FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
------------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------------- --------------------
Commission File Number 0-10974
-------
FIRST PULASKI NATIONAL CORPORATION
----------------------------------------------------------
(Exact name of registrant as specified in its charter)
Tennessee 62-1110294
------------------------------------------------------------------------
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
206 South First Street, Pulaski, Tennessee 38478
------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: 615-363-2585
---------------------
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 .
------- -------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report:
Common Stock, $1.00 par value -- 304,983 Shares Outstanding
PAGE 1 OF 15 PAGES
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements.
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
FIRST PULASKI NATIONAL CORPORATION AND SUBSIDIARY
<CAPTION>
March 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
------
Cash and due from banks $10,157,765 $8,783,095
Federal funds sold 17,525,449 1,525,929
------------ ------------
Cash and cash equivalents 27,683,214 10,309,024
Securities available for sale 42,101,848 47,012,477
Securities held to maturity 13,979,620 15,446,504
Net loans and leases 137,953,959 134,346,992
Bank premises and equipment 7,308,259 7,035,901
Accrued interest receivable 2,338,473 2,347,930
Prepayments and other assets 2,349,187 2,417,617
Other real estate owned 179,787 185,570
------------ ------------
TOTAL ASSETS $233,894,347 $219,102,015
============ ============
LIABILITIES
-----------
Deposits
Non-interest bearing balances $27,147,627 $26,374,760
Interest bearing balances 175,984,725 163,294,365
------------ ------------
203,132,352 189,669,125
Other borrowed funds 1,139,466 1,160,584
Accrued taxes 405,581 58,434
Accrued interest on deposits 1,064,562 969,657
Accrued profit sharing expense 101,044 111,234
Other liabilities 106,270 83,955
------------ ------------
TOTAL LIABILITIES 205,949,275 192,052,989
------------ ------------
STOCKHOLDERS' EQUITY
--------------------
Common Stock, $1.00 par; authorized 1,800,000
shares; 304,983 and 304,910 shares issued
and outstanding, respectively 304,983 304,910
Capital Surplus 5,729,663 5,720,392
Retained Earnings 22,298,478 21,869,084
Unrealized (losses) on securities (388,052) (845,360)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 27,945,072 27,049,026
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $233,894,347 $219,102,015
============ ============
</TABLE>
PAGE 2 OF 15 PAGES
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements. (Continued)
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FIRST PULASKI NATIONAL CORPORATION AND SUBSIDIARY
<CAPTION>
For Three Months Ended
March 31,
1995 1994
---- ----
<S> <C> <C>
INTEREST INCOME:
Loans, including fees $3,522,279 $2,896,037
Investment securities 900,017 964,738
Deposits 0 13,566
Federal funds sold 143,264 93,442
---------- ----------
TOTAL INTEREST INCOME 4,565,560 3,967,783
INTEREST EXPENSE:
Interest on deposits:
NOW accounts 120,366 118,825
Savings and MMDA accounts 204,169 198,689
Time 1,481,688 1,031,433
Notes payable 17,159 2,965
---------- ----------
TOTAL INTEREST EXPENSE 1,823,382 1,351,912
---------- ----------
NET INTEREST INCOME 2,742,178 2,615,871
Provision for loan losses 41,437 30,000
---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,700,741 2,585,871
---------- ----------
OTHER INCOME:
Service charges on deposit accounts 324,618 341,346
Other service charges and fees 108,064 92,645
Security gains, net 0 5,268
Other miscellaneous income 60,866 12,937
---------- ----------
TOTAL OTHER INCOME 493,548 452,196
---------- ----------
PAGE 3 OF 15 PAGES
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements. (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FIRST PULASKI NATIONAL CORPORATION AND SUBSIDIARY (UNAUDITED)
For Three Months Ended
March 31,
1995 1994
---- ----
OTHER EXPENSES:
Salaries and employee benefits 943,534 867,481
Occupancy, net 215,614 156,860
Furniture & equipment 173,219 105,081
Advertising & public relations 127,342 90,995
Other operating 450,784 379,175
---------- ----------
TOTAL OTHER EXPENSES 1,910,493 1,599,592
---------- ----------
Income before income taxes $1,283,796 $1,438,475
Applicable income taxes 473,173 519,545
---------- ----------
NET INCOME $810,623 $918,930
========== ==========
PER SHARE DATA:
Net income per share $2.66 $3.07
Dividends per share $1.25 $1.25
Number of shares 304,967 299,799
========= =========
</TABLE>
PAGE 4 OF 15 PAGES
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements. (Continued)
