<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2000
TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the Transition Period From ____________ to ____________.
Commission File No. 33-4984
PCB BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
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<CAPTION>
Tennessee 62-1641671
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<S> <C>
(State or other jurisdiction of incorporation) (I.R.S. Employer Identification Number)
300 Sunset Dr : Johnson City, Tennessee 37604
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(Address of Principal Executive Office) (Zip Code)
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(423) 915-2222
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(Issuer's Telephone Number Including Area Code)
Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:
None
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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
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809,700
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(Outstanding shares of the issuer's common stock as of March 31, 2000)
Transitional Small Business Disclosure Format
Yes No X
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PCB BANCORP, INC.
INDEX
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<CAPTION>
Number Page
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<S> <C> <C>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
March 31, 2000 (Unaudited) and December 31, 1999 3
Consolidated Statements of Income
Three Months ended March 31, 2000 and 1999 (Unaudited) 4
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2000 and 1999 (Unaudited) 5
Notes to Consolidated Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7 - 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Default Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-k 9
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2
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
===============================================================================
PCB BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
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<CAPTION>
(In Thousands)
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March 31, December 31,
ASSETS 2000 1999
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<S> <C> <C>
Cash and due from Banks 5,378 $ 6,049
Federal funds sold 1,967 1,359
Securities held to maturity 601 601
Securities available-for-sale, at fair value 20,139 20,043
Other Investments 295 276
Loans 75,018 71,010
Allowance for loan losses (905) (864)
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Loans, net 74,113 70,146
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Premises and equipment 3,085 3,152
Accrued income receivable 673 619
Other assets 543 251
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$ 106,794 $ 102,496
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LIABILITIES AND STOCKHOLDER'S EQUITY
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Liabilities:
Deposits:
Non-interest bearing $ 11,516 $ 9,842
Interest bearing 77,543 80,976
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Total deposits 89,059 90,818
Other Borrowings 8,500 2,000
Accrued interest payable 378 322
Other Liabilities 294 865
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Total Liabilities 98,231 94,005
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Shareholder's equity:
Preferred stock, no par value, 1,000,000 shares authorized;
none issued 0 0
Common stock, $1 par value, 3,000,000 shares authorized;
809,700 shares issued and outstanding 810 806
Additional paid-in capital 7,296 7,259
Retained Earnings 966 861
Unrealized Holding Gain/Loss-Equity (509) (435)
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Total shareholder's equity 8,563 8,491
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$ 106,794 $ 102,496
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PCB BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
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<CAPTION>
(In Thousands)
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Three Months Ended
2000 1999
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<S> <C> <C>
INTEREST INCOME:
Loans, including fees $ 1,647 $ 1,493
Securities:
Taxable 237 120
Tax exempt 85 60
Federal funds sold 13 67
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Total interest income 1,982 1,740
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INTEREST EXPENSE:
Deposits 970 924
Other borrowings 78 --
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Total interest expense 1,048 924
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Net interest income 934 816
PROVISION FOR LOAN LOSSES 49 19
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Net interest income after provision for loan losses 885 797
OTHER INCOME:
Dividend Income from FHLB 19 --
Service charges on deposit accounts 89 57
Other service charges, commissions and fees 10 6
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Total other income 118 63
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OTHER EXPENSES:
Salaries and employee benefits 416 362
Occupancy expense 49 56
Other operating expenses 249 234
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Total other expenses 714 652
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Income before income taxes 289 208
INCOME TAXES 116 84
TAX-EXEMPT SECURITIES ADJUSTMENT 29 20
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Net income 202 144
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Earnings per share 0.25 0.18
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Weighted average shares outstanding 809,700 800,000
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PCB BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
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<CAPTION>
(In Thousands)
Three Months Ended
2000 1999
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<S> <C> <C>
INCREASE (DECREASE) IN CASH AND DUE FROM BANKS
Cash flows from operating activities:
Net Income 202 144
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and Amortization 109 68
Provision for loan losses 49 19
Increase in accrued income receivable (54) (69)
Other, net (173) (280)
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Net cash provided(used) by operating activities 133 (118)
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Cash flows from investing activities:
(Increase)/decrease in federal funds sold (608) 3,259
Purchases of held to maturity securities -- --
Purchases of securities available-for-sale (199) (4,467)
Net (increase)/decrease in loans (4,008) 360
Purchases of premises and equipment (4) (121)
Purchases/Dividends of Federal Home Loan Bank stock (19) --
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Net cash used by investing activities (4,838) (969)
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Cash flows from financing activities:
Dividends paid-out -- (40)
Increase/(decrease) in deposits (2,467) 1,334
Increase in Other Borrowings 6,500 --
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Net cash provided by financing activities 4,033 1,294
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Net increase in cash (672) 207
Cash and due from banks at beginning of period 6,050 2,048
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Cash and due from banks at end of period 5,378 2,255
======= =======
Cash payments for interest 950 1,110
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Cash payments for income taxes 237 70
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5
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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 three-month period ended March 31, 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.
