CBC BANCORP, INC.
PART I. FINANCIAL INFORMATION
PAGE
Item 1. Financial Statements
Unaudited Consolidated Balance Sheets 1
March 31, 1995 and December 31, 1994
Unaudited Consolidated Statements of Operations 2
Three Months Ended March 31, 1995 and March 31, 1994
Unaudited Consolidated Statements of Changes in Shareholders' 3
Equity -- Three Months Ended March 31, 1995 and March 31, 1994
Unaudited Consolidated Statements of Cash Flows 4
Three Months Ended March 31, 1995 and March 31, 1994
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of 6
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
CBC BANCORP, INC. AND SUBSIDIARY
<TABLE>
CONSOLIDATED BALANCE SHEETS <F1>
(Dollars in 000's) (UNAUDITED)
<CAPTION>
ASSETS March 31, December 31,
1995 1994
<S> <C> <C>
LOANS <F2>: 56,871 59,070
INVESTMENT SECURITIES:
Held to Maturity 0 6,909
Held for Sale 6,833 7,280
FEDERAL FUNDS SOLD 3,190 5,700
TOTAL EARNING ASSETS 66,894 78,959
CASH AND DUE FROM BANKS 3,277 3,130
ACCRUED INTEREST RECEIVABLE 750 858
PROPERTY AND EQUIPMENT - NET 867 973
OTHER ASSETS HELD FOR LEASE 8,934 3,894
PREPAID AND OTHER ASSETS 764 595
OTHER REAL ESTATE OWNED 4,250 4,313
TOTAL ASSETS 85,736 92,722
LIABILITIES AND SHAREHOLDERS' EQUITY:
DEPOSITS:
Demand 8,267 9,248
Savings and NOW 12,880 14,979
Money market 4,161 5,090
Time deposits under $100 50,164 52,584
Time deposits of $100 or more 5,762 5,573
TOTAL DEPOSITS 81,234 87,474
ACCRUED INTEREST PAYABLE 466 941
DIVIDENDS PAYABLE 813 649
OTHER LIABILITIES 519 743
SENIOR NOTES 148 148
CAPITAL NOTES 220 220
MANDATORY CONVERTIBLE CAPITAL NOTES 1,090 1,090
TOTAL LIABILITIES 84,490 91,265
COMMITMENTS AND CONTINGENT
LIABILITIES:
SHAREHOLDERS' EQUITY:
Preferred Stock 9,960 9,830
Common Stock 20 20
Additional paid-in capital 10,739 11,032
Unrealized gain (loss) on marketable (128) (218)
equity securities
Accumulated deficit (19,345) (19,207)
TOTAL SHAREHOLDERS' EQUITY 1,246 1,457
TOTAL LIABILITIES AND SHAREHOLDERS' 85,736 92,722
EQUITY
<FN>
<F1> The accompanying notes are an integral part of these consolidated
financial statements.
