Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
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 $5.00 per share)
Indicate by mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [x] No [ ]
Indicate by mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13,
or (15d) of the Securities Exchange Act of 1934 subsequent to
the distribution of securities under a plan confirmed by a
court.
Yes [x] No [ ]
The number of outstanding shares of the registrant's
Common Stock, par value $5.00 per share, was 564,361 on April
14, 2000.
FORM 10-QSB
Index
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
as of March 31, 2000 and December 31, 1999 3
Condensed Consolidated Statements of Income
for the three months ended March 31, 2000 and 1999 4
Condensed Consolidated Statements of Cash Flows
for the three months ended March 31, 2000 and 1999 5
Condensed Consolidated Statements of Comprehensive
Income (Loss) for the three months ended March 31,
2000 and 1999 6
Notes to Condensed Consolidated Financial Statements7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9-14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote
of Securities Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)
March 31,December 31,
2000 1999
- -ASSETS-
Cash and Due from Banks $ 4,788 $ 6,221
Federal Funds Sold -0- 2,280
Total Cash and Cash Equivalents 4,788 8,501
Investment Securities Available for Sale 32,962 28,229
Loans, Net 73,367 71,152
Premises and Equipment (Net) 5,163 5,109
Accrued Interest Receivable 787 779
Other Assets 919 962
TOTAL ASSETS $117,986 $114,732
- -LIABILITIES AND STOCKHOLDERS' EQUITY-
Liabilities:
Deposits
Non-Interest Bearing $ 15,980 $ 16,592
Interest Bearing 91,322 88,817
Total Deposits 107,302 105,409
Securities Sold Under Agreements to Repurchase460 -0-
Federal Funds Purchased 765 -0-
Accrued Interest Payable 388 391
Other Liabilities 208 273
Total Liabilities 109,123 106,073
Stockholders' Equity:
Common Stock - Par Value $5.00, Authorized
2,000,000 Shares; Issued and Outstanding
564,361 Shares (513,280 in 1998) 2,822 2,566
Additional Paid-In Capital 5,430 4,357
Retained Earnings 1,528 2,639
Accumulated Other Comprehensive Income (Loss) (917) (
903)
Total Stockholders' Equity 8,863 8,659
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$117,986 $114,732
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income
(Unaudited)
(In Thousands Except
per Share Information)
Three Months Ended
March 31,
2000 1999
INTEREST INCOME:
Loans $1,637 $1,588
Investment Securities 531 448
Federal Funds Sold 30 119
Total Interest Income 2,198 2,155
INTEREST EXPENSE 1,127 991
Net Interest Income 1,071 1,164
PROVISION FOR LOAN LOSSES 10 60
Net Interest Income After
Provision for Loan Losses 1,061 1,104
OTHER INCOME 282 174
OPERATING EXPENSES 997 884
INCOME BEFORE INCOME TAX 346 394
INCOME TAXES 128 144
NET INCOME $ 218 $ 250
BASIC EARNINGS PER COMMON
SHARE $ 0.41 $ 0.49
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
Three Months Ended
March 31,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 218 $ 250
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Provision for Loan Losses 10 60
Depreciation 66 71
(Increase) Decrease in Interest Receivable (8) 19
Increase (Decrease) in Interest Payable (3) (50)
Amortization of Premiums on Investment
Securities, Net (5) 9
FHLB Stock Dividends (6) (5)
(Increase) Decrease in Other Assets 51 (161)
Increase (Decrease) in Other Liabilities (65) 52
Total Adjustments 40 (5)
Net Cash Provided by Operating Activities 258 245
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds From Maturities, Principal Paydowns and
Redemption of Investment Securities Available
for Sale 175 6,815
Purchase of Investment Securities Available
for Sale (4,919) (7,987)
(Increase) Decrease in Loans (2,225) (4,101)
Purchase of Premises and Equipment (120) (380)
Net Cash Used in Investing Activities (7,089) (5,653)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in Deposits 1,893 1,885
Increase in Securities Sold Under Agreements
to Repurchase 460 -0-
Increase in Federal Funds Purchased 765 -0-
Net Cash Provided by Financing Activities 3,118 1,885
INCREASE (DECREASE)IN CASH
AND CASH EQUIVALENTS (3,713) (3,523)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 8,501 17,47
9
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,788 $13,956
Supplementary Disclosures of Cash Flow Information:
Cash Paid During the Period For:
Interest $ 1,132 $ 1,041
