U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - KSB
( Mark One)
( X ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
( ) 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 0-22062
STANLY CAPITAL CORP
167 North Second Street
Albemarle, North Carolina 28001
(704) 983-6181
North Carolina 56-1814206
(State of incorporation) (IRS Employer Identification No.)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $1.25 Par Value
The Registrant has filed all reports required by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months and has been
subject to such filing requirements for the past 90 days.
Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of the Registrant's
knowledge, in the 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 Registrant's revenues for the year ended December 31, 1996 were $11,401,526.
There is no established trading market for the Registrant's common stock. Based
on a price of $7.50 per share for the common stock in recent transactions, the
aggregate value of the common stock held by nonaffiliates as of February 15,
1997 was $16,282,230.
As of February 15, 1997, the Registrant had 2,170,964 shares of common stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
1. Portions of the Registrant's 1996 Annual Report to Shareholders are
incorporated by reference into Part II of this report.
2. Portions of the Registrant's definitive Proxy Statement dated March
25, 1997, are incorporated by reference into Part III.
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Transitional Small Business Disclosure Format (check one) Yes ( ) No ( X )
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FORM 10-KSB CROSS REFERENCE INDEX
As indicated below, portions of (i) the Registrant's Annual Report to
Shareholders for the fiscal year ended December 31, 1996, and (ii) the
Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held
April 22, 1997, filed with the Securities and Exchange Commission via EDGAR are
incorporated by reference into Parts II and III of this report.
Key
AR Annual Report to Shareholders for the fiscal year ended
December 31, 1996.
Proxy Proxy Statement dated March 25, 1997 for the Annual Meeting
of Shareholders to be held April 22, 1997.
10-KSB 10-KSB for the year ended December 31, 1996
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<CAPTION>
Document
PART I
<S> <C> <C>
Item 1. Business................................................................ Page 3 10-KSB
Item 2. Properties.............................................................. Page 9 10-KSB
Item 3. Legal Proceedings....................................................... Page 10 10-KSB
Item 4. Submission of Matters to a Vote of Security Holders..................... Page 10 10-KSB
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters......................................... Page 4 AR
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... Page 27 AR
Item 7. Financial Statements and Supplementary Data............................. Pages 4-26 AR
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure......................... Page 9 Proxy
PART III
Item 9. Directors, Executive Officers, Promoters, and Control Persons;
Compliance with Section 16(a) of Exchange Act.............. Pages 5-7 Proxy
Item 10. Executive Compensation.................................................. Page 7 Proxy
Item 11. Security Ownership of Certain Beneficial Owners and
Management.................................................. Page 2 Proxy
Item 12. Certain Relationships and Related Transactions.......................... Page 9 Proxy
PART IV
Item 13. Exhibits and Reports on Form 8-K
(a) Index to Exhibits..................................... Page 10 10-KSB
(b) No Reports on Form 8-K were filed for the three
months ended December 31, 1996
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PART I
ITEM 1. BUSINESS
GENERAL
Stanly Capital Corp (the "Registrant") was incorporated under the laws of North
Carolina on February 24, 1993 at the direction of the Board of Directors of Bank
of Stanly (the "Bank") for the purpose of serving as a bank holding company for
the Bank. Pursuant to an Agreement and Plan of Reorganization and Merger dated
February 24, 1993, effective July 1, 1993, all outstanding shares of the Bank's
common stock held by its shareholders were converted into and exchanged for
shares of the Registrant's $1.25 par value common stock on a share-for-share
basis, the Bank's shareholders became the shareholders of the Registrant, and
the Registrant became the sole shareholder and parent holding company of the
Bank.
The Bank is a North Carolina chartered commercial bank which was incorporated in
1983 and which commenced banking operations on January 26, 1984. The Bank's main
banking office is located at 167 North Second Street, Albemarle, North Carolina,
and it operates four other banking offices located in Stanly County, North
Carolina. The Bank is the only commercial bank headquartered in Stanly County
and is owned predominately by residents of Stanly County and the immediately
surrounding area.
At December 31, 1996 the Registrant and its banking subsidiary had 52 full-time
and 35 part-time employees.
BUSINESS OF THE BANK
The Bank engages in a general banking business in Stanly County, North Carolina.