<F2> Net of allowance for loan losses: 1995, $2,347; 1994, $2,637
</FN>
</TABLE>
<TABLE>
CBC BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS <F1>
(Dollars in 000's except per share data) (UNAUDITED)
<CAPTION>
Three Months Ended March 31, 1995 1994
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans 1,284 1,951
Interest and dividends on investments:
U.S. Treasury securities 172 98
U.S. Government agency securities 0 33
Other securities 26 18
Interest on federal funds sold 57 50
TOTAL INTEREST INCOME 1,539 2,150
INTEREST EXPENSE:
Interest on deposits:
Savings and time deposits under $100 659 862
Time deposits of $100 or more 59 44
Total Interest on Deposits 718 906
Interest on borrowed money:
Long-term borrowings 42 18
Treasury demand note accounts 0 3
Other 8 5
Total Interest on borrowed money 50 26
TOTAL INTEREST EXPENSE 768 932
NET INTEREST INCOME 771 1,218
Provision for loan losses 75 74
NET INTEREST INCOME (LOSS) AFTER PROVISION 696 1,144
FOR LOAN LOSSES
OTHER OPERATING INCOME:
Service fees on deposits 135 155
Processing and transfer fees 10 16
Net gain (loss) on sale of securities (1) 38
Gain on sale of lease 0 227
Lease asset income 117 0
Gain on sale of loans 17 49
Other 47 78
TOTAL OTHER OPERATING INCOME 325 563
OTHER OPERATING EXPENSES:
Salaries and employee benefits 571 599
Occupancy 88 120
Supplies and communications 41 48
Professional services 161 353
Furniture and equipment maintenance 20 19
Depreciation and amortization 53 57
FDIC insurance 68 91
Other insurance 22 23
Other real estate owned 75 229
Other 60 6
TOTAL OTHER OPERATING EXPENSES 1,159 1,545
INCOME (LOSS) BEFORE INCOME TAX AND (138) 162
EXTRAORDINARY ITEM
Income tax 0 0
INCOME BEFORE EXTRAORDINARY ITEM (138) 162
Extraordinary item - Tax benefit from net 0 0
operating loss carryforward
NET INCOME (LOSS) (138) 162
Income (loss) per common share before (.21) .07
extraordinary item
Extraordinary item 0 0
Net income per common share (Primary) (.21) .07
<CAPTION>
WEIGHTED AVERAGE COMMON SHARES (PRIMARY)
<S> <C> <C>
Weighted Average Common Shares (Primary) 2,012,514 2,012,514
<FN>
<F1> The accompanying notes are an integral part of these consolidated
financial statements.
</FN>
</TABLE>
<TABLE>
CBC BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY <F1>
($ and shares in 000's) (UNAUDITED)
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
Unrealized
Loss on Retained
Common Stock Additional Marketable Earnings
Number of Preferred Paid-in Equity (Accum.
Shares Amount Stock Capital Securities Deficit) Total
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994 2,013 20 9,830 11,032 (218) (19,207) 1,457
Preferred dividends accrued Series 1 (49) (49)
Preferred dividends accrued Series 2 (116) (116)
Preferred dividends accrued Series 3 (128) (128)
Change in unrealized loss on 90 90
marketable equity securities
Issuance of Preferred Stock 130 130
Net income (loss) (138) (138)
BALANCE, MARCH 31, 1995 2,013 20 9,960 10,739 (128) (19,345) 1,246
BALANCE, DECEMBER 31, 1993 10,061 100 1,000 11,421 170 (15,318) (2,627)
Preferred dividends accrued (18) (18)
Change in unrealized loss on marketable (214) (214)
equity securities
Issuance of Preferred Stock 5,000 5,000
Net income 162 162
BALANCE, MARCH 31, 1994 10,061 100 6,000 11,403 (44) (15,156) 2,303
<FN>
<F1> The accompanying notes are an integral part of these consolidated
financial statements.
</FN>
</TABLE>
<TABLE>
CBC BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ IN 000's) (UNAUDITED)
<CAPTION>
Three Months Ended March 31, 1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income (Loss) (138) 162
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Provision for losses on loans 75 74
Provision for depreciation and amortization 53 57
Increase (decrease) in deferred loan fees (9) (112)
and costs - net
Amortization of loan purchase premiums 0 156
Amortization (accretion) of net investment 15 55
security premiums (discounts)
Loss (gain) on sale of securities (1) (38)
Loss on disposition of leasehold 0 12
Loss (gain) on sale and provision for 9 144
write-downs of other real estate owned
Decrease in accrued interest receivables 108 47
Decrease (increase) in prepaid and other (131) (342)
assets
Decrease (increase) in deferred charges 0 0
Decrease (increase) in accrued interest (475) (285)
payable
Increase (decrease) in deferred revenue 16 (68)
Increase (decrease) in other liabilities (142) (216)
Net cash used by operating activities (530) (354)
INVESTING ACTIVITIES:
Net decrease in federal funds sold 2,510 8,225
