-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D9yh0V//2fxAI+aT3ae6bJ381zW9vTVhEqYuFD/TCBCoujEHUvXHbM7QO4+Fwycf da8Yc237t0yYPZ40ZWP5Pg== 0000906197-02-000021.txt : 20020514 0000906197-02-000021.hdr.sgml : 20020514 ACCESSION NUMBER: 0000906197-02-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JEFFERSONVILLE BANCORP CENTRAL INDEX KEY: 0000874495 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 222385448 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12207 FILM NUMBER: 02646903 BUSINESS ADDRESS: STREET 1: 4866 STATE RT 52 CITY: JEFFERSONVILLE STATE: NY ZIP: 12748 BUSINESS PHONE: 8454824000 MAIL ADDRESS: STREET 1: 4866 STATE STREET 2: ROUTE 52 CITY: JEFFERSONVILLE STATE: NY ZIP: 12748 10-Q 1 jeff-10q.txt 10Q FOR JEFFERSONVILLE BANCORP FOR 03-31-2002 Form 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter ended March 31, 2002 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) Registrant's telephone number, including area code (845) 482-4000 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the proceeding 12 months (or for such shorter period that the Registrant was required to file such report(s), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the Issuer's classes of common stock, as of the latest practicable date: Number of Shares Outstanding Class of Common Stock as of May 7, 2002 $0.50 par value 1,478,107 INDEX TO FORM 10-Q Page Part 1 Item 1 Consolidated Interim Financial Statements (Unaudited) Consolidated Balance Sheets at March 31, 2002 and December 31, 2001 1 Consolidated Statements of Income for the Three Months Ended March 31, 2002 and 2001 2 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2002 and 2001 3 Notes to Consolidated Interim Financial Statements 4-5 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 6-8 Item 3 Quantitative and Qualitative Disclosures about Market Risk 8 Part 2 Item 1 Legal Proceedings NONE Item 2 Changes in Securities and Use of Proceeds NONE Item 3 Defaults upon Senior Securities NONE Item 4 Submission of Matters to a Vote of Security Holders NONE Item 5 Other Information NONE Item 6 Exhibits and Reports on Form 8-K NONE Signatures 9 Jeffersonville Bancorp and Subsidiary Consolidated Balance Sheets
March 31, December 31, 2002 2001 ------------ ------------ (Unaudited) ASSETS Cash and due from banks $ 11,329,000 $ 10,844,000 Securities available for sale, at fair value 105,618,000 104,104,000 Securities held to maturity, estimated fair value of $5,692,000 at March 31, 2002 and $5,920,000 at December 31, 2001 5,545,000 5,786,000 Loans, net of allowance for loan losses of $2,729,000 at March 31, 2002 and $2,614,000 at December 31, 2001 161,899,000 160,097,000 Accrued interest receivable 1,876,000 2,033,000 Premises and equipment, net 2,926,000 2,765,000 Federal Home Loan Bank stock 1,650,000 1,650,000 Other real estate owned 262,000 1,237,000 Cash surrender value of bank-owned life insurance 7,453,000 7,355,000 Other assets 3,167,000 2,239,000 ------------ ------------ Total assets $301,725,000 $298,110,000 ------------ ------------ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits: Demand deposits (non-interest bearing) $ 45,451,000 $ 45,658,000 NOW and super NOW accounts 33,525,000 30,673,000 Savings and insured money market deposits 69,076,000 66,022,000 Time deposits 92,349,000 95,676,000 ------------ ------------ Total deposits 240,401,000 238,029,000 ------------ ------------ Federal Home Loan Bank borrowings 30,000,000 30,000,000 Short-term debt 405,000 38,000 Accrued expenses and other liabilities 3,143,000 2,730,000 ------------ ------------ Total liabilities 273,949,000 270,797,000 ============ ============ Stockholders' equity: Series A preferred stock, no par value: 2,000,000 shares authorized, none issued -- -- Common stock, $0.50 par value; 2,225,000 shares authorized; 1,589,262 shares issued at March 31, 2002 and December 31, 2001 795,000 795,000 Paid-in capital 8,072,000 8,072,000 Treasury stock, at cost; 111,155 shares at March 31, 2002 and December 31, 2001 (1,108,000) (1,108,000) Retained earnings 20,705,000 19,753,000 Accumulated other comprehensive loss (688,000) (199,000) ------------ ------------ Total stockholders' equity 27,776,000 27,313,000 ------------ ------------ Total liabilities and stockholders' equity $301,725,000 $298,110,000 ============ ============
See accompanying notes to unaudited consolidated interim financial statements. 1 Jeffersonville Bancorp and Subsidiary Consolidated Statements of Income (Unaudited)
