SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004.
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
- ----- SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------- -------------
Commission File No. 33-31013-A
ISLANDS BANCORP
----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
SOUTH CAROLINA 57-1082388
------------------------ ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
2348 Boundary Street, Beaufort, SC 29902
---------------------------------------------------------------
(Address of Principal Executive Offices)
(843) 521-1968
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
N/A
------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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 preceding
12 months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common equity as of the latest
practicable date.
Common stock, no par value per share, 652,705 shares outstanding as of May
12, 2004.
Transitional small business disclosure format (check one):
Yes No X
---- ----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
------- --------------------
ISLANDS BANCORP
BEAUFORT, SOUTH CAROLINA
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS March 31, December 31,
- ------ 2004 2003
----------- ----------
Cash and due from banks $ 466,550 $ 318,730
Federal funds sold, net 1,484,000 8,000
----------- -----------
Total cash and cash equivalents $ 1,950,550 $ 326,730
Securities:
Available-for-sale, at fair value 2,121,375 2,322,726
Loans, net 28,574,674 26,346,760
Property and equipment, net 2,933,128 2,968,191
Other assets 664,086 469,298
----------- -----------
Total Assets $36,243,813 $32,433,705
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Deposits
Non-interest bearing deposits $ 3,944,292 $ 2,413,409
Interest bearing deposits 25,575,985 23,243,145
----------- -----------
Total deposits $29,520,277 $25,656,554
Federal funds purchased and borrowings 1,500,000 1,500,000
Other liabilities 94,955 152,247
----------- -----------
Total liabilities $31,115,232 $27,308,801
----------- -----------
Commitments and contingencies
Shareholders' Equity:
Common stock, zero par value,
10,000,000 shares authorized,
652,705 shares issued and
outstanding $ 6,213,061 $ 6,213,061
Retained deficit (1,065,806) (1,067,330)
Accumulated other comprehensive loss (18,674) (20,827)
----------- -----------
Total Shareholders' Equity $ 5,128,581 $ 5,124,904
----------- -----------
Total Liabilities and
Shareholders' Equity $36,243,813 $32,433,705
=========== ===========
Refer to notes to the consolidated financial statements.
ISLANDS BANCORP
BEAUFORT, SOUTH CAROLINA
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended
March 31,
------------------------
2004 2003
---- ----
Interest income $ 521,141 $ 381,769
Interest expense 153,227 140,135
--------- ---------
Net interest income $ 367,914 $ 241,634
Provision for loan losses 43,182 20,382
--------- ---------
Net interest income after
provision for loan losses $ 324,732 $ 221,252
--------- ---------
Other income:
Service fees on deposit accounts $ 37,556 $ 38,060
Miscellaneous, other 4,366 1,441
--------- ---------
Total other income $ 41,922 $ 39,501
--------- ---------
Other expenses:
Salaries and benefits $ 203,753 $ 168,617
Depreciation expense 35,063 34,499
Data processing 28,661 27,924
Rent expense 2,000 - -
ATM machine expense 9,345 6,700
Advertising and public relations 4,493 2,286
Utilities and telephone 6,708 6,269
Legal & professional 14,431 11,385
Other operating expenses 52,486 44,250
--------- ---------
Total operating expenses $ 356,940 $ 301,930
--------- ---------
Income (loss) before income tax $ 9,714 $ (41,177)
Income tax (benefit) 8,190 (15,286)
--------- ---------
Net income (loss) $ 1,524 $ (25,891)
========= =========
Basic income (loss) per share $ .00 $ (.04)
========= =========
Diluted income (loss) per share $ .00 $ (.04)
========= =========
Refer to notes to the consolidated financial statements.
