United States
Securities and Exchange Commission
WASHINGTON, D.C. 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED June 30, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------ -----------
Commission file number 0-28106
-------
FirstBancorporation, Inc.
-------------------------
(Exact name of registrant as specified in its charter)
South Carolina 57-1033905
- ------------------------------- --------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1121 Boundary Street P.O. Box 2147, Beaufort, S.C. 29901-2147
-------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 843-521-5600
------------
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
----- -----
The number outstanding shares of the issuer's $.01 par value common stock as
of August 11, 1998 is 694,215.
1
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INDEX FORM 10-QSB
Part I
Page
----
Item 1. Consolidated Financial Statements and Related Notes----------- 3-7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ------------------------------------ 8-12
Part II
Item 1. Legal Proceedings -------------------------------------------- 13
Item 2. Changes in Securities ---------------------------------------- 13
Item 3. Defaults upon Senior Securities ------------------------------ 13
Item 4. Submission of Matters to a Vote
of Security Holders ------------------------------------------ 13
Item 5. Other Information -------------------------------------------- 13
Item 6. Exhibits and Reports on Form 8-K ----------------------------- 13
Signatures ------------------------------------------------------- 14
Exhibit 27. Financial data schedule ---------------------------------- 15
2
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PART 1. CONSOLIDATED FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS AND RELATED NOTES
BALANCE SHEETS (Unaudited)
(Dollars in thousands)
At June 30, At December 31,
1998 1997
ASSETS
Cash and amounts due from banks $ 5,448 $ 4,127
Interest bearing overnight deposits 11,185 1,969
Time deposits in other banks 99 99
Securities available-for-sale 3,982 2,182
Loans available-for-sale 1,331 676
Loans 79,819 80,792
Less allowance for loan losses (825) (728)
-------- --------
Net loans 78,994 80,064
-------- --------
Premises and equipment 1,450 1,228
Accrued interest receivable 511 556
Real estate owned-acquired through foreclosure 81 127
Deferred organizational costs 117 123
Deferred tax assets 321 264
Other assets 730 224
-------- --------
Total assets $104,249 $ 91,699
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits $ 86,626 $ 77,462
Federal Home Loan Bank advances 4,300 5,050
Amounts due to depository institutions 1,072 305
Advances from borrowers for taxes and insurance 131 55
Accrued interest payable 273 208
Expenses payable 152 173
Other liabilities 679 465
-------- --------
Total liabilities $ 93,233 $ 83,718
-------- --------
Stockholders' Equity
Preferred stock - $.01 par value; shares
authorized - 1,000,000, issued and
outstanding - none
Common stock - $.01 par value; shares
authorized - 3,000,000, issued and
outstanding - 694,215 - 6/30/98;
690,323 - 12/31/97. $ 7 $ 7
Additional paid-in capital 6,287 6,249
Common stock subscribed-193,422 shares 2,481 0
Accumulated other comprehensive loss.
Unrealized loss on securities available-
for-sale, net of applicable deferred
income taxes (1) (15)
Retained earnings 2,242 1,740
-------- --------
Total stockholders' equity $ 11,016 $ 7,981
-------- --------
Total liabilities and stockholders' equity $104,249 $ 91,699
======== ========
3
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CONSOLIDATED STATEMENTS OF INCOME FOR THE PERIODS ENDED
June 30, 1998 and 1997 (Unaudited)
(Dollars in thousands, except per share amounts)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
6/30/98 6/30/97 6/30/98 6/30/97
------- ------- ------- -------
Interest income
Interest on mortgage loans $ 1,069 $ 1,544 $ 2,162 $ 3,051
Interest on other loans 746 282 1,467 516
Interest on investments 120 64 192 129
-------- -------- -------- --------
Total interest income 1,935 1,890 3,821 3,696
Interest expense
Interest on deposits 845 800 1,645 1,578
Interest on FHLB advances 17 76 49 127
-------- -------- -------- --------
Total interest expense 862 876 1,694 1,705
Net interest income 1,073 1,014 2,127 1,991
-------- -------- -------- --------
Provision for loan losses 52 30 97 60
-------- -------- -------- --------
Net interest income after
provision for loan losses 1,021 984 2,030 1,931
Non interest income
Service charges on deposit
accounts 171 140 325 260
Other non interest income 162 58 257 109
-------- -------- -------- --------
Total non interest income 333 198 582 369
Non interest expenses
Compensation and benefits 476 398 915 805
Occupancy 136 127 265 247
Data processing 29 60 162 158
Other non interest expense 284 200 445 381
-------- -------- -------- --------