<TABLE>
STOCKHOLDER'S EQUITY
FIRST PULASKI NATIONAL CORPORATION AND SUBSIDIARY (UNAUDITE
<CAPTION>
For the Three Months Ended March 31, 1995
Unrealized
Gains/<Losses>
Common Capital Retained on Securities
Stock Surplus Earnings Net of Taxes Total
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, Dec. 31,
1994 $304,910 $5,720,392 $21,869,084 ($845,360) $27,049,026
Net Income 810,623 810,623
Cash Dividends (381,229) (381,229)
($1.25 per share)
Proceeds from
Issuance of 73 9,271 9,344
Additional Stock
Change in unrealized
gains <losses> on
securities,
net of tax 457,308 457,308
-------- ---------- ----------- -------- -----------
Balance, March 31,
1995 $304,983 $5,729,663 $22,298,478 ($388,052) $27,945,072
======== ========== =========== ======== ===========
</TABLE>
PAGE 5 OF 15 PAGES
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements. (Continued)
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FIRST PULASKI NATIONAL CORPORATION AND SUBSIDIARY (UNAUDITED)
<CAPTION>
For Three Months Ending
March 31,
1995 1994
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $810,623 $918,930
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating Activities:
Provision for loan losses 41,437 30,000
Depreciation of premises and equipment 181,525 104,096
Amortization and accretion of investment
securities, net 110,780 96,908
Security gains, net 0 (5,268)
(Increase) decrease in interest receivable 9,456 (209,988)
Increase in prepaid expenses (148,100) (148,232)
Increase in other assets (19,052) (4,490)
Increase in accrued interest payable 94,905 23,917
Increase in accrued taxes 186,927 403,838
Increase (decrease) in other liabilities 175,909 (66,037)
----------- -----------
Net Cash From Operating Activities 1,444,410 1,143,674
Cash Flows for Investing Activities:
Proceeds from maturity of investment
securities 8,133,333 7,404,553
Purchase of investment securities (1,173,709) (15,358,993)
Decrease in interest bearing deposits 250,075 0
Net increase in loans (3,651,968) (1,435,024)
Principal payments received under leases 0 11,858
Capital expenditures (453,883) (676,498)
Other real estate acquired, net 5,783 111,375
----------- -----------
Net Cash Used by Investing Activities 3,109,631 (9,942,729)
Cash Flows From Financing Activities:
Net increase in deposits 13,463,227 11,022,760
Cash dividends paid (381,229) (375,649)
Proceeds from issuance of common stock 9,344 216,640
Borrowings repaid (21,118) (2,082)
----------- -----------
Net Cash From Financing Activities 13,070,224 10,861,669
----------- -----------
Net Increase in Cash and Cash Equivalents 17,624,265 2,062,614
Cash and Cash Equivalents @ Beginning of Period 10,058,949 19,727,146
----------- -----------
Cash and Cash Equivalents at End of Period $27,683,214 $21,789,760
=========== ===========
</TABLE>
PAGE 6 OF 15 PAGES
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements. (Continued)
The interim financial statements furnished under this item reflect
all adjustments which are, in the opinion of management, necessary for
a fair presentation of the results of operations for the interim periods
presented. All such adjustments are of a normal recurring nature.
Item 2. Management's Discussion and Analysis of Financial Condition
and Result of Operations.
The following analysis should be read in conjunction with the
financial statements set forth in Part I, Item 1, immediately preceding
this section.
Reference is made to the report of the registrant on Form 10-KSB
for the year ending December 31, 1994, which report was filed with the
Securities and Exchange Commission on or about March 30, 1995.
(a) Liquidity
Liquidity has been defined as the ability to fund increases in
loan demand or to compensate for decreases in deposits and other
sources of funds, or both. Maintenance of adequate liquidity is an
essential component of the financial planning process. The objective
of asset/liability management is to provide an optimum balance of
safety, liquidity and earnings. The registrant seeks to generate
adequate cash flows to meet its needs without sacrificing income or
taking undue risks.
Marketable investment securities, particularly those of short
maturities, are the principal source of asset liquidity. Securities
maturing in one year or less amounted to $13,032,056 at March 31,
PAGE 7 OF 15 PAGES
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition
and Result of Operations. (Continued)
1995, representing 23.2 percent of the investment securities portfolio
as compared to the 29.7 percent level of one year earlier. Other
sources of liquidity include federal funds sold and maturing loans.
The registrant knows of no unusual demands, commitments, or
events which could adversely impact the liquidity of the registrant.