Income Taxes $ -0- $ -0-
Supplementary Disclosures of Noncash Investing Activities:
Change in Unrealized Loss on Investment Securities$ 22 $
241
Change in Deferred Income Tax Benefit Associated with
Unrealized Loss on Investment Securities $ 8 $ 92
Change in Net Unrealized Loss on Investment Securities$ 14
$ 149
Issuance of Common Stock Dividend:
Par $ 256 $ -0-
Additional Paid-in Capital $ 1,073 $ -0-
Reduction in Retained Earnings Due to Issuance of
Common Stock $ 1,329 $ -0-
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Comprehensive Income (Los
s)
(Unaudited)
(In Thousands)
Three Months Ended
March 31,
2000 1999
Net Income $218 $ 250
Other Comprehensive Income (Loss), Net of Tax:
Unrealized Losses on Investment Securities (22) (226)
Less Reclassification Adjustment for Gains
Included in net Income -0- (15)
Less Income Taxes Related to Unrealized
Gains on Investment Securities 8 92
Other Comprehensive Income (Loss), Net of Tax (14) (149)
Comprehensive Income (Loss) $204 $ 101
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2000 and 1999
NOTE 1 - ORGANIZATION AND BUSINESS
First Central Bancshares, Inc. (the Company) was incorporated
in 1993 for the purpose of becoming a one bank holding company.
On April 3, 1993, the Company acquired 100% of First Central
Bank (the Bank) through a share exchange agreement approved by
the shareholders of the Bank. The investment in First Central
Bank represents virtually all of the assets of First Central
Bancshares, Inc.
The consolidated financial statements include the accounts of
First Central Bancshares, Inc. and its wholly owned subsidiary,
First Central Bank. All significant intercompany transactions
and balances have been eliminated.
NOTE 2 - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been
prepared by the Company. Certain information and footnote
disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles
have been condensed or omitted. In the opinion of the
Company's management, the disclosures made are adequate to make
the information presented not misleading, and the consolidated
financial statements contain all adjustments necessary to
present fairly the financial position as of March 31, 2000,
results of operations for the three months ended March 31, 2000
and 1999, and cash flows for the three months ended March 31,
2000 and 1999.
The results of operations for the three months ended March 31,
2000 are not necessarily indicative of the results to be
expected for the full year.
NOTE 3 - COMMON STOCK DIVIDEND
In February 2000, the Company distributed a ten percent (10%)
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 or $1,072,680, and
charged retained earnings a total of $1,328,080. No dividends
were distributed in 1999.
NOTE 4 - EARNINGS PER SHARE
Basic earnings per share is based on the weighted average
number of shares outstanding during the period. For the three
months ended March 31, 2000 the weighted average number of
shares was 538,821 (513,281 in 1999). During the period ended
March 31, 2000 and 1999 the Company did not have any dilutive
securities.
NOTE 5 - ACCOUNTING POLICY CHANGES
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 6 - PENDING BRANCH SALE
The Bank 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 the fourth
quarter of 1999) upon the execution of the agreement. The
$300,000 amount is nonrefundable, and as such, was 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.
Year 2000 Recap
The Bank successfully completed the century date change over
without any significant problems and zero interruptions in
operations.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
BALANCE SHEET ANALYSIS - COMPARISON AT MARCH 31, 2000 TO
DECEMBER 31, 1999
Assets totalled $118.0 million as of March 31, 2000, as
compared to $114.7 million as of December 31, 1999, an increase
of 0.29%.
INVESTMENT SECURITIES
Investment securities were $32.9 million or 27.9% of total
assets, as of March 31, 2000 an increase of $4.7 million from
$28.2 million as of December 31, 1999. During the three month
period there were $175 thousand in calls, maturities, and
principal paydowns offset by the purchase of $4.9 million in
agency securities.
The investment portfolio is comprised of U.S. Government and
federal agency obligations and mortgage-backed securities
issued by various federal agencies. Mortgage-backed issues
comprised 14.36% of the portfolio as of March 31, 2000 and
16.79% as of December 31, 1999.
