UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
COMMISSION FILE NUMBER 01-16934
______________________________
BOL BANCSHARES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER.)
LOUISIANA 72-1121561
(STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NO.)
300 ST. CHARLES AVENUE, NEW ORLEANS, LA. 70130
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(504) 889-9400
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
_____________________________
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Common Stock, par value $1.00 per share
_____________________________
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 if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-
affiliates of the registrant was approximately $914,857 as of the close
of business on February 28, 2001.
The number of shares of Common Stock, $1.00 par value, outstanding
as of February 28, 2001 was approximately 179,145.
Cross Reference Index
Page
Part I
Item 1: Business 3
Item 2: Properties 5
Item 3: Legal Proceedings 6
Item 4: Submission of Matters to a Vote of Security Holders 7
Part II
Item 5: Market for Registrant's Common Equity and Related Stockholder
Matters 7
Item 6: Selected Financial Data 8
Item 7: Management's Discussion and Analysis of Financial Condition and
Results of Operation 9
Item 8: Financial Statements and Supplementary Data 34
Item 9: Changes in and Disagreements with Accountants and Financial
Disclosure 27
Part III
Item 10: Directors and Executive Officers of the Registrant 28
Item 11: Executive Compensation 29
Item 12: Security Ownership of Certain Beneficial Owners and
Management 31
Item 13: Certain Relationships and Related Transactions 31
Part IV
Item 14: Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) Financial Statements
Independent Auditor's Report Consolidated Balance Sheets
34
Consolidated Statements of Income (Loss) 36
Consolidated Statements of Comprehensive Income (Loss) 37
Consolidated Statements of Changes in Stockholder's
Equity 38
Consolidated Statements of Cash Flow 39
Notes to Consolidated Financial Statements 41
Independent Auditor's Report on Supplementary Information
Schedules I, II, III 64
(b) Reports on Form 8-K NONE
(c) Schedules and Exhibits
Article 9 69
Item 1 Business of the Company and the Bank
Here and after BOL Bancshares, Inc. shall be referred to as the
Company and subsidiary Bank of Louisiana shall be referred to as the
Bank.
History and General Business
The Company was organized as a Louisiana corporation on May 7, 1981,
for the purpose of becoming a registered bank holding company under the
Bank Holding Company Act of 1956, as amended (the "BHC Act"). The
Company remained inactive until April 29, 1988, when it acquired the Bank
in a three-bank merger of the Bank of Louisiana in New Orleans (the "Old
Bank"), Bank of the South ("South Bank"), and Fidelity Bank & Trust
Company, all Louisiana state-chartered banks. The Old Bank was the
surviving bank in the merger and subsequently changed its name to the
Bank's current name. The merger was originally accounted for as a
"purchase", but after discussions with the Securities and Exchange
Commission, the accounting treatment of the merger was changed to a
manner similar to a "pooling of interests". [Since the change in
accounting treatment, the Company has recast its financial statements, to
reflect "pooling" accounting.] In addition, at the time of the bank's
merger, the Company merged with BOS Bancshares, Inc., a Louisiana
corporation and the registered bank holding company for South Bank. The
Company was the surviving entity in that merger. The Company is the sole
shareholder and registered bank holding company of the Bank.
Other than owning and operating the Bank, the Company may also
engage, directly or through subsidiary corporations, in those activities
closely related to banking that are specifically permitted under the BHC
Act. See "Supervision and Regulation". The Company, after acquiring the
requisite approval of the Board of Governors of the Federal Reserve
System (the "FRB") and any other appropriate regulatory agency, may seek
to engage de novo in such activities or to acquire companies already
engaged in such activities. The Company has not conducted, and has no
present intent to conduct, negotiations for the acquisition or formation
of any entities to engage in other permissible activities. There can be
no assurance, however, that the Company will not form or acquire any
other entity.
If the Company attempts to form or acquire other entities and engage
in activities closely related to banking, the Company will be competing
with other bank holding companies and companies currently engaged in the
line of business or permissible activity in which the Company might
engage, many of which have far greater assets and financial resources
than the Company and a greater capacity to raise additional debt and
equity capital. See "Business of the Company and the Bank--Territory
Served and Competition".
Banking Industry
The Company derives its revenues largely from dividends from the
Bank. As is the case with any financial institution, the profitability
of the Bank is subject, among other things, to fluctuating availability
of money, loan demand, changes in interest rates, actions of fiscal and
monetary authorities, and economic conditions in general. See "Business
of the Company and the Bank", "Supervision and Regulation", and
"Management's Discussion and Analysis of the Financial Condition and
Results of Operations of the Company and the Bank".
Banking Products and Services
The Bank is a full service commercial bank that provides a wide
range of banking services for its customers. Some of the major services
that it offers include checking accounts, negotiable order of withdrawal
("NOW") accounts, individual retirement accounts ("IRAs"), savings and
other time deposits of various types, and business, real-estate, personal
use, home improvement, automobile, and a variety of other loans, as
discussed more fully below. Other services include letters of credit,
safe deposit boxes, money orders, traveler's checks, credit cards, wire
transfer, electronic banking, night deposit, and drive-in facilities.
Prices and rates charged for services offered are competitive with the
area's existing financial institutions.
The Company offers a wide variety of fixed and variable rate loans
to qualified borrowers. With regard to interest rates, the Bank
continues to meet legal standards
while remaining competitive with the existing financial institutions in
its market area. The specific types of loans that the Bank offers
include the following:
Consumer Loans. The Company's consumer loans consist of automobile,
mobile home, recreational vehicle, and boat loans; home improvement and
second-mortgage loans; secured and unsecured personal expense loans; and
educational loans.
Real Estate Loans. The Company's real estate loans consist of
residential first and second mortgage loans on one-to-four family homes;
construction and development loans; multiple dwelling unit loans; housing
rehabilitation loans; loans to purchase developed real property; and
commercial real estate loans.
Commercial Loans (Secured and Unsecured). The Company's commercial
loans consist of working capital loans, accounts receivable loans, and
inventory loans to small businesses.
Credit Cards. The Company offers a variety of nationally recognized
credits cards, in addition to its own Mr. Bol credit card, and private
label credit cards for use at retail establishments nationwide. As of
December 31, 2000, the Company held $18,291,941 in credit card
receivables.
Proprietary Accounts. The Company has a number of proprietary
accounts it services. The Company's proprietary accounts consist largely
of small to medium sized merchants who have issued their own private-
label credit cards. The Company acquires these credit card accounts at a
discount, typically with reserves posted, and requires the merchant to
repurchase accounts 180 days or more past due. As of December 31, 2000,
the Company held $1,745,318 in proprietary accounts.
Mortgage Lending. The Company offers 15- and 30-year fixed and
adjustable rate conventional and jumbo home mortgages. The Company sells
all mortgage loans in the secondary market and does not retain the
servicing rights thereon.
Territory Served and Competition
Market Area. The market area for the Company is defined in the
Company's Community Reinvestment Act Statement as the greater New Orleans
metropolitan area. This area includes all of the City of New Orleans and
surrounding Parishes. The Company has branch offices in Orleans,
Jefferson and St. Tammany Parishes.
Population. From 1980 to 1990, the population of New Orleans
remained constant with approximately 500,000 persons. The population of
Jefferson and St. Tammany Parishes were approximately 650,000 as of
December 31, 1990.
Competition. The Company competes with other commercial banks in
New Orleans and with savings and loan associations, credit unions, and
other types of financial services providers. The Company is one of the
smallest commercial banks in New Orleans in terms of assets and deposits.
Economy. The economy of New Orleans is supported by the tourism,
shipping and energy industries. The Company has no material
concentration of deposits from any single customer or group of customers,
nor is a significant portion of its loans concentrated in a single
industry or group of related industries. There are no material seasonal
factors that have any adverse effect on the Company. The Company does
not rely on foreign sources of funds or income, and the Company does not
expend any material percentage of its income in complying with applicable
environmental laws.
Employees
As of December 31, 2000, the Company had approximately 155 full-time
and approximately 13 part-time employees. The Company considers its
relationship with its employees to be very good. The employee benefit
programs provided by the Company include group life and health insurance,
paid vacations, and sick leave. The Company has no employees who are not
employees of the Company. See "Item 11, Executive Compensation".
Item 2 Property
In addition to its main office, the Company has six branch locations
and an operations center. Set forth below is a description of the
offices of the Company.
Main Office. The main office of the Company is located at 300 St.
Charles Avenue in the central business district of New Orleans,
Louisiana. On September 30, 1991, the Company purchased a four-story
building located at 300 St. Charles Avenue from the Resolution Trust
Corporation (the "RTC") for the price of $402,500. The purchase was
financed by a loan from director Edward J. Soniat to the Company. As of
December 31, 2000, there is a balance of $62,073 in principal and accrued
but unpaid interest outstanding on the loan from Mr. Soniat to the
Company. See "Management--Certain Transactions". The building consists
of approximately 13,100 square feet of office space, and parking is
provided on the streets and commercial lots nearby. The Company occupies
the ground floor and the fourth floor. The second and third floors are
leased to the LeMoyne Bienville Club. Rental income received from the
club is $2,165 per month. The initial term of the club's lease is for 25
years, expiring on December 15, 2003.
Carrollton Branch. The Carrollton Branch of the Company is located
in the Carrollton Shopping Center at 3846 Dublin Street, New Orleans,
Louisiana. The premises consist of approximately 4,700 total square feet
of office space, and parking is provided by the shopping center. The
Company leases the office space on a month-to-month basis from Carrollton
Central Plaza. The Company pays $2,866 per month in lease payments.
Severn Branch. The Severn Branch of the Company is located in the
central business district of Metairie at 3340 Severn Avenue, Metairie,
Louisiana. The premises consist of approximately 4,600 total square feet
of office space on the first floor of a four-story office building, and
parking is provided for approximately 100 cars. The Company leases the
office space from Severn South Partnership, an affiliate of the Company.
See "Certain Relationships and Related Transactions." Pursuant to an
Amendment to Lease dated May 1, 1999, the lease commenced on June 1,
1999, and terminates on May 31, 2003. The lease payments are $12,456,
plus a percentage of operating costs, per month.
Oakwood Branch. The Oakwood Branch of the Company is located in the
Oakwood Shopping Center at 197 Westbank Expressway, Gretna, Louisiana.
The premises consist of approximately 4,160 total square feet of office
space, which includes 1,560 square feet of drive-in facility, and parking
is provided by the shopping center. The Company leases the building from
Oakwood Shopping Center, Ltd. The lease commenced on June 1, 1991, and
terminates on May 31, 2001. The lease payments are $11,832 per month.
Lapalco Branch. The Lapalco Branch of the Company is located in the
Belle Meade Plaza Shopping Center at 605 Lapalco Boulevard, Gretna,
Louisiana. The premises consist of approximately 2,500 square feet of
office space in a one-story building, and parking is provided by the
shopping center. The Company leases the building from Belle Meade
Developers. The lease commenced on January 1, 1996, and terminates on
January 1, 2001. The lease payments are $5,848 per month.
Gause Branch. The Gause Branch of the Company is located in the
central business district of Slidell at 636 Gause Boulevard, Slidell,
Louisiana. The premises consist of approximately 13,800 total square
feet of office space in a three-story office building, and parking is
provided for approximately 50 cars. The Company owns the building and
underlying land upon which this branch is situated. The Company occupies
approximately 3,300 square feet in this building and leases the remaining
space to various tenants for varying rental rates and terms. Rental
income received during 2000 totaled $113,504.
Tammany Mall Branch. The Tammany Mall Branch of the Company is
located at 3180 Pontchartrain, Slidell, Louisiana. The premises consist
of approximately 4,000 total square feet of office space, and parking is
provided for approximately 40 cars. The Company leases the building on a
month-to-month basis from Tammany Mall Partnership, an affiliate of the
Company. See Item 13, "Certain Relationships and Related Transactions".
The lease payments are $6,200 per month.
Operations Center. The Company's operations center, housing its
data processing, credit card, bookkeeping, and marketing departments, is
located at 3340 Severn Avenue, Metairie, Louisiana. The building
consists of approximately 44,500 total square feet of space in a four-
story office building, and parking is provided for approximately 200
cars. The Company leases 20,770 square feet from Severn South
Partnership, an affiliate of the Company, under two separate leases. See
"Certain Relationships and Related Transactions." Pursuant to an
Amendment to Lease dated May 1, 1999, the leases commenced on June 1,
1999, and will terminate on May 31, 2003. The lease payments total
$27,384, plus a percentage of operating costs, per month.
Item 3 Legal Proceedings
Because of the nature of the banking industry in general, the
Company and the Bank are each parties from time to time to litigation and
other proceedings in the ordinary course of business, none of which
(other than those described below), either individually or in the
aggregate, have a material effect on the Company's and/or the Bank's
financial condition.
Other than the lawsuits described below, the Company has either (i)
posted reserves adequate to pay any judgments that may be rendered
against the Company and such posting is reflected in the Company's
consolidated financial statements for the period ending December 31,
2000, or (ii) believes the lawsuit is without sufficient merit or
monetary exposure to require the posting of a reserve. Indeed, should
the Company be successful in any of those lawsuits in which it has posted
reserves, recoveries would be realized and the Company's consolidated net
income would be positively impacted.
The following actions, however, have been brought against the
Company and, if the claimants were wholly successful on the merits, could
result in significant exposure to the Bank:
1. The Company is a defendant in a lawsuit filed by another bank
alleging the Company improperly dishonored checks totaling $979,000. The
Company claims that such checks were properly returned "nonsufficient
funds". When these checks were returned to the Plaintiff, of the
$979,000, one check for $110,000 was misplaced by the FRB and therefore
returned late to the Plaintiff. The Company was forced to cover the
amount of the check. The Company filed a counter suit against the
Plaintiffs for contribution on the $110,000 loss and for tortuous
interference. The Plaintiff filed exceptions to the counter suit. These
exceptions were heard in the district court and the Company's right to
contribution was maintained, however the Company's suit for tortuous
interference was dismissed. On appeal, the appellate court sustained the
Company's right to contribution and overruled the lower court's decision
on tortuous interference, finding that the Company could maintain such a
cause of action. The Louisiana Supreme Court denied writs filed by the
Plaintiff. The case is currently awaiting trial. The Company is
vigorously defending all claims asserted in this suit.
Expected Results: Outside counsel advises that the Company will not
pay any damages in this matter and the likelihood is reasonably high that
the Company will obtain some recovery from the Plaintiff.
2. The Company is a defendant in a lawsuit filed by a proprietary
merchant alleging that the Company mishandled the Plaintiff's proprietary
credit card portfolio. The Plaintiff seeks to recover in excess of
$1,800,000. The Bankruptcy Court has established an escrow account, in
which $270,404 was on deposit as of October 31, 1996, for the protection
of the Company. This amount would significantly reduce any losses
incurred by the Company in the event the Plaintiff is wholly successful
on the merits. During 1997, a judgment was rendered against the Bank,
and accordingly, a provision for loss of $150,000 has been charged to
operation. The Bank has counter sued and in March 2000, a decision was
rendered in favor of the Bank and accordingly, the $150,000 was reversed
and is reflected in operations. In February 2001 the $243,000 deposit
for bond together with interest has been returned to the Bank.
Expected Results: Outside counsel advises that the Plaintiff will
not prevail at all against the Company and that the Company will be able
to fully recover all of its losses in this matter.
Item 4 Submission of Matters to a Vote of Security Holders
There were no matters submitted, during the fourth quarter of fiscal
year 2000, to a vote of security holders, through the solicitation of
proxies.
Item 5 Market for Registrant's Common Equity and Related Stockholder
Matters
There is no established trading market in the shares of Bank Stock,
as the Company owns 100% of the issued and outstanding shares of Bank
Stock. There is no established trading market in the shares of Company
Common Stock. The Company Common Stock is not listed or quoted on any
stock exchange or automated quotation system. Management is aware,
however, that Dorsey & Company, New Orleans, Louisiana does make a market
in the Company Common Stock. The following table sets forth the range of
high and low sales prices of Company Common Stock since 1999, as
determined by the Company based on trading records of Dorsey & Company.
The following table does not purport to be a listing of all trades in
Company Common Stock during the time periods indicated, but only those
trades of which Dorsey and Company has informed the Company. The prices
indicated below do not reflect mark-ups, mark-downs, or commissions, but
do represent actual transactions. Finally, the prices listed below are
not necessarily indicative of the prices at which shares of Bank Stock
would trade. As of December 31, 2000, the Company had approximately 654
shareholders of record.
2000
High Low
First Quarter $7.00 $5.00
Second Quarter 7.00 5.00
Third Quarter 7.00 5.00
Fourth Quarter 7.50 4.00
1999
First Quarter 7.00 5.00
Second Quarter 7.00 5.00
Third Quarter 7.00 5.00
Fourth Quarter 7.00 5.00
Principal Shareholders
Other than directors, officers, and directors and officers as a
group identified in the table in "Directors and Executive Officers of the
Company", there were no persons who, to the knowledge of management of
the Company, beneficially owned 5% or more of the Company Common Stock as
of December 31, 2000. See "Item 12 Security Ownership of Certain
Beneficial Owners and Management".
Item 6 Selected Consolidated Financial Data of the Company
For The Years Ended
December 31,
2000 1999 1998 1997 1996
(dollars in thousands, except per share data)
Operations:
Net Interest Income $7,727 $7,502 $7,827 $8,189 $10,133
Prov for (Recovery Of) Loan 308 (154) 1,085 3,630 2,040
Losses
Other Income 2,123 2,134 2,249 2,938 2,440
Other Expense 8,993 9,650 9,123 10,643 10,647
Income Tax Expense (Benefit) 170 46 96 (1,171) (20)
Net Income (Loss) 379 94 (228) (1,975) (94)
Per Share:
Common Shares Outstanding 179,145 179,145 179,145 179,145 179,145
Net Income (Loss) 2.11 0.53 (1.27) (11.03) (0.52)
Cash Dividends - Common 0.00 0.00 0.00 0.00 0.00
Book Value at End of Period 19.10 16.89 16.46 16.62 27.64
Preferred Shares Outstanding 2,302,811 2,302,811 2,302,811 2,302,811 2,302,911
Cash Dividends - Preferred 0.00 0.00 0.00 0.00 0.00
Stock
Balances at End of Period:
Investment Securities 3,370 3,370 4,789 10,567 9,060
Fed Funds Sold 25,905 24,785 26,950 21,150 14,400
Loans, Net of Unearned 57,727 58,781 61,542 57,619 69,298
Interest
Allowance for Loan Losses 1,800 1,800 1,800 1,800 1,500
Other Real Estate Owned 1,074 1,274 1,357 1,473 2,273
Total Assets 94,707 100,109 103,886 102,709 106,091
Total Deposits 85,164 90,555 94,583 93,941 95,141
Shareholders' Equity 5,722 5,329 5,185 5,280 7,251
Ratios:
Return on Average Assets 0.18% 0.09% -0.23% -1.95% -0.09%
Return on Average Equity 3.10% 1.93% -4.18% -34.49% -1.27%
Primary Capital to Total Assets &
Allowance for Possible Loan 6.16% 5.42% 5.12% 5.23% 6.93%
Losses
Allowance for Possible Loan Losses
as a Percentage of Loans, 3.12% 3.06% 2.92% 3.12% 2.61%
Net
Non-Performing Loans as a
Percentage of Loans, Net (1) 0.09% 0.07% 0.13% 0.15% 0.47%
Non-Performing Loans as a
Percentage of Total Assets 1.19% 1.31% 1.38% 1.51% 2.44%
(2)
Capital Ratios: Bank
Tier 1 Risk Based Capital 12.27% 10.50% 10.27% 10.61% 12.32%
Ratio
Risk Based Capital Ratio 13.54% 11.77% 11.54% 11.88% 13.58%
Tier 1 Leverage Ratio 7.81% 6.80% 6.89% 6.84% 8.60%
(1) Non-performing loans are comprised of non-accrual loans and restructured
loans. As of dates reported the Company did not have any restructured
loans.
(2) Non-performing assets are comprised of non-performing loans, ORE and other
repossessed assets.
Item 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF THE COMPANY
The following discussion and analysis is intended to provide a
better understanding of the consolidated financial condition and results
of operations of BOL Bancshares Inc. (the "Company") and its bank
subsidiary, (the "Bank") for the years ending December 31, 2000, 1999 and
1998. This discussion and analysis should be read in conjunction with
the consolidated financial statements, related notes and selected
financial data appearing elsewhere in this report.
The preceding chart reflects the most recent five years of the
Company's operations.
Overview
The Company had total assets of $94,707,000 at December 31, 2000 and
$100,109,000 at December 31, 1999. The Company currently operates
through seven locations, five in the metropolitan New Orleans area and
two in St. Tammany Parish.
Loans comprise the largest single component of the Company's
interest earning assets and provide a far more favorable return than
other categories of earnings assets. The Company's loans totaled
$55,927,000 and $56,981,000 net of unearned discount and Allowance for
Loan Losses at December 31, 2000 and 1999, respectively. The Company's
net interest margin was 8.71% for the year ended December 31, 2000.
Historically, credit card loans have been an important part of the
Company's total loan portfolio. At December 31, 2000, credit card loans
were $18,292,000 and represented 32.71% of the Company's loan portfolio
of $55,927,000. At December 31, 1999, credit card loans were $21,014,000
and represented 36.88% of the Company's loan portfolio of $56,981,000.
The decrease in the Company's credit card loans during 2000 was largely
attributable to (i) competition from other banks and non-traditional
credit card issuers such as AT&T and GMAC; (ii) the Company's loss of
proprietary business; and (iii) tightening of the Company's underwriting
standards.
The Company's current strategy is to continue to grow its
traditional banking operations primarily in the metropolitan New Orleans
area and to expand its credit card lending and proprietary accounts. The
Company has initiated an aggressive marketing campaign to acquire several
Visa and MasterCard portfolios and proprietary accounts. The Company
focuses on providing its customers with the financial sophistication and
breadth of products of a regional bank while successfully retaining the
local appeal and level of service of a community bank.
Results of Operations
Net Income
The Company earned $379,000, or $2.11 per share in 2000. In 1999
the net income was $94,000 or $.53 per share and in 1998 the net loss was
$228,000 or $(1.27) per share.
In 2000, the increase in net income of $285,000 over 1999 income was
primarily due to the Company recovering $202,000 in the settlement of a
lawsuit against a proprietor. Interest expense decreased $216,000; non-
interest expenses decreased $657,000 primarily from a decrease in legal
fees of $404,000 due to the settlement of the above-mentioned lawsuit.
In 1999, the $322,000 increase in income from the 1998 loss was
primarily due to the company recovering $1,100,000 in the settlement of a
lawsuit against a proprietor and the decrease in interest expense of
$140,000. Interest income decreased $466,000, non-interest income
decreased $115,000 while non-interest expense increased $527,000 from the
year 1998.
Net Interest Income
Net interest income increased $225,000 or 3.00% to $7,727,000 in
2000 from $7,502,000 in 1999. This increase is mainly due to a decrease
in interest expense on deposits which decreased $216,000 or 11.70% to
$1,630,000 in 2000 from $1,846,000 in 1999. Total interest bearing
deposits decreased $4,116,000 or 7.45%.
The Company's average balances, interest income and expense and
rates earned or paid for major balance sheet categories are set forth in
the following table:
TABLE 1 Average Balances, Interests and Yields
2000 1999 1998
Average Average Average
(Dollars in Thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate
ASSETS
INTEREST-EARNING ASSETS:
Loans, net of unearned income (1)(2)
Taxable 56,769 7,403 13.04% 57,397 7,638 13.31% 59,335 8,214 13.84%
Tax-exempt 0 0
Investment securities
Taxable 3,318 170 5.14% 4,011 191 4.76% 7,768 456 5.87%
Tax-exempt 0 0 0 0 0.00%
Interest-bearing deposits 0 0 0.00% 0 0 0.00% 0 0 0.00%
Federal funds sold 28,602 1,784 6.24% 30,645 1,519 4.96% 21,566 1,145 5.31%
Total Interest-Earning 88,689 9,357 10.55% 92,053 9,348 10.16% 88,669 9,815 11.07%
Assets
Cash and due from banks 5,450 5,739 5,617
Allowance for loan Losses (1,807 (1,792) (1,806
) )
Premises and equipment 2,324 2,678 2,592
Other Real Estate 1,165 1,350 1,432
Other assets 1,825 1,130 2,634
TOTAL ASSETS 97,646 101,158 99,138
LIABILITIES AND SHAREHOLDERS' EQUITY
INTEREST-BEARING LIABILITIES:
Deposits:
Demand Deposits 18,229 288 1.58% 19,873 332 1.67% 18,109 399 2.20%
Savings deposits 25,415 744 2.93% 26,704 784 2.94% 26,381 806 3.06%
Time deposits 9,763 382 3.91% 11,583 520 4.49% 11,879 569 4.79%
Total Interest-Bearing 53,407 1,414 2.65% 58,160 1,636 2.81% 56,369 1,774 3.15%
Deposits
Federal Funds Purchased
Securities sold under agreements
to repurchase
Other Short-term borrowings 0 0 0
Long-Term debt 2,229 216 9.69% 2,249 210 9.34% 2,278 214 9.39%
Total Int-Bearing 55,636 1,630 2.93% 60,409 1,846 3.06% 58,647 1,988 3.39%
Liabilities
Noninterest-bearing deposits 34,479 34,670 33,729
Other liabilities 1,836 1,210 1,302
Shareholders' equity 5,695 4,869 5,460
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 97,646 101,158 99,138
Net Interest Income 7,727 7,502 7,827
Net Interest Spread 7.62% 7.10% 7.68%
Net Interest Margin 8.71% 8.15% 8.83%
(1) Fee income relating to loans of $709,000 in 2000, $669,000 in 1999 and
$569,000 in 1998 is included in interest income.
(2) Nonaccrual loans are included in average balances and income on such loans,
if recognized, is recognized on the cash basis.
(3) Interest income does not include the effects of taxable-equivalent
adjustments for the three years ended December 31, 2000, 1999, and 1998 using a
federal tax rate of 34%.
TABLE 2 Rate/Volume Analyses (1)
2000 Compared to 1999 1999 Compared to 1998
Change Change
in in
Interest Due to Total Interest Due to Total
(Dollars in Thousands) Volume Rate Change Volume Rate Change
Net Loans:
Taxable (151) (84) (235) (308) (268) (576)
Tax-Exempt (2) - - - - - -
Investment Securities - - - - - -
Taxable 12 (33) (21) (44) (221) (265)
Tax-Exempt (2) - - - - - -
Interest-Bearing Deposits - - - - - -
Federal Funds Sold 366 (101) 265 (108) 482 374
Total Interest Income 227 (218) 9 (460) (7) (467)
Deposits:
Demand Deposits (16) (27) (44) (106) 39 (67)
Savings Deposits (3) (38) (40) (32) 10 (22)
Time Deposits (56) (82) (138) (35) (14) (49)
Total Interest-Bearing (75) (147)(222) (173) 35 (138)
Deposits
Federal Funds Purchased - - - - - -
Securities Sold under - - - - - -
Agreements to Repurchase
Other Short-Term Borrowings - - - - - -
Long-Term Debt 8 (2) 6 (1) (3) (4)
Total Interest Expense (67) (149) (216) (174) 32 (142)
(1) The change in interest due to both rate and volume has been allocated
to the components in proportion to the relationship of the dollar amounts of
the change in each.
(2) Reflects fully taxable equivalent adjustments using a federal tax rate
of 34%.
Provision for Loan Losses
Management's policy is to maintain the allowance for possible loan
losses at a level sufficient to absorb estimated losses inherent in the
loan portfolio. The allowance is increased by the provision for loan
losses and decreased by charge-offs, net of recoveries. Management's
evaluation process to determine potential losses includes consideration
of the industry, specific conditions of individual borrowers, historical
loan loss experience and the general economic environment. As these
factors change, the level of loan loss provision changes.
At December 31, 2000, the allowance for possible loan losses was
$1,800,000 and was that same amount at December 31, 1999. In 2000, the
provision for loan losses was $308,000 compared to (recovery of)
$(154,000) in 1999. Net charge-offs were $308,000 for 2000 compared to
net recoveries of $154,000 in 1999 and net charge-offs of $1,086,000 in
1998. The decrease in provisions for 2000 over 1999 and 1998 primarily
resulted from the recovery of $202,000 in 2000 and $1,100,000 in 1999
from the settlement of a major piece of litigation on a proprietary
account, which was previously charged off. Based on the volume of credit
card charges and payments, the credit card portfolio turns over every
eight to nine months, requiring a provision to loan loss allowance less
than annual charge-offs due to recoveries being contemporaneously made.
TABLE 3 Allowance for Loan Losses
December 31,
2000 1999 1998 1997 1996
(Dollars in Thousands)
Balance at beginning of $1,800 $1,800 $1,800 $1,500 $1,500
period
Charge-Offs:
Commercial 3 49 24 22 51
Real estate 6 0 6 20 0
Installment 38 41 43 94 43
Credit Cards 1,099 1,491 1,877 3,996 2,728
Total Charge-offs 1,146 1,581 1,950 4,132 2,822
Recoveries:
Commercial 8 11 13 100 135
Real estate 55 2 30 14 6
Installment 4 17 23 24 27
Credit Cards 771 1,705 798 664 614
Total Recoveries 838 1,735 864 802 782
Net charge-offs 308 (154) 1,086 3,330 2,040
Provision for (recovery 308 (154) 1,086 3,630 2,040
of) loan losses
Balance at end of period $1,800 $1,800 $1,800 $1,800 $1,500
Ratio of net charge-offs during
period to average loans 0.54% -0.27% 1.83% 5.35% 2.77%
outstanding
Allowance for possible loan losses
as a percentage of loans 3.22% 3.16% 3.00% 3.12% 2.16%
Other Income
An important source of the Company's revenue is derived from other
income. The following table sets forth the major components of other
income for the last three years.
TABLE 4 Other Income
$ Change From
December 31, Prior Year
2000 1999 1998 2000 1999
(Dollars in Thousands)
Service Charges 512 545 653 (33) (108)
NSF Charges 564 628 666 (64) (38)
Gain on Sale of Securities 0 0 0 0 0
Cardholder & Other Cr Card 503 497 456 6 41
Inc
Membership Fees 137 176 224 (39) (48)
Other Comm. & Fees 97 97 34 (0) 63
ORE Income 3 9 13 (6) (4)
Gain on Sale of ORE 13 27 20 (14) 7
Rev of Litigation 150 0 0 150 0
Settlement
Other Income 144 156 183 (12) (27)
Total Other Income $2,123 $2,135 $2,249 ($12) ($114)
Total other income decreased to $2,123,000 in 2000 from $2,135,000
in 1999 or a 0.56% decrease.
Total other income decreased to $2,135,000 in 1999 from $2,249,000
in 1998 or a 5.07% increase.
Other Expense
The major categories of other expense include salaries and employee
benefits, occupancy and equipment expenses and other operating costs
associated with the day-to-day operations of the Company.
The following table sets forth the major components of other expense
for the last three years:
TABLE 5 Other Expense
$ Change From
December 31, Prior Year
2000 1999 1998 2000 1999
(Dollars in Thousands)
Salaries & Benefits 4,327 4,158 3,670 169 488
Occupancy Expense 1,969 1,969 1,956 0 13
Advertising Expense 108 103 117 5 (14)
Communications 184 199 208 (15) (9)
Postage 263 301 357 (38) (56)
Loan & Credit Card Expense 933 1,031 1,005 (98) 26
Professional Fees 215 330 218 (115) 112
Legal Fees 187 591 524 (404) 67
Insurance & Assessments 95 99 92 (4) 7
Stationery, Forms & Supply 239 317 303 (78) 14
ORE Expenses 48 68 133 (20) (65)
Loss on Litigation 0 0 50 0 (50)
Other Operating Expense 425 484 491 (59) (7)
Total Other Expense $8,993 $9,650 $9,124 ($657) $526
Total other expense decreased 6.81% to $8,993,000 in 2000 from
$9,650,000 in 1999.
Total other expense increased 5.77% to $9,650,000 in 1999 from
$9,124,000 in 1998.
Provision for Income Taxes
The income tax provision for the Company and the Bank on a
consolidated basis, for the year 2000 was $170,000 as compared to $46,000
in 1999 and $96,000 in 1998. The provision for income taxes consists of
provisions for federal taxes only. Louisiana does not have an income tax
for banks.
Financial Condition
The Company manages its assets and liabilities to maximize long-term
earnings opportunities while maintaining the integrity of its financial
position and the quality of earnings. To accomplish this objective,
management strives to effect efficient management of interest rate risk
and liquidity needs. The primary objectives of interest-sensitivity
management are to minimize the effect of interest rate changes on the net
interest margin and to manage the exposure to risk while maintaining net
interest income at acceptable levels. Liquidity is provided by carefully
structuring the balance sheet. The Company's asset liability committee
meets regularly to review both the interest rate sensitivity position and
liquidity.
Interest Rate Sensitivity
The Bank has established, as bank policy, an asset/liability
management system that protects Bank profits from undue exposure to
interest rate risks. The major elements used to manage interest rate
risk include the mix of fixed and variable rate assets and liabilities
and the maturity pattern of assets and liabilities. It is the Company's
policy not to invest in derivatives in the ordinary course of business.
The Company performs a monthly review of assets and liabilities that
reprice and the time bands within which the repricing occurs. Balances
are reported in the time band that corresponds to the instrument's next
repricing date or contractual maturity, whichever occurs first. Through
such analysis, the Company monitors and manages its interest sensitivity
gap to minimize the effects of changing interest rates.
The interest rate sensitivity structure within the Company's balance
sheet at December 31, 2000, has a net interest sensitive asset gap of
33.68% when projecting out one year. In the near term, defined as 90
days, the Company currently has a net interest sensitive liability gap of
6.59%. The information represents a general indication of repricing
characteristics over time; however, the sensitivity of certain deposit
products may vary during extreme swings in the interest rate cycle.
Since all interest rates and yields do not adjust at the same velocity,
the interest rate sensitivity gap is only a general indicator of the
potential effects of interest rate changes on net interest income.
The following table illustrates the Company's interest rate
sensitivity analysis at December 31, 2000, as well as the cumulative
position at December 31, 2000.
TABLE 6 Interest Rate Sensitivity Analysis
December 31, 2000 Over
30 60 90 120 180 One One
Days Days Days Days Days Year Year
(Dollars in Thousands)
Total
Earning Assets
Securities-HTM - 1,489 - - - 1,493 -
Securities - AFS - - - - - - 20
Loans 7,959 2,388 2,127 7,613 14,577 14,543 8,523
Loans held for sale - - - - - - -
Federal funds sold 26,950 - - - - - -
Total Earning Assets 34,909 3,877 2,127 7,613 14,577 16,036 8,543
Non Earning Assets - - - - - - 7,025
TOTAL ASSETS 34,909 3,877 2,127 7,613 14,577 16,036 15,568
Interest-Bearing Liabilities
Savings & Now 37,822 - - - - - -
accounts
Money market 5,382 - - - - - -
CD's < $100,000 1,415 785 484 1,359 1,121 39 1,906
CD's > $100,000 - - 801 - - 400 -
Federal Funds - - - - - - -
purchased
Repurchase - - - - - - -
agreements
Other short-term - - - - - - -
borrowings
Notes payable - - - - - - 2,226
Total Interest- 44,619 785 1,285 1,359 1,121 439 4,132
Bearing
Liabilities
Non Costing
Liabilities - - - - - - 40,967
TOTAL LIABILITIES 44,619 785 1,285 1,359 1,121 439 45,099
Interest Sensitivity (9,710) 3,092 842 6,254 13,456 15,597 (29,531)
Gap
Cumulative Gap (9,710) (6,618) (5,776) 478 13,934 29,531 -
Cumulative Gap/Total Interest-
Earning Assets -11.07% -7.55% -6.59% 0.55% 15.89% 33.68% 0.00%
GAP & Interest Margin Spread
By Bank policy we limit the Bank's earnings exposure due to interest
rate risk by setting limits on positive and negative gaps within the next
12 months. These limits are set so that this year's profits will not be
unduly impacted no matter what happens to interest rates during the year.
In addition, we extend the scenarios out five years to monitor the risks
associated on a longer term.
Liquidity
The purpose of liquidity management is to ensure that there is
sufficient cash flow to satisfy demands for credit, deposit withdrawals,
and other corporate needs. Traditional sources of liquidity include
asset maturities and growth in core deposits. The Company has maintained
adequate liquidity through cash flow from operating activities and
financing activities to fund loan growth, and anticipates that this will
continue even if the Company expands.
Liquidity and capital resources are discussed weekly by the
management committee, the assets and liability committee and at the
monthly executive committee meeting. Bank of Louisiana maintains
adequate capital to meet its needs in the foreseeable future.
Measuring liquidity and capital on a weekly basis enables management
to constantly monitor loan growth, and shifting customer preferences.
The committee's in-depth reviews of current, projected, and worse case
scenarios through various reports ensure the availability of funds and
capital adequacy.
The Bank intends on increasing capital by implementing an extensive
marketing program and evaluating all pricing fees and investing in
proprietary accounts, which will maximize the highest yield possible and
thereby improve earnings.
There are no known trends, events, regulatory authority
recommendations, or uncertainties that the Company is aware of that will
have or that are likely to have a material adverse effect on the
Company's liquidity, capital resources, or operations.
Loans
The loan portfolio is the largest category of the Company's earning
assets. The following table summarizes the composition of the loan
portfolio for the last five years:
TABLE 7 Loans Net by Category
December 31,
2000 1999 1998 1997 1996
(Dollars in Thousands)
Commercial, financial, & 3,095 4,095 4,441 4,281 4,390
agricultural
Real estate-mortgage 32,622 30,976 28,861 24,643 22,370
Mortgage Loan Held for 0 0 0 0 0
Resale
Personal Loans 3,917 2,845 3,006 5,106 5,731
Credit cards-Visa, 16,547 18,585 21,785 20,302 25,265
MasterCard
Credit cards-Proprietary 1,745 2,429 3,510 2,931 11,344
Overdrafts 159 128 154 359 207
Loans 58,085 59,058 61,757 57,622 69,307
Less:
Unearned income 358 277 215 2 9
Deferred loan fees 0 0 0 0 0
(costs), net
Allowance for possible 1,800 1,800 1,800 1,800 1,500
loan
losses
Loans, net $55,927 $56,981 $59,742 $55,820 $67,798
Total loans, which include loan loss reserves and unearned interest,
decreased $1,053,000 or 1.85% to $55,927,000 at December 31, 2000 from
$56,981,000 at December 31, 1999. This decrease was primarily
attributable to the decrease in the Company's commercial loans of
$1,000,000 or 24.42%, a decrease in the credit card portfolio of
$2,722,000 or 12.95% which is offset by an increase in real estate loans
of $1,646,000 or 5.31%, an increase in personal loans of $1,072,000 or
37.68% over December 31, 1999 total loans.
Total loans decreased $2,761,000 or 4.62% to $56,981,000 at December
31, 1999 from $59,742,000 at December 31, 1998. This decrease was
primarily attributable to the decrease in the Company's credit card
portfolio of $4,282,000 or 16.93%, which was offset by an increase in
real estate loans of 2,114,000 or 7.33%.
The following table shows the maturity distribution and interest
rate sensitivity of the Company's loan portfolio:
TABLE 8 Loan Maturity and Interest Rate Sensitivity
December 31, 2000
Maturing
Within One To Over
One 5 Years 5 Years Total
Year
(Dollars in Thousands)
Loan Maturity by
Type
Commercial, financial and
agricultural 2,089 1,002 4 3,095
Real estate construction,
land
and land 18,317 11,363 2,587 32,267
development
All other loans 19,326 3,019 20 22,365
Total $39,732 $15,384 $2,611 $57,727
Rate Sensitivity of Loans
Loans:
Fixed rate loans 36,990 15,384 2,611 54,985
Variable rate 2,693 0 0 2,693
loans
Non-Accrual Loans 49 0 0 49
Total $39,732 $15,384 $2,611 $57,727
Nonperforming Assets
Nonperforming assets consist of nonaccrual and restructured loans
and ORE. Nonaccrual loans are loans on which the interest accruals have
been discontinued when it appears that future collection of principal or
interest according to the contractual terms may be doubtful. Interest on
these loans is reported on the cash basis as received when the full
recovery of principal is anticipated or after full principal has been
recovered when collection of interest is in question. Restructured loans
are those loans whose terms have been modified, because of economic or
legal reasons related to the debtors' financial difficulties, to provide
for a reduction in principal, change in terms, or fixing of interest
rates at below market levels. ORE is real property acquired by
foreclosure or directly by title or deed transfer in settlement of debt.
Nonperforming assets decreased $190,000 or 14.46% at December 31,
2000, to $1,123,000 from $1,314,000 December 31, 1999. At December 31,
2000 there were no restructured loans.
Nonperforming assets decreased $123,000 or 8.55% at December 31,
1999, to $1,314,000 from $1,438,000 December 31, 1998. At December 31,
1999 there were no restructured loans.
Since 1996, the ratio of past due loans to total loans has decreased
from 3.31% to .66%. During that time, the Company significantly reduced
its ratio of nonperforming assets to loans and ORE from a high of 2.87%
of total loans at December 31, 1996, to a low of 1.97% at December 31,
2000.
When a loan is classified as nonaccrual, previously accrued interest
is reversed and interest income is decreased to the extent of all
interest accrued in the current year. If any portion of the accrued
interest had been accrued in the previous years, accrued interest is
decreased and a charge for that amount is made to the allowance for
possible loan losses. For 2000, the gross amount of interest income that
would have been recorded on nonaccrual loans at December 31, 2000, if all
such loans had been accruing interest at the original contract rate, was
$4,298.
TABLE 9 Nonperforming Assets
December 31,
2000 1999 1998 1997 1996
(Dollars in Thousands)
Nonaccrual Loans 49 40 81 83 316
Restructured Loans 0 0 0 0 0
Other Real Estate Owned 1,074 1,274 1,357 1,473 1,723
Total Nonperforming $1,123 $1,314 $1,438 $1,556 $2,039
Assets
Loans past due 90 days or 367 528 852 1,257 2,295
more
Ratio of past due loans to 0.66% 0.93% 1.42% 2.18% 3.31%
loans
Ratio of nonperforming assets to
loans
and other real estate 1.97% 2.26% 2.34% 2.63% 2.87%
owned
Impaired Loans
A loan is considered potentially impaired if: a) it is probable that
the Bank will be unable to collect all amounts due (principal and
interest) according to the terms of the loan agreement; b) A loan's
original contractual terms have been modified because of the
collectability concerns.
Impairment assessment is based on the present value of expected
future cash flows related to the particular loan. The Bank discounts
expected net future cash flows or the underlying collateral of a loan to
determine the appropriate loss allowance for the loan.
For impaired loans that have risk characteristics in common with
other impaired loans, the Bank aggregates those loans and uses historical
statistics, such as average recovery period and average amount recovered,
along with a composite effective interest rate as a means of measuring
the impaired loans.
If the measure of the impaired loan is less that the recorded
investment in the loan, including accrued interest net deferred loan fees
or costs, and unamortized premium or discount, the Bank recognizes the
impairment.
The term recorded investment in the loan is distinguished from net
carrying amount of the loan because the latter term is net of a valuation
allowance, while the former term is not. The recorded investment in the
loan does, however, reflect any direct write-down of the investment.
When the Bank recognizes the impairment, we create a valuation
allowance with a corresponding charge to bad-debt expense or adjust an
existing valuation allowance for the impaired loan with a corresponding
charge or credit to bad debt expense.
