UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended Sept. 30, 2009
/ / TRANSITION REPORT PURSUANT TO 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 registrant as specified in its charter.)
Louisiana 72-1121561
(State of incorporation) (I.R.S. Employer Identification
No.)
300 St. Charles Avenue, New Orleans, La. 70130
(Address of principal executive offices)
(504) 889-9400
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company.
Large accelerated filer __ Accelerated filer __
Non-accelerated filer __ Smaller reporting company X
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes __ No X
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date: 179,145 SHARES AS OF Oct. 31,
2009.
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BOL BANCSHARES, INC. & SUBSIDIARY
INDEX
Page No.
PART I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Condition 3
Consolidated Statements of Income 4
Consolidated Statements of Comprehensive Income 5
Consolidated Statements of Cash Flow 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis 11
Item 3. Quantitative and Qualitative Disclosures about Market Risk,
Catastrophic Events and Future Growth 13
Item 4T. Controls and Procedures 14
PART II. Other Information
Item 6. Exhibits 15
Signatures 16
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BOL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CONDITION
Sept 30 Dec. 31,
(Amounts in Thousands) 2009 2008
(Unaudited) (Audited)
ASSETS
Cash and Due from Banks
Non-Interest Bearing Balances and Cash $2,942 $3,104
Federal Funds Sold 16,100 25,375
Certificates of Deposit 5,447 0
Investment Securities
Securities Held to Maturity 999 2,001
Securities Available for Sale 814 823
Loans-Less Allowance for Loan Losses of $1,800
in 2009 and in 2008 57,970 55,608
Property, Equipment and Leasehold Improvements
(Net of Depreciation and Amortization) 6,240 6,516
Other Real Estate 1,584 1,153
Other Assets 785 926
TOTAL ASSETS $92,881 $95,506
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Non-Interest Bearing 32,244 34,930
NOW Accounts 11,824 10,766
Money Market Accounts 2,987 3,667
Savings Accounts 20,857 22,717
Time Deposits, $100,000 and over 4,203 1,880
Other Time Deposits 7,070 7,018
TOTAL DEPOSITS 79,185 80,978
Notes Payable 1,144 1,543
Other Liabilities 952 1,533
TOTAL LIABILITIES 81,281 84,054
SHAREHOLDERS' EQUITY
Preferred Stock - Par Value $1
1,837,089 Shares Issued and Outstanding in 2009
1,997,360 Shares Issued and Outstanding in 2008 1,837 1,997
Common Stock - Par Value $1
179,145 Shares Issued and Outstanding in 2009 and 2008 179 179
Accumulated Other Comprehensive Income 471 477
Capital in Excess of Par - Retired Stock 191 158
Undivided Profits 8,641 7,917
Current Earnings 281 724
TOTAL SHAREHOLDERS' EQUITY 11,600 11,452
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $92,881 $95,506
The accompanying notes are an integral part of these financial statements.
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BOL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended Nine months ended
Sept 30 Sept 30
(Amounts in Thousands) 2009 2008 2009 2008
INTEREST INCOME
Interest and Fees on Loans $1,475 $1,548 $4,537 $4,930
Interest on Investment Securities 11 14 38 98
Interest on Federal Funds Sold 5 166 21 593
Interest on Certificates of Deposit 17 0 41 0
Total Interest Income 1,508 1,728 4,637 5,621
INTEREST EXPENSE
Interest on Deposits 109 183 291 590
Interest Expense on Notes Payable
and Debentures 19 29 75 85
Total Interest Expense 128 212 366 675
NET INTEREST INCOME 1,380 1,516 4,271 4,946
Provision for Loan Losses 114 38 454 167
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,266 1,478 3,817 4,779
NON-INTEREST INCOME
Service Charges on Deposit Accounts 100 132 290 381
Cardholder & Other Credit Card Income 110 125 320 368
Other Operating Income 371 22 926 668
Total Non-interest Income 581 279 1,536 1,417
NON-INTEREST EXPENSE
Salaries and Employee Benefits 687 709 2,070 1,989
Occupancy Expense 247 316 776 854
Communications 55 56 168 172
Outsourcing Fees 315 346 1,045 1,131
Loan & Credit Card Expense 35 29 100 86
Professional Fees 55 63 166 181
ORE Expense 30 11 65 28
Other Operating Expense 236 164 623 514
Total Non-interest Expense 1,660 1,694 5,013 4,955
Income Before Tax Provision 187 63 340 1,241
Provision For Income Taxes 63 15 59 422
NET INCOME $124 $48 $281 $819
Earnings Per Share of Common Stock $0.69 $0.27 $1.57 $4.57
The accompanying notes are an integral part of these financial statements.