(b) Capital Adequacy
The Federal Reserve Board, the Office of the Comptroller of the
Currency and the FDIC have issued risk-based capital guidelines for
U.S. banking organizations. These guidelines provide a uniform capital
framework that is sensitive to differences in risk profiles among
banking companies.
Under these guidelines, total capital consists of Tier I capital
(core capital, primarily stockholders' equity) and Tier II capital
(supplementary capital, including certain qualifying debt instruments
and the loan loss reserve). Assets are assigned risk weights ranging
from 0 percent to 100 percent depending on the level of credit risk
normally associated with such assets. Off-balance sheet items (such as
commitments to make loans) are also included in assets through the use
of conversion factors established by regulators and are assigned risk
weights in the same manner as on-balance sheet items. By the end of
1992, banking institutions were expected to achieve a Tier I capital to
risk-weighted assets ratio of at least 4.00 percent, a total capital
(Tier I plus Tier II) to total risk-weighted assets ratio of at least
8.00 percent, and a Tier I capital to total assets ratio (leverage
PAGE 8 OF 15 PAGES
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition
and Result of Operations. (Continued)
ratio) of at least 3.00 percent. The following table sets out the
appropriate regulatory standards as well as First Pulaski National
Corporation's actual ratios at March 31, 1995 and December 31, 1994.
<TABLE>
<CAPTION> March 31, December 31,
1995 1994
------------ ------------
(in thousands of dollars)
<S> <C> <C>
Tier I Capital to Risk-Weighted Assets:
Tier I capital 28,333 27,894
Risk-weighted assets 150,392 145,033
Tier I capital to risk-weighted assets 18.84% 19.23%
Regulatory requirement 4.00% 4.00%
Total Capital to Risk-Weighted Assets:
Total capital (Tier I plus Tier II) 30,213 29,707
Risk-weighted assets 150,392 145,033
Total capital to risk-weighted assets 20.09% 20.48%
Regulatory requirement 8.00% 8.00%
Tier I Capital to Total Assets (Leverage Ratio)
Tier I capital 28,333 27,894
Total assets 233,894 219,102
Tier I capital to total assets 12.11% 12.73%
Regulatory requirement 3.00% 3.00%
</TABLE>
(c) Results of Operations
Net income of the registrant amounted to $810,623 in the first
three months of 1995. This amounted to a decrease of $108,307, or
11.8 percent, compared to the first three months of 1994. The decrease
in net income resulted primarily because of significant increases in
other expenses despite an increase in net interest income, an increase
in other income and a slight decrease in applicable income taxes. The
increase in other expenses was mainly due to the added furniture and
equipment costs, increased costs of advertising and public relations,
PAGE 9 OF 15 PAGES
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition
and Result of Operations. (Continued)
and increased personnel costs, involving both additional personnel and
salary adjustments to existing employees. The increase in net interest
income was largely due to an increase in interest earned on loans,
including fees. Other income was up through the first three months of
1995 as compared to the same period last year mainly because of
an increase in income on other service charges and fees and
miscellaneous income even though income on service charges on deposit
accounts was slightly lower.
Net interest income, the largest component of earnings for the
registrant, is the difference between income earned on loans and
investments and interest paid on deposits and other sources of funds.
The net interest income of the registrant for the three month period
ending March 31, 1995 increased by $126,307, or 4.8 percent, as
compared to the same period of 1994, reflecting the fact that an
appropriate balance is being maintained between the company's interest
sensitive assets and interest sensitive liabilities to provide yields
appropriate to the risk and liquidity involved.
Income before taxes decreased by $154,679 or 10.8 percent as
compared to the same period from prior year. The decrease in
applicable income taxes was $46,372, or 8.9 percent.
On a per share basis, income was $2.66 per share based on 304,967
shares for the first three months of 1995 as compared to $3.07 per share
on 299,799 shares for the first three months of 1994.
PAGE 10 OF 15 PAGES
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition
and Result of Operations. (Continued)
Non-performing assets at December 31, 1994 included $186 thousand
in other real estate owned, $272 thousand in non-accrual loans, and
$161 thousand in loans past due ninety days or more as to interest or
principal payment. Additionally, loans restructured but in compliance
with modified terms amounted to $29 thousand. At March 31, 1995, the
corresponding figures were $180 thousand in other real estate owned,
$256 thousand in non-accrual loans, $181 thousand in loans past due
ninety days or more, and $29 thousand in loans restructured but in
compliance with modified terms. The allowance for loan losses, $2,111
thousand ($2,024 thousand at December 31, 1994), is deemed sufficient
to cover potential losses in the loan portfolio.
