1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1996
Commission File Number 0-11928
AMERICAN BANCORP, INC.
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(Exact name of registrant as specified in its charter)
LOUISIANA 72-0951347
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(State or other jurisdiction of (I R S Employer I. D. Number)
incorporation or organization)
328 EAST LANDRY STREET, OPELOUSAS, LA 70571-1579
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(Address of principal executive office) (Zip Code)
(318) 948-3056
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name, address, fiscal year, if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common stock, $5 Par Value----120,000 shares as of October 15, 1996
2
AMERICAN BANCORP, INC.
(PARENT COMPANY ONLY)
BALANCE SHEET
September 30, 1996 and 1995
(In Thousands)
ASSETS 1996 1995
- ------ ---- ----
Cash 2 3
Investment in Subsidiary 7,532 6,557
Dividend Receivable 0 0
Due From Subsidiary 52 472
------ ------
TOTAL ASSETS $7,586 $7,032
====== ======
LIABILITIES
- -----------
Federal Income Taxes Payable 46 361
Other Liabilities 0 0
------ ------
TOTAL LIABILITIES $ 46 $ 361
------ ------
SHAREHOLDERS' EQUITY
- --------------------
Unrealized Gain (Loss) on Securities
Available for Sale 38 82
Common Stock, $5 par value; authorized
10,000,000 shares; issued 120,000 shares 600 600
Surplus 2,150 2,150
Retained Earnings 4,752 3,839
------ ------
TOTAL EQUITY 7,540 6,671
------ ------
TOTAL LIABILITIES & EQUITY $7,586 $7,032
====== ======
3
AMERICAN BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
September 30, 1996 and 1995
(In Thousands)
1996 1995
ASSETS ------- -------
------
Cash and Due From Banks 4,040 4,284
Interest Bearing Deposits 1,091 694
Securities Held to Maturity 17,028 18,502
Securities Available for Sale 6,789 4,439
Federal Funds Sold 2,125 1,750
Loans - Net 27,195 26,032
Bank Premises and Equipment 1,384 1,271
Other Real Estate Owned 14 14
Accrued Interest Receivable 655 659
Deferred Tax Asset 6 28
Prepaid Expenses and Other Assets 457 421
------- -------
TOTAL ASSETS $60,784 $58,094
======= =======
LIABILITIES
-----------
Deposits:
Non-Interest Bearing 14,449 16,225
Interest Bearing 38,532 34,648
------- -------
Total Deposits 52,981 50,873
Accrued Interest Payable 108 99
Deferred Income Tax Credits 0 0
Accrued Expenses and Other Liabilities 155 451
------- -------
TOTAL LIABILITIES $53,244 $51,423
------- -------
SHAREHOLDERS' EQUITY
--------------------
Unrealized Gain (Loss) on Securities
Available for Sale 38 82
Common Stock, $5 par value; authorized
10,000,000 shares; issued 120,000 shares 600 600
Surplus 2,150 2,150
Retained Earnings 4,752 3,839
------- -------
TOTAL SHAREHOLDERS' EQUITY $ 7,540 $ 6,671
------- -------
TOTAL LIABILITIES & EQUITY $60,784 $58,094
======= =======
See Notes to Financial Statements.
4
AMERICAN BANCORP, INC.
