SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 19, 1999
GOLD BANC CORPORATION, INC.
(Exact name of registrant as specified in its charter)
KANSAS 0-28936 48-1008593
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) No.)
11301 Nall Avenue, Leawood, Kansas 66211
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (913) 451-8050
None
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
This Amendment to the Current Report on Form 8-K, dated and
filed November 19, 1999, is being filed because such report was
damaged in transit during the electronic filing, which resulted
in the loss of certain notes to the financial information filed
as Exhibit 99.1. This Amended 8-K reflects a complete copy of
Exhibit 99.1.
On September 6, 1999 Gold Banc Corporation, Inc. ("Gold
Banc") entered into an Agreement and Plan of Reorganization to
acquire American Bancshares, Inc., a Florida corporation
("American"). Attached hereto as Exhibits 99.1 and 99.2 are
certain financial statements of American.
ITEM 7. FINANCIAL STATEMENTS AND OTHER EXHIBITS.
EXHIBITS NO. DESCRIPTION
23.1 Consent of Independent Certified Public
Accountants.
99.1 American Bancshares, Inc. and Subsidiaries
Consolidated Financial Statements for the Years
Ended December 31, 1998, 1997 and 1996 with Report
of Independent Certified Public Accountants.
99.2 American Bancshares, Inc. and Subsidiaries
Consolidated Balance Sheet as of September 30,
1999 (unaudited); Consolidated Statements of
Income and Cash Flows for the Nine Months Ended
September 30, 1999 and 1998 (unaudited).
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 hereunto duly authorized.
Dated: December 9, 1999.
GOLD BANC CORPORATION, INC.
By: /s/ J. Craig Peterson
J. Craig Peterson,
Chief Financial Officer
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-4 (No.333-65539) of Gold Banc
Corporation, Inc. of our report dated February 13, 1999 relating
to the financial statements of American Bancshares, Inc., which
appears in this Current Report on Form 8-K of Gold Banc
Corporation, Inc.
PricewaterhouseCoopers LLP
Tampa, Florida
November 16, 1999
EXHIBIT 99.1
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of
American Bancshares, Inc. and Subsidiaries
Bradenton, Florida
In our opinion, based upon our audits and the report of the other
auditors, the accompanying consolidated balance sheets and the
related consolidated statements of income, shareholders' equity
and comprehensive income and cash flows present fairly, in all
material respects, the financial position of American Bancshares,
Inc. and its subsidiaries (the "Company") at December 31, 1998
and 1997, and the results of their operations and their cash
flows for each of the three years in the period ended December
31, 1998, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of
the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We
did not audit the financial statements of Murdock Florida Bank
which statements reflect total assets of 18% and 23% at December
31, 1997 and 1996, respectively, and net income of 15% and 13%
for the years ended December 31, 1997 and 1996, respectively, of
the related consolidated totals. Those statements were audited
by other auditors whose report thereon has been furnished to us,
and our opinion expressed herein, insofar as it relates to the
amounts included for Murdock Florida Bank, is based solely on the
report of the other auditors. We conducted our audits of these
statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We
believe that our audits and the report of other auditors provide
a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Tampa, Florida
February 13, 1999
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1998 and 1997 (in thousands except share amounts)
ASSETS 1998 1997
Cash and due from banks $20,319 $13,276
Federal funds sold 0 5,120
Loans held for sale 88,158 39,588
Investment securities
available for sale
(at aggregate fair value) 77,078 68,664
Loans receivable (net
of allowance for
loan losses and
deferred loan
fees/costs of
$1,620 in 1998
and $1,705 in 1997)
Loans receivable, net 248,808 213,405
Premises and equipment,
net 12,894 9,161
Other assets 7,907 4,687
Total assets $455,164 $353,901
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits $344,845 $302,746
Securities sold
under agreements to
repurchase 29,592 17,528
Federal Home Loan
Bank advances 34,900 5,000
Note payable 0 500
Guaranteed preferred
beneficial interests
in the Company's
junior subordinated
debentures 16,249 0
Other liabilities 2,151 2,048
Total liabilities 427,737 327,822
COMMITMENTS AND CONTINGENCIES (Note 14)
SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
Common stock - $1.175 par value;
10,000,000 shares authorized;
4,994,984 and 4,994,484
shares issued and outstanding at
December 31, 1998 and 1997,
respectively 5,870 5,870
Additional paid-in capital 15,551 15,548
Accumulated other comprehensive
income, net of tax of
$(87) and $86 at
December 31, 1998 and 1997,
respectively (143) 139
Retained earnings 6,149 4,522
Total shareholders' equity 27,427 26,079
Total liabilities and
shareholders' equity $455,164 $353,901
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
for the years ended December 31, 1998, 1997 and 1996 (in
thousands except share amounts)
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
Interest income:
Interest and fees on loans $26,250 $20,101 $16,150
Interest on federal
funds sold 265 534 336
Interest on investment
securities 4,670 3,996 2,945
Total interest income 31,185 24,631 19,431
Interest expense:
Deposits 13,142 11,905 9,475
Borrowings 3,030 1,012 490
Total interest expense 16,172 12,917 9,965
Net interest income 15,013 11,714 9,466
Provision for loan losses 1,180 921 515
Net interest income
after provision for
loan losses 13,833 10,793 8,951
Other income 5,245 4,156 2,148
Other expenses 16,574 11,912 9,856
Income before
income tax provision 2,504 3,037 1,243
Income tax provision 877 1,117 461
Net income $ 1,627 $1,920 $782
Weighted average
basic shares outstanding 4,994,765 4,988,318 4,637,565
Weighted average diluted
shares outstanding 5,019,291 5,019,484 4,692,093
Earnings per share:
Basic $ 0.33 $0.38 $0.17
Diluted $ 0.32 $0.38 $0.17
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
for the years ended December 31, 1998, 1997 and 1996
(in thousands except share amounts)
<TABLE>
<CAPTION>
--------------COMMON STOCK----------------
COMPREHENSIVE AUTHORIZED OUTSTANDING
INCOME SHARES SHARES PAR VALUE
<S> <C> <C> <C> <C>
Balance, January 1, 1996 10,000,000 3,325,094 $ 3,907
Exercise of warrants 0 163,695 192
Issuance of stock 0 1,436,979 1,689
Net income $782 0 0 0
Change in net unrealized
gain on investment
securities available
for sale (270) 0 0 0
Comprehensive income $512 0 0 0
Balance,
December 31, 1996 10,000,000 4,925,768 5,788
Exercise of warrants 0 61,597 73
Issuance of stock 0 7,119 9
Net income $ 1,920 0 0 0
Change in net unrealized
loss on investment
securities available
for sale 230 0 0 0
Comprehensive income $2,150 0 0 0
Balance,
December 31, 1997 10,000,000 4,994,484 5,870
Exercise of stock option 0 500 0
Net income $1,627 0 0 0
Change in net unrealized
gain on investment
securities available
for sale (282) 0 0 0
Comprehensive income $1,345 0 0 0
Balance,
December 31, 1998 10,000,000 4,994,984 $5,870
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
ADDITIONAL COMPREHENSIVE
PAID-IN RETAINED INCOME,
CAPITAL EARNINGS NET TOTAL
<S> <C> <C> <C> <C>
Balance,
January 1, 1996 $8,725 $1,820 $179 $14,631
Exercise of warrants 790 0 0 982
Issuance of stock 5,689 0 0 7,378
Net income 0 782 0 782
Change in net unrealized
gain on investment
securities available
for sale 0 0 (270) (270)
Comprehensive income 0 0 0 0
Balance,
December 31, 1996 15,204 2,602 (91) 23,503
Exercise of warrants 297 0 0 370
Issuance of stock 47 0 0 56
Net income 0 1,920 0 1,920
Change in net unrealized
loss on investment
securities available
for sale 0 0 230 230
Comprehensive income 0 0 0 0
Balance,
December 31, 1997 15,548 4,522 139 26,079
Exercise of stock option 3 0 0 3
Net income 0 1,627 0 1,627
Change in net unrealized
gain on investment
securities available
for sale 0 0 (282) (282)
Comprehensive income 0 0 0 0
Balance,
December 31, 1998 $15,551 $6,149 $(143) $27,427
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended December 31, 1998, 1997 and 1996
(in thousands)
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $1,627 $1,920 $782
Adjustments to reconcile
net income to net cash
(used in) provided by
operating activities:
Deferred taxes (177) (199) (420)
Depreciation 964 718 486
Amortization of
investment securities 6 18 120
Provision for loan losses 1,180 921 515
Net gain on sale of
investment securities
available for sale (410) (140) (107)
Gain on sale of loans (1,321) (678) (514)
(Gain) loss on sale of
other real estate owned 0 (13) 336
Origination of loans
held for sale,
net of repayments (116,184) (58,452) (38,628)
Proceeds from sales of
loans held for sale 68,179 44,113 38,159
Increase in deferred
loan costs 0 23 150
Increase in other
liabilities 103 767 71
(Increase) decrease in
other assets (2,036) (962) 682
Total adjustments (49,696) (13,884) 850
Net cash (used in)
provided by
operating activities (48,069) (11,964) 1,632
CASH FLOWS FROM INVESTING ACTIVITIES
Net loans to customers (35,949) (43,153) (36,812)
Purchases of bank
premises and equipment (4,697) (2,744) (3,332)
Proceeds from sales of
available for sale
investment securities 50,445 17,998 33,501
Proceeds from maturities
of available for sale
investment securities 50,779 14,178 12,338
Purchases of available for
sale investment
securities (109,516) (56,936) (49,449)
Recoveries on loans charged
off 122 101 46
Net cash used in
investing activities (48,816) (70,556) (43,708)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand
deposits, NOW, money market
and savings accounts 37,795 36,469 28,231
Net increase in time deposits 4,304 33,844 17,475
Net increase in securities
sold under agreements to
repurchase 12,064 7,415 546
Net proceeds (repayments)
from advances and from
borrowings 29,400 (800) (200)
Payments for debt issue
costs (1,007) 0 0
Proceeds from issuance of
guaranteed preferred
beneficial interests in
the Company's junior
subordinated debentures 16,249 0 0
Proceeds from stock sale 3 425 8,359
Net cash provided by
financing activities 98,808 77,353 54,411
Net increase (decrease) in
cash and cash equivalents 1,923 (5,167) 12,335
Cash and cash equivalents
at beginning of year 18,396 23,563 11,228
Cash and cash equivalents at
end of year $20,319 $18,396 $23,563
DISCLOSURES
Interest paid $15,934 $12,711 $9,787
Income taxes paid $1,330 $1,415 $542
Reclassification of loans
to foreclosed real estate $1,002 $160 $518
Loans originated for
sale of foreclosed
real estate $0 $95 $570
Unrealized appreciation
(depreciation) on
investment securities $(282) $230 $(270)
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION:
American Bancshares, Inc. (Holding Company) is a one-bank
holding company, operated under the laws of the State of
Florida. It has three wholly owned subsidiaries, which
include a banking subsidiary, American Bank (Bank), a
state-chartered bank; Freedom Finance Company (Finance), a
Florida Corporation; and ABI Capital Trust (ABICT), a
Delaware Statutory trust. The Bank is a general commercial
bank with all the rights, powers, and privileges granted and
conferred by the Florida Banking Code. Finance is a full
service consumer financing company incorporated in 1997.
