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, 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 March 31, 1995.
PART I. - FINANCIAL INFORMATION
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
(Amounts in thousands, except per share data)
Three Months Ended
__________________
1995 1994
_______ _______
INTEREST INCOME:
Interest and Fees on Loans $ 7,226 $ 5,755
Interest Income on Balances Due From Banks 12 7
Interest on U. S. Treasury Securities and
U. S. Government Agencies and Corp. 1,609 1,626
Interest on Obligation of States and
Political Subdivisions 959 774
Interest on Other Securities 94 245
Interest on Federal Funds Sold and Securities
Purchased under Agreements to Resell 131 76
_______ _______
Total Interest Income 10,031 8,483
INTEREST EXPENSE:
Interest on Time Certificates of Deposit of
$100,000 or More 701 523
Interest on Other Deposits 3,291 2,439
Interest on Federal Funds Purchased and
Securities Sold Under Agreement to Repurchase 18 8
Interest on Demand Notes Issued to the U. S.
Treasury and on Other Borrowed Money 172 193
_______ _______
Total Interest Expense 4,182 3,163
Net Interest Income 5,849 5,320
Provision for Possible Loan Losses 285 303
_______ _______
Net Interest Income After Provision for
Loan Losses 5,564 5,017
_______ _______
NONINTEREST INCOME:
Income from Fiduciary Activities 206 188
Service Charge on Deposit Accounts 861 822
Other Noninterest Income 413 454
_______ _______
Total Noninterest Income 1,480 1,464
Gains (Losses) on Securities (188) 31
_______ _______
NONINTEREST EXPENSE:
Salaries and Employee Benefits 2,339 2,168
Expense of Premises and Fixed Assets 579 533
Other Noninterest Expense 1,348 1,204
_______ _______
Total Noninterest Expense 4,266 3,905
_______ _______
Income Before Income Taxes 2,590 2,607
Applicable Income Taxes 599 664
_______ _______
Income Before Extraordinary Items and Other
Adjustments 1,991 1,943
_______ _______
NET INCOME $ 1,991 $ 1,943
======= =======
Net Earnings Per Share $ 1.66 $ 1.62
NBC CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
March 31, December 31,
1995 1994
__________ __________
ASSETS (Unaudited) (Audited)
Cash and Balances Due From Banks:
Noninterest-Bearing Balances $ 19,038 $ 21,679
Interest-Bearing Balances 578 375
_________ _________
Total Cash and Due From Banks 19,616 22,054
Held-To-Maturity Securities Market Value of
$33,015 at March 31, 1995 and $30,460 at
December 31, 1994 31,367 30,351
Available-For-Sale Securities:
Mortgage-Backed Securities 59,958 62,576
All Other Available-For-Sale Securities 92,097 83,219
_________ _________
Total Securities 183,422 176,146
Federal Funds Sold and Securities Purchased Under
Agreement to Resell 6,100 2,500
Loans 328,655 327,562
Less: Unearned Interest (3,648) (4,031)
Less: Reserve for Loan Losses (5,932) (5,719)
_________ _________
Net Loans 319,075 317,812
Bank Premises and Equipment (Net) 12,455 12,405
Interest Receivable 4,730 4,490
Other Real Estate Owned 429 668
Other Assets 9,224 9,330
_________ _________
TOTAL ASSETS $ 555,051 $ 545,405
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-Bearing $ 65,099 $ 67,460
Interest-Bearing Time, $100,000 or More 64,983 57,059
Other Interest-Bearing 352,839 331,242
_________ _________
Total Deposits 482,921 455,761
Federal Funds Purchased and Securities Sold
Under Agreements to Repurchase 25 17,800
Demand Notes Issued to the U. S. Treasury 654 1,474
Other Borrowed Funds 10,625 10,886
Interest Payable 1,756 1,671
Other Liabilities 3,844 6,158
_________ _________
TOTAL LIABILITIES 499,825 493,750
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 22,227 20,236
Net Unrealized Losses on Available-for-
Sale Securities (1,203) (2,783)
_________ _________
TOTAL STOCKHOLDERS' EQUITY 55,226 51,655
_________ _________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 555,051 $ 545,405
========= =========
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
(Amounts in thousands)
1995 1994
________ ________
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 1,991 $ 1,943
Adjustments to Reconcile Net Income
to Net Cash:
Depreciation and Amortization 335 366
Deferred Income Taxes (Credits) (33) (662)
Provision for Loan Losses 285 303
Loss on Sale of Securities 188 31
Increase in Interest Receivable (240) (613)
Increase in Other Assets (514) (2,967)
Increase (Decrease) in Interest Payable 84 171
Decrease in Other Liabilities (1,659) (280)
________ ________
Net Cash Provided by (Used in) Operating
Activities 437 (1,708)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities of Securities 3,648 18,737
Proceeds from Sale of Securities 7,584 0
Purchase of Securities (16,301) (43,408)
Decrease in Loans (1,548) (42,002)
Additions to Bank Premises and Equipment (308) (2,448)
________ ________
Net Cash Used in Investing Activities (6,925) (69,121)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in Deposits 27,159 65,396
Increase (Decrease) in Borrowed Funds (19,509) 3,385
________ ________
Net Cash Provided by Financing Activities 7,650 68,781
Net Increase (Decrease) in Cash and Cash
Equivalents 1,162 (2,048)
Cash and Cash Equivalents at Beginning
of Year 24,554 21,409
________ ________
Cash and Cash Equivalents at End of Quarter $ 25,716 $ 19,361
======== ========
NBC CAPITAL CORPORATION
MANAGEMENT'S COMMENTS
March 31, 1995
Earnings for the first quarter totalled $1,991,180 at $1.66 per share, compared
to $1.62 for the first quarter of 1994. Returns on average assets and equity
were 1.5% and 14.9% respectively.
Net interest income has increased 9.9% 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 5.9% as loan quality remains strong.
Noninterest income has registered steady growth. Exceptions may be noted in
the mortgage loan and credit life income areas, down 41.5% and 14.4%
respectively. Opportunities for income from the mortgage lending area have
obviously diminished over the past year with the rise in interest rates.
Increases in non-interest expenses were driven primarily by costs associated
with additional personnel and various miscellaneous overhead expenses such as
postage, supplies, and a more aggressive advertising and marketing budget. As
the company has grown, key personnel additions have been necessary in the
credit, marketing, operations, trust, and management areas.
Assets closed the quarter at a record high of $555.1 million, up 6.0%. The
company's assets are supported by a strong shareholders' equity total of $55.2
million. Deposits have increased 7.6% to $482.9 million. Loan growth of 10.3%
placed net loans at $319.1 million at the end of the quarter. Loan quality
remains good as evidenced by the low percentages of loan charge-offs, past
dues, and non-performing loans. If further increases in interest rates can be
avoided, we would anticipate moderately strong loan demand for the next several
quarters. Competition for deposits among institutions to support loan growth
remains intense. We expect continued aggressive activity in this area of the
market for the balance of the year.
Aggressive expansion plans are in place for the Tuscaloosa market area. The
company's board has adopted a three year plan to expand the bank's delivery
system in that market with additional branch locations, ATM outlets, and an
enlarged main office facility. Our successful completion of this strategy will
allow for better market diversification for the company and improved long term
earnings potential.
Shareholders' equity, at $55.2 million and up 5.5% 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 3/31/95, 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 $10,910,314. 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.
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, 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
May 12, 1995 Martha W. Taylor
Date Martha W. Taylor
Treasurer and Assistant Secretary
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