FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 2004
Commission File Number 0-11928
AMERICAN BANCORP, INC.
| LOUISIANA | 72-0951347 | |
| (State or other jurisdiction of incorporation or organization) |
(I R S Employer I. D. Number) |
| 321 EAST LANDRY STREET, OPELOUSAS, LA | 70570 | |
| (Address of principal executive office) | (Zip Code) |
(337) 948-3056
NOT APPLICABLE
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—115,987 shares as of April 30, 2004
AMERICAN BANCORP, INC.
(PARENT COMPANY ONLY)
BALANCE SHEETS
(In Thousands)
| March 31, 2004 |
Dec. 31, 2003 |
|||||||||||
| (Unaudited) | (Note 1) | |||||||||||
ASSETS |
||||||||||||
Cash on deposit with subsidiary |
$ | 25 | $ | 9 | ||||||||
Investment in subsidiary |
14,476 | 14,055 | ||||||||||
Due from subsidiary |
77 | 6 | ||||||||||
TOTAL ASSETS |
$ | 14,578 | $ | 14,070 | ||||||||
LIABILITIES |
||||||||||||
Accrued income tax payable |
$ | 71 | $ | 1 | ||||||||
Other liabilities |
— | — | ||||||||||
TOTAL LIABILITIES |
$ | 71 | $ | 1 | ||||||||
SHAREHOLDERS’ EQUITY |
||||||||||||
Common stock, $5 par value; authorized
10,000,000 shares; issued 120,000 shares;
115,987 and 115,987 shares outstanding,
respectively |
$ | 600 | $ | 600 | ||||||||
Surplus |
2,150 | 2,150 | ||||||||||
Retained earnings |
11,318 | 11,087 | ||||||||||
Treasury stock, 4,013 and 4,013 shares at cost,
respectively |
(263 | ) | (263 | ) | ||||||||
Net unrealized gain (loss) on securities
available for sale, net of tax |
702 | 495 | ||||||||||
TOTAL
SHAREHOLDERS’ EQUITY |
$ | 14,507 | $ | 14,069 | ||||||||
TOTAL LIABILITIES &
SHAREHOLDERS’ EQUITY |
$ | 14,578 | $ | 14,070 | ||||||||
See Notes to Consolidated Financial Statements.
AMERICAN BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
| March 31, 2004 |
Dec. 31, 2003 |
|||||||
| (Unaudited) | (Note 1) | |||||||
ASSETS |
||||||||
Cash and due from banks |
$ | 5,133 | $ | 5,199 | ||||
Federal funds sold |
9,825 | 9,125 | ||||||
Total cash and cash equivalents |
$ | 14,958 | $ | 14,324 | ||||
Securities held to maturity |
1,600 | 1,600 | ||||||
Securities available for sale |
45,065 | 42,607 | ||||||
Loans — net of allowance for loan losses |
37,301 | 39,305 | ||||||
Bank premises and equipment |
1,820 | 1,827 | ||||||
Other real estate |
— | — | ||||||
Accrued interest receivable |
447 | 512 | ||||||
Other assets |
772 | 683 | ||||||
TOTAL ASSETS |
$ | 101,963 | $ | 100,858 | ||||
LIABILITIES |
||||||||
Deposits: |
||||||||
Non-interest bearing demand deposits |
$ | 32,550 | $ | 29,747 | ||||
Interest bearing deposits: |
||||||||
NOW accounts |
12,725 | 16,866 | ||||||
Money market accounts |
4,129 | 3,460 | ||||||
Savings |
14,202 | 12,499 | ||||||
Time deposits $100,000 or more |
9,326 | 9,285 | ||||||
Other time deposits |
13,492 | 13,772 | ||||||
Total deposits |
$ | 86,424 | $ | 85,629 | ||||
Accrued interest payable |
42 | 50 | ||||||
Other liabilities |
990 | 1,110 | ||||||
TOTAL LIABILITIES |
$ | 87,456 | $ | 86,789 | ||||
SHAREHOLDERS’ EQUITY |
||||||||
Common stock, $5 par value; authorized
10,000,000 shares; issued 120,000 shares;
115,987 and 115,987 shares outstanding,
respectively |
$ | 600 | $ | 600 | ||||
Surplus |
2,150 | 2,150 | ||||||
Retained earnings |
11,318 | 11,087 | ||||||
Treasury stock, 4,013 and 4,013 shares at cost,
respectively |
(263 | ) | (263 | ) | ||||
Unrealized gain (loss) on securities
available for sale, net of tax |
702 | 495 | ||||||
TOTAL SHAREHOLDERS’ EQUITY |
$ | 14,507 | $ | 14,069 | ||||
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY |
$ | 101,963 | $ | 100,858 | ||||
See Notes to Consolidated Financial Statements.
