AMERICAN SAVINGS BANK EMPLOYEES'
SAVINGS AND PROFIT SHARING PLAN
Financial Statements and Schedule
December 31, 2000, 1999 and 1998
(With Independent Auditors' Report Thereon)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED) for the transition period from _______________
to_______________
COMMISSION FILE NUMBER: 000-27399
1. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT
FROM THAT OF THE ISSUER NAMED BELOW:
American Savings Bank Employees' Savings and Profit Sharing Plan
1. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE
ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
American Financial Holdings, Inc.
102 West Main Street
New Britain, Connecticut 06051
AMERICAN SAVINGS BANK EMPLOYEES'
SAVINGS AND PROFIT SHARING PLAN
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 1
Statements of Net Assets Available for Plan Benefits 2
Statements of Changes in Net Assets Available for Plan Benefits 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULE
Schedule H - Line 4i - Schedule of Assets Held at End of Year 9
REQUIRED INFORMATION 10
SIGNATURES 11
EXHIBIT INDEX 12
Independent Auditors' Consent
Note: The following schedules, as required by Section 103(c)(5) of the
Employee Retirement Income Security Act of 1974 are not applicable.
Line 4j - Schedule of Investment Assets (Acquired and Disposed of
Within Year)
Line 4k - Schedule of Reportable Transactions
INDEPENDENT AUDITORS' REPORT
The Human Resources Committee
American Savings Bank
New Britain, Connecticut:
We have audited the accompanying statements of net assets available for plan
benefits of the American Savings Bank Employees' Savings and Profit Sharing Plan
as of December 31, 2000 and 1999, and the related statements of changes in net
assets available for plan benefits for each of the years in the three-year
period ended December 31, 2000. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the
American Savings Bank Employees' Savings and Profit Sharing Plan as of December
31, 2000 and 1999, and the changes in net assets available for plan benefits for
each of the years in the three-year period ended December 31, 2000, in
conformity with accounting principles generally accepted in the United States of
America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
at end of year is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The
supplemental schedule has been subjected to the auditing procedures applied in
the audit of the basic financial statements, and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
[Graphic Omitted] KPMG LLP
Hartford, Connecticut
June 8, 2001
AMERICAN SAVINGS BANK EMPLOYEES'
SAVINGS AND PROFIT SHARING PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2000 and 1999
2000 1999
-------- --------
Assets:
Investments (cost basis of $9,703,616 in 2000 and $8,768,738
in 1999) (note 3) $ 13,630,129 9,989,001
Participant loans 485,193 381,704
Cash 15,517 27,193
Accrued income 212 119
Contributions receivable from employees 54,804 --
----------- -----------
Total assets 14,185,855 10,398,017
----------- -----------
Liabilities:
Accounts payable 296 77,409
----------- -----------
Total liabilities 296 77,409
----------- -----------
Net assets available for plan benefits $ 14,185,559 10,320,608
=========== ===========
See accompanying notes to financial statements.
2
AMERICAN SAVINGS BANK EMPLOYEES'
SAVINGS AND PROFIT SHARING PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 2000, 1999 and 1998
2000 1999 1998
-------- -------- --------
Additions to net assets attributed to:
Investment income:
Net change in unrealized appreciation
in fair value of investments $ 2,706,251 1,220,531 224,919
Interest and dividend income 302,157 213,537 504,765
Other income -- 4,492 --
Realized gain on investments 330,960 206,665 65,975
Interest income on participant loans 32,884 36,868 33,008
Employer contributions -- 210,961 513,114
Employee contributions 817,012 817,054 451,672
----------- ----------- -----------
Total additions 4,189,264 2,710,108 1,793,453
----------- ----------- -----------
Deductions from net assets attributed to:
Net withdrawals by participants (291,510) (721,918) (452,080)
Refund to plan participants (note 5) (2,842) (72,275) --
Administrative expenses (29,961) (16,145) (2,295)
----------- ----------- -----------
Total deductions (324,313) (810,338) (454,375)
----------- ----------- -----------
Net increase 3,864,951 1,899,770 1,339,078
Net assets available for plan benefits as of
beginning of year 10,320,608 8,420,838 7,081,760
----------- ----------- -----------
Net assets available for plan benefits as
of end of year $ 14,185,559 10,320,608 8,420,838
=========== =========== ===========
See accompanying notes to financial statements.
