1
EXHIBIT 13.1
[AMERICAN BANCORP, INC. LOGO]
- --------------------------------------------------------------------------------
2000 ANNUAL REPORT
AMERICAN BANCORP, INC.
POST OFFICE BOX 1579
OPELOUSAS, LOUISIANA 70570
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NATURE OF BUSINESS
American Bancorp, Inc. is a one-bank holding company whose sole subsidiary is
American Bank and Trust Company, a commercial bank whose general business is
that of providing banking services to the Opelousas, Louisiana area. The Bank
serves the needs of the area through 44 employees at six banking locations. The
main office is located at the corner of Landry Street and Union Street in
Opelousas. Branch banking-offices are located in the parish of St. Landry in the
communities of Lawtell, Krotz Springs, Port Barre and an office on Creswell Lane
in South Opelousas. In addition, the Bank has a branch located on Moss Street,
in Lafayette, Louisiana.
MARKET PRICE AND DIVIDENDS DECLARED
DIVIDENDS
YEAR QUARTER HIGH LOW PER SHARE
- ---- ------- ---- --- ---------
2000 First $61 $61 $ --
Second 62 62 --
Third 64 64 --
Fourth 68 30 1.70
1999 First $60 $60 $ --
Second 61 61 --
Third 61 61 --
Fourth 62 62 1.45
Note: The primary market area for American Bancorp, Inc.'s common stock is the
Opelousas, Louisiana area with American Bank and Trust Company acting as
registrar and transfer agent. There were approximately 514 shareholders of
record at December 31, 2000.
Source of market price - American Bank & Trust Company acts as the
transfer agent for the Company. The stock is thinly traded and the price ranges
are based on stated sales price to the transfer agent, which does not represent
all sales.
ANNUAL SHAREHOLDERS' MEETING
The annual meeting of the shareholders of American Bancorp, Inc. will
be held on April 11, 2001 in the Board of Directors Room at the Operations
Center located at 321 East Landry Street, Opelousas, Louisiana.
FORM 10-K ANNUAL REPORT
American Bancorp, Inc. files an annual report with the Securities and
Exchange Commission on Form 10-K. A copy of the report filed on Form 10-K will
be sent free of charge to any shareholder by writing to: Ronald J. Lashute,
Chief Executive Officer and Executive Vice-President, American Bank and Trust
Company, Post Office Box 1579, Opelousas, Louisiana 70570.
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FINANCIAL SUMMARY
(In thousands of dollars except per share data and ratios)
2000 1999 1998
---------- ---------- ----------
FOR THE YEAR
Net income.................................................... $ 1,203 $ 1,086 $ 1,008
Return on average shareholders' equity........................ 11.91% 11.38% 11.27%
Return on average total assets................................ 1.54% 1.42% 1.47%
AT YEAR END
Total assets.................................................. $ 82,760 $ 80,232 $ 73,666
Total earning assets.......................................... $ 73,116 $ 71,670 $ 67,114
Total loans................................................... $ 32,080 $ 28,253 $ 27,463
Total deposits................................................ $ 71,318 $ 70,434 $ 63,819
Total shareholders' equity.................................... $ 11,076 $ 9,506 $ 9,446
Common shares outstanding..................................... 117,630 117,712 118,449
PER SHARE
Net income.................................................... $ 10.23 $ 9.21 $ 8.47
Book value.................................................... $ 94.16 $ 80.75 $ 79.75
Cash dividends declared....................................... $ 1.70 $ 1.45 $ 1.25
CAPITAL RATIOS
Total risk-based capital ratio................................ 30.25% 29.82% 28.72%
Leverage ratio................................................ 14.14% 13.11% 13.36%
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CONTENTS
PAGE
Financial Summary........................................................................ 2
A Message to the Shareholders............................................................ 4
Management's Discussion and Analysis of Financial
Condition and Results of Operations................................................... 5 - 22
Independent Auditors' Report ............................................................ 23
Consolidated balance sheets.............................................................. 24 and 25
Consolidated statements of income........................................................ 26
Consolidated statements of changes in shareholders' equity............................... 27
Consolidated statements of cash flows.................................................... 28 and 29
Notes to consolidated financial statements............................................... 30 - 49
Officers and directors of American Bank & Trust Company.................................. 50
Officers and directors of American Bancorp, Inc.......................................... 51
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TO THE SHAREHOLDERS
American Bancorp, Inc. and its sole subsidiary, American Bank & Trust
Company, enjoyed a banner year for 2000 with record earnings in the amount of
$1,203,256, up from $1,085,545 in 1999. As a result of earnings, return on
average assets was 1.54% and return on average equity was 11.91%
Earnings per share this past year was $10.23 up from $9.21 in 1999. The
company's book value increased to $94.16 at year end compared to $80.75 in 1999.
Cash dividends declared to shareholders in 2000 was $1.70 per share, an increase
of 17% over the 1999 dividend.
Asset quality of the company continues to remain at a very high level.
Nonperforming assets were only $33,923 or .04% of total assets at year end, and
net charge-off of loans were only .04% of average total loans. Total
shareholder's equity at year end was $11,076,459, which contributes to a very
healthy leverage capital ratio of 14.14%.
During the first half of 2000, the bank successfully installed a new
computer system and software enabling the bank to enhance customer service.
Construction of the new Lafayette branch facility located on Moss Street in
Lafayette began in late 2000 and should be completed and open for business in
June of 2001.
We have been blessed throughout the years with the loyal support from
you the shareholders, our customers, and a dedicated staff of employees. Your
management and Board of Directors will continue to strive for improvement while
maintaining excellent customer service and increased shareholder value. We
appreciate your continued support and thank you for the opportunity to serve
you.
/s/ SALVADOR L. DIESI, SR.
Salvador L. Diesi, Sr., Chairman of the Board
and President
/s/ RONALD J. LASHUTE
Ronald J. Lashute, Chief Executive Officer and
Executive Vice-President of American
Bank & Trust Company
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
SUMMARY OF OPERATIONS FOR THE LAST FIVE YEARS
(In thousands of dollars except per share data and ratios)
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
Operating Data:
Interest income ..................... $ 5,210 $ 4,819 $ 4,657 $ 4,483 $ 4,306
Interest expense .................... 1,545 1,511 1,446 1,398 1,328
-------- -------- -------- -------- --------
Net interest income ................. 3,665 3,308 3,211 3,085 2,978
Provision for possible loan
losses ........................... 11 -- -- -- --
-------- -------- -------- -------- --------
Net interest income after
provision for loan losses ........ $ 3,654 $ 3,308 $ 3,211 $ 3,085 $ 2,978
Non-interest income ................. 695 693 612 606 666
Non-interest expense ................ 2,720 2,512 2,407 2,339 2,269
-------- -------- -------- -------- --------
Net income before taxes ............. 1,629 1,489 1,416 1,352 1,375
Provision for income taxes .......... 426 403 408 405 335
-------- -------- -------- -------- --------
Net income .......................... $ 1,203 $ 1,086 $ 1,008 $ 947 $ 1,040
======== ======== ======== ======== ========
Per share data:
Weighted average number of
shares outstanding ............... 117,673 117,884 118,965 119,997 120,000
Net income .......................... $ 10.23 $ 9.21 $ 8.47 $ 7.90 $ 8.65
Cash dividends declared ............. $ 1.70 $ 1.45 $ 1.25 $ 1.10 $ 1.00
Book value at end of year ........... $ 94.16 $ 80.75 $ 79.75 $ 70.96 $ 63.80
Selected year-end balances:
Loans ............................... $ 32,659 $ 28,832 $ 28,058 $ 28,435 $ 28,925
Deposits ............................ $ 71,318 $ 70,434 $ 63,819 $ 55,857 $ 59,367
Equity .............................. $ 11,076 $ 9,505 $ 9,446 $ 8,512 $ 7,656
Total assets ........................ $ 82,760 $ 80,232 $ 73,666 $ 64,621 $ 67,254
Selected average balances:
Average assets ...................... $ 77,954 $ 76,452 $ 68,472 $ 64,384 $ 61,012
Average shareholder's equity ........ $ 10,104 $ 9,536 $ 8,942 $ 8,099 $ 7,251
Selected ratios:
Return on average assets ............ 1.54% 1.42% 1.47% 1.47% 1.70%
Return on average shareholder's
equity ............................ 11.91% 11.38% 11.27% 11.70% 14.32%
Dividend payout ratio ............... 16.62% 15.74% 14.76% 13.92% 11.56%
Average equity/average assets ....... 12.96% 12.47% 13.06% 12.58% 11.88%
Tier 1 risk-based capital ratio ..... 29.00% 28.57% 27.47% 26.13% 23.23%
Total risk-based capital ratio ...... 30.25% 29.82% 28.72% 27.38% 24.48%
Leverage ratio ...................... 14.14% 13.11% 13.36% 12.97% 12.44%
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Management's discussion and analysis of financial condition and results
of operations should be read in conjunction with the accompanying financial
statements and notes.
OVERVIEW
The Company reported net income of $1,203,256 in 2000 compared to
$1,085,545 in 1999 and $1,007,868 in 1998. Interest income has increased over
the last three years. The increase for 2000 was $.391 million and an increase of
$.163 million from 1998 to 1999. Interest expense also increased in 2000. The
increase for 2000 was $.033 million and an increase of $.066 million from 1998
to 1999. Net income before taxes has been increasing over the past three years.
Average total assets continue to increase. These assets have grown
2.0%, 11.7% and 6.4% in 2000, 1999 and 1998, respectively. This increase is a
result of the growth of interest-bearing and non-interest bearing demand
deposits in 2000 and the growth of non-interest bearing demand deposits and time
deposits in 1999. Non-interest bearing demand deposits increased $1.638 million
in 2000 or 6.8% over the 1999 balance and an increase of $4.892 million in 1999
or 25.7% over the 1998 balance. Time deposits decreased $1.061 million or 4.8%
in 2000 over the 1999 amounts and increased $2.283 million or 11.5% in 1999 over
the 1998 amounts.
The year end balance sheet reflects an increase of $2.528 million or
3.2% in total assets. Securities held to maturity reflected an increase of
$2.097 million or 74.9% from 1999. During the same period, loans increased by
$3.827 million or 13.5%. In addition, total deposits increased $.884 million or
1.26% in comparing 2000 to 1999. For the same period, there was an increase of
$1.571 million in stockholders' equity or 16.5% in comparing 2000 to 1999.
STATEMENT OF INCOME ANALYSIS
Net interest income on a taxable-equivalent basis was $3.878 million in
2000, an increase of $.379 million, or 10.8% compared to 1999. In 1999, net
interest income was $3.499 million, an increase of $.175 million or 5.3% over
the prior year. The net interest margin for 2000 was 5.4% compared to 5.0% in
1999 and 5.3% in 1998. Table 1 summarizes average balances, income and average
yields on earning assets and expense and average rates paid on interest bearing
liabilities. Table 2 analyzes the change in net interest income for the two most
recent annual intervals.
The increase in the average balances of loans and securities available
for sale had a positive effect on the change in net interest margin from 1999 to
2000. However, this effect was partially negated by the decrease in average
balances of short-term investments. The increase in the average balance on time
and savings deposits also had an impact on the change in the net interest margin
from 1999 to 2000.
PROVISION FOR POSSIBLE LOAN LOSSES. The provision for possible loan losses was
$10,500 in 2000, and $-0- in 1999 and 1998. As a percentage of outstanding
loans, the allowance for possible loans losses was 1.8%, 2.0% and 2.1% at
December 31, 2000, 1999 and 1998, respectively. The annual provision is
determined by the level of net charge offs, the size of the loan portfolio, the
level of nonperforming loans, anticipated economic conditions, and review of
financial condition of specific customers.