AMERICAN BANCORP, INC.
(PARENT COMPANY ONLY)
STATEMENTS OF INCOME
(Unaudited)
(In Thousands )
| Three Months Ended | ||||||||
| March 31, |
||||||||
| 2004 |
2003 |
|||||||
INCOME FROM SUBSIDIARY |
||||||||
Dividends from bank subsidiary |
$ | 50 | $ | — | ||||
OPERATING EXPENSES |
||||||||
Directors fees |
4 | 3 | ||||||
Other expenses |
30 | 0 | ||||||
TOTAL EXPENSES |
34 | 3 | ||||||
Earnings before income tax
and equity in undistributed earnings of
subsidiary |
16 | (3 | ) | |||||
Provision for income taxes |
— | — | ||||||
Earnings before equity in undistributed
earnings of subsidiary |
16 | (3 | ) | |||||
Equity in undistributed earnings of
subsidiary |
215 | 330 | ||||||
Net Income |
$ | 231 | $ | 327 | ||||
See Notes to Consolidated Financial Statements.
AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands Except for Per Share Data)
| Three Months Ended | ||||||||||||
| March 31, |
||||||||||||
| INCREASE | ||||||||||||
| 2004 |
2003 |
(DECREASE) |
||||||||||
INTEREST INCOME: |
||||||||||||
Interest and fees on loans |
$ | 664 | $ | 722 | $ | (58 | ) | |||||
Interest on investment securities: |
||||||||||||
Taxable |
245 | 289 | (44 | ) | ||||||||
Tax-exempt |
144 | 122 | 22 | |||||||||
Other interest |
26 | 29 | (3 | ) | ||||||||
TOTAL INTEREST INCOME |
1,079 | 1,162 | (83 | ) | ||||||||
INTEREST EXPENSE: |
||||||||||||
Interest on deposits |
149 | 199 | (50 | ) | ||||||||
Interest on short-term borrowings |
— | — | — | |||||||||
TOTAL INTEREST EXPENSE |
149 | 199 | (50 | ) | ||||||||
NET INTEREST INCOME |
930 | 963 | (33 | ) | ||||||||
Provision for possible loan losses |
11 | 11 | — | |||||||||
Net interest income after provision for
possible loan losses |
919 | 952 | (33 | ) | ||||||||
NON-INTEREST INCOME: |
||||||||||||
Service charges on deposit accounts |
125 | 133 | (8 | ) | ||||||||
Investment securities gains (losses) |
— | — | — | |||||||||
Other |
28 | 35 | (7 | ) | ||||||||
TOTAL NON-INTEREST INCOME |
153 | 168 | (15 | ) | ||||||||
NON-INTEREST EXPENSE: |
||||||||||||
Salaries and employee benefits |
395 | 387 | 8 | |||||||||
Net occupancy expense |
152 | 145 | 7 | |||||||||
Net cost of operation of O.R.E.O. |
— | — | — | |||||||||
Other |
239 | 228 | 11 | |||||||||
TOTAL NON-INTEREST EXPENSE |
786 | 760 | 26 | |||||||||
INCOME BEFORE INCOME TAXES |
286 | 360 | (74 | ) | ||||||||
Provision for income taxes |
55 | 83 | (28 | ) | ||||||||
NET INCOME |
$ | 231 | $ | 277 | $ | (46 | ) | |||||
Net income per share of common stock |
$ | 1.99 | $ | 2.39 | $ | (0.40 | ) | |||||
See Notes to Consolidated Financial Statements
AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
For the Three Month Periods Ended March 31, 2004 & 2003
(Unaudited)
(In Thousands)
| ACCUMULATED | ||||||||||||||||||||||||||||
| OTHER | ||||||||||||||||||||||||||||
| COMMON | RETAINED | COMPREHENSIVE | TREASURY | COMPREHENSIVE | ||||||||||||||||||||||||
| STOCK |
SURPLUS |
EARNINGS |
INCOME |
STOCK |
INCOME |
TOTAL |
||||||||||||||||||||||
Balance December
31, 2002 |
$ | 600 | $ | 2,150 | $ | 10,343 | $ | 784 | ($245 | ) | $ | 0 | $ | 13,632 | ||||||||||||||
Comprehensive income: |
||||||||||||||||||||||||||||
Net income
