U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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, 2001.
___ Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _______________ to ________________
Commission File No. 333-25179
PEOPLE'S COMMUNITY CAPITAL CORPORATION
(Exact Name of Small Business Issuer as Specified in its Charter)
SOUTH CAROLINA 58-2287073
(State of Incorporation) (I.R.S. Employer Identification No.)
106-A PARK AVENUE, S.W., AIKEN, SOUTH CAROLINA 29801
(Address of Principal Executive Offices)
(803) 641-0142
(Issuer's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name, Former Address and Former Fiscal Year, if Changed Since
Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 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 equity, as of the latest practicable date: 998,009 shares of common
stock, par value $.01 per share outstanding at May 4, 2001.
Transitional Small Business Disclosure Format (check one):
Yes No X
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
People's Community Capital Corporation
Consolidated Balance Sheets
March 31, December 31,
2001 2000
---- ----
(Unaudited) (Audited)
Assets
Cash and due from banks $ 2,546,400 $ 1,603,996
Federal funds sold 5,019,000 5,500,000
Short-term investments 995,082 999,028
Securities, available for sale 10,488,370 10,852,109
Loans receivable, net 44,735,892 40,080,422
Properties and equipment, net 2,530,155 2,188,878
Accrued interest receivable 364,974 421,930
Deferred income taxes 122,817 140,912
Other assets 81,745 54,261
------------- -------------
Total assets $ 66,884,435 $61,841,536
============= =============
Liabilities and Shareholders' Equity
Liabilities:
Non-interest bearing deposits $ 9,309,354 $ 8,179,075
Interest bearing deposits 46,327,447 42,854,756
------------- -------------
Total deposits 55,636,801 51,033,831
Accrued interest payable 90,943 86,368
Accrued expenses and other liabilities 144,328 480,613
Other borrowings 979,527 344,631
------------- -------------
Total liabilities 56,851,599 51,945,443
------------- -------------
Shareholders' equity:
Common stock, $.01 par value; 10,000,000 shares authorized, 1,048,145
shares issued at March 31, 2001 and 998,262 at December 31, 2000 10,481 9,983
Additional paid-in-capital 10,215,478 9,776,507
Retained earnings 508,303
251,386
Accumulated other comprehensive income (loss) 12,762 (34,458)
------------- -------------
10,490,107 10,260,335
Treasury stock, 50,136 and 39,749 shares at cost (457,271) (364,242)
------------- -------------
Total shareholders' equity 10,032,836 9,896,093
------------- -------------
Total liabilities and shareholders' equity $ 66,884,435 $ 61,841,536
============= =============
See accompanying Notes to Consolidated Financial Statements.
2
People's Community Capital Corporation
Consolidated Statements of Income
(Unaudited)
For the three months
ended March 31,
2001 2000
---- ----
Interest income:
Loans, including fees $ 980,370 $ 823,647
Federal funds sold 64,948 38,029
Securities, short-term investments, and cash 189,841 169,375
------------ ------------
Total interest income 1,235,159 1,031,051
------------ ------------
Interest expense:
Deposits 550,067 378,098
Other borrowings 5,340 6,457
------------ ------------
Total interest expense 555,407 384,555
------------ ------------
Net interest income 679,752 646,496
Provision for loan losses 39,369 57,000
Net interest income after provision 640,383 589,496
------------ ------------
for loan losses
Non-interest income:
Service charges on deposit accounts 84,397 57,588
Other income 39,938 23,329
------------ ------------
Total non-interest income 124,335 80,917
------------ ------------
Non-interest expenses:
Salaries and employee benefits 280,456 271,314
Occupancy and equipment 54,144 60,935
Consulting and professional expenses 38,116 38,635
Customer related expenses 20,243 16,913
General operating expenses 86,450 87,270
Other expenses 23,426 26,726
------------ ------------
Total non-interest expenses 502,835 501,793
------------ ------------
Income before income taxes 261,883 168,620
Income tax provision 100,096 64,146
------------ ------------
Net income $ 161,787 $ 104,474
============ ============
Weighted average common shares outstanding:
Basic 968,917 1,029,943
Diluted 968,917 1,119,578
Earnings per share:
Basic $ .17 $ .10
Diluted $ .17 $ .09
See accompanying Notes to Consolidated Financial Statements.
