_________________
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period
ended June 30, 2004
OR
[ ] TRANSITION REPORT
PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _______
Commission file number 0-25752
FNBH BANCORP, INC.
(Exact name of
registrant as specified in its charter)
| MICHIGAN | 38-2869722 | ||||
| (State or other jurisdiction of | (I.R.S. Employer | ||||
| incorporation or | Identification No.) | ||||
| organization) | |||||
101 East Grand River, Howell, Michigan 48843
(Address of principal
executive offices) (Zip Code)
Registrant’s telephone number, including area code: (517)546-3150
_________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 Exchange Act). Yes X No___
The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 3,177,583 shares of the Company’s Common Stock (no par value) were outstanding as of July 31, 2004.
1
INDEX
| Part I Financial Information (unaudited): | Page Number |
||||
| Item 1 | |||||
| Interim Financial Statements: | |||||
| Consolidated Balance Sheets as of June 30, 2004 and December 31, 2003 | 4 | ||||
| Consolidated Statements of Income, three months ended | |||||
| June 30, 2004 and 2003 and six months ended June 30, 2004 and 2003 | 5 | ||||
| Consolidated Statements of Stockholders’ Equity and Comprehensive | |||||
| Income for three months ended June 30, 2004 and 2003 | 6 | ||||
| Consolidated Statements of Stockholders’ Equity and Comprehensive | |||||
| Income for six months ended June 30, 2004 and 2003 | 7 | ||||
| Consolidated Statements of Cash Flows for six months ended | |||||
| June 30, 2004 and 2003 | 8 | ||||
| Notes to Interim Consolidated Financial Statements | 9 | ||||
| Item 2 | |||||
| Management’s Discussion and Analysis of | |||||
| Financial Condition and Results of Operations | 10 | ||||
| Item 3 | |||||
| Quantitative and Qualitative Disclosures about Market Risk | 23 | ||||
| Item 4 | |||||
| Controls and Procedures | 23 | ||||
| Part II. Other Information | |||||
| Item 2 | |||||
| Changes in Securities and Use of Proceeds | 24 | ||||
| Item 6 | |||||
| Submission of Matters to a Vote of Security Holders | 24 | ||||
| Exhibits and Reports on From 8-K | 25 | ||||
| Signatures | 26 | ||||
PART I — FINANCIAL INFORMATION
Item 1.
Financial Statements
Unaudited interim consolidated
financial statements follow.
| Consolidated Balance Sheets (Unaudited) | June 30 2004 | December 31 2003 | ||||||
|---|---|---|---|---|---|---|---|---|
| Assets Cash and due from banks |
$ | 14,183,406 | $ | 16,035,121 | ||||
| Short term investments | 23,214,210 | 16,848,371 | ||||||
| Total cash and cash equivalents | 37,397,616 | 32,883,492 | ||||||
| Certificates of deposit | 1,068,000 | 1,553,000 | ||||||
| Investment securities held to maturity, net (fair value of $16,473,198 | ||||||||
| at June 30, 2004 and $16,006,625 at Dec. 31, 2003) | 15,898,071 | 15,051,293 | ||||||
| Investment securities available for sale, at fair value | 30,684,139 | 26,787,863 | ||||||
| Mortgage-backed securitities available for sale, at fair value | 18,151,033 | 12,513,486 | ||||||
| FHLBI and FRB stock, at cost | 1,107,450 | 1,082,750 | ||||||
| Total investment securities | 65,840,693 | 55,435,392 | ||||||
| Loans: | ||||||||
| Commercial | 262,143,668 | 278,002,975 | ||||||