ISLANDS BANCORP
BEAUFORT, SOUTH CAROLINA
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the three-month
period ended March 31,
------------------------------
2004 2003
---- ----
Net cash used by operating activities $ (170,158) $ (628,958)
------------ ------------
Cash flows from investing activities:
Purchase of securities $ - - $ (1,239,678)
Securities paydowns, calls, maturities 201,351 68,498
Increase in loans (2,271,096) (1,947,156)
Purchase of fixed assets - - (460)
------------ ------------
Net cash used in investing activities $ (2,069,745) $ (3,118,796)
------------ ------------
Cash flows from financing activities:
Increase in deposits $ 3,863,723 $ 4,688,400
Decrease in federal funds purchased - - (308,000)
------------ ------------
Net cash provided
from financing activities $ 3,863,723 $ 4,380,400
------------ ------------
Net increase in cash
and cash equivalents $ 1,623,820 $ 632,646
Cash and cash equivalents,
beginning of period 326,730 394,484
------------ ------------
Cash and cash equivalents,
end of period $ 1,950,550 $ 1,027,130
============ ============
Refer to notes to the consolidated financial statements.
ISLANDS BANCORP
BEAUFORT, SOUTH CAROLINA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2003 AND 2004
(UNAUDITED)
Common Stock Accumulated
------------------ Other
No. of Retained Comprehensive
Shares Amount Earnings Income Total
------ ------ -------- ------ -----
Balance,
December 31,
2002 652,705 $ 6,213,061 $(1,086,429) $ 7,252 $ 5,133,884
--------- ---------- ---------- -------- ----------
Comprehensive Income:
- ---------------------
Net (loss),
three-month
period ended
March 31,
2003 - - - - (25,891) - - (25,891)
Net unrealized
gains on
securities,
three-month
period ended
March 31, 2003 - - - - - - 1,118 1,118
--------- ---------- ---------- -------- ----------
Total comprehensive
income - - - - (25,891) 1,118 (24,773)
--------- ---------- ---------- -------- ----------
Balance,
March 31,
2003 652,705 $ 6,213,061 $(1,112,320) $ 8,370 $ 5,109,111
========= ========== ========== ======== ==========
- --------------------------
Balance,
December 31,
2003 652,705 $ 6,213,061 $(1,067,330) $ (20,827) $ 5,124,904
--------- ---------- ---------- -------- ----------
Comprehensive Income:
- ---------------------
Net income,
three-month
period ended
March 31,
2004 - - - - 1,524 - - 1,524
Net unrealized
gains on
securities,
three-month
period ended
March 31, 2004 - - - - - - 2,153 2,153
--------- ---------- ---------- -------- ----------
Total comprehensive
income - - - - 1,524 2,153 3,677
--------- ---------- ---------- -------- ----------
Balance,
March 31,
2004 652,705 $ 6,213,061 $(1,065,806) $ (18,674) $ 5,128,581
========= ========== ========== ======== ==========
Refer to notes to the consolidated financial statements.
ISLANDS BANCORP
BEAUFORT, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2004
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310 of Regulation
S-B promulgated by the Securities and Exchange Commission. Accordingly, they
do not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of those of a normal recurring
nature) considered necessary for a fair presentation have been included.
Operating results for the three-month period ended March 31, 2004 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2004. These statements should be read in conjunction with the
financial statements and footnotes thereto included in the annual report for
the year ended December 31, 2003.
NOTE 2 - SUMMARY OF ORGANIZATION
Islands Bancorp (the "Company") is a one-bank holding company with respect
to Islands Community Bank, N.A., Beaufort, South Carolina (the "Bank"). The
Company was incorporated July 23, 1999, and its principal operations commenced
when the Bank opened for business on July 9, 2001. The Bank is engaged in the
business of gathering and obtaining customers' deposits and providing
commercial, consumer and real estate loans to the general public.
