SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended September 30, 1997
Commission File Number 33-37078
FNC BANCORP, INC.
(Exact name of Small Business Issuer
as specified in its charter)
Georgia 58-1910615
(State or other jurisdiction of (I.R.S. Employer
incorporation or Organization) Identification No.)
420 South Madison Avenue
Douglas, Georgia
(Address of principal executive
offices)
(912) 384-1100
(Issuer's telephone number)
Check whether the Issuer (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
The number of shares outstanding of the Issuer's class of common stock at
September 30, 1997 was 405,710 shares of common stock.
Transitional Small Business Disclosure Format (Check one): Yes_ No X
PAGE 1
<PAGE>
FNC BANCORP, INC.
FOR 10-QSB
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 1997
(Unaudited) and December 31, 1996 ........................................3
Consolidated Statements of Income (Unaudited) - Nine
Month Periods Ended September 30, 1997 and 1996 ..........................4
Consolidated Statements of Stockholders' Equity (Unaudited) -
Nine Month Periods Ended September 30, 1997 and 1996 .....................5
Consolidated Statements of Cash Flows (Unaudited) - Nine
Month Periods Ended September 30, 1997 and 1996 ..........................6
Notes to Consolidated Financial Statements ...............................7
Item 2. Management's Discussion and Analysis or Plan of Operation ...............8
Part II - Other Information
Item 1. Legal Proceedings ......................................................13
Item 2. Changes in Securities ..................................................13
Item 3. Defaults Upon Senior Securities ........................................13
Item 4. Submission of Matters to a Vote of
Security Holders .......................................................13
Item 5. Other Information ......................................................13
Item 6. Exhibits and Reports on Form 8-K .......................................13
Signatures ........................................................................13
PAGE 2
<PAGE>
FNC BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
----------- -----------
Assets (UNAUDITED)
<S> <C> <C>
Cash and due from banks ................................................$ 3,967,671 $ 4,917,622
Federal funds sold ..................................................... 1,674,000 7,249,000
Securities available-for-sale .......................................... 6,985,516 7,829,126
Loans .................................................................. 29,583,036 27,345,643
Less allowance for loan losses ......................................... 1,091,601 1,520,385
----------- -----------
Loans, net ............................................................. 28,491,435 25,825,258
Premises and equipment ................................................. 1,662,305 1,682,081
Other assets ........................................................... 1,222,405 1,615,939
----------- -----------
Total assets ...........................................................$44,003,332 $49,119,026
=========== ===========
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing demand ..........................................$ 8,178,746 $ 9,409,021
Interest-bearing demand ............................................. 6,119,840 7,253,382
Savings ............................................................. 1,683,120 1,778,551
Time, $100,000 and over ............................................. 4,835,036 5,381,660
Other time .......................................................... 16,965,145 18,721,987
----------- -----------
Total deposits ...................................................... 37,781,887 42,544,601
Notes payable to directors ............................................. 500,000 500,000
Advances from Federal Home Loan Bank ................................... 2,080,000 2,485,000
Other .................................................................. 509,652 655,853
----------- -----------
Total liabilities ...................................................... 40,871,539 46,185,454
----------- -----------
Commitments and contingent liabilities
Stockholders' equity
Preferred stock, 10,000,000 shares authorized,
no shares issued
Common stock, par value $1; 10,000,000 shares authorized,
405,710 shares issued and
Outstanding .......................................................... 405,710 405,710
Capital surplus ........................................................ 3,610,541 3,610,541
Retained deficit ....................................................... (886,600) (1,084,329)
Unrealized gains on available-for-sale securities,
Net of applicable deferred income taxes ................................ 2,142 1,650
----------- -----------
Total stockholders' equity .............................................. 3,131,793 2,933,572
----------- -----------
Total liabilities and stockholders
equity ..................................................................$44,003,332 $49,119,026
=========== ===========
PAGE 3
<PAGE>
FNC BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
NINE AND THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- ----------------------------
