Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[x]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number: 33-58832
FIRST CENTRAL BANCSHARES, INC.
(Exact name of small business issue as specified in its charte
r)
Tennessee
(State or other jurisdiction of incorporation or organization)
725 Highway 321 North, Lenoir City, Tennessee
(Address of principal executive office)
62-1482501
(I.R.S. Employer Identification No.)
37771-0230
(Zip Code)
Registrant's telephone number, including area code: (423) 986-
1300
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock (par value $1.00 per share)
Indicate by mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [x] No [ ]
Indicate by mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13,
or (15d) of the Securities Exchange Act of 1934 subsequent to
the distribution of securities under a plan confirmed by a
court.
Yes [x] No [ ]
The number of outstanding shares of the registrant's
Common Stock, par value $5.00 per share, was 466,755 on
November 4, 1997.
FORM 10-QSB
Index
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
as of September 30, 1997 and December 31, 1996 3
Condensed Consolidated Statements of Income
for the nine months ended September 30, 1997 and
1996 4
Condensed Consolidated Statements of Cash
Flows for the nine months ended September 30, 1997
and 1996 5
Notes to Condensed Consolidated Financial Statements
6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8-13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 15
Item 3. Defaults upon Senior Securities 15
Item 4. Submission of Matters to a Vote
of Securities Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15-16
Signatures 15
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)
September 30, December 31,
1997 1996
- -ASSETS-
Cash and Due from Banks $ 2,648 $ 2,764
Federal Funds Sold 1,860 1,430
Total Cash and Cash Equivalents 4,508 4,194
Investment Securities Available for Sale11,145 11,066
Loans, Net 60,505 55,539
Premises and Equipment, Net 3,654 3,365
Accrued Interest Receivable 442 474
Other Assets 185 209
TOTAL ASSETS $80,439 $74,847
- -LIABILITIES AND STOCKHOLDERS' EQUITY-
Liabilities:
Deposits
Non-Interest Bearing $10,629 $ 9,499
Interest Bearing 62,096 58,375
Total Deposits 72,725 67,874
Federal Funds Purchased -0- -0-
Accrued Interest Payable 302 331
Other Liabilities 229 323
Total Liabilities 73,256 68,528
Stockholders' Equity:
Common Stock - Par Value $5.00, Authorized
2,000,000 Shares; Issued and Outstanding
466,755 Shares 2,334 2,334
Capital in Excess of Par Value 3,427 3,427
Retained Earnings 1,425 592
Unrealized Gain (Loss) on Investment Securities (3)
(34)
Total Stockholders' Equity 7,183 6,319
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$80,439 $74,847
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income
(Unaudited)
(In Thousands Except per Share Information)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
INTEREST INCOME:
Loans $1,589 $1,334 $4,511 $3,772
Investment Securities and CDs182 193 548 543
Federal Funds Sold 24 27 61 199
Total Interest Income 1,795 1,554 5,120 4,514
INTEREST EXPENSE 768 732 2,239 2,181
Net Interest Income 1,027 822 2,881 2,333
PROVISION FOR LOAN LOSSES 57 75 150 193
Net Interest Income After
Provision for Loan Losses 970 747 2,731 2,140
OTHER INCOME 154 105 424 307
OPERATING EXPENSES 588 556 1,795 1,615
INCOME BEFORE INCOME TAX 536 296 1,360 832
INCOME TAXES 211 115 527 324
NET INCOME $ 325 $ 181 $ 833 $ 508
EARNINGS PER SHARE $ .70 $ 0.39 $ 1.78 $ 1.10
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
Nine Months Ended
September 30,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 833 $ 508
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Provision for Loan Losses 150 193
Depreciation 179 164
Amortization 3 3
Decrease in Interest Receivable 32 7
Increase (Decrease) in Interest Payable (29) 20
Amortization of Premiums (Discounts) on
Investment Securities and Certificates
of Deposit, Net 10 13
FHLB Stock Dividends (22) (14)
(Increase) Decrease in Other Assets 21 (57)
Increase (Decrease) in Other Liabilities (112) 5
Total Adjustments 232 334
Net Cash Provided by Operating Activities 1,065 842
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds From Maturities, Principal Paydowns and
Redemption of Investment Securities Available
for Sale 1,582 3,774
Purchase of Investment Securities Available
for Sale (1,600) (6,963)
Increase in Loans (5,116)(11,077)
Purchase of Premises and Equipment (468) (423)
Net Cash Used in Investing Activities (5,602) (14,689)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Increase in Deposits 4,851 8,529
