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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One )

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


CAVALRY BANCORP, INC.
(Exact Name of Registrant as Specified in Its Charter)

Tennessee
62-1721072
(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer I.D. Number)


114 West College Street, Murfreesboro, Tennessee
37130
(Address of Principal Executive Offices)
(Zip Code)

(615) 893-1234
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.

Yes x
No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2)

Yes x
No o

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 shares as of August 8, 2003.
 
     
 


CAVALRY BANCORP, INC.

Table of Contents

Part I
Financial Information
Page
 
 
 
Item 1.
Financial Statements
 
 
 
 
 
Consolidated Balance Sheets at June 30, 2003 (unaudited)
 
 
and December 31, 2002
1 
 
 
 
 
 
 
 
Consolidated Statements of Income (unaudited) for the Three Months and Six Months
 
 
Ended June 30, 2003 and 2002
2 
 
 
 
 
 
 
 
Consolidated Statements of Comprehensive Income (unaudited) for the
 
 
Three and Six Months Ended June 30, 2003 and 2002
3 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows (unaudited) for the Six Months
 
 
Ended June 30, 2003 and 2002
4 
 
 
 
 
 
 
 
Notes to Consolidated Financial Statements (unaudited)
5-8 
 
 
 
 
 
 
Item 2.
Management’s Discussion and Analysis of Financial
 
 
Condition and Results of Operations
8-10 
 
 
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
11
 
 
 
Item 4.
Controls and Procedures
11 
 
 
 
Part II
Other Information
12 
 
 
 
Item 4.
Submission of Matters to a Vote of Security Holders
12 
 
 
 
Item 6.
Exhibits, Financial Statement Schedules and Reports on Form 8-K
12  
 
 
 
Signatures
 
13 
 
 
 



 
     
 

Part I. Financial Information

ITEM 1. FINANCIAL STATEMENTS

CAVALRY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2003 (UNAUDITED) AND DECEMBER 31, 2002
(DOLLARS IN THOUSANDS)


Assets
 
June 30, 2003
December 31, 2002
 
 
  
(Unaudited)
 
Cash
 
$
26,845
   
21,200
 
Interest-bearing deposits with other financial institutions
   
24,683
   
51,962
 
   
 
 
Cash and cash equivalents
   
51,528
   
73,162
 
Investment securities available-for-sale at fair value (amortized cost: $53,186 and $37,728 at June 30, 2003 and December 31, 2002, respectively)
   
53,334
   
37,926
 
Loans held for sale, at estimated fair value
   
11,588
   
17,800
 
Loans receivable, net of allowances for loan losses of $4,615 at June 30, 2003 and $4,657 at December 31, 2002
   
321,361
   
300,524
 
Accrued interest receivable
   
1,522
   
1,577
 
Office properties and equipment, net
   
18,922
   
18,108
 
Required investments in stock of Federal Home Loan Bank
   
 
    
 
  
and Federal Reserve Bank, at cost
   
2,929
   
2,874
 
Foreclosed assets, net
   
197
   
203
 
Bank owned life insurance
   
8,114
   
7,921
 
Goodwill
   
1,772
   
1,772
 
Other assets
   
3,034
   
2,498
 
   
 
 
Total assets
 
$
474,301
   
464,365
 
   
 
 
 
    
 
    
 
  
Liabilities and Shareholders’ Equity
   
 
    
 
  
              
Liabilities:
   
 
    
 
  
Deposits:
   
 
    
 
  
Non-interest-bearing
 
$
68,744
   
57,343
 
Interest-bearing
   
346,585
   
350,409
 
   
 
 
Total deposits
   
415,329
   
407,752
 
Advances from Federal Home Loan Bank of Cincinnati
   
2,916
   
2,944
 
Accrued expenses and other liabilities
   
3,848
   
3,923
 
   
 
 
Total liabilities
   
422,093
   
414,619
 
   
 
 
Shareholders’ equity:
   
 
    
 
  
Preferred stock, no par value
   
 
    
 
  
Authorized- 250,000 shares; none issued or outstanding at
   
 
    
 
  
June 30, 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 June 30, 2003
   
 
    
 
  
and December 31, 2002, respectively
   
9,526
   
9,138
 
Retained earnings
   
45,309
   
43,543
 
Unallocated ESOP Shares
   
(2,717
)
 
(3,057
)
Accumulated other comprehensive income, net of tax
   
90
   
122
 
   
 
 
 
    
 
    
 
  
Total shareholders’ equity
   
52,208
   
49,746
 
   
 
 
Total liabilities and shareholders’ equity
 
$
474,301
   
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.


 
 
  1  
 
CAVALRY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

 
  
Three Months Ended
Six Months Ended
 
June 30,
June 30,
 
    
2003
   
2002
   
2003
   
2002
 
   
 
 
 
 
Interest and dividend income:
   
 
    
 
    
 
    
 
  
Loans
 
$
5,045
   
5,304
   
10,069
   
10,530
 
Investment securities
   
306
   
312
   
589
   
705
 
Other
   
101
   
269
   
227
   
569
 
   
 
 
 
 
Total interest and dividend income
   
5,452
   
5,885
   
10,885
   
11,804
 
   
 
 
 
 
Interest expense - deposits
   
1,399
   
1,770
   
2,918
   
3,694
 
Interest expense - borrowings
   
25
   
5
   
49
   
11
 
   
 
 
 
 
Total interest expense
   
1,424
   
1,775
   
2,967
   
3,705
 
   
 
 
 
 
Net interest income
   
4,028
   
4,110
   
7,918
   
8,099
 
Provision for loan losses
   
45
   
54
   
101
   
163
 
   
 
 
 
 
Net interest income after provision
   
 
    
 
    
 
    
 
  
for loan losses
   
3,983
   
4,056
   
7,817
   
7,936
 
   
 
 
 
 
Non-interest income:
   
 
    
 
    
 
    
 
  
Servicing income
   
60