UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to___________________
COMMISSION FILE NUMBER 0-17939
CAROLINA FIRST BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-165582
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
402 East Main Street
Lincolnton, North Carolina 28092
(Address of principal executive office) (Zip Code)
704-732-2222
(Registrant's telephone number,including area code)
N/A
(Former name, former address, and former fiscal year,
if changed since last report)
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
2,055,847 SHARES OF COMMON STOCK, PAR VALUE $2.50 PER SHARE,
OUTSTANDING AS OF May 8, 1997
<PAGE>
CAROLINA FIRST BANCSHARES, INC. AND SUBSIDIARY COMPANIES
<TABLE>
<CAPTION>
INDEX PAGE
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 1997
and December 31, 1996 3
Consolidated Statements of Operations -
Three Months Ended March 31, 1997
and 1996 4
Consolidated Statements of Changes in
Shareholder's Equity - Three Months Ended
March 31, 1997 and 1996 5
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1997 and 1996 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 8 - 13
PART II. OTHER INFORMATION 14
Signatures 15
</TABLE>
<PAGE>
CAROLINA FIRST BANCSHARES, INC. AND SUBSIDIARY COMPANIES
-------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
-------------------------------------------------------------------
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
------------- --------------
1997 1996
------------- --------------
<S> <C> <C>
Assets:
Cash and due from banks ........................................................ $ 16,663,670 $ 16,343,459
Federal funds sold ............................................................. 14,050,000 2,982,000
------------- -------------
Total cash and cash equivalents .............................................. 30,713,670 19,325,459
Interest bearing deposits in other banks ....................................... 614,764 426,766
Investment securities (market value $36,079,899
in 1997 and $39,275,715 in 1996) ............................................. 35,990,715 38,920,273
Securities available for sale (cost of $49,396,799 in
1997 and $48,612,087 in 1996) ............................................... 49,595,714 48,696,412
Loans, net of unearned income ( $389,795 in 1997 and
$405,263 in 1996) ........................................................... 313,870,002 309,112,008
Allowance for loan losses .................................................... (4,729,827) (4,488,958)
------------- -------------
Loans, net ................................................................... 309,140,175 304,623,050
Premises and equipment, net .................................................... 9,591,906 9,509,172
Other real estate owned ........................................................ 139,604 141,067
Other assets ................................................................... 7,784,017 8,069,092
------------- -------------
Total Assets ................................................................... $ 443,570,565 $ 429,711,291
============= =============
Liabilities and Shareholders' Equity
Deposits:
Demand ...................................................................... $ 41,186,803 $ 37,858,889
Interest bearing demand accounts ............................................ 97,192,610 93,376,439
Savings ..................................................................... 41,090,563 39,445,821
Time, $100,000 and over ..................................................... 41,471,270 40,355,803
Other time .................................................................. 177,944,908 173,966,334
------------- -------------
Total deposits .............................................................. 398,886,154 385,003,286
Repurchase agreements .......................................................... 4,650,767 5,862,026
Other liabilities .............................................................. 3,950,062 3,844,123
------------- -------------
Total Liabilities .............................................................. 407,486,983 394,709,435
Shareholders' Equity:
Common stock, $2.50 par value;
authorized --- 5,000,000 shares;
issued and outstanding - 2,054,718 shares in
1997, and 2,052,971 shares in 1996 .......................................... 5,136,795 5,132,428
Additional paid-in capital ................................................... 16,444,371 16,442,810
Retained earnings ............................................................ 14,569,077 13,378,236
Net unrealized loss on available for sale securities ......................... (66,661) 48,382
------------- -------------
Total Shareholders' Equity ................................................... 36,083,582 35,001,856
Commitments and Contingent Liabilities ......................................... -- --
Total Liabilities and Shareholders' Equity ..................................... $ 443,570,565 $ 429,711,291
============= =============
Book Value Per Share ........................................................... $ 17.56 $ 15.61
============= =============
</TABLE>
3
<PAGE>
CAROLINA FIRST BANCSHARES, INC. AND SUBSIDIARY COMPANIES
- ----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quarter Ended
March 31,
------------------------------------------
1997 1996
