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 March 31, 1998
Commission File Number 0-11928
AMERICAN BANCORP, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
LOUISIANA 72-0951347
- ------------------------------- -----------------------------
(State or other jurisdiction of (I R S Employer I. D. Number)
incorporation or organization)
328 EAST LANDRY STREET, OPELOUSAS, LA 70571-1579
- --------------------------------------- -----------------------------
(Address of principal executive office) (Zip Code)
(318) 948-3056
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(Registrant's telephone number, including area code)
NOT APPLICABLE
- -------------------------------------------------------------------------------
(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------119,220 shares as of April 24, 1998
2
AMERICAN BANCORP, INC.
(PARENT COMPANY ONLY)
BALANCE SHEET
March 31, 1998 and 1997
(In Thousands)
ASSETS 1998 1997
- ------ ---------- ----------
Cash on deposit with subsidiary 67 4
Investment in Subsidiary 8,668 7,838
Dividend Receivable 0 0
Due From Subsidiary 121 143
---------- ----------
TOTAL ASSETS $ 8,856 $ 7,985
========== ==========
LIABILITIES
- -----------
Accrued Income Taxes Payable 116 137
Other Liabilities 0 0
---------- ----------
TOTAL LIABILITIES $ 116 $ 137
---------- ----------
SHAREHOLDERS' EQUITY
- --------------------
Net Unrealized Gain (Loss) on Securities
Available for Sale, net of tax 120 6
Common Stock, $5 par value; authorized 10,000,000 shares; issued 120,000
shares; 119,250 and 120,000 shares outstanding,
respectively 600 600
Surplus 2,150 2,150
Retained Earnings 5,910 5,092
Treasury stock, 750 shares at cost (40) 0
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 8,740 7,848
---------- ----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 8,856 $ 7,985
========== ==========
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AMERICAN BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 1998 and 1997
(In Thousands)
1998 1997
ASSETS ---------- ----------
------
Cash and Due From Banks 4,411 5,350
Interest Bearing Deposits 1,190 694
Securities Held to Maturity 11,004 15,031
Securities Available for Sale 16,103 10,212
Federal Funds Sold 4,950 4,000
Loans - Net of allowance for loan losses 27,896 27,011
Bank Premises and Equipment 1,185 1,304
Other Real Estate 0 14
Accrued Interest Receivable 634 593
Deferred Tax Asset 0 18
Other Assets 451 462
---------- ----------
TOTAL ASSETS $ 67,824 $ 64,689
========== ==========
LIABILITIES
-----------
Deposits:
Non-Interest Bearing 18,536 16,620
Interest Bearing 40,170 39,680
---------- ----------
Total Deposits 58,706 56,300
Accrued Interest Payable 114 110
Deferred Income Tax Liability 34 0
Other Liabilities 230 431
---------- ----------
TOTAL LIABILITIES $ 59,084 $ 56,841
---------- ----------
SHAREHOLDERS' EQUITY
--------------------
Net Unrealized Gain (Loss) on Securities
Available for Sale, net of tax 120 6
Common Stock, $5 par value; authorized 10,000,000 shares; issued 120,000
shares; 119,250 and 120,000 shares outstanding,
respectively 600 600
Surplus 2,150 2,150
Retained Earnings 5,910 5,092
Treasury stock, 750 shares at cost (40) 0
---------- ----------
TOTAL SHAREHOLDERS' EQUITY $ 8,740 $ 7,848
---------- ----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 67,824 $ 64,689
========== ==========
See Notes to Financial Statements.
4
AMERICAN BANCORP, INC.
