UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2003
Commission file number: 33-42286
HENDERSON CITIZENS BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
| Texas |
6712 |
75-2371232 | ||
| (State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(IRS Employer Identification No.) |
201 West Main Street, P.O. Box 1009
Henderson, Texas 75653-1009
(903) 657-8521
(Address, including ZIP code, and telephone number, including
area code, of registrant’s principal executive offices)
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 Act).
Yes ¨ No x
At April 30, 2003, 1,994,018 shares of Common Stock, $5.00 par value, were outstanding.
HENDERSON CITIZENS BANCSHARES, INC.
QUARTER ENDED MARCH 31, 2003
Table of Contents
| PART I – FINANCIAL INFORMATION |
||
| ITEM 1 – Financial Statements |
Page | |
| 3 | ||
| 4 | ||
| 5 | ||
| 6 | ||
| 7 | ||
| ITEM 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 | |
| ITEM 3 — Quantitative and Qualitative Disclosure About Market Risk |
16 | |
| 17 | ||
| 18 | ||
| 19 | ||
| 20 |
2
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
HENDERSON CITIZENS BANCSHARES, INC.
Consolidated Balance Sheets
(dollars in thousands, except share and per share amounts)
| March 31, 2003 |
December 31, 2002 |
||||||
| Assets |
(unaudited) |
||||||
| Cash and due from banks |
$ |
14,307 |
|
16,077 |
| ||
| Interest-bearing deposits with financial institutions |
|
1,437 |
|
1,321 |
| ||
| Federal funds sold |
|
20,860 |
|
11,410 |
| ||
| Total cash and cash equivalents |
|
36,604 |
|
28,808 |
| ||
| Interest-bearing time deposits |
|
299 |
|
596 |
| ||
| Securities available for sale, at fair value |
|
191,608 |
|
184,274 |
| ||
| Securities held to maturity, estimated fair value of $98,326 in 2003 and $87,816 in 2002 |
|
95,196 |
|
85,361 |
| ||
| Loans, net |
|
222,028 |
|
226,879 |
| ||
| Premises and equipment, net |
|
11,833 |
|
11,568 |
| ||
| Accrued interest receivable |
|
3,169 |
|
3,698 |
| ||
| Goodwill |
|
5,876 |
|
5,876 |
| ||
| Intangible assets, net |
|
4,814 |
|
4,409 |
| ||
| Other assets |
|
4,918 |
|
4,125 |
| ||
| $ |
576,345 |
|
555,594 |
| |||
| Liabilities and Stockholders’ Equity |
|||||||
| Deposits: |
|||||||
| Demand—non interest-bearing |
$ |
82,757 |
|
76,056 |
| ||
| Interest-bearing transaction accounts |
|
90,618 |
|
88,405 |
| ||
| Money market and savings |
|
80,960 |
|
77,280 |
| ||
| Certificates of deposit and other time deposits |
|
265,854 |
|
253,210 |
| ||
| Total deposits |
|
520,189 |
|
494,951 |
| ||
| Accrued interest payable |
|
975 |
|
1,020 |
| ||
| Other borrowings |
|
1,851 |
|
4,914 |
| ||
| Other liabilities |
|
4,384 |
|
6,422 |
| ||
|
|
527,399 |
|
507,307 |
| |||
| Stockholders’ equity: |
|||||||
| Preferred stock, $5 par value; 2,000,000 shares authorized, none issued or outstanding |
|
— |
|
— |
| ||
| Common stock, $5 par value; 10,000,000 shares authorized, 2,160,000 issued |
|
10,800 |
|
10,800 |
| ||
| Surplus |
|
5,400 |
|
5,400 |
| ||
| Retained earnings |
|
34,454 |
|
33,342 |
| ||
| Accumulated other comprehensive income |
|
714 |
|
1,162 |
| ||
| Treasury stock, 165,982 shares in 2003 and 165,782 shares in 2002, at cost |
|
(2,422 |
) |
(2,417 |
) | ||
| Total stockholders’ equity |
|
48,946 |
|
48,287 |
| ||
| $ |
576,345 |
|
555,594 |
| |||
See accompanying notes to consolidated financial statements.
