UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 0R 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended: March 31,1998
OR
[ ] TRANSITION REPORT PURSANT TO SECTIONS 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 333-3296
UNITED COMMUNITY BANKSHARES, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 54-1801876
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
(757) 562-5184
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
100 East Fourth Avenue, Franklin, Virginia 23851
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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
Number of shares of common stock of registrant outstanding at March 31, 1998:
1,829,209
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
UNITED COMMUNITY BANKSHARES, INC.
CONSOLIDATED BALANCE SHEET
(In thousands)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
March 31, December 31,
1998 1997
----------------- -----------------
<S> <C>
ASSETS:
Cash and cash equivalents:
Cash and due from banks $ 6,478 $ 6,362
Federal funds sold 10,101 10,814
----------------- -----------------
16,579 17,176
Investment securities:
Securities available for sale 44,940 41,856
Securities held to maturity (market value of
$8,524 and $9,772, respectively) 8,455 9,708
----------------- -----------------
53,395 51,564
Loans, net 78,707 81,449
Interest receivable 1,530 1,663
Property and equipment, net 2,014 1,923
Intangibles, net 656 668
Other assets 1,514 1,509
----------------- -----------------
Total assets $ 154,395 $ 155,952
================= =================
LIABILITIES:
Deposits:
Noninterest-bearing $ 18,220 $ 20,828
Interest-bearing 112,838 112,677
----------------- -----------------
131,058 133,505
Federal funds purchased and securities sold
under agreement to repurchase 532 309
Accrued interest 496 426
Deferred compensation 123 123
Other liabilities 836 558
----------------- -----------------
Total liabilities 133,045 134,921
STOCKHOLDERS' EQUITY:
Common stock 1,829 1,829
Additional paid-in capital 3,059 3,059
Retained earnings 15,631 15,413
Net unrealized gains on securities available for
sale (net of income taxes) 831 730
----------------- -----------------
Total stockholders' equity 21,350 21,031
----------------- -----------------
Total liabilities & stockholder's equity $ 154,395 $ 155,952
================= =================
</TABLE>
<PAGE>
UNITED COMMUNITY BANKSHARES, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
3 Months Ended
March 31,
---------------------------------
1998 1997
--------------- ---------------
<S> <C>
Interest income:
Interest and fees on loans $ 1,849 $ 1,742
Interest on investment securities:
Taxable 482 569
Nontaxable 237 232
Interest on federal funds sold 144 71
--------------- ---------------
Total interest income 2,712 2,614
Interest expense:
Interest on deposits 1,213 1,157
Interest on federal funds purchased and other borrowings 4 4
--------------- ---------------
Total interest expense 1,217 1,161
--------------- ---------------
Net interest income 1,495 1,453
Provision for loan losses 29 25
--------------- ---------------
Net interest income after provision for loan losses 1,466 1,428
Noninterest income:
Gain (loss) on sale of securities - (6)
Service charges and fees 211 185
Other 8 3
--------------- ---------------
Total other income 219 182
Noninterest expenses:
Salaries and employee benefits 529 548
Equipment 73 62
FDIC insurance 4 3
Occupancy 57 64
Professional fees 68 25
Postage 39 31
Other 187 173
--------------- ---------------
Total other expenses 957 906
--------------- ---------------
Income before income taxes 728 704
Provision for income taxes 199 201
--------------- ---------------
Net income $ 529 $ 503
=============== ===============
Basic net income per share $ 0.29 $ 0.27
Diluted net income per share 0.29 0.27
</TABLE>
<PAGE>
UNITED COMMUNITY BANKSHARES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD ENDED MARCH 31, 1998
(In thousands)
<TABLE>
<CAPTION>
Accumulated
Other Additional
Comprehensive Retained Comprehensive Common Paid-In
Total Income Earnings Income Stock Capital
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
BALANCE - JANUARY 1, 1998 $ 21,031 $ 15,413 $ 730 $ 1,829 $ 3,059
Other comprehensive income
Net income 529 529 529
Other comprehensive income, net of tax
Unrealized gains on securities available 101 101 101
for sale, net of reclassification
adjustment (see disclosure)
------
Other comprehensive income 101
------
Comprehensive income $ 630
======
Dividends declared on common stock (311) (311)
--------- ---------
BALANCE - MARCH 31, 1998 $ 21,350 $ 15,631 $ 831 $ 1,829 $ 3,059
========= ========= ===== ====== ======
Disclosure of reclassification amount:
Unrealized holding gains during period $ 151
Less: reclassification adjustment for gains included in net income (50)
-------
Net unrealized gains on securities $ 101
=======
</TABLE>
<PAGE>
