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, 1999
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 April
28, 1999.
FORM 10-QSB
Index
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
as of March 31, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Income
for the three months ended March 31, 1999 and 1998 4
Condensed Consolidated Statements of Cash
Flows for the three months ended March 31, 1999
and 1998 5
Condensed Consolidated Statements of Comprehensive
Income for the three months ended March 31, 1999
and 1998 6
Notes to Condensed Consolidated Financial Statements7-8
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
Signatures 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,
1999 1998
- -ASSETS-
Cash and Due from Banks $ 5,476 $ 2,564
Federal Funds Sold 8,480 14,915
Total Cash and Cash Equivalents 13,956 17,479
Investment Securities Available for Sale 28,066 27,139
Loans, Net 64,985 60,944
Premises and Equipment (Net) 4,613 4,304
Accrued Interest Receivable 655 674
Other Assets 471 218
TOTAL ASSETS $112,746 $110,758
- -LIABILITIES AND STOCKHOLDERS' EQUITY-
Liabilities:
Deposits
Non-Interest Bearing $ 14,178 $ 14,551
Interest Bearing 89,494 87,236
Total Deposits 103,672 101,787
Accrued Interest Payable 394 444
Other Liabilities 153 101
Total Liabilities 104,219 102,332
Stockholders' Equity:
Common Stock - Par Value $5.00, Authorized
2,000,000 Shares; Issued and Outstanding
513,281 Shares 2,566 2,566
Additional Paid-In Capital 4,358 4,358
Retained Earnings 1,707 1,457
Accumulated Other Comprehensive
Income (Loss) (104) 45
Total Stockholders' Equity 8,527 8,426
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $112,746 $110,758
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,
1999 1998
INTEREST INCOME:
Loans $1,588 $1,498
Investment Securities 448 223
Federal Funds Sold 119 123
Total Interest Income 2,155 1,844
INTEREST EXPENSE 991 858
Net Interest Income 1,164 986
PROVISION FOR LOAN LOSSES 60 5
Net Interest Income After
Provision for Loan Losses 1,104 981
OTHER INCOME 174 125
OPERATING EXPENSES 884 700
INCOME BEFORE INCOME TAXES 394 406
INCOME TAXES 144 162
NET INCOME $ 250 $ 244
BASIC EARNINGS PER COMMON SHARE $ 0.49 $ 0.50
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,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 250 $ 244
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Provision for Loan Losses 60 5
Depreciation 71 71
Amortization -0- 1
Decrease in Interest Receivable 19 38
Increase (Decrease) in Interest Payable (50) 3
Amortization of Premiums (Discounts) on
Investment Securities, Net 9 2
FHLB Stock Dividends (5) (4)
(Increase) Decrease in Other Assets (161) 88
Increase (Decrease) in Other Liabilities 52 (49)
Total Adjustments (5) 155
Net Cash Provided by Operating Activities 245 399
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds From Maturities, Principal Paydowns and
Redemption of Investment Securities Available
for Sale 6,815 4,043
Purchase of Investment Securities Available
for Sale (7,987) (9,460)
(Increase) Decrease in Loans (4,101) 960
Purchase of Premises and Equipment (380) (31)
Net Cash Used in Investing Activities (5,653) (4,488)
NET CASH PROVIDED BY INVESTING ACTIVITIES
Increase in Deposits 1,885 10,710
INCREASE (DECREASE)IN CASH
AND CASH EQUIVALENTS (3,523) 6,621
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 17,479 8,682
CASH AND CASH EQUIVALENTS AT END OF PERIOD $13,956 $15,303
Supplementary Disclosures of Cash Flow Information:
Cash Paid During the Period For:
Interest $ 1,041 $ 855
Income Taxes $ -0- $ 65
Supplementary Disclosures of Noncash Investing Activities:
Change in Unrealized Loss on Investment
Securities $ 241 $ 28
Change in Deferred Income Tax Benefit Associated with
Unrealized Loss on Investment Securities $ 92 $ 11
Change in Net Unrealized Loss on
Investment Securities $ 149 $ 17
Issuance of Common Stock Dividend:
Par $ -0- $ 232
Additional Paid-in Capital $ -0- $ 931
Reduction in Retained Earnings Due to Issuance of
Common Stock $ -0- $ 1,163
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,
1999 1998
Net Income $ 250 $244
Other Comprehensive Income, Net of Tax:
Unrealized Losses on Investment Securities (226) (28)
Less Reclassification Adjustment for Gains
Included in net Income (15) -0-
Less Income Taxes Related to Unrealized
Gains on Investment Securities 92 11
Other Comprehensive Income (Loss),
Net of Tax (149) (17)
Comprehensive Income $ 101 $227
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1999 and 1998
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, 1999,
results of operations for the three months ended March 31, 1999
and 1998, and cash flows for the three months ended March 31,
1999 and 1998.