1997 1996 1997 1996
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Interest income:
Loans .................................$686,096 $764,304 $1,873,984 $2,412,323
Taxable securities .................... 138,515 80,450 409,269 221,470
Federal funds sold .................... 7,880 65,255 122,661 190,576
-------- -------- --------- ---------
Total interest income ................. 832,491 910,009 2,405,914 2,824,369
Interest expense:
Deposits .............................. 357,365 437,933 1,124,496 1,362,651
Federal funds purchased ............... 3,600 9 4,121 9
Advances from FHLB .................... 26,460 35,713 70,863 100,365
Stockholder loan ...................... 10,064 0 28,855 0
-------- -------- --------- ---------
Total interest expense ................ 397,489 473,655 1,228,335 1,463,025
Net interest income ................... 435,002 436,354 1,177,579 1,361,344
Provision for loan losses ............. 0 481,843 30,450 1,826,158
-------- -------- --------- ---------
Net interest income after
provision for loan losses ............. 435,002 (45,489) 1,147,129 (464,814)
Other income:
Service charges on
deposit accounts ..................... 100,056 96,769 275,246 276,429
Insurance commissions ................. 0 4,151 11,139 10,235
Mortgage origination income ........... 3,681 6,815 9,773 16,407
Gain (loss) on sale of securities ..... 772 0 900 0
Other operating income ................ 14,833 20,952 51,061 64,045
-------- -------- --------- ---------
Total other income .................... 119,342 128,687 348,119 367,116
Other expenses:
Salaries and employee benefits ........ 220,823 221,885 607,305 656,277
Equipment expenses .................... 36,690 24,294 101,258 72,470
Occupancy expenses .................... 22,247 26,485 67,517 79,226
Advertising ........................... 8,869 17,890 28,420 33,238
Data Processing ....................... 15,326 17,103 45,644 50,059
Printing and office supplies ......... 16,370 10,753 41,062 43,909
Amortization .......................... 0 4,056 0 15,240
Other operating income ................ 100,158 93,962 303,829 256,016
-------- -------- --------- ---------
Total other expenses .................. 420,483 416,428 1,195,035 1,206,435
-------- -------- --------- ---------
Income (loss) before income
taxes (benefits) ..................... 133,861 (333,230) 300,213 (1,304,133)
Income tax expense (benefit) .......... 46,500 (112,512) 102,484 (441,801)
-------- -------- -------- ---------
Net income (loss) .....................$ 87,361 $(220,718) $197,729 $(862,332)
======== ========= ======== =========
Earnings (loss) per common and common
equivalent share ...................... $0.22 $(.45) $0.49 $(1.82)
PAGE 4
<PAGE>
FNC BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
<CAPTION>
UNREALIZED
LOSSES ON
SECURITIES
COMMON STOCK ADDITIONAL RETAINED AVAILABLE
NUMBER OF PAR PAID IN EARNINGS FOR-SALE
SHARES VALUE CAPITAL (DEFICIT) NET OF TAX TOTAL
-------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1995 .... 405,710 $405,710 $3,610,541 $62,003 $ (867) $4,077,387
Net income (loss) .... 0 0 0 (862,332) 0 (862,332)
Net change in unrealized
losses on securities
available-for-sale,
net of tax .......... 0 0 0 0 (11,859) (11,859)
-------- -------- ---------- --------- -------- ----------
Balance,
September 30, 1996
(unaudited) .......... 405,710 $405,710 $3,610,541 $(800,329) $(12,726) $3,203,196
======== ======== ========== ========= ======== ==========
Balance,
December 31, 1996 .... 405,710 $405,710 $3,610,541 $(1,084,329) $ 1,650 $2,933,572
Net income (loss) .... 0 0 0 197,729 0 197,729
Net change in unrealized
losses on securities
available-for-sale,
net of tax ........... 0 0 0 0 492 492
-------- -------- ---------- ----------- ------- ----------
Balance,
September 30, 1997
(unaudited) .......... 405,710 $405,710 $3,610,541 $(886,600) $ 2,142 $3,131,793
======== ======== ========== ========= ======= ==========
PAGE 5
<PAGE>
FNC BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1997 1996
--------- ---------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income (Loss) ........................................................................... $ 197,729 $(862,332)
Adjustments to reconcile net income or loss to net cash
provided by operating activities:
Depreciation ................................................................................ 100,420 78,284
Amortization ................................................................................ 0 15,240
Deferred income taxes (benefit) ............................................................. 116,284 (438,626)
(Gain) Loss on sale of securities ........................................................... (900) 0
Provision for loan losses ................................................................... 30,450 1,826,158
Securities (accretion) amortization ......................................................... (16,731) (27,150)
Change in assets and liabilities:
(Increase) Decrease in accrued interest receivable ............................................ 173,142 (259,828)
Increase (Decrease) in accrued interest payable ............................................... (80,994) (79,612)
