-----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, K1rSbyTHLhUlmYo7HeZno/g+Kd/7F0xsvsa9ODiWbXKJ5ZAERghSq6qD9gKDFmem 81bXvc/O+4CS0nxaAGWXBQ== /in/edgar/work/20000807/0000804563-00-000004/0000804563-00-000004.txt : 20000921 0000804563-00-000004.hdr.sgml : 20000921 ACCESSION NUMBER: 0000804563-00-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BENCHMARK BANKSHARES INC CENTRAL INDEX KEY: 0000804563 STANDARD INDUSTRIAL CLASSIFICATION: [6022 ] IRS NUMBER: 541460991 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-18445 FILM NUMBER: 686973 BUSINESS ADDRESS: STREET 1: 100 S BROAD ST CITY: KENBRIDGE STATE: VA ZIP: 23944 BUSINESS PHONE: 8046768444 MAIL ADDRESS: STREET 1: 100 S BROAD ST CITY: KENBRIDGE STATE: VA ZIP: 23944 10-Q 1 0001.txt SECOND QUARTER 2000 10-Q Page 1 of 19 Form 10-Q U. S. Securities and Exchange Commission Washington, DC 20549 [X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the 6-month period ended June 30, 2000. [ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______________ to ______________ Commission File No. 000-18445 Benchmark Bankshares, Inc. -------------------------- (Name of Small Business Issuer in its Charter) Virginia 54-1380808 -------- ---------- (State or Other Jurisdiction of (IRS Employer ID No.) Incorporation or Organization) 100 South Broad Street Kenbridge, Virginia 23944 ------------------------- (Address of Principal Executive Offices) Issuer's Telephone Number: (804)676-8444 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (1) Yes [X] No [ ] (2) Yes [X] No [ ] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest applicable date: 3,006,225.560 Page 2 of 19 Form 10-Q Benchmark Bankshares, Inc. Part I - Table of Contents June 30, 2000 Part I Financial Information Item 1 Consolidated Balance Sheet Consolidated Statement of Income and Comprehensive Income Condensed Consolidated Statement of Cash Flows Notes to Consolidated Financial Statements Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Item 3 Quantitative and Qualitative Disclosures about Market Risk Page 3 of 19 Form 10-Q Benchmark Bankshares, Inc. Consolidated Balance Sheet (Unaudited) (Audited) June 30, December 31, 2000 1999 ---- ---- Assets Cash and due from banks $ 7,111,065 $ 7,533,280 Securities Federal Agency obligations 13,338,430 13,322,152 State and municipal obligations 8,752,149 12,590,401 Mortgage backed securities 1,665,326 2,267,912 Other securities 195,490 137,000 Federal funds sold 4,621,000 - Loans 158,972,810 152,262,727 Less Unearned interest income (28,072) (64,643) Allowance for loan losses (1,589,752) (1,522,632) ------------- ------------- Net Loans 157,354,986 150,675,452 Premises and equipment - net 3,747,790 3,423,779 Accrued interest receivable 1,709,356 1,390,010 Deferred income taxes 678,518 642,481 Other real estate 929,307 667,808 Other assets 735,857 674,670 ------------- ------------- Total Assets $200,839,274 $193,324,945 ============= ============= Page 4 of 19 Form 10-Q Benchmark Bankshares, Inc. Consolidated Balance Sheet (Unaudited) (Audited) June 30, December 31, 2000 1999 ---- ---- Liabilities and Stockholders' Equity Deposits Demand (noninterest-bearing) $ 18,525,231 $ 16,213,541 NOW accounts 21,368,934 19,905,599 Money market accounts 7,558,198 8,046,212 Savings 10,128,167 9,763,624 Time, $100,000 and over 19,652,081 16,560,926 Other time 101,123,862 94,250,638 ------------- ------------- Total Deposits 178,356,473 164,740,540 Federal funds purchased - 7,035,000 Accrued interest payable 912,192 766,964 Accrued income tax payable 31,953 23,005 Dividends payable 480,996 482,493 Other liabilities 278,194 229,197 ------------- ------------- Total Liabilities 180,059,808 173,277,199 Stockholders' Equity Common stock, par value $.21 per share, authorized 4,000,000 shares; issued and outstanding 06-30-00, 3,006,225.560, issued and outstanding 12-31-99, 3,015,577.591 631,308 633,272 Capital surplus 4,404,101 4,501,508 Retained earnings 16,312,610 15,455,510 Unrealized security gains (losses) net of tax effect (568,553) (542,544) ------------- ------------- Total Stockholders' Equity 20,779,466 20,047,746 ------------- ------------- Total Liabilities and Stockholders' Equity $200,839,274 $193,324,945 ============= ============= Note: The balance sheet at December 31, 1999 has been derived from the audited financial statements at that date. See notes to consolidated financial statements. Page 5 of 19 Form 10-Q Benchmark Bankshares, Inc. Consolidated Statement of Income and Comprehensive Income (Unaudited) Six Months Ended June 30, 2000 1999 ---- ---- Interest Income Interest and fees on loans $7,044,305 $6,404,348 Interest on U. S. Government obligations 494,445 421,319 Interest on State and municipal obligations 231,847 302,947 Interest on Federal funds sold 106,460 334,971 Interest on other securities 5,795 2,610 ----------- ----------- Total Interest Income 7,882,852 7,466,195 Interest Expense Interest on deposits 3,782,003 3,730,224 Interest on Federal funds purchased 54,283 - Interest other 402 - ----------- ----------- Total Interest Expense 3,836,688 3,730,224 ----------- ----------- Net Interest Income 4,046,164 3,735,971 Provision for Loan Losses 127,266 151,619 ----------- ----------- Net Interest Income after Provision 3,918,898 3,584,352 Noninterest Income Service charges, commissions, and fees on deposits 240,031 213,898 Other operating income 246,468 117,419 (Losses) on sale of securities (3,308) (547) ----------- ----------- Total Noninterest Income 483,191 330,770 Noninterest Expense Salaries and wages 1,281,663 1,125,263 Employee benefits 285,484 254,402 Occupancy expenses 154,771 107,728 Furniture and equipment expense 102,764 95,830 Other operating expenses 640,570 529,072 ----------- ----------- Total Noninterest Expense 2,465,252 2,112,295 ----------- ----------- Net Income before Taxes 1,936,837 1,802,827 Income Taxes 601,452 540,913 ----------- ----------- Net Income 1,335,385 1,261,914 Other Comprehensive Income, Net of Tax Net unrealized holding gains (loss) arising during period (36,754) (224,135) ----------- ----------- Comprehensive Income $1,298,631 $1,037,779 =========== =========== Net Income per Share $ 0.44 $ 0.42 =========== =========== See notes to consolidated financial statements. Page 6 of 19 Form 10-Q Benchmark Bankshares, Inc. Consolidated Statement of Income and Comprehensive Income (Unaudited) Three Months Ended June 30, 2000 1999 ---- ---- Interest Income Interest and fees on loans $3,622,185 $3,264,726 Interest on U. S. Government obligations 244,319 223,640 Interest on State and municipal obligations 107,749 155,471 Interest on Federal funds sold 94,548 144,820 Interest on other securities 5,795 2,610 ----------- ----------- Total Interest Income 4,074,596 3,791,267 Interest Expense Interest on deposits 1,988,334 1,873,186 ----------- ----------- Net Interest Income 2,086,262 1,918,081 Provision for Loan Losses 91,579 122,722 ----------- ----------- Net Interest Income after Provision 1,994,683 1,795,359 Noninterest Income Service charges, commissions, and fees on deposits 129,886 109,892 Other operating income 133,409 80,910 ----------- ----------- Total Noninterest Income 263,295 190,802 Noninterest Expense Salaries and wages 655,493 572,159 Employee benefits 143,264 124,378 Occupancy expenses 84,565 56,165 Furniture and equipment expense 55,926 49,234 Other operating expenses 344,829 278,265 ----------- ----------- Total Noninterest Expense 1,284,077 1,080,201 ----------- ----------- Net Income before Taxes 973,901 905,960 Income Taxes 304,563 270,740 ----------- ----------- Net Income 669,338 635,220 Other Comprehensive Income, Net of Tax Net unrealized holding gains (loss) arising during period (26,009) (339,556) ----------- ----------- Comprehensive Income $ 643,329 $ 295,664 =========== =========== Net Income per Share $ 0.22 $ 0.21 =========== =========== See notes to consolidated financial statements. Page 7 of 19 Form 10-Q Benchmark Bankshares, Inc. Condensed Consolidated Statement of Cash Flows (Unaudited) Six Months Ended June 30, 2000 1999 ---- ---- Cash Flows from Operating Activities $1,124,284 $ 1,210,815 Cash Flows from Financing Activities Decrease in Federal funds purchased (7,035,000) - Net increase in demand deposits and interest- bearing transaction accounts 3,775,025 4,917,581 Net increase (decrease) in savings and money market deposits (123,471) 2,397,122 Net increase in certificates of deposit 9,964,379 1,931,398 Dividends paid (482,493) (479,594) Sale of stock 55,934 116,701 Purchase of stock (155,305) - ----------- ------------ Total Cash Provided by Financing Activities 5,999,069 8,883,208 Cash Flows from Investing Activities Purchase of securities (615,267) (9,593,846) Sale of securities 4,750,389 146,607 Maturity of securities 93,948 3,370,428 Net increase in loans (6,710,083) (11,498,628) Purchase of premises and equipment (443,555) (200,847) ----------- ------------ Total Cash (Used) by Investing Activities (2,924,568) (17,776,286) ----------- ------------ Increase (Decrease) in