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, 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)
Registrant'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, 1996.
PART I. - FINANCIAL INFORMATION
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME FOR
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
(Amounts in thousands, except per share data)
Six Months Ended
__________________
1996 1995
________ ________
INTEREST INCOME:
Interest and Fees on Loans $ 15,981 $ 14,857
Interest Income on Balances Due From Banks 11 26
Interest on U. S. Treasury Securities and
U. S. Government Agencies and Corp. 3,352 3,292
Interest on Obligation of States and
Political Subdivisions 1,899 1,905
Interest on Other Securities 188 197
Interest on Federal Funds Sold and Securities
Purchased under Agreements to Resell 228 247
________ ________
Total Interest Income 21,659 20,524
INTEREST EXPENSE:
Interest on Time Certificates of Deposit of
$100,000 or More 1,866 1,532
Interest on Other Deposits 7,412 6,974
Interest on Federal Funds Purchased and
Securities Sold Under Agreement to
Repurchase 7 46
Interest on Demand Notes Issued to the U. S.
Treasury and on Other Borrowed Money 300 340
________ ________
Total Interest Expense 9,585 8,892
________ ________
Net Interest Income 12,074 11,632
Provision for Possible Loan Losses 582 570
________ ________
Net Interest Income After Provision for
Loan Losses 11,492 11,062
NONINTEREST INCOME:
Income from Fiduciary Activities 454 413
Service Charge on Deposit Accounts 1,729 1,709
Other Noninterest Income 985 981
________ ________
Total Noninterest Income 3,168 3,103
Gains (Losses) on Securities 6 (186)
________ ________
NONINTEREST EXPENSE:
Salaries and Employee Benefits 4,969 4,607
Expense of Premises and Fixed Assets 1,243 1,170
Other Noninterest Expense 2,719 2,847
________ ________
Total Noninterest Expense 8,931 8,624
________ ________
Income Before Income Taxes 5,735 5,355
Applicable Income Taxes 1,494 1,248
________ ________
Income Before Extraordinary Items and Other
Adjustments 4,241 4,107
Adjustment for implementation of FASB 109 0 0
________ ________
NET INCOME $ 4,241 $ 4,107
======== ========
Net Earning Per Share $ 3.53 $ 3.42
NBC CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
June 30, December 31,
1996 1995
____________ ____________
ASSETS (Unaudited) (Audited)
Cash and Balances Due From Banks:
Noninterest-Bearing Balances $ 23,816 $ 23,992
Interest-Bearing Balances 442 801
____________ ____________
Total Cash and Due From Banks 24,258 24,793
Held-To-Maturity Securities (Market Value
of $33,996 at June 30, 1996 and $35,234
at December 31, 1995) 31,811 32,073
Available-For-Sale Securities:
Mortgage-Backed Securities 46,754 55,457
All Other Available-For-Sale Securities 99,398 91,813
____________ ____________
Total Securities 177,963 179,343
Federal Funds Sold and Securities
Purchased Under Agreement to Resell 10,600 3,600
Loans 362,966 351,067
Less: Unearned Interest (1,607) (2,649)
Less: Reserve for Loan Losses (6,764) (6,420)
____________ ____________
Net Loans 354,595 341,998
Bank Premises and Equipment (Net) 13,072 12,661
Interest Receivable 5,751 5,519
Other Real Estate Owned 69 118
Other Assets 10,229 8,183
____________ ____________
TOTAL ASSETS $ 596,537 $ 576,215
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-Bearing $ 74,146 $ 70,360
Interest-Bearing Time, $100,000 or More 81,519 67,526
Other Interest-Bearing 359,681 358,897
____________ ____________
Total Deposits 515,346 496,783
Federal Funds Purchased and Securities
Sold Under Agreements to Repurchase 10 0
Demand Notes Issued to the U. S. Treasury 2,705 456
Other Borrowed Funds 8,885 9,570
Interest Payable 2,017 2,346
Other Liabilities 4,862 6,788
____________ ____________
TOTAL LIABILITIES 533,825 515,943
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 28,962 25,164
Net Unrealized Holding Gains (losses) on
Available-for-Sale Securities (452) 906
____________ ____________
TOTAL STOCKHOLDERS' EQUITY 62,712 60,272
____________ ____________
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 596,537 $ 576,215
============ ============
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
(Amounts in thousands)
