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, 1995
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 39760
(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, 1995.
PART I. - FINANCIAL INFORMATION
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME FOR
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994.
(Unaudited)
(Amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
___________________ _________________
1995 1994 1995 1994
--------- -------- ------- -------
INTEREST INCOME:
Interest and Fees on Loans 7,823 6,511 22,680 18,389
Interest Income on Balances
Due From Banks 14 0 40 13
Interest on U. S. Treasury Securities
and U. S. Government Agencies and
Corp. 1,748 1,480 5,140 4,764
Interest on Obligation of States and
Political Subdivisions 978 775 2,883 2,315
Interest on Other Securities 97 283 294 702
Interest on Federal Funds Sold and
Securities Purchased under Agreements
to Resell 52 46 299 168
------- ------- ------- -------
Total Interest Income 10,712 9,095 31,336 26,351
INTEREST EXPENSE:
Interest on Time Certificates of
Deposit of $100,000 or More 878 600 2,410 1,703
Interest on Other Deposits 3,812 2,659 10,786 7,586
Interest on Federal Funds Purchased
and Securities Sold Under Agreement
to Repurchase 37 0 83 18
Interest on Demand Notes Issued to the
U. S. Treasury and on Other Borrowed
Money 176 191 516 570
------- ------- ------- -------
Total Interest Expense 4,903 3,450 13,795 9,877
Net Interest Income 5,809 5,645 17,541 16,474
Provision for Possible Loan Losses 285 308 855 914
------- ------- ------- -------
Net Interest Income After Provision
for Loan Losses 5,524 5,337 16,686 15,560
------- ------- ------- -------
NONINTEREST INCOME:
Income from Fiduciary Activities 206 188 619 563
Service Charge on Deposit Accounts 835 838 2,544 2,496
Other Noninterest Income 438 530 1,320 1,480
------- ------- ------- -------
Total Noninterest Income 1,479 1,556 4,483 4,539
Gains (Losses) on Securities 4 6 (182) 59
------- ------- ------- -------
NON INTEREST EXPENSE:
Salaries and Employee Benefits 2,319 2,214 6,926 6,515
Expense of Premises and Fixed Assets 596 576 1,766 1,664
Other Noninterest Expense 1,134 1,297 3,981 3,934
------- ------- ------- -------
Total Noninterest Expense 4,049 4,087 12,673 12,113
Income Before Income Taxes 2,958 2,812 8,314 8,045
Applicable Income Taxes 708 718 1,956 2,047
Income Before Extraordinary Items and
Other Adjustments 2,250 2,094 6,358 5,998
Adjustment for implementation of FASB 109 0 0 0 0
------- ------- ------- -------
NET INCOME 2,250 2,094 6,358 5,998
Net Earning Per Share 1.88 1.75 5.30 5.00
NBC CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
September 30, 1995 December 31, 1994
ASSETS (unaudited) (Audited)
Cash and Balances Due From Banks:
Noninterest-Bearing Balances 24,964 21,679
Interest-Bearing Balances 99 375
-------- --------
Total Cash and Due From Banks 25,063 22,054
Held-To-Maturity Securities (Market Value of
$35,282 at September 30, 1995 and $30,460 at
December 31, 1994) 32,067 30,351
Available-For-Sale Securities:
Mortgage-Backed Securities 56,443 62,576
All Other Available-For-Sale Securities 98,643 83,219
-------- --------
Total Securities 187,153 176,146
Federal Funds Sold and Securities Purchased
Under Agreement to Resell 2,900 2,500
Loans 345,632 327,562
Less: Unearned Interest (3,046) (4,031)
Less: Reserve for Loan Losses (6,176) (5,719)
-------- --------
Net Loans 339,411 317,812
Bank Premises and Equipment (Net) 12,296 12,405
Interest Receivable 5,160 4,490
Other Real Estate Owned 125 668
Other Assets 8,818 9,330
-------- --------
TOTAL ASSETS 580,926 545,405
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-Interest Bearing 71,990 67,460
Interest-Bearing Time, $100,000 or More 70,654 57,059
Other Interest-Bearing 355,021 331,242
-------- --------
Total Deposits 497,665 455,761
Federal Funds Purchased and Securities Sold
Under Agreements to Repurchase 3,599 17,800
Demand Notes Issued to the U. S. Treasury 2,679 1,474
Other Borrowed Funds 9,906 10,886
Interest Payable 2,051 1,671
Other Liabilities 4,083 6,158
-------- --------
TOTAL LIABILITIES 519,983 493,750
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 26,174 20,236
Net Unrealized Holding Gains (losses) on
Available-for-Sale Securities 567 (2,783)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 60,943 51,655
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 580,926 545,405
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
(Amounts in thousands)
1995 1994
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income 6,358 5,998
Adjustments to reconcile net income to net cash
