-----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, JR0VUNLxKQZy7bj2bXXiZ+b7uR64iINTBFSMy53LtYAJ1NmO+uLlq0LHIjLPayuX H+4nL6MdfgDTmXMQvyS+2A== 0000004570-99-000005.txt : 19990517 0000004570-99-000005.hdr.sgml : 19990517 ACCESSION NUMBER: 0000004570-99-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 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: SEC FILE NUMBER: 000-05893 FILM NUMBER: 99621465 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 10Q 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 March 31, 1999 -------------------------------------------------------- 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. April 2, 1999: 3,129,674 shares of Common stock without par value Number of pages comprising this report. . . . . . . . . 12 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report March 31, 1999 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... 11 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 12 2 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report March 31, 1999 American Bancorporation and Subsidiaries
CONSOLIDATED BALANCE SHEET March 31, December 31, 1999 1998 1998 ASSETS Cash and due from banks ................... $ 15,208,281 $ 12,096,053 $ 12,316,176 Federal funds sold ........................ 8,096,025 6,291,000 17,747,025 Investment securities available for sale .. 300,929,464 192,433,075 263,827,239 Loans, net of unearned income ............. 307,900,341 287,828,127 300,621,884 Less allowance for loan losses .......... 3,028,522 3,218,426 3,042,269 ------------- ------------- ------------- 304,871,819 284,609,701 297,579,615 Due from broker ........................... 17,081,291 -- -- Premises and equipment - net .............. 9,700,257 9,981,773 9,735,582 Accrued interest receivable ............... 4,064,177 3,350,624 3,393,337 Excess of cost over net assets purchased .. 1,564,013 1,885,071 1,633,464 Other assets .............................. 6,684,211 4,787,968 5,173,024 ------------- ------------- ------------- TOTAL ASSETS ......................... $ 668,199,538 $ 515,435,265 $ 611,405,462 ============= ============= ============= LIABILITIES Deposits Non-interest bearing ................... $ 36,682,582 $ 33,494,284 $ 39,497,617 Interest bearing ....................... 393,648,852 349,756,791 391,742,578 ------------- ------------- ------------- TOTAL DEPOSITS ..................... 430,331,434 383,251,075 431,240,195 Short-term borrowings .................... 165,223,065 88,257,113 123,891,183 Due to broker ............................. 16,026,227 -- -- Accrued interest payable ................. 2,375,242 1,808,684 2,306,854 Other liabilities ........................ 5,240,622 5,351,214 4,858,495 Long-term debt ........................... 7,609 2,020,541 11,242 Company obligated mandatorily redeemable trust preferred securities of subsidiary trust holding solely junior subordinated debentures of the Company 12,650,000 -- 12,650,000 ------------- ------------- ------------ TOTAL LIABILITIES ...................... 631,854,199 480,688,627 574,957,969 STOCKHOLDERS' EQUITY Preferred stock ........................... -- -- -- Common stock without par value, stated value $5, 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 ........................ 19,245,310 15,827,526 18,430,141 Accumulated other comprehensive income, (loss) net of income tax ............. (1,026,138) 792,945 (108,815) ------------- ------------- ------------- TOTAL STOCKHOLDERS' EQUITY ............. 36,345,339 34,746,638 36,447,493 ------------- ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ......... $ 668,199,538 $ 515,435,265 $ 611,405,462 ============= ============= =============
3 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report March 31, 1999 American Bancorporation and Subsidiaries CONSOLIDATED STATEMENT OF INCOME Three Months ended March 31, 1999 1998 ----------- ----------- INTEREST INCOME Loans ............................. $ 6,486,015 $ 6,305,911 Investment securities Taxable interest income .......... 3,756,007 2,917,727 Non-taxable interest income ...... 545,879 22,771 ----------- ----------- 4,301,886 2,940,498 Short-term investments ............ 123,373 81,445 ----------- ----------- Total interest income ........... 10,911,274 9,327,854 INTEREST EXPENSE Deposits .......................... 4,445,526 3,843,092 Borrowed funds .................... 2,162,026 1,221,436 ----------- ----------- Total interest expense .......... 6,607,552 5,064,528 ----------- ----------- NET INTEREST INCOME ........... 4,303,722 4,263,326 PROVISION FOR LOAN LOSSES .......... 75,000 60,000 ----------- ----------- Net interest income after provision for loan losses ...... 4,228,722 4,203,326 OTHER INCOME Service charges on deposit accounts 172,265 166,980 Securities gains .................. 267,812 156,000 Net gains on sale of loans ........ 185,582 459,055 Insurance commissions ............. 19,044 20,148 Other income ...................... 354,937 194,231 ----------- ----------- Total other income .............. 999,640 996,414 OTHER EXPENSE Salaries and employee benefits .... 