ABICT is a trust formed in 1998 existing for the exclusive
purpose of issuing and selling common securities and
preferred securities (together trust securities) and
investing the proceeds from the sale of the trust securities
in junior subordinated debentures issued by the Holding
Company. The sole assets of ABICT are the Junior
Subordinated Debentures of the Holding Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The accounting and reporting policies of the Holding Company
and Subsidiaries conform to generally accepted accounting
principles and general practice within the banking industry.
Following is a description of the more significant of those
policies:
BASIS OF PRESENTATION - The consolidated financial
statements give retroactive effect to the merger with
Murdock Florida Bank, American Bank of Bradenton, and the
Holding Company. The merger was consummated on March 23,
1998 and resulted in the Holding Company issuing a total of
924,024 shares of common stock in exchange for all of the
outstanding stock of Murdock Florida Bank. The transaction
has been accounted for on a pooling-of-interests basis, and
the financial statements are presented as if the merger had
been consummated for the period presented. As required by
generally accepted accounting principles, the consolidated
financial statements became the historical consolidated
financial statements upon issuance of the Holding Company's
consolidated financial statements for the quarter ended
March 31, 1998. The Company's combined net interest income
and continuing net income through the date of acquisition
for the periods ended December 31, 1998, 1997 and 1996,
respectively is as follows:
(AMOUNTS IN THOUSANDS)
NET INTEREST INCOME
1998 1997 1996
American Bancshares, Inc. $12,724 $ 9,271 $7,137
Murdock Florida Bank 2,289 2,443 2,329
Combined total $15,013 $11,714 $9,466
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
(AMOUNTS IN THOUSANDS)
NET INCOME
1998 1997 1996
American Bancshares, Inc. $1,268 $1,631 $883
Murdock Florida Bank 359 289 (101)
Combined total $1,627 $1,920 $782
PRINCIPLES OF CONSOLIDATION - The consolidated financial
statements include the accounts of the Holding Company and
its wholly owned subsidiaries, American Bank of Bradenton,
Freedom Finance Company, and ABI Capital Trust collectively
referred to herein as the Company. All significant
intercompany accounts and transactions have been eliminated.
USE OF ESTIMATES - Significant estimates are made by
management in determining the allowance for possible loan
losses. Consideration is given to a variety of factors in
establishing these estimates including current economic
conditions, diversification of the loan portfolio,
delinquency statistics, results of internal loan reviews,
borrowers' perceived financial and managerial strengths, the
adequacy of underlying collateral, if collateral dependent,
or present value of future cash flows and other relevant
factors. Since the allowance for possible loan losses is
dependent, to a great extent, on general and other
conditions that may be beyond the Bank's control, it is at
least reasonably possible that the estimates of the
allowance for possible loan losses and the carrying values
of the real estate assets could differ materially in the
near term.
LOANS HELD FOR SALE - Mortgage loans originated or purchased
and intended for sale in the secondary market are carried at
the lower of cost or market as determined by outstanding
commitments from investors or current investor yield
requirements, calculated on the aggregate loan basis. Net
unrealized losses, if any, are recognized in a valuation
allowance by charges to earnings. Gains and losses
resulting from the sales of these loans are recognized in
the period the sale occurs. Mortgage loan servicing fees
are earned concurrently with the receipt of the related
mortgage payments.
INVESTMENT SECURITIES AVAILABLE FOR SALE - Securities to be
held for indefinite periods of time and not intended to be
held to maturity are classified as available for sale.
Assets included in this category are those assets that
management intends to use as part of its asset/liability
management strategy and that may be sold in response to
changes in interest rates, resultant prepayment risk and
other factors related to interest rate and resultant
prepayment risk changes. Securities available for sale are
recorded at fair value. Both unrealized gains and losses on
securities available for sale, net of taxes, are included as
a separate component of shareholders' equity in the
consolidated balance sheets until these gains or losses are
realized. If a security has a decline in fair value that is
other than temporary, then the security will be written down
to its fair value by recording a loss in the consolidated
statements of operations.
Gains or losses on the disposition of investment securities
are recognized using the specific identification method.
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
LOANS - Loans are carried at the principal amount
outstanding, net of deferred loan fees and/or origination
costs. Interest is accrued on a simple-interest basis.
Loans are charged to the allowance for loan losses at such
time as management considers them uncollectible in the
normal course of business. Accrual of interest is
discontinued on a loan, including impaired loans, when
management believes, after considering economic and business
conditions and collection efforts, the borrower's financial
condition is such that collection of interest is doubtful.
Classification of a loan as nonaccrual is not necessarily
indicative of a potential loss of principal.
ALLOWANCE FOR LOAN LOSSES - The Company adheres to an
internal asset review system and allowance for loan losses
methodology designated to provide for the detection of
problem assets and to provide an adequate general valuation
allowance to cover loan losses. A provision for loan losses
is charged to operations based on management's evaluation of
potential losses in the loan portfolio. The provision is
based on an analysis of the loan portfolio, economic
conditions, historical loan loss experience, changes in the
nature and volume of the loan portfolios and management's
assessment of the inherent risk in the portfolio in relation
to the level of the allowance for loan losses. While
management uses the best information available to make these
evaluations, future adjustments to the allowance may be
necessary if economic conditions differ from the assumptions
used in preparing the evaluation. The Company also
establishes provisions on a specific loan basis when an
identified problem becomes known. Ultimate losses may vary
from the current estimates and any adjustments, as they
become necessary, are reported in earnings in the periods in
which they become known.
When a loan or portion of a loan, including an impaired
loan, is determined to be uncollectible, the portion deemed
uncollectible is charged against the allowance, and
subsequent recoveries, if any, are credited to the
allowance.
LOAN FEES - Loan origination fees and certain direct loan
origination costs are deferred and amortized as a yield
adjustment, using a method which approximates the interest
method, over the contractual lives of the loans. The net of
deferred origination fees and deferred origination costs is
presented as an adjustment of loans receivable in the
accompanying balance sheets.
The Company purchases consumer loans from local auto dealers
which are collateralized by automobiles. In conjunction
with this program, the Company pays a premium represented by
the present value differential of the yield required by the
Company and the underlying loan interest rate. The premium
paid is amortized as a yield adjustment, using the interest
method, over the contractual lives of the loans. If the
loan prepays, the Company has recourse against the auto
dealer for any unamortized premiums. At December 31, 1998
and 1997, the unamortized premiums totaled approximately
$611,000 and $449,000, respectively.
