UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
----------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
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Commission File Number: 0-25808
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GREAT AMERICAN BANCORP, INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 52-1923366
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State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1311 S. Neil St., P.O. Box 1010, Champaign, IL 61824-1010
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(Address of principal executive offices)
(217) 356-2265
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(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 [ ]
At April 30, 2004, the Registrant had 748,003 shares of Common Stock
outstanding, for ownership purposes, which excludes 1,304,747 shares held as
treasury stock.
Transitional Small Business Disclosure Format (Check One): Yes No X
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Table of Contents
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Income
Condensed Consolidated Statements of Cash Flows
Notes to Unaudited Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis or
Plan of Operation
Item 3. Controls and Procedures
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities, Use of Proceeds and Issuer's Purchases
of Equity Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
Great American Bancorp, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
As of March 31, 2004 and December 31, 2003
(in thousands except share data)
March 31, 2004 Dec. 31, 2003
(unaudited)
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ASSETS
Cash and due from banks $ 4,154 $ 4,388
Interest-bearing demand deposits 7,890 9,674
Federal Home Loan Bank term deposit 27,000 30,000
--------------------------------
Cash and cash equivalents 39,044 44,062
Available-for-sale securities 4,054 4,200
Held-to-maturity securities (fair value of
$485 and $562) 458 532
Loans, net of allowance for loan losses
of $1,191 and $1,190) 104,476 100,772
Premises and equipment 6,205 6,299
Federal Home Loan Bank stock 1,346 1,324
Other assets 2,187 2,261
--------------------------------
Total assets $ 157,770 $ 159,450
================================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits
Demand $ 12,339 $ 13,008
Savings, NOW and money market 61,345 59,945
Time 51,245 53,711
--------------------------------
Total deposits 124,929 126,664
Federal Home Loan Bank advances 13,000 13,000
Other liabilities 2,065 2,150
--------------------------------
Total liabilities 139,994 141,814
--------------------------------
Commitments and Contingent Liabilities
(continued)
Great American Bancorp, Inc. and Subsidiary
Condensed Consolidated Balance Sheets (Continued)
As of March 31, 2004 and December 31, 2003
(in thousands except share data)
March 31, 2004 Dec. 31, 2003
(unaudited)
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STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value
Authorized and unissued --
1,000,000 shares $ -- $ --
Common stock, $0.01 par value
Authorized -- 7,000,000 shares
Issued -- 2,052,750 shares
Outstanding: 757,703 and 756,003 shares 21 21
Additional paid-in-capital 20,545 20,412
Retained earnings 20,777 20,508
Unearned incentive plan shares (62) (63)
Accumulated other comprehensive income 46 20
Treasury stock, at cost, 1,295,047 and
1,296,747 shares (23,551) (23,262)
--------------------------------
Total stockholders' equity 17,776 17,636
--------------------------------
Total liabilities and
stockholders' equity $ 157,770 $ 159,450
================================
See notes to unaudited condensed consolidated financial statements.
Great American Bancorp, Inc. and Subsidiary
Condensed Consolidated Statements of Income
For the Three Months Ended March 31, 2004 and 2003
(Unaudited, in thousands except share data)
2004 2003
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Interest income
Loans $ 1,715 $ 2,208
Securities 50 19
Dividends on Federal Home Loan Bank stock 21 15
Deposits with financial institutions
and other 83 87
--------------------------------
Total interest and dividend income 1,869 2,329
--------------------------------
Interest expense
Deposits 410 677
Federal Home Loan Bank advances 141 154
Other 5 7
--------------------------------
Total interest expense 556 838
--------------------------------
Net interest income 1,313 1,491
Provision for loan losses -- --
--------------------------------
Net interest income after
provision for loan losses 1,313 1,491
--------------------------------
Noninterest income
Insurance sales commissions 671 406
Customer service fees 124 126
Other service charges and fees 58 60
Net gains on loan sales 12 259
Loan servicing fees 41 25
Other 27 20
--------------------------------
Total noninterest income 933 896
--------------------------------
(continued)
Great American Bancorp, Inc. and Subsidiary
Condensed Consolidated Statements of Income (Continued)
For the Three Months Ended March 31, 2004 and 2003
(Unaudited, in thousands except share data)
2004 2003
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Noninterest expense
Salaries and employee benefits $ 1,013 $ 908
Net occupancy expense 138 141
Equipment expense 148 122
Professional fees 62 73
Marketing expense 40 52
Printing and office supplies 72 77
Directors and committee fees 34 37
Amortization of mortgage servicing rights 25 45
Other 142 169
--------------------------------
Total noninterest expense 1,674 1,624
--------------------------------
Income before income taxes 572 763
Provision for income taxes 221 298
--------------------------------
Net income 351 465
Other Comprehensive Income
Change in unrealized appreciation on
available-for-sale securities, net of
income taxes of $19 for 2004 26 --
--------------------------------
Total comprehensive income $ 377 $ 465
================================
Per Share Data:
Earnings
Basic:
Net income $ 0.47 $ 0.60
================================
Average number of shares 751,970 779,824
================================
Diluted:
Net income $ 0.43 $ 0.53
================================
Average number of shares 824,155 877,483
================================
Dividends $ 0.11 $ 0.11
================================
See notes to unaudited condensed consolidated financial statements.
