SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
| [X] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||
| For the quarterly period ended June 30, 2003 | |||
| [ ] | Transition Report Under Section 13 or 15(d) of the Exchange Act | ||
| For the transition period from__________________to__________________ |
Commission File No. 000-32915
EVERGREENBANCORP, INC.
| WASHINGTON (State or Other Jurisdiction of Incorporation or Organization |
91-2097262 (I.R.S. Employer Identification Number |
301 Eastlake Avenue East
Seattle, Washington 98109-5407
(Address of Principal Executive Offices) (Zip Code)
(206) 628-4250
(Registrant’s Telephone Number, Including Area Code)
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 preceding 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 [ ]
Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Act.
YES [ ] NO [X]
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Common Stock, no par value, outstanding as of August 12, 2003: 1,077,199 shares
No Preferred Stock were issued or outstanding.
-1-
PART I
FINANCIAL INFORMATION
| Item 1. Unaudited Consolidated Financial Statements. | |||
| 1. | Unaudited Consolidated Balance Sheets - June 30, 2003 and December 31, 2002. | ||
| 2. | Unaudited Consolidated Statements of Income - For the three months and six months ended June 30, 2003 and 2002. | ||
| 3. | Unaudited Consolidated Statements of Shareholders’ Equity - For the six months ended June 30, 2003 and 2002. | ||
| 4. | Unaudited Consolidated Statements of Cash Flows - For the six months ended June 30, 2003 and 2002. | ||
| 5. | Notes to Unaudited Consolidated Financial Information. | ||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. | |||
| Item 3. Quantitative and Qualitative Disclosures About Market Risk. | |||
| Item 4. Controls and Procedures. | |||
PART II
OTHER INFORMATION
| Item 1. Legal Proceedings. | |||
| Item 2. Changes in Securities and Use of Proceeds. | |||
| Item 3. Defaults Upon Senior Securities. | |||
| Item 4. Submission of Matters to a Vote of Security Holders. | |||
| Item 5. Other Information. | |||
| Item 6. Exhibits and Reports on Form 8-K. | |||
| (a) Exhibits | ||
| Exhibit 31.1 — Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) | ||
| Exhibit 31.2 — Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) | ||
| Exhibit 32.1 — Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
| Exhibit 32.2 — Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
| (b) Reports on Form 8-K |
-2-
PART I – FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
EVERGREENBANCORP, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
June 30, 2003 and December 31, 2002
(in thousands, except per share data)
| June 30, | December 31, | ||||||||
| 2003 | 2002 | ||||||||
Assets |
|||||||||
Cash and cash equivalents: |
|||||||||
Cash and due from banks |
$ | 7,200 | $ | 9,479 | |||||
Interest-bearing deposits in financial institutions |
1,074 | 6,141 | |||||||
Federal funds sold |
12,307 | 7,000 | |||||||
Total cash and cash equivalents |
20,581 | 22,620 | |||||||
Securities available for sale |
32,122 | 23,694 | |||||||
Loans |
|||||||||
Loans |
119,135 | 121,509 | |||||||
Allowance for loan losses |
(1,614 | ) | (1,690 | ) | |||||
Net loans |
117,521 | 119,819 | |||||||
Premises and equipment |
2,104 | 2,174 | |||||||
Accrued interest and other assets |
1,710 | 1,619 | |||||||
Total assets |
$ | 174,038 | $ | 169,926 | |||||
Liabilities |
|||||||||
Deposits |
|||||||||
Noninterest bearing |
$ | 41,207 | $ | 38,750 | |||||
Interest bearing |
92,684 | 93,424 | |||||||
Total deposits |
133,891 | 132,174 | |||||||
Federal funds purchased |
2,576 | 3,353 | |||||||
Advances from Federal Home Loan Bank |
14,712 | 11,783 | |||||||
Accrued expenses and other liabilities |
1,499 | 1,656 | |||||||
Junior subordinated debt (trust preferred securities) |
5,000 | 5,000 | |||||||
Total liabilities |
157,678 | 153,966 | |||||||
Stockholders’ equity |
|||||||||
Preferred stock: |
|||||||||
No par value; 100,000 shares authorized; none issued |
— | — | |||||||
Common stock and surplus: |
|||||||||
No par value; 15,000,000 shares authorized;
1,077,199 shares issued at 2003;
1,075,730 shares issued at 2002 |
13,619 | 13,597 | |||||||
Retained earnings |
2,572 | 2,266 | |||||||
Accumulated other comprehensive income |
169 | 97 | |||||||
Total stockholders’ equity |
16,360 | 15,960 | |||||||
Total liabilities and stockholders’ equity |
$ | 174,038 | $ | 169,926 | |||||
See accompanying notes to unaudited consolidated financial statements.
