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 quarter ended June 30, 2004
Commission File No. 0-10852
SOUTHERN BANCSHARES (N.C.), INC.
(Exact name of registrant as specified in its charter)
| DELAWARE | 56-1538087 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
| 121 East Main Street Mount Olive, North Carolina |
28365 | |
| (Address of Principal Executive offices) | (Zip Code) | |
Registrant’s Telephone Number, including Area Code: (919) 658-7000
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 by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
Indicate the number of shares outstanding of the Registrant’s common stock as of the close of the quarter covered by this report.
111,029 shares
Part i – FINANCIAL INFORMATION
Item 1 – Financial Statements.
SOUTHERN BANCSHARES (N.C.), INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| (Unaudited) | ||||||||
| (Dollars in thousands except per share data)
|
June 30, 2004 |
December 31, 2003 * |
||||||
| ASSETS |
||||||||
| Cash and due from banks |
$ | 37,269 | $ | 44,552 | ||||
| Overnight funds sold |
34,159 | 40,020 | ||||||
| Investment securities: |
||||||||
| Held-to-maturity, at amortized cost (fair value $183,289 and $139,419, respectively) |
183,733 | 138,369 | ||||||
| Available-for-sale, at fair value (amortized cost $65,977 and $88,891, respectively) |
91,020 | 114,596 | ||||||
| Loans held for sale |
3,815 | 3,171 | ||||||
| Loans |
629,324 | 628,000 | ||||||
| Less allowance for loan losses |
(10,292 | ) | (10,095 | ) | ||||
| Net loans |
622,847 | 621,076 | ||||||
| Premises and equipment |
35,587 | 35,605 | ||||||
| Intangible assets |
10,304 | 11,106 | ||||||
| Accrued interest receivable |
4,488 | 4,910 | ||||||
| Other assets |
6,892 | 5,793 | ||||||
| Total assets |
$ | 1,026,299 | $ | 1,016,027 | ||||
| LIABILITIES |
||||||||
| Deposits: |
||||||||
| Noninterest-bearing |
$ | 173,009 | $ | 174,155 | ||||
| Interest-bearing |
709,521 | 702,355 | ||||||
| Total deposits |
882,530 | 876,510 | ||||||
| Short-term borrowings |
18,060 | 15,870 | ||||||
| Long-term obligations |
23,711 | 23,711 | ||||||
| Accrued interest payable |
1,332 | 1,364 | ||||||
| Other liabilities |
10,342 | 10,054 | ||||||
| Total liabilities |
935,975 | 927,509 | ||||||
| SHAREHOLDERS’ EQUITY |
||||||||
| Series B non-cumulative preferred stock, no par value; $3,573 and $3,583 liquidation value at June 30, 2004 and December 31, 2003, respectively; 408,728 shares authorized; 355,894 and 358,316 shares issued and outstanding at June 30, 2004 and December 31, 2003, respectively |
1,734 | 1,745 | ||||||
| Series C non-cumulative preferred stock, no par value; $397 liquidation value at both June 30, 2004 and December 31, 2003; 43,631 shares authorized; 39,657 shares issued and outstanding at both June 30, 2004 and December 31, 2003 |
552 | 552 | ||||||
| Common stock, $5 par value; 158,485 shares authorized; 111,029 and 111,530 shares issued and outstanding at June 30, 2004 and December 31, 2003, respectively |
555 | 558 | ||||||
| Surplus |
10,000 | 10,000 | ||||||
| Retained earnings |
62,183 | 59,919 | ||||||
| Accumulated other comprehensive income |
15,300 | 15,744 | ||||||
| Total shareholders’ equity |
90,324 | 88,518 | ||||||
| Total liabilities and shareholders’ equity |
$ | 1,026,299 | $ | 1,016,027 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| * | Derived from audited consolidated financial statements |
2
SOUTHERN BANCSHARES (N.C.), INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
| (Unaudited) | (Unaudited) | |||||||||||||||
