UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-20911
ALGIERS BANCORP, INC.
(Exact name of small business issuer as specified in its charter)
LOUISIANA 72 - 1317594
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
#1 WESTBANK EXPRESSWAY, NEW ORLEANS, LOUISIANA 70114
(Address of principal executive offices)
Issuer's telephone number, including area code: (504) 367-8221
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 such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]
Shares of common stock, par value $.01 per share, outstanding as of June 30,
1997: 615,624
Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ].
<PAGE>
Algiers Bancorp, Inc.
Form 10-QSB
Quarter Ended June 30, 1997
PART I - FINANCIAL INFORMATION
Interim Financial Information required by Rule 10-01 of Regulation S-X and Item
303 of Regulation S-B is included in this Form 10-QSB as referenced below:
Item 1 - Financial Statements
Consolidated Statements Of Financial Condition (Unaudited)
At June 30, 1997 and December 31, 1996................................. Page 3
Consolidated Statements Of Income (Unaudited) For the Three and
Six Months Ended June 30, 1997 and 1996................................ 5
Consolidated Statements Of Stockholders' Equity (Unaudited) For
The Six Months Ended June 30, 1997 and 1996............................ 7
Consolidated Statements Of Cash Flows (Unaudited) For the
Six Months Ended June 30, 1997 and 1996................................ 8
Notes to Consolidated Financial Statements............................. 10
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 13
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings............................................. 19
Item 2 - Changes in Securities......................................... 19
Item 3 - Defaults Upon Senior Securities............................... 19
Item 4 - Submission of Matters to a Vote of Security-Holders........... 19
Item 5 - Other Information............................................. 19
Item 6 - Exhibits and Reports on Form 8-K.............................. 19
Signatures............................................................. 20
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<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
ASSETS
June 30, December 31,
1997 1996
------- -------
(Unaudited)
(In Thousands)
<S> <C> <C>
Cash and Cash Equivalents ................................ $ 2,871 $ 1,722
Investments Available-for-Sale - at Fair Value ........... 2,147 2,467
Investment Securities Held-to-Maturity - Fair Value of
$199 and $825, respectively 200 825
Loans Receivable - Net ................................... 9,396 9,220
Mortgage-Backed Securities - Available-for-Sale -
at Fair Value ............................... 7,165 9,077
Mortgage-Backed Securities - Held-to-Maturity - Fair Value
of $22,462 and $23,229, respectively 22,888 23,810
Stock in Federal Home Loan Bank .......................... 469 456
Accrued Interest Receivable .............................. 232 265
Real Estate Owned - Net .................................. 44 45
Office Properties and Equipment, at Cost - Furniture,
Fixtures and Equipment, Less Accumulated
Depreciation of $198 and $187, respectively 241 231
Deferred Charges ......................................... 30 18
Other Assets ............................................. 1 5
Deferred Tax Asset ....................................... 10 23
Income Tax Receivable .................................... 93 75
------- -------
Total Assets ........ $45,787 $48,239
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
3
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<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, December 31,
1997 1996
------- -------
LIABILITIES (Unaudited)
(In Thousands)
<S> <C> <C>
Deposits ............................................ $ 36,023 $ 36,635
Advance from Federal Home Loan Bank ................. -- 1,500
Advance Payments from Borrowers for
Insurance and Taxes ............................. 158 237
Accured Interest Payable on Depositors' Accounts .... 3 1
Dividends Payable ................................... 31 32
Other Liabilities ................................... 81 35
-------- --------
Total Liabilities ........................ 36,296 38,440
-------- --------
STOCKHOLDERS' EQUITY
Stockholders' Equity
Common Stock, $.01 Par Value; Authorized
10,000,000 Shares, 648,025 Issued Shares ... 6 6
Treasury Stock, 32,401 shares , at cost ......... (451) --
Paid-in Capital in Excess of Par ................ 6,117 6,108
Retained Earnings ................................... 4,303 4,201
Unrealized Loss on Securities Available-for-Sale,
Net of Applicable Deferred Income Tax ........... (17) (24)
-------- --------
9,958 10,291
Less: Unearned ESOP Shares ............... (467) (492)
-------- --------
