|X| Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2002
or
|_| Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File #000-30521
Pavilion Bancorp, Inc.
(Exact name of registrant as specified in its charter)
|
Michigan (State or other jurisdiction of incorporation or organization) |
38-3088340 (I.R.S. Employer Identification No.) |
135 East Maumee Street, Adrian, Michigan 49221
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (517) 265-5144, Fax (517) 265-3926
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 shorter periods 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 |_| |
As of August 2, 2002, there were 839,926 outstanding shares of the registrant’s common stock, no par value.
Page 1
| ITEM NO. |
DESCRIPTION |
PAGE NO. |
|
Item 1. Item 2. Item 3. |
Financial Statements (Condensed) (a) Report of Independent Accountants (b) Condensed Consolidated Balance Sheets (c) Condensed Consolidated Statements of Income and Comprehensive Income (d) Condensed Consolidated Statements of Cash Flows (e) Notes to Condensed Consolidated Financial Statements Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk |
3 4 5 6 7 9 13 |
PART II -OTHER INFORMATION
|
Item 1. Item 2. Item 3. Item 4. Item 5. Item 6. |
Legal Proceedings Changes in Securities and Use of Proceeds Defaults Upon Senior Securities Submission of Matters to a Vote of Security Holders Other Information Exhibits and Reports on Form 8-K |
14 14 14 14 15 15 |
|
Signatures Exhibits |
16 17 |
|
Page 2
REPORT OF INDEPENDENT ACCOUNTANTS
Shareholders and Board of Directors
Pavilion Bancorp, Inc.
Adrian, Michigan
We have reviewed the condensed consolidated balance sheet of Pavilion Bancorp, Inc. as of June 30, 2002, the related condensed consolidated statements of income and comprehensive income for the quarter and year to date periods ended June 30, 2002 and 2001 and the condensed consolidated statements of cash flows for the year to date periods ended June 30, 2002 and 2001. These financial statements are the responsibility of the Company’s management.
We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles.
| /s/ Crowe, Chizek and Company LLP |
Grand Rapids, Michigan
July 29, 2002
Page 3
(b) CONDENSED CONSOLIDATED BALANCE SHEETS
June 30,
In thousands of dollars 2002 December 31,
(unaudited) 2001
----------- ----
ASSETS
Cash and due from banks $ 12,828 $ 15,987
Federal funds sold 6,560 8,290
------------ ------------
Total cash and cash equivalents 19,388 24,277
Securities available for sale 23,404 25,969
Federal Home Loan Bank stock, at cost 2,504 2,504
Federal Reserve Bank stock, at cost 480 480
Loans held for sale 1,324 417
Loans receivable, net of allowance for loan losses:
$2,321 - 2002, $2,200 - 2001 221,483 212,590
Premises and equipment, net 6,525 6,611
Accrued interest receivable 1,834 1,877
Mortgage servicing asset 2,280 2,066
Other assets 2,284 1,336
------------ ------------
Total assets $ 281,506 $ 278,127
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest bearing $ 47,995 $ 45,488
Interest bearing 189,354 189,919
------------ ------------
Total deposits 237,349 235,407
Borrowed funds 7,999 7,394
Accrued interest payable 615 850
Other liabilities 2,157 1,619
Capital securities 4,833 4,850
------------ ------------
Total liabilities 252,953 250,120
Common stock subject to repurchase obligation in ESOP 4,022 4,444
Shareholders' Equity
Common stock and paid-in capital, no par value 10,130 10,187
Retained earnings 14,074 13,124
Accumulated other comprehensive income,
net of tax 327 252
------------ ------------
Total shareholders' equity 24,531 23,563
------------ ------------
Total liabilities and shareholders' equity $ 281,506 $ 278,127
============ ============
See accompanying notes to condensed consolidated financial statements.
