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 September 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 September
30, 1997: 615,624
Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ].
<PAGE>
Algiers Bancorp, Inc.
Form 10-QSB
Quarter Ended September 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:
Page
Item 1 - Financial Statements
Consolidated Statements Of Financial Condition (Unaudited)
At September 30, 1997 and December 31, 1996 3
Consolidated Statements Of Income (Unaudited) For the Three and
Nine Months Ended September 30, 1997 and 1996 5
Consolidated Statements Of Stockholders' Equity (Unaudited) For
The Nine Months Ended September 30, 1997 and 1996 7
Consolidated Statements Of Cash Flows (Unaudited) For the
Nine Months Ended September 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
<PAGE>
<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
ASSETS
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
(In Thousands)
<S> <C> <C>
Cash and Cash Equivalents................................. $ 1,952 $ 1,722
Investments Available-for-Sale - at Fair Value............ 3,847 2,467
Investment Securities Held-to-Maturity - Fair
Value of $199 and $825, respectively ............... 200 825
Loans Receivable - Net ................................... 9,280 9,220
Mortgage-Backed Securities - Available-for-Sale
at Fair Value ......................................... 6,855 9,077
Mortgage-Backed Securities - Held-to-Maturity - Fair Value
of $21,762 and $23,229, respectively.................. 22,098 23,810
Stock in Federal Home Loan Bank .......................... 476 456
Accrued Interest Receivable .............................. 272 265
Real Estate Owned - Net ..................................
Office Properties and Equipment, at Cost - ............... 44 45
Furniture, Fixtures and Equipment, Less Accumulated
Depreciation of $203 and $187, respectively........... 246 231
Deferred Charges ......................................... 37 18
Other Assets ............................................. 10 5
Deferred Tax Asset ....................................... (3) 23
Income Tax Receivable .................................... 11 75
------- --------
Total Assets ....... $ 45,325 $ 48,239
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
September 30, December 31,
1997 1996
------------- ------------
LIABILITIES (Unaudited)
(In Thousands)
<S> <C> <C>
Deposits ............................................. $ 35,518 $ 36,635
Advances from Federal Home Loan Bank ................. -- 1,500
Advance Payments from Borrowers for
Insurance and Taxes .............................. 130 237
Accured Interest Payable on Depositors' Accounts ..... 4 1
Dividends Payable .................................... 31 32
Other Liabilities .................................... 198 35
-------- --------
Total Liabilities ........................ 35,881 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 ................. 6,121 6,108
Retained Earnings .................................... 4,236 4,201
Unrealized Loss on Securities Available-for-Sale,
Net of Applicable Deferred Income Tax ............ (14) (24)
-------- --------
9,898 10,291
Less: Unearned ESOP Shares ............... (454) (492)
-------- --------
Total Stockholders' Equity ............... 9,444 9,799
-------- --------
Total Liabilities and Stockholders' Equity $ 45,325 $ 48,239
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
---------------------------- ---------------------------
1997 1996 1997 1996
------ ------ ------ ------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans ............................. $ 197 $ 200 $ 578 $ 578
Mortgage-Backed Securities ........ 479 526 1,540 1,498
Investment Securities ............. 90 89 161 176
Other Interest-Earning Assets ..... (10) 8 31 20
------ ------ ------ ------
Total Interest Income ...... 756 823 2,310 2,272
------ ------ ------ ------
INTEREST EXPENSE
Deposits .......................... 434 457 1,290 1,377
FHLB Advances ..................... 1 2 29 2
------ ------ ------ ------
Total Interest Expense ..... 435 459 1,319 1,379
------ ------ ------ ------
NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES ....... 321 364 991 893
PROVISION FOR LOAN LOSSES ............. -- -- -- --
------ ------ ------ ------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES ......... 321 364 991 893
------ ------ ------ ------
NON-INTEREST INCOME
Gain - Sale of Investments ........ 10 -- 11 28
Service Charges and Fees .......... 39 24 115 54
Recapture of Allowance on GIC Bonds -- -- 62 67
Recovery of GIC Bonds Previously
Written Off ................... -- -- 54 --
Miscellaneous Income .............. 33 -- 57 12
------ ------ ------ ------
Total Non-Interest Income .. 82 24 299 161
------ ------ ------ ------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
