<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d) of the Securities Exchange
- ----- Act of 1934 for the quarterly period ended September 30, 1997
Transition report under Section 13 or 15(d) of the Exchange Act
- ----- For the transition period from to
--------------- ----------------
Commission File No. 333-25179
PEOPLE'S COMMUNITY CAPITAL CORPORATION
(Exact Name of Small Business Issuer as Specified in its Charter)
SOUTH CAROLINA 58-2287073
(State of Incorporation) (I.R.S. Employer Identification No.)
106 PARK AVENUE, S.W., AIKEN, SOUTH CAROLINA 29801
(Address of Principal Executive Offices)
(803) 641-0142
(Issuer's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name, Former Address and Former Fiscal Year, if Changed Since
Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
----- -----
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
993,162 shares of common stock, par value $.01 per share, were issued
and outstanding as of September 30, 1997.
Transitional Small Business Disclosure Format (check one):
Yes No X
----- -----
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM I - FINANCIAL STATEMENT
PEOPLE'S COMMUNITY CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30, 1997
(unaudited)
<S> <C>
ASSETS
Cash and due from banks $ 722,983
Cash in transit from stock sales 327,200
Investments 1,620,000
Federal funds sold 8,170,000
Loans, net 39,830
Property, at cost less accumulated depreciation 1,578,859
Accured interest receivable 37
Organization costs, net 57,292
Other assets 3,600
------------
TOTAL $ 12,519,801
============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 2,527,823
Accrued interest payable 649
Accrued expenses and other liabilities 393,975
Total liabilities $ 2,922,447
------------
Shareholders' Equity - $ 9,932
Common stock - $.01 par value, authorized
10,000,000 shares, issued 993,162 shares
Paid in capital 9,921,688
Deferred registration costs (186,355)
Retained earnings (147,911)
------------
Total shareholders' equity 9,597,354
------------
TOTAL $ 12,519,801
============
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM I - FINANCIAL STATEMENT
PEOPLE'S COMMUNITY CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF INCOME
FOR THE PERIOD ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
For the Nine For the Three
Months Ended Months Ended
September 30, September 30,
1997 1997
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
Interest Income:
Loans $ 37 $ 37
Federal funds sold 88,074 88,074
Other 1,362 11
--------- ---------
Total interest income $ 89,473 $ 88,122
--------- ---------
Interest Expense:
Deposits $ 902 $ 902
Total interest expense 902 902
--------- ---------
Net Interest Income $ 88,571 $ 87,220
Provision for Possible Loan Losses 0 0
--------- ---------
Net Interest Income After Provision For Possible Loan $ 88,571 $ 87,220
Losses
Noninterest Income:
Service charges $ 48 $ 48
Other 405 405
453 453
--------- ---------
Subtotal $ 89,024 $ 87,673
--------- ---------
Noninterest Expense:
Salaries and employee benefits $ 107,287 $ 61,201
Occupancy, office and equipment 22,296 6,480
General operating 31,690 31,690
Advertising/Marketing 30,147 30,147
Consulting, legal and accounting fees 34,204 34,204
Other 11,311 (3,034)
--------- ---------
Total noninterest expense $ 236,935 $ 160,688
--------- ---------
Income (Loss) Before Income Taxes $(147,911) $ (73,015)
Provision for Income Taxes 0 0
--------- ---------
Net Income $(147,911) $ (73,015)
</TABLE>
3
<PAGE> 4
PART I - FINANCIAL INFORMATION
ITEM I - FINANCIAL STATEMENT
PEOPLE'S COMMUNITY CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
For the Nine-Months
Ended September 30,
1997
(Unaudited)
<S> <C>
Cash flows from operating activities:
Net income (loss) $ (147,911)
Adjustments to reconcile net loss to net cash
Provided by operating activities:
Changes in deferred and accrued amounts:
Accrued interest receivable (37)
Organization costs (57,292)
Other Assets (3,600)
Accrued interest payable 649
(Increase) decrease in accrued expense and 393,975
other liabilities
Net cash provided by operating activities $ 185,784
Cash flows from investing activities:
Net (increase) decrease in federal funds sold and
other liquid investments $ (9,790,000)
Net (increase) in loans (39,830)
Net purchases of premises and equipment (1,578,859)
Net cash used in investing activities $(11,408,689)
Cash flows from financing activities:
Sale of stock, net of deferred registration costs $ 9,745,265
Borrowings from organizers 240,000
Repayment of borrowings from organizers (275,000)
Net proceeds from note payable 775,000
Repayment of note payable (775,000)
Net increase in deposits 2,527,823
Net cash provided by financing activities $ 12,238,088
Net increase in cash and due from banks $ 1,015,183
Cash, in transit, and due from banks at beginning of period 35,000
Cash, in transit, and due from banks at end of period $ 1,050,183
</TABLE>
4
<PAGE> 5
PEOPLE'S COMMUNITY CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES
BUSINESS ACTIVITY AND ORGANIZATION
People's Community Capital Corporation (the "Company") was incorporated
on February 26, 1997, under the laws of the State of South Carolina for the
purpose of operating as a bank holding company pursuant to the federal Bank
Holding Company Act of 1956, as amended. The group of organizers initiated
several financial transactions on behalf of the Company prior to the date of
incorporation and as early as December 3, 1996, the date of inception.