(loss) |
— | — | 277 | — | — | 277 | 277 | |||||||||||||||||||||
Other
comprehensive
income,
net of tax: |
||||||||||||||||||||||||||||
Change in
unrealized gains (losses)
on
securities
available
for
sale |
— | — | — | (107 | ) | — | (107 | ) | (107 | ) | ||||||||||||||||||
Total
comprehensive
income |
— | — | — | — | — | $ | 170 | |||||||||||||||||||||
Purchase of
treasury stock |
— | — | — | — | (14 | ) | (14 | ) | ||||||||||||||||||||
Dividends paid |
— | — | 0 | — | — | 0 | ||||||||||||||||||||||
Balance , March
31, 2003 |
$ | 600 | $ | 2,150 | $ | 10,620 | $ | 677 | ($259 | ) | $ | 13,788 | ||||||||||||||||
Balance December
31, 2003 |
$ | 600 | $ | 2,150 | $ | 11,087 | $ | 495 | ($263 | ) | $ | 0 | $ | 14,069 | ||||||||||||||
Comprehensive
income: |
||||||||||||||||||||||||||||
Net income
(loss) |
— | — | 231 | — | — | 231 | 231 | |||||||||||||||||||||
Other
comprehensive
income,
net of tax: |
||||||||||||||||||||||||||||
Change in
unrealized gains
(losses)
on
securities
available
for
sale |
— | — | — | 207 | — | 207 | 207 | |||||||||||||||||||||
Total
comprehensive
income |
— | — | — | — | — | $ | 438 | |||||||||||||||||||||
Purchase of
treasury stock |
— | — | — | — | — | — | ||||||||||||||||||||||
Dividends paid |
— | — | — | — | — | — | ||||||||||||||||||||||
Balance , March
31, 2004 |
$ | 600 | $ | 2,150 | $ | 11,318 | $ | 702 | ($263 | ) | $ | 14,507 | ||||||||||||||||
See Notes to Consolidated Financial Statements
AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
OPERATING ACTIVITIES |
||||||||
Net income |
$ | 231 | $ | 277 | ||||
Adjustments to reconcile
net income to net cash
provided by operating
activities: |
||||||||
Discount accretion, net
of premium amortization
on investment
securities |
(76 | ) | (55 | ) | ||||
Depreciation of
property and equipment |
50 | 43 | ||||||
Amortization of
computer software |
12 | 12 | ||||||
Provision for loan loss |
11 | 11 | ||||||
(Gain) loss on disposal
of assets |
— | — | ||||||
(Increase) decrease in
assets: |
||||||||
Other real estate
owned |
— | — | ||||||
Accrued interest
receivable |
65 | 52 | ||||||
Other assets |
(29 | ) | (59 | ) | ||||
Increase (decrease) in
liabilities: |
||||||||
Accrued interest
payable |
(7 | ) | (15 | ) | ||||
Other liabilities |
(227 | ) | (326 | ) | ||||
Net cash provided by
(used in) operating
activities |
$ | 30 | $ | (60 | ) | |||
INVESTING ACTIVITIES |
||||||||
(Increase) decrease in
interest bearing deposits
with banks |
$ | — | $ | — | ||||
Proceeds from sales &
maturities of securities
available for sale |
4,539 | 8,232 | ||||||
Proceeds from sales &
maturities of securities
held to maturity |
— | — | ||||||
Purchases of securities
available for sale |
(6,609 | ) | (4,173 | ) | ||||
Purchases of securities
held to maturity |
— | — | ||||||
Decrease in loans |
1,993 | 658 | ||||||
Purchases of property &
equipment |
(127 | ) | (19 | ) | ||||
Other |
12 | (2 | ) | |||||
Net cash provided
by (used in)
investing activities |
$ | (192 | ) | $ | 4,696 | |||
FINANCING ACTIVITIES |
||||||||
Increase (decrease) in
demand deposits,
transaction
accounts and savings |
$ | 1,035 | $ | (2,697 | ) | |||
Increase (decrease) in
time deposits |
