U.S. 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, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
__________ TO __________
Commission file number - 33-53596
FC BANC CORP.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
OHIO 34-1718070
----------------------------- ----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Farmers Citizens Bank Building,
105 Washington Square
Box 567, Bucyrus, Ohio 44820-0567
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(419) 562-7040
-------------------------
(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
--- ---
As of April 30, 1998, 321,163 shares of Common Stock of the Registrant were
outstanding. There were no preferred shares outstanding.
<PAGE>
FC BANC CORP.
BUCYRUS, OHIO
FORM 10-QSB
INDEX
================================================================================
Page Number
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets -- 3
March 31, 1998 and December 31, 1997
Condensed consolidated statements of income and 4
comprehensive income -- Three months ended
March 31, 1998 and 1997
Condensed consolidated statement of cash flows -- 5
Three months ended March 31, 1998 and 1997
Notes to condensed consolidated financial 6
statements -- March 31, 1998, 1997 and December 31, 1997
Item 2. Management's Discussion and Analysis of Financial 10
Condition and Results of Operations
PART II OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
<PAGE>
<TABLE>
<CAPTION>
FC BANC CORP.
Bucyrus, Ohio
CONSOLIDATED BALANCE SHEETS
===============================================================================================
(Dollars in thousands)
(Unaudited) (Unaudited)
March 31, December 31,
1998 1997
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents
Cash and due from banks $ 3,995 $ 3,566
Interest-bearing demand deposits 0 1
Federal funds sold 1,400 0
------- -------
Total cash and cash equivalents 5,395 3,567
Investment securities, available-for-sale 37,053 32,460
Loans (net of unearned interest) 41,855 40,029
Less: allowance for loan losses (1,582) (1,480)
------- -------
Net loans 40,273 38,549
Premises and equipment 1,387 1,416
Accrued income receivable 727 733
Cash surrender value of life insurance 1,487 1,470
Deferred income taxes 430 285
Other assets 307 148
------- -------
TOTAL ASSETS $87,059 $78,628
======= =======
LIABILITIES
Deposits
Demand deposits $ 9,807 $ 9,708
Now accounts 12,377 9,509
Savings accounts 21,595 19,583
Time deposits of $100,000 or more 1,147 1,135
Other time deposits 29,687 26,157
------- -------
Total deposits 74,613 66,092
Federal funds purchased and securities sold
under agreement to repurchase 0 600
Other borrowed funds 41 41
Accrued interest payable 172 181
Accrued federal income taxes 318 59
Other liabilities 500 460
------- -------
TOTAL LIABILITIES 75,644 67,433
------- -------
SHAREHOLDERS' EQUITY
Preferred stock ( $25.00 par value) 750 shares authorized,
no shares issued 0 0
Common stock (no par value) 1,000,000 shares authorized;
332,816 shares issued 832 832
Additional paid-in capital 1,370 1,377
Retained earnings 9,680 9,461
Treasury stock, at cost: 11,653 and 11,628 shares (485) (491)
Accumulated other comprehensive income 18 16
------- -------
TOTAL SHAREHOLDERS' EQUITY 11,415 11,195
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $87,059 $78,628
======= =======
- -----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
FC BANC CORP.
Bucyrus, Ohio
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
===============================================================================================
(Dollars in thousands, except per share)
(Unaudited)
3 Months Ended
March 31,
1998 1997
---- ----
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 982 $ 916
Interest on investment securities:
Taxable 404 370
Exempt from federal income tax 79 75
Interest on federal funds sold 29 10
------ ------
TOTAL INTEREST INCOME 1,494 1,371
------ ------
INTEREST EXPENSE
Interest on interest-bearing demand accounts 66 61
Interest on savings accounts 155 145
Interest on certificates of deposit 383 314
Interest on federal funds purchased and securities sold
under agreement to repurchase 0 2
------ ------
TOTAL INTEREST EXPENSE 604 522
------ ------
NET INTEREST INCOME 890 849
Provision for loan losses 0 20
------ ------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSS 890 829
NON-INTEREST INCOME
Service charges on deposit accounts 93 80
Other service charges 8 2
Safe/night deposit 6 7
Investment security gains 4 0
Other income 20 14
------ ------
TOTAL NON-INTEREST INCOME 131 103
------ ------
NON-INTEREST EXPENSE
Salaries and benefits 331 278
Net occupancy and equipment expense 138 146
FDIC deposit insurance expense 2 7
State and other taxes 40 41
Other expense 223 223
------ ------
TOTAL NON-INTEREST EXPENSE 734 695
------ ------
NET INCOME BEFORE FEDERAL INCOME
TAX EXPENSE 287 237
Federal income tax expense 68 52
------ ------
NET INCOME 219 185
Other comprehensive income 2 (80)
------ ------
TOTAL COMPREHENSIVE NCOME $ 221 $ 105
====== ======
PER SHARE DATA:
Basic net income $ 0.68 $ 0.57
Diluted net income 0.66 0.57
- -----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
FC BANC CORP.
