-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PS97Ezz4s22mBQMy0gJ6l0XOPIFf0O+q4Sh0ogmsuLGmSr8PPQy0am0wsXnQJQHh rV2aUNXZd932sXfTocwnMg== 0000931763-96-000894.txt : 19961113 0000931763-96-000894.hdr.sgml : 19961113 ACCESSION NUMBER: 0000931763-96-000894 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ABC BANCORP CENTRAL INDEX KEY: 0000351569 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 581456434 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16181 FILM NUMBER: 96659986 BUSINESS ADDRESS: STREET 1: 310 FIRST ST NE CITY: MOULTRIE STATE: GA ZIP: 31768 BUSINESS PHONE: 9128901111 MAIL ADDRESS: STREET 1: PO BOX 1500 CITY: MOULTRIE STATE: GA ZIP: 31776 FORMER COMPANY: FORMER CONFORMED NAME: ABC HOLDING CO DATE OF NAME CHANGE: 19870119 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended SEPTEMBER 30, 1996 ------------------ OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-16181 ------- ABC BANCORP - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) GEORGIA 58-1456434 - ------------------------ --------------------- (State of incorporation) (IRS Employer ID No.) 310 FIRST STREET, SE MOULTRIE, GA 31768 ------------------------------------------ (Address of principal executive offices) (912) 890-1111 ----------------------------- (Registrant's telephone number) 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 --- --- THERE WERE 5,031,063 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER 30, 1996. ABC BANCORP QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1996 TABLE OF CONTENTS PART I - FINANCIAL INFORMATION
Item Page - ---- ---- 1. Financial Statements Consolidated Balance Sheets 3 Consolidated Statements of Income 4 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 7 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II - OTHER INFORMATION 3. Submission of Matters to a Vote of Securities Holders 16 6. Exhibits and Reports on Form 8-K 16 SIGNATURE 18
2 ABC BANCORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) (Unaudited)
- ------------------------------------------------------------------------------------------------- Sep 30 Dec 31 1996 1995 ---------- ---------- Assets - ----- Cash and due from banks $ 27,214 $ 28,351 Federal funds sold 9,270 47,485 Securities available for sale, at fair value 73,243 58,718 Securities held to maturity, at cost 25,684 13,271 Loans 409,802 281,031 Less allowance for loan losses 6,689 5,184 -------- -------- Loans, net 403,113 275,847 -------- -------- Premises and equipment, net 12,935 9,529 Other assets 25,184 13,108 -------- -------- $576,643 $446,309 ======== ======== Liabilities and Stockholders' Equity - ------------------------------------ Deposits Noninterest -bearing demand $ 64,001 $ 69,661 Interest-bearing demand 93,403 90,495 Savings 38,076 27,468 Time, $100,000 and over 68,427 52,029 Other time 214,500 154,304 -------- -------- Total deposits 478,407 393,957 Notes payable 4,324 - - Securities sold under repurchase agreements 701 1,887 Other short term borrowings 35,519 2,600 Other liabilities 5,151 4,236 -------- -------- Total liabilities 524,102 402,680 -------- -------- Stockholders' equity Common stock,par value $1; 15,000,000 shares authorized 5,249,419 and 4,703,919 shares issued, respectively 5,249 4,704 Surplus 28,525 23,234 Retained earnings 21,011 17,048 Unrealized gains (losses) on securities available for sale, net of taxes (689) 198 -------- -------- 54,096 45,184 Less cost of 217,882 shares acquired for the treasury (1,555) (1,555) -------- ------- Total stockholders' equity 52,541 43,629 -------- -------- $576,643 $446,309 ======== =========
See Notes to Consolidated Financial Statements. 3 ABC BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (Dollars in Thousands) (Unaudited)
- ------------------------------------------------------------------------------------------------ 1996 1995 --------- --------- INTEREST INCOME Interest and fees on loans $10,757 $7,630 Interest on taxable securities 1,379 878 Interest on nontaxable securities 179 126 Interest on deposits in other banks - - 30 Interest on Federal funds sold 114 290 ------- -------- 12,429 8,954 ------- -------- INTEREST EXPENSE Interest on deposits 5,063 3,775 Interest on securities sold under repurchase agreements and other borrowings 538 121 ------- -------- 5,601 3,896 ------- -------- Net interest income 6,828 5,058 Provision for loan losses 438 284 ------- -------- Net interest income after provision for loan loss 6,390 4,774 ------- -------- OTHER INCOME Service charges on deposit accounts 1,415 910 Other service charges, commisions and fees 220 102 Other 148 164 ------- -------- 1,783 1,176 ------- -------- OTHER EXPENSE Salaries and employee benefits 2,982 2,018 Equipment expense 551 229 Occupancy expense 319 457 Amortization of intangible assets 150 87 Data processing fees 502 139 Directors fees 126 95 FDIC premiums 35 5 Other operating expenses 1,165 851 ------- -------- 5,830 3,881 -------- -------- Income before income taxes 2,343 2,069 Applicable income taxes 798 673 ------- -------- Net income $1,545 $1,396 ======= ======== Income per common share $0.31 $0.31 ======= ======= Average shares outstanding 5,031,537 4,453,410 ========= ========= See Notes to Consolidated Financial Statements.
