U.S. Securities and Exchange Commission
Washington, D.C.
Form 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period to
Commission file number 0-27474
American Bancshares, Inc.
(Exact name of small business issues as specified in its charter)
Florida 65-0624640
(State or other jurisdiction (IRS Emloyer Id. No.)
incorporation or organization
4702 Cortez Road West, Bradenton, Florida 34210
(941) 795-3050
(Former name, address or fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for 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 .
State the number of shares outstanding of each issuer's classes of common
equity, as of the last practicable date:
3,907,349 Common shares as of September 30, 1996
<PAGE>
TABLE OF CONTENTS
Part I Page
FINANCIAL INFORMATION
Item 1
-Financial Statements 1-4
-Notes to Consolidated Condensed Financial Statements 5-6
Item 2
-Management's Discussion and Analysis
of Financial Condition and Results of
Operations 7-8
Part II
OTHER INFORMATION
Item 1 Legal Proceedings n/a
(Not applicable this report)
Item 2 Changes in Securities n/a
(Not applicable this report)
Item 3 Defaults Upon Senior Securities
(Not applicable this report) n/a
Item 4 Submission of Matters to a Vote
of Security Holders
(Not applicable this report) n/a
Item 5 Other Information n/a
(Not applicable this report)
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
American Bancshares, Inc. and Subsidiary
Consolidated Condensed Balance Sheets
($ in thousands)
September 30, December 31,
1996 1995
Assets (unaudited) (unaudited)
----------- -----------
Cash and due from banks $ 5,659 $ 5,687
Federal funds sold 5,000 1,000
Interest-bearing deposits in banks 133 81
Mortgage loans held for sale 20,888 21,011
Investment securities, available for sale 19,804 18,084
Mortgage-backed securities available for sale 10,514 5,989
Loans (net of allowance for credit losses and
deferred loan fees of $401,583 as
of September 30, 1996, and $493,566 as of
December 31, 1995) 130,179 97,480
Premises and equipment, net 6,561 4,071
Other assets 2,386 1,545
---------- -----------
Total assets $ 201,124 $ 154,948
========== ===========
Liabilities and shareholders' equity
Liabilities
Deposits $ 169,084 $ 129,861
Securities sold under agreements to repurchase 7,888 9,567
Federal funds purchased and FHLB borrowings 5,000 5,000
Other liabilities 1,221 822
---------- -----------
Total liabilities $ 183,193 $ 145,250
Shareholders' equity
Common stock, $1.175 par value, 10,000,000
shares authorized, 3,907,349 shares
issued and outstanding as of
September 30, 1996, and 2,401,070
as of December 31, 1995 4,588 2,821
Additional paid-in capital 11,268 5,258
Unrealized gain(loss) on investment securities
available for sale, net (148) 47
Retained earnings 2,223 1,572
---------- -----------
Total shareholders' equity 17,931 9,698
---------- -----------
Total liabilities and shareholders' equity $ 201,124 $ 154,948
========== ===========
The accompanying notes are an integral part of these financial statements.
<PAGE>
American Bancshares, Inc. and Subsidiary
Consolidated Condensed Statements of Income
(unaudited, $ in thousands)
Three months ended Sept. 30,
1996 1995
------- --------
Interest income
Interest on loans $ 3,284 $ 2,528
Interest on mortgage backed securities, taxable 151 19
Interest on investment securities, taxable 359 298
Interest on investment securities, nontaxable 5 5
Other interest income 54 95
-------- --------
Total interest income 3,853 2,945
Interest expense
Deposits 1,898 1,455
Securities sold under agreements to repurchase 87 100
Federal funds purchased and FHLB advances 5 4
-------- --------
Total interest expense 1,990 1,559
Net interest income 1,863 1,386
Provision for loan losses 130 213
-------- --------
Net interest income after provision for loan loss 1,733 1,173
Noninterest income
Service charges & fees 193 150
Gain on sale of loans 29 0
Fees on mortgage servicing 15 15
Gain on sale of servicing 34 134
Originated mortgage servicing rights 16 0
Gain on sale of securities 47 0
Merchant fees 35 19
Other income 45 128
-------- --------
Total noninterest income 414 446
Noninterest expense
Salaries & employee benefits 713 630
Net occupancy expense 213 158
Data processing expense 117 117
Other expenses 719 199
-------- --------
Total noninterest expense 1,762 1,104
Income before income taxes 385 515
Provision for income taxes 129 197
-------- --------
Net income $ 256 $ 318
========= ========
Earnings per share
Primary $ 0.07 $ 0.15
Fully diluted 0.06 0.12
Average number of shares outstanding
Primary 3,881,834 2,172,351
Fully diluted 4,084,388 2,646,558
The accompanying footnotes are an integral part of these financial statements.
