QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 2004
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 August 6, 2004 was 2,429,417.
GREER BANCSHARES
INCORPORATED
Index
| PART 1 | |||||
| FINANCIAL INFORMATION | |||||
| Item 1 | |||||
| Consolidated Financial Statements (Unaudited) | |||||
| Consolidated Balance Sheets as of June 30, 2004 and December 31, 2003 | 3 | ||||
| Consolidated Statements of Income for the Three and Six Months Ended June 30, 2004 and 2003 | 4 | ||||
| Consolidated Statements of Comprehensive Income (loss) for the Three and Six Months Ended June 30, 2004 and 2003 | 5 | ||||
| Consolidated Statements of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2004 | 6 | ||||
| Consolidated Statements of Cash Flows for the Six Months ended June 30, 2004 and 2003 | 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 | 17 | ||||
| Index to Exhibits | 18 | ||||
2
GREER BANCSHARES
INCORPORATED
Consolidated Balance Sheets
(Unaudited)
| (dollars in thousands except per share data) | June 30, |
December 31, | ||||||
|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 | |||||||
| Assets: | ||||||||
| Cash and due from banks | $ | 8,293 | $ | 7,267 | ||||
| Federal funds sold | 0 | 159 | ||||||
| Investment securities: | ||||||||
| Held to maturity | 26,046 | 17,263 | ||||||
| Available for sale | 58,692 | 66,760 | ||||||
| Loans | 120,884 | 115,564 | ||||||
| Less: allowance for loan losses | 953 | 1,298 | ||||||
| Net loans | 119,931 | 114,266 | ||||||
| Premises and equipment, net | 4,381 | 3,886 | ||||||
| Real estate held for sale | 397 | 125 | ||||||
| Other assets | 5,601 | 4,407 | ||||||
| Total Assets | $ | 223,341 | $ | 214,133 | ||||
| Liabilities: | ||||||||
| Deposits | ||||||||
| Non-interest bearing | $ | 21,417 | $ | 20,311 | ||||
| Interest bearing | 138,384 | 132,650 | ||||||
| Total Deposits | 159,801 | 152,961 | ||||||
| Note payable to Federal Home Loan Bank | 41,917 | 40,057 | ||||||
| Fed funds purchased | 550 | 0 | ||||||
| Other liabilities | 2,398 | 1,408 | ||||||
| Total Liabilities | 204,666 | 194,426 | ||||||
| Stockholders' Equity: | ||||||||
| Common stock--par value $5 per share, 10,000,000 shares | ||||||||
| authorized, 2,429,117 and 1,615,277 shares issued and | ||||||||
| outstanding at June 30, 2004 and December 31, 2003, | ||||||||
| respectively | 12,145 | 8,076 | ||||||
| Additional paid in capital | 2,492 | 6,465 | ||||||
| Retained earnings | 4,165 | 4,060 | ||||||
| Accumulated other comprehensive income (loss) | (127 | ) | 1,106 | |||||
| Total Stockholders' Equity | 18,675 | 19,707 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 223,341 | $ | 214,133 | ||||
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 Six Months | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 06/30/04 |
06/30/03 |
06/30/04 |
06/30/03 | ||||||||||||
| Interest Income: | |||||||||||||||
| Loans (including fees) | $ | 1,721 | $ | 1,789 | $ | 3,390 | $ | 3,607 | |||||||
| Investment securities: | |||||||||||||||
| Taxable | 495 | 323 | 942 | 693 | |||||||||||
| Exempt from federal income tax | 353 | 341 | 749 | 665 | |||||||||||
| Federal funds sold | 7 | 12 | 12 | 21 | |||||||||||
| Other | 27 | 26 | 49 | 56 | |||||||||||
| Total interest income | 2,603 | 2,491 | 5,142 | 5,042 | |||||||||||
| Interest Expense: | |||||||||||||||
| Interest on deposit accounts | 529 | 493 | 1,034 | 1,020 | |||||||||||
