UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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 0-15600
CBC BANCORP, INC.
(Exact name of registrant as specified in its charter)
CONNECTICUT 06-1179862
(State or other (I.R.S. Employer
jurisdiction of incorporation or
organization) Identification No.)
128 Amity Road, Woodbridge, CT 06525
(Address or principal executive offices) (Zip Code)
(203) 389-2800
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year
if changed from last report)
Indicate by check 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13, or
15 (d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
As of March 31, 1996, there were 1,961,761 shares of CBC
Bancorp, Inc. Common Stock, par value $.01 per share, outstanding.
CBC BANCORP, INC.
PART I. FINANCIAL INFORMATION
PAGE
Item 1. Financial Statements
Unaudited Consolidated Balance Sheets 1
March 31, 1996 and December 31, 1995
Unaudited Consolidated Statements of Operations 2
Three Months Ended March 31, 1996 and March 31, 1995
Unaudited Consolidated Statements of Changes in Shareholders' 3
Equity -- Three Months Ended March 31, 1996 and March 31,
1995
Unaudited Consolidated Statements of Cash Flows 4
Three Months Ended March 31, 1996 and March 31, 1995
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of 6
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
CBC BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
March 31 December 31,
(Dollars in 000's) (UNAUDITED) 1996 1995
ASSETS
LOANS (net of allowance for loan
losses: 1996, $1,849; 1995,
$2,070): $52,834 $56,382
INVESTMENT SECURITIES HELD FOR SALE 5,580 7,582
FEDERAL FUNDS SOLD 9,140 5,000
TOTAL EARNING ASSETS 67,554 68,964
CASH AND DUE FROM BANKS 1,406 1,937
ACCRUED INTEREST RECEIVABLE 633 782
PROPERTY AND EQUIPMENT - NET 747 789
ASSETS HELD FOR LEASE 6,573 7,573
PREPAID AND OTHER ASSETS 558 522
OTHER REAL ESTATE OWNED 2,548 2,713
TOTAL ASSETS $80,019 $83,280
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Demand $7,953 $8,672
Savings and NOW 12,550 13,319
Money market 3,528 2,546
Time deposits under $100 46,204 49,342
Time deposits of $100 or more 5,669 5,166
TOTAL DEPOSITS $75,904 $79,045
ACCRUED INTEREST PAYABLE 596 532
DIVIDENDS PAYABLE 591 1,330
OTHER LIABILITIES 331 459
SENIOR NOTES 548 548
CAPITAL NOTES 220 220
MANDATORY CONVERTIBLE CAPITAL NOTES 1,090 1,090
TOTAL LIABILITIES $79,280 $83,224
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY:
Preferred Stock $12,320 $11,240
Common Stock 19 19
Additional paid-in capital 9,262 9,604
Unrealized gain (loss) on
marketable equity securities (3) (2)
Accumulated deficit (20,859) (20,805)
TOTAL SHAREHOLDERS' EQUITY $739 $56
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $80,019 $83,280
The accompanying notes are an integral part of these consolidated
financial statements.
CBC BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
(Dollars in 000's except per share data) (UNAUDITED)
1996 1995
INTEREST INCOME:
Interest and fees on loans $1,237 $1,284
Interest and dividends on investments:
U.S. Treasury and Government agency 88 172
securities
Other securities 7 26
Interest on federal funds sold 82 57
TOTAL INTEREST INCOME $1,414 $1,539
INTEREST EXPENSE:
Interest on deposits:
Savings and time deposits under $734 $659
$100
Time deposits of $100 or more 75 59
Total Interest on deposits 809 718
Interest on borrowed money:
Long-term borrowings 48 45
Other 18 5
Total Interest on borrowed money 66 50
TOTAL INTEREST EXPENSE 875 768
NET INTEREST INCOME 539 771
Provision for loan losses 40 75
NET INTEREST INCOME (LOSS) AFTER $499 $696
PROVISION FOR LOAN LOSSES
OTHER OPERATING INCOME:
Service fees on deposits $253 $145
Net gain (loss) on sale of securities 16 (1)
Lease asset income 175 117
Gain on sale of loans -- 17
Other 34 47
TOTAL OTHER OPERATING INCOME $478 $325
OTHER OPERATING EXPENSES:
Salaries and employee benefits $465 $571
Occupancy 91 88
Supplies and communications 37 41
Professional services 98 161
Furniture and equipment maintenance 12 20
Depreciation and amortization 41 53
FDIC insurance 52 68
Other insurance 25 22
Other real estate owned 101 75
Other 109 60
TOTAL OTHER OPERATING EXPENSES $1,031 $1,159
INCOME (LOSS) BEFORE INCOME TAX AND (54) (138)
EXTRAORDINARY ITEM
Income tax -- --
INCOME BEFORE EXTRAORDINARY ITEM (54) (138)
Extraordinary item - Tax benefit from -- --
net operating loss
carryforward
Net income (loss) ($54) ($138)
Less preferred stock dividends (342) (293)
LOSS APPLICABLE TO COMMON STOCK ($396) ($431)
Net loss per common share ($ .20) ($ .21)
Weighted Average Common Shares 1,961,761 2,012,514
(Primary)
The accompanying notes are an integral part of these consolidated
financial statements.
