SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1996. Commission File No. 0-10852
SOUTHERN BANCSHARES (N.C.), INC.
(Exact name of registrant as specified in its charter)
DELAWARE 56-1538087
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
121 East Main Street Mount Olive, North Carolina 28365
( Address of Principal Executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (919) 658-7000
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 the Registrant's common stock as
of the close of the period covered by this report.
119,918 shares
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<TABLE>
<CAPTION>
SOUTHERN BANCSHARES (N.C.), INC September 30, December 31,
CONSOLIDATED BALANCE SHEETS 1996 1995
(In thousands except share and per share data) (Unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks $22,910 $27,186
Federal funds sold 0 15,720
Investment securities:
Held-to-maturity, at amortized cost (fair value $86,741 and $108,679, respectively) 85,893 106,873
Available-for-sale, at fair value (amortized cost $65,883 and $31,257, respectively) 79,752 41,933
Loans, net of unearned income 323,426 287,960
Less allowance for loan losses (6,272) (6,321)
317,154 281,639
Premises and equipment, net of accumulated depreciation and amortization 14,010 11,997
Accrued interest receivable 5,190 3,971
Intangible assets 6,400 6,748
Other assets 4,531 913
$535,840 $496,980
LIABILITIES AND SHAREHOLDERS' EQUITY:
Demand deposits $65,469 $56,440
Savings and interest bearing demand deposits 155,015 152,405
Time deposits 251,038 240,157
Total deposits 471,522 449,002
Federal funds purchased 6,245 0
Short-term borrowed funds 6,452 1,469
Accrued interest payable 3,375 3,491
Note payable 1,700 2,600
Other liabilities 5,021 3,255
Total liabilities 494,315 459,817
SHAREHOLDERS' EQUITY:
Series B non-cumulative preferred stock, no par value; 408,728 shares authorized at
Sepember 31, 1996 and 840,744 shares authorized at December 31, 1995, 408,728
shares issued and outstanding at September 30, 1996 and December 31, 1995 1,991 1,991
Series C non-cumulative preferred stock, no par value; 43,631 shares authorized at
September 30, 1996 and 420,372 shares authorized at December 31, 1995, 43,631
shares issued and outstanding at September 30, 1996 and December 31, 1995 578 578
Common stock, $5 par value; 158,485 shares authorized and 119,918 shares issued
and outstanding at September 30, 1996 and December 31, 1995 600 600
Surplus 10,000 10,000
Retained earnings 19,202 16,948
Unrealized appreciation on securities available-for-sale, net of tax effect of $4,716
and $3,630 at September 30, 1996 and December 31, 1995, respectively 9,154 7,046
Total shareholders' equity 41,525 37,163
$535,840 $496,980
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
SOUTHERN BANCSHARES (N.C.), INC. (Unaudited)
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended September 30,
<CAPTION> 1996 1995
(In thousands except per share data)
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $6,922 $6,242
Investment securities:
U. S. Treasury securities and obligations of U. S. Government agencies 1,588 1,242
Obligations of states and political subdivisions 531 547
Other securities 280 219
Federal funds sold 0 344
Total interest income 9,321 8,594
INTEREST EXPENSE:
Savings and interest bearing demand deposits 795 911
Time deposits 3,337 3,399
Federal funds purchased 168 1
Other 45 110
Total interest expense 4,345 4,421
NET INTEREST INCOME 4,976 4,173
Provision for loan losses 60 0
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 4,916 4,173
OTHER OPERATING INCOME:
Service charges on deposit accounts 674 596
Other service charges and fees 211 168
Insurance commissions 27 26
Other 106 77
Total other operating income 1,018 867
OTHER OPERATING EXPENSES:
Personnel 2,051 1,817
Intangibles amortization 411 266
Furniture and equipment 269 325
Occupancy 337 279
FDIC insurance assessment 637 60
Other 1,363 1,100
Total other operating expenses 5,068 3,847
INCOME BEFORE INCOME TAXES 866 1,193
Income tax expense 221 380
NET INCOME $645 $813
Net income applicable to common shares $541 $708
EARNINGS PER COMMON SHARE $4.51 $5.83
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION> (Unaudited)
SOUTHERN BANCSHARES (N.C.), INC. Nine Months Ended September 30,
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data) 1996 1995
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $19,930 $17,979
Investment securities:
U. S. Treasury securities and obligations of U. S. Government agencies 4,946 3,663
Obligations of states and political subdivisions 1,606 1,636
Other securities 521 341
Federal funds sold 304 433
Total interest income 27,307 24,052
INTEREST EXPENSE:
Savings and interest bearing demand deposits 2,591 2,526
Time deposits 10,097 8,444
Federal funds purchased 225 231
Other 224 309
Total interest expense 13,137 11,510
NET INTEREST INCOME 14,17 12,542
Provision for loan losses 80 0
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 14,090 12,542
OTHER OPERATING INCOME:
Service charges on deposit accounts 2,010 1,669
Other service charges and fees 574 486
Insurance commissions 119 73
Non-recurring settlement of litigation 0 410
Other 379 313
Total other operating income 3,082 2,951
OTHER OPERATING EXPENSES:
Personnel 5,907 4,972
Intangibles amortization 1,229 698
Furniture and equipment 975 837
Occupancy 922 714
FDIC insurance assessment 773 544
Other 3,584 3,268
Total other operating expenses 13,390 11,033
INCOME BEFORE INCOME TAXES 3,782 4,460
Income tax expense 1,091 1,399
NET INCOME $2,691 $3,061
Net income applicable to common shares $2,388 $2,756
EARNINGS PER COMMON SHARE $19.91 $22.65
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
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"SOUTHERN BANCSHARES (N.C.), INC."
