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, 1997
Commission File Number 0-11928
AMERICAN BANCORP, INC.
- --------------------------------------------------------------------------------
(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, 1997
2
AMERICAN BANCORP, INC.
(PARENT COMPANY ONLY)
BALANCE SHEET
September 30, 1997 and 1996
(In Thousands)
ASSETS 1997 1996
---- ----
Cash 4 2
Investment in Subsidiary 8,422 7,532
Dividend Receivable 0 0
Due From Subsidiary 47 52
------ ------
TOTAL ASSETS $8,473 $7,586
====== ======
LIABILITIES
Federal Income Taxes Payable 41 46
Other Liabilities 0 0
------ ------
TOTAL LIABILITIES $ 41 $ 46
------ ------
SHAREHOLDERS' EQUITY
Unrealized Gain (Loss) on Securities
Available for Sale 90 38
Common Stock, $5 par value; authorized
10,000,000 shares; issued 120,000 shares 600 600
Surplus 2,150 2,150
Retained Earnings 5,592 4,752
------ ------
TOTAL EQUITY 8,432 7,540
------ ------
TOTAL LIABILITIES & EQUITY $8,473 $7,586
====== ======
3
AMERICAN BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
September 30, 1997 and 1996
(In Thousands)
1997 1996
ASSETS ------- ------
Cash and Due From Banks 4,065 4,040
Interest Bearing Deposits 694 1,091
Securities Held to Maturity 15,204 17,028
Securities Available for Sale 11,771 6,789
Federal Funds Sold 2,450 2,125
Loans - Net 27,462 27,195
Bank Premises and Equipment 1,246 1,384
Other Real Estate Owned 14 14
Accrued Interest Receivable 653 655
Deferred Tax Asset 0 6
Prepaid Expenses and Other Assets 476 457
------- -------
TOTAL ASSETS $64,035 $60,784
======= =======
LIABILITIES
Deposits:
Non-Interest Bearing 17,292 14,449
Interest Bearing 37,997 38,532
------- -------
Total Deposits 55,289 52,981
Accrued Interest Payable 115 108
Deferred Income Tax Liability 24 0
Accrued Expenses and Other Liabilities 175 155
------- -------
TOTAL LIABILITIES $55,603 $53,244
------- -------
SHAREHOLDERS' EQUITY
Unrealized Gain (Loss) on Securities
Available for Sale 90 38
Common Stock, $5 par value; authorized
10,000,000 shares; issued 120,000 shares 600 600
Surplus 2,150 2,150
Retained Earnings 5,592 4,752
------- -------
TOTAL SHAREHOLDERS' EQUITY $ 8,432 $ 7,540
------- -------
TOTAL LIABILITIES & EQUITY $64,035 $60,784
======= =======
See Notes to Financial Statements.
4
AMERICAN BANCORP, INC.
(PARENT COMPANY ONLY)
INCOME STATEMENT
For the Nine Month Periods Ended September 30, 1997 and 1996
(In Thousands)
1997 1996
---- ----
INCOME FROM SUBSIDIARY
Dividends $ 0 $ 0
OPERATING EXPENSES
Other Expenses 1 2
Interest Expense 0 0
----- -----
TOTAL EXPENSES $ 1 $ 2
----- -----
Earnings (loss) before income tax benefit
and equity in undistributed earnings of
subsidiary ($1) ($ 2)
Income tax (benefit) 0 0
----- -----
Earnings (loss) before equity in undistributed
earnings of subsidiary ($1) ($ 2)
Equity in undistributed earnings of
subsidiary 744 824
----- -----
Net Income $ 743 $ 822
===== =====
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AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the Nine Month Periods Ended September 30, 1997 and 1996
(In Thousands)
INCREASE
1997 1996 (DECREASE)
INTEREST INCOME: ----- ----- ----------
Interest and fees on loans $ 1,930 $ 1,951 (21)
Interest on investment securities:
Taxable 1,125 999 126
Tax-Exempt 107 82 25
Other Interest 191 181 10
------- ------- -------
TOTAL INTEREST INCOME $ 3,353 $ 3,213 140
------- ------- -------
INTEREST EXPENSE:
Interest on deposits $ 1,046 $ 985 61
Interest on short-term borrowings 0 0 0
------- ------- -------
TOTAL INTEREST EXPENSE $ 1,046 $ 985 61
------- ------- -------
NET INTEREST INCOME $ 2,307 $ 2,228 79
Provision for possible loan losses 0 0 0
------- ------- -------
Net Interest Income after provision for
possible loan losses $ 2,307 $ 2,228 79
------- ------- -------
NON-INTEREST INCOME:
Service charges on deposit accounts $ 367 $ 396 (29)
Investment securities gains (losses) 0 0 0
Other 62 71 (9)
------- ------- -------