Its operations are primarily retail oriented and directed to individuals and
small to medium-sized businesses located in its market area, and its deposits
and loans are derived primarily from customers in its geographical market. The
Bank provides most traditional commercial and consumer banking services,
including personal and commercial checking and savings accounts, money market
accounts, certificates of deposit, individual retirement accounts, and related
business and individual banking services. The Bank's lending activities include
commercial loans to small-to-medium sized businesses located primarily in its
market area for various purposes, and various consumer-type loans to
individuals, including installment loans, mortgage loans, equity lines of credit
and overdraft checking credit. The Bank also issues Visa(R) Check Card, an
electronic banking card, which functions as a point-of sale card and allows its
customers to access their deposit accounts at one branch of the Bank and at the
automatic teller machines of other banks linked to the HONOR(R) or CIRRUS(R)
networks. The Bank is licensed to offer MasterCard(R) credit cards. A program
called Business Manager(R), an accounts receivable billing system, is offered to
better serve the business community. The Bank does not provide the services of a
trust department.
NON-BANK SUBSIDIARIES
The Bank has two wholly-owned subsidiaries, BOS Agency, Inc. ("BOS Agency") and
The Strategic Alliance Corporation ("Strategic Alliance"). BOS Agency was formed
during 1987 and engages in the sale of various insurance products, including
annuities, life insurance, long-term care, disability insurance and Medicare
supplements. Strategic Alliance was formed during 1989 as BOS Financial
Corporation and, during 1993, adopted its current name. It is registered with
the Securities and Exchange Commission and licensed by the National Association
of Securities Dealers as a securities broker-dealer.
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DATA PROCESSING JOINT VENTURE
During 1992 the Bank entered into a joint venture agreement with two other banks
to form Corporate Data Services, Inc. ("CDS"), a North Carolina corporation that
provides operations and data processing services for community banks. The Bank's
ownership in this venture increased from one-third to one-half during 1995 due
to a merger involving one of the owners and the subsequent forfeiture of their
stock. The Bank's investment in CDS at December 31, 1996 amounted to $240,000.
COMPETITION
The Bank's primary geographic market is Stanly County, North Carolina.
Commercial banking in Stanly County and in North Carolina as a whole is
extremely competitive with state laws permitting state-wide branching. The Bank
competes directly for deposits in Stanly County with other commercial banks,
savings banks, credit unions, agencies issuing United States government
securities and all other organizations and institutions engaged in money market
transactions. In its lending activities, the Bank competes with all other
financial institutions as well as consumer finance companies, mortgage companies
and other lenders engaged in the business of extending credit. In Stanly County,
five other commercial banks (including two of the three largest banks in North
Carolina) presently operate a total of 14 banking offices, one savings bank
operates two offices and a credit union operates one location in the county.
Interest rates, both on loans and deposits, and prices of services are
significant competitive factors among financial institutions generally. Office
location, office hours, customer service, community reputation and continuity of
personnel are also important competitive factors. Many of the Bank's competitors
have greater resources, broader geographic markets and higher lending limits,
and can offer more products and better afford and make more effective use of
media advertising, support services and electronic technology than the Bank. The
Bank depends on its reputation as a community bank in its local market, direct
customer contact, its ability to make credit and other business decisions
locally, and personalized service to counter these competitive disadvantages.
INTERSTATE BANKING AND BRANCHING
Federal law permits adequately capitalized and managed bank holding companies to
acquire control of the assets of banks in any state (the "Interstate Banking
Law"). Acquisitions are subject to anti-trust provisions that cap at 10% the
portions of the total deposits of insured depository institutions in the United
States that a single bank holding company may control, and generally cap at 30%
the portion of the total deposits in any state that a single bank holding
company may control. Under certain circumstances, states have the authority to
increase or decrease the 30% cap, and states may set minimum age requirements of
up to five years on target banks within their borders.
Beginning June 1, 1997, and subject to certain conditions, the Interstate
Banking Law also permits interstate branching by allowing a bank to merge with a
bank located in a different state. A state may accelerate the effective date for
interstate mergers by adopting a law authorizing such transactions prior to June
1, 1997, or it can "opt out" and thereby prohibit interstate branching by
enacting legislation to that effect prior to that date. The Interstate Banking
Law also permits banks to establish branches in other states by opening new
branches or acquiring existing branches of other banks if the laws of those
other states specifically permit that form of interstate branching. North
Carolina has adopted statutes which, subject to conditions contained therein,
specifically authorize out-of-state bank holding companies and banks to acquire
or merge with North Carolina banks and to establish or acquire branches in North
Carolina. South Carolina, Tennessee and Virginia have similar laws and
interstate mergers or branching has occurred or has been applied for among these
three states and North Carolina.