Cash and Cash Equivalents $4,198,785 $(7,682,263) =========== ============ See notes to consolidated financial statements. Page 8 of 19 Form 10-Q Benchmark Bankshares, Inc. Condensed Consolidated Statement of Cash Flows (Unaudited) Three Months Ended June 30, 2000 1999 ---- ---- Cash Flows from Operating Activities $ 500,177 $ 314,448 Cash Flows from Financing Activities Net increase in demand deposits and interest- bearing transaction accounts 2,614,763 3,183,690 Net increase in savings and money market deposits 519,493 816,448 Net increase (decrease) in certificates of deposit 2,605,175 (583,486) Purchase of stock (88,680) (43,150) ----------- ------------ Total Cash Provided by Financing Activities 5,650,751 3,373,502 Cash Flows from Investing Activities Purchase of securities (149,809) (4,598,096) Sale of securities - 88,325 Maturity of securities 93,948 1,075,428 Net increase in loans (4,344,229) (6,509,213) Purchase of premises and equipment (56,830) (166,279) ----------- ------------ Total Cash (Used) by Investing Activities (4,456,920) (10,109,835) ----------- ------------ Increase (Decrease) in Cash and Cash Equivalents $1,694,008 $(6,421,885) =========== ============ See notes to consolidated financial statements. Page 9 of 19 Form 10-Q Benchmark Bankshares, Inc. Notes to Consolidated Financial Statements June 30, 2000 1. Basis of Presentation The accompanying consolidated financial statements and related notes of Benchmark Bankshares, Inc. and its subsidiary, Benchmark Community Bank, were prepared by management, which has the primary responsibility for the integrity of the financial information. The statements have been prepared in conformity with generally accepted accounting principles appropriate in the circumstances and include amounts that are based on management's best estimates and judgments. In meeting its responsibilities for the accuracy of its financial statements, management relies on the Company's internal accounting controls. The system provides reasonable assurances that assets are safeguarded and transactions are recorded to permit the preparation of appropriate financial information. The interim period financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary to a fair presentation of financial position, results of operation, and changes in financial position for the interim periods herein reported. 2. Significant Accounting Policies and Practices The accounting policies and practices of Benchmark Bankshares, Inc. conform to generally accepted accounting principles and general practice within the banking industry. Certain of the more significant policies and practices follow: (a) The consolidated financial statements of Benchmark Bankshares, Inc. and its wholly owned subsidiary, Benchmark Community Bank, include the accounts of both companies. All material inter-company balances and transactions have been eliminated in consolidation. (b) Use of Estimates in Preparation of Financial Statements. The preparation of the accompanying combined financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that directly affect the results of reported assets, liabilities, revenue, and expenses. Actual results may differ from these estimates. (c) Cash and Cash Equivalents. The term cash as used in the Condensed Consolidated Statement of Cash Flows refers to all cash and cash equivalent investments. For purposes of the statement, Federal funds sold, which have a one day maturity, are classified as cash equivalents. (d) Investment Securities. Pursuant to guidelines established in FAS 115, the Company has elected to classify a portion of its current portfolio as securities available-for-sale. This category refers to investments that are not actively traded but are not anticipated by management to be held-to-maturity. Typically, these types of investments will be utilized by management to meet short-term asset/liability management needs. The remainder of the portfolio is classified as held-to-maturity. This category refers to investments that are anticipated by management to be held until they mature. Page 10 of 19 For purposes of financial statement reporting, securities classified as available-for-sale are to be reported at fair market value (net of any tax effect) as of the date of the statements; however, unrealized holding gains or losses are to be excluded from earnings and reported as a net amount in a separate component of shareholders' equity until realized. Securities classified as held-to-maturity are recorded at cost. The