-----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, H/t3rBVMcEuRDiaEoodJ5K5gdiX4l3o+ITc+9MpCQPWI0USWiiZ8SBZmrifmjNxK vyN5c9z5YNKpSDYdFhVoRw== 0000948020-97-000006.txt : 19970613 0000948020-97-000006.hdr.sgml : 19970613 ACCESSION NUMBER: 0000948020-97-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970430 FILED AS OF DATE: 19970612 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN NATIONAL BANCORP INC CENTRAL INDEX KEY: 0000948020 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 521943817 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-26870 FILM NUMBER: 97623046 BUSINESS ADDRESS: STREET 1: 211 N LIBERTY ST CITY: BALTIMORE STATE: MD ZIP: 21201 BUSINESS PHONE: 4107520400 MAIL ADDRESS: STREET 1: 211 N LIBERTY ST CITY: BALTIMORE STATE: MD ZIP: 21201 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------- Form 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 1997 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ COMMISSION FILE NUMBER 0-26870 ------- AMERICAN NATIONAL BANCORP, INC. - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 52-1943817 - ----------------------------------- ---------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 211 North Liberty Street, Baltimore, Maryland 21201-3978 - ------------------------------------------------------------------------------ (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (410)-752-0400 -------------------------- 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 ------ ------ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No --------- --------- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Common Stock, $0.01 par value--3,613,011 shares as of May 31, 1997. AMERICAN NATIONAL BANCORP, INC. INDEX Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Financial Condition 1 at April 30, 1997 (unaudited) and July 31, 1996 Consolidated Statements of Operations (unaudited) 2 for the Three Months ended April 30, 1997 and 1996 and for the Nine months ended April 30, 1997 and 1996 Consolidated Statements of Cash Flows (unaudited) 3 for the Nine Months ended April 30, 1997 and 1996 Notes to Unaudited Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis 7 of Financial Condition and Results of Operations PART II. OTHER INFORMATION 12 AMERICAN NATIONAL BANCORP, INC. and SUBSIDIARY Consolidated Statements of Financial Condition (Unaudited)
Assets April 30, 1997 July 31, 1996 - ------------------------------------- -------------- ------------- (In thousands) Cash: On hand and due from banks $ 3,841 $ 2,671 Interest-bearing deposits 517 1,837 Federal funds sold 903 394 Securities available for sale 30,781 40,266 Investment securities 30,320 24,109 Mortgage-backed securities 102,630 100,195 Loans receivable, net 322,805 278,042 Federal Home Loan Bank stock, at cost 4,370 3,141 Investments in real estate, net 5,035 5,670 Investments in and advances to real estate joint ventures 397 1,270 Property and equipment, net 1,416 1,198 Prepaid expenses and other assets 511 612 Deferred income taxes 1,792 1,866 -------------- -------------- $ 505,318 $ 461,271 ============== ============== Liabilities and Stockholders' Equity - -------------------------------------- Liabilities: Deposits $ 329,516 $ 313,083 Borrowed funds 40,623 34,445 Advances from the Federal Home Loan Bank of Atlanta 81,323 62,824 Drafts payable 1,424 859 Advance payments by borrowers for taxes and insurance 5,699 1,760 Income taxes payable 275 - Accrued expenses and other liabilities 1,143 1,030 -------------- -------------- Total Liabilities 460,003 414,001 Stockholders' Equity: Serial preferred stock 1,000,000 shares authorized, none issued - - Common stock, $.01 par value, 8,000,000 shares authorized, 3,980,500 shares issued and 3,613,011 shares outstanding at April 30, 1997 40 40 Additional paid-in capital 30,636 30,705 Unearned common stock acquired by management recognition and retention plans (896) (77) Unearned employee stock ownership plan (ESOP) shares (1,489) (1,629) Treasury stock at cost, 367,489 shares and 199,025 shares at April 30, 1997 and July 31, 1996 respectively (4,145) (2,040) Retained income - substantially restricted 22,587 21,970 Net unrealized holding loss on securities, net of income taxes (1,418) (1,699) ------------- ------------- Total Stockholders' Equity 45,315 47,270 ------------- ------------- $ 505,318 $ 461,271 ============= =============
See accompanying notes to unaudited consolidated financial statements. -1- AMERICAN NATIONAL BANCORP, INC. and SUBSIDIARY Consolidated Statements of Operations (Unaudited)
