<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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, 1996
------------------
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-16181
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ABC BANCORP
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
GEORGIA 58-1456434
- ------------------------ ---------------------
(State of incorporation) (IRS Employer ID No.)
310 FIRST STREET, SE MOULTRIE, GA 31768
------------------------------------------
(Address of principal executive offices)
(912) 890-1111
-----------------------------
(Registrant's telephone number)
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
--- ---
THERE WERE 5,031,063 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER 30,
1996.
<PAGE>
ABC BANCORP
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item Page
- ---- ----
<S> <C> <C>
1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 9
PART II - OTHER INFORMATION
3. Submission of Matters to a Vote of
Securities Holders 16
6. Exhibits and Reports on Form 8-K 16
SIGNATURE 18
</TABLE>
2
<PAGE>
ABC BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Sep 30 Dec 31
1996 1995
---------- ----------
<S> <C> <C>
Assets
- -----
Cash and due from banks $ 27,214 $ 28,351
Federal funds sold 9,270 47,485
Securities available for sale, at fair value 73,243 58,718
Securities held to maturity, at cost 25,684 13,271
Loans 409,802 281,031
Less allowance for loan losses 6,689 5,184
-------- --------
Loans, net 403,113 275,847
-------- --------
Premises and equipment, net 12,935 9,529
Other assets 25,184 13,108
-------- --------
$576,643 $446,309
======== ========
Liabilities and Stockholders' Equity
- ------------------------------------
Deposits
Noninterest -bearing demand $ 64,001 $ 69,661
Interest-bearing demand 93,403 90,495
Savings 38,076 27,468
Time, $100,000 and over 68,427 52,029
Other time 214,500 154,304
-------- --------
Total deposits 478,407 393,957
Notes payable 4,324 - -
Securities sold under repurchase agreements 701 1,887
Other short term borrowings 35,519 2,600
Other liabilities 5,151 4,236
-------- --------
Total liabilities 524,102 402,680
-------- --------
Stockholders' equity
Common stock,par value $1; 15,000,000 shares authorized
5,249,419 and 4,703,919 shares issued, respectively 5,249 4,704
Surplus 28,525 23,234
Retained earnings 21,011 17,048
Unrealized gains (losses) on securities available for sale,
net of taxes (689) 198
-------- --------
54,096 45,184
Less cost of 217,882 shares acquired for the treasury (1,555) (1,555)
-------- -------
Total stockholders' equity 52,541 43,629
-------- --------
$576,643 $446,309
======== =========
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
ABC BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
1996 1995
--------- ---------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $10,757 $7,630
Interest on taxable securities 1,379 878
Interest on nontaxable securities 179 126
Interest on deposits in other banks - - 30
Interest on Federal funds sold 114 290
------- --------
12,429 8,954
------- --------
INTEREST EXPENSE
Interest on deposits 5,063 3,775
Interest on securities sold under repurchase
agreements and other borrowings 538 121
------- --------
5,601 3,896
------- --------
Net interest income 6,828 5,058
Provision for loan losses 438 284
------- --------
Net interest income after provision for loan loss 6,390 4,774
------- --------
OTHER INCOME
Service charges on deposit accounts 1,415 910
Other service charges, commisions and fees 220 102
Other 148 164
------- --------
1,783 1,176
------- --------
OTHER EXPENSE
Salaries and employee benefits 2,982 2,018
Equipment expense 551 229
Occupancy expense 319 457
Amortization of intangible assets 150 87
Data processing fees 502 139
Directors fees 126 95
FDIC premiums 35 5
Other operating expenses 1,165 851
------- --------
5,830 3,881
-------- --------
Income before income taxes 2,343 2,069
Applicable income taxes 798 673
------- --------
Net income $1,545 $1,396
======= ========
Income per common share $0.31 $0.31
======= =======
Average shares outstanding 5,031,537 4,453,410
========= =========
See Notes to Consolidated Financial Statements.