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EVERGREENBANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Three-month and six month periods ended June 30, 2003 and 2002
(in thousands, except per share data)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||
Interest income |
||||||||||||||||
Loans, including fees |
$ | 2,246 | $ | 2,522 | $ | 4,593 | $ | 5,037 | ||||||||
Federal funds sold and other |
23 | 60 | 60 | 109 | ||||||||||||
Securities available for sale |
264 | 147 | 490 | 294 | ||||||||||||
Total interest income |
2,533 | 2,729 | 5,143 | 5,440 | ||||||||||||
Interest expense
|
||||||||||||||||
Deposits |
339 | 544 | 724 | 1,131 | ||||||||||||
Federal funds purchased |
5 | 15 | 13 | 33 | ||||||||||||
Advances from Federal Home Loan Bank |
148 | 76 | 281 | 139 | ||||||||||||
Junior subordinated debt (trust preferred securities) |
61 | 30 | 122 | 30 | ||||||||||||
Total interest expense |
553 | 665 | 1,140 | 1,333 | ||||||||||||
Net interest income |
1,980 | 2,064 | 4,003 | 4,107 | ||||||||||||
Provision for loan losses |
35 | 99 | 38 | 188 | ||||||||||||
Net interest income after
provision for loan losses |
1,945 | 1,965 | 3,965 | 3,919 | ||||||||||||
Noninterest income |
||||||||||||||||
Service charges on deposit accounts |
211 | 169 | 414 | 336 | ||||||||||||
Net merchant credit card processing |
36 | 32 | 78 | 76 | ||||||||||||
Gain on sales of loans and available-for-sale securities |
62 | — | 62 | — | ||||||||||||
Other noninterest income |
172 | 173 | 339 | 312 | ||||||||||||
Total noninterest income |
481 | 374 | 893 | 724 | ||||||||||||
Noninterest expense |
||||||||||||||||
Salaries and employee benefits |
1,012 | 944 | 2,030 | 1,913 | ||||||||||||
Occupancy and equipment |
318 | 294 | 618 | 591 | ||||||||||||
Other noninterest expense |
761 | 599 | 1,432 | 1,192 | ||||||||||||
Total noninterest expense |
2,091 | 1,837 | 4,080 | 3,696 | ||||||||||||
Income before income tax expense |
335 | 502 | 778 | 947 | ||||||||||||
Income tax expense |
112 | 167 | 257 | 311 | ||||||||||||
Net income |
$ | 223 | $ | 335 | $ | 521 | $ | 636 | ||||||||
Basic earnings per share of common stock |
$ | 0.21 | $ | 0.31 | $ | 0.48 | $ | 0.59 | ||||||||
Diluted earnings per share of common stock |
$ | 0.21 | $ | 0.31 | $ | 0.48 | $ | 0.59 | ||||||||
Total Comprehensive Income |
$ | 267 | $ | 354 | $ | 593 | $ | 631 | ||||||||
See accompanying notes to unaudited consolidated financial statements.