(Increase) Decrease in other assets ........................................................... (83,015) (114,372)
Increase (Decrease) in other liabilities ...................................................... (65,207) 186,501
(Increase) Decrease in income taxes receivable ................................................ 187,615 0
Increase (Decrease) in income taxes payable ................................................... 0 (55,195)
---------- ---------
Net cash provided (used) by operating activities .............................................. 558,793 269,068
---------- ---------
Cash Flows From Investing Activities:
Capital expenditures ........................................................................ (80,644) (71,422)
Net (increase) decrease in loans ............................................................(2,696,627) (191,732)
Proceeds from maturity of available-for-sale securities ..................................... 4,250,000 3,497,500
Purchase of available-for-sale securities ...................................................(3,541,244) (5,186,710)
Proceeds received from sale of mortgage-backed securities ................................... 121,104 0
Payments received on mortgage-backed securities ............................................. 31,381 49,003
---------- ----------
Net cash provided (used) by operating activities ............................................(1,916,030) (1,903,361)
---------- ----------
Cash Flows From Financing Activities:
Increase (Decrease) in time deposits ........................................................(2,303,466) (542,537)
Increase (Decrease) in other deposits .......................................................(2,459,248) (4,785,157)
Proceeds from advances from Federal Home Loan Bank .......................................... 1,000,000 2,000,000
Repayment of advances from Federal Home Loan Bank ...........................................(1,405,000) (55,000)
---------- ----------
Net cash provided (used) by financing activities ............................................(5,167,714) (3,382,694)
---------- ----------
Net increase (decrease) in cash and cash equivalents ...........................................(6,524,951) (5,016,987)
Cash and Cash Equivalents at Beginning of Year .................................................12,166,622 11,239,283
---------- ----------
Cash and Cash Equivalents at End of Year .......................................................$5,641,671 $6,222,296
========== ==========
Supplemental Disclosures of Cash Flow Information Cash paid (received) during
the year for:
Interest .................................................................................... 1,309,329 1,542,637
Income taxes ................................................................................ 187,615 121,555
Schedule of Non-Cash Investing and Financing Activities
Total increase (decrease) in unrealized (losses) gains on
Securities available-for-sale .................................................................. 492 17,969
PAGE 6
<PAGE>
FNC BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the nine months ended September 30, 1997 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1997. For further information, refer to the consolidated financial statements
and footnotes there to included in the Company's annual report to stockholders
for the year ended December 31, 1996.
PAGE 7
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
Results of Operations
The Company, including the operations of its subsidiary, reported a consolidated
net income of $197,729 for the nine months ended September 30, 1997 compared to
($862,332) loss for the nine months ended September 30, 1996. Net interest income
after provision for loan losses was $1,147,129and($464,814) for the nine months
ended September 30, 1997 and 1996, respectively. The provision for loan losses
was $30,450 and $1,826,158 for the nine months ended September 30, 1997 and
1996, respectively. Noninterest income totaled $348,119 and $367,116 for the
nine months ended September 30, 1997 and 1996, respectively. Non-interest
expenses totaled $1,195,035 and $ 1,206,435 for the nine months ended September
30, 1997 and 1996, respectively.
The following table summarizes the results of operations of the Company for the
nine month period ended September 30, 1997 and 1996.
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------------
1997 1996
------- --------
(IN THOUSANDS)
<S> <C> <C>
Interest income ................................$ 2,405 $ 2,824
Interest expense ............................... (1,228) (1,463)
------- -------
Net interest income ............................ 1,177 1,361
Provision for loan losses ...................... (30) (1,826)
Noninterest income ............................. 348 367
Noninterest expense ............................ (1,195) (1,206)
------- -------
Income (loss) before taxes ..................... 300 (1,304)
Income (taxes) benefit ......................... (102) 442
------- -------
Net income (loss) ..............................$ 198 $ (862)
======= =======
Interest Income
Total interest income decreased approximately $419,000 for the nine months ended
September 30, 1997 compared to the nine months ended September 30, 1996.
