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, 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 November 6, 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 SEPTEMBER 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 September 30, 2000
(Unaudited) and December 31, 1999.................................................. 1
Consolidated Statements Of Operations (Unaudited) For the Three
and Nine Months Ended September 30, 2000 and 1999.................................. 3
Consolidated Statements Of Cash Flows (Unaudited) For the
Nine Months Ended September 30, 2000 and 1999...................................... 5
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 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>
September 30, December 31,
2000 1999
------- -------
(Unaudited)
(In Thousands)
<S> <C> <C>
Cash and Cash Equivalents $ 509 $ 1,374
Interest-Bearing Deposits in Other Banks 1,404 1,465
Investments Available-for-Sale - at Fair Value (Note 2) 5,543 5,510
Loans Receivable - Net 16,356 9,788
Mortgage Loans Held for Resale 67 130
Mortgage-Backed Securities - Available-for-Sale -
at Fair Value (Note 2) 23,624 26,054
Stock in Federal Home Loan Bank 576 541
Accrued Interest Receivable 368 324
Real Estate Owned - Net 251 251
Office Properties and Equipment, at Cost, Net of
Accumulated Depreciation of $584 and
$428, Respectively 708 795
Prepaid Expenses 53 46
Deferred Taxes 486 374
Income Tax Receivable 25 105
Other Assets 9 7
------- -------
$49,979 $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>
September 30, December 31,
2000 1999
-------- --------
LIABILITIES (Unaudited)
(In thousands)
<S> <C> <C>
Deposits:
Interest Bearing $ 37,230 $ 37,844
Non-Interest Bearing 511 524
FHLB Advances 5,000 1,000
Advance Payments from Borrowers for
Insurance and Taxes 95 84
Accrued Interest Payable on Depositors' Accounts 7 16
Dividends Payable -- 25
Advances from Affiliates 115 --
Other Liabilities 126 104
-------- --------
43,084 39,597
Minority Interest in Subsidiary (63) 48
-------- --------
Total Liabilities 43,021 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 3,508 3,882
Accumulated Other Comprehensive Income (Loss) (520) (720)
-------- --------
7,303 7,477
-------- --------
Less: Unearned ESOP Shares (322) (322)
Unearned MRP Shares (23) (36)
-------- --------
(345) (358)
-------- --------
Total Stockholders' Equity 6,958 7,119
-------- --------
Total Liabilities and Stockholders' Equity $ 49,979 $ 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 Nine Months Ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------ ------ ------ ------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans $ 321 $ 140 $ 751 $ 567
Mortgage-Backed Securities 409 346 1,199 1,183
Investment Securities 100 91 279 428
Other Interest-Earning Assets 17 21 60 117
------ ------ ------ ------
Total Interest Income 847 598 2,289 2,295
------ ------ ------ ------
INTEREST EXPENSE
Deposits 480 462 1,404 1,395
FHLB Advances 71 -- 88 --
------ ------ ------ ------
Total Interest Expense 551 462 1,492 1,395
------ ------ ------ ------
NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES 296 136 797 900
PROVISION FOR LOAN LOSSES -- -- -- --
------ ------ ------ ------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 296 136 797 900
------ ------ ------ ------
NON-INTEREST INCOME
Service Charges and Fees 70 92 189 193
Recovery of GIC Bonds Previously
Written Off (4) 1 -- 1
Gain on Sale of Investments 8 -- 8 --
Miscellaneous Income 10 11 29 19
------ ------ ------ ------
Total Non-Interest Income 84 104 226 213
------ ------ ------ ------
</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 Nine Months Ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------- ------- ------- -------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
NON-INTEREST EXPENSES
Compensation and Benefits $ 287 $ 149 $ 724 $ 460
Occupancy and Equipment 157 93 369 238
Computer 17 26 51 45
Exams and Assessments (15) 6 9 26
Professional Services 38 56 180 182
Bank Service Charges 5 25 21 29
Real Estate Owned Expenses 5 -- 20 2
Other 93 68 220 237
------- ------- ------- -------
Total Non-Interest Expense 587 423 1,594 1,219
------- ------- ------- -------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST (207) (183) (571) (106)
FEDERAL INCOME TAX
EXPENSE (BENEFIT) (52) (27) (137) (12)
------- ------- ------- -------
INCOME BEFORE MINORITY INTEREST (155) (156) (434) (94)
MINORITY INTEREST IN SUBSIDIARY 42 14 110 35
------- ------- ------- -------
NET INCOME (LOSS) (113) (142) (324) (59)