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SUPERVISION AND REGULATION
The business and operations of the Registrant and its Subsidiary Bank are
subject to extensive federal and state governmental regulation and supervision.
Registrant is a bank holding company registered with the Board of Governors of
the Federal Reserve System (the "Federal Reserve") under the Bank Holding
Company Act of 1956, as amended (the "BHCA"), and is subject to supervision and
examinations by and the regulations and reporting requirements of the Federal
Reserve. Under the BHCA, the activities of the Registrant and the Bank are
limited to banking, managing or controlling banks, furnishing services to or
performing services for their subsidiaries or engaging in any other activity
which the Federal Reserve determines to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto.
The BHCA prohibits the Registrant from acquiring direct or indirect control of
more than 5% of the outstanding voting stock or substantially all of the assets
of any financial institution, or merging or consolidating with another bank
holding or savings bank holding company, without prior approval of the Federal
Reserve. Additionally, the BHCA prohibits the Registrant from engaging in, or
acquiring ownership or control of more than 5% of the outstanding voting stock
of any company engaged in a non-banking activity unless such activity is
determined by the Federal Reserve to be so closely related to banking as to be
properly incident thereto. In approving an application by the Registrant to
engage in a non-banking activity, the Federal Reserve must consider whether that
activity can reasonably be expected to produce benefits to the public, such as
greater convenience, increased competition or gains in efficiency, that outweigh
possible adverse effects, such as undue concentration of resources, decreased or
unfair competition, conflicts of interest or unsound banking practices.
There are a number of obligations and restrictions imposed by law on a bank
holding company and its insured depository institution subsidiaries that are
designed to minimize potential loss to depositors and the FDIC insurance funds.
For example, if a bank holding company's insured depository institution
subsidiary becomes "undercapitalized," the bank holding company is required to
guarantee (subject to certain limits) the subsidiary's compliance with the terms
of any capital restoration plan filed with its appropriate federal banking
agency.
Also, a bank holding company is required to serve as a source of financial
strength to its depository institution subsidiaries and to commit resources to
support such institutions in circumstances where it might not do so absent such
policy. Under the BHCA, the Federal Reserve has the authority to require a bank
holding company to terminate any activity or to relinquish control of a nonbank
subsidiary upon the Federal Reserve's determination that such activity or
control constitutes a serious risk to the financial soundness and stability of a
depository institution subsidiary of the bank holding company.
As a result of its ownership of a North Carolina-chartered commercial bank, the
Registrant also is registered with and subject to regulation by the North
Carolina Commissioner of Banks (the "Commissioner") under the state's bank
holding company laws. The Commissioner has asserted authority to examine North
Carolina bank holding companies and their affiliates.
The Bank is a North Carolina commercial bank and its deposits are insured by the
FDIC. The Bank is subject to supervision and examination by and the regulations
and reporting requirements of the Commissioner and the FDIC. The Bank also is a
member of the Federal Home Loan Bank System (the "FHLB System").
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The Bank is subject to legal limitations on the amounts of dividends it is
permitted to pay. Prior approval of the Commissioner is required if the total of
all dividends declared by the Bank in any calendar year exceeds its net profits
(as defined by statute) for the preceding two calendar years, less any required
transfers to surplus. As an insured depository institution, the Bank also is
prohibited from making capital distributions, including the payment of
dividends, if after making such distribution, it would become "undercapitalized"
(as such term is defined in the Federal Deposit Insurance Act).
Under current federal laws, certain transactions between a depository
institution and its affiliates are governed by Sections 23A and 23B of the
Federal Reserve Act. An affiliate of a depository institution is any company or
entity that controls, is controlled by or is under common control with the
institution, and in a holding company context, the parent holding company of a
depository institution and any companies which are controlled by such parent
holding company are affiliates of the depository institution. Generally,
Sections 23A and 23B (i) limit the extent to which a depository institution or
its subsidiaries may engage in covered transactions with any one affiliate, and
(ii) require that such transactions be on terms and under circumstances
substantially the same, or at least as favorable, to the institution or the
subsidiary as those provided to a nonaffiliate.