Total non interest expenses 925 785 1,787 1,591
Net income before taxes 429 397 825 709
-------- -------- -------- --------
Income tax expense 167 153 323 271
-------- -------- -------- --------
Net income $ 262 $ 244 $ 502 $ 438
======== ========= ======== ========
Net income per share-basic $ 0.38 $ 0.35 $ 0.72 $ 0.63
======== ========= ======== ========
Net income per share-diluted $ 0.36 $ 0.33 $ 0.68 $ 0.60
======== ========= ======== ========
Average shares outstanding -
basic 692,993 690,285 692,499 690,323
======== ========= ======== ========
Average shares outstanding -
diluted 735,752 735,507 735,629 735,507
======== ========= ======== ========
4
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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the six months ending June 30, 1998 and June 30, 1997 (Unaudited)
(Dollars in thousands)
Common Common Addi- Common Retained Accumu- Total
Shares Stock tional Stock Earnings lated Stock-
Paid-in Sub- Other holders'
Capital scribed Compre- Equity
hensive
Income
(Loss)
Balances at
December 31,
1996 627,587 $ 6 $5,441 $0 $1,609 $(10) $7,046
Issuance of
62,736 shares
of stock for
10% stock
dividend 62,736 1 815 (816) -
Comprehensive
income:
Net income 438 438
Other compre-
hensive
income (loss)
net of tax:
Unrealized loss
on securities
available for
sale 3 3
--
Comprehensive
income 441
---
Balances at
June 30,
1997 690,323 $ 7 $6,256 $0 $1,231 $( 7) $7,487
Balances at
December 31,
1997 690,323 $ 7 $6,249 $0 $1,740 $(15) $7,981
Comprehensive
income:
Net income 502 502
Other compre-
hensive
income, net
of tax:
Unrealized
gain on
securities
available
for sale 14 14
--
Comprehensive
income 516
---
Common stock
subscribed 2,481 2,481
Stock options
exercised 3,892 - 38 38
Balances at
June 30,
1998 694,215 $ 7 $6,287 $2,481 $2,242 $( 1) $11,016
======= === ====== ====== ====== ==== =======
5
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STATEMENT OF CASH FLOWS FOR THE PERIODS ENDED
June 30, 1998 and 1997 (unaudited)
(Dollars in thousands)
Six months Six months
Ended Ended
6/30/98 6/30/97
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 502 $ 438
Adjustments to reconcile net income to cash
provided by operating activities:
Amortization of deferred loan fees and discounts
Provision for loan losses (21) (14)
Depreciation and amortization 97 60
Deferred income taxes 130 115
Decrease in interest receivable 9 7
Decrease (increase) in other assets 45 (9)
Originations of loans sold to investors (442) (296)
Proceeds from sales of loans to investors (12,525) (4,144)
Disbursements of loans serviced for others 12,525 4,144
Receipts of loans serviced for others (1,459) (700)
(Increase) decrease in real estate loans held for
sale 1,381 706
Increase in accrued interest payable (655) 179
Decrease in expenses payable 64 60
Increase (decrease) in other liabilities (21) (70)
Net cash provided by operating activities 180 (1)
-------- --------
(190) 475
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of securities available for sale (1,982) 27
Principal repayments of mortgage-backed securities 200 200
Loans originated or acquired, net 973 (4,242)
Proceeds from the sale of foreclosed real estate 46 112
Capital expenditures (286) (277)
-------- --------
Net cash used for investing activities (1,049) (4,180)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in non interest-bearing
demand accounts 1,378 100
Increases in Now, Money Market and
Savings accounts 5,377 1,143
Increase (decrease) in certificates of deposit, net 2,409 (430)
Proceeds from Federal Home Loan Bank advances 5,000 6,750
Repayment of Federal Home Loan Bank advances (5,750) (7,550)
Increase in amounts due to depository institutions 767 98
Increase in advances from borrowers for taxes
and insurance 76 60
Common stock subscribed 2,481 0
Proceeds from stock options exercised 38 0
-------- --------
Net cash provided by financing activities 11,776 171
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 10,537 (3,534)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 6,096 7,871
-------- --------
CASH AND CASH EQUIIVALENTS, END OF PERIOD $ 16,633 $ 4,337
======== ========
CASH PAID DURING THE PERIOD:
Interest paid on deposits and borrowings $ 1,630 $ 1,644
======== ========
Income tax paid $ 300 $ 262
======== ========
6
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. On October 31, 1995, FirstBank, N.A. ("Bank"), (formerly The Savings Bank
of Beaufort County, FSB) reorganized as a wholly-owned subsidiary of
FirstBancorporation, Inc. ("Company"). As a result of the reorganization, each
issued and outstanding share of common stock, $5.00 par value per share, of
the Bank was converted into one share of common stock, $.01 par value per
share, of the Company. The Company's principal business is its investment in
the Bank and, therefore, the assets and liabilities of the Company on a
consolidated basis are substantially those of the Bank.