</TABLE>
4
<PAGE>
ABC BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
1996 1995
------------ ------------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $26,975 $21,616
Interest on taxable securities 3,429 2,630
Interest on nontaxable securities 477 395
Interest on deposits in other banks - - - -
Interest on Federal funds sold 801 912
------- -------
31,682 25,553
------- ------
INTEREST EXPENSE
Interest on deposits 13,083 10,330
Interest on securities sold under repurchase
agreements and other borrowings 697 273
------- -------
13,780 10,603
------- -------
Net interest income 17,902 14,950
PROVISION FOR LOAN LOSSES 985 789
------- -------
Net interest income after provision for loan loss 16,917 14,161
------- -------
OTHER INCOME
Service charges on deposit accounts 3,084 2,552
Other service charges, commisions and fees 883 484
Security transactions, net (12)
Other 277 400
------ -------
4,232 3,436
------ -------
OTHER EXPENSE
Salaries and employee benefits 7,347 5,968
Equipment expense 1,196 898
Occupancy expense 868 1,020
Amortization of intangible assets 319 238
Data processing fees 1,058 436
Directors fees 312 281
FDIC premiums 92 387
Other operating expenses 2,721 2,472
------ ------
13,913 11,700
------- -------
Income before income taxes 7,236 5,897
Applicable income taxes 2,429 1,949
------- -------
NET INCOME $4,807 $3,948
====== ======
Income per common share $1.01 $0.89
===== ======
Average shares outstanding 4,779,017 4,453,410
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
ABC BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
1996 1995
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $4,807 $3,948
------ -------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 889 852
Provision for loan losses 985 225
Amortization of intangible assets 872 789
Other prepaids, deferrals and accruals, net (4,807) (2,404)
------- -------
Total adjustments (2,061) (538)
------- -------
Net cash provided by (used in) operating activities 2,746 3,410
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investment securities 23,499 15,896
Purchase of investment securities (28,336) (16,366)
Proceeds from sales of securities available for sale 1,600 1,499
(Increase)decrease in Federal funds sold 38,215 1,353
(Increase) decrease in loans (48,310) (32,138)
Net cash paid for purchased subsidiary (3,888)
Purchase of premises and equipment (1,441) (570)
------- -------
Net cash provided by (used in) investing activities (18,661) (30,326)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits (7,046) 20,519
Net increase (decrease) in repurchase agreements (1,186) (597)
Proceeds from short-term borrowings 21,119 5,774
Proceeds from long-term debt 4,000
Repayment of long-term debt (1,096)
Dividends paid (1,179) (947)
Purchase of fractional shares (6) (3)
Proceeds from exercise of stock options of pooled subsidiary 172 75
Net cash provided by (used in) financing activities 14,778 24,821
------- -------
Net increase (decrease) in cash and due from banks ($1,137) ($2,095)
Cash and due from banks at beginning of period 28,351 23,093
------- -------
Cash and due from banks at end of period $27,214 $20,998
======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of ABC Bancorp and subsidiaries
("the Company") conform to generally accepted accounting principles and to
general practices within the banking industry. The interim consolidated
financial statements included herein are unaudited, but reflect all adjustments
which, in the opinion of management, are necessary for a fair presentation of
the consolidated financial position and results of operations for the interim
periods presented. All adjustments reflected in the interim financial
statements are of a normal, recurring nature. Such financial statements should
be read in conjunction with the financial statements and notes thereto and the
report of independent auditors included in the Company's Form 10-K Annual Report
for the year ended December 31, 1995. The results of operations for the nine
months ended September 30, 1996 are not necessarily indicative of the results to
be expected for the full year.
NOTE 2. RECENT ACQUISITIONS
On June 21, 1996, the Company acquired all of the outstanding common
stock of Southland Bancorporation ("Southland") in exchange for 402,271 shares
of the Company's common stock and $5,880,392 in cash. The excess of purchase
price over net book value of assets acquired amounted to $5,310,222. The fair
value of assets acquired was deemed to approximate their recorded value;
therefore, the excess cost will be accounted for as goodwill and amortized over
a period of 15 years. Immediately following the merger, Southland was
liquidated and its wholly-owned subsidiary, Southland Bank, became a wholly-
owned subsidiary of the Company.