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BOL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Nine Months Ended
Sept 30 Sept 30
(Amounts in thousands) 2009 2008
NET INCOME $281 $819
OTHER COMPREHENSIVE INCOME, NET OF TAX
Unrealized Holding (Losses) Gains on Investment
Securities Available-for-Sale, Arising
During the Period (6) 49
COMPREHENSIVE INCOME $275 $868
The accompanying notes are an integral part of these financial statements.
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BOL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30
(Amounts in thousands) 2009 2008
OPERATING ACTIVITIES
Net Income $281 $819
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Provision for Loan Losses 454 167
Depreciation and Amortization Expense 300 319
Amortization of Investment Security Premiums (1) (2)
Decrease in Deferred Income Taxes 3 -
Gain on Sale of Other Real Estate (9) -
Decrease in Other Assets 143 62
Decrease in Other Liabilities
and Accrued Interest (579) (1,532)
Net Cash Provided by (Used in) Operating Activities 592 (167)
INVESTING ACTIVITIES
Proceeds from Held-to-Maturity Investment Securities
Released at Maturity 2,000 8,000
Purchases of Held-to-Maturity Investment Securities (1,000) (2,000)
Purchases of Property and Equipment (24) (128)
Proceeds from Sale of Other Real Estate 70 -
Increase in Certificate of Deposit with Other Banks (5,447) -
Net (Increase) in Loans (3,309) (952)
Net Cash (Used in) Provided by Investing Activities (7,710) 4,920
FINANCING ACTIVITIES
Net Decrease in Non-Interest Bearing
and Interest Bearing Deposits (1,792) (3,534)
Preferred Stock Retired (128) (58)
Proceeds from Issuance of Long-Term Debt 1,000 -
Principal Payments on Long-Term Debt (1,399) -
Net Cash Used in Financing Activities (2,319) (3,592)
Net (Decrease)Increase in Cash and Cash Equivalents (9,437) 1,161
Cash and Cash Equivalents - Beginning of Year 28,479 31,651
Cash and Cash Equivalents - End of Period $19,042 $32,812
The accompanying notes are an integral part of these financial statements.
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BOL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
SUPPLEMENTAL DISCLOSURES: 2009 2008
Cash Paid During the Year for Interest $415 $877
Cash Paid During the Year for Income Taxes $0 $429
Market Value Adjustment for Unrealized (Loss) Gain
on Securities Available-for-Sale ($9) $74
Additions to Other Real Estate Through Foreclosure $493 $117
The accompanying notes are an integral part of these financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A Summary of Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiary, Bank of Louisiana (the Bank),
and the Bank's wholly owned subsidiary, BOL Assets, LLC. These consolidated
financial statements were prepared in accordance with instructions for Form 10-
Q and Regulation S-X, and do not include information or footnotes for a
complete presentation of financial condition, results of operations, and cash
flows in conformity with accounting principles generally accepted in the United
States of America. However, in the opinion of management, all adjustments
(consisting of normal recurring adjustments) necessary for a fair presentation
of the financial statements have been included.
Use of Estimates
In preparing consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the date of the Consolidated
Statements of Financial Condition and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant change in
the near term relate to the allowance for loan losses.
Cash and Cash Equivalents
Cash equivalents include amounts due from banks and federal funds sold.
Generally, federal funds are purchased and sold for one-day periods.
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.