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| (Dollars in thousands except share and per share data)
|
2004 |
2003 |
2004 |
2003 |
||||||||||||
| Interest income: |
||||||||||||||||
| Loans |
$ | 9,393 | $ | 10,537 | $ | 18,764 | $ | 20,941 | ||||||||
| Investment securities: |
||||||||||||||||
| U. S. Government |
820 | 771 | 1,663 | 1,695 | ||||||||||||
| State, county and municipal |
265 | 273 | 517 | 569 | ||||||||||||
| Other |
613 | 400 | 962 | 792 | ||||||||||||
| Total investment securities interest income |
1,698 | 1,444 | 3,142 | 3,056 | ||||||||||||
| Overnight funds sold |
93 | 119 | 207 | 236 | ||||||||||||
| Total interest income |
11,184 | 12,100 | 22,113 | 24,233 | ||||||||||||
| Interest expense: |
||||||||||||||||
| Deposits |
2,467 | 2,733 | 4,933 | 5,667 | ||||||||||||
| Short-term borrowings |
26 | 33 | 50 | 62 | ||||||||||||
| Long-term obligations |
475 | 504 | 949 | 1,021 | ||||||||||||
| Total interest expense |
2,968 | 3,270 | 5,932 | 6,750 | ||||||||||||
| Net interest income |
8,216 | 8,830 | 16,181 | 17,483 | ||||||||||||
| Provision for loan losses |
300 | 450 | 600 | 900 | ||||||||||||
| Net interest income after provision for loan losses |
7,916 | 8,380 | 15,581 | 16,583 | ||||||||||||
| Noninterest income: |
||||||||||||||||
| Service charges on deposit accounts |
1,765 | 1,643 | 3,487 | 3,275 | ||||||||||||
| Gain on sale of loans |
33 | 702 | 359 | 1,142 | ||||||||||||
| Other service charges and fees |
626 | 614 | 1,224 | 1,137 | ||||||||||||
| Investment securities gains, net |
5 | — | 3 | — | ||||||||||||
| Other |
122 | 248 | 261 | 325 | ||||||||||||
| Total noninterest income |
2,551 | 3,207 | 5,334 | 5,879 | ||||||||||||
| Noninterest expense: |
||||||||||||||||
| Personnel |
4,645 | 4,162 | 9,235 | 8,258 | ||||||||||||
| Occupancy |
851 | 741 | 1,742 | 1,509 | ||||||||||||
| Data processing |
923 | 728 | 1,767 | 1,457 | ||||||||||||
| Furniture and equipment |
540 | 444 | 1,027 | 938 | ||||||||||||
| Intangibles amortization |
301 | 424 | 766 | 876 | ||||||||||||
| Professional fees |
286 | 200 | 473 | 508 | ||||||||||||
| Other |
1,060 | 886 | 2,151 | 1,824 | ||||||||||||
| Total noninterest expense |
8,606 | 7,585 | 17,161 | 15,370 | ||||||||||||
| Income before income taxes |
1,861 | 4,002 | 3,754 | 7,092 | ||||||||||||
| Income taxes |
602 | 1,376 | 1,000 | 2,336 | ||||||||||||
| Net income |
1,259 | 2,626 | 2,754 | 4,756 | ||||||||||||
| Other comprehensive income net of tax: |
||||||||||||||||
| Unrealized (losses) gains arising during period |
(1,678 | ) | 1,476 | (723 | ) | 1,622 | ||||||||||
| Less: tax effect |
647 | (569 | ) | 279 | (625 | ) | ||||||||||
| Less: reclassification adjustment for gains included in net income |
(2 | ) | — | (1 | ) | — | ||||||||||
| Total other comprehensive income |
(1,033 | ) | 907 | (445 | ) | 997 | ||||||||||
| Comprehensive Income |
$ | 226 | $ | 3,533 | $ | 2,309 | $ | 5,753 | ||||||||
| Per share information: |
||||||||||||||||
| Net income per common share |
$ | 10.56 | $ | 22.71 | $ | 23.18 | $ | 40.77 | ||||||||
| Cash dividends declared on common shares |
0.40 | 0.40 | 0.80 | 0.78 | ||||||||||||
| Weighted average common shares outstanding |
111,029 | 111,825 | 111,251 | 112,374 | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
SOUTHERN BANCSHARES (N.C.), INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Dollars in thousands except per share data)
(Unaudited)
| Preferred Stock |
Common Stock |
Surplus |
Retained Earnings |
Accumulated | ||||||||||||||||||||||||||||||