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, 2000
[ ] 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 July 31, 2000: 506,348
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
ALGIERS BANCORP, INC.
QUARTERLY REPORT ON FORM 10-QSB FOR
THE QUARTER ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
PAGE
PART I - FINANCIAL INFORMATION
<S> <C>
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 at June 30, 2000
(Unaudited) and December 31, 1999.................................................. 1-2
Consolidated Statements Of Operations (Unaudited) For the Three
and Six Months Ended June 30, 2000 and 1999........................................ 3-4
Consolidated Statements Of Cash Flows (Unaudited) For the
Six Months Ended June 30, 2000 and 1999............................................ 5-6
Notes to Consolidated Financial Statements......................................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................................... 8
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders............................ 12
Item 6. Exhibits and Reports on Form 8-K............................................... 12
</TABLE>
i
<PAGE>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
--------- --------
(Unaudited)
(In Thousands)
<S> <C> <C>
Cash and Cash Equivalents $ 608 $ 1,374
Interest-Bearing Deposits in Other Banks 1,011 1,465
Investments Available-for-Sale - at Fair Value (Note 2) 5,467 5,510
Loans Receivable - Net 10,110 9,788
Mortgage Loans Held for Resale - 130
Mortgage-Backed Securities - Available-for-Sale -
at Fair Value (Note 2) 25,435 26,054
Stock in Federal Home Loan Bank 566 541
Accrued Interest Receivable 323 324
Real Estate Owned - Net 251 251
Office Properties and Equipment, at Cost, Net of
Accumulated Depreciation of $530 and
$428, Respectively 702 795
Prepaid Expenses 85 46
Deferred Taxes 401 374
Income Tax Receivable 193 105
Other Assets 9 7
--------- ---------
$ 45,161 $ 46,764
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
1
<PAGE>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
---------- ------------
(Unaudited)
(In Thousands)
<S> <C> <C>
LIABILITIES
Deposits:
Interest Bearing $ 37,157 $ 37,844
Non-Interest Bearing 406 524
FHLB Advances 500 1,000
Advance Payments from Borrowers for
Insurance and Taxes 89 84
Accrued Interest Payable on Depositors' Accounts 13 16
Dividends Payable 25 25
Other Liabilities 191 104
---------- ------------
38,381 39,597
Minority Interest in Subsidiary (20) 48
---------- ------------
Total Liabilities 38,361 39,645
---------- ------------
STOCKHOLDERS' EQUITY
Preferred Stock - Par Value $.01; 5,000,000 Shares
Authorized; 0 Shares Issued and Outstanding - -
Common Stock - Par Value $.01
10,000,000 Shares Authorized, 648,025 Issued Shares 6 6
Treasury Stock - 141,677 Shares, at Cost (1,823) (1,823)
Paid-in Capital in Excess of Par 6,132 6,132
Retained Earnings 3,620 3,882
Accumulated Other Comprehensive Income (Loss) (777) (720)
---------- ------------
7,158 7,477
---------- ------------
Less: Unearned ESOP Shares (322) (322)
Unearned MRP Shares (36) (36)
---------- ------------
(358) (358)
---------- ------------
Total Stockholders' Equity 6,800 7,119
---------- ------------
Total Liabilities and Stockholders' Equity $ 45,161 $ 46,764
========== ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
----------------------------- ---------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans $ 230 $ 197 $ 430 $ 427
Mortgage-Backed Securities 396 426 790 837
Investment Securities 95 175 179 337
Other Interest-Earning Assets 25 42 43 96
---------- ---------- ---------- ----------
Total Interest Income 746 840 1,442 1,697
---------- ---------- ---------- ----------
INTEREST EXPENSE
Deposits 458 468 924 933
FHLB Advances 7 - 17 -
---------- ---------- ---------- ----------
Total Interest Expense 465 468 941 933
---------- ---------- ---------- ----------
NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES 281 372 501 764
PROVISION FOR LOAN LOSSES - - - -
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 281 372 501 764
---------- ---------- ---------- ----------
NON-INTEREST INCOME
Service Charges and Fees 53 84 119 101
Recovery of GIC Bonds Previously
Written Off - - 4 -
Miscellaneous Income 13 3 19 8
---------- ---------- ---------- ----------
