-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HmbbmWMr1jYrNz29nU8CvttUFm7u8sTU9Gt81Kfu/EVXpcKhYN5oc5LTTwQx/NGx rkS0HNLhlrk6F3nRkrfRkQ== 0000004570-98-000009.txt : 19981123 0000004570-98-000009.hdr.sgml : 19981123 ACCESSION NUMBER: 0000004570-98-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981116 DATE AS OF CHANGE: 19981120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN BANCORPORATION /WV/ CENTRAL INDEX KEY: 0000004570 STANDARD INDUSTRIAL CLASSIFICATION: 6022 IRS NUMBER: 310724349 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-05893 FILM NUMBER: 98753523 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 10 Q FOR SEPTEMBER 30TH 1998 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 September 30, 1998 ------------------------------------------------------------ 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. October 2, 1998: 3,129,674 shares of Common stock without par value Number of pages comprising this report. . . . . . . . . 13 1 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report September 30, 1998 TABLE OF CONTENTS Part I FINANCIAL INFORMATION Item 1 Financial Statements Condensed Consolidated Balance Sheet................... 3 Condensed Consolidated Statement of Income............. 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 Item 3 Quantitative and Qualitative Disclosures about Market Risk. 12 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..................... None Item 5 Other Information........................................ None Item 6 Exhibits and Reports on Form 8-K......................... None SIGNATURES 13 2 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report September 30, 1998 American Bancorporation and Subsidiaries CONSOLIDATED BALANCE SHEET September 30, December 31, 1998 1997 1997 --------------- --------------- -------------- ASSETS Cash and due from banks......................................... $ 15,407,875 $ 11,105,723 $ 11,027,692 Interest bearing deposits in other banks.................... 274,004 - - Federal funds sold........................................... 6,178,025 5,620,155 2,414,812 Investment securities available for sale....................... 226,533,508 153,456,761 169,175,987 Loans, net of unearned income.................................. 297,794,837 288,340,212 286,691,051 Less allowance for loan losses.............................. 3,090,281 3,392,785 3,284,338 --------------- --------------- --------------- 294,704,556 284,947,427 283,406,713 Premises and equipment - net................................. 9,758,214 10,184,488 10,070,377 Accrued interest receivable.................................. 3,198,708 3,633,538 2,713,240 Excess of cost over net assets purchased..................... 1,717,333 2,052,809 1,968,940 Other assets.................................................. 5,401,010 3,903,526 3,828,711 --------------- --------------- --------------- TOTAL ASSETS................................................ $563,173,233 $474,904,427 $484,606,472 ============ ============ ============ LIABILITIES Deposits Non-interest bearing........................................ $ 34,890,606 $ 34,145,567 $ 33,512,712 Interest bearing............................................ 382,499,946 309,735,355 322,221,620 ------------- ------------ ------------ TOTAL DEPOSITS.......................................... 417,390,552 343,880,922 355,734,332 Short-term borrowings......................................... 88,921,787 90,092,198 87,574,152 Accrued interest payable.................................... 2,261,983 1,952,138 1,782,668 Other liabilities........................................... 5,484,053 5,222,991 4,396,674 Long-term debt............................................ 14,764 927,816 1,424,800 Guaranteed preferred beneficial interest in subordinated debt.......................................... 12,650,000 - - ------------------------------------------------------- TOTAL LIABILITIES.......................................... 526,723,139 442,076,065 450,912,626 STOCKHOLDERS' EQUITY Preferred stock...................................... - - - Common stock without par value, stated value $2.50, authorized 6,500,000 shares, issued and outstanding 3,129,674...................................... 7,824,185 7,824,185 7,824,185 Additional paid-in capital.................................. 10,301,982 10,301,982 10,301,982 Retained earnings........................................... 17,553,511 14,128,088 14,965,228 Accumulated other comprehensive income, net of income tax.................................... 770,416 574,107 602,451 ---------------- ---------------- ---------------- TOTAL STOCKHOLDERS' EQUITY................................. 36,450,094 32,828,362 33,693,846 -------------- -------------- -------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............................... $563,173,233 $474,904,427 $484,606,472 ============ ============ ============
