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 September 30, 1999
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 October
26, 1999.
FORM 10-QSB
Index
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
as of September 30, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Income
for the three months and nine months ended
September 30, 1999 and 1998 4
Condensed Consolidated Statements of Cash
Flows for the nine months ended September 30,
1999 and 1998 5
Condensed Consolidated Statements of Comprehensive
Income (Loss) for the nine months ended September 30,
1999 and 1998 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
Signatures 15
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)
September 30, December 31,
1999 1998
- -ASSETS-
Cash and Due from Banks $ 3,689 $ 2,564
Federal Funds Sold 3,310 14,915
Total Cash and Cash Equivalents 6,999 17,479
Investment Securities Available for
Sale 28,557 27,139
Loans, Net 69,329 60,944
Premises and Equipment (Net) 5,144 4,304
Accrued Interest Receivable 675 674
Other Assets 797 218
TOTAL ASSETS $111,501 $110,758
- -LIABILITIES AND STOCKHOLDERS' EQUITY-
Liabilities:
Deposits
Non-Interest Bearing $ 16,163 $ 14,551
Interest Bearing 86,277 87,236
Total Deposits 102,440 101,787
Accrued Interest Payable 407 444
Other Liabilities 196 101
Total Liabilities 103,043 102,332
Stockholders' Equity:
Common Stock - Par Value $5.00, Authorized
2,000,000 Shares; Issued and Outstanding
513,281 Shares 2,566 2,566
Additional Paid-In Capital 4,358 4,358
Retained Earnings 2,207 1,457
Accumulated Other Comprehensive
Income (Loss) (673) 45
Total Stockholders' Equity 8,458 8,426
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $111,501 $110,758
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 Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
INTEREST INCOME:
Loans $1,676 $1,522 $4,884 $4,508
Investment Securities 455 325 1,335 842
Federal Funds Sold 60 221 268 514
Total Interest Income 2,191 2,068 6,487 5,864
INTEREST EXPENSE 978 1,021 2,948 2,825
Net Interest Income 1,213 1,047 3,539 3,039
PROVISION FOR LOAN LOSSES 35 83 155 148
Net Interest Income After
Provision for Loan
Losses 1,178 964 3,384 2,891
OTHER INCOME 183 145 555 398
OPERATING EXPENSES 913 737 2,762 2,128
INCOME BEFORE INCOME TAX 448 372 1,177 1,161
INCOME TAXES 165 138 427 439
NET INCOME $ 283 $ 234 $ 750 $ 722
BASIC EARNINGS PER COMMON
SHARE $ 0.55 $ 0.46 $ 1.46 $ 1.43
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
Nine Months Ended
September 30,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 750 $ 722
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Provision for Loan Losses 155 148
Depreciation 229 228
Amortization -0- 1
(Increase) in Interest Receivable (1) (41)
Increase (Decrease) in Interest Payable (37) 80
Amortization of Premiums on Investment
Securities, Net 22 8
FHLB Stock Dividends (54) (14)
(Increase) Decrease in Other Assets (139) 46
Increase (Decrease) in Other Liabilities 95 (295)
Total Adjustments 270 161
Net Cash Provided by Operating Activities 1,020 883
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds From Maturities, Principal Paydowns and
Redemption of Investment Securities Available
for Sale 9,420 8,995
Purchase of Investment Securities Available
for Sale (11,964) (22,770)
(Increase) Decrease in Loans (8,540) 284
Purchase of Premises and Equipment (1,069) (125)
Net Cash Used in Investing Activities (12,153) (13,616)
NET CASH PROVIDED BY INVESTING ACTIVITIES
Increase in Deposits 653 19,194
INCREASE (DECREASE)IN CASH
AND CASH EQUIVALENTS (10,480) 6,461
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 17,479 8,682
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,999 $15,143
Supplementary Disclosures of Cash Flow Information:
Cash Paid During the Period For:
Interest $ 2,911 $ 2,745
Income Taxes $ 392 $ 409
Supplementary Disclosures of Noncash Investing Activities:
Change in Unrealized Loss on Investment
Securities $ 1,158 $ 170
Change in Deferred Income Tax Benefit Associated with
Unrealized Loss on Investment Securities $ 440 $ 65
Change in Net Unrealized Loss on Investment
Securities $ 718 $ 105
Issuance of Common Stock Dividend:
Par $ -0- $ 232
Additional Paid-in Capital $ -0- $ 931
