-----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, LIUjc8lQ/4F+Gr2/x0mrsB4xtDj7nQTPy6BT8r5282+sGe10VuFhfpvQg/OxFkWN 1fwJfYF70B/TU87AEMpuAg== 0001013680-96-000006.txt : 19960517 0001013680-96-000006.hdr.sgml : 19960517 ACCESSION NUMBER: 0001013680-96-000006 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FC BANC CORP CENTRAL INDEX KEY: 0000893539 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 341718070 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-25616 FILM NUMBER: 96566234 BUSINESS ADDRESS: STREET 1: FARMERS CITIZENS BANK BLDG STREET 2: BOX 567 CITY: BUCYRUS STATE: OH ZIP: 44820 BUSINESS PHONE: 4195627040 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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, 1996 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO __________ Commission file number - 33-53596 FC BANC CORP. (Exact name of small business issuer as specified in its charter) OHIO 34-1718070 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Farmers Citizens Bank Building, 105 Washington Square Box 567, Bucyrus, Ohio 44820-0567 (Address of principal executive offices) (Zip Code) (419) 562-7040 (Issuer's telephone number) N/A (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 . . . Applicable only to issuers involved in bankruptcy proceedings during the preceding five years Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes . . No . . Applicable only to corporate issuers As of April 30, 1996, 325,020 shares of Common Stock of the Registrant were outstanding. There were no preferred shares outstanding. Transitional Small Business Disclosure Format (Check one): Yes . . No X FC BANC CORP. BUCYRUS, OHIO FORM 10-QSB INDEX
Page Number PART I FINANCIAL INFORMATION Item. 1. Financial Statements (Unaudited) Condensed consolidated balance sheets -- 3 March 31, 1996 and December 31, 1995 Condensed consolidated statements of income -- 4 Three months ended March 31, 1996 and 1995 Condensed consolidated statements of changes 5 in shareholders' equity -- Three months ended March 31, 1996 and 1995 Condensed consolidated statements of cash flows -- 6 Three months ended March 31, 1996 and 1995 Notes to condensed consolidated financial 7 statements -- March 31, 1996 Item 2. Management's Discussion and Analysis of Financial 8 Condition and Results of Operations PART II OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Changes in Securities 12 Item 3. Defaults upon Senior Securities 12 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 Signatures 13
FC BANC CORP. Bucyrus, Ohio CONSOLIDATED BALANCE SHEETS ______________________________________________________________________________
( Dollars in thousands ) (Unaudited) (Unaudited) March 31, December 31, 1996 1995 Assets Cash and due from banks $ 4,770 $ 5,329 Interest-bearing time deposits -0- -0- Federal funds sold 2,200 4,200 Securities being held to maturity -0- -0- Securities available for sale, at fair value 36,112 33,869 Loans (net of unearned interest) 35,652 37,179 Less: Allowance for loan losses (1,318) (1,297) _______ _______ Loans - net 34,334 35,882 Properties and equipment 1,480 1,406 Accrued income receivable 827 769 Deferred federal income taxes 506 467 Other assets 1,679 1,776 _______ _______ Total assets $81,908 $83,698 Liabilities Demand deposit $10,080 $10,765 NOW accounts 12,940 13,609 Savings 20,886 21,541 Time, $100,000 or over 844 837 Other time deposits 26,189 24,139 _______ _______ Total deposits 70,939 70,891 Borrowed funds -0- 1,525 Accrued interest payable 174 212 Accrued expenses and other liabilities 285 310 _______ _______ Total liabilities $71,398 $72,938 Shareholders' equity Common stock -- $ 2.50 par value 832 832 Authorized -- 500,000 shares Issued -- 332,816 shares Surplus 1,372 1,370 Retained earnings 8,798 8,653 Treasury stock (7,796 shares in 1996 and (317) -0- -0- shares in 1995) Unrealized gain (loss) on securities available-for-sale (175) (95) _______ _______ Total equity 10,510 10,760 _______ _______ Total liabilities and shareholders' equity $81,908 $83,698 ______________________________________________________________________________ The accompanying notes are an integral part of these financial statements. -3-
FC BANC CORP. Bucyrus, Ohio CONSOLIDATED STATEMENTS OF INCOME ______________________________________________________________________________ ( Dollars in thousands, except per share amounts )