As of March 31, 2000 and December 31, 1999, the Bank's entire
investment portfolio was classified as available for sale and
reflected on the consolidated balance sheets at fair value with
unrealized gains and losses reported in the consolidated
statements of comprehensive income (loss), net of any deferred
tax effect. The unrealized loss on securities available for
sale, net of tax was approximately $917,000 as of March 31,
2000, a change of approximately $14,000 from December 31, 1999,
a result of deterioration in the bond market. The fair value
of securities fluctuates with the movement of interest rates.
Generally, during periods of decreasing interest rates, the
fair values increase whereas the opposite may hold true during
a rising interest rate environment.
LOANS
During the first three months of 2000, total gross loans
outstanding increased by approximately $2.2 million to $74.8
million as of March 31, 2000 from $72.6 million as of December
31, 1999 attributable primarily to $11.1 million in originated
loans offset by amortization and payoffs of approximately $8.9
million. As of March 31, 2000 and December 31, 1999, net loans
outstanding represented 62.2% and 62.0% of total assets,
respectively. Table 1 summarizes the Bank's loan portfolio by
major category as of March 31, 2000 and December 31, 1999.
Table 1 - Loan Portfolio by Category
(In Thousands)
March 31, December 31,
2000 1998
Loans secured by real estate:
Commercial properties $12,049 $13,233
Construction and land development 9,962 9,814
Residential and other properties 21,978 22,519
Total loans secured by real estate 43,989 45,566
Commercial and industrial loans 14,909 12,631
Consumer loans 15,210 13,512
Other loans 661 878
74,769 72,587
Less: Allowance for loan losses (593) (618)
Unearned interest (787) (800)
Unearned loan fees (22) (17)
Loans, Net $73,367 $71,152
As of March 31, 2000, there were outstanding commitments to
advance construction funds and to originate loans in the amount
of $13.2 million and commitments to advance existing home
equity, letters of credit and other credit lines in the amount
of $6.3 million.
Loans are carried net of the allowance for loan losses. The
allowance is maintained at a level to absorb possible losses
within the loan portfolio. As of March 31, 2000 and December
31, 1999, the allowance had a balance of approximately $593,000
and $618,000, respectively. There were no loans on which the
accrual of interest had been discontinued as of March 31, 2000
or at December 31, 1999, and there were approximately $67,000
in loans specifically classified as impaired as defined by SFAS
No. 114. Table 2 summarizes the allocation of the loan loss
reserve by major categories and Table 3 summarizes the activity
in the loan loss reserve for the three month period.
Table 2 - Allocation of the Loan Loss Reserve (in Thousands)
3-31-00 % to 12-31-99 % to
Balance applicable to: $ Amount Total $ Amount Total
Commercial, financial, and agricultural$215 36.00%$127 21.00%
Real Estate - Construction 100 17.00% 108 17.00%
Real Estate - Mortgages 116 19.00% 113 19.00%
Installment - Consumers 152 26.00% 162 26.00%
Other 10 2.00% 108 17.00%
Total $593 100.00% $618 100.00%
Table 3 - Analysis of Loan Loss Reserve
(In Thousands) 3-31-00 3-31-99
Balance, at beginning of period $618 $594
Charge-offs:
Commercial, financial, and agricultural -0- -0-
Real estate - construction -0- -0-
Real estate - mortgage -0- -0-
Installment - Customers 56 55
Other -0- -0-
Recoveries:
Commercial, financial, and agricultural -0- -0-
Real estate - construction -0- -0-
Real estate - mortgages -0- -0-
Installment - consumers 21 21
Other -0- -0-
Net charge-offs 35 34
Additions to loan loss reserve 10 60
Balance at end of period $593 $620
Ratio of net charge-offs to average loans outstanding.05% .05%
DEPOSITS
Deposits increased by $1.9 million to $107.3 million as of
March 31, 2000 from $105.4 million as of December 31, 1999, an
increase of 1.80%. Demand deposits, which include regular,
money market, NOW and demand deposits, were $50.3 million, or
46.9% of total deposits, at March 31, 2000. Core deposits were
32.0% of total deposits at March 31, 2000. During the three
month period, the Bank was successful in increasing the
balances in the demand deposit category by $1.0 million to
$50.3 million as of March 31, 2000. Certificate accounts were
$57.0 million at March 31, 2000, a increase of $0.9 million
compared to $56.1 million as of December 31, 1999. Table 4
summarizes the Bank's deposits by major category as of March
31, 2000 and December 31, 1999.