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
INCOME RECOGNITION ON IMPAIRED AND NONACCRUAL LOANS - Loans,
including impaired loans, are generally classified as
nonaccrual if they are past due as to maturity or payment of
principal or interest for a period of more than 90 days,
unless such loans are well-collateralized and in the process
of collection. If a loan or a portion of a loan is
classified as doubtful or is partially charged off, the loan
is classified as nonaccrual. Loans that are on a current
payment status or past due less than 90 days may also be
classified as nonaccrual if repayment in full of principal
and/or interest is in doubt.
Loans may be returned to accrual status when all principal
and interest amounts contractually due (including
arrearages) are reasonably assured of repayment within an
acceptable period of time, and there is a sustained period
of repayment performance (generally a minimum of six months)
by the borrower, in accordance with the contractual terms of
interest and principal.
While a loan is classified as nonaccrual and the future
collectibility of the recorded loan balance is doubtful,
collections of interest and principal are generally applied
as a reduction to principal outstanding. When the future
collectibility of the recorded loan balance is expected,
interest income may be recognized on a cash basis. In the
case where a nonaccrual loan had been partially charged off,
recognition of interest on a cash basis is limited to that
which would have been recognized on the recorded loan
balance at the contractual interest rate. Cash interest
receipts in excess of that amount are recorded as recoveries
to the allowance for loan losses until prior charge-offs
have been fully recovered.
PREMISES AND EQUIPMENT - Premises and equipment are carried
at cost less accumulated depreciation and amortization.
Depreciation and amortization are computed on the
straight-line method over the estimated useful lives of the
related assets. Maintenance, repairs and minor improvements
are charged to operating expenses as incurred. Major
improvements and betterments are capitalized. Upon
retirement or other disposition of the assets, the
applicable cost and accumulated depreciation are removed
from the accounts and any gains or losses are included in
operations.
MORTGAGE SERVICING RIGHTS - The Company recognizes an asset
for rights to service mortgage loans for others by
management periodically. The value of mortgage servicing
rights related to loans sold was approximately $715,000 and
$145,000 at December 31, 1998 and 1997, respectively. The
Company had no valuation allowance for capitalized mortgage
servicing rights at December 31, 1998 and 1997.
OTHER REAL ESTATE OWNED - Other real estate owned includes
properties acquired through foreclosure or acceptance of
deeds in lieu of foreclosure. These properties are recorded
on the date acquired at the lower of fair value minus
estimated costs to sell or the recorded investment in the
related loan. If the fair value minus estimated costs to
sell the property acquired is less than the recorded
investment in the related loan, the resulting loss is
charged to the allowance for loan losses. The resulting
carrying value established at the date of foreclosure
becomes the new cost basis for subsequent accounting. After
foreclosure, if the fair value minus estimated costs
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
to sell the property becomes less than its cost, the
deficiency is charged to the valuation allowance on other
real estate owned or charged directly to the asset. Costs
relating to the development and improvement of the property
are capitalized, whereas those relating to holding the
property for sale are charged to expense. Gains and losses
on the disposition of other real estate owned are reflected
in operations as incurred. The Company had other real
estate owned of approximately $1,003,000 and $363,000 at
December 31, 1998 and 1997, respectively.
INCOME TAXES - The Company files consolidated income tax
returns. Deferred tax assets or liabilities are computed
based on the difference between the financial statement and
income tax bases of assets and liabilities using the enacted
marginal tax rate. Deferred income tax expenses or credits
are based on the changes in the asset or liability from
period to period. The effect on deferred income taxes of a
change in tax rates is recognized in income in the period
that includes the enactment date.
STATEMENT OF CASH FLOWS - For purposes of reporting cash
flows, cash and cash equivalents include cash and due from
banks and federal funds sold.
EARNINGS PER SHARE - In 1997 the Company adopted Financial
Accounting Standards Board Statement No. 128 (FAS No. 128),
"Earnings Per Share." FAS No. 128 replaced the calculation
of primary and fully diluted earnings per share with basic
and diluted earnings per share. All earnings per share
amounts have been restated to conform to the FAS No. 128
requirements.
Basic earnings per common share is calculated by dividing
net income by the sum of the weighted average number of
shares of common stock outstanding.
Diluted earnings per common share is calculated by dividing
net income by the weighted average number of shares of
common stock outstanding, assuming the exercise of stock
options and warrants using the treasury stock method. Such
adjustments to the weighted average number of shares of
common stock outstanding are made only when such adjustments
dilute earnings per common share. The diluted earnings per
share is summarized as follows:
1998 1997 1996
Weighted average common
shares outstanding $4,994,765 $4,988,318 $4,637,565
Weighted average common
shares equivalents 24,526 31,166 54,528
Shares used in diluted
earnings per share
calculation $5,019,291 $5,019,484 $4,692,093
RECLASSIFICATIONS - Certain amounts in the prior years'
financial statements have been reclassified to conform with
the current year presentation. Such reclassification had no
impact on total assets, equity, net income or total cash
flow balances previously reported.
<PAGE>
3. INVESTMENT SECURITIES AVAILABLE FOR SALE:
The amortized costs and approximate fair value of investment
securities available for sale at December 31, 1998 and 1997
are summarized as follows:
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
------------------------1998---------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED APPROXIMATE
COST GAINS LOSSES VALUE
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE:
U.S. Treasury Securities $ 2,026 $16 $0 $2,042
U.S. Government agencies 37,974 79 (178) 37,875
State and municipals 1,656 48 (57) 1,647
Trust preferred securities 4,975 8 (94) 4,889
Total debt securities 46,631 151 (329) 46,453
FHLB stock 1,870 0 0 1,870
Mortgage-backed securities 28,808 37 (90) 28,755
Total available for sale $77,309 $188 $(419) $77,078
</TABLE>
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
-----------------------1997----------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED APPROXIMATE
COST GAINS LOSSES VALUE
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE:
U.S. Treasury Securities $4,057 $0 $(19) $4,038
U.S. Government agencies 55,765 126 (43) 55,848
State and municipals 1,118 46 0 1,164
Total debt securities 60,940 172 (62) 61,050
FHLB stock 1,709 0 0 1,709
Mortgage-backed securities 5,789 129 (13) 5,905
Total available for sale $68,438 $301 $(75) $68,664
</TABLE>
The FHLB stock is a restricted investment that is required by the
FHLB to be maintained by the Company.
The amortized cost and approximate fair value of investments at
December 31, 1998, by scheduled maturity, are shown below.
Scheduled maturities may differ from actual maturities because
borrowers may have the right to call or prepay obligations with
or without call or prepayment penalties.
<PAGE>
3. INVESTMENT SECURITIES AVAILABLE FOR SALE, CONTINUED:
(AMOUNTS IN THOUSANDS)
AMORTIZED APPROXIMATE
COST FAIR VALUE
Due in one year or less $503 $505
Due after one year through
five years 3,026 3,029
Due after five years through
ten years 11,498 11,553
Due after ten years 31,604 31,366
Total debt securities 46,631 46,453
FHLB stock 1,870 1,870
Mortgage-backed securities 28,808 28,755
$77,309 $77,078
Proceeds from the sale of investment securities available for
sale during the years ended December 31, 1998, 1997 and 1996 was
approximately $50,455,000, $17,998,000, and $33,501,000
respectively. Gross gains of approximately $435,000, $148,000
and $160,000 were realized on these sales for the years ended
December 31, 1998, 1997 and 1996, respectively. Gross losses of
approximately $25,000, $8,000 and $53,000 were realized on these
sales for the years ended December 31, 1998 , 1997 and 1996,
respectively.
At December 31, 1998, the Company had pledged securities with a
carrying value of approximately $1,019,000 and market value of
approximately $1,029,000 to the State of Florida for public fund
deposits. The current value of pledged securities is adequate to
meet the pledging requirements.
4. LOANS RECEIVABLE, NET:
The Company's loan portfolio consisted of the following at
December 31:
(AMOUNTS IN THOUSANDS)
1998 1997
Residential mortgage loans,
substantially all single-family $30,304 $54,243
Commercial and commercial
real estate loans 159,356 112,039
Consumer loans 60,768 48,827
250,428 215,109
Less allowance for loan losses (2,355) (2,311)
Net deferred costs 735 607
Loans, net $248,808 $213,405
<PAGE>
4. LOANS RECEIVABLE, NET, CONTINUED:
The Company grants and purchases real estate, commercial and
consumer loans throughout Florida, with a majority in the
Sarasota and Manatee County area. Although the Company has
a diversified loan portfolio, a significant portion of its
debtors' ability to honor their contracts is dependent
primarily upon the economy of Sarasota and Manatee Counties,
Florida and general economic conditions.
A summary of activity in the allowance for loan losses
follows:
(AMOUNTS IN THOUSANDS)
1998 1997 1996
Balance at beginning of year $2,311 $1,761 $1,609
Provision charged to income 1,180 921 515
Recoveries on loans
previously charged off 122 100 49
Loans charged off (1,258) (471) (412)
Balance at end of year $2,355 $2,311 $1,761
In management's opinion, the allowance is adequate to
reflect the risk in the loan portfolio.