1,772,794 1,595,115 Occupancy and equipment expense ... 633,692 580,955 Other expenses .................... 1,235,864 1,215,706 ----------- ----------- Total other expense ............. 3,642,350 3,391,776 ----------- ----------- INCOME BEFORE INCOME TAXES ......... 1,586,012 1,807,964 PROVISION FOR INCOME TAXES ......... 301,392 554,457 ----------- ----------- NET INCOME ......................... $ 1,284,620 $ 1,253,507 =========== =========== Average Shares Outstanding ....... 3,129,674 3,129,674 BASIC EARNINGS PER SHARE ....... $ 0.41 $ 0.40 4 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report March 31, 1999 American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS Three months ended March 31, 1999 1998 Operating Activities: Net Income ................................................. $ 1,284,620 $ 1,253,507 Adjustments to reconcile net income to net cash from operating activities: Depreciation .............................................. 216,623 207,446 Amortization of intangibles ............................... 69,451 83,869 Net amortization of premium on investment securities ...... 337,493 152,850 Provision for loan losses ................................. 75,000 60,000 Net gain on sale of investment securities ................. (267,812) (156,000) Net gain on sale of loans ................................. (185,582) (459,055) Change in assets and liabilities net of effects from the purchase of branch assets: Net increase in accrued interest receivable ............... (670,840) (637,384) Net increase in accrued interest payable .................. 68,388 26,016 Real estate mortgage loans originated for sale ............ (26,493,845) (29,691,971) Proceeds from sale of real estate mortgage loans .......... 26,138,924 30,147,069 Net increase in other assets .............................. (737,288) (433,486) Net increase in other liabilities ......................... 382,127 1,039,876 Net decrease from other operating activities .............. (162,966) (525,770) ------------ ------------ Net cash provided by operating activities ............. 54,293 611,869 Investing Activities: Investment securities available for sale: Proceeds from maturities and repayments .............. 27,988,859 33,682,122 Proceeds from sales .................................. -- 576,000 Purchases ............................................ (67,744,083) (57,406,903) Change in loans, net of real estate mortgage loans originated for sale ............................... (6,826,701) (1,259,031) Purchase of premises and equipment ..................... (181,298) (119,842) Proceeds from sale of premises and equipment ............... -- 1,000 ------------ ------------ Net cash used by investing activities .................. (46,763,223) (24,071,556) Financing Activities: Net decrease in non-interest bearing demand deposits ....... (2,815,035) (18,428) Net increase in interest bearing demand and savings deposits 73,875 1,646,547 Net increase in time deposits .............................. 1,832,399 25,888,624 Net increase (decrease) in short-term borrowings ........... 41,331,882 682,961 Issuance (principal repayment) of long-term debt ........... (3,633) 595,741 Cash dividends paid ........................................ (469,453) (391,209) ------------ ------------ Net cash provided by financing activities ............. 39,950,035 28,404,236 ------------ ------------ Net Increase (Decrease) in Cash and Cash Equivalents ........ (6,758,895) 4,944,549 Cash and Cash Equivalents Beginning Balance .................. 30,063,201 13,442,504 ------------ ------------ Cash and Cash Equivalents Ending Balance ..................... $ 23,304,306 $ 18,387,053 ============ ============ Supplemental disclosure of cash-flow information: Non-cash investing and financial activities: Securities purchased not settled .......................... 16,026,227 -- Securities sold not settled ............................... 16,813,479 --
5 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report March 31, 1999 American Bancorporation and Subsidiaries CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY Three months ended March 31, 1999 and 1998 1999 1998 ------------ ------------ Balance at January 1, .................... $ 36,447,493 $ 33,693,846 Comprehensive results: Net Income .............................. 1,284,620 1,253,507 Other comprehensive income, net of tax .. (719,971) 236,994 Reclassification adjustment, net of tax . (197,352) (46,500) ------------ ------------ Total comprehensive results ............. 367,297 1,444,001 Dividends declared ($0.15 per share 1999, $0.125 per share 1998) ............. (469,451) (391,209) ------------ ------------ Balance at March 31, ..................... $ 36,345,339 $ 34,746,638 ============ ============ 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 1998 Annual Report to Stockholders should be read in conjunction with these statements. Certain prior period amounts have been reclassified to conform to the current period classification. 