4 ABC BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (Dollars in Thousands) (Unaudited)
- ----------------------------------------------------------------------------------------------- 1996 1995 ------------ ------------ INTEREST INCOME Interest and fees on loans $26,975 $21,616 Interest on taxable securities 3,429 2,630 Interest on nontaxable securities 477 395 Interest on deposits in other banks - - - - Interest on Federal funds sold 801 912 ------- ------- 31,682 25,553 ------- ------ INTEREST EXPENSE Interest on deposits 13,083 10,330 Interest on securities sold under repurchase agreements and other borrowings 697 273 ------- ------- 13,780 10,603 ------- ------- Net interest income 17,902 14,950 PROVISION FOR LOAN LOSSES 985 789 ------- ------- Net interest income after provision for loan loss 16,917 14,161 ------- ------- OTHER INCOME Service charges on deposit accounts 3,084 2,552 Other service charges, commisions and fees 883 484 Security transactions, net (12) Other 277 400 ------ ------- 4,232 3,436 ------ ------- OTHER EXPENSE Salaries and employee benefits 7,347 5,968 Equipment expense 1,196 898 Occupancy expense 868 1,020 Amortization of intangible assets 319 238 Data processing fees 1,058 436 Directors fees 312 281 FDIC premiums 92 387 Other operating expenses 2,721 2,472 ------ ------ 13,913 11,700 ------- ------- Income before income taxes 7,236 5,897 Applicable income taxes 2,429 1,949 ------- ------- NET INCOME $4,807 $3,948 ====== ====== Income per common share $1.01 $0.89 ===== ====== Average shares outstanding 4,779,017 4,453,410 ========= =========
See Notes to Consolidated Financial Statements. 5 ABC BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (Dollars in Thousands) (Unaudited)
- ------------------------------------------------------------------------------------------------ 1996 1995 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income $4,807 $3,948 ------ ------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 889 852 Provision for loan losses 985 225 Amortization of intangible assets 872 789 Other prepaids, deferrals and accruals, net (4,807) (2,404) ------- ------- Total adjustments (2,061) (538) ------- ------- Net cash provided by (used in) operating activities 2,746 3,410 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from maturities of investment securities 23,499 15,896 Purchase of investment securities (28,336) (16,366) Proceeds from sales of securities available for sale 1,600 1,499 (Increase)decrease in Federal funds sold 38,215 1,353 (Increase) decrease in loans (48,310) (32,138) Net cash paid for purchased subsidiary (3,888) Purchase of premises and equipment (1,441) (570) ------- ------- Net cash provided by (used in) investing activities (18,661) (30,326) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES Net increase (decrease) in deposits (7,046) 20,519 Net increase (decrease) in repurchase agreements (1,186) (597) Proceeds from short-term borrowings 21,119 5,774 Proceeds from long-term debt 4,000 Repayment of long-term debt (1,096) Dividends paid (1,179) (947) Purchase of fractional shares (6) (3) Proceeds from exercise of stock options of pooled subsidiary 172 75 Net cash provided by (used in) financing activities 14,778 24,821 ------- ------- Net increase (decrease) in cash and due from banks ($1,137) ($2,095) Cash and due from banks at beginning of period 28,351 23,093 ------- ------- Cash and due from banks at end of period $27,214 $20,998 ======= =======
See Notes to Consolidated Financial Statements. 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting and reporting policies of ABC Bancorp and subsidiaries ("the Company") conform to generally accepted accounting principles and to general practices within the banking industry. The interim consolidated financial statements included herein are unaudited, but reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the interim periods presented. All adjustments reflected in the interim financial statements are of a normal, recurring nature. Such financial statements should be read in conjunction with the financial statements and notes thereto and the report of independent auditors included in the Company's Form 10-K Annual Report for the year ended December 31, 1995. The results of operations for the nine months ended September 30, 1996 are not necessarily indicative of the results to be expected for the full year. NOTE 2. RECENT ACQUISITIONS On June 21, 1996, the Company acquired all of the outstanding common stock of Southland Bancorporation ("Southland") in exchange for 402,271 shares of the Company's common stock and $5,880,392 in cash. The excess of purchase price over net book value of assets acquired amounted to $5,310,222. The fair value of assets acquired was deemed to approximate their recorded value; therefore, the excess