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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
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AMERICAN BANCSHARES, INC.
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(Exact name of small business issues as specified in its charter)
Florida 65-0624640
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(State or other jurisdiction (IRS Employer Id. No.)
incorporation or organization
4702 Cortez Road West, Bradenton, Florida 34210
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(941) 795-3050
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(Former name, former address and former 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: 4040927 as of March 31, 1997
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TABLE OF CONTENTS
<TABLE>
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Page
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Part I FINANCIAL INFORMATION
Item 1
-Financial Statements 1-3
-Notes to Consolidated Condensed Financial Statements 4-6
Item 2
-Management's Discussion and Analysis
of Financial Condition and Results of
Operations 7-8
Part II OTHER INFORMATION
Item 1 Legal Proceedings 9
Item 2 Changes in Securities
(Not applicable this report) n/a
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
(Not applicable this report) n/a
</TABLE>
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
($ in thousands)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
ASSETS (UNAUDITED) (AUDITED)
<S> <C> <C>
Cash and due from banks $ 8,164 $ 7,517
Federal funds sold 5,145 6,000
Interest bearing deposits in banks 662 7,528
Mortgage loans held for sale 26,099 20,351
Investment securities, available for sale 34,104 21,026
Mortgage-backed securities, available for sale 5,564 5,085
Loans (net of allowance for credit losses and
deferred loan fees of $487,537 as of
March 31, 1997 and $395,463 as of
December 31, 1996) 144,714 135,108
Premises and equipment, net 7,105 6,879
Other real estate owned, net 720 0
Goodwill 54 0
Other assets 3,114 2,471
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TOTAL ASSETS $ 235,445 $ 211,965
============= ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits $ 196,803 $ 177,203
Securities sold under agreements to repurchase 13,490 10,113
Federal funds purchased and FHLB borrowings 5,000 5,000
Other liabilities 1,082 835
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TOTAL LIABILITIES 216,375 193,151
SHAREHOLDERS' EQUITY
Common stock, $1.175 par value, 10,000,000
shares authorized, 4,040,927 shares issued
and outstanding as of March 31, 1997
and 4,001,744 as of December 31, 1996 4,783 4,702
Additional paid in capital 12,033 11,736
Unrealized gain (loss) on securities available
for sale, net (456) (80)
Retained earnings 2,710 2,456
------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 19,070 18,814
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 235,445 $ 211,965
============= ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 1
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AMERICAN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED, $ IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTH'S ENDED MARCH,
1997 1996
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<S> <C> <C>
Interest income
Interest and fees on loans $ 3,555 $ 2,777
Interest on mortgage backed securities, taxable 95 80
Interest on investment securities, taxable 542 232
Interest on investment securities, nontaxable 5 5
Other interest income 125 63
------------------ -------------------
Total interest income 4,322 3,157
Interest expense
Deposits 2,075 1,465
Securities sold under agreements to repurchase 113 81
Federal funds purchased and FHLB advances 78 38
------------------ -------------------
Total interest expense 2,266 1,584
Net interest income 2,056 1,573
Provision for loan losses 140 29
------------------ -------------------
Net interest income after loan loss 1,916 1,544
Noninterest income
Service charges & fees 225 154
Gain on sale of loans 4 100
Fees on mortgage servicing 22 8
Gain on sale of servicing 52 0
Originated mortgage servicing rights 6 121
Gain on sale of securities 2 0
Merchant fees 121 59
Other income 151 74
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Total noninterest income 583 516
Noninterest expense
Salaries & employee benefits 1,018 898
Net occupancy expense 278 187
Data processing fees 108 143
Other expense 754 517
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Total noninterest expense 2,158 1,745
Income before income taxes 341 315
Provision for income taxes 134 119
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Net income $ 207 $ 196
================== ======================
Earnings per share
Primary $ 0.21 $ 0.25
Fully diluted 0.21 0.23
Average Number of shares outstanding
Primary 4,032,222 3,160,258
Fully diluted 4,052,994 3,398,112
</TABLE>
The accompanying notes are an integral part of these financial statements
Page 2
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AMERICAN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED, $ IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997 1996
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 207 $ 195
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Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 140 30
Net gain on sale of investment securities (2) 0
Net gain on sale of loans (4) (99)
Net gain on sale of mortgage servicing rights (52) 0
Net gain on originated mortgage servicing rights (6) (121)
Net gain on sale of assets 0 0
Deferred income taxes 0 119
Depreciation 144 85
Net amortization of premiums and accretion of discounts on
investment securities 4 18
Increase in other liabilities 244 239
Increase in other assets (1,360) 468
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Total adjustments (892) 739
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Net cash provided by operating activities (685) 934
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Cash flows from investing activities:
Loan originations, net of repayments (19,700) (13,868)
Purchase of loans held for sale 0 0
Proceeds from sales of loans held for sale 4,211 10,189
Purchases of bank premises and equipment (370) (1,282)
Proceeds on sales of assets 0 0
Proceeds from maturities of held to maturity investment securities 0 0
Proceeds from sales and maturities of available for sale investment