Total Stockholders' Equity ............... 9,491 9,799
-------- --------
Total Liabilities and Stockholders' Equity $ 45,787 $ 48,239
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
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<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
------ ------ ------ ------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans .............................. $ 191 $ 199 $ 381 $ 378
Mortgage-Backed Securities ......... 538 496 1,061 972
Investment Securities .............. -- 39 71 86
Other Interest-Earning Assets ...... 14 6 41 13
------ ------ ------ ------
Total Interest Income ...... 743 740 1,554 1,449
------ ------ ------ ------
INTEREST EXPENSE
Deposits ........................... 429 465 856 919
FHLB Advances ...................... 15 2 28 3
------ ------ ------ ------
Total Interest Expense ..... 444 467 884 922
------ ------ ------ ------
NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES ........ 299 273 670 527
PROVISION FOR LOAN LOSSES .......... -- -- -- --
------ ------ ------ ------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES........... 299 273 670 527
Gain - Sale of Investments ......... -- -- 1 28
Service Charges and Fees ........... 59 18 76 30
Recapture of Allowance on GIC Bonds 42 66 62 67
Recovery of GIC Bonds Previously
Written Off .................... 54 -- 54 --
Miscellaneous Income ............... 21 12 24 12
------ ------ ------ ------
Total Non-Interest Income .. 176 96 217 137
------ ------ ------ ------
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
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<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
------ ------ ------ ------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
NON-INTEREST EXPENSES
Compensation and Benefits ......... $196 $115 $382 $231
Occupancy and Equipment ........... 56 30 100 61
Computer .......................... 12 21 23 26
Deposit Insurance Premium ......... 5 25 6 50
Provision for Losses on Real Estate
Owned ......................... -- 1 -- 3
Other ............................. 89 38 160 68
---- ---- ---- ----
Total Non-Interest Expense .... 358 230 671 439
---- ---- ---- ----
INCOME BEFORE FEDERAL
INCOME TAX EXPENSE ................ 117 139 216 225
FEDERAL INCOME TAX EXPENSE ............ 15 30 52 60
---- ---- ---- ----
NET INCOME ............................ $102 $109 $164 $165
==== ==== ==== ====
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
6
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<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
June 30, June 30,
1997 1996
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
COMMON STOCK
Balance-Beginning of period ................ 6 --
Sale of common stock ....................... -- --
------- -------
Balance-End of period ...................... 6 --
======= =======
PAID IN CAPITAL IN EXCESS OF PAR
Balance-Beginning of period ................ 6,108 --
Shares allocated to the ESOP Plan .......... 9 --
Sale of common stock ....................... -- --
------- -------
Balance-End of period ...................... 6,117 --
======= =======
RETAINED EARNINGS
Balance-Beginning of period ................ 4,201 4,077
Net Income ................................ 164 165
Dividends Declared ........................ (31) --
Dividends Paid ............................ (31) --
Unrealized loss on Securities ............. (17) (26)
------- -------
Balance-End of period ...................... 4,286 4,216
======= =======
UNEARNED ESOP SHARES
Balance-Beginning of period ................ (492) --
Shares Released for Allocation ............. 25 --
------- -------
Balance-End of period ...................... (467) --
======= =======
TREASURY STOCK
Balance-Beginning of period ................ -- --
Purchase of Treasury Stock ................. (451) --
------- -------
Balance-End of period ...................... (451) --
======= =======
TOTAL STOCKHOLDERS' EQUITY ................... $ 9,491 $ 4,216
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
7
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<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30, June 30,
1997 1996
------- -------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income .................................................. $ 164 $ 165
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization ......................... 16 9
Premium Amortization Net of Discount Accretion ........ 63 (6)
Stock Dividend - FHLB ................................. (13) 12
Loss on Sale of Foreclosed Real Estate ................ -- 5
Gain on Sale of Investments ........................... (1) --
ESOP Expense .......................................... 35 --
Increase in Accrued Interest Payable .................. 2 6
Increase (Decrease) in Other Liabilities .............. 45 (15)
