U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission file Number 0-22062
UWHARRIE CAPITAL CORP
(Exact name of small business issuer as specified in its charter)
NORTH CAROLINA 56-1814206
(State of incorporation) (I.R.S Employer Identification No.)
167 North Second Street
Albemarle, North Carolina 28001
(Address of principal executive offices)
Issuer's telephone number, including area code: (704) 983-6181
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 of 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.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:
Title of Each Class Outstanding at April 30, 2000
- ------------------- -----------------------------
Common stock, par value $1.25 per share 5,578,722 shares outstanding
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
<PAGE>
UWHARRIE CAPITAL CORP AND SUBSIDIARIES
FORM 10-QSB
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART 1 FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Statements of Financial Condition
March 31, 2000 and December 31, 1999 3
Consolidated Statements of Income
Three Months Ended March 31, 2000 and 1999 4
Consolidated Statements of Changes in Shareholders' Equity for the
Three Months Ended March 31, 2000 5
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2000 and 1999 6
Notes to Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II OTHER INFORMATION
Item 4 Submission of Matters to Vote of Security Holders 13
Item 6 Exhibits and Reports on Form 8-K 13
SIGNATURES 13
Exhibit 27 Financial Data Schedule for the Three Months Ended March 31, 2000 14
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UWHARRIE CAPITAL CORP AND SUBSIDIARIES
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(In thousands) March 31, December 31,
2000 1999
ASSETS (unaudited)
----------------- ----------------
Cash and due from banks $ 4,757 $ 7,316
Interest-bearing deposits with banks 516 383
Securities available for sale:
U.S. Treasury 1,987 1,988
U.S. Government agencies 17,693 17,081
State and political subdivisions 14,100 14,004
Other securities 3,011 2,654
----------------- ----------------
Total securities 36,791 35,727
----------------- ----------------
Federal funds sold - -
Loans (Note 2) 158,367 140,095
Less: Allowance for loan losses 1,103 1,003
----------------- ----------------
Loans, net 157,264 139,092
----------------- ----------------
Premises and equipment, net 4,033 3,358
Interest receivable 1,261 1,104
Other assets 4,490 5,737
----------------- ----------------
Total assets $209,112 $192,717
================= ================
LIABILITIES
Deposits:
Demand deposits $ 17,831 $ 17,063
Money market and NOW accounts 34,396 32,442
Savings deposits 40,412 34,001
Time deposits $100,000 and over 18,584 18,484
Other time deposits 43,414 32,833
----------------- ----------------
Total deposits 154,637 134,823
----------------- ----------------
Federal funds purchased 725 2,725
Securities sold under repurchase agreements 3,121 2,856
Commercial paper 2,032 2,958
Other short-term borrowed funds 12,000 13,200
Long-term debt 17,927 18,251
Interest payable 270 220
Other liabilities 967 623
----------------- ----------------
Total liabilities 191,679 175,656
----------------- ----------------
Off balance sheet items, commitments and contingencies (Note 4)
SHAREHOLDERS' EQUITY
Common stock, $1.25 par value: 20,000,000 shares authorized;
issued and outstanding: 5,539,025 and 5,545,607 shares, respectively 6,924 6,932
Additional paid-in capital 6,291 6,319
Common stock subscriptions receivable (151) (204)
Common stock acquired by ESOP (1,168) (1,168)
Undivided profits 5,789 5,406
Accumulated other comprehensive income
Net unrealized gain on securities available for sale, net of related tax effect (252) (224)
----------------- ----------------
Total shareholders' equity 17,433 17,061
----------------- ----------------
Total liabilities and shareholders' equity $209,112 $192,717
================= ================
</TABLE>
See accompanying notes.