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 314 (5,318)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,194 10,
726
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,508 $ 5,408
Supplementary Disclosures of Cash Flow Information:
Cash Paid During the Period For:
Interest $ 2,268 $ 2,162
Income Taxes $ 589 $ 435
Supplementary Disclosures of Noncash Investing Activities:
Change in Unrealized Loss on Investment Securities$ 49 $
119
Change in Deferred Income Tax Benefit Associated with
Unrealized Loss on Investment Securities $ 18 $ 73
Change in Net Unrealized Loss on Investment Securities$ 31
$ 192
Issuance of Common Stock Dividend:
Par $ -0- $ 212
Capital in Excess of Par Value $ -0- $ 848
Reduction in Retained Earnings Due to Issuance of
Common Stock $ -0- $ 1,060
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1997 and 1996
NOTE 1 - ORGANIZATION AND BUSINESS
First Central Bancshares, Inc. (the Company) was incorporated
in 1993 for the purpose of becoming a one bank holding company.
On April 3, 1993, the Company acquired 100% of First Central
Bank (the Bank) through a share exchange agreement approved by
the shareholders of the Bank. The investment in First Central
Bank represents virtually all of the assets of First Central
Bancshares, Inc. The Bank operates out of the main office
located in Lenoir City, Loudon County, Tennessee and three
branch offices, one located in Loudon, one in Tellico Village,
Loudon County, Tennessee, and one located in Farragut, Knox
County, Tennessee. In August 1997, the Bank began construction
of a new full service branch in Kingston, Tennessee.
Construction is expected to be completed in December 1997. All
offices are full service branches serving an area approximately
50 miles in radius which encompasses parts of Knox County,
Blount County, Monroe County, Roane County, and Anderson
County. All offices provide typical commercial bank products
such as checking and savings accounts, certificates of deposit
and individual retirement accounts; and a complete range of
loans including commercial, personal, real estate, home
improvement, automobile and other installment loans, student
education loans and single pay loans. Each office also offers
Visa and MasterCard, ATM cards, safe deposit boxes, travelers
checks, money orders, cashiers checks, collection items, wire
transfers and other customary bank services. All offices have
drive-up window facilities and ATM machines. The ATM cards may
be used at all Most and Cirrus network machines. In December
1997, the Bank is scheduled to begin providing internet banking
services through nFront, Inc. The services will include access
to deposit products, account transfers, automated bill paying
and loan applications.
The consolidated financial statements include the accounts of
First Central Bancshares, Inc. and its wholly owned subsidiary,
First Central Bank. All significant intercompany transactions
and balances have been eliminated.
NOTE 2 - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been
prepared by the Company. Certain information and footnote
disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles
have been condensed or omitted. In the opinion of the
Company's management, the disclosures made are adequate to make
the information presented not misleading, and the consolidated
financial statements contain all adjustments necessary to
present fairly the financial position as of September 30, 1997,
results of operations for the nine months ended September 30,
1997 and 1996, and cash flows for the nine months ended
September 30, 1997 and 1996.
The results of operations for the nine months ended September
30, 1997 are not necessarily indicative of the results to be
expected for the full year.
NOTE 3 - COMMON STOCK DIVIDEND
In February 1996, the Company distributed a ten percent (10%)
stock dividend to its stockholders by issuing an additional
42,376 shares of common stock. The Company used a fair market
value of $25.00 per share and credited common stock $5.00 per
share or $211,880, additional paid in capital $20.00 or
$847,520, and charged retained earnings a total of $1,059,400.
No stock dividends were declared during the nine months ended
September 30, 1997.
NOTE 4 - IMPACT OF NEW ACCOUNTING STANDARDS
The following are recently issued accounting standards which
the Bank has yet to adopt.
Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities. In June 1996, the Financial
Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 125, Accounting for Transfers
and Servicing of Financial Assets and Extinguishment of
Liabilities. SFAS No. 125 provides accounting and reporting
standards for transfers and servicing of financial assets and
extinguishment of liabilities.