Decrease (Increase) in Accrued Interest Receivable .... 33 (6)
(Recovery) of Loan Losses ............................. -- (4)
Provision (Credit) for Losses on Real Estate Owned .... -- (6)
(Increase) Decrease in Other Assets ................... 4 (2)
(Increase) in Deferred Loan Fees ..................... -- (29)
(Increase) Decrease in Deferred Charges ............. (11) --
(Increase) Decrease in Prepaid Income Taxes ........... (18) (60)
Decrease in Deferred Income Taxes ..................... 20 4
------- -------
Net Cash Provided by Operating Activities ......... 339 73
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Maturities of Investment Securities - Held-to-Maturity ...... 625 300
Maturities of Investment Securities - Available-for-Sale .... 326 697
Purchases of Mortgage- Backed Securities - Held-to-Maturity . (185) (4,380)
Maturities of Mortgage- Backed Securities - Held-to-Maturity 1,123 1,169
Purchases of Mortgage- Backed Securities - Available-for-Sale (490) (500)
Maturities of Mortgage-Backed Securities - Available-for-Sale 823 1,211
Proceeds from Sale of Investments ........................... 1,464 --
Principal Collected on Loans ................................ 711 1,496
Loans Made to Customers ..................................... (887) (1,381)
Proceeds from Sale of Real Estate Held-for-Investment ....... -- (69)
Purchase of Furniture and Fixtures .......................... (27) (18)
Proceeds from Sales of Foreclosed Real Estate ............... -- 50
------- -------
Net Cash Provided by (Used In) Investing Activities 3,483 (1,425)
------- -------
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30, June 30,
1997 1996
------- -------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase (Decrease) in Deposits ......................... $ (612) $ 10,938
Net Increase (Decrease) in Advances from
Borrowers for Taxes and Insurance ........................ (79) (33)
Proceeds from Federal Home Loan Bank Advance ................ -- 2,250
Repayment of Federal Home Loan Bank Advance ................. (1,500) (2,250)
Purchase of Treasury Stock .................................. (451) --
Dividends Paid on Common Stock .............................. (31) --
-------- --------
Net Cash Provided by (Used in) Financing Activities (2,673) 10,905
-------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS ........................................ 1,149 9,553
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR ................... 1,722 1,452
-------- --------
CASH AND CASH EQUIVALENTS - END OF YEAR ......................... $ 2,871 $ 11,005
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest ................................................. $ 236 $ 274
Income Taxes ............................................. $ 38 $ 130
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
Dividends Declared ....................................... $ 31 $ --
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
9
<PAGE>
Algiers Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1997
Note 1 - Basis of Presentation -
The accompanying consolidated financial statements for the six months
ended June 30, 1997 include the accounts of Algiers Bancorp, Inc. (the
"Company"), its wholly owned subsidiary, Algiers Homestead Association (the
"Association") and its 51% owned subsidiary, Jefferson Community Lending, LLC
("Jefferson"). Currently, the business and management of Algiers Bancorp, Inc.
is primarily the business and management of the Association. All significant
intercompany transactions and balances have been eliminated in the
consolidation.
On February 5, 1996, the Association incorporated Algiers Bancorp,
Inc., to facilitate the conversion of the Association from mutual to stock form
(the "Conversion"). In connection with the Conversion, the Company offered its
common stock to the depositors and borrowers of the Association as of specified
dates, to an employee stock ownership plan and to members of the general public.
Upon consummation of the Conversion on July 8, 1996, all of the Association's
outstanding common stock was issued to the Company, the Company became the
holding company for the Association and the Company issued 648,025 shares of
common stock.
The Company filed a Form SB-2 with the Securities and Exchange
Commission ("SEC") on March 26, 1996, which as amended was declared effective by
the SEC on May 13, 1996. The Association filed a Form AC with the Office of
Thrift Supervision ("OTS") and the Office of Financial Institutions ("OFI") on
March 26, 1996. The Form AC and related offering and proxy materials, as
amended, were conditionally approved by the OTS and OFI by letters dated May 13,
1996 and May 14, 1996. The Company also filed an Application H-(e) 1-S with the
OTS and the OFI on March 26, 1996, which was conditionally approved by the OTS
and the OFI by letters dated May 13, 1996.
