UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended June 30, 2001.
Commission File Number 1-15773
NBC CAPITAL CORPORATION
(Exact name of registrant as specified in its charter.)
Mississippi 64-0694775
(State of other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
NBC Plaza, P. O. Box 1187, Starkville, Mississippi 39760
(Address of principal executive offices) (Zip Code)
Registrants's telephone number, including area code: (601) 323-1341
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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date:
Common Stock, $1 Par Value - 6,202,460 shares as of June 30, 2001.
PART I - FINANCIAL INFORMATION
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME FOR
SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(Unaudited)
(Amounts in thousands, except per share data)
2001 2000
_______ _______
INTEREST INCOME:
Interest and Fees on Loans $27,726 $28,047
Interest And Dividends On Investment Securities 8,893 6,828
Other Interest Income 687 469
_______ _______
Total Interest Income 37,306 35,344
INTEREST EXPENSE:
Interest on Deposit 16,762 14,711
Interest on Borrowed Funds 3,008 1,718
_______ _______
Total Interest Expense 19,770 16,429
_______ _______
Net Interest Income 17,536 18,915
Provision for Possible Loan Losses 1,360 765
_______ _______
Net Interest Income After Provision for
Loan Losses 16,176 18,150
_______ _______
NON-INTEREST INCOME:
Income from Fiduciary Activities 854 752
Service Charge on Deposit Accounts 2,821 2,621
Insurance Commission and Fee Income 1,868 2,000
Other Non-Interest Income 1,997 1,373
_______ _______
Total Non-Interest Income 7,540 6,746
Gains (Losses) on Securities 212 (20)
NON-INTEREST EXPENSE:
Salaries and Employee Benefits 9,276 7,776
Expense of Premises and Fixed Assets 2,320 2,228
Other Non-Interest Expense 4,564 4,338
_______ _______
Total Non-Interest Expense 16,160 14,342
_______ _______
Income Before Income Taxes 7,768 10,534
Income Taxes 1,747 3,031
_______ _______
NET INCOME $ 6,021 $ 7,503
======= =======
Net Earnings Per Share:
Basic $0.91 $1.04
===== =====
Diluted $0.91 $1.04
===== =====
Certain reclassifications have been made in the 2000 Consolidated Statement
of Income to conform to classifications used in the current year.
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME FOR
QUARTER ENDED JUNE 30, 2001 AND 2000
(Unaudited)
(Amounts in thousands, except per share data)
2001 2000
_______ _______
INTEREST INCOME:
Interest and Fees on Loans $13,407 $14,203
Interest And Dividends On Investment Securities 4,636 3,511
Other Interest Income 288 216
_______ _______
Total Interest Income 18,331 17,930
INTEREST EXPENSE:
Interest on Deposit 8,112 7,598
Interest on Borrowed Funds 1,729 883
_______ _______
Total Interest Expense 9,841 8,481
_______ _______
Net Interest Income 8,490 9,449
Provision for Possible Loan Losses 1,180 382
_______ _______
Net Interest Income After Provision for
Loan Losses 7,310 9,067
_______ _______
NON-INTEREST INCOME:
Income from Fiduciary Activities 427 376
Service Charge on Deposit Accounts 1,439 1,361
Insurance Commission and Fee Income 988 943
Other Non-Interest Income 1,120 707
_______ _______
Total Non-Interest Income 3,974 3,387
Gains (Losses) on Securities 163 (20)
_______ _______
NON-INTEREST EXPENSE:
Salaries and Employee Benefits 4,670 4,104
Expense of Premises and Fixed Assets 1,137 1,140
Other Non-Interest Expense 2,372 2,188
_______ _______
Total Non-Interest Expense 8,179 7,432
Income Before Income Taxes 3,268 5,002
Income Taxes 595 1,388
_______ _______
NET INCOME $ 2,673 $ 3,614
======= =======
Net Earnings Per Share
Basic $0.43 $0.50
======= =======
Diluted $0.43 $0.50
======= =======
Certain reclassifications have been made in the 2000 Consolidated Statement
of Income to conform to classifications used in the current year.