The acquisition has been accounted for as a purchase transaction and,
accordingly, the operations of Southland Bank will be included in the
consolidated financial statements of the Company only from June 21, 1996, the
date of acquisition. Had the acquisition of Southland Bank occurred on January
1, 1995, pro forma unaudited consolidated results of operations (after
restatement for the poolings of interest described below) for the nine months
ended September 30, 1996 and 1995 would have been as follows:
7
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------
1996 1995
---- ----
(Dollars in Thousands Except
Per Share Data)
<S> <C> <C>
Net interest income $20,151 $18,510
Other income 4,799 4,664
Net income 4,855 4,689
Net income per share .96 .97
</TABLE>
On July 31, 1996, the Company acquired all of the outstanding common
stock of Central Bankshares, Inc. ("Central") in exchange for 524,300 shares of
the Company's common stock and a nominal amount of cash in lieu of fractional
shares. Immediately following the merger, Central was liquidated and its
wholly-owned subsidiary, Central Bank & Trust, became a wholly-owned subsidiary
of the Company. On August 31, 1996, the Company acquired all of the outstanding
common stock of First National Financial Corporation ("First National") in
exchange for 725,774 shares of the Company's common stock and a nominal amount
of cash in lieu of fractional shares. Immediately following the merger, First
National was liquidated and its wholly-owned subsidiary, First National Bank of
South Georgia, became a wholly-owned subsidiary of the Company.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Liquidity management involves the matching of the cash flow requirements
of customers, who may be either depositors desiring to withdraw funds or
borrowers needing assurance that sufficient funds will be available to meet
their credit needs, and the ability of ABC Bancorp and its subsidiaries (the
"Company") to meet those needs. The Company strives to maintain an adequate
liquidity position by managing the balances and maturities of interest-earning
assets and interest-bearing liabilities so that the balance it has in short-term
investments (Federal funds sold) at any given time will adequately cover any
reasonably anticipated immediate need for funds. Additionally, the subsidiary
banks (the "Banks") maintain relationships with correspondent banks which could
provide funds to them on short notice, if needed.
The liquidity and capital resources of the Company is monitored on a
periodic basis by state and Federal regulatory authorities. As determined under
guidelines established by these regulatory authorities, the Banks' liquidity
ratios at September 30, 1996 were considered satisfactory. At that date, the
Banks' Federal funds sold were adequate to cover any reasonably anticipated
immediate need for funds. The Company is aware of no events or trends likely to
result in a material change in liquidity. At September 30, 1996, the Company's
and the Banks' capital asset ratios were considered adequate based on guidelines
established by regulatory authorities. During the nine months ended September
30, 1996, total capital increased $8.9 million to $52.5 million at September 30,
1996. This increase in capital resulted from the retention of net earnings of
$3.6 million (after deducting dividends to shareholders of $1.2 million) a
decrease of $.7 million in unrealized gains on securities available for sale,
net of taxes and a net increase of $6.0 million related to merger transactions.
At September 30, 1996, there were no material binding commitments for
capital expenditures. However, the Company anticipates that expenditures of
approximately $ 2,500,000 will be required for the expansion or relocation of
properties, which it plans to complete during the next 12 months, in order to
serve its customers and meet the needs of the citizens in the communities served
by the Banks.
9
<PAGE>
MERGERS AND ACQUISITIONS
The results of operations for the three and nine months ended September
30, 1996 and 1995 include the operations of the five wholly-owned subsidiary
banks held prior to 1996 and the operations of Central Bankshares, Inc. and
First National Financial Corporation which were acquired in 1996 in transactions
that were accounted for as poolings of interests. The results of operations for
the three and nine months ended September 30, 1996 also include the operations
of Southland Bancorporation since June 21, 1996, the date of its acquisition,
which transaction was accounted for as a purchase.
Also, the Company has entered into a definitive merger agreement with
M & F Financial Corporation, Donalsonville, Georgia,("M&F"), whereby it would
acquire all of the outstanding common stock of M&F in exchange for the Company's
common stock. The total merger consideration will approximate $6.1 million.
Total assets of M&F at September 30, 1996 were approximately $42 million. The
merger is subject to approval by M&F shareholders and certain regulatory
authorities, and the registration of the Company's common stock to be issued in
connection with the merger. As a result of the merger, Merchants & Farmers
Bank, a wholly-owned subsidiary of M&F, will become a wholly-owned subsidiary of
the Company. The merger will be accounted for as a pooling of interests and is
expected to be consummated during the fourth quarter of 1996.
RESULTS OF OPERATIONS
The Company's results of operations are determined by its ability to
effectively manage interest income and expense, to minimize loan and investment
losses, to generate noninterest income and to control noninterest expense.
Since interest rates are determined by market forces and economic conditions
beyond the control of the Company, the ability to generate net interest income
is dependent upon the Banks' ability to obtain an adequate spread between the
rate earned on interest-earning assets and the rate paid on interest-bearing
liabilities. Thus, the key performance measure for net interest income is the
interest margin or net yield, which is taxable-equivalent net interest income
divided by average earning assets.