3
AMERICAN SAVINGS BANK EMPLOYEES'
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2000, 1999 and 1998
(1) DESCRIPTION OF THE PLAN
The following brief description of the American Savings Bank Employees'
Savings and Profit Sharing Plan (the Plan), provides only general
information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
GENERAL
The Plan, which became effective December 1, 1985, is a defined
contribution plan sponsored by American Savings Bank (the Bank). Prior to
December 1, 2000 employees were eligible to participate in the Plan if
they had completed at least one year of service which included 1,000
hours of service. An amendment to the plan effective December 1, 2000
changed the eligibility requirements to allow employees to participate in
the Plan on the first day of the calendar month coinciding with or
immediately following one full month of employment which includes 83 1/3
hours of service. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). Employees must be over
the age of 21 in order to be eligible.
Effective September 1, 1999, the Bank changed trustees from Riggs
National Bank (Riggs) to Bank of New York (BONY). All investments in the
funds that existed were traded on September 3, 1999. On September 7,
1999, BONY received investment proceeds from Riggs and on September 7,
1999, reinvested proceeds into a money market account and on the
following business day the funds were transferred into the 10 available
mutual funds.
CONTRIBUTIONS
Participants may authorize payroll deductions of up to 15% of their
earnings in 1% increments. A participant's contribution up to 6% of
earnings is considered a basic contribution. The Plan allows for the Bank
to make a supplemental contribution. During 2000, the Bank did not make
any supplemental contribution to the Plan. All investments in the Plan
are participant directed. Earnings consist of basic salary or hourly
wages payable to an employee, including bonuses, incentive payments and
overtime. Participants may apportion such contributions among the
following Barclays Global Investors, N.A. (Barclays) collective trust
funds: Equity Index; S&P Mid Cap Stock Fund; Money Market Fund; Bond
Fund; Stable Value Fund; InternationaL Stock Fund; Income Plus Fund;
Growth & Income Fund; Growth Fund; S&P 500 Value Fund; S&P 500 Growth
Fund and Russell 2000 Fund. In connection with the conversion of American
Savings Bank from a state-chartered mutual to a state-chartered capital
stock savings bank and the simultaneous formation of American Financial
Holdings, Inc. (the Company), the parent company of American Savings
Bank, on November 30, 1999, the participants also have an additional
investment option of purchasing stock in the Company.
4 (Continued)
AMERICAN SAVINGS BANK EMPLOYEES'
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2000, 1999 and 1998
VESTING
All participants are fully vested in their own contributions. Effective
September 1, 1999, employees become fully vested in employer matching
contributions on the first of the month following completion of three
years of eligibility. Prior to September 1, 1999, employees became vested
in employer matching contributions on the first of the month following
completion of two years of eligibility.
PAYMENT OF BENEFITS
Upon permanent disability or death, a lump sum payment is made to the
participant. In the event of termination, if the participant's account
balance does not exceed $3,500, payment will be an automatic lump sum. If
the account balance does exceed $3,500, then the participant may elect to
defer payment not later than when age 70-1/2 is reached. Distributions
with respect to participant contributions are also permitted in the case
of hardship. If termination is due to a participant's death, the
participant's beneficiary will receive a lump-sum payment. All
distributions are made by check.
PARTICIPANT LOANS
The participant loans accrue interest and are repaid through payroll
deductions over terms selected by the participants, up to a maximum of
five years unless the loan is to be used in conjunction with the purchase
of a principal residence of the participant, in which case the term of
the loan is equal to the term of the mortgage securing the residence. All
loans bear interest at the Bank's prime lending rate plus 1%.
