Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number: 33-58832
FIRST CENTRAL BANCSHARES, INC.
(Exact name of small business issue as specified in its
charter)
Tennessee
(State or other jurisdiction of incorporation or organization)
725 Highway 321 North, Lenoir City, Tennessee
(Address of principal executive office)
62-1482501
(I.R.S. Employer Identification No.)
37771-0230
(Zip Code)
Registrant's telephone number, including area code: (423) 986-
1300
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock (par value $5.00 per share)
Indicate by mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [x] No [ ]
Indicate by mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13,
or (15d) of the Securities Exchange Act of 1934 subsequent to
the distribution of securities under a plan confirmed by a
court.
Yes [x] No [ ]
The number of outstanding shares of the registrant's
Common Stock, par value $5.00 per share, was 513,281 on August
6, 1998.
FORM 10-QSB
Index
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
as of June 30, 1998 and December 31, 1997 3
Condensed Consolidated Statements of Income
for the three months and six months ended
June 30, 1998 and 1997 4
Condensed Consolidated Statements of Cash
Flows for the six months ended June 30, 1998
and 1997 5
Condensed Consolidated Statements of Comprehensive
Income for the six months ended June 30, 1998
and 1997 6
Notes to Condensed Consolidated Financial
Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9-14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote
of Securities Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signature 15
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)
June 30, December 31,
1998 1997
- -ASSETS-
Cash and Due from Banks $ 3,112 $ 3,032
Federal Funds Sold 16,815 5,650
Total Cash and Cash Equivalents 19,927 8,682
Investment Securities Available for Sale 19,323 11,214
Loans, Net 57,680 58,036
Premises and Equipment (Net) 4,083 4,133
Accrued Interest Receivable 649 495
Other Assets 170 230
TOTAL ASSETS $101,832 $82,790
- -LIABILITIES AND STOCKHOLDERS' EQUITY-
Liabilities:
Deposits
Non-Interest Bearing $ 13,083 $10,761
Interest Bearing 80,107 63,813
Total Deposits 93,190 74,574
Accrued Interest Payable 398 335
Other Liabilities 289 400
Total Liabilities 93,877 75,309
Stockholders' Equity:
Common Stock - Par Value $5.00, Authorized
2,000,000 Shares; Issued and Outstanding
513,281 Shares in 1998 and 466,755 Shares
in 1997 2,566 2,334
Additional Paid-In Capital 4,358 3,427
Retained Earnings 1,044 1,719
Unrealized Gain (Loss) on Securities (13) 1
Total Stockholders' Equity 7,955 7,481
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $101,832 $82,790
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income
(Unaudited)
(In Thousands Except
per Share Information)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
INTEREST INCOME:
Loans $1,488 $1,509 $2,986 $2,922
Investment Securities 294 183 517 366
Federal Funds Sold 170 19 293 37
Total Interest Income 1,952 1,711 3,796 3,325
INTEREST EXPENSE 946 754 1,804 1,471
Net Interest Income 1,006 957 1,992 1,854
PROVISION FOR LOAN LOSSES 60 58 65 93
Net Interest Income After
Provision for Loan Losses 946 899 1,927 1,761
OTHER INCOME 128 147 253 270
OPERATING EXPENSES 691 595 1,391 1,207
INCOME BEFORE INCOME TAX 383 451 789 824
INCOME TAXES 139 174 301 316
NET INCOME $ 244 $ 277 $ 488 $ 508
BASIC EARNINGS PER COMMON
SHARE $ 0.48 $ 0.60 $ 0.95 $ 1.09
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
Six Months Ended
June 30,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 488 $ 508
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Provision for Loan Losses 65 93
Depreciation 150 119
Amortization 1 2
(Increase) in Interest Receivable (154) (48)
Increase (Decrease) in Interest Payable 63 (30)
Amortization of Premiums (Discounts) on
Investment Securities, Net 3 8
FHLB Stock Dividends (9) (18)
Decrease in Other Assets 59 (2)
(Decrease) in Other Liabilities (102) (121)
Total Adjustments 76 3
Net Cash Provided by Operating Activities 564 511
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds From Maturities, Principal Paydowns and
Redemption of Investment Securities Available
for Sale 5,128 892
Purchase of Investment Securities Available
for Sale (13,254) (1,000)
(Increase) Decrease in Loans 291 (5,113)
Purchase of Premises and Equipment (100) (375)
Net Cash Used in Investing Activities (7,935) (5,596)
NET CASH FROM INVESTING ACTIVITIES
Increase in Deposits 18,616 3,121
Increase in Federal Funds Purchased -0- 1,035
Net Cash Provided by Financing Activities 18,616 4,156
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 11,245 (929)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 8,682 4,194
CASH AND CASH EQUIVALENTS AT END OF PERIOD $19,927 $ 3,265
