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, 2000.
[ ] 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
incorporation or organization) (I.R.S.Employer Identification No.)
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)
As of April 30, 2000, 620,398 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, 2000 and December 31, 1999
Condensed consolidated statements of income -- 4
Three months ended March 31, 2000 and 1999
Condensed consolidated statements of changes in
Shareholders' equity -- Three months ended March 31, 2000 5
and year ended December 31, 1999
Condensed consolidated statement of cash flows -- 6
Three months ended March 31, 2000 and 1999
Notes to condensed consolidated financial statements-- 7
March 31, 2000 and December 31, 1999
Item 2. Management's Discussion and Analysis of Financial 10
Condition and Results of Operations
PART II OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 16
<PAGE>
FC BANC CORP, INC.
BUCYRUS, OHIO
CONSOLIDATED BALANCE SHEETS
==============================================================================
<TABLE>
<CAPTION>
(Dollars in thousands)
(Unaudited)
At March 31, At December 31,
------------ ---------------
2000 1999
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents:
Cash and amounts due from banks $ 3,290 $ 4,311
Interest-bearing demand deposits in other banks 10 10
------- -------
Total cash and cash equivalents 3,300 4,321
Investment securities, available-for-sale 32,614 34,795
Loans 56,600 55,975
Allowance for loan losses (1,665) (1,732)
------- -------
Net Loans 54,935 54,243
Premises and equipment, net 2,098 2,108
Accrued interest receivable 825 683
Cash surrender value of life insurance 2,400 2,373
Deferred income taxes 639 586
Other assets 131 127
------- -------
TOTAL ASSETS $96,942 $99,236
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing 10,651 11,426
Interest-bearing 73,218 75,533
------- -------
Total deposits 83,869 86,959
Borrowed funds 828 29
Accrued interest payable 152 184
Other liabilities 659 662
------- -------
TOTAL LIABILITIES 85,508 87,834
SHAREHOLDERS' EQUITY
Preferred shares of $25 par value;
750 authorized; none issued 0 0
Common shares, no par value; 4,000,000 shares
authorized; 665,632 shares issued 832 832
Additional paid-in capital 1,366 1,371
Retained earnings 10,923 10,769
Treasury shares, at cost; 43,022 and 43,441 (1,046) (1,047)
Accumulated other comprehensive income (641) (523)
------- -------
TOTAL SHAREHOLDERS' EQUITY 11,434 11,402
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $96,942 $99,236
======= =======
</TABLE>
- -----------------------
See accompanying notes.
<PAGE>
FC BANC CORP, INC.
BUCYRUS, OHIO
CONSOLIDATED STATEMENTS OF INCOME
===============================================================================
<TABLE>
<CAPTION>
(Dollars in thousands)
(Unaudited) (Unaudited)
3 Months Ended 3 Months Ended
March 31, March 31,
--------------- --------------
2000 1999
---- ----
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $1,195 $1,052
Interest and dividends on investment securities 503 508
Interest on federal funds sold 2 21
------ ------
TOTAL INTEREST INCOME 1,700 1,581
INTEREST EXPENSE
Interest on deposits 651 616
Interest on borrowed funds 8 0
------ ------
TOTAL INTEREST EXPENSE 659 616
------ ------
NET INTEREST INCOME 1,041 965
Provision for loan losses (34) (25)
------ ------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,075 990
OTHER INCOME
Service charges 122 110
Life insurance buildup 29 35
Other income 2 11
------ ------
TOTAL OTHER INCOME 153 156
OTHER EXPENSES
Salaries and employee benefits 442 379
Net occupancy and equipment expenses 154 166
Advertising and public relations 14 35
Directors? fees 22 19
Legal and professional 35 37
State taxes 35 40
Supplies 28 25
Other expenses 151 124
------ ------
TOTAL OTHER EXPENSES 881 825
------ ------
NET INCOME BEFORE FEDERAL INCOME TAX EXPENSE 347 321
Federal income tax expense 93 80
------ ------
NET INCOME $ 254 $ 241
====== ======
EARNINGS PER SHARE:
Earnings per common share - basic $0.41 $0.38
Earnings per common share - diluted $0.40 $0.37
_______________________
See accompanying notes.