2. The unaudited interim consolidated financial statements reflect all
adjustments which are, in the opinion of management, necessary to a fair
presentation of the results for the reported interim periods. Such
adjustments are of a normal recurring nature. The interim consolidated
financial statements, including related notes, should be read in conjunction
with the consolidated financial statements for the year ended December 31,
1997 appearing in the 1997 Annual Report of FirstBancorporation, Inc. The
results of operations for the period ended June 30, 1998 are not necessarily
indicative of the results of operations for the full year.
3. Earnings Per Share - Basic earnings per common share are calculated on the
basis of the weighted average number of shares outstanding during the year.
Diluted earnings per common share include stock options which have been
granted but not exercised.
4. Loan Commitments - At June 30, 1998, the Bank had total unused loan
commitments outstanding of $13,304,000 which were comprised of construction
and commercial unfunded lines of $6,288,000, unfunded consumer lines of credit
of $6,858,000 and letters of credit issued totaling $158,000. In the normal
course of business, the Bank issues loan commitments to customers at market
rates of interest. The Bank's general practice is to obtain investor
commitments for fixed rate loans at the time of commitment. At June 30, 1998,
all fixed rate residential loan commitments were covered by commitments from
investors for sale.
5. Statement of Ca sh Flows - For the purposes of reporting cash flows, cash
and cash equivalents include cash, interest-bearing overnight deposits and
other short-term investments with original maturities of 90 days or less.
6. FirstBank of the Midlands, in organization - On August 20, 1997 the
Company's Board of Directors approved the sponsorship of a new national bank,
FirstBank of the Midlands, (FBM) to be located in Columbia, South Carolina,
subject to regulatory approval. The Company has received all regulatory
approvals subject to final preopening inspections by the Office of the
Comptroller of the Currency. The Company expects to acquire all of the common
stock of FBM for $5.0 million. The acquisition of FBM's common stock is
expected to be funded with the sale of approximately $3.5 million of
additional common stock of the Company and a loan from an unaffiliated
commercial bank for the remainder. The transaction is expected to be completed
in the third quarter of 1998.
7. As of June 30, 1998 $2,481,000 in common stock subscriptions had been
received. These subscription funds are maintained in an escrow account by the
Company and are shown in the equity section of the balance sheet as "Common
stock subscribed". The subscription offering was closed on August 7, 1998
with a total of 193,422 shares and $3,481,596 raised. The terms of the stock
offering require that final regulatory approval for the new bank be granted
before the release of the funds to the Company and the issuance of the
additional shares of common stock. Should this condition not be met, the stock
offering will be withdrawn and all subscription funds will be returned.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------------------------------------------------------------------------
RESULTS OF OPERATIONS.
---------------------
Comparison of Financial Condition at June 30, 1998 and December 31, 1997
Total assets increased from $91.7 million at December 31, 1997 to $104.2
million at June 30, 1998. Loans receivable, net, decreased from $80.1 million
at December 31, 1997 to $79.0 million at June 30, 1998 primarily as a result
of mortgage loan repayments and prepayments. Cash and cash equivalents
increased from $6.1 million at December 31, 1997 to $16.6 million at June 30,
1998. Total deposits increased 10.6% from $77.5 million at December 31, 1997
to $86.6 million at June 30, 1998 primarily as a result of increases in NOW,
savings and money market accounts of $5.4 million, non interest demand
accounts of $1.3 million and certificate accounts of $2.4 million. FHLB
borrowings decreased by $.8 million to $4,300,000 at June 30, 1998 as a result
of the increase in deposits and loan repayments. Total stockholders' equity
increased 38.0% from $8.0 million at December 31, 1997 to $11.0 million at
June 30, 1998 as a result of retained net income of $502,000, proceeds of
$38,000 received from the exercise of stock options (2,425 shares at an
exercise price of $10.85 per share and 1,467 shares at $8.18 per share) and
the receipt of $2,481,000 of stock subscription proceeds. See Note 7 of
"Notes to Consolidated Financial Statements" for discussion of stock
subscription proceeds.