6 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report March 31, 1999 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 1998 Annual Report and the financial statements appearing elsewhere herein. SUMMARY American Bancorporation (the "Company") recognized net income of $1,285,000 or $0.41 basic earnings per share, for the three months ended March 31, 1999, compared to net income of $1,254,000 or $0.40 basic earnings per share, for the three months ended March 31, 1998. Return on average assets and return on average equity were 0.80% and 14.02%, respectively, for the three months ended March 31, 1999 compared to 1.00% and 14.52%, respectively, for the three months ended March 31, 1998. Total assets at March 31, 1999 increased to $652,173,000, from $515,435,000 at March 31, 1998, an increase of 26.5%. Deposits increased to $430,331,000 at March 31, 1999, from $383,251,000 at March 31, 1998, an increase of 12.3%. Total stockholders' equity was $36,345,000 at March 31, 1999, which represents a 4.6% increase over total stockholders' equity of $34,747,000 at March 31, 1998. RESULTS OF OPERATIONS QUARTER COMPARISON Net Income. Net income for the three months ended March 31, 1999 amounted to $1,285,000, or $0.41 basic earnings per share, compared to net income of $1,254,000 or $0.40 basic earnings per share, for the three months ended March 31, 1998. The increase was the result of an increase in net interest income and a decrease in income taxes which was partially offset by increases in other expense and provision for loan losses. Net Interest Income. Net interest income before provision for loan losses for the three months ended March 31, 1999 amounted to $4,304,000, an increase of $40,000 or 0.9%, compared to the three months ended March 31, 1998. The increase resulted primarily from a $135,645,000 increase in average interest earning assets , which was partially offset by a 77 basis point decrease in the Company's margin. Total interest income for the three months ended March 31, 1999 amounted to $10,911,000, an increase of $1,583,000 or 17.0%, compared to the three months ended March 31, 1998. The increase resulted primarily from the increase in the average interest earning assets which was partially offset by a 72 basis point decrease in the average yield on earning assets. Average loans outstanding increased $18,720,000 or 6.5% with average commercial loans increasing $26,519,000 or 27.9%, while average real estate loans decreased $6,031,000 or 4.3% and average consumer installment loans decreased $1,767,000 or 3.6%. The average yield on loans decreased from 8.80% in 1998 to 8.50% in 1999. Average investment securities and other short-term investments outstanding increased $116,924,000 or 62.7% while the average yield decreased from 6.48% in 1998 to 5.83% in 1999. 7 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report March 31, 1999 Total interest expense for the three months ended March 31, 1999 amounted to $6,608,000, an increase of $1,543,000 or 30.5%, compared to the three months ended March 31, 1998. The increase resulted primarily from a $131,526,000 or30.83% increase in average interest bearing liabilities. Average NOW, money market and savings accounts decreased $2,114,000 or 1.8%. Average time deposits increased $55,387,000 or 25.3%, primarily the result of increased marketing efforts. Average non-interest bearing accounts increased $4,232,000 or 13.1% and represented 8.5% of average total deposits for the three months ended March 31, 1999. Average short-term borrowings increased $67,549,000 or 78.8%, while the average rate paid on short-term borrowings decreased from 5.46% in 1998 to 4.92% in 1999. Provision for Loan Losses. The loan loss provision for the three months ended March 31, 1999 was $75,000, compared to $60,000 for the same period in 1998. Other Income. Other income for the three months ended March 31, 1999 amounted to $1,000,000, an increase of $3,000 or 0.3% compared to the three months ended March 31, 1998. Net gains on sale of loans decreased $53,000 or 11.6%. Net gains on sale of investment securities totalled $268,000 in 1999, compared to $156,000 in 1998. Other Expense. Total other expense for the three months ended March 31, 1999 amounted to $3,642,000, an increase of $251,000 or 7.4%, compared to the three months ended March 31, 1998. Salaries and employee benefits increased $178,000 or 11.1%. Occupancy and equipment expense increased $53,000 or 9.1%. Other (miscellaneous) expenses increased $20,000 or 1.7%. Provision for Income Taxes. The provision for income taxes for the three months ended March 31, 1999 was $301,000, compared to $554,000 for the three months ended March 31, 1998. The decrease is primarily the result of additional tax-exempt income in 1999. 