<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Mark One
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1996
---------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
COMMISSION FILE NUMBER: 33-28050-A
FIRST CLAYTON BANCSHARES, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
GEORGIA 58-1823105
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
POST OFFICE BOX 1250, CLAYTON, GEORGIA 30525
------------------------------------------------------------
(Address of principal executive offices)
(706) 782-7100
----------------------------------------
(Issuer's telephone number)
N/A
---------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of May 6, 1996: 424,393
Transitional Small Business Disclosure Format (Check One) Yes No X
----- -----
<PAGE>
FIRST CLAYTON BANCSHARES, INC.
AND SUBSIDIARY
INDEX
-----
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET - MARCH 31, 1996.................. 1
CONSOLIDATED STATEMENTS OF INCOME - THREE
MONTHS ENDED MARCH 31, 1996 AND 1995....................... 2 AND 3
CONSOLIDATED STATEMENTS OF CASH FLOWS - THREE
MONTHS ENDED MARCH 31, 1996 AND 1995...................... 4 AND 5
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS.................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.............. 7 AND 8
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................... 9
SIGNATURES................................................... 10
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FIRST CLAYTON BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
(UNAUDITED)
ASSETS
- ------
Cash and due from banks $ 1,446,632
Interest-bearing deposits in banks 3,707
Federal funds sold 2,920,582
Securities available for sale, at fair value 5,618,160
Securities held to maturity, at cost (fair value $6,805,000) 6,815,469
Loans 33,103,100
Less allowance for loan losses 369,574
-----------
Loans, net 32,733,526
-----------
Premises and equipment, net 1,521,832
Other assets 1,017,959
-----------
$52,077,867
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Deposits
Demand $ 3,074,037
Interest-bearing demand 8,645,854
Savings 2,338,900
Time deposits 32,423,257
-----------
Total deposits 46,482,048
Other liabilities 269,624
-----------
Total liabilities 46,751,672
COMMITMENTS AND CONTINGENCIES
Stockholders' equity
Common stock, par value $1; 10,000,000 shares authorized;
427,827 shares issued 427,827
Surplus 3,850,443
Retained earnings 1,090,436
Unrealized gain on securities available for sale, net of tax 1,045
-----------
5,369,751
Less cost of 3,434 shares of treasury stock (43,556)
-----------
Total stockholders' equity 5,326,195
-----------
$52,077,867
===========
THE ACCOMPANYING NOTE IS AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
1
<PAGE>
FIRST CLAYTON BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
1996 1995
---------- --------
INTEREST INCOME
Interest and fees on loans $ 915,337 $697,349
Interest on taxable securities 163,337 128,804
Interest on nontaxable securities 20,906 14,428
Interest on Federal funds sold 45,443 30,224
Interest on interest-bearing deposits 30 30
---------- --------
1,145,053 870,835
INTEREST EXPENSE ON DEPOSITS 581,037 385,206
---------- --------
Net interest income 564,016 485,629
PROVISION FOR LOAN LOSSES 25,000 18,000
---------- --------
Net interest income after provision for
loan losses 539,016 46,729
---------- --------
OTHER OPERATING INCOME 66,513 79,745
---------- --------
OTHER OPERATING EXPENSES
Salaries and other employee benefits 159,846 15,015
Occupancy and equipment expenses 67,004 61,096
Other operating expense 123,133 127,993
---------- --------
349,983 339,704
---------- --------
Income before income taxes 255,546 207,670
APPLICABLE INCOME TAXES 81,512 64,593
---------- --------
Net income $ 174,034 $143,077
========== ========
2
<PAGE>
FIRST CLAYTON BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
1996 1995
-------- --------
PER SHARE OF COMMON STOCK BASED ON AVERAGE
NUMBER OF SHARES OUTSTANDING DURING PERIOD
Net income $ 0.41 $ 0.34
======== ========
AVERAGE SHARES OUTSTANDING 424.393 424,850
======== ========
CASH DIVIDENDS PER SHARE OF COMMON STOCK $ - $ -
======== ========
THE ACCOMPANYING NOTE IS AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
3
<PAGE>
FIRST CLAYTON BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 174,034 $ 143,077
----------- -----------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 41,948 43,176