For the Three Months Ended March 31, March 31, 2002 2001 ---------- ---------- INTEREST INCOME Loan interest and fees $3,380,000 $3,317,000 Securities: Taxable 1,369,000 1,321,000 Non-taxable 242,000 269,000 Federal funds sold 19,000 98,000 ---------- ---------- Total interest income 5,010,000 5,005,000 INTEREST EXPENSE Deposits 1,116,000 1,904,000 Federal Home Loan Bank borrowings 320,000 283,000 Other 8,000 6,000 ---------- ---------- Total interest expense 1,444,000 2,193,000 ---------- ---------- Net interest income 3,566,000 2,812,000 Provision for loan losses 100,000 75,000 ---------- ---------- Net interest income after provision for loan losses 3,466,000 2,737,000 NON-INTEREST INCOME Service charges 443,000 342,000 Increase in cash surrender value of bank-owned life insurance 98,000 98,000 Net security gains 4,000 -- Other non-interest income 208,000 186,000 ---------- ---------- Total non-interest income 753,000 626,000 ---------- ---------- NON-INTEREST EXPENSES Salaries and wages 810,000 756,000 Employee benefits 448,000 380,000 Occupancy and equipment expenses 403,000 460,000 Other real estate owned expenses, net 32,000 160,000 Other non-interest expenses 748,000 683,000 ---------- ---------- Total non-interest expenses 2,441,000 2,439,000 ---------- ---------- Income before income taxes 1,778,000 924,000 Income taxes (530,000) (221,000) ---------- ---------- Net income $1,248,000 $ 703,000 ========== ========== Basic earnings per common share $ 0.84 $ 0.47 ========== ========== Average common shares outstanding 1,478,000 1,503,000 ========== ==========
See accompanying notes to unaudited consolidated interim financial statements. 2 Jeffersonville Bancorp and Subsidiary Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended March 31, March 31, 2002 2001 ----------- ---------- OPERATING ACTIVITIES Net income $ 1,248,000 $ 703,000 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 100,000 75,000 Write down of other real estate owned 5,000 16,000 Gain on sales of other real estate owned (61,000) (34,000) Depreciation and amortization 198,000 143,000 Net increase in cash surrender value of bank-owned life insurance (98,000) (79,000) Net security gains (4,000) -- Decrease (increase) in accrued interest receivable 157,000 (30,000) Decrease(increase) in other assets (590,000) 653,000 Increase in accrued expenses and other liabilities 413,000 25,000 ----------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,368,000 1,472,000 ----------- ---------- INVESTING ACTIVITIES Proceeds from maturities and calls: Securities available for sale 5,570,000 9,294,000 Securities held to maturity 1,633,000 1,548,000 Proceeds from sales of securities available for sale 5,186,000 -- Purchases: Securities available for sale (13,093,000) (9,023,000) Securities held to maturity (1,392,000) (1,257,000) Disbursements for loan originations, net of principal collections (1,902,000) (177,000) Net purchases of premises and equipment (359,000) (165,000) Capital improvements made on other real estate (229,000) (221,000) Proceeds from sales of other real estate owned 1,260,000 238,000 ----------- ---------- NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (3,326,000) 237,000 ----------- ---------- FINANCING ACTIVITIES Net increase in deposits 2,372,000 12,839,000 Increase(decrease) in short-term debt 367,000 (2,538,000) Cash dividends paid (296,000) (270,000) Purchases of treasury stock -- (185,000) ----------- ---------- NET CASH PROVIDED BY FINANCING ACTIVITIES 2,443,000 9,846,000 ----------- ---------- NET INCREASE IN CASH AND CASH EQUIVALENTS 485,000 11,555,000 Cash and cash equivalents at beginning of period 10,844,000 10,362,000 ----------- ---------- Cash and cash equivalents at end of period $ 11,329,000 $ 21,917,000 ============ ============ Supplemental imformation: Cash paid for: Interest $ 1,429,000 $ 2,193,000 Income taxes 166,000 5,000 -- --
See accompanying notes to unaudited consolidated interim financial statements. 3 JEFFERSONVILLE BANCORP AND SUBSIDIARY NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS March 31, 2002 (Unaudited) A. Financial Statement Presentation In the opinion of Management of Jeffersonville Bancorp (the "Company"), the accompanying unaudited consolidated interim financial statements contain all adjustments necessary to present the financial position as of March 31, 2002 and December 31, 2001, and the results of operations and cash flows for the three month periods ended March 31, 2002 and 2001. All adjustments are normal and recurring. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the Company's consolidated year-end financial statements, including notes thereto, which are included in the 2001 Annual Report. B. Earnings per Share Basic earnings per share amounts were calculated for the three month periods ended March 31, 2002 and 2001 based on weighted average common shares outstanding of 1,478,000 and 1,503,000, respectively. There were no dilutive securities during either period. C. Comprehensive Income Comprehensive income for the three-month periods ended March 31, 2002 and 2001 was $759,000 and $1,427,000, respectively. The following summarizes the components of the Company's other comprehensive income (loss) for each period: Three Months Ended March 31, 2002: - ---------------------------------- Net unrealized holding losses arising during the period, net of tax (pre-tax amount of $823,000) $ (486,000) Reclassification adjustment for net gains realized in net income during the period, net of tax (pre-tax amount