------------------- -------------------
<S> <C> <C>
Interest Income:
Interest and fees on loans ................................................. $7,286,496 $6,256,161
Interest and dividends on securities:
Taxable income ......................................................... 1,196,544 1,139,556
Non-taxable income ..................................................... 127,891 148,265
Other interest income ...................................................... 98,352 47,542
--------- ---------
Total interest income ................................................... 8,709,283 7,591,524
Interest Expense:
Interest on deposits ....................................................... 3,798,283 3,402,480
Interest on other borrowed funds ........................................... 60,723 29,366
Total Interest Expense..................................... 3,859,006 3,431,846
--------- ---------
Net Interest Income ........................................................ 4,850,277 4,159,678
Provision for Loan Losses .................................................. 285,600 231,000
--------- ---------
Net Credit Income ..................... ................................. 4,564,677 3,928,678
Other Income:
Charges on deposit accounts ................................................ 558,151 479,319
Insurance commissions ...................................................... 172,577 114,679
Other service fees and commissions ......................................... 204,206 191,488
Mortgage banking income .................................................... 108,585 119,921
Securities gains, net ...................................................... 524 9,511
Other income ............................................................... 164,120 74,915
--------- --------
Total other income ...................................................... 1,208,163 989,833
Operating Expenses:
Salaries and benefits ...................................................... 1,977,674 1,777,191
Occupancy and equipment .................................................... 426,588 390,361
Federal and other insurance premiums ....................................... 30,145 71,652
Office supplies ............................................................ 114,081 102,781
Data processing ............................................................ 102,548 91,042
Other expenses ............................................................. 928,115 746,799
--------- ---------
Total operating expenses ................................................ 3,579,151 3,179,826
--------- ---------
Income Before Income Taxes ................................................. 2,193,689 1,738,685
Income Taxes ............................................................... 756,276 619,236
---------- ----------
Net income ................................................................. $1,437,413 $1,119,449
========== ==========
Net Income Per Common Share ................................................ $ 0.69 $ 0.54
========== ==========
Cash Dividend Per Common Share ............................................. $ 0.12 $ 0.10
========== ==========
</TABLE>
4
<PAGE>
CAROLINA FIRST BANCSHARES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK
------------------------- ADDITIONAL
PAID-IN RETAINED VALUATION SHAREHOLDERS'
SHARE AMOUNT CAPITAL EARNINGS RESERVE EQUITY
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1995 .................. 1,632,458 $ 4,081,145 $ 17,377,333 $ 9,585,436 $ 79,065 $31,122,979
EXERCISE OF STOCK OPTIONS ................... 3,063 7,658 21,670 29,328
CASH DIVIDEND ($.10 PER SHARE) .............. (196,225) (196,225)
RETIREMENT OF STOCK ......................... (300) (750) (7,650) (8,400)
CHANGE IN UNREALIZED GAIN ON SECURITIES
AVAILABLE FOR SALE ...................... (163,973) (163,973)
NET INCOME .................................. 1,119,449 1,119,449
---------- ----------- ------------ ----------- -------- ----------
BALANCE, MARCH 31, 1996 ..................... 1,635,221 4,088,053 17,391,353 10,508,660 (84,908) 31,903,158
BALANCE, DECEMBER 31, 1996 .................. 2,052,971 5,132,428 16,442,810 13,378,236 48,382 35,001,856
EXERCISE OF STOCK OPTIONS ................... 2,608 6,520 28,703 35,223
CASH DIVIDEND ($.12 PER SHARE) .............. (246,572) (246,572)
RETIREMENT OF STOCK ......................... (861) (2,153) (27,142) (29,295)
CHANGE IN UNREALIZED GAIN
ON SECURITIES AVAILABLE FOR SALE ........ (115,043) (115,043)
NET INCOME .................................. 1,437,413 1,437,413
---------- ----------- ------------ ------------ -------- -----------
BALANCE, MARCH 31, 1997 ..................... 2,054,718 $ 5,136,795 $ 16,444,371 $ 14,569,077 ($66,661) $36,083,582
========== =========== ============ ============ ======== ===========
</TABLE>
5
<PAGE>
CAROLINA FIRST BANCSHARES, INC. AND SUBSIDIARY COMPANIES
- --------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED)
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, March 31,
---------------- ---------------------
1997 1996
---------------- ---------------------
<S> <C> <C>
Operating Activities:
Net Income ............................................................................... $ 1,437,413 $ 1,119,449
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization ........................................................ 251,068 177,887