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
In January 2003, the Financial Accounting Standards Board ("FASB") issued
Consolidation of Variable Interest Entities, an interpretation of Accounting
Research Bulletin No. 51 (the Interpretation), FASB Interpretation No. 46 ("FIN
46"). The purpose of this interpretation is to provide guidance on how to
identify a variable interest entity (VIE) and determine when the assets,
liabilities, non-controlling interests, and results of operations of a VIE need
to be included in a company's consolidated financial statements. A company
that holds variable interest in an entity will need to consolidate that entity
if the company's interest in the VIE is such that the company will absorb a
majority of the VIE's expected losses and or receive a majority of the VIE's
expected residual returns, if they occur. As of March 31, 2004, management
believes that the Company does not have any VIE's which would be consolidated
under the provisions of FIN 46.
In December 2003, the FASB issued a revision of FIN 46. The Revised
Interpretation codifies both the proposed modifications and other decisions
previously issued through certain FASB Staff Positions (FSPs) and supersedes
the original Interpretation to include: (1) deferring the effective date of the
Interpretation's provisions for certain variable interests, (2) providing
additional scope exceptions for certain other variable interests, (3) clarifying
the impact of troubled debt restructurings on the requirement to reconsider
(a) whether an entity is a VIE or (b) which party is the primary beneficiary of
a VIE, and (4) revising Appendix B of the Interpretation to provide additional
guidance on what constitutes a variable interest. The revised Interpretation
is effective for financial statements of periods ending after March 15, 2004.
Adoption of the revised FIN 46 did not have an adverse effect on the Company's
financial position, results of operations, or liquidity.
SFAS No. 149 "Amendment of Statement 133 on Derivative Instruments and
Hedging Activities." In April 2003, the FASB issued SFAS No. 149, which amends
and clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities under SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities," resulting in more consistent reporting of contracts
as either derivatives or hybrid instruments. SFAS No. 149 is effective for
contracts entered into or modified after June 30, 2003, and should be applied
prospectively. Adoption of SFAS No. 149 did not have a material impact on
the Company's financial position, results of operations or liquidity.
SFAS No. 150 "Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity." In May 2003, the FASB issued
SFAS No. 150, which establishes standards for how certain financial instruments
with characteristics of both liabilities and equity should be measured and
classified. Certain financial instruments with characteristics of both
liabilities and equity will be required to be classified as a liability. This
statement is effective for financial instruments entered into or modified after
May 31, 2003, and July 1, 2003 for all other financial instruments with the
exception of existing mandatorily redeemable financial instruments issued by
limited life subsidiaries that have been indefinitely deferred from the scope
of the statements. Adoption of SFAS 150 did not have a material impact on the
Company's financial position, results of operations or liquidity.
Statement of Position 03-3 ("SOP 03-3"): "Accounting for Certain Loans or
Debt Securities Acquired in a Transfer." In December 2003, the American
Institute of Certified Public Accountants ("AICPA") issued SOP 03-3. SOP 03-3
requires loans acquired through a transfer, such as a business combination,
where there are differences in expected cash flows and contractual cash flows
due in part to credit quality be recognized at their fair value. The excess of
contractual cash flows over expected cash flows is not to be recognized as an
adjustment of yield, loss accrual, or valuation allowance. Valuation allowances
cannot be created nor "carried over" in the initial accounting for loans
acquired in a transfer on loans subject to SFAS 114, "Accounting by Creditors
for Impairment of a Loan." This SOP is effective for loans acquired after
December 31, 2004, with early adoption encouraged. The Company does not believe
the adoption of SOP 03-3 will have a material impact on the Company's financial
position, results of operations or liquidity.
In December 2003, the FASB issued a revision of SFAS No. 132, Employer's
Disclosures about Pensions and Other Postretirement Benefits. Most of the
provisions of the revised statements are effective for fiscal years ending after
December 15, 2003. The Statement requires more detailed disclosures about plan
assets, investment strategies, benefit obligations, cash flows, and the
assumptions used in accounting for the plans. Adoption of the revision to SFAS
No. 132 will not have a material impact on the Company's financial position,
results of operations or liquidity.