of $4,000) (3,000) ---------- Other comprehensive loss $ (489,000) ---------- Three Months Ended March 31, 2001: - ---------------------------------- Net unrealized holding gains arising during the period, net of tax (pre-tax amount of $1,221,000) $ 724,000 Reclassification adjustment for net gains realized in net income during the period, net of tax (pre-tax amount of $0) -- ---------- Other comprehensive income $ 724,000 ---------- D. Recent Accounting Pronouncements In July 2001, the FASB issued SFAS No. 141, "Business Combinations," which requires that all business combinations be accounted for under the purchase method. Use of the pooling-of-interests method is no longer permitted. SFAS No. 141 requires that the purchase method be used for business combinations initiated after June 30, 2001. The adoption of this pronouncement did not have any effect on the Company's consolidated financial statements. In July 2001, the FASB also issued SFAS No. 142, "Goodwill and Other Intangible Assets," which requires that goodwill no longer be amortized to earnings, but instead be reviewed for impairment. The Company adopted this statement effective January 1, 2002. The adoption of this pronouncement did not have any effect on the Company's consolidated financial statements. 4 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations A. Overview - Financial Condition 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 Parent Company and the Bank based on current management 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. During the period from December 31, 2001 to March 31, 2002, total assets increased $3,615,000 or 1.2%. Increases in securities available for sale, loans, and other assets and a decrease in other real estate owned accounted for $3,269,000 or 90.4% of this net increase. Net loans increased from $160,097,000 at year end 2001 to $161,899,000 at March 31, 2002, an increase of $1,802,000 or 1.1%. Deposits increased from $238,029,000 at December 31, 2001 to $240,401,000 at March 31, 2002, an increase of $2,372,000 or 1.0%. Demand deposits decreased from $45,658,000 at December 31, 2001 to $45,451,000 at March 31, 2002, a decrease of $207,000 or 0.5%. These lower cost deposits are an important offset to the cost of higher priced funds, and this recent decrease will be monitored closely. Time deposits decreased from $95,676,000 at December 31, 2001 to $92,349,000 at March 31, 2002, a decrease of $3,327,000 or 3.5%. Most of this decrease is due to our low rate pricing on municipal deposits. Total stockholders' equity increased $463,000 or 1.7% from $27,313,000 at December 31, 2001 to $27,776,000 at March 31, 2002. This increase was the result of net income of $1,248,000 less an increase of $489,000 in accumulated other comprehensive loss and less cash dividends of $296,000. B. Allowance for Loan Losses The allowance for loan losses reflects management's assessment of the risk inherent in the loan portfolio, the general state of the economy and past loan experience. The provision for loan losses was $100,000 for the three months ended March 31, 2002 compared to $75,000 for the three months ended March 31, 2001. Total charge offs for the 2002 three month period were $50,000 compared to $93,000 for the same period in the prior year, while recoveries decreased from $120,000 for the 2001 period to $65,000 for the 2002 period. The amounts represent a net recovery of $15,000 in the first quarter of 2002 verses a net recovery of $27,000 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. 5 Changes in the allowance for loan losses are summarized as follows for the three month periods ended March 31: 2002 2001 ---- ---- Balance at beginning of period $2,614,000 $2,435,000 Provision for loan losses 100,000 75,000 Loans charged off (50,000) (93,000) Recoveries 65,000 120,000 ---------- ---------- Balance at end of period $2,729,000 $2,537,000 ========== ========== Annualized net recoveries as a percentage of average outstanding loans 0.04% 0.07% Allowance for loan losses to: Total loans 1.66% 1.72% Total non-performing loans 100.9 % 95.2 % C. Non Accrual and Past Due Loans Non-performing loans are summarized as follows at March 31: 2002 2001 ---- ---- Non-accrual loans $2,219,000 $ 722,000 Loans past due 90 days or more and still accruing interest 487,000 1,942,000 ---------- ---------- Total non-performing loans $2,706,000 $2,664,000 ---------- ---------- Non-performing loans as a percentage of total loans 1.64% 1.81% ----- ----- As of March 31, 2002 and 2001, the recorded investment in loans considered to be impaired under Statement of Financial Accounting Standards ("SFAS") No.114 totaled $1,692,000 and $952,000, respectively. There was no allowance for loan impairment under SFAS No.114 at either date, primarily due to prior charge offs and the adequacy of collateral values on these loans. D. Capital In January 2000, the Board of Directors allocated $1,000,000 for the repurchase of common stock on the open market. There were no repurchased shares from January 1, 2002 through March 31, 2002. Under the Federal Reserve Bank's risk-based capital rules, the Company's Tier I risk-based capital was 15.8% and total risk-based capital was 17.1% of risk-weighted assets at March 31, 2002. 