The primary component of consolidated earnings is net interest income,
or the difference between interest income on interest-earning assets and
interest paid on interest-bearing liabilities. The net interest margin is net
interest income expressed as a percentage of average interest-earning assets.
Interest-earning assets consist of loans, investment securities and Federal
funds sold. Interest-bearing liabilities consist of deposits and borrowings
such as Federal funds purchased,
10
<PAGE>
securities sold under repurchase agreements and Federal Home Loan Bank advances.
A portion of interest income is earned on tax-exempt investments, such as state
and municipal bonds. In an effort to state this tax-exempt income and its
resultant yields on a basis comparable to all other taxable investments, an
adjustment is made to analyze this income on a taxable-equivalent basis.
COMPARISON OF STATEMENTS OF INCOME
The net interest margin was 5.42% and 5.63% during the three months
ended September 30, 1996 and 1995, respectively, a decrease of 21 basis points.
The net interest margin was 5.43% and 5.26% during the nine months ended
September 30, 1996 and 1995, respectively, an increase of 17 basis points.
These variances are mostly attributable to fluctuations in the average rates
charged and fees earned on loans.
Net interest income on a taxable-equivalent basis was $6,920,000 as
compared to $5,123,000 during the three months ended September 30, 1996 and
1995, respectively, representing an increase of 35.1%. Net interest income on
a taxable-equivalent basis was $18,148,000 as compared to $15,153,000 during the
nine months ended September 30, 1996 and 1995, respectively, representing an
increase of 19.8%.
The provision for loan losses is a charge to earnings in the current
period to replenish the allowance for loan losses and maintain it at the level
management determines is adequate. The provision for loan losses charged to
earnings amounted to $438,000 and $284,000 during the three months ended
September 30, 1996 and 1995, and $985,000 and $789,000 during the nine months
ended September 30, 1996 and 1995. The provision for loan losses recorded by
Southland Bank ("Southland") during the nine months ended September 30, 1996 was
$77,000.
Following is a comparison of noninterest income for the three months
ended September 30, 1996 and 1995. (dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
------------------
Sept 1996 Sept 1995
--------- ---------
<S> <C> <C>
Service charges on deposits $1,415 $910
Other service charges,
commissions & fees -220 102
Other income 148 164
------ ----
Total noninterest income $1,783 $1,176
====== ======
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
Sept 1996 Sept 1995
--------- ---------
<S> <C> <C>
Service charges on deposits $3,084 $2,552
Other service charges
commissions & fees 883 484
Other income 265 400
------ -------
Total noninterest income $4,232 $3,436
====== ======
</TABLE>
Total noninterest income for the nine months ended September 30, 1996 was
$796,000 higher than during the same period in 1995. Service charges on
deposits, other service charges and other income recorded by Southland during
the nine months ended September 30, 1996 was $216,000, $121,000 and $105,000,
respectively. The additional increase in service charges on deposits for the
three and nine months ended September 30, 1996, as compared to September 30,
1995, is attributable to an increase in average deposits. The additional
increase in other service charges and fees is attributable to an increase in the
volume of loans.
Following is an analysis of noninterest expense for the three and nine
months ended September 30, 1996 and 1995. (dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
------------------
Sept 1996 Sept 1995
--------- ---------
<S> <C> <C>
Salaries and employee benefits $ 2,982 $ 2,018
Occupancy and equipment expense 870 686
Deposit insurance premium 35 5
Data processing fees 502 139
Other expense 1,441 1,033
------- ------
Total noninterest expense $ 5,830 $ 3,881
======= =======
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
Sept 1996 Sept 1995
--------- ---------
<S> <C> <C>
Salaries and employee benefits $ 7,347 $ 5,968
Occupancy and equipment expense 2,064 1,918
Deposit insurance premium 92 387
Data processing fees 1,058 436
Other expense 3,352 2,991
------- -------
Total noninterest expense $13,913 $11,700
======= =======
</TABLE>
Total noninterest expense for the nine months ended September 30, 1996 was
$2,213,000 higher than during the same period in 1995.
12
<PAGE>
Salaries and employee benefits for the nine months ended September 30, 1996
was $1,379,000 higher than during the same period in 1995. Salaries and employee
benefits recorded by Southland during the nine months ended September 30, 1996
amounted to $620,000. The remainder of the increase is mostly attributable to
an increase in the number of employees in preparation for the company's
acquisition growth during 1996.