</TABLE>
<PAGE>
FC BANC CORP, INC.
BUCYRUS, OHIO
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
===============================================================================
<TABLE>
<CAPTION>
(Dollars in thousands)
Number of Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------
Accumu-
lated
other
Additional compre- Compre-
Common Treasury Common paid-in Retained Treasury hensive hensive
stock stock stock capital earnings stock income income
----- ----- ----- ------- -------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1998 665,632 30,703 $832 $1,370 $10,079 $ (685) $ (49)
Comprehensive Income
Net Income 1,075 $1,075
Other comprehensive income, net of tax:
Change in unrealized
gain (loss) on securities
Available-for-sale, net of
Deferred income tax of $237 (474) (474)
------
Total Comprehensive income $ 601
======
Dividends declared-common ($0.61) per shares (385)
Sale of treasury stock (1,000) 1 23
Purchase of 13,738 common shares 13,738 (385)
------- ------ ---- ----- ------ ------ ----
Balances at December 31, 1999 665,632 43,441 832 1,371 10,769 (1,047) (523)
Comprehensive Income
Net Income 254 $ 254
Other comprehensive income
Change in unrealized
gain (loss) on securities
available-for-sale, net of
deferred income tax of $51 (118) (118)
------
Comprehensive income $ 136
======
Dividends declared -($0.16) per share (100)
Sale of treasury stock (2,320) (5) 56
Purchase of common shares 1,901 (55)
------- ------ ---- ------ ------- ------- -----
Balances at March 31, 2000 665,632 43,022 $832 $1,366 $10,923 $(1,046) $(641)
======= ====== ==== ====== ======= ======= =====
</TABLE>
- -----------------------
See accompanying notes.
FC BANC CORP, INC.
BUCYRUS, OHIO
CONSOLIDATED STATEMENTS OF CASH FLOWS
===============================================================================
<TABLE>
<CAPTION>
(Dollars in thousands)
(Unaudited) (Unaudited)
3 Months Ended 3 Months Ended
March 31, March 31,
--------- ---------
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 254 $ 241
Adjustments to reconcile net income to net cash
Provided by operating activities:
Provision for loan losses (34) (25)
Income accrued on life insurance contracts (27) (35)
Depreciation 87 95
Deferred income taxes (2) (1)
Investment securities amortization (accretion), net 24 57
Net change in:
Accrued interest receivable (142) (132)
Accrued interest payable (32) (32)
Other assets (4) (81)
Other liabilities (3) (97)
------ ------
Net cash provided by (used in) operating activities 121 (10)
------ -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities available-for-sale (71) (3,924)
Proceeds from maturities of securities
available-for-sale 2,059 3,535
Net increase in loans (658) (2,072)
Purchase of premises and equipment (77) (267)
Purchase of life insurance contracts 0 (505)
Net cash provided by (used in)
investing activities 1,253 (3,233)
------ -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in:
Noninterest-bearing, interest bearing,
demand, and savings deposits (2,656) (2,185)
Certificates of deposit (434) 932
Net increase in short-term borrowed funds 799 0
Exercise of stock options 51 0
Purchase of treasury stock (54) (36)
Cash dividends paid (100) 0
------ ------
Net cash used in financing activities (2,395) (1,289)
------ ------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,021) (4,532)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,321 7,469
------ ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,300 $ 2,937
======= =======
SUPPLEMENTAL DISCLOSURES
Cash paid during the year for interest $691 $648
Cash paid during the year for income taxes 59 171
</TABLE>
_______________________
See accompanying notes.