Comparison of Operations for the Three Months Ended June 30, 1998 and 1997
Net Income. Net income increased 7.2% from $244,000 for the three months
ended June 30, 1997 ($0.35 per basic earnings per common share and $0.33 per
share on a diluted basis) to $262,000 for the three months ended June 30, 1998
($0.38 per basic earnings per common share and $0.36 per share on a diluted
basis) primarily as a result of a $135,000 increase in non-interest income and
a $59,000 increase in net interest income.
Net Interest Income. Net interest income increased from $1.0 million for
the three months ended June 30, 1997 to $1.1 million for the three months
ended June 30, 1998. The Bank's interest rate spread increased from 4.08% for
the three months ended June 30, 1997 to 4.21% for the same period in 1998 as
the average yield on interest-earning assets decreased from 8.69% for the
three months ended June 30, 1997 to 8.63% for the comparative period in 1998
while the average rate paid on interest-bearing liabilities decreased from
4.61% for the three months ended June 30, 1997 to 4.42% for the same period in
1998.
Interest income increased slightly from $1,890,000 for the three months
ended June 30, 1997 to $1,935,000 for the three months ending June 30, 1998.
Interest expense decreased slightly from $876,000 for the three months ended
June 30, 1997 to $862,000 for the same period in 1998 primarily as a result of
lower average borrowings outstanding.
Provision for Loan Losses. Provisions for loan losses are charges to
earnings to bring the total allowance for loan losses to a level considered
adequate by management to provide for probable known and inherent loan losses
based on management's evaluation of the collectibility of the loan portfolio.
In determining the adequacy of the allowance for loan losses, management
considers past loan loss experience, known and inherent risks in the
portfolio, adverse situations that may affect a borrower's ability to repay,
the estimated value of any underlying collateral, and current economic
conditions. Although management uses the best information available, future
adjustments to the allowance may be necessary as a result of changes in
economic, operating, regulatory and other conditions that may be beyond the
Bank's control. While the Bank maintains its allowance for loan losses at a
level that management considers as adequate to provide for probable known and
inherent losses, there can be no assurance that further additions will not be
made to the allowance for loan losses or that actual losses will not exceed
the estimated amounts.
The provision for loan losses increased from $30,000 for the three months
ended June 30, 1997 to $52,000 for the three months ended June 30, 1998.
Management deemed the increase necessary because of the increase in nonaccrual
loans from $429,000 at December 31, 1997 to $532,000 at June 30, 1998. At
June 30, 1998, the Bank's allowance for loan losses as a percent of total
loans was 1.04%.
Noninterest Income. Noninterest income increased from $198,000 for the
three months ended June 30, 1997 to $333,000 for the same period in 1998
primarily as a result of a $31,000 increase in service charges attributable to
an increased number of deposit accounts, an $83,000 increase in gains on sale
of loans held-for-sale, and a $12,000 increase in gain on mortgage servicing
rights.
Noninterest Expenses. Noninterest expenses increased 17.8% from $785,000
for the three months ended June 30, 1997 to $925,000 for the three months
ended June 30, 1998 primarily as a result of a $78,000 increase in
compensation expense related to salary expense associated with the New Bank
and general salary increases and a $9,000 increase in occupancy expense
attributable to rent increases on the Bank's main office lease and expenses
related to quarters for the New Bank.
Provision for Income Taxes. The Company pays Federal corporate income
taxes and South Carolina bank taxes. The provision for income taxes increased
from $153,000 for the three months ended June 30, 1997 to $167,000 for the
three months ended June 30, 1998 as a result of higher income before income
taxes.