3 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report September 30, 1998 American Bancorporation and Subsidiaries CONSOLIDATED STATEMENT OF INCOME Quarter Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 -------------- -------------- ---------------- -------------- INTEREST INCOME Loans................................................. $ 6,517,169 $ 6,335,266 $19,200,532 $18,442,153 Investment securities Taxable interest income............................ 3,496,296 2,566,404 9,738,783 7,564,434 Non-taxable interest income....................... 89,346 21,624 135,360 68,978 -------------- -------------- --------------- --------------- 3.585,642 2,588,028 9,874,143 7,633,412 Other short-term investments....................... 259,443 83,603 589,527 264,436 ------------- -------------- --------------- --------------- Total interest income.............................. 10,362,254 9,006,897 29,664,202 26,340,001 INTEREST EXPENSE Deposits............................................ 4,713,715 3,401,212 12,878,353 9,522,400 Borrowed funds....................................... 1,519,812 1,245,475 4,184,090 3,856,644 ------------ ------------ --------------- ---------------- Total interest expense............................. 6,233,527 4,646,687 17,062,443 13,379,044 ------------ ------------ --------------- ---------------- NET INTEREST INCOME............................. 4,128,727 4,360,210 12,601,759 12,960,957 PROVISION FOR LOAN LOSSES........................... 60,000 - 180,000 - --------------------------------- --------------- ---------------- Net interest income after provision for loan losses........................ 4,068,727 4,360,210 12,421,759 12,960,957 OTHER INCOME Service charges on deposit accounts................. 190,551 190,571 530,453 563,817 Securities gains (losses).......................... 141,250 (44) 628,059 4,293 Net gains on sale of loans......................... 807,108 393,677 1,740,227 902,549 Insurance commissions............................. 21,483 22,882 64,913 71,879 Other income........................................ 234,910 163,108 622,544 519,476 ------------- ------------- ---------------- ----------------- Total other income................................ 1,395,302 770,194 3,586,196 2,062,014 OTHER EXPENSE Salaries and employee benefits....................... 1,675,214 1,475,122 4,864,479 4,328,362 Occupancy and equipment expense..................... 610,675 598,028 1,809,126 1,795,405 Other expenses....................................... 1,363,619 1,241,124 3,954,308 3,717,165 ------------ ------------ ---------------- ----------------- Total other expense................................ 3,649,508 3,314,274 10,627,913 9,840,932 ------------ ------------ ---------------- ----------------- INCOME BEFORE INCOME TAXES............................ 1,814,521 1,816,130 5,380,042 5,182,039 PROVISION FOR INCOME TAXES........................... 499,228 651,116 1,524,241 1,901,581 ------------- ------------- ---------------- ----------------- NET INCOME............................................. $ 1,315,293 $ 1,165,014 $ 3,855,801 $ 3,280,458 ============= ============= ================ ================ Average Shares Outstanding.......................... 3,129,674 3,129,674 3,129,674 3,129,674 BASIC EARNINGS PER SHARE ................. $ 0.42 $ 0.37 $ 1.23 $ 1.05
4 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report September 30, 1998 American Bancorporation and Subsidiaries CONSOLIDATED STATEMENT OF CASH FLOWS Nine months ended September 30, 1998 1997 ------------- ---------- Operating Activities: Net Income ......................................... $3,855,801 $3,280,458 Adjustments to reconcile net income to net cash from operating activities: Depreciation ....................................... 640,173 615,892 Amortization of intangibles ........................ 251,607 251,607 Net amortization of premium on investment securities 545,424 218,836 Provision for loan losses .......................... 180,000 -- Net gain on sale of investment securities .......... (628,059) (4,293) Net gain on sale of loans .......................... (1,740,227) (902,549) Change in assets and liabilities net of effects from the purchase of branch assets: Net increase in accrued interest receivable ........... (485,468) (648,216) Net increase in accrued interest payable .............. 479,315 463,139 Net (increase) decrease in other assets ............... (586,684) 1,679,464 Net increase in other liabilities ..................... 