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
"FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995"
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON Unrealized TOTAL
(Unaudited dollars in thousands Series B Series C STOCK Retained appreciation SHAREHOLDERS'
except per share data) Shares Amount Shares Amount Shares Amount Surplus Earnings on securities EQUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994 413,389 $2,014 43,959 $582 121,767 $609 $10,000 $13,783 $3,977 $30,965
Net Income 3,061 3,061
Retirement of stock (1,000) (5) 1,849) (9) (219) (233)
Cash dividends:
Common stock ($.75 per share) (91) (91)
Preferred B ($.66 per share) (275) (275)
Preferred C ($.66 per share) (30) (30)
Change in unrealized gain on
available-for-sale securities, net
of income tax effect 2,796 2,796
BALANCE, SEPTEMBER 30, 1995 412,389 $2,009 43,959 $582 119,918 $600 $10,000 $16,229 $6,773 $36,193
BALANCE, DECEMBER 31, 1995" 408,728 $1,991 43,631 $578 119,918 $600 $10,000 $16,948 $7,046 $37,163
Net income 2,691 2,691
Cash dividends:
Common stock ($1.14 per share) (134) (134)
Preferred B ($.66 per share) (274) (274)
Preferred C ($.66 per share) (29) (29)
Change in unrealized gain on
available-for-sale securities, net
of income tax effect 2,108 2,108
BALANCE, SEPTEMBER 30, 1996 408,728 $1,991 43,631 $578 119,918 $600 $10,000 $19,202 $9,154 $41,525
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
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SOUTHERN BANCSHARES (N.C.), INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
Nine months ended September 30,
(Thousands) 1996 1995
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $2,691 $3,061
Adjustments to reconcile net income
(used in) provided by operating activities:
Provision for loan losses 80 0
Net accretion on investments (45) (1)
Amortization of intangibles 1,229 698
Depreciation 703 593
Increase in accrued interest receivable (1,219) (1,347)
(Decrease) increase in accrued int (116) 1,596
Net decrease in other assets (4,700) (155)
Net increase in other liabilities (149) 605
NET CASH PROVIDED BY OPERATING ACTIVITIES (1,526) 5,050
INVESTING ACTIVITIES:
Proceeds from maturities of investment securities available-for-sale 110 75
Proceeds from maturities of investment securities held-to-maturity 31,596 34,377
Proceeds from sales of investment securities available-for-sale 75 0
Purchases of investment securities held-to-maturity (10,713) (41,534)
Purchases of investment securities available-for-sale (34,667) (7,855)
Net increase in loans (30,121) (25,081)
Cash received for branches acquired 3,380 46,056
Additions to premises and equipment (2,845) (1,211)
NET CASH (USED) PROVIDED IN INVESTING ACTIVITIES (43,185) 4,827
FINANCING ACTIVITIES:
Net decrease in demand and interest bearing demand deposits 8,300 (12,465)
Net increase in time deposits 4,824 31,123
Purchase of federal funds 6,245 0
Principal payments on note payable (900) (900)
Net proceeds of short-term borrowed funds 6,683 1,898
Cash dividends paid (437) (396)
Purchase and retirement of stock 0 (233)
NET CASH PROVIDED BY FINANCING ACTIVITIES 24,715 19,027
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (19,996) 28,904
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF YEAR 42,906 17,147
CASH AND CASH EQUIVALENTS AT END OF PERIOD $22,910 $46,051
SUPPLEMENTAL DISCLOSURES OF CASH PAID DURING THE PERIOD FOR:
Interest (paid and credited) $12,688 $10,970
Income taxes $851 $1,420
UNREALIZED GAIN ON AVAILABLE-FOR-SALE SECURITIES $3,194 $4,236
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
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SOUTHERN BANCSHARES (N. C.), INC.
Notes to consolidated financial statements
(In thousands except share and per share data)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Southern BancShares (N. C.), Inc. (the "Company") is the holding company
for Southern Bank and Trust Company (the "Bank"), which operates 41
banking offices in eastern North Carolina. The Bank, " which began
operations in January, 1901, has two subsidiaries, Goshen, Inc. and
Goshen Properties, Inc. whose insurance operations and property
management operations complement the operations of its parent. The
Company and the Bank are headquartered in Mount Olive, North Carolina.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company,
its wholly-owned subsidiary, the Bank, and the accounts of the Bank's
wholly-owned subsidiaries, Goshen, Inc. and Goshen Properties, Inc. The
Company's financial resources are primarily provided by dividends from the
Bank and there are no material differences between the consolidated results
of operations or financial position of the Company and the Bank. All
significant intercompany balances have been eliminated in consolidation.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The
most significant estimates made by the Company in the preparation of its
consolidated financial statements are the determination of the allowance
for loan losses, the valuation of other real " estate, the valuation
allowance for deferred tax assets and fair value estimates for financial
instruments. The statements should be read in conjunction with the
consolidated financial statements and accompanying notes for the year
ended December 31, 1995, incorporated by reference in the 1995 Annual
Report on Form 10-K.
2. RECLASSIFICATIONS
Certain prior year balances have been reclassified to conform to the
current year presentation. Such reclassifications had no effect on net
income or shareholders' equity as previously reported.
<PAGE>
SOUTHERN BANCSHARES (N.C.), INC.
Notes to consolidated financial statements continued
<TABLE>
<CAPTION>
3. INVESTMENT SECURITIES SEPTEMBER 30, 1996 DECEMBER 31, 1995
Gross Gross Estimated Gross Gross Estimated
(In thousands) Amortized Unrealized Unrealized Market Amortized Unrealized Unrealized Market
Cost Gains Losses Value Cost Gains Losses Value
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SECURITIES HELD-TO-MATURITY:
U. S. Government $56,305 $171 $56,476 $78,298 837 ($10) $79,125
Obligations of states and political sub 29,288 682 29,970 28,275 976 29,251
Corporate securities 300 (5) 295 300 3 303
85,893 853 (5) 86,741 106,873 1,816 (10) 108,679
SECURITIES AVAILABLE-FOR-SALE:
U. S. Government 50,138 (191) 49,947 16,654 114 16,768
Marketable equity securities 7,227 13,874 21,101 6,469 10,207 16,676
Obligations of states and political sub 6,268 150 6,418 5,474 259 (9) 5,724
Mortgage-backed securities 2,250 36 2,286 2,660 105 2,765
65,883 14,060 (191) 79,752 31,257 10,685 (9) 41,933
TOTALS $151,776 $14,913 ($196) $166,493 $138,130 $12,501 ($19) $150,612
</TABLE>
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SOUTHERN BANCSHARES (N.C.), INC.