Nine months ended April 30, 1997 1996 ----------- ---------- (In thousands, except per share data) Interest income: Loans receivable $ 19,144 $ 15,962 Mortgage-backed securities 6,288 7,436 Investment securities 1,817 764 Other 574 585 --------- --------- Total interest income 27,823 24,747 Interest expense: Deposits 11,562 11,930 Borrowed funds 4,926 3,478 --------- --------- Total interest expense 16,488 15,408 --------- --------- Net interest income 11,335 9,339 Provision for loan losses 460 562 --------- --------- Net interest income after provision for loan losses 10,875 8,777 Noninterest income: Fees and service charges 566 449 Gain (loss) on sales of: Loans receivable, net 24 16 Mortgage-backed securities, net (5) 30 Investment securities, net (53) (14) Other 112 134 --------- --------- Total noninterest income 644 615 Noninterest expenses: Salaries and employee benefits 3,503 3,228 Net occupancy 986 1,021 Professional services 326 286 Advertising 610 517 Federal deposit insurance premiums 2,405 586 Furniture, fixtures and equipment 345 226 Loss on investment in real estate 113 300 Equity in net loss of real estate joint ventures 363 112 Other 1,263 1,215 ---------- --------- Total noninterest expenses 9,914 7,491 ---------- --------- Income before income taxes 1,605 1,901 Income tax provision 539 614 ---------- ---------- Net income $ 1,066 $ 1,287 ========== ========== Earnings per common share $ 0.30 N/A ========== ========== Proforma earnings per common share N/A $ 0.40 ========== ========== Three months ended April 30, 1997 1996 ----------- ---------- (In thousands, except per share data) Interest income: Loans receivable $ 6,582 $ 5,508 Mortgage-backed securities 2,095 2,395 Investment securities 605 213 Other 200 208 --------- --------- Total interest income 9,482 8,324 Interest expense: Deposits 3,867 3,841 Borrowed funds 1,660 1,059 --------- --------- Total interest expense 5,527 4,900 --------- --------- Net interest income 3,955 3,424 Provision for loan losses 40 62 --------- --------- Net interest income after provision for loan losses 3,915 3,362 Noninterest income: Fees and service charges 177 157 Gain (loss) on sales of: Loans receivable, net 2 2 Mortgage-backed securities, net 59 13 Investment securities, net (53) (18) Other 25 56 --------- --------- Total noninterest income 210 210 Noninterest expenses: Salaries and employee benefits 1,176 1,077 Net occupancy 340 347 Professional services 119 103 Advertising 196 166 Federal deposit insurance premiums 24 182 Furniture, fixtures and equipment 119 79 Loss on investment in real estate 27 188 Equity in net loss of real estate joint ventures 226 - Other 422 410 ---------- --------- Total noninterest expenses 2,649 2,552 ---------- --------- Income before income taxes 1,476 1,020 Income tax provision 495 347 ---------- ---------- Net income $ 981 $ 673 ========== ========== Earnings per common share $ 0.28 $ 0.18 ========== ========== Proforma earnings per common share N/A N/A ========== ========== See accompanying notes to unaudited consolidated financial statements.
-2- AMERICAN NATIONAL BANCORP, INC. and SUBSIDIARY Consolidated Statements of Cash Flows (Unaudited)
Nine months ended April 30, 1997 1996 ------------- ----------- (In thousands) Cash flows from operating activities: Net income $ 1,066 $ 1,287 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 405 397 Noncash compensation under stock- based benefit plans 388 114 Amortization of loan fees (315) (303) Amortization of premiums and discounts, net 276 (154) Provision for losses on loans and investments in real estate 460 720 Loss (gain) on sales of assets, net 34 (32) Loans originated for sale (4,540) (3,258) Sales of loans originated for sale 3,163 2,801 Deferred income taxes (111) 506 Decrease (increase) in prepaid expenses and other assets 101 (23) Increase (decrease) in accrued expenses and other liabilities 113 (198) Decrease (increase) in income taxes payable 275 (270) Other, net (661) 48 ---------- ---------- Net cash provided by operating activities 654 1,635 ---------- ---------- Cash flows from investing activities: Sales of investment securities available for sale 2,947 969 Purchases of investment securities available for sale - (2,000) Repayments of mortgage-backed securities available for sale 2,860 2,502 Sales of mortgage-backed securities available for sale 6,857 41,041 Purchases of mortgage-backed securities available for sale (3,164) (10,988) Maturities of investment securities 3,000 11,000 Purchases of investment securities (9,040) (13,265) Repayments of mortgage-backed securities 3,462 6,750 Purchases of mortgage-backed securities (5,984) (19,198) Loan principal repayments 34,792 31,824 Loan originations (58,231) (58,849) Loan purchases (20,751) (11,363) Increase in deferred loan fees, net 455 442 Decrease in investments in real estate 1,134 2,722 Decrease in investments in and advances to real estate joint ventures 1,236 865 Purchases of property and equipment (623) (452) Federal Home Loan Bank stock purchases, net (1,229) - ----------- ----------- Net cash used in investing activities (42,279) (18,000) ----------- ----------- (continued) -3- AMERICAN NATIONAL