<PAGE>
American Bancshares, Inc. and Subsidiary
Consolidated Condensed Statements of Income
(unaudited, $ in thousands)
Nine months ended Sept. 30,
1996 1995
-------- ---------
Interest income
Interest on loans $ 9,058 7,155
Interest on mortgage backed securities, taxable 321 19
Interest on investment securities, taxable 835 902
Interest on investment securities, nontaxable 15 15
Other interest income 204 193
-------- ---------
Total interest income 10,433 8,284
Interest expense
Deposits 4,964 4,196
Securities sold under agreements to repurchase 255 199
Federal funds purchased and FHLB advances 43 5
-------- ---------
Total interest expense 5,262 4,400
Net interest income 5,171 3,884
Provision for loan losses 207 393
-------- ---------
Net interest income after provision for loan loss 4,964 3,491
Noninterest income
Service charges & fees 512 388
Gain on sale of loans 164 202
Fees on mortgage servicing 33 45
Gain on sale of servicing 38 134
Originated mortgage servicing rights 196 0
Gain on sale of securities 60 36
Merchant fees 187 59
Other income 127 90
-------- ---------
Total noninterest income 1,317 954
Noninterest expense
Salaries & employee benefits 2,538 1,789
Net occupancy expense 593 451
Data processing expense 415 279
Other expenses 1,702 714
-------- ---------
Total noninterest expense 5,248 3,233
Income before income taxes 1,033 1,212
Provision for income taxes 382 457
-------- ---------
Net income $ 651 $ 755
======== =========
Earnings per share
Primary $ 0.18 $ 0.34
Fully diluted 0.17 0.29
Average number of shares outstanding
Primary 3,633,181 2,253,384
Fully diluted 3,857,202 2,561,293
The accompanying notes are an integral part of these financial statements.
<PAGE>
American Bancshares, Inc. and Subsidiary
Consolidated Statements of Cashflow
(unaudited, $ in thousands)
Nine months September 30,
1996 1995
-------- --------
Cash flows from operating activities:
Net income $ 650 $ 755
-------- --------
Adjustments to reconcile net income to net
cash provided by operatingactivities:
Provision for loan losses 208 393
Net gain on sale of investment securities (60) 0
Net gain on sale of loans (165) (218)
Net gain on sale of mortgage servicing rights (25) 0
Deferred income taxes 381 60
Depreciation 291 198
Net amortization of premiums and accretion of discounts on
investment securities 101 42
Increase in other liabilities 406 410
Increase in other assets 119 (506)
-------- --------
Total adjustments 1,049 379
-------- --------
Net cash provided by operating activities 1,699 1,134
-------- --------
Loan originations, net of repayments (54,976) (47,127)
Proceeds from sales of loans held for sale 22,558 30,993
Purchases of bank premises and equipment (2,714) (1,184)
Proceeds from maturities of held to maturity
investment securities 0 500
Proceeds from sales and maturities of available
for sale investment securities 16,460 4,364
Purchases of held to maturity investment securities 0 (3,988)
Purchases of available for sale investment
securities (24,214) (5,744)
-------- --------
Net cash used in investing activities (42,886) (22,186)
-------- --------
Net increase (decrease) in demand deposits, NOW
and savings accounts 20,384 (1,224)
Net increase in time deposits 18,286 14,109
Net increase (decrease) in securities sold under
agreements to repurchase (1,679) 3,817
Proceeds from advances from the Federal Home Loan Bank 0 2,100
Proceeds from sale of stock 8,220 740
-------- --------
Net cash provided by financing activities 45,211 19,542
-------- --------
Net increase (decrease) in cash and cash equivalents 4,024 (1,510)
Cash and cash equivalents at beginning of the period 6,768 7,723
-------- --------
Cash and cash equivalents at end of period $ 10,792 $ 6,213
======== ========
Supplemental disclosures:
Interest paid $ 5,280 4,081
======== ========
Income taxes paid $ 417 326
======== ========