OTHER COMPREHENSIVE INCOME
(LOSS) - NET OF INCOME TAX
Unrealized Gains (Losses) on Securities 257 (912) 200 (910)
------- ------- ------- -------
COMPREHENSIVE INCOME (LOSS) $ 144 $(1,054) $ (124) $ (969)
======= ======= ======= =======
EARNINGS (LOSS) PER SHARE
Basic $ (0.24) $ (0.30) $ (0.69) $ (0.13)
Fully Diluted $ (0.24) $ (0.30) $ (0.69) $ (0.13)
</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>
Nine Months Ended
September 30, September 30,
2000 1999
------- -------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES (In Thousands)
<S> <C> <C>
Net Income (Loss) $ (324) $ (59)
Adjustments to Reconcile Net Income (Loss) to Net
Cash Used in Operating Activities:
Depreciation and Amortization 157 113
Premium Amortization Net of Discount Accretion 10 34
Stock Dividend - FHLB (35) (21)
ESOP and MRP Expense 48 60
Increase (Decrease) in Accrued Interest Payable (9) (1)
Increase (Decrease) in Other Liabilities (15) (61)
(Increase) Decrease in Accrued Interest Receivable (44) (159)
Decrease in Dividends Payable (25) (6)
Gain on Sale of Foreclosed Real Estate -- (2)
Gain on Sale of Mortgage-Backed Securities - Available for Sale (8) --
(Increase) Decrease in Other Assets (2) 25
Increase (Decrease) in Deferred Loan Fees 13 (1)
(Increase) Decrease in Prepaid Expenses (7) --
Originations of Loans Held for Sale (138) (119)
Proceeds from Sales of Loans Held for Sale 201 --
(Increase) Decrease in Prepaid Income Taxes 80 (12)
Decrease in Minority Interest in Subsidiary (111) (33)
(Increase) Decrease in Deferred Income Taxes (216) --
------- -------
Net Cash Used In Operating Activities (425) (242)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Maturities of Investment Securities - Available-for-Sale 24 500
Purchases of Mortgage- Backed Securities - Available-for-Sale (2,773) (7,024)
Maturities of Mortgage-Backed Securities - Available-for-Sale 3,257 4,955
Proceeds from Sales of Mortgage-Backed Securities - Available for Sale 2,191 --
Principal Collected on Loans 1,487 1,352
Loans Made to Customers (3,513) (2,090)
Purchase of Participation Loans (4,553) --
Purchase of Furniture and Fixtures (70) (291)
Proceeds from Sales of Foreclosed Real Estate -- 64
------- -------
Net Cash Provided by (Used In) Investing Activities (3,950) (2,534)
------- -------
</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>
Nine Months Ended
September 30, September 30,
2000 1999
------- -------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase (Decrease) in Deposits $ (627) $ 1
Net Increase (Decrease) in Advances from
Borrowers for Taxes and Insurance 11 (35)
Advances from Federal Home Loan Bank 9,750 --
Repayment of Federal Home Loan Advance (5,750) --
Advances from Affiliates 115 --
Purchase of Treasury Stock -- (148)
Dividends Paid on Common Stock (50) (72)
------- -------
Net Cash Provided by (Used In) Financing Activities 3,449 (254)
------- -------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (926) (3,030)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 2,839 4,881
------- -------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 1,913 $ 1,851
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest $ 1,501 $ 1,396
Income Taxes $ -- $ --
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
Dividends Declared $ -- $ 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)
September 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
September 30, 2000 and December 31, 1999, respectively, are summarized as
follows (in thousands):
<TABLE>
<CAPTION>
September 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 $ 5,815 $ -- $ 272 $ 5,543 $ 5,826 $-- $ 316 $ 5,510
======= ======= ======= ======= ======= === ======= =======
GNMA Certificates $ 6,143 $ 3 $ 90 $ 6,056 $ 6,877 $-- $ 146 $ 6,731
FNMA Certificates 13,570 34 358 13,246 14,756 -- 472 14,284
FHLMC Certificates 4,427 2 107 4,322 5,198 -- 159 5,039
------- ------- ------- ------- ------- --- ------- -------
$24,140 $ 39 $ 555 $23,624 $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.
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<PAGE>
As shares are released from collateral, the Company reports
compensation expense equal to the current market price of the shares. Dividends
on allocated ESOP shares are recorded as a reduction of retained earnings;
dividends on unallocated ESOP shares are recorded as a reduction of unearned
ESOP shares. ESOP compensation expense was $35,000 and $51,000 for the nine
months ended September 30, 2000 and 1999, based on the annual release of shares.
