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 March 31, 1998
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
charter)
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 $5.00 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 513,281 on May 4,
1998.
FORM 10-QSB
Index
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
as of March 31, 1998 and December 31, 1997 3
Condensed Consolidated Statements of Income
for the three months ended March 31, 1998 and 1997 4
Condensed Consolidated Statements of Cash
Flows for the three months ended March 31, 1998
and 1997 5
Condensed Consolidated Statements of Comprehensive
Income for the three months ended March 31, 1998
and 1997 6
Notes to Condensed Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9-14
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 Securities Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signature 15
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)
March 31, December 31,
1998 1997
- -ASSETS-
Cash and Due from Banks $ 3,278 $ 3,032
Federal Funds Sold 12,025 5,650
Total Cash and Cash Equivalents 15,303 8,682
Investment Securities Available for Sale 16,605 11,214
Loans, Net 57,071 58,036
Premises and Equipment (Net) 4,093 4,133
Accrued Interest Receivable 457 495
Other Assets 152 230
TOTAL ASSETS $93,681 $82,790
- -LIABILITIES AND STOCKHOLDERS' EQUITY-
Liabilities:
Deposits
Non-Interest Bearing $12,609 $10,761
Interest Bearing 72,675 63,813
Total Deposits 85,284 74,574
Accrued Interest Payable 338 335
Other Liabilities 351 400
Total Liabilities 85,973 75,309
Stockholders' Equity:
Common Stock - Par Value $5.00, Authorized
2,000,000 Shares; Issued and Outstanding
513,281 Shares in 1998 and 466,755 Shares
in 1997 2,566 2,334
Additional Paid-In Capital 4,358 3,427
Retained Earnings 800 1,719
Unrealized Gain (Loss) on Securities (16) 1
Total Stockholders' Equity 7,708 7,481
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $93,681 $82,790
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
March 31,
1998 1997
INTEREST INCOME:
Loans $1,498 $1,413
Investment Securities 223 183
Federal Funds Sold 123 18
Total Interest Income 1,844 1,614
INTEREST EXPENSE 858 717
Net Interest Income 986 897
PROVISION FOR LOAN LOSSES 5 35
Net Interest Income After
Provision for Loan Losses 981 862
OTHER INCOME 125 123
OPERATING EXPENSES 700 612
INCOME BEFORE INCOME TAX 406 373
INCOME TAXES 162 142
NET INCOME $ 244 $ 231
BASIC EARNINGS PER COMMON SHARE $ 0.50 $ 0.49
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
Three Months Ended
March 31,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 244 $ 231
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Provision for Loan Losses 5 35
Depreciation 71 60
Amortization 1 1
Decrease in Interest Receivable 38 89
Increase (Decrease) in Interest Payable 3 (26)
Amortization of Premiums (Discounts) on
Investment Securities, Net 2 5
FHLB Stock Dividends (4) (5)
Decrease in Other Assets 88 30
(Decrease) in Other Liabilities (49) (162)
Total Adjustments 155 27
Net Cash Provided by Operating Activities 399 258
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds From Maturities, Principal Paydowns and
Redemption of Investment Securities Available
for Sale 4,043 862
Purchase of Investment Securities Available
for Sale (9,460) (500)
(Increase) Decrease in Loans 960 (696)
Purchase of Premises and Equipment (31) (148)
Net Cash Used in Investing Activities (4,488) (482)
NET CASH PROVIDED BY INVESTING ACTIVITIES
Increase in Deposits 10,710 1,780
INCREASE IN CASH AND CASH EQUIVALENTS 6,621 1,556
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 8,682 4,194
CASH AND CASH EQUIVALENTS AT END OF PERIOD $15,303 $ 5,750
Supplementary Disclosure of Cash Flow Information:
Cash Paid During the Period For:
Interest $ 855 $ 743
Income Taxes $ 65 $ 199
Supplementary Disclosures of Noncash Investing Activities:
Change in Unrealized Loss on Investment
Securities $ 28 $ 120
Change in Deferred Income Tax Benefit
Associated with Unrealized Loss on
Investment Securities $ 11 $ 46
Change in Net Unrealized Loss on
Investment Securities $ 17 $ 74
Issuance of Common Stock Dividend:
Par $ 232 $ -0-
Additional Paid-in Capital $ 931 $ -0-
Reduction in Retained Earnings Due to Issuance of
Common Stock $ 1,163 $ -0-
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(In Thousands)
Three Months Ended
March 31,
1998 1997
Net Income $244 231
Other Comprehensive Income, Net of Tax:
Unrealized Losses on Investment Securities (28) (120)
Less Reclassification Adjustment for Gains
Included in net Income -0- -0-
Less Income Taxes Related to Unrealized
Gains on Investment Securities 11 46
Other Comprehensive Income (Loss), Net of Tax (17) (74)
Comprehensive Income $227 $157
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1998 and 1997
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 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 March 31, 1998,
results of operations for the three months ended March 31, 1998
and 1997, and cash flows for the three months ended March 31,
1998 and 1997.