At December 31, 1998 and 1997, the recorded investment in
loans for which impairment has been recognized totaled
approximately $1,629,000 and $662,000, respectively. The
total allowance for loan losses related to these loans was
approximately $556,000 and $246,000 at December 31, 1998 and
1997, respectively. Interest income on impaired loans of
approximately $108,000, $49,000 and $87,000 was recognized
for cash payments received in 1998, 1997 and 1996,
respectively. For the years ended December 31, 1998 and
1997, the average recorded investment in impaired loans was
$854,000 and $312,000.
At December 31, 1998 and 1997, the Company had approximately
$429,000 and $986,000 in nonaccrual loans, respectively.
For the years ended December 31, 1998, 1997 and 1996, the
amount of interest income not recorded related to nonaccrual
loans was approximately $14,000, $42,000 and $60,000,
respectively. There were accruing 8 and 2 loans that were
90 days or more past due amounting to $33,000 and $140,000
for December 31, 1998 and 1997, respectively.
LOANS TO OFFICERS AND DIRECTORS - In the course of its
business, the Company has granted loans to executive
officers, directors and principal shareholders of the
Company and to entities to which they are related.
Following is a summary of the amount of loans in which the
aggregate of the loans exceeded $60,000 during the year:
<PAGE>
4. LOANS RECEIVABLE, NET, CONTINUED:
(AMOUNTS IN THOUSANDS)
1998 1997
Balance at beginning of year $6,459 $6,892
New loans 4,722 2,164
Repayments on loans (1,473) (2,597)
Balance at end of year $9,708 $6,459
5. PREMISES AND EQUIPMENT:
A summary of premises and equipment at December 31, 1998 and
1997 is as follows:
(AMOUNTS IN THOUSANDS)
1998 1997
Land $2,802 2,802
Building and improvements 8,174 5,405
Furniture, fixtures, and
equipment 5,629 4,034
16,605 12,241
Less accumulated depreciation (3,711) (3,080)
$12,894 $9,161
Depreciation expense totaled approximately $964,000,
$718,000 and 486,000 for the years ended December 31, 1998,
1997 and 1996, respectively.
The Company leases facilities and certain equipment under
operating leases with noncancelable terms. Rent expense
amounted to approximately $220,000 for the year ended
December 31, 1998. Operating lease commitments at December
31, 1998 were $186,000, $125,000, $41,000, $20,000 and
$8,000 for 1999, 2000, 2001, 2002 and 2003, respectively.
6. LOAN SERVICING:
Mortgage loans serviced for others are not included in the
accompanying consolidated balance sheets. The unpaid
principal balances of mortgage loans serviced for others was
approximately $51,033,000 and $10,998,000 at December 31,
1998 and 1997, respectively.
Custodial escrow balances maintained in connection with the
foregoing loan servicing, and included in demand deposits,
were approximately $144,000 and $41,000 at December 31, 1998
and 1997, respectively.
<PAGE>
6. LOAN SERVICING, CONTINUED:
Mortgage servicing rights of approximately $654,000 and
$188,000 were capitalized in 1998 and 1997, respectively.
Amortization of mortgage servicing rights was approximately
$84,000, $26,000 and $29,000 during 1998, 1997 and 1996,
respectively. The value of mortgage servicing rights sold
was $0, $243,100 and $0 for 1998, 997 and 1996,
respectively. At December 31, 1998 and 1997, the
capitalized mortgage servicing rights totaled approximately
$715,000 and $145,000, respectively, which approximated fair
value.
7. DEPOSITS:
Deposits consisted of the following at December 31:
(AMOUNTS IN THOUSANDS)
1998 1997
Demand $62,123 $44,120
NOW 32,266 24,390
Money market 72,497 61,998
Savings 14,675 13,258
181,561 143,766
Certificate accounts:
Under $100,000 108,888 111,339
Over $100,000 36,200 34,838
IRAs 18,196 12,803
163,284 158,980
$344,845 $302,746
The aggregate amount of certificates of deposit of $100,000
or more at December 31, 1998 and 1997 was approximately
$38,716,000 and $36,170,000, respectively.
A summary of certificate accounts at December 31, 1998 by
year of scheduled maturity follows:
(AMOUNTS IN THOUSANDS)
1998 1997
Due within one year $107,108 86,347
Due after one year
through two years 23,170 34,662
Due after two years
through three years 20,614 13,487
Due after three years
through four years 4,852 19,389
Due after four years 7,540 5,095
$163,284 $158,980
<PAGE>
7. DEPOSITS, CONTINUED:
Interest expense on deposit accounts is summarized as
follows:
(AMOUNTS IN THOUSANDS)
1998 1997 1996
Interest on NOW accounts
and money market
deposit accounts $3,386 $3,206 $2,087
Interest on savings
accounts 308 304 312
Interest on
certificate accounts 9,448 8,395 7,076
$13,142 $11,905 $9,475
8. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE:
The Company enters into sales of securities under agreements
to repurchase. Repurchase agreements are treated as
financings, and the obligations to repurchase securities
sold are reflected as a liability in the consolidated
balance sheets. The dollar amount of securities underlying
the agreements remains in the asset accounts. The
securities sold under repurchase agreements remain in the
custody of a third-party trustee. The Company may have
sold, loaned, or otherwise disposed of such securities in
the normal course of its operations and has agreed to
maintain substantially identical securities during the
agreements. The agreements mature within 30 days.
Information related to the Company's securities sold under
repurchase agreements (including accrued interest) at
December 31, 1998 and 1997 is presented below, segregated by
the type of securities sold and by due date of the
agreement:
(DOLLAR AMOUNTS IN THOUSANDS)
1998 1997
Average balance during the year $26,039 $14,374
Average interest rate
during the year 4.63% 4.54%
Maximum month-end balance
during the year $31,433 $21,589
U.S. Government agencies
and Mortgage-backed securities
underlying the
agreements at year-end:
Cost $31,050 $19,285
Fair value $30,862 $19,332
9. FEDERAL HOME LOAN BANK ADVANCES:
Each Federal Home Loan Bank (FHLB) is authorized to make
advances to its member associations, subject to such
regulations and limitations as the FHLB may prescribe. The
Bank's borrowings from the FHLB of Atlanta at December 31,
1998 and 1997 were $34,900,000 and $5,000,000 at 5.04%
through 5.15% and 6.95%, respectively, with the December
31,1998 balance maturing at various dates through August
2008.
The FHLB requires that the Bank maintain qualifying
mortgages as collateral and all of its FHLB stock as
collateral for its advances. As of December 31, 1998, the
Bank has a credit availability of $50,000,000.
<PAGE>
9. FEDERAL HOME LOAN BANK ADVANCES, CONTINUED:
Uncollateralized lines amounting to $4.9 million at December
31, 1998 were maintained with various banks with rates which
are at or below prime rate. The lines and their terms are
periodically reviewed and are generally subject to
withdrawal at the discretion of the banks. No borrowings on
these agreements were outstanding at December 31, 1998 and
1997, respectively.
10. NOTE PAYABLE:
In 1997, the Company entered into a Loan Agreement with a
national banking association for a $5 million revolving line
of credit facility. The agreement requires the proceeds of
the new credit facility to be used for the acquisition of
real estate to be used for the development of the Company's
corporate headquarters, an operations center, and bank
branches. The credit facility is collateralized by the
shares of the Bank. The agreement requires the Company to
meet certain covenants and restricts the payment of
dividends, which have been met. Interest on the revolving
credit facility is calculated quarterly on either one- or
three-month LIBOR plus 175 basis points (7.74% at December
31, 1997). After two years, the loan converts into a
ten-year term note with a five-year balloon payment. In
1998 all amounts related to the line of credit were repaid
and the line was closed.
11. GUARANTEED PREFERRED BENEFICIAL INTERESTS IN THE COMPANY'S
JUNIOR SUBORDINATED DEBENTURES:
In 1998, ABICT was created by the Company for the exclusive
purpose of issuing and selling common securities and
preferred securities (together trust securities) and
investing the proceeds from the sale of the trust securities
in junior subordinated debentures issued by the Holding
Company. The common securities are wholly owned by the
Holding Company, and such securities are the only class of
ABICT's securities possessing general voting powers. In
May 1998, ABICT issued $15,000,000 in the aggregate
liquidation amount of its 8.50% preferred securities,
liquidation amount $10 per preferred security ("capital
securities") in a registered public offering. In August
1998, the underwriter exercised its over-allotment option,
in part, and an additional $1,249,420 in aggregate
liquidation amount of capital securities were issued. The
surety obligations constitute a full and unconditional
guarantee by the Company of the issuer trust obligations
under the capital securities.
The trust securities are scheduled to mature on June 30,
2028. Distributions on these securities are payable
quarterly, commencing September 30, 1998; such distributions
can be deferred at the option of the Company for up to five
years. In 1998, the Company exercised this option. The
trust securities can be prepaid in whole or in part on or
after June 30, 2003 in accordance with the terms of the
trust agreement. Distributions on the securities are
included in interest expense.