Accretion and amortization of securities discounts
and premiums, net .................................................................. (76,275) 85,030
Provision for loan losses ............................................................ 285,599 231,000
Deferred taxes (benefit) ............................................................. (634,148) (345,186)
Gains on sales of securities available for sale ...................................... (4,469) (900)
Gains on calls and maturities of securities held to maturity ......................... -- (8,759)
Losses on calls and maturities of securities held to maturity ........................ 1,248 148
Gains on sales of equipment, net ..................................................... -- (4,236)
Gains on sales of real estate, net ................................................... (20,262) 71
Decrease in other assets ............................................................. 960,881 148,239
Increase in other liabilities ........................................................ 110,768 412,070
------------ ------------
Net cash provided by operating activities ......................................... 2,311,823 1,814,813
------------ ------------
Investing Activities:
Proceeds from maturities of securities available for sale ................................ 6,505,424 1,527,862
Proceeds from sales of securities available for sale ..................................... -- 1,000,000
Purchases of securities available for sale ............................................... (7,484,408) (7,650,913)
Proceeds from calls and maturities of securities held to maturity ........................ 2,918,324 5,101,997
Purchases of securities held to maturity ................................................. -- (4,070,625)
Purchases and maturities of certificates of deposit, net ................................. (187,998) (29,331)
Originations of loans, net ............................................................... (4,802,724) (11,043,762)
Proceeds from sale of real estate ........................................................ 21,725 28,385
Proceeds from sales of premises and equipment ............................................ -- 4,493
Capital expenditures ..................................................................... (320,091) (287,069)
------------ ------------
Net cash used in investing activities ............................................... (3,349,748) (15,418,963)
------------ ------------
Financing Activities:
Increase in time deposits, net ........................................................... 5,094,041 5,800,630
Net increase (decrease) in other deposits, net ........................................... 8,788,827 6,981,080
Net increase (decrease) in borrowed funds ................................................ (1,211,259) 2,224,363
Repayment of notes payable ............................................................... (4,829) (4,558)
Repurchase of stock ...................................................................... (29,295) (8,400)
Payment of cash dividends and fractional shares .......................................... (246,572) (196,225)
Issuance of stock ........................................................................ 35,223 29,328
------------ ------------
Net cash provided by financing activities ........................................... 12,426,136 14,826,218
------------ ------------
Net Increase (Decrease) in Cash and Cash Equivalents ..................................... 11,388,211 1,222,068
Cash and Cash Equivalents, Beginning of Year ............................................. 19,325,459 15,391,366
============ ============
Cash and Cash Equivalents, End of Year ................................................... $ 30,713,670 $ 16,613,434
============ ============
Supplemental disclosures of cash flow information:
Interest paid ....................................................................... $ 3,783,160 $ 14,241,426
Income taxes paid ................................................................... 882,456 829,157
Supplemental disclosure on noncash investing and financing activities:
Decrease in net unrealized loss ..................................................... (115,043) (163,973)
Assets transferred to other real estate ............................................. -- 137,339
Transferred from investment securities to securities available for sale ............. -- --
Disclosure of accounting policy:
For purposes of reporting cash flows, cash and cash equivalents include cash on
hand, due from banks and federal funds sold.
See accompanying notes to consolidated financial statements.
</TABLE>
6
<PAGE>
CAROLINA FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. In the opinion of Management, the accompanying consolidated financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position of Carolina First
BancShares, Inc. and Subsidiary Companies as of March 31, 1997 and December 31,
1996 the results of operations for the three-month periods ended March 31, 1997
and 1996, and cash flows for the three-month periods ended March 31, 1997 and
1996.
The accounting policies followed by the Company are set forth in Note 1 to the
Company's audited financial statements for the year ended December 31, 1996.