Provision for loan losses 25,000 18,000
Increase in interest receivable (160,833) (58,554)
Increase in interest payable 5,366 20,769
Increase (decrease) in taxes payable 30,054 (15,977)
Other prepaids, deferrals and accruals, net (37,354) (36,421)
----------- -----------
Total adjustments (95,819) (29,007)
----------- -----------
Net cash provided by operating activities 78,215 114,070
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities available for sale (1,006,252) (500,131)
Proceeds from maturities of securities available for sale 448,490 296,561
Purchases of securities held to maturity (341,987) (100,208)
Proceeds from maturities of securities held to maturity 309,633 1048,194
Net decrease (increase) in Federal funds sold 2,734,418 (1,410,000)
Increase in bank-owned deposits (30) (30)
Net increase in loans (2,332,893) (1,511,459)
Purchase of premises and equipment (14,592) (11,205)
----------- -----------
Net cash used in investing activities (203,213) (2,188,278)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in deposits (694,384) 1,844,336
Net cash (used in) provided by financing activities (694,384) 1,844,336
----------- -----------
Net decrease in cash and due from banks (819,382) (229,872)
Cash and due from banks, beginning of period 2,266,014 1,183,525
----------- -----------
Cash and due from banks, end of period $ 1,446,632 $ 953,653
=========== ===========
</TABLE>
4
<PAGE>
FIRST CLAYTON BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
1996 1995
-------- --------
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash paid during period for:
Interest $575,671 $364,437
Income taxes 73,104 80,570
NONCASH TRANSACTION
Unrealized (gains) losses on
securities available for sale 44,001 (51,979)
THE ACCOMPANYING NOTE IS AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
5
<PAGE>
FIRST CLAYTON BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of results for the interim periods.
The results of operations for the three month period ended March 31,
1996 are not necessarily indicative of the results to be expected for
the full year.
6
<PAGE>
FIRST CLAYTON BANCSHARES, INC. AND SUBSIDIARY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the periods included in the accompanying consolidated financial
statements.
FINANCIAL CONDITION
As of March 31, 1996, the Company continued to experience moderate growth in
total loans of approximately $2,338,000 or 7.60%, as compared to December 31,
1995. Total assets and total deposits decreased slightly during the period from
December 31, 1995 to March 31, 1996 by 1.05% and 1.47%, respectively. The
increase in loans was funded by a decrease in Federal funds sold of
approximately $2,734,000 for the same time period.
LIQUIDITY
As of March 31, 1996, the liquidity ratio was 30.77%, which is above the Bank's
target ratio of 30%. Liquidity is measured by the ratio of net cash, short-term
and marketable securities to net deposits and short-term liabilities.
Management believes that this ratio is adequate to meet the liquidity needs of
the Bank.
CAPITAL
The minimum capital requirements for banks and bank holding companies require a
leverage capital to total assets ratio of at least 4%, core capital to risk-
weighted assets ratio of at least 4% and total capital to risk-weighted assets
of 8%.
Selected financial information relating to the Bank's minimum capital
requirements for the period ended March 31, 1996 is as follows:
Leverage capital ratio 10.07%
Risk-based capital ratios:
Core capital 17.73%
Total capital 18.98%
In the second quarter of 1996, the Company purchased approximately 6% of the
outstanding shares of common stock from one stockholder and recorded these
shares as treasury stock. The capital of the Company and the Bank is adequate
and is in compliance with the minimum regulatory requirements, subsequent to
this transaction.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net interest income for the three months ended March 31, 1996 increased 16.14%
to $564,000 over $486,000 for the same period in 1995. Interest income for the
three month period increased $274,000 or 31.49%, while interest expense
increased by $196,000 or 50.84%. The increase in interest income compared to
the same period in 1995 is due primarily to the continued growth of the loan
portfolio which has increased 23.47% since March 31, 1995. The increase in
interest expense is consistent with an increase in interest-bearing deposits of
$9,922,000 or 29.63% since March 31, 1995.
