MOUNTAIN BANK HOLDING CO - 10-Q Quarterly Report

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2004

¨	Transition Report Under Section 13 or 15(d) of the Exchange Act

For the transition period from to

Commission File Number : 0-28394

MOUNTAIN BANK HOLDING COMPANY

(Exact Name of Registrant as Specified in Its Charter)

WASHINGTON

91-1602736

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification Number)

501 Roosevelt Avenue

Enumclaw, Washington 98022

(Address of Principal Executive Offices)

(360) 825-0100

(Issuer’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 ¨

Check whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act): Yes ¨ No x

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


CLASS		SHARES OUTSTANDING AT JUNE 30, 2004
Common Stock - no par value		2,249,768 Shares

PART I - Financial Information


		Page
Item 1.	Financial Statements (unaudited)

	Consolidated Condensed Balance Sheets as of June 30, 2004, and December 31, 2003	1

	Consolidated Condensed Statements of Income for the three months and six months ended June 30, 2004 and 2003	2

	Consolidated Condensed Statements of Shareholders’ Equity for the six months ended June 30, 2004 and 2003	3

	Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2004 and 2003	4

	Notes to consolidated condensed financial statements	5-7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results Of Operations	8-15

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	15

Item 4.	Controls and Procedures	15-16

PART II - Other Information

Item 1.	Legal Proceedings	16

Item 2.	Change in Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	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

MOUNTAIN BANK HOLDING COMPANY AND SUBSIDIARY

CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)


	June 30, 2004			December 31, 2003
	(inthousands)
Assets
Cash and due from banks	$	1,562		$	1,641
Interest bearing deposits at other financial institutions		10,041			13,920
Securities available for sale		36,730			32,290
Federal Home Loan Bank and Federal Reserve Bank stock, at cost		702			693
Loans held for sale		571			—

Loans		109,571			98,744
Allowance for credit losses		1,230			1,101

Net loans		108,341			97,643

Premises and equipment		5,504			5,586
Foreclosed real estate		137			140
Accrued interest receivable		636			656
Bank owned life insurance		3,742			3,358
Other assets		270			349

Total assets	$	168,236		$	156,276

Liabilities
Deposits:
Demand, non-interest bearing	$	26,278		$	23,756
Savings and interest-bearing demand		68,786			66,720
Time		54,495			48,299

Total deposits		149,559			138,775

Accrued interest payable		170			159
Note payable		33			34
Other liabilities		482			413

Total liabilities		150,244			139,381

Shareholders’ Equity
Common stock (no par value); authorized 10,500,000 shares; issued and outstanding: 2004 - 2,249,768 shares; 2003 - 2,176,677 shares		1,125			1,088
Additional paid-in capital		10,559			9,655
Retained earnings		6,476			6,002
Accumulated other comprehensive income(loss)		(168	)		150

Total shareholders’ equity		17,992			16,895

Total liabilities and shareholders’ equity	$	168,236		$	156,276

See notes to consolidated condensed financial statements

MOUNTAIN BANK HOLDING COMPANY AND SUBSIDIARY

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
	(in thousands, except per share data)						(in thousands, except per share data)
Interest Income
Loans	$	2,020		$	1,817		$	3,856		$	3,539
Deposits in banks		26			41			67			89
Investment Income:
Taxable		262			246			512			519
Tax-exempt		2			—			4			—
Dividends on stock		5			—			10			—

Total interest income		2,315			2,104			4,449			4,147

Interest Expense
Deposits		468			476			919			992
Note payable		—			—			1			1

Total interest expense		468			476			920			993

Net interest income		1,847			1,628			3,529			3,154

Provision for credit losses		69			124			138			182

Net interest income after provision for credit losses		1,778			1,504			3,391			2,972

Noninterest income
Service charges on deposit accounts		152			145			297			279
Gains on mortgage loans sold		90			194			136			337
Gain on sale of securities available for sale-net		—			—			12			—
Bank owned life insurance income		41			41			82			82
Other		62			84			122			151

Total noninterest income		345			464			649			849

Noninterest expense
Salaries and employee benefits		868			814			1,771			1,666
Occupancy and equipment		230			222			458			408
Other		397			397			801			789

Total noninterest expenses		1,495			1,433			3,030			2,863

Income before income tax expense		628			535			1,010			958

Income tax expense		(203	)		(171	)		(318	)		(298	)

Net income	$	425		$	364		$	692		$	660

Comprehensive income(loss)	$	(8	)	$	371		$	374		$	675

Per share data:
Basic earnings per share	$	0.19		$	0.17		$	0.31		$	0.31
Diluted earnings per share	$	0.19		$	0.16		$	0.30		$	0.29

See notes to consolidated condensed financial statements

MOUNTAIN BANK HOLDING COMPANY AND SUBSIDIARY

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited) (In thousands)

Balance Ended June 30


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income(Loss)		Total
Balance at December 31, 2002	$	1,073	$	9,472	$	4,626	$	370	$	15,541
Exercise of options, including tax benefit		4		37		—		—		41
Sale of common stock under employee stock purchase plan		1		17		—		—		18
Comprehensive income:
Net income		—		—		660		—		660
Other comprehensive income, net of tax:
Change in fair value of securities, available for sale		—		—		—		15		15
Comprehensive Income		—		—		—		—		675
Balance Ended June 30, 2003	$	1,078	$	9,526	$	5,286	$	385	$	16,275

	Common Stock

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