UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 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: (865) 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)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [ ] No
Check if there is no disclosure of delinquent filers in response
to items 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB [ ]
The issuer's revenues for its most recent fiscal year were
$9,772,710.
At March 21, 2000, the aggregate market value of the voting stock
held by non-affiliates of the Company was approximately
$12,080,656. The last recorded trade of shares between individuals
was on August 6, 1999 at a price of $28 per share.
As of March 21, 2000, issuer had 564,361 shares of its $5.00 par
value common stock outstanding.
PART I
Item 1. Description of Business
(a) Business Development
First Central Bancshares, Inc. (the "Company") is a one bank
holding company for First Central Bank (the "Bank"). The
formation was approved by the stockholders of the Bank on March
18, 1993. On April 6, 1993 the Bank became a wholly owned
subsidiary of the Company with the exchange of one share of Bank
common stock for one share of common stock of the Company. The
Company currently has 564,361 shares of its $5.00 par value
common stock outstanding.
(b) Business of Issuer
The Bank operates out of the main office located in Lenoir City,
Loudon County, Tennessee and five branch offices, one located in
Loudon, one in Tellico Village, Loudon County, Tennessee, one
located in Farragut, Knox County, Tennessee, one located in
Kingston, Roane County, Tennessee, and one located in Alcoa,
Blount County, Tennessee. 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 Honor and Cirrus network machines.
The Alcoa office in Blount County, Tennessee opened December 7,
1998. The competition includes four other commercial banks in
Loudon County with only one of them being locally headquartered.
The adjoining counties include twelve commercial banks and seven
savings banks/savings and loan associations. A new commercial
bank opened in Anderson County in 1995 and is the smallest in
terms of asset size. First Central is the second smallest in
asset size and remains the fastest growing institution in Loudon
County and the above-described market area. The Bank expanded
its operations into Monroe County, Tennessee with the opening of
a full service branch in Sweetwater, Tennessee in March 1999. An
agreement was signed effective October 31, 1999 to sell this
branch to another bank holding company group. The sale of the
premises and equipment will include the transfer of the cash,
loans, and related accrued or unearned interest, deposits and
related accrued interest, and certain other assets and
liabilities related to the branch. The sale is expected to be
completed in April or May, 2000, but is subject to approval of
the appropriate federal and/or state regulatory authorities and
certain obligations of both parties.
The Company is subject to regulation by the Federal Reserve Bank
(FRB) and the Securities and Exchange Commission (SEC). The Bank
is subject to regulation by the Department of Financial
Institutions of the State of Tennessee (TDFI) and Federal Deposit
Insurance Corporation (FDIC). As a Bank Holding Company, the
Company is subject to regulation by the Board of Governors of the
Federal Reserve System (Federal Reserve Board). The Bank Holding
Company Act requires the prior approval of the Federal Reserve
Board in any case where a bank holding company proposes to
acquire direct or indirect ownership or control of more than 5%
of the voting shares of any bank (unless it owns a majority of
such bank's voting shares) or to merge or consolidate with any
other bank holding company. The Federal Reserve Board may not
approve such acquisition, merger or consolidation that would have
anticompetitive effects or that would permit a bank holding
company to acquire a bank outside of the holding company's
principal state of operations unless the statutes of the second
state expressly permit the acquisition.
The Bank Holding Company Act also prohibits a bank holding
company, with certain exceptions, from acquiring or retaining
more than 5% of the voting shares of any company that is not a
bank and from engaging in any business other than banking or
managing or controlling banks and other subsidiaries authorized
by the Bank Holding Company Act or providing services to them.
The Federal Reserve Board is authorized to approve the ownership
of shares by a bank holding company of any company whose
activities have been determined by the Federal Reserve Board to
be so closely related to banking or to managing or controlling
banks as to be a proper incident thereto.
The Federal Reserve Board may issue cease and desist orders
against bank holding companies and non-bank subsidiaries to stop
actions believed to present a serious threat to a subsidiary
bank. It also regulates changes in the control of bank holding
companies and the ability to proscribe the payment of dividends
by banks and bank holding companies. The Federal Reserve Board
has expressed its view that a bank holding company experiencing
earnings weakness should not pay cash dividends exceeding its net
income or which could only be funded in ways that weaken the bank
holding company's financial health, such as by borrowing.
The Financial Institutions Reform, Recovery, and Enforcement Act
("FIRREA"), signed into law in 1989, amended provisions of the
Bank Holding Company Act to specifically authorize a bank holding
company, upon receipt of appropriate approvals from the Federal
Reserve Board and the Director of the Office of Thrift
Supervision ("OTS"), to acquire control of any savings
association or holding company thereof wherever located. A
savings and loan holding company may not acquire control of a
bank. Pursuant to rules promulgated by FIRREA, a savings
association acquired by a bank holding company (i) may, so long
as it continues to meet the qualified thrift lender test,
continue to branch to the same extent as permitted to their
nonaffiliated savings associations similarly chartered in the
state, and (ii) may not continue any nonbanking activities not
authorized for bank holding companies. Savings associations
acquired by a bank holding company may, if located in a state
where the holding company is legally authorized to acquire a
bank, be converted, to the extent permitted by state law, to the
status of a bank but deposit insurance assessments and payments
continue to be paid by the association to the Savings Association
Insurance Fund of the FDIC. A savings association so converted
to a bank becomes subject to the branching restrictions
applicable to banks. Under certain circumstances, a savings
association acquired by a bank holding company may be merged with
an existing bank subsidiary of a holding company.
The Company is also a bank holding company under the Bank
Structure Act of 1974. A bank holding company whose principal
place of business is within the State of Tennessee is allowed to
enter any and all counties in the State through acquisitions of
existing banks. However, a bank holding company may not acquire
any of the shares of a bank in Tennessee unless such bank has
been in operation for at least five (5) years, except in certain
circumstances. A bank holding company is prohibited from
acquiring any bank in Tennessee as long as banks which the
holding company controls retain sixteen and one-half (16.5)%
percent or more of the total individual, partnership or corporate
demand and savings deposits in all banks in Tennessee as reported
annually by the FDIC. Tennessee law provides that any out-of-
state holding company may acquire a Tennessee bank holding
company or a Tennessee Bank with the approval of the Commissioner
of the Department of Financial Institutions of the State of
Tennessee (the "Commissioner") if the laws of the state in which
the out-of-state bank holding company has its principal office
permit such bank holding company to acquire or be acquired by
Tennessee bank holding companies. The Tennessee banks or bank
holding companies to be acquired must have been in existence for
more than five years.
The Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994(the "IBBEA") authorizes interstate acquisitions of banks
and bank holding companies without geographic limitation
beginning one year after enactment. In addition, since June 1,
1997, a bank may merge with a bank in another state as long as
neither of the states has opted out of interstate branching
between the date of enactment of the IBBEA and May 31, 1997.
Tennessee did not opt out of interstate branching. The IBBEA
further provides that states may enact laws permitting interstate
merger transactions prior to June 1, 1997. Tennessee did not
enact such a law. A bank may establish and operate a de novo
branch in a state in which the bank does not maintain a branch if
that state explicitly permits de novo branching. Once a bank has
established branches in a state through an interstate merger
transaction, the bank may establish and acquire additional
branches at any location in the state where any bank involved in
the interstate merger transaction could have established or
acquired branches under applicable federal or state law. A bank
that has established a branch in a state through de novo
branching may establish and acquire additional branches in such
state in the same manner and to the same extent as a bank having
a branch in such state as a result of an interstate merger. If a
state opts out of interstate branching within the specified time
period, no bank in any other state may establish a branch in the
opting out of state, whether through an acquisition or de novo.
Compliance with environmental laws has not directly impacted the
Company or Bank. However, compliance has impacted the lending
functions of the Bank to commercial business customers. All
commercial loans require an environmental assessment at varying
levels of expertise.
As of December 31, 1999, the Bank employed 56 salaried persons
and 7 hourly persons.
(b)(1) Distribution of Assets, Liabilities and Stockholders'
Equity; Interest Rates and Interest Differential
See Schedule I (Attached)
(b)(2) Investment and Loan Portfolio Maturities and
Sensitivities to Changes in Interest Rates
See Schedule III (Attached)
(b)(3) Risk Elements
See Item 6 - Management's Discussion and Analysis or Plan of
Operation and Schedule V - Nonperforming Assets.
(b)(4) Summary of Loan Loss Experience
See Schedule VI - Analysis of Loan Loss Reserve and Schedule VII
- - Allocation of the Loan Loss Reserve (Attached).
(b)(5) Deposits
See Item 7 - Financial Statements and Schedule I (Attached)
(b)(6) Return on Equity and Assets
See Item 6 - Management's Discussion and Analysis or Plan of
Operation and Schedule VIII - Return on Assets and Equity.
(b)(7) Short-Term Borrowings
None.
Item 2. Description of Property.
(a) Location of Property
As detailed in Item 1, the Bank operates offices in Lenoir City,
Loudon, Tellico Village, Loudon County, Tennessee; Farragut, Knox
County, Tennessee; Kingston, Roane County, Tennessee; and Alcoa,
Blount County, Tennessee. The main office in Lenoir City is a
modern facility containing approximately 10,000 square feet and
was occupied upon completion of construction in January of 1993.
The Loudon office is a modern facility which was remodeled and
expanded during 1996. The extensive remodeling in the first half
of 1996 better supports the level of business maintained at that
location. The Tellico Village office is a modern facility
containing approximately 3,000 square feet of space and is a full
service office with a drive-up ATM. The Farragut office, which
opened in May 1995, is a modern full service facility of
approximately 6,000 square feet. The Kingston office, which
opened December 29, 1997, is similar to the Loudon branch with
approximately 2,500 square feet. The Sweetwater, Tennessee
office is a full service facility of approximately 2,500 square
feet which opened in March 1999 (see discussion in Business of
Issuer). The Alcoa office is located in a temporary facility
until construction of a new full service branch is completed in
2000. The office is expected to open in mid-summer and will
contain approximately 4,000 square feet of space.
(b) Investment Policies
(1) The Bank and Company do not invest in real estate other than
for property from which to conduct its operations.
(2) The Bank makes mortgage loans for single family dwellings,
commercial properties, unimproved land, and developmental
property. These mortgage loans may be first or second
mortgages and are serviced and held by the Bank. The Bank
may also from time to time purchase government agency bonds
secured by mortgages and backed and/or guaranteed by
governmental agencies. These agency bonds may include
Federal National Mortgage Association, Federal Home Loan
Mortgage Corporation and Government National Mortgage
Association.
(3) No investment is made in securities of or interest in
persons engaged in real estate activities.
(c) Description of Real Estate and Operating Data
(1) The Company has its principal offices in its headquarters
building at 725 Highway 321 North, Lenoir City, Tennessee
37771, which is owned by the Bank. The Bank also owns
properties which house the branches at Loudon and Tellico
Village, Loudon, Tennessee, Farragut, Tennessee and at
Sweetwater, Tennessee (see discussion in Business of
Issuer), and Kingston, Tennessee. The Bank also owns
property in Alcoa, Tennessee, where there is a temporary
facility while a new branch is currently under construction.
None of the properties amount to ten (10%) percent of total
assets and none are encumbered.
Item 3. Legal Proceedings
The Company is not aware of any material pending legal
proceedings to which the Company or the Bank is a party.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders during the
fourth quarter of the Company's fiscal year ending December 31,
1999.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
(a) Market Information
The stock of the Company is not publicly traded on any exchange
or market. The stock is traded between individual stockholders
only. The stock was issued in a one for one share exchange with
the Bank stockholders when the Bank was merged with the Company
on April 6, 1993. The price for the traded stock is set between
the individuals. However, Company officials believe that the
stock has traded from a low of $28 per share to a high of $30 per
share between January 1999 and the date of this report, as per
individuals who have sold and/or purchased stock.