The members of the Association approved the Plan at a special meeting held
on June 27, 1996, and the subscription and community offering closed on June 24,
1996.
The Conversion was accounted for under the pooling of interests method of
accounting. In the Conversion, the Company issued 648,025 shares of common
stock, 51,860 shares of which were acquired by its
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<PAGE>
Employee Stock Ownership Plan, and the Association issued 1,000 shares of $.01
par value common stock to the Company.
The accompanying consolidated unaudited financial statements were
prepared in accordance with instructions for Form 10-QSB and, therefore, do not
include information or footnotes necessary for a complete presentation of
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. However, all adjustments (consisting
only of normal recurring accruals) which, in the opinion of management, are
necessary for a fair presentation of the consolidated financial statements have
been included. The results of operations for the six months ended June 30, 1997
are not necessarily indicative of the results to be expected for the year ending
December 31, 1997.
Note 2 - Employee Stock Ownership Plan-
The Company sponsors a leveraged employee stock ownership plan (ESOP)
that covers all employees who have at least one year of service with the
Company. The ESOP shares initially were pledged as collateral for its debt. The
debt is being repaid based on a ten-year amortization and the shares are being
released for allocation to active employees annually over the ten-year period.
The shares pledged as collateral are deducted from stockholders' equity as
unearned ESOP shares in the accompanying balance sheets.
As shares are released from collateral, the Company reports
compensation expense equal to the current market price of the shares. Dividends
on allocated ESOP shares are recorded as a reduction of retained earnings;
dividends on unallocated ESOP shares are recorded as a reduction of unearned
ESOP shares. ESOP compensation expense was $35,000 for the six months ended June
30, 1997 based on the annual release of shares.
Note 2 - Earnings Per Share -
Earnings per share for periods prior to June 30, 1996 is not considered
meaningful as the Conversion was not completed until after June 30, 1996, and
the 100 shares held by the Association as of June 30, 1996 were canceled upon
consummation of the Conversion.
Note 3 - Special SAIF Assessment
On September 30, 1996, as part of the omnibus appropriations package
signed by President Clinton, the government mandated a special assessment to
recapitalize the Savings Association Insurance Fund ("SAIF"), which is
administered by the Federal Deposit Insurance Corporation ("FDIC"). The
one-time, special SAIF assessment amounted to $.657 for every $100 of
SAIF-insured deposits as of March 31, 1995. The
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FDIC notified the Association that the Association's special assessment was
$241,000, which after taxes reduced the Company's net income by $159,000 in the
quarter ended September 30, 1996. The Association's deposit premiums, which were
previously $.23 for every $100 of assessable deposits, were reduced to $.064 for
every $100 of assessable deposits beginning January 1, 1997. Based on the
Association's deposits at June 30, 1997, the premium reduction should result in
a pre-tax cost savings of approximately $60,000 per year for the Association, or
approximately $.58 per share after taxes.
12
<PAGE>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The following discussion compares the consolidated financial condition
of Algiers Bancorp, Inc. and Subsidiaries at June 30, 1997 to December 31, 1996
and the results of operations for the three and six months ended June 30, 1997
with the same periods in 1996. Currently, the business and management of Algiers
Bancorp, Inc. is primarily the business and management of the Association. This
discussion should be read in conjunction with the interim consolidated financial
statements and footnotes included herein.
Changes in Financial Condition
Total assets decreased $2.4 million or 5.0% from $48.2 million at
December 31, 1996 to $45.8 million at June 30, 1997. The decrease in assets is
primarily due to decreases in investments and mortgage-backed securities offset
by an increase in cash and cash equivalents.
Interest-earning deposits in other institutions was $2.5 million at
December 31, 1996 and $2.3 million at June 30, 1997. These assets provide a
higher yield than mortgage-backed securities and have shorter maturities.
The mortgage-backed securities portfolio decreased $2.8 million or 8.6%
from $32.9 million at December 31, 1996 to $30.0 million at June 30, 1997, as
the amount of mortgage-backed securities maturing and sold exceeded the amount
purchased. Mortgage-backed securities amounted to $30.0 million or 65.5% of
total assets at June 30, 1997, compared to $32.9 million or 68.2% of total
assets at June 30, 1996.