On December 11, 2003, the SEC Staff announced its intention to release a
Staff Accounting Bulletin in order to clarify existing accounting practices
relating to the valuation of issued loan commitments, including interest rate
lock commitments, subject to Derivative Implementation Group Issue C-13, When a
Loan Commitment is included in Scope of Statement 133. The new guidance is
expected to require all registrants to begin accounting for these commitments
subject to SFAS No. 133 as written options that would be reported as liabilities
until they are exercised or expire. The provisions of this guidance are
expected to be effective for loan commitments entered into after March 31, 2004.
Management intends to adopt the provisions of this guidance effective April 1,
2004 and does not anticipate that the adoption will have a materially adverse
effect on the Company's financial position, results of operations or liquidity.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- ------ -----------------------------------------------------------------------
OF OPERATIONS.
--------------
Critical Accounting Policies
- ----------------------------
Critical accounting policies are defined as those that were reflective
of significant judgments and uncertainties and could potentially result
in materially different results under different assumptions and conditions.
We believe that our most critical accounting policy upon which our financial
condition depends, and which involve the most complex or subjective decisions
or assessments is as follows:
Allowance for Loan Losses: Arriving at an appropriate level of allowance
for loan losses involves a high degree of judgment. The Company's allowance
for loan losses provides for probable losses based upon evaluations of known
and inherent risks in the loan portfolio. Management uses historical
information to assess the adequacy of the allowance for loan losses as well
as the prevailing business environment; as it is affected by changing economic
conditions and various external factors, which may impact the portfolio in ways
currently unforeseen. The allowance is increased by provisions for loan losses
and by recoveries of loans previously charge-off, and is reduced by loans
charged-off. For an additional discussion of the Company's methodology of
assessing the adequacy of the allowance for loan losses, please refer to the
December 31, 2003 Management's Discussion and Analysis of Financial Condition
and Results of Operations found in the annual report as well as in the annual
filing with the SEC.
Overview
- --------
The Company's results of operations are largely dependent on interest
income, which is the difference between the interest earned on loans and
securities and interest paid on deposits and borrowings. The results of
operations are also affected by the level of income/fees from loans, deposits,
borrowings, as well as operating expenses, the provision for loan losses, the
impact of federal and state income taxes, and the relative levels of interest
rates and economic activity.
For calendar year 2004, the Company anticipates a higher net interest
income as the Bank continues to expand its asset base. Recently, the Bank hired
an experienced, local loan officer having knowledge of the Bank's primary
service area. Because of his addition to the management team, loans are
expected to grow at a faster rate than in the past. It appears that the
interest environment is about to change as many economists are predicting that
the Federal Reserve Board will increase short-term rates to combat inflationary
fears and to bring down the growth in GDP rate to a more sustainable level.
Because the Bank is asset sensitive, an increase in interest rates should
benefit the Bank at least in the short run. This is due to the fact that
assets would reprice faster than liabilities.
There are a number of initiatives that are expected to contribute to 2004
and beyond. These initiatives include:
* expectation of higher productivity generated by a new loan production
office in Charleston, South Carolina, and
* investment in additional new business development capabilities and
process improvements within the lending area.
Total assets increased by $3.8 million, from $32.4 million at December 31,
2003 to $36.2 million at March 31, 2004. More specifically, cash and cash
equivalents increased by $1.6 million, from $.3 million at December 31, 2003 to
$1.9 million at March 31, 2004; securities decreased by $.2 million, from $2.3
million at December 31, 2003 to $2.1 million at March 31, 2004; loans increased
by $2.2 million, from $26.4 million at December 31, 2003 to $28.6 million at
March 31, 2004; property and equipment decreased slightly for depreciation; and
all other remaining assets increased by $.2 million, from $.5 million at
December 31, 2003 to $.7 million at March 31, 2004. To fund the growth in
assets, deposits increased by $3.9 million, from $25.6 million at December 31,
2003 to $29.5 million at March 31, 2004; and other liabilities decreased by
$.1 million, from $.2 million at December 31, 2003 to $.1 million at March 31,
2004.