3
People's Community Capital Corporation
Consolidated Statements of Comprehensive Income
(Unaudited)
For the three months
ended March 31,
---------------
2001 2000
---- ----
Net income $ 161,787 $ 104,474
Other comprehensive income (loss), net of tax:
Net change in unrealized gain (loss) on
securities available for sale 47,220 (72,004)
-------------- ------------
Total other comprehensive income (loss) 47,220 (72,004)
Comprehensive income $ 209,007 $ 32,470
============== ============
See accompanying Notes to Consolidated Financial Statements.
4
People's Community Capital Corporation
Consolidated Statements of Cash Flows
(Unaudited)
For the three months
ended March 31,
----------------
2001 2000
---- ----
Operating activities:
Net income $ 161,787 $ 104,474
Adjustments to reconcile net income to net cash provided by (used for)
operating activities:
Depreciation and amortization 30,467 27,586
Provision for loan losses 39,369 57,000
Deferred income taxes 18,095 (1,228)
Changes in deferred and accrued amounts:
Other assets and accrued interest receivable 26,607 (45,462)
Accrued expenses and other liabilities (331,710) (23,130)
------------------ ---------------
Net cash provided by (used for) operating activities (55,385) 119,240
------------------ ---------------
Investing activities:
Purchase of securities available for sale (6,330,000) (8,500)
Maturities and calls of securities available for sale 6,740,959 -
Net decrease in short-term investments 3,946 -
Purchase of property and equipment (368,880) (20,697)
Net increase in loans (4,694,839) (4,969,832)
Net decrease in federal funds sold 481,000 3,650,000
------------------ ---------------
Net cash used for investing activities (4,167,814) (1,349,029)
------------------ ---------------
Financing activities:
Purchase of treasury stock (72,000) (48,750)
Net increase in deposits 4,602,970 1,511,305
Net (decrease) increase in other borrowings 634,896 (1,019,192)
Payment of dividends (263) -
------------------ ---------------
Net cash provided by financing activities 5,165,603 443,363
------------------ ---------------
Net (decrease)increase in cash and due from banks 942,404 (786,426)
Cash and due from banks at beginning of period 1,603,996 3,076,294
------------------ ---------------
Cash and due from banks at end of period $ 2,546,400 $ 2,289,868
================== ---------------
Supplemental disclosure:
Cash paid during the period for interest $ 550,832 $ 380,700
================== ===========-===
See accompanying Notes to Consolidated Financial Statements.
5
People's Community Capital Corporation
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B of the Securities and Exchange Commission. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. However, in
the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 2001, are not necessarily
indicative of the results that may be expected for the year ended December 31,
2001. For further information, please refer to the consolidated financial
statements and footnotes thereto for the Company's fiscal year ended December
31, 2000, included in the Company's Form 10-KSB for the year ended December 31,
2000.
Note 2. Summary of organization
People's Community Capital Corporation (the "Company") was incorporated
on February 26, 1997, under the laws of the State of South Carolina for the
purpose of operating as a bank holding company pursuant to the Federal Bank
Holding Company Act of 1956, as amended.
The Company is a bank holding company whose subsidiary, People's
Community Bank of South Carolina (the "Bank"), is primarily engaged in the
business of accepting savings and demand deposits insured by the Federal Deposit
Insurance Corporation, and providing mortgage, consumer and commercial loans to
the general public. The Bank formed a subsidiary, People's Financial Services,
Inc. in December 1999 for the purpose of providing comprehensive financial
planning services in addition to full service brokerage, including stocks,
bonds, mutual funds, and insurance products.
6
Item 2. Management's Discussion and Analysis or Plan of Operation.
This discussion and analysis is intended to assist the reader in
understanding our financial condition and results of operations. This commentary
should be read in conjunction with the financial statements and the related
notes and other statistical information in this report.
This report contains "forward-looking statements" relating to, without
limitation, future economic performance, plans and objectives of management for
future operations, and projections of revenues and other financial items that
are based on the beliefs of our management, as well as assumptions made by and
information currently available to our management. The words "expect,"
"anticipate," and "believe," as well as similar expressions, are intended to
identify forward-looking statements. Our actual results may differ materially
from the results discussed in the forward-looking statements, and our operating
performance each quarter is subject to various risks and uncertainties that are
discussed in detail in our filings with the Securities and Exchange Commission,
including the "Risk Factors" section in our registration statement on Form SB-2
(Registration Number 333-25179) as filed with and declared effective by the
Securities and Exchange Commission.