(PARENT COMPANY ONLY)
INCOME STATEMENT
For the Nine Month Periods Ended September 30, 1996 and 1995
(In Thousands)
1996 1995
---- ----
INCOME FROM SUBSIDIARY
----------------------
Dividends $ 0 $ 0
OPERATING EXPENSES
------------------
Other Expenses 2 5
Interest Expense 0 0
---- ----
TOTAL EXPENSES $ 2 $ 5
---- ----
Earnings (loss) before income tax benefit
and equity in undistributed earnings of
subsidiary $ (2) $ (5)
Income tax (benefit) 0 7
---- ----
Earnings (loss) before equity in undistributed
earnings of subsidiary $ (2) $(12)
Equity in undistributed earnings of
subsidiary 824 782
---- ----
Net Income $822 $770
==== ====
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AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the Nine Month Periods Ended September 30, 1996 and 1995
(In Thousands)
INCREASE
1996 1995 (DECREASE)
INTEREST INCOME: ----- ----- ---------
Interest and fees on loans $1,951 $1,937 14
Interest on investment securities:
Taxable 999 1,016 (17)
Tax-Exempt 82 19 63
Other Interest 181 206 (25)
------ ------ -----
TOTAL INTEREST INCOME $3,213 $3,178 35
------ ------ -----
INTEREST EXPENSE:
Interest on deposits $ 985 $ 853 132
Interest on short-term borrowings 0 0 0
------ ------ -----
TOTAL INTEREST EXPENSE $ 985 $ 853 132
------ ------ -----
NET INTEREST INCOME $2,228 $2,325 (97)
Provision for possible loan losses 0 0 0
------ ------ -----
Net Interest Income after provision for
possible loan losses $2,228 $2,325 (97)
------ ------ -----
NON-INTEREST INCOME:
Service charges on deposit accounts $ 396 $ 409 (13)
Investment securities gains (losses) 0 0 0
Other 71 69 2
------ ------ -----
TOTAL NON-INTEREST INCOME $ 467 $ 478 (11)
------ ------ -----
NON-INTEREST EXPENSE:
Salaries and Employee Benefits $ 794 $ 838 (44)
Net Occupancy Expense 450 424 26
Net cost of operation of O.R.E.O. (13) (3) (10)
Other 397 420 (23)
------ ------ -----
TOTAL NON-INTEREST EXPENSE $1,628 $1,679 (51)
------ ------ -----
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEMS $1,067 $1,124 (57)
INCOME TAX (BENEFIT) 245 354 (109)
------ ------ -----
INCOME BEFORE EXTRAORDINARY ITEMS $ 822 $ 770 52
EXTRAORDINARY ITEMS 0 0 0
------ ------ -----
NET INCOME $ 822 $ 770 52
====== ====== =====
Net income per share of common stock $ 6.85 $ 6.42 $0.43
====== ====== =====
See Notes to Consolidated Financial Statements
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AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the Nine Month Periods Ended September 30, 1996 & 1995
(In Thousands)
NET
UNREALIZED
GAINS(LOSS) COMMON RETAINED
SECURITIES STOCK SURPLUS EARNINGS TOTAL
----------- ------- ------- -------- ------
Balance 12/31/94 $ (1) $600 $2,150 $3,069 $5,818
Net Income (Loss) 770 770
Cash Dividends 0 0
Change in Unrealized
Gains/Losses 83 83
---- ---- ------ ------ ------
Balance 9/30/95 $ 82 $600 $2,150 $3,839 $6,671
==== ==== ====== ====== ======
Balance 12/31/95 $105 $600 $2,150 $3,930 $6,785
Net Income (Loss) 822 822
Cash Dividends 0 0
Change in Unrealized
Gains/Losses (67) (67)
---- ---- ------ ------ ------
Balance 9/30/96 $ 38 $600 $2,150 $4,752 $7,540
==== ==== ====== ====== ======
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AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Month Periods Ended September 30, 1996 and 1995
1996 1995
------- -------
OPERATING ACTIVITIES
Net income $ 822 $ 770
Adjustments to reconcile net income to net cash
provided by operating activities:
Accretion of investment security discounts (20) (16)
Amortization of investment security premiums 16 8
Depreciation 149 131
Provision for loan losses 0 0
Gain on sale of other real estate 0 3
Gain/loss on sale of assets (9) 0
Decrease (increase) in accrued interest receivable (102) (229)
Increase (decrease) in accrued interest payable 5 19
Increase (decrease) in other liabilities (371) 438
Decrease(increase) in other asset (8) (27)
------- -------
Net cash provided by operating activities $ 482 $ 1,097
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INVESTING ACTIVITIES
Proceeds from sales & maturities of available for sale securities $ 432 $ 642
Proceeds from sales & maturities of held to maturity securities 5,000 3,500
Purchases of available for sale securities (2,178) (1,824)
Purchases of held to maturity securities (5,524) (5,511)
(Increase) decrease in interest-bearing deposits with banks (397) 1,780
(Increase) decrease in loans (805) 1,021
Decrease (increase) in federal funds sold 4,225 4,300
Net decrease (increase) in other real estate 0 0
Proceeds from sale of assets 9 0
Purchases of property & equipment (97) (27)
Other 33 (143)
------- -------
Net cash provided (used) by investing activities $ 698 $ 3,738
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FINANCING ACTIVITIES
Increase (decrease) in non-interest bearing deposits $(2,480) $ 233
Increase (decrease) in int-bearing deposits (194) (8,590)
Dividends paid 0 0
------- -------
Net cash provided (used) by financing activities $(2,674) $(8,357)
------- -------
Increase (decrease) in cash and cash equivalents $(1,494) $(3,522)
Cash and cash equivalents at beginning of year 5,534 7,806
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Cash and cash equivalents at end of period $ 4,040 $ 4,284
======= =======
Cash interest income received $ 3,111 $ 2,949
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Cash interest expense paid $ 980 $ 834
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AMERICAN BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996
NOTE 1 - A BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
principles of accounting for instructions to Form 10-Q and
Article 10 of Regulations S-X. Accordingly, they do not include
all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included.