The Bank is subject to various other state and federal laws and regulations,
including state usury laws, laws relating to fiduciaries, consumer credit and
equal credit, fair reporting laws and laws relating to branch banking. As an
insured institution, the Bank is prohibited from engaging as a principal in
activities that are not permitted for national banks unless (i) the FDIC
determines that the activity would pose no significant risk to the appropriate
deposit insurance fund and (ii) the institution is and continues to be in
compliance with all applicable capital standards. Insured institutions also are
prohibited from directly acquiring or retaining any equity investment of a type
or in an amount not permitted for national banks.
The Federal Reserve, the FDIC and the Commissioner all have broad powers to
enforce laws and regulations applicable to the Registrant and the Bank and to
require corrective action of conditions affecting the safety and soundness of
the Bank. Among others, these powers include cease and desist orders, the
imposition of civil penalties and the removal of officers and directors.
Registrant and the Bank in the past have not had, and do not foresee in the
future, any significant regulatory compliance problems.
CAPITAL REQUIREMENTS
Bank holding companies are required to comply with the Federal Reserve's
risk-based capital guidelines which require a minimum ratio of total capital to
risk-weighted assets of 8%. At least half of the total capital is required to be
Tier I capital. In addition to the risk-based capital guidelines, the Federal
Reserve has adopted a minimum leverage capital ratio under which a bank holding
company must maintain a level of Tier I capital to average total consolidated
assets of at least 3% in the case of a bank holding company which has the
highest regulatory examination rating and is not contemplating significant
growth or expansion. All other bank holding companies are expected to maintain a
leverage capital ratio of at least 1% to 2% above the stated minimum.
The Bank also is subject to capital requirements imposed by the FDIC. Under the
FDIC's regulations, insured institutions that receive the highest rating during
the examination process and are not anticipating or experiencing any significant
growth are required to maintain a minimum leverage ratio of 3% of Tier I capital
to average total consolidated assets. All other insured institutions are
required to maintain a minimum ratio of 1% or 2% above the stated minimum, with
a minimum leverage ratio of not less than 4%. The FDIC also requires the Bank to
have a ratio of total capital to risk-weighted assets of at least 8%.
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FDIC INSURANCE ASSESSMENTS
The Bank is subject to insurance assessments imposed by the FDIC. Effective
January 1, 1997, the FDIC adopted a risk-based assessment schedule providing for
annual assessment rates ranging from 0% to .27% of an institution's average
assessment base, applicable to institutions insured by both the Bank Insurance
Fund ("BIF") and the Savings Association Insurance Fund ("SAIF"). The actual
assessment to be paid by each insured institution is based on the institution's
assessment risk classification, which is determined based on whether the
institution is considered "well capitalized," "adequately capitalized," or
"under capitalized," as such terms have been defined in applicable federal
regulations, and whether the institution is considered by its supervisory agency
to be financially sound or to have supervisory concerns. The FDIC also is
authorized to impose one or more special assessments in any amount deemed
necessary to enable repayment of amounts borrowed by the FDIC from the United
States Treasury Department, and beginning in 1997, all banks will pay additional
annual assessments at the rate of .013%.
Effective January 1, 1999, there will be a merger of the SAIF and BIF insurance
funds of the FDIC. One of the principal issues is the amount of additional funds
needed to recapitalize the SAIF prior to the merger. In September 1996, a
one-time special assessment was levied on SAIF-insured deposits (including such
deposits held by commercial banks) at the rate of .657% on all SAIF-insured
deposits held as of March 31, 1995, the assessment date. As of December 31,
1996, the Bank had no SAIF-insured deposits.
SAFETY AND SOUNDNESS STANDARDS
The FDIA, as amended by the FDICIA and the Riegle Community Development and
Regulatory Improvement Act of 1995, requires the federal bank regulatory
agencies to prescribe standards, by regulations or guidelines, relating to
internal controls, information systems and internal audit systems, loan
documentation, credit underwriting, interest risk exposure, asset growth, asset
quality, earnings, stock valuation and compensation, fees and benefits and such
other operational and managerial standards as the agencies deem appropriate. The
federal bank regulatory agencies have adopted, effective August 9, 1996, a set
of guidelines prescribing safety and soundness standards pursuant to FDICIA, as
amended.