UNITED COMMUNITY BANKSHARES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
3 Months Ended March 31,
--------------------------------------
1998 1997
---------------- ----------------
<S> <C>
Operating activities:
Net income $ 529 $ 503
Adjustments to reconcile to net cash provided by
operating activities:
Provision for loan losses 29 25
(Gain)/loss on sale of investment securities - 6
Depreciation and amortization 61 60
Amortization of investment securities premiums, net of discounts 4 -
(Gain)/loss on sale of premises and equipment (3) -
Changes in:
Interest receivable 133 135
Interest payable 70 118
Other assets (5) (67)
Other liabilities 228 295
---------------- ----------------
Net cash provided by operating activities 1,046 1,075
Investing activities:
Proceeds from maturities and sales of available-for-sale securities 2,519 1,753
Purchases of available-for-sale securities (5,455) (2,963)
Maturities of held-to-maturity securities 1,633 600
Purchases of held-to-maturity securities (381) (325)
Loan originations, net of principal repayments 2,713 472
Purchases of premises and equipment (140) (33)
Proceeds from sales of premises and equipment 3 -
---------------- ----------------
Net cash used by investing activities 892 (496)
Financing activities:
Net increase (decrease) in short-term borrowings 223 (23)
Cash dividends paid (311) (274)
Net increase (decrease) in noninterest bearing deposits (2,608) (1,504)
Net decrease in interest bearing deposits 161 796
---------------- ----------------
Net cash used by financing activities (2,535) (1,005)
DECREASE IN CASH AND CASH EQUIVALENTS (597) (426)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 17,176 11,152
---------------- ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 16,579 $ 10,726
================ ================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for:
Interest on deposits and other borrowings $ 1,147 $ 1,043
Income taxes $ 171 $ 223
</TABLE>
<PAGE>
Item 1. Financial Statements (Continued)
UNITED COMMUNITY BANKSHARES, INC.
Notes to Consolidated Financial Statements
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB and, therefore, do
not include all of the disclosures and notes required by generally accepted
accounting principles. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. The results of operations for the three-month periods ended March
31, 1998 and 1997 are not necessarily indicative of the results that may be
expected for the entire year or any interim periods.
The accompanying unaudited consolidated financial statements include the
accounts of United Community Bankshares, Inc. ("UCB" or "the Company") and its
wholly-owned subsidiaries, The Bank of Franklin ("BOF"), The Bank of Sussex and
Surry ("BSS"), and their wholly-owned subsidiaries, The Bank of Franklin Service
Corporation and BSS Service Corporation, respectively. All significant
intercompany accounts and transactions have been eliminated.
BOF and BSS commenced operations in 1971 and 1902, respectively. The Bank of
Franklin Service Corporation and BSS Service Corporation were organized in 1997
and 1994, respectively, to facilitate investment in financial related services.
The consolidation has been prepared using the pooling of interests method of
accounting. All information included in the unaudited financial statements has
been combined as if the merger (discussed in Note C below) occurred at the
earliest date presented.
NOTE B - EARNINGS PER SHARE
Basic earnings per share, for the periods ended March 31, 1998 and 1997, are
calculated by dividing net income by the average number of common shares
outstanding of 1,829,209 shares.
Diluted earnings per common share reflects the potential dilution that could
occur if securities or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of common stock that
then shared in the earnings of the entity. In accordance with the requirements
of adopted FASB Statement No. 128, Earnings per Share, all prior period EPS data
has been restated to reflect the change in accounting requirements. Diluted
earnings per share are calculated by dividing net income by the diluted average
shares outstanding. For the first quarters of 1998 and 1997, the average diluted
shares outstanding was 1,840,899 and 1,829,209, respectively.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Earnings Summary
UCB reported net income of $529,000 for the quarter ending March 31, 1998,
compared to $503,000 for the same period in 1997, which represents a $26,000
increase or 5.2%. Net interest income increased $42,000 during the three month
period ended March 31, 1998 compared to 1997. Non-interest income increased
$37,000 or 20.3%, primarily due to increases in service charges on deposits and
other service fees. Earnings per share of common stock increased to $0.29 for
the three-month period ending March 31, 1997, compared to $0.27 for the first
quarter of 1997.