Bucyrus, Ohio
CONSOLIDATED STATEMENTS OF CASH FLOWS
===============================================================================================
(Dollars in thousands)
(Unaudited) (Unaudited)
3 Months Ended 3 Months Ended
March 31, March 31,
1998 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 219 $ 185
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 69 67
Provision for loan losses 0 20
Provision for deferred taxes (20) 0
Gain (loss) on sale of investments (4) 0
Income accrued on life insurance contracts (17) 17
Amortization/Accretion - net 3 16
Changes in operating assets and liabilities:
Increase in other assets (178) (75)
Increase(decrease) in taxes payable 279 (10)
Decrease in accrued income receivable 6 91
Decrease in accrued interest payable (10) (31)
Increase in other liabilities 38 1
------- -------
Total adjustments 166 96
------- -------
Net cash provided by operating activities 385 281
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of available-for-sale securities 496 1,805
Purchase of available-for-sale securities (8,602) 0
Net change in loans (1,845) 1,299
Proceeds from sale of available-for-sale securities 3,514 0
Purchase of premises and equipment (40) (29)
------- -------
Net cash used in investing activities (6,477) 3,075
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in demand and savings deposits 4,979 (3,275)
Net increase in certificates of deposit 3,542 241
Net decrease in short-term borrowings (600) 0
Purchase of treasury stock (1) 0
------- -------
Net cash provided by financing activities 7,920 (3,034)
------- -------
Net increase in cash and cash equivalents 1,828 322
Cash and cash equivalents at beginning of period 3,567 5,057
------- -------
Cash and cash equivalents at end of period $ 5,395 $ 5,379
======= =======
SUPPLEMENTAL INFORMATION:
Cash paid for:
Interest $ 614 $ 553
Net income taxes (190) 62
- -----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
FC BANC CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998 and December 31,1997
(Unaudited)
================================================================================
NOTE 1. BASIS OF PRESENTATION
In the opinion of Management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary for a fair presentation
of FC Banc Corp.'s ("Company" or "Bancorp") financial condition as of March
31, 1998, and December 31, 1997, and the results of operations for the three
months ended March 31, 1998 and 1997, and the cash flows for the three months
ended March 31, 1998 and 1997. Certain information and note disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been omitted pursuant to the
rules and regulations of the Securities and Exchange Commission. It is
suggested that these consolidated financial statements be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-KSB. The results of operations for the
three months ended March 31, 1998, are not necessarily indicative of the
results which may be expected for the entire fiscal year.
NOTE 2. ALLOWANCE FOR LOAN LOSSES
Activity in the allowance for loan losses is summarized as follows:
<TABLE>
<CAPTION>
(Dollars in thousands)
Three months ended Year ended
March 31, December 31,
1998 1997
---- ----
<S> <C> <C>
Balance, beginning of period $1,480 $1,263
Provision for loan losses 0 27
Charge-offs (18) (418)
Recoveries 120 608
------ ------
Balance, end of period $1,582 $1,480
====== ======
</TABLE>
6
<PAGE>
NOTE 3. REGULATORY CAPITAL
The following table illustrates the compliance by the Bank with currently
applicable regulatory capital requirements at March 31, 1998.
<TABLE>
<CAPTION>
(Dollars in thousands)
Categorized as "Well
Capitalized" Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
----------------- ----------------- -----------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Total Risk-Based Capital $11,931 24.17% $ 3,948 8.0% $ 4,936 10.0%
(To Risk-Weighted Assets)
Tier I Capital 11,302 22.90% 1,974 4.0% 2,961 6.0%
(To Risk-Weighted Assets)
Tier I Capital 11,302 13.80% 3,275 4.0% 4,094 5.0%
(To Total Assets)
Tangible Capital 11,302 13.80% 3,275 4.0% N/A N/A
(To Total Assets)
</TABLE>
NOTE 4. EARNINGS PER SHARE
Earnings per share ("EPS") is computed in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share," which
was adopted by the Company as of December 31, 1997. Common stock equivalents
include shares granted under the Stock Option Plan ("SOP"). Following is a
reconciliation of the numerators and denominators of the basic and diluted EPS
calculations.