Proceeds from sales and maturities of 8,418 3,995
investment securities
Purchases of investment securities (988) 0
Principal payments on mortgage-backed 0 491
securities
Decrease (increase) in loans 1,890 3,745
Proceeds from sales of OREO 207 693
Purchases of property and equipment (80) (18)
Purchase of other assets held for lease (5,759) 0
Proceeds from sales of other assets held 719 0
for lease
Net cash provided by investing activities 6,917 17,131
FINANCING ACTIVITIES:
Net increase (decrease) in demand, savings (4,008) (11,649)
and money market deposit accounts
Net decrease in time deposits (2,232) (5,607)
Net decrease in treasury demand note account 0 (442)
Net cash used in financing activities (6,240) (17,698)
INCREASE (DECREASE) IN CASH AND CASH 147 (921)
EQUIVALENTS
CASH AND DUE FROM BANKS AT BEGINNING OF YEAR 3,130 4,305
CASH AND DUE FROM BANKS AT END OF QUARTER 3,277 3,384
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the quarter for:
Interest on deposits and borrowed money 1,193 1,208
Income taxes 0 0
NONCASH INVESTING AND FINANCING ACTIVITIES:
Transfers of loans to Other Real Estate Owned 243 0
Issuance of preferred stock in exchange for 0 5,000
marketable securities
Preferred stock dividend declared and unpaid 164 18
Unrealized gain (loss) on valuation of 90 (44)
instruments available for sale
Issuance of preferred stock dividend 130 0
</TABLE>
CBC BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
NOTE A: BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
CBC Bancorp, Inc. (the "Company") and its subsidiary, Connecticut Bank of
Commerce (the "Bank"). The consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In preparing such financial
statements, management is required to make estimates and assumptions that
effect the reported amounts of assets and liabilities as of the date of the
consolidated balance sheets and the revenues and expenses for the period.
Actual results could differ significantly from those estimates. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results are not necessarily indicative of the results that may be
expected for the year ending December 31, 1995. For further information,
refer to the consolidated financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
NOTE B: REGULATORY MATTERS
Under the terms of the July 1991 Cease and Desist Order (the "1991 Order"),
the Bank must obtain the prior approval of the Federal Deposit Insurance
Corporation ("FDIC") and the Connecticut Banking Commissioner (the "Banking
Commissioner") before paying any cash dividends to the Company. The 1991
Order also requires the Bank to maintain a Tier 1 leverage ratio of 6
percent. In connection with the September 1993 FDIC regulatory
examination of the Bank, the FDIC issued an additional order to cease and
desist in December 1993 (the "1993 Order"). Among other things, the 1993
Order required the Bank to correct certain policies, practices and alleged
violations of law. The Bank and its Board of Directors believe that the
Bank has complied fully with each of the terms of the 1991 and 1993 Orders,
except for the 6 percent Tier 1 leverage ratio.
In connection with the 1994 FDIC regulatory examination of the Bank, the
Bank was required to submit a Revised Capital Restoration Plan (the
"Plan"). Under the terms of the Plan, the Bank's Tier 1 capital is
projected to be augmented in the amount of $1 million by June 30, 1995.
The additional $1 million of equity capital is to be raised in an equity
offering undertaken by the Company. Upon completion of this equity
offering, the Bank's Total Capital to risk-weighted assets ratio is
projected to exceed 8%, thereby resulting in the Bank being deemed
"adequately capitalized" as defined in the FDIC Improvement Act. In
addition, the Bank's Tier 1 Leverage Ratio is projected to be above 5%.
Thereafter, the Plan provides for the Bank's attainment of the 6% Tier 1
Leverage Ratio contained in the 1991 Order by December 31, 1996 through
retained earnings. Notwithstanding the foregoing, the ability of the
Company and the Bank to complete the required equity offering or to
otherwise maintain and increase regulatory capital as projected in the
Revised Capital Plan is dependent upon, among other factors, the market
conditions for the Company's equity securities, the Bank's ongoing
profitability, the future levels of nonperforming assets and the local
and the regional economy in which the Bank and its customers operate.
The Plan was approved by the FDIC and the Banking Commissioner in
December 1994.