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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 at
September 30, 2009 and December 31, 2008, are as follows (amounts in
thousands):
September 30, 2009
Carrying Fair
Amount Value
Financial Assets:
Cash and Short-Term Investments $2,942 $2,942
Certificates of Deposit 5,447 5,447
Investment Securities 1,813 1,813
Loans 59,770 59,969
Less: Allowance for Loan Losses (1,800) (1,800)
$68,172 $68,371
Financial Liabilities:
Deposits $79,408 $79,519
Unrecognized Financial Instruments:
Commitments to Extend Credit $2,639 $2,639
Credit Card Arrangements 17,557 17,557
$20,196 $20,196
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December 31, 2008
Carrying Fair
Amount Value
Financial Assets:
Cash and Short-Term Investments $3,104 $3,104
Investment Securities 2,824 2,849
Loans 57,408 57,540
Less: Allowance for Loan Losses (1,800) (1,800)
$61,536 $61,693
Financial Liabilities:
Deposits $80,977 $81,133
Unrecognized Financial Instruments:
Commitments to Extend Credit $3,763 $3,763
Credit Card Arrangements 28,599 28,599
$32,362 $32,362
Financial Instruments
The Company adopted SFAS No. 157 on January 1, 2008 for all financial
assets and liabilities and nonfinancial assets and liabilities that are
recognized or disclosed at fair value in the financial statements on a
recurring basis (at least annually). SFAS No. 157 defines fair value,
establishes a framework for measuring fair value, and expands disclosures about
fair value measurements.
SFAS No. 157 defines fair value as the price that would be received upon
sale of an asset or paid upon transfer of a liability in an orderly transaction
between market participants at the measurement date and in the principal or
most advantageous market for that asset or liability. The fair value should be
calculated based on assumptions that market participants would use in pricing
the asset or liability, not on assumptions specific to the entity. In
addition, the fair value of liabilities should include consideration of non-
performance risk including our own credit risk.
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In addition to defining fair value, SFAS No. 157 expands the disclosure
requirements around fair value and establishes a fair value hierarchy for
valuation inputs. The hierarchy prioritizes the inputs into three levels based
on the extent to which inputs used in measuring fair value are observable in
the market. Each fair value measurement is reported in one of the three levels
which is determined by the lowest level input that is significant to the fair
value measurement in its entirety. These levels are:
* Level 1 - Inputs are based upon unadjusted quoted prices for identical
instruments traded in active markets
* Level 2 - Inputs are based upon quoted prices for similar instruments
in active markets, quoted prices for identical or similar instruments
in markets that are not active, and model-based valuation techniques
for which all significant assumptions are observable in the market or
can be corroborated by observable market date for substantially the
full term of the assets or liabilities
* Level 3 - Inputs are generally unobservable and typically reflect
management's estimates of assumptions that market participants would
use in pricing the asset or liability. The fair values are therefore
determined using model-based techniques that include option pricing
models, discounted cash flow models, and similar techniques.
The following table presents the Company's assets and liabilities measured at
fair value on a recurring basis at September 30, 2009 (amounts in thousands):
Level 1 Level 2 Level 3 Net Balance
Assets
Equity Securities $ - $999 $ - $999
Total $ - $999 $ - $999
The following table presents the Company's assets and liabilities measured at
fair value on a nonrecurring basis at September 30, 2009 (amounts in thousands):
Level 1 Level 2 Level 3 Net Balance
Assets
Impaired Loans $ - $1,258 $ - $1,258
Other Real Estate - 1,584 - 1,584
Total $ - $2,842 $ - $2,842
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Subsequent Events
In accordance with the subsequent events topic of the ASC, the Company
evaluates events and transactions that occur after the balance sheet date for
potential recognition in the financial statements. The effect of all
subsequent events that provide additional evidence of conditions that existed
at the balance sheet date are recognized in the financial statements as of
September 30, 2009. In preparing these financial statements, the Company
evaluated the events and transactions that occurred from September 30, 2009
through November 13, 2009, the date these financial statements were issued.
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
Hurricane Katrina Disclosure
Insurance proceeds received for storm damages caused by Hurricane
Katrina have covered the damages sustained to the Bank's branches. Proceeds in
the contingency account exceeded the cost of repairs caused by Hurricane
Katrina. Accordingly, the remaining funds have been booked to income as the
repairs are completed. Of the 7 branch locations that were affected by
Hurricane Katrina, only the Carrollton branch was not reopened.