3
HENDERSON CITIZENS BANCSHARES, INC.
Consolidated Statements of Income—unaudited
(dollars in thousands, except share and per share amounts)
| Three months ended March 31, | |||||
| 2003 |
2002 | ||||
| Interest income: |
|||||
| Loans, including fees |
$ |
3,862 |
3,962 | ||
| Securities: |
|||||
| Taxable—available for sale |
|
1,588 |
1,937 | ||
| Taxable—held to maturity |
|
370 |
530 | ||
| Tax-exempt—held to maturity |
|
568 |
484 | ||
| Federal funds sold |
|
72 |
104 | ||
| Interest-bearing deposits with financial institutions |
|
9 |
94 | ||
| Other interest income |
|
11 |
— | ||
| Total interest income |
|
6,480 |
7,111 | ||
| Interest expense: |
|||||
| Deposits: |
|||||
| Transaction accounts |
|
157 |
274 | ||
| Money market and savings |
|
158 |
359 | ||
| Certificates of deposit and other time deposits |
|
2,052 |
2,345 | ||
| Other borrowed funds |
|
28 |
17 | ||
| Total interest expense |
|
2,395 |
2,995 | ||
| Net interest income |
|
4,085 |
4,116 | ||
| Provision for loan losses |
|
261 |
260 | ||
| Net interest income after provision for loan losses |
|
3,824 |
3,856 | ||
| Noninterest income: |
|||||
| Service charges, commissions, and fees |
|
1,583 |
1,390 | ||
| Income from fiduciary activities |
|
381 |
369 | ||
| Net realized gains on securities transactions |
|
529 |
862 | ||
| Other |
|
350 |
262 | ||
| Total noninterest income |
|
2,843 |
2,883 | ||
| Noninterest expenses: |
|||||
| Salaries and employee benefits |
|
2,999 |
2,660 | ||
| Occupancy and equipment |
|
686 |
566 | ||
| Other |
|
1,173 |
1,001 | ||
| Total other expenses |
|
4,858 |
4,227 | ||
| Income before income tax expense |
|
1,809 |
2,512 | ||
| Income tax expense |
|
358 |
628 | ||
| Net income |
$ |
1,451 |
1,884 | ||
| Basic earnings per common share |
$ |
0.73 |
0.94 | ||
| Weighted average number of shares outstanding |
|
1,994,047 |
1,994,293 | ||
See accompanying notes to consolidated financial statements.
4
HENDERSON CITIZENS BANCSHARES, INC.
Consolidated Statements of Changes in Stockholders’ Equity—unaudited
Three months ended March 31, 2003 and 2002
(dollars in thousands, except share and per share amounts)
| Preferred Stock |
Common Stock |
Surplus |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Treasury Stock |
Total |
|||||||||||||
| Balances at January 1, 2002 |
$ |
— |
10,800 |
5,400 |
29,243 |
|
903 |
|
(2,412 |
) |
43,934 |
| |||||||
| Comprehensive income: |
|||||||||||||||||||
| Net Income |
|
— |
— |
— |
1,884 |
|
— |
|
— |
|
1,884 |
| |||||||
| Other comprehensive income: |
|||||||||||||||||||
| Net change in fair value of securities available-for- sale, net of reclassification adjustments of $862 and taxes of $(452) |
|
— |
— |
— |
— |
|
(878 |
) |
— |
|
(878 |
) | |||||||
| Total comprehensive income |
|
— |
— |
— |
— |
|
— |
|
— |
|
1,006 |
| |||||||
| Purchase of 200 shares of treasury stock |
|
— |
— |
— |
— |
|
— |
|
(5 |
) |
(5 |
) | |||||||
| Cash dividends declared ($.17 per share) |
|
— |
— |
— |
(339 |
) |
— |
|
— |
|
(339 |
) | |||||||
| Balances at March 31, 2002 |
$ |
— |
10,800 |
||||||||||||||||