Reduction in Retained Earnings Due to Issuance of
Common Stock $ -0- $ 1,163
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Comprehensive Income (Los
s)
(Unaudited)
(In Thousands)
Nine Months Ended
September 30,
1999 1998
Net Income $ 750 $722
Other Comprehensive Income (Loss), Net of Tax:
Unrealized Losses on Investment Securities (1,158) 170
Less Reclassification Adjustment for Gains
Included in net Income -0- -0-
Less Income Taxes Related to Unrealized
Gains on Investment Securities 440 (65)
Other Comprehensive Income (Loss),
Net of Tax (718) 105
Comprehensive Income (Loss) $ (32) $827
See accompanying notes to financial statements.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1999 and 1998
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 September 30, 1999,
results of operations for the three months and nine months
ended September 30, 1999 and 1998, and cash flows for the nine
months ended September 30, 1999 and 1998.
The results of operations for the three months and nine months
ended September 30, 1999 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 have been declared during 1999.
NOTE 4 - EARNINGS PER SHARE
Basic earnings per share is based on the weighted average
number of shares outstanding during the period. For the nine
months ended September 30, 1999 the weighted average number of
shares was 513,281 (504,895 in 1998). During the period ended
September 30, 1999 and 1998 the Company did not have any
dilutive securities.
NOTE 5 - ACCOUNTING POLICY CHANGES
In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and
Hedging Activities. SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including
derivative instruments embedded in other contracts,
(collectively referred to as derivatives) and for hedging
activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the consolidated
statement of financial position and measure those instruments
at fair value. This statement amends FASB Statement No. 52,
Foreign Currency Translation, to permit a special accounting
for a
hedge of a foreign currency forecasted transaction with a
derivative. It supersedes FASB Statements No. 80, Accounting
for Future Contracts, No. 105, Disclosure of Information about
Financial Instruments with Off-Balance Sheet Risk and Financial
Instruments with Concentrations of Credit Risk, and No. 119,
Disclosure about Derivative Financial Instruments and Fair
Value of Financial Instruments. It amends FASB Statement No.
107, Disclosures about Fair Value of Financial Instruments to
included in statement No. 107 the disclosure provisions about
concentrations of credit risk from Statement No. 105. In June
1999, the FASB issued Statement of Financial Accounting
Standards No. 137, Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133. SFAS 137 amends SFAS 133 to defer the
effective data until June 15, 2000. The Statement is required
to be applied retroactively to consolidated financial
statements of prior periods. The Bank is currently assessing
the impact of this statement on its consolidated financial
statements and will adopt the statement during 2000.
In October 1998, the FASB issued Statement of Financial
Accounting Standards No. 134, Accounting for Mortgage-Backed
Securities after Securitization of Mortgage Loans Held for Sale
by a Mortgage Banking Enterprise. SFAS No. 134 amends FASB
Statement No. 65, Accounting for Certain Mortgage Banking
Activities, which establishes accounting and reporting
standards for certain activities of mortgage banking
enterprises and other enterprises that conduct operations that
are substantially similar to the primary operations of a
mortgage banking enterprise. The Bank is not currently
entering into any transactions related to securitization of
mortgage loans, nor does the Bank anticipate entering into any
transactions of this nature in the future. Therefore, SFAS No.
134 will not have any effect on our financial condition or
results of operations.
Year 2000 Compliance
The Bank continued its plans to be ready in all respects for
the new millennium. A Y2K committee including executive
management has been in place for approximately twenty-one
months. The board of directors is updated monthly of progress.
A comprehensive evaluation and testing schedule was finalized
in 1998 as well as a detailed contingency backup plan. All
equipment that was not Y2K compliant was replaced and a new
operating system was installed through our data processing
server in 1998. Testing of all mission critical systems
including the primary and backup operating system was
implemented and completed during the second quarter. Testing
for all mission critical systems and all other systems/software
was completed in the second quarter of 1999. The contingency
plans detail specific steps to be taken in the unlikely event
of a disruption in our systems or other aspects of operations
within our control as well as critical services outside our
control such as power, water, and communications. We are on
schedule to be compliant in all respects to Y2K. Management
remains confident that there will be no interruptions in our
ability to continue to provide efficient service to our
customers and shareholders in the year 2000 and beyond.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
BALANCE SHEET ANALYSIS - COMPARISON AT SEPTEMBER 30, 1999 TO
DECEMBER 31, 1998
Assets totalled $111.5 million as of September 30, 1999, as
compared to $110.8 million as of December 31, 1998, an increase
of 0.63%.
INVESTMENT SECURITIES
Investment securities were $28.6 million or 25.6% of total
assets, as of September 30, 1999 an increase of $1.5 million
from $27.1 million as of December 31, 1998. During the nine
month period there were $9.4 million in calls, maturities, and
principal paydowns offset by the purchase of $12.0 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 16.89% of the portfolio as of September 30, 1999 and
17.39% as of December 31, 1998.
As of September 30, 1999 and December 31, 1998, the Bank's
entire investment portfolio was classified as available for
sale and reflected on the consolidated balance sheets at fair
value with unrealized gains and losses reported in the
consolidated statements of comprehensive income (loss), net of
any deferred tax effect. The unrealized loss on securities
available for sale, net of tax was approximately $673,000 as of
September 30, 1999, a change of approximately $718,000 from
December 31, 1998, 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 nine months of 1999, total gross loans
outstanding increased by approximately $8.3 million to $70.8
million as of September 30, 1999 from $62.5 million as of
December 31, 1998 attributable primarily to $20.9 million in
originated loans offset by amortization and payoffs of
approximately $12.6 million. As of September 30, 1999 and
December 31, 1998, net loans outstanding represented 62% and
55% of total assets, respectively. Table 1 summarizes the
Bank's loan portfolio by major category as of September 30,
1999 and December 31, 1998.
Table 1 - Loan Portfolio by Category
(In Thousands)
September 30,December 31,
1999 1998
Loans secured by real estate:
Commercial properties $ 5,465 $ 7,539
Construction and land development 7,634 8,280
Residential and other properties 19,552 23,553
Total loans secured by real estate 32,651 39,372
Commercial and industrial loans 8,754 5,490
Consumer loans 26,103 16,762
Other loans 3,296 928
70,804 62,552
Less: Allowance for loan losses (625) (594)
Unearned interest (811) (977)
Unearned loan fees (39) (37)
Loans, Net $69,329 $60,944
As of September 30, 1999, there were outstanding commitments to
advance construction funds and to originate loans in the amount
of $9.8 million and commitments to advance existing home
equity, letters of credit and other credit lines in the amount
of $7.4 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 September 30, 1999 and
December 31, 1998, the allowance had a balance of approximately
$625,000 and $594,000, respectively. There were no loans on
which the accrual of interest had been discontinued as of
September 30, 1999 or at December 31, 1998, and there were
approximately $45,000 in loans specifically classified as
impaired as defined by SFAS No. 114. Table 2 summarizes the
allocation of the loan loss reserve by major categories and
Table 3 summarizes the activity in the loan loss reserve for
the nine month period.