2. The consolidated financial statements include the accounts of the holding
company, and its wholly owned subsidiaries, Cabarrus Bank of North Carolina,
("Cabarrus Bank"), and Lincoln Bank of North Carolina, ("Lincoln Bank").
Jointly, Lincoln Bank and Cabarrus Bank own a mortgage company, Carolina First
Mortgage Corporation and a financial services company, Carolina First Financial
Services Corporation. All significant intercompany items and transactions have
been eliminated in consolidation.
3. The results of operations for the three-month periods ended March 31, 1997
and 1996, are not necessarily indicative of the results that might be expected
for the full year ending December 31, 1997 and 1996.
4. The Company's Board of Directors declared a 25% stock dividend payable August
23, 1996. The market value of the common stock was $27.60 at August 23, 1996.
Earnings per share for the periods presented have been computed after giving
retroactive effect to the stock dividend.
7
<PAGE>
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
The following discussion and analysis sets forth the major factors which
affected the Company's results of operations and financial condition reflected
in the unaudited financial statements for the three-month periods ended March
31, 1997 and 1996.
General
Net income for the quarter ended March 31, 1997, was $1,437,413, or $.69 per
share, compared to net income of $1,119,449, or $.54 per share, for the same
period in 1996.
Net Interest Income/Margins
Net interest income of $4,850,277 during the first three-months of 1997 resulted
from a net interest margin of 4.92% on average earning assets of $400.1 million.
This compares with a net interest margin of 4.86% on average earning assets of
$346.9 million generating net interest income of $4,159,678 for the same period
in 1996. The interest earned on loans is being reduced as competition increases
for market share. The Company has been able to sustain the strong net interest
margin as the growth in average earning assets has increased more than average
interest bearing liabilities. This is the result of both increased capital and
minimal increases in noninterest earning assets. Interest rates increased
slightly during the year of 1996, but have remained relatively stable since.
Each increase in the prime lending rate initially increases the Company's net
interest income since a large number of loans are tied to the prime lending rate
and are directly and immediately effected. However, with the passage of time,
interest sensitive liabilities will increase and the Company's interest margins
should stabilize. The increase in loan demand experienced by the Company
positively affects the net interest margin, as noted by the large volume related
increase, and is an indicator of the continued expanding local economy. The
increase in net interest income consists of an increase of $3,000 relative to
rate and an increase of $688,000 relative to volume.
Management reviews asset/liability volumes and rates on a weekly basis. As
Carolina First's loans have continued to grow, the funds have been obtained
primarily through customer deposits and the maturing of investment securities.
Deposit and loan rates are adjusted as market conditions and Company needs
allow.
Analysis of average balances and interest rates for the three months ended March
31, 1997 and 1996, is presented on pages 12 and 13 of this report. Such analysis
is presented on a fully-taxable equivalent basis at the federal statutory rate
of 34 %.
8
<PAGE>
Loan Loss Allowance/Provision
The allowance for loan losses represents management's determination as to an
adequate amount in relation to the risk of future losses inherent in the loan
portfolio. In evaluating the allowance and its adequacy, management considers
the bank's loan loss experience, the amount of past due and non-performing
loans, current and anticipated economic conditions and other appropriate
information. While it is the Company's policy to charge-off in the current
period the loans in which a loss is considered probable, there are additional
risks for future losses which cannot be quantified precisely or attributed to
particular loans or classes of loans. Because these risks are continually
changing in response to facts beyond the control of the Company, such as the
state of the economy, management's judgment as to the adequacy of the provision
is approximate and imprecise. It is also subject to regulatory examinations and
determinations as to adequacy, which may take into account such factors as
methodology used to calculate the allowance for loan losses and the size of the
loan loss allowance in comparison to a group of peer banks identified by the
regulatory agencies.
In assessing the adequacy of the allowance, management relies predominantly on
its ongoing review of the loan portfolio, which is undertaken to both ascertain
whether there are probable losses which must be charged-off and to assess the
risk characteristics of the portfolio in the aggregate. This review considers
the judgments of management, and also those of bank regulatory agencies that
review the loan portfolio as part of their regular bank examination process.
