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, 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 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, 1995.
PART I. - FINANCIAL INFORMATION
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME FOR
THREE MONTHS AND SIX MONTHS ENDED June 30, 1995 AND 1994.
(Unaudited)
(Amounts in thousands, except per share data)
Three Months Ended Six Months Ended
________________ ________________
1995 1994 1995 1994
_______ _______ _______ _______
INTEREST INCOME:
Interest and Fees on Loans $ 7,631 $ 6,123 $14,857 $11,878
Interest Income on Balances Due
From Banks 14 6 26 13
Interest on U. S. Treasury
Securities and U. S. Government
Agencies and Corp. 1,783 1,658 3,392 3,284
Interest on Obligation of States
and Political Subdivisions 946 766 1,905 1,540
Interest on Other Securities 103 174 197 419
Interest on Federal Funds Sold
and Securities Purchased under
Agreements to Resell 116 46 247 122
_______ _______ _______ _______
Total Interest Income 10,593 8,773 20,624 17,256
INTEREST EXPENSE:
Interest on Time Certificates
of Deposit of $100,000 or More 831 580 1,532 1,103
Interest on Other Deposits 3,683 2,488 6,974 4,927
Interest on Federal Funds
Purchased and Securities Sold
Under Agreement to Repurchase 28 10 46 18
Interest on Demand Notes Issued
to the U. S. Treasury and on
Other Borrowed Money 168 186 340 379
_______ _______ _______ _______
Total Interest Expense 4,710 3,264 8,892 6,427
Net Interest Income 5,883 5,509 11,732 10,829
Provision for Possible Loan Losses 285 303 570 606
_______ _______ _______ _______
Net Interest Income After
Provision for Loan Losses 5,598 5,206 11,162 10,223
_______ _______ _______ _______
NONINTEREST INCOME:
Income from Fiduciary Activities 207 187 412 375
Service Charge on Deposit Accounts 848 836 1,709 1,658
Other Noninterest Income 469 496 882 950
_______ _______ _______ _______
Total Noninterest Income 1,524 1,519 3,003 2,983
Gains (Losses) on Securities 2 22 (186) 53
_______ _______ _______ _______
NONINTEREST EXPENSE:
Salaries and Employee Benefits 2,268 2,133 4,607 4,301
Expense of Premises and Fixed
Assets 591 555 1,170 1,088
Other Noninterest Expense 1,499 1,433 2,847 2,637
_______ _______ _______ _______
Total Noninterest Expense 4,358 4,121 8,624 8,026
_______ _______ _______ _______
Income Before Income Taxes 2,766 2,626 5,355 5,233
Applicable Income Taxes 649 665 1,248 1,329
_______ _______ _______ _______
Income Before Extraordinary Items
and Other Adjustments 2,117 1,961 4,107 3,904
Adjustment for implementation of
FASB 109 0 0 0 0
_______ _______ _______ _______
NET INCOME 2,117 1,961 4,107 3,904
Net Earning Per Share 1.76 1.63 3.42 3.25
NBC CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
June 30, December 31,
1995 1994
___________ __________
ASSETS (Unaudited) (Audited)
Cash and Balances Due From Banks:
Noninterest-Bearing Balances $ 24,502 $ 21,679
Interest-Bearing Balances 784 375
___________ __________
Total Cash and Due From Banks 25,286 22,054
Held-To-Maturity Securities (Market
Value of $34,624 at June 30, 1995
and $30,460 at December 31, 1994) 32,059 30,351
Available-For-Sale Securities:
Mortgage-Backed Securities (Market
Value of $58,792 at June 30, 1995,
and $61,255 at December 31, 1994) 58,792 62,576
All Other Available-For-Sale
Securities 97,263 83,219
___________ __________
Total Securities 188,114 176,146
Federal Funds Sold and Securities
Purchased Under Agreement to Resell 1,500 2,500
Loans 338,823 327,562
Less: Unearned Interest (3,309) (4,031)
Less: Reserve for Loan Losses (6,018) (5,719)
___________ __________
Net Loans 329,496 317,812
Bank Premises and Equipment (Net) 12,278 12,405
Interest Receivable 5,165 4,490
Other Real Estate Owned 181 668
Other Assets 8,591 9,330
___________ __________
TOTAL ASSETS $ 570,611 $ 545,405
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-Bearing $ 68,783 $ 67,460
Interest-Bearing Time, $100,000 or
More 57,980 57,059
Other Interest-Bearing 361,904 331,242
___________ __________
Total Deposits 488,667 455,761
Federal Funds Purchased and Securities
Sold Under Agreements to Repurchase 5,117 17,800
Demand Notes Issued to the U. S. Treasury 2,554 1,474
Other Borrowed Funds 10,237 10,886
Interest Payable 1,789 1,671
Other Liabilities 3,747 6,158