Due to a slowing in the demand for mortgage loans in the Association's
market area, the loan portfolio increased slightly over the past six months from
$9.2 million to $9.4 million.
Total deposits decreased $612,000 or 1.6% to $36.0 million at June 30,
1997 from $36.6 million at December 31, 1996.
Total stockholders' equity decreased by $308,000 during the past six
months. Net income of $164,000, a $9,000 increase in additional paid-in capital
and a $10,000 reduction in the reserve for unrealized loss on securities
available-for-sale increased equity during the period, such items were offset by
a $31,000 dividend paid, a $31,000 dividend declared on common stock and the
purchase of $451,000 of treasury stock. Stockholders' equity at June 30, 1997
totaled $9.5 million compared to $9.8 million at December 31, 1996.
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Results of Operations
The profitability of the Company depends primarily on its net interest
income, which is the difference between interest and dividend income on
interest-earning assets, principally mortgage-backed securities, loans and
investment securities, and interest expense on interest-bearing deposits and
borrowings. Net interest income is dependent upon the level of interest rates
and the extent to which such rates are changing. The Company's profitability
also is dependent, to a lesser extent, on the level of its non-interest income,
provision for loan losses, non-interest expense and income taxes. In each of the
three and six months ended June 30, 1996, net interest income before provision
for loan losses exceeded total non-interest expense. However, in each of the
1997 periods, total non-interest expense exceeded net interest income, primarily
due to the start up costs for the Company's 51% owned subsidiary, Jefferson
Community Lending, LLC. Total non-interest expense consists of general,
administrative and other expenses, such as compensation and benefits, occupancy
and equipment expense, federal insurance premiums, and miscellaneous other
expenses.
The Company's net income decreased by $7,000 or 6.4% in the three
months ended June 30, 1997 from the three months ended June 30, 1996. The
decrease was due to an increase of $128,000 or 55.7% in non-interest expense,
which was mostly offset by an increase of $26,000 or 9.5% in net interest income
and an increase of $96,000 or 83.3% in non-interest income. The increase in
non-interest expense was primarily due to increases related to the operation of
the Company's mortgage subsidiary, partially offset by a decrease in the deposit
insurance premium.
Total interest income increased by $105,000 or 7.9% during the six
months ending June 30, 1997 compared to the six months ending June 30, 1996, due
to the increase in the average yield. Total interest expense decreased by
$38,000 or 4.1% in the six months ending June 30, 1997 compared to the six
months ending June 30, 1996, primarily due to the decrease in the average
balance of deposit accounts. Average deposits decreased by $3.9 million or 7.2%
in the six months of 1997 over the comparable 1996 period. This decrease was due
primarily to the withdrawal of funds from accounts for the purchase of stock in
Algiers Bancorp, Inc. in the conversion.
The increased net interest income was due to an increase of $3.2
million or 7.70% in net average interest-earning assets in the six months ending
June 30, 1997 over the comparable 1996 period, which was primarily due to the
net Conversion proceeds. The increase in net interest-earning assets was
partially offset by a decrease in the average interest rate spread from 2.47% in
the six months ending
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June 30, 1996 to 2.26% in the six months ending June 30, 1997. The average yield
on interest-earning assets decreased from 7.06% in the first half of 1996 to
7.03% in the first half of 1997, while the average rate on interest-bearing
liabilities increased from 4.59% to 4.77% over the same period. During the
second quarter of 1997, the yield on interest-earning assets decreased to 6.77%
from 7.09% in the second quarter of 1996, while the average rate on
interest-bearing liabilities increased from 4.50% to 4.86% over the same period.
The decreased yield on assets was primarily due to lower yields on the
Association's adjustable-rate mortgage loans and adjustable-rate mortgage-backed
securities. In addition, in the six months ending June 30, 1997, the Company
used a portion of its maturing investment securities to fund the repurchase of
5% of its outstanding common stock. The average rate on deposits increased from
4.58% during the first six months of 1996 to 4.73% during the first half of
1997, and the average rate on FHLB advances increased from 4.35% to 6.84% over
the same period.