---------------------------- ---------------------------
1997 1996 1997 1996
------ ------ ------ ------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
NON-INTEREST EXPENSES
Compensation and Benefits ............. $ 207 $ 119 $ 589 $ 349
Occupancy and Equipment ............... 48 36 148 96
Computer .............................. 8 12 31 38
Deposit Insurance Premium ............. 6 256 12 309
Provision for Losses on Real Estate
Owned ............................. -- (4) -- (2)
Other ................................. 100 57 260 125
------ ------ ------ ------
Total Non-Interest Expense ........ 369 476 1,040 915
------ ------ ------ ------
INCOME BEFORE FEDERAL
INCOME TAX EXPENSE .................... 34 (88) 250 139
FEDERAL INCOME TAX EXPENSE ................ 70 1 122 53
------ ------ ------ ------
NET INCOME ................................ $ (36) $ (89) $ 128 $ 86
====== ====== ====== ======
EARNINGS (LOSS) PER SHARE ................. $(0.06) $(0.14) $ 0.20 $ 0.13
------ ------ ------ ------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE>
<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
September 30, September 30,
1997 1996
----- ------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
COMMON STOCK
Balance-Beginning of period .............. -- --
Sale of common stock ..................... 6 6
Balance-End of period .................... 6 6
----- ------
PAID IN CAPITAL IN EXCESS OF PAR
Balance-Beginning of period .............. 6,108 --
Shares allocated to the ESOP Plan ........ 13 --
Sale of common stock ..................... -- 6,153
----- ------
Balance-End of period .................... 6,121 6,153
----- ------
RETAINED EARNINGS
Balance-Beginning of period .............. 4,201 4,077
Net Income............................... 128 86
Dividends Declared ...................... (31) --
Dividends Paid .......................... (62) --
Unrealized loss on Securities ........... (14) (51)
----- ------
Balance-End of period .................... 4,222 4,112
----- ------
UNEARNED ESOP SHARES
Balance-Beginning of period .............. (492) --
Shares Released for Allocation ........... 38 --
----- ------
Balance-End of period .................... (454) --
----- ------
TREASURY STOCK
Balance-Beginning of period .............. -- --
Purchase of Treasury Stock ............... (451) (518)
----- ------
Balance-End of period .................... (451) (518)
----- ------
TOTAL STOCKHOLDERS' EQUITY ................. $ 9,444 $ 9,753
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
7
<PAGE>
<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30, September 30,
1997 1996
------- -------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income ........................................................ $ 128 $ 86
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization .............................. 21 16
Premium Amortization Net of Discount Accretion ............. 69 48
Stock Dividend - FHLB ...................................... (20) (19)
Loss on Sale of Foreclosed Real Estate ..................... -- 5
Gain on Sale of Investments ................................ (11) --
ESOP Expense ............................................... 52 --
Increase in Accrued Interest Payable ....................... 3
Increase in Other Liabilities ............................. 62 247
Decrease (Increase) in Accrued Interest Receivable ......... (7) (75)
Increase in Income Tax Payable ............................. 91 --
Provision for Losses on Real Estate Owned ................. -- (2)
(Increase) Decrease in Other Assets ........................ (4) (2)
(Increase) in Deferred Loan Fees .......................... -- (2)
(Increase) in Deferred Charges ............................ (19) (15)
Decrease in Prepaid Income Taxes .......................... 64 101
Decrease in Deferred Income Taxes .......................... 33 17
------- -------
Net Cash Provided by Operating Activities ............... 462 405
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Maturities of Investment Securities - Held-to-Maturity ............ 625 300
Purchase of Investment Securities - Available-for-sale ............ (1,880) (2,593)
Maturities of Investment Securities - Available-for-Sale .......... 500 697
Purchases of Mortgage- Backed Securities - Held-to-Maturity ....... (185) (5,661)
Maturities of Mortgage- Backed Securities - Held-to-Maturity ...... 1,847 2,245
Purchases of Mortgage- Backed Securities - Available-for-Sale ..... (490) (2,281)
Maturities of Mortgage-Backed Securities - Available-for-Sale ..... 1,023 1,270
Proceeds from Sale of Mortgage-Backed Securities-Available-for-Sale 1,661 --
Principal Collected on Loans ...................................... 1,080 2,044
Loans Made to Customers ........................................... (1,140) (1,917)