1996 1995
_________ _________
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 4,241 $ 4,107
Adjustments to reconcile net income to net
cash:
Depreciation and Amortization 756 676
Deferred Income Taxes (Credits) 1,247 (58)
Provision for Loan Losses 582 570
Gain on Sale of Securities (6) 186
(Increase) Decrease in Interest
Receivable (232) (675)
(Increase) Decrease in Other Assets (2,753) (500)
Increase (Decrease) in Interest Payable (329) 118
Increase (Decrease) in Other Liabilities 779 143
_________ _________
Net Cash Provided by Operating Activities 4,285 4,567
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities of Securities 7,290 9,898
Proceeds from Sale of Securities 1,006 7,587
Purchase of Securities (8,967) (24,853)
(Increase) Decrease in Loans (13,179) (12,253)
Additions to Bank Premises and Equipment (960) (395)
_________ _________
Net Cash Used in Investing Activities (14,810) (20,016)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in Deposits 18,563 32,905
Dividend Paid on Common Stock (444) (420)
Increase (Decrease) in Borrowed Funds (1,131) (14,805)
_________ _________
Net Cash Provided by Financing Activities 16,988 17,680
_________ _________
Net Increase (decrease) in Cash and Cash
Equivalents 6,463 2,231
Cash and Cash Equivalents at Beginning of
Year 28,393 24,554
_________ _________
Cash and Cash Equivalents at End of Quarter $ 34,856 $ 26,785
========= =========
Cash Paid during Period for:
Interest $ 9,914 $ 8,775
Income Taxes 916 980
NBC CAPITAL CORPORATION
MANAGEMENT'S COMMENTS
JUNE 30, 1996
Earnings for the first two quarters totalled $4,241,366 or $3.53 per
share compared to $4,106,539 or $3.42 per share for 1995's comparable
period.
Net interest income, up 3.8%, continued to provide the primary boost
to the company's earnings. Income resulting from the 7.1% growth in
loans outstanding generated the increase in this key income component.
Interest margins have contracted somewhat over the past twelve months
as the company's cost of funds increased at a greater rate than the
yield produced from earning assets. Management has been sensitive to
this trend and has tolerated a measured amount of it to protect the
company's deposit base. Margins in recent months have stabilized and
have shown increases since April, 1996.
NBC's balance sheet continues to record gains. Total assets grew 4.5%
to $596.5 million. Loans are up 7.1%, as noted, and deposits have
increased 5.4% over the past year. Investment securities have been
allowed to decline to accommodate loan growth. Shareholders' equity
of $62.7 million compares to $58.5 million in 1995.
The quality of the company's loan portfolio remains excellent. Non-
performing loans represent only 0.54% of loans outstanding; net loan
losses are 0.07%, and past due loans on June 30, 1996, were below 1%.
Especially close supervision is being given to the consumer loan
segment of the portfolio considering the increased volume of consumer
debt and related delinquencies being reported nationally by reputable
financial sources.
Shareholders' equity continues to register gains. At $62.7 million,
this portion of the balance sheet has grown 7.2% 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
6/30/96, the institution's Tier I, Tier II and Total Capital Ratios
exceeded the well capitalized standards developed under the referenced
regulatory guidelines. At 6/30/96, $451,502 in consolidated,
unrealized holding losses, net of deferred tax, was reflected in
equity accounts on Available-for-Sale Securities.
Aggregate cash reserves of $2,198,930 were maintained at 6/30/96 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 $13,403,502. 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 Shareholder's Meeting was held
April 9, 1996. The only item of business
conducted was the reelection of the company's
Board of Directors which was approved by a vote
of 87.4% of the shares outstanding.
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 six month period
ending June 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
August 9, 1996 Martha W. Taylor
Date Martha W. Taylor
Treasurer and Assistant Secretary
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