<PAGE>
FC BANC CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000, and December 31,1999
(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 position as of March 31,
2000, and December 31, 1999, and the results of operations for the three
months ended March 31, 2000 and 1999, and the cash flows for the three months
ended March 31, 1999 and 2000. 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, 2000, 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,
2000 1999
---- ----
<S> <C> <C>
Balance, beginning of period $1,732 $1,725
Provision for loan losses (34) (130)
Recoveries 6 205
Charge-offs (39) (68)
------ ------
Balance, end of period $1,665 $1,732
====== ======
</TABLE>
<PAGE>
NOTE 3. REGULATORY CAPITAL
The following table illustrates the compliance by the Bank with currently
applicable regulatory capital requirements at March 31, 2000.
<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
(To Risk-Weighted Assets) $12,552 21.10% $4,759 8.00% $5,949 10.00%
Tier I Capital
(To Risk-Weighted Assets) 11,797 19.83% 2,380 4.00% 3,569 6.00%
Tier I Capital
(To Total Assets) 11,797 12.17% 3,878 4.00% 4,847 5.00%
Tangible Capital
(To Total Assets) 11,797 12.17% 3,878 4.00% N/A N/A
</TABLE>
NOTE 4. EARNINGS PER SHARE
Earnings per share ("EPS") is computed in accordance with Statement of
Fincial 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 Three Months Ended March 31, 2000
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Basic EPS
Income available to
common shareholders $253,715 623,079 $0.41
Effect of dilutive securities:
None 9,758 ($0.01)
------- ------
Diluted EPS Income available to
common shareholders +
assumed conversions $253,715 632,837 $0.40
======== ======= ======
NOTE 5. 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.
<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
that consists of attracting deposits from the general public and 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 that 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 Bank
can be significantly influenced by a number of environmental factors, such
as environmental factors, such as governmental monetary 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 periods
ended March 31, 2000 and 1999.
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.
In May 2000 the Bank will open its newest banking center in Fredericktown,
Ohio. The Bank will then have five banking offices located in Crawford, Morrow
and Knox Counties, Ohio. The primary market area of the Bank is North Central
Ohio that includes Crawford, Morrow, Knox and contiguous counties.
The Bank continues to focus on providing First*Class Banking (TM) to its
customers. In April, 2000 the Bank introduced Phone*Access Banking (TM)
(1-877-562-4FCB) that allows customers to access their bank account
information 24 hours a day.
Also, the Bank has engaged FundsExpress to assist in the development of
internet banking products that will offer new and existing customers a
hometown banking experience while utilizing the latest in banking technology.
In addition, the Bank's board of directors approved the demolition and
reconstruction of our Main Office located at 105 Washington Square, Bucyrus,
Ohio. The work should begin sometime during the third or fourth quarter of
2000 and be completed in 2001. This project will allow the Bank to modernize
its existing banking facility and improve upon current operating efficiencies.
Changes in Financial Condition
At March 31, 2000, the consolidated assets of the Company totaled $96.9
million, a decrease of $2.3 million, or 2.31%, from $99.2 million at December
31, 1999. The decrease in total assets resulted primarily from a $3.1 million
decrease in deposits.
Net loans receivable increased by $0.7 million, or 1.28%, to $54.9
million at March 31, 2000, compared to $54.2 million at December 31, 1999.
Loans secured by real estate and consumer loans increased $1.0 million and
$0.2 million, respectively. Somewhat offsetting these increases was a decline
in Commercial loans of $0.5 million. Growth in residential real estate loans
has slowed as compared to 1999 due to the rise in mortgage lending rates and
the resignation of a Bank lending officer in December 1999. The decline in
commercial loans resulted primarily from reductions in agricultural operating
lines of credit that will be drawn upon in the second quarter of 2000.
Investment securities declined by $2.2 million, or 6.27% to $32.6 million
at March 31, 2000, compared to $34.8 million at December 31, 1999. The decline
was used to fund loan growth and other operations of the Bank.