This decrease was from the effect of a decrease in the average loan portfolio
balance from approximately $32.8 million for the nine months ended September 30,
1996 to approximately $26.4 million for the nine months ended September 30,
1997. The effect of this change decreased interest income earned on the loan
portfolio from approximately $2,383,000 for the nine months ended September 30,
1996 to approximately $1,849,000 for the nine months ended September 30, 1997, a
decrease of $534,000. Interest income on the loan portfolio decreased from
approximately $764,000 for the quarter ended September 30, 1996 to approximately
$686,000 for the quarter ended September 30, 1997, a decrease of $78,000.
Interest earned on taxable investment securities increased from approximately
$221,000 for the nine months ended September 30, 1996 to approximately $409,000
for the nine months ended September 30, 1997, an increase of $188,000. This
increase was the combined effect of an increase in the average taxable
investment portfolio balance from approximately $5.2 million for the nine months
ended September 30, 1996 to approximately $8.6 million for the nine months ended
September 30, 1997, and an increase in the average rate earned on the taxable
investment securities portfolio from 5.67% for the nine months ended September
30, 1996 to 6.34% for the nine months ended September 30, 1997. Interest income
on the taxable investment portfolio increased from approximately $80,000 for the
quarter ended September 30, 1996 to approximately $139,000 for the quarter ended
September 30, 1997, an increase of $59,000.
PAGE 8
<PAGE>
Interest earned on federal funds sold decreased from approximately $191,000 for
the nine months ended September 30, 1996 to approximately $123,000 for the nine
months ended September 30, 1997, a decrease of $68,000. This decrease was the
net effect of a decrease in the average federal funds sold balance from
approximately $4.9 million for the nine months ended September 30, 1996 to
approximately $3.0 million for the nine months ended September 30, 1997 and an
increase in the rate earned on the federal funds sold from 5.20% for the nine
months ended September 30, 1996 to approximately 5.47% for the nine months ended
September 30, 1997. Interest income on federal funds sold decreased from
approximately $65,000 for the quarter ended September 30, 1996 to approximately
$8,000 for the quarter ended September 30, 1997, a decrease of $57,000.
Interest Expense
Total interest expense decreased approximately $235,000 for the nine months
ended September 30, 1997 compared to the nine months ended September 30, 1996.
This decrease is attributed to the factors explained in the following
information.
This decrease was the combined effect of a decrease in the average balance of
interest-bearing deposits from approximately $34.9 million for the nine months
ended September 30, 1996 to approximately $30.1 for the nine months ended
September 30, 1997 and a decrease in the average rate paid on interest-bearing
deposits from 5.21% for the nine months ended September 30, 1996 to 5.00% for
the nine months ended September 30, 1997. Interest expense on interest-bearing
deposits decreased from approximately $438,000 for the quarter ended September
30, 1996 to approximately $357,000 for the quarter ended September 30, 1997, a
decrease of $81,000.
At September 30, 1997, the Bank had advances from the Federal Home Loan Bank of
$2,080,000 at an average rate of 5.75%. Interest expense incurred for the nine
months ended September 30, 1997 totaled approximately $71,000 and approximately
$100,000 for the nine months ended September 30, 1996.
The Company also had interest expense during the nine months ended September 30,
1997 of approximately $29,000 on notes payable to directors in the amount of
$500,000. The rate of interest is prime less 1% which resulted in a rate during
the period of 7.5%. During 1996, the Company made a capital contribution to the
Bank in the amount of $1 million and the loans from directors were to partially
fund this additional capital contribution.
Noninterest Income
The following table presents the principal components of noninterest income for
the three and nine month periods ended September 30, 1997 and 1996.