___________ __________
TOTAL LIABILITIES 512,111 493,750
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 23,922 20,236
Net Unrealized Holding Gains (Losses)
on Available-for-Sale Securities 376 (2,783)
__________ __________
TOTAL STOCKHOLDERS' EQUITY 58,500 51,655
__________ __________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 570,611 $ 545,405
========== ==========
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED June 30, 1995 AND 1994
(Unaudited)
(Amounts in thousands)
1995 1994
________ ________
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 4,107 $ 3,904
Adjustments to Reconcile Net Income to
Net Cash
Depreciation and Amortization 677 730
Deferred Income Taxes (Credits) (58) (714)
Provision for Loan Losses 570 606
(Gain) Loss on Sale of Securities 186 (53)
Increase in Interest Receivable (675) (744)
Increase in Other Assets (500) (4,023)
Increase in Interest Payable 118 184
Increase (Decrease) in Other Liabilities 143 (882)
________ ________
Net Cash Provided by (Used in) Operating
Activities 4,568 (992)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities of Securities 9,898 36,544
Proceeds from Sale of Securities 7,587 7,000
Purchase of Securities (24,853) (57,052)
Increase in Loans (12,253) (47,361)
Additions to Bank Premises and Equipment (395) (2,470)
________ ________
Net Cash Used in Investing Activities (20,016) (63,339)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in Deposits 32,905 68,098
Dividend Paid on Common Stock (420) (396)
Decrease in Borrowed Funds (14,805) (452)
________ ________
Net Cash Provided by Financing Activities 17,680 67,250
Net Increase in Cash and Cash Equivalents 2,232 2,919
Cash and Cash Equivalents at Beginning of Year 24,554 21,409
________ ________
Cash and Cash Equivalents at End of Quarter $ 26,786 $ 24,328
======== ========
Cash Paid during Year for:
Interest $ 8,774 $ 6,243
Income Taxes 980 1,123
NBC CAPITAL CORPORATION
MANAGEMENT'S COMMENTS
June 30, 1995
Net income for the first two quarters totalled $4,106,539 or $3.42 per
share, an increase of 5.2% over income for the comparable period in 1994.
Return on average assets for the first half year was 1.5%; return on
average equity was 14.9%.
Net interest income, up 8.2% over the prior year, continued to contribute
significantly to the company's earnings. This important income component
has been driven primarily by increase 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 5.9% reduction in the
provision for loan losses reflects the continued high quality of its loan
portfolio.
Noninterest income, net of securities losses, has grown 4.0% over the past
year. Noninterest expense has increased 7.5% primarily due to increases in
salary and benefit costs resulting from normal merit increases as well as
the addition of several key officers. Assets totalled $570.6 million at the
end of June, up 9.2% from the prior year. This growth was concentrated in
the company's loan portfolio which grew 12% over the period to $329.5
million. Loan quality, as noted previously, remains quite strong with non-
performing loans totalling .81% of loans outstanding at the end of the
period.
Total deposits of $488.7 million reflect an 8.2% 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 $58.5 million is a strong 10.3% of assets and
continue 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 6/30/95, the institution's
Tier I, Tier II, and Total Capital Ratios exceeded the well capitalized
standards developed under the referenced regulatory guidelines. At 6/30/95,
$375,485 in consolidated, unrealized holding gains, net of deferred tax,
was reflected in equity accounts on Available-for-Sale Securities.
Aggregate cash reserves of $1,615,504 were maintained at 6/30/95 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
$12,605,673. 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.
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
4/11/95. Only one item, the reelection of directors,
was presented for shareholder approval. Directors were
reelected without opposition with 87% or 1,049,166 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, 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
August 8, 1995 Martha W. Taylor
Date Martha W. Taylor
Treasurer and Assistant Secretary
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