The results of operations for the three months ended March 31,
1999 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,
1999.
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, 1999 and 1998 the weighted average
number of shares was 513,281 and 490,018, respectively. During
the period ended March 31, 1999 and 1998 the Company did not
have any dilutive securities.
NOTE 5 - ACCOUNTING POLICY CHANGES
In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and
Hedging Activities. SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including
derivative instruments embedded in other contracts,
(collectively referred to as derivatives) and for hedging
activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the consolidated
statement of financial position and measure those instruments
at fair value. This statement amends FASB Statement No. 52,
Foreign Currency Translation, to permit a special accounting
for a
hedge of a foreign currency forecasted transaction with a
derivative. It supersedes FASB Statements No. 80, Accounting
for Future Contracts, No. 105, Disclosure of Information about
Financial Instruments with Off-Balance Sheet Risk and Financial
Instruments with Concentrations of Credit Risk, and No. 119,
Disclosure about Derivative Financial Instruments and Fair
Value of Financial Instruments. It amends FASB Statement No.
107, Disclosures about Fair Value of Financial Instruments to
included in statement No. 107 the disclosure provisions about
concentrations of credit risk from Statement No. 105. This
Statement is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. The Statement is required to be
applied retroactively to consolidated financial statements of
prior periods. The Bank is currently assessing the impact of
this statement on its consolidated financial statements and
will adopt the statement during 1999.
In October 1998, the FASB issued Statement of Financial
Accounting Standards No. 134, Accounting for Mortgage-Backed
Securities after Securitization of Mortgage Loans Held for Sale
by a Mortgage Banking Enterprise. SFAS No. 134 amends FASB
Statement No. 65, Accounting for Certain Mortgage Banking
Activities, which establishes accounting and reporting
standards for certain activities of mortgage banking
enterprises and other enterprises that conduct operations that
are substantially similar to the primary operations of a
mortgage banking enterprise. The Bank is not currently
entering into any transactions related to securitization of
mortgage loans, nor does the Bank anticipate entering into any
transactions of this nature in the future. Therefore, SFAS No.
134 will not have any effect on our financial condition or
results of operations.
Year 2000 Compliance
The Bank continued its plans to be ready in all respects for
the new millennium. A Y2K committee including executive
management has been in place for approximately eighteen months.
The board of directors is updated monthly of progress. A
comprehensive evaluation and testing schedule was finalized in
1998 as well as a detailed contingency backup plan. All
equipment that was not Y2K compliant was replaced and a new
operating system was installed through our data processing
server in 1998. Testing of all mission critical systems
including the primary and backup operating system was
implemented and nearly complete by year end. Testing for all
mission critical systems will also be completed during the
second quarter and all other systems/software will also be
completed in the second quarter. The contingency plans detail
specific steps to be taken in the unlikely event of a
disruption in our systems or other aspects of operations within
our control as well as critical services outside our control
such as power, water, and communications. We are on schedule to
be compliant in all respects to Y2K. Management remains
confident that there will be no interruptions in our ability to
continue to provide efficient service to our customers and
shareholders in the year 2000 and beyond.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
BALANCE SHEET ANALYSIS - COMPARISON AT MARCH 31, 1999 TO
DECEMBER 31, 1998
Assets totalled $112.7 million as of March 31, 1999, as
compared to $110.8 million as of December 31, 1998, an increase
of 1.79%.
INVESTMENT SECURITIES
Investment securities were $28.1 million or 24.9% of total
assets, as of March 31, 1999 an increase of $1.0 million from
$27.1 million as of December 31, 1998. During the three-month
period there were $6.8 million in calls, maturities, and
principal paydowns offset by the purchase of $8.0 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 16.79% of the portfolio as of March 31, 1999 and
16.47% as of December 31, 1998.
