UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
(Mark One)
| 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
OR
| o | 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 0-11448
LSB BANCSHARES, INC.
| North Carolina | 56-1348147 | |
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| (State or Other Jurisdiction of | (I.R.S. Employer | |
| Incorporation or Organization) | Identification No.) |
| LSB BANCSHARES, INC. ONE LSB PLAZA LEXINGTON, NORTH CAROLINA 27292 |
(336) 248-6500
Indicate by check þ 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 þ No o
Indicate by check þ whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o
LSB Bancshares, Inc. had 8,537,443 shares of common stock outstanding as of October 31, 2003.
LSB BANCSHARES, INC.
FORM 10-Q
INDEX
| Part I. | Financial Information | |
| Item 1. | Financial Statements. | |
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Consolidated Balance Sheets September 30, 2003 and 2002, and December 31, 2002 |
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Consolidated Statements of Income Three Months Ended September 30, 2003 and 2002 Nine Months Ended September 30, 2003 and 2002 |
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Consolidated Statements of Changes in Shareholders’ Equity Nine Months Ended September 30, 2003 and 2002 |
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Consolidated Statements of Cash Flows Nine Months Ended September 30, 2003 and 2002 |
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Notes to Consolidated Financial Statements Nine Months Ended September 30, 2003 and 2002 |
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| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
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| 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. | |
| Signatures |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LSB Bancshares, Inc.
Consolidated Balance Sheets
(In Thousands)
| (Unaudited) | (Unaudited) | |||||||||||||
| September 30 | December 31 | September 30 | ||||||||||||
| 2003 | 2002 | 2002 | ||||||||||||
Assets |
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Cash and Due From Banks |
$ | 42,265 | $ | 41,522 | $ | 44,244 | ||||||||
Interest-Bearing Bank Balances |
3,113 | 5,550 | 1,286 | |||||||||||
Federal Funds Sold |
15,302 | 13,384 | 31,484 | |||||||||||
Investment Securities: |
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Held to Maturity, Market Value $38,439, $46,013 and $48,562 |
36,798 | 44,030 | 46,039 | |||||||||||
Available for Sale, at Market Value |
97,132 | 84,372 | 95,026 | |||||||||||
Loans |
673,719 | 645,548 | 631,689 | |||||||||||
Less, Reserve for Loan Losses |
(7,795 | ) | (7,284 | ) | (7,155 | ) | ||||||||
Net Loans |
665,924 | 638,264 | 624,534 | |||||||||||
Premises and Equipment |
14,548 | 13,490 | 13,428 | |||||||||||
Other Assets |
11,441 | 11,181 | 12,523 | |||||||||||
Total Assets |
$ | 886,523 | $ | 851,793 | $ | 868,564 | ||||||||
Liabilities |
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Deposits |
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Demand |
$ | 89,303 | $ | 94,612 | $ | 83,573 | ||||||||
Savings, NOW and Money Market Accounts |
418,391 | 385,981 | 403,936 | |||||||||||
Certificates of Deposit of less than $100,000 |
131,751 | 145,669 | 154,515 | |||||||||||
Certificates of Deposit of $100,000 or more |
82,409 | 70,219 | 72,316 | |||||||||||
Total Deposits |
721,854 | 696,481 | 714,340 | |||||||||||
Securities Sold Under Agreements to Repurchase |
1,688 | 1,529 | 1,286 | |||||||||||
Borrowings from the Federal Home Loan Bank |
68,000 | 63,000 | 63,000 | |||||||||||
Other Liabilities |
5,791 | 5,276 | 5,416 | |||||||||||
Total Liabilities |
797,333 | 766,286 | 784,042 | |||||||||||
Shareholders’ Equity |
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Preferred Stock, Par Value $.01 Per Share: |
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Authorized 10,000,000 shares; none issued |
0 | 0 | 0 | |||||||||||
Common Stock, Par Value $5 Per Share: |
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Authorized 50,000,000 Shares; Issued 8,535,255 Shares
in 2003 and 8,472,518 and 8,466,048 shares in 2002 |
42,676 | 42,363 | 42,330 | |||||||||||
Paid-In Capital |
10,083 | 9,729 | 9,698 | |||||||||||
Common Stock Acquired for
Directors’ Deferred Plan |
(1,095 | ) | (995 | ) | (986 | ) | ||||||||
Retained Earnings |
36,267 | 32,578 | 31,409 | |||||||||||
Accumulated Other Comprehensive Income |
1,259 | 1,832 | 2,071 | |||||||||||
Total Shareholders’ Equity |
89,190 | 85,507 | 84,522 | |||||||||||
Total Liabilities and Shareholders’ Equity |
$ | 886,523 | $ | 851,793 | $ | 868,564 | ||||||||
Memorandum: Standby Letters of Credit |
$ | 4,141 | $ | 4,138 | $ | 5,012 | ||||||||
Notes to consolidated financial statements are an integral part hereof.
LSB Bancshares, Inc.
