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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 March 31, 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 March 31, 1994.
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PART I. - FINANCIAL INFORMATION
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME FOR
THREE MONTHS ENDED MARCH 31, 1994 AND 1993.
(Unaudited)
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
------------------
1994 1993
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<S> <C> <C>
INTEREST INCOME:
Interest and Fees on Loans 5,755 4,624
Interest Income on Balances Due From Banks 7 1
Interest on U. S. Treasury Securities and
U. S. Government Agencies and Corp. 1,626 2,217
Interest on Obligation of States and
Political Subdivisions 774 680
Interest on Other Securities 245 90
Interest on Federal Funds Sold and Securities
Purchased under Agreements to Resell 76 34
------- -------
Total Interest Income 8,483 7,646
INTEREST EXPENSE:
Interest on Time Certificates of Deposit of
$100,000 or More 523 548
Interest on Other Deposits 2,439 2,289
Interest on Federal Funds Purchased and
Securities Sold Under Agreement to Repurchase 8 2
Interest on Demand Notes Issued to the U. S.
Treasury and on Other Borrowed Money 193 123
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Total Interest Expense 3,163 2,962
Net Interest Income 5,320 4,684
Provision for Possible Loan Losses 303 354
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Net Interest Income After Provision for
Loan Losses 5,017 4,330
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NONINTEREST INCOME:
Income from Fiduciary Activities 188 146
Service Charge on Deposit Accounts 822 615
Other Noninterest Income 454 420
------- -------
Total Noninterest Income 1,464 1,181
Gains (Losses) on Securities 31 0
------- -------
NON INTEREST EXPENSE:
Salaries and Employee Benefits 2,168 1,919
Expense of Premises and Fixed Assets 533 493
Other Noninterest Expense 1,204 1,027
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Total Noninterest Expense 3,905 3,439
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Income Before Income Taxes 2,607 2,072
Applicable Income Taxes 664 463
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Income Before Extraordinary Items and Other
Adjustments 1,943 1,609
Adjustment for Implementation of FASB 109 0 174
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NET INCOME 1,943 1,783
Net Earning Per Share 1.62 1.49
Shares Outstanding (Restated)
</TABLE>
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NBC CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
March 31, 1994 December 31, 1993
-------------- -----------------
ASSETS (unaudited) (Audited)
<S> <C> <C>
Cash and Balances Due From Banks:
Noninterest-Bearing Balances 16,319 15,983
Interest-Bearing Balances 717 426
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Total Cash and Due From Banks 17,036 16,409
Held-To-Maturity Securities (Market Value of
$9,151 at March 31, 1994 and $94,115 at
December 31, 1993) 8,447 90,881
Available-For-Sale Securities:
Mortgage-Backed Securities (Market Value of
$69,334 at March 31, 1994, and $75,450 at
December 31, 1993) 69,334 74,164
All Other Available-For-Sale Securities 112,552 0
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Total Securities 190,333 165,045
Federal Funds Sold and Securities Purchased Under
Agreement to Resell 2,325 5,000
Loans 299,815 257,526
Less: Unearned Interest (5,436) (5,597)
Less: Reserve for Loan Losses (5,201) (4,450)
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Net Loans 289,178 247,479
Bank Premises and Equipment (Net) 12,534 10,338
Interest Receivable 3,999 3,386
Other Real Estate Owned 269 314
Other Assets 7,946 4,386
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TOTAL ASSETS 523,620 452,357
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-Interest Bearing 59,895 54,087
Interest-Bearing Time, $100,000 or More 66,245 49,066
Other Interest-Bearing 322,740 280,331
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Total Deposits 448,880 383,484
Federal Funds Purchased and Securities Sold
Under Agreements to Repurchase 4,058 0
Demand Notes Issued to the U. S. Treasury 2,134 2,500
Other Borrowed Funds 11,825 12,132
Interest Payable 1,498 1,327
Other Liabilities 2,874 3,154
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TOTAL LIABILITIES 471,269 402,597
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 17,501 15,558
Net Unrealized Holding Gains (losses) on
Available-for-Sale Securities 648 0
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TOTAL STOCKHOLDERS' EQUITY 52,351 49,760
