UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended March 31, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File No. 0-25160
ALABAMA NATIONAL BANCORPORATION
(Exact Name of Registrant as Specified in Its Charter)
| DELAWARE | 63-1114426 | |
| (State of Incorporation) | (I.R.S. Employer Identification No.) |
1927 FIRST AVENUE NORTH, BIRMINGHAM, ALABAMA 35203-4009
(Address of principal executive office)
Registrant’s telephone number, including area code: (205) 583-3600
(Former Name, Former Address and Former 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 period 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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
| Class |
Outstanding at May 6, 2004 | |
| Common Stock, $1.00 Par Value | 15,395,920 |
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
FORWARD-LOOKING INFORMATION
Statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements. In addition, Alabama National BanCorporation (“Alabama National”), through its senior management, from time to time makes forward-looking public statements concerning its expected future operations and performance and other developments. Such forward-looking statements are necessarily estimates reflecting Alabama National’s best judgment based upon current information and involve a number of risks and uncertainties, and various factors could cause results to differ materially from those contemplated by such forward-looking statements. Such factors could include those identified from time to time in Alabama National’s Securities and Exchange Commission filings and other public announcements, including the factors described in Alabama National’s Annual Report on Form 10-K for the year ended December 31, 2003. With respect to the adequacy of the allowance for loan and lease losses for Alabama National, these factors include the rate of growth in the economy, especially in the Southeast, the relative strength and weakness in the consumer and commercial credit sectors and in the real estate markets and the performance of the stock and bond markets. The forward-looking statements contained in this Quarterly Report speak only as of the date of this report, and Alabama National undertakes no obligation to revise these statements following the date of this Quarterly Report on Form 10-Q.
2
Financial Statements (Unaudited)
Alabama National BanCorporation and Subsidiaries
Consolidated Statements of Financial Condition
(In thousands, except share amounts)
| March 31, 2004 |
December 31, 2003 |
|||||||
| Assets |
||||||||
| Cash and due from banks |
$ | 153,844 | $ | 123,086 | ||||
| Interest-bearing deposits in other banks |
32,844 | 10,019 | ||||||
| Federal funds sold and securities purchased under resell agreements |
40,619 | 16,534 | ||||||
| Trading securities, at fair value |
— | 109 | ||||||
| Investment securities (fair values of $420,839 and $271,536) |
417,625 | 271,035 | ||||||
| Securities available for sale, at fair value |
723,799 | 539,192 | ||||||
| Loans held for sale |
27,356 | 16,415 | ||||||
| Loans and leases |
3,139,821 | 2,662,358 | ||||||
| Unearned income |
(2,883 | ) | (2,918 | ) | ||||
| Loans and leases, net of unearned income |
3,136,938 | 2,659,440 | ||||||
| Allowance for loan and lease losses |
(42,392 | ) | (36,562 | ) | ||||
| Net loans and leases |
3,094,546 | 2,622,878 | ||||||
| Property, equipment and leasehold improvements, net |
87,475 | 77,291 | ||||||
| Goodwill |
124,057 | 30,964 | ||||||
| Other intangible assets, net |
13,327 | 4,623 | ||||||
| Cash surrender value of life insurance |
62,565 | 59,425 | ||||||
| Receivable from investment division customers |
127,629 | 12,966 | ||||||
| Other assets |
41,361 | 35,575 | ||||||
| Total assets |
$ | 4,947,047 | $ | 3,820,112 | ||||
| Liabilities and Stockholders’ Equity |
||||||||
| Deposits: |
||||||||
| Noninterest bearing |
$ | 565,803 | $ | 404,755 | ||||
| Interest bearing |
2,895,341 | 2,348,994 | ||||||
| Total deposits |
3,461,144 | 2,753,749 | ||||||
| Federal funds purchased and securities sold under repurchase agreements |
431,555 | 358,393 | ||||||
| Treasury, tax and loan accounts |
630 | 1,431 | ||||||
| Accrued expenses and other liabilities |
52,006 | 41,577 | ||||||
| Payable for securities purchased for investment division customers |
122,569 | 11,967 | ||||||
| Short-term borrowings |
67,743 | 41,150 | ||||||
| Long-term debt |
384,984 | 332,427 | ||||||
| Total liabilities |
4,520,631 | 3,540,694 | ||||||
| Commitments and contingencies (Note B) |
||||||||
| Common stock, $1 par; 27,500,000 shares authorized; 15,361,572 and 12,838,844 shares issued at March 31, 2004 and December 31, 2003, respectively |
15,362 | 12,839 | ||||||
| Additional paid-in capital |
259,820 | 126,370 | ||||||
| Retained earnings |
146,147 | 140,028 | ||||||
| Accumulated other comprehensive income, net of tax |
5,087 | 181 | ||||||
| Total stockholders’ equity |
426,416 | 279,418 | ||||||
| Total liabilities and stockholders’ equity |
$ | 4,947,047 | $ | 3,820,112 | ||||
See accompanying notes to unaudited consolidated financial statements
3
Alabama National BanCorporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)
| For the Three Months Ended March 31, | |||||||