<TABLE>
<CAPTION>
For the Quarter Ended March 31, 1998
----------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Basic EPS
Income available to
common shareholders $219,365 321,181 $0.68
=====
Effect of dilutive securities:
None 0 11,205
-------- -------
Diluted EPS
Income available to
common shareholders +
assumed conversions $219,365 332,386 $0.66
======== ======= =====
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
For the Quarter Ended March 31, 1997
---------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Basic EPS
Income available to
common shareholders $184,524 321,188 $0.57
=====
Effect of dilutive securities:
None 0 0
-------- -------
Diluted EPS
Income available to
common shareholders +
assumed conversions $184,524 321,181 $0.57
======== ======= =====
</TABLE>
NOTE 5. COMPREHENSIVE INCOME
The Company adopted SFAS No. 130, "Reporting Comprehensive Income", effective
January 1, 1998, which establishes standards for reporting comprehensive
income and its components (revenues, expenses, gains and losses). Components
of comprehensive income are net income and all other non-owner changes in
equity. SFAS No. 130 requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and (b) display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement
of financial position. Reclassification of financial statements for earlier
periods provided for comparative purposes is required.
The Company has chosen to disclose comprehensive income. Components of
comprehensive income are displayed net of income taxes. The following table
sets forth the related tax effects allocated to each element of comprehensive
income for the three months ended March 31, 1998 and 1997:
<TABLE>
<CAPTION>
(Dollars in thousands)
Three months ended March 31, 1998
-------------------------------------
Tax
Before-Tax (Expense) Net-of-Tax
Amount or Benefit Amount
------ ---------- ------
<S> <C> <C> <C>
Unrealized gains (losses) on securities:
Unrealized holding gains (losses)
arising during period $ 7 $ (2) $ 5
Less: reclassification adjustment
for (gains) losses realized in
net income (4) 1 (3)
------ ------ ------
Net unrealized gains (losses) 3 (1) 2
------ ------ ------
Other comprehensive income $ 3 $ (1) $ 2
====== ====== ======
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
(Dollars in thousands)
Three months ended March 31, 1997
--------------------------------------
Tax
Before-Tax (Expense) Net-of-Tax
Amount or Benefit Amount
------ ---------- ------
<S> <C> <C> <C>
Unrealized gains (losses) on securities:
Unrealized holding gains (losses)
arising during period $ (120) $ 40 $ (80)
Less: reclassification adjustment
for (gains) losses realized in
net income 0 0 0
------ ------ ------
Net unrealized gains (losses) (120) 40 (80)
------ ------ ------
Other comprehensive income $ (120) $ 40 $ (80)
====== ====== ======
</TABLE>
The following table sets forth the components of accumulated other
comprehensive income for the three months ended March 31, 1998 and 1997:
<TABLE>
<CAPTION>
(Dollars in thousands)
Three months ended
March 31,
---------
1998 1997
---- ----
<S> <C> <C>
Beginning balance $ 16 $ (164)
Unrealized gains (losses) on securities, net 2 (80)
------ ------
Ending balance $ 18 $ (244)
====== ======
</TABLE>
NOTE 6. RECLASSIFICATIONS
Certain amounts in the prior period's financial statements have been
reclassified to be consistent with the current period's presentation. The
reclassifications have no effect on net income.
9
<PAGE>
FC BANC CORP.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
================================================================================
Safe Harbor Clause
This report contains certain "forward-looking statements." The Company
desires to take advantage of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995 and is including this statement for
the express purpose of availing itself of the protection of such safe harbor
with respect to all such forward-looking statements. These forward-looking
statements, which are included in Management's Discussion and Analysis,
describe future plans or strategies and include the Company's expectations of
future financial results. The words "believe," "expect," "anticipate,"
"estimate," "project," and similar expressions identify forward-looking
statements. The Company's ability to predict results or the effect of future
plans or strategies is inherently uncertain. Factors which could affect
actual results include interest rate trends, the general economic climate in
the Company's market area and the country as a whole, loan delinquency rates,
and changes in federal and state regulations. These factors should be
considered in evaluating the forward-looking statements, and undue reliance
should not be placed on such statements.