resulting book value ignores the impact of current market trends. (e) Loans. Interest on loans is computed by methods which generally result in level rates of return on principal amounts outstanding (simple interest). Unearned interest on certain installment loans is recognized as income using the Rule of 78's Method, which materially approximates the effective interest method. Loan fees and related costs are recognized as income and expense in the year the fees are charged and costs incurred. (f) Allowance for Loan Losses. The allowance for loan losses is increased by provisions charged to expense and decreased by loan losses net of recoveries. The provision for loan losses is based on the Bank's loan loss experience and management's detailed review of the loan portfolio which considers economic conditions, prior loan loss experience, and other factors affecting the collectivity of loans. Accrual of interest is discontinued on loans past due 90 days or more when collateral is inadequate to cover principal and interest or, immediately, if management believes, after considering economic and business conditions and collection efforts, that the borrower's financial condition is such that collection is doubtful. (g) Premises and Equipment. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed generally by the straight line basis over the estimated useful lives of the assets. Additions to premises and equipment and major betterments and replacements are added to the accounts at cost. Maintenance and repairs and minor replacements are expensed as incurred. Gains and losses on dispositions are reflected in current earnings. (h) Other Real Estate. As a normal course of business, the Bank periodically has to foreclose on property used as collateral on nonperforming loans. The assets are recorded at cost plus capital improvement cost. (i) Depreciation. For financial reporting, property and equipment are depreciated using the straight line method; for income tax reporting, depreciation is computed using statutory accelerated methods. Leasehold improvements are amortized on the straight line method over the estimated useful lives of the improvements. Income taxes in the accompanying financial statements reflect the depreciation method used for financial reporting and, accordingly, include a provision for the deferred income tax effect of depreciation which will be recognized in different periods for income tax reporting. (j) Earnings Per Share Earnings per share were computed by using the average shares outstanding for each period presented. The average shares of outstanding stock for the first six months of 2000 and 1999 were 3,010,823.074 and 3,008,376.022 shares, respectively. The Company has a stock option plan for its directors, officers, and employees. As of June 30, 2000, there were 133,867 share options that had been granted but were unexercised. Based on current trading values of the stock, the stock options are not considered materially dilutive; therefore, the Company's earnings per share are reported as a simple capital structure. Page 11 of 19 (k) Income Taxes. The table below reflects the components of the Net Deferred Tax Asset account as of June 30, 2000: Deferred tax assets resulting from loan loss reserves $450,703 Deferred tax liabilities resulting from depreciation (123,990) Unrealized securities losses 292,891 Deferred compensation 58,914 --------- Net Deferred Tax Asset $678,518 ========= Page 12 of 19 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Six Months Ending June 30: 2000 Versus 1999 Earnings Summary Net income of $1,335,385 for the first six months of 2000 increased $73,471 or 5.82% as compared to net income of $1,261,914 earned during the first six months of 1999. Earnings per share of $.44 as of June 30, 2000 increased $.02 over the June 30, 1999 level of $.42. The annualized return on average assets of 1.36% increased 2.26% while the annualized return on average equity of 13.08% decreased .15% when comparing first six months of 2000 results with those of first six months 1999. The increase in earnings resulted from a strong loan demand. Interest Income and Interest Expense Total interest income of $7,882,852 for the first six months of 2000 increased $416,657 or 5.58% over interest income of $7,466,195 recorded during the first six months of 1999. The major area of increase was in interest earned on loans as management realigned the earning asset mix away from lower earning investments. Total interest expense in the first six months