BANCORP, INC. and SUBSIDIARY Consolidated Statements of Cash Flows (Unaudited) Nine months ended April 30, 1997 1996 ----------- ----------- (In thousands) Cash flows from financing activities: Net increase in deposits $ 16,433 $ 1,889 Net increase (decrease) in borrowed funds 6,178 (1,617) Proceeds from Federal Home Loan Bank advances 120,276 171,597 Repayment of Federal Home Loan Bank advances (101,777) (172,751) Increase in drafts payable 565 311 Increase in advance payments by borrowers for taxes and insurance 3,939 3,562 Proceeds from issuance of common stock, net of expenses - 21,040 Proceeds from exercise of stock options 106 - Common stock acquired by ESOP - (1,746) Cash dividends paid (324) (92) Purchase of treasury stock (2,316) - Purchase of stock to fund 1996 Recognition and Retention Plan (1,096) - ----------- ----------- Net cash provided by financing activities 41,984 22,193 ----------- ---------- Net increase in cash and cash equivalents 359 5,828 Cash and cash equivalents at beginning of period 4,902 5,360 ----------- ----------- Cash and cash equivalents at end of period $ 5,261 $ 11,188 =========== =========== Supplemental information: Interest paid on deposits and borrowed funds $ 16,450 $ 15,151 Income taxes paid, net 346 297 ========== ============ Noncash activities: Loans transferred to real estate acquired through foreclosure $ 499 $ 2,363 ========== =========== See accompanying notes to unaudited consolidated financial statements.
-4- AMERICAN NATIONAL BANCORP, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements (Unaudited) April 30, 1997 (1) Basis of Presentation ----------------------- The accompanying unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary, in the opinion of management, to fairly reflect the Company's financial position, results of operations and cash flows for the periods presented. The statements have been prepared using the accounting policies described in the July 31, 1996 Annual Financial Statements. The results of operations for the three and nine months ended April 30, 1997 are not necessarily indicative of the results which may be expected for the entire year. (2) Principles of Consolidation ---------------------------- The consolidated financial statements include the accounts of American National Bancorp, Inc., (the "Company"), and its wholly owned subsidiary, American National Savings Bank, F.S.B. (the "Bank") and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. (3) Reclassification of Prior Year's Statements ------------------------------------------- Certain amounts in the 1996 financial statements have been reclassified to conform with the 1997 presentation. (4) Securities Available For Sale ----------------------------- On August 8, 1994, the Bank transferred approximately $36.3 million of its collateralized mortgage obligations (CMO), net of unrealized loss of approximately $1.8 million, from the available for sale portfolio to held to maturity. On that date, certain accounting issues were resolved permitting the Bank to transfer substantially all of these securities from the available for sale portfolio to the held to maturity portfolio as originally intended. The unrealized loss at the time of the transfer is being amortized over the remaining lives of the securities as an adjustment of yield. The unrealized loss, net of taxes, was $1.1 million and as a component of stockholders' equity is being reduced through the amortization. (5) Earnings Per Common Share ------------------------- Earnings per share were computed by dividing net income for the three and nine months ended April 30, 1997 by the weighted average number of shares of common stock and common stock equivalents outstanding for the three months ended (3,571,856 shares) and for the nine months ended (3,574,933 shares), respectively. ESOP shares that have not been committed to be released are not considered outstanding for the computation of earnings per share in accordance with Statement of Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans" ("SOP 93-6"). Shares granted but not yet issued under the Company's stock option plans are considered common stock equivalents for earnings per share calculations. Without the one-time Federal Deposit Insurance Corporation (FDIC) special assessment, earnings per share for the nine months ended April 30, 1997 would have been income of $.68 per share. See Management's Discussion and Analysis - - Noninterest Expense. Earnings per share information for the three months ended April 30, 1996 was computed by dividing the net income for the three months ended April 30, 1996 by the weighted average number of shares of common stock outstanding during the period of 3,810,294 shares. -5- The pro forma net income per share for the nine months ended April 30, 1996 has been calculated as if the 2,182,125 shares issued had been sold on