NBC CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
Jun. 30, 2001 Dec. 31, 2000
__________ __________
(Unaudited) (Audited)
ASSETS:
Cash and Balances Due From Banks:
Noninterest-Bearing Balances $ 22,619 $ 29,439
Interest-bearing Balances 2,039 2,289
__________ __________
Total Cash and Due From Banks 24,658 31,728
Held-To-Maturity Securities (Market value
of $53,238 at June 30, 2001 and $53,343
at December 31, 2000) 49,446 49,796
Available-For-Sale Securities 282,205 231,994
__________ __________
Total Securities 331,651 281,790
Federal Funds Sold and Securities Purchased
Under Agreement to Resell 14,657 13,422
Loans 636,275 647,489
Less: Reserve for Loan Losses (8,047) (9,689)
__________ __________
Net Loans 628,228 637,800
Bank Premises and Equipment (Net) 16,143 16,285
Interest Receivable 9,798 10,521
Other Assets 29,298 17,969
__________ __________
TOTAL ASSETS $1,054,433 $1,009,515
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-Interest Bearing $ 95,724 $ 96,788
Interest Bearing Deposits 719,613 708,016
__________ __________
Total Deposits 815,337 804,804
Federal Funds Purchased and Securities Sold
Under Agreements to Repurchase 18,982 16,326
Other Borrowed Funds 104,984 57,027
Interest Payable 3,406 3,420
Other Liabilities 11,635 7,815
__________ __________
TOTAL LIABILITIES 954,344 889,392
__________ __________
Shareholders' Equity:
Common Stock $1 par Value, Authorized
10,000,000 shares, Issued 7,212,662 7,213 7,213
Surplus and Undivided Profits 116,410 114,021
Accumulated Other Comprehensive Income 1,901 (68)
Treasury Stock, at cost (25,435) (1,043)
__________ __________
TOTAL SHAREHOLDERS' EQUITY 100,089 120,123
__________ __________
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $1,054,433 $1,009,515
========== ==========
NBC CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(Unaudited)
(Amounts in thousands)
2001 2000
_________ _________
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 6,021 $ 7,503
Adjustments to Reconcile Net Income to
Net Cash
Depreciation and Amortization 1,280 1,161
Deferred Income Taxes (Credits) (1,964) 25
Provision for Loan Losses 1,360 765
Loss (Gain) on Sale of Securities (212) 20
(Increase) Decrease in Interest
Receivable 723 (498)
(Increase) Decrease in Other Assets (10,743) (836)
Increase (Decrease) in Interest
Payable (14) 338
Increase (Decrease) in Other
Liabilities 3,820 1,042
_________ _________
Net Cash Provided by Operating Activities 271 9,520
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities of Securities 29,826 6,515
Proceeds from Sale of Securities 30,701 1,826
Purchase of Securities (107,193) (31,665)
(Increase) Decrease in Loans 8,212 (9,234)
(Additions) Disposal of Bank Premises
and Equipment (875) (765)
Other Investing Activities - (731)
_________ _________
Net Cash Used in Investing Activities (39,329) (34,054)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in Deposits 10,533 25,849
Dividend Paid on Common Stock (3,531) (3,461)
Increase (Decrease) in Borrowed Funds 50,613 (44,772)
Purchase of Treasury Stock (24,392) 0
Net Cash Provided by Financing Activities 33,223 (22,384)
_________ _________
Net Increase (decrease) in Cash and Cash
Equivalents (5,835) (46,918)
Cash and Cash Equivalents at Beginning
of Year 45,150 82,384
_________ _________
Cash and Cash Equivalents at the End
of the Period $ 39,315 $ 35,466
========= =========
Interest $ 19,784 $ 16,091
========= =========
Income Taxes $ 2,071 $ 2,719
========= =========
NBC CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements include the
accounts of NBC Capital Corporation (NBC) and its subsidiaries, National
Bank of Commerce and First National Finance Company. All significant
intercompany accounts and transactions have been eliminated. In the normal
decision making process, management makes certain estimates and assumptions
that affect the reported amounts that appear in these statements. Although
management believes that the estimates and assumptions are reasonable and
are based on the best information available, actual results could differ.