SEPTEMBER 30, 2009 COMPARED WITH DECEMBER 31, 2008
BALANCE SHEET
Total assets at September 30, 2009 were $92,881,000 compared to
$95,506,000 at December 31, 2008, for a decrease of $2,625,000, or 2.75%.
Federal Funds Sold decreased $9,275,000 from $25,375,000 at December 31, 2008
to $16,100,000 at September 30, 2009. This decrease was mainly attributable to
the purchase of Certificates of Deposit for a total of $5,447,000 with other
banks during the first nine months of 2009 at a higher interest rate than
Federal Funds are paying. The remainder is due to having less available to sell
due to the balance sheet shrinking back to pre-Katrina levels. Investment
securities decreased $1,011,000 to $1,813,000 at September 30, 2009 from
$2,824,000 at December 31, 2008. Total loans increased $2,362,000 or 4.25% to
$57,970,000 at September 30, 2009 from $55,608,000 at December 31, 2008. This
increase in the loan portfolio is due mainly to an increase in 1-4 residential
loans of $3,558,000, an increase in construction loans of $1,019,000, an
increase in commercial loans of $218,000, and an increase in second mortgage
loans of $156,000. This was offset by a decrease in commercial real estate and
other real estate loans of $1,767,000, a decrease in personal loans of
$308,000, and a decrease of $711,000 in the credit card portfolio. The credit
card portfolio decrease 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, in addition to the cyclical
nature of the business.
Total deposits decreased $1,793,000, or 2.21%, to $79,185,000 at
September 30, 2009 from $80,978,000 at December 31, 2008. Total non-interest
bearing deposits decreased $2,686,000 and interest-bearing accounts increased
$893,000. The increase of interest earning deposits was mainly attributable to
an increase in time deposits of $2,375,000, and an increase in NOW accounts of
$1,058,000. This was offset by a decrease in savings deposits of $1,860,000,
and a decrease in Money Market accounts of $680,000.
Other liabilities decreased $581,000 from $1,533,000 at December 31,
2008 to $952,000 at September 30, 2009. This decrease is due mainly to
insurance proceeds from Hurricane Katrina that were received and held in
contingency accounts that exceeded the total cost of repairs and impairment of
assets associated with the hurricane. This amounted to $650,000 and was
credited to miscellaneous income during the first nine months of 2009.
Shareholder's Equity increased $148,000 from $11,452,000 at December 31,
2008 to $11,600,000 at September 30, 2009. This increase is due mainly to net
income for the nine months ended September 30, 2009 of $281,000, and an
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increase in capital in excess of par-retired Preferred Stock of $33,000,
partially offset by a decrease in Preferred Stock of $160,000.
NINE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 2008
INCOME
The Company's net income for the nine months ended September 30, 2009 was
$281,000 or $1.57 per share, a decrease of $538,000 from the Company's total
net income of $819,000 or $4.57 per share for the same period last year.
Interest income decreased $984,000 for the nine months ended September
30, 2009 over the same period last year. Interest on federal funds sold
decreased $572,000 due to a decrease in the average interest rate paid from
2.35% at September 30, 2008 to .16% at September 30, 2009. The average balance
of federal funds sold decreased $16,185,000 from $33,580,000 at September 30,
2008 to $17,395,000 at September 30, 2009. Interest on investment securities
decreased $60,000 due mainly to a decrease in the average balance from
$4,363,000 at September 30, 2008 to $2,744,000 at September 30, 2009. During
the first quarter of 2008, $8,000,000 in securities were called and the Bank
purchased $2,000,000. Interest in the loan portfolio decreased $393,000 due
mainly to a decrease in the average interest rate of 11.84% at September 30,
2008 to 10.53% at September 30, 2009. The average balance of Certificates of
Deposits purchased was $3,982,000 at an average interest rate of 1.37% for 2009
as compared to $0 for 2008.
Interest expense decreased $309,000 for the nine months ended September
30, 2009 over the same period last year. This was caused by a decrease in the
average interest rate paid on interest-bearing deposits from 1.57% at September
30, 2008 to .87% as of September 30, 2009. Additionally there was a decrease in
the average balance of interest bearing deposits from $49,897,000 at September
30, 2008 to $44,513,000 at September 30, 2009. The average interest rate on
interest-bearing liabilities decreased from 1.75% at September 30, 2008 to
1.06% at September 30, 2009.