(b) Holders
The Company has six hundred and twenty-six (626) shareholders of
common stock.
(c) Dividends
In February 2000, the Company distributed a ten (10%) percent
dividend to its stockholders by issuing an additional 51,080
shares of common stock. The Company used a fair market value of
$26.00 per share and credited common stock $5.00 per share or
$255,400, additional paid in capital $21.00 per share or
$1,072,680, and charged retained earnings a total of $1,328,080.
No dividends were distributed in 1999.
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 of $20.00 per share or
$930,520, and charged retained earnings a total of $1,163,150.
Item 6. Management's Discussion and Analysis
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Central Bancshares, Inc. is a one bank holding company
which owns 100% of the outstanding stock of First Central Bank.
The investment in First Central Bank represents virtually all of
the assets of First Central Bancshares, Inc.
The following represents a narrative analysis of the financial
condition and operational results of the company and its
subsidiary bank for 1999. For a more complete understanding of
this narrative, please refer to the Consolidated Financial
Statements and notes thereto presented elsewhere in this Annual
Report.
The accompanying financial statements are consolidated statements
of the Bank and the Company as detailed above. In 1999 total
assets increased 3.6% from December 31, 1998. Federal Funds sold
decreased significantly with a net decrease of 84.7% at December
31, 1999 from December 31, 1998. This decrease in Federal Funds
sold was offset by a 142.6% increase in cash reserves and
deposits in due from banks as the Bank prepared for Y2K.
Investment securities available for sale increased $1.1 million.
The net effect was that liquidity remained very high at 32.0%
Net loans increased by 16.8% as the bank had good loan growth.
Real Estate loans overall increased 15.7%. This increase was
primarily accounted for in non farm-non-residential properties
with an increase of 75.5% over 1998 and construction and land
development loans were up 18.5%. Residential Real Estate loans
decreased by 4.4% as interest rates increased and refinancing
slowed. Consumer loans decreased by 19.4% from 1998 due
primarily to curtailment of purchases of indirect auto paper.
Management has continued to evaluate the loan loss reserve
through a monthly analysis of loans outstanding. The adequacy of
the loan loss reserve is also evaluated quarterly by the board of
directors. The reserve for loan losses increased by 4.0%.
Nonperforming assets decreased by $248,000 from 1998. This
resulted in nonperforming loan ratios of .17% and .59% of total
loans at December 31, 1999 and 1998, respectively. Nonperforming
loans were 5.5% and 38.7% of loan loss reserves for the years
ended December 31, 1999 and 1998, respectively. Total
nonperforming assets to total assets were .11% and .33% at
December 31, 1999 and 1998, respectively. The improvement in
nonperforming ratios was due to management's and lender's
continued efforts to make quality loans and monitor their
progress.
Past due loans of 30 days or more but less than 90 days total
1.43% of total net loans. We continue to monitor loans very
closely and anticipate that past dues and losses will be
effectively managed to keep both low.
Net Investment securities increased 4.0%. The total net
securities are accounted for under Financial Accounting Standard
(FAS) 115, (see notes to consolidated financial statements). All
securities are in Government or Government agency issues,
municipal securities, and stock in Banker's Bank. Also the Bank
increased by 25.1% its investment in Federal Home Loan Bank of
Cincinnati stock due to growth in assets, real estate loans and
through stock dividends. Also the bank purchased stock in the
Banker's Bank valued at $75,000.
Net investment in premises and equipment increased 18.7% due
primarily to construction of the Sweetwater office and the
opening of our Blount County office. Other assets increased
95.2%. This increase was due to a significant increase in the
deferred income tax benefit related to unrealized losses on
investment securities as the bond market took a large downturn in
the last half of the year.
Deposit increases of 3.6% reflect modest growth as the bank
concentrated on increasing loans and curtailed deposit growth to
maximize income. Deposit growth is expected to increase
significantly in 2000 as we again seek deposits aggressively in
all market areas. Demand deposits increased 8.2% and time
deposits decreased .21%. Non-interest bearing demand deposits
increased 14.0% and interest bearing demand deposits increased
5.5%. Time deposits under $100,000 increased by 2.4% while time
deposits over $100,000 decreased by 7.3%. Other liabilities
increased 21.8% which primarily was due to an increase in accrued
income tax and an increase in accrued profit sharing.
Liquidity which is the company's ability to mobilize cash to meet
operating needs remained strong at 32.0% for 1999. The Bank is a
member of the Federal Home Loan Bank of Cincinnati and eligible
to obtain both short and long term credit advances. Also, the
Bank may enter into repurchase agreements or purchase federal
funds should the need for additional liquidity arise. Cash and
due from accounts increased by 142.6% over 1998 as the bank
placed cash in reserve for Y2K preparedness. The net unrealized
loss on investments at December 31, 1999 was $1.46 million
compared to a net unrealized gain at December 31, 1998 of
$73,000. 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 rate environment which was
true in the last year and resulted in the unrealized loss.
The company and subsidiary had an increase of 31.3% in net income
for 1999. This increase was the result of a number of factors
including an increase of 15.7% in net interest income and an
increase of 69.44% in non interest income. The return on average
assets (ROAA) was 1.06% for the year versus .91% for 1998. The
return on average equity (ROAE) was 13.35% excluding unrealized
gains (loss) versus 11.39% for 1998. Interest income is composed
of loan income which increased by 8.7%, investment securities
income which increased by 42.8%, and federal funds sold income
which decreased by 55.4% as assets were transferred to loans,
investments and to cash reserves as noted earlier. Interest
expense increased a very modest 1.6% as the result of moderate
growth most of which was in non interest bearing demand deposits.
Interest expense includes interest on now accounts and money
market accounts which decreased 16.7% and savings accounts which
increased 34.3%. The net result was net interest margin of 4.24%
for 1999 versus a margin of 4.09% for 1998.
Non-interest income increased 69.4% which included income from a
non-refundable deposit of $300,000 for the proposed sale of the
Sweetwater branch office (see Note 16 of the financial
statements). Service charge income on deposit accounts increased
27.4%. Non-interest expense increased 31%. Salaries and benefits,
data processing fees and occupancy expense account for the
largest components of non-interest expense and all increased.
Salaries and benefits increased by 34.8% due to the addition of
employees for the Alcoa and the Sweetwater offices. Data
processing increased 33.1% as a result of the growth in assets,
including new offices. Occupancy expense, furniture fixtures and
equipment depreciation and maintenance expenses increased by
22.25% due to the new office and equipment purchases. Other non-
interest expenses increased 29.2%. All non-interest costs will
continue to increase as the bank grows and a new full service
office is opened in 2000.
CAPITAL ADEQUACY
The Company and Bank had consolidated total equity of $4.6
million on December 31, 1993. The company issued 38,560 shares
of stock in 1994 in the form of a stock dividend to shareholders.
The company also issued 42,376 shares of stock in the form of a
stock dividend in 1996. The company issued 46,526 shares of
stock as a stock dividend in February 1998, and has announced a
stock dividend of 51,080 shares payable in February 2000.
Total capital was $10.2 million at December 31, 1999 and total
Tier I capital was $9.5 million. Total capital at December 31,
1998 was $9.0 million and Tier I capital was $8.4 million. Risk
based capital guidelines as defined by banking regulators
required the Bank to maintain minimum total capital ratios of 8%
to risk-weighted assets, Tier I capital to risk weighted assets
of 4% and Tier I capital to average assets of 5%. The Bank
maintained total capital to risk weighted assets of 12.4% at
December 31, 1999 and 12% at December 31, 1998. Tier I capital
to risk weighted assets was 11.6% and 11.2% at December 31, 1999
and 1998, respectively. Tier I capital to average assets was
8.5% and 7.6% at December 31, 1999 and 1998, respectively. The
Bank exceeded all of the minimum capital ratio requirements in
the years discussed and management believes that the capital
position is adequate to support the operations of the company and
subsidiary bank.
YEAR 2000 RECAP
The bank successfully completed the century date change over
without any significant problems and zero interruptions in
operations. The bank had extensive direct costs and "opportunity
costs" that prevented net income from being even better in 1999.
REGULATORY MATTERS AND RECENT LEGISLATION
The Bank is state chartered and federally insured, and is subject
to the rules and regulations of the Tennessee Department of
Financial Institutions (TDFI) and the Federal Deposit Insurance
Corporation (FDIC). The holding company is also subject to the
rules and regulations of the Federal Reserve Bank (FRB) and
Securities and Exchange Commission (SEC).
In 1993, the shareholders of the Bank approved the formation of a
single-bank holding company and a plan for the exchange of one
share of bank stock for one share of holding company stock. This
transaction was accomplished April 6, 1993. The Bank had an
agreement with TDFI and FDIC not to declare or pay any cash
dividends for the first three years of existence. The Company
has now passed that three year threshold and will address
dividends according to the established dividend policy. As noted
previously, the Company declared and paid a stock dividend in
1994 of 38,560 shares which represented a dividend of 10%. The
Company also paid a stock dividend of 42,376 shares in 1996,
46,526 shares in 1998, and 51,080 will be paid in 2000.
Beginning in 1993, FDIC deposit insurance premiums were assessed
based on the financial soundness (including capital adequacy) and
the risks inherent in the Bank. The premiums ranged from $.23
per $100 of deposits to $.31 per $100. The Bank was assigned the
rate of $.23 per $100 for 1993 and 1994. In 1995 the rate was
lowered to a range of $.04 to $.31 for assessments when the Bank
Insurance Fund (BIF) reached 1.25% of total bank domestic
deposits in the third quarter. This rate varies as the BIF
fluctuates. The Bank's cost has remained relatively low for
1996, 1997, 1998 and 1999 due to our good rating.
In June 1998, the FASB issued FAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities
in the statement of financial position and measure those
instruments at fair value. FAS No.137 delayed the effective date
of this pronouncement to fiscal quarters of fiscal years
beginning after June 15, 2000. Adoption of this statement is
expected to have no material effect on the Company's financial
statements.
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 Mortgage Banking Enterprises." SFAS No. 134 amends FASB
Statement No. 65, "Accounting for Certain Mortgage Banking
Activities" which established 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 is not expected to
have any effect on our financial condition or results of
operations.
On November 12, 1999, President Clinton signed legislation which
could have a far-reaching impact on the financial services
industry. The Gramm-Leach-Bliley ("G-L-B") Act authorizes
affiliations between banking, securities, and insurance firms and
authorizes bank holding companies and national banks to engage in
a variety of new financial activities. Among the new activities
that will be permitted to bank holding companies are securities
and insurance brokerage, securities underwriting, insurance
underwriting and merchant banking. The Board of Governors of the
Federal Reserve System ("Federal Reserve Board"), in consultation
with the Secretary of the Treasury, may approve additional
financial activities.
The G-L-B Act imposes new requirements on financial institutions
with respect to customer privacy. The G-L-B Act generally
prohibits disclosure of customer information to non-affiliated
third parties unless the customer has been given the opportunity
to object and has not objected to such disclosure. Financial
institutions are further required to disclose their privacy
policies to customers annually.
The G-L-B Act contains a variety of other provisions including a
prohibition against ATM surcharges unless the customer has first
been provided notice of the imposition and amount of the fee.
The G-L-B Act reduces the frequency of Community Reinvestment Act
examinations for smaller institutions and imposes certain
reporting requirements on depository institutions that make
payments to non-governmental entities in connection with the
Community Reinvestment Act.
The Company is unable to predict the impact of the G-L-B Act on
its operations at this time.
NOTE: NUMERICAL ENTRIES APPEARING IN THIS REPORT HAVE BEEN
ROUNDED FOR EASE IN READABILITY. ACTUAL FIGURES APPEAR IN THE
AUDITOR'S REPORT, WHICH IS CONTAINED WITHIN THE FOLLOWING PAGES
OF THIS DOCUMENT.