UCB's total assets as of March 31, 1998 were $154.4 million, down by $1.6
million, or 1.0% from $156.0 million at year-end 1997. Net loans as of March 31,
1998 were $78.7 million, a decrease of $2.7 million or 3.4% from $81.4 million
at year-end 1997. Investment securities increased $1.9 million or 3.6% to $53.4
million from $51.6 million as of March 31, 1998 and December 31, 1997,
respectively. Cash and cash equivalents totaled $16.6 million at March 31, 1998
and $17.2 million at December 31, 1997, a decrease of $600,000 or 3.5%.
The annualized return on average equity (ROE) decreased to 9.95% for the quarter
ended March 31, 1998, down from 10.49% for the same period in 1997. Another
measure of the Company's profitability, the annualized return on average assets
(ROA), increased to 1.38% from 1.35% for the first three months of 1998 and
1997, respectively.
UCB is not aware of any trends, future events or uncertainties that will have a
material adverse effect on the consolidated entity. Obviously, unforeseeable
changes in the local economies where UCB subsidiaries operate, which UCB is
unable to predict, may impact the overall communities and ultimately the
performance of the Company. UCB is not aware of any such changes.
Net Interest Income
Net interest income for the first quarter of 1998 was $1.495 million, up from
$1.453 million for the same period in 1997, increasing by $42,000 or 2.9%. For
the quarter ended March 31, 1998, total interest and fees on loans increased by
$107,000 or 6.1%, from the quarter ended March 31, 1997. Interest on federal
funds sold increased $73,000 or 102.8% for the same periods. A decrease in
interest on investments of $82,000 or 10.2% partially offset these increases.
Interest expense on deposits increased $56,000 or 4.8% from the first quarter of
1998 to the same period in 1997.
Allowance for Loan Losses
The allowance for loan losses provides for potential losses inherent in the loan
portfolio. Among other factors, management considers the Company's historical
loss experience, the size and composition of the loan portfolio, the value and
adequacy of collateral and guarantors, nonperforming credits and current and
anticipated economic conditions. There are additional risks of future loan
losses which cannot be precisely quantified or attributed to particular loans or
classes of loans. Since those risks include general economic trends, as well as
conditions affecting individual borrowers, the allowance for loan losses is an
estimate. The allowance is also subject to regulatory examinations and
determination as to adequacy, which may take into account such factors as the
methodology used to calculate the allowance, and the size of the allowance in
comparison to peer banks identified by regulatory agencies.
During the first quarter of 1998, the Company had $29,000 in provision expense
compared to $25,000 in the first quarter of 1997. Loans charged off, which are
charged directly to the allowance when they occur, during the first quarter of
1997 amounted to $51,000 compared to $77,000 for the same period in 1997.
Recoveries during the first quarter of 1998 and 1997 amounted to $18,000 and
$18,000, respectively. The ratio of net charge-offs to average outstanding loans
was 0.04% in 1998 and 0.08% in 1997. Management feels that the reserve is
adequate to absorb any losses on existing loans which may become uncollectible.
The following table presents the Company's loan loss and recovery experience for
the first quarter of the past two years.