8
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Comparison of Operations for the Six Months Ended June 30, 1998 and 1997
Net Income. Net income increased 14.6% from $438,000 for the six months
ended June 30, 1997 ($0.63 per basic earnings per common share and $0.60 per
share on a diluted basis) to $502,000 for the six months ended June 30, 1998
($0.72 per basic earnings per common share and $0.68 per share on a diluted
basis) primarily as a result of a $213,000 increase in non-interest income, a
$136,000 increase in net interest income and a $196,000 increase in non
interest expense.
Net Interest Income. Net interest income increased from $2.0 million for
the six months ended June 30, 1997 to $2.1 million for the six months ended
June 30, 1998.
Interest income increased to $3.8 million for the six months ended June
30, 1998 from $3.7 million for the same period in 1997. Interest expense
decreased from $1,705,000 for the six months ended June 30, 1997 to $1,694,000
for the same period in 1998 primarily as a result of more transaction
accounts in the deposit mix and lower average borrowed funds outstanding.
Provision for Loan Losses. The provision for loan losses increased from
$60,000 for the six months ended June 30, 1997 to $97,000 for the six months
ended June 30, 1998.
Noninterest Income. Noninterest income increased 57.7% from $369,000 for
the six months ended June 30, 1997 to $582,000 for the same period in 1998
primarily as a result of a $65,000 increase in service charges attributable to
an increased number of deposit accounts, a $101,000 increase in gains on sale
of loans held-for-sale attributable to higher volumes of loans sold, and a
$26,000 increase in gain on mortgage servicing rights attributable to
increased loans sold with servicing retained.
Noninterest Expenses. Noninterest expenses increased 6.8% from
$1,591,000 for the six months ended June 30, 1997 to $1,797,000 for the six
months ended June 30, 1998 primarily as a result of a $110,000 increase in
compensation expense related to salary expense associated with the New Bank
and general salary increases , a $18,000 increase in occupancy expense
attributable to rent increases on the Bank's main office lease and expenses
related to quarters for the New Bank, and a $64,000 increase in other expenses
primarily related to the startup of the Columbia bank.
Provision for Income Taxes. The Company pays Federal corporate income
axes and South Carolina bank taxes. The provision for income taxes increased
from $271,000 for the six months ended June 30, 1997 to $323,000 for the six
months ended June 30, 1998 as a result of higher income before income taxes.
9
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Asset/Liability and Liquidity Management
Interest Sensitivity Position Year Year Year 4
June 30, 1998 1 2-3 thru 7 Year 8+ Total
(Dollars in thousands)
Interest-earning assets:
Loans and loans held for sale $ 46,324 $21,653 $5,940 $ 7,233 $81,150
GNMA MBSs 1,223 0 0 0 1,223
Overnight and other investments 13,913 0 0 130 14,043
-------- ------- ------ ------- -------
Total interest-earning assets 61,460 21,653 5,940 7,363 96,416
Interest-bearing liabilities:
Deposits 72,054 6,206 314 0 78,574
FHLB borrowings 0 1,300 3,000 0 4,300
-------- ------- ------ ------- -------
Total interest-bearing
liabilities 72,054 7,506 3,314 0 82,874
Asset (liability) gap position ($10,594) $14,147 $2,626 $ 7,363 $13,542
======== ======= ====== ======= =======
Cumulative gap position ($10,594) $ 3,553 $6,179 $13,542
======== ======= ====== =======
Cumulative Gap to Total Earning
Assets (11.0%) 3.7% 6.4% 14.0%
======== ======= ====== =======
(1) Contractual terms regarding periodic repricing during the loan terms are
used to determine repricing periods. Loans are net of undisbursed portions of
loans in process.
(2) NOW, money market and savings accounts are considered interest-sensitive.
(3) Regular savings, NOWs and money market accounts are considered to reprice
in the 1 -year period.
As of June 30, 1998, the Bank's interest-earning assets that reprice
within one year totaled $61,460,000 while interest-bearing liabilities
repricing within one year totaled $72,054,000 This resulted in a negative gap
position of $10,594,000 or 11.0% of total interest-earning assets.
10
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YIELDS EARNED AND RATES PAID
The following table is a comparison of the three months ended June 30,
1998 and 1997.