CBC BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
($ and shares in 000's) (UNAUDITED)
Common Unrealized
----Stock------ Loss on Retained
Number Additional Marketable Earnings
of Preferred Paid-in Equity (Accum.
Shares Amount Stock Capital Securities Deficit) Total
BALANCE, DECEMBER 31, 1,962 $19 $11,240 $9,604 ($2) ($20,805) $56
1995
Preferred dividends (49) (49)
accrued Series 1
Preferred dividends (116) (116)
accrued Series 2
Preferred dividends (177) (177)
accrued Series 3
Issuance of Preferred 1,080 1,080
Stock
Change in unrealized
loss on marketable (1) (1)
equity securities
Net income (loss) (54) (54)
BALANCE, MARCH 31, $1,962 $19 $12,320 $9,262 ($3) ($20,859) $739
1996
BALANCE, DECEMBER 31, 2,013 $20 $9,830 $11,032 ($218) ($19,207) $1,457
1994
Preferred dividends (49) (49)
accrued Series 1
Preferred dividends (116) (116)
accrued Series 2
Preferred dividends (128) (128)
accrued Series 3
Change in unrealized 90 90
loss on marketable
equity securities
Issuance of Preferred 130 130
Stock
Net income (loss) (138) (138)
BALANCE, MARCH 31, 2,013 $20 $9,960 $10,739 ($128) ($19,345) $1,246
1995
CBC BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1996 1995
($ IN 000's) (UNAUDITED)
OPERATING ACTIVITIES:
Net Income (Loss) ($54) ($138)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Provision for losses on loans 40 75
Provision for OREO reserves 61 --
Provision for depreciation and amortization 41 53
Increase (decrease) in deferred loan fees and (6) (9)
costs - net
Amortization (accretion) of net investment security 20 15
premiums (discounts)
(Gain) on sale of securities (16) (1)
Loss (gain) on sale and provision for write-downs of 148 99
other real estate owned
Decrease in accrued interest receivables 149 108
Decrease (increase) in prepaid and other assets (8) (131)
Decrease (increase) in accrued interest payable (64) (475)
Increase (decrease) in deferred revenue -- 16
Increase (decrease) in other liabilities (128) (142)
Net cash used by operating activities ($183) ($530)
INVESTING ACTIVITIES:
Net decrease (increase) in federal funds sold ($4,140) $2,510
Proceeds from sales and maturities of investment 2,297 8,418
securities
Purchases of investment securities (300) (988)
Decrease (increase) in loans 3,621 1,890
Proceeds from sales of OREO -- 207
Purchases of OREO/Cap Exp. (51) --
Purchases of property and equipment -- (80)
Purchase of assets held for lease -- (5,759)
Proceeds from sales of assets held for lease 1,000 719
Net cash provided by investing activities $2,427 $6,917
FINANCING ACTIVITIES:
Net increase (decrease) in demand, savings and money ($1,596) ($4,008)
market deposit accounts
Net decrease in time deposits (1,545) (2,232)
Net cash used in financing activities ($3,141) ($6,240)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (531) 147
CASH AND DUE FROM BANKS AT BEGINNING OF YEAR 1,937 3,130
CASH AND DUE FROM BANKS AT END OF QUARTER $1,406 $3,277
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the quarter for:
Interest on deposits and borrowed money 812 1,193
Income taxes -- --
NONCASH INVESTING AND FINANCING ACTIVITIES:
Transfers of loans to Other Real Estate Owned 67 243
Transfer of Other Real Estate Owned to loans 221 --
Preferred stock dividend declared 341 164
Unrealized gain (loss) on valuation of instruments (1) 90
available for sale
Issuance of preferred stock dividend 1,080 130
CBC BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
NOTE A: BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
accounts of CBC Bancorp, Inc. (the "Company") and its subsidiary,
Connecticut Bank of Commerce (the "Bank"). The consolidated
financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
preparing such financial statements, management is required to
make estimates and assumptions that effect the reported amounts of
assets and liabilities as of the date of the consolidated balance
sheets and the revenues and expenses for the period. Actual
results could differ significantly from those estimates. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1996. For further information, refer to the
consolidated financial statements and footnotes thereto included
in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
NOTE B: REGULATORY MATTERS