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EVERGREENBANCORP, INC
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Six months ended June 30, 2003, and 2002 (in thousands, except share and per share data):
| Accumulated | ||||||||||||||||||||||
| Common | other | Total | ||||||||||||||||||||
| Common | stock | comprehen- | stock- | |||||||||||||||||||
| stock | and | Retained | sive | holders’ | ||||||||||||||||||
| shares | surplus | earnings | income | equity | ||||||||||||||||||
Balance at January 1, 2002 |
934,817 | $ | 11,485 | $ | 3,198 | $ | 55 | $ | 14,738 | |||||||||||||
Comprehensive income
|
||||||||||||||||||||||
Net income |
— | — | 636 | — | 636 | |||||||||||||||||
Other comprehensive
income, net of tax: |
||||||||||||||||||||||
Change in unrealized
gain (loss) on
securities available
for sale, net of
deferred income tax
benefit of $(3) |
— | — | — | (5 | ) | (5 | ) | |||||||||||||||
Total comprehensive
income |
631 | |||||||||||||||||||||
Exercise of stock options |
600 | 9 | 9 | |||||||||||||||||||
Cash dividends ($0.157
per share) |
— | — | (168 | ) | — | (168 | ) | |||||||||||||||
Balance at June 30, 2002 |
935,417 | $ | 11,494 | $ | 3,666 | $ | 50 | $ | 15,210 | |||||||||||||
| Accumulated | ||||||||||||||||||||||
| Common | other | Total | ||||||||||||||||||||
| Common | stock | comprehen- | stock- | |||||||||||||||||||
| stock | and | Retained | sive | holders’ | ||||||||||||||||||
| shares | surplus | earnings | income | equity | ||||||||||||||||||
Balance at January 1, 2003 |
1,075,461 | $ | 13,597 | $ | 2,266 | $ | 97 | $ | 15,960 | |||||||||||||
Comprehensive income
|
||||||||||||||||||||||
Net income |
— | — | 521 | — | 521 | |||||||||||||||||
Other comprehensive
income, net of tax: |
||||||||||||||||||||||
Change in unrealized
gain (loss) on
securities available
for sale, net of
deferred income tax
benefit of $37 |
— | — | — | 72 | 72 | |||||||||||||||||
Total comprehensive
income |
593 | |||||||||||||||||||||
Cash dividends ($.20 per
share) |
— | — | (215 | ) | — | (215 | ) | |||||||||||||||
Exercise of stock options |
1,738 | 22 | — | — | 22 | |||||||||||||||||
Balance at June 30, 2003 |
1,077,199 | $ | 13,619 | $ | 2,572 | $ | 169 | $ | 16,360 | |||||||||||||
See accompanying notes to unaudited consolidated financial statements.
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EVERGREENBANCORP, INC
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30, 2003, and 2002
(in thousands, except share and per share data):
| 2003 | 2002 | ||||||||
Cash flows from operating activities |
|||||||||
Net income |
$ | 521 | $ | 636 | |||||
Adjustments to reconcile net income to
net cash provided by operating activities: |
|||||||||
Depreciation |
285 | 229 | |||||||
Provision for loan losses |
38 | 188 | |||||||
Net amortization of premium on securities |
78 | 12 | |||||||
Gain from sale of loans and available-for-sale securities |
(62 | ) | |||||||
Federal Home Loan Bank stock dividends |
(39 | ) | (18 | ) | |||||
Dividends reinvested |
(117 | ) | (163 | ) | |||||
Other changes, net |
(284 | ) | (356 | ) | |||||
Net cash provided by operating activities |
420 | 528 | |||||||
Cash flows from investing activities |
|||||||||
Proceeds from maturities of
securities available for sale |
3,535 | 165 | |||||||
Proceeds from sale of loans and
securities available for sale |
5,568 | ||||||||
Purchases of securities available for sale |
(22,010 | ) | (8,195 | ) | |||||
Proceeds from prepayments of securities available for sale |
4,726 | — | |||||||
Net decrease in loans |
2,259 | 1,200 | |||||||
Purchases of premises and equipment |
(213 | ) | (171 | ) | |||||
Net cash used in investing activities |
(6,135 | ) | (7,001 | ) | |||||
Cash flows from financing activities |
|||||||||
Net increase/(decrease) in deposits |
1,717 | (2,324 | ) | ||||||
Net decrease in federal funds purchased and securities
sold under agreements to repurchase |
(777 | ) | (36 | ) | |||||
Advances from Federal Home Loan Bank |
|||||||||