<PAGE> 1
IN ACCORDANCE WITH RULE 202 OF REGULATION S-T, THIS FORM 10-QSB IS BEING
FILED IN PAPER PURSUANT TO A CONTINUING HARDSHIP EXEMPTION
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, 2000
Commission File No. 33-4984
PCB BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<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) 915-2232
-----------------------------------------------------------------
(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
------ -----
809,700
----------------
(Outstanding shares of the issuer's common stock as of September 30, 2000)
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, 20000 (Unaudited) and December 31, 1999 2
Consolidated Statements of Income
Three Months ended September 30, 2000 and 1999 (Unaudited) 3
Nine Months ended September 30, 2000 and 1999 (Unaudited) 3
Consolidated Statement of Shareholders' Equity
Nine Months ended September 30, 2000 and 1999 (Unaudited) 6
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2000 and 1999 (Unaudited) 7
Notes to Consolidated Financial Statements (Unaudited) 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 2. Changes in Securities 16
Item 3. Default Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of Security Holders 16
</TABLE>
<PAGE> 3
PCB BANCORP, INC.
FINANCIAL STATEMENTS
WITH
ACCOUNTANT'S REVIEW REPORT
For the Quarters Ended September 30, 2000 and 1999
<PAGE> 4
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
PCB Bancorp, Inc.
Johnson City, TN 37602
We have reviewed the accompanying consolidated statement of financial condition
of PCB Bancorp, Inc. and wholly-owned subsidiary as of September 30, 2000 and
the related consolidated statement of changes in stockholders' equity for the
nine months ended September 30, 2000 and the consolidated statements of income
for the three and nine months ended September 30, 2000 and 1999 and consolidated
statements of cash flows for the nine months ended September 30, 2000 and 1999.
These financial statements are the responsibility of the Bank'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 inquires 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 consolidated 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 consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
BLACKBURN, CHILDERS & STEAGALL, PLC
October 26, 2000
<PAGE> 5
PCB BANCORP, INC.
AND WHOLLY-OWNED SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
(unaudited)
ASSETS
<S> <C> <C>
Cash and Due from Banks $ 3,893,982 6,049,616
Federal Funds Sold 4,186,000 1,359,000
Securities Held-to-Maturity 600,635 600,749
Securities Available-for-Sale 20,375,340 20,043,328
Loans Receivable, Net 82,997,597 70,146,050
Accrued Interest Receivable 739,429 619,196
Premises and Equipment, Net 2,981,425 3,152,084
Restricted Investments - Stock in Federal Home Loan Bank, Cost 305,500 275,500
Deferred Tax Asset 112,571 152,612
Other Assets 216,654 98,340
------------- ------------
Total Assets $ 116,409,133 102,496,475
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Demand Deposits $ 11,399,303 9,841,868
Savings and NOW Deposits 37,419,072 40,130,428
Other Time Deposits 57,199,901 40,845,777
Accrued Interest Payable 425,651 321,903
Dividends Payable 48,582 --
Accounts Payable and Other Liabilities 858,791 2,865,411
------------- ------------
Total Liabilities 107,351,300 94,005,387
------------- ------------
SHAREHOLDERS' EQUITY:
Common Stock - $1 par value; 3,000,000 shares authorized;
809,700 and 806,200 shares issued and outstanding
at 9-30-00 and 12-31-99, respectively 809,700 806,200
Additional Paid-in Capital 7,295,500 7,259,000
Retained Earnings 1,308,981 861,168
Accumulated Other Comprehensive Income (356,348) (435,280)
------------- ------------
Total Shareholder's Equity 9,057,833 8,491,088
------------- ------------
Total Liabilities and Shareholders' Equity $ 116,409,133 102,496,475
============= ============
</TABLE>
See Accompanying Notes and Accountant's Review Report
2
<PAGE> 6
PCB BANCORP, INC.