NOTE 2 - IMPAIRED LOANS
On January 1, 1995 the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 114, "Accounting by
Creditors for Impairment of a Loan." The adoption of SFAS No.
114 did not have a material impact on the financial condition or
operating results of the Company. 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.
As it relates to in-substance foreclosures, SFAS No. 114 requires
that a creditor continue to follow loan classification on the
balance sheet unless the creditor receives physical possession of
the collateral. The Company had no in-substance foreclosures in
foreclosed assets to transfer to nonperforming loans and no
related reserve for losses to transfer to the reserve for
possible loan losses.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's Discussion presents a review of the major factors and
trends affecting the performance of the Company and its bank subsidiary
and should be read in conjunction with the accompanying consolidated
financial statements and notes.
OVERVIEW
The Company reported net income of $ 822,000 for the first nine
months of 1996 compared to $ 770,000 for the same period of 1995. On a
per share basis, the net income was $ 6.85 for the first nine months of
1996 compared to $ 6.42 for the same period of 1995. The Company
recorded a provision for possible loan losses of $ 0 for the nine months
ended June 30, 1996 and 1995, respectively. Net interest income
decreased 4.2% to $ 2,228,000 for the first nine months of 1996 compared
to $ 2,325,000 for the same period of 1995.
Total assets were $ 60,784,000 at September 30, 1996, an increase
of $ 2,690,000 from September 30, 1995. Loans increased by $ 1,163,000
or 4.5 % from $ 26,032,000 at September 30, 1995 to $ 27,195,000 at
September 30, 1996. Deposits also increased from $ 50,873,00 at
September 30, 1995 to $ 52,981,000 at September 30, 1996.
RESULTS OF OPERATIONS
NET INTEREST INCOME. Net interest income for the nine months
ended September 30, 1996 totaled $ 2,228,000, a $ 97,000 decrease from
the same period in 1995. Factors contributing to this decrease include
an increase in both the average balance and average rate paid on time
deposits. The increase in interest expense was partially offset by an
increase in the average balance of tax-exempt securities. The overall
effect of volume and rate changes on net interest income during the nine
month period ended September 30, 1996 was unfavorable.
PROVISION FOR POSSIBLE LOAN LOSSES. The Company recorded no
provision for possible loan losses for both the first nine months of
1996 and 1995. The absence of a provision is the result of continued
improvements in asset quality and low net charge offs of loans. As a
percentage of outstanding loans, the allowance for possible loan losses
was 2.23 % and 2.33 % at September 30, 1996 and 1995, respectively.
NONINTEREST INCOME. There has been immaterial variances in
noninterest income for the nine month periods ended September 30, 1996
and 1995. The $ 11,000 decrease in noninterest income for the first
nine months of 1996 is the result of a $ 13,000 decrease in total
service charges on deposit account as compared to the same period of
1995.
There were no securities gains in the nine month periods ended September
30, 1996 and 1995.
NONINTEREST EXPENSE. For the first nine months of 1996
noninterest expense decreased $ 51,000 or 3.0% compared to the same
period in 1995.
Salaries and employee benefits , the largest component of noninterest
expense, decreased by $ 44,000 or 5.3 % for the first nine months of
1996 as compared to the same period in 1995. Employee medical insurance
expense decreased by $ 48,000 for the first nine months of 1996 as
compared to the same period of 1995. This decrease is reflective of a
decrease in medical claim experience for the nine months ended September
30, 1996.