There are no loans classified for regulatory purposes as loss, doubtful,
substandard, or special mention that the Company reasonably expects will
materially impact future operating results, liquidity, or capital resources. The
Company has no concentrations or credit risks by type of credit or industry
group within its loan or investment portfolio.
On a monthly basis, the Company reviews the adequacy of its allowance for loan
losses. The loan review staff prepares a listing of loans believed to be
deserving of a closer review by management. These loans are rated as to the
presumed collectibility, and a statistical loss factor is assigned to each
category of loans that directly relates to the associated risk. In addition to
these specific allowances, an additional component of the allowance is computed
by applying a factor based on historical loss experience to all loans by type
that are not listed on the above referenced schedule. Finally, an additional
factor is assigned to the entire portfolio to cover unexpected losses from any
borrower that may not be identified. This final component reflects the economic
conditions of the market areas served. These factors are multiplied by the
balances in each category and totaled to determine the required allowance for
loan losses. The actual allowance for loan losses (after charge-offs) is
compared with the required level to determine if an additional provision should
be made in the current period. The allowance for loan losses was $4,729,827 or
1.51% of outstanding loans, at March 31, 1997 and $4,488,958 or 1.45% of
outstanding loans, at December 31, 1996.
The provision for loan losses charged to operations during the first three
months was $285,600 in 1997 and $231,000 in 1996. The increase in the provision
was a result of the large growth in outstanding loans and not a deterioration of
the loan portfolio. Charge-offs, net of recoveries, were $44,730 or .01% of
average loans outstanding, during the three months ended March 31, 1997, as
compared to $26,384 or .01% of average loans outstanding, during the same period
in 1996. The ratio of non-accrual loans to total loans was .22% at March 31,
1997, .19% at December 31, 1996, and .26% at March 31, 1996. Management believes
that reserves and asset values are adequate to facilitate the timely disposition
of these assets.
9
<PAGE>
Net Non-Interest Income
Non-interest income increased 22.06% for the first three months of 1997 as
compared to the same period a year earlier. Non-interest income from core
operations continues to increase as the Company expands fee income areas such as
trust services and credit cards. The Company's financial services company has
continued to mature and is contributing favorably to non interest income as
nontraditional banking services are considered by depositors.
Non-interest expense increased $399,325 or 12.56%, for the three-month period
ended March 31, 1997, as compared to the same period a year earlier. The
increase is a result of the general growth in business volume and the related
increase in salaries and employee benefits (resulting from a larger number of
employees from new branch locations) . Insurance premiums on deposits insured by
the savings association insurance fund of the Federal Deposit Insurance
Corporation were reduced during the fourth quarter after a one-time assessment.
Financial Condition
The Company's total assets at March 31, 1997 and 1996, were $443,570,565 and
$328,432,306, respectively, and $429,711,291 at December 31, 1996. Average
earning assets for the first three months of 1997 were $400,146,000 versus
$346,930,000 for the same period a year earlier, an increase of 15.34%. This
growth is the result of the strong local economy and the Company's continued
expansion of its customer base and market share.
Average loans of $306,046,000 represented 76.48% of average earning assets
during the first three months of 1997. During the same period in 1996, average
loans totaled $257,893,000, or 74.34% of average earning assets. Gross loans
increased to $313,870,002 at March 31, 1997, a 1.54% increase over loans at
December 31, 1996. It is anticipated that general loan growth will continue to
mirror the economy generally, however, competition for quality loans may
adversely effect the net interest margins.
Securities averaged $86,434,000 during the three months ended March 31, 1997
versus $84,988,000 for the same period a year ago. The securities portfolio
represented 21.60% of earning assets at March 31, 1997 and 24.50% at March 31,
1996. The Company shifted funds from the securities portfolio into the loan
portfolio in an effort to capitalize on the strong loan demand in our markets
and to increase net interest income. At March 31, 1997, the securities portfolio
had unrealized losses of approximately $66,661. A gain of $524 was realized
during the first quarter of 1997. Securities held to maturity with a carrying
value of approximately $27.5 million were scheduled to mature within the next
five years. Of this amount, $8.4 million were scheduled to mature within one
year. Securities available for sale with a carrying value of $47.3 million were
scheduled to mature within the next five years. Of this amount, $23.9 million
were scheduled to mature within one year. The Company currently has the ability
and intent to hold its investment securities to maturity. Certain debt
securities are designated by management as held for sale and are carried at the
lower of cost or market because management may sell them before they mature.