(Unaudited) 3 Months Ended March 31, 1996 1995 Interest income Interest and fees on loans $ 821 $1,810 Interest on investment securities: Taxable 392 421 Exempt from federal income tax 104 122 Interest on federal funds sold 57 30 Interest on deposits with banks -0- 4 _______ _______ Total interest income 1,374 1,387 Interest expense Interest on deposits 571 584 Interest on federal funds purchased and purchased under agreement to repurchase 16 12 _______ _______ Total interest expense 587 596 Net interest income 787 791 Provision for loan losses -0- 204 _______ _______ Net interest income after provision for loan loss 787 587 Other income Service charges on deposit accounts 84 83 Net investment security profits or losses -0- -0- Other income 59 37 _______ _______ Total other income 143 120 Other expense Salaries and employee benefits 381 322 Net occupancy expense 101 73 Equipment expense 35 12 FDIC deposit insurance expense 5 32 State & other taxes 40 41 Other expense 206 172 _______ _______ Total other expense 768 652 _______ _______ Income before income taxes 162 55 Income tax expense 17 (22) ______ ______ Net Income $ 145 $ 77 ______________________________________________________________________________ Per share data: Net income per share of common stock $ .44 $ .23 ______________________________________________________________________________ The accompanying notes are an integral part of these financial statements. -4-
FC BANC CORP. Bucyrus, Ohio CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ______________________________________________________________________________ ( Dollars in thousands ) (Unaudited)
Unrealized Gain/Loss on Total Securities Share- Capital Retained Treasury Available holders' Stock Surplus Earnings Stock For Sale Equity Balance at 12/31/94 $ 832 $1,370 $8,510 $ -0- $ (893) $ 9,819 Net income 77 77 Change in unrealized gain/loss on securities available-for-sale 356 356 _______ ______ ______ ______ _______ _______ Balance at 3/31/95 $ 832 $1,370 $8,587 $ -0- $ (537) $10,252 Balance at 12/31/95 $ 832 $1,370 $8,653 $ -0- $ (95) $10,760 Net income 145 145 Purchase of 8,772 treasury shares (357) (357) Sale of 976 treasury shares 2 40 42 Change in unrealized gain/loss on securities available-for-sale (80) ( 80) _______ ______ ______ ______ ______ _______ Balance at 3/31/96 $ 832 $1,372 $8,798 $ (317) $(175) $10,510 ______________________________________________________________________________ The accompanying notes are an integral part of these financial statements. -5-
FC BANC CORP. Bucyrus, Ohio CONSOLIDATED STATEMENT OF CASH FLOWS ______________________________________________________________________________ ( Dollars in thousands )
3 Months Ended March 31, 1996 1995 Cash Flows From Operating Activities: Net income $ 145 $ 77 Adjustments to reconcile net income to next cash provided by operating activities: Depreciation 68 47 Provision for loan losses -0- 204 Provision for deferred taxes -0- (7) Provision for security loss -0- -0- Gain/Loss on investments -0- -0- Amortization/Accretion - net 18 (12) Change in accrued income and other assets (150) (293) Change in accrued expenses and other liabilities 127 (65) ______ ______ Total adjustments 63 (126) ______ ______ Net cash provided by operating activities 208 (49) Cash flows from investing activities: Net change in certificate of deposits -0- -0- Net change in federal funds sold 2,000 1,700 Securities held to maturity: Proceeds from maturities -0- 900 Proceeds from sales -0- -0- Purchases -0- (100) Securities available for sale: Proceeds from maturities 1,728 179 Proceeds from sales -0- -0- Purchases (4,109) -0- Net change in loans 1,548 (530) Capital purchases (142) (34) ______ ______ Net cash used in investing activities 1,025 2,115 Cash flows from financing activities: Net change in deposits 48 (2,221) Net change in short-term borrowing (1,525) (550) Purchase of treasury stock 42 -0- Dividends paid (357) -0- ______ ______ Net cash provided by financing activities (1,792) (2,771) Net decrease in cash and cash equivalents (559) (705) Cash and cash equivalents at beginning of year 5,329 5,018 ______ ______ Cash and cash equivalents at end of year $ 4,770 $ 4,313 Supplemental information: Interest paid $ 626 $ 624 Net income taxes paid 172 34 ______________________________________________________________________________ The accompanying notes are an integral part of these financial statements. -6-
FC BANC CORP. BUCYRUS, OHIO NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ______________________________________________________________________________ NOTE 1. BASIS OF PRESENTATION The accompanying unaudited condensed 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 Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 1995. FC BANC CORP. BUCYRUS, OHIO MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ______________________________________________________________________________ The following focuses on the consolidated financial condition of F C Banc Corp. at March 31, 1996, compared to December 31, 1995, and the results of operations for the three month period ended March 31, 1996, compared to the same periods in 1995. The purpose of this discussion is to provide a better understanding of the consolidated financial statements and footnotes included in the Form 10-QSB. The Registrant is not aware of any market or institutional trend, events or uncertainties that