0000004570-95-000011.txt : 19950810 0000004570-95-000011.hdr.sgml : 19950810 ACCESSION NUMBER: 0000004570-95-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950809 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN BANCORPORATION /WV/ CENTRAL INDEX KEY: 0000004570 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 310724349 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05893 FILM NUMBER: 95559996 BUSINESS ADDRESS: STREET 1: 1025 MAIN ST STE 800 CITY: WHEELING STATE: WV ZIP: 26003 BUSINESS PHONE: 3042335006 MAIL ADDRESS: STREET 1: 1025 MAIN STREET STREET 2: SUITE 800 CITY: WHEELING STATE: WV ZIP: 26003 10-Q 1 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 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 period ended June 30, 1995 Commission File Number: 0-5893 American Bancorporation (Exact name of registrant as specified in its charter) Ohio 31-0724349 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1025 Main Street, Suite 800, Wheeling, WV 26003 (Address of principal executive offices) (Zip Code) (304) 233-5006 (Registrant's telephone number, including area code) 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. July 10, 1995: 1,564,837 shares of Common stock without par value Number of pages comprising this report 12 TABLE OF CONTENTS Part I FINANCIAL INFORMATION Item 1 Financial Statements Condensed Consolidated Balance Sheet 3 Condensed Consolidated Statement of Operations 4 Condensed Consolidated Statement of Cash Flows 5 Condensed Consolidated Statement of Changes in Stockholders' Equity 6 Notes to the Financial Statements 6 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II OTHER INFORMATION Item 1 Legal Proceedings None Item 2 Changes in Securities None Item 3 Defaults Upon Senior Securities None Item 4 Submission of Matters to a Vote of Security Holders 11 Item 5 Other Information None Item 6 Exhibits and Reports on Form 8-K None SIGNATURES 12 American Bancorporation and Subsidiaries CONSOLIDATED BALANCE SHEET June 30, December 31, 1995 1994 1994 ASSETS Cash and due from banks $ 10,891,882 $ 9,701,590 $ 10,704,396 Interest-earning deposits and Federal funds sold 4,445,860 18,363,000 3,924,000 Securities available for sale 4,479,931 2,463,875 3,484,431 Investment securities 72,915,899 80,814,978 78,189,252 Loans, net of unearned income 242,611,223 152,549,717 228,865,744 Less allowance for loan losses 3,828,670 3,384,901 3,736,994 238,782,553 149,164,816 225,128,750 Premises and equipment - net 8,669,129 7,875,050 8,672,714 Accrued interest receivable 2,025,456 1,538,892 2,018,778 Excess of cost over net assets purchased 1,947,822 1,217,286 2,065,475 Other assets 5,304,441 3,072,162 3,927,839 TOTAL ASSETS $349,462,973 $274,211,649 $338,115,635 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits Non-interest bearing $ 31,937,884 $ 27,822,146 $ 31,208,913 Interest bearing 262,517,484 217,434,205 261,131,744 TOTAL DEPOSITS 294,455,368 245,256,351 292,340,657 Short-term borrowings 22,226,356 1,415,704 13,398,181 Accrued interest payable 1,254,111 832,716 1,011,323 Other liabilities 3,430,453 1,700,475 3,172,455 Long-term debt 1,000,000 - 2,000,000 TOTAL LIABILITIES 322,366,288 249,205,246 311,922,616 STOCKHOLDERS' EQUITY Preferred stock - - - Common stock without par value, stated value $5, authorized 6,500,000 shares, issued and outstanding 1,564,837 at June 30, 1995 and December 31, 1994, and 1,506,612 at June 30, 1994 7,824,185 7,533,060 7,824,185 Additional paid-in capital 10,301,982 9,753,871 10,301,982 Retained earnings 8,769,018 7,407,472 7,806,852 Unrealized gain on securities available for sale 201,500 312,000 260,000 TOTAL STOCKHOLDERS' EQUITY 27,096,685 25,006,403 26,193,019 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $349,462,973 $274,211,649 $338,115,635 American Bancorporation and Subsidiaries CONSOLIDATED STATEMENT OF OPERATIONS Quarter ended June 30, Six Months ended June 30, 1995 1994 1995 1994 INTEREST INCOME Loans $ 5,516,957 $ 