<PAGE> 1
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 September 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 September 30, 1994.
<PAGE> 2
PART I. - FINANCIAL INFORMATION
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME FOR
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993.
(Unaudited)
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
1994 1993 1994 1993
------- ------- ------ ------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and Fees on Loans 6,511 4,927 18,389 14,386
Interest Income on Balances Due From Banks 0 2 13 3
Interest on U. S. Treasury Securities and
U. S. Government Agencies and Corp. 1,480 1,614 4,764 5,546
Interest on Obligation of States and
Political Subdivisions 775 754 2,315 2,168
Interest on Other Securities 283 241 702 741
Interest on Federal Funds Sold and Securities
Purchased under Agreements to Resell 46 20 168 73
------- ------- ------ ------
Total Interest Income 9,095 7,558 26,351 22,917
INTEREST EXPENSE:
Interest on Time Certificates of Deposit of
$100,000 or More 600 488 1,703 1,572
Interest on Other Deposits 2,659 2,182 7,586 6,695
Interest on Federal Funds Purchased and
Securities Sold Under Agreement to Repurchase 0 0 18 16
Interest on Demand Notes Issued to the U. S.
Treasury and on Other Borrowed Money 191 191 570 471
------- -------- ------ ------
Total Interest Expense 3,450 2,861 9,877 8,754
Net Interest Income 5,645 4,697 16,474 14,163
Provision for Possible Loan Losses 308 380 914 1,089
------- ------- ------ ------
Net Interest Income After Provision for
Loan Losses 5,337 4,317 15,560 13,074
------- ------- ------ ------
NONINTEREST INCOME:
Income from Fiduciary Activities 188 146 563 437
Service Charge on Deposit Accounts 838 668 2,496 1,496
Other Noninterest Income 530 429 1,480 1,342
------- ------- ------ ------
Total Noninterest Income 1,556 1,243 4,539 3,725
Gains (Losses) on Securities 6 3 59 26
------- ------- ------ ------
NON INTEREST EXPENSE:
Salaries and Employee Benefits 2,214 1,875 6,515 5,653
Expense of Premises and Fixed Assets 576 483 1,664 1,417
Other Noninterest Expense 1,297 1,045 3,934 3,232
------- ------- ------ ------
Total Noninterest Expense 4,087 3,403 12,113 10,302
------- ------- ------ ------
Income Before Income Taxes 2,812 2,160 8,045 6,523
Applicable Income Taxes 718 491 2,047 1,492
------- ------- ------ ------
Income Before Extraordinary Items and Other
Adjustments 2,094 1,669 5,998 5,031
Adjustment for implementation of FASB 109 0 0 0 174
------- ------- ------ ------
NET INCOME 2,094 1,669 5,998 5,205
Net Earning Per Share 1.75 1.39 5.00 4.34
Shares Outstanding (Restated) 1,200,000
</TABLE>
<PAGE> 3
NBC CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
September 30, 1994 December 31, 1993
------------------ -----------------
(unaudited) (Audited)
<S> <C> <C>
ASSETS
Cash and Balances Due From Banks:
Noninterest-Bearing Balances 19,803 15,983
Interest-Bearing Balances 215 426
-------- --------
Total Cash and Due From Banks 20,018 16,409
Held-To-Maturity Securities (Market Value of
$12,380 at September 30, 1994 and $94,115 at
December 31, 1993) 11,901 90,881
Available-For-Sale Securities:
Mortgage-Backed Securities (Market Value of
$68,687 at September 30, 1994, and $75,450 at
December 31, 1993) 68,687 74,164
All Other Available-For-Sale Securities 88,457 0
-------- --------
Total Securities 169,045 165,045
Federal Funds Sold and Securities Purchased Under
Agreement to Resell 2,425 5,000
Loans 313,933 257,526
Less: Unearned Interest (4,610) (5,597)
Less: Reserve for Loan Losses (5,622) (4,450)
-------- --------
Net Loans 303,701 247,479
Bank Premises and Equipment (Net) 12,387 10,338
Interest Receivable 4,119 3,386
Other Real Estate Owned 305 314
Other Assets 7,467 4,386
-------- --------
TOTAL ASSETS 519,467 452,357
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-Interest Bearing 68,969 54,087
Interest-Bearing Time, $100,000 or More 56,665 49,066
Other Interest-Bearing 322,180 280,331
-------- --------
Total Deposits 447,814 383,484
Federal Funds Purchased and Securities Sold
Under Agreements to Repurchase 52 0
Demand Notes Issued to the U. S. Treasury 1,857 2,500
Other Borrowed Funds 11,204 12,132
Interest Payable 1,553 1,327
Other Liabilities 2,909 3,154
-------- --------
TOTAL LIABILITIES 465,389 402,597
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 21,161 15,558
Net Unrealized Holding Gains (losses) on
Available-for-Sale Securities (1,285) 0
-------- --------
TOTAL STOCKHOLDERS' EQUITY 54,078 49,760
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 519,467 452,357
</TABLE>
<PAGE> 4
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED September 30, 1994 AND 1993
(Unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
1994 1993
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income 5,998 5,205
Adjustments to reconcile net income to net cash
Depreciation and Amortization 851 786
Deferred Income Taxes (Credits) (1,030) 0
Provision for Loan Losses 914 1,089
Gain on Sale of Securities (59) (26)
(Increase) Decrease in Interest Receivable (733) (82)
(Increase) Decrease in Other Assets (3,072) (2,029)
Increase (Decrease) in Interest Payable 226 265
Increase (Decrease) in Other Liabilities (245) (444)
------- -------
Net Cash Provided by Operating Activities 2,850 4,764
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities of Securities 48,458 36,404
Proceeds from Sale of Securities 15,104 9,304
Purchase of Securities (68,814) (30,280)
(Increase) Decrease in Loans (56,325) (23,107)
Additions to Bank Premises and Equipment (2,654) (1,070)
------- -------
Net Cash Used in Investing Activities (64,231) (8,749)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in Deposits 64,330 (1,907)
Dividend Paid on Common Stock (396) (336)
Increase (Decrease) in Borrowed Funds (1,519) 521
------- -------
Net Cash Provided by Financing Activities 62,415 (1,722)
Net Increase (decrease) in Cash and Cash
Equivalents 1,034 (5,707)
Cash and Cash Equivalents at Beginning of Year 21,409 20,238
------- -------
Cash and Cash Equivalents at End of Quarter 22,443 14,531
Cash Paid during Year for:
Interest 9,651 8,489
Income Taxes 1,754 1,320
</TABLE>
<PAGE> 5
NBC CAPITAL CORPORATION
MANAGEMENT'S COMMENTS
September 30, 1994
Earnings for the first three quarters totalled $5,998,145 at $5.00 per share,
an increase of 15.21% over 1993's comparable period. Returns on average assets
and equity were 1.54% and 14.98% respectively.