Those standards are based on consistent application of a
financial-components approach that focuses on control. Under
that approach, after a transfer of financial assets, an entity
recognizes the financial and servicing assets it controls and
the liabilities it has incurred, derecognizes financial assets
when control has been surrendered, and derecognizes liabilities
when extinguished. This statement provides standards for
distinguishing transfers of financial assets that are sales
from transfers that are secured borrowings. This statement is
effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31,
1996, and is to be applied prospectively.
In December 1996, the FASB issued Statement of Financial
Accounting Standards No. 127, Deferral of the Effective Date of
Certain Provisions of FASB Statement No. 125. SFAS No. 127
provides a one year deferral on selected portions of SFAS No.
125.
The Bank has never entered into any transactions related to
transfers of financial assets, sales of loans with servicing
retained, or servicing of loans for other entities. In
addition, the Bank does not anticipate entering into any of
these types of transactions in the future. Therefore, SFAS No.
125 and SFAS No. 127 will not have any effect on the Bank's
financial condition or results of operations.
Earnings per Share. In August 1997, the FASB issued Statement
of Financial Accounting Standards No. 128, Earnings Per Share,
and Statement of Financial Accounting Standards No. 129,
Disclosure of Information about Capital Structure. SFAS Nos.
128 and 129 establish standards for computing and presenting
earnings per share and makes them comparable to international
standards. These statements are effective for financial
statements issued for periods ending after December 15, 1997.
Application of these statements is not anticipated to have a
significant impact on the preparation of the Bank's financial
statements.
Reporting Comprehensive Income and Segment Information. In
June 1997, the FASB issued Statement of Financial Accounting
Standards No. 130, Reporting Comprehensive Income and Statement
of Financial Accounting Standards No. 131, Disclosures about
Segments of an Enterprise and Related Information. SFAS Nos.
130 and 131 establish additional reporting requirements that
will apply to the Bank's financial statements, but are not
expected to have a significant impact on the financial
statements. Both statements are effective for financial
statements issued for the period ending after December 15,
1997.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
BALANCE SHEET ANALYSIS - COMPARISON AT SEPTEMBER 30, 1997 TO
DECEMBER 31, 1996
Assets totalled $80.4 million as of September 30, 1997, as
compared to $74.8 million as of December 31, 1996, an increase
of 7.49%.
INVESTMENT SECURITIES
Investment securities were $11.15 million or 13.86% of total
assets, as of September 30, 1997 an increase of $80,000 from
$11.07 million as of December 31, 1996. During the nine-month
period there were $1.6 million in calls, maturities, and
principal paydowns offset by the purchase of $1.6 million in
agency securities.
The investment portfolio is comprised of U.S. Government and
federal agency obligations and mortgage-backed securities
issued by various federal agencies. Mortgage-backed issues
comprised 14.65% of the portfolio as of September 30, 1997 and
17.31% as of December 31, 1996.
As of September 30, 1997 and December 31, 1996, the Bank's
entire investment portfolio was classified as available for
sale and reflected in the condensed consolidated balance sheets
at fair value with unrealized gains and losses excluded from
earnings and reported as a separate component of stockholders'
equity. The net unrealized loss on securities available for
sale, net of tax was approximately $3,000 as of September 30,
1997, a decrease of approximately $31,000 from December 31,
1996, a result of lower rates in the bond market. The fair
value of securities fluctuates with the movement of interest
rates. Generally, during periods of decreasing interest rates,
the fair values increase whereas the opposite may hold true
during a rising interest rate environment.
LOANS
During the first nine months of 1997, total gross loans
outstanding increased by approximately $5.2 million to $62.7
million as of September 30, 1997 from $57.5 million as of
December 31, 1996 attributable primarily to $25.1 million in
originated loans offset by amortization and payoffs. As of
September 30, 1997 and December 31, 1996, net loans outstanding
represented 75% and 74% of total assets, respectively. Table 1
summarizes the Bank's loan portfolio by major category as of
September 30, 1997 and December 31, 1996.
