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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT
For the transition period from ____________ to ____________
Commission File Number 0-22535
SISTERSVILLE BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 31-1516424
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
726 Wells Street, Sistersville, WV 26175
(Address of principal executive offices)
(304) 652-3671
(Registrant's telephone number, including area code)
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after distribution of
securities under a plan confirmed by a court. Yes X No
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date:
Class: Common Stock, par value $.10 per share
Outstanding at February 2, 2001: 484,866 shares
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SISTERSVILLE BANCORP, INC.
INDEX
Page
Number
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet (Unaudited) as of
December 31, 2000 and March 31, 2000 3
Consolidated Statement of Income (Unaudited)
for the Three Months ended December 31, 2000 and 1999 4
Consolidated Statement of Comprehensive Income (Unaudited)
for the Three Months ended December 31, 2000 and 1999 5
Consolidated Statement of Income (Unaudited)
for the Nine Months ended December 31, 2000 and 1999 6
Consolidated Statement of Comprehensive Income (Unaudited)
for the Nine Months ended December 31, 2000 and 1999 7
Consolidated Statement of Cash Flows (Unaudited)
for the Nine Months ended December 31, 2000 and 1999 8
Notes to Unaudited Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis 10 - 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Default Upon Senior Securities 14
Item 4. Submissions of Matters to a Vote
of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
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SISTERSVILLE BANCORP, INC.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
December 31, March 31,
2000 2000
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ASSETS
Cash and Cash Equivalents:
Cash and amounts due from banks $ 309,539 $ 141,439
Interest-bearing deposits with other institutions 294,363 247,632
----------- -----------
Total cash and cash equivalents 603,902 389,071
Investment Securities:
Securities held-to-maturity (fair value of
$192,524 and $239,716) 189,981 237,873
Securities available-for-sale 4,677,720 4,115,617
----------- -----------
Total investment securities 4,867,701 4,353,490
Loans receivable, (net of allowance for loan losses
of $175,700 and $174,550) 26,243,611 25,389,113
Office properties and equipment, net 1,676,799 1,368,620
Accrued interest receivable (net of reserve for
uncollected interest of $1,074 and $-0-) 201,300 215,451
Other assets 96,758 46,670
----------- -----------
TOTAL ASSETS $33,690,071 $31,762,415
=========== ===========
LIABILITIES
Deposits $23,216,810 $21,053,607
Federal Home Loan Bank advance 650,000 900,000
Deferred income taxes 416,600 199,796
Accrued interest payable and other liabilities 197,865 185,425
----------- -----------
TOTAL LIABILITIES 24,481,275 22,338,828
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STOCKHOLDERS' EQUITY
Preferred Stock, $.10 par value;
500,000 shares authorized, none issued -- --
Common Stock, $.10 par value;
2,000,000 shares authorized, 661,428 issued;
484,866 outstanding at December 31, 2000, and
538,739 outstanding at March 31, 2000 66,143 66,143
Additional paid-in capital 6,184,754 6,182,238
Treasury Stock, at cost (176,562 shares at
December 31, 2000, and 122,689 at March 31, 2000) (2,315,975) (1,649,297)
Retained Earnings - substantially restricted 4,973,675 4,983,212
Unearned Employee Stock Ownership Plan shares (ESOP) (327,009) (366,694)
Unearned Restricted Stock Plan shares (RSP) (194,397) (212,365)
Accumulated other comprehensive income 821,605 420,350
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TOTAL STOCKHOLDERS' EQUITY 9,208,796 9,423,587
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $33,690,071 $31,762,415
=========== ===========
See accompanying notes to the unaudited consolidated financial statements.
