FORM 10-Q
UNITED STATES
FEDERAL RESERVE BOARD
(Mark one)
| [X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended March 31, 2003 |
| [ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from to |
OREGON PACIFIC BANCORP
| Oregon (State or other jurisdiction of incorporation or organization) |
71-0918151 (I.R.S. Employer Identification No.) |
1355 Highway 101
Florence, Oregon 97439
(Address of principal executive offices)
(541) 997-7121
(Issuer’s telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the 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. Yes [X ] No [ ]
The number of shares outstanding of the issuer’s Common Stock, no par value, as of April 30, 2003, was 2,140,353.
1
OREGON PACIFIC BANCORP
INDEX
| Part I. | Financial Information | |||
| Item 1. | Financial statements | |||
| Consolidated balance sheets | 3 | |||
| Consolidated statements of income and comprehensive income | 4-5 | |||
| Consolidated statements of changes in stockholders’ equity | 6 | |||
| Consolidated statements of cash flows | 7-8 | |||
| Notes to consolidated financial statements | 9-11 | |||
| Item 2. | Management’s Discussion and Analysis or Plan of Operation | 11-15 | ||
| Item 3. | Quantitive and Qualitive Disclosures about Market Risk | 16 | ||
| Item 4. | Controls and Procedures | 16-17 | ||
| Part II. | Other Information | 17 | ||
| Signatures | 18 | |||
| Certification of Chief Executive Officer and Chief Financial Officer | 19-20 | |||
2
PART 1. FINANCIAL INFORMATION
Item 1. Financial statements
OREGON PACIFIC BANCORP
CONSOLIDATED BALANCE SHEETS
| Unaudited | Audited | ||||||||||
| MARCH 31, | DECEMBER 31, | ||||||||||
| 2003 | 2002 | ||||||||||
ASSETS |
|||||||||||
Cash and due from banks |
$ | 3,164,911 | $ | 3,886,203 | |||||||
Interest-bearing deposits in banks |
8,467,436 | 8,078,510 | |||||||||
Available-for-sale securities, at fair value |
14,362,413 | 13,913,137 | |||||||||
Restricted equity securities |
843,900 | 831,750 | |||||||||
Loans held for sale |
3,657,129 | 5,327,661 | |||||||||
Loans, net of allowance for loan
losses and unearned income |
76,113,293 | 70,988,652 | |||||||||
Premises & equipment, net |
2,815,749 | 2,726,595 | |||||||||
Other real estate owned |
10,259 | 117,494 | |||||||||
Accrued interest and other assets |
1,494,122 | 1,149,886 | |||||||||
Total assets |
$ | 110,929,212 | $ | 107,019,888 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||||||
Deposits |
|||||||||||
Demand deposits |
$ | 17,500,491 | $ | 18,512,436 | |||||||
Interest-bearing demand deposits |
39,130,297 | 35,996,332 | |||||||||
Savings deposits |
13,041,509 | 12,750,616 | |||||||||
Time certificate accounts: |
|||||||||||
$100,000 or more |
7,843,659 | 7,629,913 | |||||||||
Other time certificate accounts |
15,090,836 | 13,625,754 | |||||||||
Total deposits |
92,606,792 | 88,515,051 | |||||||||
Other liabilities |
|||||||||||
Federal Home Loan Bank borrowings |
8,740,000 | 8,852,500 | |||||||||
Other borrowings |
250,000 | 0 | |||||||||
Deferred compensation liability |
832,743 | 795,272 | |||||||||
Accrued interest and other liabilities |
491,504 | 964,143 | |||||||||
Total liabilities |
102,921,039 | 99,126,966 | |||||||||
Stockholders’ equity |
|||||||||||
Common stock, no par value, 10,000,000 shares
authorized with 2,140,353 and 2,135,244 issued
and outstanding at March 31, 2003 and
December 31, 2002, respectively |
4,705,085 | 939,507 | |||||||||
Surplus |
— | 3,730,019 | |||||||||
Undivided profits |
2,816,679 | 2,735,032 | |||||||||
Accumulated other comprehensive
income, net of tax |