Net interest income decreased $675,000 for the nine months ended
September 30, 2009 compared to the same period last year. Interest rate
spreads increased from 6.27% at September 30, 2008 to 6.52% at September 30,
2009.
Non-interest income increased $119,000 for the nine month period from
$1,417,000 at September 30, 2008 to $1,536,000 at September 30, 2009. Other
income increased $258,000 for the nine months ended September 30, 2009. This
increase is due mainly to the sale of Visa stock for a gain of $578,000 in the
first nine months of 2008 compared to the recognition of insurance proceeds of
$650,000 that were not needed for Hurricane Katrina repairs in the first nine
months of 2009. Deposit related fees decreased $91,000 of which $73,000 was
due to a decrease in fees collected on overdrawn accounts. Cardholder and
other credit card fees decreased $48,000.
Non-interest expense increased $58,000 for the nine month period of 2009
as compared to the same period last year. Salaries and Employee Benefits
increased $81,000 from $1,989,000 at September 30, 2008 to $2,070,000 at
September 30, 2009. This increase was due mainly to payroll expenses of
$84,000 for 2007 that were not paid until 2008 resulting in a credit of $84,000
in 2008 for 14 days payroll, compared to a credit of $17,000 for four days
payroll expenses of 2008 that were not paid until 2009. Other operating
expenses increased $109,000 due mainly to FDIC assessments of $12,000 at
September 30, 2008 compared to $117,000 at September 30, 2009. The increase in
FDIC assessments between the two periods was due to the increase in the
assessment rate and a special assessment of $39,000 in the third quarter of
2009. This was offset by a decrease of $86,000 in outsourcing fees due mainly
to credit card interchange fees of $526,000 in 2009 compared to $619,000 in
2008.
The provision for income taxes decreased $363,000, from a provision of
$422,000 at September 30, 2008 to a provision of $59,000 at September 30, 2009.
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This was due to a decrease in income before taxes and tax refunds from the IRS
of $56,000 for prior years amended tax returns.
THIRD QUARTER 2009 COMPARED WITH THIRD QUARTER 2008
INCOME
Net income for the third quarter of 2009 was $124,000 or $.69 per share
compared to $48,000 or $.27 per share for the same period last year for an
increase of $76,000.
Interest income decreased $220,000 over the same period last year.
Interest on the loan portfolio decreased $73,000 from $1,548,000 at September
30, 2008 to $1,475,000 at September 30, 2009. This was caused mainly by a
decrease in the average interest rate from 11.14% at September 30, 2008 to
10.07% at September 30, 2009. Interest on federal funds sold decreased
$161,000 due mainly to the decrease in the average balance of federal funds
sold from $33,653,000 at September 30, 2008 to $15,430,000 at September 30,
2009 and a decrease in the average interest rate from 1.97% at September 30,
2008 to .13% at September 30, 2009.
Interest expense decreased $84,000 for the three months ended September
30, 2009 over the same period last year. This was caused by a decrease in the
average interest rate on interest-bearing deposits from 1.46% at September 30,
2008 to .96% as of September 30, 2009 and a decrease in the average balance of
interest-bearing deposits from $49,780,000 at September 30, 2008 to $45,517,000
at September 30, 2009. Net interest income decreased $136,000 due primarily to
the decrease in average interest earning assets. Average interest earning
assets for the quarter ended September 30, 2009 was $81,525,000 compared to
$92,015,000 for the quarter ended September 30, 2008. The decrease in average
interest earning assets was offset by the lower average interest rates on
interest bearing deposits from 1.46% at September 30, 2008 compared to .96% at
September 30, 2009. The average interest rate on interest-bearing liabilities
decreased from 1.64% at September 30, 2008 to 1.10% at September 30, 2009.
Interest rate spreads increased from 5.87% at September 30, 2008 to 6.30% at
September 30, 2009.
Non-interest income increased $302,000 for the three-month period as
compared to the same period last year. This increase was due mainly to
insurance proceeds of $200,000 that were credited to miscellaneous income that
were not needed for Hurricane Katrina repairs in the three months ended
September 30, 2009. There was a decrease in deposit related fees of $32,000 of
which $25,000 was due to a decrease in the fees collected on overdrawn
accounts. Cardholder and other credit card fees decreased $15,000.