Great American Bancorp, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2004 and 2003
(Unaudited, in thousands)
2004 2003
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Operating Activities
Net income $ 351 $ 465
Items not requiring (providing) cash
Depreciation 128 107
Provision for loan losses -- --
Amortization of mortgage servicing rights 25 45
Net gains on loan sales (12) (259)
Loans originated for sale (649) (9,117)
Proceeds from loan sales 657 9,054
Federal Home Loan Bank stock dividends (22) (15)
Changes in:
Other assets 167 (58)
Other liabilities (252) 63
Other operating activities 6 (8)
--------------------------------
Net cash provided by
operating activities 399 277
--------------------------------
Investing Activities
Proceeds from maturities of available-
for-sale securities 190 --
Proceeds from maturities of held-to-
maturity securities 74 207
Net change in loans (3,708) 7,969
Purchase of premises and equipment (34) (19)
--------------------------------
Net cash provided by (used in)
investing activities (3,478) 8,157
--------------------------------
(continued)
Great American Bancorp, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows (Continued)
For the Three Months Ended March 31, 2004 and 2003
(Unaudited, in thousands)
2004 2003
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Financing Activities:
Net increase in demand deposits,
money market, NOW and savings accounts $ 731 $ 8,040
Net decrease in certificates of deposits (2,466) (1,224)
Repayment of Federal Home Loan Bank advances -- (1,000)
Proceeds from stock options exercised 234 21
Purchase of treasury stock (523) (1,611)
Dividends paid (82) (90)
Net increase in advances from
borrowers for taxes and insurance 167 145
--------------------------------
Net cash provided by (used in)
financing activities (1,939) 4,281
--------------------------------
Increase (decrease) in Cash
and Cash Equivalents (5,018) 12,715
Cash and Cash Equivalents, Beginning
of Period 44,062 32,334
--------------------------------
Cash and Cash Equivalents, End of
Period $ 39,044 $ 45,049
================================
Supplemental Cash Flows Information
Interest paid $ 557 $ 843
Income taxes paid (net of refunds) 20 170
Tax benefit related to stock 133 --
options exercised
See notes to unaudited condensed consolidated financial statements.
Great American Bancorp, Inc. and Subsidiary
Notes to Unaudited Condensed Consolidated Financial Statements
1. Background Information
Great American Bancorp, Inc. (the "Company") was organized in 1995 to be
the savings and loan holding company of First Federal Savings Bank of
Champaign-Urbana, Illinois, (the "Bank") in connection with the Bank's
conversion from a federally chartered mutual savings bank to a federally
chartered stock savings bank. The Company's common stock trades on the
Nasdaq SmallCap Market under the symbol "GTPS."
2. Statement of Information Furnished
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-QSB instructions and Item 310(b) of
Regulation S-B, and, in the opinion of management, contain all adjustments
necessary to present fairly the financial position as of March 31, 2004 and
December 31, 2003, the results of operations for the three months ended March
31, 2004 and 2003, and the cash flows for the three months ended March 31,
2004 and 2003. All adjustments to the financial statements were normal and
recurring in nature. These results have been determined on the basis of
accounting principles generally accepted in the United States of America.
Reclassifications of certain amounts in the 2003 financial statements have
been made to conform to the 2004 presentation. The results of operations for
the three months ended March 31, 2004 are not necessarily indicative of the
results to be expected for the entire fiscal year.
The condensed consolidated financial statements are those of the Company
and the Bank. Certain information and note disclosures normally included in
the Company's financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted. These condensed consolidated financial statements
should be read in conjunction with the audited financial statements and notes
thereto included in the Company's 2003 Annual Report to Shareholders. The
condensed consolidated balance sheet of the Company as of December 31, 2003
has been derived from the audited consolidated balance sheet of the Company
as of that date.
3. Stock Options
The Company has a stock-based employee compensation plan, which is
described more fully in Notes to Financial Statements included in the 2003
Annual Report to Shareholders. The Company accounts for this plan under the
recognition and measurement principles of APB Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations. No stock-based
employee compensation cost is reflected in net income, as all options granted
under the plan had an exercise price equal to the market value of the
underlying common stock on the grant date. The following table illustrates
the effect on net income and earnings per share if the Company had applied
the fair value provisions of Statement of Financial Accounting Standards
(SFAS) No. 123, Accounting for Stock-Based Compensation, to stock-based
employee compensation.
Three Months Ended
---------------------
March 31, March 31,
2004 2003
---------------------
Net income as reported $ 351 $ 465
Less: Total stock-based employee compensation
cost determined under the fair value based
method, net of income taxes -- --
---------------------
Pro forma net income $ 351 $ 465
=====================
Earnings per share:
Basic - as reported $ 0.47 $ 0.60
=====================
Basic - pro forma $ 0.47 $ 0.60
=====================
Diluted - as reported $ 0.43 $ 0.53
=====================
Diluted - pro forma $ 0.43 $ 0.53
=====================
The Company did not grant additional options in either of the three
month periods ended March 31, 2004 and 2003.
PART I -- Item 2.
GREAT AMERICAN BANCORP, INC.
Management's Discussion and Analysis
or Plan of Operation
Forward-Looking Information
In addition to historical information, this Report on Form 10-QSB may
include certain forward-looking statements based on current management
expectations. The Company's actual results could differ materially from
those management expectations. Factors that could cause future results to
vary from current management expectations include, but are not limited to,
general economic conditions, legislative and regulatory changes, monetary and
fiscal policies of the federal government, changes in tax policies, rates and
regulations of federal, state and local tax authorities, changes in interest
rates, deposit flows, the cost of funds, demand for loan products, demand for
financial services, competition, changes in the quality or competition,
changes in the quality or composition of the Company's loan and investment
portfolios, changes in accounting principles, policies or guidelines, and
other economic, competitive, governmental and technological factors affecting
the Company's operations, markets, products, services and prices. Further
description of the risks and uncertainties to the business are included in
detail under the caption: Liquidity and Capital Resources.
General
The Company is the holding company for the Bank. The Bank operates a
wholly owned subsidiary, Park Avenue Service Corporation ("PASC"). PASC
operates the GTPS Insurance Agency ("Agency") which offers a variety of
insurance products, including life, health, automobile, and property and
casualty insurance. Prior to October 1, 2003, PASC also offered full service
brokerage activities through UMB Scout Brokerage Services, Inc., ("UMB") a
subsidiary of United Missouri Bank. Effective October 1, 2003, the contract
between PASC and UMB was terminated and a new contract was entered into
between the Bank and UMB. All brokerage activities are now being conducted
through the Bank.
Financial Condition
The Company's total assets decreased $1.68 million from $159.45 million
at December 31, 2003 to $157.77 million at March 31, 2004. This decline was
primarily in cash and cash equivalents. Cash and cash equivalents decreased
$5.02 million, from $44.06 million at December 31, 2003 to $39.04 million at
March 30, 2004. Cash and cash equivalents declined mainly due to cash used
to fund an increase in loans and a decline in total deposits. A decrease of
$3.00 million in the balance of the Federal Home Loan Bank ("FHLB") term
deposit comprised the majority of the decrease in cash and cash equivalents.