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SISTERSVILLE BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Three Months Ended December 31,
2000 1999
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INTEREST AND DIVIDEND INCOME
Taxable interest on loans $519,173 $494,470
Taxable interest on investments 46,866 53,613
Nontaxable interest on loans 4,619 3,875
Nontaxable interest on investments 10,288 10,299
Dividends on Federal Home Loan Bank Stock 4,500 4,010
Dividends on Federal Home Loan
Mortgage Corporation Stock 3,249 2,867
-------- --------
Total interest and dividend income 588,695 569,134
-------- --------
INTEREST EXPENSE
Deposits 261,047 220,387
Federal Home Loan Bank advance 3,860 13,161
-------- --------
Total interest expense 264,907 233,548
-------- --------
NET INTEREST INCOME 323,788 335,586
Provision for loan losses 300 950
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 323,488 334,636
-------- --------
NONINTEREST INCOME
Service charges 9,767 9,008
Other income 584 579
-------- --------
Total noninterest income 10,351 9,587
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NONINTEREST EXPENSE
Compensation and employee benefits 139,602 137,898
Occupancy 25,132 12,609
Furniture and equipment expense 12,780 9,429
Deposit insurance premiums 1,079 3,177
Supervisory examination, audit and legal fees 10,945 16,970
Advertising and public relations 4,021 8,349
Service bureau expense 20,975 17,606
Franchise, payroll and other taxes 14,957 15,271
Other expenses 20,168 17,995
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Total noninterest expense 249,659 239,304
-------- --------
Income before income taxes 84,180 104,919
INCOME TAXES 19,284 38,541
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NET INCOME $ 64,896 $ 66,378
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EARNINGS PER SHARE
Basic $ .14 $ .14
======== ========
Diluted $ .13 $ .13
======== ========
AVERAGE SHARES OUTSTANDING - BASIC 474,891 484,856
======== ========
AVERAGE SHARES OUTSTANDING - DILUTED 484,368 497,035
======== ========
See accompanying notes to the unaudited consolidated financial statements.
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SISTERSVILLE BANCORP, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended December 31,
2000 1999
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NET INCOME $ 64,896 $ 66,378
-------- --------
Other comprehensive income, net of tax:
Unrealized gain (loss) on securities:
Unrealized holding gain (loss) arising
during the period 242,421 (96,151)
Reclassification adjustment for gains
included in net income -- 14,806
-------- --------
Other comprehensive income (loss) 242,421 (81,345)
-------- --------
COMPREHENSIVE INCOME (LOSS) $307,317 $(14,967)
======== ========
See accompanying notes to the unaudited consolidated financial statements.
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SISTERSVILLE BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Nine Months Ended December 31,
2000 1999
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INTEREST AND DIVIDEND INCOME
Taxable interest on loans $1,530,133 $1,474,632
Taxable interest on investments 134,584 185,825
Nontaxable interest on loans 11,980 7,700
Nontaxable interest on investments 30,842 30,850
Dividends on Federal Home Loan Bank Stock 13,283 11,838
Dividends on Federal Home Loan Mortgage
Corporation Stock 9,747 8,600
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Total interest and dividend income 1,730,569 1,719,445
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INTEREST EXPENSE
Deposits 715,775 665,525
Federal Home Loan Bank advance 42,413 39,340
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Total interest expense 758,188 704,865
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NET INTEREST INCOME 972,381 1,014,580
Provision for loan losses 1,150 3,095
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 971,231 1,011,485
---------- ----------
NONINTEREST INCOME
Service charges 31,330 25,385
Other income 2,076 1,771
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Total noninterest income 33,406 27,156
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NONINTEREST EXPENSE
Compensation and employee benefits 434,015 407,522
Occupancy 57,788 35,652
Furniture and equipment expense 36,404 27,975
Deposit insurance premiums 3,259 9,308
Supervisory examination, audit and legal fees 39,110 51,972
Advertising and public relations 18,586 23,029
Service bureau expense 62,806 53,402
Franchise, payroll and other taxes 47,052 44,669
Loss on sale of available for sale securities -- 22,731
Other expenses 66,644 56,659
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Total noninterest expense 765,664 732,919
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Income before income taxes 238,973 305,722
INCOME TAXES 64,418 102,883
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NET INCOME $ 174,555 $ 202,839
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EARNINGS PER SHARE
Basic $ .36 $ .41
========== ==========
Diluted $ .35 $ .40
========== ==========
AVERAGE SHARES OUTSTANDING - BASIC 485,412 491,838
========== ==========
AVERAGE SHARES OUTSTANDING - DILUTED 495,017 505,175
========== ==========
See accompanying notes to the unaudited consolidated financial statements.