Notes to consolidated financial statements
(In thousands except share and per share data)
<TABLE>
<CAPTION> September 30, December 31,
1996 1995
(In thousands except share data)
<S> <C> <C>
4. LOANS
Loans by type were as follows:
Commercial, financial and agricultural $77,920 $57,398
Real estate - construction 2,496 1,533
Real estate - mortgage 206,380 189,315
Consumer 34,534 37,548
Lease financing 2,400 2,410
Total loans 323,730 288,204
Less unearned income (294) (244)
Total loans less unearned income $323,436 $287,960
Loans held for sale $ 4,923 $ 3,411
Loans serviced for others $ 70,577 $ 65,563
</TABLE>
<TABLE>
<CAPTION>
September 30, December 31,
(In thousands) 1996 1995
<S> <C> <C>
5. ALLOWANCE FOR LOAN LOSSES
Balance at beginning of year $6,321 $6,653
Provision for loan losses 80 0
Loans charged off (344) (463)
Loan recoveries 215 131
Balance at end of the period $6,272 $6,321
</TABLE>
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SOUTHERN BANCSHARES (N.C.), INC.
Notes to consolidated financial statements
(In thousands except share and per share data)
<PAGE>
<TABLE>
<CAPTION> September 30, December 31,
1996 1995
(In thousands)
<S> <C> <C>
6. PREMISES AND EQUIPMENT
Land $2,783 $2,715
Buildings and improvements 9,213 8,543
Furniture and equipment 5,541 4,881
Construction-in-progress 2,464 1,189
20,001 17,328
Less: accumulated depreciation (5,991) (5,331)
$14,010 $11,997
</TABLE>
7. EARNINGS PER COMMON SHARE
Earnings per common share are computed by dividing income applicable to
common shares by the weighted average number of common shares outstanding
during the period. Income applicable to common shares represents net
income reduced by dividends paid to preferred shareholders and is
calculated as follows for the nine months ended September 30:
<TABLE>
<CAPTION>
(In thousands except share data) 1996 1995
<S> <C> <C>
Net income $2,691 $3,061
Less: preferred dividends (303) (305)
Net income applicable to common shares $2,388 $2,756
Weighted average common shares outstanding
during the period 119,918 121,666
</TABLE>
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SOUTHERN BANCSHARES ((N.C.), INC.
Notes to consolidated financial statements
(In thousands except share and per share data)
8. RELATED PARTIES
The Company has entered into various service contracts with another
corporation and its subsidiary (the ""Corporation""). The Corporation has
two significant shareholders, which are also significant shareholders of
the Company. The following table lists the various charges paid to the
Corporation:
<PAGE>
<TABLE>
<CAPTION>
September 30, September 30,
(In thousands) 1996 1995
<S> <C> <C>
Data and item processing $1,282 $1,074
Forms, supplies and equipment 261 147
Trustee for employee benefit plans 47 35
Consulting fees 61 52
Trust investment services 18 10
Internal auditing services 40 63
Other services 63 41
$1,772 $1,422
</TABLE>
<PAGE>
Data and item processing expenses include courier services, proof and
encoding, microfilming, check storage, statement rendering and item
processing forms. The Company also has a correspondent relationship with
the Corporation. Correspondent account balances with the Corporation
included in cash and due from banks totaled $11,261 at September 30, 1996
and $16,167 at December 31, 1995.
The first significant shareholder is a director of the Company and, at
September 30, 1996, beneficially owned 30,691 shares, or 25.59%, of the
Company's outstanding common stock and 22,171 shares, or 5.42%, of the
Company's outstanding Series B preferred stock. At the same date, the
second significant shareholder beneficially owned 28,185 shares, or
23.50%, of the Company's outstanding common stock, and 17,205 shares, or
4.21%, of the Company's Series B preferred stock. The above totals
include 17,205 Series B preferred shares, or 4.21%, that are considered
to be beneficially owned by both of the shareholders and, therefore, are
included in each of their totals.
These two significant shareholders are directors and executive officers of
the Corporation and at September 30, 1996, beneficially owned 2,590,098
shares, or 26.79%, and 1,200,946 shares, or 12.42%, respectively, of the
Corporation's outstanding Class A common stock, and 632,021 shares, or
35.92%, and 324,094 shares, or 18.42%, respectively, of the Corporation's
outstanding Class B common stock. The above totals include 268,820 Class
A common shares, or 2.78%, and 41,825 Class B Common shares, or 2.38%,
that are considered to be beneficially owned by both of the shareholders
and, therefore, are included in each of their totals. A subsidiary of the
Corporation is First-Citizens Bank & Trust Company ("First Citizens"). As
more fully discussed elsewhere herein, the Company acquired a branch from
First Citizens in both 1995 and 1996.
<PAGE>
SOUTHERN BANCSHARES (N.C), INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - FIRST NINE MONTHS OF 1996 VS. FIRST NINE MONTHS OF 1995
(DOLLARS IN THOUSANDS EXCEPT FOR PER SHARE DATA)
INTRODUCTION
In June 1995, Southern Bank and Trust Company ("the Bank"), a wholly-owned
subsidiary of Southern BancShares (N.C.), Inc. ("the Company") acquired
branches in Farmville, North Carolina, Garland, North Carolina, Kill Devil
Hills, North Carolina and Salemburg, North Carolina from First Union National
Bank ("First Union") and one branch in Kill Devil Hills, North Carolina from
First-Citizens Bank & Trust Company ("First Citizens"). These acquisitions
were accounted for as purchases, and therefore, the results of operations
prior to the purchase of these branches are not included in the consolidated
financial statements. In these transactions, the Bank acquired approximately
$46 million of cash, $26 million of demand and savings deposits, $25 million
of time deposits, $2 million of goodwill, and $3 million of loans.