Page 4
(c) CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (unaudited)
Three Months Ended Six Months Ended
In thousands of dollars, except per share data June 30, June 30,
---------------------------- ----------------------------
2002 2001 2002 2001
---- ---- ---- ----
Interest and dividend income
Loans receivable, including fees $ 4,327 $ 4,940 $ 8,699 $ 9,936
Securities available for sale 338 364 726 674
Federal funds sold and other 21 115 42 218
------------ ------------ ------------ ------------
Total interest and dividend income 4,686 5,419 9,467 10,828
Interest expense
Deposits 1,384 2,129 2,832 4,303
Federal Home Loan Bank advances 77 84 155 166
Other 85 41 160 59
------------ ------------ ------------ ------------
Total interest expense 1,546 2,254 3,147 4,528
------------ ------------ ------------ ------------
Net interest income 3,140 3,165 6,320 6,300
Provision for loan losses 150 44 256 144
------------ ------------ ------------ ------------
Net interest income after provision
for loan losses 2,990 3,121 6,064 6,156
Noninterest income
Service charges and fees 522 372 1,141 662
Net gains on loan sales 423 579 1,099 984
Other 14 62 66 124
------------ ------------ ------------ ------------
959 1,013 2,306 1,770
Noninterest expense
Salaries and employee benefits 1,860 1,790 3,845 3,335
Occupancy and equipment 598 498 1,188 975
Other 666 791 1,412 1,483
------------ ------------ ------------ ------------
3,124 3,079 6,445 5,793
------------ ------------ ------------ ------------
Income before income tax 825 1,055 1,925 2,133
Income tax expense 265 332 619 677
------------ ------------ ------------ ------------
Net income $ 560 $ 723 $ 1,306 $ 1,456
============ ============ ============ ============
Comprehensive income $ 750 $ 790 $ 1,381 $ 1,688
============ ============ ============ ============
Basic earnings per share $ .66 $ .85 $ 1.54 $ 1.71
============ ============ ============ ============
Diluted earnings per share $ .66 $ .84 $ 1.53 $ 1.69
============ ============ ============ ============
Dividends per share $ .22 $ .20 $ .42 $ .40
============ ============ ============ ============
See accompanying notes to condensed consolidated financial statements.
Page 5
(d) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended
In thousands of dollars June 30,
-----------------------------
2002 2001
---- ----
Cash flows from operating activities
Net income $ $ 1,306 $ 1,456
Adjustments to reconcile net income to
net cash from operating activities
Depreciation 447 395
Provision for loan losses 256 144
Net amortization and accretion on securities
available for sale 154 37
Amortization of mortgage servicing rights 282 274
Loans originated for sale (59,280) (58,644)
Proceeds from sale of mortgage loans 58,976 58,076
Net gains on sales of mortgage loans (1,099) (984)
Net gains on sales of securities (9) -
Net change in:
Accrued interest receivable 43 144
Other assets (948) 373
Accrued interest payable (235) (31)
Other liabilities 499 29
------------ ------------
Net cash from operating activities 392 1,269
------------ ------------
Cash flows from investing activities
Proceeds from:
Maturities, calls and principal payments on
securities available for sale 14,139 3,902
Sales of securities available for sale 3,500 -
Purchases of:
Federal Reserve Bank stock - (120)
Securities available for sale (15,105) (10,525)
Premises and equipment, net (361) (1,001)
Net increase in loans (9,149) (2,997)
------------ ------------
Net cash from investing activities (6,976) (10,741)
Cash flows from financing activities
Net change in deposits 1,942 6,977
Net change in borrowed funds and capital securities 588 (1,006)
Change in shareholders' equity (835) (486)
------------ ------------
Net cash from financing activities 1,695 5,485
------------ ------------
Net change in cash and cash equivalents (4,889) (3,987)
Cash and cash equivalents at beginning of period 24,277 12,992
------------ ------------
Cash and cash equivalents at end of period $ 19,388 $ 9,005
============ ============
Cash paid for:
Interest $ $ 3,382 $ 4,559
Income taxes 505 662
See accompanying notes to condensed consolidated financial statements.
Page 6
(e) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENT (unaudited)
The unaudited condensed consolidated financial statements include the accounts of Pavilion Bancorp, Inc. (the “Company”) and its wholly-owned subsidiaries, Bank of Lenawee and Bank of Washtenaw (together the “Banks”). The Bank of Lenawee includes its wholly-owned subsidiaries, Pavilion Financial Services and Pavilion Mortgage Company (the “Mortgage Company”). It should be noted that the name change to Pavilion Bancorp, Inc. previously Lenawee Bancorp, Inc. was approved by the shareholders on April 18, 2002. All significant intercompany balances and transactions have been eliminated in consolidation.
The Company is a two-bank holding company which conducts limited business activities. The Banks perform the majority of the Company’s business activities.
