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, 2004
OR
| ¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number: 0-16181
ABC BANCORP
(Exact name of registrant as specified in its charter)
| GEORGIA | 58-1456434 | |
| (State of incorporation) | (IRS Employer ID No.) |
24 SECOND AVE., SE MOULTRIE, GA 31768
(Address of principal executive offices)
(229) 890-1111
(Registrant’s telephone number)
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 by Rule 12b-2) of the Exchange Act). Yes x No ¨
There were 9,784,761 shares of Common Stock outstanding as of August 5, 2004.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2004
TABLE OF CONTENTS
| Item |
Page | |||
| PART I - FINANCIAL INFORMATION |
||||
| 1. |
Financial Statements |
|||
| 3 | ||||
| 4 | ||||
| 6 | ||||
| 7 | ||||
| 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
9 | ||
| 3. |
13 | |||
| 4. |
14 | |||
| PART II - OTHER INFORMATION |
||||
| 4. |
14 | |||
| 6. |
15 | |||
| 15 | ||||
| 16 | ||||
2
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
| June 30 2004 |
December 31 2003 |
|||||||
| Assets |
||||||||
| Cash and due from banks |
$ | 46,417 | $ | 80,480 | ||||
| Securities available for sale, at fair value |
192,784 | 190,595 | ||||||
| Loans |
859,653 | 840,539 | ||||||
| Less allowance for loan losses |
15,206 | 14,963 | ||||||
| Loans, net |
844,447 | 825,576 | ||||||
| Premises and equipment, net |
26,302 | 25,537 | ||||||
| Intangible assets |
2,891 | 3,286 | ||||||
| Goodwill |
19,231 | 19,231 | ||||||
| Other assets |
25,084 | 24,406 | ||||||
| $ | 1,157,156 | $ | 1,169,111 | |||||
| Liabilities and Stockholders’ Equity |
||||||||
| Deposits |
||||||||
| Noninterest-bearing demand |
129,224 | 141,715 | ||||||
| Interest-bearing demand |
285,874 | 291,715 | ||||||
| Savings |
69,426 | 65,918 | ||||||
| Time, $100,000 and over |
155,724 | 149,991 | ||||||
| Other time |
238,939 | 257,185 | ||||||
| Total deposits |
879,187 | 906,524 | ||||||
| Federal funds purchased & securities sold under agreements to repurchase |
4,665 | 8,211 | ||||||
| Other borrowings |
116,809 | 97,545 | ||||||
| Other liabilities |
5,783 | 7,651 | ||||||
| Subordinated deferrable interest debentures |
35,567 | 35,567 | ||||||
| Total liabilities |
1,042,011 | 1,055,498 | ||||||
| Stockholders’ equity |
||||||||
| Common stock, par value $1; 30,000,000 shares authorized; 10,871,422 and 10,849,922 shares issued respectively |
10,871 | 10,850 | ||||||
| Capital surplus |
46,824 | 46,446 | ||||||
| Retained earnings |
69,636 | 66,145 | ||||||
| Accumulated other comprehensive income |
(1,248 | ) | 522 | |||||
| Unearned compensation |
(744 | ) | (491 | ) | ||||
| 125,339 | 123,472 | |||||||
| Less cost of 1,085,342 and 1,066,068 shares acquired for the treasury |
(10,194 | ) | (9,859 | ) | ||||
| Total stockholders’ equity |
115,145 | 113,613 | ||||||
| $ | 1,157,156 | $ | 1,169,111 | |||||
See Notes to Consolidated Financial Statements.