The Company opened a branch in Whitakers, North Carolina in March, 1996 and
opened a second branch in Farmville, North Carolina in May, 1996. In June
1996, the Company acquired approximately $7 million of the deposits of the
Windsor, North Carolina office of First Citizens and sold approximately $4
million of the deposits of its Scotland Neck, North Carolina office to
Triangle Bank. The Company purchased $83 of the loans of the First Citizens
Windsor branch and sold $42 of the loans of its Scotland Neck branch. The
Company paid a premium of $539, or approximately 7%, for the deposits of the
Windsor branch. This acquisition was accounted for as a purchase, and
therefore, the results of operations prior to the purchase are not included
in the consolidated financial statements. The Company did not sell any
branches in the 1995 period.
In August 1996, the Company acquired the Edenton, North Carolina office of
United Carolina Bank and approximately $6 million of its deposits and
approximately $5 million of its loans. The Company paid a premium of $419,
or approximately 7%, for the deposits of the Edenton branch. This acquisition
was accounted for as a purchase, and therefore, the results of operations
prior to the purchase are not included in the consolidated financial
statements. The following comparisons of the nine months and quarter ending
September 30, 1996 to the nine months and quarter ending September 30, 1995
are accordingly impacted by the above transactions.
In the first nine months of 1996, the net income of Southern BancShares
decreased $370 from $3,061 in the first nine months of 1995 to $2,691 in the
first nine months of 1996, a decrease of 12%. This decrease resulted
primarily because of a reduction in non-recurring income of $317, a one-time
1996 FDIC SAIF insurance assessment of $569 mandated by Congress and a $176
non-recurring 1996 external credit card related fraud expense. In the nine
months ended September 30, 1995, $530 of non-recurring income was realized
from legal settlements and other real estate sales. For the nine months ended
September 30, 1996, non-recurring income of $213 resulted from the sale of a
branch and non-recurring expenses of $176 resulted from an external credit
card fraud.
Net income per share for the first nine months of 1996 was $19.91 per common
share, a decrease of $2.74, or 12%, from $22.65 in 1995. The return on average
equity declined to 9.84%, at September 30, 1996, from 13.92% at September 30,
1995 and the return on average assets declined to .73%, at September 30, 1996,
from 1.05% at September 30, 1995. At September 30, 1996, the Company's assets
totaled $535,840 an increase of $38,860, or 8%, from the $496,980 reported at
December 31, 1995. During this nine month period, net loans increased $35,515
or 13%, from $281,639 to $317,154. During the nine months ended September 30,
1996 investment securities increased $16,839, or 11% from $148,806 at December
31, 1995 to $165,645 at September 30, 1996. Total deposits increased $22,520,
or 5% from $449,002 at December 31, 1995 to $471,522 at September 30, 1996.
During the quarter ended September 30, 1996 the Bank purchased the Edenton
branch of United Carolina Bank. This transaction resulted in an increase in
deposits of approximately $6 million. The Whitakers branch, which opened in
the first quarter of 1996, resulted in approximately $3 million of new
deposits as of September 30, 1996.
INTEREST INCOME
Interest and fees on loans increased $1,951, or 11%, from $17,979 for the nine
months ended September 30, 1995 to $19,930 for the nine months ended September
30, 1996. This increase was primarily due to increased loan volume that more
than offset a slight decrease in loan yields. Average loans for the nine
months ending September 30, 1996 were $308 million, an increase of 15% from
$267 million for the prior year nine month period. The yield on the loan
portfolio decreased from 8.9% in the nine months ended September 30, 1995 to
8.6% for the nine months ended September 30, 1996.
Interest income from investment securities, including U. S. Treasury and
Government obligations, obligations of state and county subdivisions and other
securities increased $1,433, or 25%, from $5,640 in the nine months ended
September 30, 1995 to $7,073 in the nine months ended September 30, 1996.
This increase was primarily due to an increase in the volume of average
investment securities for the nine months ended September 30, 1996 to $146
million as compared to $124 million for the 1995 period. The yield on
investment securities was 6.0% for 1995 and 6.3% in 1996.
Interest income on federal funds sold decreased $129, or 30%, from $433 for
the nine months ended September 30, 1995 to $304 for the nine months ended
September 30, 1996. This decrease in income resulted primarily from the
decrease in the average federal funds sold to $8 million for the nine months
ended September 30, 1996 from $10 million for the nine months ended September
30, 1995. Average federal funds sold yields were 5.4 % for the nine months
ended September 30, 1996 down from 5.7% for the nine months ended September
30, 1995.
Total interest income increased $3,255, or 14%, from $24,052 for the nine
months ended September 30, 1995 to $27,307 for the nine months ended September
30, 1996. This increase was primarily the result of volume increases more
than offsetting a slight overall decrease in average earning asset interest
yields. Average earning asset interest yields for the nine months ended
September 30, 1996 decreased to 7.8% from the 7.9% yield on average earning
assets for the nine months ended September 30, 1995. Average earning assets
increased from $402 million in the nine months ended September 30, 1995 to
$461 million in the period ended September 30, 1996. This $59 million
increase in the average earning assets primarily resulted from the
acquisitions discussed above.
INTEREST EXPENSE
Total interest expense increased $1,627 or 14%, from $11,510 in the nine
months ended September 30, 1995 to $13,137 for the nine months ended September
30, 1996. The principal reason for the increase was the interest bearing time
and savings deposits acquired in June 1995. The Company's cost of funds did
decrease from 4.49% at September 30, 1995 to 4.24% one year later principally
as a result of decreased savings deposit costs. Average interest bearing
demand and savings deposits were $152 million in the nine months ended
September 30, 1996, an increase of $17 million from the $135 million in the
nine months ending September 30, 1995. Overall, average total interest
bearing deposits increased $57 million, or 16%, from $346 million at
September 30, 1995 to $403 million at September 30, 1996.