898,123 147,577 Net increase (decrease) from other operating activities (219,705) 249,017 ---------- ---------- Net cash provided by operating activities ........ 3,190,300 5,350,932 Investing Activities: Investment securities available for sale: Proceeds from maturities and repayments 101,034,116 25,585,188 Proceeds from sales ................... 6,377,464 46,746,234 Purchases ............................. (164,376,191) (82,031,056) Net increase in loans ...................... (9,737,616) (16,158,819) Purchase of premises and equipment ......... (329,010) (1,069,500) Proceeds from sale of premises and equipment 1,000 -- ------------ ----------- Net cash used by investing activities .. (67,030,237) (26,927,953) Financing Activities: Net increase (decrease) in non-interest bearing demand deposits....................... 1,377,894 (2,598,749) Net decrease in interest bearing demand and savings deposits........... (4,136,850) (9,291,309) Net increase in time deposits............. 64,415,176 35,960,162 Net increase (decrease) in short-term borrowings 1,347,635 (14,003,845) Principal repayment of long-term debt..... (2,410,037) (9,865) Proceeds from issuance of long-term debt.. 12,884,091 - Cash dividends paid....................... (1,220,572) (1,173,628) -------------- ------------ Net cash provided by financing activities.. 72,257,337 8,882,766 -------------- ------------ Net Increase (Decrease) in Cash and Cash Equivalents 8,417,400 (12,694,255) Cash and Cash Equivalents Beginning Balance...... $ 13,442,504 $ 29,420,133 ------------- ------------ Cash and Cash Equivalents Ending Balance......... $ 21,859,904 $ 16,725,878 ============= ============ 5 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report September 30, 1998 American Bancorporation and Subsidiaries CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY Nine months ended September 30, 1998 and 1997 1998 1997 --------------- ------------ Balance at January 1,................... $33,693,846 $30,422,694 Net Income............................. 3,855,801 3,280,458 Dividends declared ($.405 per share 1998, $0.375 per share 1997)............ (1,267,518) (1,173,628) Other comprehensive income............. 167,965 298,838 --------------- ------------ Balance at September 30,................ $36,450,094 $32,828,362 =============== ============ 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 1997 Annual Report to Stockholders should be read in conjunction with these statements. NOTE A - ADOPTION OF FINANCIAL ACCOUNTING STANDARDS On January 1, 1998 the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 129, "Disclosure of Information about Capital Structure." SFAS No. 129 summarizes previously issued disclosure guidance contained with Accounting Principles Board ("APB") Opinion Nos. 10 and 15 as well as SFAS No. 47. There were no material changes to the Company's disclosures pursuant to the adoption of SFAS No. 129. On January 1, 1998 the Company adopted SFAS No. 130, "Reporting Comprehensive Income". SFAS No. 130 established standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income is defined as "the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners." The comprehensive income and related cumulative equity impact of comprehensive income items is required to be disclosed prominently as part of the notes to the financial statements. Only the impact of unrealized gains or losses on securities available for sale is disclosed as an additional component of the Company's income under the requirements of SFAS No. 130. 6 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report September 30, 1998 Amounts included in comprehensive income are as follows for the quarter ended September 30, 1998 and 1997 and the nine months ended September 30, 1998 and 1997, respectively: Quarter ended Nine months ended September 30, September 30, ------------------------ -------------------------- 1998 1997 1998 1997 ---------- ---------- ----------- ----------- Net Income .......... $ 1,315,293 $ 1,165,014 $ 3,855,801 $ 3,280,458 Other comprehensive income, net of tax Unrealized gains on securities: Unrealized holding gain arising during the period 454,588 596,343 375,416 550,853 Reclassification adjustment for gains included in net income (38,750) (639) (207,451) (252,015) ---------- ----------- ----------- ----------- Other comprehensive income.. 415,838 595,704 167,965 298,838 ---------- ----------- ----------- ----------- Comprehensive income .....$ 1,731,131 $ 1,760,718 $ 4,023,766 $ 3,579,296 =========== =========== =========== =========== MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS INTRODUCTION The discussion and analysis, when read in conjunction with the consolidated financial statements and accompanying notes, is designed to provide information relevant to an assessment of financial performance and management's perception of significant events. 