Supplementary Disclosures of Cash Flow Information:
Cash Paid During the Period For:
Interest $ 1,741 $ 1,501
Income Taxes $ 277 $ 375
Supplementary Disclosures of Noncash Investing Activities:
Change in Unrealized Loss on
Investment Securities $ 23 $ 14
Change in Deferred Income Tax Benefit
Associated with Unrealized Loss on
Investment Securities $ 9 $ 6
Change in Net Unrealized Loss on
Investment Securities $ 14 $ 8
Issuance of Common Stock Dividend:
Par $ 232 $ -0-
Additional Paid-in Capital $ 931 $ -0-
Reduction in Retained Earnings Due to
Issuance of Common Stock $1,163 $ -0-
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(In Thousands)
Six Months Ended
June 30,
1998 1997
Net Income $488 $508
Other Comprehensive Income, Net of Tax:
Unrealized Losses on Investment Securities (23) (14)
Less Reclassification Adjustment for Gains
Included in net Income -0- -0-
Less Income Taxes Related to Unrealized
Gains on Investment Securities 9 6
Other Comprehensive Income (Loss), Net of Tax (14) (8)
Comprehensive Income $474 $500
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1998 and 1997
NOTE 1 - ORGANIZATION AND BUSINESS
First Central Bancshares, Inc. (the Company) was incorporated
in 1993 for the purpose of becoming a one bank holding company.
On April 3, 1993, the Company acquired 100% of First Central
Bank (the Bank) through a share exchange agreement approved by
the shareholders of the Bank. The investment in First Central
Bank represents virtually all of the assets of First Central
Bancshares, Inc.
The consolidated financial statements include the accounts of
First Central Bancshares, Inc. and its wholly owned subsidiary,
First Central Bank. All significant intercompany transactions
and balances have been eliminated.
NOTE 2 - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been
prepared by the Company. Certain information and footnote
disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles
have been condensed or omitted. In the opinion of the
Company's management, the disclosures made are adequate to make
the information presented not misleading, and the consolidated
financial statements contain all adjustments necessary to
present fairly the financial position as of June 30, 1998,
results of operations for the three months and six months ended
June 30, 1998 and 1997, and cash flows for the six months ended
June 30, 1998 and 1997.
The results of operations for the three months and six months
ended June 30, 1998 are not necessarily indicative of the
results to be expected for the full year.
NOTE 3 - COMMON STOCK DIVIDEND
In February 1998, the Company distributed a ten percent (10%)
dividend to its stockholders by issuing an additional 46,526
shares of common stock. The Company used a fair market value of
$25.00 per share and credited common stock $5.00 per share or
$232,630, additional paid in capital $20.00 or $930,520, and
charged retained earnings a total of $1,163,150. No stock
dividends were declared during the quarter ended June 30, 1997.
NOTE 4 - EARNINGS PER SHARE
Basic earnings per share is based on the weighted average
number of shares outstanding during the period. For the six
months ended June 30, 1998 and 1997 the weighted average number
of shares was 513,281 and 466,755, respectively. During the
period ended June 30, 1998 and 1997 the Company did not have
any dilutive securities.
NOTE 5 - ACCOUNTING POLICY CHANGES
In June 1997 the FASB issued SFAS No. 130, "Reporting
Comprehensive Income." This statement establishes standards
for reporting comprehensive income and its components in the
financial statements. The object of the statement is to report
a measure of all changes in equity of an enterprise that
results from transactions and other economic events of the
period other than transactions with owners. Items included in
comprehensive income include revenues, gains and losses that
under generally accepted accounting principles are directly
charged to equity. Examples include foreign currency
translations, pension liability adjustments and unrealized
gains and losses on investment securities available for sale.
The Company adopted this statement in the first quarter of 1998
and has included its comprehensive income in a separate
financial statement as part of the consolidated financial
statements.
In June 1997, the FASB issued FAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information." This
statement establishes standards for reporting information about
operating segments in annual reports and in interim financial
reports issued to shareholders. The statement is effective for
fiscal years beginning after December 15, 1997. The Company has
adopted FAS No. 131 but does not have multiple industry
segments as defined in FAS No. 131.