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1. Holding Company and Subsidiary Background
Information
American Bancshares, Inc. (Company), is a one bank holding company,
operated under the laws of the state of Florida. Its wholly owned
banking subsidiary is American Bank of Bradenton (Bank), a state
chartered bank. The Holding Company, a Florida corporation organized
June 30, 1995, is a registered holding company under the Bank Holding
Company Act of 1956, as amended, and on December 31, 1995 became the
bank holding company for the Bank. The Bank was incorporated on
December 6, 1988 and opened for business on May 8, 1989. The Bank is a
general commercial bank with all the rights, powers, and privileges
granted and conferred by the Florida Banking Code. Although the Holding
Company was not formed until June 30, 1995 and did not acquire the Bank
until December 1, 1995, the financial statements have been presented as
if the Holding Company had been in existence since the Bank was formed
in 1988 and as if the Bank was its wholly owned subsidiary since that
time.
Note 2. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements,
in the opinion of management, include all adjustments, consisting only
of normal recurring adjustments necessary for a fair presentation of
the results for the interim periods. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to SEC rules and regulations, although
the Company believes that the disclosures included herein are adequate
to make the information presented not misleading. The results of
operations for the nine month period ended September 30, 1996 are not
necessarily indicative of the results expected for the full year.
The organization and business of the Company, accounting policies
followed by the Company and other information are contained in the
Company's December 31, 1995 Form 10KSB. This quarterly report should be
read in conjunction with such
annual report.
Note 3. Investments
The Company's investment and mortgage-backed securities are classified
as available for sale and recorded at fair value as required by the
provisions of Statement of Financial Accounting Standards (FAS115).
Unrealized gains and losses are reflected as a separate component of
shareholders' equity on the consolidated statement of condition. At
September 30, 1996, an unrealized loss, net of tax, of $148,000 was
reflected as a decrease of shareholders' equity.
Note 4. Earnings Per Share
Earnings per share have been computed by dividing net income by the
weighted average number of shares outstanding for the respective
period(s). The increase in the weighted average number of shares is a
result of the Company's public offering in February 1996. Common stock
equivalents in the form of stock warrants have been included to reflect
the dilution effect of such warrants.
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 5. Capital
In December 1995, the Company filed a registration statement on Form
SB-2 with the Securities and Exchange Commission to register for sale
1,250,000 shares of the Company's common stock (with an additional
187,500 shares subject to the underwriters' over allotment option) at
$6.00 per share pursuant to a firm commitment underwritten public
offering. The SB-2 became effective February 6, 1996, with the sale of
1,250,000 shares of common stock consummated on February 13, 1996. On
March 6, 1996, the underwriter's elected to exercise the over
allotment, consummating the transaction on March 13, 1996. Of the net
proceeds of approximately $7.5 million, $3.3 million has been
contributed as capital to the Bank and approximately $600,000 invested
in land to be used for the construction of an administrative facility.
The balance will be used for general corporate purposes including the
construction of a new administrative facility, possible acquisitions of
other financial institutions, and working capital.
