| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 11-19 | |
| 19 | ||
| Part II. OTHER INFORMATION | ||
| 20 | ||
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
20 | |
| 20 | ||
| 20 | ||
| 20 | ||
| 20 | ||
| SIGNATURES | 21 | |
1
Table of Contents
INDEPENDENT BANCSHARES, INC. AND SUBSIDIARIES
Part I. FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets
($ in thousands, except per share amounts)
| At September 30, 2007 |
At December 31, 2006 |
|||||||
| (Unaudited) | ||||||||
| Assets |
||||||||
| Cash and due from banks |
$ | 5,543 | $ | 6,057 | ||||
| Interest-earning deposits |
75 | 86 | ||||||
| Federal funds sold |
5,676 | 6,134 | ||||||
| Cash and cash equivalents |
11,294 | 12,277 | ||||||
| Securities available for sale |
39,814 | 40,996 | ||||||
| Loans, net of allowance for loan losses of $1,918 and $1,899 |
156,129 | 149,985 | ||||||
| Accrued interest receivable |
1,088 | 925 | ||||||
| Premises and equipment, net |
7,972 | 7,933 | ||||||
| Federal Home Loan Bank stock |
926 | 935 | ||||||
| Federal Reserve Bank stock |
237 | 237 | ||||||
| Goodwill |
1,525 | — | ||||||
| Customer intangible, net |
437 | — | ||||||
| Other assets |
1,352 | 1,329 | ||||||
| Total assets |
$ | 220,774 | $ | 214,617 | ||||
| Liabilities and Stockholders’ Equity |
||||||||
| Liabilities: |
||||||||
| Noninterest-bearing demand deposits |
$ | 21,435 | $ | 19,053 | ||||
| NOW, money-market and savings deposits |
81,454 | 81,005 | ||||||
| Time deposits |
84,339 | 79,428 | ||||||
| Total deposits |
187,228 | 179,486 | ||||||
| Federal Home Loan Bank advances |
10,000 | 10,000 | ||||||
| Junior subordinated debenture |
2,062 | 2,062 | ||||||
| Other borrowings |
3,253 | 3,528 | ||||||
| Accrued interest payable and other liabilities |
1,506 | 3,380 | ||||||
| Total liabilities |
204,049 | 198,456 | ||||||
| Stockholders’ equity: |
||||||||
| Common stock, $2 par value, 2,000,000 shares authorized, 1,235,646 and 1,176,975 shares issued and outstanding |
2,471 | 2,354 | ||||||
| Additional paid in capital |
8,831 | 7,517 | ||||||
| Retained earnings |
5,768 | 6,649 | ||||||
| Accumulated other comprehensive loss |
(345 | ) | (359 | ) | ||||
| Total stockholders’ equity |
16,725 | 16,161 | ||||||
| Total liabilities and stockholders’ equity |
$ | 220,774 | $ | 214,617 | ||||
See accompanying Notes to Condensed Consolidated Financial Statements.
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Table of Contents
INDEPENDENT BANCSHARES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings (Unaudited)
($ in thousands, except per share amounts)
| Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||
| Interest income: |
||||||||||||
| Loans |
$ | 3,067 | $ | 2,843 | $ | 8,852 | $ | 8,324 | ||||
| Securities |
451 | 367 | 1,375 | 984 | ||||||||
| Other |
67 | 136 | 123 | 309 | ||||||||
| Total interest income |
3,585 | 3,346 | 10,350 | 9,617 | ||||||||
| Interest expense: |
||||||||||||
| Deposits |
1,664 | 1,322 | 4,767 | 3,380 | ||||||||
| Borrowings |
184 | 239 | 566 | 596 | ||||||||
| Total interest expense |
1,848 | 1,561 | 5,333 | 3,976 | ||||||||
| Net interest income |
1,737 | 1,785 | 5,017 | 5,641 | ||||||||
| Provision for loan losses |
34 | 13 | 215 | 41 | ||||||||
| Net interest income after provision for loan losses |
1,703 | 1,772 | 4,802 | 5,600 | ||||||||
| Noninterest income: |
||||||||||||
| Service charges on deposit accounts |
122 | 119 | 349 | 349 | ||||||||
| Brokerage fees |
157 | — | 455 | — | ||||||||
| Gain on sale of securities |
— | — | 2 | — | ||||||||
| Other |
138 | 120 | 414 | 379 | ||||||||
| Total noninterest income |
417 | 239 | 1,220 | 728 | ||||||||
| Noninterest expense: |