ALLOWANCE FOR LOAN LOSSES
(In thousands)
<TABLE>
<CAPTION>
3 Months Ended March 31,
------------------------------------
1998 1997
--------------- ----------------
<S> <C>
Balance, beginning of period $ 1,106 $ 1,209
Charge-offs:
Residential real-estate - -
Commercial real-estate 10 -
Commercial - 2
Consumer 41 75
--------------- ----------------
Total charge-offs 51 77
--------------- ----------------
Recoveries:
Residential real-estate - 1
Commercial real-estate - -
Commercial 1 1
Consumer 17 16
--------------- ----------------
Total recoveries 18 18
--------------- ----------------
Net recoveries (charge-offs) (33) (59)
Provision for loan losses 29 25
--------------- ----------------
Balance, end of period $ 1,102 $ 1,175
=============== ================
Net charge-offs to average loans outstanding during period 0.04% 0.08%
Ratio of allowance of loan losses to total loans
outstanding at quarter-end 1.38% 1.51%
</TABLE>
Noninterest Income
Total noninterest income increased by $37,000, or 20.3%, from $182,000 in the
first quarter of 1998 to $219,000 for the same period of 1997. The largest
component of this increase is an increase in service charges of $269,000 from
the first quarter of 1998 to the first quarter of 1997. Also during the quarter
ended March 31, 1998, miscellaneous noninterest income increased $5,000 and net
gains on the sale of investment securities increased $6,000, compared to the
same period in 1997.
Noninterest Expense
Total noninterest expenses for the first quarter of 1998 were $957,000, an
increase of $51,000 or 5.6% compared to $906,000 for the same period last year.
This increase is primarily due to the following factors: 1) a $43,000 or 172.0%
increase in professional fees, to $68,000 in the first quarter of 1998 from
$25,000 in the first quarter of 1997, arising from timing differences in the
payment of fees for the year-end audits of financial statements; 2) an increase
in other miscellaneous expenses of $14,000 or 8.1%, from $173,000 during the
quarter ended March 31, 1997 to $187,000 for the same period during 1998; 3) a
$11,000 or 17.7% increase in equipment costs from $62,000 in the first quarter
of 1997 to $73,000 during the same period in 1998. These increases were
partially offset by a decrease in salaries and employee benefits of $19,000, or
3.5%, to $529,000 in 1998 from $548,000 in 1997.
Nonperforming Assets
Total nonperforming assets increased from $347,000 at year-end 1997 to $427,000
at March 31, 1998. Loans past due 90 days or more and still accruing interest
declined $198,000 or 39.7% to $301,000 as of March 31, 1997 from $499,000 at
December 31, 1997. The following table summarizes nonperforming assets and loans
past due 90 days or more and still accruing interest as of March 31, 1998 and
year end 1997.
NONPERFORMING ASSETS
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------------ -------------------
<S> <C>
Nonaccrual loans $ 155 $ 180
Restructured loans - -
Other real estate owned 170 170
------------------ -------------------
Total nonperforming assets $ 325 $ 350
================== ===================
Loans past due 90 days or more and still accruing $ 845 $ 119
Allowance for loan losses $ 1,102 $ 1,106
Allowance for possible loan loss to nonperforming loans 710.97% 614.44%
Allowance for possible loan loss to nonperforming assets 339.08% 316.00%
Nonperforming assets and loans past due 90 days accruing
interest to period-end loans and foreclosed property 1.48% 0.57%
</TABLE>
Liquidity and Short-term Borrowings
Liquidity represents an institution's ability to meet present and future
financial obligations through either the sale of existing assets or the
acquisition of additional funds through short-term borrowings. Liquid assets
include cash, interest-bearing deposits with banks, federal funds sold and
investments and loans maturing within one year. As a result of the Company's
management of liquid assets, and the ability to generate liquidity through
liability fundings, management believes that the Company maintains overall
liquidity which is sufficient to satisfy its depositors' requirements and to
meet customers' credit needs. The Company has no long-term debt and no material
commitments for capital expenditures.
Cash and cash equivalents totaled $16.6 million at March 31, 1998 and $17.2
million at December 31, 1997. At March 31, 1998, cash and due from banks,
federal funds sold and securities classified as available for sale were $61.6
million, 41.4% of total earning assets, compared to $59.0 million, 39.3% of
total earning assets at December 31, 1997. Asset liquidity is also provided by
managing both loan and securities maturities.