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 9.4% at March 31, 2002 is well above the 4.0% minimum regulatory requirement. 6 The following table shows the Company's actual capital measurements compared to the minimum regulatory requirements at March 31, 2002. TIER I CAPITAL Stockholders' equity, excluding the after-tax net unrealized loss on securities availbale for sale $ 28,464,000 TIER II CAPITAL Allowance for loan losses(1) 2,257,000 ------------ Total risk-based capital $ 30,721,000 ------------ Risk-weighted assets(2) $180,069,000 ------------ Average assets $303,471,000 ------------ RATIOS Tier I risk-based capital (minimum 4.0%) 15.8% Total risk-based capital (minimum 8.0%) 17.1% Leverage (minimum 4.0%) 9.4% (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 E. Result of Operations Net income for the first three months of 2002 increased by $595,000 to $1,248,000 compared to $703,000 for the same period in 2001. An increase of $754,000 in net interest income and $127,000 in non-interest income were offset by an increase of $2,000 in non-interest expenses. The Company's annualized return on average assets was 1.6% in the current quarter compared to 1.0% in the same period last year. The return on average stockholders' equity was 17.4% and 11.0% for the first three months of 2002 and 2001, respectively. Tax equivalent interest income decreased $9,000 or 0.2% in the first three month's of 2002 compared to the same period in 2001, primarily due to a decrease in asset yields partially offset by an increase in average earning assets. The yield on investment securities decreased 57 basis points from 6.82% in 2001 to 6.25% in 2002. The yield on the total loan portfolio decreased by 73 basis in the quarter ended March 31, 2002 compared to the first quarter of 2001. All loan category rates decreased. The average yield on real estate mortgage loans, the major portion of the loan portfolio, decreased 44 basis points to 8.06% from 8.50% for the three month period. The overall yield on interest earning assets decreased 68 basis points from 8.04% for the three months ended March 31, 2001 to 7.36% for the same period in 2002. The total average balance for earning assets was $279,089,000 for the three month period ended March 31, 2002 compared to $255,979,000 for the same three month period in 2001, an increase of $23,110,000 or 9.0%. An increase in loans of $15,997,000 accounted for 69.2% of this increase. An increase in investments of $7,113,000 accounted for 30.8% of the increase. The yield on interest bearing liabilities decreased by 158 basis points for the three month period ended March 31, 2002 as compared to the same period in 2001. The overall net interest margin increased 68 basis points from 4.61% in the first quarter of 2001 to 5.29% in the first quarter of 2002. Non-interest expenses were $2,441,000 for the first three months of 2002 compared to $2,439,000 for the same period in 2001, an increase of $2,000 or 0.1%. This increase reflects a $57,000 decrease in occupancy and equipment costs. A decrease of $128,000 in net other real estate owed expense is due to the reduced carrying costs of Grandview Palace. Grandview Palace is an 81 unit condominium project which the Company took possession of in the third quarter of 2000. As of March 31, 2002, the Company owns 26 units of which 18 are in contact to be sold. The average selling price of units through March 31, 2002 has been $57,000. Other categories of non-interest expense and compensation costs increased by $187,000 for the three months ended March 31, 2002. 7 F. Critical Accounting Policies Pursuant to recent SEC guidance, management of public companies are encouraged to evaluate and disclose those accounting policies that are judged to be critical policies, or those most important to the portrayal of the Company's financial condition and results, and that require management's most difficult subjective or complex judgments. 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, pas loan loss experience, the financial condition of individual borrowers, and underlying collateral values based on independent appraisals. While management uses available information to recognized losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions, particularly in Sullivan County. In addition, Federal regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for loan losses and my 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. 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, 2001. 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. 8 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/ John M. Riley -------------------------------------- John M. Riley Treasurer and Chief Accounting Officer May 13, 2002 9 -----END PRIVACY-ENHANCED MESSAGE-----