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 523,620 452,357
</TABLE>
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NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993
(Unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
1994 1993
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income 1,943 1,783
Adjustments to reconcile net income to net cash
Depreciation and Amortization 366 229
Deferred Income Taxes (Credits) (662) 0
Provision for Loan Losses 303 354
Gain on Sale of Securities 31 0
(Increase) Decrease in Interest Receivable (613) (216)
(Increase) Decrease in Other Assets (2,967) (1,699)
Increase (Decrease) in Interest Payable 171 236
Increase (Decrease) in Other Liabilities (280) 337
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Net Cash Provided by Operating Activities (1,708) 1,024
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities of Securities 18,737 6,024
Proceeds from Sale of Securities 0 0
Purchase of Securities (43,408) (12,112)
Increase (Decrease) in Loans (42,002) (5,428)
Additions to Bank Premises and Equipment (2,448) (178)
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Net Cash Used in Investing Activities (69,121) (11,694)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in Deposits 65,396 6,992
Increase (Decrease) in Borrowed Funds 3,385 (2,467)
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Net Cash Provided by Financing Activities 68,781 4,525
Net Increase (decrease) in Cash and Cash
Equivalents (2,048) (6,145)
Cash and Cash Equivalents at Beginning of Year 21,409 20,238
-------- -------
Cash and Cash Equivalents at End of Quarter 19,361 14,093
</TABLE>
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NBC CAPITAL CORPORATION
MANAGEMENT'S COMMENTS
March 31, 1994
Earnings for 1994's first quarter totalled $1,942,667 or $1.62 per share.
This represents a 9.0% increase over comparable income totals from the prior
year. Income amounts for 1994 include results from the company's First State
Bank of Tuscaloosa, Alabama subsidiary.
Net interest income increased 13.6% to $5,319,523. Loan quality remains
excellent, and management did not feel any increase was warranted in the
Provision for Loan Losses. Non-interest income grew 26.6%. The 13.6% gain in
non-interest expenses represents normal overhead amounts from First State
Bank's operations. It is significant to note that non-interest expenses in the
company's two subsidiary banks showed no increase during the year's first
quarter.
Assets totalled $523.6 million to close the quarter with a 16.2% increase
over the previous year. Loan grew 26.3% to 299.8 million. Management observed
some softening in loan demand during the first two months of the year; however,
improved demand resumed during March and hopefully will continue in the months
ahead. Deposits closed the quarter at $448.9 million, up 16.0%.
Shareholders' equity, at $52.4 million and up 10.7% 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 3/31/94, the institution's Tier 1,
Tier 2 and total capital ratios exceeded the "well capitalized" standards
developed under the referenced regulatory guidelines.
The company implemented mark to market accounting guidelines for its
securities portfolio as of 1/1/94. At 3/31/94, $648,000 in consolidated,
unrealized holding gains, net of deferred tax, was reflected in equity accounts
on available-for-sale securities.
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 currents year's net profits and retained net
earnings of the two preceeding years, or a total availabe dividend of
$9,822,775. 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.
Aggregate cash reserves of $18,000 were maintained at 3/31/94 to satisfy
federal regulatory requirements.
While net interest income showed significant improvement in the dollars
contributed, both components of net interest income are significantly lower
than for the prior year (cost of deposits as well as return on earning assets
reflect lower yields). Average earning assets are approximately $68 million
greater than for the prior year while average interest earning deposits are
approximately $52 million greater than for the prior year. Strong loan growth
as well as the contribution of First State Bank of Tuscaloosa, Alabama, are
major contributing factors. NBC Capital Corporation's acquisition of First
State Bank was effective 1/1/94 and is accounted for as a purchase, using push
down accounting.
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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 three month period ending March 31, 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
May 11, 1994 /s/ Martha W. Taylor
Date Martha W. Taylor
Treasurer and Assistant Secretary