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SISTERSVILLE BANCORP, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Nine Months Ended December 31,
2000 1999
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NET INCOME $ 174,555 $ 202,839
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Other comprehensive income, net of tax:
Unrealized gain (loss) on securities:
Unrealized holding gain (loss) arising
during the period 401,255 (246,158)
Reclassification adjustment for gains
included in net income -- 14,806
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Other comprehensive income (loss) 401,255 (231,352)
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COMPREHENSIVE INCOME (LOSS) $ 575,810 $ (28,513)
========= =========
See accompanying notes to the unaudited consolidated financial statements.
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SISTERSVILLE BANCORP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Nine Months Ended December 31,
2000 1999
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OPERATING ACTIVITIES
Net income $ 174,555 $ 202,839
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and accretion, net 54,910 39,044
Loss (gain) on sale of available for sale securities -- 22,581
Provision for loan losses 1,150 3,095
Deferred income taxes (5,000) --
ESOP and RSP amortization 60,169 97,240
Decrease (increase) in accrued interest receivable
and other assets (35,937) (118,229)
Increase (decrease) in accrued interest payable
and other liabilities 12,440 (31,262)
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Net cash provided by operating activities 262,287 215,308
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INVESTING ACTIVITIES
Purchase of available-for-sale securities (11,200) (1,060,000)
Proceeds from maturity of available-for-sale securities -- 900,000
Proceeds from sale of available-for-sale securities -- 382,892
Principal collected on mortgage-backed securities 118,417 197,829
Net increase in loans (855,648) (922,743)
Purchases of office properties and equipment (361,458) (563,772)
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Net cash used for investing activities (1,109,889) (1,065,794)
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FINANCING ACTIVITIES
Net increase in deposits 2,163,203 167,686
Net Federal Home Loan Bank advance (250,000) --
Purchase of Treasury Stock (666,678) (322,527)
Dividends paid (184,092) (173,683)
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Net cash provided by (used for) financing activities 1,062,433 (328,524)
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Change in cash and cash equivalents 214,831 (1,179,010)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 389,071 1,873,799
----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 603,902 $ 694,789
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest on deposits and borrowings $ 757,266 $ 707,162
Income taxes 104,400 249,040
See accompanying notes to the unaudited consolidated financial statements.
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SISTERSVILLE BANCORP, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements of Sistersville Bancorp, Inc.(the
"Company"),include its wholly-owned subsidiary, First Federal Savings Bank (the
"Bank"). All significant intercompany balances and transactions have been
eliminated.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-QSB and, therefore, do not
necessarily include all information that would be included in audited financial
statements. The information furnished reflects all adjustments which are, in the
opinion of management, necessary for a fair statement of the results of
operations. All such adjustments are of a normal recurring nature. The results
of operations for the interim periods are not necessarily indicative of the
results to be expected for the fiscal year ended March 31, 2001.
These statements should be read in conjunction with the consolidated statements
as of and for the fiscal year ended March 31, 2000, and related notes which are
included in the Company's Annual Report on Form 10-KSB (file no. 0-2535).
NOTE 2 - RECENT ACCOUNTING STANDARDS
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 provides accounting and
reporting standards for derivatives instruments, including certain derivative
instruments embedded in other contracts, by requiring the recognition of those
items as assets or liabilities in the statement of financial position, recorded
at fair value. SFAS No. 133 precludes a held-to-maturity security from being
designated as a hedge item. However, at the date of initial application of SFAS
No. 133, an entity is permitted to transfer any held-to- maturity security into
the available-for-sale or trading categories. The unrealized holding gain or
loss on such transferred securities shall be reported consistent with the
requirements of SFAS No. 115, "Accounting for Certain Investment in Debt and
Equity Securities." Such transfers do not raise an issue regarding an entity's
intent to hold other debt securities to maturity in the future. The FASB has
also issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities-Deferral of the Effective date of FASB Statement No. 133." SFAS No.
137 defers the effective date of SFAS No. 133 to be effective for all fiscal
quarters beginning after June 15, 2000. Earlier adoption is permitted for any
fiscal quarter that begins after the issue date of SFAS No. 133. The adoption of
SFAS No. 133 did not have a material impact on the Company.
The FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities." SFAS No. 138 addresses a limited number of issues
causing implementation difficulties for numerous entities that have adopted SFAS
No. 133 and amends the accounting and reporting standards for SFAS No. 133 for
certain derivative instruments and certain hedging activities as indicated in
the statement. The effective date of this statement is concurrent with the
effective date of SFAS. No. 133 (deferred by SFAS No. 137), which is for all
fiscal quarters beginning after June 15, 2000. The adoption of SFAS No. 138 did
not have a material impact on the Company.
FASB recently issued SFAS No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." SFAS No. 140 replaces SFAS
No. 125 and revises the standards for accounting for securitizations and other
transfers of financial assets and collateral and requires certain disclosures,
but it carries over most of SFAS 125's provisions without reconsideration. Under
SFAS No. 140, after a transfer of financial assets, an entity must recognize the
financial and servicing assets it controls and the liabilities it has incurred,
and derecognize financial assets when control has been surrendered, and
derecognize liabilities when extinguished. A transfer of financial assets in
which the transferor surrenders control over those assets is accounted for as a
sale to the extent that consideration other than beneficial interests in the
transferred assets is received in exchanged. This Statement is generally
effective for activity occurring after March 31, 2001. Earlier or retroactive
application of this Statement is not permitted. Management believes that the
adoption of SFAS No. 140 will not have a material impact on the Company.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
Comparison of Financial Condition at December 31, 2000 and March 31, 2000
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Total assets increased by $1,928,000 to $33,690,000 at December 31, 2000, from
$31,762,000 at March 31, 2000. Cash and cash equivalents increased by $215,000
to $604,000 at December 31, 2000, from $389,000 at March 31, 2000. The increase
is a result of an increase in customer deposits, cash provided by operating
activities, and principal collected on mortgage-backed securities offset by the
net increase in loans, purchase of office properties and equipment, decrease in
the Federal Home Loan Bank advance, purchase of shares for treasury, and
dividends paid to stockholders. Investment securities increased $515,000 to
$4,868,000 at December 31, 2000, from $4,353,000 at March 31, 2000. The increase
was a result of the purchase of additional Federal Home Loan Bank (FHLB) stock
of $11,000 and an increase in the fair value of available-for-sale securities of
$623,000 offset by principal collected on mortgage-backed securities of
$118,000. Net loans receivable increased by $855,000 to $26,244,000 at December
31, 2000, from $25,389,000 at March 31, 2000. The increase in loans was
attributable to an increase in one- to-four family residential mortgage loans.
Such increases primarily reflect the economic health of the Bank's market area
and competitive pricing of the Bank's loan products. Office property and
equipment increased by $308,000 to $1,677,000 at December 31, 2000 from
$1,369,000 at March 31, 2000, which was a direct result of construction costs of
the new branch office, located in Parkersburg, West Virginia.
Total liabilities increased by $2,142,000 to $24,481,000 at December 31, 2000,
from $22,339,000 at March 31, 2000. This increase was mostly attributable to an
increase in deposits of $2,163,000, to $23,217,000 at December 31, 2000, from
$21,054,000 at March 31, 2000, which was a direct result of deposit growth
attributed to the new branch office. Deferred income taxes increased $217,000 to
$417,000 at December 31, 2000 from $200,000 at March 31, 2000 as a result of the
increase in the fair value of available-for-sale securities. The Federal Home
Loan Bank advance decreased by $250,000, from $900,000 at March 31, 2000, to
$650,000 at December 31, 2000, as funds provided by the increase in deposit
accounts were used to reduce the advance.
Stockholders' equity decreased by $215,000, to $9,209,000 at December 31, 2000,
from $9,424,000 at March 31, 2000. The decrease was attributable to $667,000 in
shares purchased for treasury and $184,000 in dividends paid to stockholders,
offset by net income of $175,000, an increase in unrealized gains on
available-for-sale securities of $401,000 and amortization of RSP and ESOP
shares of $60,000. The increase in treasury stock was a result of a ten percent
(10%) stock repurchase completed by the Company in December.
Comparison of the Results of Operations for the Three Months ended
December 31, 2000 and 1999
- ------------------------------------------------------------------
Net income decreased by $1,000, to net income of $65,000 for the three month
period ended December 31, 2000, compared to net income of $66,000 for the three
months ended December 31, 1999.