Table 1 - Loan Portfolio by Category
(In Thousands)
September 30,December 31,
1997 1996
Loans secured by real estate:
Commercial properties $ 9,857 $15,745
Construction and land development 9,700 7,781
Residential and other properties 24,054 16,816
Total loans secured by real estate 43,611 40,342
Commercial and industrial loans 5,114 5,500
Consumer loans 12,963 10,719
Other loans 991 906
62,679 57,467
Less: Allowance for loan losses (617) (563)
Unearned interest (1,500) (1,303)
Unearned loan fees (57) (62)
Loans, Net $60,505 $55,539
As of September 30, 1997, there were outstanding commitments to
advance construction funds and to originate loans in the amount
of $4.5 million and commitments to advance existing home
equity, letters of credit and other credit lines in the amount
of $13.5 million.
Loans are carried net of the allowance for loan losses. The
allowance is maintained at a level to absorb possible losses
within the loan portfolio. As of September 30, 1997 and
December 31, 1996, the allowance had a balance of approximately
$617,000 and $563,000, respectively. There were no loans on
which the accrual of interest had been discontinued as of
September 30, 1997 or at December 31, 1996, and there were no
loans specifically classified as impaired as defined by SFAS
No. 114. Table 2 summarizes the allocation of the loan loss
reserve by major categories and Table 3 summarizes the activity
in the loan loss reserve for the nine month period.
Table 2 - Allocation of the Loan Loss Reserve (in Thousands)
9-30-97 % to 12-31-96 % to
Balance applicable to: $ Amount Total $ Amount Total
Commercial, financial, and agricultural$ 70 11.35%$ 64 11.37%
Real Estate - Construction 100 16.21% 78 13.85%
Real Estate - Mortgages 145 23.50% 169 30.02%
Installment - Consumers 131 21.23% 108 19.18%
Other 15 2.43% -0- .00%
Other Unallocated 156 25.28% 144 25.58%
Total $617 100.00% $563 100.00%
Table 3 - Analysis of Loan Loss Reserve
(In Thousands) 9-30-97 9-30-96
Balance, at beginning of period $563 $434
Charge-offs:
Commercial, financial, and agricultural 2 7
Real estate - construction -0- -0-
Real estate - mortgage -0- 6
Installment - Customers 137 89
Other -0- -0-
Recoveries:
Commercial, financial, and agricultural 1 6
Real estate - construction -0- -0-
Real estate - mortgages -0- -0-
Installment - consumers 42 20
Other -0- -0-
Net charge-offs 96 76
Additions to loan loss reserve 150 193
Balance at end of period $617 $551
Ratio of net charge-offs to average loans outstanding .16%
.12%
DEPOSITS
Deposits increased by $4.8 million to $72.7 million as of
September 30, 1997 from $67.9 million as of December 31, 1996,
an increase of 7.1%. Demand deposits, which include regular,
money market, NOW and demand deposits, were $37.8 million, or
51.98% of total deposits, at September 30, 1997. Core deposits
were 33.0% of total deposits as of September 30, 1997 (39% as
of December 31, 1996). During the nine-month period, the Bank
was successful in increasing the balances in the demand deposit
category as a result of its efforts to restructure the deposit
portfolio from higher yielding term deposits to lower yielding
demand deposits. Certificate accounts were $34.9 million at
September 30, 1997, a decrease of $3.1 million over the $38.0
million as of December 31, 1996. Table 4 summarizes the Bank's
deposits by major category as of September 30, 1997 and
December 31, 1996.
Table 4 - Deposits by Category
(In Thousands)
September 30,December 31,
1997 1996
Demand Deposits:
Noninterest-bearing accounts $10,629 $ 9,499
NOW and MMDA accounts 23,884 16,916
Savings accounts 3,287 3,437
Total Demand Deposits 37,800 29,852
Term Deposits:
Less than $100,000 27,127 29,051
$100,000 or more 7,798 8,971
34,925 38,022
$72,725 $67,874
CAPITAL
During the nine month period ended September 30, 1997,
stockholders' equity increased by $864,000 to $7.2 million, due
to net income for the period of $833,000 and the increase in
the value of securities available for sale.
LIQUIDITY AND CAPITAL RESOURCES
The Bank's primary sources of liquidity are deposit balances,
available-for-sale securities, principal and interest payments
on loans and investment securities, FHLB advances, and federal
funds purchased.