||||||||||||
| Salaries and employee benefits |
1,016 | 919 | 3,034 | 2,518 | ||||||||
| Occupancy and equipment |
207 | 156 | 579 | 470 | ||||||||
| Data processing |
124 | 88 | 349 | 239 | ||||||||
| Advertising and business development |
38 | 53 | 100 | 171 | ||||||||
| Directors fees |
41 | 37 | 123 | 112 | ||||||||
| Stationary and supplies |
32 | 38 | 129 | 117 | ||||||||
| Other |
400 | 340 | 1,084 | 848 | ||||||||
| Total noninterest expense |
1,858 | 1,631 | 5,398 | 4,475 | ||||||||
| Earnings before income taxes |
262 | 380 | 624 | 1,853 | ||||||||
| Income taxes |
42 | 118 | 69 | 629 | ||||||||
| Net earnings |
$ | 220 | $ | 262 | $ | 555 | $ | 1,224 | ||||
| Earnings per share - basic |
$ | 0.18 | $ | 0.21 | $ | 0.45 | $ | 0.99 | ||||
| Cash dividends per share |
$ | — | $ | — | $ | — | $ | — | ||||
See accompanying Notes to Condensed Consolidated Financial Statements.
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Table of Contents
INDEPENDENT BANCSHARES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity
Nine Months Ended September 30, 2007 and 2006
($ in thousands)
| Common Stock | Additional Paid in Capital |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||
| Shares | Par Amount |
|||||||||||||||||||
| Balance at December 31, 2005 |
1,119,791 | $ | 2,240 | $ | 5,936 | $ | 6,782 | $ | (476 | ) | $ | 14,482 | ||||||||
| Comprehensive income: |
||||||||||||||||||||
| Net earnings (unaudited) |
— | — | — | 1,224 | — | 1,224 | ||||||||||||||
| Change in unrealized loss on securities available for sale, net of taxes (unaudited) |
— | — | — | — | 161 | 161 | ||||||||||||||
| Comprehensive income (unaudited) |
1,385 | |||||||||||||||||||
| Proceeds from shares issued in connection with purchases under the Employee Stock Purchase Plan (unaudited) |
1,373 | 2 | 18 | — | — | 20 | ||||||||||||||
| 5% stock dividend (unaudited) |
55,811 | 112 | 1,562 | (1,674 | ) | — | — | |||||||||||||
| Cash in lieu of shares (unaudited) |
— | — | — | (7 | ) | — | (7 | ) | ||||||||||||
| Balance at September 30, 2006 (unaudited) |
1,176,975 | $ | 2,354 | $ | 7,516 | $ | 6,325 | $ | (315 | ) | $ | 15,880 | ||||||||
| Balance at December 31, 2006 |
1,176,975 | $ | 2,354 | $ | 7,517 | $ | 6,649 | $ | (359 | ) | $ | 16,161 | ||||||||
| Comprehensive income: |
||||||||||||||||||||
| Net earnings (unaudited) |
— | — | — | 555 | — | 555 | ||||||||||||||
| Change in unrealized loss on securities available for sale, net of taxes (unaudited) |
— | — | — | — | 14 | 14 | ||||||||||||||
| Comprehensive income (unaudited) |
569 | |||||||||||||||||||
| 5% stock dividend (unaudited) |
58,671 | 117 | 1,314 | (1,431 | ) | — | — | |||||||||||||
| Cash in lieu of shares (unaudited) |
— | — | — | (5 | ) | — | (5 | ) | ||||||||||||
| Balance, at September 30, 2007 (unaudited) |
1,235,646 | $ | 2,471 | $ | 8,831 | $ | 5,768 | $ | (345 | ) | $ | 16,725 | ||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
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Table of Contents
INDEPENDENT BANCSHARES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
| Nine Months Ended September 30, |
||||||||
| 2007 | 2006 | |||||||
| Cash flows from operating activities: |
||||||||
| Net earnings |
$ | 555 | $ | 1,224 | ||||
| Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: |
||||||||
| Depreciation and amortization |
255 | 176 | ||||||
| Provision for loan losses |
215 | 41 | ||||||
| Net amortization of premiums and discounts on securities |
181 | 182 | ||||||
| Gain on sale of securities available for sale |
(2 | ) | — | |||||
| Amortization of customer intangible |
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