cost will be accounted for as goodwill and amortized over a period of 15 years. Immediately following the merger, Southland was liquidated and its wholly-owned subsidiary, Southland Bank, became a wholly- owned subsidiary of the Company. The acquisition has been accounted for as a purchase transaction and, accordingly, the operations of Southland Bank will be included in the consolidated financial statements of the Company only from June 21, 1996, the date of acquisition. Had the acquisition of Southland Bank occurred on January 1, 1995, pro forma unaudited consolidated results of operations (after restatement for the poolings of interest described below) for the nine months ended September 30, 1996 and 1995 would have been as follows: 7
Nine Months Ended September 30, ------------------ 1996 1995 ---- ---- (Dollars in Thousands Except Per Share Data) Net interest income $20,151 $18,510 Other income 4,799 4,664 Net income 4,855 4,689 Net income per share .96 .97
On July 31, 1996, the Company acquired all of the outstanding common stock of Central Bankshares, Inc. ("Central") in exchange for 524,300 shares of the Company's common stock and a nominal amount of cash in lieu of fractional shares. Immediately following the merger, Central was liquidated and its wholly-owned subsidiary, Central Bank & Trust, became a wholly-owned subsidiary of the Company. On August 31, 1996, the Company acquired all of the outstanding common stock of First National Financial Corporation ("First National") in exchange for 725,774 shares of the Company's common stock and a nominal amount of cash in lieu of fractional shares. Immediately following the merger, First National was liquidated and its wholly-owned subsidiary, First National Bank of South Georgia, became a wholly-owned subsidiary of the Company. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Liquidity management involves the matching of the cash flow requirements of customers, who may be either depositors desiring to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs, and the ability of ABC Bancorp and its subsidiaries (the "Company") to meet those needs. The Company strives to maintain an adequate liquidity position by managing the balances and maturities of interest-earning assets and interest-bearing liabilities so that the balance it has in short-term investments (Federal funds sold) at any given time will adequately cover any reasonably anticipated immediate need for funds. Additionally, the subsidiary banks (the "Banks") maintain relationships with correspondent banks which could provide funds to them on short notice, if needed. The liquidity and capital resources of the Company is monitored on a periodic basis by state and Federal regulatory authorities. As determined under guidelines established by these regulatory authorities, the Banks' liquidity ratios at September 30, 1996 were considered satisfactory. At that date, the Banks' Federal funds sold were adequate to cover any reasonably anticipated immediate need for funds. The Company is aware of no events or trends likely to result in a material change in liquidity. At September 30, 1996, the Company's and the Banks' capital asset ratios were considered adequate based on guidelines established by regulatory authorities. During the nine months ended September 30, 1996, total capital increased $8.9 million to $52.5 million at September 30, 1996. This increase in capital resulted from the retention of net earnings of $3.6 million (after deducting dividends to shareholders of $1.2 million) a decrease of $.7 million in unrealized gains on securities available for sale, net of taxes and a net increase of $6.0 million related to merger transactions. At September 30, 1996, there were no material binding commitments for capital expenditures. However, the Company anticipates that expenditures of approximately $ 2,500,000 will be required for the expansion or relocation of properties, which it plans to complete during the next 12 months, in order to serve its customers and meet the needs of the citizens in the communities served by the Banks. 9 MERGERS AND ACQUISITIONS The results of operations for the three and nine months ended September 30, 1996 and 1995 include the operations of the five wholly-owned subsidiary banks held prior to 1996 and the operations of Central Bankshares, Inc. and First National Financial Corporation which were acquired in 1996 in transactions that were accounted for as poolings of interests. The results of operations for the three and nine months ended September 30, 1996 also include the operations of Southland Bancorporation since June 21, 1996, the date of its acquisition, which transaction was accounted for as a purchase. Also, the Company has entered into a definitive merger agreement with M & F Financial Corporation, Donalsonville, Georgia,("M&F"), whereby