(PARENT COMPANY ONLY)
INCOME STATEMENT
For the Three Month Periods Ended March 31, 1998 and 1997
(In Thousands)
1998 1997
---------- ----------
INCOME FROM SUBSIDIARY
- ----------------------
Dividends $ 50 $ 0
OPERATING EXPENSES
- ------------------
Other Expenses 1 0
Interest Expense 0 0
---------- ----------
TOTAL EXPENSES $ 1 $ 0
---------- ----------
Earnings (loss) before income taxes
and equity in undistributed earnings of
subsidiary $ 49 $ 0
Income tax (benefit) 0 0
---------- ----------
Earnings (loss) before equity in undistributed
earnings of subsidiary $ 49 $ 0
Equity in undistributed earnings of
subsidiary 196 243
---------- ----------
Net Income $ 245 $ 243
========== ==========
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AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the Three Month Periods Ended March 31, 1998 and 1997
(In Thousands)
INCREASE
1998 1997 (DECREASE)
INTEREST INCOME: ---------- ---------- ----------
Interest and fees on loans $ 647 $ 637 10
Interest on investment securities:
Taxable 371 352 19
Tax-Exempt 40 29 11
Other Interest 90 74 16
---------- ---------- ----------
TOTAL INTEREST INCOME $ 1,148 $ 1,092 56
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits $ 352 $ 348 4
Interest on short-term borrowings 2 0 2
---------- ---------- ----------
TOTAL INTEREST EXPENSE $ 354 $ 348 6
---------- ---------- ----------
NET INTEREST INCOME $ 794 $ 744 50
Provision for possible loan losses 0 0 0
---------- ---------- ----------
Net Interest Income after provision for
possible loan losses $ 794 $ 744 50
---------- ---------- ----------
NON-INTEREST INCOME:
Service charges on deposit accounts $ 118 $ 122 (4)
Investment securities gains (losses) 0 0 0
Other 31 31 0
---------- ---------- ----------
TOTAL NON-INTEREST INCOME $ 149 $ 153 (4)
---------- ---------- ----------
NON-INTEREST EXPENSE:
Salaries and Employee Benefits $ 272 $ 264 8
Net Occupancy Expense 142 138 4
Net cost of operation of O.R.E.O 5 (1) 6
Other 175 148 27
---------- ---------- ----------
TOTAL NON-INTEREST EXPENSE $ 594 $ 549 45
---------- ---------- ----------
INCOME BEFORE INCOME TAXES $ 349 $ 348 1
Provision for income taxes 104 105 (1)
---------- ---------- ----------
NET INCOME $ 245 $ 243 2
========== ---------- ----------
Net income per share of common stock $ 2.06 $ 2.03 $ 0.03
========== ========== ==========
See Notes to Consolidated Financial Statements
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AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the Three Month Periods Ended March 31, 1998 & 1997
(In Thousands)
NET
UNREALIZED
GAINS(LOSS) COMMON RETAINED TREASURY
SECURITIES STOCK SURPLUS EARNINGS STOCK TOTAL
----------- ------ ------- -------- -------- -------
Balance 12/31/96 $ 57 $ 600 $ 2,150 $ 4,849 $ 0 $ 7,656
Net Income (Loss) 243 243
Cash Dividends 0 0
Change in Unrealized
Gains/Losses on Securities (51) (51)
----------- ------ ------- -------- -------- -------
Balance 3/31/97 $ 6 $ 600 $ 2,150 $ 5,092 $ 0 $ 7,848
=========== ====== ======= ======== ======== =======
Balance 12/31/97 $ 100 $ 600 $ 2,150 $ 5,665 ($ 2) $ 8,513
Net Income (Loss) 245 245
Cash Dividends 0 0
Change in Unrealized
Gains/Losses on Securities 20 20
Purchase of treasury stock (38) (38)
----------- ------ ------- -------- -------- -------
Balance 3/31/98 $ 120 $ 600 $ 2,150 $ 5,910 ($ 40) $ 8,740
=========== ====== ======= ======== ======== =======
See Notes to Consolidated Financial Statements
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AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Month Periods Ended March 31, 1998 and 1997
1998 1997
---------- ----------
OPERATING ACTIVITIES
Net income $ 245 $ 243
Adjustments to reconcile net income to net cash
provided by operating activities:
Premium amortization, net of discount accretion on
investment securities 2 6
Depreciation 47 49
Provision for loan losses 0 0
Write down of other real estate 7 0
(Gain) loss on sale of assets 0 0
Decrease (increase) in accrued interest receivable (15) (25)
Increase (decrease) in accrued interest payable (6) (9)
Increase (decrease) in other liabilities 133 320
Decrease(increase) in other asset 17 (23)
---------- ----------
Net cash provided by operating activities $ 430 $ 561
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INVESTING ACTIVITIES
Proceeds from sales & maturities of available for sale securities $ 77 334
Proceeds from sales & maturities of held to maturity securities 3,200 500
Purchases of available for sale securities (3,958) (1,972)
Purchases of held to maturity securities 0 0
(Increase) decrease in loans (61) 1,301
Net decrease (increase) in other real estate 0 0
Purchases of property & equipment (5) (17)
Other (12) 23
---------- ----------
Net cash provided (used) by investing activities ($ 759) $ 169
---------- ----------
FINANCING ACTIVITIES
Increase (decrease) in demand deposits, transaction $ 2,537 ($ 2,442)
accounts and savings
Increase (decrease) in time deposits 313 (625)
Dividends paid 0 0
Purchase of treasury stock (38) 0
---------- ----------
Net cash provided (used) by financing activities $ 2,812 ($ 3,067)
---------- ----------
Increase (decrease) in cash and cash equivalents $ 2,483 ($ 2,337)
Cash and cash equivalents at beginning of year 8,068 12,381
---------- ----------
Cash and cash equivalents at end of period $ 10,551 $ 10,044
========== ==========
Cash payments for:
Interest expense $ 360 $ 357
========== ==========
Income taxes $ 0 $ 0
========== ==========
See Notes to Consolidated Financial Statements
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AMERICAN BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
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 $245,000 for the first three months of
1998 compared to $243,000 for the same period of 1997. On a per share basis,
the income was $2.06 for the first quarter of 1998 compared to $2.03 for the
same period of 1997. The Company recorded a provision for possible loan losses
of $0 for the three months ended March 31, 1998 and 1997, respectively. Net
interest income increased 6.7% to $794,000 for the first quarter of 1998
compared to $744,000 for the same period of 1997.