Additional sources of liquidity available to the Company include its subsidiary
Banks' capacity to borrow additional funds through several established federal
funds arrangements and the Federal Home Loan Bank (the "FHLB"). As of March 31,
1998, UCB had no outstanding borrowings from the FHLB. UCB could borrow
approximately $13.0 million from the FHLB, if collateral acceptable to the FHLB
were provided. In addition, federal funds arrangements with other institutions
provide an additional $15.3 million of short-term borrowing capacity. At March
31, 1997, the Company had no outstanding balances on these federal funds lines
of credit. Also, the Company offers overnight repurchase agreements to a
commercial customer, which amounted to $532,000 at March 31, 1997.
Effects of Changing Prices and Seasonality
Because of the seasonality of the agricultural industry, the volume of loans and
deposits typically fluctuate during the year. Loans are typically heaviest from
April to November and deposits are typically their lowest during the same
period. At the end of the year and the beginning of the following year, loans
decrease as they are repaid and deposits increase as a result of the sale of the
fall harvest.
Capital Adequacy
Management reviews the adequacy of the Banks' capital on an ongoing basis with
reference to the size, composition, and quality of the Banks' resources and
compliance with regulatory requirements and industry standards. Management seeks
to maintain a capital structure that will assure an adequate level of capital to
support anticipated asset growth and absorb potential losses.
The Federal Reserve, along with the Comptroller of the Currency and the Federal
Deposit Insurance Corporation, has adopted new capital guidelines to supplement
the existing definitions of capital for regulatory purposes and to establish
minimum capital standards. Specifically, the guidelines categorize assets and
off-balance sheet items into four risk-weighted categories. At March 31, 1998
and December 31, 1997, the required minimum ratio of qualifying total capital to
risk-weighted assets was 8.0%, of which 4.0% must be tier-one capital. Tier-one
capital generally includes stockholders' equity, retained earnings and a limited
amount of perpetual stock, less certain goodwill items. UCB's ratios
significantly exceed regulatory requirements adopted by the Federal Reserve Bank
regulatory agencies, as illustrated below.
<TABLE>
<CAPTION>
CAPITAL RATIOS
Regulatory March 31, 1998 December 31, 1997
----------------------------------- -----------------------------------
Minimum BOF BSS UCB BOF BSS UCB
------- --- --- --- --- --- ---
<S><C>
Risk-based capital
Tier 1 4.00% 16.04% 26.90% 20.42% 15.54% 26.69% 19.97%
Total 8.00% 17.25% 27.97% 21.57% 16.71% 27.80% 21.11%
Leverage 4.00% 10.52% 15.60% 12.72% 10.35% 15.84% 12.69%
</TABLE>
New Accounting Pronouncements
During June 1997, the Financial Accounting Standards Board ("FASB") issued FASB
Statement No. 130, Reporting Comprehensive Income. This pronouncement
established standards for reporting and display of comprehensive income and its
components (revenues, expenses, gains and losses) in a full set of general
purpose financial statements. SFAS No. 130 is effective for financial statement
periods beginning after December 15, 1997. As the Company's only known item of
comprehensive income is the unrealized appreciation or depreciation on
investment securities available-for-sale, management does not expect the
application of this pronouncement to have a material impact on the Company's
financial statements.
Additionally during June of 1997, SFAS No. 131, Disclosures about Segment of an
Enterprise and Related Information, was issued. This pronouncement establishes
standards for the way that public enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operation segments in annual and interim
financial reports to shareholders. It also establishes standards for related
disclosures about products and services, geographic areas and major customers.
This statement becomes effective for financial statements for periods beginning
after December 15, 1997. Management is currently assessing the impact of this
statement on the Company's future disclosures.
SFAS No. 132, Employers' Disclosures about Pension and Other Post Retirement
Benefits, revises disclosures regarding pension and other post retirement
benefits and standardizes certain disclosure requirements regarding these items.
This Statement is effective for fiscal years beginning after December 15, 1997.
Management will assess the impact, if any, of this Statement on the Company's
future disclosures.
Year 2000 Project
The Year 2000 technology problem presents risks to all corporations due to the
potential failure of date related systems. United Community Bankshares and its
subsidiaries have undertaken a variety of measures to ensure that hardware and
software systems will be century date compliant. The Banks have established
project plans, completed hardware and software inventories and developed
preliminary impact assessments. The Banks have initiated contacts with vendors
for specific project compliance confirmation.