3,423,137 $ 10,762,540 $ 6,820,786 Investment securities Taxable interest income 1,032,235 1,150,950 2,092,151 2,356,793 Non-taxable interest income 36,446 40,945 73,723 85,672 1,068,681 1,191,895 2,165,874 2,442,465 Other short-term investments 93,094 185,361 175,574 269,327 Total interest income 6,678,732 4,800,393 13,103,988 9,532,578 INTEREST EXPENSE Deposits 2,436,196 1,678,110 4,715,090 3,388,698 Borrowed funds 364,969 7,054 706,494 14,648 Total interest expense 2,801,165 1,685,164 5,421,584 3,403,346 NET INTEREST INCOME 3,877,567 3,115,229 7,682,404 6,129,232 PROVISION FOR LOAN LOSSES 45,000 45,000 90,000 125,000 Net interest income after provision for loan losses 3,832,567 3,070,229 7,592,404 6,004,232 OTHER INCOME Service charges on deposit accounts 181,825 164,868 332,436 323,273 Securities gains (losses) (106) - (106) 2,634 Insurance commissions 32,509 23,810 63,289 54,719 Other income 205,571 49,485 405,102 113,302 Total other income 419,799 238,163 800,721 493,928 OTHER EXPENSE Salaries and employee benefits 1,307,106 1,071,800 2,703,871 2,174,083 Occupancy and equipment expense 507,383 475,376 1,040,662 935,894 Other expenses 1,237,797 959,977 2,390,051 1,931,921 Total other expense 3,052,286 2,507,153 6,134,584 5,041,898 Income before income taxes 1,200,080 801,239 2,258,541 1,456,262 PROVISION FOR INCOME TAXES 438,566 300,554 826,924 543,254 NET INCOME $ 761,514 $ 500,685 $ 1,431,617 $ 913,008 Average Shares Outstanding 1,564,837 1,506,612 1,564,837 1,506,612 NET INCOME PER SHARE $ 0.49 $ 0.33 $ 0.91 $ 0.61 American Bancorporation and Subsidiaries CONSOLIDATED STATEMENT OF CASH FLOWS Six months ended June 30, 1995 1994 Operating Activities: Net Income $ 1,431,617 $ 913,008 Charges to operations not using (using) cash in the current period (440,502) 213,060 Net cash provided by operating activities 991,115 1,126,068 Investing Activities: Proceeds from maturities of investment securities 8,134,750 16,355,000 Proceeds from repayment of investment securities 2,593,433 12,110,806 Proceeds from sales of securities available for sale - 3,017,375 Proceeds from redemption of investment securities available for sale 754,100 - Purchase of securities available for sale (1,808,100) - Purchase of investment securities (5,434,656) (20,433,709) Net change in loans (13,743,803) (2,310,747) Purchase of premises and equipment (290,048) (280,473) Net cash provided by (applied to) investing activities (9,794,324) 8,458,252 Financing Activities: Net increase in non-interest bearing demand deposits 728,971 1,901,536 Net increase (decrease) in interest bearing demand and savings deposits (12,068,374) (1,551,459) Net increase (decrease) in certificates of deposit 13,454,114 (3,133,437) Net increase (decrease) in short-term borrowings 8,828,175 (193,043) Principal repayment of long-term debt (1,000,000) - Cash dividends paid (430,331) (376,653) Net cash provided by (applied to) financing activities 9,512,555 (3,353,056) Net Increase in Cash and Cash Equivalents 709,346 6,231,264 Cash and Cash Equivalents Beginning Balance 14,628,396 21,833,326 Cash and Cash Equivalents Ending Balance $15,337,742 $28,064,590 American Bancorporation and Subsidiaries CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY Six months ended June 30, 1995 and 1994 1995 1994 Balance at January 1, $26,193,019 $24,158,048 Net Income 1,431,617 913,008 Dividends declared ($0.30 per share 1995, $0.25 per share 1994) (469,451) (376,653) Unrealized gain/(loss) on securities available for sale (58,500) 312,000 Balance at June 30, $27,096,685 $25,006,403 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The unaudited interim condensed consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary to a fair presentation of the financial position and results of operations. All adjustments are of a normal recurring nature. The notes to the financial statements contained in the 1994 Annual Report to Stockholders should be read in conjunction with these