<PAGE>
12. INCOME TAXES:
The Company's provision for income taxes consisted of the
following for the years ended December 31:
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
1998 1997 1996
<S> <C> <C> <C>
Current:
Federal $992 $1,240 $535
State 62 76 29
1,054 1,316 564
Deferred:
Federal (161) (184) (91)
State (16) (15) (12)
(177) (199) (103)
$877 $1,117 $461
Deferred income taxes consisted of the following for the
years ended December 31:
(AMOUNTS IN THOUSANDS)
1998 1997 1996
Provision for loan losses $163 $(163) $134
Cash to accrual adjustment (58) (58) 58
Merger expense (58) (128) 0
Net operating loss
carryforward 0 219 (219)
Market value of loans
held for sale (179) 0 0
Other (45) (69) (76)
$(177) $(199) $(103)
Deferred income taxes reflect the impact of temporary
differences between the amounts of assets and liabilities
recorded for financial reporting purposes and such amounts
as measured in accordance with tax laws. The items which
comprise a significant portion of deferred tax assets and
liabilities at December 31 are as follows:
<PAGE>
12. INCOME TAXES, CONTINUED:
(AMOUNTS IN THOUSANDS)
1998 1997 1996
Deferred tax assets:
Book over tax bad debts $641 $657 $495
Market value of loans
held for sale 285 106 101
Merger expense 128 128 0
Net operating loss
carryforward 0 0 219
Other 11 32 15
Deferred tax assets 1,065 923 830
Deferred tax liabilities:
Loan origination fees (95) (71) (50)
Cash to accrual adjustment 0 (58) (117)
Other 0 0 (64)
Deferred tax liabilities (95) (129) (231)
Net deferred tax asset $970 $794 $599
The Company's effective income tax rates of 35%, 36.7% and
37% for the years ended December 31, 1998, 1997 and 1996,
respectively, vary from the statutory federal income tax
rate of 34% due primarily to state income taxes and tax
exempt interest income.
13. OTHER INCOME:
Other income consisted of the following for the years ended
December 31:
(AMOUNTS IN THOUSANDS)
1998 1997 1996
Service charges on
deposit accounts $1,878 $1,812 $1,192
Broker loan fees 152 327 33
Net gains on sales
of investment securities 410 140 107
Net gains on sales of loans 1,321 870 514
Net gain (loss) on sale of
other real estate owned 0 13 (336)
Merchant fees on
credit cards 750 479 262
Late fees 223 171 127
Other 511 344 249
$5,245 $4,156 $2,148
<PAGE>
14. OTHER EXPENSES:
Other expenses consisted of the following for the years
ended December 31:
(AMOUNTS IN THOUSANDS)
1998 1997 1996
Compensation and related
benefits $7015 5,181 $4,361
Occupancy and equipment 1,953 1,627 1,184
SAIF assessment 0 0 348
FDIC insurance 131 82 148
Data processing 946 917 925
Advertising and promotion 487 307 351
Printing supplies and postage 634 434 322
Directors fees and expenses 138 157 124
Professional fees 634 534 244
ATM and credit card fees 943 631 206
Foreclosed real estate
expense 23 29 223
Intangible taxes 167 157 126
Litigation settlement 525 0 0
Other 2,978 1,856 1,294
$16,574 $11,912 $9,856
Loan origination costs of approximately $985,000, $686,000
and $342,000 in 1998, 1997 and 1996, respectively, have been
offset against compensation and related benefits.
15. COMPREHENSIVE INCOME:
The components of comprehensive income, net of related tax,
are as follows:
(AMOUNTS IN THOUSANDS)
Year ended December 31, 1998 1997 1996
Net income $1,627 $1,920 $782
Other comprehensive income:
Unrealized gains
(losses) on securities:
Arising during the period,
net of tax expense
(benefit) of $(8),
$173 and $(108) (16) 321 (200)
Less: reclassification
adjustment for gains
included in income,
net of tax expense
of $144, $49 and $37 (266) (91) (70)
Other comprehensive
income (expense) (282) 230 (270)
Comprehensive income $1,345 $2,150 $512
<PAGE>
16. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK:
The Company is a party to financial instruments with
off-balance sheet risk in the normal course of business to
meet the financing needs of its customers. These financial
instruments include commitments to extend credit, standby
letters of credit, and credit cards. They involve, to
varying degrees, elements of credit and interest rate risk
in excess of the amount recognized on the balance sheet.
The contract or notional amounts of those instruments
reflect the extent of involvement the Company has in
particular classes of financial instruments. The Company
has no financial instruments with off-balance-sheet risk
that are held for trading purposes.
The Company's exposure to credit loss in the event of
nonperformance by the other party to the financial
instrument for commitments to extend credit and standby
letters of credit is represented by the contractual or
notional amount of the instruments. The Company uses the
same credit policies in making commitments and conditional
obligations as it does for on-balance sheet instruments. As
of December 31, 1998 and 1997 financial instruments with
off-balance-sheet risk were as follows:
(AMOUNTS IN THOUSANDS)
CONTRACTUAL OR NOTIONAL AMOUNTS 1998 1997
Commitments to extend credit $75,799 $56,598
Standby letters of credit $986 $537
Credit cards $6,840 $4,742
Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition
established in the contract. Commitments generally have
fixed expiration dates or other termination clauses and may
require payment of a fee. Since many of the commitments are
expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash
requirements. The Company evaluates each customer's credit
worthiness on a case-by-case basis. The amount of
collateral obtained if deemed necessary by the Company upon
extension of credit is based on management's credit
evaluation of the counter-party. Collateral held varies but
may include accounts receivable, inventory, property, plant,
and equipment, and income-producing commercial properties.
Standby letters of credit are conditional commitments issued
by the Company to guarantee the performance of a customer to
a third party. Those guarantees are primarily issued to
support public and private borrowing arrangements, including
commercial paper, bond financing, and similar transactions.
The guarantees at December 31, 1998 are short-term, expiring
in 1999.
<PAGE>
17. EMPLOYEE BENEFIT AND STOCK OPTION PLANS:
The Company has qualified plans under Section 401(k) of the
Internal Revenue Code (Plans) for all employees meeting
certain eligibility requirements. The Plans allow
participants to make annual contributions equal to 15% or
less of the participant's compensation up to a maximum
allowed by Internal Revenue Service regulation. The Company
may match a percentage of the participant's contributions.
Plan contributions by the Company for the year ended
December 31, 1998, 1997 and 1996 was approximately $49,000,
$28,000 and $18,0000 respectively.
The Company has a qualified Incentive Stock Option plan
(Incentive Plan) and a Non-qualified Share Option Plan for
non-employee directors (Non-qualified Plan) (together Option
Plans) under which the Company may grant options for up to
150,000 and 75,000 shares of common stock, respectively.
Under the Option Plans, the exercise price of each option
equals the market price of the Company's stock on the date
of grant. Options are granted upon approval of the Board of
Directors and vest 33% per year for three years and are
exercisable over 10 years from the date of the grant.
The Company applies APB Opinion No. 25, "Accounting for
Stock Issued to Employees" (APB 25) and related
Interpretations in accounting for its Option Plans.
Accordingly, no compensation cost has been recognized for
options granted under the Option Plans. Had compensation
cost for the Company's Option Plans been determined based on
the fair value at the grant dates for awards under the
Option Plans consistent with the method of Financial
Accounting Standards Statement No. 123, "Accounting for
Stock-Based Compensation," the Company's net income and net
income per share would have been reduced to the pro forma
amounts of approximately $1,562,000, $1,891,000 and $775,000
net income and basic earnings per share of .31, .38 and .17
for the years ended December 31, 1998, 1997 and 1996,
respectively.
The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model with
the following weighted-average assumptions used for grants
in 1998; dividend yield of 0% in each period, as there has
been no regular dividend payment history, expected stock
price volatility of 27.1%, 23.6% and 23.6%, risk-free
interest rates of 5.36%, 6.35%, and 6.39% for December 31,
1998, 1997 and 1996, respectively; and expected lives of
five years.