Total assets were $ 67,824,000 at March 31, 1998, an increase of $3,135,000
or 4.8% from March 31, 1997. Loans increased by $885,000 or 3.3% from
$27,011,000 at March 31, 1997 to $27,896,000 at March 31, 1998. Deposits
also increased $2,406,000 or 4.3% to $58,706,000 at March 31, 1998.
RESULTS OF OPERATIONS
NET INTEREST INCOME. Net interest income for the three months ended March
31, 1998 totaled $794,000, a $50,000 increase from the same period in 1997.
Factors contributing to this increase include an increase in the average
balance of taxable investment securities as well as an increase in the average
rate earned on tax exempt investments and loans. This positive effect was
partially negated by an increase in the average balance of savings deposits.
The overall effect of volume and rate changes on net income during the first
quarter of 1998 was favorable.
PROVISION FOR POSSIBLE LOAN LOSSES. The Company recorded no provision for
possible loan losses for both the first quarter of 1998 and 1997. 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 2.12% and 2.19% at March 31, 1998 and 1997,
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 three month periods ended March 31, 1998 and 1997. The $4,000
decrease in noninterest income for the first quarter of 1998 is the result of a
$4,000 decrease in total service charges on deposit account as compared to the
same period of 1997.
There were no securities gains in the first three months of 1998 or of 1997.
NONINTEREST EXPENSE. For the first three months of 1998 noninterest
expense increased $45,000 or 8.2% compared to the same period in 1997.
Salaries and employee benefits, the largest component of noninterest expense,
increased by $8,000 or 3% for the first three months of 1998 as compared to
the same period in 1997. Other non-interest expense increased by $27,000 or
18.2% for the first quarter of 1998. Included in this increase was an increase
in advertising and promotion expense of $18,000 as compared to the first three
months of 1997.
INCOME TAXES. The Company recorded provisions for income taxes of $104,000
in the first quarter of 1998 as compared to $105,000 in the first
quarter of 1997. Effective January 1, 1992, the company adopted Statement of
Financial Accounting Standard 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.
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\
FINANCIAL CONDITION
LOANS. Loans were $27,896,000 at March 31, 1998; up by $885,000 or 3.3%
from March 31, 1997.
TABLE I - COMPOSITION OF LOAN PORTFOLIO
March 31, 1998 March 31, 1997
-------------- --------------
Commercial, Financial and Agricultural Loans $ 6,780 $ 6,625
Real Estate Construction Loans 556 302
Real Estate Mortgage Loans 15,969 15,743
Consumer Loans 4,924 4,486
Industrial Revenue Bonds 272 461
-------------- --------------
TOTAL LOANS $ 28,501 $ 27,617
Allowance for possible loan losses 605 606
Unearned income 0 0
-------------- --------------
$ 27,896 $ 27,011
============== ==============
SECURITIES HELD TO MATURITY. Securities held to maturity were $11,004,000
at March 31, 1998; down by $4,027,000 or 26.8% from March 31, 1997.
SECURITIES AVAILABLE FOR SALE. Securities available for sale were
$16,103,000 at March 31, 1998; up by $5,891,000 or 57.7% from March 31, 1997.