Depreciation and Amortization 1,003 851
Deferred Income Taxes (Credits) (262) (1,030)
Provision for Loan Losses 855 914
Gain on Sale of Securities 182 (59)
(Increase) Decrease in Interest Receivable (670) (733)
(Increase) Decrease in Other Assets (623) (3,072)
Increase (Decrease) in Interest Payable 380 226
Increase (Decrease) in Other Liabilities 604 (245)
-------- --------
Net Cash Provided by Operating Activities 7,827 2,850
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities of Securities 13,716 48,458
Proceeds from Sale of Securities 7,590 15,104
Purchase of Securities (27,417) (68,814)
(Increase) Decrease in Loans (22,454) (56,325)
Additions to Bank Premises and Equipment (682) (2,654)
-------- --------
Net Cash Used in Investing Activities (29,247) (64,231)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in Deposits 41,904 64,330
Dividend Paid on Common Stock (420) 396)
Increase (Decrease) in Borrowed Funds (16,655) (1,519)
-------- --------
Net Cash Provided by Financing Activities 24,829 62,415
Net Increase (decrease) in Cash and Cash
Equivalents 3,409 1,034
Cash and Cash Equivalents at Beginning of Year 24,554 21,409
-------- --------
Cash and Cash Equivalents at End of Quarter 27,963 22,443
Cash Paid during Year for:
Interest 8,774 9,651
Income Taxes 980 1,754
NBC CAPITAL CORPORATION
MANAGEMENT'S COMMENTS
SEPTEMBER 30, 1995
The company earned $6,357,951 or $5.30 per share for the first three quarters.
These totals represent a 6.0% increase over prior year earnings of $5,998,145
or $5.00 per common share.
Net interest income of $17,540,788 is 6.5% above 1994's comparable amount.
Although interest margins narrowed during the third quarter, continued growth
in loan volume has caused this key income component to remain ahead of last
year. The company's Provision for Loan Losses has declined 6.4%. Loan quality
remains excellent as evidenced by net loan losses of .11% of the portfolio
through three quarters and non-performing loans of .75% of loans outstanding.
Non-interest income, excluding the impact of securities gains (losses) remains
essentially unchanged from the previous year. The ability to identify and
effectively market new non-interest revenue producing products is a high
priority of the company. Also, the company took a planned loss of $.16 per
share on securities sales in January to allow for the reinvestment of the
sales proceeds into higher yielding, tax free general obligation investments.
The 4.6% growth in non-interest expenses reflects normal operating cost
increases. The addition of key personnel, planned increases in various
marketing and advertising expenditures, and higher supply costs have all
contributed to this total. The company's banking subsidiaries benefitted
from Bank Insurance Fund rebates from the FDIC amounting to $.16 per share.
The company's asset growth of 11.9% to $580.9 million has been funded primarily
from a strong increase in deposits. Deposits gains aggregated 11.1% to close
the quarter at $497.7 million. Loan demand has been consistent throughout the
year. Quarter end loans outstanding of $348.6 million are 11.1% above the
previous year. Most of the company's loan growth has been concentrated in
real estate and commercial credits. Consumer related loans have shown more
modest increases.
Shareholders' equity continues to register gains. At $60.9 million, this
portion of the balance sheet has grown over 12.7% during the past year. The
bank is required to maintain minimum amounts of capital to total risk
weighted assets asdefined by the banking regulators. At 9/30/95, the
institution's Tier 1, Tier 11 and Total Capital Ratios exceeded the well
capitalized standards developed under the referenced regulatory guidelines.
At 9/30/95, $567,055 in consolidated, unrealized holding gains, net of deferred
tax, was reflected in equity accounts on Available-for-Sale Securities.
Aggregate cash reserves of $504,483 were maintained at 9/30/95 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 $14,857,085. 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.
New branch construction is underway in key Philadelphia and Tuscaloosa
locations. We feel these facilities will contribute positively to our
competitiveness in these growing markets. Loan and deposit pricing will
become increasingly important if strong loan demand continues.
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 September 30, 1995
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
September 30, 1995 Martha W. Taylor
Date Martha W. Taylor
Treasurer and Assistant Secretary
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