statements. NOTE A - NEW FINANCIAL ACCOUNTING STANDARD ISSUED In May, 1995 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 122, "Accounting for Mortgage Servicing Rights". SFAS No. 122 amends SFAS No. 65 "Accounting for Certain Mortgage Banking Activities" by requiring that a mortgage banking enterprise that acquires mortgage servicing rights through either the purchase or origination of mortgage loans recognize those rights as separate assets by allocating the total cost of the mortgage loans to the mortgage servicing rights and the loans (without the mortgage servicing rights) based on their relative fair values. In addition, SFAS No. 122 requires that a mortgage banking enterprise assess its capitalized mortgage servicing rights for impairment based on the fair value of those rights. The standard will be applied prospectively in 1996. Management does not believe that adoption will have a material effect on the Company's financial statements. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS SUMMARY American Bancorporation (the "Company") recognized net income of $1,432,000 ($0.91 per share) for the six months ended June 30, 1995, compared to net income of $913,000 ($0.61 per share) for the six months ended June 30, 1994. The Company's assets totalled $349,463,000 at June 30, 1995, compared to $274,212,000 at June 30, 1994. The following is a discussion of significant factors influencing operating performance and change in financial position during the interim periods presented. The discussion should be read in connection with the 1994 Annual Report and the financial statements appearing elsewhere herein. RESULTS OF OPERATIONS SIX MONTH COMPARISON Net Income. Net income for the six months ended June 30, 1995 amounted to $1,432,000, compared to $913,000 for the six months ended June 30 1994. The increase was the result of increases in net interest income and other income which were partially offset by an increase in other expenses. Net Interest Income. Net interest income before provision for loan losses for the six months ended June 30, 1995 amounted to $7,682,000, an increase of $1,553,000 or 25.3%, as compared to the six months ended June 30, 1994. The increase resulted primarily from a $68,799,000 or 27.1% increase in average interest earning assets. Interest Income. Total interest income for the six months ended June 30, 1995 amounted to $13,104,000 an increase of $3,571,000 or 37.5%, as compared to the same period in 1994. The increase resulted primarily from a $68,799,000 increase in the average volume of earning assets and a 61 basis point increase in the average yield on earning assets. Average loans outstanding increased $89,914,000 or 60.1%. Average real estate loans increased $71,240,000 or 130.5% and average commercial loans increased $13,185,000 or 29.3% and average consumer installment loans increased $5,489,000 or 11.0%. The average yield on loans decreased from 9.12% in 1994 to 8.99% in 1995. Average investment securities and other short-term investments outstanding decreased $21,115,000 or 20.2% while the average yield increased from 5.18% in 1994 to 5.60% in 1995. Interest Expense. Total interest expense for the six months ended June 30, 1995 amounted to $5,422,000, an increase of $2,018,000 or 59.3% as compared to the six months ended June 30, 1994. The increase resulted primarily from a $63,987,000 or 29.0% increase in the average volume of interest bearing liabilities and a 73 basis point increase in interest rates paid on such liabilities. Average NOW, money market and savings accounts increased $7,321,000. Average time deposits increased $34,343,000. Average noninterest bearing accounts increased $3,473,000 and represented 10.8% of average total deposits in 1995. Average borrowings increased $22,323,000. Provision for Loan Losses. The loan loss provision was $90,000 for the six months ended June 30, 1995, compared to $125,000 for the same period in 1994. Other Income. Other income