The Banks provide a full range of banking services to individuals, agricultural businesses, commercial business and light industries located in its service area. The Banks maintain diversified loan portfolios, including loans to individuals for home mortgages, automobiles and personal expenditures, and loans to business enterprises for current operations and expansion. The Banks offer a variety of deposit products, including checking, savings, money market, individual retirement accounts and certificates of deposit.
The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 2002 are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.
Page 7
A reconciliation of the numerators and denominators of the basic earnings and diluted earnings per share computations for the three and six months ended June 30, 2002 and 2001 is presented below in thousands, except for per share information:
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
2002 2001 2002 2001
---- ---- ---- ----
Basic earnings per share
- ------------------------
Net income available to common shareholders $ 560 $ 723 $ 1,306 $ 1,456
============ ============ ============ ============
Weighted average common shares outstanding 844 850 847 851
============ ============ ============ ============
Basic earnings per share $ .66 $ .85 $ 1.54 $ 1.71
============ =========== ============ ============
Diluted earnings per share
- --------------------------
Net income available to common shareholders $ 560 $ 723 $ 1,306 $ 1,456
============ ============ ============ ============
Weighted average common shares outstanding 844 850 847 851
Add: Dilutive effects of exercise of stock options 7 10 7 10
------------ ------------ ------------ ------------
Weighted average common and dilutive
potential shares outstanding 851 860 854 861
============ ============ ============ ============
Diluted earnings per share $ .66 $ .84 $ 1.53 $ 1.69
============ ============ ============ ============
Page 8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion provides information about the consolidated financial condition and results of operations of the Company as of June 30, 2002 and for the three and six month periods ending June 30, 2002 and 2001.
Securities
The balance of the
Company’s securities portfolio decreased by $2.6 million during the first
half of 2002. Purchases of securities available for sale totaling $15.1 million
were offset by principal repayments on mortgage backed securities and maturities
within the portfolio totaling $14.1 million and sales of securities available
for sale of $3.5 million. The securities portfolio has decreased as a result of
the additional funds being used to fund loan growth.
Loans
Loan growth continued
through the first half of 2002. During the first six months of 2002, annualized
loan growth was 8.4%. The mix of the loan portfolio remains relatively unchanged
from prior periods. The Banks continue to originate residential mortgage and
business loans on a sustained basis.
In addition to the increase in portfolio loans, the Company experienced a decrease in the volume of its residential mortgage loans sold into the secondary market when compared to the first half of 2001. The significant decrease in short-term interest rates during the first half of 2002 has also caused a decline in mortgage interest rates, however, the refinancing volumes existing for mortgage loans did level off, as compared to prior periods.
Credit Quality
The Company continuously
monitors the asset quality of its loan portfolios utilizing both internal and
external loan review specialists. Periodically, reports are submitted to the
Banks’ Senior Management and Boards of Directors regarding the credit
quality of the loan portfolios. These reviews are independent of the loan
approval process. Also, management continues to monitor delinquencies,
nonperforming assets and potential problem loans to assess the continued quality
of the Company’s loan portfolio.
Nonperforming loans are comprised of (1) loans accounted for on a nonaccrual basis, (2) loans contractually past due 90 days or more as to interest or principal payments (but not included in the nonaccrual loans in (1) above) and (3) other nonperforming loans (but not included in (1) or (2) above) which consist of loan arrangements under the Business Manager program. The aggregate amount of nonperforming loans, in thousands of dollars, is shown in the table below. The Company’s classifications of nonperforming loans are generally consistent with loans identified as impaired.
Page 9
The chart below shows the makeup of the Company’s nonperforming assets by type, in thousands of dollars, as of June 30, 2002 and 2001, and December 31, 2001.
6/30/2002 12/31/2001 6/30/2001
--------- ---------- ---------
Nonaccrual loans $ 261 $ 230 $ 145
90 days or more past due & still accruing 1,325 1,046 535
--------- ---------- ---------
Total nonperforming loans 1,586 1,276 680
Other real estate 1,900 879 435
--------- ---------- ---------
Total nonperforming assets $ 3,486 $ 2,155 $ 1,115
========= ========== =========
Nonperforming loans as a percent of total loans .71% .59% .31%
Nonperforming assets as a percent of total loans 1.56% 1.00% .51%
Nonperforming loans as a percent of the allowance
for loan losses 68.33% 58.00% 29.30%
Total nonperforming assets increased $1.3 million or 62% during the six months ending June 30, 2002. This significant increase is attributable to real estate properties acquired in foreclosure as well as multiple small loan customers that are experiencing financial difficulties in an economically challenging period. These nonperforming assets have collateral values or, in the case of other real estate, values sufficient to avoid any material loss to the Banks.
