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 March 31, 1999
___ 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.
(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) (Zip Code)
Issuer's telephone number: (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 ___
Number of shares of Common Stock outstanding on April 20, 1999: 517,248
Transitional Small Business Disclosure Format (check one): Yes ___ No _X_
ALGIERS BANCORP, INC.
QUARTERLY REPORT ON FORM 10-QSB FOR
THE QUARTER ENDED MARCH 31, 1999
TABLE OF CONTENTS
PAGE
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 March 31, 1999 and December 31, 1998 1
Consolidated Statements Of Income (Unaudited)
For the Three Months Ended March 31, 1999 and 1998 3
Consolidated Statements Of Cash Flows (Unaudited)
For the Three Months Ended March 31, 1999 and 1998 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
------------------ ----------------
(Unaudited)
(In Thousands)
<S> <C> <C>
Cash and Cash Equivalents $ 2,062 $ 3,659
Interest-Bearing Deposits in Other Banks 3,079 1,222
Investments Available-for-Sale
at Fair Value (Note 2) 4,821 5,304
Loans Receivable - Net 9,131 9,297
Mortgage Loans Held for Resale 312 -
Mortgage-Backed Securities - Available-for-Sale
at Fair Value (Note 2) 27,310 27,392
Stock in Federal Home Loan Bank 512 512
Accrued Interest Receivable 498 369
Real Estate Owned - Net 62 62
Office Properties and Equipment, at Cost -
Furniture, Fixtures and Equipment, Less
Accumulated Depreciation of $285 and
$258, respectively 854 662
Prepaid Expenses 88 87
Income Tax Receivable 101 28
Other Assets 4 32
---------- ----------
Total Assets $ 48,834 $ 48,626
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
------------------ ----------------
(Unaudited)
(In Thousands)
LIABILITIES
<S> <C> <C>
Deposits $ 39,875 $ 39,495
Advance Payments from Borrowers for Taxes and
Insurance 63 114
Accrued Interest Payable on Depositors' Accounts 61 23
Dividends Payable 26 32
Deferred Tax Liability 214 212
Income Taxes Payable - -
Other Liabilities 66 84
---------- -----------
40,305 39,960
Minority Interest in Subsidiary 76 87
---------- -----------
Total Liabilities 40,381 40,047
---------- -----------
STOCKHOLDERS' EQUITY
Stockholders' Equity
Preferred Stock - Par Value $.01; 5,000,000 Shares
Authorized; 0 Shares Issued and Outstanding - -
Common Stock - $.01 Par Value;
10,000,000 Shares Authorized,
648,025 Issued Shares 6 6
Treasury Stock - 141,677 shares and 128,777 shares,
Respectively, at Cost (1,823) (1,675)
Paid-in Capital in Excess of Par 6,137 6,137
Retained Earnings 4,363 4,344
Accumulated Other Comprehensive Income 194 191
---------- -----------
8,877 9,003
---------- -----------
Less: Unearned ESOP Shares (376) (376)
Unearned MRP Shares (48) (48)
---------- -----------
(424) (424)
---------- -----------
Total Stockholders' Equity 8,453 8,579
---------- -----------
Total Liabilities and Stockholders' Equity $ 48,834 $ 48,626
========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
1999 1998
------------------ ----------------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
INTEREST INCOME
Loans $ 230 $ 228
Mortgage-Backed Securities 411 431
Investment Securities 162 94
Other Interest-Earning Assets 54 39
---------- -----------
Total Interest Income 857 792
---------- -----------
INTEREST EXPENSE
Deposits 465 429
FHLB Advances - -
---------- -----------
Total Interest Expense 465 429
---------- -----------
NET INTEREST INCOME BEFORE PROVISION
FOR LOAN LOSSES 392 363
PROVISION FOR LOAN LOSSES - -
---------- -----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 392 363
---------- -----------
NON-INTEREST INCOME
Gain - Sale of Investments - 15
Service Charges and Fees 17 14
Recapture of Allowance on GIC Bonds - -
Recovery of Allowance on GIC Bonds Previously
Written Off - -
Miscellaneous Income 5 3
---------- -----------
Total Non-Interest Income 22 32
---------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
1999 1998
------------------ ----------------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
NON-INTEREST EXPENSES
Compensation and Benefits $ 148 $ 163
Occupancy and Equipment 83 48
Computer 9 18
Deposit Insurance Premium 14 6
Professional Services 55 28
FHLB Service Charges 2 9
Real Estate Owned Expenses 1 1
(Recovery of) Provision for Losses on Real
