U. S. Securities and Exchange Commission
Washington, D.C 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
Commission File Number 33-64520
BANK BUILDING CORPORATION
Virginia
54-1714800
9112 Virginia Avenue, Bassett, Virginia 24055
(703) 629-3331
Securities registered pursuant to Section 12-(b) of the Act:
None
Securities registered pursuant to Section 12-(g) of the Act:
400,000 Shares of Common Stock with no par value
Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months, and (2) has been subject to such
filing requirements for the last 90 days. Yes No X
_______
There are 398,244 shares of stock outstanding as of May 21,
2004.
INDEX
PART 1 - FINANCIAL INFORMATION 3
ITEM 1 - FINANCIAL STATEMENTS 3
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 3
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS 4
CONSOLIDATED STATEMENTS OF CASH FLOWS 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 6
PART II - OTHER INFORMATION 7
ITEM 1 - LEGAL PROCEEDINGS 7
ITEM 2 - CHANGES IN SECURITIES 7
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES 7
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 7
ITEM 5 - OTHER INFORMATION 7
ITEM 6 - EXHIBITS AND REPORTS ON FORMS 8-K 7
ITEM 7 - CONTROLS AND PROCEDURES 7
ITEM 8 - CERTIFICATIONS 8
EXHIBIT 99 10
Part 1 - Financial Information
Item 1 - Financial Statements
Consolidated Statements of Financial Condition
June 30 December
31
2002 2001
ASSETS
Current Assets
Cash $ $
187,988 97,560
Receivables
23,804 -
Total current assets
211,792 97,560
Property
Land
10,211,3 10,403,3
93 36
Building
26,414,8 26,414,8
32 32
36,626,2 36,818,1
25 68
Less accumulated
depreciation (1,998,0 (1,728,0
83) 83)
34,628,1 35,090,0
42 85
Other assets
264,564 284,338
$ $
35,104,4 35,471,9
98 83
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Accounts payable $ $
- 4,282
Accrued interest 227,020 228,984
Current portion of long-term 759,059 804,047
debt
Note payable 100,000 325,000
Other liabilities 97,157 -
Total current liabilities 1,183,23 1,362,31
6 3
Long-term debt
33,535,0 33,888,8
01 36
Deferred income taxes 91,600 91,600
Total long-term liabilities 33,626,6 33,980,4
01 36
Shareholders' equity
Capital stock, common,
authorized 400,000 shares,
no par value, 398,244 shares - -
issued and outstanding
Retained earnings 294,661 129,234
Total shareholders' 294,661 129,234
equity
$ $
35,104,4 35,471,9
98 83
Consolidated Statements of Income and Retained Earnings
Six Months Three Months
Ended Ended
June 30 June 30
2002 2001 2002 2001
INCOME
Lease income $ $ $ $
1,936,3 1,537,2 965,70 787,97
33 40 7 7
Other income
101,450 54,832 52,943 15,187
2,037,7 1,592,0 1,018, 803,16
83 72 650 4
OPERATING EXPENSES
Interest
1,365,2 1,038,6 681,55 517,54
50 06 5 8
Depreciation
270,000 221,933 135,00 103,46
0 6
Amortization
9,000 6,907 4,500 3,453
Other
130,947 91,378 54,205 42,714
1,775,1 1,358,8 875,26 667,18
97 24 0 1
Income before income taxes
262,586 233,248 143,39 135,98
0 3
Income taxes
(97,157 (86,302 (53,05 (50,31
) ) 5) 4)
Net income
165,429 146,946 90,335 85,669
Retained earnings
(deficit), beginning of 129,232 (22,490 204,32 38,787
period ) 6
Retained earnings, end of $ $ $ $
period 294,661 124,456 294,66 124,45
1 6
Earnings per share $ $ $ $
0.42 0.37 0.23 0.22
Consolidated Statements of Cash Flows
Six Months
Ended
June 30
2002 2001
Cash flows from operating
activities
Net Income $165,42 $146,94
9 6
Adjustments to reconcile net
income to net cash
from by operating
activities:
Depreciation
270,000 221,933
Amortization
9,000 6,907
Changes in
Increase (decrease) in
other assets 10,774 (13,213
)
Increase (decrease) in -
receivables (23,804
)
(Decrease) increase in
accounts payable (4,282) (60)
(Decrease) increase in
accrued interest (1,964) 31,050
Increase (decrease) 97,155 86,302
in other liabilities
Net cash from operating
activities 522,308 479,865
Cash flows from investing
activities
Additions to loan fees
- (66,929
)
Purchase of property
- (2,154,
816)
Sale of property -
191,943
Net cash from investing
activities 191,943 (2,221,
745)
Cash flows from financing
activities
Repayment of long-term debt (244,50
(398,82 0)
3)
Proceeds from note payable -
2,170,0
00
Repayment of note payable -
(225,00
0)
Proceeds from deposit on -
property 50,000
Net cash from financing
activities (623,82 1,975,5
3) 00
Change in cash
90,428 233,620
Cash at beginning of period
97,560 68,123
Cash at end of period $ $
187,988 301,743
BANK BUILDING CORPORATION
Notes to Consolidated Financial Statements
1. Presentation of Statements
In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments (all of
which were normal recurring adjustments) considered necessary for
a fair presentation of financial position, results of operations
and cash flows for the interim periods.
The accompanying financial statements include the Company's
wholly-owned subsidiary, Blackstone Properties, LLC. All
intercompany transactions between the Company and Blackstone have
been eliminated in these statements. Blackstone Properties owns
a shopping center in Southside Virginia and an office complex in
Roanoke, Virginia.