Under the terms of the July 1991 Cease and Desist Order (the "1991
Order"), the Bank must obtain the prior approval of the Federal
Deposit Insurance Corporation ("FDIC") and the Connecticut Banking
Commissioner (the "Banking Commissioner") before paying any cash
dividends to the Company. The 1991 Order also requires the Bank
to maintain a Tier 1 leverage ratio of 6 percent. The Bank and
its Board of Directors believe that the Bank has complied fully
with each of the terms of the 1991 Order, except for the 6 percent
Tier 1 leverage ratio. Under the Bank's approved 1996 Capital
Restoration Plan (the "1996 Capital Plan"), which was approved by
the FDIC and the Banking Commissioner on March 21, 1996, the Bank
has until December 31, 1997 to achieve the 6 percent Tier 1
leverage capital ratio mandated by the 1991 Order.
Under the terms of a written agreement (the "Agreement") between
the Company and the Federal Reserve Bank of Boston ("Reserve
Bank"), effective as of November 2, 1994, the holding company is
required to obtain the written approval of the Reserve Bank prior
to the declaration or payment of dividends on its outstanding
common or preferred stock, increasing its outstanding borrowings
or incurring additional holding company indebtedness, engaging in
material transactions with the Bank (other than capital
contributions) or making cash disbursements in excess of certain
agreed upon amounts. All such actions required by the Written
Agreement have been taken by the Company.
NOTE C: PREFERRED STOCK DIVIDEND
In accordance with the dividend payment provisions of the Series
III Preferred Stock offering, the Board of Directors voted to pay
stock dividends in the amount of 18 shares of Series III Preferred
Stock with a stated value of $180,000 to the shareholders as
satisfaction of the same amount of dividends payable to them as of
March 31, 1996. In addition, the majority shareholder accepted a
stock dividend in the amount of 90 shares of Preferred Series III
Stock with a stated value of $900,000 as satisfaction of the same
amount of Series II Preferred Stock dividends payable to him as of
March 31, 1996.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL HIGHLIGHTS
CBC BANCORP, INC. AND SUBSIDIARY
CONDENSED STATEMENTS OF INCOME
Three Months Ended March 31, 1996 1995
($ In thousands, except per share data)
Net interest income 539 771
Provision for loan losses 40 75
Net interest income after provision for loan losses 499 696
Investment securities gains (losses) 16 (1)
Other non-interest income 462 326
Other real estate owned expense 101 75
Other non-interest expense 930 1,084
NET INCOME (LOSS) (54) (138)
Common Per share data:
Book value -- --
Net income (.20) (.21)
Cash dividends -- --
Financial Ratios:
Yield on interest-bearing assets 8.59 8.29
Cost of funds 4.94 4.05
Interest rate spread 3.65 4.24
Net interest margin 3.27 4.15
Return on average assets(annualized) -- --
Return on average equity(annualized) -- --
Average equity to average assets .49 1.52
At end of quarter:
Loans to deposits 69.60 70.00
Nonperforming loans to total loans 8.39 12.75
Nonperforming assets to total loans and OREO 12.89 19.32
Allowance for loan losses to nonperforming loans 40.25 31.04
Capital ratios of bank subsidiary:
Total risk-based 7.36 6.89
Tier 1 risk-based 6.09 5.61
Tier 1 leverage 4.44 4.15
At end of period March 31, 1996 1995
Total assets 80,019 85,736
Net loans 52,834 56,871
Allowance for loan losses (1,849) (2,347)
Securities 5,580 6,833
Deposits 75,904 81,234
Stockholders' equity 739 1,256
Outstanding shares 1,961,761 2,012,514
RESULTS OF OPERATIONS
The Company's net loss for the three months ending March 31, 1996
was $54,000 or $.03 per share of common stock, an improvement from
the loss of $138,000 or $.07 per share of common stock for the
prior year period. The Company's loss consisted of $59,000 of
interest expense on Company debt which was offset by the Ban's net
income of $5,000 for the period. The Bank's improvement for the
first three months of 1995 was due primarily to the recovery of
service charges on dormant accounts in the amount of $112,000 and
a decrease in other operating expenses of $128,000. This was
tempered by a decrease in net interest income of $246,000,
excluding interest expense on Company debt.