Table 4 - Deposits by Category
(In Thousands)
March 31, December 31,
2000 1999
Demand Deposits:
Noninterest-bearing accounts $ 15,980 $ 16,592
NOW and MMDA accounts 28,813 27,649
Savings accounts 5,513 5,075
Total Demand Deposits 50,306 49,316
Term Deposits:
Less than $100,000 43,709 42,272
$100,000 or more 13,287 13,821
56,996 56,093
Total Deposits $107,302 $105,409
CAPITAL
During the three month period ended March 31, 2000,
stockholders' equity increased by $204,000 to $8.9 million, due
to net income for the period of $218,000 offset by the decline
in value of securities available for sale of $14,000.
LIQUIDITY AND CAPITAL RESOURCES
The Bank's primary sources of liquidity are deposit balances,
available-for-sale securities, principal and interest payments
on loans and investment securities and FHLB advances.
As of March 31, 2000, the Bank held $33.0 million in available-
for-sale securities and during the first three months of 2000
the Bank received $175 thousand in proceeds from maturities,
redemptions and principal payments on its investment portfolio.
Deposits increased by $1,893,000 during the same three month
period.
The Bank is a member of the Federal Home Loan Bank of
Cincinnati (FHLB) and is eligible to obtain both short and long
term credit advances. Borrowing capacity is limited to the
Bank's available qualified collateral which consists primarily
of certain 1-4 family residential mortgages and certain
investment securities. The Bank had no advances outstanding
from the FHLB at March 31, 2000.
The Bank can also enter into repurchase agreement transactions
should the need for additional liquidity arise. At March 31,
2000, the Bank had $460,000 of repurchase agreements
outstanding.
As of March 31, 2000, the Bank had capital of $8.9 million, or
7.5% of total assets, as compared to $8.7 million, or 7.6%, at
December 31, 1999. Tennessee chartered banks that are insured
by the FDIC are subject to minimum capital requirements.
Regulatory guidelines define the minimum amount of qualifying
capital an institution must maintain as a percentage of risk-
weighted assets and total assets.
Table 5 - Regulatory Capital
(Dollars in Thousands)
Minimum
March 31, December 31,Regulatory
2000 1999 Ratios
Tier 1 Capital as a Percentage
of Risk-Weighted Assets 11.8% 11.6% 4.00%
Total Capital as a Percentage
of Risk-Weighted Assets 12.5% 12.4% 8.00%
Leverage Ratio 8.5% 8.5% Up to 5.00%
Total Risk-Weighted Assets $83,259 $82,275
As of March 31, 2000 and December 31, 1999, the Bank exceeded
all of the minimum regulatory capital ratio requirements.
RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED MARCH
31, 2000 AND 1999
GENERAL
The Bank reported net income of $218,000, or $0.41 per share
for the three month period ended March 31, 2000 as compared
with $250,000 or $0.49 per share for the same period in 1999, a
decrease of 12.8%.
NET INTEREST INCOME
Net interest income decreased by $93,000 to $1.07 million for
the three month period in 2000 from the comparable period in
1999. Contributing to this decrease was an increase in average
interest bearing liabilities. Average interest bearing
liabilities, at a yield of 4.93% totalled $90.5 million as of
March 31, 2000. In comparison to 1999, average interest
earning assets, at a yield of 4.55%, totalled $87.1 million.
Interest income increased by $43,000 for the three month period
in 2000 compared to the same period in 1999. This improvement
is primarily attributable to an increase of approximately $3.9
million, or 3.8%, in the volume of average earning assets
during the three month period ended March 31, 2000 compared to
the three month period ended March 31, 1999. Interest income on
loans increased by $49,000 over the same periods primarily as a
result of an increase of approximately $7.9 million in average
loans outstanding. Over the same period, interest on
investments increased by $83,000 due to an increase of
approximately $3.9 million or 14.0% in the average volume of
investments during the three month period. Interest income on
Federal Funds Sold decreased by $89,000 due to a decrease in
the average balance outstanding of $8.0 million over the same
period in 1999.
Total interest expense increased $136,000 for the three month
period ended March 31, 2000 compared to the same period in
1999. Interest on deposits increased as a result of an
increase of approximately $3.4 million in average interest-
bearing deposits over the same period in 1999. The average
rate on interest-bearing liabilities increased to 4.93% for the
three month period in 2000 from 4.55% in the comparable period
of 1999.