486,409 | 488,364 | |||||||||
Total stockholders’ equity |
8,008,173 | 7,892,922 | |||||||||
Total liabilities and stockholders’ equity |
$ | 110,929,212 | $ | 107,019,888 | |||||||
3
OREGON PACIFIC BANCORP
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
| Three Months Ended March 31, | ||||||||||
| 2003 | 2002 | |||||||||
INTEREST INCOME |
||||||||||
Interest and fees on loans |
$ | 1,530,299 | $ | 1,218,189 | ||||||
Interest on investment securities: |
||||||||||
U.S. Teasuries and agencies |
29,169 | 52,697 | ||||||||
State and political subdivisions |
88,996 | 111,650 | ||||||||
Corporate and other investments |
62,267 | 93,564 | ||||||||
Interest on deposits in banks |
22,871 | 5,797 | ||||||||
Total interest income |
1,733,602 | 1,481,897 | ||||||||
INTEREST EXPENSE |
||||||||||
Interest-bearing demand deposits |
161,553 | 99,051 | ||||||||
Savings deposits |
39,805 | 48,433 | ||||||||
Time deposits |
146,635 | 204,931 | ||||||||
Other borrowings |
92,159 | 62,449 | ||||||||
Total interest expense |
440,152 | 414,864 | ||||||||
Net interest income |
1,293,450 | 1,067,033 | ||||||||
PROVISION FOR LOAN LOSSES |
50,000 | 35,000 | ||||||||
Net interest income after provision for loan losses |
1,243,450 | 1,032,033 | ||||||||
NONINTEREST INCOME |
||||||||||
Mortgage loan sales and servicing fees |
386,714 | 259,899 | ||||||||
Service charges and fees |
102,055 | 87,707 | ||||||||
Investment sales commissions |
25,496 | 50,742 | ||||||||
Trust fee income |
102,162 | 82,645 | ||||||||
Other income |
15,978 | 24,600 | ||||||||
Total noninterest income |
632,405 | 505,593 | ||||||||
4
OREGON PACIFIC BANCORP
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
| Three Months Ended March 31, | ||||||||||
| 2003 | 2002 | |||||||||
NONINTEREST EXPENSE |
||||||||||
Salaries and benefits |
1,002,829 | 814,534 | ||||||||
Occupancy |
156,827 | 102,897 | ||||||||
Supplies |
50,461 | 42,059 | ||||||||
Postage and freight |
22,891 | 18,780 | ||||||||
Outside services |
155,322 | 94,451 | ||||||||
Advertising |
36,036 | 27,694 | ||||||||
Loan collection expense |
39,538 | 20,814 | ||||||||
Securities and trust department expenses |
33,207 | 52,205 | ||||||||
Other expenses |
117,358 | 88,411 | ||||||||
Total noninterest expense |
1,614,469 | 1,261,845 | ||||||||
INCOME BEFORE INCOME TAXES |
261,386 | 275,781 | ||||||||
PROVISION FOR INCOME TAXES |
73,000 | 61,000 | ||||||||
NET INCOME |
188,386 | 214,781 | ||||||||
OTHER COMPREHENSIVE INCOME |
||||||||||
Unrealized holding loss arising during the period |
(1,955 | ) | (65,926 | ) | ||||||
COMPREHENSIVE INCOME |
$ | 186,431 | $ | 148,855 | ||||||
EARNINGS PER SHARE OF COMMON STOCK |
||||||||||
Basic earnings per share |
$ | 0.09 | $ | 0.10 | ||||||
Diluted earnings per share |
$ | 0.09 | $ | 0.10 | ||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
||||||||||
Basic earnings per share |
2,138,196 | 2,115,762 | ||||||||
Diluted earnings per share |
2,152,012 | 2,129,237 | ||||||||
5
OREGON PACIFIC BANCORP
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
| Accumulated | ||||||||||||||||||||||||
| Other | Total | |||||||||||||||||||||||
| Common Stock | Undivided | Comprehensive | Stockholders’ | |||||||||||||||||||||
| Shares | Amount | Surplus | Profits | Income | Equity | |||||||||||||||||||
Balance, December 31, 2001 (Audited) |
2,112,493 | $ | 929,497 | $ | 3,609,063 | $ | 2,295,068 | $ | 277,687 | $ | 7,111,315 | |||||||||||||
Cash dividends paid |
— | — | — | (250,879 | ) | — | (250,879 | ) | ||||||||||||||||
Dividends reinvested in stock |
