NB&T FINANCIAL GROUP INC - 10-Q Quarterly Report

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from/to

NB&T FINANCIAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Ohio

31-1004998

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

48 N. South Street, Wilmington, Ohio 45177

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number: (513) 382-1441

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date: As of August 1, 2003, 3,227,893 common shares were issued and outstanding.

NB&T FINANCIAL GROUP, INC.

June 30, 2003 Form 10-Q

Table of Contents

		Page
	PART I

Item 1:	Financial Statements	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
	Independent Accountants’ Report	9

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3:	Quantitative and Qualitative Disclosures about Market Risk	15
Item 4:	Controls and Procedures	15

	Part II

Item 1:	Legal Proceedings	16
Item 2:	Changes in Securities and Use of Proceeds	16
Item 3:	Defaults Upon Senior Securities	16
Item 4:	Submission of Matters to a Vote of Security Holders	16
Item 5:	Other Information	16
Item 6:	Exhibits and Reports on Form 8-K	16

Signatures		17

Certifications		19

NB&T Financial Group, Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands)	June 30, 2003			December 31, 2002
	(Unaudited)
Assets
Cash and due from banks	$	19,347		$	18,812
Interest-bearing demand deposits		4			10
Federal funds sold		9,691			6,988

Cash and cash equivalents		29,042			25,810

Securities—available-for-sale		177,834			168,600
Securities—held-to-maturity		40,121			44,490
Loans, net of allowance for loan losses of $ 4,058 and $4,010		399,071			380,661
Premises and equipment		14,466			14,832
Federal Reserve and Federal Home Loan Bank stock		7,736			7,598
Goodwill and other intangibles		7,399			7,584
Interest receivable and other assets		15,813			15,228

Total assets	$	691,482		$	664,803

Liabilities and Stockholders’ Equity

Liabilities
Deposits
Demand	$	50,666		$	52,273
Savings, NOW and Money Market		223,516			208,221
Time		196,437			207,595

Total deposits		470,619			468,089

Short-term borrowings		23,647			19,240
Long-term debt		134,790			116,446
Interest payable and other liabilities		3,634			3,724

Total liabilities		632,690			607,499

Commitments and Contingencies
Stockholders’ Equity
Preferred stock, no par value, authorized 100,000 shares; none issued Common stock, no par value; authorized 6,000,000 shares; issued – 3,818,950 shares		1,000			1,000
Additional paid-in capital		9,402			9,270
Retained earnings		53,511			51,792
Unearned employee stock ownership plan (ESOP) shares		(1,649	)		(1,703	)
Accumulated other comprehensive income		1,468			2,064
Treasury stock; 575,518 and 596,418 shares at cost in 2003 and 2002		(4,940	)		(5,119	)

Total stockholders’ equity		58,792			57,304

Total liabilities and stockholders’ equity	$	691,482		$	664,803

See Notes to Condensed Consolidated Financial Statements

NB&T Financial Group, Inc.

Consolidated Statements of Income

	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands, except per share amounts)	2003		2002		2003		2002
	(Unaudited)				(Unaudited)
Interest and Dividend Income
Loans	$	6,652	$	7,332	$	13,424	$	14,750
Securities-Taxable		1,758		2,268		3,459		4,449
Securities-Tax-exempt		402		678		1,069		1,356
Federal funds sold and other		32		20		64		91
Dividends on Federal Home Loan and Federal Reserve Bank stock		82		85		160		163

Total interest and dividend income		8,926		10,383		18,176		20,809

Interest Expense
Deposits		1,887		2,819		3,954		6,089
Short-term borrowings		50		90		103		184
Long-term debt		1,595		1,434		3,121		2,855

Total interest expense		3,532		4,343		7,178		9,128

Net Interest Income		5,394		6,040		10,998		11,681
Provision for Loan Losses		487		475		1,027		850

Net Interest Income After Provision for Loan Losses		4,907		5,565		9,971		10,831

Non-interest Income
Trust income		223		234		417		467
Service charges and fees		875		593		1,641		1,150
ATM network fees		114		151		227		316
Insurance agency commissions		707		598		1,358		1,114
Net gains on sales of securities available-for-sale		361		34		907		34
Other		380		696		719		1,184

Total non-interest income		2,660		2,306		5,269		4,265

Non-interest Expense
Salaries and employee benefits		2,812		2,731		5,866		5,383
Net occupancy expense		338		288		684		591
Equipment and data processing expense		763		797		1,468		1,570
Professional fees		422		323		750		593
Marketing expense		171		240		331		398
State franchise tax		200		128		378		272
Amortization of intangibles		178		156		352		298
Other		631		870		1,373		1,696

Total non-interest expense		5,515		5,533		11,202		10,801

Income Before Income Tax		2,052		2,338		4,038		4,295
Provision for Income Taxes		461		439		810		857

Net Income	$	1,591	$	1,899	$	3,228	$	3,438

Basic Earnings Per Share	$	.51	$	.62	$	1.03	$	1.11

Diluted Earnings Per Share	$	.50	$	.61	$	1.02	$	1.10

Dividends Declared Per Share	$	.24	$	.23	$	1.02	$	.46