Total Non-Interest Income 66 87 142 109
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
----------------------------- ---------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
NON-INTEREST EXPENSES
Compensation and Benefits $ 229 $ 163 $ 437 $ 311
Occupancy and Equipment 100 62 212 145
Computer 19 10 34 19
Exams and Assessments 17 6 24 20
Professional Services 102 71 142 126
Bank Service Charges 9 2 16 4
Real Estate Owned Expenses 10 1 15 2
Other 80 110 127 169
----------- ---------- ----------- ----------
Total Non-Interest Expense 566 425 1,007 796
----------- ---------- ----------- ----------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST (219) 34 (364) 77
FEDERAL INCOME TAX
EXPENSE (BENEFIT) (78) - (85) 15
----------- ---------- ----------- ----------
INCOME BEFORE MINORITY INTEREST (141) 34 (279) 62
MINORITY INTEREST IN SUBSIDIARY 36 10 68 21
----------- ---------- ----------- ----------
NET INCOME (LOSS) (105) 44 (211) 83
OTHER COMPREHENSIVE INCOME
(LOSS) - NET OF INCOME TAX
Unrealized Gains (Losses) on Securities 10 (1) (57) 2
----------- ---------- ----------- ----------
COMPREHENSIVE INCOME (LOSS) $ (95) $ 43 $ (268) $ 85
=========== ========== =========== ==========
EARNINGS (LOSS) PER SHARE
Basic $ (0.22) $ 0.09 $ (0.45) $ 0.18
Fully Diluted $ (0.22) $ 0.09 $ (0.45) $ 0.18
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
2000 1999
---------- ----------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (211) $ 83
Adjustments to Reconcile Net Income (Loss) to Net
Cash Used in Operating Activities:
Depreciation and Amortization 103 55
Premium Amortization Net of Discount Accretion 17 7
Stock Dividend - FHLB (25) -
ESOP and MRP Expense 21 46
Increase (Decrease) in Accrued Interest Payable (3) 3
Increase (Decrease) in Other Liabilities 60 (70)
(Increase) Decrease in Accrued Interest Receivable 1 (237)
(Increase) Decrease in Other Assets (2) 1
Increase (Decrease) in Deferred Loan Fees 16 (1)
(Increase) Decrease in Prepaid Expenses (39) 7
Originations of Loans Held for Sale (71) (112)
Proceeds from Sales of Loans Held for Sale 201 -
Increase in Prepaid Income Taxes (88) (73)
Decrease in Minority Interest in Subsidiary (68) (21)
Decrease in Deferred Income Taxes 2 -
---------- ----------
Net Cash Used In Operating Activities (86) (312)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Investment Securities - Available-for-Sale - -
Maturities of Investment Securities - Available-for-Sale 16 500
Purchases of Mortgage- Backed Securities - Available-for-Sale (1,802) (5,485)
Maturities of Mortgage-Backed Securities - Available-for-Sale 2,346 3,469
Principal Collected on Loans 800 1,186
Loans Made to Customers (1,134) (806)
Purchase of Furniture and Fixtures (10) (281)
Proceeds from Sales of Foreclosed Real Estate - -
---------- ----------
Net Cash Provided by (Used In) Investing Activities 216 (1,417)
---------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
ALGIERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
2000 1999
------------ ------------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase (Decrease) in Deposits $ (805) $ 299
Net Increase (Decrease) in Advances from
Borrowers for Taxes and Insurance 5 (62)
Repayment of Federal Home Loan Advance (500) -
Purchase of Treasury Stock - (148)
Dividends Paid on Common Stock (50) (52)
------------ ------------
Net Cash Provided by (Used In) Financing Activities (1,350) 37
------------ ------------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (1,220) (1,692)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 2,839 4,881
------------ ------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 1,619 $ 3,189
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash Paid During
the Year for:
Interest $ 944 $ 930
Income Taxes $ - $ 88
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
Dividends Declared $ 25 $ 26
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE>
Algiers Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 2000
Note 1 - Basis of Presentation -
Algiers Bancorp, Inc. (the "Company") 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 (the "Association") in a business
reorganization of entities under common control in a manner similar to a pooling
of interest. The 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.