it would acquire all of the outstanding common stock of M&F in exchange for the Company's common stock. The total merger consideration will approximate $6.1 million. Total assets of M&F at September 30, 1996 were approximately $42 million. The merger is subject to approval by M&F shareholders and certain regulatory authorities, and the registration of the Company's common stock to be issued in connection with the merger. As a result of the merger, Merchants & Farmers Bank, a wholly-owned subsidiary of M&F, will become a wholly-owned subsidiary of the Company. The merger will be accounted for as a pooling of interests and is expected to be consummated during the fourth quarter of 1996. RESULTS OF OPERATIONS The Company's results of operations are determined by its ability to effectively manage interest income and expense, to minimize loan and investment losses, to generate noninterest income and to control noninterest expense. Since interest rates are determined by market forces and economic conditions beyond the control of the Company, the ability to generate net interest income is dependent upon the Banks' ability to obtain an adequate spread between the rate earned on interest-earning assets and the rate paid on interest-bearing liabilities. Thus, the key performance measure for net interest income is the interest margin or net yield, which is taxable-equivalent net interest income divided by average earning assets. The primary component of consolidated earnings is net interest income, or the difference between interest income on interest-earning assets and interest paid on interest-bearing liabilities. The net interest margin is net interest income expressed as a percentage of average interest-earning assets. Interest-earning assets consist of loans, investment securities and Federal funds sold. Interest-bearing liabilities consist of deposits and borrowings such as Federal funds purchased, 10 securities sold under repurchase agreements and Federal Home Loan Bank advances. A portion of interest income is earned on tax-exempt investments, such as state and municipal bonds. In an effort to state this tax-exempt income and its resultant yields on a basis comparable to all other taxable investments, an adjustment is made to analyze this income on a taxable-equivalent basis. COMPARISON OF STATEMENTS OF INCOME The net interest margin was 5.42% and 5.63% during the three months ended September 30, 1996 and 1995, respectively, a decrease of 21 basis points. The net interest margin was 5.43% and 5.26% during the nine months ended September 30, 1996 and 1995, respectively, an increase of 17 basis points. These variances are mostly attributable to fluctuations in the average rates charged and fees earned on loans. Net interest income on a taxable-equivalent basis was $6,920,000 as compared to $5,123,000 during the three months ended September 30, 1996 and 1995, respectively, representing an increase of 35.1%. Net interest income on a taxable-equivalent basis was $18,148,000 as compared to $15,153,000 during the nine months ended September 30, 1996 and 1995, respectively, representing an increase of 19.8%. The provision for loan losses is a charge to earnings in the current period to replenish the allowance for loan losses and maintain it at the level management determines is adequate. The provision for loan losses charged to earnings amounted to $438,000 and $284,000 during the three months ended September 30, 1996 and 1995, and $985,000 and $789,000 during the nine months ended September 30, 1996 and 1995. The provision for loan losses recorded by Southland Bank ("Southland") during the nine months ended September 30, 1996 was $77,000. Following is a comparison of noninterest income for the three months ended September 30, 1996 and 1995. (dollars in thousands)
Three Months Ended ------------------ Sept 1996 Sept 1995 --------- --------- Service charges on deposits $1,415 $910 Other service charges, commissions & fees -220 102 Other income 148 164 ------ ---- Total noninterest income $1,783 $1,176 ====== ======
11
Nine Months Ended ----------------- Sept 1996 Sept 1995 --------- --------- Service charges on deposits $3,084 $2,552 Other service charges commissions & fees 883 484 Other income 265 400 ------ ------- Total noninterest income $4,232 $3,436 ====== ======
Total noninterest income for the nine months ended September 30, 1996 was $796,000 higher than during the same period in 1995. Service charges on deposits, other service charges and other income recorded by Southland during the nine months ended September 30, 1996 was $216,000, $121,000 and $105,000, respectively. The additional increase in service charges on deposits for the three and nine months ended September 30, 1996, as compared to September 30, 1995, is attributable to an increase in average deposits. The additional increase in other service charges and fees is attributable to an increase in the volume of loans. Following is an analysis of noninterest expense for the three and nine months ended September 30, 1996 and 1995. (dollars in thousands)