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 -
On October 4, 2000, the Office of Thrift Supervision (OTS) issued an
order to "Cease and Desist" (the "Order") to the Association. The Order was
issued by the OTS as a result of their examination of the Association as of
April 10, 2000. The Order is an arrangement between the Association and the OTS
in which the Association agrees to perform, among other things, the following
within specified time periods:
(a) the Association shall appoint a permanent compliance officer;
(b) the Association shall develop written policies and procedures for
compliance in consumer lending, and for training lending
personnel in these policies and procedures and in consumer
compliance laws;
(c) the Association shall establish a plan for internal controls and
procedures to ensure compliance with compliance regulations, and
provide an ongoing monitoring program to assess the effectiveness
and progress of compliance controls;
(d) the Association shall review all outstanding loans made since the
last OTS compliance examination, dated June 23, 1997 to determine
certain compliance matters for reporting to the OTS.
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
8
<PAGE>
(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 Order and 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 September 30, 2000 to
December 31, 1999 and the results of operations for the three and nine months
ended September 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
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 $3,215,000 or 6.87% from $46.8 million at
December 31, 1999 to $50.0 million at September 30, 2000. The increase in assets
is primarily due to an increase in loans, partially funded by FHLB advances, and
partially offset by decreases in cash and cash equivalents, interest-bearing
deposits in other banks, mortgage backed securities, and deposits.
Interest-earning deposits in other banks and investments were $6.9
million at September 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 $2.5 million or
9.33% from $26.1 million at December 31, 1999 to $23.6 million at September 30,
2000, as $2.2 million of mortgage-backed securities were sold, $2.9 million of
new mortgage-backed securities were purchased and the amount of mortgage-backed
securities maturing totaled $3.2 million. Mortgage-backed securities amounted to
$23.6 million or 47.3% of total assets at September 30, 2000, compared to $26.1
million or 55.7% of total assets at December 31, 1999.
9
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The Association's loan portfolio increased $6.6 million or 67.1%
over the past nine months from $9.8 million at December 31, 1999 to $16.4
million at September 30, 2000.
Total deposits decreased $627,000 or 1.6% to $37.8 million at
September 30, 2000 from $38.4 million at December 31, 1999. The decrease was
primarily in certificate of deposit accounts.
Total stockholders' equity declined by $161,000 during the past nine
months. This decrease was due to a net loss of $324,000, an increase in
accumulated other comprehensive income of $200,000, and $50,000 in dividends
declared on common stock. Stockholders' equity at September 30, 2000 totaled
$7.0 million or 13.9% 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 nine
months ended September 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 September 30,
2000 increased $29,000 or 20.4% compared to the three months ended September 30,
1999. The increase was due to an increase of $249,000 or 41.6% in interest
income, a $25,000 or 92.6% increase in income tax benefit partially offset by an
increase of $89,000 or 19.3% in interest expense, a decrease of $20,000 or 19.2%
in non-interest income, and an increase of $164,000 or 38.8% in non-interest
expense.
The Company's net income for the nine months ended September 30,
2000 decreased $265,000 or 449.2% compared to the nine months ended September
30, 1999. The decrease was due to a decrease of $6,000 or .3% in interest
income, an increase of $97,000 or 7.0% in interest expense, and an increase of
$375,000 or 30.8% in non-interest expense, partially offset by an increase of
$13,000 or 6.1% in non-interest income and an increase of $125,000 or 104.2% in
income tax benefit.
Total interest income increased by $249,000 or 41.6% during the
three months ended September 30, 2000 compared to the three months ending
September 30, 1999, due to an increase in the average yield on interest earning
assets from 5.42% in the three months ending September 30, 1999 to 7.44% in the
three months ending September 30, 2000 and an increase of $1,391,000 or 3.2% in
average interest earning assets. The increase was primarily due to increases in
loans, investment securities and interest bearing deposits in other banks
partially offset by sales and principal pay-downs on mortgage backed securities
exceeding repurchases. Total interest expense increased by $89,000 or 19.3% in
the three months ending September 30, 2000, as compared to the same period in
1999.
The increased net interest income of $160,000 was due to an increase
in the average interest rate spread to 2.0% in the quarter ending September 30,
2000 from .74% in the same quarter in 1999 and an increase of $349,000 or 7.5%
in net average interest-earning assets in the three months ended September 30,
2000 over the comparable 1999 period. The average yield on interest-earning
assets increased to 7.44% during the three months ended September 30, 2000
compared to 5.42% during the three months ended September 30, 2000. The
increased yield on assets was primarily due to an increase in the average rate
earned on loans and mortgage-backed securities. The average rate on deposits
10
<PAGE>
increased from 4.68% during the three months ended September 30, 1999 to 5.11%
during the three months ended September 30, 2000.