3
<PAGE>
UWHARRIE CAPITAL CORP AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
(In thousands) Three Months Ended
March 31,
2000 1999
------------- ---------------
INTEREST INCOME:
<S> <C> <C>
Interest on loans $ 3,213 $ 2,746
Interest on securities:
U.S. Treasury 27 51
U.S. Government agencies 316 206
State and political subdivisions 198 80
Other securities 47 21
Other interest income 40 13
------------- ---------------
Total interest income 3,841 3,117
INTEREST EXPENSE:
Interest on deposits and borrowed funds 1,906 1,349
------------- ---------------
NET INTEREST INCOME 1,935 1,768
Provision for loan losses 10 30
------------- ---------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,925 1,738
------------- ---------------
NONINTEREST INCOME:
Service charges on deposit accounts 263 254
Other service fees and commissions 239 147
Other income(loss) 22 11
------------- ---------------
Total noninterest income 524 412
------------- ---------------
NONINTEREST EXPENSE:
Salaries, wages and employee benefits 1,064 936
Occupancy expenses 84 68
Equipment expense 141 127
Data processing 117 112
Other expenses 538 405
------------- ---------------
Total noninterest expense 1,944 1,648
------------- ---------------
INCOME BEFORE INCOME TAXES 505 502
Provision for income taxes 122 153
------------- ---------------
NET INCOME $ 383 $ 349
============= ===============
Net Income Per Common Share
Basic $ .07 $ .07
Assuming dilution $ .07 $ .07
Weighted Average Shares Outstanding
Basic 5,302,417 5,143,751
Effect of dilutive stock options 165,208 65,882
------------- ---------------
Assuming dilution 5,467,625 5,209,633
============= ===============
</TABLE>
See accompanying notes.
4
<PAGE>
UWHARRIE CAPITAL CORP AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders' Equity (unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
(in thousands)
Accumulated
Additional Common Stock Other
Common Paid-in Subscriptions ESOP Notes Undivided Comprehensive
Stock Capital Receivable Receivable Profits Income Total
----- ------- ---------- ---------- ------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1999 $ 6,932 $ 6,319 $ (204) $ (1,168) $ 5,406 $ (224) $ 17,061
Comprehensive income
Net income - - - - 383 - 383
Net increase (decrease) in
fair value of securities
available for sale - - - - - (28) (28)
-------------
Total comprehensive income 355
-------------
Repurchase of common stock (8) (28) - - - - (36)
Collections of subscriptions - - 53 - - - 53
receivable
----------- ------------ -------------- ------------ ------------ -------------- -------------
Balance, March 31, 2000 $ 6,924 $ 6,291 $ (151) $ (1,168) $ 5,789 $ (252) $ 17,433
=========== ============ ============== ============ ============ ============== =============
</TABLE>
See accompanying notes.
5
<PAGE>
UWHARRIE CAPITAL CORP AND SUBSIDIARIES
Consolidated Statements of Cash Flows (unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
(in thousands) Three Months Ended
March 31, March 31,
2000 1999
----------------- ----------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 383 $ 349
Adjustments to reconcile net income to net cash provided by operations:
Depreciation 89 84
Amortization of investment discounts and premiums, net 2 (5)
Provision for loan losses 10 30
(Gain) loss on sale of foreclosed real estate (3) -
Changes in assets and liabilities:
Interest receivable (121) (83)
Other assets 183 (327)
Interest payable (2) (40)
Accrued and other liabilities (629) 73
----------------- ----------------
Net cash provided by operating activities (88) 81
----------------- ----------------
INVESTING ACTIVITIES
Net increase in interest-bearing deposits with banks (132) (36)
Proceeds from maturities of securities available for sale 3,657 3,231
Purchase of securities available for sale - (2,787)
Net decrease in federal funds sold - 1,950
Net increase in loans (6,530) (2,777)
Net cash paid for business acquired (3,214) -
Purchase of premises and equipment (122) (264)
Collection of receivables from securities sales 2,460 -
Proceeds from sale of foreclosed properties 32 -
----------------- ----------------
Net cash used in investing activities (3,849) (683)
----------------- ----------------
FINANCING ACTIVITIES
Net increase (decrease) in deposit accounts 5,545 (1,401)
Net increase (decrease) in federal funds purchased (2,000) 1,600
Net decrease in securities sold under repurchase agreements 266 79
Repayment of long-term advances from Federal Home Loan Bank (324) (1,424)
Net increase (decrease) in commercial paper (926) 202
Net decrease in other short-term borrowed funds (1,200) -
Proceeds from issuance of common stock - 2,753
Decrease in common stock subscribed - (385)
Decrease in common stock subscriptions receivable 53 -
Repurchases of common stock (36) (233)
Common stock acquired by ESOP - (1,200)
----------------- ----------------
Net cash provided by financing activities 1,378 $ (9)
----------------- ----------------
DECREASE IN CASH AND DUE FROM BANKS (2,559) (611)
Cash and due from banks at beginning of period 7,316 4,371
----------------- ----------------
Cash and due from banks at end of period $ 4,757 $ 3,760
================= ================
</TABLE>
See accompanying notes.