As of March 31, 1999 and December 31, 1998, the Bank's entire
investment portfolio was classified as available for sale and
reflected on the consolidated balance sheets at fair value with
unrealized gains and losses reported in the consolidated
statements of comprehensive income (loss), net of any deferred
tax effect. The net unrealized loss on securities available
for sale, net of tax was approximately $104,000 as of March 31,
1999, a change of approximately $149,000 from December 31,
1998, 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 1999, total gross loans
outstanding increased by approximately $4.0 million to $65.0
million as of March 31, 1999 from $61.0 million as of December
31, 1998 attributable primarily to $17.3 million in originated
loans offset by amortization and payoffs of approximately $12.8
million. As of March 31, 1999 and December 31, 1998, net loans
outstanding represented 58% and 55% of total assets,
respectively. Table 1 summarizes the Bank's loan portfolio by
major category as of March 31, 1999 and December 31, 1998.
Table 1 - Loan Portfolio by Category
(In Thousands)
March 31,December 31,
1999 1998
Loans secured by real estate:
Commercial properties $ 6,704 $ 7,539
Construction and land development 9,075 8,280
Residential and other properties 22,315 23,553
Total loans secured by real estate 38,094 39,372
Commercial and industrial loans 6,386 5,490
Consumer loans 20,743 16,762
Other loans 1,332 928
66,555 62,552
Less: Allowance for loan losses (620) (594)
Unearned interest (909) (977)
Unearned loan fees (41) (37)
Loans, Net $64,985 $60,944
As of March 31, 1999, there were outstanding commitments to
advance construction funds and to originate loans in the amount
of $12.9 million and commitments to advance existing home
equity, letters of credit and other credit lines in the amount
of $8.0 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, 1999 and December
31, 1998, the allowance had a balance of approximately $620,000
and $594,000, respectively. There were no loans on which the
accrual of interest had been discontinued as of March 31, 1999
or at December 31, 1998, and there were approximately $82,000
in 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)
3-31-99 % to 12-31-98 % to
Balance applicable to: $ Amount Total $ Amount Total
Commercial, financial, and
agricultural $ 96 16.00% $ 56 9.00%
Real Estate - Construction 91 15.00% 123 21.00%
Real Estate - Mortgages 182 29.00% 111 19.00%
Installment - Consumers 231 37.00% 158 27.00%
Other 20 3.00% 0 0.00%
Other Unallocated 0 0.00% 146 24.00%
Total $620 100.00% $594 100.00%
Table 3 - Analysis of Loan Loss Reserve
(In Thousands) 3-31-99 3-31-98
Balance, at beginning of period $594 587
Charge-offs:
Commercial, financial, and agricultural -0- -0-
Real estate - construction -0- -0-
Real estate - mortgage -0- -0-
Installment - Customers 55 31
Other -0- -0-
Recoveries:
Commercial, financial, and agricultural -0- -0-
Real estate - construction -0- -0-
Real estate - mortgages -0- -0-
Installment - consumers 21 10
Other -0- -0-
Net charge-offs 34 21
Additions to loan loss reserve 60 5
Balance at end of period $620 571
Ratio of net charge-offs to average loans outstanding.05% .04%
DEPOSITS
Deposits increased by $2.1 million to $103.7 million as of
March 31, 1999 from $102.8 million as of December 31, 1998, an
increase of 1.85%. Demand deposits, which include regular,
money market, NOW and demand deposits, were $47.7 million, or
46.0% of total deposits, at March 31, 1999. Core deposits were
32.0% of total deposits at March 31, 1999. During the three-
month period, the Bank was successful in increasing the
balances in the demand deposit category. Certificate accounts
were $56.0 million at March 31, 1999, a decrease of $195,000
compared to $56.2 million as of December 31, 1998. Table 4
summarizes the Bank's deposits by major category as of March
31, 1999 and December 31, 1998.
Table 4 - Deposits by Category
(In Thousands)
March 31,December 31,
1999 1998
Demand Deposits:
Noninterest-bearing accounts $ 14,178 $ 14,551
NOW and MMDA accounts 28,684 27,170
Savings accounts 4,795 3,856
Total Demand Deposits 47,657 45,577
Term Deposits:
Less than $100,000 45,581 41,301
$100,000 or more 10,434 14,909
56,015 56,210
$103,672 $101,787
CAPITAL
During the three month period ended March 31, 1999,
stockholders' equity increased by $101,000 to $8.5 million, due
to net income for the period of $250,000 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, 1999, the Bank held $28.1 million in available-
for-sale securities and during the first three months of 1999
the Bank received $6.8 million in proceeds from maturities,
redemptions and principal payments on its investment portfolio.
Deposits increased by $1.9 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, 1999.
The Bank can also enter into repurchase agreement transactions
should the need for additional liquidity arise. At March 31,
1999, the Bank had $495,000 of repurchase agreements
outstanding.