3
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
THREE MONTHS ENDED June 30, 2004 AND 2003
(Dollars in Thousands)
(Unaudited)
| 2004 |
2003 |
|||||||
| Interest income |
||||||||
| Interest and fees on loans |
$ | 13,663 | $ | 14,565 | ||||
| Interest on taxable securities |
1,684 | 1,525 | ||||||
| Interest on nontaxable securities |
44 | 41 | ||||||
| Interest on deposits in other banks |
55 | 161 | ||||||
| 15,446 | 16,292 | |||||||
| Interest expense |
||||||||
| Interest on deposits |
2,718 | 3,854 | ||||||
| Interest on federal funds purchased and securities sold under agreements to repurchase |
14 | 17 | ||||||
| Interest on other borrowings |
1,926 | 1,969 | ||||||
| 4,658 | 5,840 | |||||||
| Net interest income |
10,788 | 10,452 | ||||||
| Provision for loan losses |
627 | 1,251 | ||||||
| Net interest income after provision for loan losses |
10,161 | 9,201 | ||||||
| Other income |
||||||||
| Service charges on deposit accounts |
2,533 | 2,693 | ||||||
| Other service charges, commissions and fees |
639 | 879 | ||||||
| Other |
65 | 43 | ||||||
| Gain(loss) on sale of securities |
58 | (21 | ) | |||||
| 3,295 | 3,594 | |||||||
| Other expense |
||||||||
| Salaries and employee benefits |
4,958 | 4,612 | ||||||
| Equipment and occupancy expense |
1,212 | 1,203 | ||||||
| Amortization of intangible assets |
198 | 255 | ||||||
| Other operating expenses |
2,552 | 2,540 | ||||||
| 8,920 | 8,610 | |||||||
| Income before income taxes |
4,536 | 4,185 | ||||||
| Applicable income taxes |
1,494 | 1,375 | ||||||
| Net income |
$ | 3,042 | $ | 2,810 | ||||
| Other comprehensive income, net of tax: |
||||||||
| Unrealized holding gains(losses) arising during period, net of tax |
$ | (2,446 | ) | $ | 335 | |||
| Reclassification adjustment for gains(losses) included in net income, net of tax |
$ | (38 | ) | $ | 14 | |||
| Comprehensive income |
$ | 558 | $ | 3,159 | ||||
| Income per common share-Basic |
$ | 0.31 | $ | 0.29 | ||||
| Income per common share-Diluted |
$ | 0.31 | $ | 0.29 | ||||
| Average shares outstanding |
9,773,501 | 9,759,034 | ||||||
See Notes to Consolidated Financial Statements.
4
ABC BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
SIX MONTHS ENDED June 30, 2004 AND 2003
(Dollars in Thousands)
(Unaudited)
| 2004 |
2003 |
|||||||
| Interest income |
||||||||
| Interest and fees on loans |
$ | 27,426 | $ | 29,220 | ||||
| Interest on taxable securities |
3,480 | 3,159 | ||||||
| Interest on nontaxable securities |
86 | 81 | ||||||
| Interest on deposits in other banks |
117 | 365 | ||||||
| 31,109 | 32,825 | |||||||
| Interest expense |
||||||||
| Interest on deposits |
5,464 | 7,961 | ||||||
| Interest on federal funds purchased and securities sold under agreements to repurchase |
32 | 35 | ||||||
| Interest on other borrowings |
3,864 | 3,980 | ||||||
| 9,360 | 11,976 | |||||||
| Net interest income |
21,749 | 20,849 | ||||||
| Provision for loan losses |
938 | 1,982 | ||||||
| Net interest income after provision for loan losses |
20,811 | 18,867 | ||||||
| Other income |
||||||||
| Service charges on deposit accounts |
5,009 | 5,210 | ||||||
| Other service charges, commissions and fees |
1,406 | 1,667 | ||||||
| Other |
156 | 329 | ||||||
| Gain(loss) on sale of securities |
58 | (1 | ) | |||||
| 6,629 | 7,205 | |||||||
| Other expense |
||||||||
| Salaries and employee benefits |
10,181 | 9,756 | ||||||
| Equipment and occupancy expense |
2,339 | 2,367 | ||||||
| Amortization of intangible assets |
395 | 511 | ||||||
| Other operating expenses |
5,244 | 5,166 | ||||||
| 18,159 | 17,800 | |||||||
| Income before income taxes |
9,281 | 8,272 | ||||||
| Applicable income taxes |
3,053 | 2,693 | ||||||
| Net income |
$ | 6,228 | 5,579 | |||||
| Other comprehensive income, net of tax: |
||||||||
| Unrealized holding losses arising during period, net of tax |
$ | (1,732 | ) | $ | (86 | ) | ||
| Reclassification adjustment for gains(losses) included in net income, net of tax |
$ | (38 | ) | $ | 1 | |||
| Comprehensive income |
$ | 4,458 | $ | |||||