securities 1,546 5,609
Purchases of held to maturity investment securities 0 0
Purchases of available for sale investment securities, net of
repayments (15,481) (5,878)
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Net cash used in investing activities (29,794) (5,230)
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Cash flows from financing activities:
Net increase (decrease) in demand deposits, NOW and savings
accounts 19,506 6,345
Net increase in time deposits 97 2,557
Net increase (decrease) in securities sold under agreements to
repurchase 3,377 (265)
Principal payments under capital lease obligations 0 0
Proceeds from advances from the FHLB and Federal Funds purchased 0 (5,000)
Proceeds from sale of stock 425 7,908
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Net cash provided by financing activities 23,405 11,545
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Net increase (decrease) in cash and cash equivalents (7,074) 7,249
Cash and cash equivalents at beginning of period 21,045 22,514
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Cash and cash equivalents at end of period $ 13,971 $ 29,763
============== ===============
Supplemental disclosures:
Interest paid $ 2,259 $ 1,594
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Taxes paid $ 0 $ 0
============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
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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 1, 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 three month period ended March 31, 1997 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, 1996 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 number 115. Unrealized gains and losses
are reflected as a separate component of shareholders' equity
on the consolidated statement of condition. At March 31,
1997, an unrealized loss, net of tax, of $456,000 was
reflected as a decrease of shareholders' equity.
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AMERICAN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
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.
Note 5. Capital
In December 1995, the Company filed a registration statement
on Form SB-2 with 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 elected to exercise
the over allotment, consummating the transaction on March 13,
1996. Of the net proceeds of approximately $7.5 million, $4.0
million has been contributed as capital to the Bank and
approximately $786,000 invested to date in land and building
in 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
Earnings Per Share: In February 1997, Statement of Financial
Accounting Standards No. 128, "Earnings Per Share" (SFAS No.
128), was issued. SFAS No. 128 specifies the computation,
presentation, and disclosure requirements for earnings per
share.
SFAS No. 128 is designed to improve the Earnings Per Share
(EPS) information provided in financial statements by
simplifying computational guidelines, revising the disclosure
requirements, and increasing the comparability of EPS data on
an international basis. Some of the changes made to simplify
the EPS computations include: (a) eliminating the presentation
of primary EPS and replacing it with basic EPS, with the
principal difference being that common stock equivalents are
not considered in computing basic EPS, (b) eliminating the
modified treasury stock method and the three percent
materiality provision, and (c) revising the contingent share
provisions and the supplemental EPS data requirements. SFAS
No. 128 requires dual presentation of basic and fully diluted
EPS on the face of the income statement for all entities with
complex capital structures regardless of whether basic and
fully diluted EPS are the same. It also requires a
reconciliation of the numerator and denominator used in
computing basic and fully diluted EPS.
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AMERICAN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 6. Impact of Recently Issued Accounting Standards (Continued)
SFAS No. 128 is effective for financial statements issued for
periods ending after December 15, 1997, including interim
periods. Earlier application is not permitted. The statement
requires restatement of all prior-period EPS data presented
after the effective date. The Company has not yet determined
the impact adoption of SFAS No. 128 will have on its financial
statements.
Capital Structure Disclosure: In February 1997 the Financial
Accounting Standards Board issued Statement of Financial
Accounting Standards No. 129, "Disclosure of Information About
Capital Structure" (SFAS No. 129). SFAS No. 129 consolidates
the existing requirements to disclose certain information
about an entity's capital structure.
SFAS No. 129 requires that disclosure about an entity's
capital structure include a brief discussion of rights and
privileges for securities outstanding, including dividend and
liquidation preferences, participation rights, call prices and
dates, conversion or exercise prices or rates and pertinent
dates, sinking-fund requirements, unusual voting rights, and
significant terms of contracts to issue additional shares. The
number of shares issued upon conversion, exercise or
satisfaction of required conditions during at least the most
recent annual fiscal period and any subsequent interim period
presented also are required to be disclosed. In addition,
companies that issue stock with liquidation preferences or
redeemable stock are required to disclose all pertinent
characteristics of those securities.
SFAS No. 129 is effective for financial statements for periods
ending after December 15, 1997. As SFAS No. 129 relates only to
disclosure issues, there will be no impact on the Company's
financial statements upon adoption.
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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 11% to $235,445,000 as of March 31,
1997, from $211,965,000 as of December 31, 1996 and 42% from $166,117,000 as of
March 31, 1996. The increase in assets from December 31, 1996, was primarily
the result of increases in interest earning assets with net loans increasing by
$15,353,000 to $170,813,000 and investment securities increasing by
$13,557,000. Federal funds sold decreased by $855,000 to $5,145,000 as of
March 31, 1997. The increases in assets were funded through increases in
deposits at existing locations.