In February 1998, the FASB issued FAS No. 132, "Employers'
Disclosures About Pensions and Other Post Retirement Benefits."
FAS No. 132 changes disclosure only on applicable defined
benefit pension or post retirement plans. The statement is
effective for fiscal years beginning after December 15, 1997.
At this time, the Company does not have a defined benefit
pension or post retirement plan.
In June 1998, the FASB issued FAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded
in other contracts, and for hedging activities. This statement
is effective for all fiscal quarters of fiscal years beginning
after June 15, 1999. Adoption of this statement is not
expected to have a material effect on the Company's financial
statements.
Year 2000 Compliance
The Company is conducting a comprehensive review of its
subsidiary bank's computer systems to identify the systems that
could be affected by the "Year 2000 Issue" ("Issue"), and is
developing a remediation plan to resolve the Issue. The Issue
is whether computer systems will properly recognize date-
sensitive information when the year changes to 2000. Systems
that do not properly recognize such information could generate
erroneous data or cause a system to fail. The subsidiary bank
is heavily dependent on computer processing in the conduct of
its business activities.
Because this review is not yet complete, management is unable
to accurately estimate the costs of making all systems "Year
2000 Compliant." However, the total cost is not expected to be
significant to the Company's financial position or results of
operations.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
BALANCE SHEET ANALYSIS - COMPARISON AT JUNE 30, 1998 TO
DECEMBER 31, 1997
Assets totalled $101.8 million as of June 30, 1998, as compared
to $82.8 million as of December 31, 1997, an increase of
22.95%.
INVESTMENT SECURITIES
Investment securities were $19.3 million or 19.0% of total
assets, as of June 30, 1998 an increase of $8.1 million from
$11.2 million as of December 31, 1997. During the six-month
period there were $5.1 million in calls, maturities, and
principal paydowns offset by the purchase of $13.2 million in
agency securities.
The investment portfolio is comprised of U.S. Government and
federal agency obligations and mortgage-backed securities
issued by various federal agencies. Mortgage-backed issues
comprised 6.42% of the portfolio as of June 30, 1998 and 13.59%
as of December 31, 1997.
As of June 30, 1998 and December 31, 1997, the Bank's entire
investment portfolio was classified as available for sale and
reflected on the balance sheet at fair value with unrealized
gains and losses excluded from earnings and reported as a
separate component of stockholders' equity. The net unrealized
loss on securities available for sale, net of tax was
approximately $13,000 as of June 30, 1998, a change of
approximately $14,000 from December 31, 1997, a result of
deterioration in the bond market. The fair value of securities
fluctuates with the movement of interest rates. Generally,
during periods of decreasing interest rates, the fair values
increase whereas the opposite may hold true during a rising
interest rate environment.
LOANS
During the first six months of 1998, total gross loans
outstanding decreased by approximately $523,000 to $59.5
million as of June 30, 1998 from $60.1 million as of December
31, 1997 attributable primarily to $12.8 million in originated
loans offset by amortization and payoffs of approximately $13.4
million. As of June 30, 1998 and December 31, 1997, net loans
outstanding represented 57% and 70% of total assets,
respectively. Table 1 summarizes the Bank's loan portfolio by
major category as of June 30, 1998 and December 31, 1997.
Table 1 - Loan Portfolio by Category
(In Thousands)
June 30,December 31,
1998 1997
Loans secured by real estate:
Commercial properties $ 6,607 $ 8,108
Construction and land development 10,247 8,272
Residential and other properties 24,937 25,087
Total loans secured by real estate 41,791 41,467
Commercial and industrial loans 5,658 5,231
Consumer loans 11,220 12,389
Other loans 878 983
59,547 60,070
Less: Allowance for loan losses (577) (587)
Unearned interest (1,243) (1,395)
Unearned loan fees (47) (52)
Loans, Net $57,680 $58,036
As of June 30, 1998, there were outstanding commitments to
advance construction funds and to originate loans in the amount
of $10.6 million and commitments to advance existing home
equity, letters of credit and other credit lines in the amount
of $6.3 million.
Loans are carried net of the allowance for loan losses. The
allowance is maintained at a level to absorb possible losses
within the loan portfolio. As of June 30, 1998 and December 31,
1997, the allowance had a balance of approximately $577,000 and
$587,000, respectively. There were no loans on which the
accrual of interest had been discontinued as of June 30, 1998
or at December 31, 1997, and there were no loans specifically
classified as impaired as defined by SFAS No. 114. Table 2
summarizes the allocation of the loan loss reserve by major
categories and Table 3 summarizes the activity in the loan loss
reserve for the three month period.