A summary of the status of the Company's Option Plans as of
December 31, 1998, 1997 and 1996, respectively, and changes
during the years ending on those dates is presented below:
</TABLE>
<TABLE>
<CAPTION>
1998
WEIGHTED
AVERAGE
EXERCISE
SHARES PRICE
<S> <C> <C>
Outstanding at beginning of year 63,600 $6.71
Granted 122,698 11.13
Forfeited (1,000) 8.37
Exercised (500) 8.37
Outstanding at end of year 184,798 10.94
Options exercisable at year-end 184,798
</TABLE>
<TABLE>
<CAPTION>
1997
WEIGHTED
AVERAGE
EXERCISE
SHARES PRICE
<S> <C> <C>
Outstanding at beginning of year 28,800 $5.24
Granted 34,800 7.93
Forfeited 0 0
Exercised 0 0
Outstanding at end of year 63,600 6.71
Options exercisable at year-end 33,600
</TABLE>
<TABLE>
<CAPTION>
1996
WEIGHTED
AVERAGE
EXERCISE
SHARES PRICE
<S> <C> <C>
Outstanding at beginning of year 24,000 $5.25
Granted 4,800 5.17
Forfeited 0
Exercised 0
Outstanding at end of year 28,800 5.24
Options exercisable at year-end 43,600
</TABLE>
<PAGE>
17. EMPLOYEE BENEFIT AND STOCK OPTION PLANS, CONTINUED:
The following table summarizes information about the Option
Plans' stock options at December 31, 1998:
<TABLE>
<CAPTION>
-------------------OPTIONS OUTSTANDING-----------------
NUMBER WEIGHTED-AVERAGE WEIGHTED
RANGE OF OUTSTANDING REMAINING AVERAGE
EXERCISE PRICES CONTRACTUAL LIFE EXERCISE PRICE
<S> <C> <C> <C>
5.00 - 11.125 186,798 10 years $10.94
</TABLE>
<TABLE>
<CAPTION>
---------------OPTIONS EXERCISABLE----------
NUMBER WEIGHTED
RANGE OF EXERCISABLE AVERAGE
EXERCISE PRICES EXERCISE PRICE
<S> <C> <C>
5.00 - 11.125 43,600 $11.57
</TABLE>
18. SHAREHOLDERS' EQUITY:
The Company's current policy is to retain all earnings to
fund operations. Future dividend payments will be at the
discretion of the Board of Directors of the Company and will
be dependent upon several factors, including State and
Federal banking regulations that impose limitations on such
payments.
In February 1996, the Company completed a public offering of
1,250,000 shares of common stock at $6.00 per share (the
Offering). Subsequent to the Offering, an additional
187,000 shares of common stock were issued as part of the
over-allotment amount. The net proceeds of the Offering,
after deducting applicable issuance costs and expenses, were
approximately $7,378,000.
In January 1997, the Company acquired the net assets of
Deschamps & Gregory Mortgage Company, Inc., a mortgage
brokerage company, for approximately $56,000. The Company
issued 7,119 shares of common stock in connection with the
acquisition. The Company accounted for the acquisition
using the purchase method of accounting.
The following table summarizes the activity of the Company's
issued and outstanding warrants and their corresponding
exercise prices for December 31, 1997 and 1996. There were
no warrants issued or outstanding at December 31, 1998.
<TABLE>
<CAPTION>
1992 WARRANTS 1994 WARRANTS
WARRANTS EXERCISE WARRANTS EXERCISE
OUTSTANDING PRICE OUTSTANDING PRICE
<S> <C> <C> <C> <C>
Balance, January 1, 1996 18,594 $4.00 227,224 $6.00
Warrants exercised - 0.00 (163,695) 6.00
Balance, December 31, 1996 18,594 4.00 63,529 6.00
Warrants expired (18,594) 0.00 (1,932) 6.00
Warrants exercised - 0.00 (61,597) 6.00
Balance, December 31, 1997 0 $4.00 0 6.00
</TABLE>
<PAGE>
19. DIVIDEND RESTRICTIONS:
State banking regulations limit the amount of dividends that
may be paid by the Bank to its Parent without prior approval
of regulatory agencies. The amount of dividends that may be
paid is based on the net profits of the current year
combined with retained net profits of the preceding two
years as defined by state banking regulations. At December
31, 1998, approximately $5,503,000 are available for payment
of dividends without prior regulatory approval.
20. FAIR VALUES OF FINANCIAL INSTRUMENTS:
Statement of Financial Accounting Standards No. 107,
"Disclosures About Fair Value of Financial Instruments,"
requires that the Company disclose estimated fair values for
its financial instruments. Fair value is defined as the
price at which a financial instrument could be liquidated in
an orderly manner over a reasonable time period under
present market conditions. Fair values estimates, methods
and assumptions are set forth below for the Company's
financial instruments.
CASH AND DUE FROM BANK AND FEDERAL FUNDS SOLD - For cash and
due from banks and Federal Funds Sold, the carrying amount
is a reasonable estimate of fair value.
INVESTMENTS AND MORTGAGE-BACKED SECURITIES - The fair value
of investments and mortgage-backed securities is estimated
based on bid prices published in financial newspapers or bid
quotations received from securities dealers.
LOANS RECEIVABLE - The estimated fair value of the Company's
fixed rate loans was calculated by discounting contractual
cash flows adjusted for current prepayment estimates. The
discount rates were based on the interest rate charged to
current customers for comparable loans. The Company's
adjustable rate loans reprice frequently at current market
rates. Therefore, the fair value of these loans has been
estimated to be approximately equal to their carrying
amount.
The impact of delinquent loans on the estimation of the fair
values described above is not considered to have a material
effect and, accordingly, delinquent loans have been
disregarded in the valuation methodologies used.
DEPOSIT LIABILITIES - The fair value of deposits with no
stated maturity, such as demand, NOW, money market and
savings is equal to the amount payable on demand as of
December 31, 1998. The fair value of time deposits is
estimated using the rates currently offered for deposits of
similar remaining maturities.
SECURITIES SOLD UNDER REPURCHASE AGREEMENTS - The repurchase
agreements outstanding at December 31, 1998 mature within 30
days. The estimated fair value of these agreements
approximates the carrying value.
FHLB ADVANCES AND NOTE PAYABLE - Cash flow from fixed-rate
borrowings are discounted at a spread to the zero Treasury
curve which equates to the LIBOR yield. The note payables
interest rate reprices quarterly. The estimated fair value
approximates the carrying value.
GUARANTEED PREFERRED BENEFICIAL INTERESTS IN THE COMPANY'S
JUNIOR SUBORDINATED DEBENTURES - The fair values are
estimated based on bid prices published in financial
newspapers.
<PAGE>
20. FAIR VALUES OF FINANCIAL INSTRUMENTS, CONTINUED:
COMMITMENTS TO EXTEND CREDIT AND STANDBY LETTERS OF CREDIT -
The fair value of commitments to extend credit is estimated
using the fees currently charged to enter into similar
agreements, taking into account the remaining terms of the
agreements and the present creditworthiness of the
counterparties. For fixed rate loan commitments, fair value
also considers the difference between current levels of
interest rates and the committed rates. The fair value of
standby letters of credit is based on fees currently charged
for similar agreements or on the estimated cost to terminate
them or otherwise settle the obligations with the
counterparties.
The estimated fair values of the Company's financial
instruments are as follows:
<TABLE>
<CAPTION>
-----------(AMOUNTS IN THOUSANDS)-----------
--------1998------- -------1997--------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
<S> <C> <C> <C> <C>
Financial assets:
Cash and due from bank $20,215 $20,215 $13,276 $13,276
Federal funds sold 0 0 5,120 5,120
Loans held for sale 88,158 89,674 39,588 39,747
Investment securities
available for sale 77,078 77,078 68,664 68,664
Loans receivable, net 248,808 253,008 213,405 218,927
Financial liabilities:
Deposits 344,845 190,670 302,746 303,586
Securities sold under
agreements to repurchase 29,592 29,592 17,528 17,528
FHLB advances 34,900 34,900 5,000 5,000
Note payable 0 0 500 500
Guaranteed preferred beneficial
interests in the Company's
junior subordinated
debentures 16,249 16,249 0 0
</TABLE>
<TABLE>
<CAPTION>
CONTRACT FAIR CONTRACT FAIR
AMOUNT VALUE AMOUNT VALUE
<S> <C> <C> <C> <C>
Unrecognized financial instruments:
Loan commitments $75,799 $114 $56,598 $80
Standby letters of credit 986 0 537 0
Credit cards 6,840 0 4,742 0
</TABLE>
LIMITATIONS - The fair value estimates are made at a
discrete point in time based on relevant market information
and information about the financial instrument. Quoted
market prices, when available, are used as the measure of
fair value. When quoted market prices are not available,
fair value estimates have been based on judgments regarding
future expected loss experience, current economic
conditions, risk characteristics of various financial
instruments, and other factors. These estimates are
inherently subjective, involving uncertainties and matters
of significant judgment, and, therefore, may not be
indicative of the value that could be realized in a current
market exchange. Changes in assumptions could significantly
affect the estimates.
<PAGE>
20. FAIR VALUES OF FINANCIAL INSTRUMENTS, CONTINUED:
The value estimates are based on existing on- and
off-balance-sheet financial instruments without attempting
to estimate the value of anticipated future business and the
value of assets and liabilities that are not considered
financial instruments. Other significant assets and
liabilities that are not considered financial assets or
liabilities include deferred tax assets and property, plant
and equipment. In addition, the tax ramifications related
to the realization of the unrealized gains and losses for
investments and mortgage-backed securities can have a
significant effect on fair value estimates and have not been
considered in many of the estimates.