The FHLB short-term time deposit of $27.00 million at March 31, 2004 was a
14-day deposit with a yield of 0.95%.
Available-for-sale securities and held-to-maturity securities declined
$146,000 and $74,000, respectively, from December 31, 2003 to March 31, 2004
primarily due to repayments of mortgage-backed securities.
Total loans increased from $100.77 million at December 31, 2003 to
$104.48 million at March 31, 2004, mainly due to increases in one-to-four-
family residential mortgage loans and construction loans.
The following schedule shows the balances by loan category at March 31,
2004 compared to December 31, 2003 balances, along with the change and
percentage change:
Balance Balance
March 31, December 31, Percentage
2004 2003 Change Change
- ----------------------------------------------------------------------------
One-to-four-family
mortgage loans $ 48,526 $ 44,305 $ 4,221 9.5%
Multi-family mortgage loans 17,943 18,347 (404) (2.2)
Commercial mortgage loans 9,907 10,749 (842) (7.8)
Construction loans 3,408 2,125 1,283 60.4
- ----------------------------------------------------------------------------
Total real estate loans 79,784 75,526 4,258 5.6
Commercial loans 11,098 12,022 (924) (7.7)
Consumer loans 14,785 14,414 371 2.6
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Total loans 105,667 101,962 3,705 3.6
Allowance for loan losses (1,191) (1,190) (1) 0.1
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Total loans, net $ 104,476 $ 100,772 $ 3,704 3.7%
============================================================================
One-to-four-family mortgage loans increased due to the Company
maintaining the majority of new home loans in the loan portfolio rather than
selling loans to the secondary market. Since market interest rates remained
at historically low levels during the first quarter of 2004, the majority of
new home mortgage loans were refinancing loans where the customers' prior
loans were at other financial institutions. During the three months ended
March 31, 2004, the Company did sell $649,000 in newly originated 30-year
fixed rate one-to-four-family home mortgage loans to the Federal National
Mortgage Association ("FNMA"). These loans were sold according to a
management strategy implemented during the quarter to sell lower rate 30-year
fixed rate home mortgage loans. Approximately $1.21 million of the increase
in one-to-four-family mortgage loans was due to loans the Company refinanced
for customers where the Company had sold the customers' prior loans to FNMA
upon origination.
Construction loans increased partly due to disbursements totaling
$363,000 for a commercial construction loan opened in December 2003. The
remainder of the increase in construction loans was for single-family home
construction.
Total deposits decreased $1.73 million from $126.66 million at December
31, 2003 to $124.93 million at March 31, 2004. Noninterest-bearing demand
deposits decreased by $669,000 and time deposits declined by $2.46 million,
while savings, NOW and money market deposits grew by $1.40 million during the
first three months of 2004. The growth in savings, NOW and money market
accounts was partly due to customers transferring matured certificates of
deposit into short-term, interest-bearing demand accounts in anticipation
that market interest rates will climb in the near future. The growth in
savings, NOW and money market accounts was also due to seasonal fluctuations
in these accounts. The decline in time deposits was mainly in certificates
of deposit maturing in two to three years.
The following table summarizes the balances of deposits at March 31,
2004 and December 31, 2003, the change in the balances and the percentage
change:
Balance Balance
March 31, December 31, Percentage
2004 2003 Change Change
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Noninterest bearing
checking accounts $ 12,339 $ 13,008 $ (669) (5.1)%
Interest bearing:
NOW accounts 22,386 22,210 176 0.8
IMMA accounts 19,075 18,991 84 0.4
Savings accounts 19,884 18,744 1,140 6.1
Certificates of deposit 51,245 53,711 (2,466) (4.6)
- -----------------------------------------------------------------------------
Total interest
bearing deposits 112,590 113,656 (1,066) (0.9)
- -----------------------------------------------------------------------------
Total deposits $ 124,929 $ 126,664 $ (1,735) (1.4)%
=============================================================================
FHLB advances totaled $13.00 million at both March 31, 2004 and December
31, 2003. The following schedule presents FHLB advances at March 31, 2004,
by maturity date:
Date Fixed First or
of Interest or Maturity Next Call
Advance Rate Variable Date Date Amount
- -----------------------------------------------------------------------------
October 1998 4.30 Fixed October 2008 April 2004 $ 5,000
January 2001 4.55 Fixed January 2011 April 2004 5,000
September 2001 3.80 Fixed September 2011 September 2004 3,000
-------
$13,000
=======
The $10.00 million in advances callable in April 2004 were not called.
Both of these advances are callable quarterly. The $3.00 million advance has
only a one-time call date in September 2004.
Total stockholders' equity increased $140,000, from $17.64 million at
December 31, 2003 to $17.78 million at March 31, 2004. Book value per
outstanding voting share increased from $23.33 at December 31, 2003 to $23.46
at March 31, 2004.
The increase in stockholders' equity is summarized as follows (in
thousands):
Stockholders' equity, December 31, 2003 $ 17,636
Net income 351
Purchase of treasury stock (523)
Stock options exercised 234
Tax benefit related to stock options exercised 133
Dividends declared (82)
Increase in unrealized net gain on available-for-
sale securities 26
Incentive plan shares allocated 1
------
Stockholders' equity, March 31, 2004 $ 17,776
======
In July 2003, the Company announced a 5% common stock repurchase program
totaling 38,187 shares. This repurchase program completed in April 2004 at
an average price of $34.53. In February 2004, the Company announced an
additional 5% stock repurchase program totaling 37,555 shares. As of April
30, 2004, 9,434 shares had been repurchased under this program at an average
price of $34.55. All repurchased shares will be held as treasury shares to
be used for issuing stock under stock option agreements and for general
corporate purposes. (See Part II, Item 2. Changes in Securities, Use of
Proceeds and Issuer's Purchases of Equity Securities for additional
disclosures relating to stock repurchase programs).