AND WHOLLY-OWNED SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
The Three Months Ended The Nine Months Ended
------------------------------ ------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest on Loans $1,844,026 1,463,421 5,118,186 4,291,313
Interest on Investments 336,417 248,378 1,026,383 666,547
Interest on Federal Funds Sold 81,922 112,664 114,831 210,668
---------- --------- --------- ---------
Total Interest Income 2,262,365 1,824,463 6,259,400 5,168,528
---------- --------- --------- ---------
INTEREST EXPENSE:
Interest on Interest Bearing Checking Accounts 24,647 18,818 71,496 46,316
Interest on Money Market Accounts 154,145 60,374 261,129 154,796
Interest on Passbook Accounts 254,720 445,711 894,004 1,278,958
Interest on Certificates of Deposit 938,935 476,663 2,190,387 1,334,791
Interest on Other Borrowed Funds 1,135 -- 161,936 --
---------- --------- --------- ---------
Total Interest Expense 1,373,582 1,001,566 3,578,952 2,814,861
---------- --------- --------- ---------
Net Interest Income 888,783 822,897 2,680,448 2,353,667
Provision for Loan Losses 45,279 33,442 146,411 70,677
---------- --------- --------- ---------
Net Interest Income after Provision for Loan Losses 843,504 789,455 2,534,037 2,282,990
---------- --------- --------- ---------
NON-INTEREST INCOME:
Service Charges 92,525 92,050 291,895 232,756
Loan Origination Fees 87,108 87,860 246,656 192,689
Net Gains (Losses) from Sale of Loans 206 6,728 2,328 13,995
Net Realized Gain on Sales and Calls of Securities 4,165 8,061 4,165 10,782
Miscellaneous 451 446 2,573 1,778
---------- --------- --------- ---------
Total Non-Interest Income 184,455 195,145 547,617 452,000
---------- --------- --------- ---------
</TABLE>
(Continued)
3
<PAGE> 7
PCB BANCORP, INC.
AND WHOLLY-OWNED SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
The Three Months Ended The Nine Months Ended
---------------------------- -----------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
NON-INTEREST EXPENSE:
Salaries 357,965 347,045 1,056,349 940,019
Payroll Taxes 26,298 27,295 82,993 82,280
Employee Benefits 33,423 34,184 109,539 82,689
Occupancy Expense 23,693 22,181 76,451 67,760
Rental Expense 6,300 6,900 18,900 22,500
Furniture and Equipment Expense 5,661 4,946 15,189 16,118
Computer Equipment Expense 22,880 30,596 78,227 98,712
Stationery, Supplies and Printing 19,208 18,760 66,779 51,925
Postage, Express and Freight 22,780 18,719 65,668 51,604
Telephone Expense 10,944 14,115 37,299 39,196
Vehicle Expense 5,430 4,370 16,496 10,284
Outside Services 24,402 33,786 81,508 72,095
Teller Over and Short 487 242 575 337
Advertising and Promotion 18,921 21,277 56,543 69,764
Loan Collection Expense 4,594 2,846 15,660 6,486
Bank Security and Protection 1,389 56 2,364 1,563
FDIC Assessment 4,456 2,367 14,195 6,991
Insurance 11,993 9,044 26,358 27,798
Dues and Subscriptions 5,460 8,600 14,860 14,078
Franchise Tax Expense 9,200 6,000 22,700 18,000
Refunds and Reimbursements 2,245 2,659 6,796 5,659
Travel and Meetings 1,285 4,011 2,503 5,494
Contributions 1,290 500 4,380 4,135
Depreciation and Amortization 74,739 74,321 222,258 216,660
Directors' Fees 8,340 7,990 24,435 23,288
Miscellaneous Expenses 15,624 14,638 49,219 43,057
------- ------- --------- ---------
Total Non-Interest Expenses 719,007 717,448 2,168,244 1,978,492
------- ------- --------- ---------
Income Before Taxes 308,952 267,152 913,410 756,498
</TABLE>
(Continued)
4
<PAGE> 8
PCB BANCORP, INC.
AND WHOLLY-OWNED SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
The Three Months Ended The Nine Months Ended
------------------------------- -------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Income Before Taxes (Brought Forward) 308,952 267,152 913,410 756,498
INCOME TAX PROVISION:
Income Tax Expense 56,863 91,992 271,479 246,594
-------- ------- ------- -------
Net Income $252,089 175,160 641,931 509,904
======== ======= ======= =======
Net Income per Share-Basic $ .31 .22 .79 .63
======= ======= =======
Net Income per Share-Assuming Dilution $ .29 .20 .74 .58
======== ======= ======= =======
</TABLE>
See Accompanying Notes and Accountants' Review Report.
5
<PAGE> 9
PCB BANCORP, INC.
