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Previous: HOME BANCORP OF ELGIN INC, 10-Q, 1997-11-10 |
Next: EDUCATIONAL MEDICAL INC, 10-Q/A, 1997-11-10 |
<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1997
Commission File No. 33-4984
PCB BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<CAPTION>
<S> <C>
Tennessee 62-1641671
- -------------------------------------------------------- --------------------------------------------------
(State or other jurisdiction of incorporation) (I.R.S. Employer Identification Number)
300 Sunset Dr : Johnson City, Tennessee 37604
- -------------------------------------------------------- --------------------------------------------------
(Address of Principal Executive Office) (Zip Code)
</TABLE>
(423) 915-2222
----------------------------------------------------------------
(Issuer's Telephone Number Including Area Code)
Securities Registered Pursuant to Section 12(b) or
12(g) of the Act:
None
----------------
Indicate by the check mark whether the Issuer: (1) has filed all reports
required 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
----- -----
800,000
---------------
(Outstanding shares of the issuer's common stock as of September 30, 1997)
Transitional Small Business Disclosure Format
Yes No X
----- -----
<PAGE> 2
PCB BANCORP, INC.
INDEX
<TABLE>
<CAPTION>
Number Page
- --------- ------------
<S> <C> <C>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
September 30, 1997 (Unaudited) and December 31, 1996 4
Consolidated Statements of Income
Three Months and Nine Months Ended September 30, 1997
and 1996 (Unaudited) 5
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1997 and 1996 (Unaudited) 6
Notes to Consolidated Financial Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8 - 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Default Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-k 10
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PCB BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
(In Thousands)
----------------------------------
September 30, December 31,
ASSETS 1997 1996
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash and due from Banks $ 1,640 $ 1,167
Federal funds sold 1,211 3,278
Securities held to maturity 3,713 5,691
Securities available-for-sale, at fair value 1,192 0
Other Investments 39 0
Loans 51,257 30,569
Allowance for loan losses (641) (382)
------------- ------------
Loans, net 50,616 30,187
------------- ------------
Premises and equipment 2,282 1,549
Accrued income receivable 306 239
Deferred income taxes, net 168 276
Other assets 104 143
------------- ------------
$ 61,271 $ 42,530
============= ============
LIABILITIES AND STOCKHOLDER'S EQUITY
- --------------------------------------------------------------------------------------------------------------------
Liabilities:
Deposits:
Non-interest bearing 6,079 $ 4,977
Interest bearing 47,007 29,653
------------- ------------
Total deposits 53,086 34,630
Accrued interest payable 387 128
Other Liabilities 77 213
------------- ------------
Total Liabilities 53,550 34,971
------------- ------------
Shareholder's equity:
Preferred stock, no par value, 1,000,000 shares authorized;
none issued 0
Common stock, $1 par value, 3,000,000 shares authorized;
800,000 shares issued and outstanding 800 800
Additional paid-in capital 7,200 7,200
Retained Earnings (280) (441)
Unrealized Holding Gain/Loss-Equity 1 0
------------- ------------
Total shareholder's equity 7,721 7,559
------------- ------------
$ 61,271 $ 42,530
============= ============
</TABLE>
3
<PAGE> 4
PCB BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income
(Unauditied)
<TABLE>
<CAPTION>
(In Thousands) (In Thousands)
------------------------ ------------------------
Three Months Ended Nine Months Ended
1997 1996 1997 1996
---------- --------- --------- ----------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans, including fees $ 1,160 $ 493 $ 3,048 $ 899
Securities
Taxable 68 90 261 232
Tax exempt 1 1 -
Federal funds sold 30 34 58 123
---------- ---------- ---------- ----------
Due from Banks
---------- ---------- ---------- ----------
Total interest income 1,259 617 3,368 1,254
---------- ---------- ---------- ----------
INTEREST EXPENSE:
Deposits 627 259 1,647 474
Other borrowings - - 7 -
---------- ---------- ---------- ----------
Total interest expense 627 259 1,654 474
---------- ---------- ---------- ----------
Net interest income 632 358 1,714 780
PROVISION FOR LOAN LOSSES 54 98 259 274
---------- ---------- ---------- ----------