(239 | ) | (444 | ) | ||||
Dividends paid |
— | — | ||||||
Purchase of treasury stock |
— | (14 | ) | |||||
Net cash provided
by (used in)
financing activities |
$ | 796 | $ | (3,155 | ) | |||
Increase in cash and
cash equivalents |
$ | 634 | $ | 1,481 | ||||
Cash and cash
equivalents at
beginning of year |
14,324 | 17,274 | ||||||
Cash and cash
equivalents at end of
period |
$ | 14,958 | $ | 18,755 | ||||
SUPPLEMENTAL DISCLOSURES: |
||||||||
Cash payments for: |
||||||||
Interest expense |
$ | 157 | $ | 214 | ||||
Income taxes |
$ | — | $ | — | ||||
See Notes to Consolidated Financial Statements
AMERICAN
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2004
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. Operating results for the three month period ended March 31, 2004 are not necessarily indicative of the results that may be expected for the year ended December 31, 2004.
The balance sheet at December 31, 2003 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
For further information, refer to the consolidated financial statements and footnotes thereto included in American Bancorp, Inc.’s annual report on Form 10-K for the year ended December 31, 2003.
NOTE 2 — IMPAIRED LOANS
In accordance with Statement of Financial Accounting Standards (SFAS) No.114, 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.
NOTE 3 — RELATED PARTIES
Directors, executive officers, and 10% shareholders and their related interests had loans outstanding totaling $1,394,000 at March 31, 2004.
NOTE 4- EARNING PER SHARE
The earnings per share computations are based on weighted average number of shares outstanding during each quarter of 115,987 and 116,079 for the quarters ended March 31, 2004 and 2003, respectively.
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 $231,000 for the first three months of 2004 compared to $277,000 for the same period of 2003. On a per share basis, the net income was $1.99 for the first three months of 2004 compared to $2.39 for the same period of 2003. The Company recorded a provision for possible loan losses of $11,000 for the three months ended both March 31, 2004 and 2003. Net interest income decreased 3.4% to $930,000 for the first three months of 2004 compared to $963,000 for the same period of 2003.
Total assets were $101,963,000 at March 31, 2004, an increase of $1,105,000 from December 31, 2003. Loans decreased by $2,004,000 or 5.1% from $39,305,000 at December 31, 2003 to $37,301,000 at March 31, 2004. Deposits increased by $795,000 or 0.9% from $85,629,000 at December 31, 2003 to $86,424,000 at March 31, 2004.
RESULTS OF OPERATIONS
NET INTEREST INCOME. Net interest income for the three months ended March 31, 2004 totaled $930,000, an $33,000 decrease from the same period in 2003. The greatest contributing factors to this decrease were decreases in the yields on loans and investment securities, which were partially offset by decreases in the interest paid on interest- bearing deposits and increases in the average balances of investment securities. The overall effect of volume and rate changes on net interest income during the three month period ended March 31, 2004 was unfavorable.