Interest and dividend income increased by $20,000, from $569,000 for the three
months ended December 31, 1999, to $589,000 for the same period in 2000. The
increase is attributed to an increase in interest on loans of $26,000, partially
offset by a decrease in interest and dividends on investments of $6,000. The
increase in interest on loans is attributed to the average balance on loans
increasing by $846,000, to $26,135,000 for the period ended December 31, 2000,
compared to $25,289,000 for the period ended December 31, 1999. The decrease in
interest and dividends on investments is a result of a lower average balance in
funds invested for the December 31, 2000 period compared to the same period in
1999.
Interest expense increased by $31,000, to $265,000 for the three month period
ended December 31, 2000, compared to $234,000 for the same three month period in
1999. Interest expense on deposits increased by $41,000, to $261,000 for the
three month period ended December 31, 2000, compared to $220,000, for the same
period in 1999. The increase in interest on deposits is attributed to an
increase in average deposits of $1,926,000, to $23,071,000 for the three month
period ended December 31, 2000, compared to $21,145,000 for the three month
period ended December 31, 1999, and due to an increase of 0.37% in the average
yield on deposits during the period ended December 31, 2000 compared to the
corresponding period in 1999. Interest expense on advances from the Federal Home
Loan Bank decreased by $10,000 due to a reduction in the average balance of the
advance during the December 31, 2000 period.
Management regularly performs an analysis to identify the inherent risk of loss
in its loan portfolio. This analysis included evaluation of concentrations of
credit, past loss experience, current economic conditions, amount and
composition of the loan portfolio (including loans specifically monitored by
management), estimated fair value of underlying collateral, loan commitments
outstanding, delinquencies, and other factors. Based on this analysis,
management established an allowance for loan losses. The allowance for loan
losses is adjusted periodically by a provision for loan losses which is charged
to operations based on management's evaluation of the losses that may be
incurred in the Bank's portfolio. The provision for loan losses decreased by
$650, to $300, for the three months ended December 31, 2000, compared to $950
for the same period in 1999.
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The Bank will continue to monitor its allowance for loan losses and make future
additions to the allowance through the provision for loan losses as economic
conditions dictate. Although the Bank maintains its allowance for loan losses at
a level that it considers to be adequate to provide for the inherent risk of
loss it its loan portfolio, there can be no assurance that future losses will
not exceed estimated amounts or that additional provisions for loan losses will
not be required in future periods. In addition, the Bank's determination as to
the amount of its allowance for loan losses is subject to review by its primary
federal regulator, the Office of Thrift Supervision (OTS), as part of its
examination process, which may result in the establishment of an additional
allowance based on the judgment of the OTS after a review of the information
available at the time of the OTS examination.
Non-interest income increased by $1,000, to $10,000 for the three month period
ended December 31, 2000, compared to $9,000, for the same period in 1999. The
increase is attributed to the increase in service charge income.
Non-interest expense increased by $11,000, to $250,000 for the three month
period ended December 31, 2000, compared to $239,000 for the three month period
ended December 31, 1999. The increase is a result of increased salaries and
benefits and occupancy expenses associated with the new branch offset by the
decrease in Restricted Stock Plan ("RSP") compensation expense. RSP compensation
expense decreased as a result of an agreement with employees to defer the
earning and recognition of their previously awarded shares.
Income tax expense decreased by $20,000, from $39,000 for the three month period
ended December 31, 1999, to $19,000 for the three month period ended December
31, 2000. The decrease is attributed to lower pre-tax income for the three month
period ended December 31, 2000 compared to the same period in 1999.
Comparison of the Results of Operations for the Nine Months
ended December 31, 2000 and 1999
- -----------------------------------------------------------
Net income decreased by $28,000, to net income of $175,000 for the nine month
period ended December 31, 2000, compared to net income of $203,000 for the nine
months ended December 31, 1999.