6
<PAGE>
UWHARRIE CAPITAL CORP AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
- ------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION
The financial statements and accompanying notes are presented on a consolidated
basis including Uwharrie Capital Corp (the "Company"), it's subsidiaries, Bank
of Stanly ("Stanly"), Anson Bank & Trust Co. ("Anson"), and Strategic Investment
Advisors, Inc., (SIA). Bank of Stanly consolidates its two subsidiaries, the
Strategic Alliance Corporation and BOS Agency, Inc. each of which are
wholly-owned by Stanly.
The information contained in the consolidated financial statements is unaudited.
In the opinion of management, the consolidated financial statements have been
prepared in conformity with generally accepted accounting principles and all
material adjustments necessary for a fair presentation of results of interim
periods have been made. The results of operations for the interim periods are
not necessarily indicative of the results which may be expected for an entire
year. Management is not aware of economic events, outside influences or changes
in concentrations of business that would require additional clarification or
disclosure in the consolidated financial statements. Certain prior period
amounts have been reclassified to conform to current period classifications.
The organization and business of the Company, accounting policies followed by
the Company and other information are contained in the notes to consolidated
financial statements filed as part of the Company's 1999 annual report on Form
10-KSB. This quarterly report should be read in conjunction with such annual
report.
NOTE 2 - LOANS
Loans outstanding at period end:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
<S> <C> <C>
(in thousands) March 31, December 31,
2000 1999
---------------- ----------------
Real estate loans $ 116,951 $ 100,027
Commercial and industrial 25,644 23,673
Loans to individuals for household, family and other
consumer expenditures 15,743 16,445
All other loans 29 16
---------------- ----------------
Total $ 158,367 $ 140,161
================ ================
----------------------------------------------------------------------------------------------
</TABLE>
NOTE 3 - PER SHARE DATA
In the fourth quarter of 1999, the Company's Board of Directors declared a 3%
stock dividend payable on November 19, 1999 to shareholders of record on
November 1, 1999. All information presented in the accompanying interim
consolidated financial statements regarding earnings per share and weighted
average number of shares outstanding has been computed giving effect to this
stock dividend.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
The subsidiary banks are parties to financial instruments with off-balance sheet
risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include commitments to extend credit,
lines of credit and standby letters of credit. These instruments involve
elements of credit risk in excess of amounts recognized in the accompanying
financial statements.
The banks' risks of loss with the unfunded loans and lines of credit or standby
letters of credits is represented by the contractual amount of these
instruments. The banks use the same credit policies in making commitments under
such instruments as it does for on-balance sheet instruments. The amount of
collateral obtained, if any, is
7
<PAGE>
based on management's credit evaluation of the borrower. Since many of the
commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements. Credit
card commitments are unsecured. At March 31, 2000, outstanding financial
instruments whose contract amounts represent credit risk were approximately (in
thousands):
Commitments to extend credit $ 19,954
Credit card commitments 5,142
Standby letters of credit 977
--------
Total commitments $ 26,073
========
NOTE 5 - ACQUISITION OF ANSON BANK & TRUST CO.
In 1999 the Company announced the signing of an agreement to acquire Anson
Bancorp, Inc. and its wholly-owned subsidiary, Anson Savings Bank. Anson Savings
Bank, a state chartered savings bank operated a full service banking location in
Wadesboro, North Carolina. The acquisition closed on January 19, 2000, with the
acquisition cost of approximately $10.2 million paid principally in cash. This
business combination is being accounted for using the purchase method.
At the date of closing, Anson Bancorp, Inc. had total consolidated assets of
approximately $24 million and customer deposits of approximately $14.5 million.
The savings bank retained its North Carolina savings bank charter and became a
wholly-owned subsidiary of Uwharrie Capital Corp as Anson Bank & Trust Co.
The Company recorded intangible assets of approximately $1,150,000 as a result
of this acquisition.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Quarterly Report on Form 10-QSB may contain certain forward-looking
statements consisting of estimates with respect to the financial condition,
results of operations and business of the Company that are subject to various
factors which could cause actual results to differ materially from these
estimates. These factors include, but are not limited to, general economic
conditions, changes in interest rates, deposit flows, loan demand, real estate
values, and competition; changes in accounting principles, policies, or
guidelines; changes in legislation or regulation; and other economic,
competitive, governmental, regulatory, and technological factors affecting the
Company's operations, pricing, products and services.
COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2000 AND DECEMBER 31, 1999
As of March 31, 2000 total assets were $209.1 million, compared to $192.7
million at December 31, 1999, an increase of $16.4 million or 8.5%. This
increase was provided by the acquisition of Anson Bancorp, Inc., consummated on
January 19, 2000.
At year-end 1999, the Company's balance sheet reflected approximately $3 million
in additional cash on hand relative to anticipated cash needs for Y2K. Other
assets at that date included $2.5 million in net proceeds receivable from the
sale and purchase of securities with trade dates in December and settlements in
January 2000. The effect of the disposition of these transactions reduced assets
and borrowings by approximately $5.5 million in the first quarter of 2000.
The Company has experienced steady growth in loans, which increased from $140.1
million at December 31, 1999 to $158.4 million on March 31, 2000, reflecting an
increase of $18.3 million. The acquisition provided $11.8 million in loans and
loan growth amounted to $6.5 million, an increase of 4.6%.
During the three-month period ended March 31, 2000, deposits increased $19.8
million. The acquisition contributed $14.3 million and deposits grew by $5.5
million or 4.1%. Other funding sources and borrowings decreased by $4.2 million
during this period.
Shareholders' equity was $17.1 million at December 31, 1999 compared to $17.4
million at March 31, 2000, an increase of $372 thousand. This increase was the
result of net income of $383 thousand, offset by an increase in the unrealized
loss on securities available for sale and stock repurchses. At March 31, 2000,
the Company and its subsidiary banks exceeded all applicable regulatory capital
requirements.
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000
AND 1999
EARNINGS
The first quarter of 2000 reflected good operating results with net income of
$383 thousand, an increase of 9.7% when compared to the first quarter of 1999.
This improvement can be primarily attributed to a 9.4% increase in net interest
income due to growth in the loan and investment portfolios and improvement in
fee income of 25.2%.
NET INTEREST INCOME
Net interest income increased $167 thousand or 9.4% when comparing the
three-month periods presented, attributable to an increased volume of interest
earning assets. The net interest margin, on a tax equivalent basis, decreased
from 4.70% in the first three months of 1999 compared to 4.36% in the current
three-month period. Factors that contributed to the decline in this ratio were:
rising interest rates, competitive markets for deposit funding, interest expense
on parent company debt relative to the acquisition of Anson, which carries a
higher rate than the overnight funding costs of its subsidiary banks, and an
increase in other borrowings.
The average rate paid on interest-bearing liabilities increased from 4.01% in
1999 to 4.55% in 2000. Interest-bearing deposits, as a percent of total
interest-bearing liabilities was 78.1% at March 31, 2000 compared to
9
<PAGE>
91.1% at March 31, 1999. This change was due principally to the addition of
$14.5 million in deposits contributed by the acquisition of Anson in the first
quarter of 2000.
The following table presents average balance sheets and a net interest income
analysis for the three months ended March 31, 2000 and 1999.
Average Balance Sheet and Net Interest Income Analysis
For the Three Months Ended March 31,
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Average Level Income/Expense Rate/Yield
($ in thousands) 2000 1999 2000 1999 2000 1999
----------- ----------- ----------- ------------ ----------- -----------
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Loans (1) $ 148,131 $ 130,914 $ 3,138 $ 2,712 8.52% 8.40%
Nontaxable loans (2) 5,167 2,567 75 34 8.95% 8.22%
Taxable securities 23,146 17,605 390 278 6.78% 6.40%
Nontaxable securities (2) 13,897 5,511 198 80 8.83% 9.05%
Other (3) 1,769 1,072 40 13 9.09% 4.92%
----------- ----------- ----------- ------------ ----------- -----------
Total interest-earning assets 192,110 157,669 3,841 3,117 8.35% 8.17%
----------- ----------- ----------- ------------ ----------- -----------
Interest-bearing liabilities:
Interest-bearing deposits 131,727 124,401 1,374 1,196 4.20% 3.90%
Short-term borrowings 18,662 5,830 264 57 5.69% 3.97%
Long-term borrowings 18,204 6,251 268 96 5.92% 6.23%
----------- ----------- ----------- ------------ ----------- -----------
Total interest-bearing
Liabilities 168,593 136,482 1,906 1,349 4.55% 4.01%
----------- ----------- ----------- ------------ ----------- -----------
Net interest spread $23,517 $ 21,187 $ 1,935 $1,768 3.80% 4.16%
=========== =========== =========== ============ =========== ===========
Net interest margin (2)
(% of earning assets) 4.36% 4.70%
=========== ===========
</TABLE>
(1) Average loan balances are stated net of unearned income and include
nonaccrual loans. Interest recognized on nonaccrual loans is included in
interest income.