Non-interest expense decreased $34,000 for the three-month period as
compared to the same period last year. The reduction in Occupancy expense of
$69,000 was due mainly a decrease of $32,000 in utilities expense from $80,000
for the third quarter of 2008 to $48,000 for the third quarter of 2009. The
reduction in Outsourcing fees of $31,000 from $346,000 to $315,000 for the
third quarter of 2009 was due mainly to a decrease in credit card interchange
fees from $174,000 at September 30, 2008 to $146,000 at September 30, 2009.
The provision for income taxes increased $48,000 compared to the same period
last year from a provision of $15,000 at September 30, 2008 to a provision of
$63,000 at September 30, 2009 due to an increase in income before taxes.
Item 3 Quantitative and Qualitative Disclosures about Market Risk, Catastrophic
Events, and Future Growth
Management considers interest rate risk to be a market risk that could
have a significant effect on the financial condition of the Company.
Additional risks and uncertainties not currently known to us or that we
currently deem to be immaterial also may materially adversely affect our
business, financial condition, and/or operating results. Difficult conditions
in the financial services markets may materially and adversely affect the
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business and results of operations of the Bank and the Company.
Dramatic declines in the housing market during the past year, along with
falling home prices and increasing foreclosures and unemployment, have resulted
in significant write downs of asset values by financial institutions, including
government-sponsored entities and major commercial and investment banks. These
write-downs, initially of mortgage-backed securities by spreading to credit
default swaps and other derivative securities, have caused many financial
institutions to seek additional capital, to merge with larger and stronger
institutions, and, in some cases, to fail. Many lenders and institutional
investors have reduced, and in some cases, ceased to provide funding to
borrowers, including other financial institutions. This market turmoil and
tightening of credit have led to an increased level of commercial and consumer
delinquencies, lack of consumer confidence, increased market volatility, and
widespread reduction of business activity generally, which could have a
material adverse effect on our business and operations. A worsening of these
conditions would likely exacerbate any adverse effects of these difficult
market conditions on us and others in the financial institutions industry.
However, the majority of small community banks, such as Bank of Louisiana, have
strong reserve positions and are well capitalized.
The occurrence of catastrophic events such as hurricanes, tropical
storms, earthquakes, windstorms, floods, severe winter weather, fires and other
catastrophes could adversely affect our consolidated financial condition or
results of operations. Unpredictable natural and other disasters could have an
adverse effect on us in that such events could materially disrupt our
operations or the ability or willingness of our customers to access financial
services offered by us. The incidence and severity of catastrophic events
could nevertheless reduce our earnings and cause volatility in our financial
results for any fiscal quarter or year and have a material adverse effect on
our financial condition or results of operation.
The Company is a customer-focused organization. Future growth is
expected to be driven in a large part by the relationships maintained with
customers. The Company has assembled an experienced management team, and has
management development plans in place.
Item 4T Controls and Procedures
Under the supervision and with the participation of our management, we
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities and Exchange Act of 1934) as of the end of the period covered by
this report. Based upon that evaluation, the certifying officers of the
Company have concluded that, as of the end of the period covered by this
report, our disclosure controls and procedures are effective to ensure that
information required to be disclosed in the reports that the Company files or
submits under the Securities and Exchange Act of 1934, is recorded, processed,
summarized and reported within the applicable time periods specified by the
Securities and Exchange Commission's rules and forms. There has been no change
in the Company's internal control over financial reporting during the Company's
most recent fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the Company's internal control over financial
reporting.
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PART II - OTHER INFORMATION
Item 6 Exhibits
Exhibits
1.1 Rule 13a-14(a)/15d-14(a) Certification of Principal Executive
Officer
31.2 Rule 13a-14(a)/15d-14(a) Certification of Principal Financial
Officer
32 Certification Pursuant to 18 U.S.C. Section 1350
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BOL BANCSHARES, INC.
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/ G. Harrison Scott
November 13, 2009 G. Harrison Scott
Date Chairman
(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)
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