AND WHOLLY-OWNED SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
Accumulated
Additional Other
Common Paid-in Retained Comprehensive
Stock Capital Earnings Income Total
---------- ----------- --------- -------------- ---------
<S> <C> <C> <C> <C> <C>
Balances, January 1, 1999 $ 800,000 7,200,000 310,456 68,578 8,379,034
COMPREHENSIVE INCOME:
Net Income -- -- 671,022 -- 671,022
Other Comprehensive Income
Net of Tax:
Change In Unrealized
Gain (Loss) on Securities
Available-For-Sale, Net
of Deferred Income Tax
of $(335,906) (503,858) (503,858)
----------
Total Comprehensive Income 167,164
Stock Option Excercised 6,200 59,000 -- -- 65,200
Cash Dividends -- -- (120,310) -- (120,310)
--------- ---------- ---------- -------- ----------
Balances, December 31, 1999 $ 806,200 7,259,000 861,168 (435,280) 8,491,088
COMPREHENSIVE INCOME:
Net Income -- -- 641,931 -- 641,931
Other Comprehensive Income
Net of Tax:
Change in Unrealized
Gain (Loss) on Securities
Available-For-Sale, Net
of Deferred Income Tax
of $(52,621) 78,932 78,932
----------
Total Comprehensive Income 720,863
Stock Option Exercised 3,500 36,500 -- 40,000
Cash Dividends -- -- (194,118) -- (194,118)
--------- ---------- ---------- -------- ----------
Balances, September 30, 2000 $ 809,700 7,295,500 1,308,981 (356,348) 9,057,833
========= ========== ========== ======== ==========
</TABLE>
See Accompanying Notes and Accountant's Review Report
6
<PAGE> 10
PCB BANCORP, INC.
AND WHOLLY-OWNED SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
September 30, 2000 September 30, 1999
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 641,931 509,904
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation Expense 222,258 190,386
Amortization Expense -- 26,274
Provision for Loan Losses 146,411 70,677
Discount Accretion Net of Premium Amortization (52,814) (28,390)
Origination of Mortgage Loans Held for Sale -- (496,300)
Proceeds from Mortgage Loans Sold -- 876,550
Net Realized (Gains) Loss on Sales and Calls of Securities (4,165) (10,782)
Deferred Income Tax 40,041 (233,706)
(Increase) Decrease in Assets:
Interest Receivable (120,233) (71,874)
Other Assets (118,314) (37,358)
Increase (Decrease) in Liabilities:
Increase (Decrease) in Accrued Interest Payable 103,748 (103,523)
Other Liabilities (2,006,620) 53,283
------------ -----------
Net Cash Provided (Used) by Operating Activities (1,147,757) 745,141
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Increase) Decrease in Federal Funds Sold (2,827,000) (2,552,000)
Purchases of Available-for-Sale Securities (1,336,635) (9,019,183)
Purchase of Held-to-Maturity-Security -- (100,814)
Proceeds from Maturities and Calls of Available-For-Sale Securities 532,400 3,711,563
Principal Payments Received on Mortgage Back Securities 608,457 548,799
Purchases of Restricted Investments (30,000) (4,700)
Purchases of Premises and Equipment (51,808) (170,063)
Net (Increase) in Loans Receivable (12,997,958) (2,804,382)
------------ -----------
Net Cash Used for Investing Activities (16,102,544) (10,390,780)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends Paid (145,536) (80,000)
Stock Options Exercised 40,000 --
Net Increase in Deposits 15,200,203 11,201,208
------------ -----------
Net Cash Provided by Financing Activities 15,094,667 11,121,208
------------ -----------
Increase (Decrease) in Cash and Cash Equivalents (2,155,634) 1,475,569
</TABLE>
(Continued)
7
<PAGE> 11
PCB BANCORP, INC.
AND WHOLLY-OWNED SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
September 30, 2000 September 30, 1999
------------------ ------------------
<S> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents (2,155,634) 1,475,569
(Brought Forward)
Cash and Cash Equivalents, Beginning of Year 6,049,616 2,048,350
----------- ---------
Cash and Cash Equivalents, End of Period $ 3,893,982 3,523,919
=========== =========
SUPPLEMENTAL DISCLOSURES:
Cash Paid during the Period for Interest $ 3,475,204 2,912,000
=========== =========
Cash Paid during the Period for Income Taxes $ 323,223 273,000
=========== =========
</TABLE>
See Accompanying Notes and Accountant's Review Report.
8
<PAGE> 12
PCB BANCORP, INC.
AND WHOLLY-OWNED SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES:
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instruction to Form 10-QSB. 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
three month period ended September 30, 2000 are not necessarily indicative of
the results that may be expected for the year ended December 31, 2000. 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, 1999.
NOTE 2. ACCOUNTS PAYABLE AND OTHER LIABILITIES:
At December 31, 1999 there was a $2,000,000 balance on a line of credit included
in Accounts Payable and other liabilities. This balance had been repaid in its
entirety at September 30, 2000.
9
<PAGE> 13
PCB BANCORP, INC.
