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 September 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 | 91-2097262 | |
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| (State or Other Jurisdiction of | (I.R.S. Employer | |
| Incorporation or Organization) | 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 November 5, 2003: 1,081,818 shares
No Preferred Stock were issued or outstanding.
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PART I FINANCIAL INFORMATION |
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| Item 1. | Unaudited Consolidated Financial Statements. | |
| 1. | Unaudited Consolidated Balance Sheets - September 30, 2003 and December 31, 2002. | |
| 2. | Unaudited Consolidated Statements of Income and Comprehensive Income- For the three months and nine months ended September 30, 2003 and 2002. | |
| 3. | Unaudited Consolidated Statements of Shareholders’ Equity - For the nine months ended September 30, 2003 and 2002. | |
| 4. | Unaudited Consolidated Statements of Cash Flows - For the nine months ended September 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 Disclosure About Market Risk. | |
| Item 4. | Controls and Procedures. | |
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PART II OTHER INFORMATION |
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| 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 Sarbanes-Oxley Act of 2002 | ||
| (b) Reports on Form 8-K | ||
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PART I – FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
EVERGREENBANCORP, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
September 30, 2003 and December 31, 2002
(in thousands, except share data)
| September 30, | December 31, | ||||||||
| 2003 | 2002 | ||||||||
Assets |
|||||||||
Cash and cash equivalents: |
|||||||||
Cash and due from banks |
$ | 5,589 | $ | 9,479 | |||||
Interest-bearing deposits in financial institutions |
5,496 | 6,141 | |||||||
Federal funds sold |
14,000 | 7,000 | |||||||
Total cash and cash equivalents |
25,085 | 22,620 | |||||||
Securities available for sale |
37,638 | 23,694 | |||||||
Loans |
|||||||||
Loans |
120,162 | 121,509 | |||||||
Allowance for loan losses |
(1,636 | ) | (1,690 | ) | |||||
Net loans |
118,526 | 119,819 | |||||||
Premises and equipment |
2,470 | 2,174 | |||||||
Accrued interest and other assets |
1,889 | 1,619 | |||||||
Total assets |
$ | 185,608 | $ | 169,926 | |||||
Liabilities |
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Deposits |
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Noninterest bearing |
$ | 41,943 | $ | 38,750 | |||||
Interest bearing |
102,939 | 93,424 | |||||||
Total deposits |
144,882 | 132,174 | |||||||
Federal funds purchased |
3,409 | 3,353 | |||||||
Advances from Federal Home Loan Bank |
14,497 | 11,783 | |||||||
Accrued expenses and other liabilities |
1,627 | 1,656 | |||||||
Junior subordinated debt (trust preferred securities) |
5,000 | 5,000 | |||||||
Total liabilities |
169,415 | 153,966 | |||||||
Stockholders’ equity |
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Preferred stock: |
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No par value; 100,000 shares authorized; none issued |
— | — | |||||||
Common stock and surplus: |
|||||||||
No par value; 15,000,000 shares authorized; 1,078,831 shares
issued at September 30, 2003; 1,075,461 shares issued at December 31, 2002 |
13,640 | 13,597 | |||||||
Retained earnings |
2,654 | 2,266 | |||||||
Accumulated other comprehensive income/(loss) |
(101 | ) | 97 | ||||||
Total stockholders’ equity |
16,193 | 15,960 | |||||||
Total liabilities and stockholders’ equity |
$ | 185,608 | $ | 169,926 | |||||
See accompanying notes to unaudited consolidated financial statements.