Cash and amounts due from banks declined by $1.0 million to $3.3 million
at March 31, 2000, compared to $4.3 million at December 31, 1999. The decline
was attributable to the reduction of cash reserves that were set aside for
potential problems related to the Year 2000 ("Y2K"). The Bank did not
experience any losses related to Y2K, therefore $1.0 million was reinvested
into earning assets in January 2000.
Deposit liabilities decreased by $3.1 million, or 3.55%, to $83.9 million
at March 31, 2000, from $87.0 million at December 31, 1999. The decline was
attributable to the loss of public funds and disbursement of funds from the
settlement of a significant estate. Money market, savings and certificates of
deposit balances declined by $1.4 million, $0.9 million and $0.5 million,
respectively. From time to time the Bank's Asset/Liability management
committee will allow certain high yielding deposits to leave the Bank (For
further explanation see the last two paragraphs of this section).
Total shareholders' equity remained at $11.4 million at March 31, 2000 as
compared to December 31, 1999. During the firs three months of 2000 the Bank
earned net income of $0.2 million that was offset by the payment of dividends
of $0.1 million and the reduction of other comprehensive income (unrealized
losses on securities available for sale) of $0.1 million.
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 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.
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 banks.
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 weighing, 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, 2000, that the Bank meets all of the
capital adequacy requirements to which it is subject.
As of December 31, 1999, 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 3 - 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, 2000, FC Banc Corp. had approximately $254,000 in commitments
for capital expenditures.
Results of Operations
Comparison of Three Months Ended March 31, 2000 and 1999
General. Net income increased during the first quarter of 2000
as compared to the same three-month period ended March 31, 1999. Net
income amounted to $254 thousand versus $241 thousand, an increase of $13
thousand, or 5.39%. The increase was primarily attributed to an increase in
net interest income and a negative provision for possible loan losses. The
increase was partially offset by increases in salary and benefits, and other
general operating expenses.
Interest Income. The increase in average earning assets was the primary
contributing factor to the increase in net interest income of $76 thousand, or
7.88%, for the three months ended March 31, 2000 compared to 1999. Loan
interest and fee income increased by $143 thousand resulting primarily from
an increase in loans receivable. Loans receivable as of March 31, 2000 were
$56.6 million up $8.9 million as compared to March 31, 1999. The Bank
increased its loan to deposit ratio from 59.58% at March 31, 1999 to 67.42% at
March 31, 2000. The growth in loans was partially off-set by a $19 thousand
decrease in income from federal funds sold and an increase of $43 thousand in
interest expense.
Interest Expense. Interest expense on deposit liabilities increased by $35
thousand, or 5.68% for the three months ended March 31, 2000, as compared to
the same period in 1999. Total deposits increased by $3.8 million comparing
March 31, 2000, to 1999. In addition, short-term borrowings increased by $828
thousand at March 31, 2000 as compare to March 31, 1999. During the first
quarter of 1999 to the first quarter of 2000 the average Fed Funds rate
increased from 4.73% to 5.68% or 95 basis points. The Bank's average cost of
funds (including short-term borrowings) for the first three months of 2000 was
3.15%, as compared to 3.11% for the same period in 1999.
Provision for Loan Losses. The Bank recorded net chargeoffs of $33
thousand during the three months ended March 31, 2000, compared to net
recoveries of $2 thousand during the same period in 1999. However, in early
April the Bank recovered $39 thousand on loans charged off in March 2000.
Based upon continued strong credit quality the Bank recorded a negative
provision for loan losses during the first quarter in 2000 of $34 thousand
as compared to a negative provision of $25 thousand for the first quarter of
1999. The negative 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 declined by $3 thousand, or
1.92%, to $153 thousand for the three months ended March 31, 2000, from $156
thousand for the three months ended March 31, 1999. The decline was primarily
attributable to a reduction in cash surrender values of $6 thousand for former
key executives and a reduction of $5 thousand in rental property income. No
security gains or losses were recognized for the periods of March 31, 2000 and
1999.