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 management, all adjustments necessary for the fair
presentation of the financial statement presented in this report have been
made. Such adjustments were of a normal recurring nature.
PART I. ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2001
DISCLOSURE REGARDING FORWARD LOOKING INFORMATION
This current report includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Act of 1934, as amended. Although the
Corporation believes that the expectations reflected in such forward-
looking statements are reasonable, such forward-looking statements are
based on numerous assumptions (some of which may prove to be incorrect)
and are subject to risks and uncertainties which could cause the actual
results to differ materially from the Corporation's expectations.
Forward-looking statements have been and will be made in written
documents and oral presentations of the Corporation. Such statements are
based on management's beliefs as well as assumptions made by and
information currently available to management. When used in the
Corporation's documents and oral presentations, the words "anticipate,"
"estimate," "expect," "objective," "projection," "forecast," "goal"
and similar expressions are intended to identify forward looking
statements. In addition to any assumptions and other factors referred to
specifically in connection with forward-looking statements, factors that
could cause the Corporation's actual results to differ materially from
those contemplated in any forward-looking statements include, among others,
increased competition, regulatory factors, economic conditions, changing
interest rates, changing market conditions, availability or cost of
capital, employee workforce factors, cost and other effects of legal and
administrative proceedings, and changes in federal, state, or local
legislature requirements. The Corporation undertakes no obligation to
update or revise any forward-looking statements, whether as a result of
changes in actual results, changes in assumptions or other factors
affecting such statements.
RESULTS OF OPERATIONS
First two quarters of 2001 compared to the first two quarters of 2000
Earnings for the first two quarters of 2001 decreased by 19.8% to $6.02
million or $.91 per share. This compares to $7.50 million or $1.04 per
share for the first two quarters of 2000. These 2001 totals equate to a
1.2% return on average assets and a 11.3% return on average equity. For
this same period in 2000, return on average assets was 1.6% and return on
average equity was 13.3%.
Net interest income for the first two quarters of 2001 was $17.54 million
compared to $18.92 million for 2000. This represents a decrease of 7.3%.
This decrease resulted from a seventy-four basis point decrease in the net
interest margin. This decline in margin was partially offset by a 12.0%
increase in average earning assets. The primary reason for the decline in
margin was the very rapid reduction in interest rates by the Federal
Reserve during the first six-months of 2001. There were two; one-half point
interest rates cuts during January, followed by additional half-point cuts
in March, April and May and a quarter point cut in June. Even though lower
interest rates may improve future loan growth, it can create problems in
any given period depending on the maturities of fixed rate loans and
certificates of deposit and the number of adjustable rate loans in the loan
portfolio. During this period the yields on loans adjusted down more
quickly than the cost of deposits could be lowered. Management believes
that if the Federal Reserve has basically completed its rate reductions,
the Corporation's net interest income should improve during the second half
of the year as spreads begin to even out. For additional information, see
the table entitled "Analysis of Net Interest Earnings" at the end of this
section. The Corporation's Provision for Loan Losses is utilized to
replenish the Reserve for Loan Losses on its balance sheet. The reserve is
maintained at a level deemed adequate by the Board of Directors after its
evaluation of the risk exposure contained in the Corporation's loan
portfolio. The methodology used to make this determination is performed on
a quarterly basis. An overall analysis of the portfolio is performed by
the senior credit officers and the loan review staff. As a part of this
evaluation, certain loans are individually reviewed to determine if
there is an impairment of the bank's ability to collect the loan and the
related interest. This determination is generally made based on collateral
value. If it is determined that an impairment exist, a specific portion of
the reserve is allocated to these individual loans. All other loans are
grouped into homogeneous pools and risk exposure is determined by
considering the following list of factors (this list is not all inclusive
and the factors reviewed may change as circumstances change): Historical
loss experiences; trends in delinquencies and non-accruals and national,
regional and local economic conditions. These economic conditions would
include, but not be limited to, general real estate conditions, the current
interest rate environment and trends, unemployment levels and other
information, as deemed appropriate. Classified loan to capital was 21.0% at
June 30, 2001 and the percentage of loans past due 30 days or more was
2.14%. The Reserve for Loan Losses as a percentage of total loans has
declined from 1.50% at the end of 2000 to 1.27% at the end of the second
quarter of 2001. Overall, Loan quality remains good. At the end of the
second quarter of 2001, the ratio of non-performing loans to total loans
remained low at .63%. This compares to .59% at December 31, 2000 and .80%
at June 30, 2001. Management is committed to not relaxing its underwriting
standards. Based on these evaluations, the reserve amounts maintained at
the end of the second quarter of 2001 and at the end of 2000 were deemed
adequate to cover exposure within the Corporation's loan portfolio.