Table 2 - Allocation of the Loan Loss Reserve (in Thousands)
9-30-99 % to 12-31-98 % to
Balance applicable to: $ Amount Total $ Amount Total
Commercial, financial,
and agricultural $187 30.00% $ 56 9.00%
Real Estate - Construction 76 12.00% 123 21.00%
Real Estate - Mortgages 104 17.00% 111 19.00%
Installment - Consumers 209 33.00% 158 27.00%
Other 49 8.00% 0 0.00%
Other Unallocated 0 0.00% 146 24.00%
Total $625 100.00% $594 100.00%
Table 3 - Analysis of Loan Loss Reserve
(In Thousands) 9-30-99 9-30-98
Balance, at beginning of period $594 $587
Charge-offs:
Commercial, financial, and agricultural -0- 23
Real estate - construction -0- -0-
Real estate - mortgage -0- -0-
Installment - Customers 173 171
Other -0- -0-
Recoveries:
Commercial, financial, and agricultural -0- 2
Real estate - construction -0- -0-
Real estate - mortgages -0- -0-
Installment - consumers 49 33
Other -0- -0-
Net charge-offs 124 159
Additions to loan loss reserve 155 148
Balance at end of period $625 $576
Ratio of net charge-offs to average loans outstanding.18% .28%
DEPOSITS
Deposits increased by $0.6 million to $102.4 million as of
September 30, 1999 from $101.8 million as of December 31, 1998,
an increase of 0.59%. Demand deposits, which include regular,
money market, NOW and demand deposits, were $47.4 million, or
46.3% of total deposits, at September 30, 1999. Core deposits
were 30.4% of total deposits at September 30, 1999. During the
nine month period, the Bank was successful in increasing the
balances in the demand deposit category by $1.8 million to
$47.4 million as of September 30, 1999. Certificate accounts
were $55.0 million at September 30, 1999, a decrease of $1.2
million compared to $56.2 million as of December 31, 1998.
Table 4 summarizes the Bank's deposits by major category as of
September 30, 1999 and December 31, 1998.
Table 4 - Deposits by Category
(In Thousands)
September 30,December 31,
1999 1998
Demand Deposits:
Noninterest-bearing accounts $ 16,177 $ 14,551
NOW and MMDA accounts 26,078 27,170
Savings accounts 5,163 3,856
Total Demand Deposits 47,418 45,577
Term Deposits:
Less than $100,000 41,160 41,301
$100,000 or more 13,862 14,909
55,022 56,210
Total Deposits $102,440 $101,787
CAPITAL
During the nine month period ended September 30, 1999,
stockholders' equity increased by $32,000 to $8.5 million, due
to net income for the period of $750,000 offset by the decline
in value of securities available for sale of $718,000.
LIQUIDITY AND CAPITAL RESOURCES
The Bank's primary sources of liquidity are deposit balances,
available-for-sale securities, principal and interest payments
on loans and investment securities and FHLB advances.
As of September 30, 1999, the Bank held $28.6 million in
available-for-sale securities and during the first nine months
of 1999 the Bank received $9.4 million in proceeds from
maturities, redemptions and principal payments on its
investment portfolio. Deposits increased by $653,000 during
the same nine 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 September 30, 1999.
The Bank can also enter into repurchase agreement transactions
should the need for additional liquidity arise. At September
30, 1999, the Bank had $1,721,000 of repurchase agreements
outstanding.
As of September 30, 1999, the Bank had capital of $8.5 million,
or 7.6% of total assets, as compared to $8.4 million, or 7.6%,
at December 31, 1998. 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
September 30, December 31, Regulatory
1999 1998 Ratios
Tier 1 Capital as a Percentage
of Risk-Weighted Assets 11.4% 11.2% 4.00%
Total Capital as a Percentage
of Risk-Weighted Assets 12.2% 12.0% 8.00%
Leverage Ratio 8.71% 7.6% Up to 5.00%
Total Risk-Weighted Assets $80,098 $74,658
As of September 30, 1999 and December 31, 1998, the Bank
exceeded all of the minimum regulatory capital ratio
requirements.
RESULTS OF OPERATIONS FOR THE NINE MONTH PERIODS ENDED SEPTEMB
ER 30, 1999 AND 1998
GENERAL
The Bank reported net income of $750,000, or $1.46 per share
for the nine month period ended September 30, 1999 as compared
with $722,000 or $1.43 per share for the same period in 1998,
an increase of 3.88%.