Table 2 - Allocation of the Loan Loss Reserve (in Thousands)
6-30-98 % to 12-31-97 % to
Balance applicable to: $ Amount Total $ Amount Total
Commercial, financial, and agricultural$ 86 14.90%$ 80 13.63%
Real Estate - construction 102 17.68% 83 14.14%
Real Estate - mortgages 198 34.32% 205 34.92%
Installment - consumers 112 19.41% 124 21.12%
Other 13 2.25% 14 2.39%
Other Unallocated 66 11.44% 81 13.80%
Total $577 100.00% $587 100.00%
Table 3 - Analysis of Loan Loss Reserve
(In Thousands) 6-30-98 6-30-97
Balance, at beginning of period $587 $563
Charge-offs:
Commercial, financial, and agricultural 23 2
Real estate - construction -0- -0-
Real estate - mortgages -0- -0-
Installment - consumers 76 74
Other -0- -0-
Recoveries:
Commercial, financial, and agricultural 3 -0-
Real estate - construction -0- -0-
Real estate - mortgages -0- -0-
Installment - consumers 21 28
Other -0- -0-
Net charge-offs 75 48
Additions to loan loss reserve 65 93
Balance at end of period $577 $608
Ratio of net charge-offs to average loans outstanding.13% .08%
DEPOSITS
Deposits increased by $18.6 million to $93.2 million as of June
30, 1998 from $74.6 million as of December 31, 1997, an
increase of 24.96%. Demand deposits, which include regular,
money market, NOW and demand deposits, were $43.4 million, or
46.6% of total deposits, at June 30, 1998. Core deposits were
32.6% of total deposits at June 30, 1998. During the six-month
period, the Bank was successful in increasing the balances in
the demand deposit category by $2.3 million. Certificate
accounts were $49.8 million at June 30, 1998, a increase of
$11.7 million over the $38.1 million as of December 31, 1997.
Table 4 summarizes the Bank's deposits by major category as of
June 30, 1998 and December 31, 1997.
Table 4 - Deposits by Category
(In Thousands)
June 30,December 31,
1998 1997
Demand Deposits:
Noninterest-bearing accounts $13,083 $10,760
NOW and MMDA accounts 26,723 22,351
Savings accounts 3,618 3,355
Total Demand Deposits 43,424 36,466
Term Deposits:
Less than $100,000 37,156 27,451
$100,000 or more 12,610 10,657
49,766 38,108
$93,190 $74,574
CAPITAL
During the six month period ended June 30, 1998, stockholders'
equity increased by $474,000 to $8.0 million, due to net income
for the period of $488,000 offset by the decrease in the value
of securities available for sale.
LIQUIDITY AND CAPITAL RESOURCES
The Bank's primary sources of liquidity are deposit balances,
available-for-sale securities, principal and interest payments
on loans and investment securities and FHLB advances.
As of June 30, 1998, the Bank held $19.3 million in available-
for-sale securities and during the first six months of 1998 the
Bank received $5.1 million in proceeds from maturities,
redemptions and principal payments on its investment portfolio.
Deposits increased by $18.6 million during the same six month
period.
The Bank is a member of the Federal Home Loan Bank of
Cincinnati (FHLB) and is eligible to obtain both short and long
term credit advances. Borrowing capacity is limited to the
Bank's available qualified collateral which consists primarily
of certain 1-4 family residential mortgages and certain
investment securities. The Bank had no advances outstanding
from the FHLB at June 30, 1998.
The Bank can also enter into repurchase agreement transactions
should the need for additional liquidity arise. At June 30,
1998, the Bank had $190,000 of repurchase agreements
outstanding.
As of June 30, 1998, the Bank had capital of $8.0 million, or
7.8% of total assets, as compared to $7.5 million, or 9.0%, at
December 31, 1997. Tennessee chartered banks that are insured
by the FDIC are subject to minimum capital requirements.
Regulatory guidelines define the minimum amount of qualifying
capital an institution must maintain as a percentage of risk-
weighted assets and total assets.