FORFEITURES
Forfeitures of nonvested accounts of employer contributions and earnings
thereon shall be made available to the employer, through transfer from
the participant's account to the employer credit account. Once the
transfer has occurred, such amounts shall be used at the option of the
Bank to (1) reduce administrative expenses for that contribution period
(2) offset any contributions to be made by the Bank for that contribution
period or (3) be allocated to all eligible participants deemed to be
employed as of the last day of the contribution period.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared using the
accrual basis of accounting.
5 (Continued)
AMERICAN SAVINGS BANK EMPLOYEES'
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2000, 1999 and 1998
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in collective trust funds (funds) are stated at estimated
fair values, which have been determined based on the unit values of the
funds. Unit values are determined by the bank sponsoring such funds by
dividing the fund's net assets at fair value by its units outstanding at
the valuation dates. The common shares of American Financial Holdings,
Inc. are valued at fair value which is based on published market price.
Realized gains and losses on investments are based on the average cost of
the investments. Interest income is recorded on the accrual basis.
Purchases and sales of securities are recorded on a trade-date basis.
LOAN VALUATION
Loans to participants are stated at amortized cost, which approximates
their market value.
PAYMENT OF BENEFITS/WITHDRAWALS
Benefits/withdrawals are recorded when paid.
USE OF ESTIMATES
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 that affect the reported
amounts of assets, liabilities, and changes therein and disclosure of
contingent assets and liabilities. Actual results could differ from those
estimates.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities"
("SFAS No. 133"). SFAS No. 133 requires that an entity recognize all
derivatives and measure those instruments at fair value. SFAS No. 133 is
effective for fiscal years beginning after June 15, 2000. Pursuant to
SFAS No. 137, the Plan is required to adopt SFAS No. 133 effective
January 1, 2001. Management has determined SFAS No. 133 will not have an
impact on the Plan's financial statements.
(3) INVESTMENTS
In September 1999, the American Institute of Certified Public Accountants
issued Statement of Position 99-3, Accounting for and Reporting of
Certain Defined Contribution Plan Investments and Other Disclosure
Matters (SOP 99-3). SOP 99-3 simplified the disclosure for certain
investments and is effective for plan years ended after December 15,
1999. The Plan adopted SOP 99-3 during the Plan year ended December 31,
1999. Accordingly, information previously required to be disclosed about
participant-directed fund investment programs is not presented in the
Plan's 2000 and 1999 financial statements.
6 (Continued)
AMERICAN SAVINGS BANK EMPLOYEES'
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2000, 1999 And 1998
The following table represents the fair value of individual investments which
exceed 5% of the Plan's net assets.
2000 1999
-------- --------
American Financial Holdings, Inc. common stock,
392,835 shares in 2000 and 382,404 shares in 1999* $ 8,102,222 4,803,950
Barclays Equity Index Collective Trust Fund, 125,362 units
in 2000 and 121,051 units in 1999 2,177,544 2,313,619
Barclays Government Money Market Fund, 2,139,100 units
in 2000 and 1,959,303 units in 1999 2,139,100 1,959,304
*Indicates party-in-interest to the Plan.
During 2000 and 1999, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
appreciated in value by $ 3,037,211 and $1,427,196, respectively, as
follows:
2000 1999
-------- --------
Collective trust funds $ (223,226) 454,825
Common stock* 3,260,437 972,371
----------- -----------
$ 3,037,211 1,427,196
=========== ===========
*Indicates party-in-interest to the Plan.
(4) PLAN TERMINATION
Although it has not expressed any intent to do so, the Bank has the right
under the provisions of the Plan to discontinue its contributions at any
time and to terminate the Plan, subject to provisions of ERISA. In the
event of Plan termination or complete discontinuance of contributions,
the participants' account balances would become nonforfeitable and
distributable in accordance with the provisions of the Plan.