Item 7. Consolidated Financial Statements and Financial Data
Schedules
FIRST CENTRAL BANCSHARES, INC.
AND SUBSIDIARY
Lenoir City, Tennessee
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999, 1998, and 1997
FIRST CENTRAL BANCSHARES, INC.
AND SUBSIDIARY
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INDEPENDENT AUDITOR'S REPORT
Board of Directors
First Central Bancshares, Inc.
Lenoir City, Tennessee
We have audited the accompanying consolidated balance sheets of
First Central Bancshares, Inc. and subsidiary as of December 31,
1999 and 1998, and the related consolidated statements of income,
comprehensive income, changes in shareholders' equity, and cash
flows for the years ended December 31, 1999, 1998, and 1997.
These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of First Central Bancshares, Inc. and subsidiary as of
December 31, 1999 and 1998 and the results of their operations
and their cash flows for the years ended December 31, 1999, 1998
and 1997, in conformity with generally accepted accounting
principles.
Pugh & Company, P.C.
Certified Public Accountants
Knoxville, Tennessee
January 28, 2000
FIRST CENTRAL BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
As of December 31, 1999 1998
ASSETS
Cash and Due From Banks $ 6,221,10 $ 2,563,83
8 7
Federal Funds Sold 2,280,000 14,915,000
Total Cash and Cash Equivalents 8,501,108 17,478,837
Investment Securities at Fair 28,229,212 27,139,181
Value
Loans, Net 71,151,700 60,943,601
Premises and Equipment, Net 5,109,301 4,304,387
Accrued Interest Receivable 779,330 673,890
Prepaid Expenses and Other 368,152 181,626
Prepaid Income Taxes 0 10,050
Deferred Income Tax Benefit 593,463 26,181
TOTAL ASSETS $ 114,732,26 $ 110,757,75
6 3
LIABILITIES AND EQUITY
LIABILITIES
Deposits:
Demand $ 49,316,23 $ 45,576,73
3 2
Term 56,092,665 56,210,445
Total Deposits 105,408,898 101,787,177
Accrued Interest Payable 391,187 443,710
Accrued Income Taxes 108,302 0
Other 164,335 101,195
Total Liabilities 106,072,722 102,332,082
SHAREHOLDERS' EQUITY
Common Stock - Par Value $5.00,
Authorized 2,000,000 Shares,
Issued and
Outstanding 513,281 Shares 2,566,405 2,566,405
Capital in Excess of Par Value 4,357,519 4,357,519
Retained Earnings 2,638,826 1,456,410
Shareholders' Equity Before
Accumulated
Other Comprehensive Income 9,562,750 8,380,334
(Loss)
Accumulated Other Comprehensive
Income (Loss) (903,206) 45,337
Total Shareholders' Equity 8,659,544 8,425,671
TOTAL LIABILITIES AND EQUITY $ 114,732,26 $ 110,757,75
6 3
The accompanying notes are an integral part of these financial
statements.
FIRST CENTRAL BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 1999 1998 1997
31,
INTEREST INCOME
Loans $6,212,26 $5,715,8 $5,902,30
4 52 2
Investment Securities 1,792,025 1,255,07 740,478
6
Federal Funds Sold 305,820 685,277 123,232
Total Interest Income 8,310,109 7,656,20 6,766,012
5
INTEREST EXPENSE 3,930,390 3,869,02 3,033,938
6
NET INTEREST INCOME 4,379,719 3,787,17 3,732,074
9
PROVISION FOR LOAN LOSSES 160,000 235,000 177,500
NET INTEREST INCOME AFTER
PROVISION
FOR LOAN LOSSES 4,219,719 3,552,17 3,554,574
9
NONINTEREST INCOME
Service Charges on Demand 640,953 502,978 488,050
Deposits
Loan Fees and Other Service
Charges 461,590 337,504 244,812
Gain on Sale of Investment
Securities 23,578 0 0
Income From Non-Refundable
Deposit
on Sale of Branch 300,000 0 0
Other 36,480 22,692 27,922
Total Noninterest Income 1,462,601 863,174 760,784
NONINTEREST EXPENSE
Salaries and Employee 1,969,530 1,461,46 1,262,753
Benefits 8
Occupancy Expense 352,250 293,918 234,578
Data Processing Fees 352,721 265,006 200,105
Furniture and Equipment,
Depreciation and 402,540 323,516 253,172
Maintenance
Federal Insurance Premiums 37,073 22,711 21,961
Advertising and Promotion 128,991 96,908 93,087
Office Supplies and Postage 231,119 170,084 131,344
Other 379,956 311,681 275,922
Total Noninterest Expense 3,854,180 2,945,29 2,472,922
2
INCOME BEFORE INCOME TAXES 1,828,140 1,470,06 1,842,436
1
INCOME TAXES 645,724 569,583 715,166
NET INCOME $1,182,41 $ 900,4 $1,127,27
6 78 0
EARNINGS PER SHARE AMOUNTS $ 2.3 $ 1. $ 2.4
0 77 2
The accompanying notes are an integral part of these financial
statements.
FIRST CENTRAL BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended 1999 1998 1997
December 31,
NET INCOME $ 1,182,41 $ 900,47 $1,127,27
6 8 0
OTHER COMPREHENSIVE INCOME
(LOSS), NET OF TAX:
Unrealized Gains (Losses)
on Investment Securities
Available for Sale (1,553,486 71,066 56,125
)
Less Reclassification
Adjustment
for Gains on Sales of
Investment Securities 23,578 0 0
Deferred Income Tax
(Expense)
Benefit Associated With
Unrealized Gains (Losses)
on
Investment Securities
Available
for Sale 581,365 (27,005) (21,328)
Other Comprehensive
Income
(Loss), Net of Tax (948,543) 44,061 34,797
COMPREHENSIVE INCOME $ 233,87 $ 944,53 $1,162,06
3 9 7
The accompanying notes are an integral part of these financial
statements.
FIRST CENTRAL BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the Years Ended December 31, 1999, 1998, 1997
Accumulated
Other
Capital in Comprehensive Total
Common Excess of Retained Income Shareholders'
Stock Par Value Earnings (Loss) Equity
BALANCES,
JANUARY 1,
1997 $2,333,775$3,426,999$ 591,812 $ (33,521) $6,319,065
Other
Comprehensive
Income 0 0 0 34,797 34,797
Net Income 0 0 1,127,270 0 1,127,270
BALANCES,
DECEMBER 31,
1997 2,333,775 3,426,999 1,719,082 1,276 7,481,132
Other
Comprehensive
Income 0 0 0 44,061 44,061
Stock Dividend
of 46,526
Shares of
Common Stock232,630 930,520(1,163,150) 0 0
Net Income 0 0 900,478 0 900,47
8
BALANCES,
DECEMBER 31,
1998 2,566,405 4,357,519 1,456,410 45,337 8,425,671
Other
Comprehensive
Loss 0 0 0 (948,543) (948,543)
Net Income 0 0 1,182,416 0 1,182,416
BALANCES,
DECEMBER 31,
1999 $2,566,405$4,357,519$ 2,638,826 $(903,206) $8,659,544
The accompanying notes are an integral part of these financial
statements.
-6-
FIRST CENTRAL BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended
December 31, 1999 1998 1997
CASH FLOWS FROM
OPERATING
ACTIVITIES
Net Income $ 1,182,41 $ 900,47 $ 1,127,27
6 8 0
Adjustments to
Reconcile
Net Income to Net
Cash
Provided by Operating
Activities:
Provision For Loan 160,000 235,000 177,500
Losses
Depreciation 326,718 277,338 238,292
Amortization 0 1,119 4,460
Gain on Sale of
Investment (23,578) 0 0
Securities
Loss on Sale of
Premises
and Equipment 0 0 143
Deferred Income Tax
(Benefit) 14,083 (9,968) 72,681
Increase (Decrease)
in
Unearned Interest (177,024) (417,886) 92,637
(Increase) in
Unearned
Loan Fees (19,802) (15,715) (9,225)
Amortization of Net
Premiums on
Investment
Securities 13,278 7,995 12,874
Federal Home Loan
Bank
Stock Dividends (22,500) (18,600) (15,900)
(Increase) in
Accrued
Interest Receivable (105,440) (179,297) (21,017)
(Increase) Decrease
in
Prepaid Expenses
and Other 23,766 4,062 (120,298)
(Increase) Decrease
in
Prepaid Income 10,050 (10,050) 0
Taxes
Increase (Decrease)
in
Accrued Interest (52,523) 108,468 4,279
Payable
Increase (Decrease)
in
Income Taxes 108,302 (9,499) (138,558)
Payable
Increase (Decrease)
in
Other Liabilities 63,140 (245,451) 216,994
Total Adjustments 318,470 (272,484) 514,862
Net Cash Provided
by
Operating 1,500,886 627,994 1,642,132
Activities
The accompanying notes are an integral part of these financial
statements.
FIRST CENTRAL BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the Years Ended
December 31, 1999 1998 1997
CASH FLOWS FROM
INVESTING
ACTIVITIES
Purchases of
Investment
Securities Available
for Sale (11,782,649 (30,740,050 (2,827,894
) ) )
Principal Repayments
on
Mortgage-Backed
Securities
Available for Sale 1,457,869 897,250 388,432
Maturities of
Investment
Securities Available
for Sale 6,250,000 14,000,000 2,350,000
Increase in Loans (10,381,565 (2,709,342) (2,757,242
) )
Sales of Investment
Securities Available
for Sale 1,487,641 0 0
Net Purchases of
Premises
and Equipment (1,131,632) (448,643) (1,007,064
)
Proceeds From Sale of
Premises and 0 0 862
Equipment
Net Cash Used in
Investing (14,100,336 (19,000,785 (3,852,906
Activities ) ) )
CASH FLOWS FROM
FINANCING
ACTIVITIES
Increase in Deposits 3,621,721 27,212,684 6,700,546
Repayment of Federal
Home
Loan Bank Advances 0 (43,121) (2,170)
Net Cash Provided
by
Financing 3,621,721 27,169,563 6,698,376
Activities
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS (8,977,729) 8,796,772 4,487,602
CASH AND CASH
EQUIVALENTS,
BEGINNING OF YEAR 17,478,837 8,682,065 4,194,463
CASH AND CASH
EQUIVALENTS,
END OF YEAR $ 8,501,10 $ 17,478,83 $ 8,682,06
8 7 5
The accompanying notes are an integral part of these financial
statements.
FIRST CENTRAL BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the Years Ended
December 31, 1999 1998 1997
Supplementary
Disclosures
of Cash Flow
Information:
Cash Paid During the
Year for:
Interest $ 3,982,91 $ 3,760,55 $ 3,029,65
3 8 9
Income Taxes $ 513,28 $ 599,10 $ 781,04
9 0 3
Supplementary
Disclosures of
Noncash Investing
Activities:
Change in Unrealized
Gain
Gain (Loss) on
Investment $ (1,529,90 $ 71,06 $ 56,12
Securities 8) 6 5
Change in Deferred
Income
Tax Associated With
Unrealized Gain
(Loss)
on Investment $ (581,36 $ 27,00 $ 21,32
Securities 5) 5 8
Change in Net
Unrealized
Gain (Loss) on
Investment $ (948,54 $ 44,06 $ 34,79
Securities 3) 1 7
Issuance of Common
Stock Dividend:
Par $ $ 232,63 $
0 0 0
Capital in Excess
of Par Value $ $ 930,52 $
0 0 0
Reduction in
Retained
Earnings Due to
Issuance of
Common Stock $ $ 1,163,15 $
0 0 0
Acquisition of
Foreclosed Real $ 210,29 $ $
Estate 2 0 0
The accompanying notes are an integral part of these financial
statements.