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NON-INTEREST INCOME. Non-interest income increased only $2,819 or .4% from 1999
to 2000. There was an increase of $80,161 or 13.1% from 1998 to 1999. The Bank's
management realizes that non-interest income will become increasingly important
as deregulation continues to impact the net interest margin; therefore,
management is continuously evaluating new opportunities for fee revenues through
proper pricing of services and the development of new sources of non-interest
revenue.
NON-INTEREST EXPENSE. Non-interest expense increased $208,492 or 8.3% in 2000
from 1999. The increase from 1998 to 1999 was $104,494 or 4.3%. There is no one
particular expense category that has experienced a large increase in 2000. The
increase is spread over a large number of accounts. In comparing 2000 to 1999
and 1998, there were immaterial variances between years. These increases are
mainly due to increases in overall salaries for the three year period.
INCOME TAXES. The Company recorded income tax expense of $426,328 in 2000
compared to $402,933 in 1999 and $407,896 in 1998.
Net future deductible temporary differences at December 31, 2000 was
$57,415. The allowance for loan losses represents $17,592 and the deferred
executive compensation represents $34,254 of the future deductible temporary
differences. The provision for possible loan losses which contributed to the
allowance has been recognized as expense for financial reporting purposes but is
not deductible for federal income tax purposes until the loans are charged off.
The deferred executive compensation is an expense for financial reporting
purposes but is not deductible until actually paid. Valued at the 34% federal
statutory tax rate, the net future deductible amounts, if ultimately recognized,
would generate tax benefits of $57,415. There are deferred tax liabilities of
$47,384 as of December 31, 2000. The primary deferred liability is related to
accumulated depreciation in the amounts of $37,624. The deferred tax related to
unrealized appreciation and loss on available for sale securities is reflected
in shareholders equity. The net deferred tax asset of $10,031 is included in
other assets. These benefits are recorded as a deferred tax asset at December
31, 2000.
BALANCE SHEET AND CAPITAL FUNDS ANALYSIS
Investment securities are a major use of funds by the Bank. The balance
at December 31, 2000 was $35,963,685 which represented a $1,741,381 or 5.1%
increase from the $34,222,304 balance outstanding at December 31, 1999.
Investment securities serve several purposes. A portion of investment securities
provides liquidity or secondary reserves, which management can use, if
necessary, to meet loan demand or deposit withdrawals. Investment securities,
especially obligations of state and political subdivisions, provide for schools,
road construction, sewers, and various other projects. The Bank invests a
portion of these funds in the market area as a service to the community in which
it operates. The remainder of these funds are invested in obligations of the
United States Government or its agencies. It is management's policy to minimize
risk in investments and provide liquidity by investing in short-term maturities
with quality ratings. A substantial portion of the investment portfolio is
pledged on public deposits (39.3%), this is more than the 1999 pledged
percentage of 35.7%. The amount of public funds on deposit has been increasing
slightly for the last three years and management anticipates this source of
deposits will not grow substantially in the future.
The Bank' primary use of funds is to meet loan demand. Loans, net of
unearned income, were $32,659,608 at December 31, 2000, compared to $28,832,360
at December 31, 1999. This $3,827,248 or 13.3% increase is the result of
increased market share in the market area.
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The Bank attracts deposits from consumers and businesses, and also
utilizes its access to the money markets to purchase funds to support the asset
side of the balance sheet. The two primary sources of funds may be classified as
"interest-bearing deposits" and "non-interest bearing deposits."
"Interest-bearing deposits" consist of time deposits, savings accounts, NOW
accounts and Money Market deposit accounts. The largest source of "non-interest
bearing deposits" is demand deposits, which consist of gross demand deposits
less reciprocal balances with our correspondent banks.
As of December 31, 2000, total deposits increased $884,115 or 1.3% from
December 31, 1999. The most significant change in deposits from 1999 to 2000 was
the increase in non-interest bearing demand deposit accounts of $2,122,746 or
8.9%. The increase in non-interest bearing accounts is attributable to an
increase in commercial accounts in 2000.
Shareholders' equity increased $1,570,784 or 16.5% from December 31,
1999 to December 31, 2000. Retained earnings increased $1,003,273 or 13.5% in
2000. However, the accumulated other comprehensive loss at 1999 of $553,801
became income of $18,946 in 2000 due to the effect of interest rate reductions
on the investment portfolio. The equity or book value of the Bank is the
shareholders' investment in the Bank resulting from the sale of stock and the
accumulation of earnings retained by the Bank. The strength of the Bank and its
ability to grow depends to a great extent on management's ability to maintain a
corresponding growth in shareholders' equity.
We declared cash dividends in the amount of $199,983 or $1.70 per share
in 2000 and $170,683 or $1.45 per share in 1999. Dividends of $148,134 or $1.25
per share were declared in 1998.
Eighty-two shares of treasury stock were purchased in 2000. This brings
the total of treasury stock owned to 2,370 with a cost of $134,637.
NONPERFORMING ASSETS AND PAST DUE LOANS. Nonperforming assets are loans carried
on a nonaccrual basis, those classified as restructured loans (loans with
below-market interest rates or other concessions due to the deteriorated
financial condition of the borrower), repossessed real estate, property in the
process of being repossessed and repossessed movable property. A loan is placed
on nonaccrual when, in management's judgment, the borrower's financial condition
has deteriorated to the point that his ability to service the principal and/or
interest is in doubt. At that time, any accrued interest on the loan is reversed
and accruing of interest is discontinued. The Company's nonperforming assets
consist primarily of a small number of installment loans.
Nonperforming assets at December 31, 2000 were $33,923, a decrease of
$75,106 or 68.9% from December 31, 1999. The most significant decrease in
nonperforming assets from 1999 to 2000 was in the loans on nonaccrual status.
This resulted primarily from collection efforts on nonaccrual loans. The Bank
has experienced little activity in other real estate for the three year period
ended December 31, 2000. Management anticipates this favorable trend to
continue.
Loans are considered to be impaired when it is probable that all
amounts due in accordance with the contractual terms will not be collected.
Included in nonaccrual loans are loans that are considered to be impaired, which
totaled $-0- at December 31, 2000 and $69,889 at December 31, 1999. The
allowance for loan losses related to these loans was $-0- and $10,000 at
December 31, 2000 and 1999, respectively.
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LIQUIDITY. Liquidity is the ability to ensure that adequate funds are available
to satisfy contractual liabilities, fund operations, meet withdrawal
requirements of depositors, and provide for customers' credit needs in a timely
manner. The liquidity position of the Bank is founded on a stable base of core
deposits. The primary source of liquidity for the Bank is its short-term
investments. The Bank has overnight fund lines with correspondent banks
providing additional sources of liquidity. Securities available for sale also
provide a major source of liquidity to the Bank, as do the cash flows from
repayments and maturities of its loan portfolio. The franchise from which the
Bank operates allows access to a broad base of retail customers, and management
has been successful at attracting additional deposits when a continuing need for
further funding has arisen. The Bank's core deposit base is supplemented by
public fund time deposits and federal funds obtained through correspondent
relationships.
At the Parent Company (American Bancorp, Inc.) level, cash is needed to
fund operations and to pay dividends. During December 2000, the Parent Company
received $213,500 from the Bank in dividends. The majority of these funds were
used to pay dividends to stockholders and to repurchase outstanding Company
stock.
The purpose of liquidity management is to assure that the Bank has the
ability to raise funds to support asset growth, meet deposit withdrawal,
maintain reserve requirements and otherwise operate the Bank on a continuing
basis. Liquidity for the Bank is provided by the acquisition of additional funds
in the form of deposits, borrowing such as federal funds, investment maturities
and sales, and loan maturities and repayments.
In recognition of the increased pace of deregulation and increasing
competition, the Bank will continue to increase its competitive position in the
area to assure the availability of funds. The Bank's reputation, capital
position and base of deposits will help to insure flexibility and liquidity.
CAPITAL ADEQUACY. The management of capital is a continuous process which
consists of providing capital for anticipated growth of the Bank. An evaluation
of capital adequacy cannot be made solely in terms of total capital or related
ratios. A more comprehensive indication of financial strength is management's
ability to generate capital through the retention of earnings. The Bank's main
source of capital during the last several years has been cumulative earnings
derived through profitable operations.
Regulations applicable to state banks and their holding companies
prescribe minimum capital levels. These levels are based on established
guidelines which relate required capital standards to both risk-weighted
assets (risk-based capital ratios) and total assets (leverage ratio). In
accordance with risk-based guidelines, assets and off-balance-sheet financial
instruments are assigned weights to measure their levels of risk. The total Tier
1 risk-based capital ratio for the Bank was 29.00% at year end 2000 and 28.57%
at year end 1999. Leverage ratios were 14.14% and 13.11% at December 31, 2000
and 1999, respectively. The Bank presently meets or exceeds all required
risk-based capital standards and anticipates no difficulty in maintaining those
standards.
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FAIR VALUES OF FINANCIAL INSTRUMENTS. Statement of Financial Accounting
Standards No. 107, "Disclosures About Fair Values of Financial Instruments"
requires disclosure of estimated fair values of financial instruments. Financial
instruments are defined as cash and contractual rights and obligations that
require settlement, directly or indirectly, in cash. Note 13 to the consolidated
financial statements provides information regarding the fair values of financial
instruments as of December 31, 2000.
MARKET RISK. Market risk is the effect that interest rate changes in market
interest rates have on a bank's earnings and its underlying economic value.
Changes in interest rates affect a bank's earnings by changing its net interest
income and the level of other sensitive income and operating expenses. The
underlying economic value of the Company's assets, liabilities, and off-balance
sheet instruments also are affected by changes in interest rates. These changes
occur because the present value of future cash flows, and in some cases the cash
flows themselves, change when interest rates change. The combined effects of the
changes in these present values reflect the change in the Bank's underlying
economic value.
Table 14 presents the Bank's Interest Rate Sensitivity Analysis. The
table is prepared utilizing present value calculations. Present value is the
future cash flows of a financial instrument, or portfolio of financial
instruments, discounted to the present. The discount rate is constructed by the
use of the build-up approach or the risk premium approach.
The build-up approach views the discount rate as consisting of four
components. They are risk-free rate, credit risk, operating expense, and
prepayment option price. Risk-free rate forms the foundation of the discount
rate and is derived from the Treasury yield curve. The credit risk component is
the annualized yield needed to cover the loss of value expected over the entire
life of a portfolio. The operating expense component represents an annualized
cost rate derived from operating expense allocations. This component is used to
adjust the risk-free rate in order to compensate for operating expenses. The
prepayment option price is the final component, and represents a basis point
adjustment to the risk-free rate to reflect the value of imbedded prepayment
options.
The risk premium approach views the discount rate as the sum of two
components: the risk-free rate, and a risk premium. The risk-free rate is the
same as defined above. The risk premium is the annualized yield needed to cover
the risk reflected in the portfolio. This risk premium incorporates all forms of
risk in a single spread to the Treasury yield curve. Consistent with an entry
rate concept of selecting a discount rate, the marginal pricing rate for each
account serves as the basis for determining an appropriate risk premium to the
Treasury yield curve. This risk premium is calculated by subtracting the value
on the Treasury yield curve which corresponds to the average maturity of the
account from the account's marginal pricing rate.
The build-up approach is used for loans, deposits, and short-term
borrowing. The risk premium approach is used for securities and short-term
investments.
The cash flows for all assets and liabilities are estimated based upon
reasonable assumptions on the time remaining until maturity, repricing
frequency, decay factors, and prepayment rates. These assumptions are either
based on historical trends or available industry accepted information.