TOTAL NON-INTEREST INCOME $ 429 $ 467 (38)
------- ------- -------
NON-INTEREST EXPENSE:
Salaries and Employee Benefits $ 816 $ 794 22
Net Occupancy Expense 423 423 0
Net cost of operation of O.R.E.O (6) (13) 7
Other 439 424 15
------- ------- -------
TOTAL NON-INTEREST EXPENSE $ 1,672 $ 1,628 44
------- ------- -------
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEMS $ 1,064 $ 1,067 (3)
INCOME TAX (BENEFIT) 321 245 76
------- ------- -------
INCOME BEFORE EXTRAORDINARY ITEMS $ 743 $ 822 (79)
EXTRAORDINARY ITEMS 0 0 0
------- ------- -------
NET INCOME $ 743 $ 822 (79)
======= ======= =======
Net income per share of common stock $ 6.19 $ 6.85 ($ 0.66)
======= ======= =======
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, 1997 & 1996
(In Thousands)
NET
UNREALIZED
GAINS(LOSS) COMMON RETAINED
SECURITIES STOCK SURPLUS EARNINGS TOTAL
------- ------- ------- -------- --------
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
====== ====== ====== ====== ======
Balance 12/31/96 $ 57 $ 600 $2,150 $4,849 $7,656
Net Income (Loss) 743 743
Cash Dividends 0 0
Change in Unrealized
Gains/Losses 33 33
------ ------ ------ ------ ------
Balance 9/30/97 $ 90 $ 600 $2,150 $5,592 $8,432
====== ====== ====== ====== ======
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AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Month Periods Ended September 30, 1997 and 1996
1997 1996
-------- --------
OPERATING ACTIVITIES
Net income $ 743 $ 822
Adjustments to reconcile net income to net cash
provided by operating activities:
Premium amortization, net of accretion on
investment securities 7 (4)
Depreciation 148 149
Provision for loan losses 0 0
Gain on sale of other real estate 0 0
(Gain) loss on sale of assets 3 (9)
Decrease (increase) in accrued interest receivable (85) (102)
Increase (decrease) in accrued interest payable (4) 5
Increase (decrease) in other liabilities 87 (371)
Decrease (increase) in other asset (14) (8)
-------- --------
Net cash provided by operating activities $ 885 $ 482
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INVESTING ACTIVITIES
Proceeds from sales & maturities of available for sale securities $ 1,119 $ 432
Proceeds from sales & maturities of held to maturity securities 3,300 5,000
Purchases of available for sale securities (4,178) (2,178)
Purchases of held to maturity securities (2,986) (5,524)
(Increase) decrease in loans 849 (805)
Net decrease (increase) in other real estate 0 0
Purchases of property & equipment (60) (97)
Other (24) 42
-------- --------
Net cash provided (used) by investing activities ($ 1,980) ($ 3,130)
-------- --------
FINANCING ACTIVITIES
Increase (decrease) in demand deposits, transaction
accounts and savings (4,186) (5,066)
Increase (decrease) in time deposits 109 2,392
Dividends paid 0 0
-------- --------
Net cash provided (used) by financing activities ($ 4,077) ($ 2,674)
-------- --------
Increase (decrease) in cash and cash equivalents ($ 5,172) ($ 5,322)
Cash and cash equivalents at beginning of year 12,381 12,578
-------- --------
Cash and cash equivalents at end of period $ 7,209 $ 7,256
======== ========
Cash payments for:
Interest expense $ 1,050 $ 980
======== ========
Income taxes $ 313 $ 609
======== ========
See Notes to Consolidated Financial Statements
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AMERICAN BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1997
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 $743,000 for the first nine months of
1997 compared to $822,000 for the same period of 1996. On a per share basis,
the net income was $6.19 for the first nine months of 1997 compared to $6.85
for the same period of 1996. The Company recorded a provision for possible loan
losses of $0 for the nine months ended September 30, 1997 and 1996,
respectively. Net interest income increased 3.5% to $2,307,000 for the first
nine months of 1997 compared to $2,228,000 for the same period of 1996.