10
<PAGE>
Average interest bearing liabilities rose 13.98%, to $355,714,000 in the first
three months of 1997, from an average of $312,072,000 in the first three months
of 1996. Total deposits increased 14.50% from March 31, 1997 to March 31, 1996,
and 3.61% from December 31, 1996 to March 31, 1997. As the Company gains market
share and opens additional offices, deposits will continue to increase.
The Company continues to maintain capital ratios in excess of regulatory minimum
requirements. The current capital standards call for a minimum total capital of
8% of risk-adjusted assets, including 4% Tier I capital, and a minimum leverage
ratio of Tier I capital to total tangible assets of at least 4-5%. At March 31,
1997, the Company's ratio of total Tier I capital to total assets, adjusted for
the loans loss allowance and intangibles, was 9.16% and the Company's ratio of
total capital to risk-adjusted assets was 14.24% which includes 12.99% Tier I
capital.
Liquidity
The liquidity position of the Company's subsidiaries, Lincoln Bank ("Lincoln")
and Cabarrus Bank of North Carolina ("Cabarrus"), is primarily dependent upon
their need to respond to withdrawals from deposit accounts and upon the
liquidity of their assets. Primary liquidity sources include cash and due from
banks, federal funds sold, short-term investment securities and loan repayments.
At March 31, 1997, the Company had a liquidity ratio of 28.94%. Management
believes the liquidity sources are adequate to meet operating needs. Except as
discussed above, there are no known trends, events or uncertainties that will
have or that are reasonably likely to have a material effect on the Company's
liquidity, capital resources or operations.
11
<PAGE>
CAROLINA FIRST BANCSHARES, INC.
- -------------------------------------------------------------
AVERAGE BALANCE SHEET AS MARCH 31,
- -------------------------------------------------------------
(In Thousands)
<TABLE>
<CAPTION>
1997 1996
--------------- --------------
Interest Interest
Average Income/ Average Average Income/ Average
Balance Expense Rate Balance Expense Rate
--------------------------------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest bearing deposits in other banks .......... $ 451 $ 3 2.66% 360 $ 9 10.00%
Taxable securities ................................ 78,874 1,197 6.07% 74,434 1,139 6.12%
Non-taxable securities ............................ 7,560 128 6.77% 10,554 148 5.61%
Federal funds sold and securities
purchased with agreements to
resell ......................................... 7,215 95 5.27% 3,689 39 4.23%
Loans ............................................. 306,046 7,286 9.52% 257,893 6,256 9.70%
------- ------- ------- -----
Interest earning assets ........................ 400,146 8,709 8.71% 346,930 7,591 8.75%
------- -----
Cash and due from banks ........................... $ 15,167 $ 12,803
Other assets ...................................... 17,191 16,189
------- --------
Total assets ...................................... $432,504 $375,922
======= =======
Liabilities and Shareholders' Equity
Interest bearing deposits
Demand .......................................... $ 92,178 $ 550 2.39% $ 81,769 $ 484 2.37%
Savings ......................................... 39,722 248 2.50% 41,636 262 2.52%
Time ............................................ 218,107 3,000 5.50% 187,117 2,657 5.68%
Other borrowings .................................. 5,707 61 4.28% 1,550 29 7.48%
------- ------- -------- -----
Interest bearing liabilities ................... 355,714 3,859 4.34% 312,072 3,432 4.40%
------- ----- -------- -----
Other liabilities ................................. 40,634 33,685
Shareholders' equity .............................. 36,156 30,163
------- ------
Total liabilities and shareholders'
equity ......................................... $432,504 $375,920
======= =======
Interest rate spread .............................. 4.37% 4.35%
====== =====
Net interest earned and net
yield on earning assets ........................ $ 4,850 4.92% $ 4,159 4.86%
===== ===== ======= =====
</TABLE>
12
<PAGE>
CAROLINA FIRST BANCSHARES, INC.
