basis points from 5.51% in the
first half of 2003 to 5.41% in the first half of 2004.
The provision for loan losses was $18,000 for the six months ended June
30, 2004, a decrease of $80,000 compared to $260,000 for the six months
ended June 30, 2003. This decrease was principally due to improved asset
quality and lower delinquency rates.
Non-interest income was $1,899,000 for the six month period ended June
30, 2004 compared to $1,914,000 for the corresponding period in 2003, a
decrease of $15,000 or 0.8%. This decrease was primarily due to
decreases in net security gains and a decrease in earnings from the cash
surrender value of bank-owned life insurance.
Non-interest expenses were $5,848,000 for the first six months of 2004
compared to $5,592,000 for the same period in 2003, a increase of
$256,000 or 4.6%. Occupancy and equipment expenses decreased by $80,000
as a result of implementing new software and an onsite disaster recovery
center during the six month period ended June 30, 2003. A $301,000
increase in salaries and employee benefits costs was primarily due to
normal salary increases and increased costs for health care benefits.
Other non-interest expenses increased by $91,000 primarily due to
increases in legal fees and advertising expenditures.
Income tax expense was $1,098,000 for the six month period ended June
30, 2004 compared to $1,023,000 for the corresponding period in 2003, a
increase of $75,000 or 7.3%. The Company's effective tax rates were
26.4% and 26.6% for six month periods ended June 30, 2004 and 2003,
respectively.
18
F. Critical Accounting Policies
Management of the Company considers the accounting policy relating to
the allowance for loan losses to be a critical accounting policy given
the inherent uncertainty in evaluating the levels of the allowance
required to cover credit losses in the portfolio and the material effect
that such judgments can have on the results of operations. The allowance
for loan losses is maintained at a level deemed adequate by management
based on an evaluation of such factors as economic conditions in the
Company's market area, past loan loss experience, the financial
condition of individual borrowers, and underlying collateral values
based on independent appraisals. While management uses available
information to recognize losses on loans, future additions to the
allowance for loan losses may be necessary based on changes in economic
conditions and values of real estate particularly in Sullivan County. In
the event that the casino gambling proposals do not progress, collateral
underlying certain real estate loans could lose value which could lead
to future additions to the allowance for loan losses. In addition,
Federal regulatory agencies, as an integral part of their examination
process, periodically review the Company's allowance for loan losses and
may require the Company to recognize additions to the allowance based on
their judgments about information available to them at the time of their
examination, which may not be currently available to management. There
are no new accounting standards that are expected to have a material
impact on the Company's consolidated financial statements.
Item 3: Quantitative and Qualitative Disclosures about Market Risk
The Company's most significant form of market risk is interest rate risk, as
the majority of the assets and liabilities are sensitive to changes in
interest rates. There have been no material changes in the Company's interest
rate risk position since December 31, 2003. Other types of market risk, such
as foreign exchange rate risk and commodity price risk, do not arise in the
normal course of the Company's business activities.
19
ITEM 4. CONTROLS and PROCEDURES
The Company's management, including the Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of the design and operation of
the Company's disclosure controls and procedures (as defined in Rule
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended) (the "Exchange Act") as of the end of the period covered by this
report. Based upon that evaluation, the Company's management, including the
Chief Executive Officer and Chief Financial Officer, concluded that the
Company's disclosure controls and procedures are effective in timely alerting
them to any material information relating to the Company and its subsidiaries
required to be included in the Company's Exchange Act filings.
There were no significant changes made in the Company's internal controls
over financial reporting that occurred during the Company's most recent
fiscal quarters that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.
20
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no pending legal proceedings, other than ordinary routine
litigation incidental to the business, to which the Company or any
of its subsidiaries is a party or which their property is subject.
Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases
of Equity Securities
None
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders was held on April 27, 2004.
(b) The Following individuals were elected as directors at the annual
meetihng for three year terms:
Douglas A. Heinle
James F. Roche
Kenneth C. Klein
The other continuing directors are: John W. Galligan,
John K. Gempler, Solomon Katzoff, Arthur E. Keelser,
Gibson E. McKean, Edward T. Sykes,
Raymond Walter and Earle A. Wilde.
(c) The following matters were voted upon and approved by the
Registrant's shareholders at the 2004 Annual Meeting of
Shareholders on April 29, 2004:
(i) the election of three directors to serve for three-year
terms (Proposal 1)
(ii) the ratification of the appointment of KPMG LLP as
independent auditors of the Company for the Fiscal Year ending
December 31, 2003 (Proposal 2).
The votes for the above-listed proposals were as follows:
Proposal 1
Douglas A. Heinle received 3,319,220.596 votes for election
and 22,711 votes were withheld;
James F. Roche received 3,318,758.596 votes for election
and 23,173 votes were withheld;
Kenneth C. Klein received 3,255,730.940 votes for election
and 86,212 votes were withheld;
***[There were no abstentions or broker non-votes for any of the
nominees.] {NOTE: Confirm that this is correct or provide number
of abstentions and broker non-votes}
Proposal 2
Shareholders cast 3,305,700.596 votes for, 1,093 votes against
and 35,136 abstentions.
(d) Not applicable.
21
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
31.1 Certification of Chief Executive Officer
pursuant to Section 302 of Sarbanes-Oxley of 2002
31.2 Certification of Chief Financial Officer
pursuant to Section 302 of Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer pursuant
to Section 906 of Sarbanes-Oxley Act of 2002
32.2 Certification of Chief Financial Officer pursuant
to Section 906 of Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
Current Report on Form 8-K filed with the
Securities and Exchange Commission on May 17, 2004
22
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
/s/ Raymond Walter
Raymond Walter
President and Chief Executive Officer
/s/ Charles E. Burnett
Charles E. Burnett
Chief Financial Officer and Treasurer
August 13, 2004
23