Deposit insurance premiums for the nine months ended September 30, 1996 was
$295,000 lower than during the same period in 1995. Southland's deposit
insurance premium for the nine months ended September 30, 1996 amounted to
$19,000. Deposit insurance premiums, excluding Southland, decreased $314,000
during the nine months ended September 30, 1996 as compared to the same period a
year earlier. This decrease is attributable to a reduction in FDIC deposit
insurance for commercial banks which became effective in 1995.
Data processing fees for the nine months ended September 30, 1996 were
$622,000 higher than during the same period in 1995, with the increase
attributable to the conversion costs during 1996 to a new process for rendering
month-end statements to customers.
Other operating expense for the nine months ended September 30, 1996
increased $361,000 as compared to the same period in 1995, with $352,000 of this
increase attributable to Southland.
Following is a condensed summary of net income during the three and nine
months ended September 30, 1996 and 1995. (dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
------------------
Sept 1996 Sept 1995
---------- ---------
<S> <C> <C>
Net interest income $6,828 $5,058
Provision for loan losses 438 284
Other income 1,783 1,176
Other expense 5,830 3,881
------ ------
Income before income taxes 2,343 2,069
Applicable income taxes 798 673
------ ------
Net income $1,545 $1,396
====== ======
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended
-----------------------
Sept 1996 Sept 1995
--------- ---------
<S> <C> <C>
Net interest income $17,902 $14,950
Provision for loan losses 985 789
Other income 4,232 3,436
Other expense 13,913 11,700
------ ------
Income before income taxes 7,236 5,897
Applicable income taxes 2,429 1,949
------- -------
Net income $ 4,807 $ 3,948
======= =======
</TABLE>
Net income increased $859,000 or 21.76% to $4,807,000 for the nine months
ended September 30, 1996 as compared to $3,948,000 for the nine months ended
September 30, 1995. Approximately 40% of this increase represents net income of
$343,000 contributed by the purchased subsidiary, Southland. Net interest
income of ABC and its subsidiaries excluding Southland increased $1,591,000
offset by an increase in provision for loan losses of $119,000 and an increase
in all other net noninterest expense of $956,000, resulting in a net increase of
$516,000 in net income for the consolidated group excluding Southland.
COMPARISON OF BALANCE SHEETS
Total assets increased by $130.3 million, or 29.2%, to $576.6 million at
September 30, 1996 from $446.3 million at December 31, 1995. Of this increase,
$120 million is attributable to Southland.
Total earning assets increased by $116.0 million, or 29.3%, to $511.3
million at September 30, 1996 from $395.3 million at December 31, 1995. Of this
increase, $105 million is attributable to Southland.
Total loans, net of the allowance for loan losses, increased by $127.3
million, or 31.6%, to $403.1 million at September 30, 1996 from $275.8 million
at December 31, 1995. Of this increase, $82 million is attributable to
Southland.
Total deposits increased by $84.4 million, or 21.4%, to $478.4 million at
September 30, 1996 from $394.0 million at December 31, 1995. Of this increase,
$94 million is attributable to Southland. Approximately 14% and 18% of deposits
were noninterest-bearing as of September 30, 1996 and December 31, 1995,
respectively.
14
<PAGE>
The allowance for loan losses represents a reserve for potential losses in
the loan portfolio. The adequacy of the allowance for loan losses is evaluated
quarterly based on a review of all significant loans, with a particular emphasis
on non-accruing, past due and other loans that management believes require
attention. Another factor used in determining the adequacy of the reserve is
management's judgment about factors affecting loan quality and assumptions about
the local and national economy.
The allowance for loan losses was 1.63% and 1.84% of total loans
outstanding at September 30, 1996 and December 31, 1995, respectively.
Management considers the allowance for loan losses as of September 30, 1996
adequate to cover potential losses in the loan portfolio.
15
<PAGE>
PART II. OTHER INFORMATION
ITEM 3. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
There were no matters submitted to a vote of securities holders during
the quarter ended September 30, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits - None.
B. ABC has filed a Report on Form 8-K, dated July 31, 1996, concerning its
acquisition by merger of Central Bankshares, Inc. ("Central"), Cordele,
Georgia. The following financial information was incorporated by reference
concerning ABC, Central, and the two other entities which ABC has acquired
by merger in 1996, Southland Bancorporation ("Southland"), Dothan, Alabama,
and First National Financial corporation ("First National"), Albany,
Georgia.