August 1, 1995. The net proceeds of the offering are assumed to have been invested at a net effective yield of 7.86%, (the approximate weighted average yield on all interest earning assets during the period from August 1, 1995 to October 31, 1995) for the period from August 1, 1995 to October 31, 1995, and income so calculated, reduced for income taxes at an assumed effective tax rate of 38.6%, was added to reported net income for the period to obtain the pro forma net income used in the calculation. (6) Dividends on Common Stock ------------------------- On April 17, 1997, the Company declared a quarterly cash dividend of $0.03 per share payable on May 16, 1997 to stockholders of record as of April 30, 1997. (7) Employee Stock Benefit Plans ---------------------------- At its Annual Meeting on November 21, 1996, stockholders approved the Company's 1996 Recognition and Retention Plan (RRP) and the 1996 Stock Option Plan (the Stock Plan). The RRP authorizes the grant of stock to directors and officers of the Company for 87,285 shares. Shares will vest at the rate of 20% of the initially awarded amount per year with the first installment being earned on the first trading day of 1998 and succeeding installments being earned on the first trading day of the following year. The Stock Plan authorized the grant of stock to directors and officers for the aggregate of 218,213 of authorized, but unissued shares. Options are exercisable at the market price at the time of grant on a cumulative basis at a rate of 20 percent per year commencing one year from the date of grant and expire 10 years from the date of grant. (8) Impact of New Accounting Standards ---------------------------------- In June 1996, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (Statement 125). Statement 125 is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after December 31, 1996 and is to be applied prospectively. This Statement requires, among other things, that the Company record at fair value, assets and liabilities resulting from a transfer of financial assets. In December 1996, Statement 127 was issued which deferred the effective date of certain provisions of Statement 125 until January 1, 1998 related to repurchase agreements, securities, lending and similar transactions. The Company adopted the provisions of Statement 125 as of January 1, 1997 and there was no significant impact on operations as a result of the adoption of this Statement. -6- AMERICAN NATIONAL BANCORP, INC. ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis covers material changes in the financial condition since July 31, 1996 and material changes in the results of operations for the three and nine months ended April 30, 1997 as compared to the same period in 1996. This discussion should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the 1996 Annual Report to Stockholders. Financial Condition - ------------------- Total assets increased by $44.0 million, or 9.5%, to $505.3 million at April 30, 1997 from $461.3 million at July 31, 1996. Assets increased primarily due to an increase in mortgage loans originated and purchased. Loans receivable increased by $44.8 million, or 16.1% to $322.8 million from $278.0 million at July 31, 1996. Mortgage-backed securities increased by $2.4 million, or 2.4%, to $102.6 million at April 30, 1997, from $100.2 million at July 31, 1996. Investment securities increased by $6.2 million, or 25.8%, to $30.3 million, at April 30, 1997, from $24.1 million at July 31, 1996. Securities available for sale decreased $9.5 million, or 23.6%, to $30.8 million at April 30, 1997 from $40.3 million at July 31, 1996 due to the sale of securities. Deposits increased by $16.4 million, or 5.2%. Borrowed funds increased by $6.2 million, or 17.9%. Advances from the Federal Home Loan Bank of Atlanta increased $18.5 million, or 29.4%. The increases are due to the funding of loan originations and loan and security purchases. Total stockholders' equity decreased by $2.0 million to $45.3 million at April 30, 1997 compared to $47.3 million at July 31, 1996. This decrease was the result of the Company repurchasing 189,074 shares of common stock for $2.3 million or $12.25 per share, the purchase of 87,285 shares of common stock in the second quarter to fund the 1996 Recognition and Retention Plan which was approved by the stockholders at the November 21, 1996 annual meeting, and quarterly dividends of approximately $324,000 for the nine months ended April 30, 1997, partially offset by a decrease in the net unrealized holding loss on securities of $281,000 and net income for the nine months of $1.1 million. Results of Operations - --------------------- The consolidated earnings of the Company depend primarily on the difference between the interest earned on its loan, mortgage-backed securities and investment portfolios and the interest paid on deposits