will have or are reasonably likely to have a material effect on liquidity, capital resources or operations except as discussed herein. Other than as discussed herein, the Registrant is not aware of any current recommendations by regulatory authorities which would have such effect if implemented. Financial Condition Liquidity Liquidity relates to the Corporation's ability to meet cash demands of its customers and their credit needs. Liquidity is provided by the Corporation's ability to readily convert assets to cash and readily marketable, short-term assets such as federal funds sold and deposits in other banks. Cash, amounts due from banks and federal funds sold totaled $6,970,000 at March 31, 1996. Investments and mortgage-backed securities available for sale were $36,112,000 at March 31, 1996. This amount increased by $316,000 from December 31, 1995 balances. These assets, as well as anticipated deposit growth d scheduled loan payments and maturing investment securities, provide the Corporation with an adequate source of funds for expected future demand for loans and for fluctuations in deposit volume. They also provide management with the flexibility to change the composition of interest earning assets as market conditions change in the future. -8- Liability liquidity relates to the Corporation's ability to retain existing deposits, obtain new deposits and borrow in the marketplace. Total deposits remained relatively constant decreasing by $48,000 for the three months ended March 31, 1996. The Corporation has experienced some deposit disintermediation during the first three months of 1996. This is evidenced by the reductions in demand deposit and NOW account and savings account balances of $1,354,000 and $655,000 respectively being offset by increases in time accounts balances of $2,057,000. Management anticipates some continued disintermediation with total deposits to experience moderate growth or remain stable during the rest of the year. Access to advances from the Federal Reserve Bank (FRB) in the form of Federal Funds Purchased is a supplemental source of cash to meet liquidity needs. Capital Resources Shareholders' equity totaled $10,510,000 at March 31, 1996, compared to $10,760,000 at December 31, 1995. This decrease was primarily due to the acquisition of 7,796 shares of treasury stock and a net unrealized holding loss on securities available-for-sale of $80,000. As of March 31, 1996, the ratio of shareholders' equity to assets was 12.83% compared to 12.86% at December 31, 1995. Regulatory Capital Requirements The Corporation complies with the capital requirements established by the Federal Reserve System, which bare summarized as follows: Capital Position Regulatory as of Minimum March 31, 1996 December 31, 1995 Tier I 4.00% 23.72% 22.61% risk-based capital...... Total Risk- 8.00% 22.45% 23.88% Based capital Tier I 3.00% - 5.00% 12.83% 13.04% leverage..... -9- Under "Prompt Corrective Action" regulations adopted in September 1992, the Federal Deposit Insurance Corporation (FDIC) has defined five categories of capitalization (well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized). The Corporation meets the "Well capitalized" definition, which requires a total risk-based capital ratio of at least 10%, and a leverage ratio of at least 8%. Under a current regulatory proposal, interest rate risk would become an additional element in measuring risk-based capital. This proposed change is not expected to significantly impact the Corporation's compliance with capital guidelines. Changes in Financial Condition Consolidated total assets were $81,908,000 at the end of the current period reflecting a decrease of $1,790,000 or 2.14% during the first three months of 1996. This reduction was funded primarily by the federal funds sold of $2,000,000 and payment and maturities in the loan portfolio of $1,548,000. Approximately $2,323,000 was utilized to fund security purchases, $1,525,000 to reduce short-term borrowings, and the remainder to fund treasury stock acquisitions. Investment Portfolio The total investments outstanding increased during the first quarter primarily due to the allocation of short-term funds in an effort to increase yields. The valuation of the investment portfolio, which is all classified as available-for-sale, continues to remain relatively stable as shown by the aggregate market value decline for the first quarter of 1996 of $119,000, or less than 50 basis points since December 31, 1995. Allowance for Loan Loss The allowance for loan losses was established and is maintained by periodic charges to the provision for loan loss, an operating expense, in order to provide for losses inherent in the Bank's loan portfolio. Loan losses and recoveries are charged or credited respectively to the allowance for loan losses as they occur. The allowance/provision for loan losses is determined by management by considering such