In an effort to restore and maintain the financial soundness of the
Company, a written agreement (the "Agreement") was entered into with the
Federal Reserve Bank of Boston (the "FRB") effective November 2, 1994. The
Agreement requires the Company to seek written approval of the FRB prior to
declaring or paying dividends, increasing borrowings or incurring debt,
engaging in material transactions with the Bank or other affiliated parties,
or making cash disbursements in excess of agreed upon amounts.
NOTE C: PREFERRED STOCK DIVIDEND.
In accordance with the dividend payment provisions of the Series III
Preferred Stock offering, the Board of Directors voted to pay a stock
dividend in the amount of 13 shares of Preferred Series III Stock with a
stated value of $130,000 to the majority shareholder as satisfaction of
the same amount of dividends payable to him as of March 31, 1995.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FINANCIAL HIGHLIGHTS
<TABLE>
CBC BANCORP, INC. AND SUBSIDIARY
CONDENSED STATEMENTS OF INCOME
($ In thousands, except per share data)
<CAPTION>
Three Months Ended March 31, 1995 1994
<S> <C> <C>
Net interest income 771 1,218
Provision for loan losses 75 74
Net interest income after provision for loan 696 1,144
losses
Investment securities gains (losses) (1) 38
Other non-interest income 326 525
Other real estate owned expense 75 229
Other non-interest expense 1,084 1,316
NET INCOME (LOSS) (138) 162
Common Per share data <F1>
Book value
Net income (.21) .07
Cash dividends
Financial Ratios
Yield on interest-bearing assets 8.29 8.67
Cost of funds 4.05 3.64
Interest rate spread 4.24 5.03
Net interest margin 4.15 4.91
Return on average assets(annualized) 0 .56
Return on average equity(annualized) 0 0
Average equity to average assets 1.5 (2.11)
At end of quarter:
Loans to deposits 70.00 81.18
Nonperforming loans to total loans 12.75 15.69
Nonperforming assets to total loans and OREO 19.32 23.62
Allowance for loan losses to nonperforming 31.04 35.14
loans
Capital ratios of bank subsidiary:
Total risk-based 6.89 (1.32)
Tier 1 risk-based 5.61 (1.32)
Tier 1 leverage 4.15 (0.97)
<CAPTION>
At end of period March 31, 1995 1994
<S> <C> <C>
Total assets 85,736 110,041
Net loans 56,871 80,352
Allowance for loan losses (2,347) (4,648)
Securities 6,833 13,484
Deposits 81,234 103,824
Stockholders' equity 1,256 2,303
Outstanding shares <F1> 2,012,514 2,012,514
<FN>
<F1> Per share financial data and number of shares outstanding have been
adjusted to reflect the one for five stock split effective July 25,
1994.
</FN>
</TABLE>
RESULTS OF OPERATIONS
The Company's net loss for the three months ending March 31, 1995 was
$138,000 or $.07 per share of common stock, a decrease of $300,000 from
the gain of $162,000 or $.08 per share of common stock for the prior year
period. Net income for the first three months of 1994 was due primarily
to the gain of $227,000 on the sale of the Bank's leasehold interest in a
parcel of land adjacent to the Bank's main office for cash.
Total interest income for the three months ended March 31, 1995 decreased
$430,000 or 35% from the three month period ended March 31, 1994. This was
due primarily to a 30% decrease in the average loans outstanding during the
three month period, combined with a slight decrease in average interest
rates charged for loans and a reallocation of the Bank's assets from
investment securities to financial lease transactions which generate other
non-interest income.
Total interest expense on deposits for the three months ended March 31,
1995 decreased $188,000 or 21% from the three month period ended March 31,
1994 This reflects a 26% decrease in interest bearing deposits combined
with an increase in average interest rates paid.