-8-
FIRST CENTRAL BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999, 1998, and 1997
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Nature of Operations - The Company's subsidiary, First Central
Bank (the Bank), provides a variety of banking services to
individuals and businesses through its six branches in Lenoir
City, Loudon, Tellico Village, Farragut, Kingston, and Alcoa,
Tennessee. Its primary deposit products are demand deposits and
certificates of deposit, and its primary lending products are
commercial business, real estate mortgage, and installment loans.
Principles of Consolidation - The consolidated financial
statements include the accounts of First Central Bancshares,
Inc., a bank holding company, and its wholly owned subsidiary,
First Central Bank. All significant intercompany balances and
transactions have been eliminated.
Consolidated Statements of Comprehensive Income - In June 1997
the Financial Accounting Standards Board issued SFAS No. 130,
Reporting Comprehensive Income. This statement establishes
standards for reporting comprehensive income and its components
in the consolidated 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 1998 and has included its
comprehensive income in a separate financial statement as part of
its consolidated financial statements.
Estimates - The preparation of consolidated financial statements
in accordance with generally accepted accounting principles
requires management to make estimates and assumptions. Those
estimates and assumptions affect certain reported amounts and
disclosures. Accordingly, actual results could vary from those
estimates.
Cash and Due From Banks - Cash and due from banks includes
balances in four correspondent commercial banks located in the
southeastern United States, approximately $387,000 ($125,000 in
1998) on deposit with the Nashville branch of Federal Reserve
Bank of Atlanta, and approximately $15,000 ($13,000 in 1998) on
deposit with the Federal Home Loan Bank of Cincinnati. Balances
in correspondent bank accounts in excess of FDIC insurance limits
are approximately $399,500 as of December 31, 1999 ($74,000 in
1998).
Federal Funds Sold - Federal funds sold consist of unsecured
loans to two correspondent commercial banks located in the
southeastern United States. These loans are repaid on the next
business day.
Investment Securities - The Bank applies the Financial Accounting
Standards Board Statement of Financial Accounting Standards No.
115, Accounting for Certain Investments in Debt Equity Securities
(SFAS No. 115). In accordance with SFAS No. 115, the Bank has
classified all of its investment securities in the available for
sale category. These securities are carried at fair value based
on quoted market prices. Any unrealized gain or loss is reported
in the consolidated statements of comprehensive income, net of
any deferred tax effect.
Realized gains and losses on the sales of investment securities
are based on the net proceeds and amortized cost of the
securities sold, using the specific identification method.
See Note 2 for additional information on investment securities.
Recognition of Interest on Loans - Unearned interest on
installment loans is recognized as income over the terms of the
loans using a declining balance method. Interest on other loans
is calculated using the simple interest method on the principal
outstanding. Accrual of interest is discontinued on a loan when
management believes, after considering economic and business
conditions and collection efforts, that the borrower's financial
condition is such that collection of interest is doubtful.
Allowance for Loan Losses - The allowance for loan losses is
maintained at a level which, in management's judgment, is
adequate to absorb credit losses inherent in the loan portfolio.
The amount of the allowance is based on management's evaluation
of the collectibility of the loan portfolio, including the nature
of the portfolio, credit concentrations, trends in historical
loss experience, specific impaired loans, and economic
conditions. Allowances for impaired loans are generally
determined based on collateral values or the present value of
estimated cash flows. Because of uncertainties associated with
regional economic conditions, collateral values, and future cash
flows on impaired loans, it is reasonably possible that
management's estimate of credit losses inherent in the loan
portfolio and the related allowance may change materially in the
near term. The allowance is increased by a provision for loan
losses, which is charged to expense and reduced by charge-offs,
net of recoveries. Changes in the allowance relating to impaired
loans are charged or credited to the provision for loan losses.
Loan Fees - Loan fees, net of initial direct costs related to
initiating and closing loans, have been deferred and are being
amortized into interest income over the remaining lives of the
loans as an adjustment of yield using the interest method.
Premises and Equipment - Premises and equipment are stated at
cost, less accumulated depreciation. Depreciation, computed
principally using the straight-line method, is based on the
following estimated useful lives:
Buildings and Land Improvements 15 to 40 years
Leasehold Improvements 7 to 31 years
Furniture, Fixtures and Equipment 5 to 7 years
Organization Costs - Organization costs incurred in the share
exchange with the Holding Company totalled $22,304 and were
amortized over sixty months.
Earnings Per Share - Earnings per share is based on the weighted
average number of shares outstanding of 513,281 in 1999 (507,465
and 466,755 in 1998 and 1997).
Income Taxes - Income taxes are provided for the tax effects of
transactions reported in the consolidated financial statements
and consist of taxes currently due plus deferred taxes related
primarily to differences between the basis of the allowance for
loan losses, accumulated depreciation, and the conversion from
the accrual basis of accounting for financial reporting purposes
to the cash basis of accounting for tax reporting. The deferred
tax assets and liabilities represent the future tax return
consequences of those differences which will either be taxable or
deductible when the assets and liabilities are recovered or
settled.
Advertising and Promotion - Advertising and promotion costs are
expensed as incurred.
NOTE 2 - INVESTMENT SECURITIES
The Bank applies SFAS No. 115 for its accounting for investment
securities. The amortized cost and estimated fair value of
investment securities as of December 31, 1999 and 1998 are as
follows:
Investment Securities Available for Sale
Gross Gross Estimated
Amortized UnrealizedUnrealized Market
Cost Gains Losses Value
As of December 31, 1999:
Debt Securities:
U.S. Treasury Securities
and Obligations of
U.S. Government
Corporations and
Agencies $22,395,485 $ 0 $(1,258,541)$21,136,
944
Obligations of States
and Political
Subdivisions 2,163,640 397 (91,694) 2,072,343
Mortgage-Backed
Securities 4,702,195 3,148 (110,093) 4,595,
250
29,261,320 3,545 (1,460,328)27,804,537
Equity Security:
Stock in Federal Home
Loan Bank of Cincinnati,
at Cost 350,100 0 0 350,100
Stock in Banker's Bank,
at Cost 74,575 0 0 74,575
$29,685,995 $ 3,545 $(1,460,328)$28,229,
212
As of December 31, 1998:
Debt Securities:
U.S. Treasury Securities
and Obligations of
U.S. Government
Corporations and
Agencies $20,161,589 $ 47,998 $ (44,149)$20,165,
438
Obligations of
States and Political
Subdivisions 2,180,234 46,580 (4,352) 2,222,462
Mortgage-Backed
Securities 4,444,434 31,022 (3,975) 4,471,
481
26,786,257 125,600 (52,476) 26,859,381
Equity Security:
Stock in Federal Home
Loan Bank of Cincinnati,
at Cost 279,800 0 0 279,800
$27,066,057 $125,600 $ (52,476)$27,139,
181
The amortized cost and estimated market value of debt securities
as of December 31, 1999 by contractual maturity are shown below.
Actual maturities may differ from contractual maturities because
borrowers may have the right to call or prepay obligations with
or without call or prepayment penalties.
Available for Sale
Estimated
Amortized Market
Cost Value
Due in One Year or Less $ 8,065,582$ 7,622,598
Due After One Year Through Five Years 9,734,008 9,344,715
Due After Five Years Through Ten Years 10,216,878 9,695,201
Due After Ten Years 1,244,852 1,142,023
Total Debt Securities $29,261,320$27,804,537
For purposes of the maturity table, mortgage-backed securities,
which are not due at a single maturity date, have been allocated
over maturity groupings based on their contractual maturities.
The mortgage-backed securities may mature earlier than their
contractual maturities because of principal prepayments.
Gross gains of $23,578 were realized on the sale of certain
investment securities classified as available for sale during the
year ended December 31, 1999.
There were no sales of investment securities classified as
available for sale during the years ended December 31, 1998 or
1997. Accordingly, no gross gains or gross losses were realized
for the years ended December 31, 1998 or 1997.
Investments with carrying values of approximately $5,144,000 and
$3,987,000 were pledged to secure deposits of public funds as of
December 31, 1999 and 1998, respectively.
NOTE 3 - LOANS AND ALLOWANCE FOR LOAN LOSSES
The Bank provides mortgage, commercial and consumer lending
services to businesses and individuals primarily in the Loudon
County area. A summary of loans is as follows:
1999 1998
Loans secured by real estate:
Non farm-non-residential $13,232,573 $ 7,539,262
Construction and land development 9,814,058 8,280,106
Residential and other properties 22,519,366 23,552,907
Total loans secured by real estate 45,565,997 39,372,275
Commercial and industrial loans 12,631,423 5,489,849
Consumer loans 13,511,471 16,761,563
Other loans 878,177 928,133
72,587,068 62,551,820
Less: Allowance for Loan Losses (618,034) (594,059)
Unearned Interest (800,425) (977,449)
Unearned Loan Fees (16,909) (36,711)
$71,151,700 $60,943,601
In the ordinary course of business, the Bank has entered into off-
balance-sheet financial instruments consisting of commitments to
extend credit, commercial letters of credit and standby letters
of credit. These financial instruments are recorded in the
financial statements when they become payable. Outstanding
letters of credit were approximately $2,296,000 and $3,146,000 as
of December 31, 1999 and 1998, respectively. Unadvanced lines of
credit and commitments to extend credit were approximately
$13,701,000 and $14,359,000 as of December 31, 1999 and 1998,
respectively. Of the total outstanding letters of credit and
unadvanced lines and commitments as of December 31, 1999 and
1998, approximately $7,898,000 and $8,008,000, respectively, were
secured, primarily by real estate.
From time to time, the Bank provides credit to its executive
officers, directors and their affiliates. Such transactions are
made on the same terms as those prevailing for comparable
transactions with other borrowers and do not represent more than
a normal risk of collection.
Loans to executive officers, directors and their affiliates are
as follows:
December 31,
December 31,
1999 1998
Loans at beginning of year $ 1,805,956 $1,152,906
Disbursements 928,646 1,184,718
Repayments (1,521,614) (531,668)
Loans at end of year $ 1,212,989 $1,805,956
The transactions in the allowance for loan losses are as follows:
1999 1998 1997
Balance,
Beginning of Year $ 594,059 $ 586,860 $ 562,536
Provision -
Charged to Expense 160,000 235,000 177,500
Recoveries of Loans
Previously Charged Off 59,653 56,762 55,329
Loans Charged Off (195,678) (284,563) (208,505)
Balance,
End of Year $ 618,034 $ 594,059 $ 586,860
Loans past due ninety days or more and still accruing interest
totalled approximately $89,000 as of December 31, 1999 ($141,000
in 1998). There were loans totalling approximately $34,000 on
which the accrual of interest had been discontinued as of
December 31, 1999 ($230,000 in 1998).
As of December 31, 1999 and 1998, the Bank had loans amounting to
approximately $658,000 and $810,000, respectively, that were
specifically classified as impaired. The average individual loan
balance of these impaired loans amounted to approximately $22,000
and $19,000, respectively, for the years ended December 31, 1999
and 1998. As of December 31, 1999 and 1998 the allowance for
loan losses for impaired loans amounted to approximately $73,000
and $162,000. Also, interest income of $138,000 and $147,000
relating to these impaired loans was recognized for the years
ended December 31, 1999 and 1998.