factors as the size and character of the loan portfolio, loan loss experience, problem loans, and economic conditions in the Bank's market area. The risk associated with the lending operation can be minimized by evaluating each loan independently based upon criteria which includes, but is not limited to, (a) the purpose of the loan, (b) the credit history of the borrower, (c) the borrower's financial standing and trends, (d) the market value of the collateral involved, and (e) the downpayment received. Quarterly reviews of the loan portfolio are conducted to identify problem loans and to determine appropriate courses of action on a loan by loan basis. Collection policies have been developed to monitor the status of all loans. Collection procedures are being activated when a loan becomes past due. Current internal loan review procedures provide for the analysis of a borrower's operating data, tax returns and financial statement performance ratios for all significant commercial loans, regulatory classified loans, past due loans and internally identified "watch" loans. Specifically these procedures include; 1) the designation of an individual to function primarily as a loan reviewer, 2) placing the loan reviewer under the direct supervision of the senior lending officer, 3) utilization of a "loan risk rating system" which prioritize the loans to be reviewed, 4) review of all new credits by the senior lending officer, 5) revision of the "watch list" with formal presentation to the Board each quarter, and 6) utilization of the services of an outside consulting firm to supplement the review function. The entire allowance for loan losses is available to absorb any particular loan loss. However, for analytical purposes, the allowance could be allocated based upon net historical charge-offs of each type of loan for the last five years. Currently, the losses experienced combined with the type and market value of the collateral securing the loan portfolio and the current financial standing of certain borrowers are the primary factors for the larger percentage allocation. Management believes significant factors affecting the allowance are being reviewed regularly and that the allowance is adequate to cover potentially uncollectible loans as of March 31, 1996. The Bank has no exposure from troubled debt to lesser developed countries. Results of Operations - First Quarter 1996 vs First Quarter 1995 Consolidated net income of $145,000 for the first quarter of 1996 was 88% more than the $77,000 recorded for the first quarter of 1995. Expressed as annualized returns on average assets and average shareholders' equity, net income for 1996 was 0.76% and 5.59% compared to 0.45% and 3.61% for 1995. Earnings per share increased $.21 to $.44 per share for the first quarter 1996 compared to the same period in 1995. The increased level of net income for the first quarter of 1996 compared to the first quarter of 1995, resulted primarily from lower provision for loan losses. This was partially off-set by a $116,000 increase in other expenses and the increased income tax provision of $39,000. Net interest income was almost the same for both the first quarter of 1996 and 1995. Total interest income decreased by $13,000 and total interest expenses decreased by $4,000. This occurred primarily as a result of decreasing yields on interest earning assets and the restructuring of the deposit portfolio. The decrease in the provision for loan losses is attributed primarily to those factors previously discussed above. Net occupancy and equipment expenses increased primarily as a result of the installation of a new computer system and the physical expansion of the Bank's main office facility. FC BANC CORP. BUCYRUS, OHIO PART II OTHER INFORMATION ______________________________________________________________________________ ITEM 1 - LEGAL PROCEEDINGS Not Applicable ITEM 2 - CHANGES IN SECURITIES Not Applicable ITEM 3 - DEFAULTS UPON SENIOR SECURITIES Not Applicable ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On April 24, 1996 the Company held its annual meeting of Shareholders and approved the following: 1. Electing three (3) class I directors to the Board of Directors for terms of three (3) years and until their successors are elected and qualified. 2. Ratification of the appointment of the Company's Independent Accountants for the fiscal year ending December 31, 1996. ITEM 5 - OTHER INFORMATION Not Applicable ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K No reports on Form 8-K were filed during the quarter. -12- SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1993, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FC BANC CORP. Date: May 14, 1996 Robert L. Morton Robert L. Morton President and Chief Executive Officer Date: May 14, 1996 Phillip W. Gerber Phillip W. Gerber Executive Vice President, Secretary and Treasurer -----END PRIVACY-ENHANCED MESSAGE-----