General
The Company is a bank holding company whose activities are primarily
limited to holding the stock of The Farmers Citizens Bank, Bucyrus, Ohio,
("Bank"). The Bank conducts a general banking business in northwest Ohio
which consists of attracting deposits from the ge applying those funds to the
origination of loans for residential, consumer and non-residential purposes.
The Bank's profitability is significantly dependent on net interest income which
is the difference between interest income generated from interest-earning assets
(i.e., loans and investments) and the interest expense paid on interest-bearing
liabilities (i.e., customer deposits and borrowed funds). Net interest income
is affected by the relative amount of interest-earning assets and interest-
bearing liabilities and interest received or paid on these balances. The level
of interest rates paid or received by the Company can be significantly
influenced by a number of enviromental factors, such as governmental montary
policy, that are outside of management control.
Earnings per common share were computed by dividing net income by the
weighted-average number of shares outstanding for the three-month period ended
March 31, 1998.
The consolidated financial information presented herein has been prepared
in accordance with generally accepted accounting principles ("GAAP") and
general accounting practices within the financial services industry. In
preparing consolidated financial statements in accordance with GAAP,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues
and expenses during the reporting period. Actual results could differ from
such estimates.
The Company is subject to regulation by the Board of Governors of the
Federal Reserve System which limits the activities in which the Company and
the Bank may engage. The Bank is supervised by the State of Ohio, Division of
Financial Institutions and its deposits are insured up to applicable limits
under the Bank Insurance Fund ("BIF") of the Federal Deposit Insurance
Corporation ("FDIC"). The Bank is a member of the Federal Reserve System and
is subject to its supervision. The Company and the Bank must file with the
U.S. Securities and Exchange Commission, the Federal Reserve Board and Ohio
Division of Financial Institutions the prescribed periodic reports containing
full and accurate statements of its affairs.
The Bank conducts its business through its three offices located in
Crawford and Morrow Counties, Ohio. The primary market area of the Bank is
Crawford and Morrow and contiguous counties in northwest central Ohio.
10
<PAGE>
Recently Issued Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board ("FASB") also
issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information." SFAS No. 131 redefines how operating segments are determined
and requires disclosure of certain financial and descriptive information about
the Company's operating segments. This statement supercedes SFAS No. 14,
"Financial Reporting for Segments of Business Enterprises." The new standard
becomes effective for years beginning after December 15, 1997, and requires
that comparative information from earlier periods be restated to conform to
the requirements of this standard. The adoption of this statement is not
expected to be material to the Company.
Changes in Financial Condition
At March 31, 1998, the consolidated assets of the Company totaled $87.1
million, an increase of $8.4 million, or 10.72%, from $78.6 million at
December 31, 1997. The increase in total assets was primarily the result of
an $8.5 million increase in deposits which were utilized to fund a net
increase of $4.6 million in investments and $1.7 million in loan growth. The
remainder of the funds were invested in federal funds sold and other
short-term interest-bearing deposits.
Net loans receivable increased by $1.7 million, or 4.47%, to $40.3
million at March 31, 1998, compared to $38.5 million at December 31, 1997.
The increase was primarily in the real estate related loan portfolio where the
new loan demand continued to exceed loan repayments.
Investment securities increased $4.6 million, or 14.15%, from $32.5
million at December 31, 1997, to $37.1 million at March 31, 1998. The
increase was primarily the result of rapid deposit growth realized from the
opening of the Cardington, Ohio branch office which is a part of the Company's
strategy to expand their market presence and customer base.
A portion of the funds received from the deposit increases were
temporally invested in federal funds which increased to $1.4 million at March
31, 1998.
Deposit liabilities increased $8.5 million, or 12.89%, from $66.1 million
at December 31, 1997, to $74.6 million at March 31, 1998. Management
attributes the majority of the increase to the expansion of the banking
operation while maintaining a competitive rate structure in the market area.
Interest credited on accounts also contributed to the increase.
Total shareholders' equity increased $220,000, or 1.97%, from $11.2
million at December 31, 1997, to $11.4 million at March 31, 1998. This
increase was primarily the result of $219,000 in earnings for the first
quarter and a $2,000 increase in the unrealized gains on securities
available-for-sale during the three months ended March 31, 1998.
The Bank's liquidity, primarily represented by cash and cash equivalents,
is a result of its operating, investing and financing activities. Principal
sources of funds are deposits, loan and mortgage-backed security repayments,
maturities of securities and other funds provided by operations. The Bank
also has the ability to borrow from the Federal Home Bank of Cincinnati
("FHLB") as well as the Federal Reserve Bank of Cleveland ("FRB"or "Fed").