of 2000 increased to a level of $3,836,688. This amounted to an increase of $106,464 or 2.85% over the level reached during the first six months of 1999. This increase in interest expense resulted from deposit growth, as well as the payment of higher interest rates to meet market competition. Provision for Loan Losses While the Bank's loan loss experience ratio remains low, management continues to set aside increasing provisions to the loan loss reserve. During the first six months of 2000, the Bank increased the loan loss reserve by $67,120 to a level of $1,589,752 or 1.00% of the outstanding loan balance. At year end 1999, the reserve level amounted to $1,522,632 or 1.00% of the outstanding loan balance net of unearned interest. Nonperforming Loans Nonperforming loans consist of loans accounted for on a non-accrual basis and loans which are contractually past due 90 days or more as to interest and/or principal payments regardless of the amount of collateral held. As of June 30, 2000, the Bank had $780,419 in nonperforming loans or .49% of the loan portfolio. The amount of unsecured loans in this category amounted to $4,112. Noninterest Income and Noninterest Expense Noninterest income of $483,191 increased $152,421 or 46.08% for the first six months of 2000 as compared to the level of $330,770 reached during the first six months of 1999. The increase resulted from an increase in other operating income as the Bank expands into the Chase City, Clarksville, and Lawrenceville locations. Page 13 of 19 Noninterest expense of $2,465,252 increased $352,957 or 16.71% for the first six months of 2000 as compared to the level of $2,112,295 reached during the first six months of 1999. The increase was also related to additional expenses incurred as the Bank moved into and developed new markets. Off-Balance-Sheet Instruments/Credit Concentrations The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. Unless noted otherwise, the Bank does not require collateral or other security to support these financial instruments. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to facilitate the transaction of business between these parties where the exact financial amount of the transaction is unknown, but a limit can be projected. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. There is a fee charged for this service. As of June 30, 2000, the Bank had $1,902,489 outstanding letters of credit. These instruments are based on the financial strength of the customer and the existing relationship between the Bank and the customer. Following are the maturities of these instruments as of June 30: 2001 $1,885,489 2002 16,000 2003 1,000 Liquidity As of the end of the first six months of 2000, $49,401,785 or 31.08% of gross loans will mature or are subject to repricing within one year. These loans are funded in part by $19,652,081 in certificates of deposit of $100,000 or more of which $10,602,498 mature in one year or less. Currently, the Bank has a maturity average ratio for the next twelve months of 54.27% when comparing current assets and current liabilities. At year end 1999, $55,137,045 or 39.44% of gross loans were scheduled to mature or were subject to repricing within one year and $13,285,923 in certificates of deposit were scheduled to mature during 2000. Capital Adequacy Total shareholder equity was $20,779,466 or 10.35% of total assets as of June 30, 2000. This compared to $20,047,746 or 10.37% of total assets as of December 31, 2000. Primary capital (shareholders' equity plus loan loss reserves) of $22,369,218 represents 11.14% of total assets as of June 30, 2000 as compared to $21,570,378 or 11.16% of total assets as of December 31, 1999. The increase in the equity position resulted from an increase in earnings in the first six months of 2000 versus the first six months of 1999. Page 14 of 19 Three Months Ending June 30: 2000 Versus 1999 The same operating policies and philosophies discussed in the six month discussion were prevalent throughout the second quarter and the operating results were predictably similar. Earnings Summary Net income of $669,338 for the second quarter of 2000 increased $34,118 or 5.37% as compared to the $635,220 earned during the second quarter of 1999. Earnings per share of $.22 for the second quarter of 2000 increased $.01 or 4.76% when compared to the corresponding period in 1999. The annualized return on average assets was 1.36% and the return on average equity was 13.12% for the second quarter of 1999. This compares to a return on