7 (Continued)
AMERICAN SAVINGS BANK EMPLOYEES'
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2000, 1999 and 1998
(5) INCOME TAX STATUS
The Plan has received a tax determination letter from the Internal
Revenue Service dated September 14, 1995 indicating that the Plan
qualifies under the provisions of Section 401(a) of the Internal Revenue
Code (IRC) and is, therefore, exempt from federal income taxes. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. Routine compliance testing for 1999 revealed
that allocations under a newly-instituted ESOP would cause Plan
contributions to exceed the limits permissible under the IRC Section 415
for certain individuals. In order to avoid violating these limitations
the Plan refunded $75,117 to the employees affected during the first and
second quarters of 2000. At December 31, 1999 $72,275 of this amount is
included in accounts payable on the financial statements. The remaining
$2,842 is shown as a refund to plan participants for the year 2000 and is
a reduction to Plan assets. The Plan sponsor does not believe that these
matters will have a significant impact on the Plan and its exemption from
federal income taxes. Compliance testing was completed for the year 2000
activity and it was determined that contributions were within limits
allowable under IRS Section 415.
8
AMERICAN SAVINGS BANK EMPLOYEES'
SAVINGS AND PROFIT SHARING PLAN
Schedule H - Line 4i - Schedule of Assets Held
at End of Year
December 31, 2000
Current
Identity of Issue Number of Shares/Units Held Value
- ---------------------------------------- --------------------------------------------------------------------- -------------------
American Financial Holdings,
Inc. common stock * 392,835.000 shares: net asset value per share $20.625 $ 8,102,222
Barclays Equity Index
Collective Trust Fund 125,362.349 units: net asset value per unit $17.37 2,177,544
Barclays S&P Mid Cap Stock
Collective Trust Fund 5,211.973 units: net asset value per unit $18.73 97,620
Barclays Government Money
Market Fund 2,139,100.010 units: net asset value per unit $1.00 2,139,100
Barclays Bond Collective
Trust Fund 2,135.916 units: net asset value per unit $14.15 30,223
Barclays Stable Value
Collective Trust Fund 30,673.867 units: net asset value per unit $12.48 382,796
Barclays International Stock
Collective Trust Fund 2,312.366 units: net asset value per unit $12.09 27,960
Barclays Income Plus
Collective Trust Fund 513.937 units: net asset value per unit $12.80 6,578
Barclays Growth & Income
Collective Trust Fund 27,244.361 units: net asset value per unit $13.62 371,068
Barclays Growth Collective
Trust Fund 16,589.449 units: net asset value per unit $14.48 240,215
Barclays S&P 500 Value
Trust Fund 574.515 units: net asset value per unit $11.42 6,561
Barclays S&P 500 Growth
Trust Fund 4,177.758 units: net asset value per unit $9.82 41,026
Barclays Russell 2000
Trust Fund 633.499 units: net asset value per unit $11.39 7,216
-----------
Total investments $ 13,630,129
===========
Loans to participants* $ 485,193
===========
* Indicates party-in-interest to the Plan
9
REQUIRED INFORMATION
ITEM 1-3. The American Savings Bank Employees' Savings and Profit Sharing Plan
(the Plan) is subject to the Employee Retirement Income Security Act of 1974, as
amended (ERISA) and files plan financial statements and schedules prepared in
accordance with the financial reporting requirements of ERISA.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this Annual Report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: June 29, 2001 AMERICAN SAVINGS BANK EMPLOYEES'
SAVINGS AND PROFIT SHARING PLAN
By:/s/Richard J. Moore
-------------------------------------------
Richard J. Moore
Plan Administrator
11
EXHIBIT INDEX
------------------------------
EXHIBIT
NUMBER DESCRIPTION
- --------------- ---------------------------------------------------------------
23 Consent of KPMG LLP
12
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
American Financial Holdings, Inc.:
We consent to the incorporation by reference in the registration statement (No.
333-93953) on Form S-8 of American Financial Holdings, Inc. of our report dated
June 8, 2001, relating to the statements of net assets available for benefits of
the American Savings Bank Employees' Savings and Profit Sharing Plan as of
December 31, 2000 and 1999 and the related statements of changes in net assets
available for benefits for each of the years in the three-year period ended
December 31, 2000, which report appears in the December 31, 2000 annual report
on Form 11-K of American Financial Holdings, Inc.
[Graphic Omitted] KPMG LLP
Hartford, Connecticut
June 29, 2001
13