The guidelines establish general standards relating to internal controls and
information systems, internal audit systems, loan documentation, credit
underwriting, interest rate exposure, asset growth and compensation, fees and
benefits. In general, the guidelines require, among other things, appropriate
systems and practices to identify and manage the risks and exposures specified
in the guidelines. The guidelines prohibit excessive compensation as an unsafe
and unsound practice and describe compensations as excessive when the amounts
paid are unreasonable or disproportionate to the services performed by an
executive officer, employee, director, or principal stockholders. The federal
banking agencies determined that stock valuation standards were not appropriate.
In addition, the agencies adopted regulations that authorize, but do not
require, an agency to order an institution that has been given notice by an
agency that it is not satisfying any of such safety and soundness standards to
submit a compliance plan. If, after being so notified, an institution fails to
submit an acceptable compliance plan, the agency must issue an order directing
action to correct the deficiency and may issue an order directing other actions
of the types to which an undercapitalized association is subject under the
prompt correction action provisions of FDICIA. If an institution fails to comply
with such an order, the agency may seek to enforce such order in judicial
proceedings and to impose civil money penalties.
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COMMUNITY REINVESTMENT ACT
The Bank is subject to the provisions of the Community Reinvestment Act (CRA).
Under the terms of the CRA, the appropriate federal bank regulatory agency is
required, in connection with the examination of a bank, to assess such bank's
record in meeting the credit needs of the community served by that bank,
including low and moderate-income neighborhoods. The regulatory agency's
assessment of the bank's record is made available to the public. Such an
assessment is required of any bank which has applied for any application for a
domestic deposit-taking branch, relocation of a main office, branch or ATM,
merger or consolidation with or acquisition of assets or assumption of
liabilities of a federally insured depository institution.
Under CRA regulations, banks with assets of less that $250,000,000 that are
independent or affiliated with a holding company with total banking assets of
less than $1 billion, are subject to streamlined small bank performance
standards and much less stringent data collection and reporting requirements
than larger banks. The agencies emphasize that small banks are not exempt from
CRA requirements. The streamlined performance method for small banks focuses on
the bank's loan-to-deposit ratio, adjusted for seasonal variations and as
appropriate, other lending-related activities, such as loan originations for
sale to secondary markets or community development lending or qualified
investments; the percentage of loans and, as appropriate, other lending-related
activities located in the bank's assessment areas; the bank's record of lending
to and, as appropriate, other lending-related activities for borrowers of
different income levels and businesses and farms of different sizes; the
geographic distribution of the bank's loans given its assessment areas, capacity
to lend, local economic conditions, and lending opportunities; and the bank's
record of taking action, if warranted, in response to written complaints about
its performance in meeting the credit needs of its assessment areas.
Regulatory agencies will assign a composite rating of "outstanding,"
"satisfactory," "needs to improve," or "substantial noncompliance" to the
institution using the following ground rules. A bank's performance need not fit
each aspect of a particular rating profile in order for the bank to receive that
rating; exceptionally strong performance with respect to some aspects may
compensate for weak performance in others, and the bank's overall performance
must be consistent with safe and sound banking practices and generally with the
appropriate rating profile. To earn an outstanding rating, the bank first must
exceed some or all of the standards mentioned above. The agencies may assign a
"needs to improve" or "substantial noncompliance" rating depending on the degree
to which the bank has failed to meet the standards mentioned above.
The regulation further states that the agencies will take into consideration
these CRA ratings when considering any application and that a bank's record of
performance may be the basis for denying or conditioning approval of an
application.
CHANGE OF CONTROL
State and federal law restricts the amount of voting stock of a bank holding
company or a bank that a person may acquire without the prior approval of
banking regulators. The overall effect of such laws is to make it more difficult
to acquire a bank holding company or bank by tender offer or similar means than
it might be to acquire control of another type of corporation.
Pursuant to North Carolina law, no person may, directly or indirectly, purchase
or acquire voting stock of any bank holding company or bank which would result
in the change of control of that entity unless the Commissioner first shall have
approved such proposed acquisition. A person will be deemed to have
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acquired "control" of a bank holding company or bank if he, she or it, directly
or indirectly, (i) owns, controls or has the power to vote 10% or more of the
voting stock of the bank holding company or bank, or (ii) possesses the power to
direct or cause the direction of its management and policy.