Due to the challenging economic conditions during the last quarter of 2001 and the first half of 2002, the Company intensified its utilization of independent third party loan review specialists in order to verify the overall quality of the loan portfolio. The Company increased the provision for loan losses 78% for the six month period ending June 30, 2002 when compared to the same period of the prior year as a result of the increase in net charge-offs and nonperforming loans. The provision for loan losses provides for probable incurred losses inherent in the loan portfolio.
Deposits
Total deposit growth for the first half of 2002 was approximately $1.9 million or approximately 2% on an
annualized basis. This increase is primarily the result of an increase in noninterest bearing deposits which was
partially offset by a small decrease in interest bearing deposits Theses results were primarily the effect of the
expansion of liquidity in the local and national market. The Company anticipates moderate deposit growth during
2002 as a result of continued expansion into new and existing markets.
Capital Resources
At June 30, 2002 and December 31, 2001, equity capital totaled $24.5 and $23.6 million. This increase is
primarily the result of the Company's net income for the six months ended June 30, 2002 partially offset by
dividends declared during the six months ended June 30, 2002. Management monitors the capital levels of the
Company and the banks to provide for current and future business opportunities and to meet regulatory guidelines
for "well capitalized" institutions. "Well capitalized" institutions are eligible for reduced FDIC premiums, and
also enjoy other reduced regulatory restrictions.
At June 30, 2002 and December 31, 2001, the Company and the banks exceeded all regulatory minimum capital requirements and are considered to be "well capitalized."
Page 10
Liquidity
The Company anticipates that deposit and loan growth will cause continued variation in its short term funds
position. The Company has a number of additional liquidity sources should the need arise, and management
believes that the Company's liquidity position is adequate.
The Company's federal funds sold position dropped during the first six months of 2002 as compared to December 31, 2001. The decrease is mainly attributable to funding needed for loan growth, although the Company generally moves in and out of the federal funds market as liquidity needs vary.
Results of Operations
Net Income
Net income decreased 10.3%, diluted earnings per share decreased from $1.69 to $1.53 and dividends per share
increased from $.40 to $.42 when comparing the results of the six months ended June 30, 2002 to the same period
in 2001. Net income decreased 22.5%, diluted earnings per share decreased from $.84 to $.66 and dividends per
share increased from $.20 to $.22 when comparing the results of the three months ended June 30, 2002 to the same
period in 2001.
The decrease in net income for the three and six months ended June 30, 2002 when compared to the same periods of
2001, is primarily the result of reduced revenue from the sale of mortgage loans into the secondary market, increased noninterest expense and an increase in the provision for loan losses.
The decrease in net income during the six months ended June 30, 2002, was offset by a one time increase during
the first quarter in non-interest income of $283,000 resulting from processing errors occurring over a period of
time relating to the recognition of fee income on foreign ATM transactions. The Company has taken the
appropriate measures to ensure that these processing errors do not occur in the future.
Net Interest Income
The yield on interest earning assets decreased for the three and six months ended June 30, 2002 as compared to
the same periods in the prior year primarily as a result of the general decline in industry rates during the
first half of 2002 and the continued repricing of the Company's interest earning assets. The cost of funds on
interest bearing liabilities decreased for the three and six months ended June 30, 2002 as compared to the same
periods during the prior year primarily as a result of the declining interest rate environment and the continued
repricing of customer deposit accounts. Despite the economic challenges during the past eighteen months, the
Company's net interest margin remains quite strong, and the Company continues to take steps to neutralize some
portion of this risk.
The following table shows the year to date daily average balances for interest earning assets and interest
bearing liabilities, interest earned or paid, and the annualized effective rate or yield, for the six month
periods ended June 30, 2002 and 2001.