The results of operations for the three months ended March 31,
1998 are not necessarily indicative of the results to be
expected for the full year.
NOTE 3 - COMMON STOCK DIVIDEND
In February 1998, the Company distributed a ten percent (10%)
dividend to its stockholders by issuing an additional 46,526
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
$232,630, additional paid in capital $20.00 or $930,520, and
charged retained earnings a total of $1,163,150. No stock
dividends were declared during the quarter ended March 31,
1997.
NOTE 4 - EARNINGS PER SHARE
Basic earnings per share is based on the weighted average
number of shares outstanding during the period. For the three
months ended March 31, 1998 and 1997 the weighted average
number of shares was 490,018 and 466,755, respectively. During
the period ended March 31, 1998 and 1997 the Company did not
have any dilutive securities.
NOTE 5 - ACCOUNTING POLICY CHANGES
In June 1997 the FASB issued SFAS No. 130, "Reporting
Comprehensive Income." This statement establishes standards
for reporting comprehensive income and its components in the
financial statements. The object of the statement is to report
a measure of all changes in equity of an enterprise that
results from transactions and other economic events of the
period other than transactions with owners. Items included in
comprehensive income include revenues, gains and losses that
under generally accepted accounting principles are directly
charged to equity. Examples include foreign currency
translations, pension liability adjustments and unrealized
gains and losses on investment securities available for sale.
The Company adopted this statement in the first quarter of 1998
and has included its comprehensive income in a separate
financial statement as part of the consolidated financial
statements.
In June 1997, the FASB issued FAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information." This
statement establishes standards for reporting information about
operating segments in annual reports and in interim financial
reports issued to shareholders. The statement is effective for
fiscal years beginning after December 15, 1997. The Company has
adopted FAS No. 131 but does not have multiple industry
segments as defined in FAS No. 131.
In February 1998, the FASB issued FAS No. 132, "Employers'
Disclosures About Pensions and Other Post Retirement Benefits."
FAS No. 132 changes disclosure only on applicable defined
benefit pension or post retirement plans. The statement is
effective for fiscal years beginning after December 15, 1997.
At this time, the Company does not have a defined benefit
pension or post retirement plan.
Year 2000 Compliance
The Company is conducting a comprehensive review of its
subsidiary bank's computer systems to identify the systems that
could be affected by the "Year 2000 Issue" ("Issue"), and is
developing a remediation plan to resolve the Issue. The Issue
is whether computer systems will properly recognize date-
sensitive information when the year changes to 2000. Systems
that do not properly recognize such information could generate
erroneous data or cause a system to fail. The subsidiary bank
is heavily dependent on computer processing in the conduct of
its business activities.
Because this review is not yet complete, management is unable
to accurately estimate the costs of making all systems "Year
2000 Compliant." However, the total cost is not expected to be
significant to the Company's financial position or results of
operations.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
BALANCE SHEET ANALYSIS - COMPARISON AT MARCH 31, 1998 TO
DECEMBER 31, 1997
Assets totalled $93.7 million as of March 31, 1998, as compared
to $82.8 million as of December 31, 1997, an increase of
13.16%.
INVESTMENT SECURITIES
Investment securities were $16.6 million or 17.7% of total
assets, as of March 31, 1998 an increase of $5.4 million from
$11.2 million as of December 31, 1997. During the three-month
period there were $4.0 million in calls, maturities, and
principal paydowns offset by the purchase of $9.5 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 8.34% of the portfolio as of March 31, 1998 and
13.59% as of December 31, 1997.