We were incorporated in South Carolina on February 26, 1997 for the
purpose of operating as a bank holding company. Our wholly-owned subsidiary,
People's Community Bank of South Carolina (the Bank), commenced business on
September 22, 1997 and is primarily engaged in the business of accepting savings
and demand deposits and providing mortgage, consumer and commercial loans to the
general public. The Bank operates two banking centers located in Aiken and one
located in North Augusta, South Carolina.
The second banking center located in Aiken was opened on September 8,
1998 in leased offices that have also been the headquarters of the holding
company. A tract of land was purchased in downtown Aiken for the construction of
a permanent banking center office and holding company headquarters. Construction
began in September 2000 and will be completed in May 2001. Total land and
construction costs through March 31, 2001 were approximately $1,090,000. Total
estimated costs are expected to be approximately $1,400,000.
In December 1999, the Bank formed a subsidiary, People's Financial
Services, Inc. for the purpose of providing comprehensive financial planning
services in addition to full service brokerage, including stocks, bonds, mutual
funds, and insurance products.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
EARNINGS REVIEW
Our net income for the first quarter of 2001 was $161,787 compared to
$104,474 for the same period last year, an increase of 55%. The basic income per
share increased to $.17 compared to $.10 for the same period in 2000. Weighted
shares outstanding have been adjusted for the effect of a 5% stock dividend paid
on March 31, 2001 to shareholders of record as of February 15, 2001. This
improvement in earnings reflects the continued growth in the level of earning
assets since the Bank commenced operations. The level of average earning assets
was $59.2 million for the three months ended March 31, 2001 as compared to $48.9
million for the three months ended March 31, 2000.
Net interest income represents the difference between interest received
or accrued on interest earning assets and interest paid or accrued on interest
bearing liabilities. The following presents, in a tabular form,
7
average balance sheets that highlight the main components of interest earning
assets and interest bearing liabilities, on an annualized basis, for the three
month periods ended March 31, 2001 and 2000. Yields are derived by dividing
income or expense by the average balance of the corresponding assets or
liabilities. Average balances have been derived from daily averages.
Three months ended March 31, 2001 Three months ended March 31, 2000
--------------------------------- ---------------------------------
Average Interest Yield Average Interest Yield
Balance Income/Expense /Rate Balance Income/Expense /Rate
------- -------------- ----- ------- -------------- -----
ASSETS
Cash $ 9,612 $ 124 5.16% $ -- $ -- --
Federal funds sold 4,673,077 64,948 5.56% 2,663,686 38,029 5.71%
Short-term investments 993,294 16,428 6.62% -- -- --
Securities 11,058,231 173,289 6.27% 10,707,665 169,375 6.33%
Loans 42,461,340 980,370 9.24% 35,553,983 823,647 9.27%
------------ --------------- ------------ ------------
Total earnings assets 59,195,554 1,235,159 8.34% 48,925,334 1,031,051 8.43%
------------ --------------- ------------ ------------
Cash and due from banks 1,823,357 1,783,900
Premises and equipment 2,288,919 1,666,168
Other assets 1,034,627 1,086,977
Allowance for loan losses (596,167) (434,833)
------------- -------------
Total assets 63,746,290 53,027,546
============ ============
LIABILITIES &
EQUITY
Interest-bearing deposits:
Transaction accounts 6,625,492 20,453 1.23% 6,598,623 20,840 1.26%
Money market accounts 10,772,192 109,181 4.05% 9,306,120 92,365 3.97%
Savings deposits 937,946 5,560 2.37% 747,515 4,527 2.42%
Time deposits 26,656,322 414,873 6.23% 19,228,402 260,366 5.42%
------------ --------------- ------------ ------------
Total interest bearing
deposits 44,991,952 550,067 4.89% 35,880,660 378,098 4.22%
Interest-bearing
borrowings 400,244 5,340 5.34% 453,734 6,457 5.69%
------------ --------------- ------------ ------------
Total interest bearing
liabilities 45,392,196 555,407 4.89% 36,334,394 384,555 4.23%
------------ --------------- ------------ ------------
Demand deposits 8,029,776 7,155,944
Other liabilities 404,207 42,633
Shareholders' equity 9,920,111 9,494,575
------------ -------------
Total liabilities &
shareholders' equity $ 63,746,290 $ 53,027,546
============ ============
Net interest spread 3.45% 4.20%
Net interest income/margin $ 679,752 4.59% $ 646,496 5.29%
=============== ============
Net interest income was $679,752 for the three months ended March 31,
2001 as compared to $646,496 for the three months ended March 31, 2000,
representing a 5% increase. The net interest margin (net interest income divided
by average earning assets) was 4.59% for the three months ended March 31, 2001
compared to the net interest margin of 5.29% for the three months ended March
31, 2000. The decline in net interest margin is largely the result of lower
yields on overnight federal funds sold and higher rates being paid by the Bank
on time deposits to attract funds.