Consolidated Statements of Income
(In Thousands except Share Data)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| September 30 | September 30 | |||||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||||
Interest Income |
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Interest and Fees on Loans |
$ | 11,318 | $ | 11,398 | $ | 34,151 | $ | 33,553 | ||||||||||
Interest on Investment Securities: |
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Taxable |
963 | 1,294 | 3,026 | 4,236 | ||||||||||||||
Tax Exempt |
426 | 409 | 1,229 | 1,246 | ||||||||||||||
Interest-Bearing Bank Balances |
35 | 50 | 133 | 202 | ||||||||||||||
Federal Funds Sold |
46 | 108 | 207 | 391 | ||||||||||||||
Total Interest Income |
12,788 | 13,259 | 38,746 | 39,628 | ||||||||||||||
Interest Expense |
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Deposits |
1,853 | 2,952 | 6,319 | 9,308 | ||||||||||||||
Securities Sold Under Agreements to Repurchase |
2 | 4 | 10 | 37 | ||||||||||||||
Borrowings from the Federal Home Loan Bank |
786 | 807 | 2,330 | 2,373 | ||||||||||||||
Total Interest Expense |
2,641 | 3,763 | 8,659 | 11,718 | ||||||||||||||
Net Interest Income |
10,147 | 9,496 | 30,087 | 27,910 | ||||||||||||||
Provision for Loan Losses |
839 | 532 | 1,913 | 1,594 | ||||||||||||||
Net Interest Income After Provision
for Loan Losses |
9,308 | 8,964 | 28,174 | 26,316 | ||||||||||||||
Noninterest Income |
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Service Charges on Deposit Accounts |
1,824 | 1,731 | 5,147 | 4,800 | ||||||||||||||
Gains on Sales of Mortgages |
403 | 132 | 1,140 | 461 | ||||||||||||||
Other Operating Income |
1,611 | 1,192 | 4,615 | 3,585 | ||||||||||||||
Total Noninterest Income |
3,838 | 3,055 | 10,902 | 8,846 | ||||||||||||||
Noninterest Expense |
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Personnel Expense |
5,376 | 4,595 | 15,691 | 13,124 | ||||||||||||||
Occupancy Expense |
440 | 370 | 1,218 | 1,080 | ||||||||||||||
Equipment Depreciation and Maintenance |
549 | 478 | 1,523 | 1,354 | ||||||||||||||
Other Operating Expense |
2,995 | 2,690 | 8,994 | 8,007 | ||||||||||||||
Total Noninterest Expense |
9,360 | 8,133 | 27,426 | 23,565 | ||||||||||||||
Income Before Income Taxes |
3,786 | 3,886 | 11,650 | 11,597 | ||||||||||||||
Income Taxes |
1,261 | 1,282 | 3,874 | 3,824 | ||||||||||||||
Net Income |
$ | 2,525 | $ | 2,604 | $ | 7,776 | $ | 7,773 | ||||||||||
Earnings Per Share: |
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Basic |
$ | 0.30 | $ | 0.31 | $ | 0.91 | $ | 0.92 | ||||||||||
Diluted |
0.29 | 0.30 | 0.91 | 0.91 | ||||||||||||||
Weighted Average Shares Outstanding: |
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Basic |
8,534,255 | 8,465,715 | 8,506,558 | 8,459,689 | ||||||||||||||
Diluted |
8,613,409 | 8,572,018 | 8,575,203 | 8,544,877 | ||||||||||||||
Cash Dividends Declared per Share |
$ | 0.16 | $ | 0.15 | $ | 0.48 | $ | 0.45 | ||||||||||
Notes to consolidated financial statements are an integral part hereof.
LSB Bancshares, Inc.
Consolidated Statements of
Changes in Shareholders’ Equity
(In Thousands)
(Unaudited)
| Accumulated | |||||||||||||||||||||||||
| Directors’ | Other | Total | |||||||||||||||||||||||
| Common | Paid-In | Deferred | Retained | Comprehensive | Shareholders' | ||||||||||||||||||||
| Stock | Capital | Plan | Earnings | Income | Equity | ||||||||||||||||||||
Balances at December 31, 2001 |
$ | 42,209 | $ | 9,860 | $ | (878 | ) | $ | 27,444 | $ | 708 | $ | 79,343 | ||||||||||||
Net Income |
7,773 | 7,773 | |||||||||||||||||||||||
Change in unrealized loss on securities
available for sale, net of deferred
income taxes |
1,363 | 1,363 | |||||||||||||||||||||||
Comprehensive income |
9,136 | ||||||||||||||||||||||||
Cash dividends declared on
common stock |
(3,808 | ) | (3,808 | ) | |||||||||||||||||||||
Common stock issued for stock
options exercised |
221 | 142 | 363 | ||||||||||||||||||||||
Common stock acquired |
(100 | ) | (304 | ) | (108 | ) | (512 | ) | |||||||||||||||||
Balances at September 30, 2002 |
$ | 42,330 | $ | 9,698 | $ | (986 | ) | $ | 31,409 | $ | 2,071 | $ | 84,522 | ||||||||||||
Balances at December 31, 2002 |
$ | 42,363 | $ | 9,729 | $ | (995 | ) | $ | 32,578 | $ | 1,832 | $ | 85,507 | ||||||||||||
Net Income |
7,776 | 7,776 | |||||||||||||||||||||||
Change in unrealized gain on securities
available for sale, net of deferred
income taxes |
(573 | ) | (573 | ) | |||||||||||||||||||||
Comprehensive income |
7,203 | ||||||||||||||||||||||||
Cash dividends declared on
common stock |
(4,087 | ) | (4,087 | ) | |||||||||||||||||||||
Common stock issued for stock
options exercised |
313 | 354 | 667 | ||||||||||||||||||||||
Common stock acquired |
(100 | ) | (100 | ) | |||||||||||||||||||||
Balances at September 30, 2003 |
$ | 42,676 | $ | 10,083 | $ | (1,095 | ) | $ | 36,267 | $ | 1,259 | $ | 89,190 | ||||||||||||
Notes to consolidated financial statements are an integral part hereof.
LSB Bancshares, Inc.
Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
| Nine Months Ended September 30 | |||||||||||
| 2003 | 2002 | ||||||||||
Cash Flow from Operating Activities |
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