-- Unaudited consolidated financial statements of ABC as of March 31,
1996, together with the notes thereto, as well as the audited
financial statements of ABC as of December 31, 1995 and the year then
ended, audited by the independent accounting firm of Mauldin &
Jenkins.
-- Unaudited consolidated financial statements of Central as of March 31,
1996, together with the notes thereto, as well as the audited
financial statements of Central as of December 31, 1995 and the year
then ended audited by the independent accounting firm of Mauldin &
Jenkins.
-- Unaudited consolidated financial statements of Southland as of March
31, 1996, together with the notes thereto, as well as the audited
financial statements of Southland as of December 31, 1995, and the
year then ended, audited by the independent accounting firm of KPMG
Peat Marwick LLP.
-- Unaudited consolidated financial statements of First National as of
March 31, 1996, together with the notes thereto, as well as the
audited financial statements of First National as of December 31, 1995
and the year then ended, audited by the independent accounting firm of
Francis & Co., CPA's.
-- Unaudited Pro Forma Condensed Consolidated Financial Data and
Historical Financial Data of each of ABC, First National, Central and
Southland.
16
<PAGE>
ABC has filed a Report on Form 8-K, dated August 30, 1996, concerning its
acquisition by merger of First National. The following financial information
was incorporated by reference concerning ABC, First National, Central and
Southland.
-- Unaudited consolidated financial statements of ABC as of March 31,
1996, together with the notes thereto, as well as the audited
financial statements of ABC as of December 31, 1995 and the year then
ended, audited by the independent accounting firm of Mauldin &
Jenkins.
-- Unaudited consolidated financial statements of First National as of
March 31, 1996, together with the notes thereto, as well as the
audited financial statements of First National as of December 31, 1995
and the year then ended, audited by the independent accounting firm of
Francis & Co., CPA's.
-- Unaudited consolidated financial statements of Central as of March 31,
1996, together with the notes thereto, as well as the audited
financial statements of Central as of December 31, 1995 and the year
then ended, audited by the independent accounting firm of KPMG Peat
Marwick LLP.
-- Unaudited Pro Forma Condensed Consolidated Financial Data and
Historical Financial Data of each of ABC, First National, Central and
Southland.
17
<PAGE>
SIGNATURE
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:
ABC BANCORP
November 7, 1996 /s/ W. Edwin Lane, Jr.
- -------------------------------------- -------------------------------------
DATE W. EDWIN LANE, JR.
EXECUTIVE VICE PRESIDENT &
CHIEF FINANCIAL OFFICER
(Duly Authorized Oddicer and principal
financial/accounting officer)
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 27,214
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 9,270
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 73,243
<INVESTMENTS-CARRYING> 25,684
<INVESTMENTS-MARKET> (281)
<LOANS> 409,802
<ALLOWANCE> 6,689
<TOTAL-ASSETS> 576,643
<DEPOSITS> 478,407
<SHORT-TERM> 40,544
<LIABILITIES-OTHER> 5,151
<LONG-TERM> 0
0
0
<COMMON> 5,249
<OTHER-SE> 47,292
<TOTAL-LIABILITIES-AND-EQUITY> 576,643
<INTEREST-LOAN> 26,975
<INTEREST-INVEST> 3,906
<INTEREST-OTHER> 801
<INTEREST-TOTAL> 31,682
<INTEREST-DEPOSIT> 13,083
<INTEREST-EXPENSE> 13,780
<INTEREST-INCOME-NET> 17,902
<LOAN-LOSSES> 985
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 13,913
<INCOME-PRETAX> 7,236
<INCOME-PRE-EXTRAORDINARY> 7,236
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,807
<EPS-PRIMARY> 1.01
<EPS-DILUTED> 1.01
<YIELD-ACTUAL> 5.43
<LOANS-NON> 5,005
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 5,005
<ALLOWANCE-OPEN> 5,184
<CHARGE-OFFS> 1,055
<RECOVERIES> 364
<ALLOWANCE-CLOSE> 6,689<F1>
<ALLOWANCE-DOMESTIC> 6,689<F1>
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 6,689<F1>
<FN>
<F1> Includes $1,211 reserve increase due to acquisition
</FN>
</TABLE>