Federal law imposes additional restrictions on acquisitions of stock in bank
holding companies and FDIC-insured banks. Under the federal Change in Bank
Control Act and the regulations thereunder, a person or group acting in concert
must give advance notice to the Federal Reserve Board or the FDIC before
directly or indirectly acquiring the power to direct the management or policies
of, or to vote 25% or more of any class of voting securities of, any bank
holding company or federally-insured bank. Upon receipt of such notice, the
federal regulator either may approve or disapprove the acquisition. The Change
in Bank Control Act generally creates a rebuttable presumption of a change in
control if a person or group acquires ownership or control of or the power to
vote 10% or more of any class of a bank holding company or bank's voting
securities and, following such transaction, no other person owns a greater
percentage of that class of securities.
GOVERNMENT MONETARY POLICY AND ECONOMIC CONTROLS
As a bank holding company whose primary asset is the ownership of the capital
stock of a commercial bank, the Registrant is directly affected by the
government monetary policy and the economy in general. The actions and policies
of the FRB which acts as the nation's central bank can directly affect money
supply and, in general, affect banks' lending activities by increasing or
decreasing their costs and availability of funds. An important function of the
FRB is to regulate the national supply of bank credit in order to combat
recession and curb inflationary pressures. Among the instruments of monetary
policy used by the FRB to implement these objectives are open market operations
in U.S. Government securities, changes in the discount rate and surcharge, if
any, on member bank borrowings, and changes in reserve requirements against bank
deposits. These methods are used in varying combinations to influence overall
growth of bank loans, investments and deposits, and interest rates charged on
loans or paid for deposits. The Bank is not a member of the Federal Reserve
System but is subject to reserve requirements imposed by the Federal Reserve on
non-member banks. The monetary policies of the FRB have had a significant effect
on the operating results of commercial banks in the past and are expected to
continue to do so in the future.
ITEM 2. PROPERTIES
The Bank's Main Office is located at 167 North Second Street in Albemarle, North
Carolina. The Bank has leased a portion of this facility since it opened in
1984. The Bank's Main Office also occupies an adjoining building, purchased in
1991, which houses much of the Bank and Registrant's administrative functions.
The Bank purchased a commercial building and parking lot adjacent to its Main
Office in Albemarle in 1988. The Bank is holding this property for possible
future expansion purposes.
The Bank owns its other banking locations at 710 North First Street in
Albemarle, which houses the Village Branch opened in June 1984, its East
Albemarle Branch at 800 Highway 24-27 Bypass in Albemarle acquired in 1988, a
branch office located at 107 S. Main Street in Norwood acquired in 1987 and a
branch located at 624 N. Main Street in Oakboro opened in 1993.
All of the Bank's existing offices are freestanding, fully equipped and have
adequate parking and drive-up banking facilities, except the Main Office which
does not have a drive-up facility. At December 31, 1996, the cost less
accumulated depreciation of the Bank's investment in premises and equipment was
$2,117,249. The Registrant owns all of its properties through its subsidiary,
Bank of Stanly.
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ITEM 3. LEGAL PROCEEDINGS
Neither the Registrant nor the Bank, nor any of their properties, are subject to
any legal proceedings other than ordinary routine litigation incidental to their
business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of the Registrant's security holders during
the fourth quarter of 1996.
PART II
ITEMS 5 THROUGH 7.
Incorporated by reference to the Registrant's Annual Report to Shareholders for
the fiscal year ended December 31, 1996.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The information required by Item 8 is incorporated herein by reference from
page 9 of the Registrant's definitive proxy statement dated March 25, 1997.
PART III
ITEMS 9 THROUGH 12.
Incorporated by reference to the Registrant's definitive proxy statement dated
March 25, 1997.
PART IV
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) (1) FINANCIAL STATEMENTS.
The following consolidated financial statements of the Registrant are
incorporated herein by reference from the indicated pages of the
Registrant's 1996 Annual Report to Shareholders:
(2) FINANCIAL STATEMENT SCHEDULES.
All financial statement schedules are omitted as substantially all the
required information is contained in the Registrant's consolidated
financial statements listed above which are incorporated herein by
reference or is not applicable.