During the first six months, net charge-offs totaled $3,002,000 compared to
$842,000 for the same period of 2000. The reason for the increased charge-
offs during 2001, was that in June, the Corporation charged-off a $2
million dollar loan that had defaulted. This loan had previously not been
classified as a problem loan and there were special circumstances
surrounding its default. The Corporation has filed a claim with its
bonding company to recover the entire $2 million; however, it is too early
to predict whether there will be a recovery.
The Provision for Loan Losses has increased from $765,000 during the first
half of 2000 to $1,360,000 in the same period of 2001. This increase in
the provision was the result of a special one time provision of $1 million
during June as a result of the above mention charge-off. Even though the
Reserve for Loan Losses was adequate to cover the above mentioned loss,
management believed that in light of the current economic conditions, it
was in the Corporation's best interest to make this special provision. If
not for this special charge, the level of the provision for the first half
of 2001 would have been lower than in 2000 due to the overall quality of
the portfolio.
Non-interest income grew 11.8% resulting from a 13.6% increase in income
from the Corporation's Trust and Financial Management activities and a 7.6%
increase in income from deposit accounts. Additionally, other non-interest
income increased by $624,000 or 45.4%. The majority of this increase came
from a $410,000 increase in fees from our mortgage-related activities and a
$241,000 increase in earnings from a $10 million purchase of Bank Owned
Life Insurance. Insurance commissions, fees and premiums declined by
$132,000 or 6.6%. This change in insurance commissions, fees and premiums
relates directly to the volume of insurance product sold during these
periods. During the first quarter of 2001 a great deal of time and effort
was spent handling claims that resulted from a major storm that hit the
service area. This took away from time that would have been spent
developing customers and selling product.
Non-interest expenses increased 12.7% during the first half of 2001. This
increase resulted from a 19.3 increase in salaries and employment benefits,
a 4.1% increase in the expenses associated with premises and fixed assets
and a 5.2% increase in other non-interest expenses. The large increase in
salaries and employee benefits resulted the Corporation's growth plus
normal annual increases, the quarterly accrual of bonuses that had
previously been accrued annually during the fourth quarter, and a non-
recurring credit of $370,000 that reduced salaries and employee benefits in
the first quarter of 2000. The increase in expenses associated with
premises and fixed assets is primarily the result of additional
depreciation and amortization expenses resulting from the 2000 expenditure
on technology. The increase in other expenses are primarily the result of
higher legal expenses resulting from the litigation discussed in Part II,
Item 1 of this document.
Changes in the Corporation's income tax expense have generally paralleled
changes in income. The Corporation's effective tax rate declined from
28.8% for the first half of 2000 to 22.5% for the first half of 2001. This
decline in the effective tax rate for the six-month period resulted
primarily from the Corporation's ability to add to its portfolio of tax
exempt securities and Bank Owned Life Insurance. The Corporation's
ability to further reduce income tax expense by acquiring additional tax-
free investments is limited by the Alternative Minimum Tax Provision, the
market supply of acceptable municipal securities and the Corporation's
normal liquidity and balance sheet structure requirements.