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 1997 Annual Report and the financial statements appearing elsewhere herein. SUMMARY American Bancorporation (the "Company") recognized net income of $3,856,000 or $1.23 basic earnings per share for the nine months ended September 30, 1998, compared to net income of $3,280,000 or $1.05 basic earnings per share for the nine months ended September 30, 1997. Return on average assets and return on average equity were 0.96% and 14.6%, respectively, for the nine months ended September 30, 1998 compared to 0.94% and 14.0%, respectively, for the nine months ended September 30, 1997. Total assets at September 30, 1998 increased to $563,173,000, from $474,904,000 at September 30, 1997, an increase of 18.6%. Deposits increased to $417,391,000 at September 30, 1998, from $343,881,000 at September 30, 1997, an increase of 21.4%. Total stockholders' equity was $36,450,000 at September 30, 1998, which represents an 11.0% increase over total stockholders' equity of $32,828,000 at September 30, 1997. 7 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report September 30, 1998 RESULTS OF OPERATIONS NINE MONTH COMPARISON Net Income. Net income for the nine months ended September 30, 1997 amounted to $3,856,000, or $1.23 basic earnings per share, compared to $3,280,000 or $1.05 basic earnings per share for the nine months ended September 30, 1997. The increase was the result of an increase in other noninterest income which was partially offset by increases in other noninterest expense and provision for loan losses and a decrease in net interest income. Net Interest Income. Net interest income before provision for loan losses for the nine months ended September 30, 1998 amounted to $12,602,000, a decrease of $359,000 or 2.8%, compared to the nine months ended September 30, 1997. The decrease resulted primarily from a 66 basis point decrease in the Company's margin which was partially offset by a $72,089,000 or 16.6% increase in average interest earning assets. Total interest income for the nine months ended September 30, 1998 amounted to $29,664,000, an increase of $3,324,000 or 12.6%, compared to the same period in 1997. The increase resulted primarily from a $72,089,000 increase in the average volume of earning assets offset by a 27 basis point decrease in the average yield on earning assets. Average loans outstanding increased $10,893,000 or 3.9%. Average commercial loans increased $6,055,000 or 6.6%, average real estate loans increased $2,585,000 or 1.8%, and average consumer installment loans increased $2,253,000 or 4.7%. The average yield on loans increased from 8.80% in 1997 to 8.82% in 1998. Average investment securities and other short-term investments outstanding increased $61,196,000 or 39.3%, while the average yield decreased from 6.76% in 1997 to 6.43% in 1998. Total interest expense for the nine months ended September 30, 1998 amounted to $17,062,000, an increase of $3,683,000 or 27.5% compared to the nine months ended September 30, 1997. The increase resulted primarily from a $67,291,000 or 17.1% increase in the average volume of interest bearing liabilities and a 40 basis point increase in interest rates paid on such liabilities. Average NOW, money market and savings accounts decreased $5,165,000. Average time deposits increased $69,373,000. Average noninterest bearing accounts increased $907,000 and represented 8.6% of average total deposits in 1998. Average short-term borrowings decreased $5,082,000 or 5.5% and the average rate paid on short-term borrowings increased from 5.46% in 1997 to 5.55% in 1998. Provision for Loan Losses. The loan loss provision for the nine months ended September 30, 1998 was $180,000. There was no loan loss provision for the nine months ended September 30, 1997. Other Income. Other income for the nine months ended September 30, 1998 amounted to $3,586,000, an increase of $1,524,000 or 73.9%. Net gains on sale of loans totalled $1,740,000 for the nine months ended September 30, 1998, including a $297,000 gain on the sale of the Company's credit card portfolio, compared to net gains of $903,000 for the same period in 1997. The remainder of the increase is primarily the result of increased residential mortgage loans generated for sale to secondary markets by the Company. Net gains on sale of investment securities totalled $628,000 in 1998 primarily the result of liquidating a majority of the Company's SLMA preferred stock portfolio, compared to $4,000 in 1997. 