Non-interest income decreased $255,000 in the first three months of 1995
over the comparable period in 1994. The decrease was largely attributable
to the gain of approximately $227,000 realized on the sale of the Bank's
leasehold interest. Included in non-interest income for 1995 is $117,000
of income related to the financial leasing business which began in the
second quarter of 1994. Non-interest income for the same period in 1994
includes $58,000 of income related to the military loan business, which
was sold in the fourth quarter of 1994.
Non-interest expense decreased $386,000 or 25% for the first three months
ended March 31, 1995 compared to the same period in 1994. The reduction of
non-interest expense reflects management's efforts to significantly reduce
professional fees and Other Real Estate Owned expenses, as well as overall
cost containment measures in all other general and administrative expenses.
The year-to-date provision for loan losses was $75,000 for 1995 and $74,000
for 1994.
FINANCIAL CONDITION
Gross loans decreased by $2,489,000 or 4% in the aggregate for the three
months ended March 31, 1995. Investment securities and federal funds sold
decreased $9,866,000 or 50%. The decrease is primarily the result of a
reallocation of assets to the leasing program and a $6,240,000 decrease in
deposits.
In the first quarter of 1995, the Bank disbursed funds of $8,459,000 for
leasing-related transactions. The leasing business includes short term
financing of leases which are subsequently placed with permanent lenders,
accounts receivable purchases resulting from leasing transactions and
equipment purchased for prospective lessees. Most transactions are short
term in nature.
Total deposits decreased $6,240,000 or 7% for the three months ended
March 31, 1995. This is partially attributed to the closing of the Bank's
Greenwich Branch on March 1, 1995.
<TABLE>
CAPITAL ADEQUACY
The following table summarizes the minimum capital requirements and capital
positions at March 31, 1995 and December 31, 1994:
($ in thousands)
<CAPTION>
March 31, 1995 December 31, 1994
Minimum Capital Actual Capital Minimum Capital Actual Capital
Required - Bank - Bank Required - Bank - Bank
<S> <C> <C> <C> <C>
Regulatory Capital Requirements
Total risk based capital 8.00% 6.89% 8.00% 7.26%
percentage
Total risk based capital 5,238 4,511 5,059 4,590
Tier 1 risk based capital 4.00% 5.61% 4.00% 5.97%
percentage
Tier 1 risk based capital 2,619 3,674 2,530 3,777
Leverage (per order) percentage 6.00% 4.15% 6.00% 3.95%
Leverage (per order) 5,311 3,674 5,725 3,799
</TABLE>
<TABLE>
LOANS
($ in thousands)
<CAPTION>
March 31, 1995 December 31, 1994
% of % of
Amount Total Amount Total
<S> <C> <C> <C> <C>
Commercial collateralized by real 31,135 52% 34,044 55%
estate
Commercial other 11,187 19% 12,757 21%
Residential real estate mortgage 12,933 22% 12,663 21%
Consumer 1,947 3% 2,331 3%
Lease financing 2,095 4% 0 0
Total loans - gross 59,297 100% 61,795 100%
Unearned income (41) (49)
Deferred loan fees (38) (39)
Allowance for loan losses (2,347) (2,637)
Total Loans - net 56,871 59,070
Average outstanding loans - net 60,089 74,283
</TABLE>
<TABLE>
NONPERFORMING ASSETS
($ in thousands)
<CAPTION>
March 31, December 31,
1995 1994
<S> <C> <C>
Loans past due 90 days or more:
Non-accrual 6,772 7,885
Accrual 789 1,305
Total loans past due 90 days or more 7,561 9,190
Other real estate owned:
Foreclosed properties 3,243 3,088
In-substance foreclosures 1,007 1,225
Total OREO 4,250 4,313
TOTAL NONPERFORMING ASSETS 11,811 13,503
Nonperforming assets to total loans 19.32% 21.30%
(net) and OREO (net)
Allowance for loan losses to total 31.04% 28.69%
loans past due 90 days or more
As a percentage of total loans:
Loans past due 90 days or more 12.75% 14.89%
Allowance for loan losses 3.96% 4.27%
</TABLE>
<TABLE>
Non-accrual loans consisted of the following:
($ in thousands)
<CAPTION>
March 31, December 31,
1995 1994
<S> <C> <C>
Non-accrual loans:
Real estate loans 6,244 7,354
Commercial other 528 530
TOTAL NON-ACCRUAL LOANS 6,772 7,884
</TABLE>
<TABLE>
OREO consisted of the following:
($ in thousands)
<CAPTION>
March 31, December 31,
1995 1994
<S> <C> <C>
1 - 4 family residential properties 1,159 1,233
Multifamily residential properties 392 331
Commercial real estate 1,796 1,846
Construction & Land Development 903 903
TOTAL OREO 4,250 4,313
</TABLE>
The Company discontinues the accrual of interest income whenever
reasonable doubt exists as to its ultimate collectibility or when the loan
is 90 days or more past due. When the accrual of interest income is
discontinued, all previously accrued interest income is generally reversed
against the current period's income. A non-accrual loan is restored to an
accrual status when it is no longer delinquent and collectibility of
interest and principal is no longer in doubt.