Second quarter of 2001 compared to the second quarter of 2000
Earnings for the second quarter of 2001 decreased by 26.0% to $2.67 million
or $.43 per share. This compares to $3.61 million or $.50 per share for the
second quarter of 2000. These 2001 totals equate to a 1.0% return on
average assets and a 10.7% return on average equity. For this same period
in 2000, return on average assets was 1.5% and return on average equity was
12.7%.
Net interest income for the second quarter of 2001 was $8.49 million
compared to $9.45 million for 2000. This represents a decrease of 10.2%.
This decrease resulted from an eighty-eight basis point decrease in the net
interest margin. This decline in margin was partially offset by an 12.3%
increase in average earning assets. The primary reason for the decline in
margin was the very rapid reduction in interest rates by the Federal
Reserve during the second quarter. There were one-half point interest
rates cuts during April and May and a quarter point cut in June. Even
though lower interest rates may improve future loan growth, it can create
problems in any given quarter depending on the maturities of fixed rate
loans and certificates of deposit and the number of adjustable rate loans
in the loan portfolio. As was the case during the first quarter, the
yields on loans during the second quarter adjusted down more quickly than
the cost of deposits could be lowered.
The Provision for Loan Losses was increased from $382,000 for the second
quarter of 2000 to $1,180,000 for the same period of 2001. As discussed in
the previous section, this increase in the provision was the result of a
special one-time provision of $1 million during June. If not for this
special charge, the level of the provision for the second quarter of 2001
would have been lower than in 2000 due to the overall quality of the
portfolio.
Non-interest income grew 17.3% resulting from a 13.6% increase in income
from the Corporation's Trust and Financial Management activities and a 5.7%
increase in income from deposit accounts. Additionally, Insurance
commissions, fees and premiums increased by 4.77% and other non-interest
income increased by $413,000 or 48.4%. The change in insurance commissions,
fees and premiums relates directly to the volume of insurance product sold
during these periods. The majority of the increase in other non-interest
income came from a $276,000 increase in fees from our mortgage-related
activities and a $184,000 increase in earnings from a $10 million
purchase of Bank Owned Life Insurance.
Non-interest expenses increased 10.1% over the second quarter of 2000.
This increase resulted from a 13.8 increase in salaries and employment
benefits and a 8.4% increase in other non-interest expenses. The large
increase in salaries and employee benefits resulted the Corporation's
growth plus normal annual increases, the quarterly accrual of bonuses that
had previously been accrued annually during the fourth quarter, certain
changes made in the employee benefit plans and a reduction in the deferral
of salaries and benefits under FASB 91 due the reduction in loan volume.
The increase in other expenses are primarily the result of higher legal
expenses resulting from the litigation discussed in Part II, Item 1
of this document.
Changes in the Corporation's income tax expense have generally paralleled
changes in income. The Corporation's effective tax rate declined from
27.7% for the second quarter of 2000 to 18.2% for the second quarter of
2001. This decline in the effective tax rate for the quarter resulted
primarily from the Corporation's ability to add to its portfolio of tax
exempt securities and Bank Owned Life Insurance. The Corporation's
ability to further reduce income tax expense by acquiring additional tax-
free investments is limited by the Alternative Minimum Tax Provision, the
market supply of acceptable municipal securities and the Corporation's
normal liquidity and balance sheet structure requirements.