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ----------------
1997 1996 1997 1996
----- ----- ----- -----
<S> <C> <C> <C> <C>
Service charges on deposit accounts .............. $100 $97 $275 $277
Insurance Commissions ............................ 0 4 11 10
Mortgage origination income ...................... 4 7 10 16
Gain (loss) on sale of securities ................ 1 0 1 0
Other operating income ........................... 14 21 51 64
----- ----- ----- -----
Total noninterest income ................... $119 $129 $348 $367
===== ===== ===== =====
PAGE 9
<PAGE>
Service charges on deposit accounts for the nine months ended September 30, 1997
as compared to the nine months ended September 30, 1996, decreased approximately
$2,000. This decrease was related primarily to a decrease in NSF fees and
transaction deposit account activity. All other income totaled approximately
$73,000 and $90,000 for the nine months ended September 30, 1997 and 1996,
respectively.
Noninterest Expenses
The following table presents the principal components of noninterest expenses
for the three and nine month periods ended September 30, 1997 and 1996.
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- ---------------------
1997 1996 1997 1996
----- ----- ----- -----
<S> <C> <C> <C> <C>
Salaries and employee benefits .............. $ 221 $ 222 $ 607 $ 656
Equipment expenses .......................... 37 24 101 73
Occupancy expenses .......................... 22 26 68 79
Advertising ................................. 9 18 28 33
Data processing ............................. 15 17 46 50
Printing and office supplies ................ 16 11 41 44
Amortization ................................ 0 4 0 15
Other operating expenses .................... 100 94 304 256
----- ----- ----- -----
Total noninterest expense ................... $ 420 $ 416 $1,195 $1,206
===== ===== ====== ======
Noninterest expenses for the nine months ended September 30, 1997 as compared to
the nine months ended September 30, 1996, decreased approximately $11,000.
Salaries and employee benefits decreased approximately $49,000 for the nine
months ended September 30, 1997 as compared to the nine months ended September
30,1996. This decrease reflects decreases in the number of employees, in wage
levels, and in the cost of employee benefits. All other expenses increased
approximately $38,000 for the nine months ended September 30, 1997 compared to
the nine months ended September 30, 1996. This increase is primarily
attributable to an increase in auditing expenses associated with loan review,
which accounted for $29,000 of the increase.
Provision for Loan Losses
The provision for loan losses for the nine months ended September 30, 1997 was
approximately $30,000 compared to approximately $1,826,000 for the nine months
ended September 30, 1996. The balance of the allowance for loan losses was
approximately $1,091,000 (approximately 3.37% of outstanding loans) at September
30, 1997 and approximately $1,520,000 (approximately 5.6% of outstanding loans)
at December 31, 1996. Actual loan charge-offs net of recoveries were
approximately $458,000 for the nine months ended September 30, 1997 and
approximately $898,000 for the nine months ended September 30, 1996. Non-accrual
loans were approximately $1,254,000 at September 30, 1997. In determining an
adequate level of loan loss reserve, such loans were included in such
consideration.
The amount of the provision for loan losses is a result of the amount of loans
charged off, the amount of loans recovered and management's conclusion
concerning the level of the allowance for loan losses. The level of the
allowance for loan losses is based upon a number of factors including the Bank's
past loan loss experience, management's evaluation of the collectability of
loans, the general state of the economy and other relevant factors.
For a further discussion concerning loans and the allowance for loan losses,
refer to "financial condition".
PAGE 10
<PAGE>
Income Taxes
The provision for income taxes reflected an effective rate of 34% for the nine
months ended September 30, 1997. A tax credit was accrued for the nine months
ended September 30, 1996 based upon the loss incurred of approximately
$1,304,000 before taxes.
Financial Condition
The company including its subsidiary bank, reported consolidated total assets of
approximately $44 million at September 30, 1997 and approximately $49.1 million
at December 31, 1996. Representing a decrease of approximately $5.1 million.
During the nine months ended September 30, 1997, cash and due from banks
decreased $.9 million, operations generated $.6 million, available-for-sale
securities decreased $.9 million, while federal funds sold decreased by $5.6
million providing $8 million of funds available which were used to reduce
deposits by $4.8 million, reduce Federal Home Loan Bank advances by $.4 million,
increase
capital expenditures by $.1 million, and increase loans by $2.7
million.