8
Interest income for the first three months of 2001 was $1,235,159
compared to $1,031,051 for the same period in 2000. The volume of total earnings
assets increased by approximately $10 million between the two periods. The
largest component of interest income was interest and fees on loans amounting to
$980,370 for the three months ended March 31, 2001 compared to $823,647 for the
comparable prior year period. The average balance increased by $6.9 million. The
overall rate on the loan portfolio decreased slightly from 9.27% for the three
months ended March 31, 2000 to 9.24% for the three-month period ended March 31,
2001. Interest earned on federal funds sold increased from $38,029 for the first
quarter of 2000 to $64,948 for the first quarter of 2001. In addition average
balances increased by about $2 million and the yield fell from 5.71% to 5.56%.
The securities, short-term investments portfolio, and interest-earning cash
earned $189,841 for the first three months of 2001 with a yield of 6.30%. For
the first three months of 2000, these investments earned $169,375 with a yield
of 6.33%. The average balance outstanding increased from $10,707,665 to
$12,061,137, an increase of approximately $1.4 million.
Interest expense increased from $384,555 for the three months ended
March 31, 2000 to $555,407 for the three months ended March 31, 2001. The
increase was the result of a grow in interest-bearing liabilities, primarily
deposits, from $36,334,394 to $45,392,196, an increase of 25%. The average rate
paid on interest bearing liabilities increased from 4.23% to 4.89% reflecting
the increased rates paid primarily on time deposits, the largest deposit
category.
Non-interest Income
Non-interest income for the three-month period ended March 31, 2001 was
$124,335 compared to $80,917 for the same period in 2000. Of this total, $84,397
represented service charges on deposit accounts for the three months ended March
31, 2001 compared to $57,588 for the comparable period in 2000. The increase in
income from deposit service charges is due to the increase in deposit customers
during the comparable periods. The remaining $39,938 of non-interest income for
the first three months of 2001 was income generated from other fees charged. For
the same period in 2000, other income amounted to $23,329, the largest component
being $10,622 of fees from non-deposit investment products' activity associated
with the Bank's financial services subsidiary that commenced operations in
December 1999. Fees generated by the subsidiary for the first quarter of 2001
amounted to $5,344. However, certain other fees in the Bank increased in the
first quarter compared to last year's first quarter, such as check cashing fees,
brokered mortgage origination fees, and internet banking fees. Internet banking
was introduced in the second quarter of 2000.
Non-interest Expense
Non-interest expense for the three-month periods ended March 31, 2001
and 2000 were at $502,835 and $501,793, respectively. The largest component of
non-interest expense was salaries and employee benefits of $280,456 and
$271,314, respectively, representing a 3% increase. Occupancy and equipment
expense decreased from $60,935 for the three months ended March 31, 2000 to
$54,144 for the three months ended March 31, 2001 largely due to miscellaneous
maintenance and repairs on buildings and equipment that occurred in the first
quarter of 2000. See the Consolidated Statements of Income for more details on
non-interest expense amounts for the two periods under comparison.
Provision for Loan Losses
The provision for loan losses was $39,369 and $57,000, respectively,
for the first three months of 2001 and 2000, bringing the total reserve balance
to $613,000 and $467,000 at March 31, 2001 and 2000, respectively. This amount
represents 1.35% of gross loans at March 31, 2001, compared to 1.21% at March
31,
9
2000. It also reflects our estimate of the amounts necessary to maintain the
allowance for loan losses at a level believed to be adequate in relation to the
current size, mix and quality of the loan portfolio. See the description of the
allowance for loan losses below. However, our judgment as to the adequacy of the
allowance is based upon a number of assumptions about future events that we
believe to be reasonable, but which may or may not be accurate. Because of the
inherent uncertainty of assumptions made during the evaluation process, there
can be no assurance that charge-offs in future periods will not exceed the
allowance for loan losses or that additional increases in the loan loss
allowance will not be required. We had $189,633 in loans that were classified as
non-accrual at March 31, 2001 compared to $41,847 in non-accrual loans at March
31, 2000. There were no charge-offs for the periods ended March 31, 2001 or
March 31, 2000, and there were $1,631 of recoveries for the first quarter of
2001.