Purchase of Furniture and Fixtures ................................ (36) (26)
Proceeds from Sales of Foreclosed Real Estate ..................... -- 50
------- -------
Net Cash Provided by (Used In) Investing Activities ..... 3,005 (5,872)
------- -------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
8
<PAGE>
<TABLE>
<CAPTION>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30, September 30,
1997 1996
------- -------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase (Decrease) in Deposits .......................... $(1,117) $ (823)
Net Increase (Decrease) in Advances from
Borrowers for Taxes and Insurance ........................ (107) 102
Proceeds from Federal Home Loan Bank Advance ................. -- 2,250
Repayment of Federal Home Loan Bank Advance .................. (1,500) (2,250)
Proceeds from Issuance of Common Stock ....................... -- 6,159
Loan to ESOP ................................................. -- (518)
Purchase of Treasury Stock ................................... (451) --
Dividends Paid on Common Stock ............................... (62) --
------- -------
Net Cash Provided by (Used in) Financing Activities (3,237) 4,920
------- -------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS ......................................... 230 (547)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR .................... 1,722 1,452
------- -------
CASH AND CASH EQUIVALENTS - END OF YEAR .......................... $ 1,952 $ 905
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest ................................................. $ 1,316 $ 1,265
Income Taxes ............................................. $ -- $ 62
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
Dividends Declared ....................................... $ 31
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
9
<PAGE>
Algiers Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1997
Note 1 - Basis of Presentation -
The accompanying consolidated financial statements for the nine months
ended September 30, 1997 include the accounts of Algiers Bancorp, Inc. (the
"Company"), its wholly owned subsidiary, Algiers Homestead Association (the
"Association") and its 70% 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 September 27, 1996, and the subscription and community offering closed
on September 24, 1996.
10
<PAGE>
Algiers Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1997
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 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 nine months ended September 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 the ESOP 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 $52,000 for the nine months ended
September 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.
11
<PAGE>
Algiers Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1997
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 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 September 30, 1997, the premium
reduction should result in a pre-tax cost savings of approximately $60,000 per
year for the Association, or approximately $.07 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 September 30, 1997 to December 31,
1996 and the results of operations for the three and nine months ended September
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 $2.9 million or 6.0% from $48.2 million at
December 31, 1996 to $45.3 million at September 30, 1997. The decrease in assets
is primarily due to a decrease in mortgage-backed securities partially offset by
increases in total investments and in cash and cash equivalents and a decrease
in Advances from Federal Home Loan Bank.
Interest-earning investments in other institutions was $3.3 million at
December 31, 1996 and $4.0 million at September 30, 1997. These assets provide a
higher yield than mortgage-backed securities and have shorter maturities.
The mortgage-backed securities portfolio decreased $3.9 million or
11.9% from $32.9 million at December 31, 1996 to $29.0 million at September 30,
1997, as the amount of mortgage-backed securities maturing and sold exceeded the
amount purchased. Mortgage-backed securities amounted to $29.0 million or 64.0%
of total assets at September 30, 1997, compared to $32.9 million or 68.3% of
total assets at September 30, 1996.
Due to a slowing in the demand for mortgage loans in the Association's
market area, the loan portfolio increased only slightly over the past nine
months from $9.2 million to $9.3 million.
Total deposits decreased $1.1 million or 3.0% to $35.5 million at
September 30, 1997 from $36.6 million at December 31, 1996. This decrease was
due primarily to the Association not paying the inflated interest rates that are
available elsewhere in our local market.