AND WHOLLY-OWNED SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. INVESTMENTS:
The amortized costs of securities and their approximate fair values are as
follows:
<TABLE>
<CAPTION>
September 30, 2000 (unaudited) December 31, 1999
------------------------------------------------ ------------------------------------------------
Gross Gross Gross Gross
Amortized Unrealized Unrealized Amortized Unrealized Unrealized
Cost Gains Losses Fair Value Cost Gains Losses Fair Value
----------- ---------- ---------- ---------- --------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Available-for-Sale
U.S. Government
Federal Agencies $ 7,773,618 -- 353,046 7,420,572 7,720,191 -- 288,194 7,431,997
State and Municipal
Governments 7,441,302 19,781 167,295 7,293,788 7,395,994 204 283,339 7,112,859
Corporate Securities 764,636 -- 3,059 761,577 -- -- -- --
Mortgage-Backed
Securities 4,987,183 5,008 92,788 4,899,403 5,652,610 2,895 157,033 5,498,472
----------- ------ ------- ---------- ---------- ----- ------- ----------
Total Available-for-Sale 20,966,739 24,789 616,188 20,375,340 20,768,795 3,099 728,566 20,043,328
----------- ------ ------- ---------- ---------- ----- ------- ----------
Held-to-Maturity
US Government Agencies 500,000 -- 8,360 491,640 500,000 -- 4,548 495,452
State and Municipal
Governments 100,635 -- 604 100,031 100,749 -- 4,442 96,307
----------- ------ ------- ---------- ---------- ----- ------- ----------
Total Held-to-Maturity 600,635 -- 8,964 591,671 600,749 -- 8,990 591,759
----------- ------ ------- ---------- ---------- ----- ------- ----------
Total Investment
Securities $21,567,374 24,789 625,152 20,967,011 21,369,544 3,099 737,556 20,635,087
=========== ====== ======= ========== ========== ===== ======= ==========
</TABLE>
The amortized cost and market value of debt securities at December 31, 1999, by
contractual maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Held-to-Maturity Available-for-Sale
---------------------------- ----------------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Amounts maturing in:
One year or less $ -- -- 50,000 49,924
After one year through five years -- -- 4,263,672 4,182,011
After five years through ten years 500,000 495,452 6,528,760 6,231,773
After ten years 100,749 96,307 4,273,753 4,081,148
Mortgage-Backed Securities -- -- 5,652,610 5,498,472
-------- ---------- ---------- ----------
$600,749 591,759 20,768,795 20,043,328
======== ========== ========== ==========
</TABLE>
Accrued interest on investments at September 30, 2000 and December 31, 1999 was
$276,198 and $241,885, respectively. During the year ended December 31, 1999 and
the nine months ended September 30, 2000 the bank received $4,711,563 and
$532,400 proceeds from sales and calls of securities with a carrying value based
on historical cost and adjusted for amortization of premiums and accretion of
discounts of $4,700,781 and $528,235 resulting in a realized gain of $10,782 and
$4,165 on sales and calls of securities, respectively.
10
<PAGE> 14
PCB BANCORP, INC.
AND WHOLLY-OWNED SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4. LOANS RECEIVABLE:
Loans are summarized as follows:
<TABLE>
<CAPTION>
September 30, December 31,
2000 (unaudited) 1999
---------------- -------------
<S> <C> <C>
Commercial $ 41,034,927 35,563,247
Commercial Real Estate 140,449 147,015
Residential Real Estate 10,996,654 11,726,358
Installment 29,602,145 21,768,308
Consumer 2,090,972 1,666,176
Other 172,872 181,453
------------ -----------
84,038,019 71,052,557
Allowance for Loan Losses (968,330) (863,816)
Unearned Discount on Mortgages and
Installment Loans (16) (232)
Net Deferred Loan Origination Fees (72,076) (42,459)
------------ -----------
$ 82,997,597 70,146,050
============ ===========
</TABLE>
An analysis of the change in the allowance for loan losses follows:
<TABLE>
<CAPTION>
September 30, December 31,
2000 (unaudited) 1999
---------------- ------------
<S> <C> <C>
Balance at Beginning of Period $ 863,816 825,649
Provision for Loan Losses 146,411 79,677
Loans Charged Off (44,838) (47,821)
Recoveries on Loans 2,941 6,311
---------------- ------------
Balance at End of Period $ 968,330 863,816
================ ============
</TABLE>
A summary of loans by estimated maturity as of December 31, 1999 is as follows:
<TABLE>
<S> <C>
Maturity within one year $ 29,296,509
One to five years 40,670,129
Over five years 1,085,919
------------
$ 71,052,557
============
</TABLE>
Accrued interest receivable on loans at September 30, 2000 and December 31, 1999
was $463,231 and $377,311, respectively.