As of March 31, 1999, the Bank had capital of $8.5 million, or
7.6% of total assets, as compared to $8.4 million, or 7.6%, at
December 31, 1998. 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
1999 1998 Ratios
Tier 1 Capital as a Percentage
of Risk-Weighted Assets 11.0% 11.2% 4.00%
Total Capital as a Percentage
of Risk-Weighted Assets 11.8% 12.0% 8.00%
Leverage Ratio 8.4% 7.6% Up to 5.00%
Total Risk-Weighted Assets $78,089 $74,658
As of March 31, 1999 and December 31, 1998, the Bank exceeded
all of the minimum regulatory capital ratio requirements.
RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED MARCH
31, 1999 AND 1998
GENERAL
The Bank reported net income of $250,000, or $0.49 per share
for the three month period ended March 31, 1999 as compared
with $244,000 or $0.50 per share for the same period in 1998,
an increase of 2.46%.
NET INTEREST INCOME
Net interest income increased by $178,000 to $1.2 million for
the three month period in 1999 from the comparable period in
1998. Contributing to this increase was an increase in average
interest earning assets. Average interest earning assets, at a
yield of 8.37% totalled $103.0 million as of March 31, 1999.
In comparison in 1998, average interest earning assets, at a
yield of 8.87%, totalled $83.1 million.
Interest and dividend income increased by $311,000 for the
three month period in 1999 compared to the same period in 1998.
This improvement is primarily attributable to an increase of
approximately $19.9 million, or 23.9%, in the volume of average
earning assets during the three month period ended March 31,
1999 compared to the three month period ended March 31, 1998.
Interest income on loans increased by $90,000 over the same two
periods primarily as a result of an increase of approximately
$5.7 million in average loans outstanding. Over the same two
periods, interest and dividends on investments increased by
$225,000 due to an increase of approximately $13.5 million or
94.7% in the volume of investments during the three month
period. Interest income on Federal Funds Sold decreased by
$4,000 due to an decrease in the average yield on Federal Funds
Sold outstanding during the three month period from 5.21% in
1998 to 4.72% in 1999.
Total interest expense increased $133,000 for the three month
period ended March 31, 1999 compared to the same period in
1998. Interest on deposits increased as a result of an
increase of approximately $18.5 million in average deposits
over the same period in 1998. The average rate on interest-
bearing liabilities decreased to 4.55% for the three month
period in 1999 from 5.00% in the comparable period of 1998.
Table 6 - Average Balances, Interest and Average Rates
March 31
1999 (in thousands) 1998
Average AverageAverage Average
Balance Interest Rate Balance Interest Rate
Assets:
Federal Funds Sold$ 10,088 $ 119 4.72%$ 9,452 $ 123 5.21%
Investments:
Securities--Taxable 25,606 424 6.62% 14,273 223 6.25%
Non-Taxable 2,185 24 4.39% -0- -0- N/A
Total Loans, Including
Fees 65,139 1,588 9.75% 59,410 1,498 10.09%
Total Interest Earning
Assets 103,018 2,155 8.37% 83,135 1,844 8.87%
Cash and Due From
Banks 3,431 2,646
All Other Assets 5,357 4,755
Loan Loss Reserve/
Unearned Fees (1,558) (1,968)
TOTAL ASSETS $110,248 $88,568
Liabilities and Stockholders Equity:
Interest Bearing Deposits:
Time Deposits $ 55,986 $ 752 5.37% $41,478 $ 582 5.61%
Other 31,132 239 3.07% 27,068 273 4.03%
FHLB Advances -0- -0- N/A 37 3 8.11%
Federal Funds
Purchased -0- -0- N/A -0- -0- N/A
Total Interest-Bearing
Liabilities 87,118 991 4.55% 68,583 858 5.00%
Net Interest Income $1,164 $ 986
Non-Interest Bearing
Deposits 14,105 11,505
Total Cost of Funds 3.92% 4.29%
All Other Liabilities 680 1,002
Stockholders Equity 8,365 7,464
Unrealized Gain/Loss on
Securities (20) 14
TOTAL LIABILITIES
AND STOCKHOLDERS
EQUITY $110,248 $88,568
Net Interest Yield 3.82% 3.87%
Net Interest Margin 4.52% 4.74%
Table 7 - Interest Rate Sensitivity
(In Thousands) March 31, 1999
Less One YearGreater Non-
Than Through Than Interest
1 Year 5 Years5 Years Bearing Total
Asset:
Federal Funds Sold $8,480 $8,480
Investments 307 3,405 24,354 28,066
Loans 34,974 31,360 221 66,555
Non-Interest Earning Assets
and Unearned Assets/Loan
Loss Reserve 9,645 9,645
43,761 34,765 24,575 9,645 112,746
Liabilities and Stockholders' Equity:
Interest-Bearing Deposits67,923 21,571 -0- 89,494
Non-Interest Bearing Deposits 14,178 14,178
FHLB Advances -0- -0-
Noninterest Bearing Liabilities
and Stockholders' Equity 9,074 9,074
Total 67,923 21,571 -0- 23,252 112,746
Interest Rate Sensitivity
Gap (24,162) 13,194 24,575 (13,607) -0-
Cumulative Interest Rate
Sensitivity Gap $(24,162)$(10,986)$13,607$ -0- $ -0-
OTHER INCOME
Total other income was $174,000 for the three month period
ended March 31, 1999 as compared to $125,000 for the same
period in 1998, an increase of $49,000. Other income is
comprised primarily of customer service fees and other items.