NOTE 4 - PREMISES AND EQUIPMENT
A summary of premises and equipment is as follows:
1999 1998
Land $1,689,970 $1,134,298
Buildings 3,059,913 2,856,415
Furniture, Fixtures and Equipment 1,856,409 1,483,947
6,606,292 5,474,660
Less Accumulated Depreciation 1,496,991 1,170,273
$5,109,301 $4,304,387
NOTE 5 - ACCRUED INTEREST RECEIVABLE
A summary of accrued interest receivable is as follows:
1999 1998
Investment securities $424,806 $369,161
Loans 354,524 304,729
$779,330 $673,890
NOTE 6 - DEPOSITS
A summary of deposits is as follows:
1999 1998
Demand Deposits:
Noninterest-bearing accounts $ 16,592,114$ 14,550,674
NOW and MMDA accounts 27,648,830 27,169,833
Savings accounts 5,075,289 3,856,225
Total Demand Deposits 49,316,233 45,576,732
Term Deposits:
Less than $100,000 42,271,834 41,300,879
$100,000 or more 13,820,831 14,909,566
Total Term Deposits 56,092,665 56,210,445
$105,408,898$101,787,177
As of December 31, 1999, the scheduled maturities of term
deposits above are as follows:
2000 $36,832,899
2001 14,634,583
2002` 1,247,695
2003 2,983,757
2004 393,731
$56,092,665
NOTE 7 - ADVANCES FROM FEDERAL HOME LOAN BANK
During 1994, the Bank obtained an advance from the Federal Home
Loan Bank of Cincinnati (FHLB). The advance was repayable
monthly with interest at the rate of 8.20% and had a maturity of
fifteen years but was paid off in 1998. Interest expense
associated with the advance from the FHLB totalled $ 0 for the
year ended December 31, 1999 ($3,612 in 1998 and $3,634 in 1997).
Pursuant to collateral agreements with the FHLB, the advance was
secured by the Bank's FHLB stock and certain first mortgage
loans.
NOTE 8 - INTEREST EXPENSE
A summary of interest expense is as follows:
1999 1998 1997
Deposits:
NOW and MMDA Accounts $ 862,001 $1,035,393 $ 928,161
Savings Accounts 108,868 81,078 72,545
Term Deposits 2,959,521 2,748,943 2,028,246
Total Interest
Expense on Deposits 3,930,390 3,865,414 3,028,952
Borrowings:
Federal Funds Purchased 0 0 1,352
FHLB Advances 0 3,612 3,634
Total Interest Expense on Borrowings 0 3,612 4
,986
Total Interest Expense $3,930,390 $3,869,026 $3,033,938
NOTE 9 - INCOME TAXES
Income taxes as shown in the consolidated statements of income
differ from the amount computed using the statutory federal
income tax rate as follows:
1999 1998 1997
Percent Percent Percent
of of of
Pretax Pretax Pretax
Amount Income Amount Income Amount Income
Federal income
tax at
statutory rate$621,567 34.0 %$499,821 34.0 % $626,428 34.0%
Tax exempt income(22,442)(1.2) (15,283) (1.0) (290) 0.0
State income, net68,470 3.7 54,216 3.7 72,043 3.9
Other, net (21,871) (1.2) 30,829 2.0 16,985 0.9
$645,724 35.3 %$569,583 38.7 % $715,166 38.8 %
Income taxes
consist of:
Current $631,641 $579,551 $642,485
Deferred (Benefit) 14,083 (9,968) 72,681
$645,724` $569,583 $715,166
The net deferred tax asset in the December 31, 1999 and 1998
consolidated balance sheets includes the following components:
1999 1998
Deferred Tax Assets:
Provision for Loan Losses $169,244 $178,825
Deferred Loan Fees 6,419 13,936
Unrealized Holding Loss on Investment Securities 553,578 0
Total Deferred Tax Assets 729,241 192,761
Deferred Tax Liabilities:
Depreciation 72,615 74,429
FHLB Stock Dividends 36,556 28,015
Change in Accounting Method 1,574 3,149
Unrealized Holding Gain on Investment Securities 0 27,787
Prepaid Items 20,021 24,931
Other 5,012 8,269
Total Deferred Tax Liabilities 135,778 166,580
Net Deferred Tax Assets $593,463 $ 26,181
NOTE 10 - RETIREMENT PLAN
The Bank has a profit sharing retirement plan which allows for
discretionary contributions by the Bank as determined annually by
its board of directors. The plan also allows for voluntary
(401k) contributions by employees up to fifteen percent of their
compensation. The Bank's contributions to the plan for the years
ended December 31, 1999, 1998 and 1997 are as follows:
401k
Matching Profit Sharing Total
1999 $7,452 $70,484 $77,936
1998 7,201 66,644 73,845
1997 6,522 68,105 74,627
NOTE 11 - REGULATORY MATTERS
The Bank is subject to various regulatory capital requirements
administered by the federal and state banking agencies. Failure
to meet minimum capital requirements can initiate certain
mandatory, and possibly additional discretionary, actions by
regulators that, if undertaken, could have a direct material
effect on the Bank's financial statements. Under 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 are also subject to qualitative
judgments by the regulators about components, risk weightings,
and other factors.
Quantitative measures established by regulation to ensure capital
adequacy require the Bank to maintain minimum amounts and ratios
(set forth in the table below) of Total and Tier I capital (as
defined in the regulations) to Risk-Weighted Assets (as defined),
and of Tier I capital (as defined) to Average Assets (as
defined). Management believes, as of December 31, 1999, that the
Bank meets all capital adequacy requirements to which it is
subject.
As of December 31, 1999, the Bank is categorized as well
capitalized under the regulatory framework for prompt corrective
action. To be categorized as well capitalized, the Bank must
maintain minimum total risk-based, Tier I risk-based and Tier I
leverage ratios as set forth in the table. There are no
conditions or events since that date that management believes
have changed the institution's category.
The Bank's actual capital amounts and ratios are also presented
in the table. All amounts are in thousands of dollars.
To be Well
To Comply With Capitalized U
nder
Minimum CapitalPrompt Correc
tive
Actual Requirements Action Provis
ions
Amount Ratio Amount Ratio Amount Ratio
As of December 31, 1999:
Total Capital
(to Risk-
Weighted Assets) $10,166 12.4%$6,582 >8.0% $8,228 >10.0%
Tier I Capital
(to Risk-
Weighted Assets) $ 9,548 11.6%$3,291 >4.0% $4,937 >6.0%
Tier I Capital
(to Average
Assets) $ 9,548 8.5%$5,628 >5.0% $5,628 >5.0%
As of December 31, 1998:
Total Capital
(to Risk-
Weighted Assets) $ 8,959 12.0%$5,991 >8.0% $7,489 >10.0%
Tier I Capital
(to Risk-
Weighted Assets) $ 8,365 11.2%$2,996 >4.0% $4,494 >6.0%
Tier I Capital
(to Average
Assets) $ 8,365 7.6%$5,504 >5.0% $5,504 >5.0%
NOTE 12 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards No. 107, Disclosures About Fair
Value of Financial Instruments (SFAS No. 107), which requires the
Company to disclose the fair value of financial instruments, both
assets and liabilities recognized and not recognized in the
consolidated statements of financial condition, for which it is
practicable to estimate fair value.
According to SFAS No. 107, a financial instrument is defined as
cash, evidence of an ownership interest in an entity, or a
contract that both: (1) imposes on one entity a contractual
obligation to deliver cash or another financial instrument to a
second entity, or to exchange other financial instruments on
potentially unfavorable terms with the second entity, and (2)
conveys to that second entity a contractual right to receive cash
or another financial instrument from the first entity, or to
exchange other financial instruments on potentially favorable
terms with the first entity.
SFAS No. 107 also states that the fair value of a financial
instrument is the amount at which the instrument could be
exchanged in a current transaction between willing parties, other
than in a forced or liquidation sale. Quoted market prices in an
active market, if available, are the best evidence of the fair
value of financial instruments. For financial instruments that do
not trade regularly, management's best estimate of fair value is
based on either the quoted market price of a financial instrument
with similar characteristics or on valuation techniques such as
the present value of estimated future cash flows using a discount
rate commensurate with the risks involved.
For the Bank, as for most financial institutions, the majority of
its assets and liabilities are considered financial instruments
as defined above. However, a large majority of those assets and
liabilities do not have an active trading market nor are their
characteristics similar to other financial instruments for which
an active trading market exists. In addition, it is the Bank's
practice and intent to hold the majority of its financial
instruments to maturity and not to engage in trading or sales
activities. Therefore, much of the information as well as the
amounts disclosed below are highly subjective and judgmental in
nature. The subjective factors include estimates of cash flows,
risks characteristics, credit quality, and interest rates, all of
which are subject to change. Because the fair value is estimated
as of December 31, 1999, the amounts which will actually be
realized or paid upon settlement or maturity of the various
financial instruments could be significantly different.
The estimates of fair value are based on existing financial
instruments without attempting to estimate the value of
anticipated future business or activity nor the value of assets
and liabilities that are not considered financial instruments.
For example, the value of mortgage loan servicing rights and the
value of the Bank's long-term relationships with depositors,
commonly known as core deposit intangibles, have not been
considered in the estimates of fair values presented below. In
addition, the tax implications related to the realization of
unrealized gains and losses can have a significant effect on fair
value estimates and have not been included in the estimated fair
values below.
The following methods and assumptions were used to estimate the
fair value of the following classes of financial instruments:
Cash and Cash Equivalents - Cash and cash equivalents include
cash and due from banks, and interest-bearing deposits with
banks. For these short-term instruments, the recorded book value
is a reasonable estimate of fair value.
Investment Securities - Quoted market prices are used to
determine the estimated fair value of investment securities.
Net Loans - The estimated fair value of fixed rate mortgage loans
and commercial loans is calculated by discounting future cash
flows to their present value. Future cash flows, consisting of
both principal and interest payments, are discounted using
current Bank rates for similar loans with similar maturities.
The estimated fair value of variable rate loans is considered
equal to recorded book value.
Fixed rate installment loans have an average maturity of less
than three years, a relatively stable average interest rate, and
a variety of credit risks associated with them. The fair value
of these loans is estimated by discounting future estimated cash
flows to their present value using current Bank rates for similar
loans with similar maturities.
The estimated fair value of the allowance for loan losses is
considered to be recorded book value. Additionally, the credit
exposure known to exist in the loan portfolio is embodied in the
allowance for loan losses.
Deposits - The estimated fair value of demand, savings, NOW and
money market deposits is the amount payable on demand at the
reporting date. The fair value of fixed-maturity certificates of
deposit is estimated using the rates currently offered for
deposits of similar maturities.
Advances From Federal Home Loan Bank - The advances are fixed
rate and fixed maturity liabilities. Their fair value is
estimated using rates currently available to the Bank for debt
with similar terms and remaining maturities.
Off-Balance-Sheet Loan Commitments - The fair value of loan
commitments is based on fees currently charged to enter into
similar agreements, taking into account the remaining terms of
the agreements and the present creditworthiness of the
counterparties. For fixed rate loan commitments, fair value also
considers the difference between current levels of interest rates
and the committed rates. The fair value of letters of credit is
based on fees currently charged for similar agreements or on the
estimated cost to terminate them or otherwise settle the
obligations with the counterparties at the reporting date. The
fair value of these items is not material to the Company as of
December 31, 1999.
The recorded book value and estimated fair value of the Company's
financial instruments as of December 31 are as follows:
1999
1998
Recorded Estimated Recorded Estimated
Book Fair Book Fair
Value Value Value Value
FINANCIAL ASSETS:
Cash and Cash
Equivalents $ 8,501,108$ 8,501,108$ 17,478,837$ 17,478,8
37
Investment Securities$ 28,229,212$ 28,229,212$ 27,139,181$ 27,1
39,181
Net Loans $ 71,151,700$ 70,897,350$ 60,943,601$ 60,747,2
03
FINANCIAL LIABILITIES:
Deposits $105,408,898$105,324,926$101,787,177$102,117,6
40
Advances From Federal
Home Loan Bank $ 0$ 0$ 0$
0
NOTE 13 - SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK
The Bank's primary business activity is with customers located
within East Tennessee. As of December 31, 1999, the Bank's
receivables included two industry concentrations, one to four
family residential properties ($18,535,045) and commercial
properties ($5,161,190).These concentrations are generally
mitigated by being spread over several hundred unrelated
borrowers and by more than adequate collateral loan to value
ratios.