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(3) EXHIBITS.
The following exhibits are filed herewith or incorporated herein by
reference.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
3 (a) * Registrant's Articles of Incorporation
3 (b) * Registrant's By-laws
10 * Incentive Stock Option Plan, as amended * *
13 1996 Annual Report to Shareholders (filed herewith)
21 Subsidiary of the Registrant (filed herewith)
27 Financial Data Schedule (filed herewith)
99 Registrant's definitive proxy statement * * *
* Incorporated by reference from exhibits to Registrant's Registration
Statement on Form S-4 (Reg. No. 33-58882)
* *Denotes a management contract or compensatory plan or arrangement.
* * * To be filed with the Commission pursuant to Rule
14a-6(b).
(B) REPORTS ON FORM 8-K.
The Registrant did not file a Current Report on Form 8-K during the
three months ended December 31, 1996.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
STANLY CAPITAL CORP
March 25, 1997
By: /s/_____________________
Roger L. Dick, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
/ s / March 25, 1997
Roger L. Dick, President and
Chief Executive Officer
/ s / March 25, 1997
Barbara S. Williams, Vice President
(Principal Financial and Accounting Officer)
/ s / March 25, 1997
William S. Aldridge, Jr., Director
/ s / March 25, 1997
Cynthia H. Beane, Director
/ s / March 25, 1997
Barton D. Burpeau, Jr., Director
/ s / March 25, 1997
William F. Clayton, Director
/ s / March 25, 1997
John J. Earnhardt, Jr., Director
/ s / March 25, 1997
G. Chad Efird, Director
12
<PAGE>
/ s / March 25, 1997
W. Kermit Efird, Director
/ s / March 25, 1997
James L. Harris, Director
/ s / March 25, 1997
Eric M. Johnsen, M.D., Director
/ s / March 25, 1997
Jerry J. Long, Director
/ s / March 25, 1997
W. Chester Lowder, Director
/ s / March 25, 1997
James R. Mauney, Sr., Director
/ s / March 25, 1997
Pamela S. Morton, Director
/ s / March 25, 1997
John P. Murray, M.D., Director
/ s / March 25, 1997
Catherine A. Pickler, Director
/ s / March 25, 1997
B. A. Smith, Director
/ s / March 25, 1997
Boyce E. Thompson, Director
/ s / March 25, 1997
Douglas V. Waddell, Director
13
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
13 1996 Annual Report to Shareholders
21 Subsidiary of the Registrant
27 Financial Data Schedule
- --------------------------------------------------------------------------------
14
<PAGE>
Exhibit 13
15
<PAGE>
EXHIBIT 21
SUBSIDIARY OF THE REGISTRANT
NAME OF SUBSIDIARY STATE OF INCORPORATION
Bank of Stanly North Carolina
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the 1996
Annual Report of the Registrant and is qualified in its entirety to reference to
such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 4,883
<INT-BEARING-DEPOSITS> 91,747
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 25,220
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 100,852
<ALLOWANCE> 1,050
<TOTAL-ASSETS> 133,876
<DEPOSITS> 104,599
<SHORT-TERM> 11,156
<LIABILITIES-OTHER> 551
<LONG-TERM> 6,266
0
0
<COMMON> 2,719
<OTHER-SE> 8,585
<TOTAL-LIABILITIES-AND-EQUITY> 133,876
<INTEREST-LOAN> 8,552
<INTEREST-INVEST> 1,445
<INTEREST-OTHER> 43
<INTEREST-TOTAL> 10,040
<INTEREST-DEPOSIT> 3,686
<INTEREST-EXPENSE> 4,511
<INTEREST-INCOME-NET> 5,529
<LOAN-LOSSES> 137
<SECURITIES-GAINS> 29
<EXPENSE-OTHER> 5,277
<INCOME-PRETAX> 1,476
<INCOME-PRE-EXTRAORDINARY> 1,025
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,025
<EPS-PRIMARY> .47
<EPS-DILUTED> .47
<YIELD-ACTUAL> 4.70
<LOANS-NON> 332
<LOANS-PAST> 57
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 975
<CHARGE-OFFS> 75
<RECOVERIES> 13
<ALLOWANCE-CLOSE> 1,050
<ALLOWANCE-DOMESTIC> 1,050
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