Estate Owned - (4)
Other 59 49
---------- -----------
Total Non-Interest Expense 371 318
---------- -----------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 43 77
FEDERAL INCOME TAX EXPENSE 15 26
---------- -----------
INCOME BEFORE MINORITY INTEREST 28 51
MINORITY INTEREST IN SUBSIDIARY 11 -
---------- -----------
NET INCOME 39 51
OTHER COMPREHENSIVE INCOME -
NET OF INCOME TAX
Unrealized gains(losses) on Securities 3 (26)
========== ===========
COMPREHENSIVE INCOME $ 42 $ 25
========== ===========
EARNINGS PER SHARE
Basic $ 0.08 $ 0.09
========== ===========
Fully Diluted $ 0.08 $ 0.09
========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
1999 1998
------------------ ----------------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 39 $ 51
Adjustments to Reconcile Net Income to Net
Cash Used in Operating Activities:
Depreciation and Amortization 27 5
Premium Amortization Net of Discount Accretion 17 13
Stock Dividend - FHLB - (7)
Gain on Sale of Investments - (15)
ESOP and MRP Expense 20 22
Increase in Accrued Interest Payable 38 2
Increase (Decrease) in Other Liabilities (38) 94
Increase in Accrued Interest Receivable (129) -
Increase in Income Tax Payable - 25
Recapture of Provision for Real Estate Owned - (4)
(Increase) in Real Estate Owned - (63)
(Increase) Decrease in Other Assets 28 (57)
Decrease in Deferred Loan Fees (1) (18)
Increase (Decrease) in Deferred Charges 1 (31)
Increase in Mortgages Held for Resale (312) -
(Increase) in Accounts Receivable - (92)
Increase in Prepaid Income Taxes (73) -
(Increase) Decrease in Deferred Income Taxes - -
--------- ---------
Net Cash Used In Operating Activities (383) (75)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Investment Securities - Available-for-Sale - (2,950)
Maturities of Investment Securities - Available-for-
Sale 500 1,404
Maturities of Mortgage- Backed Securities -
Held-to-Maturity - 814
Purchases of Mortgage- Backed Securities -
Available-for-Sale (2,055) -
Maturities of Mortgage-Backed Securities -
Available-for-Sale 2,110 225
Proceeds from Sale of Mortgage Backed Securities -
Available-for-Sale - 401
Principal Collected on Loans 614 254
Loans Made to Customers (447) (774)
Purchase of Furniture and Fixtures (283) (16)
Proceeds from Sales of Foreclosed Real Estate - 4
(Increase) in Investment in Subsidiary 43 (18)
--------- ---------
Net Cash Provided by (Used In)
Investing Activities 482 (656)
--------- ---------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
1999 1998
------------------ ----------------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase (Decrease) in Deposits $ 380 $ 1,253
Net Decrease in Advances from Borrowers
for Taxes and Insurance (51) (41)
Repayment of Federal Home Loan Advance - -
Purchase of Treasury Stock (148) (98)
Dividends Paid on Common Stock (20) (31)
--------- ---------
Net Cash Provided by Financing Activities 161 1,083
--------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 260 352
CASH AND CASH EQUIVALENTS -
BEGINNING OF YEAR 4,881 2,555
--------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 5,141 $ 2,907
--------- ---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash Paid During the Year for:
Interest $ 427 $ 429
Income Taxes $ 88 $ 92
SUPPLEMENTAL DISCLOSURE OF NON-CASH
TRANSACTIONS
Dividends Declared $ 26 $ 31
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
ALGIERS BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1999
Note 1 - Basis of Presentation -
Algiers Bancorp, Inc. was organized as a Louisiana corporation on
February 5, 1996 for the purpose of engaging in any lawful act or activity for
which a corporation may be formed under the Louisiana Business Corporation Law,
as amended. Other than steps related to the reorganization described below,
the Corporation was essentially inactive until July 8, 1996, when it acquired
Algiers Homestead Association in a business reorganization of entities under
common control in a manner similar to a pooling of interest. Algiers Homestead
Association is engaged in the savings and loan industry. The acquired
association became a wholly-owned subsidiary of the Corporation through the
issuance of 1,000 shares of common stock to the Corporation in exchange for 50%
of the net proceeds received by the Corporation in the reorganization.