Liquidity and Sources of Capital
- --------------------------------
From its inception until July 6, 2001, the Company's operations were
funded primarily through loans and other borrowings. On July 6, 2001, the
Company received approximately $6.2 million from the sale of its common stock
to the public. Soon thereafter, the Company injected $6.0 million into the
Bank's capital accounts and used the majority of the remaining funds to pay-off
debt it had incurred during the development stage. The Bank, in turn, also
paid-off debts associated with its organizational costs, the purchase of its
facilities, and the purchase of its furniture and equipment.
Liquidity is the Company's ability to meet all deposit withdrawals
immediately, while also providing for the credit needs of customers. The March
31, 2004 financial statements evidence a satisfactory liquidity position as
total cash and cash equivalents amounted to $2.0 million, representing 5.4%
of total assets. Investment securities, which amounted to $2.1 million, or
5.9% of total assets, provide a secondary source of liquidity because securities
can be converted into cash in a timely manner. The Bank is a member of the
Federal Reserve System and maintains relationships with several correspondent
banks and, thus, could obtain funds from these banks on short notice. The
Company's management closely monitors and maintains appropriate levels of
interest earning assets and interest bearing liabilities, so that maturities
of assets can provide adequate funds to meet customer withdrawals and loan
demand. The Company knows of no trends, demands, commitments, events or
uncertainties that will result in or are reasonably likely to result in its
liquidity increasing or decreasing in any material way. The Bank maintains
an adequate level of capitalization as measured by the following capital
ratios and the respective minimum capital requirements by the Bank's primary
regulator, the OCC.
Bank's Minimum required
March 31, 2004 by the OCC
-------------- ----------------
Leverage ratio 14.9% 4.0%
Risk weighted ratio 18.4% 8.0%
Results of Operations
- ---------------------
For the three-month period ended March 31, 2004, net income amounted to
$1,524, or $.00 per both basic and diluted share. For the three-month
period ended March 31, 2003, net (loss) amounted to $(25,891) or $(.04) per both
basic and diluted share. The primary reasons for the improvement in income for
the three-month period ended March 31, 2004 when compared with the three-month
period ended March 31, 2003 are as follows:
a. Interest income, which represents interest received on interest earning
assets, increased from $381,769 for the three-month period ended March 31,
2003 to $521,141 for the three-month period ended March 31, 2004, an
increase of $139,372. The cost of funds, which represents interest paid
on deposits and borrowings, increased as well, from $140,135 for the three-
month period ended March 31, 2003 to $153,227 for the three-month period
ended March 31, 2004, an increase of $13,092. Because the growth in
interest income during the three-month period ended March 31, 2004 out-
paced the increase in cost of funds, net interest income grew from $241,634
for the three-month period ended March 31, 2003 to $367,914 for the three-
month period ended March 31, 2004.
Net interest yield, defined as net interest income divided by average
interest earnings assets, increased from 4.31% during the three-month
period ended March 31, 2003 to 4.89% during the three-month period ended
March 31, 2004. The increase is due to the fact the Company was able to
increase the yield on its earning assets in a declining rate environment.
Below is pertinent information concerning the yield on earning assets and
the cost of funds for the three-month period ended March 31, 2004.