Table 6 - Average Balances, Interest and Average Rates
March 31,
2000 (in thousands) 1999
Average AverageAverage Average
Balance Interest Rate Balance Interest Rate
Assets:
Federal Funds Sold$ 2,134 $ 30 5.64%$10,088 $ 119 4.72%
Investments:
Securities--Taxable29,323 510 6.96% 25,606 424 6.62%
Non-Taxable 2,400 21 3.50% 2,185 24 4.39%
Total Loans, Including
Fees 73,025 1,729 9.47% 65,139 1,588 9.75%
Total Interest Earning
Assets 106,882 2,290 8.57% 103,018 2,155 8.37%
Cash and Due From Banks4,020 3,431
All Other Assets 6,272 5,357
Loan Loss Reserve/
Unearned Fees (1,422) (1,558)
TOTAL ASSETS $115,752 $110,248
Liabilities and Stockholders Equity:
Interest Bearing Deposits:
Time Deposits $ 57,238 $ 840 5.87%$ 55,986 $ 752 5.37%
Other 31,239 266 3.40% 31,132 239 3.07%
Repurchase Agreements1,972 20 4.06% -0- -0- N/A
Fed. Funds Purchased 66 16.06% -0- -0- N/A
Total Interest-Bearing
Liabilities 90,515 1,127 4.93% 87,118 991 4.55%
Net Interest Income $1,163 $1,164
Non-Interest Bearing
Deposits 16,633 14,105
Total Cost of Funds 4.20% 3.92%
All Other Liabilities111 680
Stockholders Equity9,548 8,365
Unrealized Gain/Loss on
Securities (1,055) (20)
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY$115,752 $110,248
Net Interest Yield 3.64% 3.82%
Net Interest Margin 4.35% 4.52%
Table 7 - Interest Rate Sensitivity
(In Thousands) March 31, 2000
Less One YearGreater Non-
Than Through Than Interest
1 Year 5 Years5 Years Bearing Total
Asset:
Federal Funds Sold $
-
0-
$
-
0-
Investments 259 4,375 28,328 32,962
Loans 35,232 38,981 556 74,769
Non-Interest Earning Assets
and Unearned Assets/Loan
Loss Reserve 10,255 10,255
35,491 43,356 28,884 10,255 117,986
Liabilities and Stockholders' Equity:
Interest-Bearing Deposits78,822 12,500 91,322
Non-Interest Bearing Deposits 15,980 15,980
Repurchase Agreements 460 460
Fed. Funds Purchased 765 765
Noninterest Bearing Liabilities
and Stockholders' Equity 9,459 9,459
Total 80,047 12,500 -0- 25,439 117,986
Interest Rate Sensitivity Gap (44,556) 30,856 28,884 (15,184) -0-
Cumulative Interest Rate
Sensitivity Gap $ 43,844 $ 13,700 $15,184$ -0- $ -0-
OTHER INCOME
Total other income was $282,000 for the three month period
ended March 31, 2000 as compared to $174,000 for the same
period in 1999, an increase of $108,000. Other income is
comprised primarily of customer service fees and other items.
OPERATING EXPENSES
Total operating expenses were $997,000, or 0.86% of average
total assets, for the three month period ended March 31, 2000
as compared to $884,000, or 0.80%, for the same period in 1999.
Both the salaries and employee benefits and occupancy and
equipment categories of expenses increased when comparing the
two periods. Salaries and employee benefits increased by
$147,000 or 10% over the first three months of 2000 due to
normal salary increases and additional branch personnel.
Occupancy and equipment expenses increased approximately
$16,000 when compared to expenses at March 31, 1999, an
increase of 11.28%. Contributing to the increase in occupancy
and equipment expenses was the opening of the Alcoa branch
during the fourth quarter of 1998 and the Sweetwater branch
during the first quarter of 1999.
INCOME TAXES
The Bank recognizes income taxes using the Financial Accounting
Standards Board Statement No. 109, Accounting for Income Taxes.
Under this method, deferred tax assets and liabilities are
established for the temporary differences between the
accounting basis and the tax basis of the Bank's assets and
liabilities at enacted tax rates expected to be in effect when
the amounts related to such temporary differences are realized
or settled. The Bank's deferred tax asset is reviewed quarterly
and adjustments to such asset are recognized as deferred income
tax expense or benefit based on management's judgment relating
to the realizability of such asset.