and borrowings. This difference is known as "net interest income". The Company's net income also is affected by its provision for losses on loans and investments in real estate, as well as the amount of non-interest income, including loan fees and service charges, and non-interest expense, such as salaries and employee benefits, deposit insurance premiums, occupancy and equipment costs and income taxes. Earnings of the Company also are affected significantly by general economic and competitive conditions, particularly changes in market interest rates, government policies and actions of regulatory authorities. -7- Interest Income. Interest income totalled $9.5 million and $27.8 million for the three and nine months ended April 30, 1997, compared to $8.3 million and $24.7 million for the three and nine months ended April 30, 1996, respectively. The $1.2 million increase for the three months ended April 30, 1997 compared to the three months ended April 30, 1996 primarily resulted from a $46.6 million, or 10.5%, increase in average interest earning assets to $489.8 million for the three months ended April 30, 1997 and an increase in the yield on average interest earning assets to 7.7% for the three months ended April 30, 1997, from 7.5% for the three months ended April 30, 1996. The increase in average interest earning assets resulted from a $55.9 million, or 21.7%, increase in average loans to $314.2 million from $258.3 million; and a $19.2 million, or 137.1% increase in average investment securities to $33.2 million from $14.0 million, offset by a $28.3 million, or 17.8%, decrease in average mortgage-backed securities. The increase in the yield on interest- earning assets was due to increases in the weighted average yield on consumer loans and investment and mortgage-backed securities partially offset by decreases in the weighted average yield on mortgage loans and other interest- earning assets. The $3.1 million increase for the nine months ended April 30, 1997 was due to a $46.5 million, or 10.7%, increase in average interest earning assets to $478.8 million for the nine months ended April 30, 1997 and an increase of eleven (11) basis points in the yield on average interest earning assets to 7.7%. Average loans increased $55.1 million and average investment securities increased $17.5 million. These increases were offset by a decrease in average mortgage-backed securities of $26.3 million. Interest Expense. Interest expense totalled $5.5 million and $16.5 million for the three and nine months ended April 30, 1997, compared to $4.9 million and $15.4 million for the three and nine months ended April 30, 1996. The $627,000 increase for the three months ended April 30, 1997 was due to a $43.1 million increase in average interest-bearing liabilities and an increase of 9 basis points in the average cost of funds. The $1.1 million increase for the nine months ended April 30, 1997 compared to the nine months ended April 30, 1996 was due to a $42.8 million increase in average interest-bearing liabilities, offset by a decrease of 18 basis points in the average cost of funds. The Company utilized deposits, FHLB advances and other borrowings to fund loan originations and purchases of loans and securities. Net Interest Income. Net interest income totalled $4.0 million and $11.3 million for the three and nine months ended April 30, 1997 compared to $3.4 million and $9.3 million for the three and nine months ended April 30, 1996. The increase in net interest income for the three and nine months was primarily due to the results of operations discussed above, which resulted in an increase in the Company's interest rate spread to 2.78% from 2.64% for the three months and 2.70% from 2.40% for the nine months. Provision for Loan Losses. The Company maintains an allowance for loan losses based upon management's periodic evaluation of known and inherent risks in the loan portfolio, the Company's past loan loss experience, adverse situations that may affect borrowers' ability to repay loans, estimated value of underlying loan collateral, and current and expected future economic conditions. The allowance for loan losses was $3.8 million, or 1.2%, of net loans receivable, at April 30, 1997, compared to $4.4 million, or 1.6% of net loans receivable at July 31, 1996. Nonperforming assets decreased from $4.7 million, or 1.0%, of total assets at July 31, 1996, to $2.9 million, or .6% of total assets at April 30, 1997. The provision for loan losses decreased by $102,000 to $460,000 for the nine months ended April 30, 1997 from $562,000 for the nine months ended April 30, 1996. This decrease reflects the results of management's evaluations mentioned above. -8- The following table sets forth information regarding nonperforming loans, real estate owned and restructured loans within the meaning of Statement 15, at the dates indicated.