Total assets were $64,035,000 at September 30, 1997, an increase of
$3,251,000 from September 30, 1996. Loans increased by $267,000 or 1% from
$27,195,000 at September 30, 1996 to $27,462,000 at September 30, 1997.
Deposits also increased from $52,981,00 at September 30, 1996 to $55,289,000 at
September 30, 1997, a 4.3% increase.
RESULTS OF OPERATIONS
NET INTEREST INCOME. Net interest income for the nine months ended
September 30, 1997 totaled $2,307,000, a $79,000 increase from the same period
in 1996. Factors contributing to this increase include an increase in the
average balance and average rate earned on taxable investment securities. The
increase in interest income was partially offset by an increase in the average
balance of time deposits. The overall effect of volume and rate changes on net
interest income during the nine month period ended September 30, 1997 was
favorable.
PROVISION FOR POSSIBLE LOAN LOSSES. The Company recorded no provision for
possible loan losses for both the first nine months of 1997 and 1996. 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 2.13% and 2.23% at September 30, 1997
and 1996, respectively. The 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.
NONINTEREST INCOME. There has been immaterial variances in noninterest
income for the nine month periods ended September 30, 1997 and 1996. The
$38,000 decrease in noninterest income for the first nine months of 1997 is the
result of a $29,000 decrease in total service charges on deposit account as
compared to the same period of 1996.
There were no securities gains in the nine month periods ended September 30,
1997 and 1996.
NONINTEREST EXPENSE. For the first nine months of 1997 noninterest expense
increased $44,000 or 2.7% compared to the same period in 1996.
Salaries and employee benefits , the largest component of noninterest expense,
increased by $22,000 or 2.8% for the first nine months of 1997 as compared to
the same period in 1996. Employee medical insurance expense increased by $7,000
for the first nine months of 1997 as compared to the same period of 1996. This
increase is reflective of an increase in medical claim experience for the nine
months ended September 30, 1997.
Net occupancy expense and other expenses experienced normal variations between
the first nine months of 1997 and 1996.
INCOME TAXES. The Company recorded provisions for income taxes of
$321,000 for the nine month period ended September 30, 1997 as compared to
$245,000 for the same period of 1996. Effective January 1, 1992, the company
adopted Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes." Due to limitations related to the valuation of deferred tax
assets, there was no cumulative effect adjustment at adoption. During the first
quarter of 1996 the deferred tax valuation reserve was removed resulting in a
reduction in the income tax expense of $62,000.
10
FINANCIAL CONDITION
LOANS. Loans were $27,462,000 at September 30, 1997; up by $267,000 or
1% from September 30, 1996.
TABLE I - COMPOSITION OF LOAN PORTFOLIO
Sept. 30, 1997 Sept. 30, 1996
-------------- --------------
Commercial, Financial and Agricultural $ 7,251 $ 6,093
Real Estate Construction 342 348
Real Estate Mortgage 15,302 16,010
Consumer Loans 4,778 4,793
Industrial Revenue Bonds 388 571
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TOTAL LOANS $28,061 $27,815
Allowance for possible loan losses 599 620
Unearned income 0 0
------- -------
$27,462 $27,195
======= =======
SECURITIES HELD TO MATURITY. Securities held to maturity were $15,204,000
at September 30, 1997; down by $1,824,000 or 10.7% from September 30, 1996.
SECURITIES AVAILABLE FOR SALE. Securities available for sale were
$11,771,000 at September 30, 1997; up by $4,982,000 or 73.4% from September 30,
1996.