Interest and dividend income increased by $11,000, from $1,720,000 for the nine
months ended December 31, 1999, to $1,731,000 for the same period in 2000. The
increase is attributed to an increase in interest on loans of $60,000, to
$1,542,000 for the nine months ended December 31, 2000, compared to $1,482,000,
for the nine months ended December 31, 1999. The increase in interest on loans
is attributed to the average balance on loans increasing by $1,048,000, to
$25,930,000 for the period ended December 31, 2000, compared to an average
balance on loans of $24,882,000 for the period ended December 31, 1999. Interest
on investments decreased $49,000, from $237,000 for the nine month period ended
December 31, 1999, to $188,000 for the same period in 2000. The decrease in
interest on investments was due to the decrease in average investments of
$1,502,000, from $6,205,000 for the nine month period ended December 31, 1999,
to $4,703,000 for the nine month period ended December 31, 2000.
Interest expense increased by $53,000, to $758,000 for the nine month period
ended December 31, 2000, compared to $705,000 for the same period in 1999.
Interest expense on deposits increased by $50,000, to $716,000 for the nine
month period ended December 31, 2000, compared to $666,000 for the same period
in 1999. The increase in interest expense on deposits is attributed to the
increase in average deposits of $770,000, to $21,963,000 for the nine month
period ended December 31, 2000, compared to $21,193,000 for the nine month
period ended December 31, 1999, and due to an increase of 0.16% in the average
yield on deposits during the period ended December 31, 2000 compared to the
corresponding period in 1999. Interest expense on Federal Home Loan Bank
advances increased $3,000 for the period ended December 31, 2000 compared to the
corresponding period in 1999.
Management regularly performs an analysis to identify the inherent risk of loss
in its loan portfolio. This analysis included evaluation of concentrations of
credit, past loss experience, current economic conditions, amount and
composition of the loan portfolio (including loans specifically monitored by
management), estimated fair value of underlying collateral, loan commitments
outstanding, delinquencies, and other factors. Based on this analysis,
management established an allowance for loan losses. The allowance for loan
losses is adjusted periodically by a provision for loan losses, which is charged
to operations based on management's evaluation of the losses that may be
incurred in the Bank's portfolio. The provision for loan losses decreased by
$2,000, to $1,000, for the nine months ended December 31, 2000, compared to
$3,000 for the same period in 1999.
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The Bank will continue to monitor its allowance for loan losses and make future
additions to the allowance through the provision for loan losses as economic
conditions dictate. Although the Bank maintains its allowance for loan losses at
a level that it considers to be adequate to provide for the inherent risk of
loss it its loan portfolio, there can be no assurance that future losses will
not exceed estimated amounts or that additional provisions for loan losses will
not be required in future periods. In addition, the Bank's determination as to
the amount of its allowance for loan losses is subject to review by its primary
federal regulator, the Office of Thrift Supervision (OTS), as part of its
examination process, which may result in the establishment of an additional
allowance based on the judgment of the OTS after a review of the information
available at the time of the OTS examination.
Non-interest income increased by $6,000, to $33,000 for the nine month period
ended December 31, 2000, compared to $27,000, for the same period in 1999. The
increase is attributed to an increase in service charge income.
Non-interest expense increased by $33,000, to $766,000 for the nine month period
ended December 31, 2000, compared to $733,000 for the nine month period ended
December 31, 1999. The increase is attributed to an increase in salaries and
benefits of $27,000, to $434,000 for the nine month period ended December 31,
2000, from $407,000 for the same nine month period in 1999, which is the result
of the addition of personnel for the new Parkersburg branch office. This was
partially offset by a loss on the sale of securities of $23,000 during the nine
month period ended December 31, 1999, which did not occur during the nine month
period ended December 31, 2000. The remaining increase of $29,000 for the nine
month period ended December 31, 2000, compared to the same nine month period in
1999, is directly attributed to the increases in occupancy, advertising, and
equipment expense related to the opening of the new branch in Parkersburg, West
Virginia.
Income tax expense decreased by $39,000, from $103,000 for the nine month period
ended December 31, 1999, to $64,000 for the nine month period ended December 31,
2000, attributed to a decrease in pre-tax income.
Liquidity and Capital Resources
- -------------------------------
The Bank's primary sources of funds are deposits, amortization and prepayment of
loans, maturities of investment securities, and funds provided from operations.