At At April 30, 1997 July 31, 1996 -------------- ------------- (Dollars in Thousands) Nonperforming loans: One to four-family residential real estate $ 806 $ 690 Multifamily residential real estate 1,487 1,580 Commercial real estate 75 1,374 Construction loans 215 - Consumer loans 218 265 -------- -------- Total nonperforming loans 2,801 3,909 Total real estate owned 141 766 -------- -------- Total nonperforming assets 2,942 4,675 Restructured loans 780 1,636 -------- -------- Total nonperforming assets and restructured loans $ 3,722 $ 6,311 ======== ======= Impaired loan balance with a valuation allowance of $498,000 and $1.4 million at April 30, 1997 and July 31, 1996, respectively $ 1,500 $ 2,953 ======== ======= Total nonperforming loans to total loans receivable .82% 1.31% Total nonperforming loans to total assets .55% .85% Total nonperforming loans and real estate owned to total assets .58% 1.01% Represents property acquired by the Company through foreclosure or deed in lieu of foreclosure. All restructured loans are performing in accordance with their restructured payment terms.
Noninterest Income. Noninterest income, consisting primarily of deposit fees, loan servicing fees, and gains and losses on sales of loans, mortgage- backed securities and investments, totalled $210,000 and $644,000 for the three and nine months ended April 30, 1997, compared to $210,000 and $615,000 for the three and nine months ended April 30, 1996. The $29,000 increase for nine months ended April 30, 1997 is due to increases in deposit fees collected partially offset by the loss on the sale of mortgage-backed and investment securities for the nine months ended April 30, 1997. Noninterest Expense. Noninterest expense, consisting primarily of salaries and employee benefits, occupancy and equipment, federal deposit insurance premiums and provision for losses on investments in real estate ("REO"), totalled $2.6 million and $9.9 million for the three and nine months ended April 30, 1997, compared to $2.6 million and $7.5 million for the three and nine months ended April 30, 1996. The increases in non-interest expense for the three months ended April 30, 1997 were the result of amortization of the 1996 Recognition and Retention Plan, an increase in professional services and additional loss recognized on the investment in a real estate joint venture, and were partially offset by a $158,000 decrease in the Federal deposit insurance premium. -9- The $2.4 million increase for the nine months ended April 30, 1997 was due to the results of changes noted above as well as the Federal Deposit Insurance Corporation ("FDIC") one-time special assessment to recapitalize the Savings Association Insurance Fund. On September 30, 1996, legislation was enacted and signed into law which provided a resolution to the disparity in the Bank Insurance Fund/ Savings Association Insurance Fund ("SAIF") premiums. In particular, SAIF-insured institutions paid a one-time assessment of 65.7 cents on every $100 of deposits held at March 31, 1995. As a result of the new law, the Company paid approximately $2.1 million. The special assessment is tax deductible, therefore, the cost, net of income tax benefits, is approximately $1.4 million. The Company has made a one-time charge to earnings of this amount for the fiscal quarter ended October 31, 1996. Also, beginning January 1, 1997, the previous annual minimum premium of 23 basis points was reduced to 6.5 basis points. Net Income. Net income was $981,000 or $.28 per share for the three months ended April 30, 1997, compared to $673,000 or $.18 per share for the three months ended April 30, 1996. The $308,000 increase in net income was primarily due to an increase in net interest income of $531,000 and a decrease in the provision for loan loss of $22,000, partially offset by increases in noninterest expense of $97,000 and income tax expense of $148,000. Net income was $1.1 million for the nine months ended April 30, 1997 compared to $1.3 million for the nine months ended April 30, 1996. The $221,000 decrease in net income was primarily due to an increase in noninterest expense of $2.4 million from the FDIC special assessment, partially offset by an increase in net interest income of $2.0 million, a decrease in the provision for loan loss of $102,000, an increase in noninterest income of $29,000, and a decrease in the income tax provision of $75,000. Without the one-time FDIC special assessment, net income for the nine months ended April 30, 1997 would have been $2.4 million, or $.68 per share. Liquidity and Capital Resources - ------------------------------- The Bank is required to maintain minimum levels of liquid assets as defined by Office of Thrift Supervision (OTS) regulations. This requirement, which varies from time to time depending upon economic conditions and deposit flows, is based upon a percentage of deposits and short-term borrowings. The required ratio currently is 5%. The Bank's liquidity ratio averaged 3.51% during the month of April 1997 due to securities pledged against short term borrowings. The securities were released on May 30, 1997 and the Bank is currently in compliance with the liquidity ratio. In addition, the Bank is required to maintain short term liquid assets of at least 1% of the Bank's average daily balance of net withdrawable deposit accounts and current borrowings. The Bank adjusts liquidity as