Total interest income for the three months ended March 31, 1996
decreased $125,000 or 8% from the three month period ended March
31, 1995. This was due primarily to a 12% decrease in the average
earnings assets outstanding during the three month period, which
was tempered by a slight increase in average interest rates
charged for loans.
Total interest expense on interest-bearing liabilities for the
three months ended March 31, 1996 increased $107,000 or 14% from
the three month period ended March 31, 1995. This reflects an 83
basis point increase on the average rate paid for interest-bearing
deposits and an 89 basis point increase on other borrowings.
Non-interest income increased $153,000 in the first three months
of 1996 over the comparable period in 1995. The increase was
largely attributable to the recovery of service charges mentioned
above. Also included in non-interest income for 1996 is $175,000
of income related to the financial leasing business which
represents a 50% increase from the three month period ended March
31, 1995.
Non-interest expense decreased $128,000 or 11% for the first three
months ended March 31, 1996 compared to the same period in 1995.
The reduction of non-interest expense reflects management's
efforts to significantly reduce salaries and professional fees, as
well as overall cost containment measures in all other general and
administrative expenses.
The year-to-date provision for loan losses was $40,000 for 1996
and $75,000 for 1995.
FINANCIAL CONDITION
Gross loans decreased by $3,775,000 or 6% in the aggregate for
the three months ended March 31, 1996. Assets held for lease
decreased $1,000,000 or 13%. This was tempered by an increase of
$2,138,000 or 17% in investment securities and federal funds sold.
The net decrease is primarily the result of a $3,141,000 decrease
in deposits.
In the first quarter of 1996, the Bank disbursed $4.2 million of
new financial leasing-related transactions and had pay-downs of $6
million from funds previously deployed. The financial lease
program includes short term financing of full pay-out leases which
are subsequently placed with permanent lenders, accounts
receivable purchases resulting from leasing transactions and
equipment purchased for financial lease transactions both
available for lease and subject to existing leases. Most
transactions are short term in nature.
Total deposits decreased $3,141,000 or 4% for the three months
ended March 31, 1996.
CAPITAL ADEQUACY
The following table summarizes the minimum capital requirements
and capital positions at March 31, 1996 and December 31, 1995:
($ in thousands) March 31, 1996 December 31, 1995
Minimum Actual Minimum Actual
Capital Capital Capital Capital
Required Bank Required Bank
- Bank - Bank
Regulatory Capital
Requirements
Total risk based 8.00% 7.36% 8.00% 6.94%
capital percentage
Total risk based 4,737 4,358 5,080 4,409
capital
Tier 1 risk based 4.00% 6.09% 4.00% 5.67%
capital percentage
Tier 1 risk based 2,368 3,604 2,540 3,599
capital
Leverage (per order) 6.00% 4.44% 6.00% 4.38%
percentage
Leverage (per order) 4,867 3,604 4,927 3,599
LOANS
($ in thousands) March 31, 1996 December 31, 1995
% of % of
Amount Total Amount Total
Commercial collateralized by $26,358 48% $30,083 51%
real estate
Commercial other 10,860 20% 9,021 15%
Residential real estate 10,890 20% 10,791 19%
mortgage
Lease financing 5,042 9% 6,860 12%
Consumer 1,579 3% 1,743 3%
Total loans - gross $54,729 100% $58,504 100%
Unearned income ($17) ($22)
Deferred loan fees (29) (30)
Allowance for loan losses (1,849) (2,070)
Total Loans - net $52,834 $56,382
Average outstanding loans-net $58,610
NONPERFORMING ASSETS
($ in thousands)
March 31,December 31, 1996 1995
Loans past due 90 days or more:
Non-accrual $4,318 $6,383
Accrual 276 356
Total loans past due 90 days or more 4,594 6,739
Other real estate owned ("OREO"):
Foreclosed properties 2,803 3,054
OREO allowance (255) (341)