On December 23, 1996, Algiers Bancorp, Inc. entered into a limited
liability company partnership when it acquired a majority interest in Jefferson
Community Lending, LLC. Jefferson Community Lending, LLC is engaged in the
business of consumer lending. During 1998, the Corporation initiated a
restructuring plan to reduce costs and increase future operating efficiency by
consolidating the operations of Jefferson Community Lending, LLC. Accordingly,
net assets of Jefferson Community Lending, LLC have been reduced to $-0- at
December 31, 1998.
During 1998, the Algiers Bancorp, Inc. formed Algiers Com, Inc., a
subsidiary that owns a 51% interest in Planet Mortgage, LLC. Planet Mortgage,
LLC is engaged in the solicitation of mortgage loans through its Internet site.
The accompanying consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries, Algiers Homestead Association
and Algiers Com, Inc. and its majority-owned subsidiary, Jefferson Community
Lending, LLC. In consolidation, significant inter-company accounts,
transactions, and profits have been eliminated.
Note 2 - Available for Sale Securities -
Investments and mortgage-backed securities available-for-sale at March
31,1999 and December 31, 1998, respectively, are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
March 31, 1999
------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Investments $ 4,782 $ 39 $ - $ 4,821
======== =========== ========== =========
GNMA Certificates $ 7,080 $ 90 $ - $ 7,170
FNMA Certificates 15,039 156 - 15,195
FHLMC Certificates 4,915 30 - 4,945
-------- ----------- ---------- ---------
$ 27,034 $ 276 $ - $ 27,310
======== =========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998
------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Investments $ 5,292 $ 39 $ 27 $ 5,304
========= ======= ======== ========
GNMA Certificates $ 6,885 $ 90 $ - $ 6,975
FNMA Certificates 16,320 156 - 16,476
FHLMC Certificates 3,911 30 - 3,941
--------- ------- -------- --------
$ 27,116 $ 276 $ - 27,392
========= ======= ======== ========
</TABLE>
Note 3 - 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 Consolidated Statements of
Financial Condition.
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 $16,850 for the three months ended
March 31, 1999 based on the annual release of shares.
Note 4 - Management Recognition Plan -
On July 18, 1997, the Association established a Recognition and
Retention Plan as an incentive to retain personnel of experience and ability in
key positions. The Association approved a total of 25,921 shares of stock to
be acquired for the Plan, of which 4,205 have been allocated for distribution
to key employees and directors. As shares are acquired for the Plan, the
purchase price of these shares is recorded as unearned compensation, a contra
equity account. As the shares are distributed, the contra equity account is
reduced.
Plan share awards are earned by recipients at a rate of 20% of the
aggregate number of shares covered by the Plan over five years. If the
employment of an employee or service as a non-employee director is terminated
prior to the fifth anniversary of the date of grant of plan share award for any
reason, the recipient shall forfeit the right to any shares subject to the
award which have not been earned. The total cost associated with the Plan is
based on the market price of the stock as of the date on which the Plan shares
were granted.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
GENERAL
The following discussion compares the consolidated financial condition
of Algiers Bancorp, Inc. and Subsidiaries at March 31, 1999 to December 31,
1998 and the results of operations for the three months ended March 31, 1999
with the same period in 1998. 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.
This quarterly report includes statements that may constitute forward-
looking statements, usually containing the words "believe," "estimate,"
"project," "expect," "intend" or similar expressions. These statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially from those
reflected in the forward-looking statements. Factors that could cause future
results to vary from current expectations include, but are not limited to, the
following: changes in economic conditions (both generally and more
specifically in the markets in which the Company operates); changes in interest
rates, deposit flows, loan demand, real estate values and competition; changes
in accounting principles, policies or guidelines and in government legislation
and regulation (which change from time to time and over which the Company has
no control); and other risks detailed in this quarterly report and in the
Company's other public filings. Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events or
circumstances that arise after the date hereof.
CHANGES IN FINANCIAL CONDITION
Total assets increased $208,000 or .43% from $48.6 million at December
31, 1998 to $48.8 million at March 31, 1999. The increase in assets is
primarily due to an increase in deposits, loans and investment securities
available for sale.
Interest-earning deposits in other banks and investments was $7.9
million at March 31, 1999 and $6.5 million at December 31, 1998. This increase
was due to an increase in balances held by FHLB.
The mortgage-backed securities portfolio decreased $82,000 or .3% from
$27.4 million at December 31, 1998 to $27.3 million at March 31, 1999, as the
amount of mortgage-backed securities maturing increased and new mortgage-backed
securities purchased increased slightly. Mortgage-backed securities amounted
to $27.3 million or 55.9% of total assets at March 31, 1999, compared to $27.4
million or 56.3% of total assets at December 31, 1998.