NOTE 14 - CONDENSED PARENT COMPANY FINANCIAL INFORMATION
Condensed financial information of First Central Bancshares, Inc.
(parent company only) is as follows:
CONDENSED BALANCE SHEET
December 31, 1999
Assets:
Demand Balance With Subsidiary $ 15,146
Accounts Receivable - Subsidiary (11)
Investment in Subsidiary 9,547,615
Total Assets $9,562,750
Shareholders' Equity:
Common Stock - Par Value $5.00,
Authorized 2,000,000 Shares; 513,281
Shares Issued and Outstanding $ 2,566,405
Capital in Excess of Par Value 4,357,519
Retained Earnings 2,638,826
Total Shareholders' Equity $ 9,562,750
CONDENSED STATEMENT OF INCOME
Year Ended December 31, 1999
Undistributed Earnings of Subsidiary $ 1,182,416
Net Income $ 1,182,416
CONDENSED STATEMENT OF CASH FLOWS
Year Ended December 31, 1999
Operating Activities:
Net Income $ 1,182,416
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Undistributed Earnings of Subsidiary (1,182,416)
Decrease in Accounts Receivable - Subsidiary 425
Total Adjustments (1,181,991)
Net Cash Provided by Operating Activities and
Net Increase in Demand Balance With Subsidiary 425
Demand Balance With Subsidiary, Beginning of Year 14,721
Demand Balance With Subsidiary, End of Year $ 15,146
NOTE 15 - STOCK DIVIDENDS
During 1998, the Holding Company's board of directors approved
the issuance of a ten percent stock dividend to shareholders of
record as of January 1, 1998. An additional 46,526 shares of
common stock were issued at $25 per share, and retained earnings
were reduced by $1,163,150 in 1998 as a result of the stock
dividend. The holding company did not declare a stock dividend
in 1999 or 1997.
NOTE 16 - PENDING BRANCH SALE
The Bank has entered into an agreement, effective October 31,
1999, to sell one of its branches to another bank holding
company. The sale of the premises and equipment will include the
transfer of the cash, loans and related accrued or unearned
interest, deposits and related accrued interest, and certain
other assets and liabilities related to the branch.
The total consideration of $1,500,000 is for the opportunity to
acquire the branch and for the branch itself and is payable in
two components. The buyer paid $300,000 (received in 1999) upon
the execution of the agreement. The $300,000 amount is
nonrefundable, and as such, has been recorded in the 1999
consolidated statement of income as Income From Non-Refundable
Deposit on Sale of Branch. The remaining $1,200,000 is due at
closing of the transaction in 2000.
The sale is subject to approval of the appropriate federal and/or
state regulatory authorities and certain obligations of both
parties, and may be terminated at any time on or before closing
by the mutual consent in writing by both parties, none of which
affect the nonrefundable nature of the $300,000.
FINANCIAL DATA SCHEDULES
SCHEDULE I
AVERAGE BALANCES, INTEREST AND AVERAGE RATES
(IN THOUSANDS)
1999 1998
Average AverageAverage Average
Balance Interest Yield BalanceInterest Yield
ASSETS
Federal Funds Sold$ 6,281 $ 306 4.87%$13,057 $ 685 5.25%
Investment Securities:
Available for Sale:
Taxable 26,089 1,710 6.55% 18,594 1,199 6.45%
Tax - Exempt 2,234 82 3.67% 1,347 56 4.16%
Gross Loans,
Including Fees 68,619 6,212 9.05% 59,509 5,716 9.61%
Total Interest
Earning Assets 103,223 $8,310 8.05% 92,507 $7,656 8.28%
Cash and Due From Banks3,793 3,094
All Other Assets 6,587 4,779
Less:
Reserve for Loan Losses(622) (578)
Unearned Fees and
Interest (1,510) (1,245)
Total Assets $111,471 $98,557
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest Bearing Deposits:
Time Deposits $ 55,292 $2,960 5.35%$48,449 $2,752 5.68%
Other Deposits 31,620 970 3.07% 29,393 1,116 3.80%
FHLB Advances` 0 0 0.00% 11 1 9.09%
Federal Funds Purchased 0 00.00% 0 0 0.00%
Total Interest
Bearing Liabilities86,912 $3,930 4.52% 77,853 $3,869 4.97%
Non-Interest Bearing
Deposits 15,734 12,317
Total Cost of Funds 3.83% 4.29%
All Other Liabilities 361 488
Shareholders' Equity8,856 7,905
Unrealized Gain (Loss)
on Securities Available
for Sale (392) (6)
Total Liabilities and
Shareholders' Equity$111,471 $98,557
Net Interest Yield 3.53% 3.31%
Net Interest Margin 4.24% 4.09%
SCHEDULE II
RATE/VOLUME ANALYSIS
(IN THOUSANDS)
1999/1998 1998/1997
Increase (Decrease) dueIncrease (Decrease) due
to change in to change in
AverageAverage AverageAverage
Balance Rate Total Balance Rate Total
INTEREST REVENUE
Federal Funds Sold $ (330) $(49)$ (379)$ 564 $ (2)$ 562
Securities Available
for Sale Taxable 491 20 511 489 (29) 460
Securities Available
for Sale, Tax Exempt 33 (7) 26 55 (0) 55
Loans, Including Fees 824 (329) 495 (145) (41) (186)
Total Interest Revenue1,018 (365) 653 963 (72) 891
INTEREST EXPENSE
Interest Bearing
Deposits 410 (348) 62 829 10 839
Other Short-Term
Borrowings 0 (1) (1) (3) 0 (3)
Federal Funds Purchased 0 0 0 0 (1) (1)
Total Interest Expense$ 410 (349) 61 $ 826 (9) 835
Net Change in Net
Interest Revenue $ 608 $(16) $ 592 $ 137 $(81)$ 56
SCHEDULE III
INTEREST RATE SENSITIVITY
(IN THOUSANDS)
December 31, 1999
0-3 4 MO 1 YR
MONTHS TO 1 YR TO 5 YR > 5 YR TOTAL
ASSETS
Federal Funds Sold $ 2,280 $ 0 $ 0 $ 0 $ 2,280
Investments 8,047 0 9,345 10,837 28,229
Loans 25,160 12,179 35,051 197 72,587
Total Earning Assets$ 35,487 $ 12,179 $ 44,396 $11,034 $103,096
LIABILITIES AND SHAREHOLDERS EQUITY
Interest-Bearing
Deposits $ 48,619 $ 24,368 $ 15,830 $ 0 $ 88,817
Non-Interest
Bearing Deposits 16,592 0 0 0 16,592
Total Interest and
Non-Interest
Bearing Deposits $ 65,211 $ 24,368 $ 15,830 $ 0 $105,409
Interest Rate
Sensitivity Gap $(29,724)$(12,189)$ 28,566 $11,034 $ (2,313)
Cumulative Interest
Rate Sensitivity Gap$(29,724)$(41,913)$(13,347)$(2,313)
Net Repricing Gap as a
Percentage of Total
Earning Assets (28.83)% (11.82)% 27.71% 10.70% (2.24)%
Cumulative Gap as a
Percentage of Total
Earning Assets (28.83)% (40.65)% (12.94)% (2.24)%
SCHEDULE IV
LOAN REPRICING
(IN THOUSANDS)
December 31, 1999
0-3 4 MO 1 YR
MONTHS TO 1 YR TO 5 YR > 5 YR TOTAL
LOAN CATEGORY
Real Estate -
Commercial $ 4,361 $2,005 $6,862 $ 0 $13,228
Real Estate -
Construction and
Land Development 4,416 5,398 0 0 9,814
Real Estate -
Residential 7,839 1,144 13,536 0 22,519
Commercial and
Industrial 3,578 1,274 7,717 67 12,636
Installment Loans -
Consumer and Other 4,966 2,358 6,936 130 14,390
Total $25,160 $12,179 $35,051 $ 197 $72,587
SCHEDULE V
NONPERFORMING ASSETS
(IN THOUSANDS)
December 31,
1999 1998
Non-Accrual Loans $ 34 $230
Loans Past Due > 90 Days 89 141
Restructured Loans 0 0
Total Non-Performing Assets $123 $371
SCHEDULE VI
ANALYSIS OF LOAN LOSS RESERVE
(IN THOUSANDS)
December 31,
1999 1998
Balance at Beginning of Period $594 $587
Charge-Offs:
Commercial, Financial & Agricultural 0 26
Real Estate - Construction 0 0
Real Estate - Mortgages 0 0
Installment - Consumer 196 259
Other 0 0
Total Charge-Offs 196 285
Recoveries:
Commercial, Financial and Agricultural 0 8
Real Estate - Construction 0 0
Real Estate - Mortgages 0 0
Installment - Consumer 60 49
Other 0 0
Total Recoveries 60 57
Net Charge-Offs 136 228
Provision for Loan Losses 160 235
Balance at the End of the Period $618 $594
Ratio of Net Charge-Offs to
Average Loans Outstanding 0.20% $0.38%
SCHEDULE VII
ALLOCATION OF LOAN LOSS RESERVE
(IN THOUSANDS)
December 31,
1999% of Total 1998% of Total
Commercial, Financial and
Agricultural $127 21% $ 56 9%
Real Estate - Construction 108 17% 123 21%
Real Estate - Mortgages 113 18% 111 19%
Installment - Consumer 162 27% 158 27%
Other 108 17% 146 24%
Unallocated 0 0% 0 0%
$618 100% $594 100%
SCHEDULE VIII
RETURN ON ASSETS AND EQUITY
(IN THOUSANDS)
1999 1998
Return on Average Assets 1.06% 0.91%
Return on Average Equity 13.35% 11.39%
Dividend Payout Ratio 0.00% 0.00%
Average Equity to Average Assets 7.94% 8.02%
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
There have been no disagreements with the Company's independent
accountants on any matter of accounting or financial statement
disclosure.
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange
Act
(a) Directors and Executive Officers
The information appearing under the caption "Election of
Directors" on pages 3 and 4 of the Proxy Statement relating to
the 2000 Annual Meeting of the Stockholders is incorporated
herein by reference. The Proxy Statement is included with this
report as Exhibit 99.
Item 10. Executive Compensation
The information appearing under the caption "Compensation of
Executive Officers and Directors" on page 5 of the Proxy
Statement is incorporated herein by reference.
Item 11. Security Ownership of Certain Beneficial Owners and
Management
The information appearing under the caption "Information
Regarding Certain Beneficial Owners" on page 2 of the Proxy
Statement is incorporated herein by reference.
Item 12. Certain Relationships and Related Transactions
The information appearing under the caption "Certain
Relationships and Related Transactions" on page 6 of the Proxy
Statement is incorporated herein by reference.