Note 6. Impact of Recently Issued Accounting Standards
The Bank adopted Statement of Financial Accounting Standards No. 122
during the first quarter of 1996, as required. Standard 122 amends standard
65 as it relates, among other changes, to the treatment of originated
mortgage servicing rights. Originated Mortgage Servicing Rights are created
when an institution originates a mortgage loan, selling the loan in the
secondary market, but retaining the right to service the loan. Due to the
fees received for servicing the loan(s) and the investability of cashflows,
servicing rights have an inherent value. Standard 122 requires that such
rights be capitalized at the time they are created and amortized over the
expected future cashflows of the servicing. In addition, because servicing
rights are effected by changes in market rates, periodic valuations are
required to determine if any impairment exists. As of September 30, 1996,
the Bank had recorded approximately $178,000 of originated mortgage
servicing rights. Although management believes that such rights have been
properly valued and are being amortized in accordance with standard 122,
there can be no assurance that the Bank will continue to generate servicing
rights, or that recorded servicing rights will not become impaired and
require an adjustment which would negatively effect earnings.
<PAGE>
PART 1
ITEM 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
American Bancshares, Inc. and Subsidiary
Liquidity and Capital Resources
Total assets of the Company increased by 30% to $201,124,000 as of
September 30, 1996, from $154,948,000 as of December 31, 1995. The increase
in assets was primarily the result of increases in interest earning assets
with net loans increasing by $32,576,000 to $151,067,000 and investment
securities increasing by $6,245,000. Federal funds sold also increased by
$4,000,000 to $5,000,000 as of September 30, 1996. The increases in assets
were funded through increases in deposits at existing locations and the
addition of two new full service branch locations. One of the locations
opened March 18 and the second location opened September 18, 1996. In
addition, deposit growth resulted in part from a deposit program released
in late May, 1996 which included five year certificates of deposit, money
market accounts, and a Visa/Mastercard promotion. The program was used to
generate additional customer relationships with a focus on cross-selling
opportunities. The funds received during the program will be used to fund
strong loan demand which management expects to continue through the
remainder of the year.
As a result of the public offering and subsequent $3,300,000
investment in the Bank by the Company, the Bank's Tier 1 leverage ratio was
7.08%, Tier 1 to risk weighted assets was 9.38% and total risk based
capital was 10.05% as of September 30, 1996, resulting in a classification
of "Well Capitalized" under FDIC guidelines. The Bank, through its
Asset/Liability Committee, monitors, among other things, the Bank's capital
and liquidity position, making adjustments to deposit, loan, and investment
strategies as necessary. The Bank continues to maintain adequate liquidity
levels with a liquidity ratio at September 30, 1996 of 30.34%. In addition,
the Bank is a member of the Federal Home Loan Bank of Atlanta (FHLB). FHLB
has approved an advance totaling $11,500,000 collateralized by qualifying
mortgages and all of the Bank's FHLB stock. As of September 30, 1996 an
advance in the amount of $5,000,000 was outstanding. The Bank also
maintains Federal Funds Purchased agreements with several correspondent
banks to provide sources of overnight funds. As of September 30, 1996 the
Bank had no federal funds purchased.
<PAGE>
PART 1
ITEM 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
(continued)
American Bancshares, Inc. and Subsidiary
Results of Operations
The Company's net income for the quarter ended September 30, 1996 was
$256,000 or $.07 per share, compared to net income of $318,000 or $.15 per
share for the same period for 1995. Earnings per share were effected by the
reduction in net income and from the effect of additional shares
outstanding as a result of the public offering which was completed in the
first quarter of 1996. The reduction in earnings is primarily attributable
to start-up costs associated with the opening of two new full service
branches and additional lending personnel and support staff necessary to
support the Bank's rapid growth. Net interest income increased $477,000 to
$1,863,000 for the quarter ended September 30, 1996 as a result of the
increase in interest earning assets. Non-interest income decreased from
$446,000 for the quarter ended September 30, 1995 to $414,000 for the same
period in 1996. The decrease in non-interest income is primarily
attributable to extraordinary items during the third quarter of 1995 which
are not reflected in the same quarter of 1996. These include a $62,000 gain
on sale of property, and a sale of mortgage loan servicing of $134,000.
These extraordinary items were partially offset by increases in deposit
fees of $43,000 resulting from an increase in the deposit base, gains on
sale of loans of $29,000, originated mortgage servicing rights of $59,000
generated by the wholesale mortgage division, an increase in credit card
merchant fee income of $16,000, and a gain on sale of securities of
$47,000.