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The effect of an increase in 200 basis points from December 31, 2000
rates would be a reduction of $.956 million in total market value of
shareholders' equity or a 7.52% decrease in the market value of the portfolio
equity. A decrease of 200 basis points from December 31, 2000 would result in an
increase of $.153 million or a 1.21% increase in the market value of the
portfolio equity.
The effect on earnings is also reflected in Table 14. A 200 basis point
increase on the assets and liabilities outstanding as of December 31, 2000 would
result in an increase in net income of $.061 million or a 5.15% increase in net
income. A 200 basis point decrease on the assets and liabilities outstanding as
of December 31, 2000 would have the opposite effect and would result in a
decrease of net income in the amount of $.148 million or a 12.45% decrease in
net income.
Computation of prospective effects of hypothetical interest rate
changes are based on many assumptions, including relative levels of market
interest rates, loan prepayments, and deposits decay. They should not be relied
upon as indicative of actual results. Further, the computations do not
contemplate certain actions that management could undertake in response to
changes in interest rates.
The Bank does not invest in derivatives and has none in its securities
portfolio.
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TABLE 1
SUMMARY OF CONSOLIDATED NET INTEREST INCOME
Fully taxable equivalent basis (In thousands)
2000
--------------------------------------------
AVERAGE AVERAGE
BALANCE INTEREST RATE
---------- ---------- ----------
ASSETS
Short-term investments .............................. $ 4,455 $ 268 6.02%
Loans, net of unearned income (1)(2) ................ 29,974 2,777 9.26
Securities available for sale (1)(3) ................ 33,193 2,138 6.44
Securities held to maturity ......................... 4,091 240 5.87
---------- ----------
Total interest earning assets ................. 71,713 5,423 7.56%
---------- ----------
Allowance for possible loan losses .................. (572)
Cash and due from banks ............................. 4,814
Other assets ........................................ 1,999
----------
Total assets .................................. $ 77,954
==========
LIABILITIES
Interest-bearing demand deposits .................... $ 11,630 $ 237 2.04%
Savings deposits .................................... 9,216 248 2.69
Time deposits ....................................... 20,969 1,060 5.06
Short-term borrowings ............................... -- -- --
---------- ----------
Total interest-bearing liabilities ............ 41,815 1,545 3.69%
---------- ----------
Non-interest bearing demand deposits ................ 25,600
Other liabilities ................................... 435
----------
Total liabilities ............................. 67,850
SHAREHOLDERS' EQUITY
Shareholders' equity ................................ 10,104
----------
Total liabilities and shareholders' equity .... $ 77,954
==========
Total interest expense related to earning assets .... 2.15%
----------
Net interest income ................................. $ 3,878
==========
Net interest margin ................................. 5.41%
==========
1999
----------------------------------------
AVERAGE AVERAGE
BALANCE INTEREST RATE
---------- ---------- ----------
ASSETS
Short-term investments .............................. $ 9,782 $ 492 5.03%
Loans, net of unearned income (1)(2) ................ 26,880 2,450 9.11
Securities available for sale (1)(3) ................ 28,672 1,781 6.21
Securities held to maturity ......................... 4,689 288 6.14
---------- ----------
Total interest earning assets ................. 70,023 5,011 7.16%
---------- ----------
Allowance for possible loan losses .................. (592)
Cash and due from banks ............................. 4,912
Other assets ........................................ 2,109
----------
Total assets .................................. $ 76,452
==========
LIABILITIES
Interest-bearing demand deposits .................... $ 10,838 $ 211 1.95%
Savings deposits .................................... 9,714 263 2.71
Time deposits ....................................... 22,030 1,038 4.71
Short-term borrowings ............................... -- -- --
---------- ----------
Total interest-bearing liabilities ............ 42,582 1,512 3.55%
---------- ----------
Non-interest bearing demand deposits ................ 23,962
Other liabilities ................................... 372
----------
Total liabilities 66,916
SHAREHOLDERS' EQUITY
Shareholders' equity ................................ 9,536
----------
Total liabilities and shareholders' equity .... $ 76,452
==========
Total interest expense related to earning assets .... 2.16%
----------
Net interest income ................................. $ 3,499
==========
Net interest margin ................................. 5.00%
==========
1998
----------------------------------------
AVERAGE AVERAGE
BALANCE INTEREST RATE
---------- ---------- ----------
ASSETS
Short-term investments .............................. $ 5,732 $ 309 5.39%
Loans, net of unearned income (1)(2) ................ 28,548 2,639 9.24
Securities available for sale (1)(3) ................ 19,113 1,237 6.47
Securities held to maturity ......................... 9,092 585 6.43
---------- ----------
Total interest earning assets ................. 62,485 4,770 7.63%
---------- ----------
Allowance for possible loan losses .................. (602)
Cash and due from banks ............................. 4,093
Other assets ........................................ 2,496
----------
Total assets .................................. $ 68,472
==========
LIABILITIES
Interest-bearing demand deposits .................... $ 11,104 $ 216 1.95%
Savings deposits .................................... 9,223 250 2.71
Time deposits ....................................... 19,747 978 4.95
Short-term borrowings ............................... 29 2 6.90
---------- ----------
Total interest-bearing liabilities ............ 40,103 1,446 3.61%
---------- ----------
Non-interest bearing demand deposits ................ 19,070
Other liabilities ................................... 357
----------
Total liabilities ............................. 59,530
SHAREHOLDERS' EQUITY
Shareholders' equity ................................ 8,942
----------
Total liabilities and shareholders' equity .... $ 68,472
==========
Total interest expense related to earning assets .... 2.31%
----------
Net interest income ................................. $ 3,324
==========
Net interest margin ................................. 5.32%
==========
(1) Interest income earned on nontaxable investment securities and certain
loans are exempt from taxation. However, an adjustment has been made for
the tax preference item related to nontaxable securities purchased after
December 31, 1982. An incremental tax rate of 34% is used to compute the
taxable equivalent adjustment for 2000, 1999, and 1998.
(2) For purposes of yield computations, non-accrual loans are included in loans
outstanding.
(3) Yield computations are based on historical cost of securities available for
sale.
-12-
14
TABLE 2
RATE/VOLUME ANALYSIS
Fully taxable equivalent basis (In thousands)
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
---------------------------------------- ----------------------------------------
2000/1999 1999/1998
---------------------------------------- ----------------------------------------
INCREASE (DECREASE) INCREASE (DECREASE)
DUE TO CHANGE IN: (1) DUE TO CHANGE IN: (1)
------------------------- -------------------------
AVERAGE AVERAGE NET AVERAGE AVERAGE NET
BALANCE RATE CHANGE BALANCE RATE CHANGE
---------- ---------- ---------- ---------- ---------- ----------
Interest income:
Short-term investments ............... $ (294) $ 70 $ (224) $ 211 $ (28) $ 183
Loans, net of unearned income ........ 284 43 327 (153) (36) (189)
Securities available for sale ........ 286 71 357 606 (62) 544
Securities held to maturity .......... (36) (12) (48) (277) (20) (297)
---------- ---------- ---------- ---------- ---------- ----------
Total interest income ............. 240 172 412 387 (146) 241
---------- ---------- ---------- ---------- ---------- ----------
Interest expense:
Demand deposits ...................... 16 10 26 (5) -- (5)
Savings deposits ..................... (13) (2) (15) 13 -- 13
Time deposits ........................ (52) 74 22 108 (50) 58
Short-term borrowing ................. -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total interest expense ............ (49) 82 33 116 (50) 66
---------- ---------- ---------- ---------- ---------- ----------
Taxable-equivalent net interest income .. $ 289 $ 90 $ 379 $ 271 $ (96) $ 175
========== ========== ========== ========== ========== ==========
(1) The change in interest due to both rate and volume has been allocated to
rate and volume changes in proportion to the relationship of the absolute
dollar amounts of the change in each.
-13-
15
TABLE 3
SECURITIES PORTFOLIO
(In thousands)
DECEMBER 31, 2000 DECEMBER 31, 1999
---------------------------------------- ----------------------------------------
HELD TO AVAILABLE HELD TO AVAILABLE
MATURITY FOR SALE TOTAL MATURITY FOR SALE TOTAL
---------- ---------- ---------- ---------- ---------- ----------
U.S. Treasury ........ $ 4,396 $ -- $ 4,396 $ 2,300 $ 3,501 $ 5,801
U.S. Government and
Agencies .......... 500 14,413 14,913 500 12,536 13,036
Mortgage-Backed
Securities ........ -- 7,253 7,253 -- 6,931 6,931
State and Political
Subdivisions ...... -- 9,252 9,252 -- 8,306 8,306
Equity Securities .... -- 149 149 -- 149 149
---------- ---------- ---------- ---------- ---------- ----------
$ 4,896 $ 31,067 $ 35,963 $ 2,800 $ 31,423 $ 34,223
========== ========== ========== ========== ========== ==========
-14-
16
TABLE 4
MATURITY DISTRIBUTION AND SECURITIES PORTFOLIO YIELDS
(In thousands)
AFTER AFTER
ONE BUT FIVE BUT
WITHIN ONE WITHIN FIVE WITHIN TEN
YEAR AMT. YIELD YEARS AMT. YIELD YEARS AMT. YIELD
---------- ---------- ----------- ---------- ---------- ----------
December 31, 2000:
Held to maturity:
U.S. Treasury .................... $ 2,601 5.61% $ 1,795 6.61% $ -- --%
U.S. Government
and Agencies .................. 500 6.43 -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total held to maturity .... 3,101 5.74% 1,795 6.61% -- --
---------- ---------- ---------- ---------- ---------- ----------
Available for sale:
U.S. Treasury .................... -- --% -- --% -- --%
U.S. Government
and Agencies .................. 500 6.50 11,419 6.43 2,495 6.65
Mortgage-Backed
Securities(2) ................. 36 7.37 1,888 5.79 2,366 6.59
State and
Political
Subdivisions(1) ............... 1,033 6.89 4,099 6.87 3,798 7.08
Equity Securities ................. 149 -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total available for sale ... 1,718 6.83% 17,406 6.48% 8,659 6.91%
---------- ---------- ---------- ---------- ---------- ----------
Total securities ........... $ 4,819 6.13% $ 19,201 6.49% $ 8,659 6.91%
========== ========== ========== ========== ========== ==========
AFTER TEN TOTAL
YEARS AMT. YIELD AMOUNT YIELD
---------- ---------- ---------- ----------
December 31, 2000:
Held to maturity:
U.S. Treasury .................... $ -- --% $ 4,396 6.02%
U.S. Government
and Agencies .................. -- -- 500 6.43
---------- ---------- ---------- ----------
Total held to maturity .... -- --% 4,896 6.06%
---------- ---------- ---------- ----------
Available for sale:
U.S. Treasury .................... -- --% -- --%
U.S. Government
and Agencies .................. -- -- 14,414 6.47
Mortgage-Backed
Securities(2) ................. 2,962 7.10 7,252 6.59
State and
Political
Subdivisions(1) ............... 322 8.15 9,252 7.00
Equity Securities ................. -- -- 149 --
---------- ---------- ---------- ----------
Total available for sale ... 3,284 7.19% 31,067 6.66%
---------- ---------- ---------- ----------
Total securities ........... $ 3,284 7.19% $ 35,963 6.59%
========== ========== ========== ==========
(1) Tax exempt yields are expressed on a fully taxable equivalent basis,
assuming a rate of 34% for 2000.
(2) Distributed by contractual maturity without regard to repayment schedules
or projected payments.
-15-
17
TABLE 5
LOAN PORTFOLIO
The loans outstanding for the three years ended December 31, 2000 are shown in
the following table according to type of loan (in thousands).