OPERATING EXPENSES
Total operating expenses were $884,000, or 0.80% of average
total assets, for the three month period ended March 31, 1999
as compared to $700,000, or 3.16%, for the same period in 1998.
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
$147,000 or 44% over the first three months of 1999 due to
normal salary increases and addition of a new branch.
Occupancy and equipment expenses increased approximately $2,000
when compared to expenses at March 31, 1998, an increase of
1.5%. Contributing to the increase in occupancy and equipment
expenses was the opening of the Alcoa branch during 1998.
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, 1999, the Bank
recorded $144,000 in tax expense which resulted in an
approximate effective rate of 36.5%. Comparably, in 1998, the
Bank recorded $162,000 in tax expense, resulting in an
approximate effective rate of 39.9%.
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
Exhibit 27 - Financial Data Schedule
3-31-99
Amount (In Thousands)
Cash $ 5,476
Federal Funds Sold 8,480
Trading Assets -0-
Investments AFS 28,066
Investments HTM -0-
Investments-Market -0-
Loans 66,555
Allowance for Losses 620
Total Assets 112,746
Deposits 103,672
Short-Term Borrowings -0-
Other Liabilities 153
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 112,746
Interest on Loans 1,588
Interest on Investments 448
Other Interest Income 119
Total interest Income 2,155
Interest on Deposits 991
Total Interest Expense 991
Net Interest Income 1,164
Provision-Loan Losses 60
Securities-Gain/Loss 15
Other Expenses 884
Income Before Tax 394
Income Before Extraordinary 394
Extraordinary Less Tax -0-
Cumul. Change Acct. Principal -0-
Net Income 250
Earnings Per Share-P 0.49
Earnings Per Share-D 0.49
Net Interest Yield-EA 3.82
Loans-Non Accrual 82
Loans Past Due > 90 Days -0-
Troubled Debt Restructuring -0-
Potential Problem Loans -0-
Allowance-Beginning 594
Total Charge-Offs 55
Total Recoveries 21
Allowance End of Period 620
Loan Loss-Domestic 620
Loan Loss-Foreign -0-
Loan Loss-Unallocated -0-
(b) Reports on Form 8-K, None.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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Exhibit 27 - Financial Data Schedule
3-31-99
Amount (In Thousands)
Cash $ 5,476
Federal Funds Sold 8,480
Trading Assets -0-
Investments AFS 28,066
Investments HTM -0-
Investments-Market -0-
Loans 66,555
Allowance for Losses 620
Total Assets 112,746
Deposits 103,672
Short-Term Borrowings -0-
Other Liabilities 153
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 112,746
Interest on Loans 1,588
Interest on Investments 448
Other Interest Income 119
Total interest Income 2,155
Interest on Deposits 991
Total Interest Expense 991
Net Interest Income 1,164
Provision-Loan Losses 60
Securities-Gain/Loss 15
Other Expenses 884
Income Before Tax 394
Income Before Extraordinary 394
Extraordinary Less Tax -0-
Cumul. Change Acct. Principal -0-
Net Income 250
Earnings Per Share-P 0.49
Earnings Per Share-D 0.49
Net Interest Yield-EA 3.82
Loans-Non Accrual 82
Loans Past Due > 90 Days -0-
Troubled Debt Restructuring -0-
Potential Problem Loans -0-
Allowance-Beginning 594
Total Charge-Offs 55
Total Recoveries 21
Allowance End of Period 620
Loan Loss-Domestic 620
Loan Loss-Foreign -0-
Loan Loss-Unallocated -0-
(b) Reports on Form 8-K, None.
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