amounted to $801,000 for the six months ended June 30, 1995, an increase of $307,000 or 62.1%, as compared to the same period in 1994. Other Expense. Total other expense for the six months ended June 30, 1995 amounted to $6,135,000, an increase of $1,093,000 or 21.7%, as compared to the same period in 1994. Salaries and employee benefits increased $530,000 or 24.4%. Occupancy and equipment expense increased $105,000 or 11.2 %. Other (miscellaneous) expenses increased $458,000 or 23.7%. Provision for Income Taxes. The provision for income taxes for the six months ended June 30, 1995 was $827,000 , an increase of $284,000 or 52.2% as compared to the same period in 1994. The increase was due to the increase in the Company's pre-tax income. RESULTS OF OPERATIONS QUARTER COMPARISON Net Income. Net income for the quarter ended June 30, 1995 amounted to $762,000, compared to net income of $501,000 for the quarter ended June 30, 1994. The increase was the result of increases in net interest income and other income which were partially offset by an increase in other expenses. Net Interest Income. Net interest income before provision for loan losses for the quarter ended June 30, 1995 amounted to $3,878,000, an increase of $762,000 or 24.5% as compared to the quarter ended June 30, 1994. The increase resulted primarily from a $68,660,000 or 26.9% increase in average interest earning assets. Interest Income. Total interest income for the quarter ended June 30, 1995 amounted to $6,679,000 an increase of $1,878,000 or 39.1% as compared to the same period in 1994. The increase resulted primarily from a $68,660,000 or 26.9% increase in the average volume of earning assets and a 73 basis point increase in the average yield on earning assets. Average loans outstanding increased $90,826,000 or 60.2%. Average real estate loans increased $71,472,000 or 128.6%, average commercial loans increased $12,976,000 or 28.3% and average installment loans increased $6,378,000 or 12.9%. The average yield on loans increased from 9.08% in 1994 to 9.13% in 1995. Average investment securities and other short-term investments outstanding decreased $22,166,000 or 21.2% while the average yield increased from 5.27% in 1994 to 5.64% in 1995. Interest Expense. Total interest expense for the quarter ended June 30, 1995 amounted to $2,801,000, an increase of $1,116,000 or 66.2%, as compared to the three months ended June 30, 1994. The increase resulted primarily from a $64,156,000 or 29.1% increase in the average volume of interest bearing liabilities and an 88 basis point increase in interest rates paid on such liabilities. Provision for Loan Losses. The loan loss provision was $45,000 for the quarters ended June 30, 1995 and June 30, 1994. Other Income. Other income amounted to $420,000 for the quarter ended June 30, 1995, compared to $238,000 for the same period in 1994. Other Expense. Total other expense for the quarter ended June 30, 1995 amounted to $3,052,000, an increase of $545,000 or 21.7% as compared to the same period in 1994. Salaries and employee benefits increased $235,000 or 22.0%. Occupancy and equipment expense increased $32,000 or 6.7%. Other (miscellaneous) expenses increased $278,000 or 28.9%. Provision for Income Taxes. The provision for income taxes for the quarter ended June 30, 1995 was $439,000, compared to $301,000 for the same period in 1994. The increase was due to the increase in the Company's pre-tax income. ASSET QUALITY Nonperforming loans totalled $1,711,000 or 0.7% of total loans at June 30, 1995, compared to $2,590,000 or 1.1% at December 31, 1994. Nonperforming loans at June 30, 1995 consisted of nonaccrual loans totalling $581,000, 90 day delinquent loans of $419,000, and restructured loans aggregating $711,000. Other real estate held totalled $600,000 at June 30, 1995, compared to $682,000 at December 31, 1994. CAPITAL RESOURCES Stockholders' equity totalled $27,097,000 at June 30, 1995. The Company's risk-based capital ratio was 12.7%, of which 11.4% constituted common stockholder equity, while risk-based capital ratios for the Company's two bank subsidiaries, Wheeling National Bank and Columbus National Bank, were 14.3% and 10.4%, respectively, with common stockholders' equity of 13.0% and 9.2%, respectively. At June 30, 1995 the Company's leverage capital ratio was 7.0%, while the leverage ratios for Wheeling National Bank and Columbus National Bank were 8.2% and 5.5%, respectively.