Average balances and yields earned versus rates paid
Quarter ended June 30, 1998 compared to 1997
(Dollars in thousands)
Average Interest Earned Annualized
Balance or Paid Yield/Rate
For the quarter ended June 30,
1998 1997 1998 1997 1998 1997
---- ---- ---- ---- ---- ----
Assets:
Interest-earning
assets
Loans $81,165 $82,943 $1,815 $1,826 8.95% 8.80%
Investments 8,523 4,047 120 64 5.63% 6.37%
------- ------- ------ ------ ---- ----
Total earning
assets/
Income earned 89,688 86,990 1,935 1,890 8.63% 8.69%
Non-earning assets 5,424 5,429
------- -------
Total assets $95,112 $92,419
======= =======
Liabilities:
Interest-bearing
deposits $77,231 $71,175 $ 845 $ 800 4.38% 4.49%
Borrowings 1,113 5,097 17 76 6.30% 5.99%
------- ------- ------ ------ ---- ----
Interest-bearing
deposits and
borrowings/
expense 78,344 76,272 862 876 4.42% 4.61%
Non-interest-
bearing
liabilities 8,374 8,843
Stockholders'
equity 8,394 7,304
------- -------
Total Liabilities
and Stockholders'
equity $95,112 $92,419
======= =======
Net interest
income
Interest Rate
Spread (1) $1,073 $1,014
====== ======
Net yield on
average interest-
earning
assets (1) 4.21% 4.08%
4.88% 4.66%
(1) Net interest income is the difference between interest income and interest
expense. Interest rate spread is the difference between the average rate on
earning assets and the average rate on interest-bearing liabilities. Net
yield on average interest-earning assets is net interest income divided by
total interest-earning assets.
Net interest income increased by $59,000 during the current year's
quarter as a result of the combined effects of a greater net interest rate
spread and a higher volume of interest earning assets. Yield on interest
earning assets decreased by .06% during the current year's quarter and the
rate paid on interest bearing liabilities decreased by .19% resulting in an
increase in the net interest rate spread of .13% over the same period last
year. Total average interest earning assets increased by $2,789,000 while
interest bearing liabilities increased by $2,072,000 from first quarter 1997.
11
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CAPITAL RESOURCES
For regulatory purposes, the Bank is required to maintain a minimum of level
of capital based upon the risk related composition of its loan portfolio. This
risk-based capital requirement requires that the Bank maintain capital at a
minimum 8% level of its regulatory defined risk weighted assets. The Bank may
not declare or pay a cash dividend or repurchase any of its capital stock, if
the effect would cause the stockholders' equity of the Bank to be reduced
below its capital requirements. As of June 30, 1998, the Bank met all of its
risk-based capital requirements and met the definition of a "well capitalized
institution" under the OCC's regulation entitled Prompt and Corrective Action.
The Company's and FirstBank's actual capital ratios are presented in the
following table:
At June 30, 1998 Amount Ratio
Tier 1 Capital ( to
Average Assets):
Consolidated $8,431 8.86%
FirstBank 7,795 8.25
Tier 1 Capital (to
Risk Weighted Assets):
Consolidated 8,431 12.82
FirstBank 7,795 11.97
Total Capital (to
Risk Weighted Assets):
Consolidated 9,245 14.24
FirstBank 8,609 13.22
For the capital amounts and ratios above, "Common stock subscribed" as
shown in the equity section of the balance sheet, has been excluded since
final regulatory approval for opening the new bank is a condition of closing
the stock sale.
12
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PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- --------------------------
There were no material legal proceedings pending or settled during the quarter
in which the Company or the Bank was a party.
ITEM 2. CHANGES IN SECURITIES
- ------------------------------
There were no changes made in the rights of security holders or in the
securities of the Company during the quarter.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- ----------------------------------------
The Company has not issued any instruments of indebtedness which constitute
securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
At the annual shareholders meeting held on April 23, 1998 shareholders
approved the election of directors of the Holding Company. Colden R. Battey,
Jr., Russell L. Jeter and James D. Neighbors were elected for a three year
term.
ITEM 5. OTHER INFORMATION
- --------------------------
There were no matters of the registrant which required reporting.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
No exhibits are applicable.
No reports on Form 8-K were filed during the quarter under report.
13
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FirstBancorporation, Inc.
DATED: August 12, 1998 /s/ James A. Shuford, III
---------------------------------
James A. Shuford, III
Chief Executive Officer
DATED: August 12, 1998 /s/ James L. Pate, III
---------------------------------
James L. Pate, III
Chief Financial Officer
14
<PAGE>
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