Net interest income after provision for loan losses 578 260 1,455 506
---------- ---------- ---------- ----------
OTHER INCOME:
Service charges on deposit accounts 29 12 73 22
Other service charges, commissions and fees 8 2 28 4
---------- ---------- ---------- ----------
Total other income 37 14 101 26
---------- ---------- ---------- ----------
OTHER EXPENSES:
Salaries and employee benefits 261 200 735 578
Occupancy expense 31 36 94 101
Other operating expenses 166 131 457 344
---------- ---------- ---------- ----------
Total other expenses 458 367 1,286 1,023
---------- ---------- ---------- ----------
Income before income taxes 157 (93) 270 (491)
INCOME TAXES 63 - 109
---------- ---------- ---------- ----------
Net income 94 (93) 161 (491)
========== ========== ========== ==========
Earnings per share .12 (0.12) .20 (0.61)
========== ========== ========== ==========
Weighted average shares outstanding 800,000 800,000 800,000 800,000
========== ========== ========== ==========
</TABLE>
4
<PAGE> 5
PCB BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
(In Thousands)
-----------------------------
Nine Months Ended
1997 1996
----------- -----------
<S> <C> <C>
INCREASE(DECREASE) IN CASH AND DUE FROM BANKS Cash flows from operating
activities:
Net Income $ 161 $ (491)
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and Amortization 95 131
Provision for loan losses 259 274
Increase in accrued income receivable (86) (139)
Other, net 404 (146)
----------- -----------
Net cash provided(used) by operating activities 833 (371)
----------- -----------
Cash flows from investing activities:
Increase in federal funds sold 2,067 1,384
Purchases of held to maturity securities 1,978 (2,327)
Purchases of securities available-for-sale (1,192)
Net increase in loans (20,688) (22,047)
Purchases of premises and equipment (981) (434)
----------- -----------
Net cash used by investing activities (18,816) (23,424)
----------- -----------
Cash flows from financing activities:
Increase in deposits 18,456 24,994
----------- -----------
Net cash provided by financing activities 18,456 24,994
----------- -----------
Net increase in cash 473 1,199
Cash and due from banks at beginning of period 1,167 346
----------- -----------
Cash and due from banks at end of period $ 1,640 $ 1,545
=========== ===========
Cash payments for interest $ 1,267 $ 364
=========== ===========
Cash payments for income taxes $ - $ -
=========== ===========
</TABLE>
5
<PAGE> 6
PCB BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements (Unaudited)
NOTE 1. BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB. 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 nine month period ended September 30, 1997 are not necessarily
indicative of the results that may be expected for the year ended December 30,
1997. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1996.
6
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
FINANCIAL CONDITION
People's Community Bank (the "Bank") represents virtually all of the assets of
PCB Bancorp, Inc. (the "Company"). The Company's consolidated results of
operations are dependent primarily on net interest income, which is the
difference between the interest income earned on interest-earning assets, such
as loans and investments, and the interest expense incurred on interest-bearing
liabilities, such as deposits and other borrowings. The Bank, which was opened
December 15, 1995, has continued to experience growth during the third quarter
of 1997. Total assets have grown $2.5 million or 4% since June 30, 1997 and
$18.9 million or 45% since December 31, 1996. During the period July 1, 1997 to
September 30, 1997, the growth in total assets has been funded by increases in
deposits of $2.4 million or 5% and $18.5 million or 53% since December 31, 1996.
This growth and the anticipated future growth will allow the Bank to satisfy its
cash requirements. It is not anticipated that it will be necessary to raise any
additional funds.
Loans have increased $4.3 million or 9% since June 30, 1997 and $20.7 million or
68% since December 31, 1996.
NONPERFORMING ASSETS AND RISK ELEMENTS. At September 30, 1997, the bank had
nonperforming assets totaling $122,000 or .2% of total assets. Diversification
within the loan profile is an important means of reducing inherent lending
risks. At September 30, 1997, the Bank had no concentrations of ten percent or
more of total loans in any single industry nor any geographical area outside the
immediate market area of the Bank.
