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UNITED STATES
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 quarterly period ended June 30, 1994
Commission File Number 2-89900
NBC CAPITAL CORPORATION
(Exact name of registrant as specified in its charter.)
Mississippi 64-0694775
(State of other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
NBC Plaza, P. O. Box 1187, Starkville, Mississippi 39759
(Address of principal executive offices) (Zip Code)
Registrants's telephone number, including area code: (601) 323-1341
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 latest practical date:
Common Stock, $1 Par Value - 1,200,000 shares as of June 30, 1994.
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PART I. - FINANCIAL INFORMATION
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME FOR
THREE MONTHS AND SIX MONTHS ENDED June 30, 1994 AND 1993.
(Unaudited)
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------- ----------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and Fees on Loans 6,123 4,835 11,878 9,459
Interest Income on Balances Due From Banks 6 0 13 1
Interest on U. S. Treasury Securities and
U. S. Government Agencies and Corp. 1,658 1,715 3,284 3,932
Interest on Obligation of States and
Political Subdivisions 766 734 1,540 1,414
Interest on Other Securities 174 410 419 500
Interest on Federal Funds Sold and Securities
Purchased under Agreements to Resell 46 19 122 53
----- ----- ------ ------
Total Interest Income 8,773 7,713 17,256 15,359
INTEREST EXPENSE:
Interest on Time Certificates of Deposit of
$100,000 or More 580 536 1,103 1,084
Interest on Other Deposits 2,488 2,224 4,927 4,513
Interest on Federal Funds Purchased and
Securities Sold Under Agreement to Repurchase 10 14 18 16
Interest on Demand Notes Issued to the U. S.
Treasury and on Other Borrowed Money 186 157 379 280
----- ----- ------ ------
Total Interest Expense 3,264 2,931 6,427 5,893
Net Interest Income 5,509 4,782 10,829 9,466
Provision for Possible Loan Losses 303 355 606 709
----- ----- ------ ------
Net Interest Income After Provision for
Loan Losses 5,206 4,427 10,223 8,757
----- ----- ------ ------
NONINTEREST INCOME:
Income from Fiduciary Activities 187 145 375 291
Service Charge on Deposit Accounts 836 663 1,658 1,278
Other Noninterest Income 496 493 950 913
----- ----- ------ ------
Total Noninterest Income 1,519 1,301 2,983 2,482
Gains (Losses) on Securities 22 23 53 23
----- ----- ------ ------
NON INTEREST EXPENSE:
Salaries and Employee Benefits 2,133 1,859 4,301 3,778
Expense of Premises and Fixed Assets 555 441 1,088 934
Other Noninterest Expense 1,433 1,160 2,637 2,187
----- ----- ------ ------
Total Noninterest Expense 4,121 3,460 8,026 6,899
----- ----- ------ ------
Income Before Income Taxes 2,626 2,291 5,233 4,363
Applicable Income Taxes 665 538 1,329 1,001
----- ----- ------ ------
Income Before Extraordinary Items and Other
Adjustments 1,961 1,753 3,904 3,362
Adjustment for implementation of FASB 109 0 0 0 174
----- ----- ------ ------
NET INCOME 1,961 1,753 3,904 3,536
Net Earning Per Share 1.63 1.62 3.25 2.95
Shares Outstanding (Restated) 1,200,000
</TABLE>
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NBC CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
June 30, 1994 December 31, 1993
------------- -----------------
ASSETS (unaudited) (Audited)
<S> <C> <C>
Cash and Balances Due From Banks:
Noninterest-Bearing Balances 18,665 15,983
Interest-Bearing Balances 288 426
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Total Cash and Due From Banks 18,953 16,409
Held-To-Maturity Securities (Market Value of
$10,932 at June 30, 1994 and $94,115 at
December 31, 1993) 10,296 90,881
Available-For-Sale Securities:
Mortgage-Backed Securities (Market Value of
$64,870 at June 30, 1994, and $75,450 at
December 31, 1993) 64,870 74,164
All Other Available-For-Sale Securities 103,387 0
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Total Securities 178,553 165,045
Federal Funds Sold and Securities Purchased Under
Agreement to Resell 5,375 5,000
Loans 304,845 257,526
Less: Unearned Interest (5,272) (5,597)
Less: Reserve for Loan Losses (5,411) (4,450)
--------- -----------
Net Loans 294,162 247,479
Bank Premises and Equipment (Net) 12,459 10,338
Interest Receivable 4,130 3,386
Other Real Estate Owned 312 314
Other Assets 8,412 4,386
--------- -----------
TOTAL ASSETS 522,356 452,357
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-Interest Bearing 63,715 54,087
Interest-Bearing Time, $100,000 or More 61,092 49,066
Other Interest-Bearing 326,775 280,331
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Total Deposits 451,582 383,484
Federal Funds Purchased and Securities Sold
Under Agreements to Repurchase 318 0
Demand Notes Issued to the U. S. Treasury 2,346 2,500
Other Borrowed Funds 11,742 12,132
Interest Payable 1,511 1,327
Other Liabilities 2,271 3,154
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TOTAL LIABILITIES 469,770 402,597
Stockholders' Equity:
Common Stock $1 par Value, Authorized
3,000,000 shares, Issued and Outstanding
1,200,000 1,200 1,200
Surplus 33,002 33,002
Undivided Profits 19,066 15,558
Net Unrealized Holding Gains (losses) on
Available-for-Sale Securities (682) 0
--------- -----------
TOTAL STOCKHOLDERS' EQUITY 52,586 49,760
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 522,356 452,357
</TABLE>
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NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED June 30, 1994 AND 1993
(Unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income 3,904 3,536
Adjustments to reconcile net income to net cash
Depreciation and Amortization 730 546
Deferred Income Taxes (Credits) (714) 0
Provision for Loan Losses 606 709
Gain on Sale of Securities (53) (23)
(Increase) Decrease in Interest Receivable (744) 149
(Increase) Decrease in Other Assets (4,023) (1,769)
Increase (Decrease) in Interest Payable 184 141
Increase (Decrease) in Other Liabilities (882) (205)
------- -------
Net Cash Provided by Operating Activities (992) 3,084
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities of Securities 36,544 17,010
Proceeds from Sale of Securities 7,000 9,304
Purchase of Securities (57,052) (20,078)
(Increase) Decrease in Loans (47,361) (15,875)
Additions to Bank Premises and Equipment (2,470) (683)
------- -------
Net Cash Used in Investing Activities (63,339) (10,322)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in Deposits 68,098 3,880
Dividend Paid on Common Stock (396) (335)
Increase (Decrease) in Borrowed Funds (452) 718
------- -------
Net Cash Provided by Financing Activities 67,250 4,263
Net Increase (decrease) in Cash and Cash
Equivalents 2,919 (2,975)
Cash and Cash Equivalents at Beginning of Year 21,409 20,238
------- -------
Cash and Cash Equivalents at End of Quarter 24,328 17,263
Cash Paid during Year for:
Interest 6,243 5,752
Income Taxes 1,123 880
</TABLE>
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NBC CAPITAL CORPORATION
MANAGEMENT'S COMMENTS
June 30, 1994
Net income for the first two quarters totalled $3,904,238 or $3.25 per
share, an increase of 10.4% over income for the comparable period in 1993.
Return on average assets for the first half year was 1.5%; return on average
equity was 15.1%.
Net interest income continued to contribute significantly to the
company's earnings. This important income component has been driven primarily
by increased loan volume and a continued low cost of funds. Funds costs have
risen in recent months, reflecting the general rise of interest rates in the
marketplace. This trend is expected to make future comparable increases in net
interest income more difficult to obtain unless loan growth can be maintained.
The company's 14.5% reduction in the provision for loan losses reflects the
continued high quality of its loan portfolio.
Non-interest income has grown 21.2% over the past year. Service
charges on an increasing deposit account base have contributed significantly to
the growth in this income sector.
Assets totalled $522.4 million at the end of June, up 15.5% from the
prior year. This growth was concentrated in the company's loan portfolio which
grew 22.6% over the period to $304.8 million. Loan quality, as noted
previously, remains quite strong with non-performing loans totalling .84% of
loans outstanding at the end of the period.
Total deposits of $451.6 million reflect a 17.7% increase over the
period shown. The company has experienced renewed growth in core time deposits
in recent months as interest rates have become somewhat more attractive.
Shareholder's equity of $52.6 million is a strong 10.1% of assets and
continues as a primary strength of the company's balance sheet. The bank is
required to maintain minimum amounts of capital to total risk weighted assets
as defined by the banking regulators. At 6/30/94, the institution's Tier I,
Tier II, and Total Capital Ratios exceeded the well capitalized standards
developed under the referenced regulatory guidelines. At 6/30/94, $681,697 in
consolidated, unrealized holding losses, net of deferred tax, was reflected in
equity accounts on Available-for-Sale Securities.
Aggregate cash reserves of $684,000 were maintained at 6/30/94 to
satisfy federal regulatory requirements.
Dividends paid by the corporation are provided from dividends received
from the bank. Under regulations controlling national banks, the payment of
dividends by the bank without prior approval from the Comptroller of the
Currency is limited to the current year's net profits and retained net earnings
of the two preceding years, or a total available dividend of $11,375,346.
Also, under regulations controlling national banks, the bank is limited in the
amount it may lend to the corporation and such loans are required to be on a
fully secured basis.
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PART II - OTHER INFORMATION
Item 1 Not Applicable
Item 2 Not Applicable
Item 3 Not applicable
Item 4 The regular Annual Meeting of Shareholders was held 4/12/94.
Only one item, the reelection of directors, was presented for
shareholder approval. Directors were reelected without
opposition with 87% or 1,043,738 votes cast in favor of
reelection. Annual Report and Proxy Statement are
incorporated herein by reference.
Item 5 Not Applicable
Item 6 Annual Report and Proxy Statement herein referenced.
The Financial information furnished herein has not been audited by
independent accountants, however, in the opinion of management, all adjustments
are of a normal recurring nature necessary for a fair presentation of the
results of operations for the three month period ending June 30, 1994 have been
included.
NBC CAPITAL CORPORATION
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
NBC CAPITAL CORPORATION
Registrant
August 11, 1994 Martha W. Taylor
Date Martha W. Taylor
Treasurer and Assistant Secretary