Total interest income decreased by $6,000 or .3% during the nine
months ended September 30, 2000 compared to the nine months ending September 30,
1999, due to a decrease in the average yield on interest earning assets from
7.06% in the first nine months of 1999 to 6.70% in the first nine months of 2000
partially offset by an increase of $1,391,000 or 3.2% in average
interest-earning assets. The increase in the average balance was primarily due
to increases in loans, investment securities and interest bearing deposits in
other banks, partially offset by sales and principal pay-downs on mortgage
backed securities exceeding repurchases. Total interest expense increased by
$97,000 or 7.0% in the nine months ending September 30, 2000 compared to the
nine months ending September 30, 1999, primarily due to an increase in the
average rate on interest-bearing liabilities to 4.91% from 4.53% over the same
period in 1999. The higher average rate was partially offset by a decrease in
average interest bearing deposits of $1,959,000 or 5.0% in the first nine months
of 2000 over the comparable 1999 period.
The decreased net interest income of $103,000 was due to a decrease
in the average interest rate spread to 1.80% in the first nine months of 2000
from 2.53% in the first nine months of 1999, partially offset by an increase of
$349,000 or 7.5% in net average interest-earning assets in the nine months ended
September 30, 2000 over the comparable 1999 period. The average yield on
interest-earning assets decreased to 6.70% during the nine months ended
September 30, 2000 compared to 7.06% during the nine months ended September 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
4.53% during the first nine months of 1999 to 4.91% during the first nine months
of 2000.
The Association had no provision or credit for loan losses in the
quarter or the nine months ended September 30, 2000 and 1999. Total
non-performing loans at September 30, 2000 and December 31, 1999 was $306,000
and $177,000 and the allowance for loan losses at September 30, 2000 and
December 31, 1999 was $223,000 and $230,000, respectively.
During the quarter ended September 30, 2000 compared to the same
period of 1999, non-interest income decreased $20,000 due to a decrease of
$22,000 in service charges and fees.
The increase in non-interest income of $13,000 or 6.1% in the nine
months ended September 30, 2000, as compared to the same period in 1999, was
mainly due to an increase in miscellaneous income.
The $164,000 increase in total non-interest expense in the three
months ended September 30, 2000 was due to a $139,000 increase in compensation
and benefits, a $64,000 increase in occupancy and equipment expense, and a
$25,000 increase in other expenses, offset by a $18,000 decrease in professional
services, as compared to the same period in 1999.
The $375,000 increase in non-interest expense in the nine months
ended September 30, 2000 was due to a $264,000 increase in compensation and
benefits, a $131,000 increase in occupancy and equipment expense, and a $18,000
increase in real estate owned expenses, offset by a $17,000 decrease in other
expenses, as compared to the same period in 1999.
The $125,000 increase in income tax benefit was primarily due to a
decrease of $465,000 in pre-tax income for the nine months ended September 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
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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 September 30, 2000, the Association's liquidity was 66.2% or
$26.1 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 September 30, 2000, the Association's tangible and
core capital both amounted to $7.0 million or 13.84% of adjusted total assets of
$50.7 million, and the Association's risk-based capital amounted to $7.2 million
or 40.64% of adjusted risk-weighted assets of $17.6 million.
As of September 30, 2000, the Association's unaudited regulatory
capital requirements are as indicated in the following table:
Tangible Core Risk-Based
Capital Capital Capital
----- ----- -----
(Dollars in Thousands)
GAAP Capital 6,513 6,513 6,513
Additional Capital Items:
General Valuation Allowance -- -- 146
Unrealized Loss on Securities -
Available for Sale 501 501 501
----- ----- -----
Regulatory Capital 7,014 7,014 7,160
Minimum Capital Requirement 760 1,520 1,410
----- ----- -----
Regulatory Capital Excess 6,254 5,494 5,750
Regulatory Capital as a Percentage 13.84 % 13.84 % 40.64 %
Minimum Capital Required as
a Percentage 1.50 % 3.00 % 8.00 %
Based on the above capital ratios, the Association meets the
criteria for a "well capitalized" institution at September 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.
The Board of Directors, responding to regulatory requirements, has
elected to suspend the payment of quarterly dividends for the quarter ended
September 30, 2000.
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PART II - OTHER INFORMATION
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
10.2 Order to Cease and Desist dated October 4, 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.
** Incorporated herein by reference to the Company's 10QSB for the
quarterly period ended June 30, 2000, filed by the Company with the
SEC on August 14, 2000.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Registrant during
the quarter ended September 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: November 14, 2000 By: /s/ Thomas M. Arnold, Sr.
---------------------------
Thomas M. Arnold, Sr.
Chairman of the Board
Date: November 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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