8 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report March 31, 1999 ASSET QUALITY Nonperforming loans totalled $2,730,000 or 0.9% of total loans at March 31, 1999, compared to $2,960,000 or 1.0% at December 31, 1998. Nonperforming loans at March 31, 1999 consisted of nonaccrual loans totalling $1,087,000, 90 day delinquent loans of $1,318,000, and restructured loans aggregating $325,000. Other real estate held totalled $346,000 at March 31, 1999, compared to $183,000 at December 31, 1998. CAPITAL RESOURCES Stockholders' equity totalled $36,345,000 at March 31, 1999. The Company's risk-based capital ratio was 16.1%, of which 15.0% constituted common stockholder equity, while the risk-based capital ratio for the Company's bank subsidiary, Wheeling National Bank, was 14.7%, with common stockholders' equity of 13.7%. At March 31, 1999 the Company's leverage capital ratio was 7.6%, while the leverage ratio for Wheeling National Bank was 7.0%. YEAR 2000 COMPLIANCE The Company may be 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 Issue. A number of computer systems which are affected by Year 2000 are utilized by the Company to operate its day-to-day business. Management has established a task force to develop and maintain a Year 2000 Compliance Plan. The Company's Year 2000 Compliance Plan has been prepared in accordance with the Federal Financial Institutions Examination Council ("FFIEC") guidelines on Year 2000 Compliance and involves the following five phases: awareness, assessment, renovation, validation and implementation. To date, the Company has completed the awareness, assessment and renovation phases of the Year 2000 Compliance Plan. The validation/testing phase of mission critical third party hardware and software systems required by the FFIEC has been completed, noting no Year 2000 compliance issues. The Company is expected to complete the Year 2000 project no later than June 30, 1999. The Company has contacted large commercial customers and significant suppliers to determine their capability to resolve the Year 2000 issues and attain compliance. Risk ratings have been assigned to customers and suppliers. Further contact will occur based on survey results. The Company has prepared general contingency plans to address unforeseen Year 2000 issues. Contingency plans will be continuously monitored and updated as conditions change throughout 1999 and into the Year 2000. 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. 9 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report March 31, 1999 Three months ended March 31, 1999 1998 ---------------- --------------- Average Yield/ Average Yield/ Balance Rate Balance Rate INTEREST EARNING ASSETS (000's) (000's) Loans Commercial........................ $121,725 8.57% $ 95,206 9.11% Real estate....................... 135,878 8.14 141,910 8.33 Installment-net.................. 47,714 8.39 49,481 8.42 -------- -------- Total loans ................... 305,317 8.50 286,597 8.80 Investment securities Taxable........................... 247,215 6.08 181,246 6.44 Tax-exempt....................... 47,244 4.62 1,089 8.37 -------- --------- Total investment securities ... 294,459 5.84 182,335 6.45 Other short-term investments...... 9,007 5.48 4,207 7.74 -------- --------- Total interest earning assets... $608,784 7.17 $473,139 7.88 ======== ======== INTEREST BEARING LIABILITIES Deposits NOW, Savings and MMDA............. $118,016 2.26% $120,130 2.63% Time............................. 274,184 5.51 218,797 5.58 --------- -------- Total deposits.................. 392,200 4.53 338,927 4.54 Short-term borrowings............. 153,315 4.92 85,766 5.46 Long-term debt.................... 12,659 8.71 1,955 10.17 --------- -------- Total interest bearing liabilities.......... $558,173 4.74 $426,648 4.75 ======== ======== MARGIN ANALYSIS (as a % of earning assets) Interest income.................... 7.17% 7.88% Interest expense.................... 4.34 4.28 ---- ---- Net interest income................ 2.83% 3.60% ==== ==== 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. 10 AMERICAN BANCORPORATION FORM 10-Q Quarterly Report March 31, 1999 Item 3. Quantitative and Qualitative Disclosures about Market Risk Quantitative and qualitative disclosures about market risk are presented at December 31, 1998 in Item 7a of the Company's Annual Report on Form 10-K filed with the SEC on March 31, 1999. Management believes there have been no material changes in the Company's market risk since December 31, 1998. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K B. Reports on Form 8-K: Date Item Description None 11 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 May 14, 1999 /s/ Jeremy C. McCamic ---------------------------- ------------------------ Jeremy C. McCamic Chairman and Chief Executive Officer Date May 14, 1999 /s/ Brent E. Richmond ---------------------------- ------------------------ Brent E. Richmond Executive Vice President and Chief Operating Officer Date May 14, 1999 /s/ Jeffrey A. Baran ------------------------------ ------------------------- Jeffrey A. Baran Chief Financial Officer 12 EX-27 2 ARTICLE 9 FDS FOR 10Q
9 1 DEC-31-1999 3-MOS JAN-01-1999 MAR-31-1999 14,742,876 465,405 8,096,025 0 300,929,464 0 0 307,900,341 3,028,522 668,199,538 430,331,434 165,223,065 23,642,091 12,657,609 7,824,185 0 0 28,521,154 668,199,538 6,486,015 4,301,886 123,373 10,911,274 4,445,526 6,607,552 4,303,722 75,000 267,812 3,642,350 1,586,012 1,284,620 0 0 1,284,620 0.41 0.41 0283 1,087,000 1,318,000 325,000 0 0 0 0 0 0 0 0
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