NET INTEREST INCOME
Net interest income was up $1,548, or 12%, from $12,542 for the nine months
ended September 30, 1995 to $14,090 for the nine months ended September 30,
1996. This increase was primarily due to the 1995 branch acquisitions from
First Union and First Citizens. The net interest margin at September 30, 1996
was 3.57% a decrease of 4 basis points from 3.61% at September 30, 1995. The
Company had $225 in interest for federal funds purchased in the nine months
ended September 30, 1996 compared to $231 in the nine months ended September
30, 1995.
ASSET QUALITY AND PROVISION FOR LOAN LOSSES
For the nine months ended September 30, 1996 management added $80 as a volume
related addition to the provision for loan losses. Management made no
provisions for loan losses for the nine months ended September 30, 1995.
During the first nine months of 1996 management charged-off loans totaling
$344 and received recoveries of $215, resulting in net charge-offs of $129.
During the same period in 1995, $304 in loans were charged-off and recoveries
of $70 were received, resulting in net charge-offs of $234. The decrease in
net charge-offs was principally due to increased recoveries in 1996. The
following table presents comparative Asset Quality ratios of the company:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
Ratio of net charge-offs
to average loans outstanding .04% .12%
Allowance for loan losses
to total loans 1.94% 2.20%
Non-performing loans
to total loans .11% .19%
Non-performing loans and assets
to total assets .07% .13%
Allowance for loan losses
to non-performing loans 1,797% 1,133%
</TABLE>
<PAGE>
The ratio of net charge-offs to average loans outstanding decreased to .04% at
September 30, 1996 from .12% at December 31, 1995 primarily due to increased
recoveries of loans previously charged off. The allowance for loan losses
represented 1.94% of total loans outstanding at September 30, 1996, a decrease
of 26 basis points from the December 31, 1995 ratio of 2.20%. Loans
outstanding increased $36 million, or 13%, between December 31, 1995 and
September 30, 1996 and there was no substantial change in the credit quality
of the loan portfolio during the period.
The decrease in the ratio of nonperforming loans to total loans, from .19% at
December 31, 1995 to .11% at September 30, 1996 is the result of a slight
improvement in the loan portfolio. Nonperforming loans and assets to total
assets decreased to .07% at September 30, 1996 from .13% at December 31, 1995.
The allowance for loan losses to nonperforming loans represented 1,797% of
nonperforming loans at September 30, 1996, an increase from the 1,133% at
December 31, 1995. This increase is primarily the result of a decrease in
nonperforming loans to $349 at September 30, 1996 from $558 at December 31,
1995. The nonperforming loans at September 30, 1996 included $58 of nonaccrual
loans, $283 of loans 90 days past due and $8 of restructured loans.
Management considers the September 30, 1996 allowance for loan losses adequate
to cover the losses and risks inherent in the loan portfolio at September 30,
1996 and will continue to monitor its portfolio and to adjust the relative
level of the allowance as needed. At September 30, 1996, the Bank has no
loans classified for regulatory purposes as loss, no loans classified as
doubtful and $881 of loans classified as substandard and the company's
impaired loans have not materially changed since December 31, 1995.
Management actively maintains a current loan watch list and knows of no other
loans which are material and (i) represent or result from trends or
uncertainties which management reasonably expects will materially impact
future operating results, liquidity or capital resources, or (ii) represent
material credits about which management is aware of any information which
causes management to have serious doubts as to the ability of such borrowers
to comply with the loan repayment terms.
OTHER OPERATING INCOME
The Company had a gain of $213 on the sale of its Scotland Neck branch to
Triangle Bank in June 1996. The Company did not sell any branches in the nine
months ended September 30, 1995 but did have nonrecurring income of $410
related to the settlement of a law suit. The Company had losses on the sale
of mortgage loans of $167 in the nine months ended September 30, 1996 compared
to $12 in gains on the sale of mortgage loans in the nine months ended
September 30, 1995. Income from service charges on deposit accounts, other
service charges and fees, insurance commissions and other income not detailed
above increased $507, or 20%, from $2,529 for the nine months ended September
30, 1995 to $3,036 for the nine months ended September 30, 1996. This increase
was principally caused by the 1995 branch acquisitions discussed above.
OTHER OPERATING EXPENSES
Other operating expenses, including personnel, occupancy, furniture and
equipment, data processing, FDIC & state assessment, printing & supplies and
other expenses, increased $2,357 or 21%, from $11,033 in the nine months ended
September 30, 1995 to $13,390 in the nine months ended September 30, 1996.
Excluding the non-recurring items discussed below, this increase was primarily
due to an increase in personnel expense of $935, or 19% from $4,972 at
September 30, 1995 to $5,907 at September 30, 1996 and increased occupancy,
furniture and equipment expense and other volume related expenses resulting
from the 1995 acquisitions of the branch locations from First Union and First
Citizens, the second quarter opening of the Whitakers Branch, the late second
quarter 1996 purchase of the First Citizens Windsor branch and the third
quarter 1996 purchase of the Edenton branch from United Carolina Bank.
The Company has deposits insured under both of the FDIC's insurance funds, the
Bank Insurance Fund ("BIF") and the Savings Association Insurance Fund
("SAIF"). In July 1995, the FDIC and other regulatory agencies proposed a
plan to recapitalize the SAIF, and Congress mandated a one-time assessment for
all SAIF insured deposits on September 30, 1996. Congress required that 80%
of the Company's SAIF insured deposits as reported on the Company's March 31,
1995 call report and 100% of SAIF insured deposits purchased by the Company
after March 31, 1995 be assessed at $.00657. On September 30, 1996 the
Company had approximately $87 million of SAIF-insured deposits based on the
above formula and recorded $569 on September 30, 1996 as a one-time FDIC SAIF
insurance expense. The Company also incurred a non-recurring loss of $176
related to an external credit card fraud in the quarter ended September 30,
1996.