2000 1999 1998
---------- ---------- ----------
Commercial, financial and agricultural .. $ 6,946 $ 7,326 $ 7,666
Real Estate - Construction .............. 539 949 51
Real Estate - Mortgage .................. 20,052 15,809 15,361
Installment ............................. 5,122 4,748 4,981
---------- ---------- ----------
Total ........................... 32,659 28,832 28,059
Less:
Allowance for possible loan losses .... (579) (579) (596)
Unearned income ....................... -- -- --
---------- ---------- ----------
$ 32,080 $ 28,253 $ 27,463
========== ========== ==========
TABLE 6
LOAN MATURITY AND INTEREST RATE SENSITIVITY
The following table shows the amount of commercial, financial and agricultural
loans, real estate-construction loans and real estate mortgage loans, exclusive
of installment loans, outstanding as of December 31, 2000 which, based on
remaining scheduled repayments of principal, are due in the amounts indicated.
Also, the amounts are classified according to the sensitivity to the changes in
interest rates (in thousands).
ONE YEAR OVER ONE
OR TO OVER
LESS(1) 5 YEARS 5 YEARS TOTAL
---------- ---------- ---------- ----------
Maturity of Loans:
Commercial, financial and
agricultural ..................... $ 3,076 $ 2,945 $ 152 $ 6,173
Real Estate - mortgage and
construction ...................... 3,051 14,320 3,993 21,364
---------- ---------- ---------- ----------
Total ........................... $ 6,127 $ 17,265 $ 4,145 $ 27,537
========== ========== ========== ==========
Interest Rate Sensitivity of Loans:
With predetermined interest rates ... $ 4,513 $ 16,177 $ 1,809 $ 22,499
With floating interest rates (2) .... 1,614 1,088 2,336 5,038
---------- ---------- ---------- ----------
Total ........................... $ 6,127 $ 17,265 $ 4,145 $ 27,537
========== ========== ========== ==========
(l) Includes demand loans, loans having no stated schedule of repayments and no
stated maturity, and overdrafts.
(2) The floating interest rate loans generally fluctuate according to a formula
based on a prime rate.
-16-
18
TABLE 7
NONPERFORMING ASSETS
Nonperforming assets include nonaccrual loans, loans which are contractually 90
days past due, restructured loans, and foreclosed assets. Restructured loans are
loans which, due to a deteriorated financial condition of the borrower, have a
below-market yield. Interest payments received on nonperforming loans are
applied to reduce principal if there is doubt as to the collectibility of the
principal; otherwise, these receipts are recorded as interest income. Certain
nonperforming loans that are current as to principal and interest payments are
classified as nonperforming because there is a question concerning full
collection of both principal and interest.
Nonperforming assets totaled $33,923 at year ended 2000, a $75,106 (68.9%)
decrease from the prior year. Nonperforming assets totaled $109,029 at December
31, 1999, which was a decrease of $96,519 (47.0%) from December 31, 1998. The
composition of nonperforming assets for the past three years are illustrated
below.
2000 1999 1998
---------- ---------- ----------
Nonperforming loans:
Loans on nonaccrual .................. $ -- $ 69,889 $ 144,797
Restructured loans which are not
on nonaccrual ...................... 33,923 39,140 60,751
---------- ---------- ----------
Total nonperforming loans ........ 33,923 109,029 205,548
Other real estate and repossessed
assets received in complete or
partial satisfaction of loan
obligations ......................... -- -- 1
---------- ---------- ----------
Total nonperforming assets ...... $ 33,923 $ 109,029 $ 205,549
========== ========== ==========
Loans contractually past due 90
days or more as to principal or
interest but which are not on
nonaccrual ......................... $ 11,061 $ 8,119 $ 14,718
========== ========== ==========
At December 31, 2000, the Bank has loans outstanding to multiple numbers of
borrowers engaged in the medical industry and the legal profession. Loans to the
medical industry were approximately $7,126,000, while the loans to the legal
profession were approximately $3,177,000. There were no significant
nonperforming loans outstanding in these two concentrations.
-17-
19
TABLE 8
ALLOWANCE FOR POSSIBLE LOAN LOSSES
(In Thousands)
YEAR ENDED DECEMBER 31,
--------------------------------------------
2000 1999 1998
---------- ---------- ----------
Beginning balance ................................ $ 579 $ 596 $ 600
---------- ---------- ----------
Charge-offs:
Commercial, financial and agricultural loans ... (3) (13) --
Real estate mortgage loans ..................... -- -- --
Real estate construction loans ................. -- -- --
Installment loans .............................. (8) (7) (15)
---------- ---------- ----------
Total charge-offs .......................... (11) (20) (15)
---------- ---------- ----------
Recoveries:
Commercial, financial and agricultural loans ... -- -- --
Real estate mortgage loans ..................... -- -- --
Real estate construction loans ................. -- -- --
Installment loans .............................. -- 3 11
---------- ---------- ----------
Total recoveries ........................... - 0- 3 11
---------- ---------- ----------
Net (charge-offs) recoveries ..................... (11) (17) (4)
---------- ---------- ----------
Provision charged against income ................. 11 - 0- - 0-
---------- ---------- ----------
Ending balance ................................... $ 579 $ 579 $ 596
========== ========== ==========
Net charge-offs to average loans ................ (.04)% (.06)% (.01)%
========== ========== ==========
Year-end allowance to year-end loans ............. 1.77 % 2.01 % 2.12 %
========== ========== ==========
-18-
20
TABLE 9
ALLOCATION FOR POSSIBLE LOAN LOSSES
(In thousands)
The allowance for possible loan losses has been allocated according to the
amount deemed to be reasonably necessary to provide for the possibility of
losses being incurred within the following categories of loans at the date
indicated.
DECEMBER 31, 2000 DECEMBER 31, 1999
--------------------------- ---------------------------
% OF LOANS % OF LOANS
OUTSTANDING OUTSTANDING
TO TOTAL TO TOTAL
ALLOWANCE LOANS ALLOWANCE LOANS
---------- ----------- ---------- -----------
Commercial, financial and
agricultural loans ........ $ 115 21.27% $ 120 25.41%
Real estate construction ..... 4 1.65 5 3.29
Real estate mortgage loans ... 236 61.40 238 54.83
Installment loans ............ 224 15.68 216 16.47
---------- ---------- ---------- ----------
$ 579 100.00% $ 579 100.00%
========== ========== ========== ==========
DECEMBER 31, 1998
---------------------------
% OF LOANS
OUTSTANDING
TO TOTAL
ALLOWANCE LOANS
---------- -----------
Commercial, financial and
agricultural loans ...................... $ 135 27.32%
Real estate construction ................... 1 .18
Real estate mortgage loans ................. 272 54.75
Installment loans .......................... 188 17.75
---------- ----------
$ 596 100.00%
========== ==========
-19-
21
TABLE 10
DEPOSITS
The following table presents the average balance and an average rate paid on
deposits (in thousands):
DECEMBER 31,
-------------------------------------------------------------------------------------
2000 1999 1998
------------------------- ------------------------- -------------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE RATE BALANCE RATE BALANCE RATE
---------- ---------- ---------- ---------- ---------- ----------
Non-interest bearing
demand deposits ....... $ 25,600 --% $ 23,962 --% $ 19,070 --%
Interest bearing
demand deposits ....... 11,630 2.04 10,838 1.95 11,104 1.95
Savings deposits ........ 9,216 2.69 9,714 2.71 9,223 2.71
Time deposits ........... 20,969 5.06 22,030 4.71 19,747 4.95
Short-term borrowings ... -- -- -- -- 29 6.90
---------- ---------- ----------
Total .......... $ 67,415 $ 66,544 $ 59,173
========== ========== ==========
TABLE 11
CERTIFICATES OF DEPOSIT OF $100,000 OR MORE, MATURITY DISTRIBUTION
The following table provides the maturities of time certificates of deposit of
the Bank in amounts of $100,000 or more (in thousands):
DECEMBER 31,
----------------------------------------
2000 1999 1998
---------- ---------- ----------
Maturing in:
3 months or less .................... $ 2,961 $ 3,076 $ 2,587
Over 3 months less than 6 months .... 1,536 1,084 920
Over 6 months less than 12 months ... 682 458 500
Over 12 months ...................... -- -- --
---------- ---------- ----------
Total ......................... $ 5,179 $ 4,618 $ 4,007
========== ========== ==========
-20-
22
TABLE 12
RISK-BASED CAPITAL
(In thousands)
DECEMBER 31,
------------------------------
2000 1999
------------ ------------
Risk-weighted assets ........................... $ 38,022 $ 35,073
============ ============
Capital:
Tier I ...................................... $ 11,025 $ 10,022
Tier II ..................................... 475 438
------------ ------------
Total capital ............................ $ 11,500 $ 10,460
============ ============
Ratios:
Tier I capital to risk-weighted assets ...... 29.00% 28.57%
Tier II capital to risk-weighted assets ..... 1.25 1.25
------------ ------------
Total capital to risk-weighted assets .... 30.25% 29.82%
============ ============
Leverage - Tier I capital to total
average assets ........................... 14.14% 13.11%
============ ============
TABLE 13
RETURN ON EQUITY AND ASSETS
The following table shows consolidated operating and capital ratios for each of
the last three years:
YEARS ENDED DECEMBER 31,
------------------------------------------
2000 1999 1998
---------- ---------- ----------
Return on average total assets ............. 1.54% 1.42% 1.47%
Return on average shareholders' equity ..... 11.91% 11.38% 11.27%
Dividend payout ratio ...................... 16.62% 15.74% 14.76%
Average equity to average assets ratio ..... 12.96% 12.47% 13.06%
-21-
23
TABLE 14
INTEREST RATE SENSITIVITY ANALYSIS
DECEMBER 31, 2000
(In thousands)
RATES
-------------------------------
FORECAST +200 BP -200 BP
------------ ------------ ------------
Economic value at risk:
Total assets ................................ $ 82,749
Bank equity ................................. $ 11,044
Market value of portfolio equity ............ $ 12,708 $ 11,752 $ 12,861
Market value to book value
of equity ................................ 1.15 1.06 1.16
Amount of change in market value of
portfolio equity ......................... $ (956) $ 153
Percent change in market value of
portfolio equity ......................... (7.52)% 1.21%
Total securities market value premium
percentage ............................... 0.17% (6.00)% 4.31%
Net loans present value premium
percentage ............................... 1.60% (1.37)% 4.61%
Total deposits present value premium
percentage ............................... 1.57% 3.66% (0.98)%
Earnings at risk:
January 1 to December 31, 2001-
Interest margin on earning assets ...... 5.19% 5.31% 4.89 %
Amount of change in interest
margin on earning assets ............ .12% (.30)%
Net interest income .................... $ 3,690 $ 3,777 $ 3,472
Amount of change in net
interest income ..................... $ 87 $ (218)
Percent change in net interest
income .............................. 2.35% (5.91)%
Net income ............................. $ 1,189 $ 1,250 $ 1,040
Amount change in net income ............ $ 61 $ (148)
Percent change in net income ........... 5.15% (12.45)%
-22-
24
[BROUSSARD, POCHE, LEWIS & BREAUX, L.L.P. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
American Bancorp, Inc.
Opelousas, Louisiana
We have audited the accompanying consolidated balance sheets of American
Bancorp, Inc. and subsidiary as of December 31, 2000 and 1999, and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for each of the three years in the period ended December 31, 2000. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
American Bancorp, Inc. and subsidiary as of December 31, 2000 and 1999, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000, in conformity with generally
accepted accounting principles.