Total OREO (net) 2,548 2,713
TOTAL NONPERFORMING ASSETS $7,142 $9,451
Nonperforming assets to total loans 12.89% 16.00%
(net) and OREO (net)
Allowance for loan losses to total 40.25% 30.72%
loans past due 90 days or more
As a percentage of total loans:
Loans past due 90 days or more 8.43% 11.51%
Allowance for loan losses 3.38% 3.54%
Non-accrual loans consisted of the following:
($ in thousands)
March 31, December 31,
1996 1995
Non-accrual loans:
Real estate loans $2,494 $3,557
Commercial other 1,824 2,826
TOTAL NON-ACCRUAL LOANS $4,318 $16,383
OREO consisted of the following:
($ in thousands)
March 31, December 31,
1996 1995
1 - 4 family residential properties $1,489 $569
Multifamily residential properties 265 272
Commercial real estate 812 1,151
Construction & Land Development 765 721
TOTAL OREO $3,331 $2,713
The Company discontinues the accrual of interest income whenever
reasonable doubt exists as to its ultimate collectability or when
the loan is 90 days or more past due. When the accrual of
interest income is discontinued, all previously accrued interest
income is generally reversed against the current period's income.
A non-accrual loan is restored to an accrual status when it is no
longer delinquent and collectability of interest and principal is
no longer in doubt.
The Company's ability to reduce nonperforming assets is dependent
on conditions in the real estate market and general economy.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is established through charges
against income and maintained at a level that management considers
adequate to absorb potential losses in the loan portfolio.
Management's estimate of the adequacy of the allowance for loan
losses is based on evaluations of individual loans, estimates of
current collateral values and the results of the most recent
regulatory examination. Management also evaluates the general
risk characteristics inherent in the loan portfolio, prevailing
and anticipated conditions in the real estate market and general
economy, and historical loan loss experience. Loans are charged
against the allowance for loan losses when management believes
that collection is unlikely. Any subsequent recoveries are
credited back to the allowance for loan losses when received.
The changes in the allowance for loan losses were as follows:
($ in thousands)
Three months ended March 31, 1996 1995
Beginning balance $2,070 $2,637
Loans charged off 297 (553)
Recoveries 36 188
Net loan recoveries (charge-offs) (261) (365)
Provision for loan losses 40 75
Ending balance $1,849 $2,347
Net loan charge-offs to average loans 0.49% 0.60%
outstanding
While the Company believes its allowance for loan losses is
adequate in light of present economic conditions and the current
regulatory environment, there can be no assurance that the
Company's banking subsidiary will not be required to make future
adjustments to its allowance and charge-off policies in response
to changing economic conditions or future regulatory examinations.
The Bank has adopted Financial Accounting Standard 114 "Accounting
By Creditors for Impaired Loans" effective January 1, 1995. In
connection therewith, Management reviews the non-accrual loan
portfolio and loans past due 90 days and accruing to determine if
there is loan impairment. At March 31, 1996 the Bank's impaired
loans amounted to $4,318,000. The Bank has allocated $671,000 of
the general loan loss reserve to this portfolio.
SECURITIES
All of the Company's investment securities were available for sale
as of March 31, 1996 and December 31, 1995 in accordance with the
requirements of Statement of Financial Accounting Standards No.
115 (SFAS No. 115) "Accounting for Certain Investments in Debt and
Equity Securities." The specific accounting policies pertaining
to SFAS No. 115 are detailed in the Summary of Accounting Policies
to the Company's Consolidated Statements included in Item 14 of
the December 31, 1995 Form 10-K.