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Selected Financial Data
(b) Exhibit 99 - Proxy Statement
FORM 1O-KSBA
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: 3/30/00 By: /s/ Ed F. Bell
Ed F. Bell Chairman, President and Chief
Executive Officer
Date: 3/30/00 By: /s/ Willard D. Price
Willard D. Price, Executive Vice President
and
Chief Operating Officer
In accordance with Section 13 or 15(d) of the Exchange Act, this
report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates
indicated:
_________________________________
____________________________________
Ed F. Bell, Chairman, President Willard D. Price, Executive
Vice
and Chief Executive Officer President and Chief Operating
Director Officer, Director
Date: 3/30/00
Date: 3/30/00
___________________________________
____________________________________
Jack Hammontree, Director Barry H. Gordon, Director
Date: Date:
___________________________________
____________________________________
Robert D. Grimes, Director Gary Kimsey, Director
Date: Date:
___________________________________
____________________________________
G. Bruce Martin, Director Peter G. Stimpson, Director
Date: Date:
___________________________________
____________________________________
Benny L. Shubert, Director Ted L. Wampler, Jr., Director
Date: Date:
___________________________________
____________________________________
Guilford F. Tyler, Jr., Director James W. Wilburn, III, Director
Date: Date:
EXHIBIT 27
SELECTED FINANCIAL DATA
(IN THOUSANDS)
December 31, 1999
Cash $ 6,221
Federal Funds Sold 2,280
Investments Available for Sale 28,229
Loans, Net of Unearned Fees and Interest 71,770
Allowance for Losses (618)
Other Assets 6,850
Total Assets 114,732
Deposits 105,409
Short-Term Borrowings 0
Other Liabilities 664
Common Stock 2,566
Other Stockholders' Equity 6,093
Total Liabilities & Stockholders' Equity 114,732
Interest on Loans 6,212
Interest on Investments 1,792
Other Interest Income 306
Total Interest Income 8,310
Interest on Deposits 3,930
Total Interest Expense 3,930
Net Interest Income 4,380
Provision for Loan Losses 160
Securities Gain/Loss 23
Noninterest Income 1,439
Noninterest Expense 3,854
Income Before Tax 1,828
Income Taxes 646
Net Income 1,182
Earnings Per Share 2.30
Net Interest Yield - EA 3.53%
Loans - Non Accrual 34
Loans Past Due > 90 Days 89
Troubled Debt Restructuring 0
Potential Problem Loans 0
Allowance - Beginning 594
Total Charge-Offs 196
Total Recoveries 60
Provision for Loan Losses 160
Allowance - End of Period 618
Loan Loss - Domestic 618
Loan Loss - Foreign 0
Loan Loss - Unallocated 0
Selected Performance Ratios:
Return on Average Assets 1.05%
Return on Average Equity 13.35%
Net Interest Margin 4.24%
Average Net Loans as a Percent of Average Deposits
Capital Ratios:
Leverage 8.50%
Tier 1 Risk-Based 11.60%
Total Risk-Based 12.40%
(b) EXHIBIT 99 - PROXY STATEMENT
Proxy
First Central Bancshares, Inc.
725 Highway 321 North
Lenoir City, Tennessee 37771
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
FIRST CENTRAL BANCSHARES, INC. ("The Corporation")
The undersigned does hereby appoint Ed F. Bell and Willard D.
Price and each of them, with full power to each of substitution
and revocation as proxies to vote all shares of common stock of
the Corporation registered in the name(s) of the undersigned and
held by them of record as of March 10, 2000, at the Annual
Meeting of Shareholders to be held at the main office of First
Central Bank, 725 Highway 321 North, Lenoir City, Tennessee
37771, on April 20, 2000 at 7:00 p.m., local time, and at any and
all adjournments, upon the following matters:
1. Election of Directors
______ For all nominees listed below (except as indicated to
the contrary below)
______ Withhold authority to vote for all listed below:
G. Bruce Martin Guilford F. Tyler, Jr.
Willard Price
Instruction: To withhold authority to vote for any
individual nominee, write nominee's name in the space
provided below.
_________________________________________________________________
_______
2. _____For _____Against _____Abstain
The proposal to approve the appointment of Pugh and Company,
P.C., C.P.A.'s as auditors for the Corporation for 2000.
3. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the
meeting or any adjournment thereon.
This proxy, when properly executed , will be voted in the
manner directed herein by the undersigned shareholder(s). If no
direction is made this proxy will be voted for proposals 1 and 2.
Please sign exactly as name (or names) appear(s) on stock
certificates. When shares are held by joint tenants, both
should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by
authorized officer. If a partnership, please sign in
partnership name by authorized person.
DATED: Signature
Please Print Signature if held jointly
MEETING RESPONSE:
Please sign, date and return promptly in the enclosed, self-
addressed envelope.
____I/We will attend ____I/We will bring guests ____I/We
will not attend
First Central Bancshares, Inc.
P. O. Box 230
Lenoir City, Tennessee 37771
_____________________________
Dear First Central Shareholder:
You are cordially invited to attend the Annual Meeting of
Shareholders of First Central Bancshares, Inc. Loudon County,
Tennessee, to be held Thursday, April 20, 2000 at 7:00 p.m.
The meeting will be held at the Main Office of First Central
Bank, located at 725 Highway 321 North, Lenoir City, Tennessee,
followed by a reception.
At the meeting you will be asked to consider and vote on two
issues: (I) the election of three (3) directors to serve until
the 2003 Annual Meeting , and [II] the ratification of Pugh and
Company, P.C. as auditors of the Company for 2000. The
individuals nominated for election to the Board of Directors are:
G. Bruce Martin, Willard D. Price, and Guilford F. Tyler, Jr. to
serve until the 2003 Annual Meeting.
Please review the additional materials enclosed which highlight
details of our April 20, 2000 meeting. It is important that you
complete your YELLOW PROXY FORM and return it to us by April 5th,
whether you plan to attend the meeting or not. Also, be sure to
let us know if you are planning to attend the meeting and the
number of guests accompanying you. A self-addressed envelope has
been provided for the return of your proxy.
Thank you for your continued support. We look forward to
receiving your proxy form and having you join us for our Annual
Meeting.
Kindest regards,
Ed F. Bell
Chairman, President and CEO
EFB.mst
Enclosures/Notice
FIRST CENTRAL BANCSHARES, INC.
725 Highway 321 North
Lenoir City, Tennessee 37771
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held Thursday, April 20, 2000
Notice is hereby given that the 2000 Annual Meeting of
Shareholders of First Central Bancshares, Inc. (the "Annual
Meeting") will be held on Thursday, April 20, 2000 at 7:00 p.m.
local time, in the main office of First Central Bank at 725
Highway 321 North, Lenoir City, Tennessee for the following
purposes:
(1) To elect three (3) directors who will serve three-year terms
or until their successors have been duly elected and
qualified;
(2) To ratify the appointment of Pugh and Company, P.C., CPA's
as independent accountants and auditors for First Central
Bancshares, Inc.; and
(3) To consider and act upon any other matters that may properly
come before the Annual Meeting or any adjournment or
adjournments thereof.
Only holders of First Central Bancshares, Inc.'s common
shares of record at the close of business on March 10, 2000 will
be entitled to notice of, and to vote at, the Annual Meeting.
IMPORTANT NOTE: Please COMPLETE AND RETURN the enclosed
proxy even if you plan to attend the Annual Meeting. You may, of
course, withdraw your proxy and vote your own shares if you
attend the Annual Meeting.
BY ORDER OF THE BOARD OF
DIRECTORS
Ed F. Bell, President and
Chief
Executive Officer
March 15, 2000
IMPORTANT NOTICE
REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING,
PLEASE REVIEW THE ENCLOSED MATERIAL, AND PROMPTLY MARK, DATE,
SIGN AND RETURN THE ENCLOSED FORM OF PROXY IN THE ENCLOSED SELF-
ADDRESSED ENVELOPE BY APRIL 5, 2000.
FIRST CENTRAL BANCSHARES, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS, APRIL 20, 2000
THIS PROXY STATEMENT, together with the enclosed proxy, which is
first being mailed to shareholders on or about March 15, 2000, is
furnished in connection with the solicitation of proxies by the
Board of Directors of First Central Bancshares, Inc., a Tennessee
corporation (the "Corporation"), for use at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held on Thursday, April
20, 2000, at 7:00 p.m. local time, in the main office of First
Central Bank at 725 Highway 321 North, Lenoir City, Tennessee
37771.
Voting
Shareholders of the Corporation of record at the close of
business on March 10, 2000, the record date designated by the
Board of Directors, will be entitled to notice of and to vote at
the Annual Meeting. On that date, the Corporation had
outstanding 564,361 shares of $5.00 par value per share common
stock (the "Common Shares").
The presence in person or by proxy of holders of a majority of
the issued and outstanding Common Shares entitled to vote at the
Annual Meeting is necessary in order to constitute a quorum. The
election of each of the nominees to the Board of Directors of the
Corporation will require the affirmative vote of a majority of
the Common Shares voting at the Annual Meeting. The affirmative
vote of a majority of the Common Shares voting at the Annual
Meeting is required for the ratification of the selection of the
independent accountants and auditors.
Each holder of the Common Shares is entitled to one vote for each
Common Share held on all matters submitted before the Annual
Meeting or any adjournment or adjournments thereof. Cumulative
voting is not provided for in the election of directors.
Common Shares represented by properly executed proxies, unless
previously revoked, will be voted in accordance with the
instructions on such proxies. If no instruction is indicated on
the proxy, the named holders of the proxies will vote such
Common Shares in favor of all nominees named in this Proxy
Statement and the ratification of the selection of the
independent accountants and auditors. The named holders of
proxies also will use their discretion in voting the Common
Shares in connection with any other business that properly may
come before the Annual Meeting.
Any shareholder who sends in a proxy has the power to revoke that
proxy any time prior to the exercise of the proxy by giving
written notice to the Secretary of the Corporation at its
executive offices located at 725 Highway 321 North, Lenoir City,
Tennessee 37771. Shareholders also may revoke proxies either by
a later dated proxy, if the Corporation receives such proxy prior
to the exercise of the prior proxy, or by attending the Annual
Meeting and voting in person.
Information Regarding Certain Beneficial Owners
The following table sets forth certain information concerning the
beneficial ownership (as defined by certain rules of the
Securities and Exchange Commission) of the Common Shares by (a)
directors and persons nominated to become directors of the
Corporation, and (b) directors and officers of the Corporation
as a group. There are no persons known to the Corporation to be
the beneficial owners of more than five percent of the
outstanding Common Shares of the Corporation. The information
shown in the Proxy Statement, unless otherwise indicated, is
based on information provided to the Corporation as of March 1,
2000.
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership (1) Class(2)
(a) Ed F. Bell 12,708 (5)
2.25%
Barry H. Gordon 16,913 (3) (4)
3.00%
Robert D. Grimes 11,781 (3) (5)
2.09%
Gary Kimsey 19,121 3.39%
G. Bruce Martin 4,188 (4)
.74%
Willard D. Price 12,023 (3)
2.13%
Benny L. Shubert 7,320 (3)
1.30%
Peter G. Stimpson 16,836 (3)
2.98%
Guilford F. (Tim)
Tyler, Jr. 11,350 (3) (4) (5) (6)
2.01%
Ted L. Wampler, Jr. 5,993 1.06%
James W. Wilburn, III 9,660 (3) (4)
1.71%
(b) Directors and officers
as a group (19
persons) 132,909 23.55%
(1) Includes Common Shares as to which each shareholder,
directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise has or shares
voting power and/or investment power. Unless otherwise
indicated, each listed shareholder possesses sole voting
and investment power with respect to all of the Common
Shares issued and outstanding.
(2) Based upon 564,361 Common Shares issued and outstanding.
(3) Includes shares held by and/or joint with spouse.
(4) Includes shares held by the named individuals' children
and/or dependents.
(5) Includes shares held by Mr. Bell's, Mr. Tyler's and Mr.
Grime's individual retirement accounts.
(6) Includes shares held by and/or joint with Mr. Tyler's
sister.
Election of the Directors (Proposal 1)
The Board of Directors of the Corporation is divided into three
classes with the three-year term of office of each class expiring
in succeeding years. At the Annual Meeting, the following three
persons, all of whom are members of the present Board of
Directors are nominees for election. Each director elected at the
Annual Meeting will hold office until the annual meeting of
shareholders held in 2003 or until their successors are elected
and qualified.
Three-Year Term Expiring 2003
G. Bruce Martin
Willard D. Price
Guilford F. Tyler, Jr.
