CAVALRY BANCORP INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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 March 31, 2005
	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

(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 (2) 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: 7,217,565 shares as of May 5, 2005.

CAVALRY BANCORP, INC.

Table of Contents

Part I	Financial Information	Page

Item 1.	Financial Statements

	Consolidated Balance Sheets at March 31, 2005 (unaudited) and December 31, 2004	1

	Consolidated Statements of Income (unaudited) for the Three Months Ended March 31, 2005 and 2004	2

	Consolidated Statements of Comprehensive Income (unaudited) for the Three Months Ended March 31, 2005 and 2004	3

	Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2005 and 2004	4

	Notes to Consolidated Financial Statements (unaudited)	5-7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7-11

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

Item 4.	Controls and Procedures	13

Part II	Other Information	14

Item 1.	Legal Proceedings	14

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14

Item 3.	Defaults Upon Senior Securities	14

Item 4.	Submission of Matters to a Vote of Security Holders	14

Item 5.	Other Information	14

Item 6.	Exhibits	15

Signatures		16

Part I. Financial Information

ITEM 1. FINANCIAL STATEMENTS

CAVALRY BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2005 (UNAUDITED) AND DECEMBER 31, 2004

(DOLLARS IN THOUSANDS)

Assets	March 31, 2005			December 31, 2004
	(Unaudited)
Cash	$	15,203			24,319
Interest-bearing deposits with other financial institutions		46,523			38,816
Cash and cash equivalents		61,726			63,135
Time deposits with Federal Home Loan Bank		16,000			-
Investment securities available-for-sale at fair value (amortized cost: $32,088 and $42,376 at March 31, 2005 and December 31, 2004, respectively)		31,484			42,183
Loans held for sale, at estimated fair value		1,668			2,501
Loans receivable, net of allowances for loan losses of $4,907 at March 31, 2005 and $4,863 at December 31, 2004		425,917			430,526
Accrued interest receivable		1,968			1,985
Office properties and equipment, net		17,663			17,607
Required investments in stock of Federal Home Loan Bank and Federal Reserve Bank, at cost		3,256			3,125
Foreclosed assets		251			16
Bank owned life insurance		11,717			11,604
Goodwill		1,772			1,772
Other assets		3,409			4,216
Total assets	$	576,831			578,670

Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Non-interest-bearing	$	95,350			81,719
Interest-bearing		418,292			424,815
Total deposits		513,642			506,534
Advances from Federal Home Loan Bank of Cincinnati		2,821			2,835
Dividends payable		505			11,332
Accrued expenses and other liabilities		4,535			4,136
Total liabilities		521,503			524,837
Shareholders’ equity:
Preferred stock, no par value:
Authorized - 250,000 shares; none issued or outstanding at March 31, 2005 and December 31, 2004		-			-
Common stock, no par value:
Authorized - 49,750,000 shares; issued and outstanding 7,217,565 at March 31, 2005 and December 31, 2004		19,354			19,354
Retained earnings		36,341			34,598
Accumulated other comprehensive loss, net of tax		(367	)		(119	)

Total shareholders’ equity		55,328			53,833
Total liabilities and shareholders’ equity	$	576,831			578,670

Note: The balance sheet presented above at December 31, 2004 has been derived from the audited consolidated 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)

(UNAUDITED)

	Three Months Ended March 31,
	2005		2004
Interest income:
Loans	$	6,480		5,273
Investment securities:
Taxable		320		341
Non-taxable		25		7
Other		346		90
Total interest income		7,171		5,711
Interest expense:
Deposits		1,818		1,269
Borrowings		24		24
Total interest expense		1,842		1,293
Net interest income		5,329		4,418
Provision for loan losses		61		101
Net interest income after provision for loan losses		5,268		4,317
Non-interest income:
Servicing income		50		45
Gain on sale of loans, net		348		586
Gain on sale of other assets		-		53
Gain on sale of investment securities, net		-		66
Deposit servicing fees and charges		1,329		1,224
Trust service fees		252		292
Commissions and other non-banking fees		694		655
Other operating income		298		264
Total non-interest income		2,971		3,185
Non-interest expenses: