UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
/X/ QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 2006
/ / TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
For the transition period from to
Commission file Number 00-16934
BOL BANCSHARES, INC.
(Exact name of small business issuer 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
(Issuer?s telephone number)
Check whether the issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes /X/ No
/ /
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practical date: 179,145 SHARES AS OF APRIL 30,
2006
Transitional Small Business Disclosure Format (Check one): Yes / / No /X/
BOL BANCSHARES, INC. & SUBSIDIARY
INDEX
Page No.
PART 1. Financial Information
Item 1: Financial Statements
Consolidated Statement of Condition 3
Consolidated Statements of Income 4
Consolidated Statements of Comprehensive Income 5
Consolidated Statement of Cash Flow 6
Item 2: Management's Discussion and Analysis 7
Item 3: Controls and Procedures 8
PART II. Other Information
Item 6. Exhibits 8
Signatures 9
Part I. - Financial Information
BOL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CONDITION
March 31, Dec. 31,
(Amounts in thousands) 2006 2005
Unaudited Audited
ASSETS
Cash and Due from Banks
Non-Interest Bearing Balances and Cash $6,463 $9,167
Federal Funds Sold 43,500 35,865
Investment Securities
Securities Held to Maturity 19,000 19,000
Securities Available for Sale 618 618
Loans-Less Allowance for Loan Losses of $1,800
in 2006 and $1,913 in 2005 55,576 57,269
Property, Equipment and Leasehold Improvements
(Net of Depreciation and Amortization) 2,471 2,231
Other Real Estate 658 658
Other Assets 1,349 1,146
TOTAL ASSETS $129,635 $125,954
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Non-Interest Bearing 59,729 61,105
NOW Accounts 15,383 14,467
Money Market Accounts 4,060 3,516
Savings Accounts 33,650 30,906
Time Deposits, $100,000 and over 309 409
Other Time Deposits 5,302 5,013
TOTAL DEPOSITS 118,433 115,416
Notes Payable 2,143 2,145
Federal Funds Purchased 0 0
Other Liabilities 1,520 1,328
TOTAL LIABILITIES 122,096 118,889
SHAREHOLDERS' EQUITY
Preferred Stock - Par Value $1
2,117,244 Shares Issued and Outstanding
in 2006 2,117 2,117
2,117,244 Shares Issued and Outstanding
in 2005
Common Stock - Par Value $1
179,145 Shares Issued and Outstanding
in 2006 and 2005 179 179
Accumulated Other Comprehensive Income 332 332
Capital in Excess of Par - Retired Stock 126 126
Undivided Profits 4,311 3,843
Current Earnings 474 468
TOTAL SHAREHOLDERS' EQUITY 7,539 7,065
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $129,635 $125,954
BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31, March 31,
(Amounts in thousands) 2006 2005
INTEREST INCOME
Interest and Fees on Loans 1,695 1,765
Interest on Investment Securities 130 115
Interest on Federal Funds Sold 448 17
Total Interest Income 2,273 1,897
INTEREST EXPENSE
Interest on Deposits 110 62
Other Interest Expense 9 10
Interest on Notes Payable 0 1
Interest Expense on Debentures 30 30
Total Interest Expense 149 103
NET INTEREST INCOME 2,124 1,794
Provision for Loan Losses 76 169
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 2,048 1,625
NON-INTEREST INCOME
Service Charges on Deposit Accounts 136 236
Cardholder & Other Credit Card Income 152 158
ORE Income - 238
Other Operating Income 41 212
Total Non-Interest Income 329 844
NON-INTEREST EXPENSE
Salaries and Employee Benefits 596 795
Occupancy Expense 301 351
Communications 65 55
Outsourcing Fees 390 379
Loan & Credit Card Expense 17 32
Professional Fees 56 73
ORE Expense 4 69
Other Operating Expense 229 212
Total Non-Interest Expense 1,658 1,966
Income Before Tax Provision 719 503
Provision For Income Taxes 245 171
NET INCOME $474 $332
Earnings Per Share of Common Stock $2.65 $1.85
BOL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
March 31, March 31,
(Amounts in thousands) 2006 2005
NET INCOME $474 $332
OTHER COMPREHENSIVE INCOME, NET OF TAX
Unrealized Holding Gains on Investment
Securities Available-for-Sale, Arising
During the Period - -
COMPREHENSIVE INCOME $474 $332
BOL BANCSHARES, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31,
(Amounts in thousands) 2006 2005
OPERATING ACTIVITIES
Net Income 474 332
Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided by (Used in) Operating Activities:
Provision for Loan Losses 76 169
Depreciation and Amortization Expense 71 51
Amortization of Investment Security Premiums 0 0
Accretion of Investment Security Discounts 0 0
Decrease in Deferred Income Taxes (0) 180
(Gain) Loss on Sale of Property and Equipment 0 0
(Gain) Loss on Sale of Other Real Estate 0 (235)
Decrease (Increase) in Other Assets (202) 53
Increase (Decrease) in Other Liabilities and
Accrued Interest 192 (319)
Net Cash Provided by Operating Activities 611 231
INVESTING ACTIVITIES
Proceeds from Held-to-Maturity Investment Securities
Released at Maturity 0 0
Purchases of Held-to-Maturity Investment Securities 0 0
Proceeds from Sale of Property and Equipment 0 1
Purchases of Property and Equipment (312) (14)
Proceeds from Sale of Other Real Estate 0 585
Net Decrease in Loans 1,616 2,874
Net Cash Provided by Investing Activities 1,304 3,446
FINANCING ACTIVITIES
Net Increase in Non-Interest Bearing
and Interest Bearing Deposits 3,018 2,542
Repayment of Federal Funds Purchased 0 (350)
Preferred Stock Retired 0 (16)
Principal Payments on Long Term Debt (2) (3)
Net Cash Provided by Financing Activities 3,016 2,173
Net Increase in Cash and Cash Equivalents 4,931 5,850
Cash and Cash Equivalents - Beginning of Year 45,032 6,350
Cash and Cash Equivalents - End of Period 49,963 12,200
BOL BANCSHARES, INC.
STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
SUPPLEMENTAL DISCLOSURES: 2006 2005
Additions to Other Real Estate through Foreclosure - 279
Cash Paid for Interest 169 118
Cash (Paid) Received for Income Taxes - -
Market Value Adjustment for Unrealized Gain on
Securities Available-for-Sale - -
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.
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS
Internal Control and Assessment Disclosure
Hurricane Katrina Disclosure
Management expects insurance proceeds for storm damages caused by Hurricane
Katrina to cover the majority of damages sustained to the Bank?s branches. The
branch locations that the bank owned directly or indirectly, St. Charles,
Severn, Gause and Tammany, are open and operating, however, branch locations,
wherein the Bank leased the premises, Carrolton, Lapalco, and Oakwood, are
still closed with the exception of the drive-thru facility at the Oakwood
location. Management is diligently reviewing new sites to purchase or lease in
an effort to replace the Carrollton and Oakwood locations, and will re-open the
Lapalco branch during the 3rd or 4th quarter of 2006. The Company?s management
team and employees have and are continuing to work diligently to control
operating expenses and costs while restoring normal business operations.
MARCH 31, 2006 COMPARED WITH DECEMBER 31, 2005
BALANCE SHEET
Total Assets at March 31, 2006 were $129,635,000 compared to $125,954,000
at December 31, 2005 an increase of $3,681,000 or 2.92%. Federal Funds Sold
increased $7,635,000 at March 31, 2006 from $35,865,000 at December 31, 2005
and Fixed Assets increased $240,000 due mainly to the purchase of equipment
necessary to outsource the Bank?s core processing, in addition to the
replacement of equipment, furniture and fixtures destroyed by Hurricane
Katrina. Cash and due from banks decreased $2,704,000 or 29.50%. This was
mainly attributable to a decrease in the Bank?s Federal Reserve Bank account of
$3,268,000 which was offset by an increase in Cash and Cash Items of $369,000.
