QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 2003
GREER BANCSHARES INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
| South Carolina | 57-1126200 | |
| (State or Other Jurisdiction of Incorporation) | (I.R.S. Employer Identification Number) |
| 1111 West Poinsett Street P.O. Box 1029 Greer, SC 29650 |
(864) 877-2000 |
|
| (Address of Principal Executive OFfices) | (Issuer's Telephone Number) |
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 Exchange Act). Yes No X
The number of outstanding shares of the issuer's $5.00 par value common stock as of October 24, 2003 was 1,615,152.
Index
FINANCIAL INFORMATION
Item 1
Consolidated Financial Statements (Unaudited)
| Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002 | 3 | ||||
| Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2003 and 2002 | 4 | ||||
| Consolidated Statements of Comprehensive Income for the Three and Nine Months ended September 30, 2003 and 2002 | 5 | ||||
| Consolidated Statements of Changes in Stockholders' Equity for the Nine Months Ended September 30, 2003 and Twelve Months Ended December 31, 2002 | 6 | ||||
| Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2003 and 2002 | 7 | ||||
| Notes to Consolidated Financial Statements | 8 | ||||
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 9 | ||||
| Item 3. Quantitative and Qualitative Disclolsures About Market Risk | 14 | ||||
| Item 4. Controls and Procedures | 15 | ||||
| PART II | |||||
| OTHER INFORMATION | |||||
| Item 1. Legal Proceedings | 15 | ||||
| Item 2. Changes in Securities and Use of Proceeds | 15 | ||||
| Item 3. Defaults Upon Senior Securities | 15 | ||||
| Item 4. Submission of Matters to a Vote of Security Holders | 15 | ||||
| Item 5. Other Information | 15 | ||||
| Item 6. Exhibits and Report on 8-K | 15 | ||||
| Signatures | 16 | ||||
| Certifications | 17-22 | ||||
2
GREER BANCSHARES INCORPORATED
Consolidated Balance Sheets
(Unaudited)
| (dollars in thousands except share data) | September 30, |
December 31, | ||||||
|---|---|---|---|---|---|---|---|---|
| Assets: | 2003 |
2002 | ||||||
| Cash and Due from Banks | $ | 6,699 | $ | 7,368 | ||||
| Investment Securities: | ||||||||
| Held to maturity | 19,065 | 14,607 | ||||||
| Available for sale | 59,022 | 52,163 | ||||||
| Net Loans | 111,289 | 106,581 | ||||||
| Premises and Equipment, Net | 3,974 | 4,247 | ||||||
| Federal Funds Sold | 2,970 | 3,351 | ||||||
| Other Assets | 4,405 | 4,214 | ||||||
| Total Assets | $ | 207,424 | 192,531 | |||||
| Liabilities: | ||||||||
| Deposits | ||||||||
| Non-interest bearing | $ | 21,327 | $ | 18,711 | ||||
| Interest bearing | 124,376 | 118,852 | ||||||
| Total Deposits | 145,703 | 137,563 | ||||||
| Note payable to Federal Home Loan Bank | 40,177 | 34,837 | ||||||
| Other liabilities | 1,695 | 1,518 | ||||||
| Total Liabilities | 187,575 | 173,918 | ||||||
| Stockholders' Equity: | ||||||||
| Common stock--par value $5 per share, 10,000,000 shares | ||||||||
| authorized, 1,610,917 and 1,606,018 shares issued and | ||||||||
| outstanding at September 30, 2003 and December 31, 2002, | ||||||||
| respectively | 8,055 | 8,030 | ||||||
| Additional paid in capital | 6,413 | 6,350 | ||||||
| Retained Earnings | 4,511 | 3,440 | ||||||
| Accumulated other comprehensive income | 870 | 793 | ||||||
| Total Stockholders' Equity | 19,849 | 18,613 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 207,424 | 192,531 | |||||
The accompanying notes are an integral part of these consolidated financial statements.