FINANCIAL CONDITION
The Corporation's balance sheet shows an increase in total assets from
$1,010 million to $1,054 million during the first half of 2001. During
this period, deposits increased by $10.5 million. Also, the Federal Home
Loan Bank borrowings and Securities Sold Under Agreements to Repurchase
increased by $58.5 million and $2.7 million, respectively. Also, during
the first half of 2001, net loans declined by $11.2 million from $647.5
million to $636.3 million. These changes resulted in a net increase in
available funds of approximately $82.9 million. These available funds were
used to increase Fed Funds Sold and Securities Purchased Under Agreements
to Resell by $1.2 million, the investment securities portfolio by $49.9
million and other assets by $11.3 million. Also, the Corporation purchased
$24.5 million of its common stock back from its largest shareholder (this
transaction will be discussed in more detail later in the document). This
purchase was funded with a portion of the borrowings from the Federal Home
Loan Bank. This stock was placed in Treasury Stock. The increase in
investment securities was added as arbitrage transactions with matched
funding from the Federal Home Loan Bank. This brought the total arbitrage
transactions to $50 million at June 30, 2001. The increase in other
assets resulted primarily from the purchase of $10 million of Bank Owned
Life Insurance. This purchase was made so that the additional spread
earned over the one-year treasury rate and the tax advantage of these
earnings could be used to reduce the overall cost of employee benefits for
the Corporation.
Stockholders' equity decreased from $120.1 million to $100.1 million during
the first half of 2001. This represented a 16.7% decrease. During this
period there was an increase in the market value of the available-for-sale
portion of the investment securities portfolio. This resulted in the
Accumulated Other Comprehensive Income component of Stockholders' Equity
increasing from an unrealized loss of $68,000 at December 31, 2000 to an
unrealized gain of $1,901,000 at June 30, 2001. Also, during the first half
of the year the Company declared dividends of approximately $3,532,000. On
March 22, 2001, the Corporation repurchased 976,676 shares of its common
stock, or 13.6% of its outstanding shares, for approximately $24.5 million.
This stock, which is being carried as Treasury Stock, accounted for the
remaining change in Stockholders' Equity during this period. Additional
information on this transaction can be found in Form 8-K filed by the
Corporation on April 5,2001.
The Corporation's bank subsidiary is required to maintain a minimum amount
of capital to total risk weighted assets as defined by the banking
regulators. At June 30, 2001, the bank's Tier I, Tier II and Total Capital
Ratios exceeded the well-capitalized standards developed under the
referenced regulatory guidelines.
Dividends paid by the Corporation are provided from dividends received from
the subsidiary bank. Under the regulations controlling national banks, the
payment of dividends by the bank without prior approval from the
Comptroller of the Currency is limited in amount to the current year's net
profit and the retained net earnings of the two preceding years. To fund
the repurchase transaction discussed above, the Corporation's subsidiary
bank borrowed funds from the Federal Home Loan Bank and with special
permission from the Office of the Comptroller of the Currency, declared
a special dividend to the Corporation to purchase this stock. This
dividend used up the bank's exemption to pay any additional dividends for
the remainder of 2001. Subsequently, the subsidiary bank has requested and
been given permission by the Comptroller of Currency to pay additional
dividends to the Company during the remaining portion of 2001. At June 30,
2001, this amounted to approximately $3.5 million. Also, under regulations
controlling national banks, the bank is limited in the amount it can lend
to the Company and such loans are required to be on a fully secured basis.
At June 30, 2001, there were no borrowings between the Company and the
subsidiary bank.
ANALYSIS OF NET INTEREST EARNINGS
The table below shows, for the periods indicated, an analysis of net
interest earnings, including the average amount of interest-earning assets
and interest-bearing liabilities outstanding during the period, the
interest earned or paid on such amounts, the average yields/rates paid and
the net yield on interest-earning assets.