The Company authorized the issuance of 10,000,000 shares of common
stock, $.01 par value per share. In addition to the above common stock, the
Company also has the authority, exercisable by its Board of Directors, to issue
up to 10,000,000 shares of preferred stock, $.01 par value per share.
The Company filed a Registration Statement with the Securities and
Exchange Commission to sell a maximum of 1,200,000 shares of its common stock at
$10 per share, through a public offering. The Company completed the offering on
September 30, 1997, after selling 993,162 shares and raising $9,931,620. The
Company used $6,000,000 of the net proceeds of the offering to capitalize its
state banking subsidiary, People's Community Bank of South Carolina (the
"Bank"). The Company will retain the balance of the proceeds and intends
initially to invest it in United States government securities or as a deposit
with the Bank. In the long-term, the Company will use these sums for working
capital and other general corporate purposes, including payments of expenses of
the Company and the provision of additional capital for the Bank, if necessary.
The Bank opened for business on September 22, 1997.
NOTE 2 - BASIS OF PRESENTATION
The accompanying 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
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 ending December 31, 1997. For further
information, refer to the financial statements and footnotes thereto included in
the Company's Registration Statement on Form S-1 (Registration Number 333-25179)
as filed with and declared effective by the Securities and Exchange Commission.
Until the Bank opened for business on September 22, 1997, the Company
was accounted for as a development stage enterprise as defined by Statement of
Financial Accounting Standards No. 7, "Accounting and Reporting by Development
Stage Enterprises," as the Company devoted substantially all its efforts to
establishing a new business. When the Bank opened on September 22, 1997, certain
reclassifications and adjustments were made to the financial statements and
balance sheet to reflect that the Company is now accounted for as an operating
company.
5
<PAGE> 6
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion contains forward-looking statements that
involve risks and uncertainties. The Company's actual results may differ
materially from the results discussed in the forward-looking statements, and the
Company's operating performance each quarter is subject to various risks and
uncertainties that are discussed in detail in the Company's filings with the
Securities and Exchange Commission, including the "Risk Factors" section in the
Company's Registration Statement on Form S-1 (Registration Number 333-25179) as
filed with and declared effective by the Securities and Exchange Commission.
The Company was organized on February 26, 1997. Since February 26, 1997
the Company's principal activities have related to its organization, the
conducting of its initial public offering, the pursuit of approvals from the
South Carolina State Board of Financial Institutions (the "South Carolina Bank
Board") for its application to charter its subsidiary bank, People's Community
Bank of South Carolina (the "Bank"), and the pursuit of approvals from the
Federal Deposit Insurance Corporation (the "FDIC") for its application for
insurance of the deposits of the Bank. The Company completed the offering on
September 30, 1997, after selling 993,162 shares and raising $9,931,620. The
Bank opened for business on September 22, 1997.
At September 30, 1997, the Company had total assets of $12,519,801,
consisting principally of federal funds sold of $8,170,000, investments of
$1,620,000, property, at cost less accumulated depreciation of $1,578,859, and
cash of $772,983. The organizational costs related to the organization of the
Company and the Bank have been capitalized and will be amortized over five
years.
The Company's liabilities at September 30, 1997, were $2,922,447,
consisting of deposits, accrued expenses and other liabilities. The Company had
shareholders' equity of $9,597,354 at September 30, 1997.
The Company had a net loss of $147,911 for the nine months ended
September 30, 1997. These losses resulted primarily from expenses incurred in
connection with activities related to the organization of the Company and the
Bank. These activities included (without limitation) the preparation and filing
of an application with the South Carolina Bank Board to charter the Bank, the
preparation and filing of an application with the FDIC to obtain insurance of
the deposits of the Bank, responding to questions and providing additional
information to the South Carolina Bank Board and the FDIC in connection with the
application process, the selling of the Company's common stock in the offering,
meetings and discussions among various Organizers regarding application
information, target markets, and capitalization issues, and planning and
organizing for the opening of the Bank. Because the Bank did not open until
September 22, 1997, it has had minimal operations from which to generate
revenues.