As of March 31, 1998 and December 31, 1997, the Bank's entire
investment portfolio was classified as available for sale and
reflected on the balance sheet 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 $16,000 as of March 31, 1998, a change of
approximately $17,000 from December 31, 1997, a result of
deterioration 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 three months of 1998, total gross loans
outstanding decreased by approximately $1,100,000 to $59.0
million as of March 31, 1998 from $60.1 million as of December
31, 1997 attributable primarily to $5.6 million in originated
loans offset by amortization and payoffs of approximately $6.7
million. As of March 31, 1998 and December 31, 1997, net loans
outstanding represented 61% and 70% of total assets,
respectively. Table 1 summarizes the Bank's loan portfolio by
major category as of March 31, 1998 and December 31, 1997.
Table 1 - Loan Portfolio by Category
(In Thousands)
March 31,December 31,
1998 1997
Loans secured by real estate:
Commercial properties $ 8,599 $ 8,108
Construction and land development 8,773 8,272
Residential and other properties 24,140 25,087
Total loans secured by real estate 41,512 41,467
Commercial and industrial loans 4,907 5,231
Consumer loans 11,636 12,389
Other loans 915 983
58,970 60,070
Less: Allowance for loan losses (571) (587)
Unearned interest (1,279) (1,395)
Unearned loan fees (49) (52)
Loans, Net $57,071 $58,036
As of March 31, 1998, there were outstanding commitments to
advance construction funds and to originate loans in the amount
of $11.6 million and commitments to advance existing home
equity, letters of credit and other credit lines in the amount
of $6.6 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 March 31, 1998 and December
31, 1997, the allowance had a balance of approximately $571,000
and $587,000, respectively. There were no loans on which the
accrual of interest had been discontinued as of March 31, 1998
or at December 31, 1997, 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 three month period.
Table 2 - Allocation of the Loan Loss Reserve (in Thousands)
3-31-98 % to 12-31-97 % to
Balance applicable to: $ Amount Total $ Amount Total
Commercial, financial,
and agricultural $ 74 12.96% $ 80 13.63%
Real Estate - Construction 88 15.41% 83 14.14%
Real Estate - Mortgages 193 33.80% 205 34.92%
Installment - Consumers 116 20.32% 124 21.12%
Other 14 2.45% 14 2.39%
Other Unallocated 86 15.06% 81 13.80%
Total $57 100.00% $587 100.00%
Table 3 - Analysis of Loan Loss Reserve
(In Thousands) 3-31-98 3-31-97
Balance, at beginning of period $587 $563
Charge-offs:
Commercial, financial, and agricultural -0- -0-
Real estate - construction -0- -0-
Real estate - mortgage -0- -0-
Installment - Customers 31 37
Other -0- -0-
Recoveries:
Commercial, financial, and agricultural -0- -0-
Real estate - construction -0- -0-
Real estate - mortgages -0- -0-
Installment - consumers 10 13
Other -0- -0-
Net charge-offs 21 24
Additions to loan loss reserve 5 35
Balance at end of period $571 $574
Ratio of net charge-offs to average
loans outstanding .04% .04%
DEPOSITS
Deposits increased by $10.7 million to $85.3 million as of
March 31, 1998 from $74.6 million as of December 31, 1997, an
increase of 14.34%. Demand deposits, which include regular,
money market, NOW and demand deposits, were $40.7 million, or
47.8% of total deposits, at March 31, 1998. Core deposits were
33.0% of total deposits at March 31, 1998. During the three-
month period, the Bank was successful in increasing the
balances in the demand deposit category. Certificate accounts
were $44.5 million at March 31, 1998, a increase of $6.4
million over the $38.1 million as of December 31, 1997. Table
4 summarizes the Bank's deposits by major category as of March
31, 1998 and December 31, 1997.
Table 4 - Deposits by Category
(In Thousands)
March 31,December 31,
1998 1997
Demand Deposits:
Noninterest-bearing accounts $12,610 $10,760
NOW and MMDA accounts 24,536 22,351
Savings accounts 3,603 3,355
Total Demand Deposits 40,749 36,466
Term Deposits:
Less than $100,000 33,286 27,451
$100,000 or more 11,249 10,657
44,535 38,108
$85,284 $74,574
CAPITAL
During the three month period ended March 31, 1998,
stockholders' equity increased by $225,000 to $7.7 million, due
to net income for the period of $244,000 offset by the decrease
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 and FHLB advances.
