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 Quarter Ended March 31, 2005
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 000-24147
KILLBUCK BANCSHARES, INC.
(Exact name of registrant as specified in its Charter)
| OHIO | 34-1700284 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
165 N. Main Street, Killbuck, OH 44637
(Address of principal executive offices and zip code)
(330) 276-2771
(Registrant’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 Exchange Act Rule 12b-2). Yes ¨ No x
State the number of shares outstanding for each of the issuer’s classes of common equity as of the latest practicable date:
Class: Common Stock, no par value
Outstanding at May 4, 2005: 656,428
Index
| Page Number | ||||
| PART I. FINANCIAL INFORMATION |
||||
| Item 1. |
Financial Statements (Unaudited): | |||
|
Consolidated Balance Sheet as of March 31, 2005 and December 31, 2004 |
3 | |||
|
Consolidated Statements of Income for the three months ended March 31, 2005 and 2004 |
4 | |||
|
Consolidated Statements of Changes In Shareholders’ Equity for the three months ended March 31, 2005 |
5 | |||
|
Consolidated Statements of Cash Flows for the three months ended March 31, 2005 and 2004 |
6 | |||
| Notes to Unaudited Consolidated Financial Statements | 7-8 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 9-15 | ||
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk | 16-17 | ||
| Item 4. |
Controls and Procedures | 18 | ||
| PART II. OTHER INFORMATION |
||||
| Item 1. |
Legal Proceedings | 19 | ||
| Item 2. |
Unregistered Sales of Equity Securities and Proceeds | 19 | ||
| Item 3. |
Default Upon Senior Securities | 19 | ||
| Item 4. |
Submissions of Matters to a Vote of Security Holders | 19 | ||
| Item 5. |
Other Information | 19 | ||
| Item 6. |
Exhibits | 20 | ||
| 21 | ||||
-2-
CONSOLIDATED BALANCE SHEET (UNAUDITED)
| March 31, 2005 |
December 31, 2004 |
|||||||
| ASSETS | ||||||||
| Cash and cash equivalents: |
||||||||
| Cash and amounts due from depository institutions |
$ | 8,057,756 | $ | 12,163,199 | ||||
| Federal funds sold |
6,900,000 | 9,500,000 | ||||||
| Total cash and cash equivalents |
14,957,756 | 21,663,199 | ||||||
| Investment securities: |
||||||||
| Securities available for sale |
9,496,694 | 9,754,110 | ||||||
| Securities held to maturity (fair value of $37,560,171 and $37,947,368) |
36,043,689 | 36,015,317 | ||||||
| Total investment securities |
45,540,383 | 45,769,427 | ||||||
| Loans (net of allowance for loan losses of $2,444,117 and $2,645,981) |
214,132,131 | 214,161,315 | ||||||
| Loans held for sale |
224,300 | 167,500 | ||||||
| Premises and equipment, net |
5,262,003 | 4,949,795 | ||||||
| Accrued interest receivable |
1,377,667 | 927,860 | ||||||
| Goodwill, net |
1,329,249 | 1,329,249 | ||||||
| Other assets |
5,023,406 | 4,898,694 | ||||||
| Total assets |
$ | 287,846,895 | $ | 293,867,039 | ||||
| LIABILITIES | ||||||||
| Deposits: |
||||||||
| Noninterest bearing demand |
$ | 42,344,500 | $ | 47,185,066 | ||||
| Interest bearing demand |
32,013,864 | 34,569,644 | ||||||
| Money market |
18,996,743 | 17,504,480 | ||||||
| Savings |
42,580,151 | 43,282,000 | ||||||
| Time |
104,608,759 | 104,807,571 | ||||||
| Total deposits |
240,544,017 | 247,348,761 | ||||||
| Federal Home Loan Bank advances |
6,701,059 | 6,845,342 | ||||||
| Short-term borrowings |
3,935,000 | 3,730,000 | ||||||
| Accrued interest and other liabilities |
619,147 | 584,002 | ||||||
| Total liabilities |
251,799,223 | 258,508,105 | ||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Common stock – No par value: 1,000,000 shares authorized, 718,431 issued |
8,846,670 | 8,846,670 | ||||||
| Retained earnings |
32,404,123 | 31,558,974 | ||||||
| Accumulated other comprehensive income (loss) |
(17,510 | ) | 35,201 | |||||
| Treasury stock, at cost (62,003 and 60,945 shares) |
(5,185,611 | ) | (5,081,911 | ) | ||||
| Total shareholders’ equity |
36,047,672 | 35,358,934 | ||||||
| Total liabilities and shareholders’ equity |
$ | 287,846,895 | $ | 293,867,039 | ||||
See accompanying notes to the unaudited consolidated financial statements.