21. RISKS AND UNCERTAINTIES:
The earnings of the Company depend on the earnings of the
Bank. The Bank is dependent primarily upon the level of net
interest income, which is the difference between interest
earned on its interest earning assets, such as loans and
investments and the interest paid on its interest-bearing
liabilities, such as deposits and borrowings. Accordingly,
the operations of the Bank are subject to risks and
uncertainties surrounding its exposure to changes in the
interest rate environment.
Most of the Bank's lending activity is with customers
located within Sarasota and Manatee counties. Generally,
the loans are collateralized by real estate consisting of
single family residential properties and commercial
properties. While this represents a concentration of credit
risk, the credit losses arising from this type of lending
compares favorably with the Bank's credit loss experience on
its portfolio as a whole. The ultimate repayment of these
loans is dependent to a certain degree on the local economy
and real estate market.
The financial statements of the Company are prepared in
conformity with generally accepted accounting principles
that require management to make estimates and assumptions
that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of
revenues and expenses during the reported period. Actual
results could differ from these estimates.
22. REGULATORY CAPITAL:
The Bank is subject to various regulatory capital
requirements administered by the federal banking agencies.
Failure to meet minimum capital requirements can initiate
certain mandatory and possibly additional discretionary
actions by regulators that, if undertaken, could have a
direct material effect on the Bank's financial statements.
Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, the Bank must meet
specific capital guidelines that involve quantitative
measures of the Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory
accounting practices. The Bank's capital amounts and
classification are also subject to qualitative judgments by
the regulators about components, risk weightings, and other
factors.
<PAGE>
22. REGULATORY CAPITAL, CONTINUED:
Quantitative measures established by regulation to ensure
capital adequacy require the Bank to maintain minimum
amounts and ratios (set forth in the table below) of total
and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as
defined) to average assets (as defined). Management
believes, as of December 31, 1998, that the Bank meets all
capital adequacy requirements to which it is subject.
As of December 31, 1998, the most recent notification from
the FDIC categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action. To be
categorized as well capitalized, the Bank must maintain
minimum total risk-based, Tier I risk-based, and Tier I
leverage ratios as set forth in the table. There are no
conditions or events since that notification that management
believes have changed the Bank's category.
The Bank's actual capital amounts and ratios are also
presented in the table. There were no deductions for
interest-rate risk in 1998 or 1997.
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
ACTUAL
AMOUNT RATIO
<S> <C> <C>
As of December 31, 1998:
Total Capital
(to Risk Weighted
Assets) $39,642 12.40%
Tier I Capital
(to Risk Weighted
Assets) $37,319 11.70%
Tier I Capital
(to Averaged
Assets) $37,319 8.40%
As of December 31, 1997:
Total Capital
(to Risk Weighted
Assets) $25,709 10.90%
Tier I Capital
(to Risk Weighted
Assets) $23,820 10.11%
Tier I Capital
(to Averaged
Assets) $23,820 6.87%
</TABLE>
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
FOR CAPITAL
ADEQUACY PURPOSES
AMOUNT RATIO
<S> <C> <C>
As of December 31, 1998:
Total Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $24,496 or equal to 8.0
Tier I Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $12,748 or equal to 4.0
Tier I Capital
(to Averaged Greater than/ Greater than/
Assets) or equal to $13,297 or equal to 3.0
As of December 31, 1997:
Total Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $18,857 or equal to 8.0
Tier I Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $9,428 or equal to 4.0
Tier I Capital
(to Averaged Greater than/ Greater than/
Assets) or equal to $10,398 or equal to 3.0
</TABLE>
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
TO BE WELL
CAPITALIZED UNDER
PROMPT CORRECTIVE
ACTION PROVISIONS
AMOUNT RATIO
<S> <C> <C>
As of December 31, 1998:
Total Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $31,869 or equal to 10.0
Tier I Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $19,122 or equal to 6.0
Tier I Capital
(to Averaged Greater than/ Greater than/
Assets) or equal to $22,162 or equal to 5.0
As of December 31, 1997:
Total Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $23,571 or equal to 10.0
Tier I Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $14,143 or equal to 6.0
Tier I Capital
(to Averaged Greater than/ Greater than/
Assets) or equal to $17,330 or equal to 5.0
</TABLE>
23. FUTURE ACCOUNTING PRONOUNCEMENTS:
Financial Accounting Standards Board Statement (FAS) No.
133, "Accounting for Derivative Instruments and Hedging
Activities," requires all derivatives to be recorded on the
balance sheet at fair value and establishes standard
accounting methodologies for hedging activities. The
standard will result in the recognition of offsetting
changes in value or cash flows of both the hedge and the
hedged item in earnings or comprehensive income in the same
period. The statement is effective for the Company's fiscal
year ending December 31, 2000. Because the Company does not
currently hold any derivative investments, the adoption of
this statement is not expected to have an impact on the
financial statements.
<PAGE>
23. FUTURE ACCOUNTING PRONOUNCEMENTS, CONTINUED:
FAS No. 134, "Accounting for Mortgage-Backed Securities
retained after the Securitization of Mortgage Loans Held for
Sale by a Mortgage Banking Entity," amends FAS No. 65
allowing mortgage-backed securities or other retained
interests arising from the securitization of mortgage loans
to be classified based on the mortgage banking entities'
ability and intent to sell of hold those securities.
Previously these securities had to be held within a trading
account. This statement is effective for the Company's
fiscal year ending December 31, 1999. The adoption of this
standards is not expected to have a significant impact on
the financial statements.
24. CONDENSED PARENT COMPANY FINANCIAL STATEMENTS:
The condensed financial statements of American Bancshares,
Inc., as the parent organization, are presented as follows:
CONDENSED BALANCE SHEET (AMOUNTS IN THOUSANDS)
DECEMBER 31, DECEMBER 31,
1998 1997
Assets:
Cash $4,335 $374
Investment in banking subsidiary 37,535 24,040
Investment in finance subsidiary 245 0
Investment in trust subsidiary 503 0
Premises and equipment 0 2,160
Prepaid expense 588 156
Debt issue costs 1,007 0
Other assets 6 3
Total assets $44,219 $26,733
Liabilities:
Junior subordinated debentures $16,752 $0
Other liabilities 40 654
Total liabilities 16,792 654
Shareholders' equity:
Common stock 5,870 5,870
Additional paid-in capital 15,551 15,548
Unrealized gain (loss) on
investment securities
available for sale, net (143) 139
Retained earnings 6,149 4,522
Total shareholders' equity 27,427 26,079
Total liabilities and
shareholders' equity $44,219 $26,733
<PAGE>
24. CONDENSED PARENT COMPANY FINANCIAL STATEMENTS, CONTINUED:
CONDENSED STATEMENT OF OPERATIONS
--------(AMOUNTS IN THOUSANDS)----------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996
Equity in undistributed
earnings of banking
subsidiaries $2,576 $2,021 852
Operating expense (949) (101) (70)
Net income $1,627 $1,920 $782
CONDENSED STATEMENT OF CASH FLOWS
-----------(AMOUNTS IN THOUSANDS)--------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996
Cash flows (used in)
provided by
operating
activities $670 $399 (76)
Cash flows (used in)
investing activities:
Investments and
advances to
subsidiary (11,957)
Acquisition of
premises and
equipment 0 (3,843) (4,891)
(11,957) (3,843) (4,891)
Cash flows provided by
(used in) financing
activities:
Proceeds from sale
of common stock
(net of stock
offering costs) 3 425 8,360
Proceeds from
junior subordinate
debentures 16,752 0 0
Payments of
debt issue costs (1,007) 0 0
Net repayment of
line of credit (500) 0 0
15,248 425 8,360
Net increase
(decrease) in cash 3,961 (3,019) 3,393
Cash at beginning
of year 374 3,393 0
Cash at end of year $4,335 $374 $3,393
<PAGE>
25. SAIF ASSESSMENT
On September 30, 1996, a one-time SAIF recapitalization
assessment was enacted. The rate was 65.7 cents per $100 on
domestic deposits held as of March 31, 1995. The effect on
the Bank is a pretax charge of $348,000 on deposits of $52.9
million at March 31, 1995. This amount was paid in November
1996.