/s/ BROUSSARD, POCHE, LEWIS & BREAUX
Lafayette, Louisiana
January 31, 2001
-23-
25
AMERICAN BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2000 AND 1999
ASSETS 2000 1999
------------ ------------
Cash and due from banks .......................... $ 6,900,623 $ 6,048,962
Federal funds sold ............................... 4,775,000 8,104,742
------------ ------------
Total cash and cash equivalents ............... 11,675,623 14,153,704
Interest-bearing deposits with banks ............. 298,000 1,090,000
Securities held to maturity (estimated
market values $4,928,531 and $2,771,757,
respectively) ................................. 4,896,244 2,799,634
Securities available for sale .................... 31,067,441 31,422,670
Loans, net of allowance for possible
loan losses of $579,481 and $579,047,
respectively .................................. 32,080,127 28,253,313
Bank premises and equipment ...................... 1,549,934 1,108,299
Accrued interest receivable ...................... 665,791 616,515
Other assets ..................................... 526,902 787,605
------------ ------------
$ 82,760,062 $ 80,231,740
============ ============
See Notes to Consolidated Financial Statements.
-24-
26
LIABILITIES AND SHAREHOLDERS' EQUITY 2000 1999
------------ ------------
LIABILITIES
Deposits:
Non-interest bearing demand deposits ........................ $ 25,925,833 $ 23,803,087
Interest bearing deposits ................................... 45,392,649 46,631,280
------------ ------------
Total deposits ........................................ 71,318,482 70,434,367
Accrued interest payable ....................................... 158,760 132,163
Other liabilities .............................................. 206,361 159,535
------------ ------------
Total liabilities ..................................... 71,683,603 70,726,065
------------ ------------
SHAREHOLDERS' EQUITY
Common stock, $5 par value; 10,000,000
shares authorized; 120,000 shares
issued; 117,630 and 117,712 outstanding, respectively ....... 600,000 600,000
Surplus ........................................................ 2,150,000 2,150,000
Retained earnings .............................................. 8,442,150 7,438,877
Accumulated other comprehensive income
(loss), net of tax of $9,760
and ($285,291), respectively ................................ 18,946 (553,801)
Treasury stock, 2,370 and 2,288 shares at cost, respectively ... (134,637) (129,401)
------------ ------------
Total shareholders' equity ............................ 11,076,459 9,505,675
------------ ------------
$ 82,760,062 $ 80,231,740
============ ============
-25-
27
AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
2000 1999 1998
------------ ------------ ------------
Interest income:
Interest and fees on loans .............. $ 2,776,182 $ 2,433,152 $ 2,642,229
Interest on investment securities-
Taxable .............................. 1,750,951 1,556,496 1,478,482
Tax-exempt ........................... 414,496 338,148 226,872
Federal funds sold ...................... 230,179 411,878 240,724
Deposits with banks ..................... 38,270 79,744 68,220
------------ ------------ ------------
Total interest income ............. 5,210,078 4,819,418 4,656,527
Interest expense:
Interest on deposits .................... 1,545,041 1,511,660 1,445,816
------------ ------------ ------------
Net interest income ........................ 3,665,037 3,307,758 3,210,711
Provision for possible loan losses ......... 10,500 -- --
------------ ------------ ------------
Net interest income after provision
for possible loan losses ................ 3,654,537 3,307,758 3,210,711
------------ ------------ ------------
Non-interest income:
Service charges on deposit accounts ..... 555,331 559,418 508,135
Other ................................... 140,034 133,128 104,250
------------ ------------ ------------
Total non-interest income ......... 695,365 692,546 612,385
------------ ------------ ------------
Non-interest expense:
Salary and employee benefits ............ 1,395,243 1,301,324 1,198,730
Net occupancy expense ................... 306,870 287,674 293,939
Equipment expense ....................... 276,781 224,367 246,471
Net cost (revenue) from other
real estate .......................... -- (40,434) 299
Other ................................... 741,424 738,895 667,893
------------ ------------ ------------
Total non-interest expense ........ 2,720,318 2,511,826 2,407,332
------------ ------------ ------------
Income before income taxes ................. 1,629,584 1,488,478 1,415,764
Provision for income taxes ................. 426,328 402,933 407,896
------------ ------------ ------------
Net income ........................ $ 1,203,256 $ 1,085,545 $ 1,007,868
============ ============ ============
Net income per common share ................ $ 10.23 $ 9.21 $ 8.47
============ ============ ============
See Notes to Consolidated Financial Statements.
-26-
28
AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
ACCUMULATED
OTHER
COMMON STOCK RETAINED COMPREHENSIVE
SHARES AMOUNT SURPLUS EARNINGS INCOME
------------ ------------ ------------ ------------ -------------
Balance, December 31, 1997 ................... 120,000 $ 600,000 $ 2,150,000 $ 5,664,281 $ 100,417
Comprehensive income
Net income for 1998 ....................... -- -- -- 1,007,868 --
Other comprehensive income:
Changes in unrealized holding gains
(losses) on securities available
for sale, net of tax of $131,975 ..... -- -- -- -- 155,770
Total comprehensive income ........... -- -- -- -- --
Purchase of treasury stock ................... -- -- -- -- --
Dividends paid in 1998 ....................... -- -- -- (148,134) --
------------ ------------ ------------ ------------ ------------
Balance, December 31, 1998 ................... 120,000 600,000 2,150,000 6,524,015 256,187
Comprehensive income
Net income for 1999 ....................... -- -- -- 1,085,545 --
Other comprehensive income:
Changes in unrealized holding gains
(losses) on securities available
for sale, net of tax of $(285,291) ... -- -- -- -- (809,988)
Total comprehensive income ........... -- -- -- -- --
Purchase of treasury stock ................... -- -- -- -- --
Dividends paid in 1999 ....................... -- -- -- (170,683) --
------------ ------------ ------------ ------------ ------------
Balance, December 31, 1999 ................... 120,000 600,000 2,150,000 7,438,877 (553,801)
Comprehensive income
Net income for 2000 ....................... -- -- -- 1,203,256 --
Other comprehensive income:
Changes in unrealized holding gains
(losses) on securities available
for sale, net of tax of $295,051 ..... -- -- -- -- 572,747
Total comprehensive income ........... -- -- -- -- --
Purchase of treasury stock ................... -- -- -- -- --
Dividends paid in 2000 ....................... -- -- -- (199,983) --
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2000 ................... 120,000 $ 600,000 $ 2,150,000 $ 8,442,150 $ 18,946
============ ============ ============ ============ ============
TREASURY COMPREHENSIVE
STOCK INCOME TOTAL
------------ ------------- ------------
Balance, December 31, 1997 ................... $ (2,014) $ -- $ 8,512,684
Comprehensive income
Net income for 1998 ....................... -- 1,007,868 1,007,868
Other comprehensive income:
Changes in unrealized holding gains
(losses) on securities available
for sale, net of tax of $131,975 ..... -- 155,770 155,770
------------
Total comprehensive income ........... -- $ 1,163,638 --
============
Purchase of treasury stock ................... (82,681) (82,681)
Dividends paid in 1998 ....................... -- (148,134)
------------ ------------
Balance, December 31, 1998 ................... (84,695) $ -- 9,445,507
Comprehensive income
Net income for 1999 ....................... -- 1,085,545 1,085,545
Other comprehensive income:
Changes in unrealized holding gains
(losses) on securities available
for sale, net of tax of $(285,291) ... -- (809,988) (809,988)
------------
Total comprehensive income ........... -- $ 275,557 --
============
Purchase of treasury stock ................... (44,706) (44,706)
Dividends paid in 1999 ....................... -- (170,683)
------------ ------------
Balance, December 31, 1999 ................... (129,401) $ -- 9,505,675
Comprehensive income
Net income for 2000 ....................... -- 1,203,256 1,203,256
Other comprehensive income:
Changes in unrealized holding gains
(losses) on securities available
for sale, net of tax of $295,051 ..... -- 572,747 572,747
------------
Total comprehensive income ........... -- $ 1,776,003 --
============
Purchase of treasury stock ................... (5,236) (5,236)
Dividends paid in 2000 ....................... -- (199,983)
------------ ------------
Balance, December 31, 2000 ................... $ (134,637) $ 11,076,459
============ ============
See Notes to Consolidated Financial Statements.
-27-
29
AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
2000 1999 1998
------------ ------------ ------------
OPERATING ACTIVITIES
Net income .............................................. $ 1,203,256 $ 1,085,545 $ 1,007,868
Adjustments to reconcile net income
to net cash provided by operating
activities:
Premium amortization, (discount
accretion) on investment securities ............... (99,495) (49,466) 5,846
Depreciation ......................................... 161,126 129,296 165,247
(Gain) loss on disposal of assets .................... (9,308) -- --
(Increase) decrease in assets:
Other real estate owned ........................... -- -- 6,899
Accrued interest receivable ....................... (49,276) (7,739) 11,201
Other assets ...................................... (23,118) 126,902 (21,372)
Increase (decrease) in liabilities:
Accrued interest payable .......................... 26,597 (12,105) 24,101
Other liabilities ................................. 46,826 (98,011) 45,983
------------ ------------ ------------
Net cash provided by operating
activities .................................. 1,256,608 1,174,422 1,245,773
------------ ------------ ------------
INVESTING ACTIVITIES
(Increase) decrease in interest-bearing
deposits with banks .................................. 792,000 297,000 (693,000)
Proceeds from maturities
of available for sale securities ..................... 6,479,450 5,421,738 4,364,835
Proceeds from maturities
of held to maturity securities ....................... 200,000 5,000,000 8,700,000
Purchase of available for sale
securities ........................................... (5,160,466) (14,008,754) (15,951,986)
Purchase of held to maturity
securities ........................................... (2,293,072) (2,098,859) (199,844)
(Increase) decrease in loans ............................ (3,826,814) (790,718) 372,343
Purchases of property and equipment ..................... (611,453) (124,227) (51,206)
Other ................................................... 6,770 -- (9,336)
------------ ------------ ------------
Net cash used in investing
activities .................................. (4,413,585) (6,303,820) (3,468,194)
------------ ------------ ------------
-28-
30
2000 1999 1998
------------ ------------ ------------
FINANCING ACTIVITIES
Increase (decrease) in liabilities:
Demand deposits, transaction
accounts and savings .............................. 1,490,976 5,952,640 6,412,096
Time deposits ........................................ (606,861) 662,744 1,550,141
Dividends paid .......................................... (199,983) (170,683) (148,134)
Purchase of treasury stock .............................. (5,236) (44,706) (82,681)
------------ ------------ ------------
Net cash provided by
financing activities ........................... 678,896 6,399,995 7,731,422
------------ ------------ ------------
Increase (decrease) in cash and cash
equivalents ............................................. (2,478,081) 1,270,597 5,509,001
Cash and cash equivalents at
beginning of year ....................................... 14,153,704 12,883,107 7,374,106
------------ ------------ ------------
Cash and cash equivalents at end
of year ................................................. $ 11,675,623 $ 14,153,704 $ 12,883,107
============ ============ ============
SUPPLEMENTAL DISCLOSURES
Cash payments for:
Interest expense ..................................... $ 1,518,444 $ 1,523,315 $ 1,308,437
============ ============ ============
Income taxes ......................................... $ 444,042 $ 363,552 $ 410,200
============ ============ ============
See Notes to Consolidated Financial Statements
-29-
31
AMERICAN BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Accounting Policies
American Bancorp, Inc. (the Company) and its subsidiary, American Bank
and Trust Company (the Bank), follow generally accepted accounting
principles and reporting practices applicable to the banking industry.