While scheduled loan repayments and maturing investments are relatively
predictable, deposit flows and early loan and mortgage-backed security
prepayments are more influenced by interest rates, general economic conditions
and competition. The Bank maintains investments in liquid assets based upon
management's assessment of (i) the need for funds, (ii) expected deposit flows,
(iii) the yields available on short-term liquid assets and (iv) the objectives
of the asset/liability management program. In the ordinary course of
business, part of such liquid investments portfolio is composed of deposits
at correspondent banks. Although the amount on deposit at such banks often
exceeds the $100,000 limit covered by FDIC insurance, the Bank monitors the
capital of such institutions to ensure that such deposits do not expose the
Bank to undue risk of loss.
11
<PAGE>
The Asset/Liability Management Committee of the Bank is responsible for
liquidity management. This committee, which is comprised of various managers,
has an Asset/Liability Policy that covers all assets and liabilities, as well
as off-balance sheet items that are potential sources and uses of liquidity.
The Bank's liquidity management objective is to maintain the ability to meet
commitments to fund loans and to purchase securities, as well as to repay
deposits and other liabilities in accordance with their terms. The Bank's
overall approach to liquidity management is to ensure that sources of
liquidity are sufficient in amounts and diversity to accommodate changes in
loan demand and deposit fluctuations without a material adverse impact on net
income. The Committee monitors the Bank's liquidity needs on an ongoing
basis. Currently the Bank has several sources available for both short- and
long-term liquidity needs. These include, but are not restricted to advances
from the FHLB, Federal Funds and borrowings from the Fed and other
correspondent banking arrangements.
The Bank is subject to various regulatory capital requirements
administered by its primary federal regulator, the FRB. Failure to meet
minimum capital requirements can initiate certain mandatory, and possible
additional discretionary actions by regulators that, if undertaken, could have
a material affect on the Company and the consolidated financial statements.
Under the regulatory capital adequacy guidelines and the regulatory framework
for prompt corrective action, the Bank must meet specific capital guidelines
that involve quantitative measures of the Bank's assets, liabilities, and
certain off-balance-sheet items as calculated under regulatory accounting
practices. The Bank's capital amounts and classification under the prompt
corrective action guidelines are also subject to qualitative judgements by
the regulators about components, risk weightings, and other factors.
Qualitative measures established by the regulation to ensure capital
adequacy requires the Bank to maintain minimum amounts and ratios of: total
risk-based capital and Tier I capital to risk-weighted assets (as defined by
the regulations), and Tier I capital to average assets (as defined).
Management believes, as of March 31, 1998, that the Bank meets all of the
capital adequacy requirements to which it is subject.
As of December 31, 1997, the most recent notification from the FDIC, the
Bank was categorized as well capitalized under the regulatory framework for
prompt corrective action. To remain categorized as well capitalized, the Bank
will have to maintain minimum total risk-based, Tier I risk-based, and Tier I
leverage ratios as disclosed in Note 4 - Regulatory Capital. There are no
conditions or events since the most recent notification that management
believes have changed the Bank's prompt corrective action category.
At March 31, 1998, FC Banc Corp. had no material commitments for capital
expenditures.
Results of Operations
Comparison of Three Months Ended March 31, 1998 and 1997
General. Net income is continuing to increase at a steady pace during
the first three months of 1998, $219,000, as compared to the same three month
period ended March 31, 1997, $185,000, an increase of $34,000. This increase
was primarily attributed to an increase in net interest income, the absence of
a provision for loan losses coupled increases in other non-interest income. A
portion of the increase was off-set by an increase in non-interest expense.
Interest Income. The rapid increase in average earning assets
contributed to an increase in interest income of $123,000, or 8.97%, for the
three months ended March 31, 1998 compared to 1997. The increase was
attributed to the additional loan interest and fee income of $66,000 resulting
primarily from an increase in loans receivable and a $38,000 increase in
investment income as well as the $19,000 increase in income from federal funds
sold. These increases were off-set by the $82,000 increase in interest
expense.
12
<PAGE>
Interest Expense. Interest expense on deposit liabilities increased
$82,000 for the three months ended March 31, 1998, as compared to the same
period in 1997. Total deposits increased by $8.5 million comparing March 31,
1998 to 1997, the average cost of funds over the past twelve months was 3.58%
with a gradual decline being noted during the last three months to 3.53% . The
Federal Funds purchased that were outstanding at December were repaid during
the quarter.