8 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report September 30, 1998 Other Expense. Total other expense for the nine months ended September 30, 1998 amounted to $10,628,000, an increase of $787,000 or 8.0%, compared to the same period in 1997. Salaries and employee benefits increased $536,000 or 12.4%. Occupancy and equipment expense increased $14,000 or 0.1%. Other (miscellaneous) expenses increased $237,000 or 6.4%. Provision for Income Taxes. The provision for income taxes for the nine months ended September 30, 1998 was $1,524,000, compared to $1,902,000 for the nine months ended September 30, 1997. RESULTS OF OPERATIONS QUARTER COMPARISON Net Income. Net income for the quarter ended September 30, 1998 amounted to $1,315,000, compared to net income of $1,165,000 for the quarter ended September 30, 1997. The increase was primarily the result of an increase in noninterest income, which was partially offset by increases in other noninterest expense and provision for loan losses and a decrease in net interest income. Net Interest Income. Net interest income before provision for loan losses for the quarter ended September 30, 1998 amounted to $4,129,000, a decrease of $231,000 or 5.3%, compared to the quarter ended September 30, 1997. The decrease resulted primarily from an 83 basis point decrease in the Company's margin which was partially offset by an $87,307,000 or 19.8% increase in average interest earning assets. Total interest income for the quarter ended September 30, 1998 amounted to $10,362,000, an increase of $1,355,000 or 15.0%, compared to the same period in 1997. The increase resulted primarily from an $87,307,000 or 19.8% increase in the average volume of earning assets offset by a 32 basis point decrease in the average yield on earning assets. Average loans outstanding increased $10,456,000 or 3.7%. Average commercial loans increased $7,155,000 or 7.7%, average installment loans increased $3,255,000 or 6.8%, and average real estate loans increased $46,000. The average yield on loans decreased from 8.91% in 1997 to 8.84% in 1998. Average investment securities and other short-term investments outstanding increased $76,851,000 or 48.9%, while the average yield decreased from 6.80% in 1997 to 6.57% in 1998. Total interest expense for the quarter ended September 30, 1998 amounted to $6,234,000, an increase of $1,587,000 or 34.1%, compared to the same period in 1997. The increase resulted primarily from a $84,790,000 or 21.4% increase in the average volume of interest bearing liabilities and a 50 basis point increase in interest rates paid on such liabilities. Provision for Loan Losses. The loan loss provision for the quarter ended September 30, 1998 was $60,000. There was no loan loss provision for the quarter ended September 30, 1997. Other Income. Other income amounted to $1,395,000 for the quarter ended September 30, 1998, compared to $770,000 for the quarter ended September 30, 1997. Net gains on sale of loans increased $413,000 or 105.0%, primarily the result of sale of the Company's credit card portfolio. Net gain on sale of investment securities totalled $141,000 for the quarter ended September 30, 1998. 9 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report September 30, 1998 Other Expense. Total other expense for the quarter ended September 30, 1998 amounted to $3,650,000, an increase of $335,000 or 10.1%, compared to the same period in 1997. Salaries and employee benefits increased $200,000 or 13.6%. Occupancy and equipment expense increased $13,000 or 2.1%. Other (miscellaneous) expenses increased $122,000 or 9.9%. Provision for Income Taxes. The provision for income taxes for the quarter ended September 30, 1998 was $499,000, compared to $651,000 for the quarter ended September 30, 1997. ASSET QUALITY Nonperforming loans totalled $2,862,000 or 1.0% of total loans at September 30, 1998, compared to $2,658,000 or 0.9% at December 31, 1997. Nonperforming loans at September 30, 1998 consisted of nonaccrual loans totalling $1,215,000, 90 day delinquent loans of $1,165,000, and restructured loans aggregating $482,000. Other real estate held totalled $456,000 at September 30, 1998, compared to $236,000 at December 31, 1997. CAPITAL RESOURCES Stockholders' equity totalled $36,450,000 at September 30, 1998. The Company's risk-based capital ratio was 17.4%, of which 16.1% constituted common stockholder equity, while the risk-based capital ratio for the Company's bank subsidiary, Wheeling National Bank, was 15.0%, with common stockholders' equity of 13.9%. At September 30, 1998 the Company's leverage capital ratio was 8.2%, while the leverage ratio for Wheeling National Bank was 7.1%. YEAR 2000 COMPLIANCE The Company is exposed to potential losses due to business interruption or errors which could result if any of its computer systems are not modified to ensure that dates beginning in January, 2000 are not misinterpreted by the system