TABLE II - INVESTMENT SECURITIES
A comparison of the book value and estimated market value of investment
securities is as follows:
September 30, 1997
----------------------------------------------------
HELD-TO-MATURITY AVAILABLE-FOR-SALE
AMORT MARKET AMORT MARKET
COST VALUE COST VALUE
U.S. Treasury $ 3,691 $ 3,707 $ 1,993 $ 2,007
U.S. Agencies 11,513 11,562 4,999 5,029
Mortgaged-backed securities 0 0 1,245 1,306
State & Political Subdivisions 0 0 3,397 3,429
------- ------- ------- -------
TOTAL $15,204 $15,269 $11,634 $11,771
======= ======= ======= =======
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 1,500 1,488
Mortgaged-backed securities 0 0 1,815 1,881
State & Political Subdivisions 0 0 2,422 2,423
------- ------- ------ ------
TOTAL $17,028 $16,899 $6,733 $6,789
======= ======= ====== ======
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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, 1997 Sept. 30, 1996
-------------- --------------
Non-Performing Loans:
Loans on Non-Accrual $351 $511
Restructured loans which are not
on non-accrual 14 26
---- ----
Total nonperforming loans 365 537
Other Real Estate and repossessed assets
received in complete or partial
satisfaction of loan obligation 14 14
---- ----
TOTAL NONPERFORMING ASSETS $379 $551
==== ====
Loans past due 90 days or more as to
principal or interest, but not on $ 4 $104
non-accrual ==== ====
TABLE IV - ANALYSIS OF ALLOWANCE FOR LOAN LOSSES
Sept. 30, 1997 Sept. 30, 1996
-------------- --------------
Beginning balance $614 $624
Charge-offs:
Commercial, financial and agricultural -- --
Real estate - construction -- --
Real estate - mortgage -- --
Installment loans to individuals 16 12
---- ----
Total charge-offs 16 12
---- ----
Recoveries:
Commercial, financial and agricultural -- 5
Real estate - construction -- --
Real estate - mortgage -- 1
Installment loans to individuals 1 2
---- ----
Total recoveries 1 8
---- ----
Net charge-offs 15 4
---- ----
Provision charged against income -- --
---- ----
Balance at end of period $599 $620
==== ====
Ratio of net charge-offs during the period to average loans
outstanding during the period 0.05% 0.01%
==== ====
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.
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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, 1997 Sept. 30, 1996
-------------------- --------------------
% OF LOANS % OF LOANS
TO TOTAL TO TOTAL
AMOUNT LOANS AMOUNT LOANS
------ ----- ------ -----
Commercial, financial and
agricultural $117 19% $136 22%
Real estate - construction 4 1% 6 1%
Real estate - mortgage 247 41% 360 58%
Installment loans 227 38% 106 17%
Industrial revenue bonds 4 1% 12 2%
---- ----
$599 100% $620 100%
==== ====
DEPOSITS. As of September 30, 1997 total deposits have increased by
$2,308,000 or 4.3% from September 30, 1996. Noninterest bearing deposits
increased by $2,843,000 or 19.7% from September 30, 1996 to September 30,
1997. Interest bearing deposits decreased by $535,000 or 1.4% from September
30, 1996 to September 30, 1997.
CAPITAL. Shareholders' equity totaled $8,432,000 at September 30, 1997,
compared to $7,540,000 at September 30, 1996. 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 1997 1996
(Bank subsidiary) ---- ----
Risk-based capital:
Tier 1 risk-based capital ratio 26.13% 24.24%
Total risk-based capital ratio 27.39% 25.50%
Leverage ratio 12.97% 12.40%
INSIDERS. Directors, executive officers and 10% shareholders and their
related interest had loans outstanding totaling $1,491,000 at September 30,
1997.
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.
13
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 th registrant.
AMERICAN BANCORP, INC.
-----------------------
(Registrant)
10/29/97 /s/ SALVADOR L. DIESI
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DATE Salvador L. Diesi
Chairman of the Board/President
10/29/97 /s/ RONALD J. LASHUTE
- --------------- -----------------------
DATE Ronald J. Lashute
Secretary/Treasurer
of the Board
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
27 Financial Data Schedule