average assets of 1.32% and a return on average equity of 13.48% for the same period in 1999. The increased earnings is an indication of the growth experienced during the second quarter. Interest Income and Interest Expense Total interest income of $4,074,596 for the second quarter of 2000 increased $283,329 or 7.47% from the total interest income of $3,791,267 for the corresponding quarter in 1999. The increase resulted primarily from growth in the loan portfolio. Interest and fees on loans amounted to $3,622,185. This represented an increase of $357,459 or 10.95% over the corresponding period in 1999. Interest expense for the second quarter of 2000 increased $115,148 or 6.15% over the same period in 1999. The increase in interest expense reflected the current economic trend of increased interest rates as well as steady deposit growth. Provision for Loan Losses During the second quarter, the demand for loans was strong and the level of quality loans continued to increase. During the period, the Bank provided an additional $91,379 to the reserve through its provision for loan losses. Loans and Deposits During the second quarter of 2000, net loans grew $4,344,229. This growth results from the Bank's expansion into three new markets in 1999. Deposits increased by $5,739,431 for the three month period ending June 30, 2000. Management feels that the growth in deposits has resulted from an increase in the size of the trade area as well as further penetration into existing market areas through the community bank operating concept. Page 15 of 19 Item 3 Quantitative and Qualitative Disclosures about Market Risk Through the nature of the banking industry, market risk is inherent in the Bank's operation. A majority of the business is built around financial products, which are sensitive to changes in market rates. Such products, categorized as loans, investments, and deposits are utilized to transfer financial resources. These products have varying maturities, however, and this provides an opportunity to match assets and liabilities so as to offset a portion of the market risk. Management follows an operating strategy that limits the interest rate risk by offering only shorter-term products that typically have a term of no more than five years. By effectively matching the maturities of inflows and outflows, management feels it can effectively limit the amount of exposure that is inherent in its financial portfolio. As a separate issue, there is also the inherent risk of loss related to loans and investments. The impact of loss through default has been considered by management through the utilization of an aggressive loan loss reserve policy and a conservative investment policy that limits investments to higher quality issues; therefore, only the risk of interest rate variations is considered in the following analysis. The Company does not currently utilize derivatives as part of its investment strategy. The tables below present principal amounts of cash flow as it relates to the major financial components of the Company's balance sheet. The cash flow totals represent the amount that will be generated over the life of the product at its stated interest rate. The present value discount is then applied to the cash flow stream at the current market rate for the instrument to determine the current value of the individual category. Through this two-tiered analysis, management has attempted to measure the impact not only of a rate change, but also the value at risk in each financial product category. Only financial instruments that do not have price adjustment capabilities are herein presented. In Table One, the cash flows are spread over the life of the financial products in annual increments as of June 30 each year with the final column detailing the present value discounting of the cash flows at current market rates. Fair Value of Financial Assets Benchmark Bankshares, Inc. June 30, 2000
Current Categories 2001 2002 2003 2004 2005 Thereafter Value ---------- ---- ---- ---- ---- ---- ---------- ----- Loans Commercial $ 17,202,560 $ - $ - $ - $ - $ - $15,710,100 Mortgage 28,934,801 20,298,477 22,237,923 23,507,348 22,287,420 6,943,688 96,477,870 Simple Interest I/L 12,900,254 9,563,532 5,403,800 3,147,272 1,347,272 66,752 27,558,306 Rule of 78ths I/L - - - - - - 371,790 Investments U. S. Government Agencies 863,810 863,810 1,849,748 3,261,798 2,917,085 9,523,550 8,838,430 Municipals Nontaxable 568,586 928,495 1,127,179 888,246 265,436 5,260,660 6,840,577 Taxable 61,693 61,693 61,693 571,693 31,450 157,250 1,166,128 Mortgage Backed Securities 281,169 254,905 231,741 211,217 334,635 631,219 1,665,329