During the three month period ending March 31, 2000, the Bank
recorded $128,000 in tax expense which resulted in an
approximate effective rate of 37.0%. Comparably, in 1999, the
Bank recorded $144,000 in tax expense, resulting in an
approximate effective rate of 36.5%.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
PART 1 - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2.Changes in Securities
None.
Item 3.Defaults Upon Senior Securities
None.
Item 4.Submission of Matters to a Vote of Security Holders
None.
Item 5.Other Information
None.
Item 6.Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule.
FORM IO-QSB(A)
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST CENTRAL BANCSHARES, INC.
Date: By:
____________________________________________________
Ed. F. Bell, Chairman, President
and Chief Executive Officer
Date: By:
____________________________________________________
Willard D. Price, Executive Vice President
and Chief Operating Officer
Exhibit 27 - Financial Data Schedule
3-31-00
Amount (In Thousands)
Cash $ 4,788
Federal Funds Sold -0-
Trading Assets -0-
Investments AFS 32,962
Investments HTM -0-
Investments-Market -0-
Loans 73,960
Allowance for Losses 593
Total Assets 117,986
Deposits 107,302
Securities Sold Under Agreements to Repurchase 460
Short-Term Borrowings 765
Other Liabilities 208
Long-Term Debt -0-
Preferred Stock-Mandatory -0-
Preferred-Non Mandatory -0-
Common Stock 2,822
Other Stockholders Equity 6,041
Total Liab.-Stockh. Equity 117,986
Interest on Loans 1,637
Interest on Investments 531
Other Interest Income 30
Total interest Income 2,198
Interest on Deposits 1,127
Total Interest Expense 1,127
Net Interest Income 1,071
Provision-Loan Losses 10
Securities-Gain/Loss -0-
Other Expenses 997
Income Before Tax 346
Income Before Extraordinary 346
Extraordinary Less Tax -0-
Cumul. Change Acct. Principal -0-
Net Income 218
Earnings Per Share-P 0.41
Earnings Per Share-D 0.41
Net Interest Yield-EA 3.59
Loans-Non Accrual -0-
Loans Past Due > 90 Days 130
Troubled Debt Restructuring -0-
Potential Problem Loans -0-
Allowance-Beginning 618
Total Charge-Offs 56
Total Recoveries 21
Allowance End of Period 593
Loan Loss-Domestic 593
Loan Loss-Foreign -0-
Loan Loss-Unallocated -0-
(b) Reports on Form 8-K, None
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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Exhibit 27 - Financial Data Schedule
3-31-00
Amount (In Thousands)
Cash $ 4,788
Federal Funds Sold -0-
Trading Assets -0-
Investments AFS 32,962
Investments HTM -0-
Investments-Market -0-
Loans 73,960
Allowance for Losses 593
Total Assets 117,986
Deposits 107,302
Securities Sold Under Agreements to Repurchase 460
Short-Term Borrowings 765
Other Liabilities 208
Long-Term Debt -0-
Preferred Stock-Mandatory -0-
Preferred-Non Mandatory -0-
Common Stock 2,822
Other Stockholders Equity 6,041
Total Liab.-Stockh. Equity 117,986
Interest on Loans 1,637
Interest on Investments 531
Other Interest Income 30
Total interest Income 2,198
Interest on Deposits 1,127
Total Interest Expense 1,127
Net Interest Income 1,071
Provision-Loan Losses 10
Securities-Gain/Loss -0-
Other Expenses 997
Income Before Tax 346
Income Before Extraordinary 346
Extraordinary Less Tax -0-
Cumul. Change Acct. Principal -0-
Net Income 218
Earnings Per Share-P 0.41
Earnings Per Share-D 0.41
Net Interest Yield-EA 3.59
Loans-Non Accrual -0-
Loans Past Due > 90 Days 130
Troubled Debt Restructuring -0-
Potential Problem Loans -0-
Allowance-Beginning 618
Total Charge-Offs 56
Total Recoveries 21
Allowance End of Period 593
Loan Loss-Domestic 593
Loan Loss-Foreign -0-
Loan Loss-Unallocated -0-
(b) Reports on Form 8-K, None
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