- ----------------------------------------------------
RATE / VOLUME ANALYSIS
- ----------------------------------------------------
FOR THE PERIOD ENDED MARCH 31, 1997 AND 1996
- ----------------------------------------------------
(In Thousands)
<TABLE>
<CAPTION>
Increase/(Decrease)
due to
1996 Volume Rate 1997
Inc/exp Inc/exp
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Income:
Loans ....................................................... 6,256 1,146 (116) 7,286
Securities - tax - exempt ................................... 148 (51) 31 128
Securities - taxable ........................................ 1,139 67 (9) 1,197
Federal funds sold & interest bearing
balances in other banks ................................ 48 46 4 98
----- ----- ---- -----
Total Interest Income .................................. 7,591 1,209 (91) 8,709
Interest Expense:
Interest Bearing Demand ..................................... 484 62 4 550
Savings ..................................................... 262 (12) (2) 248
Time ........................................................ 2,657 426 (83) 3,000
Other Borrowings ............................................ 29 44 (12) 61
----- ------ ---- -----
Total Interest Expense ................................. 3,432 521 (94) 3,859
----- ------ ---- -----
Net Interest Income .................................... 4,159 688 3 4,850
===== ====== ==== =====
</TABLE>
13
<PAGE>
PART II - OTHER INFORMATION
<TABLE>
<CAPTION>
Item
<S> <C>
1 - Legal Proceedings None
2 - Changes in Securities None
3 - Defaults upon Senior Securities None
4 - Submission of Matters to a Vote of
Security Holders None
5 - Other Information None
6 - Exhibits and Reports on Form 8-K
(a) Exhibits: 27 - Financial Data Schedule (SEC Use Only)
(b) Reports on Form 8-K
</TABLE>
14
<PAGE>
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 thereunto duly authorized.
CAROLINA FIRST BANCSHARES, INC.
(Registrant)
Date: May 13, 1997 By: /s/ D. Mark Boyd,III
------------------------- --------------------------------
D. Mark Boyd, III
Chairman and Chief Executive Officer
Date: May 13, 1997 By: /s/ Jan H.Hollar
------------------------- -------------------------------
Jan H. Hollar
Principal Accounting Officer
15
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000846465
<NAME> CAROLINA FIRST BANCSHARES, INC.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 16,663,670
<INT-BEARING-DEPOSITS> 614,764
<FED-FUNDS-SOLD> 14,050,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 49,595,714
<INVESTMENTS-CARRYING> 35,990,715
<INVESTMENTS-MARKET> 36,079,899
<LOANS> 313,870,002
<ALLOWANCE> 4,729,827
<TOTAL-ASSETS> 443,570,565
<DEPOSITS> 398,886,154
<SHORT-TERM> 0
<LIABILITIES-OTHER> 8,600,829
<LONG-TERM> 0
0
0
<COMMON> 5,136,795
<OTHER-SE> 30,946,787
<TOTAL-LIABILITIES-AND-EQUITY> 443,570,565
<INTEREST-LOAN> 7,286,496
<INTEREST-INVEST> 1,324,435
<INTEREST-OTHER> 98,352
<INTEREST-TOTAL> 8,709,283
<INTEREST-DEPOSIT> 3,798,283
<INTEREST-EXPENSE> 60,723
<INTEREST-INCOME-NET> 4,850,277
<LOAN-LOSSES> 285,600
<SECURITIES-GAINS> 524
<EXPENSE-OTHER> 3,579,151
<INCOME-PRETAX> 2,193,689
<INCOME-PRE-EXTRAORDINARY> 2,193,689
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,437,413
<EPS-PRIMARY> 0.69
<EPS-DILUTED> 0.69
<YIELD-ACTUAL> 4.92
<LOANS-NON> 668,056
<LOANS-PAST> 258,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,488,958
<CHARGE-OFFS> 76,368
<RECOVERIES> 31,638
<ALLOWANCE-CLOSE> 4,729,827
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