The provision for loan losses increased for the three month period ended March
31, 1996 by $7,000 as compared to 1995. The Company's reserve for loan losses
amounted to $369,574 or 1.12% of total loans outstanding at March 31, 1996 as
compared to 1.10% at December 31, 1995. Management believes that the reserve
for loan losses is adequate to absorb anticipated loan losses.
Other operating income decreased $13,000 or 16.59% for the three month period
ended March 31, 1996 as compared to the same period in 1995. The change was due
to a decrease in credit life income of $22,000 which was the result of a
decrease in commission rates in 1995. The decrease was partially offset by an
increase in service charges on deposit accounts which increased $5,000 or 11.14%
as compared to the same period in 1995. The increase in service charges is
primarily attributable to an increase in insufficient fund charges.
Other operating expenses increased $10,000 for the three month period ended
March 31, 1996 as compared to the same period in 1995. The largest increases
occurred in personnel expense, occupancy and equipment expenses, and stationery
and supplies expense, which increased $9,000, $6,000 and $8,000, respectively,
for the three month period ended March 31, 1996 as compared to the same period
in 1995. The above increases were offset by a decrease of $19,000 in FDIC
assessments for the same time period which is due to lower assessment rates
implemented during 1995.
Income tax expense increased by $17,000 for the three months ended March 31,
1996 as compared to the three month period ended March 31, 1995. Through March
31, 1996, the effective tax rate increased to 32% as compared to 31% for the
same period in 1995.
Net income for the three months ended March 31, 1996 has increased by $31,000
when compared to the three month period ended March 31, 1995. The subsidiary
bank continues to experience moderate growth in earning assets, which has
enabled the Company to increase earnings. This trend is expected to continue.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
9
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
FIRST CLAYTON BANCSHARES, INC.
DATE: ______________ BY: \s\ Robert H. Blalock
------------------------------------
Robert H. Blalock, President
DATE: ______________ BY: \s\J. Mark Smith
--------------------------------
J. Mark Smith, Chief Executive
Officer of the Subsidiary
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCING INFORMATION EXTRACTED FROM 3-31-96
BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,446,632
<INT-BEARING-DEPOSITS> 3,707
<FED-FUNDS-SOLD> 2,920,582
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 5,618,160
<INVESTMENTS-CARRYING> 6,815,469
<INVESTMENTS-MARKET> 6,805,000
<LOANS> 33,103,100
<ALLOWANCE> 369,574
<TOTAL-ASSETS> 52,077,867
<DEPOSITS> 46,482,048
<SHORT-TERM> 0
<LIABILITIES-OTHER> 269,624
<LONG-TERM> 0
0
0
<COMMON> 427,827
<OTHER-SE> 4,898,368
<TOTAL-LIABILITIES-AND-EQUITY> 52,077,867
<INTEREST-LOAN> 915,337
<INTEREST-INVEST> 184,243
<INTEREST-OTHER> 45,473
<INTEREST-TOTAL> 1,145,053
<INTEREST-DEPOSIT> 581,037
<INTEREST-EXPENSE> 581,037
<INTEREST-INCOME-NET> 564,016
<LOAN-LOSSES> 25,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 349,983
<INCOME-PRETAX> 255,546
<INCOME-PRE-EXTRAORDINARY> 174,034
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 174,034
<EPS-PRIMARY> .41
<EPS-DILUTED> 0
<YIELD-ACTUAL> 1.17
<LOANS-NON> 436,000
<LOANS-PAST> 23,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 339,087
<CHARGE-OFFS> 0
<RECOVERIES> 5,487
<ALLOWANCE-CLOSE> 369,574
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 369,574
</TABLE>