<PAGE>
AMERICAN BANCSHARES AND SUBSIDIARIES
QUARTERLY EARNINGS SUMMARY (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
QUARTER ENDED 1998 MARCH 31 JUNE 30 SEPT. 30 DEC. 31
<S> <C> <C> <C> <C>
Interest income 7,101 7,482 8,241 8,361
Interest expense 3,583 3,675 4,527 4,387
Net interest income 3,518 3,807 3,714 3,974
Provision for
loan losses 124 151 154 751
Net interest income
after provision for
loan losses 3,394 3,656 3,560 3,223
Other income 1,103 1,172 1,477 1,493
Other expenses 3,876 4,531 4,060 4,107
Provision for
income taxes 217 104 342 214
Net income 404 193 635 395
Earnings per share:
Basic 0.08 0.04 0.13 0.08
Diluted 0.08 0.04 0.13 0.07
</TABLE>
<PAGE>
American Bancshares, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31, % $
ASSETS 1999 1998 CHANGE CHANGE
<S> <C> <C> <C> <C>
Cash and due from banks 17,357 20,215 (14.14) (2,858)
Interest bearing deposits
in banks 43 104 (58.65) (61)
Mortgage loans held for sale 102,220 88,158 15.95 14,062
Investment securities,
available for sale 37,065 48,323 (23.30) (11,258)
Mortgage-backed securities,
available for sale 34,275 28,755 19.20 5,520
Loans (net of allowance for
credit losses and
deferred loan fees of $1,651
as of September 30, 1999
and $1,620 as of
December 31, 1998) 257,467 248,808 3.48 8,659
Premises and equipment, net 12,682 12,894 (1.64) (212)
Other real estate owned, net 318 1,003 (68.30) (685)
Goodwill 70 74 (5.41) (4)
Other assets 9,962 6,830 45.86 3,132
Total assets 471,459 455,164 3.58 16,295
Liabilities and shareholders' equity
Liabilities
Deposits 352,138 344,845 2.11 7,293
Securities sold under
agreements to repurchase 29,195 29,592 (1.34) (397)
Federal funds purchased and
FHLB borrowings 43,150 34,900 23.64 8,250
Guaranteed Preferred Beneficial
Interests in the Company's
Junior Subordinated Debentures 16,249 16,249 0.00 0
Other liabilities 3,734 2,151 73.59 1,583
Total liabilities 444,466 427,737 3.91 16,729
Shareholders' equity
Preferred shares,
5,000,000 shares authorized,
0 shares issued and
outstanding as of
September 30, 1999 0 0 0.00 0
Common shares,
$1.175 par value,
20,000,000 shares authorized,
5,032,584 shares issued
and outstanding as of
September 30, 1999
and 4,994,984 as of
December 31, 1998 5,914 5,870 0.75 44
Additional paid in capital 15,716 15,551 1.06 165
Accumulated other comprehensive
income, net (2,455) (143) 1,616.78 (2,312)
Retained earnings 7,818 6,149 27.14 1,669
Total shareholders' equity 26,993 27,427 (1.58) (434)
Total liabilities and
shareholders' equity 471,459 455,164 3.58 16,295
</TABLE>
The accompanying notes are an integral part
of these financial statements.
<PAGE>
American Bancshares, Inc. and Subsidiaries
Consolidated Condensed Statements of Income
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
THREE MONTH'S ENDED % $
SEPTEMBER 30,
1999 1998 CHANGE CHANGE
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans 7,480 6,851 9.18 629
Interest on mortgage backed
securities, taxable 591 86 587.21 505
Interest on investment securities,
taxable 629 1,260 (50.08) (631)
Interest on investment securities,
nontaxable 8 30 (73.33) (22)
Other interest income 34 14 142.86 20
Total interest income 8,742 8,241 6.08 501
Interest expense
Deposits 3,421 3,335 2.58 86
Securities sold under
agreements to repurchase 292 332 (12.05) (40)
Federal funds purchased and
FHLB advances 419 531 (21.09) (112)
Trust preferred securities 354 331 6.95 23
Other borrowed money 0 (2) (100.00) (2)
Total interest expense 4,486 4,527 (0.91) (41)
Net interest income 4,256 3,714 14.59 542
Provision for loan losses 375 154 143.51 221
Net interest income after loan loss 3,881 3,560 9.02 321
Noninterest income
Service charges & fees 838 476 76.05 362
Gain on sale of mortgage loans 51 510 (90.61) (492)
Gain on sale of securities 0 58 (100.00) (58)
Gain on sale of servicing 195 15 1,200.00 180
Broker loan fees 23 27 (14.81) (4)
Merchant fees 238 172 38.87 66
Other income 232 219 24.73 46
Total noninterest income 1,577 1,477 6.77 100
Noninterest expense
Salaries & employee benefits 1,920 1,863 3.06 57
Net occupancy expense 293 232 26.29 61
Furniture and equipment expenses 369 274 34.67 95
Data processing fees 204 220 (7.27) (16)
Interchange fee expenses 161 114 41.23 47
Legal fees 95 114 (16.67) (19)
Litigation settlement 0 0 0.00 0
Other expense 1,272 1,243 2.33 29
Total noninterest expense 4,314 4,060 6.26 254
Income before income taxes 1,144 977 17.09 167
<PAGE>
Provision for income taxes 440 342 28.65 98
Net income 704 635 10.87 69
Earnings per share (actual $'s)
Basic 0.14 0.13
Diluted 0.14 0.13
Average number of shares
outstanding
Basic 5,031,497 4,994,984
Diluted 5,047,836 5,015,921
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
American Bancshares, Inc. and Subsidiaries
Consolidated Condensed Statements of Income
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED % $
SEPTEMBER 30,
1999 1998 Change Change
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans 22,272 19,136 16.39 3,136
Interest on mortgage backed
securities, taxable 1,409 208 577.40 1,201
Interest on investment
securities, taxable 2,223 3,202 (30.57) (979)
Interest on investment
securities, nontaxable 49 78 (37.18) (29)
Other interest income 47 200 (76.50) (153)
Total interest income 26,000 22,824 13.92 3,176
Interest expense
Deposits 9,751 9,823 (0.73) (72)
Securities sold under agreements
to repurchase 865 880 (1.70) (15)
Federal funds purchased and
FHLB advances 1,655 726 127.96 929
Trust preferred securities 1,061 331 220.54 730
Other borrowed money (1) 25 (104.00) (26)
Total interest expense 13,331 11,785 13.12 1,546
Net interest income 12,669 11,039 14.77 1,630
Provision for loan losses 1,203 429 180.42 774
Net interest income after
loan loss 11,466 10,610 8.07 856
Noninterest income
Service charges & fees 2,102 1,352 55.47 750
Gain on sale of loans 617 949 (34.98) (332)
Gain on sale of securities 28 186 (84.95) (158)
Gain on sale of servicing 206 87 136.78 119
Broker loan fees 83 115 (27.83) (32)
Merchant fees 811 564 43.79 247
Other income 761 500 52.20 261
Total noninterest income 4,608 3,753 22.78 855
Noninterest expense
Salaries & employee benefits 6,124 5,131 19.35 993
Net occupancy expense 863 650 32.77 213
Furniture and equipment expenses 1,053 726 45.04 327
Data processing fees 674 707 (4.67) (33)
Interchange fee expense 531 363 46.28 168
Legal fees 287 604 (52.48) (317)
Litigation settlement 0 525 (100.00) (525)
Other expense 3,911 3,761 3.99 150
Total noninterest expense 13,443 12,467 7.83 976
Income before income taxes 2,631 1,896 38.77 735
<PAGE>
Provision for income taxes 961 664 44.73 297
Net income 1,670 1,232 35.55 438
Earnings per share (actual $'s)
Basic 0.33 0.25
Diluted 0.33 0.25
Average Number of shares outstanding
Basic 5,023,535 4,994,691
Diluted 5,031,406 5,022,425
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
American Bancshares, Inc. and Subsidiaries
Consolidated Condensed Statement of Cashflows
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net income 1,670 1,232
Adjustments to reconcile net income
to net cash provided by operating activities:
Provision for loan losses 1,203 429
Net gain on sale of investment securities (20) (170)
Net gain on sale of loans (617) (949)
Net gain on sale of mortgage servicing
rights (206) (87)
Net loss on sale of foreclosed
real estate 50 0
Depreciation 964 689
Origination of loans held for sale
(net of repayments) (58,451) (95,199)
Proceeds from sales of loans
held for sale 44,389 52,191
Net amortization of premiums and
accretion of discounts on
investment securities 39 3
Increase in other liabilities 1,583 1,049
(Increase) decrease in other assets (2 287) (2,413)
Total adjustments (13,353) (44,457)
Net cash provided by/(used in)
operating activities (11,683) (43,225)
Cash flows from investing activities:
Loan originations, net of repayments (9,412) (21,088)
Purchases of bank premises and equipment (752) (3,983)
Proceeds from sales and maturities of
available for sale investment securities 18,321 54,201
Purchases of available for sale
investment securities, net of
repayments (14,914) (66,405)
Recoveries on loans charged off 166 83
Net cash used in investing activities (6,591) (37,192)
Cash flows from financing activities:
Net increase (decrease) in demand
deposits, NOW and savings accounts (662) 25,644
Net increase (decrease) in
time deposits 7,955 (1,533)
Net increase (decrease) in
securities sold under agreements to
repurchase (397) 12,850
Proceeds from issuance of
trust preferred securities 0 16,249
Net proceeds from advances
(repayments)from the FHLB and
Federal Funds purchased 8,250 27,000
Proceeds from issuance of stock 209 0
Net cash provided by financing activities 15,355 80,210
Net increase (decrease) in cash and
cash equivalents (2,919) (207)
Cash and cash equivalents at
beginning of period 20,319 18,396
Cash and cash equivalents at
end of period 17,400 18,189
Supplemental disclosures:
Interest paid 12,988 11,422
Income taxes paid 415 915
</TABLE>
The accompanying notes are an integral part of these financial statements.