As of September 30, 1997, the Bank held $11.1 million in
available-for-sale securities and during the first nine months
of 1997 the Bank received $1,582,000 in proceeds from
maturities, redemptions and principal payments on its
investment portfolio. Deposits increased by $4.8 million
during the same nine month period.
The Bank is a member of the Federal Home Loan Bank of
Cincinnati (FHLB) and is eligible to obtain both short and long
term credit advances. Borrowing capacity is limited to the
Bank's available qualified collateral which consists primarily
of certain 1-4 family residential mortgages and certain
investment securities. The Bank had advances outstanding from
the FHLB of approximately $44,000 at September 30, 1997.
The Bank can also enter into repurchase agreement transactions
should the need for additional liquidity arise. As of
September 30, 1997, the Bank had no repurchase agreements
outstanding.
As of September 30, 1997, the Bank had no federal funds
purchased.
As of September 30, 1997, the Bank had capital of $7.2 million,
or 8.9% of total assets, as compared to $6.3 million, or 8.4%,
as of December 31, 1996. Tennessee chartered banks that are
insured by the FDIC are subject to minimum capital
requirements. Regulatory guidelines define the minimum amount
of qualifying capital an institution must maintain as a
percentage of risk-weighted assets and total assets.
Table 5 - Regulatory Capital
(Dollars in Thousands)
Minimum
September 30,December 31,Regulatory
1997 1996 Ratios
Tier 1 Capital as a Percentage
of Risk-Weighted Assets 12.1% 10.9% 4.00%
Total Capital as a Percentage
of Risk-Weighted Assets 13.1% 11.9% 8.00%
Leverage Ratio 10.1% 8.4% Up to 5.00%
Total Risk-Weighted Assets $59,469 $58,125
As of September 30, 1997 and December 31, 1996, the Bank
exceeded all of the minimum regulatory capital ratio
requirements.
RESULTS OF OPERATIONS FOR THE NINE MONTH PERIODS ENDED
SEPTEMBER 30, 1997 AND 1996
GENERAL
The Bank reported net income of $833,000, or $1.78 per share
for the nine month period ended September 30, 1997 as compared
with $508,000 or $1.10 per share for the same period in 1996,
an increase of 63.97%.
NET INTEREST INCOME
Net interest income increased by $548,000 to $2,881,000, for
the nine month period in 1997 from the comparable period in
1996. Contributing to this increase was an increase in average
interest earning assets. Average interest earning assets, at a
yield of 9.34% totalled $73.1 million as of September 30, 1997.
In comparison in 1996, average interest earning assets, at a
yield of 9.02%, totalled $66.7 million.
Interest and dividend income increased by $606,000 for the nine
month period in 1997 compared to the same period in 1996. This
improvement is primarily attributable to an increase of
approximately $7.2 million, or 10.8%, in the volume of average
earning assets during the nine month period ended September 30,
1997 compared to the nine month period ended September 30,
1996. Interest income on loans increased by $739,000 over the
same two periods primarily as a result of an increase of
approximately $10.1 million in average loans outstanding. Over
the same two periods, interest and dividends on investments
increased only by $5,000 due to an increase in average yield on
investments from 6.52% to 6.65%. Average investments decreased
approximately $129,000 or 1.16% during the nine month period
ended September 30, 1997. Interest income on Federal Funds
Sold decreased by $138,000 due to a decrease of approximately
$3.5 million in average Federal Funds Sold outstanding during
the nine month period as compared to the same period in 1996.
Total interest expense increased $59,000 for the nine month
period ended September 30, 1997 compared to the same period in
1996. Interest on deposits decreased by $324,000 as a result
of lower weighted average rates paid on deposits. Interest
paid on Federal Home Loan Bank advances for the two comparable
periods was unchanged. The average rate on interest-bearing
liabilities decreased to 4.94% for the nine month period in
1997 from 5.18% in the comparable period of 1996.