Table 5 - Regulatory Capital
(Dollars in Thousands)
Minimum
June 30,December 31,Regulatory
1998 1997 Ratios
Tier 1 Capital as a Percentage
of Risk-Weighted Assets 12.9% 12.9% 4.00%
Total Capital as a Percentage
of Risk-Weighted Assets 13.8% 13.9% 8.00%
Leverage Ratio 8.6% 9.5% Up to 5.00%
Total Risk-Weighted Assets $61,865 $57,914
As of June 30, 1998 and December 31, 1997, the Bank exceeded
all of the minimum regulatory capital ratio requirements.
RESULTS OF OPERATIONS FOR THE SIX MONTH PERIODS ENDED JUNE 30,
1998 AND 1997
GENERAL
The Bank reported net income of $488,000, or $0.95 per share
for the six month period ended June 30, 1998 as compared with
$508,000 or $1.09 per share for the same period in 1997, an
decrease of 3.94%.
NET INTEREST INCOME
Net interest income increased by $138,000 to $1,992,000 for the
six month period in 1998 from the comparable period in 1997.
Contributing to this increase was an increase in average
interest earning assets. Average interest earning assets, at a
yield of 8.75% totalled $86.7 million as of June 30, 1998. In
comparison in 1997, average interest earning assets, at a yield
of 9.26%, totalled $71.8 million.
Interest and dividend income increased by $471,000 for the six
month period in 1998 compared to the same period in 1997. This
improvement is primarily attributable to an increase of
approximately $15.0 million, or 21%, in the volume of average
earning assets during the six month period ended June 30, 1998
compared to the six month period ended June 30, 1997. Interest
income on loans increased by $64,000 over the same two periods
primarily as a result of an increase in average yield on loans
from 9.82% to 10.03%. Over the same two periods, interest and
dividends on investments increased by $151,000 due to an
increase of approximately $4.4 million or 36.30% in the volume
of investments during the six month period. Interest income on
Federal Funds Sold increased by $256,000 due to an increase of
approximately $9.5 million in average Federal Funds Sold
outstanding during the six month period as compared to a
decrease of $5.2 million during the same period in 1997.
Total interest expense increased $333,000 for the six month
period ended June 30, 1998 compared to the same period in 1997.
Interest on deposits increased by $332,000 as a result of an
increase of approximately $12.5 million in average deposits
over the same period in 1997. The average rate on interest-
bearing liabilities increased to 5.00% for the six month period
in 1998 from 4.92% in the comparable period of 1997.
Table 6 - Average Balances, Interest and Average Rates
June 30
1998 (in thousands) 1997
Average AverageAverage Average
Balance Interest Rate Balance Interest Rate
Assets:
Federal Funds Sold$10,875 $ 293 5.39%$ 1,340 $ 37 5.52%
Investments:
Securities--Taxable14,926 497 6.66% 10,951 366 6.68%
Non-Taxable 1,386 20 2.89% -0- -0- N/A
Total Loans, Including
Fees 59,555 2,986 10.03% 59,499 2,922 9.82%
Total Interest Earning
Assets 86,742 3,796 8.75% 71,790 3,325 9.26%
Cash and Due From
Banks 2,759 2,344
All Other Assets 4,789 4,100
Loan Loss Reserve/
Unearned Fees (1,933) (2,096)
TOTAL ASSETS $92,357 $76,138
Liabilities and Stockholders Equity:
Interest Bearing Deposits:
Time Deposits $44,290 $1,250 5.64%$36,533 $1,016 5.56%
Other 27,880 550 3.95% 23,146 452 3.90%
FHLB Advances 18 4 4.44% 45 2 8.88%
Federal Funds
Purchased -0- -0- N/A 36 1 5.56%
Total Interest-Bearing
Liabilities 72,188 1,804 5.00% 59,760 1,471 4.92%
Net Interest Income $1,992 $1,854
Non-Interest Bearing
Deposits 11,700 9,365
Total Cost of Funds 4.30% 4.26%
All Other Liabilities761 482
Stockholders Equity7,718 6,607
Unrealized Gain/Loss on
Securities (10) (76)
TOTAL LIABILITIES
AND STOCKHOLDERS
EQUITY $92,357 $76,138
Net Interest Yield 3.75% 4.34%
Net Interest Margin 4.59% 5.17%
Table 7 - Interest Rate Sensitivity
(In Thousands) June 30, 1998
Less One YearGreater Non-
Than Through Than Interest
1 Year 5 Years5 Years Bearing Total
Asset:
Federal Funds Sold $16,815 $16,815
Investments 787 1,964 16,572 19,323
Loans 28,794 30,675 79 59,548
Non-Interest Earning Assets
and Unearned Assets/Loan
Loss Reserve 6,146 6,146
46,396 32,639 16,651 6,146 101,832
Liabilities and Stockholders' Equity:
Interest-Bearing Deposits 57,439 22,668 -0- 80,107
Non-Interest Bearing Deposits 13,083 13,083
FHLB Advances -0- -0-
Noninterest Bearing Liabilities
and Stockholders' Equity 8,642 8,642
Total 57,439 22,668 -0- 21,725 101,832
Interest Rate Sensitivity
Gap (11,043) 9,971 16,651 (15,579) -0-
Cumulative Interest Rate
Sensitivity Gap $(11,043)$(1,072)$15,579 $ -0- $ -0-
OTHER INCOME
Total other income was $253,000 for the six month period ended
June 30, 1998 as compared to $270,000 for the same period in
1997, a decrease of $17,000. Other income is comprised
primarily of customer service fees and other items.