(2) Yields related to securities and loans exempt from income taxes are stated
on a fully tax-equivalent basis, assuming a 35% tax rate.
(3) Includes federal funds sold and due from banks, interest-bearing.
- --------------------------------------------------------------------------------
NONINTEREST INCOME AND EXPENSE
Income from service charges and fees produced earnings of $502 and $401 thousand
for the first quarters of 2000 and 1999, respectively, an increase of 25.2%.
Other income increased by $11 thousand, compared to the prior first quarter.
For this same period, noninterest expenses increased by $296 thousand or 18.0%.
Salaries and benefits, the largest component of noninterest expense, increased
by $128 thousand. Personnel costs increased due to additional staff to support
the Company's growth, normal salary adjustments and associated benefit costs,
including the acquisition of Anson. All other expenses as a group increased by
$168 thousand when comparing results of the first quarter of 2000 to the same
period in 1999.
10
<PAGE>
PROVISION FOR LOAN LOSSES
The provision for loan losses was $10 thousand for the first quarter of 2000,
compared to $30 in the first quarter of 1999. The loan portfolio is analyzed
periodically in an effort to identify potential problems before they actually
occur. An allowance for loan losses, which is utilized to absorb actual losses
in the loan portfolio, is maintained at a level sufficient to provide for
estimated potential charge-offs of non-collectible loans. At March 31, 2000 the
allowance for loan losses was $1.1 million compared to $1.0 million at December
31, 1999. Management believes the allowance for loan losses is sufficient to
absorb known risks in the portfolio; however, no assurance can be given that
economic conditions will not adversely affect borrowers and result in increased
losses.
Net charge-offs for the three months ended March 31, 2000 totaled $14 thousand,
reflecting a ratio to average loans of .01% compared to net recoveries of $14
thousand in the prior period.
INCOME TAX EXPENSE
Income taxes computed at the statutory rate are reduced primarily by the
eligible amount of interest earned on state and municipal securities. Income tax
expense calculated to date in 2000 totaled $122 thousand, an effective tax rate
of 24.2% of pretax income compared to $153 thousand in 1999, which reflected an
effective rate of 30.5%.
During the fourth quarter of 1999, the Company implemented a tax savings
transaction that resulted in realized losses from sales of investment
securities. The proceeds from the sale of taxable securities were reinvested in
non-taxable municipal securities, which will result in increased interest
income, primarily non-taxable income, in year 2000 and beyond. The reduction in
taxes, reflected in the effective tax rate, is a result of this transaction.
NON-PERFORMING ASSETS
Non-performing assets include non-accrual loans, accruing loans contractually
past due 90 days or more, restructured loans, other real estate, and other real
estate under contract for sale. While non-performing assets represent potential
losses to the Company, management does not anticipate any aggregate material
losses since most loans are believed to be adequately secured.
The following table summarizes non-performing assets at March 31, 2000 and
December 31, 1999. Other than the amounts listed, there were no other loans that
(i) represent or result from trends or uncertainties which management reasonably
expects will materially impact future operating results, liquidity or capital
resources or (ii) represent material credits about which management has
information that causes them to have serious doubts as to the ability of such
borrowers to comply with the loan repayment terms.
Schedule of Non-Performing Assets
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
(In thousands) March 31, December 31,
2000 1999
---------------- ----------------
Nonaccrual loans $ 231 $ 317
Loans past due 90 days or more and still accruing 104 26
Other real estate owned, net 85 114
Renegotiated troubled debt - -
---------------- ----------------
Total non-performing assets $ 420 $ 457
================ ================
Non-performing assets as a percentage of gross loans .27% .33%
- -----------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The objective of the Company's liquidity management is to ensure the
availability of sufficient cash flows to meet all financial commitments and to
capitalize on the opportunities for expansion. Liquidity management addresses
the ability to meet deposit withdrawals on demand or at contractual maturity, to
repay borrowings as they mature, and to fund new loans and investments as
opportunities arise.