| Interest on other borrowings | 385 | 446 | 765 | 875 | |||||||||||
| Total interest expense | 914 | 939 | 1,799 | 1,895 | |||||||||||
| Net interest income | 1,689 | 1,552 | 3,343 | 3,147 | |||||||||||
| Provision for loan losses | 30 | 0 | 45 | 10 | |||||||||||
| Net interest income after provision for loan losses | 1,659 | 1,552 | 3,298 | 3,137 | |||||||||||
| Non-interest income: | |||||||||||||||
| Service charges for deposit accounts | 315 | 329 | 619 | 615 | |||||||||||
| Other service charges | 63 | 78 | 124 | 140 | |||||||||||
| Gain on sale of investment securities | 0 | 41 | 81 | 41 | |||||||||||
| Other operating income | 171 | 126 | 315 | 238 | |||||||||||
| Total non-interest income | 549 | 574 | 1,139 | 1,034 | |||||||||||
| Non-interest expenses: | |||||||||||||||
| Salaries and employee benefits | 837 | 763 | 1,673 | 1,520 | |||||||||||
| Occupancy and equipment | 179 | 210 | 352 | 422 | |||||||||||
| Postage and supplies | 63 | 79 | 117 | 136 | |||||||||||
| Other operating expenses | 424 | 414 | 804 | 773 | |||||||||||
| Total non-interest expenses | 1,503 | 1,466 | 2,946 | 2,851 | |||||||||||
| Income before income taxes | 705 | 660 | 1,491 | 1,320 | |||||||||||
| Provision for income taxes: | 121 | 119 | 287 | 258 | |||||||||||
| Net income | $ | 584 | $ | 541 | $ | 1,204 | $ | 1,062 | |||||||
| Basic net income per share of common stock | $ | 0.24 | $ | 0.22 | $ | 0.50 | $ | 0.44 | |||||||
| Diluted net income per share of common stock | $ | 0.24 | $ | 0.22 | $ | 0.49 | $ | 0.44 | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
GREER BANCSHARES
INCORPORATED
Consolidated Statements of Comprehensive Income (Loss)
| For Three Months |
For Six Months | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 06/30/04 |
06/30/03 |
06/30/04 |
06/30/03 | ||||||||||||
| Net Income | $ | 584 | $ | 541 | $ | 1,204 | $ | 1,062 | |||||||
| Other comprehensive | |||||||||||||||
| income(loss), net of tax: | |||||||||||||||
| Unrealized Holding Gains (Losses) on | |||||||||||||||
| Investment Securities | (1,447 | ) | 491 | (809 | ) | 851 | |||||||||
| Less Reclassification Adjustments for | |||||||||||||||
| (Gains)/Losses Included in Net Income | 0 | (25 | ) | (66 | ) | (25 | ) | ||||||||
| Subtotal | (1,447 | ) | 466 | (875 | ) | 826 | |||||||||
| Cash flow hedging activities: | |||||||||||||||
| Unrealized holding gains (losses) on | |||||||||||||||
| cash flow hedging activities, net of tax | (358 | ) | 0 | (358 | ) | 0 | |||||||||
| Comprehensive Income (Loss) | $ | (1,221 | ) | $ | 1,007 | $ | (29 | ) | $ | (1,268 | ) | ||||
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 Six Months Ended June 30, 2004 and
Twelve Months Ended December 31, 2003
(Unaudited)
| (dollars in thousands, except per share data | Additional | Accumulated | Total | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common | Paid-In | Retained | Other Comp. | Stockholders | |||||||||||||
| Stock |
Capital |
Earnings |
Income |
Equity | |||||||||||||
| Balances at 12/31/2003 | $ | 8,076 | $ | 6,465 | $ | 4,060 | $ | 1,106 | $ | 19,707 | |||||||
| Net Income | 1,204 | 1,204 | |||||||||||||||
| Other comprehensive income, net of tax | (1,233 | ) | (1,233 | ) | |||||||||||||
| Stock exercised pursuant | |||||||||||||||||
| to stock option plan | 22 | 74 | 96 | ||||||||||||||
| Stock split (3 for 2) | 4,047 | (4,047 | |||||||||||||||