As of December 31, 2000 and 1999, there was no recorded investment
in loans that are considered impaired under SFAS 114 and 118.
Watch List
The Bank's watch list includes loans, which, for management
purposes, have been identified as requiring a higher level of monitoring
due to risk, and includes both performing and nonperforming loans. The
majority of watch list loans are classified as performing, because they
do not have characteristics resulting in uncertainty about the borrower's
ability to repay principal and interest in accordance with the original
terms of the loans.
The watch list consists of classifications, identified as Type 1
through Type 4. Types 1, 2 and 3 generally parallel the regulatory
classifications of loss, doubtful and substandard, respectively. Type 4
generally parallels the regulatory classification of Other Assets
Especially Mentioned (OAEM). These loans require monitoring due to
conditions which, if not corrected, could increase credit risk. Total
watch list loans decreased 15.01% to $2,996,000 at December 31, 2000 from
$3,525,000 at December 31, 1999.
Management is not aware of any potential problem loans other than
those disclosed above, which includes all loans recommended for
classification by regulators, which would have a material impact on asset
quality.
Other Real Estate
The Bank's ORE category has also been affected by the depressed
economic conditions in Louisiana. This was coupled with the adverse
impact the Bank encountered with the merger in 1988, whereby the Bank
inherited over $2,500,000 in ORE properties.
These properties, which are held for sale, are recorded on the
Bank's records, at cost, adjusted to the lower of current appraised
value. Any difference is charged to the allowance for loan losses in the
year of foreclosure. Any subsequent writedowns and income and expenses
associated with ORE are included in the income and expense of the Bank.
ORE totaled $1,074,000 at December 31, 2000, $1,274,000 at December
31, 1999, and $1,357,000 at December 31, 1998. There was one new parcel
added in 2000.
During the fiscal year 2000 the Bank sold 2 parcels of ORE totaling
$31,000 as compared to 3 parcels sold in 1999 totaling $168,000 and 2
parcels totaling $116,000 in 1998. Historically the Bank has always sold
ORE parcels for a net gain, $13,000 in 2000, $27,000 in 1999, and $20,000
in 1998. The costs associated with the sales of ORE are minimal as
compared to the gains, $0 in 2000, $3,000 in 1999, and $1,000 in 1998.
The Bank annually obtains a current appraisal from a qualified
appraiser as to the fair market value of all ORE properties and adjusts
the book value accordingly. Management voluntarily recognizes any
writedown due to reductions in the fair market value upon receipt of the
appraisal.
Below is a schedule of all ORE parcels held as of December 31, 2000,
which are in excess of $50,000:
TABLE 10 Other Real Estate Over %50,000
Date Book AppraisalAppraisal
Address Acquired Value Date Amount
(Dollars in Thousands)
123-125 Carondelet 01/17/91 423 02/01/00 460
617 N. Broad 09/24/91 391 10/01/99 605
27 Audubon Blvd 09/24/91 260 10/17/00 515
$1,074
In addition, any expenditure such as maintenance and repairs, etc.
is recognized during the year in which it occurred. The net gain(cost)of
operation of ORE totaled ($32,000) in 2000, ($32,000) in 1999, ($100,000)
in 1998. The following table reflects a breakdown of the income and
expense amounts related to ORE operations:
TABLE 11 Other Real Estate Income/Expense
2000 1999 1998
(Dollars in Thousands)
ORE Income
Rental Income 3 9 13
Gain on Sales 13 27 20
Total Income 16 36 33
ORE Expenses
Maintenance, Repairs, Upkeep & 15 20 40
Security
Real Estate Fees, Advertising & 5 7 6
Appraisals
Insurance 10 18 49
Sheriff Sale 3 0 0
Legal Fees 1 4 20
Taxes 14 13 18
Writedowns 0 6 0
Loss on Sale 0 0 0
Total Expenses 48 68 133
Net Gain or Loss ($32) ($32) ($100)
Allocation of Allowance for Possible Loan Losses
Allocation of the allowance for loan losses is based primarily on
previous credit loss experience, adjusted for changes in the risk
characteristics of each category. Additional amounts are allocated based
on the evaluation of the loss potential of individual troubled loans and
the anticipated effect of economic conditions on both individual loans
and loan categories. Since the allocation is based on estimates and
subjective judgment, it is not necessarily indicative of the specific
amounts of loan categories in which losses may ultimately occur.
Table 12 Allocation of Allowance for Possible Loan Losses
December 31, December 31, December 31,
2000 1999 1998
Allowance % * Allowance % * Allowance % *
(Dollars in Thousands)
Commercial,
financial
and agricultural 330 61.49% 324 55.53% 314 53.92%
Real Estate- - - - - - -
Construction
Real Estate-Mortgage - - - - - -
Consumer Installment 124 6.70% 103 8.89% 99 5.12%
Credit Cards 1,346 31.81% 1,373 35.58% 1,387 40.96%
Unallocated - - - - - -
Total 1,800 1,800 1,800
December 31, December 31,
1997 1996
Allowance % * Allowance % *
(Dollars in Thousands)
Commercial,
financial
and agricultural 285 50.20% 263 33.61%
Real Estate- - - - -
Construction
Real Estate-Mortgage - - - -
Consumer Installment 110 9.48% 118 8.57%
Credit Cards 1,405 40.32% 1,119 52.82%
Unallocated - - - -
Total 1,800 1,500
* Percentage of respective loan type to total loans.
Investment Securities
The Company's investment portfolio policy is to maximize income
consistent with liquidity, asset quality, regulatory constraints, and
asset/liability objectives. The Company's Board of Directors reviews the
policy not less than annually. The levels of taxable and tax-exempt
securities and short-term investments reflect the Company's strategy of
maximizing portfolio yields while providing for liquidity needs. The
Investment securities totaled $3,400,000 at December 31, 2000, $3,400,000
at December 31, 1999, and $4,800,000 at December 31, 1998. The majority
of the holdings are backed by U.S. Government or federal agency
guarantees limiting the credit risks associated with these securities.
The average maturity of the Company's securities portfolio was one year
or less at December 31, 2000. At December 31, 2000 securities classified
as available-for-sale were $388,000 and $367,000 at December 31, 1999.
The gross unrealized holding gains on these securities at December 31,
2000 was $99,000 after taxes compared to net unrealized holding gains of
$272,000 after taxes at December 31, 1999.
At December 31, 2000, the Company classified all of its U. S.
Treasury securities and obligations of U.S. government corporations and
federal agencies as held-to-maturity.
The following table sets forth the carrying and approximate market
values of investment securities for the last three years:
TABLE 13 Investment Securities
December 31,
2000 1999 1998
Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value
(Dollars in Thousands)
U.S. Treasury securities and
obligations of U.S. government
corporations and 2,982 2,984 3,004 3,000 4,498 4,514
agencies
Other investments 291 388 90 367 90 291
Total $3,273 $3,372 $3,094 $3,367 $4,588 $4,805
TABLE 14 Securities Maturities and Yields
December 31, 2000
Amortized Fair Average
Cost Value Yield (2)
Available-for-Sale
U.S. Treasury securities
and
obligations of U.S. government
corporations and agencies
Due in 1 year or - -
less
Due 1-5 years - -
Total - - -
Held-to-Maturity
U.S. Treasury securities
and
obligations of U.S. government
corporations and agencies
Due in 1 year or 2,982 2,984 4.59%
less
Due 1-5 years 0 0 0.00%
Total $2,982 $2,984 4.59%
(1) This table excludes equity investments, which have no maturity date.
(2) Weighted average yields are calculated on the basis of the carrying value
of the security. The weighted average yields on tax-exempt obligations are
compounded on a fully taxable-equivalent basis assuming a federal tax rate of
34%.
Included in Investment Securities are equity securities acquired
through foreclosure, which have no maturity date. Below is a table of
these securities at December 31,2000 (dollars in thousands):
TABLE 15 Other Securities
Mississippi River Bank 299,860
Liberty Financial 68,100
Services, Inc.
New Orleans SBIDCO, Inc. 20,000
Total Other Securities $387,960
Deposits
Total deposits decreased $5,391,000 or 5.95% to $85,164,000 at
December 31, 2000 from $90,555,000 at December 31, 1999. Core deposits,
the Company's largest source of funding, consist of all interest-bearing
and noninterest bearing deposits except certificates of deposits over
$100,000. Core deposits are obtained from a broad range of customers.
Average interest-bearing core deposits decreased 7.78% in 2000. Market
rate core deposits, primarily CD's of less of $100,000 and money market
accounts, decreased 15.19% in 2000.
Total deposits decreased $4,028,000 or 4.26% to $90,555,000 at
December 31, 1999 from $94,583,000 at December 31, 1998. Core deposits,
the Company's largest source of funding, consist of all interest-bearing
and noninterest bearing deposits except certificates of deposits over
$100,000. Core deposits are obtained from a broad range of customers.
Average interest-bearing core deposits increased 2.48% in 1999. Market
rate core deposits, primarily CD's of less of $100,000 and money market
accounts, increased 1.62% in 1999.
Noninterest bearing deposits are comprised of business accounts,
including correspondent bank accounts, escrow deposits, as well as
individual accounts. Average noninterest bearing demand deposits
represented 39.89% of average core deposits in 2000 compared to 38.10% of
average core deposits in 1999.
The average amount of, and average rate paid on deposits by category
for the period shown are presented below:
TABLE 16 Selected Statistical Information
December 31,
2000 1999 1998
Average Average Average
Amount Rate Amount Rate Amount Rate
(Dollars in Thousands)
Noninterest-bearing $34,479 N/A $34,670 N/A $33,729 N/A
Deposits
Interest-bearing Demand 18,229 1.58% 19,873 1.67% 18,109 2.20%
Deposits
Savings Deposits 25,415 2.93% 26,704 2.94% 26,381 3.06%
Time Deposits 9,763 3.91% 11,583 4.49% 11,879 4.79%
Total Average Deposits $87,886 $92,830 $90,098
The composition of average deposits for the last three years are
presented below:
TABLE 17 Deposit Composition
December 31,
2000 1999 1998
(Dollars in Thousands)
Average % of Average % of Average % of
Balances Deposits Balances Deposits Balances Deposits
Demand, noninterest- 34,479 39.23% 34,670 37.35% 33,729 37.44%
bearing
NOW accounts 13,360 15.20% 14,091 15.18% 13,295 14.76%
Money market deposit 4,869 5.54% 5,782 6.23% 4,814 5.34%
accounts
Savings accounts 25,415 28.92% 26,704 28.77% 26,381 29.28%
Other time deposits 8,312 9.46% 9,760 10.51% 10,481 11.63%
Total core deposits 86,435 98.35% 91,007 98.04% 88,700 98.45%
Certificates of deposit of
$100,000 or more 1,451 1.65% 1,823 1.96% 1,398 1.55%
Total deposits $87,886 100.00% $92,830 100.00% $90,098 100.00%
The following table sets forth maturity distribution of Time
Deposits of $100,000 or more for the past three years:
TABLE 18 Maturity Distribution of Time Deposits $100,000 or More
December 31,
2000 1999 1998
(Dollars in Thousands)
Three months or less 801 633 614
After three months through one year 400 851 830
After one year through three years 0 200 200
Total $1,201 $1,684 $1,644
Other Assets and Other Liabilities
The following are summaries of other assets and other liabilities
for the last three years:
TABLE 19 Other Assets & Other Liabilities
December 31,
2000 1999 1998
(Dollars in Thousands)
Interest Receivable 64 108 213
Prepaid Expenses 358 314 296
Accounts Receivable 254 1,122 364
Cash Surrender Value 411 394 393
Other Assets 39 31 45
Total Other Assets $1,126 $1,969 $1,311
December 31,
2000 1999 1998
(Dollars in Thousands)
Accrued Expenses Payable 229 228 150
Accounts Payable 0 0 0
Deferred Membership Fees 40 53 64
Blanket Bond Fund 50 50 50
Other Liabilities 698 920 85
Total Other $1,017 $1,251 $349
Liabilities
Borrowings
The Company's long-term debt is comprised primarily of debentures.
Each $500 debenture is secured by a pledge of 40.79 shares of the Bank's
stock. The Bank has no long-term debt. It is the Bank's policy to
manage its liquidity so that there is no need to make unplanned sales of
assets or to borrow funds under emergency conditions. The Bank maintains
a Federal Funds line of credit in the amount of $1,000,000 with a
correspondent bank and also has a commitment from an upstream
correspondent that will increase our Federal Funds line of credit over
and above the normal amount by pledging unused securities. The Bank can
borrow the amount of unpledged securities at the discount window at the
Federal Reserve Bank by pledging those securities.
Shareholders' Equity
Shareholders' equity increased $393,000 or 7.37% to $5,722,000 at
December 31, 2000 from $5,329,000 at December 31, 1999. This increase in
shareholders' equity since December 31, 2000, was attributable to
$379,000 in net income and an increase in accumulated other comprehensive
income of $14,000.
Shareholders' equity increased $144,000 or 2.77% to $5,329,000 at
December 31, 1999 from $5,185,000 at December 31, 1998. This increase in
shareholders' equity since December 31, 1998, was attributable to $94,000
in net income and an increase in accumulated other comprehensive income
of $50,000.
The leverage ratio (Tier 1 capital to total assets) at December 31,
2000, was 7.81% compared to 6.80% at December 31, 1999, which are
compared to the minimum capital requirement of 4.00%.
The leverage ratio (Tier 1 capital to total assets) at December 31,
1999, was 6.80% compared to 6.89% at December 31, 1998, which are
compared to the minimum capital requirement of 4.00%.
At December 31, 2000, based on the Federal Reserve Board's
guidelines, the Company's Tier 1 risk based capital ratio was 12.27, and
the risk based capital ratio was 13.54%.
At December 31, 1999, the Company's Tier 1 risk based capital ratio
was 10.50, and the risk based capital ratio was 11.77%.
The ratio of average shareholders' equity to average assets was
5.83% in 2000, 4.81% in 1999, and 5.51% in 1998.
Supervision and Regulation Enforcement Action
The Bank is currently subject to an enforcement action from its
primary regulators, the Federal Deposit Insurance Corporation (FDIC), and
the Office of Financial Institutions (OFI), in the form of a Memorandum
of Understanding. See Note X "Regulatory Matters."
Item 9 Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
LaPorte, Sehrt, Romig and Hand, Certified Public Accountants perform
all audit services for the Company and the subsidiary. The same firm
will be retained to perform audit services in 2001.
Item 10 Directors and Executive Officers of the Company
Principal
Occupation
For
Company Stock Beneficially Owned Last Five
Years
Common Preferred If Not With
Name (Age) Position Number Percent Number Percent The Company
Held
G. Harrison Scott Director; 58,480 32.64% 104,798 4.55% N/A
(77) Chairman of the
Board of the
Company and the Bank
James A. Comiskey Director; 36,559 20.41%(1) 101,520 4.41% N/A
(74) President of the
Company and the Bank
Douglas A. Director of 2,740 1.53%(2) 18,537 (*) President,
Schonacher the
(70) Company and the Bank V.I.P. Dist.