On January 1 of 1994, the Company adopted Statement of Financial
Accounting Standards No. 115. As a result of the issuance and
adoption of this statement, management now classifies a majority of the
investment portfolio in the available-for-sale category and reports
these securities at fair value. Management does not anticipate the sale
of a material amount of investment securities classified as available-
for-sale in the forseeable future. However, these securities may be
sold in response to changes in interest rates, changes in prepayment
risk, the need to increase regulatory capital or asset/liability
strategy.
On January 1, 1995, the Company adopted FASB Statements No. 114 and
No. 118, both of which deal with accounting by creditors for impairment
PAGE 11 OF 15 PAGES
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition
and Result of Operations. (Continued)
of loans. No. 114 and No. 118 provide new rules for measuring impair-
ment losses on loans. As of the first quarter of 1995, the Company has
identified those loans which it deems to be impaired and has computed
allowances which management believes to be sufficient for those loans.
The adoption of these statements had no material effect on the earnings
or financial condition of the Company.
In the opinion of management, the registrant maintains a strong
financial position and is optimistic that trends as reflected in the
Form 10-Q will be sustained.
PAGE 12 OF 15 PAGES
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings.
The registrant and its subsidiary are involved, from time to time,
in ordinary routine litigation incidental to the banking business.
Neither the registrant nor its subsidiary is involved in any material
pending legal proceedings.
Item 6. Exhibits and Reports on Form 8-K.
(a) Following the signature page of this report on Form 10-Q is
an Index of Exhibits listed according to the numbers assigned to such
exhibits as shown on Table II of Regulation S-K.
(b) No Form 8-K Reports were required to be filed during the
first quarter of 1995.
PAGE 13 OF 15 PAGES
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15 (d) 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.
FIRST PULASKI NATIONAL CORPORATION
Date: May 12, 1995 /s/ Robert M. Curry
---------------- ---------------------------------------
Robert M. Curry, Chairman of the Board
and Chief Executive Officer
Date: May 12, 1995 /s/ Glen Lamar
---------------- ---------------------------------------
Glen Lamar, Secretary/Treasurer
PAGE 14 OF 15 PAGES
<PAGE>
INDEX TO EXHIBITS FOR THE FIRST PULASKI NATIONAL CORPORATION
------------------------------------------------------------
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1995
------------------------------------------------
(11) Statement regarding computation of per share earnings
(27) Financial Data Schedules
PAGE 15 OF 15 PAGES
<PAGE>
EXHIBIT 11
COMPUTATION OF PER SHARE EARNINGS OF
------------------------------------
FIRST PULASKI NATIONAL CORPORATION
----------------------------------
Computation of per share earnings relative to the common capital
stock of First Pulaski National Corporation is calculated by dividing
the net income of the registrant by the weighted average of the then
outstanding shares of common capital stock ($1.00 par value) during
the quarter.
For the quarter ended March 31, 1995, 304,967 shares were used
in the computation; 299,799 shares were used in the computation for the
quarter ended March 31, 1994.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS THE SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S 10-Q FOR THE PERIOD ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND THE NOTES THERETO.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 10,157,765
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 17,525,449
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 42,101,848
<INVESTMENTS-CARRYING> 13,979,620
<INVESTMENTS-MARKET> 13,993,584
<LOANS> 140,064,825
<ALLOWANCE> 2,110,866
<TOTAL-ASSETS> 233,894,347
<DEPOSITS> 203,132,352
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,677,457
<LONG-TERM> 1,139,466
<COMMON> 304,983
0
0
<OTHER-SE> 27,640,089
<TOTAL-LIABILITIES-AND-EQUITY> 233,894,347
<INTEREST-LOAN> 3,522,279
<INTEREST-INVEST> 900,017
<INTEREST-OTHER> 143,264
<INTEREST-TOTAL> 4,565,560
<INTEREST-DEPOSIT> 1,806,223
<INTEREST-EXPENSE> 1,823,382
<INTEREST-INCOME-NET> 2,742,178
<LOAN-LOSSES> 41,437
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,910,493
<INCOME-PRETAX> 1,283,796
<INCOME-PRE-EXTRAORDINARY> 810,623
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 810,623
<EPS-PRIMARY> 2.66
<EPS-DILUTED> 2.66
<YIELD-ACTUAL> 1.30
<LOANS-NON> 255,444
<LOANS-PAST> 180,552
<LOANS-TROUBLED> 28,912
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,023,681
<CHARGE-OFFS> 33,090
<RECOVERIES> 78,820
<ALLOWANCE-CLOSE> 2,110,866
<ALLOWANCE-DOMESTIC> 2,110,866
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