Non-Interest Expense. Non-interest expense increased by $56 thousand, or
6.79%%, to $881 thousand for the three months ended March 31, 2000, from $825
thousand in the comparable period in 1999. Of this $63 thousand was
attributable to an increase in compensation and benefit expense in 2000,
reflecting increased personnel costs for staffing the Bank's new Fredericktown
office (scheduled to open in May 2000), hiring of a Vice President, and
nominal salary and benefit adjustments. The non-interest expense to revenue
ratio ("NIE/Revenue") measured 73.79% and 73.60% for the three months ended
March 31, 2000 and 1999, respectively. The NIE/Revenue ratio reflects the
investment costs associated with upgrading the Bank's infrastructure as it
expands into new markets.
Income Taxes. The provision for income taxes increased by $13 thousand
for the three months ended March 31, 2000, compared with the prior year,
primarily as a result of higher taxable income for the quarter.
<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 22, 2000, the Corporation held its Annual Meeting of
Shareholders. Each of the three directors nominated were elected to
terms of three (3) years expiring in 2003 by the following votes:
David G. Dostal For: 406,517 Withheld: 2,755
------- -----
Robert D. Hord For: 407,025 Withheld: 2,257
------- -----
Joan C. Stemen For: 406,801 Withheld: 2,481
------- -----
Two other matters were submitted to the shareholders, for which the
following votes were cast:
2. Approval of Patrick J. Drouhard to serve on the Board of Directors
on an interim basis to fill the vacancy created by the December
31, 1999 resignation of James P. Pigman:
For: 403,962 Against: 5,320
------- -----
3. Ratification of the selection of Robb, Dixon, Francis, Davis, &
Company as the auditors of FC Banc Corp. for the current year:
For: 393,762 Against: 461 Abstain: 15,059
_______ ___ ______
<PAGE>
ITEM 5 - OTHER INFORMATION
Not Applicable
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
1. Exhibit 27: Financial Data Schedule
2. A report on Form 8-K was filed on January 13, 2000
announcing the resignation of Director Pigman.
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, hereunto duly authorized.
FC BANC CORP.
May 12, 2000 /s/ G. W. Holden
- -------------------------------- --------------------------------
Date G. W. Holden
President and
Chief Executive Officer
May 12, 2000 /s/ Jeffrey Wise
- ------------------------------- --------------------------------
Date Jeffrey Wise
Principal Financial Officer
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
The schedule contains summary financial information extracted from the
Consolidated Balance Sheets as of March 31, 2000, and December 31, 1999, and the
related Consolidated Statement os Income for the three months ended March 31,
2000 and 1999, 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-31-1999
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 3,290
<INT-BEARING-DEPOSITS> 10
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 32,614
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 56,600
<ALLOWANCE> 1,665
<TOTAL-ASSETS> 96,942
<DEPOSITS> 83,869
<SHORT-TERM> 828
<LIABILITIES-OTHER> 811
<LONG-TERM> 0
832
0
<COMMON> 0
<OTHER-SE> 10,602
<TOTAL-LIABILITIES-AND-EQUITY> 96,942
<INTEREST-LOAN> 1,195
<INTEREST-INVEST> 503
<INTEREST-OTHER> 2
<INTEREST-TOTAL> 1,700
<INTEREST-DEPOSIT> 651
<INTEREST-EXPENSE> 659
<INTEREST-INCOME-NET> 1,041
<LOAN-LOSSES> (34)
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 881
<INCOME-PRETAX> 347
<INCOME-PRE-EXTRAORDINARY> 254
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 254
<EPS-BASIC> 0.41
<EPS-DILUTED> 0.40
<YIELD-ACTUAL> 470
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,732
<CHARGE-OFFS> 39
<RECOVERIES> 6
<ALLOWANCE-CLOSE> 1,665
<ALLOWANCE-DOMESTIC> 1,665
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 70
</TABLE>