Descriptions of significant accounting policies are summarized below:
Description of business:
The Company is a bank holding company headquartered in Opelousas,
Louisiana, operating principally in the community banking
business segment by providing banking services to commercial and
retail customers through its wholly owned subsidiary, the Bank.
The Bank is community oriented and focuses primarily on offering
competitive commercial and consumer loan and deposit services to
individuals and small to middle market businesses.
Comprehensive income:
Comprehensive income includes net income and other comprehensive
income which, in the case of the Company, includes only
unrealized gain and losses on securities available-for-sale.
Consolidation:
The consolidated financial statements include the accounts of the
respective parent Company and its subsidiary. All significant
intercompany accounts and transactions have been eliminated.
Cash and cash equivalents:
For the purpose of reporting cash flows, cash and cash
equivalents include cash on hand, amounts due from banks, and
federal funds sold. Generally, federal funds are purchased or
sold for one-day periods.
Use of estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the consolidated financial statements and accompanying notes.
Actual results could differ from those estimates.
-30-
32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Securities:
Management determines the appropriate classification of debt
securities (trading, available for sale, or held to maturity) at
the time of purchase and re-evaluates this classification
periodically. Securities classified as trading account assets are
held for sale in anticipation of short-term market movements. Debt
securities are classified as held to maturity when the Bank has
the positive intent and ability to hold the securities to
maturity. Securities not classified as held to maturity or trading
are classified as available for sale.
Securities classified as trading account assets are carried at
market value and are included in short-term investments. Gains and
losses, both realized and unrealized, are reflected in earnings as
other operating income. Securities classified as held to maturity
are stated at amortized costs. Securities classified as available
for sale are stated at fair value, with unrealized gains and
losses, net of tax, reported in shareholders' equity and included
in other comprehensive income.
The amortized cost of debt securities classified as held to
maturity or available for sale is adjusted for amortization of
premiums and accretion of discounts to maturity or, in the case of
mortgage-backed securities, over the estimated life of the
security. Amortization, accretion and accruing interest are
included in interest income on securities using the level-yield
method. Realized gains and losses, and declines in value judged to
be other than temporary, are included in net securities gains
(losses). The cost of securities sold is determined based on the
specific identification method.
Loans:
Loans that management has the intent and ability to hold for the
foreseeable future or until maturity or pay-off are reported at
their outstanding principal adjusted for any charge-offs, the
allowance for loan losses and unearned income. Interest on loans
and accretion of unearned income are computed by methods which
approximate a level rate of return on recorded principal.
The Company considers a loan to be impaired when, based upon
current information and events, it believes it is probable that
the Company will be unable to collect all amounts due according to
the contractual terms of the loan agreement. The Company's
impaired loans include troubled debt restructurings, performing
and nonperforming loans, in which full payment of principal or
interest is not expected. The Company calculates a reserve
required for impaired loans based on the expected future cash
flows discounted at the loan's effective interest rate, or at the
loan's observable market price or the fair value of its
collateral.
Generally, loans other than consumer loans, which become 90 days
delinquent are either in the process of collection through
repossession or foreclosure or alternatively, are deemed currently
uncollectible. Loans deemed currently uncollectible are charged
off against the allowance account. As a matter of policy, loans
are placed on a nonaccrual basis where doubt exits as to
collectibility.
-31-
33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Allowance for possible loan losses:
The allowance for possible loan losses is maintained to provide
for possible losses inherent in the loan portfolio. The allowance
related to loans that are identified as impaired is based on
discounted cash flows, using the loan's initial effective interest
rate, or the fair value of the collateral for certain collateral
dependent loans.
The allowance is based on management's estimate of future losses;
actual losses may vary from the current estimate. The estimate is
reviewed periodically, taking into consideration the risk
characteristics of the loan portfolio, past loss experience,
general economic conditions and other factors which warrant
current recognition. As adjustments to the estimate of future
losses become necessary, they are reflected as a provision for
possible loan losses in current-period earnings. Actual loan
losses are deducted from, and subsequent recoveries are added to,
the allowance.
Bank premises and equipment:
Bank premises and equipment are stated at cost less accumulated
depreciation. Depreciation is computed primarily by the
straight-line method. Useful lives utilized for purposes of
computing depreciation are as follows: buildings, 10 to 30 years;
furniture and equipment, 3 to 10 years. Maintenance, repairs and
minor improvements are charged to operating expenses. Gains or
losses on dispositions are reflected currently in the Statement of
Income.
Foreclosed assets:
Foreclosed assets include real estate and other collateral
acquired upon the default of loans and loans classified as
in-substance foreclosures. A loan is classified as in-substance
foreclosure when the Bank has taken possession of the collateral
regardless of whether formal foreclosure proceedings have taken
place. Foreclosed assets and excess bank-owned property are
recorded at the fair value of the assets less estimated selling
costs. Losses arising from the initial reduction of an outstanding
loan amount to fair value are deducted from the allowance for loan
losses. Losses arising from the transfer of bank premises and
equipment to excess bank-owned property are charged to expense. A
valuation reserve for foreclosed assets and excess bank-owned
property is maintained for subsequent valuation adjustments on a
specific-property basis. Income and expenses associated with
foreclosed assets and excess bank-owned property prior to sale are
included in current earnings.
Income taxes:
The Company files a consolidated federal income tax return with
the subsidiary Bank. The Company accounts for income taxes using
the asset and liability method. Under this method, deferred tax
assets and liabilities are based on the temporary differences
between the financial reporting basis and tax basis of the
Company's assets and liabilities at enacted tax rates expected to
be in effect when such amounts are realized or settled.
-32-
34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Recent pronouncements:
The FASB issued No. 137, "Accounting for Derivative Instruments
and Hedging Activities-Deferral of the Effective Date of
FASB Statement No. 133," in June 1999. This statement is effective
for all fiscal quarters of all fiscal years beginning after June
15, 2000. Adoption of the standard is not expected to have a
material effect on the Company's financial statements, financial
position or results of operations. The Company will adopt this
accounting standard on January 1, 2001.
In September 2000, the FASB issued No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities," a replacement of FASB Statement No. 125, which is
effective for fiscal years ending after December 15, 2000.
Adoption of the above standards will not have a material effect on
the Company's financial statements, financial position or results
of operations.
Reclassifications:
Certain amounts in the 1999 and 1998 financial statements have
been reclassified to conform with the financial statement
presentation for 2000 for comparability. These reclassifications
had no effect on net income as previously reported for the 1999
and 1998 fiscal years.
Note 2. Restrictions on Cash and Due From Bank Accounts
The Bank is required to maintain average reserve balances by the
Federal Reserve Bank. The average amount of these reserve balances
was $844,000 and $731,000 for the years ended December 31, 2000
and 1999, respectively.
-33-
35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3. Investment Securities
The carrying amounts of investment securities as shown in the
consolidated balance sheets of the Bank and their approximate
market values at December 31 were as follows:
DECEMBER 31, 2000
---------------------------------------------------------------
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
------------ ------------ ------------ ------------
Securities held to maturity:
U.S. Treasury Securities ................ $ 4,396,094 $ 33,308 $ 1,286 $ 4,428,116
U.S. Government and Agencies ............ 500,150 265 -- 500,415
------------ ------------ ------------ ------------
$ 4,896,244 $ 33,573 $ 1,286 $ 4,928,531
============ ============ ============ ============
DECEMBER 31, 2000
---------------------------------------------------------------
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
------------ ------------ ------------ ------------
Securities available for sale:
Mortgage-Backed Securities .............. $ 7,283,844 $ 48,672 $ 79,400 $ 7,253,116
U.S. Government and Agencies ............ 14,407,398 64,331 58,756 14,412,973
State and Political Subdivisions ........ 9,198,091 84,537 30,676 9,251,952
Equity Securities ....................... 149,400 -- -- 149,400
------------ ------------ ------------ ------------
$ 31,038,733 $ 197,540 $ 168,832 $ 31,067,441
============ ============ ============ ============
DECEMBER 31, 1999
---------------------------------------------------------------
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
------------ ------------ ------------ ------------
Securities held to maturity:
U.S. Treasury Securities ................ $ 2,299,634 $ -- $ 24,132 $ 2,275,502
U.S. Government and Agencies ............ 500,000 -- 3,745 496,255
------------ ------------ ------------ ------------
$ 2,799,634 $ -0- $ 27,877 $ 2,771,757
============ ============ ============ ============
-34-
36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
---------------------------------------------------------------
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
------------ ------------ ------------ ------------
Securities available for sale:
Mortgage-Backed Securities .............. $ 7,146,769 $ 19,315 $ 235,394 $ 6,930,690
U.S. Treasury Securities ................ 3,503,378 1,832 3,955 3,501,255
U.S. Government and Agencies ............ 12,912,224 -- 376,686 12,535,538
State and Political Subdivisions ........ 8,549,991 5,551 249,755 8,305,787
Equity Securities ....................... 149,400 -- -- 149,400
------------ ------------ ------------ ------------
$ 32,261,762 $ 26,698 $ 865,790 $ 31,422,670
============ ============ ============ ============
Securities with book values of $14,124,852 and $12,222,416 at December 31, 2000
and 1999, respectively, were pledged to secure public deposits and other
transactions as required by law.
There were no gross-realized gains or gross-realized losses on sales of
securities for the fiscal years ended December 31, 2000, 1999 or 1998.
The maturities of investment securities at December 31, 2000 were as
follows:
SECURITIES TO BE HELD
TO MATURITY
-----------------------------
AMORTIZED FAIR
YEARS TO MATURITY COST VALUE
------------ ------------
Less than one .............................. $ 3,101,248 $ 3,103,036
Greater than one but less than five ........ 1,794,996 1,825,495
Greater than five but less than ten ........ -- --
Greater than ten ........................... -- --
------------ ------------
$ 4,896,244 $ 4,928,531
============ ============
SECURITIES AVAILABLE
FOR SALE
-----------------------------
AMORTIZED FAIR
YEARS TO MATURITY COST VALUE
------------ ------------
Less than one .............................. $ 1,717,023 $ 1,718,405
Greater than one but less than five ........ 17,406,470 17,406,541
Greater than five but less than ten ........ 8,658,108 8,658,391
Greater than ten ........................... 3,257,132 3,284,104
------------ ------------
$ 31,038,733 $ 31,067,441
============ ============
-35-
37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4. Loans
Major classifications of subsidiary Bank's loan portfolio at December 31,
are as follows:
2000 1999
------------ ------------
Commercial, financial and
agricultural ............................ $ 6,946,020 $ 7,325,960
Real estate construction ................... 538,744 948,827
Real estate mortgage ....................... 20,052,654 15,808,978
Installment ................................ 5,122,190 4,748,595
------------ ------------
32,659,608 28,832,360
Unearned income ............................ -- --
------------ ------------
Net loans ............................... 32,659,608 28,832,360
Allowance for possible loan
losses .................................. (579,481) (579,047)
------------ ------------
$ 32,080,127 $ 28,253,313
============ ============
The following is a summary of loans classified by type at December 31, 2000
and 1999:
2000 1999
--------------- ---------------
Commercial, financial and
agricultural.............................. $ 6,946,020 $ 7,325,960
Real estate construction..................... 538,744 948,827
Real estate mortgage ........................ 7,112,467 7,991,175
Total commercial.......................... 14,597,231 16,265,962
-------------- ---------------
Residential mortgage......................... 12,940,187 7,817,803
Installment.................................. 5,122,190 4,748,595
-------------- ---------------
Total consumer............................ 18,062,377 12,566,398
-------------- ---------------
Total loans............................... $ 32,659,608 $ 28,832,360
=============== ===============
-36-
38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following summarizes the non-performing elements of the loan portfolio and
total foreclosed assets at December 31:
2000 1999 1998
---------- ---------- ----------
Nonperforming loans:
Loans on nonaccrual ..................... $ -- $ 69,889 $ 144,797
Restructured loans which
are not on nonaccrual ................ 33,923 39,140 60,751
---------- ---------- ----------
Total nonperforming loans ..... 33,923 109,029 205,548
Other real estate and repossessed assets
received in complete or partial
satisfaction of loan obligations ........ -- -- 1
---------- ---------- ----------
Total nonperforming assets .... $ 33,923 $ 109,029 $ 205,549
========== ========== ==========
Loans contractually past due 90 days
or more as to principal or interest,
but which are not on nonaccrual ......... $ 11,061 $ 8,119 $ 14,718
========== ========== ==========
At December 31, 2000, the recorded investment in loans that were considered to
be impaired under SFAS No. 114 was $-0-. The related allowance for loan losses
was $-0- for impaired loans. The average recorded investment in impaired loans
during the year ended December 31, 2000 was approximately $3,000. Interest
payments received on impaired loans are applied to principal if there is doubt
as to the collectibility of the principal; otherwise, these receipts are
recorded as interest income. For the year ended December 31, 2000, the Company
did not recognize interest income on impaired loans.