During 1998, the Company 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. 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
June 30, 2000 and December 31, 1999, respectively, are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
------------- -----------------
Gross Gross Gross Gross
Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair
Cost Gains Losses Value Cost Gains Losses Value
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments $ 5,819 $ -- $ 352 $ 5,467 $ 5,826 $-- $ 316 $ 5,510
======= ======= ======= ======= ======= === ======= =======
GNMA Certificates $ 6,416 $ 3 $ 164 $ 6,255 $ 6,877 $-- $ 146 $ 6,731
FNMA Certificates 15,222 26 535 14,713 14,756 -- 472 14,284
FHLMC Certificates 4,624 2 159 4,467 5,198 -- 159 5,039
------- ------- ------- ------- ------- --- ------- -------
$26,262 $ 31 $ 858 $25,435 $26,831 $-- $ 777 $26,054
======= ======= ======= ======= ======= === ======= =======
</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 and have
attained the age of 21. The ESOP shares are 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 $27,650 and $33,700 for the six
months ended June 30, 2000 and 1999, based on the annual release of shares.
7
<PAGE>
Note 4 - Management Recognition Plan -
On July 18, 1997, the Company 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.
Note 5 - Regulatory Matters -
As previously reported in the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1999, on March 1, 2000 the Office of
Thrift Supervision (OTS) and the Office of Financial Institutions (OFI) issued a
preliminary supervisory agreement (the "Agreement") as a result of their
examination of the Association as of November 29, 1999. On April 17, 2000 the
Company signed the Agreement, which, among other things, calls for the following
actions to be taken within specified time periods:
(a) the Association shall appoint a new Chief Executive Officer, two new
directors and a compliance officer;
(b) the Association must formulate a revised three year business plan;
(c) the Association must adopt written policy and procedures for non-real
estate commercial and consumer lending; and
(d) the Association must obtain written approval from the regional
director for any contractual arrangements with employees or third
parties outside of the normal course of business and for any
capital distributions.
Management believes it has taken affirmative action toward complying
with the provisions of the Agreement.
ITEM 2. 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, 2000 to December
31, 1999 and the results of operations for the three and six months ended June
30, 2000 with the same periods in 1999. 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
8
<PAGE>
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 decreased $1,603,000 or 3.43% from $46.8 million at
December 31, 1999 to $45.2 million at June 30, 2000. The decrease in assets is
primarily due to a decrease in cash and cash equivalents, interest-bearing
deposits in other banks, mortgage backed securities, deposits and FHLB advances,
partially offset by an increase in loans.
Interest-earning deposits in other banks and investments were $6.5
million at June 30, 2000 and $7.0 million at December 31, 1999. This decrease
was due to a decrease in balances held by FHLB.
The mortgage-backed securities portfolio decreased $619,000 or 2.38%
from $26.1 million at December 31, 1999 to $25.4 million at June 30, 2000, as
$1.8 million of new mortgage-backed securities were purchased and the amount of
mortgage-backed securities maturing totaled $2.5 million. Mortgage-backed
securities amounted to $25.4 million or 56.3% of total assets at June 30, 2000,
compared to $26.1 million or 55.7% of total assets at December 31, 1999.
The Association's loan portfolio increased $322,000 or 3.3% over the
past six months from $9.8 million at December 31, 1999 to $10.1 million at June
30, 2000.
Total deposits decreased $805,000 or 2.1% to $37.6 million at June
30, 2000 from $38.4 million at December 31, 1999. The decrease was primarily in
certificate of deposit accounts.
Total stockholders' equity declined by $319,000 during the past six
months. This decrease was due to a net loss of $211,000, a decrease in
accumulated other comprehensive income of $57,000, and $50,000 in dividends
declared on common stock. Stockholders' equity at June 30, 2000 totaled $6.8
million or 15.1% of total assets compared to $7.1 million or 15.2% of total
assets at December 31, 1999.
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 six
months ended June 30, 2000, 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 for the three months ended June 30, 2000
decreased $149,000 or 338.6% compared to the three months ended June 30, 1999.