The results of operations for the interim period ended June 30,
2002 are not necessarily indicative of the results that may be
expected for the full year ended December 31, 2002. These
unaudited financial statements should be read in conjunction with
the financial statements, accounting policies and financial
footnotes thereto included in the Bank's 2001 Form 10-KSB filed
with the Securities and Exchange Commission.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and income and expenses during the
reporting period. Actual results could differ from those
estimates.
Except for the historical information contained in this form, the
matters set forth herein include Forward-Looking Statements
within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These Forward-Looking
Statements include, among other things, statements of goals,
plans, intentions, and expectations, regarding or based upon
desired business strategies, general economic conditions,
interest rates, developments in local and national markets, and
other matters, which, by their nature, are subject to significant
uncertainties. Because of these uncertainties and the
assumptions, actual future developments with respect to the
business of the Company may differ materially from those
contemplated by such statements.
Item 2 - Management's Discussion And Analysis Of Financial
Condition And Results Of Operations
The primary purpose of BBC is to acquire and develop property for
lease as bank offices to the Participating Banks. The selection
of sites and construction of the offices is done by the
Participating Banks that will lease the site to insure the needs
of the bank are met. There are, however, no commitments on the
part of any Participating Bank to present prospective office
properties to BBC nor are there any commitments on the part of
BBC to accept any prospective office properties offered by any of
the Participating Banks. The acquisition and development of
property is financed through loans from various sources.
The Company now owns 46 offices that are leased to various
Participating Banks under triple net operating leases. The
leasing bank is responsible for all property taxes, insurance and
maintenance costs on each leased office. The Company incurs both
interest and depreciation expenses related to each office as well
as other, minimal operating costs.
The Company also owns the Westlake Corner Shopping Center near
Smith Mountain Lake. This center consists of 50,000 square feet
of space on 29 acres. The anchor tenants for the center are Food
Lion, Revco, and Family Dollar Store. First National Bank, Rocky
Mount, Virginia opened an office on a portion of this property on
June 5, 1998. As noted above, the Company also owns Blackstone
Properties, a wholly-owned subsidiary, which owns a shopping
center in southside Virginia that is leased to a number of retail
tenants.
During 2001, Blackstone Properties acquired Executive Office
Park, an office complex located in Roanoke, Virginia. The
complex consists of six separate building containing
approximately 54,000 square feet of space divided into 28 suites.
For the first six months of 2002, the Company generated net
income of $165,429 compared to $146,946 for the previous year.
As has been the case historically, the Company's principal source
of revenue is from property rental while interest expense and
depreciation remain the principal expenses.
Part II - Other Information
Item 1 - Legal Proceedings
There are no material pending legal proceedings to which the
Company is a party or to which any of the Company's property
is subject.
Item 2 - Changes in Securities
There have been no changes in the Company's securities
during the period covered by this report.
Item 3 - Defaults Upon Senior Securities
There have been no defaults on any securities.
Item 4 - Submission of Matters to a Vote of Security Holders
There were no matters presented to a vote of security
holders during the period covered by this report.
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Forms 8-K
There have been no reports on Form 8-K filed during the
period covered by this report.
Exhibit 99 - Certification of Chief Executive Officer and
Chief Financial Officer.
Item 7 - Controls and Procedures
Within ninety days of the filing of this Form 10-QSB, management,
including the Chief Executive Officer and Chief Financial
Officer, conducted an evaluation of the Company's disclosure
controls and procedures as required by Rules 13a-14 and 13a-15 of
the Securities Exchange Act of 1934. Based on this evaluation,
the Chief Executive Officer and Chief Financial Officer has
concluded that the disclosure controls and procedures are
effective to ensure that material information relating to the
Company is made known to him in connection with the filing of
this Quarterly Report for the period ended June 30, 2002.
No changes have been made in the internal controls or other
factors that could significantly affect these controls subsequent
to the date of the evaluation referred to above.
Item 8 - Certifications
I, Worth Harris Carter, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Bank
Building Corporation;
2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or
omit to state a material fact necessary to make the
statements made, in light of the circumstances under which
such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this
quarterly report, fairly present in all material respects
the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods
presented in this quarterly report;
4. I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15e
and 15d-15e) for the registrant and have:
a). designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to me
by others within those entities, particularly during the
period in which this quarterly report is prepared;
b). evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90
days prior to the filing date of this quarterly report (the
"Evaluation Date"); and
c). presented in this quarterly report my conclusions about
the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
functions):
a). all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b). any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrant's internal controls; and
I have indicated in this quarterly report whether or not there
were significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
DATE: May 21, 2004 /s/ Worth Harris Carter, Jr.
Worth Harris Carter, Jr.
Chairman of the Board,
President,
Chief Executive Office and
Chief Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934 the Registrant has caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
BANK BUILDING CORPORATION
DATE: May 21, 2004 BY: /s/ Worth Harris Carter,
Jr.
Worth Harris Carter, Jr.
Chairman of the Board,
President,
Chief Executive Office and
Chief Financial Officer
EXHIBIT 99
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Bank Building
Corporation (the Company) on Form 10-QSB for the period ended
June 30, 2002 as filed with the Securities Exchange Commission on
the date hereof (the Report), I, Worth Harris Carter, Jr.,
Chairman, President, Chief Executive Officer, and Chief Financial
Officer of the Company certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
1. The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities and Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.
DATE: May 21, 2004 /s/ Worth Harris Carter, Jr.
Worth Harris Carter, Jr.
Chairman of the Board,
President,
Chief Executive Office and
Chief Financial Officer