Results of Operations
Comparison of Three Month Periods Ended March 31, 2004 and 2003
Net income totaled $351,000 for the three months ended March 31, 2004
compared to $465,000 for the three months ended March 31, 2003, a decrease of
$114,000, or 24.5%. Basic earnings per share were $0.47 for the three months
ended March 31, 2004, compared to $0.60 for the three months ended March 31,
2003. Diluted earnings per share were $0.43 for the three months ended March
31, 2004 compared to $0.53 for the same period in 2003. Net income decreased
in 2004 primarily due to lower net interest income and an increase in
noninterest expense, offset by an increase in noninterest income and a
reduction in the provision for income taxes.
Net interest income decreased $178,000, or 11.9%, from $1,491,000 for
the three months ended March 31, 2003 to $1,313,000 for the same period in
2004. Interest income declined $460,000, or 19.8%, from $2,329,000 for the
three months ended March 31, 2003 to $1,869,000 for the first three months of
2004. Interest expense decreased $282,000, or 33.7%, from $838,000 in 2003
to $556,000 in 2004.
Interest income from loans was $1,715,000 for the first three months of
2004, $493,000, or 22.3% less than the $2,208,000 recorded for the first
three months of 2003. Interest income from loans declined mainly as a result
of a decrease in total average loans from a year ago and a reduction in
average loan yields. The average balance of total net loans decreased $17.67
million in 2004, from $119.46 million in the first quarter of 2003 to $101.79
million in the first quarter of 2004.
The following schedule compares average total loan balances by major
categories for the first three months of fiscal 2004 to the same period in
2003:
Average Average
Balance Balance Percentage
2004 2003 Change Change
- ----------------------------------------------------------------------------
One-to-four-family
mortgage loans $ 45,664 $ 57,963 $(12,299) (21.2)%
Multi-family mortgage loans 17,857 20,064 (2,207) (11.0)
Commercial mortgage loans 10,435 16,304 (5,869) (36.0)
Construction loans 2,842 2,167 675 31.1
- ----------------------------------------------------------------------------
Total real estate loans 76,798 96,498 (19,700) (20.4)
Commercial loans 11,523 9,836 1,687 17.2
Consumer loans 14,660 14,311 349 2.4
- ----------------------------------------------------------------------------
Total loans 102,981 120,645 (17,664) (14.6)
Allowance for loan losses (1,191) (1,189) (2) 0.2
- ----------------------------------------------------------------------------
Total loans, net $101,790 $119,456 $(17,666) (14.8)%
============================================================================
The average balance of total loans declined from the level maintained
during the first quarter of 2003 primarily due to the Company selling the
majority of new and refinanced one-to-four-family residential mortgage loans
during 2003. The average balance of total one-to-four-family mortgage loans
during the first quarter of 2004 was $12.30 million lower than the average
balance maintained during the first quarter of 2003. During 2003, the
Company sold $30.83 million in home mortgage loans. The average balance of
total one-to-four-family loans serviced for others increased $10.86 million,
from $33.57 million for the three months ended March 31, 2003 to $44.43
million for the three months ended March 31, 2004.
The $2.21 million decrease in the average total balance of multifamily
loans is due to the sale during 2003 of $1.51 million in loans to one
borrower that were held by the holding company and the payoff of one large
loan totaling $415,000 in early January 2004. The $5.87 million decrease in
commercial mortgage loans is mainly due to three large payoffs totaling $3.58
million in the second and third quarters of 2003 and several smaller loan
payoffs in December 2003 and January 2004. Average total commercial loans
increased $1.69 million in the first quarter of 2004 compared to the first
quarter of 2003, due mainly to one large loan originated in August 2003 and a
separate commercial loan customer maintaining a higher balance on their line
of credit during 2004.
Interest income from loans also declined in 2004 due to lower average
yields, mainly the result of declining interest rates during 2003. The prime
rate, the rate used by financial institutions in establishing the majority of
commercial and multi-family loan offering rates, declined on June 30, 2003
from 4.25% to 4.00%. The average yield on the Company's net loans decreased
from 7.50% for the first three months of 2003 to 6.78% for the first three
months of 2004.
Interest income from securities increased from $19,000 for the three
months ended March 31, 2003 to $50,000 for the same period in 2004, due to
the purchase of adjustable-rate mortgage-backed securities in November 2003
totaling $4.19 million. The average balance of total securities was $4.64
million for the quarter ended March 31, 2004 compared to $1.17 million for
the first quarter of 2003. The average yield on securities was 4.33% for the
first quarter of 2004, down from 6.59% for the first quarter of 2003.
Interest income from deposits with financial institutions and other
decreased only slightly, from $87,000 for the quarter ended March 31, 2003 to
$83,000 for the quarter ended March 31, 2004. The average balance of total
deposits with financial institutions and other increased from $32.29 million
for the first three months of 2003 to $37.05 million for the same period in
2004, mainly due to proceeds from loan sales during 2003. The average yield
on deposits with financial institutions and other decreased from 1.09% for
the three months ended March 31, 2003 to 0.90% for the three months ended
March 31, 2004. The majority of these deposits are overnight funds or short-
term deposits with the FHLB, which were affected by a decline in short-term
market interest rates during the latter half of 2003 and in 2004.
Interest expense decreased by $282,000, or 33.7%, from $838,000 for the
three months ended March 31, 2003 to $556,000 for the same period in 2004,
mainly interest expense on deposits. Interest expense on deposits declined
$267,000, or 39.4%, from $677,000 for the three months ended March 31, 2003
to $410,000 for the three months ended March 31, 2004. Interest expense on
interest-bearing demand deposits decreased $83,000, or 52.2%, from $159,000
for the first quarter of 2003 to $76,000 for the first quarter of 2004.
Interest expense on certificates of deposit declined $184,000, or 35.5%, from
$518,000 for the quarter ended March 31, 2003 to $334,000 for the quarter
ended March 31, 2004.
Interest expense on interest-bearing demand and savings deposits
declined mainly as a result of the Company lowering deposit rates during the
latter half of 2003. The average balance of total interest-bearing deposits
increased from $59.73 million for the quarter ended March 31, 2003 to $61.07
million for the quarter ended March 31, 2004. The average rate on interest-
bearing demand and savings deposits decreased from 1.08% for the quarter
ended March 31, 2003 to 0.50% for the quarter ended March 31, 2004.