as January, 1900. This is commonly referred to as the Year 2000 Problem ("Y2K"). A number of computer systems which are affected by Y2K are utilized by the Company to operate its day-to-day business. Most of these systems use software developed by and licensed from third party vendors, some of which have been customized by the Company, while others have been developed internally. Management has established a task force to identify all instances where the Company is not currently Y2K compliant, and to ensure that those systems are brought into compliance before the end of 1998. For software licensed from third party vendors, software upgrades have either been received or are forthcoming from those vendors. The Company has begun testing for Y2K compliance. The Company has estimated that direct costs for Y2K compliance will not be material. Y2K problems which are inherent in the regional, national and global banking and payments system are expected to be brought into compliance, but are completely beyond the Company's control. 10 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report September 30, 1998
Three months ended September 30, Nine months ended September 30, 1998 1997 1998 1997 --------------- ----------------- ---------------- -------------- 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................................ $ 99,533 9.31% $ 92,378 9.61% $ 97,185 9.23% $ 91,130 9.29% Real estate............................... 144,038 8.22 143,992 8.14 142,936 8.28 140,351 8.07 Installment-net.......................... 51,241 8.47 47,986 8.81 50,249 8.44 47,996 8.83 ----------- ---------- --------- ---------- Total loans ............................. 294,812 8.84 284,356 8.91 290,370 8.82 279,477 8.80 Investment securities Taxable................................... 213,157 6.56 153,301 6.70 202,803 6.40 151,423 6.66 Tax-exempt............................... 10,096 3.54 1,028 8.41 4,109 4.39 1,109 8.30 ----------- ----------- --------- ----------- Total investment securities.............. 223,253 6.42 154,329 6.71 206,912 6.36 152,532 6.67 Other short-term investments.............. 10,704 9.69 2,777 12.04 9,962 7.89 3,146 11.21 ---------- --------- ---------- ---------- Total interest earning assets............ $528,769 7.84 $441,462 8.16 $507,244 7.80 $435,155 8.07 ======== ======== ======== ======== INTEREST BEARING LIABILITIES Deposits NOW, Savings and MMDA..................... $117,373 2.80% $122,804 2.73% $119,689 2.71% $124,854 2.67% Time..................................... 265,905 5.85 185,189 5.54 243,601 5.72 174,228 5.38 --------- ---------- -------- ---------- Total deposits.......................... 383,278 4.92 307,993 4.42 363,290 4.73 299,082 4.25 Short-term borrowings.................... 84,825 5.85 87,058 5.63 87,689 5.55 92,771 5.46 Long-term debt........................... 12,666 8.84 928 8.58 9,097 7.86 932 8.44 ---------- ------------ -------- ---------- Total interest bearing liabilities....... $480,769 5.19 $395,979 4.69 $460,076 4.94 $392,785 4.54 ======== ======== ======== ======== MARGIN ANALYSIS (as a % of earning assets) Interest income................... 7.84% 8.16% 7.80% 8.07% Interest expense................... 4.72 4.21 4.49 4.10 ---- ---- ---- ---- Net interest income............... 3.12% 3.95% 3.31% 3.97% ===== ==== ==== ==== 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.
11 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report September 30, 1998 Item 3. Quantitative and Qualitative Disclosures about Market Risk Quantitative and qualitative disclosures about market risk are presented at December 31, 1997 in Item 7a. of the Company's Annual Report on Form 10-K, filed with the SEC on March 31, 1998. Management believes there have been no material changes in the Company's market risk since December 31, 1997. Part II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K B. Reports on Form 8-K: Date Item Description None 12 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 November 16, 1998 /s/ Jeremy C. McCamic - - ---------------------- --------------------- Jeremy C. McCamic Chairman and Chief Executive Officer Date November 16, 1998 /s/ Brent E. Richmond - - ----------------------- --------------------- Brent E. Richmond Chief Financial and Accounting Officer 13 EX-27 2 ARTICLE 9 FDS FOR 10-Q
9 1,000 9-MOS DEC-31-1998 SEP-30-1998 15,407,875 274,004 6,178,025 0 226,533,508 0 226,533,508 297,794,837 3,090,281 563,173,233 417,390,552 88,921,787 7,746,036 12,664,764 7,824,185 0 0 28,625,909 563,173,233 19,200,532 9,874,143 589,527 29,664,202 12,878,353 4,184,090 12,601,759 180,000 628,059 10,627,913 5,380,042 3,855,801 0 0 3,855,801 1.23 1.23 0331 1,215,000 1,165,000 482,000 0 0 0 0 0 0 0 0
-----END PRIVACY-ENHANCED MESSAGE-----