| Consumer | 36,109,607 | 34,995,478 | ||||||
| Real estate mortgage | 34,901,302 | 34,087,202 | ||||||
| Total loans | 333,154,577 | 347,085,655 | ||||||
| Less allowance for loan losses | 6,165,067 | 5,958,375 | ||||||
| Net loans | 326,989,510 | 341,127,280 | ||||||
| Premises and equipment, net | 11,491,691 | 11,910,399 | ||||||
| Land and facilities held for sale, net | 155,690 | 1,400,290 | ||||||
| Other real estate owned, held for sale | 646,682 | 65,000 | ||||||
| Accrued interest and other assets | 5,625,948 | 5,443,555 | ||||||
| Total assets | $ | 449,215,830 | $ | 449,818,408 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Liabilities | ||||||||
| Deposits: | ||||||||
| Demand (non-interest bearing) | $ | 76,482,285 | $ | 69,233,515 | ||||
| NOW | 40,112,690 | 46,056,749 | ||||||
| Savings and money market | 143,573,700 | 140,639,653 | ||||||
| Time | 134,511,327 | 137,174,926 | ||||||
| Brokered certificates of deposit | 3,595,790 | 5,968,458 | ||||||
| Total deposits | 398,275,792 | 399,073,301 | ||||||
| Other borrowings | 5,066,836 | 5,327,708 | ||||||
| Accrued interest, taxes, and other liabilities | 3,273,798 | 4,181,918 | ||||||
| Total liabilities | 406,616,426 | 408,582,927 | ||||||
| Stockholders' Equity | ||||||||
| Common stock, no par value. Authorized 4,200,000 shares; 3,177,583 | ||||||||
| shares issued and outstanding at June 30, 2004 and 3,168,931 shares | ||||||||
| issued and outstanding at Dec. 31, 2003 | 5,953,028 | 5,725,898 | ||||||
| Retained earnings | 37,118,216 | 35,425,699 | ||||||
| Unearned long term incentive plan | (184,166 | ) | (222,652 | ) | ||||
| Accumulated other comprehensive income, net | (287,674 | ) | 306,536 | |||||
| Total stockholders' equity | 42,599,404 | 41,235,481 | ||||||
| Total liabilities and stockholders' equity | $ | 449,215,830 | $ | 449,818,408 | ||||
See notes to interim consolidated financial statements.
4
| Three months ended June 30 | Six months ended June 30 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Consolidated Statements of Income (Unaudited) | 2004 | 2003 | 2004 | 2003 | ||||||||||
| Interest and dividend income: | ||||||||||||||
| Interest and fees on loans | $ | 5,331,516 | $ | 5,661,240 | $ | 10,811,159 | $ | 11,322,978 | ||||||
| Interest and dividends on investment securities: | ||||||||||||||
| U.S. Treasury and agency securities | 364,167 | 221,761 | 702,626 | 450,695 | ||||||||||
| Obligations of state and political subdivisions | 175,656 | 193,929 | 361,114 | 396,028 | ||||||||||
| Corporate bonds | 32,780 | 47,003 | 77,389 | 94,472 | ||||||||||
| Other securities | 13,075 | 14,609 | 26,124 | 14,936 | ||||||||||
| Interest on short term investments | 54,060 | 13,403 | 86,189 | 46,982 | ||||||||||
| Interest on certificates of deposit and other bank deposits | 13,282 | 29,712 | 29,121 | 74,513 | ||||||||||
| Total interest and dividend income | 5,984,536 | 6,181,657 | 12,093,722 | 12,400,604 | ||||||||||
| Interest expense: | ||||||||||||||
| Interest on deposits | 1,265,475 | 1,452,969 | 2,602,689 | 3,077,053 | ||||||||||
| Interest on other borrowings | 93,475 | 98,599 | 187,597 | 196,341 | ||||||||||
| Total interest expense | 1,358,950 | 1,551,568 | 2,790,286 | 3,273,394 | ||||||||||
| Net interest income | 4,625,586 | 4,630,089 | 9,303,436 | 9,127,210 | ||||||||||