As of March 31, 1998, the Bank held $16.6 million in available-
for-sale securities and during the first three months of 1998
the Bank received $4.1 million in proceeds from maturities,
redemptions and principal payments on its investment portfolio.
Deposits increased by $10.7 million during the same three 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 no advances outstanding
from the FHLB at March 31, 1998.
The Bank can also enter into repurchase agreement transactions
should the need for additional liquidity arise. At March 31,
1998, the Bank had $208,000 of repurchase agreements
outstanding.
As of March 31, 1998, the Bank had capital of $7.7 million, or
8.2% of total assets, as compared to $7.5 million, or 9.0%, at
December 31, 1997. 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
March 31,December 31,Regulatory
1998 1997 Ratios
Tier 1 Capital as a Percentage
of Risk-Weighted Assets 12.9% 12.9% 4.00%
Total Capital as a Percentage
of Risk-Weighted Assets 13.9% 13.9% 8.00%
Leverage Ratio 8.7% 9.5% Up to 5.00%
Total Risk-Weighted Assets $59,679 $57,914
As of March 31, 1998 and December 31, 1997, the Bank exceeded
all of the minimum regulatory capital ratio requirements.
RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED MARCH
31, 1998 AND 1997
GENERAL
The Bank reported net income of $244,000, or $0.50 per share
for the three month period ended March 31, 1998 as compared
with $231,000 or $0.49 per share for the same period in 1997,
an increase of 5.63%.
NET INTEREST INCOME
Net interest income increased by $89,000 to $986,000 for the
three month period in 1998 from the comparable period in 1997.
Contributing to this increase was an increase in average
interest earning assets. Average interest earning assets, at a
yield of 8.87% totalled $83.1 million as of March 31, 1998. In
comparison in 1997, average interest earning assets, at a yield
of 9.16%, totalled $70.5 million.
Interest and dividend income increased by $230,000 for the
three month period in 1998 compared to the same period in 1997.
This improvement is primarily attributable to an increase of
approximately $12.6 million, or 18%, in the volume of average
earning assets during the three month period ended March 31,
1998 compared to the three month period ended March 31, 1997.
Interest income on loans increased by $85,000 over the same two
periods primarily as a result of an increase of approximately
$1.2 million in average loans outstanding. Over the same two
periods, interest and dividends on investments increased by
$40,000 due to an increase of approximately $3.3 million or
30.18% in the volume of investments during the three month
period. Interest income on Federal Funds Sold increased by
$105,000 due to an increase of approximately $8.1 million in
average Federal Funds Sold outstanding during the three month
period as compared to a decrease of $6.7 million during the
same period in 1997.
Total interest expense increased $141,000 for the three month
period ended March 31, 1998 compared to the same period in
1997. Interest on deposits increased by $131,000 as a result
of an increase of approximately $9.8 million in average
deposits over the same period in 1997. The average rate on
interest-bearing liabilities increased to 5.00% for the three
month period in 1998 from 4.88% in the comparable period of
1997.