Unless contrary instructions are received, the enclosed
proxy will be voted in favor of the election as directors of the
nominees listed above. Each nominee has consented to be a
candidate and to serve, if elected. While the Board has no
reason to believe that any nominee will be unable to accept
nomination or election as a director, if such an event should
occur, the proxy will be voted with discretionary authority for a
substitute or substitutes as shall be designated by the current
Board of Directors.
The following table contains certain information concerning the
directors of the Corporation, including the nominees, which
information has been furnished to the Corporation by the
individuals named:
Year First
Name and Positions Became a
with the Corporation Age Principal Occupation
Director
Ed F. Bell 64 Banker 1991
President and Chief
Executive Officer
Barry Gordon 53 Veterinarian, Lenoir City
Animal Clinic 1991
Robert D. Grimes 62 Robert D. Grimes Construction Co. 1991
Jack Hammontree 58 Vice President, Baker Realty 1997
(term expires April 20,
2000, and will
not seek reelection)
Gary Kimsey 57 President, Gemtron Corp. 1991
G. Bruce Martin 48 Agent, State Farm Insurance
Company 1991
Willard D. Price 53 Banker 1991
Executive Vice President
and Chief Operating
Officer
Benny Shubert 66 Owner, Shubert Motors 1991
Dr. Peter Stimpson 51 Physician 1991
Guilford F. (Tim)
Tyler, Jr. 52 Banker 1991
Senior Vice President
Ted Wampler, Jr. 41 President,
Wampler's Farm Sausage 1991
James Wilburn, III 50 President,
Wilburn Hardware 1991
Description of Board and Committees
The Board holds monthly meetings and special meetings as called.
Each director receives $750 for each meeting of the Board of
Directors attended and receives no compensation for committee
meetings attended. During the fiscal year ended December 31,
1999, the Board of Directors held 14 meetings. All incumbent
directors attended more than 75 percent of the aggregate number
of meetings of the Board and committees of the Board on which
they served. The Board of Directors has three (3) standing
committees consisting of the Executive, Audit, and Investment
Committees. The Board of Directors does not have a nominating or
compensation committee.
The Executive Committee is composed of Messrs. Bell, Gordon,
Price, Kimsey, Tyler, and Wilburn. The Executive Committee
reviews corporate activities, loan requests, makes
recommendations to the Board on policy matters and makes
executive decisions on matters that do not require a meeting of
the full Board of Directors. The Executive Committee met 29
times in 1999.
The Audit Committee, composed of Messrs. Martin, Shubert,
Wampler, and Wilburn, reviews annual and interim reports of
independent auditors and provides the recommendation of
independent auditors. The Audit Committee met 4 times during
1999.
The Investment Committee is composed of Messrs. Price, Grimes,
Kimsey and Stimpson. The Investment Committee reviews and directs
the investment portfolio of the Bank. The Investment Committee
held 0 meetings in 1999.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary Compensation Table
The following table sets forth the aggregate compensation paid by
the Corporation and its subsidiaries to the President of the
Corporation for services rendered in all capacities during the
fiscal years ended December 31, 1999, 1998 and 1997. No other
officer compensation exceeded $100,000 during such years.
Name and Principal Position Year Salary Bonus
Other Annual
Ed F. Bell, President & CEO 1999 $92,000
$ 1,916 $36,604
1998 $80,000 $13,855
$34,713
1997 $73,000 $17,504
$29,183
Certain Relationships and Related Transactions
Some directors and officers of First Central Bank, the principal
banking subsidiary of the Corporation ("the Bank") at present, as
in the past, are customers of the Bank and have had and expect to
have loan transactions with the Bank in the ordinary course of
business. In addition, some of the directors and officers of the
Bank are at present, as in the past, affiliated with businesses
which are customers of the Bank and which have had and expect to
have loan transactions with the Bank in the ordinary course of
business and were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time
for comparable transactions with other parties. In the opinion of
the Board of Directors, these loans do not involve more than a
normal risk of collectibility or present other unfavorable
features.
The following directors were indebted to the Bank as of December
31, 1999 as follows: Gordon: $101,000; Shubert $426,550*,
Stimpson, $288,961; Grimes $71,802. No other director or
executive officer (or their affiliate) was indebted $60,000 or
more to the bank.
*Direct Liability: $418,395 ; Indirect Liability: $8,155
Approval of Independent Public Accountants (Proposal 2)
The Board of Directors of the Corporation has selected Pugh and
Company, P.C. as its independent public accountants for 2000.
Pugh and Company, P.C. was also employed by the Corporation in
that capacity in 1999. A representative from Pugh and Company,
P.C. CPAs is expected to be present at the Annual Meeting and
will have an opportunity to make a statement if he desires to do
so. The representative is also expected to be available to
respond to appropriate questions.
Expense Solicitation
The Corporation will pay the total expense of preparing,
assembling, printing, and mailing proxies and proxy solicitation
materials. It may be that, following the original solicitation,
some further solicitation will be made by officers and directors
of the Corporation, who will not receive additional compensation
for such activities.
Shareholder Proposals
Shareholder's proposals intended to be presented at the 2001
Annual Meeting of Shareholders must be received by the
Corporation at the executive offices on or before December 31,
2000 to be included in the proxy statement and form of proxy
relating to that meeting.
Other Matters
At the time of preparation of this Proxy Statement, the Board of
Directors of the Corporation has not been informed and is not
aware of any matters to be presented for action at the Annual
Meeting other than the matters listed in the notice of meeting
included with this Proxy Statement. If any other matters should
come before the Annual Meeting, or any adjournment thereof, it
is intended that the persons named in the enclosed proxy will
have discretionary authority to vote on such matters according to
their best judgment.
Availability of Annual Report on Form 10-K
A copy of the Corporation's Annual Report on Form 10-K,
including the financial statements and schedules thereto, which
is filed with the Securities and Exchange Commission is available
without charge to each shareholder of record upon written request
to First Central Bancshares, Inc., Attention: Willard Price,
Chief Operating Officer, 725 Highway 321 North, Lenoir City,
Tennessee 37771. Each such written request must set forth a good
faith representation that as of the record date of March 10,
2000, the person making the request was a beneficial owner of
Common Shares entitled to vote at the Annual Meeting. Exhibits
to the Form 10-K will also be supplied upon written request to
the Chief Operating Officer and payment to the Corporation of its
costs of furnishing the requested exhibits. The copy of the Form
10-K furnished without charge to the requesting shareholder will
be accompanied by a list briefly describing all of the exhibits
and indicating the cost of furnishing the exhibits.
BY THE ORDER OF THE BOARD OF DIRECTORS
Ed F. Bell, President and CEO
March 15, 2000
March 15, 2000
A Message to Our Shareholders
1999 At A Glance.
First Central Bancshares, Inc., and its single bank
subsidiary, enjoyed another strong year of growth in 1999. It
was a year that saw our company retain its distinguished rank
again among Tennessee's strongest financial institutions.
First Central's continued progress reflects a network of
successful elements whose main adhesive ingredient is a steadfast
base of investors and satisfied customers. This formula
represents a proud accomplishment for all of us, for without
satisfied patrons, our achievements would not exist.
In 1999, First Central's achievements included our first
full year of service to Blount County at our full-service
facility in Alcoa. We acquired property and completed plans to
relocate to a new modern office in Hunters Crossing, which will
be large enough to accommodate our continued growth there. This
facility is under construction and is scheduled to open in mid-
summer of 2000.
Our Internet branch at www.firstcentralbank.com, which was
one of the first on-line banking services offered in our area,
continued to grow and evolve with new technology. In addition,
First Central expanded customer service through the offering of a
network of ATM access through industrial plant sites, convenience
markets, retail product centers, and colleges throughout our five
county service area.
In the face of a continued strong local economy, First
Central experienced a good increase in demand for loans,
particularly in real estate loans. First Central stands ready to
continue meeting the credit needs of customers in the year 2000.
Also, First Central will be expanding its products and services
by offering annuities and mutual funds in all offices throughout
our system.
We are pleased to report that our preparedness paid
dividends as Y2K came and went with no glitches or problems in
our operations. We are thankful for the confidence shown by you,
our shareholders, and our customers as the year of 1999 came to a
close.
Indeed, 1999 was an excellent year at First Central Bank and
we can say, with full confidence, that the new century brings
great opportunities for continued growth and unlimited success.
We wish to thank our shareholders, customers, and staff, for your
commitment and support these past years and we ask for your
continued support in this new century as we enthusiastically
embark upon the year 2000.
With great appreciation,
Ed F. Bell
Chairman, President and CEO
MARKET ANALYSIS
The Main Office of First Central Bank is located in Loudon
County. This county has a population of more than 38,000. Loudon
County's geographic proximity to Interstates 40 and 75, and the
rapidly expanding West Knox County area, is important to its economic
growth. It is blessed with an improving economy, due in part to the
attraction of manufacturing businesses and a flourishing construction
industry. Conditions in these areas create ideal job demand in new
home construction and residential development, small-to-mid size
retail developments, and abundant employment opportunities in
government and industry.
First Central Bancshare's primary market area lies
geographically in Loudon County, Tennessee and areas within a 50
mile radius. Included in this designation are parts of the counties
of Knox, Blount, Monroe, Anderson, and Roane. Knox County
contains a population of more than 365,000. First Central services
the growth-oriented, western portion of this county. Population
figures for the remainder of the service area are as follows: Blount
(100,377); Roane (49,909); and Monroe (33,934). Economically, each
county is different, with varying characteristics in industry,
levels of employment, tax structure, and quality of life.
On the state level, economic improvements are sporadic and scattered-
with each county facing challenges and obstacles unique unto
themselves. First Central Bank's service area is no exception.
While the opportunities presented here are never fully utilized, the
steady progress in the area is evident in the quality of life.
For the Company and its member bank, diversity has been the key
to success. The growing financial needs of the small business sector
coupled with the growing loan needs of a stable blue-collar market,
comprise the foundation of First Central's business platform.
Continued growth within these segments is both planned and expected.
First Central Bancshares, Inc. is strategically positioned to
manage the economic challenges which are present in the markets
served by the institution. First Central is well equipped to expand
and refine its current product and services, in order to meet the
demands of the marketplace.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27
SELECTED FINANCIAL DATA
(IN THOUSANDS)
December 31, 1999
Cash $ 6,221
Federal Funds Sold 2,280
Investments Available for Sale 28,229
Loans, Net of Unearned Fees and Interest 71,770
Allowance for Losses (618)
Other Assets 6,850
Total Assets 114,732
Deposits 105,409
Short-Term Borrowings 0
Other Liabilities 664
Common Stock 2,566
Other Stockholders' Equity 6,093
Total Liabilities & Stockholders' Equity 114,732
Interest on Loans 6,212
Interest on Investments 1,792
Other Interest Income 306
Total Interest Income 8,310
Interest on Deposits 3,930
Total Interest Expense 3,930
Net Interest Income 4,380
Provision for Loan Losses 160
Securities Gain/Loss 23
Noninterest Income 1,439
Noninterest Expense 3,854
Income Before Tax 1,828
Income Taxes 646
Net Income 1,182
Earnings Per Share 2.30
Net Interest Yield - EA 3.53%
Loans - Non Accrual 34
Loans Past Due > 90 Days 89
Troubled Debt Restructuring 0
Potential Problem Loans 0
Allowance - Beginning 594
Total Charge-Offs 196
Total Recoveries 60
Provision for Loan Losses 160
Allowance - End of Period 618
Loan Loss - Domestic 618
Loan Loss - Foreign 0
Loan Loss - Unallocated 0
Selected Performance Ratios:
Return on Average Assets 1.05%
Return on Average Equity 13.35%
Net Interest Margin 4.24%
Average Net Loans as a Percent of Average Deposits
Capital Ratios:
Leverage 8.50%
Tier 1 Risk-Based 11.60%
Total Risk-Based 12.40%
</TABLE>