Total loans decreased $1,693,000 or 2.96% to $55,576,000 at March 31, 2006 from
$57,269,000 at December 31, 2005. This decrease in the loan portfolio is due
mainly to a decrease in the credit card portfolio of $1,734,000 which was
largely attributable to (i) competition from other banks and non-traditional
credit card issuers; (ii) tightening of the Bank?s underwriting standards; and
(iii) normal attrition.
Total deposits increased $3,017,000 or 2.61% to $118,433,000 at March 31,
2006 from $115,416,000 at December 31, 2005. This increase was attributable to
additional funds on deposit from customers receiving insurance proceeds and
FEMA monies post Katrina. Total non-interest bearing deposits decreased
$1,376,000 and interest-bearing accounts increased $4,393,000.
Shareholder?s Equity increased $474,000 due to net income at March 31,
2006.
THREE MONTHS ENDED MARCH 31, 2006 COMPARED WITH THREE MONTHS ENDED MARCH 31,
2005
INCOME
The Company?s net income for the three months ended March 31, 2006 was
$474,000 or $2.65 per share an increase of $142,000 from the Company?s net
income of $332,000 for the same period last year. Interest income increased
$376,000 for the three months ended March 31, 2006 over the same period last
year. This was caused by an increase of $431,000 in interest received on
Federal Funds sold. This increase was due mainly to an increase in the average
balance of Federal Funds sold from $2,769,000 at March 31, 2005 to $41,492,000
at March 31, 2006 and an increase in the rate from 2.46% at March 31, 2005 to
4.32% at March 31, 2006. Interest expense increased $46,000 over the same
period last year. This was due to an increase in the interest rate on interest
bearing deposits from a rate of .52% at March 31, 2005 to a rate of .76% at
March 31, 2006. Net interest income increased $330,000 due to the additional
monies the Bank was able to invest in Federal Funds. However this produced a
lower rate spread as opposed to if the Bank invested in higher yielding loans.
The interest rate spreads decreased from 8.11% at March 31, 2005 to 6.66%
at March 31, 2006.
Non-interest income decreased $515,000 for the three months period as
compared to the same period last year. This decrease is due mainly to the gain
of $235,000 on the sale of an ORE property during the first quarter of 2005.
In addition the Bank also recognized $141,000 as beneficiary of two insurance
policies on the life of the Bank?s president, Mr. James Comiskey, who passed on
in February 2005. Deposit related fees decreased $100,000 of which $76,000 was
due to a decrease in fees collected on overdrawn accounts.
Non-interest expense decreased $308,000 for the three months period as
compared to the same period last year. Salaries and Employee Benefits
decreased $199,000, Occupancy expense decreased $50,000 and Loan & Credit Card
expenses decreased $15,000 while Outsourcing fees increased $11,000 over the
same period last year. These decreases and increases are directly attributable
to the Bank outsourcing its credit card operations, thereby reducing staff and
software expenses. In addition, rental expense was reduced because the Bank
purchased a building which had been previously leased.
The provision for income taxes increased $74,000 compared to the same
period last year from $171,000 at March 31, 2005 to $245,000 at March 31, 2006.
Item 3 Controls and Procedures
The certifying officers of the Company have evaluated the Company?s
disclosure controls and procedures as of a date within 90 days of the filing
date of this report and have concluded that such controls and procedures are
effective. There have been no significant changes in the Company?s internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation.
PART II - OTHER INFORMATION
Item #6 Exhibits
Exhibits
31.1 Section 302 Principal Executive Officer Certification
31.2 Section 302 Principal Financial Officer Certification
32.1 Section 1350 Certification
32.2 Section 1350 Certification
BOL BANCSHARES, INC.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BOL BANCSHARES, INC.
(Registrant)
/s/ G. Harrison Scott
May 11, 2006 G. Harrison Scott
Date Chairman and President
(in his capacity as a duly authorized
officer of the Registrant)
/s/ Peggy L. Schaefer
Peggy L. Schaefer
Treasurer
(in her capacity as Chief Accounting
Officer of the Registrant)