INCOME TAXES
In the nine months ended September 30, 1996 the Company had income tax expense
of $1,091, a decrease of $308, or 22%, from $1,399 in the prior year period.
This decrease was due principally to reduced profitability. The resulting
effective tax rates based on the accruals for the nine months ended in
September 1996 and 1995 were 29% and 31%, respectively.
SOUTHERN BANCSHARES (N.C), INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION - THIRD QUARTER OF 1996
VS. THIRD QUARTER OF 1995
(DOLLARS IN THOUSANDS EXCEPT FOR PER SHARE DATA)
INTRODUCTION
Southern BancShares net income decreased $168, or 21% from $813 in the third
quarter of 1995 to $645 in the third quarter of 1996. Earnings per common
share decreased $1.32, or 23%, to $4.51 for the quarter ended September 30,
1996 compared to $5.83 for the prior year quarter. This decrease was
principally the result of a September, 1996 one-time additional FDIC SAIF
insurance assessment of $569 mandated by Congress and a September, 1996 $176
nonrecurring external credit card fraud. In August 1996, the Company acquired
the Edenton, North Carolina office of United Carolina Bank purchasing $6
million of its deposits and $5 million of its loans. The Company paid a
premium of $419, or approximately 7%, for the Edenton deposits.
INTEREST INCOME
Interest and fees on loans increased $680 or 11%, from $6,242 in the quarter
ended September 30, 1995 to $6,922 in the quarter ended September 30, 1996.
This increase was due principally to the higher average outstanding balances
in 1996 principally as a result of loan growth and the August 1996 purchase of
the United Carolina Bank Edenton loans. Average loans outstanding for the
1996 quarter were $321 million, up from $280 million in 1995, an increase of
$41 million or 15%.
Interest income from investment securities, including U.S. Treasuries and
obligations of U. S. Government agencies, obligations of state and political
subdivisions and other securities, increased $391, or 19%, from $2,008 in 1995
to $2,399 in 1996. The increase is the result of both an increase in the
yields of the portfolio for the 1996 quarter to 6.21% as compared to 5.99% for
the quarter ended September 30, 1995 and an increase in the volume of average
investments of $19 million, or 15%, in the quarter ending September 30, 1996
to $149 million from $130 million for the quarter ended September 30, 1995.
INTEREST EXPENSE
Total interest expense decreased $76, or 2%, from $4,421 in the quarter ended
September 30, 1995 to $4,345 in the quarter ended September 30, 1996. This
decrease is principally attributable to reduced interest rates on regular
savings deposits. Average interest bearing liabilities increased $30 million
or 8% from $384 million for the quarter ending September 30, 1995 to $414
million for the quarter ending September 30, 1996. The cost of interest
bearing liabilities decreased 32 basis points from 4.51% for the 1995 quarter
ending September 30 to 4.19% for the 1996 quarter ending September 30.
NET INTEREST INCOME
Net interest income was up $803, or 19%, from $4,173 for the three months
ended September 30, 1995 to $4,976 for the three months ended September 30,
1996. This increase was primarily due to the acquisitions and new offices
discussed above. The net interest margin at September 30, 1996 was 3.57% a
decrease of 4 basis points from 3.61% at September 30, 1995. The Company had
$168 interest for Federal Funds Purchased in the three months ended September
30, 1996 compared to $1 in the three months ended September 30, 1995. In
1996, the Company utilized Federal Funds Purchased to support loan growth and
seasonal deposit fluctuations.
ASSET QUALITY AND PROVISION FOR LOAN LOSSES
In the three months ended September 30, 1995, management considered the
overall reserve adequate to cover the risks inherent in the loan portfolio
and, accordingly, made no provisions to the reserve for loan losses. In the
three months ended September 30, 1996, management accrued $60 as a volume
related addition to the reserve for loan losses. During the third quarter of
1996, the Company had charge-offs net of recoveries of $68. During the same
period in 1995 the Company had charge-offs net of recoveries, of $5. The
reserve for loan losses at September 30, 1996 of 1.9% of loans decreased
approximately 40 basis points from 2.3% at September 30, 1995 and is
considered adequate by management to cover the losses and risks inherent in
the loan portfolio at September 30, 1996.
OTHER OPERATING INCOME
In the quarter ended September 30, 1995 and 1996 the Company had no gains or
losses on sales of investment securities. The Company had losses on the sale
of mortgage loans of $52 in the three months ended September 30, 1996 compared
to $7 in gains on the sale of mortgage loans in the three months ended
September 30, 1995. Income from service charges on deposit accounts, other
service charges and fees, insurance commissions and other income not detailed
above increased $210, or 24% from $860 in the three months ended September 30,
1995 to $1,070 in the three months ended September 30, 1996. This increase
was principally attributed to overall increased service charges resulting from
the acquisitions and new offices discussed above.
OTHER OPERATING EXPENSES
Other operating expenses including personnel, occupancy, furniture and
equipment, data processing, FDIC and state assessments, printing and supplies
and other expenses increased $1,221, or 32% from $3,847 in 1995 to $5,068 in
1996. This increase was primarily due to an increase of $569 for a one time
SAIF assessment mandated by Congress on September 30, 1996, a nonrecurring
loss of $176 related to an external credit card fraud in the quarter ended
September 30, 1996 and an increase of $234, or 13%, in personnel expenses
which increased from $1,817 for the quarter ended September 30, 1995 to $2,051
for the quarter ended September 30, 1996.