($ In Thousands)
Average Balance
Quarter Six Months Year
ended ended ended
6/30/01 6/30/01 12/31/00
__________ __________ __________
EARNING ASSETS:
Net loans $ 634,454 $ 639,233 $ 620,445
Federal funds sold and
other interest-bearing
Assets 26,295 27,601 17,962
Securities
Taxable 187,730 176,937 133,497
Nontaxable 135,139 133,094 118,341
__________ __________ __________
Totals 983,618 976,865 890,245
__________ __________ __________
INTEREST-BEARING LIABILITIES:
Interest-bearing deposits 727,932 727,311 685,287
Borrowed funds, federal funds
Purchased and securities sold
and other 108,175 107,285 58,515
__________ __________ __________
Totals 836,108 834,596 743,802
__________ __________ __________
Net amounts $ 147,510 $ 142,269 $ 146,443
========== ========== ==========
($ In Thousands)
Interest Income
Quarter Six Months Year
ended ended ended
6/30/01 6/30/01 12/31/00
__________ __________ __________
EARNING ASSETS:
Net loans $ 13,407 $ 27,726 $ 57,535
Federal funds sold and other
interest-bearing assets 288 687 1,148
Securities:
Taxable 2,893 5,448 7,966
Nontaxable 1,743 3,445 6,086
__________ __________ __________
Totals $ 18,331 $ 37,306 $ 72,735
========== ========== ==========
INTEREST-BEARING LIABILITIES:
Interest-bearing deposits $ 8,112 $ 16,762 $ 31,559
Borrowed funds, federal funds sold
and other 1,729 3,008 3,419
__________ __________ __________
Totals 9,841 19,770 34,978
__________ __________ __________
Net interest income $ 8,490 $ 17,536 $ 37,757
========== ========== ==========
Yields Earned
And Rates Paid (%)
Quarter Six Months Year
ended ended ended
6/30/01 6/30/01 12/31/00
__________ __________ __________
EARNING ASSETS:
Net loans 8.48% 8.75% 9.27%
Federal funds sold and other
interest-bearing assets 4.39% 5.02% 6.39%
Securities:
Taxable 6.18% 6.21% 5.97%
Nontaxable 7.96% 8.03% 7.91%
__________ __________ __________
Totals 7.86% 8.08% 8.53%
========== ========== ==========
INTEREST-BEARING LIABILITIES:
Interest-bearing deposits 4.47% 4.65% 4.61%
Borrowed funds, federal funds sold
and other 6.41% 5.65% 5.84%
__________ __________ __________
Totals 4.72% 4.78% 4.70%
__________ __________ __________
Net yield on earning assets 3.46% 3.62% 4.24%
Note: Yields on nontaxable securities are tax equivalent.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
National Bank of Commerce is a defendant in a lawsuit in which a
class is pursuing unspecified and punitive damages as a result of
the placement of collateral protection insurance. The Bank has
vigorously defended its position and, as of March 15, 2001, has
reached a preliminary settlement in the amount of $450,000. The
settlement is yet to be approved by the court. This settlement,
if approved, will not have a material impact on the future
earnings of the Corporation.
There are no other pending proceedings of a material nature to
which the Corporation, or any of its subsidiaries, is a party.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Debt
None
Item 4. Submission of Matters to a Vote of Security Holders
The 2001 Annual Meeting of Shareholders was held on May 8, 2001.
The only item submitted for shareholder vote was the election of
directors. Since the proxies were solicited under Regulation
14A, there were no solicitations in opposition to the Board of
Directors' nominees and all nominees were elected, no additional
information is required to be disclosed.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10 2001 Long-term Incentive Compensation Plan
11 Statement re computation of per-share earnings
(b) Form 8-K
A Form 8-K, was filed to announce a Stock Repurchase
Program. This Program authorized the repurchase of up
to 5%, or 310,000 shares of the Corporation's Common
stock. No financial statements were required to be
filed with the report. The Program was announced on
June 28, 2001 and reported on Form 8-K filed on
July 2, 2001.
The financial information furnished herein has not been audited by
independent accountants; however, in the opinion of management, all
adjustments necessary for a fair presentation on the results of
operations for the six month period ended June 30, 2001, have been
included.
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
NBC CAPITAL CORPORATION
Registrant
August 9, 2001 /s/ Richard T. Haston
Date Richard T. Haston
Executive Vice President,
Chief Financial Officer and
Treasurer