Other expenses decreased by $ 23,000 or 5.5 % for the first nine months
of 1996 as compared to the same period in 1995. The most significant
variance was a decrease in FDIC assessment expense of $ 53,000 due to a
reduction in the FDIC assessment rates. The other categories in
non-interest expense experienced normal variations between the first
nine months of 1996 and 1995.
INCOME TAXES. The Company recorded provisions for income taxes of
$ 245,000 for the nine month period ended September 30, 1996 as compared
to $ 354,000 for the same period of 1995. Upon filing the 1995 federal
tax return the company was able to utilize tax credits of $ 96,000
carried forward. These tax credits were included in deferred tax assets
as of December 31, 1995, however, a deferred tax valuation reserve was
also recorded due to uncertainty of realizable value.
10
FINANCIAL CONDITION
LOANS. Loans were $ 27,195,000 at September 30, 1996; up by $ 1,163,000
or 4.5 % from September 30, 1995.
TABLE I - COMPOSITION OF LOAN PORTFOLIO
- ---------------------------------------
Sept. 30, 1996 Sept. 30, 1995
-------------- ---------------
Commercial, Financial and Agricultural $ 6,093 $ 5,812
Real Estate Construction 348 85
Real Estate Mortgage 16,010 15,857
Consumer Loans 4,793 4,154
Industrial Revenue Bonds 571 746
------- -------
TOTAL LOANS $27,815 $26,654
Allowance for possible loan losses 620 622
Unearned income 0 0
------- -------
$27,195 $26,032
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SECURITIES HELD TO MATURITY. Securities held to maturity were
$ 17,028,000 at September 30, 1996; down by $ 1,474,000 from September
30, 1995.
SECURITIES AVAILABLE FOR SALE. Securities available for sale were
$ 6,789,000 at September 30, 1996; up by $ 2,350,000 or 53 % from
September 30, 1995. Securities classified as available for sale are
primarily mortgage backed securities and municipal securities.
TABLE II - INVESTMENT SECURITIES
- --------------------------------
A comparison of the book value and estimated market value of investment
securities is as follows:
September 30, 1996
-------------------------------------------
HELD-TO-MATURITY AVAILABLE-FOR-SALE
AMORT MARKET AMORT MARKET
COST VALUE COST VALUE
U.S. Treasury $ 4,503 $ 4,509 $ 996 997
U.S. Agencies 12,525 12,390 3,315 3,369
State & Political Subdivisions 0 0 2,422 2,423
------- ------- ------ ------
TOTAL $17,028 $16,899 $6,733 $6,789
======= ======= ====== ======
September 30, 1995
-------------------------------------------
HELD-TO-MATURITY AVAILABLE-FOR-SALE
AMORT MARKET AMORT MARKET
COST VALUE COST VALUE
U.S. Treasury $ 5,509 $ 5,547 $ 0 0
U.S. Agencies 12,993 12,977 3,311 3,409
State & Political Subdivisions 0 0 1,003 1030
------- ------- ------ ------
TOTAL $18,502 $18,524 $4,314 $4,439
======= ======= ====== ======
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TABLE III - NONPERFORMING ASSETS
- --------------------------------
Non-performing 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 are current as to principal and interest payments are classified
as nonperforming because there is a question concerning full
collectibility of both principal and interest.
Sept. 30, 1996 Sept. 30, 1995
Non-Performing Loans: -------------- ---------------
Loans on Non-Accrual $511 $ 2
Loans past due 90 days or more as to
principal or interest, but not on
non-accrual 104 8
Loans & leases restructured and in
compliance with terms 26 18
---- ---
$641 $28
Other Real Estate and repossessed assets
received in complete or partial
satisfaction of debt 14 14
---- ---
TOTAL NONPERFORMING ASSETS $655 $42
==== ===
Effective January 1, 1995, the Company adopted SFAS No. 114, which
addresses the accounting treatment of certain impaired loans. The
Company makes an assessment of impairment when and while loans are on
nonaccrual or when the loans are restructured. The Company primarily
bases the measurement of impaired loans on the fair value of the
collateral reduced by costs to sell. If the measurement of the impaired
loan is less than the recorded investment in the loan, the Company
recognizes impairment by creating or adjusting an existing allocation of
the allowance for loan losses.
