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, 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 September 30,
1996.
PART I. - FINANCIAL INFORMATION
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME FOR
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995.
(Unaudited)
(Amounts in thousands, except per share data)
Nine Months Ended
_________________
1996 1995
_______ _______
INTEREST INCOME:
Interest and Fees on Loans $24,457 $22,680
Interest Income on Balances Due From Banks 18 40
Interest on U. S. Treasury Securities and
U. S. Government Agencies and Corp. 4,758 5,140
Interest on Obligation of States and
Political Subdivisions 2,826 2,883
Interest on Other Securities 288 294
Interest on Federal Funds Sold and Securities
Purchased under Agreements to Resell 284 299
_______ _______
Total Interest Income 32,631 31,336
INTEREST EXPENSE:
Interest on Time Certificates of Deposit of
$100,000 or More 2,794 2,410
Interest on Other Deposits 11,064 10,786
Interest on Federal Funds Purchased and
Securities Sold Under Agreement to
Repurchase 64 83
Interest on Demand Notes Issued to the U. S.
Treasury and on Other Borrowed Money 450 516
_______ _______
Total Interest Expense 14,372 13,795
Net Interest Income 18,259 17,541
Provision for Possible Loan Losses 873 855
_______ _______
Net Interest Income After Provision for
Loan Losses 17,386 16,686
_______ _______
NONINTEREST INCOME:
Income from Fiduciary Activities 681 619
Service Charge on Deposit Accounts 2,618 2,544
Other Noninterest Income 1,648 1,320
_______ _______
Total Noninterest Income 4,947 4,483
Gains (Losses) on Securities 6 (182)
_______ _______
NON INTEREST EXPENSE:
Salaries and Employee Benefits 7,412 6,926
Expense of Premises and Fixed Assets 1,896 1,766
Other Noninterest Expense 4,044 3,981
_______ _______
Total Noninterest Expense 13,352 12,673
_______ _______
Income Before Income Taxes 8,987 8,314
Applicable Income Taxes 2,432 1,956
_______ _______
Income Before Extraordinary Items and Other
Adjustments 6,555 6,358
_______ _______
NET INCOME 6,555 6,358
Net Earning Per Share 5.46 5.30
NBC CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
September 30, December 31,
1996 1995
____________ ____________
(Unaudited) (Audited)
ASSETS
Cash and Balances Due From Banks:
Noninterest-Bearing Balances $ 25,731 $ 23,992
Interest-Bearing Balances 266 801
____________ ____________
Total Cash and Due From Banks 25,997 24,793
Held-To-Maturity Securities
(Market Value of $34,449 at
September 30, 1996 and $35,234 at
December 31, 1995) 31,817 32,073
Available-For-Sale Securities:
Mortgage-Backed Securities 43,068 55,457
All Other Available-For-Sale
Securities 92,476 91,813
____________ ____________
Total Securities 167,361 179,343
Federal Funds Sold and Securities
Purchased Under Agreement to Resell 600 3,600
Loans 380,095 351,067
Less: Unearned Interest (1,217) (2,649)
Less: Reserve for Loan Losses (6,911) (6,420)
____________ ____________
Net Loans 371,967 341,998
Bank Premises and Equipment (Net) 13,090 12,661
Interest Receivable 5,258 5,519
Other Real Estate Owned 0 118
Other Assets 12,046 8,183
____________ ____________
TOTAL ASSETS 596,319 576,215
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-Interest Bearing 71,362 70,360
Interest-Bearing Time, $100,000
or More 83,712 67,526
Other Interest-Bearing 346,995 358,897
____________ ____________
Total Deposits 502,069 496,783
Federal Funds Purchased and Securities
Sold Under Agreements to Repurchase 10,909 0
Demand Notes Issued to the U. S.
