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 September 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 ¨

Indicate by check mark 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 OCTOBER 29, 2004
Common Stock - no par value		2,249,768 Shares


		Page
PART I - Financial Information

Item 1.	Financial Statements (unaudited)

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

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

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

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

	Notes to consolidated condensed financial statements	5-8

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

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

MOUNTAIN BANK HOLDING COMPANY AND SUBSIDIARY

CONSOLIDATED CONDENSED BALANCE SHEETS


	September 30, 2004 (unaudited)		December 31, 2003
	*(in thousands)*
Assets
Cash and due from banks	$	2,430	$	1,641
Interest bearing deposits at other financial institutions		9,152		13,920
Securities available for sale		37,689		32,290
Federal Home Loan Bank and Federal Reserve Bank stock, at cost		731		693
Loans held for sale		172		—

Loans		116,608		98,744
Allowance for credit losses		1,300		1,101

Net loans		115,308		97,643

Premises and equipment		6,290		5,586
Foreclosed real estate		—		140
Accrued interest receivable		710		656
Bank owned life insurance		3,783		3,358
Other assets		289		349

Total assets	$	176,554	$	156,276

Liabilities
Deposits:
Demand, non-interest bearing	$	29,901	$	23,756
Savings and interest-bearing demand		72,575		66,720
Time		54,670		48,299

Total deposits		157,146		138,775

Accrued interest payable		174		159
Note payable		32		34
Other liabilities		530		413

Total liabilities		157,882		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		6,935		6,002
Accumulated other comprehensive income		53		150

Total shareholders’ equity		18,672		16,895

Total liabilities and shareholders’ equity	$	176,554	$	156,276

See notes to consolidated condensed financial statements

Page 1

MOUNTAIN BANK HOLDING COMPANY AND SUBSIDIARY

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2003			2004			2003
	*(in thousands, except per share data)*						*(in thousands, except per share data)*
Interest Income
Loans	$	2,099		$	1,900		$	5,955		$	5,439
Deposits in banks		30			62			97			151
Investment Income:
Taxable		290			189			802			668
Tax-exempt		2			4			6			13
Dividends on stock		12			5			22			36

Total interest income		2,433			2,160			6,882			6,307

Interest Expense
Deposits		492			474			1,411			1,466
Note payable		1			1			2			2

Total interest expense		493			475			1,413			1,468

Net interest income		1,940			1,685			5,469			4,839

Provision for credit losses		69			109			207			291

Net interest income after provision for credit losses		1,871			1,576			5,262			4,548

Noninterest income
Service charges on deposit accounts		151			149			448			428
Gains on mortgage loans sold		60			205			196			542
Gain on sale of securities available for sale-net		2			—			14			—
Bank owned life insurance income		40			34			122			116
Other		80			78			202			229

Total noninterest income		333			466			982			1,315

Noninterest expense
Salaries and employee benefits		971			953			2,742			2,619
Occupancy and equipment		225			226			683			634
Other		338			360			1,139			1,149

Total noninterest expenses		1,534			1,539			4,564			4,402

Income before income tax expense		670			503			1,680			1,461

Income tax expense		(211	)		(156	)		(529	)		(454	)

Net income	$	459		$	347		$	1,151		$	1,007

Comprehensive income(loss)	$	362		$	239		$	1,054		$	899

Earnings per share:
Basic	$	0.20		$	0.16		$	0.52		$	0.47
Diluted	$	0.20		$	0.15		$	0.50		$	0.45
Average shares:
Basic		2,249,768			2,155,477			2,221,638			2,154,365
Diluted		2,324,478			2,243,583			2,295,654			2,241,371

See notes to consolidated condensed financial statements

Page 2

MOUNTAIN BANK HOLDING COMPANY AND SUBSIDIARY

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

Balance Ended September 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		—		—		1,007		—			1,007
Other comprehensive income, net of tax:
Change in fair value of securities, available for sale		—		—		—		(108	)		(108	)

Comprehensive Income		—		—		—		—			899

Balance Ended September 30, 2003	$	1,078	$	9,526	$	5,633	$	262		$	16,499

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