The Bank generated in excess of $2.5 million in deposits between its
opening date and September 30, 1997 and has placed the bulk ($8.2 million) of
the funds it raised in the stock offering in federal funds sold until the Bank
begins to generate loans. Since principal banking operations only commenced on
September 22, 1997, a more detailed discussion of the Bank's results of
operations is not meaningful.
6
<PAGE> 7
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company or
any of its subsidiaries is a party or of which any of their property is the
subject.
ITEM 2. CHANGES IN SECURITIES.
(a) Not applicable.
(b) Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to security holders for a vote during
the three months ended September 30, 1997.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
3.1 Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 of the
Registration Statement on Form S-1, File No.
333-25179).
3.2 Bylaws of the Company (incorporated by reference to
Exhibit 3.2 of the Registration Statement on Form
S-1, File No. 333-25179).
4.1 Provisions in the Company's Articles of
Incorporation and Bylaws defining the rights of
holders of the Company's Common Stock
(incorporated by reference to Exhibit 4.1 of the
Registration Statement on Form S-1, File No.
333-25179).
4.2 Form of Certificate of Common Stock (incorporated
by reference to Exhibit 4.2 of the Registration
Statement on Form S-1, File No. 333-25179).
10.1 Purchase and Sale Agreement dated March 20, 1997,
by and between NationsBank National Association, as
seller, and People's Community Capital Corporation,
as purchaser (incorporated by reference to Exhibit
10.1 of the Registration Statement on Form S-1,
File No. 333-25179).
7
<PAGE> 8
10.2 Employment Agreement dated March 3, 1997, between the
Company and Tommy B. Wessinger (incorporated by
reference to Exhibit 10.2 of the Registration
Statement on Form S-1, File No. 333-25179).
10.3 Employment Agreement dated March 3, 1997, by
and between the Company and Alan J. George
(incorporated by reference to Exhibit 10.3 of the
Registration Statement on Form S-1, File No.
333-25179).
10.4 Escrow Agreement dated March 14, 1997, by and
between The Bankers Bank and the Company
(incorporated by reference to Exhibit 10.4 of the
Registration Statement on Form S-1, File No.
333-25179).
10.5 Lease Agreement dated February 28, 1997, between the
Company, as lessee, and Margaret Holley-Taylor, as
lessor (incorporated by reference to Exhibit 10.5 of
the Registration Statement on Form S-1, File No.
333-25179).
10.6 Form of Subscription Agreement (incorporated by
reference to Exhibit 10.6 of the Registration
Statement on Form S-1, File No. 333-25179).
10.7 Negative Pledge Agreement dated as of May 19, 1997,
between the Company and Carolina First Bank
(incorporated by reference to Exhibit 10.7 of the
Registration Statement on Form S-1, File No.
333-25179).
10.8 Promissory Note dated May 19, 1997, issued by the
Company to Carolina First Bank (incorporated by
reference to Exhibit 10.8 of the Registration
Statement on Form S-1, File No. 333-25179).
10.9 Sales Agency Agreement dated July 9, 1997
between the Company and Interstate/Johnson Lane
Corporation.
27.1 Financial Data Schedule (for electronic filing
purposes).
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed by the Company during
the quarter ended September 30, 1997.
8
<PAGE> 9
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act"), the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PEOPLE'S COMMUNITY CAPITAL CORPORATION
Date: November 12, 1997 By: /s/ Tommy B. Wessinger
--------------------------------
Tommy B. Wessinger
Chief Executive Officer
9
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 722,983
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 8,170,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,620,000
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 39,830
<ALLOWANCE> 0
<TOTAL-ASSETS> 12,519,801
<DEPOSITS> 2,527,823
<SHORT-TERM> 0
<LIABILITIES-OTHER> 394,624
<LONG-TERM> 0
0
0
<COMMON> 9,932
<OTHER-SE> 9,587,422
<TOTAL-LIABILITIES-AND-EQUITY> 12,519,801
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 89,473
<INTEREST-DEPOSIT> 902
<INTEREST-EXPENSE> 902
<INTEREST-INCOME-NET> 88,571
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 236,935
<INCOME-PRETAX> (147,911)
<INCOME-PRE-EXTRAORDINARY> (147,911)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (147,911)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