Interest income in the amount of $3,857 for 2000, $9,501 for 1999 and $32,424
for 1998 would have been recorded on nonperforming loans if they had been
classified as performing. The Company recorded $2,490, $2,733 and $4,796 of
interest income on nonperforming loans during 2000, 1999 and 1998, respectively.
The following is a summary of the allowance for loan losses for the three years
ended December 31, 2000:
2000 1999 1998
---------- ---------- ----------
Balance, beginning of year ................. $ 579,047 $ 595,762 $ 599,593
Provisions charged to operating expense .... 10,500 -- --
Recoveries on loans ........................ 303 2,938 11,370
Loans charged off .......................... (10,369) (19,653) (15,201)
---------- ---------- ----------
Balance, end of year ....................... $ 579,481 $ 579,047 $ 595,762
========== ========== ==========
-37-
39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5. Related Party Transactions
In the ordinary course of business, loans have been made to directors
and executive officers and their associates. Such loans to these
related parties were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons. Loans to these related
parties were approximately $2,273,824 and $2,291,812 at December 31,
2000 and 1999, respectively. The following provides an analysis of the
activity with respect to loans to related parties:
Balance at January 1, 2000 ................. $ 2,291,812
New loans made ............................. 1,909,805
Repayment on loans ......................... (1,927,793)
------------
Balance at December 31, 2000 ............... $ 2,273,824
============
NOTE 6. BANK PREMISES AND EQUIPMENT
Bank premises and equipment, at cost, consisted of the following as of
December 31:
2000 1999 1998
------------ ------------ ------------
Land ....................................... $ 459,386 $ 384,387 $ 384,387
Premises and leasehold
improvements ......................... 1,863,020 1,811,929 1,789,144
Furniture and equipment .................... 1,341,381 1,242,411 1,216,548
Construction in progress ................... 154,808 52,704 --
------------ ------------ ------------
3,818,595 3,491,431 3,390,079
Less accumulated depreciation
and amortization ....................... 2,268,661 2,383,132 2,276,711
------------ ------------ ------------
Total .............................. $ 1,549,934 $ 1,108,299 $ 1,113,368
============ ============ ============
Depreciation and amortization expense included in non-interest expense
was $161,122 in 2000, $129,296 in 1999, and $165,247 in 1998.
-38-
40
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7. Deposits
Deposit account balances at December 31, 2000 and 1999, are summarized
as follows:
2000 1999
------------ ------------
Non-interest bearing ....................... $ 25,925,833 $ 23,803,087
Interest bearing demand .................... 15,374,416 15,964,721
Savings deposits ........................... 9,357,554 9,399,019
Time deposits .............................. 20,660,679 21,267,540
------------ ------------
$ 71,318,482 $ 70,434,367
============ ============
Time deposits maturing in years ending December 31, as of December 31,
2000:
2001 ...................................... $ 19,363,604
2002 ...................................... 412,541
2003 ...................................... 771,629
2004 ...................................... 112,905
------------
$ 20,660,679
============
The Bank held related party deposits of approximately $2,345,000 and
$1,572,000 at December 31, 2000 and 1999.
Note 8. Employee Benefit Plan
The Bank maintains a 401(k) Savings Plan available to employees with
over one year of service. The Bank matches 50% of the salary deferral,
up to a maximum of 3% of compensation for 2000 and 1999, which becomes
vested after five years of service. Total contributions to the plan by
the Bank were $19,050 for 2000 and $19,735 for 1999. The Bank has a
non-qualified deferred compensation plan for certain executives of the
Company. The total deferred compensation expense for 2000 and 1999 was
$52,717 and $12,384, respectively.
-39-
41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Lease Commitments
The Company leases land, buildings, and equipment under cancelable and
noncancelable leases. The leased properties are used primarily for
banking purposes.
Future minimum payments, by year and in the aggregate, for
noncancelable operating leases with initial or remaining terms of one
year or more consisted of the following at December 31, 2000:
YEAR ENDING AMOUNT
----------
2001 ...................................... $ 52,089
2002 ...................................... 45,871
2003 ...................................... 40,771
2004 ...................................... 35,671
2005 ...................................... 35,671
----------
Total future minimum lease payments ....... $ 210,073
==========
All leases contain options to extend the lease term upon expiration
and will probably be exercised.
The total rental expense on operating leases for the years ended
December 31, 2000, 1999, and 1998, amount to $70,443, $68,360 and
$63,409, respectively.
One of the Bank's branch offices is leased from a corporation which is
owned by a shareholder and director of the Bank. Lease expense related
to this property totaled $20,671 for the 2000, 1999 and 1998 fiscal
years.
Note 10. Other Operating Expenses
The composition of other operating expenses for each of the three
years for the period ended December 31 are as follows:
2000 1999 1998
---------- ---------- ----------
FDIC and Louisiana assessments ............. $ 31,602 $ 26,948 $ 24,707
Advertising ................................ 80,123 56,479 63,622
Office supplies ............................ 80,582 82,594 70,465
Postage .................................... 56,450 57,560 56,269
Insurance .................................. 11,730 15,503 12,727
ATM expenses ............................... 34,691 35,940 27,029
Director fees .............................. 101,200 92,650 87,700
Other ...................................... 345,046 371,221 325,374
---------- ---------- ----------
$ 741,424 $ 738,895 $ 667,893
========== ========== ==========
-40-
42
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 11. Income Taxes
Income tax expense includes amounts currently payable and amounts
deferred to or from other years as a result of differences in the
timing of recognition of income and expense for financial reporting
and federal tax purposes. The components of income tax expense are as
follows:
2000 1999 1998
---------- ---------- ----------
Current federal income tax
expense ............................. $ 438,945 $ 376,331 $ 418,969
Deferred federal income tax
expense (benefit) ................... (12,617) 26,602 (11,073)
---------- ---------- ----------
$ 426,328 $ 402,933 $ 407,896
========== ========== ==========
Included in shareholders' equity:
Deferred tax expense
(benefit) related to the
change in net unrealized
gain (loss) on securities
available for sale .................. $ 295,051 $ (417,266) $ 80,246
========== ========== ==========
-41-
43
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The reconciliation of the federal statutory income tax rate to
the Company's effective rate is summarized as follows for the years ended
December 31:
2000 1999 1998
-------------------------- --------------------------- ---------------------------
AMOUNT RATE AMOUNT RATE AMOUNT RATE
---------- ---------- ---------- ---------- ---------- ----------
Tax based on
federal
statutory rate .... $ 554,059 34.0% $ 506,083 34.0% $ 481,360 34.0%
Effect of tax-
exempt income ..... (140,929) (8.6) (116,718) (7.8) (82,593) (5.8)
Other ................ 13,198 .8 13,568 .9 9,129 .6
---------- ---------- ---------- ---------- ---------- ----------
$ 426,328 26.2% $ 402,933 27.1% $ 407,896 28.8%
========== ========== ========== ========== ========== ==========
Deferred income taxes are based on differences between the bases of
assets and liabilities for financial statement purposes and tax
reporting purposes. The tax effects of the cumulative temporary
differences which create deferred tax assets and liabilities are as
follows:
2000 1999
---------- ----------
Deferred tax assets:
Allowance for loan losses ............... $ 17,592 $ 14,022
Deferred executive compensation ......... 34,254 16,331
Net unrealized loss on available
for sale securities .................. -- 285,291
Other ................................... 5,569 5,141
---------- ----------
Total deferred tax assets .............. 57,415 320,785
---------- ----------
Deferred tax liabilities:
Net unrealized appreciation
on available for sale securities ..... 9,760 --
Accumulated depreciation ................ 37,624 28,322
---------- ----------
Total deferred tax liabilities ....... 47,384 28,322
---------- ----------
Net deferred tax asset ..................... $ 10,031 $ 292,463
========== ==========
Management estimates realizability of a deferred tax asset based on
the Company's ability to generate taxable income in the future. A
deferred tax valuation reserve is established, if needed, to limit the
net deferred tax asset to its realizable value.
Note 12. Earnings Per Share
The earnings per share computations are based on weighted average
number of shares outstanding during each year of 117,673, 117,884 and
118,965 for the years ended December 31, 2000, 1999 and 1998,
respectively.
-42-
44
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 13. Financial Instruments
Generally accepted accounting principles require disclosure of fair
value information about financial instruments for which it is
practicable to estimate fair value, whether or not the financial
instruments are recognized in the financial statements. When quoted
market prices are not available, fair values are based on estimates
using present value or other valuation techniques. Those techniques
are significantly affected by the assumptions used, including the
discount rate and estimates of future cash flows. The derived fair
value estimates cannot be substantiated through comparison to
independent markets and, in many cases, could not be realized in
immediate settlement of the instrument. Certain financial instruments
and all non-financial instruments are excluded from these disclosure
requirements. Further, the disclosures do not include estimated fair
values for items which are not financial instruments but which
represent significant value to the Bank, among them, core deposit
intangibles, loan servicing rights and other fee-generating
businesses. Accordingly, the aggregate fair value amounts presented do
not represent the underlying value of the Company.
The carrying amount of cash and short-term investments and demand
deposits approximates the estimated fair value of these financial
instruments. The estimated fair value of securities is based on quoted
market prices, dealer quotes and prices obtained from independent
pricing services. The estimated fair value of loans and interest
bearing deposits is based on present values using applicable
risk-adjusted spreads to the appropriate yield curve to approximate
current interest rates applicable to each category of these financial
instruments.
Interest rates were not adjusted for changes in credit risk of
performing commercial loans for which there are no known credit
concerns. Management segregates loans into appropriate risk categories
and believes the risk factor embedded in the interest rates results in
a fair valuation of these loans on an entry-value basis.
Variances between the carrying amount and the estimated fair value of
loans reflect both credit risk and interest rate risk. The Bank is
protected against changes in credit risk by the allowance for possible
loan losses of $579,481 at December 31, 2000.
The fair value estimates presented are based on information available
to management as of December 31, 2000. Although management is not
aware of any factors that would significantly affect the estimated
fair value amounts, these amounts have not been revalued for purposes
of these financial statements since that date. Therefore, current
estimates of fair value may differ significantly from the amounts
presented. None of the assets or liabilities included in the table
below are held for trading purposes.