Treasury 1,934 456
Other Borrowed Funds 8,535 9,570
Interest Payable 1,934 2,346
Other Liabilities 5,668 6,788
____________ ____________
TOTAL LIABILITIES 531,049 515,943
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 31,275 25,164
Net Unrealized Holding Gains (losses)
on Available-for-Sale Securities (207) 906
____________ ____________
TOTAL STOCKHOLDERS' EQUITY 65,270 60,272
____________ ____________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 596,319 $ 576,215
============ ============
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
(Amounts in thousands)
1996 1995
________ ________
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 6,555 $ 6,358
Adjustments to reconcile net income to
net cash:
Depreciation and Amortization 1,094 1,004
Deferred Income Taxes (Credits) 1,055 (262)
Provision for Loan Losses 873 855
Gain on Sale of Securities (6) 182
(Increase) Decrease in Interest
Receivable 260 (670)
(Increase) Decrease in Other Assets (4,493) (623)
Increase (Decrease) in Interest
Payable (412) 380
Increase (Decrease) in Other
Liabilities 815 604
________ ________
Net Cash Provided by Operating
Activities 5,741 7,828
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities of Securities 9,848 13,716
Proceeds from Sale of Securities 6 7,590
Purchase of Securities 447 (27,418)
(Increase) Decrease in Loans (30,841) (22,454)
Additions to Bank Premises and Equipment (1,257) (682)
________ ________
Net Cash Used in Investing Activities (21,797) (29,248)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in Deposits 5,286 41,904
Dividend Paid on Common Stock (444) (420)
Increase (Decrease) in Borrowed Funds 9,418 (16,655)
________ ________
Net Cash Provided by Financing Activities 14,260 24,829
________ ________
Net Increase (decrease) in Cash and Cash
Equivalents (1,796) 3,409
Cash and Cash Equivalents at Beginning
of Year 28,393 24,554
________ ________
Cash and Cash Equivalents at End
of Quarter $ 26,597 $ 27,963
======== ========
Cash Paid during Year for:
Interest $ 14,784 $ 13,415
Income Taxes 1,387 1,595
NBC CAPITAL CORPORATION
MANAGEMENT'S COMMENTS
SEPTEMBER 30, 1996
Earnings for the first three quarters were $6,555,110 or $5.46 per
share compared to $6,357,951 or $5.30 per share for 1995's comparable
period. Both net income and earnings per share for 1995 were
favorably impacted by an industry-wide refund of FDIC premiums
resulting from a surplus in the overall Bank Insurance Fund. NBC
Capital Corporation's share of this refund resulted in an earnings
increase of $.24 per share for 1995. Growth in net interest income,
together with a 10.5% gain in non-interest income (exclusive of
securities gains/losses), are primary factors in this year's earnings
performance. Non-interest expenses reflect the cost of expanded
delivery systems, additions of key personnel, and increased
marketing and promotional expenditures in the company's Tuscaloosa
market. Several other major projects, mentioned later in this
discussion and important to the company's long-term competitiveness,
have also added to this year's non-interest expenses.
Balance sheet growth has been marked by modest deposit gains. Some
deposits have shifted into a new repurchase agreement product offered
by the company. Loan growth has been consistent throughout most of
the year. Current loan demand can be described as good; the quality
of the portfolio remains excellent.
Shareholders' equity at $65.3 million has grown 7% 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
9/30/96, the institution's Tier I, Tier II and Total Capital Ratios
exceeded the well capitalized standards developed under the referenced
regulatory guidelines. At 9/30/96, $207,263 in consolidated,
unrealized holding losses, net of deferred tax, was reflected in
equity accounts on Available-for-Sale Securities.
Aggregate cash reserves of $2,512,225 were maintained at 9/30/96 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 $15,717,246. 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.
Efforts to improve efficiency and add to customer service continue to
represent high priorities for management. Key projects designed to
upgrade loan processing, provide check imaging, and enhance service
rendered through out teller windows are all well underway. Loan
processing changes should be complete by year-end; check imaging will
be offered in February 1997, and enhancements throughout the teller
area are expected to be complete by June of next year. These projects
have commanded a significant expenditure of time and dollars. They
will help keep NBC's "Today's Bank" image relevant in the days and
years that will follow.
PART II - OTHER INFORMATION
Item I 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, 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
November 6, 1996 Martha W. Taylor
Date Martha W. Taylor
Treasurer & Assistant Secretary
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