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, 1996
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 March 31, 1996.
PART I. - FINANCIAL INFORMATION
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME FOR
THREE MONTHS ENDED MARCH 31, 1996 AND 1995.
(Unaudited)
(Amounts in thousands, except per share data)
Three Months Ended
__________________
1996 1995
________ ________
INTEREST INCOME:
Interest and Fees on Loans $ 7,920 $ 7,226
Interest Income on Balances Due From Banks 5 12
Interest on U. S. Treasury Securities and
U. S. Government Agencies and Corp. 1,672 1,609
Interest on Obligation of States and
Political Subdivisions 950 959
Interest on Other Securities 94 94
Interest on Federal Funds Sold and
Securities Purchased under Agreements
to Resell 133 131
________ ________
Total Interest Income 10,774 10,031
INTEREST EXPENSE:
Interest on Time Certificates of Deposit of
$100,000 or More 943 701
Interest on Other Deposits 3,735 3,291
Interest on Federal Funds Purchased and
Securities Sold Under Agreement to
Repurchase 5 18
Interest on Demand Notes Issued to the U. S.
Treasury and on Other Borrowed Money 152 172
________ ________
Total Interest Expense 4,835 4,182
________ ________
Net Interest Income 5,939 5,849
Provision for Possible Loan Losses 291 285
________ ________
Net Interest Income After Provision for
Loan Losses 5,648 5,564
NONINTEREST INCOME:
Income from Fiduciary Activities 227 206
Service Charge on Deposit Accounts 859 861
Other Noninterest Income 463 413
________ ________
Total Noninterest Income 1,549 1,480
Gains (Losses) on Securities 3 (188)
NONINTEREST EXPENSE:
Salaries and Employee Benefits 2,462 2,339
Expense of Premises and Fixed Assets 616 579
Other Noninterest Expense 1,249 1,348
________ ________
Total Noninterest Expense 4,327 4,266
________ ________
Income Before Income Taxes 2,873 2,590
Applicable Income Taxes 756 599
Income Before Extraordinary Items and Other
Adjustments 2,117 1,991
Adjustment for implementation of FASB 109 0 0
________ ________
NET INCOME $ 2,117 $ 1,991
======== ========
Net Earning Per Share $ 1.76 $ 1.66
NBC CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
March 31, December 31,
1996 1995
___________ ___________
ASSETS (Unaudited) (Audited)
Cash and Balances Due From Banks:
Noninterest-Bearing Balances $ 24,745 $ 23,992
Interest-Bearing Balances 297 801
___________ ___________
Total Cash and Due From Banks 25,042 24,793
Held-To-Maturity Securities (Market
Value of $35,282 at September 30,
1995 and $30,460 at December 31,
1994) 31,829 32,073
Available-For-Sale Securities
Mortgage-Backed Securities 51,622 55,457
All Other Available-For-Sale Securities 103,491 91,813
___________ ___________
Total Securities 186,942 179,343
Federal Funds Sold and Securities
Purchased Under Agreement to Resell 9,500 3,600
Loans 352,575 351,067
Less: Unearned Interest (2,061) (2,649)
Less: Reserve for Loan Losses (6,581) (6,420)
___________ ___________
Net Loans 343,933 341,998
Bank Premises and Equipment (Net) 13,171 12,661
Interest Receivable 5,142 5,519
Other Real Estate Owned 110 118
Other Assets 9,910 8,183
___________ ___________
TOTAL ASSETS $ 593,750 $ 576,215
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-Interest Bearing $ 72,237 $ 70,360
Interest-Bearing Time, $100,000 or
More 77,709 67,526
Other Interest-Bearing 363,961 358,897
___________ ___________
Total Deposits 513,907 496,783
Federal Funds Purchased and Securities
Sold Under Agreements to Repurchase 93 0
Demand Notes Issued to the U. S.