Table 6 - Average Balances, Interest and Average Rates
September 30,
1997 (in thousands) 1996
Average AverageAverage Average
Balance Interest Rate Balance Interest Rate
Assets:
Federal Funds Sold$ 1,510 $ 61 5.39%$ 5,046 $ 199 5.26%
Investments:
Securities--Taxable10,974 548 6.66% 11,103 543 6.52%
Non-Taxable -0- -0- N/A -0- -0- N/A
Total Loans, Including
Fees 60,635 4,511 9.92% 50,555 3,772 9.95%
Total Interest Earning
Assets 73,119 5,120 9.34% 66,704 4,514 9.02%
Cash and Due From Banks2,359 2,484
All Other Assets 4,166 3,731
Loan Loss Reserve/
Unearned Fees (2,134) (1,412)
TOTAL ASSETS $77,510 $71,507
Liabilities and Stockholders Equity:
Interest Bearing Deposits:
Time Deposits $36,109 1,510 5.57%$41,641 1,834 5.87%
Other 24,285 725 3.99% 14,413 344 3.19%
FHLB Advances 44 3 9.09% 47 3 8.51%
Federal Funds Purchased 30 1 4.44% -0- -0-0.00%
Total Interest-Bearing
Liabilities 60,468 2,239 4.94% 56,101 2,181 5.18%
Net Interest Income $2,881 $2,333
Non-Interest Bearing
Deposits 9,847 9,149
Total Cost of Funds 4.26% 4.46%
All Other Liabilities496 501
Stockholders Equity6,756 5,852
Unrealized Gain/Loss on
Securities (57) (96)
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY$77,510 $71,507
Net Interest Yield 4.40% 3.84%
Net Interest Margin 5.25% 4.66%
Table 7 - Interest Rate Sensitivity
(In Thousands)
September 30, 1997
Less One Year Greater Non-
Than Through Than Interest
1 Year 5 Years 5 Years Bearing Total
Assets:
Federal Funds Sold $ 1,860 $ -0-$ -0- $ -0-$ 1,860
Investments 250 4,545 6,350 -0- 11,145
Loans - Closed-End 5,229 15,253 46 -0- 20,528
Other Loans 22,757 19,379 15 -0- 42,151
Non-Interest Earning Assets
and Unearned Assets/Loan
Loss Reserve -0- -0- -0- 4,757 4,757
30,096 39,177 6,411 4,757 80,441
Liabilities and Stockholders' Equity:
Interest-Bearing Deposits51,775 10,320 -0- 62,095
Non-Interest Bearing Deposits 10,629 10,629
Federal Funds Purchased -0- -0- -0- -0- -0-
FHLB Advances 44 44
Noninterest Bearing Liabilities
and Stockholders' Equity 7,673 7,673
Total 51,775 10,320 44 18,302 80,441
Interest Rate Sensitivity Gap 21,679 28,857 6,367 (13,545) -0-
Cumulative Interest Rate
Sensitivity Gap $21,679 $ 7,178$13,545 $ -0- $ -0-
OTHER INCOME
Total other income was $424,000 for the nine month period ended
September 30, 1997 as compared to $307,000 for the same period
in 1996, an increase of $117,000. Other income is comprised
primarily of customer service fees and other items.
Contributing to the increase in other income was growth of
$61,000 in checking service fees and NSF charges resulting
primarily from an increase in the number of checking accounts.
OPERATING EXPENSES
Total operating expenses were $1,795,000, or an annualized
3.09% of average total assets, for the nine month period ended
September 30, 1997 as compared to $1,615,000, or 3.01% for the
same period in 1996. Both the salaries and employee benefits
and occupancy and equipment categories of expenses increased
when comparing the two periods. Salaries and employee benefits
increased by $92,000 or 11.39% over the first nine months of
1997 due to normal salary increases. Occupancy and equipment
expenses increased approximately $93,000 when compared to
expenses at September 30, 1996, an increase of 16.34%.
INCOME TAXES
The Bank recognizes income taxes using the Financial Accounting
Standards Board Statement No. 109, Accounting for Income Taxes.
Under this method, deferred tax assets and liabilities are
established for the temporary differences between the
accounting basis and the tax basis of the Bank's assets and
liabilities at enacted tax rates expected to be in effect when
the amounts related to such temporary differences are realized
or settled. The Bank's deferred tax asset is reviewed quarterly
and adjustments to such asset are recognized as deferred income
tax expense or benefit based on management's judgment relating
to the realizability of such asset.