Interest expense on certificates of deposits decreased due to a decline
in the balance of total average certificates and a reduction in the average
rate. Average total certificates of deposit declined $9.18 million, from
$61.46 million in the first three months of 2003 to $52.28 million in the
first three months of 2004. The decline in average certificates of deposit
was primarily in the one-year to two-year maturity categories. Because of
the decline in market interest rates during 2003, the Company lowered
offering rates for new and renewing certificates during the latter half of
2003. As a result, many customers moved maturing certificates to shorter-
term certificates or into demand or savings accounts. The average rate on
certificates of deposit declined from 3.42% for the three months ended March
31, 2003 to 2.57% for the same period in 2004.
Interest expense on FHLB advances was $141,000 for the three months
ended March 31, 2004 compared to $154,000 for the same period in 2003.
Interest expense on FHLB advances declined in 2004 due to the maturity of
advances in March and September, 2003. The average balance of total FHLB
advances was $13.00 million for the first three months of 2004 compared to
$14.79 million for the same period in 2003. The average rate on FHLB
advances increased from 4.22% for the three months ended March 31, 2003 to
4.36% for the three months ended March 31, 2004.
Net interest income as a percent of interest earning assets was 3.65%
for the three months ended March 31, 2004 versus 3.92% for the same period in
2003. The spread between the yield on interest-earning assets and the rate
on interest bearing liabilities was 3.43% and 3.64% for the three months
ended March 31, 2004 and 2003, respectively.
The Company recorded no provision for loan losses during either of the
three month periods ended March 31, 2004 and 2003. Management's analyses of
the allowance for loan losses during the first three months of 2004
determined that no additional allocation to the allowance was warranted for
the period, primarily due to a decrease in non-performing loans and a
decrease in commercial and commercial mortgage loans. Management assesses
the adequacy of the allowance for loan losses based on evaluating known and
inherent risks in the loan portfolio and upon management's continuing
analysis of the factors underlying the quality of the loan portfolio. While
management believes that, based on information currently available, the
allowance for loan losses is sufficient to cover losses inherent in its loan
portfolio at this time, no assurance can be given that the level of the
allowance for loan losses will be sufficient to cover future possible loan
losses incurred by the Company or that future adjustments to the allowance
for loan losses will not be necessary if economic and other conditions differ
substantially from the economic and other conditions used by management to
determine the current level of the allowance for loan losses. Management may
in the future increase the level of the allowance for loan losses as a
percentage of total loans and non-performing loans in the event it increases
the level of commercial real estate, multifamily, or consumer lending as a
percentage of its total loan portfolio. In addition, various regulatory
agencies, as an integral part of their examination process, periodically
review the allowance for loan losses. Such agencies may require the Company
to provide additions to the allowance based upon judgements different from
management.
During the three months ended March 31, 2004, the Company had no loans
charged-off and collected $1,000 in loans previously charged-off. For the
three months ended March 31, 2003, the Company had no loans charged-off and
collected $1,000 in recoveries.
Non-performing loans, which are loans past due 90 days or more and non-
accruing loans, totaled $38,000 at March 31, 2004, compared to $399,000 at
March 31, 2003. Non-performing loans at March 31, 2004 consisted of one
residential mortgage loan totaling $33,000 and two consumer loans totaling
$5,000. These loans were past due 90 days or more at March 31, 2004, with
one consumer loan totaling $3,000 in non-accrual status. Non-performing
loans at March 31, 2003 consisted of one residential mortgage loan totaling
$90,000 and four consumer loans totaling $309,000. All of these loans were
past due 90 days or more at March 31, 2003, with two consumer loans totaling
$6,000 in non-accrual status. One consumer loan, totaling $300,000 at March
31, 2003, comprised the majority of the total of consumer loans past due 90
days or more at March 31, 2003. The customer brought the loan current during
2003 and the balance of the loan at March 31, 2004 was $276,000. The Company
stops accruing interest on loans, including past due loans, at such time that
the ultimate collection of all principal and interest becomes doubtful. The
ratio of the Company's allowance for loan losses to total loans was 1.13% at
March 31, 2004 and 1.01% at March 31, 2003.
Noninterest income totaled $933,000 for the three months ended March 31,
2004, compared to $896,000 for the same period in 2003, increasing $37,000,
or 4.1%. This increase was mainly due to an increase in insurance sales
commissions, offset by a decrease in net gains on loan sales. Insurance
sales commissions increased $265,000, or 65.3%, from $406,000 to $671,000.
This increase was mainly due to growth in new commercial and group life and
health insurance customers and an increase in contingent commissions which
are commissions paid by an insurance company based on the overall profit
and/or volume of business placed with that insurance company. Total net
gains on loan sales totaled $12,000 for the first quarter of 2004 compared to
$259,000 for the first quarter of 2003. The Company sold $649,000 in loans
during the first three months of 2004 compared to $9.05 million in loan sales
for the first quarter of 2003. The Company sold loans mainly in order to
reduce interest rate risk due to the decline in home mortgage rates.
Noninterest expense was $1,674,000 for the three months ended March 31,
2004, $50,000 or 3.1% higher than the $1,624,000 recorded for the first three
months of 2003. Noninterest expense was higher in 2004 mainly due to
increases in salaries and employee benefits expense and equipment expense,
offset by reductions in professional fees, marketing expense, amortization of
mortgage servicing rights and other expenses. Salaries and employee benefits
expense increased $105,000, or 11.6%, from $908,000 for the three months
ended March 31, 2003 to $1,013,000 for the first three months of 2004, due
primarily to normal salary raises and higher commissions earned by producers
at the Agency. Equipment expenses were $26,000 higher in 2004, due mainly to
depreciation expense for new computers and item processing software and
hardware installed in the second and third quarters of 2003. Professional
fees declined by $11,000 from 2003 to 2004, mainly legal fees, which were
$14,000 lower in 2004. Marketing expense was $12,000 lower in 2004 due
mainly to the costs of implementing a new web site for local area youth
sports in 2003. Amortization of mortgage servicing rights decreased by
$20,000, from $45,000 in 2003 to $25,000 in 2004, mainly due to a significant
number of sold loans being paid off in the first quarter of 2003. The
remaining unamortized portion of mortgage servicing rights recorded for a
loan is immediately amortized at the time a loan is paid off. Other expenses
were $27,000 lower in 2004, mainly due to decreases in charitable
contributions and travel and meeting expenses.