Treasury 2,346 456
Other Borrowed Funds 9,230 9,570
Interest Payable 2,012 2,346
Other Liabilities 4,348 6,788
___________ ___________
TOTAL LIABILITIES 531,936 515,943
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 27,281 25,164
Net Unrealized Holding Gains (losses) on
Available-for-Sale Securities 331 906
___________ ___________
TOTAL STOCKHOLDERS' EQUITY 61,814 60,272
___________ ___________
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 593,750 $ 576,215
=========== ===========
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
(Amounts in thousands)
1996 1995
_________ _________
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 2,117 $ 1,991
Adjustments to reconcile net income to
net cash:
Depreciation and Amortization 421 335
Deferred Income Taxes (Credits) 853 (33)
Provision for Loan Losses 291 285
Gain on Sale of Securities (3) 188
(Increase) Decrease in Interest
Receivable 378 (240)
(Increase) Decrease in Other Assets (2,425) (514)
Increase (Decrease) in Interest Payable (334) 84
Increase (Decrease) in Other Liabilities (94) (1,659)
_________ _________
Net Cash Provided by Operating Activities 1,204 437
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities of Securities 5,840 3,648
Proceeds from Sale of Securities 3 7,584
Purchase of Securities (14,311) (16,301)
(Increase) Decrease in Loans (2,225) (1,548)
Additions to Bank Premises and Equipment (783) (308)
_________ _________
Net Cash Used in Investing Activities (11,476) (6,925)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in Deposits 17,124 27,159
Dividend Paid on Common Stock 0 0
Increase (Decrease) in Borrowed Funds (703) (19,509)
_________ _________
Net Cash Provided by Financing Activities 16,421 7,650
_________ _________
Net Increase (decrease) in Cash and Cash
Equivalents 6,149 1,162
Cash and Cash Equivalents at Beginning
of Year 28,393 24,554
_________ _________
Cash and Cash Equivalents at End of Quarter $ 34,542 $ 25,716
========= =========
Cash Paid during Year for:
Interest $ 5,170 $ 4,098
Income Taxes 422 365
NBC CAPITAL CORPORATION
MANAGEMENT'S COMMENTS
MARCH 31, 1996
Earnings for 1996's first quarter grew 6.3% to $2,116,876 or $1.76 per
share. The first quarter's income annualized represents a 1.5% return
on average assets, an attractive return relative to peer comparisons
and in line with the company's objectives.
Although the company's net interest income grew slightly during the
period, its interest margin contracted 20 basis points as interest
expense grew more rapidly than interest income. Fifty-five percent
(55%) of the company's loan portfolio is composed of variable rate
loans, mostly indexed to prime. The company has been unwilling to
pass the full 75 basis point reduction in prime experienced since last
July over to the deposit side of the balance sheet since deposits are
needed to support the current level of loans.
Non-interest income increased by 4.6% for the period. The modest 1.4%
increase in non-interest expense was influenced favorably by continued
reductions in Bank Insurance Fund premiums.
NBC's balance sheet continues to denote steady growth. Deposits grew
6.4% to a record $513.9 million. Deposit growth has been used to fund
a $24.9 million or 7.8% increase in loans over the past year. Loan
quality remained excellent as evidenced by the .53% non-performing
loans total, and past due loans (less than 30 days) being below 2%.
Asset growth of 7.0% to $593.8 million and shareholders' equity gains
of 12.0% to $61.8 million complete a summarical review of the balance
sheet.
A heavy emphasis continues on improving our sales and service,
expanding our product lines, and improving our delivery systems and
efficiency. Our branding as "TODAY'S BANK" will provide an appealing
and flexible means for us to communicate many of the efforts being
undertaken by NBC.
Shareholders' equity continues to register gains. At $61.8 million,
this portion of the balance sheet has grown over 11.9% during the past
year. The bank is required to maintain minimum amounts of capital to
total risk weighted assets as defined by the banking regulators. At
3/31/96, the institution's Tier I, Tier II and Total Capital Ratios
exceeded the well capitalized standards developed under the referenced
regulatory guidelines. At 3/31/96, $330,813 in consolidated,
unrealized holding gains, net of deferred tax, was reflected in equity
accounts on Available-for-Sale Securities.
Aggregate cash reserves of $2,927,012 were maintained at 3/31/96 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 $11,723,012. 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.
The company's Alabama subsidiary, the former First State Bank of
Tuscaloosa, Alabama, was converted to a national bank charter and took
on the name of National Bank of Commerce, Tuscaloosa on March 18. The
conversion was handled in a highly positive manner throughout the
Tuscaloosa market and allows for a common identity throughout the
company.
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, 1996, 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 13, 1996 Martha W. Taylor
Date Martha W. Taylor
Treasurer and Assistant Secretary
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