Three months ended June 30, Six months ended June 30, 1995 1994 1995 1994 Average Yield/ Average Yield/ Average Yield/ Average Yield/ Balance Rate Balance Rate Balance Rate Balance Rate INTEREST EARNING ASSETS (000's) (000's) (000's) (000's) Loans Commercial $ 58,880 9.95% $ 45,904 8.08% $ 58,150 10.04% $ 44,965 8.19% Real estate 127,032 8.50 55,560 8.64 125,838 8.10 54,598 8.63 Installment-net 55,694 8.87 49,316 9.53 55,541 9.15 50,052 9.58 Total loans 241,606 9.13 150,780 9.08 239,529 8.99 149,615 9.12 Investment securities Taxable 76,062 5.43 86,087 5.35 77,400 5.41 89,539 5.26 Tax-exempt 1,972 7.39 2,249 7.28 2,009 7.34 2,350 7.29 Total investment securities 78,034 5.48 88,336 5.40 9,409 5.45 91,889 5.32 Other short-term investments 4,293 8.67 16,157 4.59 4,141 8.48 12,776 4.22 Total interest earning assets $323,933 8.25 $255,273 7.52 $323,079 8.11 $254,280 7.50 INTEREST BEARING LIABILITIES Deposits NOW, Savings and MMDA $131,124 2.65% $127,408 2.54% $134,244 2.68 $126,923 2.55% Time 130,716 4.79 92,107 3.78 127,245 4.58 92,902 3.81 Total deposits 261,840 3.72 219,515 3.06 261,489 3.61 219,825 3.08 Short-term borrowings 21,758 6.30 927 3.04 22,047 5.91 891 3.29 Long-term debt 1,000 8.90 - 0.00 1,167 9.45 - 0.00 Total interest bearing liabilities $284,598 3.94 $220,442 3.06 $284,703 3.81 $220,716 3.08 MARGIN ANALYSIS (as a % of earning assets) Interest income 8.25% 7.52% 8.11% 7.50% Interest expense. . . . . 3.46 2.64 3.36 2.68 Net interest income . . . . 4.79% 4.88% 4.75 4.82%
Averages stated are month end average balances. Installment loans are stated net of unearned income. Average loans include nonaccrual loans. Yields do not reflect tax equivalent adjustments. Part II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Securities Holders The Annual Meeting of Shareholders was held May 17, 1995. Proxies were solicited pursuant to Regulation 14 of the 1934 Act. Shares represented in person or by proxy totalled 730,247 or 46.67% of the shares then outstanding. Shareholders approved by affirmative vote the following proposals: 1. To fix the number of positions for director at 9, with 2 vacancies that may be filled by the Board of Directors: Vote For: 722,412 Against: 6,656 Abstain: 1,179 2. To elect Jack O. Cartner, Paul W. Donahie and John J. Malik, Jr. directors for a three year term and to elect Robert C. Mead director for a one year term: Vote For Vote Withheld Abstain Jack O. Cartner 724,431 5,816 0 Paul W. Donahie 724,431 5,816 0 John J. Malik, Jr. 724,431 5,816 0 Robert C. Mead 724,431 5,816 0 Continuing in the position of director were the following: Term Expiring John E. Wait 1996 Jeremy C. McCamic 1997 Jolyon W. McCamic 1997 Item 6. Exhibits and Reports on Form 8-K B. Reports on Form 8-K: Date Item Description None 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. AMERICAN BANCORPORATION (Registrant) Date: August 9, 1995 /s/ Jeremy C. McCamic Jeremy C. McCamic Chairman and Chief Executive Officer Date: August 9, 1995 /s/ Brent E. Richmond Brent E. Richmond Chief Financial and Accounting Officer EX-27 2 ARTICLE 9 FDS FOR 10-Q
9 1 6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 10,891,882 0 4,445,860 0 4,479,931 72,915,899 72,089,000 242,611,223 3,828,670 349,462,973 294,455,368 22,226,356 4,684,564 1,000,000 7,824,185 0 0 19,272,500 349,462,973 10,762,540 2,165,874 175,574 13,103,988 4,715,090 5,421,584 7,682,404 90,000 (106) 6,134,584 2,258,541 1,431,617 0 0 1,431,617 0.91 0.91 475 581,000 419,000 711,000 0 0 0 0 0 0 0 0