Total income taxes were $221,000 for the three months ended March 31,
2004 and $298,000 for the same period in 2003. The effective tax rates for
the three months ended March 31, 2004 and 2003 were 38.6% and 39.1%
respectively.
Business Industry Segments
The Company's primary business involves the typical banking services of
generating loans and receiving deposits. Through PASC, for 2004 and 2003,
the Company also provided insurance services to customers. The following
segment financial information has been derived from the internal
profitability reporting system used by management to monitor and manage the
financial performance of the Company.
Three months Ended March 31, 2004
(unaudited, in thousands)
Banking Insurance
Services Services Company Eliminations Total
- -----------------------------------------------------------------------------
Interest income $ 1,869 $ -- $ 1,869 $ -- $ 1,869
Interest expense 556 -- 556 -- 556
Noninterest income 283 671 954 (21) 933
Noninterest expense 1,307 388 1,695 (21) 1,674
Net income 177 174 351 -- 351
Total assets 158,385 1,806 160,191 (2,421) 157,770
Three months Ended March 31, 2003
(unaudited, in thousands)
Banking Insurance
Services Services Company Eliminations Total
- -----------------------------------------------------------------------------
Interest income $ 2,329 $ -- $ 2,329 $ -- $ 2,329
Interest expense 838 -- 838 -- 838
Noninterest income 503 409 912 (16) 896
Noninterest expense 1,324 316 1,640 (16) 1,624
Net income 405 60 465 -- 465
Total assets 172,350 1,207 173,557 (1,497) 172,060
Critical Accounting Policies
The accounting and reporting policies of the Company are in accordance
with accounting principles generally accepted in the United States and
conform to general practices within the banking industry. The notes to the
consolidated financial statements contain a summary of the Company's
significant accounting policies, including significant estimates, presented
on pages 36 through 41 of the Annual Report to Shareholders for the year
ended December 31, 2003. The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions. The
financial position and results of operations can be affected by these
estimates and assumptions and are integral to the understanding of reported
results. Critical accounting policies are those policies that management
believes are the most important to the portrayal of the Company's financial
condition and results, and they require management to make estimates that are
difficult, subjective, or complex.
Allowance for Loan Losses - The allowance for loan losses provides
coverage for probable losses inherent in the Company's loan portfolio.
Management evaluates the adequacy of the allowance for credit losses each
quarter based on changes, if any, in underwriting activities, the loan
portfolio composition (including product mix and geographic, industry or
customer-specific concentrations), trends in loan performance, regulatory
guidance and economic factors. This evaluation is inherently subjective, as
it requires the use of significant management estimates. Many factors can
affect management's estimates of specific and expected losses, including
volatility of default probabilities, rating migrations, loss severity and
economic and political conditions. The allowance is increased through
provisions charged to operating earnings and reduced by net charge-offs.
The Company determines the amount of the allowance based on relative
risk characteristics of the loan portfolio. The allowance recorded for
commercial loans is based on reviews of individual credit relationships and
an analysis of the migration of commercial loans and actual loss experience.
The allowance recorded for homogeneous consumer loans is based on an analysis
of loan mix, risk characteristics of the portfolio, fraud loss and bankruptcy
experiences, and historical losses, adjusted for current trends, for each
homogeneous category or group of loans. The allowance for credit losses
relating to impaired loans is based on the loan's observable market price,
the collateral for certain collateral-dependent loans, or the discounted cash
flows using the loan's effective interest rate. A loan is considered
impaired when, based on current information and events, it is probable that
the Company will be unable to collect the scheduled payments of principal or
interest when due according to the contractual terms of the loan agreement.
Loans that experience insignificant payment delays and payment shortfalls
generally are not classified as impaired. Management determines the
significance of payment delays and payment shortfalls on a case-by-case
basis, taking into consideration all of the circumstances surrounding the
loan and the borrower, including the length of the delay, the reasons for the
delay, the borrower's prior payment record and the amount of the shortfall in
relation to the principal and interest owed. Because the Company reviews
loans on an individual basis for impairment, the Company does not use a
specific timeframe of delinquency after which a specific loan is assumed to
be impaired.
Large groups of smaller balance homogenous loans are collectively
evaluated for impairment. Accordingly, the Company does not separately
identify individual consumer and residential loans for impairment
disclosures.
Regardless of the extent of the Company's analysis of customer
performance, portfolio trends or risk management processes, certain inherent
but undetected losses are probable within the loan portfolio. This is due to
several factors including inherent delays in obtaining information regarding
a customer's financial condition or changes in their unique business
conditions, the judgmental nature of individual loan evaluations, collateral
assessments and the interpretation of economic trends. Volatility of
economic or customer-specific conditions affecting the identification and
estimation of losses for larger non-homogeneous credits and the sensitivity
of assumptions utilized to establish allowances for homogenous groups of
loans are among other factors. The Company estimates a range of inherent
losses related to the existence of these exposures. The estimates are based
upon the Company's evaluation of imprecision risk associated with the
commercial and consumer allowance levels and the estimated impact of the
current economic environment.
Mortgage Servicing Rights - Mortgage servicing rights ("MSRs")
associated with loans originated and sold, where servicing is retained, are
capitalized and included in the consolidated balance sheet. The value of the
capitalized servicing rights represents the present value of the future
servicing fees arising from the right to service loans in the portfolio.
Critical accounting policies for MSRs relate to the initial valuation and
subsequent impairment tests. The methodology used to determine the valuation
of MSRs requires the development and use of a number of estimates, including
anticipated principal amortization and prepayments of that principal balance.
Events that may significantly affect the estimates used are changes in
interest rates, mortgage loan prepayment speeds and the payment performance
of the underlying loans. The carrying value of the MSRs is periodically
reviewed for impairment based on a determination of fair value. For purposes
of measuring impairment, the servicing rights are compared to a valuation
prepared based on a discounted cash flow methodology, utilizing current
prepayment speeds and discount rates. Impairment, if any, is recognized
through a valuation allowance and is recorded as amortization of intangible
assets. As of March 31, 2004 and December 31, 2003, mortgage servicing
rights had carrying values of $130,000 and $151,000, respectively.