As a result of the public offering and subsequent $4,000,000 investment in the
Bank by the Company, the Bank's Tier 1 leverage ratio was 6.90%, Tier 1 to risk
weighted assets was 9.41% and total risk based capital was 10.01% as of March
31, 1997, 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 March 31, 1997 of
35.34%. 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
March 31, 1997, 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 March 31,
1997, the Bank had no federal funds purchased.
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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 March 31, 1997 was $207,000 or
$.05 per share, compared to net income of $196,000 or $.06 per share for the
same period for 1996. Earnings per share were affected by the additional shares
outstanding as a result of the public offering which was completed in the first
quarter of 1996. Net interest income increased $483,000 to $2,056,000 for the
quarter ended March 31, 1997 as a result of the increase in interest earning
assets. Non-interest income increased from $516,000 for the quarter ended
March 31, 1996 to $583,000 for the same period in 1997. The increase in
non-interest income is primarily attributable to increases in deposit fees of
$71,000 resulting from a larger deposit base, increase in the gains on the
sale of servicing rights of $52,000 and an increase in credit card merchant fee
income of $62,000.
Total general and administrative expense for the quarter ended March 31, 1997,
increased $413,000 over the same period of 1996. 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, occupancy
expense, professional services and depreciation accounted for a substantial
portion of the increase for both the quarter and year to date ended March 31,
1997. In addition, salary and benefit costs increased $120,000 as a result of
increased staff in lending, operations, and accounting which were added to
support the significant growth experienced during 1996. Also, in January, 1997,
the Company acquired Deschamps & Gregory, a local mortgage brokerage firm, and
hired staff for the new Palmetto branch office that will open in June 1997.
Full time equivalent employees increased from 105.5 at March 31, 1996 to 135 as
of March 31, 1997.
For the three months ended March 31, 1997, net interest income increased
$483,000 to $2,056,000 compared to $1,573,000 for the same period in 1996 as a
result of the 42% asset growth. The provision for loan loss expense increased
from $29,000 for the three month period ended March 31, 1996 to $140,000 for
the same period in 1997. Management uses a procedure on a monthly 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.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On January 15, 1997, Theresa Moss, a former employee of the Bank,
filed a claim with the Equal Employment Opportunity Commission (EEOC)
alleging that such employee was demoted by the Bank in retaliation
for complaining against a co-employee for offensive comments which
caused a hostile work environment leading to her resignation from the
Bank. It is alleged that this conduct violated her rights under Title
VII of the Civil Rights Act of 1964. The EEOC claim does not request
any specific relief or remedies sought in connection therewith. The
Company believes that the Bank acted appropriately and that this
action is without merit and it intends to defend this action
vigorously.
On March 27,1997, James J. Bazata, a former employee of the Bank, filed
an claim in the United States District Court, Tampa Division, alleging
that such employee was discriminated against. It is alleged that this
conduct violated his rights under the Americans with Disabilities Act
of 1990. The company believes that the Bank acted appropriately and
that this action is without merit and intends to defend this action
vigorously.
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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: May 12, 1997
/s/ BRIAN M. WATTERSON
-------------------------------------
Brian M. Watterson
Senior Vice President and
Chief Financial Officer
Date: May 12, 1997
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM: THE COMPANY'S
GENERAL LEDGER AND BOARD OF DIRECTORS FINANCIAL REPORT PACKAGE AND IS QUALIFIED
IN IT'S ENTIRETY BY REFERENCE TO SUCH
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 8,164
<INT-BEARING-DEPOSITS> 662
<FED-FUNDS-SOLD> 5,145
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 39,668
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 171,799
<ALLOWANCE> (986)
<TOTAL-ASSETS> 235,445
<DEPOSITS> 196,803
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,082
<LONG-TERM> 5,000
0
0
<COMMON> 4,783
<OTHER-SE> 14,287
<TOTAL-LIABILITIES-AND-EQUITY> 235,445
<INTEREST-LOAN> 3,555
<INTEREST-INVEST> 642
<INTEREST-OTHER> 125
<INTEREST-TOTAL> 4,322
<INTEREST-DEPOSIT> 2,075
<INTEREST-EXPENSE> 2,266
<INTEREST-INCOME-NET> 2,056
<LOAN-LOSSES> 140
<SECURITIES-GAINS> 2
<EXPENSE-OTHER> 2,158
<INCOME-PRETAX> 341
<INCOME-PRE-EXTRAORDINARY> 341
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 207
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 8.55
<LOANS-NON> 74
<LOANS-PAST> 0
<LOANS-TROUBLED> 24
<LOANS-PROBLEM> 2,513
<ALLOWANCE-OPEN> 1,000
<CHARGE-OFFS> 185
<RECOVERIES> 31
<ALLOWANCE-CLOSE> 986
<ALLOWANCE-DOMESTIC> 986
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