NET INTEREST INCOME
Net interest income increased by $500,000 to $3.5 million for
the nine month period in 1999 from the comparable period in
1998. Contributing to this increase was an increase in average
interest earning assets. Average interest earning assets, at a
yield of 8.37% totalled $103.3 million as of September 30,
1999. In comparison in 1998, average interest earning assets,
at a yield of 8.68%, totalled $90.0 million.
Interest income increased by $623,000 for the nine month period
in 1999 compared to the same period in 1998. This improvement
is primarily attributable to an increase of approximately $13.3
million, or 14.8%, in the volume of average earning assets
during the nine month period ended September 30, 1999 compared
to the nine month period ended September 30, 1998. Interest
income on loans increased by $376,000 over the same two periods
primarily as a result of an increase of approximately $8.3
million in average loans outstanding. Over the same two
periods, interest on investments increased by $493,000 due to
an increase of approximately $10.5 million or 59.0% in the
volume of investments during the nine month period. Interest
income on Federal Funds Sold decreased by $246,000 due to a
decrease in the average yield on Federal Funds Sold outstanding
during the nine month period from 5.29% in 1998 to 4.79% in
1999, and also a decrease in the average balance outstanding of
$5.5 million over the same period in 1998.
Total interest expense increased $123,000 for the nine month
period ended September 30, 1999 compared to the same period in
1998. Interest on deposits increased as a result of an
increase of approximately $11.7 million in average deposits
over the same period in 1998. The average rate on interest-
bearing liabilities decreased to 4.52% for the nine month
period in 1999 from 5.00% in the comparable period of 1998.
Table 6 - Average Balances, Interest and Average Rates
September 30,
1999 (in thousands) 1998
Average AverageAverage Average
Balance Interest Rate Balance Interest Rate
Assets:
Federal Funds Sold $ 7,464 $ 268 4.79%$12,952 $ 514 5.29%
Investments:
Securities--Taxable 26,042 1,273 6.52% 16,611 806 6.47%
Non-Taxable 2,206 62 3.75% 1,180 36 4.07%
Total Loans, Including
Fees 67,627 4,884 9.63% 59,299 4,508 10.14%
Total Interest Earning
Assets 103,339 6,487 8.37% 90,042 5,864 8.68%
Cash and Due From Banks3,422 2,719
All Other Assets 5,893 4,747
Loan Loss Reserve/
Unearned Fees (1,529) (1,873)
TOTAL ASSETS $111,125 $95,635
Liabilities and Stockholders Equity:
Interest Bearing Deposits:
Time Deposits $ 55,402 $2,224 5.35%$46,380 $1,978 5.69%
Other 31,611 724 3.05% 28,937 843 3.88%
FHLB Advances -0- -0- 0.00% 12 4 4.44%
Total Interest-Bearing
Liabilities 87,013 2,948 4.52% 75,329 2,825 5.00%
Net Interest Income $3,539 $3,039
Non-Interest Bearing
Deposits 15,276 11,992
Total Cost of Funds 3.84% 4.31%
All Other Liabilities 382 478
Stockholders Equity 8,731 7,843
Unrealized Gain/Loss on
Securities (277) (7)
TOTAL LIABILITIES
AND STOCKHOLDERS
EQUITY $111,125 $95,635
Net Interest Yield 3.85% 3.68%
Net Interest Margin 4.57% 4.50%
Table 7 - Interest Rate Sensitivity
(In Thousands) September 30, 1999
Less One Year Greater Non-
Than Through Than Interest
1 Year 5 Years 5 Years Bearing Total
Asset:
Federal Funds Sold $3,310 $3,310
Investments 315 3,972 24,270 28,557
Loans 34,398 36,102 304 70,804
Non-Interest Earning Assets
and Unearned Assets/Loan
Loss Reserve 8,830 8,830
38,023 40,074 24,574 8,830 111,501
Liabilities and Stockholders' Equity:
Interest-Bearing
Deposits 59,269 27,008 -0- 86,277
Non-Interest Bearing Deposits 16,163 16,163
FHLB Advances -0- -0-
Noninterest Bearing Liabilities
and Stockholders' Equity 9,061 9,061
Total 59,269 27,008 -0- 25,224 111,501
Interest Rate
Sensitivity Gap (21,246) 13,066 24,574 (16,394) -0-
Cumulative Interest Rate
Sensitivity Gap $(21,246) $(8,180) $16,394 $ -0- $ -0-
OTHER INCOME
Total other income was $555,000 for the nine month period ended
September 30, 1999 as compared to $398,000 for the same period
in 1998, an increase of $157,000. Other income is comprised
primarily of customer service fees and other items.