Postretirement Benefit Obligation - Management obtains an independent
actuarial calculation to estimate the postretirement benefit obligation. The
calculation is largely dependent on estimates relating to future health care
cost trends and the number of employees that will retire and be eligible for
benefits under the plan. The total amount of contributions paid for the
three months ended March 31, 2004 and 2003 were $5,000 and $3,000. The net
periodic benefit cost recognized for the three months ended March 31, 2004
and 2003 is as follows:
For Three Months Ended
March 31, March 31,
2004 2003
----------------------
Service cost $ 8 $ 5
Interest cost 7 5
Amortization of prior service cost 2 2
Amortization of (gain) loss 1 --
----------------------
Total net periodic benefit cost $ 18 $ 12
======================
Liquidity and Capital Resources
The Bank's primary sources of funds are deposits, principal and interest
payments on loans, FHLB advances and proceeds from mortgage loan sales.
While maturities and scheduled amortization of loans are predictable sources
of funds, deposit flows and mortgage prepayments are greatly influenced by
general interest rates, economic conditions, and competition. Office of
Thrift Supervision regulations require the Bank to maintain sufficient
liquidity to ensure its safe and sound operation.
A review of the Condensed Consolidated Statements of Cash Flows included
in the accompanying financial statements shows that the Company's cash and
cash equivalents ("cash") decreased $5.02 million from December 31, 2003 to
March 31, 2004, compared to an increase of $12.72 million for the three
months ended March 31, 2003. During the three months ended March 31, 2004,
cash was primarily provided from earnings, proceeds from sales of one-to-
four-family residential mortgage loans, and an increase in demand, money
market, NOW and savings accounts. During this period, cash was primarily
used to fund the origination of loans, a decrease in certificates of deposit,
and to purchase treasury stock.
During the three months ended March 31, 2003, cash was primarily
provided from earnings, proceeds from sales of one-to-four-family residential
mortgage loans, loan repayments in excess of loan originations, and an
increase in demand, money market, NOW and savings accounts. During this
period, cash was primarily used to fund originations of loans held for sale,
a decrease in certificates of deposit, the repayment of FHLB advances, and to
purchase treasury stock.
The Company's primary investment activity during the three months ended
March 31, 2004 was the origination of loans. During the three months ended
March 31, 2004 and 2003, the Company disbursed funds for mortgage loans (not
including refinanced mortgage loans) in the amounts of $8.13 million and
$6.50 million, respectively, commercial loans in the amounts of $2.95 million
and $930,000, respectively, and consumer loans in the amounts of $1.63
million and $3.08 million, respectively.
As of March 31, 2004, the Company had outstanding commitments (including
undisbursed loan proceeds) of $3.61 million. The Company anticipates it will
have sufficient funds available to meet its current loan origination
commitments. Certificates of deposit, which are scheduled to mature in one
year or less from March 31, 2004, totaled $39.05 million. Management
believes a significant portion of such deposits will remain with the Company.
At March 31, 2004, the Bank exceeded all of its regulatory capital
requirements with tangible capital and core capital both at $11.89 million or
7.77% of total adjusted tangible assets, core capital at $11.89 million or
7.77% of adjusted total assets, and risk-based capital at $12.93 million or
14.95% of total risk-weighted assets. The required ratios are 1.5% for
tangible capital to tangible assets, 2% for core capital to total adjusted
tangible assets, 4.0% for core capital to adjusted total assets and 8.0% for
risk-based capital to risk-weighted assets.
Item 3. Controls and Procedures
The Company's management, including the Company's principal executive
officer and principal financial officer, have evaluated the effectiveness of
the Company's "disclosure controls and procedures," as such term is defined
in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as
amended, (the "Exchange Act"). Based upon their evaluation, the principal
executive officer and principal financial officer concluded that, as of the
end of the period covered by this report, the Company's disclosure controls
and procedures were effective for the purpose of ensuring that the
information required to be disclosed in the reports that the Company files or
submits under the Exchange Act with the Securities and Exchange Commission
(the "SEC") (1) is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms, and (2) is accumulated
and communicated to the Company's management, including its principal
executive and principal financial officers, as appropriate to allow timely
decisions regarding required disclosure. In addition, based on that
evaluation, no change in the Company's internal control over financial
reporting occurred during the quarter ended March 31, 2004 that has
materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not involved in any pending legal proceedings other
than routine legal proceedings occurring in the ordinary course of business.
Such routine legal proceedings, in the aggregate, are believed by management
to be immaterial to the Company's financial condition or results of
operations.
Item 2. Changes in Securities, Use of Proceeds and Issuer's Purchases of
Equity Securities
The following schedule discloses common stock repurchased by the
Company during the first quarter of 2004:
Total Number Maximum
of Shares (or Number (or
Units) Approximate
Purchased as Dollar Value) of
Part of Shares (or Units)
Total Number Average Publicly that May Yet Be
of Shares (or Price Paid Announced Purchased Under
Units) per Share Plans or the Plans or
Period Purchased (or Unit) Programs Programs
- -----------------------------------------------------------------------------
January 2004 10,000 (a) $35.25 10,000 10,566 (b)
February 2004 5,000 (a) $34.05 5,000 43,121 (c)
March 2004 -- -- -- 43,121 (c)
- -----------------------------------------------------------------------------
Total 15,000 $34.85 15,000 43,121
=============================================================================
(a) Purchased pursuant to a stock repurchase program announced on July 15,
2003 ("2003 Program"). The total number of shares under the 2003 Program is
38,187, which is equal to 5% of the outstanding common shares on the date the
2003 Program was announced. There is no expiration date for the 2003
Program. All common stock repurchased under the 2003 Program was purchased
in open-market transactions.
(b) Includes 10,566 shares to be repurchased under the 2003 Program.