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EVERGREENBANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Three-month and nine month periods ended September 30, 2003 and 2002
(in thousands, except per share data)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||
Interest income |
||||||||||||||||
Loans, including fees |
$ | 2,300 | $ | 2,506 | $ | 6,893 | $ | 7,543 | ||||||||
Federal funds sold and other |
22 | 58 | 82 | 167 | ||||||||||||
Securities available for sale |
252 | 239 | 742 | 533 | ||||||||||||
Total interest income |
2,574 | 2,803 | 7,717 | 8,243 | ||||||||||||
Interest expense |
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Deposits |
309 | 492 | 1,033 | 1,623 | ||||||||||||
Federal funds purchased |
4 | 13 | 17 | 46 | ||||||||||||
Advances from Federal Home Loan Bank |
152 | 134 | 433 | 273 | ||||||||||||
Junior subordinated debt (trust preferred
securities) |
58 | 68 | 180 | 98 | ||||||||||||
Total interest expense |
523 | 707 | 1,663 | 2,040 | ||||||||||||
Net interest income |
2,051 | 2,096 | 6,054 | 6,203 | ||||||||||||
Provision for loan losses |
36 | 102 | 74 | 290 | ||||||||||||
Net interest income after provision for
loan losses |
2,015 | 1,994 | 5,980 | 5,913 | ||||||||||||
Noninterest income |
||||||||||||||||
Service charges on deposit accounts |
198 | 193 | 612 | 529 | ||||||||||||
Net merchant credit card processing |
38 | 36 | 116 | 112 | ||||||||||||
Gain on sales of loans and
available-for-sale securities |
4 | 10 | 66 | 10 | ||||||||||||
Other noninterest income |
172 | 148 | 511 | 460 | ||||||||||||
Total noninterest income |
412 | 387 | 1,305 | 1,111 | ||||||||||||
Noninterest expense |
||||||||||||||||
Salaries and employee benefits |
1,019 | 977 | 3,049 | 2,890 | ||||||||||||
Occupancy and equipment |
326 | 301 | 944 | 892 | ||||||||||||
Other noninterest expense |
730 | 576 | 2,162 | 1,768 | ||||||||||||
Total noninterest expense |
2,075 | 1,854 | 6,155 | 5,550 | ||||||||||||
Income before income tax expense |
352 | 527 | 1,130 | 1,474 | ||||||||||||
Income tax expense |
118 | 177 | 375 | 488 | ||||||||||||
Net income |
$ | 234 | $ | 350 | $ | 755 | $ | 986 | ||||||||
Basic earnings per share of common stock |
$ | 0.22 | $ | 0.33 | $ | 0.70 | $ | 0.92 | ||||||||
Diluted earnings per share of common stock |
$ | 0.21 | $ | 0.32 | $ | 0.70 | $ | 0.91 | ||||||||
Total comprehensive income |
$ | (36 | ) | $ | 379 | $ | 557 | $ | 1,010 | |||||||
See accompanying notes to unaudited consolidated financial statements.
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EVERGREENBANCORP, INC
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Nine months ended September 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 |
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Net income |
— | — | 986 | — | 986 | |||||||||||||||||
Other comprehensive income, net of tax: |
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Change in unrealized gain (loss) on
securities available for sale, net
of deferred income tax benefit of
$12 |
— | — | — | 24 | 24 | |||||||||||||||||
Total comprehensive income |
1,010 | |||||||||||||||||||||
Exercise of stock options |
600 | 9 | 9 | |||||||||||||||||||
Cash dividends ($0.157 per share) |
— | — | (168 | ) | — | (168 | ) | |||||||||||||||
Stock dividend (15 percent) |
140,044 | (4 | ) | (4 | ) | |||||||||||||||||
Balance at September 30, 2002 |
1,075,461 | $ | 11,490 | $ | 4,016 | $ | 79 | $ | 15,585 | |||||||||||||
| 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 |
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Net income |
— | — | 755 | — | 755 | ||||||||||||||||||
Other comprehensive income, net of tax:
|
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Change in unrealized gain (loss) on securities available for
sale, net of deferred income tax benefit of $123 |
— | — | — | (198 | ) | (198 | ) | ||||||||||||||||
Total comprehensive income |
557 | ||||||||||||||||||||||
Cash dividends ($.35 per share) |
— | — | (367 | ) | — | (367 | ) | ||||||||||||||||
Exercise of stock options |
3,370 | 43 | — | — | 43 | ||||||||||||||||||
Balance at September 30, 2003 |
1,078,831 | $ | 13,640 | $ | 2,654 | $ | (101 | ) | $ | 16,193 | |||||||||||||
See accompanying notes to unaudited consolidated financial statements.
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EVERGREENBANCORP, INC
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30, 2003, and 2002
(in thousands, except share and per share data):
| September 30, | September 30, | ||||||||
| 2003 | 2002 | ||||||||
Cash flows from operating activities |
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Net income |
$ | 755 | $ | 986 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation |
435 | 359 | |||||||
Provision for loan losses |
74 | 290 | |||||||
Net amortization of premium on securities |
128 | 32 | |||||||
Gain from sale of loans and available-for-sale securities |
(66 | ) | (10 | ) | |||||
Loss on disposal of premises and equipment |
0 | 44 | |||||||
Federal Home Loan Bank stock dividends |
(57 | ) | (55 | ) | |||||
Dividends reinvested |
(201 | ) | (212 | ) | |||||
Other changes, net |
(176 | ) | (412 | ) | |||||
Net cash provided by operating activities |
892 | 1,022 | |||||||
Cash flows from investing activities |
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Proceeds from maturities of securities available for sale |
3,535 | 6,419 | |||||||
Proceeds from sale of loans and securities available for sale |
5,747 | ||||||||
Purchases of securities available for sale |
(29,504 | ) | (13,283 | ) | |||||
Proceeds from prepayments of securities available for sale |
6,153 | — | |||||||
Net (increase) decrease in loans |
1,219 | (674 | ) | ||||||
Purchases of premises and equipment |
(731 | ) | |||||||