Gordon A. Burgess Director of 1,015 (*) 36,164 1.57% President,
the
(67) Company and the Bank Tangipahoa
Parish Council
Lionel J. Favret, Director of 571 (*) 31,656 1.38% Retired
Sr. the
(89) Company and the Bank
Leland L. Landry Director of 3,800 2.12% 2,387 (*) President,
the
(74) Company and the Bank Landry Realty
Edward J. Soniat Director of 9,495 5.30% 249,448 10.83% President,
the
(88) Company and the Bank Blaise
and Secretary of the Parking
Company Enterprise
Corp.
Non-Director Executive
Officers
Peggy L. Treasurer 50 (*) 2,772 (*) N/A
Schaefer of
(49) the Company and
Senior Vice President, and
Chief Financial Officer of the
Bank
All Directors & Executive 112,710 62.92% 547,282 23.77%
Officers as a group (8 persons)
(*) Represents less than 1% of the shares outstanding.
(1) Includes 47 common shares and 2,661 preferred shares owned by
Director Comiskey's spouse.
(2) Includes 2,525 common shares and 9,213 preferred shares owned by
Director Schonacher's spouse.
Directors of the Company each serve for a term of one year.
Messrs. Scott, Comiskey, Favret, and Soniat have served as directors
since 1981. Messrs. Burgess, Landry, and Schonacher have served as
directors since 1988. Mr. Scott has served as Chairman of the Board of
the Company since 1981. Mr. Soniat has served in his capacity as
Secretary of the Company since 1988. Ms. Schaefer has served in her
capacity as Treasurer of the Company since 1988 and as a Bank officer
since 1983.
No family relationships exist among the current directors or
executive officers of the Company or the Bank, and, except for service as
directors of the Company, no director of the Company is a director of any
other company with a class of securities registered pursuant to Section
12 of the Exchange Act or subject to the requirements of Section 15(b) of
that act or any company registered as an investment company under the
Investment Company Act of 1940.
The Company does not have standing nominating, or compensation
committees of the Board of Directors, or committees performing similar
functions. In lieu thereof, the Board of Directors as a group performs
the foregoing functions.
Item 11 Executive Compensation
The Company pays no salaries or other compensation to its directors
and executive officers. The Bank pays each director, other than Messrs.
Scott and Comiskey, an honorarium for attending each meeting of the Board
of Directors, and each meeting of the Bank's Audit and Finance Committee
and Executive Committee, in the amount of $400, $300, and $300,
respectively.
From October 1, 1990, through June 30, 1992, the director-recipients
loaned these honorariums to the Company. The total amount loaned to the
Company since October 1, 1990, and as of December 31, 2000, was $545,652,
including accrued and unpaid interest at the rate of 10% per annum. At
this time, there is no maturity date on these loans.
The following table sets forth compensation for the Bank's executive
officers for the calendar years 2000, 1999, and 1998:
Annual Compensation
Other
Annual All Other
Name and Principal Year Salary Compensation Compensation
Position ($) ($) ($)
G. Harrison Scott, 2000 89,800 41,000 19,494
Chairman of the 1999 93,254 41,000 19,494
Board 1998 89,800 20,500 19,494
James A. Comiskey, 2000 89,800 41,000 19,000
President 1999 93,254 41,000 19,000
1998 89,800 20,500 19,000
In addition to the cash compensation shown in the foregoing table,
the Bank provides an automobile and certain club memberships for Messrs.
Scott and Comiskey. The Bank also provides life insurance policies for
Messrs. Scott and Comiskey. Upon the death of the insured, the Company
is entitled to receive, from the death proceeds, all of the premiums it
has paid for such policy, but in no event more than $150,000 per man,
with the remaining death benefit being paid to the named beneficiary.
The Bank
has also provided Messrs. Scott and Comiskey with life insurance policies
in which each is entitled to name their own respective beneficiaries.
The cost of these benefits borne by the Bank in 2000 were $19,494 for Mr.
Scott's policy and $19,000 for Mr. Comiskey's policy as reflected in the
"All Other Compensation" column in the foregoing table.
Committees of the Board of Directors of the Company and the Bank
During fiscal year 2000, the Board of Directors of the Company held
a total of 5 meetings, and the Board of Directors of the Bank held a
total of 12 meetings. Each director attended at least 75% of the
aggregate of the meetings of the Board of Directors and of the committees
on which such director served. Neither the Board of Directors of the
Company nor the Bank has a standing compensation committee or committee
performing similar functions. In lieu thereof, the Board of Directors as
a group performs the foregoing function.
The Board of Directors of the Bank has an Audit and Finance
Committee. This committee also serves as the Audit and Finance Committee
for the Company. It is a five-member body consisting of three permanent
members and two rotating members. The permanent members are Messrs.
Favret (chairman), Landry, and Soniat. The two rotating members are
Messrs. Burgess, and Schonacher.
By its charter, this committee meets monthly on the first Tuesday of
the month. The Audit and Finance Committee reviews information from
management; reviews financial and delinquency reports; reviews the work
performed by the Bank's internal auditor and by the independent certified
public accountant firm. In addition this committee also reviews capital
expenditures in excess of $5,000; analyzes the Loan Loss Reserve
adequacy; and approves charge offs. The Audit and Finance Committee met
12 times in 2000.
The Audit and Finance Committee discloses the following:
1. They have reviewed and discussed the audited financial statements
with management, and with the independent auditors.
2. They have received a letter and written disclosure from the
independent auditors, and have discussed the independence of the
auditors.
3. They have recommended to the Board of Directors that the
financial statements prepared by the independent auditors be
included in the Annual Report.
The Bank also has an Executive Committee consisting of five
permanent members and two rotating members. The permanent members of the
Executive Committee in 2000 were Messrs. Scott (chairman), Comiskey,
Favret, Soniat, and Burgess, and the rotating members were selected from
Messrs. Landry, and Schonacher. The Executive Committee formulates
policy matters for determination by the Board of Directors and reviews
financial reports, loan reports, new business, and other real estate
owned information. The Executive Committee met 26 times in 2000.
Item 12 Security Ownership Of Certain Beneficial Owners and Management
As of December 31, 2000, the following persons were known to be the
beneficial owners of more than 5% of the Company's stock.
Name & Address Of Title Of Amount Percent
Beneficially
Beneficial Owners Class Owned Of Class
G. Harrison Scott Common 58,480 32.64%
55481 Hwy. 433 Preferred 104,798 4.55%
Slidell, LA 70461
James A. Comiskey Common 36,559 (1) 20.41%
1100 City Park Preferred 101,520 4.41%
Ave.
New Orleans, LA 70119
Edward J. Soniat Common 9,495 5.30%
49 Oriole Street Preferred 249,448 10.83%
New Orleans, LA 70124
(1) Includes 47 common shares and 2,661 preferred shares owned by
Director Comiskey's spouse.
Item 13 Certain Relationships and Related Transactions
The Bank makes loans in the ordinary course of business to its
directors and executive officers, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons, and do not involve more
than the normal risk of collectability or present other unfavorable
features.
The aggregate amount borrowed by all officers, directors, and their
associates totaled $817,717 at December 31, 2000 and the highest
aggregate amount borrowed during the year totaled $1,449,672. These
aggregate amounts represented 10.77% and 19.09% of the total capital of
the Bank, respectively.
On September 30, 1991, the Bank purchased a four-story building
located at 300 St. Charles Avenue from the RTC for a price of $402,500.
The building serves as the Bank's main office. The purchase was financed
by a loan from Mr. Soniat to the Company, which in turn sold the building
to the Bank. As of December 31, 2000, there was a balance of $62,073 in
principal and accrued but unpaid interest on the loan, which bears
interest at the rate of 13.50% per annum. The loan matured on September
30, 1996, however, Mr. Soniat agreed to renew this loan at the same
interest rate and repayment schedule, on a month-to-month basis, which
unless changed, would fully amortize such loan on September 30, 2006.
The Bank leases office space from Severn South Partnership and
Tammany Mall Partnership. The general partners of these Partnerships are
majority shareholders in BOL BANCSHARES, INC. Rent paid to Severn South
Partnership for the years ended December 31, 2000, 1999 and 1998 totaled
$478,970, $490,244, and $479,388 respectively. An annual rent of $74,400
was paid to Tammany Mall Partnership for the years ended December 31,
2000, 1999 and 1998.
Item 14 Exhibits, Financial Statement Schedules, and Reports on Form 8-K
BOL BANCSHARES, INC.
& SUBSIDIARY
December 31, 2000
Audits of Financial Statements
December 31, 2000
and
December 31, 1999
To the Board of Directors
BOL Bancshares, Inc.
& Subsidiary
Independent Auditor's Report
We have audited the accompanying consolidated balance sheets of BOL
BANCSHARES, INC. and its wholly-owned subsidiary, Bank of Louisiana, as
of December 31, 2000 and 1999, and the related consolidated statements of
income (loss), comprehensive income (loss), changes in stockholders'
equity, and cash flows for the years ended December 31, 2000, 1999 and
1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
The Company had excluded from income in the accompanying
consolidated income statement for the year ended December 31, 1999, an
amount received from litigation settlement, that in our opinion, should
have been included to conform with generally accepted accounting
principles. This settlement has been included in the consolidated income
statement for the year ended December 31, 2000. If the settlement was
accounted for properly, other liabilities would be decreased by $201,292,
deferred tax assets would be decreased by $68,440, retained earnings
would be increased by $132,852 as of December 31, 1999, and net income
would be increased by $132,852 ($.75 per share), for the year then ended.
In addition, net income for the year ended December 31, 2000, would be
decreased by $132,852 ($.75 per share).
In our opinion, except for the effects of not including the amount
received from litigation settlement, as discussed in the preceding
paragraph, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of BOL
BANCSHARES, INC. and its wholly-owned subsidiary, Bank of Louisiana, as
of December 31, 2000 and 1999, and the results of their operations and
their cash flows for the years ended December 31, 2000, 1999 and 1998, in
conformity with generally accepted accounting principles.
A Professional Accounting Corporation
/s/ LAPORTE, SEHRT, ROMIG & HAND
Metairie, LA
January 15, 2001
A Professional Accounting Corporation
110 Veterans Memorial Boulevard, Suite 200, Metairie, LA 70005-4958
(504)835-5522 FAX (504)835-5535
724 East Boston Street Covington, LA 70433(504)892-5850 FAX (504)892-5956
E-Mail Address: laporte@laporte.com Internet Address:
http://www.laporte.com/
Member of AICPA Division for CPA Firms-Private Companies Practice Section
and
SEC Practice Section
Affiliation with CPAmerica International
BOL BANCSHARES, INC. & SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31,
2000 1999
Cash and Due from Banks
Non-Interest Bearing Balances and Cash $ 4,909,060 $ 8,703,964
Federal Funds Sold 25,905,000 24,785,000
Investment Securities
Securities Held-to-Maturity (Fair Value of
$2,984,427 in 2000 and $2,999,061 in 1999) 2,981,849 3,003,546
Securities Available-for-Sale, at Fair Value 387,960 366,545
Loans - Less Allowance for Loan Losses of
$1,800,000 in 2000 and 1999, and Unearned Discounts
of $358,437 in 2000 and $276,804 in 1999 55,926,682 56,980,651
Property, Equipment and Leasehold Improvements
(Net of Depreciation and Amortization) 2,131,262 2,540,585
Other Real Estate 1,074,012 1,274,013
Other Assets 1,126,435 1,968,500
Deferred Taxes 210,740 382,308
Letters of Credit 53,980 103,888
$94,706,980 $100,109,000
The accompanying notes are an integral part of these financial
statements.
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31,
2000 1999
LIABILITIES
Deposits
Non-Interest Bearing $34,030,683 $35,305,878
Interest Bearing 51,133,401 55,249,817
Notes Payable 2,225,827 2,232,528
Other Liabilities 1,017,113 1,251,449
Accrued Litigation Settlement 0 150,000
Letters of Credit Outstanding 53,980 103,888
Accrued Interest 524,194 486,363
Total Liabilities 88,985,198 94,779,923
STOCKHOLDERS' EQUITY
Preferred Stock - Par Value $1
2,302,811 Shares Issued and
Outstanding in 2000 and 1999 2,302,811 2,302,811
Common Stock - Par Value $1
179,145 Shares Issued and
Outstanding in 2000 and 1999 179,145 179,145
Accumulated Other Comprehensive Income 196,917 182,783
Capital in Excess of Par - Retired Stock 14,888 14,888
Retained Earnings 3,028,021 2,649,450
Total Stockholders' Equity 5,721,782 5,329,077
$94,706,980 $100,109,000
BOL BANCSHARES, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
For the Years Ended
December 31,
2000 1999 1998
INTEREST INCOME $9,357,443 $9,348,210 $9,813,783
INTEREST EXPENSE 1,630,450 1,846,456 1,986,681
Net Interest Income 7,726,993 7,501,754 7,827,102
PROVISION FOR (RECOVERY OF)
LOAN LOSSES 308,194 (154,231) 1,085,625
Net Interest Income After Provision
for Loan Losses 7,418,799 7,655,985 6,741,477
OTHER INCOME
Service Charges on Deposit Accounts 1,125,943 1,228,330 1,318,419
Other Non-Interest Income 847,275 906,224 930,992
Reversal of Litigation Settlement 150,000 0 0
Total Other Income 2,123,218 2,134,554 2,249,411
OTHER EXPENSES
Salaries and Employee Benefits 4,327,373 4,148,212 3,669,949
Occupancy Expense 1,969,464 1,978,669 1,956,172
Loss on Litigation 0 0 50,000
Other Non-Interest Expense 2,696,115 3,523,229 3,447,384
Total Other Expenses 8,992,952 9,650,110 9,123,505
INCOME (LOSS) BEFORE
INCOME TAX EXPENSE (BENEFIT) 549,065 140,429 (132,617)
INCOME TAX EXPENSE 170,494 46,272 95,650
NET INCOME (LOSS) $378,571 $94,157 ($228,267)
EARNINGS (LOSS) PER SHARE OF
COMMON STOCK $2.11 $0.53 ($1.27)
The accompanying notes are an integral part of these financial
statements.