appropriate to meet its asset and liability management objectives. At April 30, 1997, the Bank was in compliance with such liquidity requirements. The Bank's primary sources of funds are deposits, amortization and prepayment of loans and mortgage-backed securities, maturities of investment securities and other short-term investments, FHLB advances and earnings and funds provided from operations. While scheduled principal repayments on loans and mortgage-backed securities are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. The Bank manages the pricing of its deposits to maintain a desired deposit balance. In addition, the Bank invests excess funds in federal funds, and other short-term interest-earning and other assets, which provide liquidity to meet lending requirements. Regulatory capital regulations require minimum levels of tangible and core capital of 1.5% and 3%, respectively, of adjusted total assets and risk- based capital of 8% of risk-weighted assets. The Bank was in compliance with the regulatory capital requirements with tangible, core and risk-based capital ratios of approximately 8.26%, 8.26%, and 17.37%, respectively, at April 30, 1997. Also, the Bank is in the "well capitalized" category at April 30, 1997 under the regulatory framework for prompt corrective action. -10- Impact of New Accounting Standards - ---------------------------------- Stock-Based Compensation. In November 1995, the FASB issued Statement of Financial Accounting Standards No. 123 Accounting for Awards of Stock-Based Compensation to Employees (Statement 123). Statement 123 is effective for years beginning after December 15, 1995. The Statement defines a fair value- based method of accounting for an employee stock option or similar equity instrument and encourages all entities to adopt that method of accounting for an employee stock option or similar equity instrument, and for all of their employee stock compensation plans. However, it also allows an entity to continue to measure compensation cost for those plans using the intrinsic value-based method of accounting prescribed by APB Opinion No. 25, Accounting for Stock Issued to Employees (Opinion 25). Under the fair value-based method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. Under the intrinsic value-based method, compensation cost is the excess, if any, of the quoted market price of the stock at the grant date or other measurement date over the amount an employee must pay to acquire the stock. Most fixed stock option plans, the most common type of stock compensation plan, have no intrinsic value at grant date, and under Opinion 25 no compensation cost is recognized for them. Compensation cost is recognized for other types of stock based compensation plans under Opinion 25, including plans with variable, usually performance-based features. Statement 123 requires that an employer's financial statements include certain disclosures about stock-based employee compensation arrangements regardless of the method used to account for them. Management adopted the provisions of Statement 123 as of August 1, 1996 using the intrinsic value-based method and believes that the adoption will not have a material impact on the Company's financial statements. The Company will provide disclosure about its stock based employee compensation plans in its 1997 financial statements, as required by Statement 123. In February 1997, the Financial Accounting Standards Board ("FASB") issued statement of Financial Accounting Standards 128, Earnings Per Share (Statement 128). Statement 128 is effective for fiscal years ending after December 15, 1997. This Statement simplifies the standards for computing earnings per share previously found in APB Opinion No. 15, Earnings per Share, and makes them comparable to international EPS standards. It replaces the presentation of primary EPS with a presentation of basic EPS. It also requires dual presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Management has not determined when it will adopt the provision of Statement 128 but believes that the adoption of Statement 128 will not have a material impact on the Company's financial statements. -11- PART II. OTHER INFORMATION Item 1. Legal Proceedings - -------------------------- There are various claims and lawsuits in which the Company is periodically involved incidental to the Company's business. In the opinion of management, no material loss is expected from any of such pending claims or lawsuits. Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- No Form 8-K reports were filed during the period ended April 30, 1997. -12- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned thereunto duly authorized. AMERICAN NATIONAL BANCORP, INC. Date: June 12, 1997 By: /s/ A. Bruce Tucker -------------- ------------------------------------ A. Bruce Tucker PRESIDENT and CHIEF EXECUTIVE OFFICER Date: June 12, 1997 By: /s/ James M. Uveges -------------- ----------------------------------- James M. Uveges SENIOR VICE PRESIDENT and CHIEF FINANCIAL OFFICER -13- EX-27 2 ARTICLE 9 FDS FOR 10Q
9 1,000 9-MOS JUL-31-1997 APR-30-1997 3,841 517 903 0 30,781 132,950 131,538 322,805 3,827 505,318 329,516 77,128 8,541 44,818 0 0 40 45,275 505,318 19,144 8,105 574 27,823 11,562 4,926 11,335 460 (58) 9,914 1,605 1,066 0 0 1,066 0.30 0.30 3.16 2,171 116 780 6,343 4,412 1,353 296 3,827 3,827 0 2,226 -----END PRIVACY-ENHANCED MESSAGE-----