TABLE II - INVESTMENT SECURITIES
A comparison of the book value and estimated market value of investment
securities is as follows:
March 31, 1998
---------------------------------------
HELD-TO-MATURITY AVAILABLE-FOR-SALE
AMORT MARKET AMORT MARKET
COST VALUE COST VALUE
U.S. Treasury $ 2,993 $ 3,017 $ 2,500 $ 2,517
U.S. Government Agencies 8,011 8,051 8,439 8,501
Mortgaged-backed securities 0 0 1,599 1,652
State & Political Subdivisions 0 0 3,383 3,433
------- -------- ------- --------
TOTAL $11,004 $ 11,068 $15,921 $ 16,103
======= ======== ======= ========
March 31, 1997
---------------------------------------
HELD-TO-MATURITY AVAILABLE-FOR-SALE
AMORT MARKET AMORT MARKET
COST VALUE COST VALUE
U.S. Treasury $ 4,004 $ 3,989 $ 1,492 $ 1,497
U.S. Government Agencies 11,027 10,956 4,000 3,967
Mortgaged-backed securities 0 0 1,519 1,574
State & Political Subdivisions 0 0 3,191 3,174
------- -------- ------- --------
TOTAL $15,031 $ 14,945 $10,202 $ 10,212
======= ======== ======= ========
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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 that 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.
March 31, 1998 March 31, 1997
Non-Performing Loans: -------------- --------------
Loans on Non-Accrual $ 265 $ 443
Restructured loans which are not
on nonaccrual 13 26
-------------- --------------
Total nonperforming loans 278 469
Other Real Estate and repossessed assets
received in complete or partial
satisfaction of loan obligations 0 14
-------------- --------------
TOTAL NONPERFORMING ASSETS $ 278 $ 483
============== ==============
Loans past due 90 days or more as to
principal or interest, but not on
non-accrual $ 5 $ 3
============== ==============
Nonperforming assets totaled $278,000 at March 31, 1998, a $205,000 (42.4%)
decrease.
TABLE IV - ANALYSIS OF ALLOWANCE FOR LOAN LOSSES
March 31, 1998 March 31, 1997
-------------- --------------
Beginning balance $ 600 $ 614
Charge-offs:
Commercial, financial and agricultural loans -- --
Real estate - construction loans -- --
Real estate - mortgage loans -- --
Installment loans to individuals 2 8
-------------- --------------
Total charge-offs 2 8
-------------- --------------
Recoveries:
Commercial, financial and agricultural loans -- --
Real estate - construction loans -- --
Real estate - mortgage loans -- --
Installment loans to individuals 7 --
-------------- --------------
Total recoveries 7 0
-------------- --------------
Net (charge-offs) recovery 5 (8)
-------------- --------------
Provision charged against income -- --
-------------- --------------
Balance at end of period $ 605 $ 606
============== ==============
Ratio of net (charge-offs) recoveries during the period
to average loans outstanding during the period .018% (.032)%
============== ==============
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.
March 31, 1998 March 31, 1997
---------------------- ----------------------
% OF LOANS % OF LOANS
TO TOTAL TO TOTAL
AMOUNT LOANS AMOUNT LOANS
------ ---------- ------ ----------
Commercial, financial and
agricultural loans $ 145 24% $ 109 18%
Real estate - construction loans 12 2% 5 1%
Real estate - mortgage loans 339 56% 260 43%
Installment loans 103 17% 224 37%
Industrial revenue bonds 6 1% 8 1%
------ ------
$ 605 100% $ 606 100%
====== ======
DEPOSITS. As of March 31, 1998 total deposits have increased by $2,406,000
or 4.3% from March 31, 1997. Noninterest bearing deposits increased
by $1,916,000 or 11.5% from March 31, 1997 to March 31, 1998. Interest
bearing deposits increased by $490,000 or 1.2% from March 31, 1997 to March
31, 1998.
CAPITAL. Shareholders' equity totaled $8,740,000 at March 31, 1998,
compared to $7,848,000 at March 31, 1997. 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
March 31,
----------------------
AMERICAN BANK & TRUST COMPANY 1998 1997
-------- --------
Risk-based capital:
Tier 1 risk-based capital ratio 26.16% 25.01%
Total risk-based capital ratio 27.41% 26.26%
Leverage ratio 12.71% 12.21%
INSIDERS. Directors, executive officers and 10% shareholders and their
related interest had loans outstanding totaling $1,754,000 at March 31, 1998.
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.
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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)
4/30/1998 /s/ Salvador L. Diesi
- --------------- -----------------------------------------
DATE Salvador L. Diesi
Chairman of the Board / President
4/30/1998 /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