22,751 | 10,010 | 120,956 | (130,966 | ) | — | — | |||||||||||||||||
Net income and comprehensive income |
— | — | — | 821,809 | 210,677 | 1,032,486 | ||||||||||||||||||
Balance, December 31, 2002 (Audited) |
2,135,244 | $ | 939,507 | $ | 3,730,019 | $ | 2,735,032 | $ | 488,364 | $ | 7,892,922 | |||||||||||||
Change in capitalization as a result of holding
company formation |
3,730,019 | (3,730,019 | ) | — | ||||||||||||||||||||
Cash dividends paid |
(71,180 | ) | (71,180 | ) | ||||||||||||||||||||
Dividends reinvested in stock |
5,109 | 35,559 | (35,559 | ) | — | |||||||||||||||||||
Net income and comprehensive income |
188,386 | (1,955 | ) | 186,431 | ||||||||||||||||||||
Balance, March 31, 2003 (Unaudited) |
2,140,353 | $ | 4,705,085 | $ | — | $ | 2,816,679 | $ | 486,409 | $ | 8,008,173 | |||||||||||||
6
OREGON PACIFIC BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| 2003 | 2002 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|||||||||||
Net income |
$ | 188,386 | $ | 214,781 | |||||||
Adjustments to reconcile net income to net cash
from operating activities: |
|||||||||||
Depreciation and amortization |
82,759 | 73,907 | |||||||||
Provision for possible loan losses |
50,000 | 35,000 | |||||||||
Federal Home Loan Bank stock dividends |
(11,500 | ) | (9,600 | ) | |||||||
Net change in mortgage loans held-for-sale |
1,670,532 | 1,569,835 | |||||||||
Loss (gain) on disposition of premises, equipment, and other real estate |
2,286 | (6,240 | ) | ||||||||
Decrease in trading securities |
— | 3,276,527 | |||||||||
Net increase in accrued interest and other assets |
(342,933 | ) | (115,628 | ) | |||||||
Net decrease in accrued interest and other liabilities |
(435,168 | ) | (164,648 | ) | |||||||
Net cash from operating activities |
1,204,362 | 4,873,934 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
|||||||||||
Proceeds from sales and maturities of available-for-sale securities |
1,055,347 | 1,324,195 | |||||||||
Purchases of available-for-sale-securities |
(1,517,560 | ) | (2,004,435 | ) | |||||||
Proceeds from sale (purchase) of restricted equity securities |
(650 | ) | 450 | ||||||||
Net increase in interest-bearing deposits in banks |
(388,926 | ) | (1,855,000 | ) | |||||||
Loans originated, net of principal repayments |
(5,174,641 | ) | (923,632 | ) | |||||||
Purchase of premises and equipment |
(162,234 | ) | (69,025 | ) | |||||||
Proceeds from sale of other real estate |
104,949 | 98,643 | |||||||||
Additions to other real estate owned |
— | (5,217 | ) | ||||||||
Net cash from investing activities |
(6,083,715 | ) | (3,434,021 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|||||||||||
Net increase in demand and savings deposit accounts |
2,412,913 | 2,252,176 | |||||||||
Net increase (decrease) in time deposits |
1,678,828 | (3,782,204 | ) | ||||||||
Proceeds from Federal Home Loan Bank borrowings |
— | — | |||||||||
Repayment of Federal Home Loan Bank borrowings |
(112,500 | ) | 487,500 | ||||||||
Proceeds from other bank borrowing |
250,000 | — | |||||||||
Cash dividends paid |
(71,180 | ) | (69,905 | ) | |||||||
Net cash from financing activities |
4,158,061 | (1,112,433 | ) | ||||||||
7
(continued)
| Three Months Ended March 31, | |||||||||
| 2003 | 2002 | ||||||||
CASH AND CASH EQUIVALENTS, beginning of period |
$ | 3,886,203 | $ | 2,276,107 | |||||
CASH AND CASH EQUIVALENTS, end of period |
$ | 3,164,911 | $ | 2,603,587 | |||||
SUPPLEMENTAL CASH FLOW INFORMATION |
|||||||||
Cash paid for interest |
$ | 435,976 | $ | 449,708 | |||||
Cash paid for income taxes |
$ | 2,880 | $ | 4,398 | |||||