| Provision for loan losses | 200,000 | 275,000 | 695,000 | 600,000 | ||||||||||
| Net interest income after provision for loan losses | 4,425,586 | 4,355,089 | 8,608,436 | 8,527,210 | ||||||||||
| Noninterest income: | ||||||||||||||
| Service charges and other fee income | 883,835 | 676,043 | 1,671,051 | 1,423,196 | ||||||||||
| Trust income | 64,638 | 70,360 | 126,548 | 124,432 | ||||||||||
| Gain on sale of loans | 21,135 | 96,711 | 39,695 | 238,133 | ||||||||||
| Gain on sale/call of investments | - | 3,823 | - | 3,823 | ||||||||||
| Other | 35,260 | 69,237 | 346,122 | 63,436 | ||||||||||
| Total noninterest income | 1,004,868 | 916,174 | 2,183,416 | 1,853,020 | ||||||||||
| Noninterest expense: | ||||||||||||||
| Salaries and employee benefits | 1,943,304 | 1,790,258 | 3,793,868 | 3,579,640 | ||||||||||
| Net occupancy expense | 259,035 | 243,462 | 557,822 | 479,783 | ||||||||||
| Equipment expense | 222,323 | 291,490 | 441,654 | 572,475 | ||||||||||
| Professional and service fees | 401,830 | 274,455 | 751,714 | 575,934 | ||||||||||
| Printing and supplies | 79,006 | 91,667 | 160,304 | 173,961 | ||||||||||
| Advertising | 76,913 | 99,769 | 155,148 | 171,735 | ||||||||||
| Other | 584,723 | 571,299 | 986,712 | 1,026,665 | ||||||||||
| Total noninterest expense | 3,567,134 | 3,362,400 | 6,847,222 | 6,580,193 | ||||||||||
| Income before federal income taxes | 1,863,320 | 1,908,863 | 3,944,630 | 3,800,037 | ||||||||||
| Federal income taxes | 548,050 | 581,450 | 1,173,556 | 1,154,975 | ||||||||||
| Net income | $ | 1,315,270 | $ | 1,327,413 | $ | 2,771,074 | $ | 2,645,062 | ||||||
| Per share statistics | ||||||||||||||
| Basic EPS | $ | 0.41 | $ | 0.42 | $ | 0.87 | $ | 0.84 | ||||||
| Diluted EPS | $ | 0.41 | $ | 0.42 | $ | 0.87 | $ | 0.84 | ||||||
| Dividends | $ | 0.17 | $ | 0.17 | $ | 0.34 | $ | 0.34 | ||||||
| Average shares outstanding | 3,173,596 | 3,162,563 | 3,171,403 | 3,160,297 | ||||||||||
See notes to interim consolidated financial statements.
5
FNBH BANCORP, INC. AND
SUBSIDIARIES
Consolidated Statements of Stockholders' Equity and Comprehensive Income
For the Three Months Ended June 30, 2004 and 2003 (Unaudited)
| Common stock | Retained earnings | Unearned long term incentive plan | Accumulated other comprehensive imcome | Total | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balances at March 31, 2003 | $ | 5,488,298 | $ | 32,466,638 | $ | (220,735 | ) | $ | 600,281 | $ | 38,334,482 | ||||||
| Issued 3,036 shares for long term incentive plan | 72,454 | (72,454 | ) | ||||||||||||||
| Amortization of long term incentive plan | 64,540 | 64,540 | |||||||||||||||
| Issued 757 shares for employee stock purchase plan | 15,511 | 15,511 | |||||||||||||||
| Issued 251 shares for current directors' fees | 5,943 | 5,943 | |||||||||||||||
| Issued 1,689 shares for directors' variable fee plan | 39,996 | 39,996 | |||||||||||||||
| Comprehensive income: | |||||||||||||||||
| Net income | 1,327,413 | 1,327,413 | |||||||||||||||
| Change in unrealized gain (loss) on debt securities | |||||||||||||||||
| available for sale, net of tax effect | 26,787 | 26,787 | |||||||||||||||
| Total comprehensive income | 1,354,200 | ||||||||||||||||
| Cash dividends ($.17 per share) | (537,981 | ) | (537,981 | ) | |||||||||||||