| 2004 |
2003 | ||||||
| Interest income: |
|||||||
| Interest and fees on loans and leases |
$ | 40,213 | $ | 34,516 | |||
| Interest on securities |
8,755 | 8,335 | |||||
| Interest on deposits in other banks |
11 | 35 | |||||
| Interest on trading securities |
18 | 20 | |||||
| Interest on federal funds sold and securities purchased under resell agreements |
133 | 124 | |||||
| Total interest income |
49,130 | 43,030 | |||||
| Interest expense: |
|||||||
| Interest on deposits |
10,216 | 11,146 | |||||
| Interest on federal funds purchased and securities sold under repurchase agreements |
997 | 759 | |||||
| Interest on short-term borrowings |
294 | 556 | |||||
| Interest on long-term debt |
2,953 | 2,582 | |||||
| Total interest expense |
14,460 | 15,043 | |||||
| Net interest income |
34,670 | 27,987 | |||||
| Provision for loan and lease losses |
1,228 | 1,091 | |||||
| Net interest income after provision for loan and lease losses |
33,442 | 26,896 | |||||
| Noninterest income: |
|||||||
| Securities gains |
— | 5 | |||||
| Gain (loss) on disposition of assets |
(20 | ) | 49 | ||||
| Service charges on deposit accounts |
3,811 | 3,322 | |||||
| Investment services income |
3,907 | 5,160 | |||||
| Securities brokerage and trust income |
4,099 | 4,118 | |||||
| Gain on sale of mortgages |
2,542 | 3,334 | |||||
| Bank owned life insurance |
727 | 720 | |||||
| Insurance commissions |
958 | 784 | |||||
| Other |
1,616 | 1,253 | |||||
| Total noninterest income |
17,640 | 18,745 | |||||
4
Alabama National BanCorporation and Subsidiaries
Consolidated Statements of Income (Unaudited) (Continued)
(In thousands, except per share data)
| For the Three Months Ended March 31, | ||||||
| 2004 |
2003 | |||||
| Noninterest expense: |
||||||
| Salaries and employee benefits |
17,679 | 15,292 | ||||
| Commission based compensation |
4,765 | 5,574 | ||||
| Occupancy and equipment expenses |
3,498 | 3,213 | ||||
| Amortization of intangibles |
482 | 233 | ||||
| Other |
7,747 | 7,179 | ||||
| Total noninterest expense |
34,171 | 31,491 | ||||
| Income before provision for income taxes |
16,911 | 14,150 | ||||
| Provision for income taxes |
5,604 | 4,625 | ||||
| Net income |
$ | 11,307 | $ | 9,525 | ||
| Weighted average common shares outstanding: |
||||||
| Basic |
13,927 | 12,503 | ||||
| Diluted |
14,171 | 12,685 | ||||
| Earnings per common share: |
||||||
| Basic |
$ | 0.81 | $ | 0.76 | ||
| Diluted |
$ | 0.80 | $ | 0.75 | ||
| Cash dividends per common share |
$ | 0.3125 | $ | 0.25 | ||
See accompanying notes to unaudited consolidated financial statements
5
Alabama National BanCorporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands)
| For the Three Months Ended March 31, | ||||||
| 2004 |
2003 | |||||
| Net income |
$ | 11,307 | $ | 9,525 | ||
| Other comprehensive income: |
||||||
| Unrealized gains on securities available for sale arising during the period |
7,620 | 458 | ||||
| Less: Reclassification adjustment for net gains included in net income |
— | 5 | ||||
| Other comprehensive income, before tax |
7,620 | 453 | ||||
| Provision for income taxes related to items of other comprehensive income |
2,714 | 138 | ||||
| Other comprehensive income |
4,906 | 315 | ||||
| Comprehensive income |
$ | 16,213 | $ | 9,840 | ||
See accompanying notes to unaudited consolidated financial statements
6
Alabama National BanCorporation and Subsidiaries
Consolidated Condensed Statements of Cash Flows (Unaudited)
(In thousands)
| For the Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Net cash flows provided by operating activities |
$ | 3,770 | $ | 4,739 | ||||
| Cash flows from investing activities: |
||||||||
| Proceeds from calls and maturities of investment securities |
27,930 | 99,985 | ||||||
| Purchases of investment securities |
(148,766 | ) | (103,017 | ) | ||||
| Purchases of securities available for sale |
(272,179 | ) | (269,457 | ) | ||||
| Proceeds from sale of securities available for sale |
2,357 | 14,609 | ||||||
| Proceeds from calls and maturities of securities available for sale |
335,108 | 139,595 | ||||||
| Net (increase) decrease in interest bearing deposits in other banks |
(22,825 | ) | 1,168 | |||||
| Net (increase) decrease in federal funds sold and securities purchased under resell agreements |
(22,742 | ) | 41,187 | |||||
| Net increase in loans and leases |
(115,108 | ) | (89,607 | ) | ||||
| Purchase acquisitions, net of cash acquired |
28,866 | — | ||||||
| Purchases of property, equipment and leasehold improvements |
(4,270 | ) | (2,381 | ) | ||||
| Proceeds from sale of other real estate owned and fixed assets |
136 | 779 | ||||||
| Net cash used in investing activities |
(191,493 | ) | (167,139 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Net increase in deposits |
158,448 | 157,153 | ||||||
| Net increase in federal funds purchased and securities sold under agreements to repurchase |
33,563 | 33,885 | ||||||
| Net increase (decrease) in short-term borrowings and capital leases |
25,500 | (57,207 | ) | |||||
| Proceeds from long-term debt |
5,000 | 34,000 | ||||||
| Purchase of treasury stock |
— | (900 | ) | |||||
| Dividends on common stock |
(4,800 | ) | (3,525 | ) | ||||
| Other |
770 | |||||||