BALANCE SHEET REVIEW
Total consolidated assets grew by $5,042,899 from $61,841,536 at
December 31, 2000 to $66,884,435 at March 31, 2001. The increase was generated
primarily through a $4,602,970 increase in deposits with a $634,896 increase in
borrowed funds. Of the increase in deposits, $2,500,000 was generated from one
customer in a one-year time deposit product. Federal funds sold decreased by
$481,000, and the funds generated from the decrease in Federal funds sold and
the increases in deposits and other borrowings were used to increase net loans
by $4,655,470, and cash by $942,404. Although there was not a significant change
in the total amount of short-term investments and securities outstanding between
December 31, 2000 and March 31, 2001, there were material changes to the
composition of the portfolio. As interest rates fell, many agency bonds were
called, and we purchased new bonds, some with slightly lower yields. Total calls
equaled $6.7 million and total purchases equaled $6.3 million. In addition, we
purchased $27,200 of stock in the Federal Home Loan Bank to satisfy minimum
stock ownership requirements.
Loans
Outstanding loans represent the largest component of earning assets as
of March 31, 2001 at $44,735,892, or approximately 73% of total earning assets.
Net loans increased $4,655,470, or 12% since December 31, 2000.
The interest rates charged on loans vary with the degree of risk,
maturity and amount of the loan. Competitive pressures, money market rates,
availability of funds, and government regulations also influence interest rates.
The average yield on our loans for the period ended March 31, 2001 was 9.24% as
compared to a yield of 9.37% for the year ended December 31, 2000.
The principal components of our loan portfolio at March 31, 2001 and
December 31, 2000, consisted of real estate loans comprising approximately 82.5%
and 75.7% of total loans, respectively. Real estate loan means any loan secured
by real estate, regardless of the purpose of the loan. It is common practice for
financial institutions in our market area to obtain a security interest in real
estate whenever possible, in addition to any other available collateral. This
collateral is taken to reinforce the likelihood of the ultimate repayment of the
loan and tends to increase the magnitude of the real estate portfolio component.
The following table shows the composition of the loan portfolio by category.
10
March 31, 2001 December 31, 2000
-------------- -----------------
Amount Percent Amount Percent
------ ------- ------ -------
Commercial, financial and agricultural $ 5,521,000 12.2% $ 7,266,130 17.9%
Real estate 37,426,818 82.5% 30,813,021 75.7%
Consumer and other 2,434,737 5.3% 2,598,990 6.4%
------------ ----- ------------ -----
Total loans 45,382,555 100.0% 40,678,141 100.0%
Allowance for loan losses (613,000) (572,000)
Unearned fees (33,663) (25,719)
------------ -------------
Total net loans $44,735,892 $40,080,422
============ =============
Allowance for Loan Losses
The allowance for loan losses at March 31, 2001 was $613,000, or 1.35%
of loans outstanding, compared to an allowance of $572,000, or 1.41% of loans
outstanding, at December 31, 2000. The allowance for loan losses is based upon
our continuing evaluation of the collectibility of loans based somewhat on
historical loan loss experience, but primarily on current economic conditions
affecting the ability of borrowers to repay, the volume of loans, the quality of
collateral securing non-performing and problem loans, and other factors
deserving recognition. As of March 31, 2001, there were $189,633 in
non-performing loans with no charge-offs and $1,631 in recoveries for the
period.
Short-Term Investments and Securities
Short-term investments and securities represented 19% of earning assets
at March 31, 2001, or $11,483,452. This represented a decrease of $367,685 from
the December 31, 2000 balance of $11,851,137. The combined yield on short-term
investments and securities was 6.30% for the three months ended March 31, 2001
compared to 6.33% for the year ended December 31, 2000. Short-term investments
at March 31, 2001 and at December 31, 2000 consisted of commercial paper in
another financial institution with balances of $995,082 and $999,028,
respectively. Included in available-for-sale securities is $137,100 of stock
purchased in the Federal Home Loan Bank of Atlanta, of which $27,200 was
purchased in the first quarter of 2001. This purchase was a requirement from the
FHLB in order to secure borrowings from them in the future.
Deposits
Our primary source of funds for loans and investments is deposits.