The decrease was due to a decrease of $94,000 or 11.2% in interest income, a
decrease of $21,000 or 24.1% in non-interest income, and an increase of $141,000
or 33.2% in non-interest expense, partially offset by a $78,000 or 100.0%
increase in income tax benefit.
9
<PAGE>
The Company's net income for the six months ended June 30, 2000
decreased $294,000 or 354.22% compared to the six months ended June 30, 1999.
The decrease was due to a decrease of $255,000 or 15.0% in interest income, an
increase of $211,000 or 26.5% in non-interest expense, partially offset by an
increase of $33,000 or 30.3% in non-interest income and an increase of $100,000
or 666.7% in income tax benefit.
Total interest income decreased by $94,000 or 11.2% during the three
months ended June 30, 2000 compared to the three months ending June 30, 1999,
due to a decrease in the average yield on interest earning assets from 7.50% in
the three months ending June 30, 1999 to 6.93% in the three months ending June
30, 2000 and a decrease of $1,743,000 or 3.9% in average interest earning
assets. The decrease was primarily due to principal pay-downs on mortgage backed
securities exceeding repurchases and decreases in interest bearing deposits in
other banks, partially offset by increases in loans and investment securities.
Total interest expense decreased by $3,000 or .6% in the three months ending
June 30, 2000, as compared to the same period in 1999.
The decreased net interest income of $91,000 was due to a decrease
in the average interest rate spread to 2.13% in the quarter ending June 30, 2000
from 2.78% in the same quarter in 1999 and a decrease of $814,000 or 15.8% in
net average interest-earning assets in the three months ended June 30, 2000 over
the comparable 1999 period. The average yield on interest-earning assets
decreased to 6.93% during the three months ended June 30, 2000 compared to 7.50%
during the three months ended June 30, 2000. The decreased yield on assets was
primarily due to a decrease in the average rate earned on investments. The
average rate on deposits increased from 4.72% during the three months ended June
30, 1999 to 4.83% during the three months ended June 30, 2000.
Total interest income decreased by $255,000 or 15.0% during the six
months ended June 30, 2000 compared to the six months ending June 30, 1999, due
to a decrease in the average yield on interest earning assets from 7.58% in the
first six months of 1999 to 6.70% in the first six months of 2000 and a decrease
of $1,743,000 or 3.9% in average interest-earning assets. The decrease in the
average balance was primarily due to principal pay-downs on mortgage backed
securities exceeding repurchases and decreases in interest bearing deposits in
other banks, partially offset by increases in loans and investment securities.
Total interest expense increased by $8,000 or .9% in the six months ending June
30, 2000 compared to the six months ending June 30, 1999, primarily due to an
increase in the average rate on interest-bearing liabilities to 4.86% from 4.71%
over the same period in 1999. The higher average rate was partially offset by a
decrease in average interest bearing liabilities of $929,000 or 2.3% in the
first six months of 2000 over the comparable 1999 period.
The decreased net interest income of $263,000 was due to a decrease
in the average interest rate spread to 1.84% in the first six months of 2000
from 2.87% in the first six months of 1999 and a decrease of $814,000 or 15.8%
in net average interest-earning assets in the six months ended June 30, 2000
over the comparable 1999 period. The average yield on interest-earning assets
decreased to 6.70% during the six months ended June 30, 2000 compared to 7.58%
during the six months ended June 30, 1999. The decreased yield on assets was
primarily due to a decrease in the average rate earned on investments. The
average rate on deposits increased from 4.71% during the first six months of
1999 to 4.87% during the first three months of 2000.
The Association had no provision or credit for loan losses in the
quarter or the six months ended June 30, 2000 and 1999. Total non-performing
loans at June 30, 2000 and December 31, 1999 was $216,000 and $177,000 and the
allowance for loan losses at June 30, 2000 and December 31, 1999 was $223,000
and $230,000, respectively.
During the quarter ended June 30, 2000 compared to the same period
of 1999, non-interest income decreased $21,000 due to a decrease of $31,000 in
service charges and fees.