Page 11
Yield Analysis of Consolidated Average Assets and Liabilities
- -------------------------------------------------------------
Dollars in thousands 6/30/2002 6/30/2001
--------- ---------
Average Interest Average Interest
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate Balance Paid Rate
------- ---- ---- ------- ---- ----
Interest earning assets:
Loans (1) $ 216,196 $ 8,699 8.05% $ 215,639 $ 9,936 9.22%
Investment securities (2) (3) 30,726 726 4.64% 24,670 674 5.46%
Federal funds sold and other 5,926 42 1.42% 8,860 218 4.92%
----------- ----------- ----------- -----------
Total int. earning assets 252,848 9,467 7.49% 249,169 10,828 8.70%
Interest bearing liabilities:
Interest bearing demand
deposits $ 55,487 $ 355 1.28% $ 54,573 $ 712 2.61%
Savings deposits 26,784 129 .96% 23,787 176 1.48%
Time deposits 105,500 2,348 4.45% 118,133 3,415 5.78%
Other borrowings 12,613 315 4.99% 7,650 225 5.88%
----------- ----------- ----------- -----------
Total int. bearing liabilities 200,384 3,147 3.14% 204,143 4,528 4.44%
----------- ------------
Net interest income (3) $ 6,320 $ 6,300
=========== ===========
Net spread (3) 4.35% 4.26%
====== ======
Net interest margin (3) 5.00% 5.06%
====== ======
Ratio of interest earning assets to
interest bearing liabilities 1.26 1.22
=========== ===========
(1) Non-accrual loans and overdrafts are included in the average balances of loans.
(2) Includes Federal Home Loan Bank stock.
(3) Interest income on tax-exempt securities has not been adjusted to a taxable equivalent basis.
Noninterest Income
For the three and six
months ended June 30, 2002, noninterest income from banking products and
services has decreased 5.3% and increased 30.3% as compared to the same periods
in 2001. Increases in service charges and fees primarily contributed to the
overall growth in noninterest income for the six month period ended June 30,
2002; however, this growth in service charges and fee income was offset by a
decline in net gains on loan sales during the three months ended June 30, 2002,
as a result of mortgage loan originations decreasing during the quarter. The
Company also experienced a significant increase in service charges and fees
during the first quarter of 2002 due to a one-time increase of $283,000
resulting from processing errors occurring over a period of time related to the
recognition of fee income on foreign ATM transactions.
Noninterest Expense
Noninterest expense has increased
during the three and six months ended June 30, 2002 when compared to the same
periods of 2001, reflecting the Company’s continued growth and expansion.
Total noninterest expense for the three and six month periods ended June 30,
2002 was 1.5% and 11.3% above the same periods of 2001. Increases in salaries
and employee benefits for the three and six month periods ended June 30, 2002 of
approximately 3.9% and 15.3% were the primary factors contributing to the
overall increase. These increases, along with increases in occupancy and
equipment, offset by decreases in other expenses, are mainly attributable to the
Company’s continued efforts to expand its services into new and existing
markets.
Page 12
Federal Income Tax
The Company’s changes in
income tax expense continue to be relatively consistent with the Company’s
change in income before income tax.
Forward-Looking Statements
This discussion and
analysis of financial condition and results of operations and other sections of
this Form 10-Q contain forward looking statements that are based on
management’s beliefs, assumptions, current expectations, estimates and
projections about the financial services industry, the economy and about the
Company itself. Words such as “anticipates”, “believes”,
“estimates”, “expects”, “forecasts”,
“foresee”, “intends”, “is likely”,
“plans”, “projects”, variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve certain risks,
uncertainties and assumptions (“Future Factors”) that are difficult to
predict with regard to timing, extent, likelihood and degree of occurrence.
Therefore, actual results and outcomes may materially differ from what may be
expressed or forecasted in such forward-looking statements. Furthermore,
the Company undertakes no obligation to update, amend or clarify forward-looking
statements, whether as a result of new information, future events or otherwise.
Future Factors include:
These are representative of the Future Factors that could cause a difference between an actual outcome and a forward-looking statement.
The Company’s primary market risk exposure is interest rate risk and liquidity risk. All of its transactions are denominated in U.S. dollars with no specific foreign exchange exposure. The Company has a limited exposure to commodity prices related to agricultural loans. Any impacts that changes in foreign exchange rates and commodity prices would have on interest rates are assumed to be insignificant.
Interest rate risk (IRR) is the exposure of a banking organization’s financial condition to adverse movements in interest rates. Accepting this risk can be an important source of profitability and stockholder value; however, excessive levels of IRR could pose a significant threat to the Company’s earnings and capital base. Accordingly, effective risk management that maintains IRR at prudent levels is essential to the Company’s safety and soundness.