At December 31, 1999, the total recorded investment in impaired loans amounted
to $292,818. The amount of the recorded investment in impaired loans for which
there is a related allowance for credit losses at December 31, 1999, is
$158,411. The amount of the recorded investment in impaired loans for which
there is no related allowance for credit loss and is classified as substandard
is $134,407. The amount of accrued interest is recognized prior to principal for
any cash receipts on impaired loans. Interest income in the amount of $17,812
was recognized for cash receipts during 1999.
11
<PAGE> 15
PCB BANCORP, INC.
AND WHOLLY-OWNED SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5. EARNINGS PER SHARE:
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED
---------------------------------------------------------------------------------------------
September 30, December 31,
2000(unaudited) 1999
---------------------------------------------------------------------------------------------
Weighted-Average Weighted-Average
Income Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- -------- ----------- ------------- ------
<S> <C> <C> <C> <C> <C> <C>
Net Income $641,931 -- -- 671,022 -- --
Basic EPS
Income Available to
Common Stockholders 641,931 809,355 .79 671,022 802,633 .84
Effect of Dilutive Options
Stock Options
(using the Treasury Stock
Method) -- 57,828 -- -- 76,563 --
-------- ------- --- ------- ------- ---
Diluted EPS
Income Available to
Common Stockholders plus
Assumed Exercise of Options $641,931 867,183 .74 671,022 879,196 .76
======== ======= === ======= ======= ===
</TABLE>
12
<PAGE> 16
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 second quarter
of 2000. Total assets have grown $13.9 million or 13.6% since December 31, 1999.
Loans have increased $12.9 million or 18.3% since December 31, 1999. Investment
securities have increased $332 thousand or 1.6% since December 31, 1999.
NONPERFORMING ASSETS AND RISK ELEMENTS. The bank had $272,000 in nonperforming
assets at June 30, 2000. Diversification within the loan profile is an important
means of reducing inherent lending risks. At June 30, 2000, 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. At the
present time, the Bank has impaired loans totaling $272,000. In reference to the
impaired loans, the Bank has related allowance for credit losses totaling
$175,000, leaving a balance classified as substandard of $97,486. The Bank also
currently has $128,000 in other real estate owned.
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.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is adequate with cash and due from banks of $3.9 million as of
September 30, 2000. In addition, loans and investment securities repricing
13
<PAGE> 17
or maturing in one year or less exceed $ 36 million at September 30, 2000. The
Bank has approximately $9.484 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 $250,000 at
September 30, 2000. The Bank has outside funding sources including fed fund
lines of credit, cash management accounts, and security repurchase agreements
with the Federal Home Loan Bank, AmSouth Bank and Columbus Bank and Trust of
Georgia. The amount of funding available through these agreements totaled $16
million with none having been drawn as of September 30, 2000. 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.
Total equity capital at September 30, 2000, is $9.1 million or 7.8% of total
assets. The Bank's capital position is adequate to meet the minimum capital
requirements as of September 30, 2000 for all regulatory agencies. The Bank's
capital ratios as of September 30, 2000, are as follows:
<TABLE>
<CAPTION>
<S> <C>
Tier 1 capital 10.7%
Tier 2 capital 1.1%
Total risk-based 11.8%
</TABLE>
14
<PAGE> 18
RESULTS OF OPERATIONS
The Company had net income of $252,000 during the third quarter of 2000 compared
to net income of $175,000 during the third quarter of 1999. For the nine months
ended September 30, 2000, the Company had net income of $642,000, which was a
26% increase over the same period in 1999. Net interest income was up $66,000 or
8% over the third quarter of 2000 compared to 1999. Net interest income for the
nine month period ended September 30, 2000 increased $327,000 or 13.9% over the
same period in 1999.
Interest income and interest expense both increased from 1999 to 2000 because of
the increase in earning assets and deposits from September 1999 to September
2000. The growth in non-interest income for the period ending September 30, 2000
reflects the increase in deposits during 1999 and 2000.
The provision for loan losses was $45,000 in the third quarter of 2000 compared
to $33,000 in the third quarter of 1999. The allowance for loan losses of
$968,000 at September 30, 2000 (approximately 1.15% of total 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 the loan losses based on this evaluation.
15
<PAGE> 19
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
Ex-27 Financial Data Schedule (for SEC use only)
16
<PAGE> 20
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.
PCB BANCORP, INC.
---------------------------------
(Registrant)
11/3/00 /s/ Phillip R. Carriger
------------- ---------------------------------
(Date) Phillip R. Carriger, Chairman and
Chief Executive Officer
(Principle Executive Officer)
11/3/00 /s/ Michael Christian
------------- ---------------------------------
(Date) Michael Christian, President
17