-3-
Killbuck Bancshares, Inc. and Subsidiary
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
| Three Months Ended March 31, | ||||||
| 2005 |
2004 | |||||
| INTEREST INCOME |
||||||
| Interest and fees on loans |
$ | 3,222,519 | $ | 2,767,931 | ||
| Federal funds sold |
30,223 | 13,782 | ||||
| Investment securities: |
||||||
| Taxable |
121,758 | 171,794 | ||||
| Exempt from federal income tax |
393,621 | 432,481 | ||||
| Total interest income |
3,768,121 | 3,385,988 | ||||
| INTEREST EXPENSE |
||||||
| Deposits |
784,721 | 754,992 | ||||
| Federal Home Loan Bank advances |
75,989 | 55,485 | ||||
| Short term borrowing |
4,591 | 1,348 | ||||
| Total interest expense |
865,301 | 811,825 | ||||
| NET INTEREST INCOME |
2,902,820 | 2,574,163 | ||||
| Provision for loan losses |
75,000 | 90,000 | ||||
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |
2,827,820 | 2,484,163 | ||||
| NON INTEREST INCOME |
||||||
| Service charges on deposit accounts |
188,224 | 183,341 | ||||
| Gain on sale of loans, net |
19,750 | 26,937 | ||||
| Other income |
102,919 | 34,272 | ||||
| Total non interest income |
310,893 | 244,550 | ||||
| NON INTEREST EXPENSE |
||||||
| Salaries and employee benefits |
1,170,755 | 926,351 | ||||
| Occupancy expense |
258,283 | 243,721 | ||||
| Professional fees |
107,153 | 72,239 | ||||
| Franchise tax |
111,000 | 108,000 | ||||
| Other expenses |
397,528 | 395,379 | ||||
| Total non interest expense |
2,044,719 | 1,745,690 | ||||
| INCOME BEFORE INCOME TAXES |
1,093,994 | 983,023 | ||||
| Income taxes |
248,845 | 209,855 | ||||
| NET INCOME |
$ | 845,149 | $ | 773,168 | ||
| Earning per common share |
$ | 1.29 | $ | 1.16 | ||
| Weighted Average shares outstanding |
657,046 | 664,369 | ||||
See accompanying notes to the unaudited consolidated financial statements.
-4-
Killbuck Bancshares, Inc. and Subsidiary
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2005
| Common Stock |
Retained Earnings |
Accumulated Other Comprehensive Income |
Treasury Stock |
Total Shareholders’ Equity |
Comprehensive Income |
|||||||||||||||||
| Balance, December 31, 2004 |
$ | 8,846,670 | $ | 31,558,974 | $ | 35,201 | $ | (5,081,911 | ) | $ | 35,358,934 | |||||||||||
| Net income |
845,149 | 845,149 | $ | 845,149 | ||||||||||||||||||
| Purchase of Treasury stock, at cost (1,058 shares) |
(103,700 | ) | (103,700 | ) | ||||||||||||||||||
| Other comprehensive income: |
||||||||||||||||||||||
| Net unrealized loss on securities, net of tax |
(52,711 | ) | (52,711 | ) | (52,711 | ) | ||||||||||||||||
| Comprehensive income |
$ | 792,438 | ||||||||||||||||||||
| Balance, March 31, 2005 |
$ | 8,846,670 | $ | 32,404,123 | $ | (17,510 | ) | $ | (5,185,611 | ) | $ | 36,047,672 | ||||||||||
See accompanying notes to the unaudited consolidated financial statements.
-5-
Killbuck Bancshares, Inc. and Subsidiary
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
| Three Months Ended March 31, |
||||||||
| 2005 |
2004 |
|||||||
| OPERATING ACTIVITIES |
||||||||
| Net income |
$ | 845,149 | $ | 773,168 | ||||
| Adjustments to reconcile net income to net cash provided by Operating activities: |
||||||||
| Provision for loan losses |
75,000 | 90,000 | ||||||
| Gain on sale of loans |
(19,750 | ) | (26,937 | ) | ||||
| Provision for depreciation and amortization |
115,541 | 101,081 | ||||||
| Origination of loans held for sale |
(3,471,679 | ) | (3,894,760 | ) | ||||
| Proceeds from the sale of loans |
3,434,629 | 4,240,647 | ||||||
| Federal Home Loan Bank stock dividend |
(12,500 | ) | (11,400 | ) | ||||
| Net change in: |
||||||||
| Accrued interest and other assets |
(534,866 | ) | (566,121 | ) | ||||
| Accrued expenses and other liabilities |
35,145 | 22,625 | ||||||
| Net cash provided by operating activities |
466,669 | 728,303 | ||||||
| INVESTING ACTIVITIES |
||||||||
| Investment securities available for sale: |
||||||||
| Proceeds from maturities and repayments |
1,176,253 | 3,322,627 | ||||||
| Purchases |
(997,968 | ) | (560,037 | ) | ||||
| Investment securities held to maturity: |
||||||||
| Proceeds from maturities and repayments |
154,225 | 655,697 | ||||||
| Purchases |
(200,872 | ) | — | |||||
| Net increase in loans |
(45,816 | ) | (9,326,264 | ) | ||||
| Purchase of premises and equipment |
(410,207 | ) | (39,154 | ) | ||||
| Net cash used in investing activities |
(324,385 | ) | (5,947,131 | ) | ||||
| FINANCING ACTIVITIES |
||||||||
| Net (decrease) increase in demand, money market and savings deposits |
(6,605,932 | ) | 6,663,544 | |||||
| Net decrease in time deposits |
(198,812 | ) | (939,298 | ) | ||||
| Repayment of Federal Home Loan Bank advances |
(144,283 | ) | (191,739 | ) | ||||
| Net increase (decrease) in short term borrowings |
205,000 | (850,000 | ) | |||||
| Purchase of Treasury stock |
(103,700 | ) | (58,425 | ) | ||||