The Association's loan portfolio decreased $166,000 or 1.8% over the
past three months from $9.3 million at December 31, 1998 to $9.1 million at
March 31, 1999.
Total deposits increased $380,000 or .96% to $39.9 million at March 31,
1999 from $39.5 million at December 31, 1998. The increase was primarily in
certificate of deposit accounts.
Total stockholders' equity declined by $126,000 during the past three
months. Net income was $39,000, and was offset by the purchase of $148,000 of
treasury stock, and a $26,000 dividend declared on common stock. Stockholders'
equity at March 31, 1999 totaled $8.5 million or 17.3% of total assets compared
to $8.6 million or 17.6% of total assets at December 31, 1998.
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. For the three
months ended March 31, 1999, net interest income before provision for loan
losses was more 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 for the three months ended March 31, 1999
decreased $12,000 or 23.5% compared to the three months ended March 31, 1998.
The decrease was due to an increase of $65,000 or 8.2% in interest income, an
increase of $53,000 or 16.7% in non-interest expense partially offset by a
$36,000 or 8.4% increase in interest expense and a decrease of $10,000 or 31.2%
in non-interest income.
Total interest income increased by $65,000 or 8.2% during the three
months ended March 31, 1999 compared to the three months ending March 31, 1998,
due to an increase in the average yield on interest-earning assets from 7.36%
in the first three months of 1998 to 7.71% in the first three months of 1999.
The higher yield was partially offset by a $145,000 or 3.2% decrease in average
interest-earning assets. The decrease in the average balance was primarily due
to the Company's repurchase of $148,000 of common stock since December 31, 1998
and the payment of dividends on common stock of $20,000. Total interest
expense increased by $36,000 or 8.4% in the three months ending March 31, 1999
compared to the three months ending March 31, 1998, primarily due to an
increase in average deposits of $3.5 million or 9.7% in the first three months
of 1999 over the comparable 1998 period. The higher average balance was
partially offset by a decrease in the average rate on interest-bearing
liabilities to 4.69% from 4.76% over the same period in 1998.
The increased net interest income of $29,000 was due to an increase in
the average interest rate spread to 3.02% in the first three months of 1999
from 2.64% in the first three months of 1998. The higher spread was partially
offset by a decrease of $3.7 million or 8.3% in net average interest-earning
assets in the three months ended March 31, 1999 over the comparable 1998
period. The average yield on interest-earning assets increased to 7.71% during
the three months ended March 31, 1999 compared to 7.36% during the three months
ended March 31, 1998. The increased yield on assets was primarily due to an
increase in the average rate earned on investments. In the three months ending
March 31, 1999, the Company used a portion of its maturing mortgage-backed
securities and interest-earning deposits in other banks to fund the repurchase
of 148,000 of its outstanding common stock. The average rate on deposits
decreased from 4.76% during the first three months of 1998 to 4.69% during the
first three months of 1999.
During the quarter ended March 31, 1999 compared to the same period of
1998, non-interest income decreased $10,000 due to a decrease of $2,000 in
miscellaneous income, a decrease of $15,000 in gain on sale of investments,
partially offset by a $3,000 increase in service charges and fees.
The Association had no provision or credit for loan losses in the three
months ended March 31, 1999 and 1998. Total non-performing loans at March 31,
1999 and December 31, 1998 was $737,000 and the allowance for loan losses at
March 31, 1999 and December 31, 1998 was $526,000.
The $53,000 increase in total non-interest expense in the three months
ended March 31, 1999 was due to a $35,000 increase in occupancy and equipment
expense, a $27,000 increase in professional services offset by a $15,000
decrease in compensation and benefits, and a $9,000 decrease in computer
expenses.
The $11,000 or 42.3% decrease in income tax expense was primarily due to
a decrease of $34,000 or 44.1% in pre-tax income for the three months ended
March 31, 1999 from the comparable 1998 period.
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 4% of its average daily balance of net
withdrawable deposit accounts and borrowings payable in one year or less. At
March 31, 1999, the Association's liquidity was 12.98% or $3.5 million in
excess of the minimum OTS requirement of 4%.
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 March 31, 1999, the Association's tangible and core capital
both amounted to $7.5 million or 15.55% of adjusted total assets of $48.0
million, and the Association's risk-based capital amounted to $7.6 million or
55.11% of adjusted risk-weighted assets of $13.8 million.