Provision for Loan Losses. There were no provisions for loan losses and
there were net recoveries of $102,000 during the three months ended March 31,
1998, compared to a provision of $20,000 and net charge-offs of $28,000,
during the same period ending March 31, 1997. The absence of a provision was
based upon the results of the ongoing loan reviews and composition of the loan
portfolio, primarily loans secured by one- to four-family residential
properties and other forms of collateral, which are considered to have less
risk.
Non-Interest Income. Non-interest income increased $28,000, or 27.18%,
to $131,000 for the three months ended March 31, 1998, from $103,000 for the
three months ended March 31, 1997. The increase was primarily attributable to
a $13,000 increase in service charges on deposit accounts and $6,000 increase
in other service charges. There were $4,000 in gains recognized on the sale of
several available-for-sale investment securities during the period ended March
31, 1998.
Non-Interest Expense. Non-interest expense increased $39,000, or 5.61%,
to $734,000 for the three months ended March 31, 1998, from $695,000 in the
comparable period in 1997. Of this increase, $53,000 was attributable to an
increase in compensation and benefit expense in 1998, reflecting normal salary
benefit adjustments. Net occupancy and equipment expense decreased $8,000, or
17.39%, to $138,000 for the first three months ended March 31, 1998 as
compared to the same period in 1997. The ratio of non-interest expense to
average total assets was 3.59% and 3.56% for the three months ended March 31,
1998 and 1997, respectively.
Income Taxes. The provision for income taxes increased $16,000 for the
three months ended March 31, 1998, compared with the prior year, primarily as
a result of higher taxable income for the quarter.
13
<PAGE>
FC BANC CORP.
PART II - OTHER INFORMATION
================================================================================
ITEM 1 - LEGAL PROCEEDINGS
Not Applicable
ITEM 2 - CHANGES IN SECURITIES
Not Applicable
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On March 25, 1998, the Company held its Annual Meeting
of Shareholders.
Each of the three directors nominated were elected to terms
expiring in 2001 by the following votes:
Terry L. Gernert For: 196,829 Withheld: 25,565
G.W. Holden For: 219,287 Withheld: 3,107
John O. Spreng, Jr. For: 219,143 Withheld: 3,251
One other matter was submitted to the shareholders, for which
the following votes were cast:
1. Ratification of the selection of Robb, Dixon, Francis,
Davis, Oneson & Company as the auditors of the Company
for the current fiscal year:
For: 213,648 Against: 0 Abstain: 8,746
ITEM 5 - OTHER INFORMATION
Not Applicable
14
<PAGE>
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibit 27: Financial Data Schedule
b. Report on Form 8-K - press release date March 25, 1998
announcing the share repurchase program.
15
<PAGE>
SIGNATURES
In accordance with 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.
FC BANC CORP.
Date May 15, 1998 /s/ G. W. Holden
-------------------------- -----------------------
G. W. Holden
President and Chief Executive Officer
Date May 15, 1998 /s/ Jeffrey Wise
-------------------------- -----------------------
Jeffrey Wise
Principal Financial Officer
16
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
The schedule contains summary financial information extracted from the
Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997, and the
related Consolidated Statements of Income and Comprehensive Income for the three
months ended March 31, 1998 and 1997, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000893539
<NAME> FC BANC CORP.
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 3,995
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 1,400
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 37,053
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 41,855
<ALLOWANCE> 1,582
<TOTAL-ASSETS> 87,059
<DEPOSITS> 74,613
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,031
<LONG-TERM> 0
0
0
<COMMON> 832
<OTHER-SE> 10,583
<TOTAL-LIABILITIES-AND-EQUITY> 87,059
<INTEREST-LOAN> 982
<INTEREST-INVEST> 483
<INTEREST-OTHER> 29
<INTEREST-TOTAL> 1,494
<INTEREST-DEPOSIT> 604
<INTEREST-EXPENSE> 604
<INTEREST-INCOME-NET> 890
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 4
<EXPENSE-OTHER> 734
<INCOME-PRETAX> 287
<INCOME-PRE-EXTRAORDINARY> 219
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 219
<EPS-PRIMARY> 0.68
<EPS-DILUTED> 0.66
<YIELD-ACTUAL> 4.51
<LOANS-NON> 0
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<ALLOWANCE-OPEN> 1,480
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</TABLE>
