CAVALRY BANCORP INC - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________

x Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 2003 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: 0-23605

______________________

CAVALRY BANCORP, INC.

(exact name of registrant as specified in its charter)

Tennessee	62-1721072
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

114 West College Street

Murfreesboro, Tennessee 37130

(Address of Registrant’s principal executive office)

(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 has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2)

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock Issued and Outstanding: 6,820,179 as of May 12, 2003.

	CAVALRY BANCORP, INC.

	Table of Contents

Part I	Financial Information	Page

Item 1.	Financial Statements

	Consolidated Balance Sheets at March 31, 2003 (unaudited)
	and December 31, 2002	1-2


	Consolidated Statements of Income (unaudited) for the Three Months
	Ended March 31, 2003 and 2002	3


	Consolidated Statements of Comprehensive Income (unaudited) for the
	Three Months Ended March 31, 2003 and 2002	4


	Consolidated Statements of Cash Flows (unaudited) for the Three Months
	Ended March 31, 2003 and 2002	5


	Notes to Consolidated Financial Statements (unaudited)	6-8


Item 2.	Management’s Discussion and Analysis of Financial
	Condition and Results of Operations	8-11

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	11-12

Item 4.	Controls and Procedures	12

Part II	Other Information	13

Signatures		14

Certifications

Part I. Financial Information

ITEM 1. FINANCIAL STATEMENTS

CAVALRY BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2003 (UNAUDITED) AND DECEMBER 31, 2002

(DOLLARS IN THOUSANDS)

Assets	March 31, 2003			December 31, 2002

	(Unaudited)
Cash	$	25,631			21,200
Interest-bearing deposits with other financial institutions		39,062			51,962

Cash and cash equivalents		64,693			73,162
Investment securities available-for-sale at fair value (amortized cost:
$37,973 and $37,728 at March 31, 2003 and
December 31, 2002, respectively)		38,112			37,926
Loans held for sale, at estimated fair value		3,349			17,800
Loans receivable, net of allowances for loan losses of $4,634 at March 31,
2003 and $4,657 at December 31, 2002		315,785			300,524
Accrued interest receivable		1,581			1,577
Office properties and equipment, net		18,644			18,108
Required investments in stock of Federal Home Loan Bank
and Federal Reserve Bank, at cost		2,896			2,874
Foreclosed assets, net		201			203
Bank owned life insurance		8,018			7,921
Goodwill		1,772			1,772
Other assets		2,582			2,498

Total assets	$	457,633			464,365


Liabilities and Shareholders’ Equity

Liabilities:
Deposits:
Non-interest-bearing	$	59,935			57,343
Interest-bearing		337,531			350,409

Total deposits		397,466			407,752
Advances from Federal Home Loan Bank of Cincinnati		2,930			2,944
Accrued expenses and other liabilities		6,427			3,923

Total liabilities		406,823			414,619

Shareholders’ equity:
Preferred stock, no par value
Authorized- 250,000 shares; none issued or outstanding at
March 31, 2003 and December 31, 2002		-			-
Common stock, no par value
Authorized- 49,750,000 shares; issued and outstanding
6,820,179 and 6,830,679 at March 31, 2003
and December 31, 2002, respectively		9,199			9,138
Retained earnings		44,413			43,543
Unallocated ESOP Shares		(2,887	)		(3,057	)
Accumulated other comprehensive income, net of tax		85			122


Total shareholders’ equity		50,810			49,746

Total liabilities and shareholders’ equity	$	457,633			464,365

Note: The balance sheet presented above at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

See accompanying notes to consolidated financial statements.

CAVALRY BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

	Three Months Ended
	March 31,

	2003		2002


Interest and dividend income:
Loans	$	5,024		5,226
Investment securities		283		520
Other		126		172

Total interest and dividend income		5,433		5,918

Interest expense - deposits		1,519		1,924
Interest expense - borrowings		24		5

Total interest expense		1,543		1,929

Net interest income		3,890		3,989
Provision for loan losses		56		109

Net interest income after provision
for loan losses		3,834		3,880

Non-interest income:
Servicing income		71		69
Gain on sale of loans, net		1,322		569
Gain on sale of investment securities, net		11		-
Deposit servicing fees and charges		1,055		879
Trust service fees		246		256
Commissions and other non-banking fees		616		459
Other operating income		298		239

Total non-interest income		3,619		2,471

Non-interest expenses:
Salaries and employee benefits		3,659		2,792
Occupancy expense		315		270
Supplies, communications and other
office expenses		253		259
Federal insurance premiums		15