While scheduled loan repayments are a relatively predictable source of funds,
deposit flows and loan prepayments are greatly influenced by general interest
rates, economic conditions, and competition. In addition, the Bank invests
excess funds in overnight deposits which provide liquidity to meet lending
requirements.
The Bank has other sources of liquidity if a need for additional funds arises.
Additional sources of liquidity include funds available from the Federal Home
Loan Bank ("FHLB") of Pittsburgh amounting to $21.2 million. As of December 31,
2000, the Bank had $650,000 in outstanding advances from the FHLB.
As of December 31, 2000, the Bank had $1,120,000 in outstanding mortgage and
construction loan commitments. Management believes that it has adequate sources
to meet the actual funding requirements.
Management monitors the Bank's tangible, core, and risk-based capital ratios in
order to assess compliance with OTS regulations. At December 31, 2000, the Bank
exceeded the minimum capital ratios requirements imposed by the OTS.
At December 31, 2000, the Bank's capital ratios were as follows:
Bank
Requirement Actual
----------- ------
Tangible capital 1.50% 23.74%
Core capital 4.00% 23.74%
Risk-based capital 8.00% 45.10%
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RISK ELEMENTS
The table below shows information concerning non-performing assets including
non-accrual loans, renegotiated loans, loans 90 days or more past due, other
real estate loans, and repossessed assets. A loan is classified as non- accrual
when, in the opinion of management, there are serious doubts about
collectibility of interest and principal. At the time the accrual of interest is
discontinued, future income is recognized only when cash is received.
Renegotiated loans are those loans which terms have been renegotiated to provide
a reduction or deferral of principal or interest as a result of the
deterioration of the borrower's ability to pay.
December 31, March 31,
2000 2000
------------ --------
(dollars in thousands)
Loans on non-accrual basis $ -- $ --
Loans past due 90 days or more 47 --
Renegotiated loans -- --
------- -----
Total non-performing loans 47 --
------- -----
Other real estate -- --
Repossessed assets -- --
------- -----
Total non-performing assets $ 47 $ --
======= =====
Non-performing loans as a
percent of total loans .18% --
======= =====
Non-performing assets as a
percent of total assets .14% --
======= =====
Allowance for loan losses to
non-performing loans 373.83% --
======= =====
Management monitors impaired loans on a continual basis. As of December 31,
2000, the Company had no impaired loans.
During the nine months ended December 31, 2000, loans increased $854,000 and
non-performing loans increased $47,000 while the allowance for loan losses
increased $1,000 for the same period. The percentage of allowance for loan
losses to loans outstanding remained at 0.7% during this time period. The
collateral requirements on such loans reduce the risk of potential losses to an
acceptable level in management's opinion.
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14
PART II. OTHER INFORMATION
Item 1. Legal proceedings
The registrant was not engaged in any material pending legal
proceedings as of the date of this Report. From time to time, the Bank is a
party to legal proceedings within the normal course of business wherein it
enforces its security interest in loans made by it, and other matters of a like
kind.
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
Any proposals of shareholders intended to be included in the Company's
proxy statement and proxy card for the 2001 Annual Meeting of Shareholders
should be sent to the Company by certified mail and must be received by the
Company not later than May 21, 2001. In addition, if a shareholder intends to
present a proposal at the 2001 Annual Meeting without including the proposal in
the proxy materials related to that meeting and, if the proposal is not received
by May 21, 2001, then the proxies designated by the Board of Directors of the
Company for the 2001 Annual Meeting of Shareholders of the Company may vote in
their discretion on any such proposal, any shares for which they have been
appointed proxies, without mention of such matter in the proxy statement or on
the proxy card for such meeting.
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits:
27. Financial Data Schedule (Electronic Filing Only)
99.1 Independent Accountant's Report
(b) None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused the report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SISTERSVILLE BANCORP, INC.
Date: February 2, 2001 By: /s/ Stanley M. Kiser
----------------------------------
Stanley M. Kiser
President and Chief Executive Officer
(Duly Authorized Officer)
Date: February 2, 2001 By: /s/ Stanley M. Kiser
----------------------------------
Stanley M. Kiser
President and Chief Executive Officer
(Principal Executive and Financial Officer)
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