10
<PAGE>
The increase in non-interest income of $33,000 or 30.3% in the six
months ended June 30, 2000, as compared to the same period in 1999, was mainly
due to an increase in service charges and fees.
The $141,000 increase in total non-interest expense in the three
months ended June 30, 2000 was due to a $66,000 increase in compensation and
benefits, a $38,000 increase in occupancy and equipment expense, and a $31,000
increase in professional services, offset by a $30,000 decrease in other
expenses, as compared to the same period in 1999.
The $211,000 increase in non-interest expense in the six months
ended June 30, 2000 was due to a $126,000 increase in compensation and benefits,
a $67,000 increase in occupancy and equipment expense, and a $16,000 increase in
professional services, offset by a $42,000 decrease in other expenses, as
compared to the same period in 1999.
The $100,000 decrease in income tax expense was primarily due to a
decrease of $441,000 in pre-tax income for the six months ended June 30, 2000
from the comparable 1999 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
June 30, 2000, the Association's liquidity was 4.34% or $128,000 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 June 30, 2000, the Association's tangible and core
capital both amounted to $7.1 million or 15.34% of adjusted total assets of
$46.2 million, and the Association's risk-based capital amounted to $7.2 million
or 62.10% of adjusted risk-weighted assets of $11.6 million.
As of June 30, 2000, 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 6,325 6,325 6,325
Additional Capital Items:
General Valuation Allowance - - 146
Unrealized Loss on Securities -
Available for Sale 757 757 757
----- ----- -----
Regulatory Capital 7,082 7,082 7,228
Minimum Capital Requirement 693 1,385 931
----- ----- -----
Regulatory Capital Excess 6,389 5,697 6,297
Regulatory Capital as a Percentage 15.34 % 15.34 % 62.10 %
Minimum Capital Required as
a Percentage 1.50 % 3.00 % 8.00 %
</TABLE>
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<PAGE>
Based on the above capital ratios, the Association meets the
criteria for a "well capitalized" institution at June 30, 2000. 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.
PART II - OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders of the Company was held on July
28, 2000 (the "Annual Meeting").
(b) At the Annual Meeting, Janice Ray was elected and Thomas M. Arnold, Sr. was
re-elected to serve until the annual meeting of stockholders for the year 2003.
In addition to the directors elected at the Annual Meeting, the terms of Hugh E.
Humphrey, III, Thu Dang, Francis M. Minor, Jr. and John H. Gary, III continued
after the Annual Meeting.
(c) At the Annual Meeting, holders of shares of the Company's common stock
elected two directors with the number of votes cast for and withheld for such
nominees as follows:
Name For Withheld
---- --- --------
Janice Ray 387,322 108,600
Thomas M. Arnold, Sr. 387,322 108,600
With respect to the election of the directors, there were no abstentions or
non-votes.
At the Annual Meeting, the stockholders also voted on and approved a proposal to
ratify the appointment of LaPorte, Sehrt, Romig and Hand, A Professional
Accounting Corporation, as the Company's independent auditors for the fiscal
year ending December 31, 2000. Holders of 463,722 shares voted for, holders of
16,900 shares voted against and holders of 15,300 shares abstained from voting
on such proposal. There were no non-votes with respect to such proposal.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) The following exhibit is filed herewith:
Exhibit No. Description
----------- -----------
3.1 * Articles of Incorporation of Algiers Bancorp, Inc.
3.2 * Bylaws of Algiers Bancorp, Inc.
10.1 Supervisory Agreement dated April 17, 2000
27.1 Financial Data Schedule
--------------------------------------------------------------------------------
* Incorporated herein by reference to the Company's Form
SB-2 (Registration No. 333-2770) filed by the Company with
the SEC on March 26, 1996, as subsequently amended.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Registrant during the
quarter ended June 30, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALGIERS BANCORP, INC.
Date: August 14, 2000 By: /S/ Thomas M. Arnold, Sr.
----------------------------------
Thomas M. Arnold, Sr.
Chairman of the Board
Date: August 14, 2000 By: /S/ Francis M. Minor, Jr.
----------------------------------
Francis M. Minor, Jr.
Acting President and
Chief Executive Officer
(Principal Financial and
Accounting Officer)
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