ALABAMA NATIONAL BANCORPORATION - 10-Q Quarterly Report

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 June 30, 2004

¨	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 August 6, 2004
Common Stock, $1.00 Par Value		16,837,550

INDEX

ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES


		PAGE

PART 1. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Consolidated Statements of Financial Condition at June 30, 2004 and December 31, 2003	3

	Consolidated Statements of Income
	For The Three Months Ended June 30, 2004 and 2003;
	For The Six Months ended June 30, 2004 and 2003	4

	Consolidated Statements of Comprehensive Income
	For The Three Months Ended June 30, 2004 and 2003;
	For The Six Months Ended June 30, 2004 and 2003	8

	Consolidated Condensed Statements of Cash Flows
	For The Six Months Ended June 30, 2004 and 2003	10

	Notes to the Unaudited Consolidated Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24

Item 4.	Controls and Procedures	24

PART II. OTHER INFORMATION

Item 4.	Submission of Matters to a Vote of Security Holders	24

Item 6.	Exhibits and Reports on Form 8-K	24

SIGNATURES		25

FORWARD-LOOKING INFORMATION

Statements contained in this Quarterly Report on Form 10-Q that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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.

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements.

Financial Statements (Unaudited)

Alabama National BanCorporation and Subsidiaries

Consolidated Statements of Financial Condition

(In thousands, except share amounts)


	June 30, 2004			December 31, 2003
Assets
Cash and due from banks	$	142,667		$	123,086
Interest-bearing deposits in other banks		14,438			10,019
Federal funds sold and securities purchased under resell agreements		47,191			16,534
Trading securities, at fair value		—			109
Investment securities (fair values of $530,483 and $271,536)		542,829			271,035
Securities available for sale, at fair value		632,939			539,192
Loans held for sale		19,466			16,415
Loans and leases		3,200,044			2,662,358
Unearned income		(2,757	)		(2,918	)

Loans and leases, net of unearned income		3,197,287			2,659,440
Allowance for loan and lease losses		(43,484	)		(36,562	)

Net loans and leases		3,153,803			2,622,878
Property, equipment and leasehold improvements, net		89,665			77,291
Goodwill		124,328			30,964
Other intangible assets, net		12,101			4,623
Cash surrender value of life insurance		63,241			59,425
Receivable from investment division customers		49,961			12,966
Other assets		46,820			35,575

Total assets	$	4,939,449		$	3,820,112

Liabilities and Stockholders’ Equity
Deposits:
Noninterest bearing	$	574,334		$	404,755
Interest bearing		3,040,893			2,348,994

Total deposits		3,615,227			2,753,749
Federal funds purchased and securities sold under repurchase agreements		372,029			358,393
Treasury, tax and loan accounts		792			1,431
Accrued expenses and other liabilities		44,966			41,577
Payable for securities purchased for investment division customers		47,544			11,967
Short-term borrowings		31,333			41,150
Long-term debt		403,888			332,427

Total liabilities		4,515,779			3,540,694
Commitments and contingencies (Note B)
Common stock, $1 par; 27,500,000 shares authorized; 15,419,936 and 12,838,844 shares issued at June 30, 2004 and December 31, 2003, respectively		15,420			12,839
Additional paid-in capital		261,301			126,370
Retained earnings		154,519			140,028
Accumulated other comprehensive (loss) income, net of tax		(7,570	)		181

Total stockholders’ equity		423,670			279,418
Total liabilities and stockholders’ equity	$	4,939,449		$	3,820,112

See accompanying notes to unaudited consolidated financial statements.

Alabama National BanCorporation and Subsidiaries

Consolidated Statements of Income (Unaudited)

(In thousands, except per share data)


	For the three months ended June 30,
	2004		2003
Interest income:
Interest and fees on loans and leases	$	44,099	$	35,947
Interest on securities		11,097		8,115
Interest on deposits in other banks		17		25
Interest on trading securities		17		29
Interest on federal funds sold and securities purchased under resell agreements		167		209

Total interest income		55,397		44,325
Interest expense:
Interest on deposits		11,263		10,994
Interest on federal funds purchased and securities sold under repurchase agreements		963		861
Interest on short-term borrowings		285		442
Interest on long-term debt		3,252		2,655

Total interest expense		15,763		14,952

Net interest income		39,634		29,373
Provision for loan and lease losses		1,278		1,424

Net interest income after provision for loan and lease losses		38,356		27,949
Noninterest income:
Securities gains		—		34
Gain (loss) on disposition of assets		57		(82	)
Service charges on deposit accounts		4,520		3,491
Investment services income		3,273		6,372
Securities brokerage and trust income		4,197		3,905
Gain on sale of mortgages		3,491		4,615
Bank owned life insurance		683		648
Insurance commissions		779		854
Other		2,288		1,699

Total noninterest income		19,288		21,536

See accompanying notes to unaudited consolidated financial statements.

Alabama National BanCorporation and Subsidiaries

Consolidated Statements of Income (Unaudited) (Continued)

(In thousands, except per share data)


	For the three months ended June 30,
	2004		2003
Noninterest expense:
Salaries and employee benefits		18,992		16,566
Commission based compensation		4,784		6,649
Occupancy and equipment expenses		3,867		3,157
Amortization of intangibles		842		244
Other		9,127		7,721

Total noninterest expense		37,612		34,337

Income before provision for income taxes		20,032		15,148
Provision for income taxes		6,788		4,984

Net income	$	13,244	$	10,164

Weighted average common shares outstanding:
Basic		15,555		12,570

Diluted		15,806		12,745

Earnings per common share:
Basic	$	0.85	$	0.81

Diluted	$	0.84	$	0.80

Cash dividends per common share	$	0.3125	$	0.285

See accompanying notes to unaudited consolidated financial statements.

Alabama National BanCorporation and Subsidiaries

Consolidated Statements of Income (Unaudited)

(In thousands, except per share data)


	For the six months ended June 30,
	2004		2003
Interest income:
Interest and fees on loans and leases	$	84,312	$	70,463
Interest on securities		19,852		16,450
Interest on deposits in other banks		28		60
Interest on trading securities		35		49
Interest on federal funds sold and securities purchased under resell agreements		300		333

Total interest income		104,527		87,355
Interest expense:
Interest on deposits		21,479		22,140
Interest on federal funds purchased and securities sold under repurchase agreements		1,960		1,620
Interest on short-term borrowings		579		998
Interest on long-term debt		6,205		5,237

Total interest expense		30,223		29,995

Net interest income		74,304		57,360
Provision for loan and lease losses		2,506		2,515

Net interest income after provision for loan and lease losses		71,798		54,845
Noninterest income:
Securities gains		—		39
Gain (loss) on disposition of assets		37		(33	)
Service charges on deposit accounts		8,331		6,813
Investment services income		7,180		11,532
Securities brokerage and trust income		8,296		8,023
Gain on sale of mortgages		6,033		7,949
Bank owned life insurance		1,410		1,368
Insurance commissions		1,737		1,638
Other		3,904		2,952

Total noninterest income		36,928		40,281

See accompanying notes to unaudited consolidated financial statements.

Alabama National BanCorporation and Subsidiaries

Consolidated Statements of Income (Unaudited) (Continued)

(In thousands, except per share data)


	For the six months ended June 30,
	2004		2003
Noninterest expense:
Salaries and employee benefits		36,671		31,858
Commission based compensation		9,549		12,223
Occupancy and equipment expenses		7,365		6,370

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