BOL BANCSHARES, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the Years Ended
December 31,
2000 1999 1998
NET INCOME (LOSS) $378,571 $94,157 ($228,267)
OTHER COMPREHENSIVE INCOME,
NET OF TAX:
Unrealized Holding Gains on
Investment Securities Available-for-
Sale, Arising During the Period 14,134 49,596 133,806
Less: Reclassification Adjustment for
Gains Included in Net Income 0 0 (50)
OTHER COMPREHENSIVE INCOME 14,134 49,596 133,756
COMPREHENSIVE INCOME (LOSS) $392,705 $143,753 ($94,511)
The accompanying notes are an integral part of these financial
statements.
BOL BANCSHARES, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Accumulated Capital In
Other Excess of
Preferred Common Comprehensive Par Retained
Stock Stock Income Retired Earnings Total
Stock
BALANCE - December 31, $2,302,811 $179,145 ($569) $14,888 $2,783,560 $5,279,835
Other Comprehensive Income,
Net of Applicable Deferred
Income Taxes 133,756 -
- - - 133,756
Net (Loss) for the Year - -
1998 - - (228,267) (228,267)
BALANCE - December 31, 133,187 14,888
1998 2,302,811 179,145 2,555,293 5,185,324
Other Comprehensive Income,
Net of Applicable Deferred
Income Taxes 49,596 -
- - - 49,596
Net Income for the Year - -
1999 - - 94,157 94,157
BALANCE - December 31, 182,783 14,888
1999 2,302,811 179,145 2,649,450 5,329,077
Other Comprehensive Income,
Net of Applicable Deferred
Income Taxes 14,134 -
- - - 14,134
Net Income for the Year - -
2000 - - 378,571 378,571
BALANCE - December 31, $2,302,811 $179,145 $196,917 $14,888 $3,028,021 $5,721,782
The accompanying notes are an integral part of these financial statements.
BOL BANCSHARES, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Years Ended
December 31,
2000 1999 1998
OPERATING ACTIVITIES
Net Income (Loss) $378,571 $94,157 ($228,267)
Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided by (Used in) Operating Activities:
Provision for (Recovery of) Loan Losses 308,194 (154,231) 1,085,625
Depreciation and Amortization Expense 510,066 540,745 454,298
Amortization of Investment Security 3,546 18,220 2,170
Premiums
Accretion of Investment Security (3,833) (2,263) (20,221)
Discounts
Decrease in Deferred Income Taxes 164,287 46,272 95,651
Gain on Sale of Other Real Estate (13,114) (27,206) (19,733)
(Increase) Decrease in Other Assets 830,987 (657,181) 1,223,789
Increase (Decrease) in Other Liabilities, Accrued
Interest and Accrued Loss Contingency (346,506) 126,387 670,271
Net Cash Provided by (Used in)
Operating Activities 1,832,198 (15,100) 3,263,583
INVESTING ACTIVITIES
Proceeds from Available-for-Sale
Securities
Released at Maturity - - 1,000,000
Proceeds from Held-to-Maturity Investment Securities
Released at Maturity 5,917,843 4,500,000 5,500,000
Purchases of Held-to-Maturity Investment (5,895,858)(3,021,562) (501,250)
Securities
Proceeds from Sale of Property and 244 410 858
Equipment
Purchases of Property and Equipment (89,909) (576,000) (263,313)
Proceeds from Sale of Other Real Estate 244,500 168,000 136,000
Purchases of Loans (418,500) (764,353)(4,792,309)
Net (Increase) Decrease in Loans 1,132,890 3,621,850 (216,033)
Net Cash Provided by Investing 891,210 3,928,345 863,953
Activities
The accompanying notes are an integral part of these financial statements.
BOL BANCSHARES, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
For The
Years Ended
December 31,
2000 1999 1998
FINANCING ACTIVITIES
Net Increase (Decrease) in Non-Interest Bearing
and Interest Bearing Deposits ($5,391,611) ($4,027,417) $642,575
Proceeds from Issuance of Long-Term Debt 1,753,000 - -
Principal Payments on Long-Term Debt (1,759,701) (39,859) (11,121)
Net Cash Provided by (Used in) Financing
Activities (5,398,312) (4,067,276) 631,454
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (2,674,904) (154,031) 4,758,990
CASH AND CASH EQUIVALENTS -
BEGINNING OF YEAR 33,488,964 33,642,995 28,884,005
CASH AND CASH EQUIVALENTS -
END OF YEAR $30,814,060 $33,488,964 $33,642,995
SUPPLEMENTAL DISCLOSURES:
Additions to Other Real Estate through $31,385 $62,663 $0
Foreclosure
Cash Paid During the Year for Interest $1,592,619 $1,886,062 $1,988,981
Cash (Paid) Received During the Year for ($5,000) $0 $876,831
Income Taxes
Market Value Adjustment for Unrealized Gain (Loss)
on Securities Available-for-Sale $21,415 $75,145 $202,660
Accounting Policies Note:
Cash Equivalents Include Amounts Due from Banks
And Federal Funds Sold. Generally, Federal Funds
Are Purchased and Sold for One Day Periods.
The accompanying notes are an integral part of these financial statements.
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS OF THE COMPANY
BOL BANCSHARES, INC. was organized as a Louisiana corporation
on May 7, 1981 for the purpose of becoming a registered bank holding
company under the Bank Holding Company Act. The Company was
inactive until April 29, 1988, when it acquired Bank of Louisiana,
BOS Bancshares, Inc. and its wholly-owned subsidiary, Bank of the
South, and Fidelity Bank and Trust Company of Slidell, Inc., and its
wholly-owned subsidiary, Fidelity Land Co. in a business
reorganization of entities under common control in a manner similar
to a pooling of interest. The acquired companies are engaged in the
banking industry.
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiary, Bank of
Louisiana. In consolidation, significant inter-company accounts,
transactions, and profits have been eliminated.
INVESTMENT SECURITIES
Debt securities that management has the ability and intent to
hold to maturity are classified as held-to-maturity and carried at
cost, adjusted for amortization of premium and accretion of
discounts using methods approximating the interest method. Other
marketable securities are classified as available-for-sale and are
carried at fair value. Realized gains and losses on securities are
included in net income. Unrealized gains and losses on securities
available-for-sale are recognized as direct increases or decreases
in stockholders' equity. Cost of securities sold is recognized
using the specific identification method.
LOANS AND UNEARNED INCOME
Loans are stated at the amount of unpaid principal, reduced by
unearned discount and an allowance for loan losses. Unearned
discounts on loans are recognized as income over the term of the
loans on the interest method. Interest on other loans is calculated
and credited to operations on a simple interest basis. Loans are
charged against the allowance for loan losses when management
believes that collectibility of the principal is unlikely. Loan
origination fees and certain direct origination costs, when
material, are capitalized and recognized as an adjustment of the
yield on the related loan.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is established through a
provision for loan losses charged to expenses. Loans are charged
against the allowance for loan losses when management believes that
the collectibility of the principal is unlikely. The allowance is
an amount that management believes will be adequate to absorb
possible losses on existing loans that may become uncollectible,
based on evaluation of the collectibility of loans and prior loss
experience. The evaluations take into consideration such factors as
changes in the nature and volume of the loan portfolio, overall
portfolio quality, review of specific problem loans, and current
economic conditions that may affect the borrowers' ability to pay.
Accrual of interest is discontinued and accrued interest is charged
off on a loan when management believes, after considering economic
and business conditions and collection efforts, that the borrowers'
financial condition is such that collection of interest is doubtful.
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Buildings, office equipment and leasehold improvements are
stated at cost, less accumulated depreciation and amortization
computed principally on the straight-line and modified accelerated
cost recovery methods over the estimated useful lives of the assets.
Maintenance and repairs are expensed as incurred while major
additions and improvements are capitalized. Gains and losses on
dispositions are included in current operations.
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
INCOME TAXES
The Company and its consolidated subsidiary file a consolidated
Federal income tax return. Federal income taxes are allocated
between the companies, in accordance with a written agreement.
MEMBERSHIP FEES
Membership fees are collected in the month of June and
amortized over a twelve-month period using the straight-line method.
CASH AND DUE FROM BANKS
The Bank considers all amounts Due from Banks and Federal Funds
Sold to be cash equivalents.
The Subsidiary Bank is required to maintain non-interest
bearing reserve balances to fulfill its reserve requirements. The
average amount of the required reserve balance was approximately
$1,491,885 and $1,595,000 for the years ended December 31, 2000 and
1999, respectively.
NON-DIRECT RESPONSE ADVERTISING
The Bank expenses advertising costs as incurred.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
ACCOUNTING STANDARDS NOT YET ADOPTED
Statement of Financial Accounting Standards No. 138 (SFAS 138),
"Accounting for Certain Derivative Instruments and Certain Hedging
Activities", an amendment of SFAS 133, is effective for the quarter
beginning after June 15, 2000. This statement addresses a limited
number of issues causing implementation difficulties for entities
that apply SFAS 133, which requires all derivatives to be recognized
at fair value as either assets or liabilities in the consolidated
balance sheets. Changes in the fair value of derivatives not
designated as hedging instruments are to be recognized currently in
earnings. Gains or losses on derivatives designated as hedging
instruments are either to be recognized currently in earnings or are
to be recognized as a component of other comprehensive income,
depending on the intended use of the derivatives and the resulting
designation. The Company currently has no derivatives, therefore,
adoption of this pronouncement had no effect on the financial
position and results of operations of the Company.
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
ACCOUNTING STANDARDS NOT YET ADOPTED (Continued)
Statement of Financial Accounting Standards No. 140 (SFAS 140),
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", a replacement of SFAS 125. This
statement provides accounting and reporting standards for transfers
and servicing of financial assets and extinguishments of
liabilities. Those standards are based on consistent application of
a financial-components approach that focuses on control. Under this
approach, after a transfer of financial assets, an entity recognizes
the financial and servicing assets it controls and the liabilities
it has incurred, derecognizes financial assets when control has been
surrendered, and derecognizes liabilities when extinguished. This
statement provides consistent standards for distinguishing transfers
of financial assets that are sales from transfers that are secured
borrowings. This statement is effective for transfers and servicing
of financial assets and extinguishments of liabilities occurring
after March 31, 2001 and for recognition and reclassification of
collateral and for disclosures relating to securitization
transactions and collateral for years ending after December 15,
2000. The adoption of this pronouncement had no effect on the
financial position and results of operations of the Company.
NOTE B
RESTATEMENT OF PRIOR PERIOD
During 1999, the Banks' regulators advised that the Company
incorrectly applied the full accrual method of accounting for the
sale of Other Real Estate in 1998. Accordingly, the accompanying
consolidated financial statements have been restated from those
originally reported to reflect the change to the cost recovery
method. The effect of the restatement for 1998 was a decrease in
income before income tax expense of $901,282 ($5.03 per share), a
decrease in income tax expense of $166,852 ($.93 per share), for an
overall decrease in net income of $734,430 ($4.10 per share).
Under the cost recovery method, the bank does not recognize the
gain on the sale of this piece of other real estate or interest
income on the loan made to the purchasers, until the total payments
made by the purchaser reach certain levels. If all scheduled
payments are made in accordance with the loan agreement, the
transaction will revert to the full accrual method on January 25,
2001, resulting in recognition of a $686,026 gain and approximately
$145,000 in interest income.
NOTE C
OTHER REAL ESTATE
The Subsidiary Bank has acquired various parcels of real estate
in connection with the default and foreclosure on certain loans.
These properties, which are held for sale, are recorded on the
Subsidiary Bank's records at the lower of the loan balance or net
realizable value. Any difference is charged to the allowance for
loan losses in the year of foreclosure.
The net income (expense) from Other Real Estate totaled
($32,309) in 2000, ($31,640) in 1999, and ($100,058) in 1998.
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE D
LOANS
Major classification of loans are as follows:
December 31,
2000 1999
Real Estate Mortgages $32,621,620 $30,960,725
Commercial 3,094,802 1,830,551
Personal 3,916,773 5,125,223
Credit Cards 18,291,947 21,012,608
Overdrafts 159,977 128,348
58,085,119 59,057,455
Unearned Discounts 358,437 276,804
57,726,682 58,780,651
Allowance for Loan Losses 1,800,000 1,800,000
$55,926,682 $56,980,651
The following is a classification of loans by rate and
maturity: (Dollar amounts in thousands)
December 31,
2000 1999
Fixed Rate Loans:
Maturing in 3 Months or Less $5,563 $6,800
Maturing Between 3 and 12 Months 15,271 12,612
Maturing Between 1 and 5 Years 31,540 33,502
Maturing After 5 Years 2,969 2,713
55,343 55,627
Variable Rate Loans:
Maturing Quarterly or More
Frequently 2,599 3,391
Maturing Between 3 and 12 Months 94 -
Non-Accrual Loans 49 40
58,085 59,058
Less: Unearned Discount 358 277
Less: Allowance for Loan Losses 1,800 1,800
Net Loans $55,927 $56,981
As of December 31, 2000 and 1999, there was no recorded
investment in loans that are considered impaired under SFAS 114 and
118.
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE D
LOANS (Continued)
The Bank purchases credit card portfolios occasionally
resulting in premiums or discounts. Premiums and discounts are being
amortized as an adjustment to interest income over a three year
period following the purchase date. Unamortized premiums at
December 31, 2000 and 1999 totaled $93,044 and $290,207,
respectively.
NOTE E
NON-PERFORMING ASSETS
Non-performing assets include real estate acquired through
foreclosure or deed taken in lieu of foreclosure. These assets are
included on the accompanying consolidated balance sheets under the
account caption, "Other Real Estate", and amount to $1,074,012 at
December 31, 2000 and $1,274,013 at December 31, 1999.
Loans are placed on non-accrual status when, in management's
opinion, the collection of additional interest is questionable.
Thereafter no interest is taken into income unless received in cash
or until such time as the borrower demonstrates the ability to pay
principal and interest.
At December 31, 2000, $49,177 of loans were in the non-accrual
status and $4,298 of interest was foregone in the year then ended.
At December 31, 1999, $39,698 of loans were in the non-accrual
status and $1,909 of interest was foregone in the year then ended.
NOTE F
INVESTMENT SECURITIES
Carrying amounts and approximate market values of investment
securities are summarized as follows:
Securities held-to-maturity consisted of the following at
December 31, 2000:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
U.S. Treasury Securities $2,981,849 $2,578 $ - $2,984,427
Securities available-for-sale consisted of the following at
December 31, 2000:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
Equity Securities $291,400 $96,560 $- $387,960
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE F
INVESTMENT SECURITIES (Continued)
Securities held-to-maturity consisted of the following at
December 31, 1999:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
U.S. Treasury Securities $3,003,546 $ - $ 4,485 $2,999,061
Securities available-for-sale consisted of the following at
December 31, 1999:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
Equity Securities $89,601 $276,944 $- $366,545
The maturities of investment securities at December 31, 2000
are as follows:
Securities Held-to-Maturity Securities Available-for-Sale
Amortized Market Amortized Market
Cost Value Cost Value
Amounts maturing in:
One year or less $2,981,849 $2,984,427 $ 291,400 $387,960
Securities of $995,212 at December 31, 2000 and $1,101,300 at
December 31, 1999 were pledged to secure public funds.