(Dollars in '000s)
Avg. Assets/ Interest Yield/
Description Liabilities Income/Expense Cost
----------- ----------- -------------- ------
Federal funds $ 508 $ 1 .79%
Securities 2,244 18 3.21%
Loans 27,364 502 7.34%
------ --- ----
Total $30,116 $521 6.92%
====== --- ----
Federal funds $ 43 $ -- .98%
FHLB borrowings 1,500 8 2.13
Transactional
accounts 5,765 17 1.18%
Savings 468 1 .85%
CD's 16,546 127 3.07%
------ --- ----
Total $24,322 $153 2.52%
====== --- ----
Net interest income $368
===
Net yield on earnings assets 4.89%
====
b. For the three-month period ended March 31, 2004, non-interest income
amounted to $41,922, or .49% of average assets. By comparison, non-
interest income for the three-month period ended March 31, 2003 amounted to
$39,501, or .60% of average assets. Non-interest income, as a percent
of average assets, declined in the year-over-year comparison because
service charges on deposit accounts are priced very competitively in order
to attract such deposits to the Bank.
c. For the three-month period ended March 31, 2004, non-interest expense
amounted to $356,940, or 4.16% of average assets. By comparison, for the
three-month period ended March 31, 2003, non-interest expense amounted to
$301,930, or 4.57% of average assets. This decrease is primarily due to
the improvement of operational efficiencies.
d. Provision for loan losses for the three-month periods ended March 31, 2004
and 2003 amounted to $43,182 and $20,382, respectively. The increase in
the 2004 period, as compared to the 2003 period, is due to the growth in
the loan portfolio rather than a deterioration in asset quality.
During the three-month period ended March 31, 2004, the allowance for loan
losses increased by $27,088, to $353,643. The allowance for loan losses as a
percent of gross loans remained unchanged at 1.22% at December 31, 2003 and
March 31, 2004. Management considers the allowance for loan losses to be
adequate and sufficient to absorb possible future losses; however, there can be
no assurance that charge-offs in future periods will not exceed the allowance
for loan losses or that additional provisions to the allowance will not be
required.
The Company is not aware of any current recommendation by the regulatory
authorities which, if it was to be implemented, would have a material effect on
the Company's liquidity, capital resources, or results of operations.
The Company cautions readers of this report that such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from those expressed or implied by such forward-
looking statements. Although the Company's management believes that their
expectations of future performance are based on reasonable assumptions within
the bounds of their knowledge of their business and operations, there can be no
assurance that actual results will not differ materially from their
expectations.
The Company's operating performance each quarter is subject to various
risks and uncertainties that are discussed in detail in the Company's filings
with the SEC, including the "Risk Factors" section of the Company's Registration
Statement (Registration No. 333-92653) as filed with the SEC and declared
effective on March 13, 2000.
ITEM 3 - CONTROLS AND PROCEDURES
- ------ -----------------------
At March 31, 2004, an evaluation was performed, under the supervision
and with the participation of the Company's management, including the Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures.
Based on the evaluation, the Company's management, including the Chief Executive
Officer and Chief Financial Officer, concluded that the Company's disclosure
controls and procedures were effective at timely alerting them to material
information relating to the Company (including its consolidated subsidiary)
that is required to be included in the Company's periodic filings with the
Securities and Exchange Commission. There have been no changes in the Company's
internal control over financial reporting during the three-months ended March
31, 2004 that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
- ------- ------------------
The Company is not a party to any pending litigation.
ITEM 2. CHANGES IN SECURITIES AND REPURCHASE OF SECURITIES.
- ------- --------------------------------------------------
This item is not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
- ------- --------------------------------
This item is not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
- ------- ----------------------------------------------------
No matters were submitted to a vote of the shareholders of the Company
during the three-month period ended March 31, 2004.
ITEM 5. OTHER INFORMATION.
- ------- ------------------
This item is not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
- ------- ---------------------------------
(a) The certification of chief executive and financial officer is filed
as Exhibit 31.1 hereto.
(b) The certification pursuant to Section 906 of the Sarbanes-Oxley Act is
filed as Exhibit 32.1 hereto.
(c) Reports on Form 8-K. There were no reports on Form 8-K filed during
the quarter ended March 31, 2004.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ISLANDS BANCORP
------------------------------------------
(Registrant)
Date: May 14, 2004 BY: /s/ William B. Gossett
--------------- --------------------------------
William B. Gossett
President and Chief Executive Officer
(principal executive and financial officer)