The Company's ability to reduce nonperforming assets is dependent on
conditions in the real estate market and general economy.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is established through charges against
income and maintained at a level that management considers adequate to
absorb potential losses in the loan portfolio. Management's estimate of
the adequacy of the allowance for loan losses is based on evaluations of
individual loans, estimates of current collateral values and the results
of the most recent regulatory examination. Management also evaluates the
general risk characteristics inherent in the loan portfolio, prevailing
and anticipated conditions in the real estate market and general economy,
and historical loan loss experience. Loans are charged against the
allowance for loan losses when management believes that collection is
unlikely. Any subsequent recoveries are credited back to the allowance
for loan losses when received.
<TABLE>
The changes in the allowance for loan losses were as follows:
($ in thousands)
<CAPTION>
Three months ended March 31, 1995 1994
<S> <C> <C>
Beginning balance 2,637 5,012
Loans charged-off (553) (731)
Recoveries 188 292
Net loan recoveries (charge-offs) (365) (438)
Provision for loan losses 75 74
Ending balance 2,347 4,648
Net loan charge-offs to average 0.60% 0.59%
loans outstanding
</TABLE>
While the Company believes its allowance for loan losses is adequate in
light of present economic conditions and the current regulatory
environment, there can be no assurance that the Company's banking
subsidiary will not be required to make future adjustments to its
allowance and charge-off policies in response to changing economic
conditions or future regulatory examinations.
The Bank has adopted Financial Accounting Standard 114 "Accounting By
Creditors for Impaired Loans" effective January 1, 1995. In connection
therewith, Management reviews the non-accrual loan portfolio and loans
past due 90 days and accruing to determine if there is loan impairment.
At March 31, 1995 the Bank's impaired loans amounted to $6,772,000. The
Bank has allocated $920,000 of the general loan loss reserve to this
portfolio.
SECURITIES
All of the Company's investment securities were available for sale as of
March 31, 1995 in accordance with the requirements of Statement of
Financial Accounting Standards No. 115 (SFAS No. 115) "Accounting for
Certain Investments in Debt and Equity Securities." The specific
accounting policies pertaining to SFAS No. 115 are detailed in the
Summary of Accounting Policies to the Company's Consolidated Statements
included in Item 14 of the December 31, 1994 Form 10-K.
<TABLE>
SECURITIES
($ in thousands)
<CAPTION>
At March 31, 1995 Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Treasury Securities 6,256 0 (99) 6,157
Marketable equity securities 205 0 (29) 176
Other 500 0 0 500
TOTAL INVESTMENT SECURITIES 6,961 0 (128) 6,833
<CAPTION>
At December 31, 1994 Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
(A) HELD-TO MATURITY
U.S. Treasury Notes 6,909 0 (39) 6,870
(B) AVAILABLE FOR SALE
U.S. Treasury Notes 6,293 0 (195) 6,098
Certificate of Deposit 500 0 0 500
State of Israel Bond 500 0 0 500
Marketable Equity Securities 205 0 (23) 182
TOTAL INVESTMENT SECURITIES 7,498 0 (218) 7,280
</TABLE>
In March 1995 the Bank made a business decision to sell the investments
held to maturity as a result of a comparable decrease in deposits.