13
<PAGE>
Total stockholders' equity decreased by $355,000 during the past nine
months. Net income of $128,000, a $13,000 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, but these items were
offset by a $62,000 dividend paid, a $31,000 dividend declared on common stock
and the purchase of $451,000 of treasury stock. Stockholders' equity at
September 30, 1997 totaled $9.4 million compared to $9.8 million at December 31,
1996.
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 nine months ended September 30, 1997 and 1996, net interest income
before provision for loan losses was less than total non-interest expense. 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 increased by $42,000 or 48.8% for the nine
months ending September 30, 1997 as compared to the same period ended September
30, 1996. The increase was due to an increase of $38,000 or 16.7% in interest
income, an increase of $138,000 or 46.2% in non-operating income, an increase of
$125,000 or 13.5% in non-interest expenses offset by an increase of $111,000 or
79.9% in income taxes and a decrease of $60,000 or 4.5% in interest expense.
The Company's net loss improved by $53,000 or 59.6% in the three months
ended September 30, 1997 from the three months ended September 30, 1996. The
improvement was due to a decrease of $107,000 or 22.5% in non-interest expense
and an increase of $58,000 or 241.7% in non-interest income, which factors were
mostly offset by a decrease of $43,000 or 11.8% in net interest income and by a
$69,000 increase in income tax expense. 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.
14
<PAGE>
Total interest income increased by $38,000 or 1.7% during the nine
months ending September 30, 1997 compared to the nine months ending September
30, 1996, due to the increase in the average yield. Total interest expense
decreased by $60,000 or 4.4% in the nine months ending September 30, 1997
compared to the nine months ending September 30, 1996, primarily due to the
decrease in the average balance of deposit accounts. Average deposits decreased
by $3.2 million or 8.1% in the nine months of 1997 over the comparable 1996
period.
Total interest income decrease by $67,000 or 8.9% during the three
months ending September 30, 1997 compared to the three months ending September
30, 1996, due to a decrease in the balance of mortgage-backed securities. Total
interest expense decreased $24,000 or 5.2% in the three months ending September
30, 1997 compared to the three months ending September 30, 1996 primarily due to
the decrease in the average balance of deposit accounts.
The decrease in deposit accounts was due primarily to funds that were
on deposit in the first six months of 1996 that were withdrawn for the purchase
of stock in Algiers Bancorp, Inc. in the conversion.
The increased net interest income was due to an increase of $1.9
million or 4.5% in net average interest-earning assets in the nine months ending
September 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 2.54% in
the nine months ending September 30, 1996 to 2.22% in the nine months ending
September 30, 1997. The yield on interest-earning assets decreased from 7.21% in
the first nine months of 1996 to 7.02% in the first nine months of 1997, while
the average rate on interest-bearing liabilities increased from 4.67% to 4.80%
over the same period. During the third quarter of 1997, the yield on
interest-earning assets decreased to 6.94% from 7.55% in the third quarter of
1996, while the average rate on interest-bearing liabilities increased from
4.54% 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 nine months ending September 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 4.93% during the first nine months of 1996 to 4.98% during the
first nine months of 1997, and the average rate on FHLB advances increased from
4.35% to 6.84% over the same period.
15
<PAGE>
The increase in non-interest income in the nine months ended September
30, 1997 was due to an increase of $61,000 in service charges and fees, and an
increase of $57,000 in miscellaneous income, partially offset by a decrease of
$17,000 in gain on sale of investments and a decrease of $5,000 in recapture of
allowance on GIC bonds.
During the quarter ending September 30, 1997 compared to the same
period of 1996, non-interest income increased due to an increase of $10,000 in
gain on sale of investments, an increase of $15,000 in service charges and fees,
and a $33,000 increase in miscellaneous income.
The Association had no provision or credit for loan losses in the nine
months ended September 30, 1997 and 1996. Total non-performing loans totaled
$511,000 at September 30, 1997, and the allowance for loan losses at such date
was $525,000.
The increase in total non-interest expense in the nine months ended
September 30, 1997 was due to a $240,000 increase in compensation expense, a
$52,000 increase in occupancy and equipment expense and a $135,000 increase in
other operating expenses. The increases in these expense accounts are associated
with the costs of the Company's 70% 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 $297,000 in deposit
insurance premiums, due to the one-time, special SAIF assessment in the 1996
period.