Three Months Ended ------------------ Sept 1996 Sept 1995 --------- --------- Salaries and employee benefits $ 2,982 $ 2,018 Occupancy and equipment expense 870 686 Deposit insurance premium 35 5 Data processing fees 502 139 Other expense 1,441 1,033 ------- ------ Total noninterest expense $ 5,830 $ 3,881 ======= =======
Nine Months Ended ----------------- Sept 1996 Sept 1995 --------- --------- Salaries and employee benefits $ 7,347 $ 5,968 Occupancy and equipment expense 2,064 1,918 Deposit insurance premium 92 387 Data processing fees 1,058 436 Other expense 3,352 2,991 ------- ------- Total noninterest expense $13,913 $11,700 ======= =======
Total noninterest expense for the nine months ended September 30, 1996 was $2,213,000 higher than during the same period in 1995. 12 Salaries and employee benefits for the nine months ended September 30, 1996 was $1,379,000 higher than during the same period in 1995. Salaries and employee benefits recorded by Southland during the nine months ended September 30, 1996 amounted to $620,000. The remainder of the increase is mostly attributable to an increase in the number of employees in preparation for the company's acquisition growth during 1996. Deposit insurance premiums for the nine months ended September 30, 1996 was $295,000 lower than during the same period in 1995. Southland's deposit insurance premium for the nine months ended September 30, 1996 amounted to $19,000. Deposit insurance premiums, excluding Southland, decreased $314,000 during the nine months ended September 30, 1996 as compared to the same period a year earlier. This decrease is attributable to a reduction in FDIC deposit insurance for commercial banks which became effective in 1995. Data processing fees for the nine months ended September 30, 1996 were $622,000 higher than during the same period in 1995, with the increase attributable to the conversion costs during 1996 to a new process for rendering month-end statements to customers. Other operating expense for the nine months ended September 30, 1996 increased $361,000 as compared to the same period in 1995, with $352,000 of this increase attributable to Southland. Following is a condensed summary of net income during the three and nine months ended September 30, 1996 and 1995. (dollars in thousands)
Three Months Ended ------------------ Sept 1996 Sept 1995 ---------- --------- Net interest income $6,828 $5,058 Provision for loan losses 438 284 Other income 1,783 1,176 Other expense 5,830 3,881 ------ ------ Income before income taxes 2,343 2,069 Applicable income taxes 798 673 ------ ------ Net income $1,545 $1,396 ====== ======
13
Nine Months Ended ----------------------- Sept 1996 Sept 1995 --------- --------- Net interest income $17,902 $14,950 Provision for loan losses 985 789 Other income 4,232 3,436 Other expense 13,913 11,700 ------ ------ Income before income taxes 7,236 5,897 Applicable income taxes 2,429 1,949 ------- ------- Net income $ 4,807 $ 3,948 ======= =======
Net income increased $859,000 or 21.76% to $4,807,000 for the nine months ended September 30, 1996 as compared to $3,948,000 for the nine months ended September 30, 1995. Approximately 40% of this increase represents net income of $343,000 contributed by the purchased subsidiary, Southland. Net interest income of ABC and its subsidiaries excluding Southland increased $1,591,000 offset by an increase in provision for loan losses of $119,000 and an increase in all other net noninterest expense of $956,000, resulting in a net increase of $516,000 in net income for the consolidated group excluding Southland. COMPARISON OF BALANCE SHEETS Total assets increased by $130.3 million, or 29.2%, to $576.6 million at September 30, 1996 from $446.3 million at December 31, 1995. Of this increase, $120 million is attributable to Southland. Total earning assets increased by $116.0 million, or 29.3%, to $511.3 million at September 30, 1996 from $395.3 million at December 31, 1995. Of this increase, $105 million is attributable to Southland. Total loans, net of the allowance for loan losses, increased by $127.3 million, or 31.6%, to $403.1 million at September 30, 1996 from $275.8 million at December 31, 1995. Of this increase, $82 million is attributable to Southland. Total deposits increased by $84.4 million, or 21.4%, to $478.4 million at September 30, 1996 from $394.0 million at December 31, 1995. Of this increase, $94 million is attributable to Southland. Approximately 14% and 18% of deposits were noninterest-bearing as of September 30, 1996 and December 31, 1995, respectively. 