Net interest income has increased 16.31% over the prior year's amount. Strong
loan growth and continued relatively low funds costs have allowed the company
to maintain favorable interest margins throughout the period. The company has
reduced its provision for loan losses 16.11% as loan quality remains strong.
Loan charge offs through three quarters are .08% of loans outstanding; non-
performing loans total .85% of aggregate loans.
Increases in non-interest income and expense reflect NBC's expanded activity
into the Tuscaloosa-West Alabama market during the year. Management remains
optimistic over the company's prospects in this growing area. Plans are being
formulated to increase First State Bank's presence in the Tuscaloosa-Northport
market.
Assets totalled $519.5 million, an increase of 15.98% over 1993's amount.
Deposits have grown 18.46% to close the quarter at 447.8 million. Competition
for funds is intense; non-bank competitors continue to maintain a significant
market presence.
Loans have increased 22.81% over the period to $313.9 million. Growth has been
concentrated primarily in commercial and real estate credits. The level of the
company's securities portfolio has remained unchanged, although funds have been
reallocated into the Treasury and Municipal Bond portions of the portfolio.
Management would prefer to have an even larger tax free, municipal bond
component. However, the availability of high quality, bank qualified municipal
bonds and the thin pricing on many of the issued available make additional
portfolio increases difficult.
Shareholders' equity, at $54.1 million and up 7.3% from the prior year,
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 9/30/94, the institution's tier 1,
Tier 2 and total capital ratios substantially exceeded the "well capitalized"
standards developed under the referenced regulatory guidelines.
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 $13,482,253. Also, under
regulations controlling national banks, the bank is limited in the amount it
may lend the corporation and such loans are required to be on a fully secured
basis.
<PAGE> 6
PART II - OTHER INFORMATION
Item 1 Not Applicable
Item 2 Not Applicable
Item 3 Not Applicable
Item 4 Not Applicable
Item 5 Not Applicable
Item 6 Not Applicable
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 nine month period ending September 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
November 11, 1994 Martha W. Taylor
Date Martha W. Taylor
Treasurer and Assistant Secretary
<PAGE> 7
EXHIBIT INDEX
Description of
Exhibit No. Exhibit
- - ---------- --------------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 19,803
<INT-BEARING-DEPOSITS> 215
<FED-FUNDS-SOLD> 2,425
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 157,144
<INVESTMENTS-CARRYING> 11,901
<INVESTMENTS-MARKET> 12,380
<LOANS> 309,323
<ALLOWANCE> 5,622
<TOTAL-ASSETS> 519,467
<DEPOSITS> 447,814
<SHORT-TERM> 1,909
<LIABILITIES-OTHER> 4,462
<LONG-TERM> 11,204
<COMMON> 1,200
0
0
<OTHER-SE> 52,878
<TOTAL-LIABILITIES-AND-EQUITY> 519,467
<INTEREST-LOAN> 18,389
<INTEREST-INVEST> 7,781
<INTEREST-OTHER> 181
<INTEREST-TOTAL> 26,351
<INTEREST-DEPOSIT> 9,289
<INTEREST-EXPENSE> 9,877
<INTEREST-INCOME-NET> 16,474
<LOAN-LOSSES> 914
<SECURITIES-GAINS> 59
<EXPENSE-OTHER> 12,113
<INCOME-PRETAX> 8,045
<INCOME-PRE-EXTRAORDINARY> 5,998
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,998
<EPS-PRIMARY> 5.00
<EPS-DILUTED> 5.00
<YIELD-ACTUAL> 4.57
<LOANS-NON> 1,873
<LOANS-PAST> 801
<LOANS-TROUBLED> 221
<LOANS-PROBLEM> 3,035
<ALLOWANCE-OPEN> 4,935
<CHARGE-OFFS> 366
<RECOVERIES> 139
<ALLOWANCE-CLOSE> 5,622
<ALLOWANCE-DOMESTIC> 914
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