6
<PAGE> 7
Item 2. Management's Discussion And Analysis of Financial Condition and Results
of Operations
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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 first quarter
of 2000. Total assets have grown $4.3 million or 4.2% since December 31, 1999.
Loans have increased $4.0 million or 5.6% since December 31, 1999. Investment
securities have increased $96 thousand or 0.5% since December 31, 1999.
NONPERFORMING ASSETS AND RISK ELEMENTS. The Bank had $317,000 in nonperforming
assets at March 31, 2000. Diversification within the loan profile is an
important means of reducing inherent lending risks. At March 31, 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 $293,000. In
reference to the impaired loans, the Bank has related allowance for credit
losses totaling $167 thousand, leaving a balance classified as substandard of
$126 thousand. The Bank also currently has $124 thousand 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 $5.4 million as of March
31, 2000. In addition, loans and investment securities repricing or maturing in
one year or less exceed $30.8 million at March 31, 2000. The Bank has
approximately $6.56 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 $724,000 at March 31,
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 $14.5 million with $8.5
million having been drawn as of March 31, 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 March 31, 2000, is $8.6 million or 8.0% of total assets. The Bank's
capital position is adequate to meet the minimum capital requirements as of
March 31, 2000 for all regulatory agencies. The Bank's capital ratios as of
March 31, 2000, are as follows:
Tier 1 capital 11.5%
Tier 2 capital 1.1%
Total risk-based 12.6%
7
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RESULTS OF OPERATIONS
The Company had net income of $202,000 in the first quarter of 2000 compared to
income of $144,000 in the first quarter of 1999. Net interest income was up
$120,000 or 14.7% over the first quarter of 2000 compared to 1999.
Interest income and interest expense both increased from 1999 to 2000 because of
the increase in earning assets and funding sources (i.e. deposits and
borrowings) from March 31, 1999 to March 31, 2000.
The provision for loan losses was $49,000 in the first quarter of 2000 compared
to $19,000 in the first quarter of 1999. The allowance for loan losses of
$905,000 at March 31, 2000 (approximately 1.21% 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
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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
27 Financial Data Schedule (For SEC use only)
9
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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.
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(Registrant)
5/9/00 /s/ Phillip R. Carriger
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(Date) Phillip R. Carriger, Chairman and Chief
Executive Officer
(Principle Executive Officer)
5/9/00 /s/ Larry E. Parks
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(Date) Larry E. Parks, Vice President
(Principle Accounting Officer)
10
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 5,378
<INT-BEARING-DEPOSITS> 93
<FED-FUNDS-SOLD> 1,967
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 20,139
<INVESTMENTS-CARRYING> 601
<INVESTMENTS-MARKET> 588
<LOANS> 75,018
<ALLOWANCE> 905
<TOTAL-ASSETS> 106,794
<DEPOSITS> 89,059
<SHORT-TERM> 8,500
<LIABILITIES-OTHER> 672
<LONG-TERM> 0
0
0
<COMMON> 810
<OTHER-SE> 7,753
<TOTAL-LIABILITIES-AND-EQUITY> 8,563
<INTEREST-LOAN> 1,647
<INTEREST-INVEST> 335
<INTEREST-OTHER> 19
<INTEREST-TOTAL> 1,982
<INTEREST-DEPOSIT> 970
<INTEREST-EXPENSE> 1,048
<INTEREST-INCOME-NET> 934
<LOAN-LOSSES> 49
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 714
<INCOME-PRETAX> 289
<INCOME-PRE-EXTRAORDINARY> 202
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 202
<EPS-BASIC> .25
<EPS-DILUTED> .23
<YIELD-ACTUAL> 8.08
<LOANS-NON> 317
<LOANS-PAST> 4
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 864
<CHARGE-OFFS> 9
<RECOVERIES> 1
<ALLOWANCE-CLOSE> 905
<ALLOWANCE-DOMESTIC> 905
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>