The Company's primary sources of internally generated funds are principal and
interest payments on loans, cash flows generated from operations and cash flow
generated by investments. Growth in deposits is typically the primary source of
funds for loan growth. The Company and its subsidiary banks have multiple
funding sources in addition to deposits that can be used to increase liquidity
and provide additional financial flexibility. These sources are the subsidiary
banks' established federal funds lines with correspondent banks aggregating
$15.5 million at March 31, 2000, established borrowing relationships with the
Federal Home Loan Bank totaling approximately $45 million, access to borrowings
from the Federal Reserve Bank discount window, and the sale of securities under
agreements. In addition the parent company has a line of credit of $4.5 million
issues commercial paper. Total debt from these sources aggregated $35.1 million
at March 31, 2000, compared to $40.0 million at December 31, 1999.
Banks and bank holding companies, as regulated institutions, must meet required
levels of capital. The FDIC and the Federal Reserve, the primary regulators of
the Company and its subsidiary banks, have adopted minimum capital regulations
or guidelines that categorize components and the level of risk associated with
various types of assets.
Regulatory guidelines require a minimum of total capital to risk-adjusted assets
ratio of 8 percent and Tier I leverage ratio of 4 percent. Banks, which meet or
exceed a Tier I ratio of 6 percent, a total capital ratio of 10 percent and a
Tier I leverage ratio of 5 percent are considered well capitalized by regulatory
standards. Financial institutions are expected to maintain a level of capital
commensurate with the risk profile assigned to its assets in accordance with
those guidelines.
Both the Company and its subsidiary banks have maintained capital levels
exceeding minimum levels for "well capitalized" banks and bank holding
companies.
ACCOUNTING AND REGULATORY MATTERS
Management is not aware of any known trends, events, uncertainties or current
recommendations by regulatory authorities that will have or that are reasonably
likely to have a material effect on the Company's liquidity, capital resources,
or other operations.
IMPACT OF INFLATION AND CHANGING PRICES
Inflation affects financial institutions in ways that are different from most
commercial and industrial companies, which have significant investments in fixed
assets and inventories. The effect of inflation on interest rates can materially
impact bank operations, which rely on net interest margins as a major source of
earnings. Noninterest expenses, such as salaries and wages, occupancy and
equipment cost are also negatively impacted by inflation.
YEAR 2000
The Company's management is pleased that business continued as normal without
adverse impact to the Company during the critical date change. In coming months,
the Company will continue monitoring external entities to assure that they have
not experienced any Year 2000 problems that could impact their relationship with
the Company.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits - Exhibit 27 - Financial Data Schedule
b. Reports on Form 8-K
FORM 8-K dated January 19, 2000 was filed with the Securities
and Exchange Commission to report the acquisition and merger of
Anson Savings Bank, Inc. and the name change to Anson Bank &
Trust Co.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned who is thereunto duly authorized.
UWHARRIE CAPITAL CORP
(Registrant)
Date May 10, 2000 By: /s/ Roger L. Dick
--------------------- -------------------------------------
Roger L. Dick
President and Chief Executive Officer
/s/ Barbara S. Williams
-------------------------------------
Barbara S. Williams
Senior Vice President-Finance
13
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 4,757
<INT-BEARING-DEPOSITS> 516
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 36,791
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 158,367
<ALLOWANCE> 1,103
<TOTAL-ASSETS> 209,112
<DEPOSITS> 154,637
<SHORT-TERM> 17,878
<LIABILITIES-OTHER> 967
<LONG-TERM> 17,927
0
0
<COMMON> 6,924
<OTHER-SE> 10,509
<TOTAL-LIABILITIES-AND-EQUITY> 209,112
<INTEREST-LOAN> 3,213
<INTEREST-INVEST> 588
<INTEREST-OTHER> 40
<INTEREST-TOTAL> 3,841
<INTEREST-DEPOSIT> 1,374
<INTEREST-EXPENSE> 1,906
<INTEREST-INCOME-NET> 1,935
<LOAN-LOSSES> 10
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,944
<INCOME-PRETAX> 505
<INCOME-PRE-EXTRAORDINARY> 383
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 383
<EPS-BASIC> .07
<EPS-DILUTED> .07
<YIELD-ACTUAL> 4.36
<LOANS-NON> 231
<LOANS-PAST> 104
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,003
<CHARGE-OFFS> 24
<RECOVERIES> 10
<ALLOWANCE-CLOSE> 1,103
<ALLOWANCE-DOMESTIC> 1,103
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