The Association had no provision or credit for loan losses in the six
months ended June 30, 1997 and 1996. Total non-performing loans totaled $163,000
at June 30, 1997, and the allowance for loan losses at such date was $525,000.
The increase in non-interest income in the six months ended June 30,
1997 was due to an increase of $46,000 in service charges and fees, primarily
from Jefferson Community Lending, an increase of $54,000 in recovery of GIC
bonds previously written off, and an increase of $12,000 in miscellaneous
income, partially offset by a decrease of $27,000 in gain on sale of investments
and a decrease of $5,000 in recapture of allowance on GIC bonds.
During the quarter ending June 30, 1997 compared to the same period of
1996, non-interest income increased due to an increase of $41,000 in service
charges and fees, a $54,000 increase in recovery of GIC bonds previously written
off and a $9,000 increase in miscellaneous income, partially offset by a
decrease of $24,000 in recapture of allowance on GIC bonds.
The increase in total non-interest expense in the six months ended June
30, 1997 was due to a $151,000 increase in compensation expense, a $39,000
increase in occupancy and equipment expense and a $92,000 increase in other
operating expenses. The increases in these expense accounts are associated with
the start up costs of the Company's 51% owned subsidiary, Jefferson Community
Lending, LLC and, to a lesser extent, the costs associated with the Company's
ESOP. These increases were partially offset by a decrease of $44,000 in deposit
insurance premiums.
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<PAGE>
Total non-interest expense increased in the three months ended June 30,
1997 compared to the three months ended June 30, 1996 due to an $81,000 increase
in compensation expense, a $26,000 increase in occupancy and equipment expense
and a $51,000 increase in other operating expenses partially offset by a $20,000
decrease in deposit insurance premiums.
The decreases in income tax expense were primarily due to a decrease of
$9,000 or 4.0% in pre-tax income for the six months ended June 30, 1997 and a
decrease of $22,000 or 15.8% in pre-tax income for the quarter ended June 30,
1997. In addition, the effective tax rate in the quarter ended June 30, 1997
declined to 12.8% because the $54,000 recovery on the GIC bonds was non-taxable.
Liquidity and Capital Resources
The Association is required under applicable federal regulations to
maintain specified levels of "liquid" investments in qualifying types of U.S.
Government, federal agency and other investments having maturities of five years
or less. Current OTS regulations require that a savings institution maintain
liquid assets of not less than 5% of its average daily balance of net
withdrawable deposit accounts and borrowings payable in one year or less, of
which short-term liquid assets must consist of not less than 1.0%. At June 30,
1997, the Association's liquidity was 9.4% or $3.4 million in excess of the
minimum OTS requirement of 5.0%.
The Association is required to maintain regulatory capital sufficient
to meet tangible, core and risk-based capital ratios of 1.5%, 3.0%, and 8.0%,
respectively. At June 30, 1997, the Association's tangible and core capital both
amounted to $6.8 million or 15.6% of adjusted total assets of $43.6 million, and
the Association's risk-based capital amounted to $7.0 million or 52.3% of
adjusted risk-weighted assets of $13.0 million.
16
<PAGE>
As of June 30, 1997, the Association's unaudited regulatory capital
requirements are as indicated in the following table:
<TABLE>
<CAPTION>
TANGIBLE CORE RISK-BASED
CAPITAL CAPITAL CAPITAL
(Dollars in Thousands)
<S> <C> <C> <C>
GAAP Capital ......................... $6,796 $6,796 $6,796
Additional Capital Items:
General Valuation Allowances ....... -- -- 163
------ ------ ------
Regulatory Capital ................... 6,796 6,796 6,959
Minimum Capital Requirement .......... 807 1,307 1,043
------ ------ ------
Regulatory Capital Excess ............ $5,989 $5,489 $5,916
====== ====== ======
Regulatory Capital as a
Percentage ......................... 15.60% 15.60% 52.30%
Minimum Capital Required
as a Percentage .................... 1.50% 3.00% 8.00%
------ ------ ------
Regulatory Capital as a
Percentage in Excess
of Requirements .................. 14.10% 12.60% 44.30%
====== ====== ======
</TABLE>
Based on the above capital ratios, the Association meets the criteria
for a "well capitalized" institution at June 30, 1997. The Association's
management believes that under the current regulations, the Association will
continue to meet its minimum capital requirements in the foreseeable future.