Table 6 - Average Balances, Interest and Average Rates
March 31
1998 (in thousands) 1997
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Assets:
Federal Funds Sold $ 9,452 $ 123 5.21% $ 1,315 $ 18 5.48%
Investments:
Securities--Taxable 14,273 223 6.25% 10,964 183 6.68%
Non-Taxable -0- -0- N/A -0- -0- N/A
Total Loans, Including
Fees 59,410 1,498 10.09% 58,226 1,413 9.71%
Total Interest Earning
Assets 83,135 1,844 8.87% 70,505 1,614 9.16%
Cash and Due From Banks 2,646 2,400
All Other Assets 4,755 3,955
Loan Loss Reserve/
Unearned Fees (1,968) (1,968)
TOTAL ASSETS $88,568 $88,568
Liabilities and Stockholders Equity:
Interest Bearing Deposits:
Time Deposits $41,478 $ 582 5.61% $36,595 $ 505 5.52%
Other 27,068 273 4.03% 22,104 211 3.82%
FHLB Advances 37 3 8.11% 45 1 8.89%
Federal Funds Purchased -0- -0- 0.00% -0- -0- 0.00%
Total Interest-Bearing
Liabilities 68,583 858 5.00% 58,744 717 4.88%
Net Interest Income $ 986 $ 897
Non-Interest Bearing
Deposits 11,505 9,128
Total Cost of Funds 4.29% 4.22%
All Other Liabilities 1,002 576
Stockholders Equity 7,464 6,472
Unrealized Gain/Loss on
Securities 14 (43)
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $88,568 $74,877
Net Interest Yield 3.87% 4.28%
Net Interest Margin 4.74% 5.09%
Table 7 - Interest Rate Sensitivity
(In Thousands) March 31, 1997
Less One Year Greater Non-
Than Through Than Interest
1 Year 5 Years 5 Years Bearing Total
Asset:
Federal Funds Sold $12,025 $12,025
Investments 796 2,261 13,548 16,605
Loans 28,660 30,250 60 58,970
Non-Interest Earning Assets
and Unearned Assets/Loan
Loss Reserve 6,081 6,081
41,481 32,511 13,608 6,081 93,681
Liabilities and Stockholders' Equity:
Interest-Bearing Deposits 54,193 18,482 -0- 72,675
Non-Interest Bearing Deposits 12,609 12,609
FHLB Advances -0- -0-
Noninterest Bearing Liabilities
and Stockholders' Equity 8,397 8,397
Total 54,193 18,482 -0- 21,006 93,681
Interest Rate Sensitivity
Gap (12,712) 14,029 13,608 (14,925) -0-
Cumulative Interest Rate
Sensitivity Gap $(12,712) $ 1,317 $14,925$ -0- $ -0-
OTHER INCOME
Total other income was $125,000 for the three month period
ended March 31, 1998 as compared to $123,000 for the same
period in 1997, an increase of $2,000. Other income is
comprised primarily of customer service fees and other items.
OPERATING EXPENSES
Total operating expenses were $700,000 annualized, or 3.16% of
average total assets, for the three month period ended March
31, 1998 as compared to $612,000, or 3.27%, for the same period
in 1997. 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
$38,000 or 13.06% over the first three months of 1998 due to
normal salary increases. Occupancy and equipment expenses
increased approximately $24,000 when compared to expenses at
March 31, 1997, an increase of 20.55%. Contributing to the
increase in occupancy and equipment expenses was the opening of
the Kingston branch in December 1997.
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 three month period ending March 31, 1998, the Bank
recorded $162,000 in tax expense which resulted in an
approximate effective rate of 39.9%. Comparably, in 1997, the
Bank recorded $142,000 in tax expense, resulting in an
approximate effective rate of 38%.
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
Exhibit 27 - Financial Data Schedule.
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>
Exhibit 27 - Financial Data Schedule
3-31-98
Amount (In Thousands)
Cash $3,278
Federal Funds Sold 12,025
Trading Assets -0-
Investments AFS 16,605
Investments HTM -0-
Investments-Market -0-
Loans 58,970
Allowance for Losses 571
Total Assets 93,681
Deposits 85,284
Short-Term Borrowings -0-
Other Liabilities 351
Long-Term Debt -0-
Preferred Stock-Mandatory -0-
Preferred-Non Mandatory -0-
Common Stock 2,566
Other Stockholders Equity 4,358
Total Liab.-Stockh. Equity 93,681
Interest on Loans 1,498
Interest on Investments 223
Other Interest Income 123
Total interest Income 1,844
Interest on Deposits 855
Total Interest Expense 858
Net Interest Income 986
Provision-Loan Losses 5
Securities-Gain/Loss -0-
Other Expenses 700
Income Before Tax 406
Income Before Extraordinary 406
Extraordinary Less Tax -0-
Cumul. Change Acct. Principal -0-
Net Income 244
Earnings Per Share-P 0.50
Earnings Per Share-D 0.50
Net Interest Yield-EA 3.87
Loans-Non Accrual -0-
Loans Past Due > 90 Days -0-
Troubled Debt Restructuring -0-
Potential Problem Loans -0-
Allowance-Beginning 587
Total Charge-Offs 31
Total Recoveries 10
Allowance End of Period 571
Loan Loss-Domestic 571
Loan Loss-Foreign -0-
Loan Loss-Unallocated 86
(b) Reports on Form 8-K, None.
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