Total general and administrative expense for the quarter ended
September 1996, increased $658,000 over the same period of 1995. This
increase resulted primarily from increases in other operating expenses
related to the growth in the Company's assets and number of Bank branches.
Specifically, legal, advertising, processing fees, stationary and supplies
costs accounted for a substantial portion of the increase for both the
quarter and year to date ended September 30, 1996. In addition, salary and
benefit costs increased $83,000 as a result of increased staff in lending,
operations, and accounting which were added to support the significant
growth experienced during 1995 and 1996. Full time equivalent employees
increased from 77 at September 30, 1995 to 120 as of September 30, 1996. In
addition, loan officers were added in the first quarter of 1996 to provide
support for loan demand and to continue to increase the earning asset base
of the Bank.
For the nine months ended September 30, 1996, net interest income
increased $1,287,000 to $5,171,000 compared to $3,884,000 for the same
period in 1995 as a result of the 30% asset growth. The provision for loan
loss decreased from $393,000 for the nine month period ended September 30,
1995 to $207,000 for the same period in 1996. Management uses a procedure
on a quarterly basis for evaluating the adequacy of the allowance for loan
loss. Based on that review management considers the allowance sufficient to
cover expected loan losses. Non-interest income increased by $363,000 to
$1,317,000 for the nine months ended September 30, 1996 compared to
$954,000 for the same period in 1995 for the reasons discussed above.
Non-interest expense increased to $5,249,000 for the nine month period
ended September 30, 1996 from $3,233,000 for the same period in 1995 for
the reasons discussed above.
<PAGE>
PART II - OTHER INFORMATION
American Bancshares, Inc. and Subsidiary
Item 1. Legal Proceedings
Not applicable this filing.
Item 2. Changes in Securities
Not applicable this filing.
Item 3. Defaults Upon Senior Securities.
Not applicable this filing.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable this filing.
Item 5. Other Information.
Not applicable this filing.
<PAGE>
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.
/s/ Gerald L. Anthony
Gerald L. Anthony, President and
Chief Executive Officer
Date: November 7, 1996
/s/ Brian P. Peters
Senior Vice President and
Chief Financial Officer
Date: November 7, 1996
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of American Bancshares, Inc. for the nine months ended
September 30, 1996, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<CURRENCY> U.S. Dollars
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Sep-30-1996
<EXCHANGE-RATE> 1.000
<CASH> 5,659,000
<INT-BEARING-DEPOSITS> 133,000
<FED-FUNDS-SOLD> 5,000,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 30,318,000
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 151,067,000
<ALLOWANCE> 971,000
<TOTAL-ASSETS> 201,124,000
<DEPOSITS> 169,084,000
<SHORT-TERM> 7,888,000
<LIABILITIES-OTHER> 1,221,000
<LONG-TERM> 5,000,000
0
0
<COMMON> 4,588,000
<OTHER-SE> 11,268,000
<TOTAL-LIABILITIES-AND-EQUITY> 201,124,000
<INTEREST-LOAN> 9,058,000
<INTEREST-INVEST> 1,375,000
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 10,433,000
<INTEREST-DEPOSIT> 4,964,000
<INTEREST-EXPENSE> 5,262,000
<INTEREST-INCOME-NET> 5,171,000
<LOAN-LOSSES> 207,000
<SECURITIES-GAINS> 60,000
<EXPENSE-OTHER> 5,248,000
<INCOME-PRETAX> 1,033,000
<INCOME-PRE-EXTRAORDINARY> 1,033,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 651,000
<EPS-PRIMARY> .18
<EPS-DILUTED> .17
<YIELD-ACTUAL> 8.53
<LOANS-NON> 849,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 150,000
<ALLOWANCE-OPEN> 946,000
<CHARGE-OFFS> 219,000
<RECOVERIES> 37,000
<ALLOWANCE-CLOSE> 971,000
<ALLOWANCE-DOMESTIC> 971,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 28,000
</TABLE>