However, events beyond the control of the Association, such as increased
interest rates or a downturn in the economy of the Association's area, could
adversely affect future earnings and consequently, the ability of the
Association to continue to exceed its future minimum capital requirements.
17
<PAGE>
Common Stock Repurchase Plan
On March 12, 1997, the Company received permission from the Office of
Thrift Supervision ("OTS") to repurchase up to 32,401 shares or 5.0% of the
Company's common stock. Pursuant to the plan, the Company purchased 29,901
shares of its common stock on April 1, 1997 and 2,500 shares of its common stock
on May 7, 1997. These two purchases have fulfilled the number of shares approved
by the OTS.
18
<PAGE>
Algiers Bancorp, Inc.
Form 10-QSB
Quarter Ended June 30, 1997
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings:
There are no matters required to be reported under this item.
Item 2 - Changes in Securities:
There are no matters required to be reported under this item.
Item 3 - Defaults Upon Senior Securities:
There are no matters required to be reported under this item.
Item 4 - Submission of Matters to a Vote of Security Holders:
At the Annual Meeting of Stockholders held on April 30, 1997, the stockholders
of the Company approved each of the proposals as set forth below. The number of
shares present at the Annual Meeting in person or by proxy was 545,140. The
matters voted upon together with the applicable voting results were as follows
(there were no broker non-votes at the meeting):
FOR WITHHOLD
--- --------
1. Election of Directors
Hugh E. Humphrey, Jr. 478,890 66,250
Thomas L. Arnold 478,890 66,250
John Gary, Eugene J. LeBoeuf, Hugh E. Humphrey, III and Thu Dang,
continued as directors.
FOR AGAINST
--- -------
2. Ratification of appointment
of LaPorte, Sehrt, Romig
and Hand as independent
auditors. 529,140 16,000
Item 5 - Other Information:
There are no matters required to be reported under this item.
Item 6 - Exhibits and Reports on Form 8-K:
(a) The following exhibit is filed herewith:
EXHIBIT NO. DESCRIPTION
----------- -----------
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Registrant
during the quarter ended June 30, 1997.
19
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ALGIERS BANCORP, INC.
Registrant
Date: August 8, 1997 By: /s/Hugh E. Humphrey, Jr.
---------------------------
Hugh E. Humphrey, Jr., Chairman
of the Board, President and
Chief Executive Officer
Date: August 8, 1997 By: /s/Dennis J. McCluer
--------------------
Dennis J. McCluer
Vice President
20
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,871
<INT-BEARING-DEPOSITS> 2,347
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 9,312
<INVESTMENTS-CARRYING> 23,088
<INVESTMENTS-MARKET> 22,661
<LOANS> 9,396
<ALLOWANCE> 525
<TOTAL-ASSETS> 45,787
<DEPOSITS> 36,023
<SHORT-TERM> 0
<LIABILITIES-OTHER> 273
<LONG-TERM> 0
0
0
<COMMON> 6
<OTHER-SE> 9,485
<TOTAL-LIABILITIES-AND-EQUITY> 45,787
<INTEREST-LOAN> 0
<INTEREST-INVEST> 1,132
<INTEREST-OTHER> 41
<INTEREST-TOTAL> 1,554
<INTEREST-DEPOSIT> 856
<INTEREST-EXPENSE> 28
<INTEREST-INCOME-NET> 670
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 1
<EXPENSE-OTHER> 671
<INCOME-PRETAX> 216
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 164
<EPS-PRIMARY> .29
<EPS-DILUTED> .29
<YIELD-ACTUAL> 7.03
<LOANS-NON> 163
<LOANS-PAST> 163
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 526
<CHARGE-OFFS> 1
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 525
<ALLOWANCE-DOMESTIC> 525
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