OPERATING EXPENSES
Total operating expenses were $1,391,000, or 3.01% annualized
of average total assets, for the six month period ended June
30, 1998 as compared to $1,207,000, or 3.17%, for the same
period in 1997. Both the salaries and employee benefits and
occupancy and equipment categories of expenses increased when
comparing the two periods. Salaries and employee benefits
increased by $80,000 or 13.40% over the first six months of
1998 due to normal salary increases. Occupancy and equipment
expenses increased approximately $53,000 when compared to
expenses at June 30, 1997, an increase of 22.96%. Contributing
to the increase in occupancy and equipment expenses was the
opening of the Kingston branch in December 1997.
INCOME TAXES
The Bank recognizes income taxes using the Financial Accounting
Standards Board Statement No. 109, Accounting for Income Taxes.
Under this method, deferred tax assets and liabilities are
established for the temporary differences between the
accounting basis and the tax basis of the Bank's assets and
liabilities at enacted tax rates expected to be in effect when
the amounts related to such temporary differences are realized
or settled. The Bank's deferred tax asset is reviewed quarterly
and adjustments to such asset are recognized as deferred income
tax expense or benefit based on management's judgment relating
to the realizability of such asset.
During the six month period ending June 30, 1998, the Bank
recorded $301,000 in tax expense which resulted in an
approximate effective rate of 38.2%. Comparably, in 1997, the
Bank recorded $313,000 in tax expense, resulting in an
approximate effective rate of 38%.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
PART 1 - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule.
FORM IO-QSB(A)
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST CENTRAL BANCSHARES, INC.
Date: By:
____________________________________________________
Ed. F. Bell, Chairman, President
and Chief Executive Officer
Date: By:
____________________________________________________
Willard D. Price, Executive Vice President
and Chief Financial Officer
Exhibit 27 - Financial Data Schedule
6-30-98
Amount (In Thousands)
Cash $ 3,112
Federal Funds Sold 16,815
Trading Assets -0-
Investments AFS 19,323
Investments HTM -0-
Investments-Market -0-
Loans 59,547
Allowance for Losses 577
Total Assets 101,832
Deposits 93,190
Short-Term Borrowings -0-
Other Liabilities 289
Long-Term Debt -0-
Preferred Stock-Mandatory -0-
Preferred-Non Mandatory -0-
Common Stock 2,566
Other Stockholders Equity 4,358
Total Liab.-Stockh. Equity 101,832
Interest on Loans 2,986
Interest on Investments 517
Other Interest Income 293
Total interest Income 3,796
Interest on Deposits 1,800
Total Interest Expense 1,804
Net Interest Income 1,992
Provision-Loan Losses 65
Securities-Gain/Loss -0-
Other Expenses 1,391
Income Before Tax 789
Income Before Extraordinary 488
Extraordinary Less Tax -0-
Cumul. Change Acct. Principal -0-
Net Income 488
Earnings Per Share-P 0.95
Earnings Per Share-D 0.95
Net Interest Yield-EA 3.75
Loans-Non Accrual -0-
Loans Past Due > 90 Days -0-
Troubled Debt Restructuring -0-
Potential Problem Loans -0-
Allowance-Beginning 587
Total Charge-Offs 99
Total Recoveries 24
Allowance End of Period 577
Loan Loss-Domestic 577
Loan Loss-Foreign -0-
Loan Loss-Unallocated 86
(b) Reports on Form 8-K, None.