PROVISION FOR POSSIBLE LOAN LOSSES. The Company recorded provisions for possible loan losses of $11,000 for the first three months of both 2004 and 2003. As a percentage of outstanding loans, the allowance for possible loan losses was 1.77% and 1.67% at March 31, 2004 and December 31, 2003, respectively. The provision is determined by the level of net chargeoffs, the size of the loan portfolio, the level of nonperforming loans, anticipated economic conditions, and review of financial condition of specific customers.
NONINTEREST INCOME. For the first three months of 2004 noninterest income decreased $15,000 or 8.9% compared to the same period of 2003.
Other noninterest income decreased by $7,000 or 20.0% compared to the same period of 2003. This decrease resulted from small decreases in several different components of other noninterest income for the first quarter of 2004.
There were no securities gains in the three month periods ended March 31, 2004 and 2003.
NONINTEREST EXPENSE. For the first three months of 2004, noninterest expense increased $26,000 or 3.4% compared to the same period in 2003.
Salaries and employee benefits, the largest component of noninterest expense, increased by $8,000 or 2.1% for the first three months of 2004 as compared to the same period in 2003. This increase was attributed to adjustments to accruals for deferred compensation, an increase in employee compensation and a decrease in the cost of employee benefits.
Net occupancy expense also increased by $7,000 or 4.8% for the first three months of 2004 as compared to the same period in 2003.
INCOME TAXES. The Company recorded provisions for income taxes of $55,000 for the three month period ended March 31, 2004 as compared to $83,000 for the same period of 2003.
FINANCIAL CONDITION
LOANS. Loans were $37,301,000 at March 31, 2004; down by $2,004,000 or 5.1% from December 31, 2003.
TABLE I — COMPOSITION OF LOAN PORTFOLIO (In thousands)
| March 31, 2004 |
Dec. 31, 2003 |
|||||||
Commercial, financial
and agricultural loans |
$ | 7,695 | $ | 8,873 | ||||
Real estate construction
loans |
900 | 936 | ||||||
Real estate mortgage
loans |
23,489 | 24,101 | ||||||
Consumer loans |
5,888 | 6,061 | ||||||
TOTAL LOANS |
$ | 37,972 | $ | 39,971 | ||||
Allowance for possible
loan losses |
671 | 667 | ||||||
| $ | 37,301 | $ | 39,304 | |||||
SECURITIES HELD TO MATURITY. Securities held to maturity were $1,600,000 at March 31, 2004; unchanged from December 31, 2003.
SECURITIES AVAILABLE FOR SALE. Securities available for sale were $45,065,000 at March 31, 2004; which is up by $2,458,000 or 5.8% from December 31, 2003.
TABLE II — INVESTMENT SECURITIES (In thousands)
A comparison of the book values and the estimated market values of investment securities is as follows:
| March 31, 2004 |
||||||||||||||||
| HELD TO MATURITY |
AVAILABLE FOR SALE |
|||||||||||||||
| AMORTIZED | MARKET | AMORTIZED | MARKET | |||||||||||||
| COST |
VALUE |
COST |
VALUE |
|||||||||||||
U.S.
Treasury |
$ | 1,600 | $ | 1,605 | $ | — | $ | — | ||||||||
U.S. Government Agencies |
0 | 0 | 18,860 | 19,056 | ||||||||||||
Mortgaged-backed securities |
0 | 0 | 10,602 | 10,735 | ||||||||||||
State & Political
Subdivisions |
0 | 0 | 14,356 | 15,090 | ||||||||||||
Equity
securities |
0 | 0 | 184 | 184 | ||||||||||||
TOTAL |
$ | 1,600 | $ | 1,605 | $ | 44,002 | $ | 45,065 | ||||||||
| December 31, 2003 |
||||||||||||||||
| HELD TO MATURITY |
AVAILABLE FOR SALE |
|||||||||||||||
| AMORTIZED | MARKET | AMORTIZED | MARKET | |||||||||||||