As of March 31, 1999, 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 $ 7,676 $ 7,676 $ 7,676
Additional Capital Items:
General Valuation Allowances -- -- 151
Unrealized Gain on Securities -
Available-For-Sale (207) (207) (207)
----------- ---------- ----------
Regulatory Capital 7,469 7,469 7,620
Minimum Capital Requirement 720 1,441 1,106
Regulatory Capital Excess $ 6,749 $ 6,028 $ 6,514
----------- ---------- ----------
Regulatory Capital as a Percentage 15.55% 15.55% 55.11%
Minimum Capital Required as a
Percentage 1.50% 3.00% 8.00%
----------- ---------- ----------
Regulatory Capital as a Percentage in
Excess of Requirements 14.50% 12.55% 47.11%
----------- ---------- ----------
</TABLE>
Based on the above capital ratios, the Association meets the criteria
for a "well capitalized" institution at March 31, 1999. 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.
THE YEAR 2000
The Company utilizes and is dependent upon data processing systems and
software to conduct its business. The approach of the Year 2000 presents a
problem in that many computer programs have been written using two digits
rather than four digits to define the appropriate year. Computer programs
that have time-sensitive software may recognize a date using "00" as the
year 1900 rather than the Year 2000. For example, computer systems may
compute payment, interest, delinquency or other figures important to the
operations of the Company based on the wrong date. This could result in
internal system failure or miscalculations, and also creates risks for the
Company from third parties with whom the Company deals on financial
transactions.
Risks to the Company if its computer system is not Year 2000 compliant
include the inability to process customer deposits or checks drawn on the
Association, inaccurate interest accruals, and maturity dates of loans and
time deposits, and the inability to update accounts for daily transactions.
Other risks to the Company exist if certain of its vendors', suppliers' and
customers' computer systems are not Year 2000 compliant. These risks include
the interruption of business in the event of power outages, the inability of
loan customers to comply with repayment terms if their businesses are
interrupted, the inability to make payment for checks drawn on the Association,
receive payment for checks deposited by the Association's customers, or invest
excess funds if the FHLB or correspondent banks are not Year 2000 compliant.
The Company has structured its Year 2000 compliance plans in accordance
with the OTS and FDIC guidelines. As part of its Year 2000 compliance plan,
the Company has identified mission critical systems and is developing
contingency plans relating to a "worst case scenario" relative to the Year 2000
issue. The Company's most important mission critical system is the software and
hardware responsible for maintaining and processing the general ledger,
deposits and loan accounts. This system and other internal systems used by the
Company have been tested as part of the Company's Year 2000 compliance plan and
have been certified Year 2000 compliant. The Company's Year 2000 plan also
addresses contingencies related to increased liquidity and currency demands
which may arise in the latter part of 1999.
The Company has communicated with its key vendors and suppliers to
determine their Year 2000 compliance and to determine the potential impact of
such third parties' failure to remediate their own Year 2000 issues. The
Company has been assured that such third parties either are already Year 2000
compliant or are in the process of modifying, upgrading or replacing their
computer applications to ensure Year 2000 compliance.
In light of its compliance efforts, the Company does not believe that
the Year 2000 issue is likely to have a material adverse effect on the
Company's liquidity, capital resources or results of operations. However,there
can be no assurance that all of the Company's systems will be Year 2000
compliant, or that the failure of any such system will not have a material
adverse effect on the Company's business, financial condition or operating
results. In addition, to the extent that the Year 2000 issue has a material
adverse effect on the business, financial condition or operating results of
third parties with whom the Company has material relationship, such as other
financial institutions, the Year 2000 issue could have a material adverse
effect on the Company's business, financial condition and operating results.
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 then outstanding 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 30,781 shares or 5.0% of the Company's then outstanding common
stock. Several purchases of the Company's common stock were made and the 5.0%
repurchase was completed on April 3, 1998.
The OTS granted the Company permission on September 3, 1998 to
repurchase approximately 14% of the Company's outstanding common tock. The
approval included 21,419 shares to fund the 1997 Management Recognition and
Retention Plan and shares for general corporate purposes.
PART II - OTHER INFORMATION
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 March 31, 1999.
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.
ALGIERS BANCORP, INC.
Date: May 14, 1999 By: /s/ Hugh E. Humphrey, Jr.
----------------------------------
Hugh E. Humphrey, Jr.,
Chairman of the Board,
President and
Chief Executive Officer
Date: May 14, 1999 By: /s/ Francis M. Minor, Jr.
----------------------------------
Francis M. Minor, Jr.
Chief Financial Officer
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