OPERATING EXPENSES
Total operating expenses were $2,762,000, or 2.48% of average
total assets, for the nine month period ended September 30,
1999 as compared to $2,128,000, or 2.07%, for the same period
in 1998. 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
$393,000 or 38% over the first nine months of 1999 due to
normal salary increases and additional branch personnel.
Occupancy and equipment expenses increased approximately
$53,000 when compared to expenses at September 30, 1998, an
increase of 12.41%. Contributing to the increase in occupancy
and equipment expenses was the opening of the Alcoa branch
during the fourth quarter of 1998 and the Sweetwater branch
during the first quarter of 1999.
INCOME TAXES
The Bank recognizes income taxes using the Financial Accounting
Standards Board Statement No. 109, Accounting for Income Taxes.
Under this method, deferred tax assets and liabilities are
established for the temporary differences between the
accounting basis and the tax basis of the Bank's assets and
liabilities at enacted tax rates expected to be in effect when
the amounts related to such temporary differences are realized
or settled. The Bank's deferred tax asset is reviewed quarterly
and adjustments to such asset are recognized as deferred income
tax expense or benefit based on management's judgment relating
to the realizability of such asset.
During the nine month period ending September 30, 1999, the
Bank recorded $427,000 in tax expense which resulted in an
approximate effective rate of 36.28%. Comparably, in 1998, the
Bank recorded $439,000 in tax expense, resulting in an
approximate effective rate of 37.8%.
FIRST CENTRAL BANCSHARES, INC. AND SUBSIDIARY
PART 1 - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule.
FORM IO-QSB(A)
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST CENTRAL BANCSHARES, INC.
Date: By:_______________________________
Ed. F. Bell, Chairman, President
and Chief Executive Officer
Date: By:_______________________________
Willard D. Price, Executive Vice President
and Chief Operating Officer
Exhibit 27 - Financial Data Schedule
9-30-99
Amount (In Thousands)
Cash $ 3,689
Federal Funds Sold 3,310
Trading Assets -0-
Investments AFS 28,557
Investments HTM -0-
Investments-Market -0-
Loans 69,954
Allowance for Losses 625
Total Assets 111,501
Deposits 102,440
Short-Term Borrowings -0-
Other Liabilities 196
Long-Term Debt -0-
Preferred Stock-Mandatory -0-
Preferred-Non Mandatory -0-
Common Stock 2,566
Other Stockholders Equity 5,892
Total Liab.-Stockh. Equity 111,501
Interest on Loans 4,884
Interest on Investments 1,335
Other Interest Income 268
Total interest Income 6,487
Interest on Deposits 2,948
Total Interest Expense 2,948
Net Interest Income 3,539
Provision-Loan Losses 155
Securities-Gain/Loss -0-
Other Expenses 2,762
Income Before Tax 1,177
Income Before Extraordinary 1,177
Extraordinary Less Tax -0-
Cumul. Change Acct. Principal -0-
Net Income 750
Earnings Per Share-P 1.46
Earnings Per Share-D 1.46
Net Interest Yield-EA 3.85
Loans-Non Accrual 45
Loans Past Due > 90 Days -0-
Troubled Debt Restructuring -0-
Potential Problem Loans -0-
Allowance-Beginning 594
Total Charge-Offs 173
Total Recoveries 49
Allowance End of Period 625
Loan Loss-Domestic 625
Loan Loss-Foreign -0-
Loan Loss-Unallocated -0-
(b) Reports on Form 8-K, None