Total non-interest expense decreased in the three months ended
September 30, 1997 compared to the three months ended September 30, 1996 due to
a $250,000 decrease in deposit insurance premiums partially offset by an $88,000
increase in compensation expense, a $12,000 increase in occupancy and equipment
expense and a $43,000 increase in other operating expenses.
The increases in income tax expense in the 1997 periods were primarily
due to an increase of $111,000 or 79.9% in pre-tax income for the nine months
ended September 30, 1997 and an increase of $122,000 or 138.6% in pre-tax income
for the quarter ended September 30, 1997.
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 September
30, 1997, the Association's liquidity was 8.9% or $3.1 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 September 30, 1997, the Association's tangible and core capital
both amounted to $7.1 million or 14.91% of adjusted total assets of $43.5
million, and the Association's risk-based capital amounted to $7.3 million or
54.22% of adjusted risk-weighted assets of $10.9 million.
16
<PAGE>
As of September 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 ...................... $7,141 $7,141 $7,141
Additional Capital Items:
General Valuation Allowances .... -- -- 137
------ ------ ------
Regulatory Capital ................ 7,141 7,141 7,278
Minimum Capital Requirement ....... 652 1,304 873
------ ------ ------
Regulatory Capital Excess ......... $6,489 $5,837 $6,405
====== ====== ======
Regulatory Capital as a
Percentage ...................... 14.91% 14.91% 54.22%
Minimum Capital Required
as a Percentage ................. 1.50% 3.00% 8.00%
------ ------ ------
Regulatory Capital as a
Percentage in Excess
of Requirements ............... 13.41% 11.91% 46.22%
====== ====== ======
</TABLE>
Based on the above capital ratios, the Association meets the criteria
for a "well capitalized" institution at September 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.
On October 15, 1997, the Company received permission from the OTS to
repurchase up to 30,782 shares or 5.0% of the Company's outstanding common
stock.
18
<PAGE>
Algiers Bancorp, Inc.
Form 10-QSB
Quarter Ended September 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 a Special Meeting of Stockholders held on July 18, 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 467,080. The
matters voted upon together with the applicable voting results were as follows
(there were no broker non-votes at the meeting):
FOR Against Abstain
--- ------- -------
1. Proposal to approve the 1997 Stock Option Plan 430,798 36,282 0
2. Proposal to approve the 1997 Recognition and
Retention Plan and Trust Agreement 430,298 36,282 500
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 September 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: November 7, 1997 By:/s/Hugh E. Humphrey, Jr.
------------------------
Hugh E. Humphrey, Jr., Chairman
of the Board, President and
Chief Executive Officer
Date: November 7, 1997 By:/s/Dennis J. McCluer
--------------------
Dennis J. McCluer
Vice President
Date: November 7, 1997 By:/s/Frances Minor, Jr.
---------------------
Frances Minor, Jr.
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,952
<INT-BEARING-DEPOSITS> 4,047
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 10,702
<INVESTMENTS-CARRYING> 22,098
<INVESTMENTS-MARKET> 21,762
<LOANS> 9,280
<ALLOWANCE> 525
<TOTAL-ASSETS> 45,325
<DEPOSITS> 35,518
<SHORT-TERM> 0
<LIABILITIES-OTHER> 363
<LONG-TERM> 0
0
0
<COMMON> 6
<OTHER-SE> 9,438
<TOTAL-LIABILITIES-AND-EQUITY> 45,235
<INTEREST-LOAN> 578
<INTEREST-INVEST> 1,701
<INTEREST-OTHER> 31
<INTEREST-TOTAL> 2,310
<INTEREST-DEPOSIT> 1,290
<INTEREST-EXPENSE> 1,319
<INTEREST-INCOME-NET> 991
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 11
<EXPENSE-OTHER> 1,040
<INCOME-PRETAX> 250
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 128
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 7.02
<LOANS-NON> 511
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 525
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 525
<ALLOWANCE-DOMESTIC> 525
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