NOTE G
INCOME TAXES
The components of the provision for income tax expense are:
2000 1999 1998
Current $ 6,207 $ - $-
Deferred 164,287 46,272 95,650
Total Provision for
Income Tax $170,494 $ 46,272 $95,650
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE G
INCOME TAXES (Continued)
A reconciliation of income tax at the statutory rate to income
tax expense at the Company's effective rate is as follows:
2000 1999 1998
Computed Tax at the Expected
Statutory Rate $186,682 $ 47,746 $(45,090)
Tax Exempt Income - - 139,584
Other Adjustments (16,188) (1,474) 1,156
Income Tax Expense (Benefit)
for Operations $170,494 $ 46,272 $ 95,650
Certain income and expense items are accounted for differently
for financial reporting purposes than for income tax purposes.
Provisions for deferred taxes are made in recognition of these
temporary differences and are measured using the income tax rates
applicable to the period when the differences are expected to be
realized or settled.
There were net deferred tax assets of $210,740 and $382,308 as
of December 31, 2000 and 1999, respectively. The major temporary
differences, which created deferred tax assets and liabilities, are
as follows:
2000 1999
Deferred Tax Assets:
Other Real Estate $ 41,752 $ 28,880
Allowance for Loan Loss 71,921 -
Deferred Gain on Sale of
Other Real Estate 166,852 166,852
Accruals not Deductible Until Paid - 24,025
Net Operating Loss and Tax Credit
Carryforward 77,183 310,713
Contributions Carryforward 21,181 16,893
Accrued Litigation Settlement - 51,000
Total Deferred Tax Assets 378,889 598,363
Deferred Tax Liabilities:
Unrealized Gain on Securities
FASB 115 Adjustment (81,680) (76,772)
Accumulated Depreciation (86,469) (106,418)
Allowance for Loan Loss - (32,865)
Total Deferred Tax Liabilities (168,149) (216,055)
Deferred Tax Assets, Net of Deferred Tax
Liabilities $210,740 $382,308
The net operating loss carryforwards totaling $88,700 and the
tax credit carryforwards totaling $47,025 expire in the years 2014
through 2015.
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE H
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
December 31,
2000 1999
Furniture and Equipment $4,462,555 $4,393,886
Bank Owned Vehicles 77,357 77,357
Leasehold Improvements 404,106 383,110
Land 468,425 468,425
Buildings 1,334,075 1,334,075
6,746,518 6,656,853
Less: Accumulated Depreciation
and Amortization 4,615,256 4,116,268
$2,131,262 $2,540,585
Depreciation and amortization expense aggregated $510,066 in
2000, $540,745 in 1999 and $454,298 in 1998.
NOTE I
ALLOWANCE FOR LOAN LOSSES
Changes in the allowance for loan losses were as follows:
For The Years Ended
December 31,
2000 1999 1998
Balance - January 1 $1,800,000 $1,800,000 $1,800,000
Provision Charged to:
Operations 308,194 (154,231) 1,085,625
Loans Charged Off (1,146,684) (1,581,595) (1,950,067)
Recoveries 838,490 1,735,826 864,442
Balance - December 31 $1,800,000 $1,800,000 $1,800,000
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE J
STOCKHOLDERS' EQUITY
PREFERRED STOCK
8%, non-cumulative, non-participating, non-convertible, par
value $1; 3,000,000 shares authorized, 2,302,811 shares issued and
outstanding in 2000 and 1999. Preferred stock ranks prior to common
stock as to dividends and liquidation.
COMMON STOCK
Par value $1; 1,000,000 shares authorized, 179,145 shares
issued and outstanding in 2000 and 1999.
On August 10, 1999, the Company declared a dividend
distribution of one purchase right for each outstanding share of
common stock. Each right entitles the holder, at any time following
the "Distribution Date" to purchase one share of common stock of the
Company at an exercise price of $7.50 per share. A "Distribution
Date" occurs ten days following certain actions designed to acquire
20% or more of the Company's voting securities. The rights will
expire on August 9, 2009.
NOTE K
EARNINGS PER COMMON SHARE
Earnings per share are computed using the weighted average
number of shares outstanding, which were 179,145 in 2000, 1999 and
1998. There was no provision for dividends for the years ended
December 31, 2000, 1999 or 1998.
NOTE L
CONTINGENT LIABILITIES AND COMMITMENTS
The Subsidiary Bank's financial statements do not reflect
various commitments and contingent liabilities which arise in the
normal course of business and which involve elements of credit risk,
interest rate risk and liquidity risk. These commitments and
contingent liabilities are commitments to extend credit. A summary
of the Bank's commitments and contingent liabilities are as follows:
2000 1999 1998
Credit Card Arrangements $62,401,000 $52,025,000 $54,089,000
Commitments To Extend Credit 1,373,000 2,017,293 557,000
Commitments to extend credit, credit card arrangements and
commercial letters of credit all include exposure to some credit
loss in the event of nonperformance of the customer. The Bank's
credit policies and procedures for credit commitments and financial
guarantees are the same as those for extension of credit that are
recorded on the statements of condition. Because these instruments
have fixed maturity dates, and because many of them expire without
being drawn upon, they do not generally present any significant
liquidity risk to the Bank.
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE L
CONTINGENT LIABILITIES AND COMMITMENTS (Continued)
The Subsidiary Bank in the course of conducting its business,
becomes involved as a defendant or plaintiff in various lawsuits.
In one such case, the Subsidiary Bank is a defendant in a lawsuit
filed by another bank. Outside counsel for the Subsidiary Bank has
advised that at this stage in the proceedings he believes the
probable outcome to be favorable to Bank of Louisiana. The
Subsidiary Bank has filed a counter-claim in this case and believes
the suits are without merit and intends to defend vigorously its
position.
The Subsidiary Bank is a defendant in a lawsuit filed by one of
its proprietary customers for alleged breach of contract. In 1997,
a judgment was rendered against the bank, and accordingly, a
provision for loss of $150,000 was charged to operations. During
2000, the subsidiary bank was successful in its appeal, resulting in
a reversal of the $150,000 litigation settlement in the accompanying
consolidated financial statements for 2000.
NOTE M
RELATED PARTY TRANSACTIONS
In the ordinary course of business, the Subsidiary Bank makes
loans to its directors, officers and principal holders of equity
securities. These loans are made on substantially the same terms
including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons. An analysis of
loans made to directors, officers and principal holders of equity
securities, including companies in which they have a significant
ownership interest, is as follows:
2000 1999
Balance - January 1 $986,583 $1,053,824
New Loans Made and Renewals 463,089 61,524
Reclassifications - (16,697)
Repayments and Maturities (631,955) (112,068)
Balance - December 31 $817,717 $ 986,583
The Subsidiary Bank leases office space from Severn South
Partnership and Tammany Mall Partnership. The general partners of
these Partnerships are majority shareholders in BOL BANCSHARES, INC.
Rent paid to Severn South Partnership for the years ended December
31, 2000, 1999 and 1998 totaled $478,970, $490,244 and $479,388,
respectively. An annual rent of $74,400 was paid to Tammany Mall
Partnership for the years ended December 31, 2000, 1999 and 1998.
At December 31, 2000 and 1999 amounts due to Officers and
Directors of the Company, including accrued interest, totaled
$545,652 and $649,781, respectively. These amounts which are
included in Notes Payable and Accrued Interest Payable in the
accompanying consolidated balance sheets, are payable on demand and
bear interest at 10% per annum. Of the debentures payable at
December 31, 2000 and 1999, $140,500 and $196,000, respectively,
were to Officers and Directors of the Company (see Note R). Another
note payable to Director totaled $62,073 and $68,774 at December 31,
2000 and 1999, respectively, and is also disclosed in Note R.
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE N
LEASES
The Subsidiary Bank leases office space under agreements
expiring in various years through December 31, 2006. Two of the
leases are with related parties, as discussed in Note M. In
addition, the Subsidiary Bank rents office space on a month-to-month
basis from non-related groups. Various pieces of data processing
equipment are also leased.
The total minimum rental commitment at December 31, 2000, under
the leases is $2,207,503, which is due as follows:
December 31,
2001 $663,943
2002 669,295
2003 397,274
2004 393,276
2005 83,715
$2,207,503
For the years ended December 31, 2000, 1999 and 1998, $800,947,
$792,323 and $805,605 was charged to rent expense, respectively.
The Subsidiary Bank is the lessor of office space under
operating leases expiring in various years through 2003.
Minimum future rentals to be received on non-cancelable leases
as of December 31, 2000 are:
December 31,
2001 $ 94,124
2002 39,256
2003 25,976
$159,356
NOTE O
LETTERS OF CREDIT
Outstanding letters of credit were $53,980 and $103,888 as of
December 31, 2000 and 1999, respectively.
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE P
INTEREST BEARING DEPOSITS
Major classifications of interest bearing deposits are as
follows:
December 31,
2000 1999
NOW Accounts $12,738,496 $13,654,393
Money Market Accounts 5,004,015 5,458,005
Savings Accounts 24,834,795 25,816,343
Certificates of Deposit Greater
Than $100,000 1,200,954 1,684,337
Other Certificates of Deposit 7,355,141 8,636,739
$51,133,401 $55,249,817
The maturities of Certificates of Deposit Greater than $100,000
at December 31, 2000 are as follows: (Dollar amounts in thousands)
Three Months or Less $ 801 $ 633
After Three Months Through One Year 400 851
After One Year Through Three Years - 200
$1,201 $1,684
NOTE Q
FUNDS AVAILABLE FOR DIVIDENDS
The Subsidiary Bank is restricted under applicable laws and
regulatory authority in the payment of cash dividends. Such laws
generally restrict cash dividends to the extent of the Subsidiary
Bank's earnings.
The Subsidiary Bank has been further restricted by regulatory
authorities from paying dividends without prior regulatory approval.
Refer to Note X.
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE R
NOTES PAYABLE
The following is a summary of notes payable at December 31,
2000 and 1999:
December 31,
2000 1999
Notes payable to current and past Directors
of the Company, payable on demand,
interest at 10%. $410,754 $410,754
Notes payable to Director, interest at
13.5%, maturing September 30, 2006,
monthly payments of $1,298. 62,073 68,774
Debentures payable, due July 2003, interest at
9%, callable at 103%, 102% and 101% of
face value during the first, second, and third
years, respectively, following the closing date,
interest payable semi-annually, each $500
debenture secured by 40.79 shares of the
Subsidiary Bank's stock. 1,753,000 1,753,000
$2,225,827 $2,232,528
Following are maturities of long-term debt:
December 31,
2001 $418,417
2002 8,763
2003 1,763,023
2004 11,462
2005 13,109
Subsequent to 2005 11,053
$2,225,827
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE S
INTEREST INCOME AND INTEREST EXPENSE
Major categories of interest income and interest expense are as
follows:
December 31,
2000 1999 1998
INTEREST INCOME
Interest and Fees on Loans:
Real Estate Loans $2,644,013 $2,451,875 $2,423,299
Installment Loans 368,048 358,530 390,419
Credit Cards and Related Plans 3,870,716 4,382,728 4,896,216
Commercial and all
Other Loans 520,616 445,326 502,902
Interest on Investment Securities -
U.S. Treasury and Other
Securities 170,477 191,231 455,529
Interest on Federal Funds Sold 1,783,573 1,518,520 1,145,418
$9,357,443 $9,348,210 $9,813,783
INTEREST EXPENSE
Interest on Time Deposits
of $100,000 or More $ 60,280 $ 78,057 $ 61,204
Interest on Other Deposits 1,353,433 1,558,521 1,711,816
Interest on Other Borrowed
Funds 7,798 - 1,824
Interest on Notes Payable 208,939 209,878 211,837
$1,630,450 $1,846,456 $1,986,681
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE T
NON-INTEREST INCOME AND NON-INTEREST EXPENSES
Major categories of other non-interest income and non-interest
expenses are as follows:
December 31,
2000 1999 1998
OTHER NON-INTEREST INCOME
Cardholder and Other Charge Card
Income $639,894 $672,941 $679,405
Data Processing and Items Processing - 75 175
Other Commission and Fees 86,248 92,282 87,634
Other Real Estate Income 15,702 36,036 32,905
Other Income 105,431 104,890 130,873
$847,275 $906,224 $930,992
OTHER NON-INTEREST EXPENSE
Loan and Charge Card Expenses $932,617 $1,031,232 $1,005,179
Communications 447,126 500,349 565,470
Stationery, Forms and Supplies 238,946 317,017 302,858
Professional Fees 401,413 921,007 741,324
Insurance and Assessments 94,809 98,717 92,049
Advertising 108,496 102,935 116,638
Miscellaneous Losses 22,545 52,977 53,461
Promotional Expenses 166,005 178,902 154,636
Other Real Estate Expenses 48,010 67,677 132,962
Other Expenses 236,148 252,416 282,807
$2,696,115 $3,523,229 $3,447,384
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE U
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY
BOL BANCSHARES, INC.
CONDENSED BALANCE SHEETS
December 31,
2000 1999
ASSETS
Due from Banks $384,835 $427,889
Due from Subsidiary 81,892 99,636
Securities Available-for-Sale, at Fair 367,960 346,545
Value
Other Assets 39,170 19,312
Investment in Bank of Louisiana 7,593,414 7,128,177
$8,467,271 $8,021,559
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes Payable $2,225,827 $2,232,528
Accrued Expenses - -
Deferred Taxes 32,830 25,549
Accrued Interest 418,221 365,794
Shareholders' Equity 5,790,393 5,397,688
$8,467,271 $8,021,559
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE U
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY (Continued)
BOL BANCSHARES, INC.
STATEMENTS OF INCOME (LOSS)
December 31,
2000 1999 1998
INCOME
Dividend Income - Bank of Louisiana $ - $ - $387,500
Interest Income 8,704 13,595 18,223
Miscellaneous Income 59,972 12,760 0
68,676 26,355 405,723
EXPENSES
Interest 208,939 209,878 211,837
Other Expenses 12,675 15,570 35,218
221,614 225,448 247,055
INCOME (LOSS) BEFORE EQUITY
IN UNDISTRIBUTED EARNINGS
(LOSS) OF SUBSIDIARY (152,938) (199,093) 158,668
Equity in Undistributed
Earnings (Loss) of Subsidiary 465,237 222,521 (262,939)
INCOME (LOSS) BEFORE
INCOME TAX BENEFIT 312,299 23,428 (104,271)
INCOME TAX BENEFIT 66,272 70,728 77,803
NET INCOME (LOSS) $378,571 $94,156 ($26,468)
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE U
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY (Continued)
BOL BANCSHARES, INC.