Page 16 of 19
Current Categories 2001 2002 2003 2004 2005 Thereafter Value ---------- ---- ---- ---- ---- ---- ---------- ----- Certificates of Deposits < 182 days 2,615,134 - - - - - 2,609,327 182 - 364 days 5,044,026 - - - - - 4,989,197 1 year - 2 years 39,966,173 11,223,178 - - - - 47,763,020 2 years - 3 years 7,616,342 3,645,927 3,991,968 - - - 13,777,347 3 years - 4 years 1,200,762 1,828,279 3,846,564 378,235 - - 6,273,383 4 years - 5 years 1,333,267 540,194 883,172 813,177 - - 3,110,355 5 years 5,978,550 5,351,422 7,356,762 11,439,946 18,675,669 - 39,019,773
In Table Two, the cash flows are present value discounted by predetermined factors to measure the impact on the financial products portfolio at six and twelve month intervals. Variable Interest Rate Disclosure Benchmark Bankshares, Inc. June 30, 2000
Valuation of Valuation of Financial Instruments No Financial Instruments Given an Interest Rate Change In Given an Interest Rate Decrease of (x) Basis Points Interest Increase of (x) Basis Points Categories (200 BPS) (100 BPS) Rate 100 BPS 200 BPS ---------- --------- --------- ---- ------- ------- Loans Commercial $ - $ - $15,710,100 $ - $ - Mortgage 101,828,151 99,091,285 96,477,870 93,980,587 91,592,649 Simple Interest I/L 28,607,688 28,074,110 27,558,306 27,059,459 26,576,800 Rule of 78ths I/L 380,115 375,908 371,790 367,760 363,814 Investments U. S. Government Securities 10,371,871 9,606,763 8,838,430 8,065,953 7,288,367 Municipals Nontaxable 7,289,009 7,059,146 6,840,577 6,632,560 6,434,417 Taxable 1,311,551 1,235,780 1,166,128 1,101,999 1,042,861 Mortgage Backed Securities 1,815,855 1,738,015 1,665,329 1,597,369 1,533,748 Certificates of Deposit < 182 days 2,634,167 2,627,550 2,609,327 2,602,834 2,596,374 182 - 364 days 5,013,994 5,001,565 4,989,197 4,976,900 4,964,644 1 year - 2 years 48,879,204 48,314,863 47,763,020 47,223,276 46,695,244 2 years - 3 years 14,238,364 14,004,423 13,777,347 13,556,858 13,342,692 3 years - 4 years 6,570,842 6,419,480 6,273,383 6,132,315 5,996,051 4 years - 5 years 3,246,753 3,177,297 3,110,355 3,045,809 2,983,544 5 years 41,728,732 40,341,402 39,019,773 37,760,019 36,558,574
Page 17 of 19 Form 10-Q Benchmark Bankshares, Inc. June 30, 2000 Part II Other Information Item 1 Legal Proceedings None 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 Independent Accountant's Review Report Item 6 Report on Form 8-K No reports on Form 8-K have been filed during the quarter ended June 30, 2000. Page 18 of 19 INDEPENDENT ACCOUNTANT'S REVIEW REPORT Board of Directors Benchmark Bankshares, Inc. Kenbridge, Virginia We have reviewed the accompanying 10Q filing including the balance sheet of Benchmark Bankshares, Inc. (a corporation) as of June 20, 2000 and the related statements of income and cash flows for the three month period then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of Benchmark Bankshares, Inc. A review consists principally of inquiries of Company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. Our review was made for the purpose of expressing limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles. The additional required information included in the 10Q filing for June 30, 2000 is presented only for supplementary analysis purposes. Such information has been subjected to the inquiry and analytical procedures applied in the review of the basic financial statements, and we are not aware of any material modifications that should be made thereto. Creedle, Jones, and Alga, P. C. Certified Public Accountants August 1, 2000 Page 19 of 19 Form 10-Q Benchmark Bankshares, Inc. June 30, 2000 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. Benchmark Bankshares, Inc. (Registrant) Date: August 1, 2000 Ben L. Watson, III President and CEO Date: August 1, 2000 Janice W. Pernell Cashier and Treasurer EX-27 2 0002.txt FDS --
9 (Replace this text with the legend) 0000804563 Benchmark Bankshares, Inc. 1 $ 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 1.000 7,111,065 0 13,338,430 0 18,510,464 5,245,444 4,929,049 158,972,810 1,589,752 200,839,274 178,356,473 1,703,335 0 0 0 0 631,308 20,148,158 200,839,274 7,044,305 838,547 0 7,882,852 3,782,003 3,836,688 4,046,164 127,266 (3,308) 2,465,252 1,936,837 1,335,385 0 0 1,335,385 .44 .44 4.17 340,989 439,430 467,998 11,225,401 1,522,632 126,591 66,445 1,589,752 1,589,752 0 1,589,752
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