Approximately mid-year 1996, an internal loan review was performed by the new
senior lending officer which concluded that the underwriting procedures were
inadequate. For the year ended December 31,
1996, the Bank had loan charge-offs of approximately $1.4 million, many due to
bankruptcies. The Bank had a reduction in assets partly for the purpose of
managing the capital requirements of the Bank for which the Company increased
the capital by $1 million during the year ended December 31, 1996. The Company
continues its on-going loan review procedures, continues to operate under more
stringent underwriting
standards and has hired a new bank
president.
The Company's subsidiary Bank is required to maintain minimum amounts of capital
to total "risk weighted" assets, as defined by the banking regulators. At
September 30, 1997, a comparison of the minimum required, and actual capital
ratios are as follows:
<CAPTION>
To Be Well
For Capital Capitalized Under
Adequacy Prompt Corrective
Actual Purposes Action Provisions
---------------- ---------------- ---------------
Amount Ratio Amount Ratio Amount Ratio
------- ----- ------- ----- ------- -----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
As of June 30, 1997
Total Capital
(to Risk Weighted Assets) ......... $3,915 12.10% $2,589 8% $3,237 10%
Tier 1 Capital
(to Risk Weighted Assets) ......... $3,511 10.85% $1,295 4% $1,942 6%
Tier 1 Capital
(to Average Assets) ................$3,511 8.33% $1,685 4% $2,106 5%
Liquidity and Capital Resources
Liquidity management involves the matching of the cash flow requirements of
customers, either depositors withdrawing funds or funding additional loans, and
the ability of the Bank to meet those requirements. Management monitors and
maintains appropriate levels of assets and liabilities so that maturities of
assets are such that adequate funds are provided to meet estimated customer
withdrawals and loan requests.
PAGE 11
<PAGE>
The Bank's liquidity position depends primarily upon the liquidity of its assets
relative to its need to respond to short-term demand for funds caused by
withdrawals from deposit accounts and loan funding commitments. Primary sources
of liquidity are scheduled payments on its loans and interest on the Bank's
investments. The Bank may also utilize its cash and due from banks, short-term
deposits with financial institutions, federal funds sold and investment
securities to meet liquidity requirements. At September 30, 1997, the Company's
cash and due from banks were approximately $4 million and its federal funds sold
were approximately $1.7 million. All of the above can be converted to cash on
short notice. The sale of investments, which had a market value of approximately
$1.7 million at September 30, 1997, can also be used to meet liquidity
requirements, to the extent the investments are not pledged. At September 30,
1997, the market value of pledged securities was $3.4 million.
The Bank also has the ability, on a short-term basis, to borrow and purchase
federal funds from other financial institutions.
The Bank is a member of the Federal Home Loan Bank of Atlanta and as such has
the ability to secure advances therefrom, although the cost of such advances
exceed lower cost alternatives such as deposits from the local community. The
Bank had advances outstanding of $2,080,000 at September 30, 1997, at an average
rate of 5.75%.
PAGE 12
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security
Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits:
Exhibit No.
27.1 Financial Data Schedule
(B) Reports on Form 8-K:
The Company did file a report on Form 8-K during the quarter ended September 30,
1997. A change in auditors was requested and approved by the Stockholders of the
Corporation.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, there unto duly
authorized.
FNC BANCORP. INC.
------------------
(Registrant)
Date November 14. 1997 By/s/ Bob Cation
----------------- ------------------
Bob Cation Chairman
PAGE 13
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,967,671
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 1,674,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 6,985,516
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<DEPOSITS> 37,781,887
<SHORT-TERM> 2,080,000
<LIABILITIES-OTHER> 509,652
<LONG-TERM> 500,000
0
0
<COMMON> 405,710
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<INTEREST-LOAN> 1,873,984
<INTEREST-INVEST> 409,269
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<INTEREST-DEPOSIT> 1,124,496
<INTEREST-EXPENSE> 1,228,335
<INTEREST-INCOME-NET> 1,177,579
<LOAN-LOSSES> 30,450
<SECURITIES-GAINS> 900
<EXPENSE-OTHER> 1,195,035
<INCOME-PRETAX> 300,213
<INCOME-PRE-EXTRAORDINARY> 197,729
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 197,729
<EPS-PRIMARY> .49
<EPS-DILUTED> .49
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
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<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