STATEMENTS OF CASH FLOWS
December 31,
2000 1999 1998
OPERATING ACTIVITIES
Net Income (Loss) $378,571 $94,156 ($26,468)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided by (Used in) Operating Activities
Equity in Undistributed (Earnings)
Loss of Subsidiary (465,237) (222,521) 262,939
Net (Increase) Decrease in Other Assets (19,858) 12,648 889,478
Net Increase (Decrease) in Other 52,427 (34,879) 38,060
Liabilities
Net Cash Provided by (Used in)
Operating Activities (54,097) (150,596) 1,164,009
INVESTING ACTIVITIES
Investment in Available-for-Sale Securities - - (271,400)
Net Cash Used in Investing Activities - - (271,400)
FINANCING ACTIVITIES
Repayments of Advances from Subsidiaries - - (791,065)
(Increase) Decrease in Due From Subsidiary 17,744 19,102 (77,803)
Proceeds from Issuance of Long-Term Debt 1,753,000 - -
Repayment of Long-Term Debt (1,759,701) (39,858) (11,122)
Net Cash Provided by (Used in) Financing 11,043 (20,756) (879,990)
Activities
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS (43,054) (171,352) 12,619
CASH AND CASH EQUIVALENTS -
BEGINNING OF YEAR 427,889 599,241 586,622
CASH AND CASH EQUIVALENTS -
END OF YEAR $384,835 $427,889 $599,241
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE V
CONCENTRATIONS OF CREDIT
All of the Bank's loans, commitments, and commercial and
standby letters of credit have been granted to customers in the
Bank's market area. All such customers are depositors of the Bank.
The concentrations of credit by type of loan are set forth in Note
D. Commercial letters of credit were granted primarily to
commercial borrowers.
NOTE W
COMPREHENSIVE INCOME
Comprehensive income was comprised of changes in the Company's
unrealized holding gains or losses on securities available-for-sale
during 2000, 1999 and 1998. The following represents the tax
effects associated with the components of comprehensive income:
December 31,
2000 1999 1998
Gross Unrealized Holding Gains
Arising During the Period 21,415 75,145 202,736
Tax (Expense) (7,281) (25,549) (68,930)
14,134 49,596 133,806
Reclassification Adjustment for
Gains Included in Net Income - - (76)
Tax Benefit - - 26
- - (50)
Net Unrealized Holding Gains
Arising During the Period $14,134 $49,596 $133,756
NOTE X
REGULATORY MATTERS
On December 14, 1999, the Bank consented to a revised
Memorandum of Understanding issued by the Federal Deposit Insurance
Corporation (FDIC) and the Office of Financial Institutions (OFI).
The Memorandum was issued by the FDIC and OFI as a result of their
examination of the Bank as of August 9, 1999 and replaces the
Memorandum of Understanding dated March 12, 1996. The Memorandum of
Understanding is an arrangement between the Bank and the FDIC and
OFI in which the Bank agrees to perform, among other things, the
following within specified time periods:
a) The Bank shall maintain a Tier I leverage capital ratio equal to
or greater than seven percent, including restricting dividends,
pending regulatory approval,
b) Eliminate from its books certain criticized assets and reduce
other criticized assets to specified levels,
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE X
REGULATORY MATTERS (Continued)
c) Initiate and implement a marketing program to dispose of
its other real estate in a timely manner,
d) Formulate and implement a written strategic plan,
management plan, management succession plan, and profit
plan,
e) Perform a quarterly review of the adequacy of the Bank's
loan valuation reserve,
f) Revision of the Bank's loan policy and loan review program,
g) Restatement of 1998 income for accounting for a gain recognized
on the sale of other real estate.
While no assurance can be given, Bank management believes it
has taken action toward complying with the provisions of the
Memorandum of Understanding, although at December 31, 1999 their
Tier I leverage capital ratio fell below the seven percent threshold
to 6.80%. It is not presently determinable what actions, if any,
bank regulators might take if requirements of the Memorandum are not
complied with in the specified time periods.
As of December 31, 2000, the most recent notification from the
FDIC categorized the Bank as "well capitalized" under the regulatory
framework for prompt corrective action. To be categorized "well
capitalized" the Bank must maintain minimum leverage capital ratios
and minimum amounts of capital to total "risk weighted" assets, as
defined by banking regulators. Management philosophy and plans are
directed to enhancing the financial stability of the Subsidiary Bank
to ensure the continuity of operations.
At December 31, 2000, the Bank is required to have a minimum
Tier I leverage capital and minimum Tier I and Total capital risk
based ratio of 4.00%, 4.00% and 8.00%, respectively. The Bank's
actual risk based ratios at that date were 12.27% and 13.54%,
respectively. Tier I leverage capital ratios for the Subsidiary
Bank were 7.81% for 2000 and 6.80% for 1999.
NOTE Y
DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the
fair value of each class of financial instruments for which it is
practicable to estimate the value:
CASH AND SHORT-TERM INVESTMENTS
For cash, the carrying amount approximates fair value. For
short-term investments, fair values are calculated based upon
general investment market interest rates for similar maturity
investments.
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE Y
DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
INVESTMENT SECURITIES
For securities and marketable equity securities held-for-
investment purposes, fair values are based on quoted market prices.
LOAN RECEIVABLES
For certain homogeneous categories of loans, such as
residential mortgages, credit card receivables and other consumer
loans, fair value is estimated using the current U.S. treasury
interest rate curve, a factor for cost of processing and a factor
for historical credit risk to determine the discount rate.
DEPOSIT LIABILITIES
The fair value of demand deposits, savings deposits and certain
money market deposits are calculated based upon general investment
market interest rates for investments with similar maturities. The
value of fixed maturity certificates of deposit is estimated using
the U.S. treasury interest rate curve currently offered for deposits
of similar remaining maturities.
COMMITMENTS TO EXTEND CREDIT
The fair value of commitments is estimated using the fees
currently charged to enter into similar agreements, taking into
account the remaining terms of the agreements and the present credit-
worthiness of the counterparties.
The estimated fair values of the Company's financial
instruments are as follows:
December 31, 2000
Carrying Fair
Amount Value
Financial Assets:
Cash and Short-Term Investments $30,814,060 $30,814,060
Investment Securities 3,369,809 3,372,387
Loans 57,726,682 57,245,981
Less: Allowance for Loan Losses 1,800,000 1,800,000
$90,110,551 $89,632,428
Financial Liabilities:
Deposits $85,164,084 $85,132,230
Unrecognized Financial Instruments:
Commitments to Extend Credit $1,319,020 $1,319,020
Commercial Letters of Credit 53,980 53,980
Credit Card Arrangements 62,401,000 62,401,000
$63,774,000 $63,774,000
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE Y
DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
December 31, 1999
Carrying Fair
Amount Value
Financial Assets:
Cash and Short-Term Investments $33,488,964 $33,488,964
Investment Securities 3,370,091 3,365,606
Loans 58,780,651 58,527,842
Less: Allowance for Loan Losses 1,800,000 1,800,000
$93,839,706 $93,582,412
Financial Liabilities:
Deposits $90,555,695 $90,606,530
Unrecognized Financial Instruments:
Commitments to Extend Credit $1,913,405 $ 1,913,405
Commercial Letters of Credit 103,888 103,888
Credit Card Arrangements 52,025,000 52,025,000
$54,042,293 $54,042,293
BOL BANCSHARES, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE Z
SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
The following sets forth condensed results of operations for
2000 and 1999 (dollar amounts in thousands, except per share data):
First Second Third Fourth
2000 Quarter Quarter Quarter Quarter
Interest Income $2,306 $2,349 $2,339 $2,363
Interest Expense 404 402 401 423
Net Interest Income 1,902 1,947 1,938 1,940
Provision for Loan Losses (80) 108 122 158
Other Income 503 474 482 664
Other Expense 2,062 2,274 2,231 2,426
Income Tax Expense 146 13 41 (30)
Net Income $277 $26 $26 $50
Net Income per Common Share (1)
Basic $1.55 $0.14 $0.14 $0.28
Dilluted $1.55 $0.14 $0.14 $0.28
(1) Quarterly per share amounts do not add to total for the year ended
due to rounding.
First Second Third Fourth
1999 Quarter Quarter Quarter Quarter
Interest Income $2,340 $2,320 $2,477 $2,211
Interest Expense 470 483 469 424
Net Interest Income 1,870 1,837 2,008 1,787
Provision for Loan Losses 98 327 237 (816)
Other Income 534 530 528 543
Other Expense 2,407 2,481 2,414 2,348
Income Tax Expense - - - 46
Net Income ($101) ($441) ($115) $752
Net Income per Common Share (1)
Basic ($0.56) ($2.46) ($0.64) $4.20
Dilluted ($0.56) ($2.46) ($0.64) $4.20
(1) Quarterly per share amounts do not add to total for the year ended
due to rounding.
To the Board of Directors
BOL Bancshares, Inc.
& Subsidiary
Independent Auditor's Report
on Supplementary Information
Our report on our audits of the basic financial statements of BOL
BANCSHARES, INC. and its wholly-owned subsidiary, Bank of Louisiana, for
the years ended December 31, 2000 and 1999 appears on page 1. These
audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information
contained in Schedules I, II and III is presented for the purposes of
additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
A Professional Accounting Corporation
/s/ LAPORTE, SEHRT, ROMIG & HAND
January 15, 2001
A Professional Accounting Corporation
110 Veterans Memorial Boulevard, Suite 200, Metairie, LA 70005-4958
(504)835-5522 FAX (504)835-5535
724 East Boston Street Covington, LA 70433(504)892-5850 FAX (504)892-5956
E-Mail Address: laporte@laporte.com Internet Address:
http://www.laporte.com/
Member of AICPA Division for CPA Firms-Private Companies Practice Section
and
SEC Practice Section
Affiliation with CPAmerica International
BANK OF LOUISIANA
SUPPLEMENTARY INFORMATION
SCHEDULE I
BALANCE SHEETS
UNCONSOLIDATED
ASSETS
December 31,
2000 1999
Cash and Due from Banks
Non Interest Bearing Balances and Cash $4,909,060 $ 8,703,964
Federal Funds Sold 25,905,000 24,785,000
Investment Securities
Securities Held-to-Maturity (Fair Value of
$2,984,427 in 2000
and $2,999,061 in 1999) 2,981,849 3,003,546
Securities Available-for-Sale, at Fair Value 20,000 20,000
Loans: Less Allowance for Loan Losses of $1,800,000
in 2000 and 1999 and Unearned Discount of
$358,437 in 2000 and $276,804 in 1999 55,926,682 56,980,651
Property, Equipment and Leasehold Improvements (Net
of Depreciation and Amortization) 2,131,262 2,540,585
Other Real Estate 1,074,012 1,274,013
Other Assets 1,087,265 1,949,188
Deferred Taxes 312,182 476,469
Letters of Credit 53,980 103,888
$94,401,292 $99,837,304
LIABILITIES
Deposits
Non-Interest Bearing $34,036,725 $35,309,757
Interest Bearing 51,512,194 55,673,827
Other Liabilities 1,017,114 1,251,450
Letters of Credit Outstanding 53,980 103,888
Due to Parent 81,892 99,636
Accrued Litigation Settlement - 150,000
Accrued Interest 105,973 120,569
Total Liabilities 86,807,878 92,709,127
STOCKHOLDERS' EQUITY
Common Stock - 143,000 Shares Issued and
Outstanding 1,430,000 1,430,000
Surplus 4,616,796 4,616,796
Retained Earnings 1,546,618 1,081,381
Total Stockholders' Equity 7,593,414 7,128,177
Total Liabilities and Stockholders' Equity $94,401,292 $99,837,304
See independent auditor's report on supplementary information.
BANK OF LOUISIANA
SUPPLEMENTARY INFORMATION
SCHEDULE II
STATEMENTS OF INCOME
UNCONSOLIDATED
For The Years Ended
December 31,
2000 1999 1998
INTEREST INCOME $ 9,357,443 $ 9,348,210 $ 9,813,783
INTEREST EXPENSE 1,430,215 1,650,173 1,793,067
Net Interest Income 7,927,228 7,698,037 8,020,716
PROVISION FOR (RECOVERY OF) LOAN LOSSES 308,194 (154,231) 1,085,625
Net Interest Income After Provision
For Loan Losses 7,619,034 7,852,268 6,935,091
OTHER INCOME
Service Charges on Deposit Accounts 1,125,943 1,228,330 1,318,419
Other Non-Interest Income 787,303 893,464 930,992
Reversal of Litigation Settlement 150,000 - -
Gain on Securities - - 201,799
2,063,246 2,121,794 2,451,210
OTHER EXPENSES
Salaries and Employee Benefits 4,327,373 4,148,212 3,669,949
Occupancy Expense 1,969,464 1,978,669 1,956,172
Loss on Litigation - - 50,000
Oher Non-Interest Expense 2,683,440 3,507,660 3,412,166
8,980,277 9,634,541 9,088,287
INCOME BEFORE INCOME
TAX EXPENSE 702,003 339,521 298,014
INCOME TAX EXPENSE 236,766 117,000 173,453
NET INCOME
EARNINGS PER SHARE
OF COMMON STOCK $3.25 $1.56 $0.87
See independent auditor's report on supplementary information.
BANK OF LOUISIANA
SUPPLEMENTARY INFORMATION
SCHEDULE III
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
UNCONSOLIDATED
Accumulated
Other
Common Comprehensive Retained
Stock Income Surplus Earnings Total
BALANCE - December 31, $1,430,000 ($569) $4,616,796 $1,121,799 $7,168,026
Net Income for the Year - - - 124,561 124,561
1998
Cash Dividends Declared for
the Year ($2.71 per - - - (387,500) (387,500)
share)
Other Comprehensive Income,
Net of Applicable Deferred
Income Taxes - 569 - - 569
BALANCE - December 31, 1,430,000 - 4,616,796 858,860 6,905,656
1998
Net Income for the Year - - - 222,521 222,521
1999
BALANCE - December 31, 1,430,000 - 4,616,796 1,081,381 7,128,177
1999
Net Income for the Year - - - 465,237 465,237
2000
BALANCE - December 31, $1,430,000 $ - $4,616,796 $1,546,618 $7,593,414
2000
See independent auditor's report on supplementary information.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BOL BANCSHARES, INC.
/s/ Peggy L. Schaefer
Peggy L. Schaefer
Treasurer
March 27, 2001
Date
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 27, 2001.
/s/ Douglas A. Schonacher /s/ Gordon A. Burgess
Director Director
/s/ G. Harrison Scott /s/ Lionel J. Favret, Sr.
Director Director