The Company has deposits insured under both the FDIC's BIF and SAIF insurance
funds. In July 1995, the FDIC and other regulatory agencies proposed a plan
to recapitalize the SAIF, and Congress mandated a one-time assessment for all
SAIF insured deposits on September 30, 1996. Congress required that 80% of
the Company's SAIF insured deposits as reported on the Company's March 31,
1995 call report and 100% of SAIF insured deposits purchased by the Company
after March 31, 1995 be assessed at $.00657. On September 30, 1996 the
Company had approximately $87 million of SAIF-insured deposits based on the
above formula and recorded $569 as a one-time FDIC SAIF insurance expense.
The increase in personnel expense was principally the result of staff
additions for the acquisitions and new offices discussed above. The remaining
expense categories also increased principally as a result of the acquisitions
and new offices discussed above.
INCOME TAXES
Income tax expense for the quarter ended September 30, 1996 was $221, a
decrease of $159, or 42% from $380 in the quarter ending September 30, 1995.
This decrease is principally due to a reduction in the estimated effective
income tax rate for the Company for the nine months ended September 30, 1996
which was adjusted in the quarter ended September 30, 1996. The tax rates
estimated for the three months ended September 30, 1996 and 1995 were 26% and
32%, respectively. The tax rates estimated for the nine months ended
September 30, 1996 and 1995 were 29% and 31%, respectively.
SHAREHOLDERS' EQUITY AND CAPITAL ADEQUACY
Sufficient levels of capital are necessary to sustain growth and absorb
losses. To this end, the Federal Reserve Board, which regulates the Company,
and the Federal Deposit Insurance Corporation, which regulates the Bank, have
established minimum capital guidelines for the institutions they supervise.
One of the guidelines sets minimum requirements for the Company's leverage
capital ratio. Leverage capital equals total equity less goodwill and certain
other intangibles. According to these guidelines, the company's leverage
capital ratio at September 30, 1996 was 5.19%. At December 31, 1995, the
company's leverage capital ratio was 5.60%. Both of these ratios are greater
than the level designated as well capitalized by the FDIC.
The Company is also required to meet minimum requirements for Risk Based
Capital ("RBC"). The Company's assets, including loan commitments and other
off-balance sheet items, are weighted according to federal guidelines for the
risk considered inherent in each asset. At September 30, 1996, the Total RBC
ratio was 10.03%. At December 31, 1995 the RBC ratio was 10.22%. Both of
these ratios are greater than the level designated as well capitalized by the
FDIC.
The regulatory capital ratios reflect increases in assets and liabilities from
the acquisitions discussed above. Each of the acquisitions required the
payment of a premium for the assets and liabilities received. Each of these
premiums resulted in increased intangible assets on the Company's financial
statements, which is deducted from total equity in the ratio calculations.
The sale discussed above required the write-off of the remaining unamortized
premium originally paid in 1994 for this branch's assets and liabilities and
accordingly resulted in a reduction of $73 of intangible assets on the
Company's financial statements.
The unrealized gains on securities available for sale at September 30, 1996 of
$9.2 million and at December 31, 1995 of $7.0 million, although a part of
total shareholders' equity, are not included in the calculation of either the
RBC or leverage capital ratios pursuant to regulatory definitions of these
capital requirements. The following table presents capital adequacy
calculations and ratios of the Company:
<TABLE>
<CAPTION>
(Thousands except percentages) September 30, December 31,
1996 1995
<S> <C> <C>
Total Shareholders' Equity $ 41,525 $ 37,163
Leverage Capital $ 25,971 $ 23,369
Risk Based Capital $ 29,835 $ 26,819
Leverage Capital Ratio 5.19% (1) 5.60% (1)
Tier I Capital Ratio 8.73% (1) 8.91% (1)
Total Risk-Based Capital Ratio 10.03% (1) 10.22% (1)
(1) These ratios exceed the minimum ratios required for a bank to be
classified as "well- capitalized," as defined by the FDIC.
</TABLE>
<PAGE>
LIQUIDITY
Liquidity refers to the ability of the Company to generate sufficient funds to
meet its financial obligations and commitments at a reasonable cost.
Maintaining liquidity ensures that funds will be available for reserve
requirements, customer demand for loans, withdrawal of deposit balances and
maturities of other deposits and liabilities. Past experiences help management
anticipatecyclical demands and amounts of cash required. These obligations
can be met by existing cash reserves or funds from maturing loans and
investments, but in the normal course of business are met by deposit growth.
In assessing liquidity, many relevant factors are considered, including
stability of deposits, quality of assets, economy of the markets served,
business concentrations, competition and the Company's overall financial
condition. The Company's liquid assets include cash and due from banks,
federal funds sold and investment securities available for sale. The
liquidity ratio, which isdefined as net cash plus short term and marketable
securities divided by net deposits and short term liabilities, was 31% at
September 30, 1996 and 39% at December 31, 1995.
The Statement of Cash Flows discloses the principal sources and uses of cash
from operating, investing and financing activities for the nine months ended
September 30, 1996 and 1995, respectively. The Company has no brokered
deposits. Jumbo time deposits are considered to include all time deposits of
$100,000 or more. The Company has never aggressively bid on these deposits.
Almost all jumbo time deposit customers have other relationships with the
Company, including savings, demand and other time deposits, and in some cases,
loans. At September 30, 1996 and at December 31, 1995 jumbo time deposits
represented 10% and 9%, respectively, of total deposits.
Management believes that the Company has the ability to generate sufficient
amounts of cash to cover normal requirements and any additional needs which
may arise, within realistic limitations, and management is not aware of any
known demands, commitments or uncertainties that will affect liquidity in a
material way. The following table presents comparative liquidity ratios of
the company:
<TABLE>
<CAPTION>
September 30, December 31, Legal
1996 1995 Limits
<S> <C> <C> <C>
Total Loans to Deposits 69% 64% 80% (1)
Interest Bearing Deposits To Total Deposits 86% 87%
Jumbo Time Deposits to Total Deposits 10% 9%
Total Loans to Total Assets 60% 58% 70% (1)
Liquidity 31% 39% 25% (2)
Temporary Investments To Volatile
Liabilities (3) 113% 170% 100% (2)
Volatile Liability Dependency -2% -8% 0 or (-)
(1) Maximum
(2) Minimum
(3) Volatile Liabilities include certificates of deposit of $100,000 or more,
repurchase agreements, and the Treasury Tax and Loan Account.