Testing of primary software applications will be conducted in conjunction with
regularly scheduled testing and is not expect to result in material additional
costs. The testing phase is expected to be completed by year-end 1998. In
addition to efforts to ensure readiness of internal systems, the Banks have
informed many retail and commercial customers of the need to address the Year
2000 issue. Based upon the results of the preliminary impact assessment and
information provided by vendors, management believes that its plan for
determining century date compliance is adequate and that the Company will not
incur significant
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Banks are subject to claims and lawsuits that arise primarily in the
ordinary course of business. Based on information presently available and advice
received from legal counsel representing the Banks in connection with such
claims and lawsuits, it is the opinion of management that only one such lawsuit
could have a material adverse effect on the financial position of the Banks.
This suit is described below. The only other litigation in which UCB and its
subsidiaries, BOF and BSS, are involved are collection suits involving
delinquent loan accounts.
Fidelity National Title Insurance Company of New York, successor by merger to
Security Title and Guaranty Company (the "Title Company"), filed suit against
the Bank of Sussex and Surry in November, 1997. The Title Company issued a title
insurance policy in favor of the BSS (the "Title Policy") insuring that the Bank
had a first priority deed of trust lien on a one-quarter interest in certain
real property located in Isle of Wight County, Virginia (the "Isle of Wight
Property"). The Circuit Court for Isle of Wight entered a Final Decree on March
6, 1997 that Farmers Bank, Windsor had a first priority deed of trust lien on
that one-quarter interest in the Isle of Wight Property and that BSS had a
second priority deed of trust lien on that same one-quarter interest.
The Title Company seeks the following relief: (i) a declaratory judgment that
the first priority deed of trust lien in favor of Farmers Bank, Windsor on the
one-quarter interest Isle of Wight Property be excluded from coverage under the
Title Policy, (ii) that the Title Policy be reformed to exclude the Farmers
Bank, Windsor deed of trust from coverage under the Title Policy and (iii) that
the Title Company be reimbursed for its costs and attorneys' fees.
BSS intends to vigorously defend this suit. At this time, the Bank's legal
counsel is unable to express any view as to the possible outcome of this matter.
Counsel notes, however, that if this matter is resolved in a manner adverse to
the interests of the Bank, the amount of any loss that will be sustained by BSS
will not be more than the approximately $75,000 expended by the Title Company
for costs and attorneys' fees.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submissions of Matters to a Vote of Security Holders.
None.
Item 5. Other Information
Not applicable.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
None.
b. Form 8-K.
None.
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.
UNITED COMMUNITY BANKSHARES, INC.
/s/ W.O. Pearce Date: May 14, 1998
- -------------------------------------------- ------------
W.O. Pearce
President & Chief Executive Officer
/s/ Wayne C. Carruthers Date: May 14, 1998
- -------------------------------------------- ------------
Wayne C. Carruthers, CPA
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 6,478
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 10,101
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 44,940
<INVESTMENTS-CARRYING> 8,455
<INVESTMENTS-MARKET> 8,524
<LOANS> 0
<ALLOWANCE> 1,102
<TOTAL-ASSETS> 154,395
<DEPOSITS> 131,058
<SHORT-TERM> 532
<LIABILITIES-OTHER> 1,455
<LONG-TERM> 0
0
0
<COMMON> 1,829
<OTHER-SE> 19,521
<TOTAL-LIABILITIES-AND-EQUITY> 154,395
<INTEREST-LOAN> 1,849
<INTEREST-INVEST> 719
<INTEREST-OTHER> 144
<INTEREST-TOTAL> 2,712
<INTEREST-DEPOSIT> 1,213
<INTEREST-EXPENSE> 1,217
<INTEREST-INCOME-NET> 1,495
<LOAN-LOSSES> 29
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 957
<INCOME-PRETAX> 728
<INCOME-PRE-EXTRAORDINARY> 728
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 529
<EPS-PRIMARY> 0.29
<EPS-DILUTED> 0.29
<YIELD-ACTUAL> 4.51
<LOANS-NON> 155
<LOANS-PAST> 845
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,106
<CHARGE-OFFS> 51
<RECOVERIES> 18
<ALLOWANCE-CLOSE> 1,102
<ALLOWANCE-DOMESTIC> 1,102
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