At March 31, 1996 Amortized Gross Unrealized Estimated
($ in thousands) Cost Gains Losses Market Value
U.S. Treasury Securities $4,033 -- ($3) $4,030
U.S. Agency Notes 1,000 -- -- 1,000
Other 550 -- -- 550
TOTAL INVESTMENT SECURITIES $5,583 -- ($3) $5,580
At December 31, 1995 Amortized Gross Unrealized Estimated
($ in thousands) Cost Gains Losses Market Value
U.S. Treasury Notes $4,053 -- ($2) $4,051
U.S. Agency Notes 3,000 -- -- 3,000
Marketable Equity Securities 281 -- -- 281
Other 250 -- -- 250
TOTAL INVESTMENT SECURITIES $7,584 -- ($2) $7,582
NET INTEREST INCOME
The following table presents condensed average statements of
condition, including non-accrual loans, the components of net
interest income and selected statistical data:
Three months ended March 31, 1996 1995
Average Average Average Average
($ in thousands) Balance Interest Rate Balance Interest Rate
Assets:
Loans $53,185 $1,237 9.35% $57,608 $1,284 9.05%
Securities 6,736 95 5.67% 13,492 198 5.92%
Federal Funds Sold 6,306 82 5.23% 4,210 57 5.49%
Total Earning Assets 66,227 1,414 8.59% 75,310 1,539 8.29%
Cash and due from banks 1,983 2,410
Other assets 12,922 10,957
Total Assets $81,132 $88,677
Liabilities & Stockholder's equity:
Interest-bearing deposits:
Time certificates $54,010 $744 5.54% $56,459 $624 4.48%
Savings deposits 15,117 65 1.73% 18,687 94 2.04%
Total interest-bearing deposits 69,127 809 4.70% 75,146 718 3.87%
Other borrowings 2,130 66 12.46% 1,753 50 11.57%
Total interest-bearing liabilities 71,257 875 4.94% 76,899 768 4.05%
Demand deposits 7,774 8,335
Other liabilities 1,704 2,091
Stockholders' equity 397 1,352
Total liabilities and stockholders' $81,132 $88,677
equity
Net interest income/rate spread 539 3.65% 771 4.24%
Net interest margin 3.27% 4.15%
The following table presents the changes in interest income and
expense for each major category of interest-bearing assets and
interest-bearing liabilities, and the amount of the change
attributable to changes in average balances (volume) and rates.
Changes attributable to both volume and rate changes have been
allocated in proportion to the relationship of the absolute dollar
amount of the changes in volume and rate.
Change from March 31, 1995 to March 31, 1996 attributable to:
($ in thousands) Volume Rate Total
Interest income:
Loans (86) 39 (47)
Investment securities (94) (9) (103)
Federal Funds sold 27 (2) 25
Total interest income ($153) $28 ($125)
Interest expense:
Deposits:
Time certificates (27) 147 120
Savings deposits (16) (13) (29)
Total interest expense on (43) 134 91
deposits
Other interest-bearing 12 4 16
liabilities
Total interest expense ($31) $138 $107
NET INTEREST INCOME ($122) ($110) ($232)
COMMITMENTS AND CONTINGENCIES
The Company and certain of its then directors and officers are
defendants in a suit alleging violations under the Securities
Exchange Act of 1934. The suit is described more fully in Item 3
of the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
RECENT ACCOUNTING PRONOUNCEMENTS
In October 1994, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard 119 ("SFAS No. 119")
"Disclosure About Derivative Financial Instruments and Fair Value
of Financial Instruments" effective for year ends beginning after
December 15, 1994, except for entities with less than $150 million
in total assets in the current statement of financial position.
For these entities, the statement shall be effective for financial
statements issued for fiscal years ending after December 15, 1995.
The Company does not hold or issue any derivative financial
instruments, and accordingly the statement will not have a
material effect on the consolidated financial statements.
In October 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation." SFAS No. 123 allows companies to
continue to account for their stock option plans in accordance
with APB Opinion 25 but encourages the adoption of a new
accounting method based on the estimated fair market value of
employee stock options. Companies electing not to follow the new
fair value based method are required to provide expanded footnote
disclosures, including pro forma net income and earnings per
share, determined as if the company had applied the new method.
SFAS No. 123 is required to be adopted prospectively beginning
January 1, 1996. Management intends to continue to account for
its stock option plans in accordance with APB Opinion 25 and
provide supplemental disclosures as required by SFAS No. 123,
beginning in 1996.
PART II. OTHER INFORMATION
Item 6. Exhibits and Report on Form 8-K
(a) Exhibit 27: Financial Data Schedule
(b) None
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 duly authorized.
CBC BANCORP, INC.
(Registrant)
Date: May 10, 1996
Dennis Pollack
President and Chief Executive
Officer
Barbara Van Bergen
Chief Accounting Officer
EXHIBIT 27 FINANCIAL DATA SCHEDULE