Deposits grew $4,602,970, or 9%, since year-end 2000 for a total of $55,636,801
at March 31, 2001. The average rates paid on interest-bearing deposits were
4.89% and 4.60% at March 31, 2001 and December 31, 2000, respectively. In
pricing deposits, we consider our liquidity needs, the direction and levels of
interest rates, and local market conditions. We have seen an increase in the
price of our deposits due to local market competition associated with rates on
time deposits.
Of the $4,602,970 increase in deposits since year-end, one
institutional customer's time deposit accounted for $2,500,000 of the increase.
This deposit is secured by agency bonds and was accepted for a one-year term.
11
Shareholders' Equity
On January 23, 2001, the Board of Directors declared a 5% stock
dividend which was paid on March 1, 2001 to shareholders of record on February
15, 2001. The number of shares issued was 49,883 with a market value of $8.81 on
the declaration date for a total decrease in retained earnings of $439,469. Due
to the dividend, treasury stock was increased by 2,387 shares, or $21,029. Cash
paid in lieu of stock for fractional shares totaled $263.
On January 24, 2001, we purchased an additional 8,000 shares of our own
stock to hold in treasury for a price of $9.00 per share, or $72,000. Total
treasury stock at March 31, 2001 was 50,136 shares, or $457,271.
Liquidity and Sources of Capital
At March 31, 2001, our liquid assets, consisting of cash and due from
banks and Federal funds sold, amounted to $7,565,400, representing 11.3% of
total assets. Short-term investments and securities equaled $11,483,452, or
17.2% of total assets. These securities provide a secondary source of liquidity
because they can be converted into cash in a timely manner. Our ability to
maintain and expand our deposit base and borrowing capabilities also serves as a
source of liquidity. For the three-month period ended March 31, 2001, total
deposits increased by $4,602,970 representing an increase of 9%, or 36% on an
annualized basis. Growth for the first quarter of the year is not necessarily
indicative of expected growth for the remainder of the year. We closely monitor
and seek to maintain appropriate levels of interest-earning assets and
interest-bearing liabilities so that maturities of assets are such that adequate
funds are provided to meet customer withdrawals and loan demand.
We plan to meet future cash needs through the liquidation of temporary
investments, maturities of loans and investment securities, and generation of
deposits. In addition, the Bank maintains two lines of credit from correspondent
banks in the amount of $1,800,000 each, and is a member of the Federal Home Loan
Bank, from which applications may be made for borrowing capabilities, if needed.
The Bank currently maintains a level of capitalization in excess of the
minimum capital requirements set by the regulatory agencies. Despite anticipated
asset growth, we expect capital ratios to continue to be adequate for the next
two to three years. However, no assurances can be given in this regard, as rapid
growth, deterioration in loan quality, and operating losses, or a combination of
these factors, could change our capital position in a relatively short period of
time.
Costs to complete the construction of our new office building in
downtown Aiken, South Carolina are estimated at $1,400,000. As of March 31,
2001, we have incurred approximately $1,090,000 in construction costs. This
project has been funded with internal sources.
Below is a table that reflects the leverage and risk-based regulatory
capital ratios of the Bank at March 31, 2001:
Well-Capitalized Minimum
Ratio Requirement Requirement
----- ---------------- -----------
Tier 1 capital 14.77% 6.00% 4.0%
Total capital 16.02% 10.00% 8.0%
Tier 1 leverage ratio 10.73% 5.00% 4.0%
12
Recently Issued Accounting Standards
Accounting standards that have been issued or proposed by the Financial
Accounting Standards Board that do not require adoption until a future date are
not expected to have a material impact on the consolidated financial statements
upon adoption.
PART II - OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings
- -------------------------
Not Applicable
Item 2. Changes in Securities and Use of Proceeds
- -------------------------------------------------
Not Applicable
Item 3. Defaults Upon Senior Securities
- ---------------------------------------
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
Not Applicable
Item 5. Other Information
- -------------------------
None.
Item 6. Exhibits and Report on Form 8-K
- ---------------------------------------
(a) Exhibits - None.
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
quarter ended March 31, 2001.
13
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.
People's Community Capital Corporation
--------------------------------------
(Registrant)
Date: May 8, 2001 By: /s/ Tommy B. Wessinger
-----------------------------------
Tommy B. Wessinger
Chief Executive Officer
By: /s/ Jean H. Covington
-----------------------------------
Jean H. Covington
Principal Accounting and Chief
Financial Officer
14