14 The allowance for loan losses represents a reserve for potential losses in the loan portfolio. The adequacy of the allowance for loan losses is evaluated quarterly based on a review of all significant loans, with a particular emphasis on non-accruing, past due and other loans that management believes require attention. Another factor used in determining the adequacy of the reserve is management's judgment about factors affecting loan quality and assumptions about the local and national economy. The allowance for loan losses was 1.63% and 1.84% of total loans outstanding at September 30, 1996 and December 31, 1995, respectively. Management considers the allowance for loan losses as of September 30, 1996 adequate to cover potential losses in the loan portfolio. 15 PART II. OTHER INFORMATION ITEM 3. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS There were no matters submitted to a vote of securities holders during the quarter ended September 30, 1996. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K A. Exhibits - None. B. ABC has filed a Report on Form 8-K, dated July 31, 1996, concerning its acquisition by merger of Central Bankshares, Inc. ("Central"), Cordele, Georgia. The following financial information was incorporated by reference concerning ABC, Central, and the two other entities which ABC has acquired by merger in 1996, Southland Bancorporation ("Southland"), Dothan, Alabama, and First National Financial corporation ("First National"), Albany, Georgia. -- Unaudited consolidated financial statements of ABC as of March 31, 1996, together with the notes thereto, as well as the audited financial statements of ABC as of December 31, 1995 and the year then ended, audited by the independent accounting firm of Mauldin & Jenkins. -- Unaudited consolidated financial statements of Central as of March 31, 1996, together with the notes thereto, as well as the audited financial statements of Central as of December 31, 1995 and the year then ended audited by the independent accounting firm of Mauldin & Jenkins. -- Unaudited consolidated financial statements of Southland as of March 31, 1996, together with the notes thereto, as well as the audited financial statements of Southland as of December 31, 1995, and the year then ended, audited by the independent accounting firm of KPMG Peat Marwick LLP. -- Unaudited consolidated financial statements of First National as of March 31, 1996, together with the notes thereto, as well as the audited financial statements of First National as of December 31, 1995 and the year then ended, audited by the independent accounting firm of Francis & Co., CPA's. -- Unaudited Pro Forma Condensed Consolidated Financial Data and Historical Financial Data of each of ABC, First National, Central and Southland. 16 ABC has filed a Report on Form 8-K, dated August 30, 1996, concerning its acquisition by merger of First National. The following financial information was incorporated by reference concerning ABC, First National, Central and Southland. -- Unaudited consolidated financial statements of ABC as of March 31, 1996, together with the notes thereto, as well as the audited financial statements of ABC as of December 31, 1995 and the year then ended, audited by the independent accounting firm of Mauldin & Jenkins. -- Unaudited consolidated financial statements of First National as of March 31, 1996, together with the notes thereto, as well as the audited financial statements of First National as of December 31, 1995 and the year then ended, audited by the independent accounting firm of Francis & Co., CPA's. -- Unaudited consolidated financial statements of Central as of March 31, 1996, together with the notes thereto, as well as the audited financial statements of Central as of December 31, 1995 and the year then ended, audited by the independent accounting firm of KPMG Peat Marwick LLP. -- Unaudited Pro Forma Condensed Consolidated Financial Data and Historical Financial Data of each of ABC, First National, Central and Southland. 17 SIGNATURE 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 thereunto duly authorized: ABC BANCORP November 7, 1996 /s/ W. Edwin Lane, Jr. - -------------------------------------- ------------------------------------- DATE W. EDWIN LANE, JR. EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER (Duly Authorized Oddicer and principal financial/accounting officer) 18 EX-27 2 FINANCIAL DATA SCHEDULE
9 1,000 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 27,214 0 9,270 0 73,243 25,684 (281) 409,802 6,689 576,643 478,407 40,544 5,151 0 0 0 5,249 47,292 576,643 26,975 3,906 801 31,682 13,083 13,780 17,902 985 0 13,913 7,236 7,236 0 0 4,807 1.01 1.01 5.43 5,005 0 0 5,005 5,184 1,055 364 6,689 6,689 0 6,689 Includes $1,211 reserve increase due to acquisition
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