Evaluating a financial institution’s exposure to changes in interest rates includes assessing both the adequacy of the management process used to control IRR and the organization’s quantitative level of exposure. When assessing the IRR management process, the Company seeks to ensure that appropriate policies, procedures, management information systems and internal controls are in place to maintain IRR at prudent levels with consistence and continuity. Evaluating the quantitative level of IRR exposure requires management to assess the existing and potential future effects of changes in interest rates on it’s the Company’s consolidated financial condition, including capital adequacy, earnings, liquidity, and, where appropriate, asset quality.
Page 13
The Company has not experienced a material change in its financial instruments that are sensitive to changes in interest rates since December 31, 2001, which information can be located in the Company’s Annual Report on Form 10-K.
There are no material legal proceedings pending against the Company. The Company’s wholly-owned subsidiaries, Bank of Lenawee and Bank of Washtenaw, are involved in ordinary routine litigation incident to their business; however, no such proceedings are expected to result in any material adverse effect on the operations or earnings of the Banks. Neither the Banks nor the Company are involved in any proceedings to which any director, principal officer, affiliate thereof, or person who owns of record or beneficially five percent (5%) or more of the outstanding stock of the Company or the Banks, or any associate of the foregoing, is a party or has a material interest adverse to the Company or the Banks.
No changes in the securities of the Company occurred during the quarter ended June 30, 2002.
There have been no defaults upon senior securities relevant to the requirements of this section during the three months ended June 30, 2002.
The annual meeting of shareholders was held on April 18, 2002. At that meeting, the following matters were submitted to a vote of the shareholders. There were 842,044 voting shares outstanding on April 18, 2002. 675,200 shares or 80.2% voted as follows:
Page 14
| Directors elected for three year terms expiring in
2005: |
||||
|
Allan F. Brittain Edward J. Engle, Jr. William R. Gentner Douglas L. Kapnick |
For 658,478 644,848 603,740 643,912 |
Against 16,722 30,352 71,460 31,288 |
||
|
Amendment to Articles of Incorporation to change the name of the Company to Pavilion Bancorp, Inc. |
For 593,467 |
Against 66,377 |
Abstained 15,356 |
|
|
Selection of Crowe, Chizek and Company LLP as Auditors for 2002 |
For 669,601 |
Against 944 |
Abstained 4,655 |
ITEM 5 - OTHER INFORMATION
| None. |
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
| (a) | Exhibits |
|
| 99.1 | Certificate of the Chief Executive Officer of Pavilion Bancorp, Inc. pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
| 99.2 | Certificate of the Treasurer and Chief Financial Officer of Pavilion Bancorp, Inc. pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
| (b) | Reports on 8-K |
|
| 1. | The Company filed a Current Report on Form 8-K dated April 18, 2002, filing copies of press
releases announcing the change in the Company's name, a dividend increase, and a stock
repurchase program. |
|
| 2. | The Company filed a Current Report on Form 8-K dated May 3, 2002, filing a copy of the speech
given by the Company's President at the 2002 annual shareholder meeting. |
|
Page 15
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, to be signed on its behalf by the undersigned, thereunto duly authorized.
|
PAVILION BANCORP, INC. /s/ Patrick K. Gill Patrick K. Gill President and Chief Executive Officer /s/ Loren V. Happel Loren V. Happel Treasurer/Chief Financial Officer (Principal Financial and Accounting Officer) |
DATE: August 12, 2002
Page 16
EXHIBIT INDEX
| Exhibit | Description |
Page |
| 99.1 | Certificate of the Chief Executive Officer of Pavilion Bancorp, Inc. pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002. |
18 |
| 99.2 | Certificate of the Treasurer and Chief Financial Officer of Pavilion Bancorp, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | 19 |
Page 17
EXHIBIT 99-1
I, Patrick K. Gill, Chief Executive Officer of Pavilion Bancorp, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002 which this
statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, and |
|
| (2) | the information contained in the Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2002 fairly presents, in all material respects, the financial condition and results of
operations of Pavilion Bancorp, Inc. |
Dated: August 12, 2002
|
/s/ Patrick K. Gill Patrick K. Gill Chief Executive Officer |
Page 18
EXHIBIT 99-2
I, Loren V. Happel, Treasurer and Chief Financial Officer of Pavilion Bancorp, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002 which this
statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, and |
|
| (2) | the information contained in the Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2002 fairly presents, in all material respects, the financial condition and results of
operations of Pavilion Bancorp, Inc. |
Dated: August 12, 2002
|
/s/ Loren v. Happel Loren v. Happel Treasurer and Chief Financial Officer |
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