(c) Includes 5,566 shares to be repurchased under the 2003 Program and
37,555 total shares to be repurchased under a stock repurchase program
announced on February 11, 2004 ("2004 Program"). The total of 37,555 shares
is equal to 5% of the outstanding common shares on the date the 2004 Program
was announced. There is no expiration date for the 2004 Program.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
3.1 Certificate of Incorporation of Great American Bancorp, Inc.*
3.2 By-laws of Great American Bancorp, Inc.*
11.0 Statement re: computation of per share earnings
31.1 Rule 13a-14(a)/15d-14(a) Chief Executive Officer Certification
31.2 Rule 13a-14(a)/15d-14(a) Chief Financial Officer Certification
32.0 Section 1350 Certifications
b. Reports on Form 8-K
1. On January 13, 2004, the Registrant furnished a Current Report
on Form 8-K reporting information under Items 7 and 12, attaching as an
exhibit a press release dated January 13, 2004, relating to the Registrant's
unaudited results for the three months and year ended December 31, 2003.
2. On January 16, 2004, the Registrant filed a Current Report on
Form 8-K reporting information under Items 5 and 7, attaching as an exhibit a
press release dated January 16, 2004 announcing that the Annual Meeting of
Stockholders would be held on April 27, 2004.
3. On February 6, 2004, the Registrant furnished a Current Report
on Form 8-K reporting information under Items 7 and 12, attaching as an
exhibit a press release dated February 5, 2004 announcing that the Company
was correcting previously announced unaudited financial information for the
three months and year ended December 31, 2003 and would be restating its
unaudited financial statements for the three and nine months ended September
30, 2003 to revise the financial accounting impact of certain stock option
exercises occurring in the last two quarters of 2003. The Company also
announced that it would be filing an Amended Form 10-QSB for the quarter
ended September 30, 2003 which would include the effect of the restatement on
the Company's unaudited financial statements for the applicable periods.
4. On February 11, 2004, the Registrant furnished a Current
Report on Form 8-K reporting information under Items 5 and 7, attaching as an
exhibit a press release dated February 11, 2004 announcing that the Board of
Directors had approved a 5% stock repurchase program.
5. On March 15, 2004, the Registrant filed a Current Report on
Form 8-K reporting information under Items 4 and 7 announcing that the
Registrant's Audit/Compliance Committee determined not to engage BKD, LLP as
the Registrant's independent accountants for the fiscal year ending December
31, 2004. A letter from BKD, LLP regarding the disclosure set forth in the
Form 8-K is attached as an exhibit to the Form 8-K. In addition, the
Registrant announced that the Committee engaged McGladrey & Pullen, LLP as
the Registrant's principal accountants for the fiscal year ending December
31, 2004.
_________________
* Incorporated herein by reference into this document from Form
S-1 Registration Statement, as amended, filed on March 24, 1995,
Registration No. 33-90614.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Great American Bancorp, Inc.
Dated: May 11, 2004 /s/ George R. Rouse
----------------------- ----------------------------
George R. Rouse
President and
Chief Executive Officer
Dated: May 11, 2004 /s/ Jane F. Adams
-------------------------- ----------------------------
Jane F. Adams
Chief Financial Officer,
Secretary and Treasure
Exhibit 11.0
Statement re: computation of per share earnings
Earnings per share (unaudited)
Earnings per share (EPS) were computed as follows
(dollar amounts in thousands except share data):
Three months Ended
March 31, 2004
-------------------------------
Weighted
Average Per Share
Income Shares Amount
-------------------------------
Basic Earnings Per Share
Income available to common stockholders $ 351 751,970 $ 0.47
Effect of Dilutive Securities
Stock options 66,984
Unearned incentive plan shares 5,201
-------------------------------
Diluted Earnings Per Share
Income available to common stockholders
and assumed conversion $ 351 824,155 $ 0.43
===============================
Three months Ended
March 31, 2003
-------------------------------
Weighted
Average Per Share
Income Shares Amount
-------------------------------
Basic Earnings Per Share
Income available to common stockholders $ 465 779,824 $ 0.60
Effect of Dilutive Securities
Stock options 92,260
Unearned incentive plan shares 5,399
-------------------------------
Diluted Earnings Per Share
Income available to common stockholders
and assumed conversion $ 465 877,483 $ 0.53
===============================
EXHIBIT 31.1
RULE 13a-14(a)/15d-14(a)
CHIEF EXECUTIVE OFFICER CERTIFICATION
I, George R. Rouse, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Great American
Bancorp, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the small business issuer as of, and for, the periods presented in
this report;
4. The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the small business
issuer, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which
this report is being prepared;
(b) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and
(c) Disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the small business
issuer's fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
small business issuer's internal control over financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the
audit committee of the small business issuer's board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the small business issuer's
ability to record, process, summarize and report financial information;
and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business
issuer's internal control over financial reporting.
Date: May 11, 2004 /s/ George R. Rouse
----------------------- -----------------------
George R. Rouse
President and Chief Executive Officer
EXHIBIT 31.2
RULE 13a-14(a)/15d-14(a)
CHIEF FINANCIAL OFFICER CERTIFICATION
I, Jane F. Adams, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Great American
Bancorp, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the small business issuer as of, and for, the periods presented in
this report;
4. The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the small
business issuer, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period
in which this report is being prepared;
(b) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and
(c) Disclosed in this report any change in the small business
issuer's internal control over financial reporting that occurred during
the small business issuer's most recent fiscal quarter (the small
business issuer's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over
financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the
audit committee of the small business issuer's board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the small business issuer's
ability to record, process, summarize and report financial information;
and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business
issuer's internal control over financial reporting.
Date: May 11, 2004 /s/ Jane F. Adams
--------------------------- -----------------------------
Jane F. Adams
Chief Financial Officer,
Secretary and Treasurer
EXHIBIT 32.0
SECTION 1350 CERTIFICATIONS
In connection with the Quarterly Report of Great American Bancorp, Inc.
(the "Company") on Form 10-QSB for the fiscal quarter ended March 31, 2004 as
filed with the Securities and Exchange Commission (the "Report"), the
undersigned certify, pursuant to 18 U.S.C. 1350, as added by Section 906 of
the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company as of and for the period covered by the
Report.
/s/ George R. Rouse
-------------------------------------
George R. Rouse
President and Chief Executive Officer
/s/ Jane F. Adams
-------------------------------------
Jane F. Adams
Chief Financial Officer, Secretary and
Treasurer
Date: May 11, 2004
--------------------------------