The following table reflects the recorded investment in impaired loans
and the related SFAS No. 114 allowance for loan losses at September 30,
1996.
Recorded Related
Investment in Allowance
Impaired Loans for Losses
-------------- ---------
Impaired loans requiring a SFAS No. 114 allowance:
Consumer loans $ 511 $ 170
============== ==========
Total interest income recognized on loans designated as impaired for the
nine months ended September 30, 1996 was $ 8,000. The average recorded
investment in impaired loans was approximately $218,000 for the nine
months ended September 30, 1996.
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TABLE IV - ANALYSIS OF ALLOWANCE FOR LOAN LOSSES
- ------------------------------------------------
Sept. 30, 1996 Sept. 30, 1995
-------------- --------------
Beginning balance $624 614
Charge-offs:
Commercial, financial and agricultural - -
Real estate - construction - -
Real estate - mortgage - -
Installment loans to individuals 12 6
---- -----
Total charge-offs 12 6
---- -----
Recoveries:
Commercial, financial and agricultural 5 6
Real estate - construction - -
Real estate - mortgage 1 -
Installment loans to individuals 2 7
---- -----
Total recoveries 8 13
---- -----
Net charge-offs 4 (7)
---- -----
Provision charged against income - -
---- -----
Balance at end of period $620 621
==== =====
Ratio of net charge-offs during the period to average loans
outstanding during the period 0.01% (.03%)
==== =====
The present level of the allowance for loan losses is considered
adequate to absorb future potential loan losses. In making this
determination, management considered asset quality, the level of net
loan charge-offs, as well as current economic conditions and market
trends.
TABLE V - ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
- -----------------------------------------------------
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.
Sept. 30, 1996 Sept. 30, 1995
-------------------------- ---------------------------
% OF LOANS % OF LOANS
TO TOTAL TO TOTAL
AMOUNT LOANS AMOUNT LOANS
-------------------------- ---------------------------
Commercial, financial and
agricultural $136 22% $137 22%
Real estate - construction 6 1% 0 0%
Real estate - mortgage 360 58% 366 59%
Installment loans 106 17% 99 16%
Industrial revenue bonds 12 2% 19 3%
---- ----
$620 100% $621 100%
==== ====
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DEPOSITS. As of September 30, 1996 total deposits have increased
by $ 2,108,000 or 4.1% from September 30, 1995. Noninterest bearing
deposits decreased by $ 1,776,000 or 10.9 % from September 30, 1995 to
September 30, 1996. Interest bearing deposits increased by $ 3,884,000
or 11.2 % from September 30, 1995 to September 30, 1996.
CAPITAL. Shareholders' equity totaled $ 7,540,000 at September
30, 1996, compared to $ 6,671,000 at September 30, 1995. The increase
is primarily the result of net income over the most recent 12 months.
Risk-based capital and leverage ratios for the Company and the bank
subsidiary exceed the ratios required for the designation as a
"well-capitalized" institution under regulatory guidelines.
TABLE VI - CAPITAL RATIOS
- -------------------------
September 30,
----------------------------
AMERICAN BANK & TRUST COMPANY 1996 1995
(Bank subsidiary) ------------- --------------
Risk-based capital:
Tier 1 risk-based capital ratio 24.24% 22.17%
Total risk-based capital ratio 25.50% 23.42%
Leverage ratio 12.40% 11.00%
INSIDERS. Directors, executive officers and 10 % shareholders and
their related interest had loans outstanding totaling $ 1,544,000 at
September 30, 1996.
CONTINGENT LIABILITIES. In the normal course of business, the
bank becomes involved in legal proceedings. It is the opinion of
management that the resulting liability, if any, for pending litigation
is negligible.
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized to sign on behalf of
the registrant.
AMERICAN BANCORP, INC.
------------------------
(Registrant)
October 25, 1996 /s/ Salvador L. Diesi
- --------------- ------------------------------------
DATE Salvador L. Diesi
Chairman of the Board/President
October 25, 1996 /s/ Ronald J. Lashute
- --------------- ------------------------------------
DATE Ronald J. Lashute
Secretary/Treasurer
of the Board
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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27 Financial Data Schedule