The Bank discontinues the accrual of interest on loans which become ninety days
past due (principal and/or interest), unless the loans are adequately secured
and in the process of collection. Other real estate owned is carried at fair
value, determined by an appraisal. A loan is classified as a restructured loan
when the interest rate is materially reduced or the term is extended beyond the
original maturity date because of the inability of the borrower to service the
debt under the original terms. The Bank had no restructured loans or other real
estate at September 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is adequate with cash and due from banks of $1.6 million and federal
funds sold of $1.2 million as of September 30, 1997. In addition, loans and
investment securities repricing or maturing in one year or less exceed $20
million at September 30, 1997. The Bank has approximately $8.45 million in
unfunded loan commitments. It is not known how much of this will be funded
within the next six months. Other commitments, primarily, standby letters of
credit, are approximately $3,000 at September 30, 1997. In addition to the
Federal Home Loan Bank membership, the Bank has established a federal fund line
of credit with a correspondent bank totaling $2 million to meet unexpected
liquidity demands. With the exception of unfunded loan commitments, there are no
known trends or any known commitments or uncertainties that will result in the
Bank's liquidity increasing or decreasing in a material way. In addition, the
Company is not aware of any recommendations by any regulatory authorities which
would have a material effect on the Company's liquidity, capital resources, or
results of operations.
7
<PAGE> 8
Total equity capital at September 30, 1997, is $7.7 million or 13% of total
assets. The Bank's capital position is adequate to meet the minimum capital
requirement's as of September 30, 1997 for all regulatory agencies. The Bank's
capital ratios as of September 30, 1997, are as follows:
Tier 1 capital 12.2%
Tier 2 capital 1.0%
Total risk-based 13.2%
RESULTS OF OPERATIONS
The Company had net income of $94,000 in the third quarter compared to a loss of
$93,000 in the third quarter of 1996. Net interest income was up $274,000 or
76.5% over the third quarter of 1997 compared to 1996 and has increased $934,000
or 120% for the nine months ended September 30, 1997 compared to the nine months
ended September 30, 1996.
Interest income and interest expense both increased from 1996 to 1997 because of
the increase in earning assets and deposits from September 30, 1996 to September
30, 1997. The growth in non-interest income for the third quarter of 1997
reflects the increase in deposits during 1996 and 1997.
The provision for loan losses was $54,000 in the third quarter of 1997 compared
to $98,000 in the third quarter of 1996. The allowance for loan losses of
$641,000 at September 30, 1997 (approximately 1.25% of loans) is considered to
be adequate to cover losses inherent in the loan portfolio. Management evaluates
the adequacy of the allowance for loan losses monthly and makes provisions for
loan losses based on this evaluation.
8
<PAGE> 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a) EX-27 Financial Data Schedule (for SEC use only)
b) The Company did not file any reports on Form 8-K
during the quarter ended September 30, 1997.
9
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
/s/ PCB BANCORP, INC.
------------------------------------------------------------
(Registrant)
10/29/97 /s/ Phillip R. Carriger
- -------------------------------- ------------------------------------------------------------
(Date) Phillip R. Carriger, Chairman and Chief
Executive Officer
(Principle Executive Officer)
10/29/97 /s/ Larry E. Parks
- -------------------------------- ------------------------------------------------------------
(Date) Larry E. Parks, Vice President
(Principle Accounting Officer)
</TABLE>
10
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,638
<INT-BEARING-DEPOSITS> 2
<FED-FUNDS-SOLD> 1,211
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,192
<INVESTMENTS-CARRYING> 3,713
<INVESTMENTS-MARKET> 3,728
<LOANS> 51,257
<ALLOWANCE> 641
<TOTAL-ASSETS> 61,271
<DEPOSITS> 53,086
<SHORT-TERM> 0
<LIABILITIES-OTHER> 464
<LONG-TERM> 0
0
0
<COMMON> 800
<OTHER-SE> 6,921
<TOTAL-LIABILITIES-AND-EQUITY> 61,271
<INTEREST-LOAN> 3,048
<INTEREST-INVEST> 262
<INTEREST-OTHER> 58
<INTEREST-TOTAL> 3,368
<INTEREST-DEPOSIT> 1,647
<INTEREST-EXPENSE> 1,654
<INTEREST-INCOME-NET> 1,714
<LOAN-LOSSES> 259
<SECURITIES-GAINS> 1
<EXPENSE-OTHER> 1,286
<INCOME-PRETAX> 270
<INCOME-PRE-EXTRAORDINARY> 270
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 161
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
<YIELD-ACTUAL> 3.58
<LOANS-NON> 122
<LOANS-PAST> 1
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 336
<ALLOWANCE-OPEN> 382
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 641
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 641
</TABLE>
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