During the nine month period ended September 30, 1997, the Bank
recorded $527,000 in tax expense which resulted in an
approximate effective rate of 39%. Comparably, in 1996, the
Bank recorded $324,000 in tax expense, resulting in an
approximate effective rate of 39%.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
PART 1 - 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 27 - Financial Data Schedule.
Exhibit 27 - Financial Data Schedule
9-30-97
Amount (In Thousands)
Cash $ 2,648
Interest-Bearing Deposits -0-
Federal Funds Sold 1,860
Trading Assets -0-
Investments AFS 11,145
Investments HTM -0-
Investments-Market -0-
Loans 62,679
Allowance for Losses 617
Total Assets 80,439
Deposits 72,725
Short-Term Borrowings -0-
Other Liabilities 229
Long-Term Debt 44
Preferred Stock-Mandatory -0-
Preferred-Non Mandatory -0-
Common Stock 2,334
Other Stockholders Equity 3,427
Total Liab.-Stockh. Equity 80,439
Interest on Loans 4,511
Interest on Investments 548
Other Interest Income 61
Total interest Income 5,120
Interest on Deposits 2,236
Total Interest Expense 2,239
Net Interest Income 2,881
Provision-Loan Losses 150
Securities-Gain/Loss -0-
Other Expenses 1,795
Income Before Tax 1,360
Income Before Extraordinary 1,360
Extraordinary Less Tax -0-
Cumul. Change Acct. Principal -0-
Net Income 833
Earnings Per Share-P 1.78
Earnings Per Share-D 1.78
Net Interest Yield-EA 4.40
Loans-Non Accrual -0-
Loans Past Due > 90 Days -0-
Troubled Debt Restructuring -0-
Potential Problem Loans -0-
Allowance-Beginning 563
Total Charge-Offs 139
Total Recoveries 43
Allowance End of Period 617
Loan Loss-Domestic 617
Loan Loss-Foreign -0-
Loan Loss-Unallocated 156
(b) Reports on Form 8-K, None.
FORM IO-QSB(A)
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST CENTRAL BANCSHARES, INC.
Date: By:
____________________________________________________
Ed. F. Bell Chairman, President and Chief
Executive Officer
Date: By:
____________________________________________________
Willard D. Price, Executive Vice President
and
Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
Page 1
Exhibit 27 - Financial Data Schedule
9-30-97
Amount (In Thousands)
Cash $ 2,648
Interest-Bearing Deposits -0-
Federal Funds Sold 1,860
Trading Assets -0-
Investments AFS 11,145
Investments HTM -0-
Investments-Market -0-
Loans 62,679
Allowance for Losses 617
Total Assets 80,439
Deposits 72,725
Short-Term Borrowings -0-
Other Liabilities 229
Long-Term Debt 44
Preferred Stock-Mandatory -0-
Preferred-Non Mandatory -0-
Common Stock 2,334
Other Stockholders Equity 3,427
Total Liab.-Stockh. Equity 80,439
Interest on Loans 4,511
Interest on Investments 548
Other Interest Income 61
Total interest Income 5,120
Interest on Deposits 2,236
Total Interest Expense 2,239
Net Interest Income 2,881
Provision-Loan Losses 150
Securities-Gain/Loss -0-
Other Expenses 1,795
Income Before Tax 1,360
Income Before Extraordinary 1,360
Extraordinary Less Tax -0-
Cumul. Change Acct. Principal -0-
Net Income 833
Earnings Per Share-P 1.78
Earnings Per Share-D 1.78
Net Interest Yield-EA 4.40
Loans-Non Accrual -0-
Loans Past Due > 90 Days -0-
Troubled Debt Restructuring -0-
Potential Problem Loans -0-
Allowance-Beginning 563
Total Charge-Offs 139
Total Recoveries 43
Allowance End of Period 617
Loan Loss-Domestic 617
Loan Loss-Foreign -0-
Loan Loss-Unallocated 156
(b) Reports on Form 8-K, None.
FORM IO-QSB(A)
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST CENTRAL BANCSHARES, INC.
Date: By:
____________________________________________________
Ed. F. Bell Chairman, President and Chief
Executive Officer
Date: By:
____________________________________________________
Willard D. Price, Executive Vice President
and
Chief Financial Officer
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