</TABLE>
<PAGE>
ACCOUNTING AND REGULATORY MATTERS
In March 1995, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of" ("SFAS No. 121") which establishes
accounting standards for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to those assets to be held
and used and for those to be disposed of. This statement requires that
long-lived assets and certain intangibles be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying value may not be
recoverable. An impairment loss should be recognized if the sum of the
undiscounted future cash flows is less than the carrying amount of the asset.
Those assets to be disposed of are to be reported at the lower of the carrying
amount or fair value, less costs to sell. Adoption of SFAS No. 121 was
required for fiscal years beginning after December 15, 1995. Adoption of this
statement did not have a material effect on the Company's consolidated
financial statements. However, this statement could have a material impact on
the Company's consolidated financial statements for future periods should an
event or changes in circumstances occur in such future periods, requiring a
review by management for impairment.
In October 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage
Servicing Rights, an amendment of SFAS No. 65." The statement amends SFAS
No. 65, "Accounting for Certain Mortgage Banking Activities," to require that
a mortgage banking enterprise, or an entity engaged in mortgage banking
activities, recognize as separate assets rights to service mortgage loans for
others, however those rights are acquired. A mortgage banking enterprise that
acquires mortgage servicing rights through either the purchase or origination
of mortgage loans and sells or securitizes those loans with servicing rights
retained should allocate the total cost of the mortgage loans to the mortgage
servicing rights and the loans (without the mortgage servicing rights) based
on their relative fair values if it is practicable to estimate those fair
values. This statement also requires that a mortgage banking enterprise
assess its capitalized mortgage servicing rights for impairment based on the
fair values of these rights. Impairment should be recognized through a
valuation allowance for each impaired stratum. The adoption of this statement
on January 1, 1996 has had no material impact on the Company's financial
statements.
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"). The statement defines a fair value method of
accounting for an employee stock option or similar equity instrument and
encourages all entities to adopt that method of accounting for all of their
employee stock compensation plans. It also allows an entity to continue to
measure compensation cost for those plans using the intrinsic value based
method of accounting prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"). SFAS No. 123 requires
that an employers' financial statements include certain disclosures about
stock-based compensation arrangements regardless of the method used to account
for them. Entities electing to remain with the accounting in APB 25 must make
pro forma disclosures of net income and, if presented, earnings per share, as
if the fair value based method of accounting defined in SFAS No. 123 had been
applied. The accounting requirements of this statement are effective for
transactions entered into in fiscal years that begin after December 31, 1995.
The disclosure requirements of this statement are effective for financial
statements for fiscal years beginning after December 15, 1995, or for an
earlier fiscal year for which this statement is initially adopted for
recognizing compensation cost. Pro forma disclosures required for entities
that elect to continue to measure compensation cost using APB 25 must include
the effects of all awards granted in fiscal years that begin after December
15, 1994. The Company does not currently have any stock-based compensation
plans, but has determined that in the event it does offer stock-based
compensation plans in future periods that it will elect to continue to measure
compensation cost using APB 25.
In September 1996, the FASB issued SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities," ("SFAS No.
125") which establishes accounting standards for determining when a liability
should be considered extinguished through the transfer of assets to a creditor
or the setting aside of assets dedicated to eventually settling a liability.
The statement provides conditions for determining if a transferor has
surrendered control over transferred financial assets and requirements for
derecognizing a liability when it is extinguished. The statement also
requires the recognition of either a servicing asset or a servicing liability
when an entity undertakes an obligation to service financial assets. Such
servicing assets or liabilities shall be amortized in proportion to and over
the period of the estimated net servicing income or loss, as appropriate.
SFAS 125 is effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996 and is to be
only applied on a prospective basis. The application of SFAS 125 is not
anticipated to have a material impact on the Company's financial condition or
results of operations.
The FASB also issues exposure drafts for proposed statements of financial
accounting standards. Such exposure drafts are subject to comment from the
public, to revisions by the FASB and to final issuance by the FASB as
statements of financial accounting standards. Management considers the effect
of the proposed statements on the consolidated financial statements of the
Company and monitors the status of changes to issued exposure drafts and to
proposed effective dates.
OTHER EVENTS
The Company has announced that Mr. John C. Pegram, Jr., Senior Vice President
of the Bank, will become President of the Bank upon the retirement of Bank
President M. J. McSorley on July 1, 1998.
Management is not aware of any other trends, events, uncertainties, or
current recommendations by regulatory authorities that will have or that are
reasonably likely to have a material effect on BancShares' liquidity, capital
resources or other operations.
SIGNATURES
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.
SOUTHERN BANCSHARES (N.C.), INC.
Dated: November 14, 1996 __________________________________
M. J. McSorley, Vice President
Dated: November 14, 1996 __________________________________
David A. Bean, Secretary/Treasurer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEPT-30-1996
<CASH> 22,910
<SECURITIES> 165,645
<RECEIVABLES> 5,190
[ALLOWANCE] 6,272
<INVENTORY> 0
<CURRENT-ASSETS> 188,555
<PP&E> 20,001
<DEPRECIATION> 5,991
<TOTAL-ASSETS> 535,840
<CURRENT-LIABILITIES> 489,294
<BONDS> 0
0
2,569
<COMMON> 600
<OTHER-SE> 38,356
<TOTAL-LIABILITY-AND-EQUITY 535,840
<SALES> 27,307
<TOTAL-REVENUES> 30,389
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 13,390
<LOSS-PROVISION> 80
<INTEREST-EXPENSE> 13,137
<INCOME-PRETAX> 3,782
<INCOME-TAX> 1,091
<INCOME-CONTINUING> 2,691
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,691
<EPS-PRIMARY> 19.91
<EPS-DILUTED> 19.91
</TABLE>