The Bank issues financial instruments in the normal course of business
to meet the financing needs of its customers and to reduce exposure to
fluctuations in interest rates. These financial instruments include
commitments to extend credit and letters of credit and involve, to
varying degrees, elements of credit and interest rate risk in excess
of the amount recognized on the balance sheet.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CARRYING FAIR
AMOUNT VALUE
------------ ------------
ASSETS
Cash equivalents ......................... $ 11,675,623 $ 11,675,623
Interest-bearing deposits with banks ..... $ 298,000 $ 298,000
Securities held to maturity .............. $ 4,896,244 $ 4,928,531
Securities available for sale ............ $ 31,067,441 $ 31,067,441
Commercial loans ......................... $ 6,946,020 $ 6,878,000
Consumer loans ........................... $ 5,122,190 $ 4,983,000
Real estate loans ........................ $ 20,591,398 $ 20,733,000
LIABILITIES
Demand deposits .......................... $ 25,925,833 $ 25,925,833
NOW accounts ............................. $ 12,772,402 $ 12,772,402
Money market accounts .................... $ 2,602,014 $ 2,602,014
Savings .................................. $ 9,357,554 $ 9,357,554
Time Deposits ............................ $ 20,660,679 $ 20,702,000
Commitments to extend credit are legally binding, conditional
agreements generally having fixed expiration or termination dates and
specified interest rates and purposes. These commitments generally
require customers to maintain certain credit standards. Collateral
requirements and loan-to-value ratios are the same as those for funded
transactions and are established based on management's credit
assessment of the customer. Commitments may expire without being drawn
upon. Therefore, the total commitment amount does not necessarily
represent future funding requirements. The Bank's experience has been
that most loan commitments are drawn upon by customers. Outstanding
loan commitments at December 31, 2000 were $4,631,059 and $4,303,248
at December 31, 1999.
The Bank issues letters of credit and financial guarantees (standby
letters of credit) whereby it agrees to honor certain financial
commitments in the event its customers are unable to perform. The
majority of the standby letters of credit consist of performance
guarantees. Management conducts regular reviews of all outstanding
standby letters of credit, and the results of these reviews are
considered in assessing the adequacy of the Bank's reserve for
possible loan losses. The letters of credit balance was $395,664 and
$307,116 at December 31, 2000 and 1999, respectively. The Bank has not
incurred any losses in its commitments in 2000 or 1999. Management
does not anticipate any material losses related to these instruments.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The estimated fair values of off-balance-sheet financial instruments
are not material. A summary of the notional amounts of the Bank's
financial instruments with off-balance-sheet risk at December 31, 2000
and 1999 are as follows:
2000 1999
------------ ------------
Commitments to extend credit ............... $ 4,631,059 $ 4,303,248
Credit card arrangements ................... $ 2,193,207 $ 1,865,133
Standby letters of credit .................. $ 395,664 $ 307,116
Note 14. Regulatory Matters
The Bank is subject to the dividend restrictions set forth by the
Louisiana Commissioner of Financial Institutions. Under such
restrictions, the Bank may not, without the prior approval of the
Commissioner of Financial Institutions, declare dividends in excess of
the sum of the current year and prior year earnings less dividends
paid during these periods. The dividends as of December 31, 2000, that
the Bank could declare without the approval of the Commissioner of
Financial Institutions, amounted to $1,872,158. The Bank is also
required to maintain minimum amounts of capital to total "risk
weighted" assets, as defined by the banking regulators. At December
31, 2000, the Bank is required to have minimum Tier 1 risk-based, Tier
1 leverage capital, and Total capital ratios of 4%, 4% and 8%,
respectively. The Bank's actual ratios at that date were 29.0%, 14.14%
and 30.25%, respectively. At December 31, 1999, the Bank's actual
ratios were 28.57%, 13.11%, and 29.82%, respectively.
Under Section 18J of the Federal Deposit Insurance Act, which is
subject to Section 23A of the Federal Reserve Act, the Bank cannot
make loans, extensions of credit, repurchase agreements, investments,
and advances, which exceed 10 percent of its capital stock and
surplus, to an affiliate. Such loans must be collateralized by assets
with market values of 100% to 130% of loan amounts, depending upon the
nature of the collateral.
As of December 31, 2000 and 1999, the most recent notifications from
the Federal Deposit Insurance Corporation categorized the Bank as well
capitalized under the regulatory framework for prompt action. To be
categorized as well capitalized, the Bank must maintain minimum Total
risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as indicated
above. There are no conditions or events since those notifications
that management believes have changed the Bank's category.
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47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 15. American Bancorp, Inc. (Parent Company Only)
The following financial statements of American Bancorp, Inc. (Parent
Company Only) include the Bank under the equity method of accounting.
BALANCE SHEETS
DECEMBER 31,
------------------------------
2000 1999
------------ ------------
ASSETS
Cash on deposit with subsidiary .................... $ 26,850 $ 32,370
Investment in subsidiary ........................... 11,044,124 9,467,820
Due from American Bank ............................. 28,013 33,110
------------ ------------
Total assets ................................... $ 11,098,987 $ 9,533,300
============ ============
LIABILITIES
Accrued income taxes payable ....................... $ 22,528 $ 27,625
------------ ------------
Total liabilities .............................. 22,528 27,625
------------ ------------
SHAREHOLDERS' EQUITY
Common stock: $5 par value, 10,000,000
shares authorized; 120,000 shares
issued, 117,630 and
117,712 shares outstanding, respectively ....... 600,000 600,000
Surplus ............................................ 2,150,000 2,150,000
Retained earnings .................................. 8,442,150 7,438,877
Net unrealized gain (loss) on securities
available for sale, net of tax of $9,760
and $(285,291), respectively ................... 18,946 (553,801)
Treasury stock, 2,370 and 2,288 shares
at cost, respectively .......................... (134,637) (129,401)
------------ ------------
Total shareholders' equity ..................... 11,076,459 9,505,675
------------ ------------
Total liabilities and shareholders' equity ..... $ 11,098,987 $ 9,533,300
============ ============
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
American Bancorp, Inc. (Parent Company Only)
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31,
----------------------------------------------
2000 1999 1998
------------ ------------ ------------
Income:
Dividends from bank subsidiary .......... $ 213,500 $ 230,000 $ 216,134
------------ ------------ ------------
Expenses:
Directors fees .......................... 12,000 12,000 8,400
Other expenses .......................... 1,801 1,057 967
------------ ------------ ------------
13,801 13,057 9,367
------------ ------------ ------------
Earnings before income taxes
and equity in undistributed
earnings of subsidiary .................. 199,699 216,943 206,767
Provision for income taxes ................. -- -- --
------------ ------------ ------------
Earnings before equity in
undistributed earnings of
subsidiary .............................. 199,699 216,943 206,767
Equity in undistributed
earnings of subsidiary .................. 1,003,557 868,602 801,101
------------ ------------ ------------
Net income ........................... $ 1,203,256 $ 1,085,545 $ 1,007,868
============ ============ ============
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
American Bancorp, Inc. (Parent Company Only)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31,
------------------------------------------------
2000 1999 1998
------------ ------------ ------------
OPERATING ACTIVITIES
Net income .................................... $ 1,203,256 $ 1,085,545 $ 1,007,868
Adjustments to reconcile net
income to net cash provided
by operating activities:
Equity in undistributed
earnings of subsidiary ............ (1,003,557) (868,602) (801,101)
(Increase) decrease in other assets ..... 5,097 (12,779) (8,769)
Increase (decrease) in income taxes
payable ........................... (5,097) 12,779 8,769
------------ ------------ ------------
Net cash provided by
operating activities .............. 199,699 216,943 206,767
------------ ------------ ------------
FINANCING ACTIVITIES
Dividends paid to shareholders ................ (199,983) (170,683) (148,134)
------------ ------------ ------------
Net cash used by
financing activities .............. (199,983) (170,683) (148,134)
------------ ------------ ------------
INVESTING ACTIVITIES
Purchase of treasury stock .................... (5,236) (44,706) (82,681)
------------ ------------ ------------
Net cash used by
investing activities ............... (5,236) (44,706) (82,681)
------------ ------------ ------------
Increase (decrease) in cash
and cash equivalents ............... (5,520) 1,554 (24,048)
Cash and cash equivalents at
beginning of year ............................. 32,370 30,816 54,864
------------ ------------ ------------
Cash and cash equivalents at
end of year ................................... $ 26,850 $ 32,370 $ 30,816
============ ============ ============
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50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 16. Concentrations of Credit Risk
Substantially, all of the Bank's loans, commitments and standby
letters of credit have been granted to customers in the Bank's market
area of South Louisiana. Investments in state and municipal securities
also involve governmental entities within the Bank's market area. The
concentrations of credit by type of loan are set forth in Note 4. The
distribution of commitments to extend credit approximates the
distribution of loans outstanding. Standby letters of credit were
granted primarily to commercial borrowers. The Bank, as a matter of
policy, does not extend credit to any single borrower or group of
related borrowers in excess of $1,375,000.
At December 31, 2000, the Bank has loans outstanding to multiple
numbers of borrowers engaged in the medical industry and the legal
profession. The loans to the medical industry were approximately
$7,126,000, while the loans to the legal profession were approximately
$3,177,000. There were no significant nonperforming loans outstanding
in these two concentrations.
Note 17. Contingencies
In the ordinary course of business, the Bank has various outstanding
commitments and contingent liabilities that are not reflected in the
accompanying consolidated financial statements. In addition, the Bank
is a defendant in certain claims and legal actions arising in the
ordinary course of business. In the opinion of management, after
consultation with legal counsel, the ultimate disposition of these
matters is not expected to have a material adverse effect on the
consolidated financial condition of the Bank.
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51
OFFICERS AND DIRECTORS OF
AMERICAN BANK & TRUST COMPANY
CHAIRMAN OF THE BOARD AND PRESIDENT
Salvador L. Diesi, Sr.
CHIEF EXECUTIVE OFFICER AND EXECUTIVE VICE-PRESIDENT
Ronald J. Lashute
SENIOR VICE-PRESIDENT
Walter J. Champagne, Jr.
VICE-PRESIDENTS
Charlene Louviere Joan T. Muller, Chief
Angel Powell Financial Officer,
Mark J. LeBlanc Cashier
ASSISTANT VICE-PRESIDENTS
David Gremillion Christopher Choate
J. Karla Manuel
ASSISTANT CASHIERS
Elaine D. Ardoin Elizabeth Miller
DeAnna Cox Bonnie Pavy
Sally Hooks Stephanie Richard
Cindy Whitmore
DIRECTORS
Jasper Artall Salvador L. Diesi, Sr.
Walter J. Champagne, Jr. Alvin Haynes II
Attaway Darbonne Charles Jagneaux
J. C. Diesi Sylvia Sibille
OFFICES LOCATED IN
OPELOUSAS KROTZ SPRINGS
LAFAYETTE PORT BARRE
LAWTELL
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52
OFFICERS AND DIRECTORS OF
AMERICAN BANCORP, INC.
CHAIRMAN OF THE BOARD AND PRESIDENT
Salvador L. Diesi, Sr.
SECRETARY/TREASURER
Ronald J. Lashute
BOARD OF DIRECTORS OCCUPATION AND MAIN AFFILIATION
Jasper J. Artall Farmer.
Walter J. Champagne, Jr. Farmer.
J.C. Diesi Automobile Dealer; Diesi
Pontiac-Cadillac-Buick, Inc.
Salvador L. Diesi, Sr. Chairman of the Board and President,
American Bancorp, Inc. and American
Bank & Trust Company; Gas Station,
Convenience Store, and Video Poker;
Little Capitol of Louisiana, Inc.;
Commercial real estate, farming interest;
and Attorney-At-Law.
Ronald J. Lashute Chief Executive Officer and Executive Vice
President of American Bank & Trust Company
and Secretary/Treasurer of American Bancorp, Inc.
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BLANK