3
GREER BANCSHARES
INCORPORATED
Consolidated Statements of Income
(Unaudited)
| (dollars in thousands except per share data) | For Three Months |
For Nine Months | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest Income: | 09/30/03 |
09/30/02 |
09/30/03 |
09/30/02 | ||||||||||
| Loans (including fees) | $ | 1,774 | $ | 1,993 | $ | 5,381 | $ | 6,046 | ||||||
| Investment Securities: | ||||||||||||||
| Taxable | 286 | 444 | 979 | 1,279 | ||||||||||
| Exempt from federal income tax | 351 | 267 | 1,016 | 700 | ||||||||||
| Federal funds sold | 10 | 6 | 31 | 45 | ||||||||||
| Other | 62 | 26 | 118 | 82 | ||||||||||
| Total interest income | 2,483 | 2,736 | 7,525 | 8,152 | ||||||||||
| Interest Expense: | ||||||||||||||
| Interest on deposit accounts | 465 | 601 | 1,485 | 1,899 | ||||||||||
| Interest on other borrowings | 452 | 412 | 1,327 | 1,204 | ||||||||||
| Total interest expense | 917 | 1,013 | 2,812 | 3,103 | ||||||||||
| Net interest income | 1,566 | 1,723 | 4,713 | 5,049 | ||||||||||
| Provision for loan losses | 0 | 75 | 10 | 233 | ||||||||||
| Net interest income after provision for loan losses | 1,566 | 1,648 | 4,703 | 4,816 | ||||||||||
| Non-interest income: | ||||||||||||||
| Service charges for deposit accounts | 293 | 277 | 908 | 811 | ||||||||||
| Other service charges | 68 | 60 | 208 | 143 | ||||||||||
| Gain(loss) on sale of investment securities | 0 | 19 | 41 | 39 | ||||||||||
| Other operating income | 142 | 172 | 380 | 544 | ||||||||||
| Total non-interest income | 503 | 528 | 1,537 | 1,537 | ||||||||||
| Non-interest expenses: | ||||||||||||||
| Salaries and employee benefits | 790 | 693 | 2,310 | 2,111 | ||||||||||
| Occupancy and equipment | 207 | 223 | 629 | 665 | ||||||||||
| Postage and supplies | 44 | 58 | 180 | 173 | ||||||||||
| Other operating expenses | 352 | 364 | 1,125 | 1,127 | ||||||||||
| Total non-interest expenses | 1,393 | 1,338 | 4,244 | 4,076 | ||||||||||
| Income before income taxes | 676 | 838 | 1,996 | 2,277 | ||||||||||
| Provision for income taxes: | 104 | 237 | 362 | 535 | ||||||||||
| Net Income | $ | 572 | $ | 601 | $ | 1,634 | $ | 1,742 | ||||||
| Basic net income per share of common stock | $ | 0.36 | $ | 0.38 | $ | 1.02 | $ | 1.10 | ||||||
| Diluted net income per share of common stock | $ | 0.35 | $ | 0.37 | $ | 1.01 | $ | 1.09 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
GREER BANCSHARES
INCORPORATED
Consolidated Statements of Comprehensive Income
(Unaudited)
| For Three Months |
For Nine Months | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 09/30/03 |
09/30/02 |
09/30/03 |
09/30/02 | |||||||||||
| Net Income | $ | 572 | $ | 601 | $ | 1,634 | $ | 1,742 | ||||||
| Other comprehensive | ||||||||||||||
| income(loss), net of tax: | ||||||||||||||
| Unrealized Holding Gains (Losses) on | ||||||||||||||
| Investment Securities | (749 | ) | 654 | 102 | 1,167 | |||||||||
| Less Reclassification Adjustments for | ||||||||||||||
| (Gains)/Losses Included in Net Income | 0 | (12 | ) | (25 | ) | (24 | ) | |||||||
| Subtotal | (749 | ) | 642 | 77 | 1,143 | |||||||||
| Comprehensive Income | ($ 177 | ) | $ | 1,243 | $ | 1,711 | $ | 2,885 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
GREER BANCSHARES
INCORPORATED
Consolidated Statements of Changes in Stockholders’ Equity
For the Nine Months Ended September 30, 2003
and Twelve Months Ended December 31, 2002
(Unaudited)
| Additional | Accumulated | Total | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands except share data) | Common | Paid-In | Retained | Other Comp. | Stockholders | ||||||||||||
| Stock | Capital | Earnings | Income | Equity | |||||||||||||
| Balances at 12/31/2001 | $ | 7,788 | $ | 5,345 | $ | 2,757 | $ | 35 | $ | 15,925 | |||||||
| Net Income | 2,523 | 2,523 | |||||||||||||||
| Other Comprehensive Income, Net of Tax | |||||||||||||||||
| Unrealized Gains/(Losses) on | |||||||||||||||||
| investment portfolio | 751 | 751 | |||||||||||||||
| Less reclassification adjustments for | |||||||||||||||||
| (gains)/losses included in net income | 7 | 7 | |||||||||||||||
| Comprehensive Income | 3,281 | ||||||||||||||||
| Cash in lieu of fractional | |||||||||||||||||
| shares (stock dividend) | (9 | ) | (9 | ) | |||||||||||||
| Stock exercised pursuant | |||||||||||||||||
| to stock option plan | 48 | 144 | 192 | ||||||||||||||
| Tax benefit of stock options exercised | 7 | 7 | |||||||||||||||
| Cash dividends ($.50 per share) | (783 | ) | (783 | ) | |||||||||||||
| Issuance of | |||||||||||||||||
| Stock Dividend (2.5%) | 194 | 854 | (1,048 | ) | - | ||||||||||||
| Balances at 12/31/2002 | $ | 8,030 | $ | 6,350 | $ | 3,440 | $ | 793 | $ | 18,613 | |||||||
| Net Income | 1,634 | 1,634 | |||||||||||||||
| Other Comprehensive Income, Net of Tax | |||||||||||||||||
| Unrealized Gains/(Losses) on | |||||||||||||||||
| investment portfolio | 102 | 102 | |||||||||||||||
| Less reclassification adjustments for | |||||||||||||||||
| (gains)/losses included in net income | |||||||||||||||||