NET INTEREST INCOME
The following table presents condensed average statements of condition,
including non-accrual loans, the components of net interest income and
selected statistical data:
<TABLE>
NET INTEREST INCOME
($ in thousands)
<CAPTION>
Three months ended March 31, 1995 1994
---------------------------- ----------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
<S> <C> <C> <C> <C> <C> <C>
Assets:
Loans 57,608 1,284 9.05% 82,304 1,951 9.61%
Securities 13,492 198 5.92% 11,469 149 5.27%
Federal Funds Sold 4,210 57 5.49% 6,824 50 2.97%
Total Earning Assets 75,310 1,539 8.29% 100,597 2,150 8.67%
Cash and due from banks 2,410 3,527
Other assets 10,957 10,927
Total Assets 88,677 115,051
Liabilities & Stockholder's equity:
Interest-bearing deposits:
Time certificates 56,459 624 4.48% 72,441 725 4.06%
Savings deposits 18,687 94 2.04% 29,747 181 2.47%
Total interest-bearing deposits 75,146 718 3.87% 102,188 906 3.60%
Other borrowings 1,753 50 11.57% 1,622 26 6.50%
Total interest-bearing liabilities 76,899 768 4.05% 103,810 932 3.64%
Demand deposits 8,335 11,165
Other liabilities 2,091 2,509
Stockholders' equity 1,352 (2,433)
Total liabilities and 88,677 115,051
stockholders' equity
Net interest income/rate spread 771 4.24% 1,218 5.03%
Net interest margin 4.15% 4.91%
</TABLE>
The following table presents the changes in interest income and expense
for each major category of interest-bearing assets and interest-bearing
liabilities, and the amount of the change attributable to changes in
average balances (volume) and rates. Changes attributable to both volume
and rate changes have been allocated in proportion to the relationship of
the absolute dollar amount of the changes in volume and rate.
<TABLE>
CHANGES IN INTEREST INCOME AND EXPENSE
($ in thousands)
<CAPTION>
Change from March 31, 1994 to March 31, 1995 attributable to:
Volume Rate Total
<S> <C> <C> <C>
Interest income:
Loans (556) (110) (666)
Investment securities 28 20 48
Short-term investments (6) 13 7
Total interest income (534) (77) (611)
Interest expense:
Deposits:
Time certificates (191) 90 (101)
Savings deposits (59) (28) (87)
Total interest expense on deposits (250) 62 (188)
Other interest-bearing liabilities 2 22 24
Total interest expense (248) 84 (164)
NET INTEREST INCOME (286) (161) (447)
</TABLE>
COMMITMENTS AND CONTINGENCIES
The Company and certain of its then directors and officers are defendants
in a suit alleging violations under the Securities Exchange Act of 1934.
The suit is described more fully in Item 3 of the Company's Annual Report
on Form 10-K for the year ended December 31, 1994.
RECENT ACCOUNTING PRONOUNCEMENTS
In October 1994, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard 119 ("SFAS No. 119") "Disclosure About
Derivative Financial Instruments and Fair Value of Financial Instruments"
effective for year ends beginning after December 15, 1994, except for
entities with less than $150 million in total assets in the current
statement of financial position. For these entities, the statement shall
be effective for financial statements issued for fiscal years ending after
December 15, 1995. The Company does not hold or issue any derivative
financial instruments, and accordingly the statement will not have a
material effect on the consolidated financial statements.
PART II. OTHER INFORMATION
Item 6. Exhibits and Report on Form 8-K
(a) Exhibit 27: Financial Data Schedule
(b) None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
CBC BANCORP, INC.
(Registrant)
Date: May 12, 1995 /S/ CHARLES PIGNATELLI
Charles Pignatelli
President and Chief Executive Officer
/S/ BARBARA VAN BERGEN
Barbara Van Bergen
Vice President, Finance
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