<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[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
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period to
------- -------
Commission File No. 0-30505
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WEST POINTE BANCORP, INC.
(Exact name of registrant as specified in its charter)
Illinois 36-4149655
------------------------ -------------------------------
(State of incorporation) (IRS Employer Identification No.)
West Pointe Bancorp, Inc.
5701 West Main Street
Belleville, Illinois 62226
----------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (618) 234-5700
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding at October 31, 2000
------------------------- -------------------------------
Common stock $1 par value 489,959
1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statement of Changes in Stockholders' Equity
and Comprehensive Income 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 17
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 18
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 18
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 18
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 18
ITEM 5. OTHER INFORMATION 18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 18
SIGNATURE PAGE 19
EXHIBIT INDEX 20
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WEST POINTE BANCORP, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
2000 1999
------------- --------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 10,294,366 $ 12,065,796
Federal funds sold 3,900,000 3,600,000
Interest bearing due from banks 205,889 408,261
Time certificates of deposit 99,800 267,170
Investment securities:
Held-to-maturity (fair value of $3,269,401 and $4,450,592
at September 30, 2000 and December 31, 1999, respectively) 3,309,453 4,513,819
Available-for-sale, at fair value (cost of $119,686,059 and
$108,173,137 at September 30, 2000 and December 31, 1999, respectively) 117,083,111 104,112,092
Loans 187,884,007 174,192,437
Allowance for loan losses (1,840,159) (1,687,021)
------------- -------------
Net Loans 186,043,848 172,505,416
Accrued interest receivable 2,743,401 2,102,319
Other real estate 98,050 348,792
Bank premises and equipment 12,224,545 8,862,171
Income taxes receivable 433,186 124,753
Deferred tax asset, net 1,548,531 2,038,178
Other assets 2,851,111 805,638
------------- -------------
TOTAL ASSETS $ 340,835,291 $ 311,754,405
============= =============
LIABILITIES
Deposits:
Noninterest bearing $ 29,222,612 $ 27,350,618
Interest bearing 272,928,364 251,791,697
------------- -------------
Total Deposits 302,150,976 279,142,315
Securities sold under agreements to repurchase 10,772,850 6,938,200
Other borrowings 1,737,500 1,837,500
Federal Home Loan Bank advances 5,000,000 5,000,000
Accrued interest payable 1,449,170 1,137,399
Other liabilities 1,049,897 718,769
------------- -------------
TOTAL LIABILITIES 322,160,393 294,774,183
Commitments and contingent liabilities -- --
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value - 50,000 shares authorized;
none issued or outstanding at September 30, 2000 or December 31, 1999 -- --
Common stock, $1 par value - 1,000,000 shares authorized; 496,209 and 496,169
shares issued at September 30, 2000 and December 31, 1999, respectively 496,209 496,169
Surplus 12,751,596 12,749,474
Retained earnings 7,378,421 6,589,927
Treasury stock, 6,250 shares at cost (337,500) (337,500)
Accumulated other comprehensive loss (1,613,828) (2,517,848)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 18,674,898 16,980,222
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 340,835,291 $ 311,754,405
============= =============
</TABLE>
See the accompanying notes to consolidated financial statements.
3
<PAGE> 4
WEST POINTE BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------------ -------------------------------
2000 1999 2000 1999
---------------- ------------ ---------------- -----------
<S> <C> <C> <C> <C>
Interest and Fee Income:
Interest and fees on loans $ 4,279,982 $ 3,533,798 $ 12,092,679 $ 9,781,446
Interest on U.S. Treasuries and agencies 1,304,999 909,204 3,783,824 2,670,318
Interest on state and municipal obligations 401,935 399,355 1,233,027 1,194,819
Interest on federal funds sold 100,049 63,106 207,746 185,477
Interest on deposits with banks 5,359 10,962 22,397 71,461
------------ ------------ ------------ ------------
TOTAL INTEREST AND FEE INCOME 6,092,324 4,916,425 17,339,673 13,903,521
Interest Expense:
NOW, money market and savings deposits 1,003,861 585,787 2,832,000 1,668,574
Certificates of deposit 2,692,267 1,948,922 7,203,907 5,709,792
Securities sold under agreements to repurchase 133,449 88,128 346,216 233,486
Other borrowings 40,037 3,830 125,632 10,284
Federal Home Loan Bank advances 85,270 62,538 231,294 186,169
------------ ------------ ------------ ------------
TOTAL INTEREST EXPENSE 3,954,884 2,689,205 10,739,049 7,808,305
------------ ------------ ------------ ------------
NET INTEREST INCOME 2,137,440 2,227,220 6,600,624 6,095,216
Provision for Loan Losses 733,000 226,641 1,228,000 573,132
------------ ------------ ------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,404,440 2,000,579 5,372,624 5,522,084
Noninterest Income:
Service charges on deposits 262,011 205,851 704,372 589,058
Mortgage banking 46,069 92,003 170,936 343,569
Trust fees 111,895 80,915 292,328 215,411
Credit card income 68,162 56,739 194,313 157,577
Investment securities gains 5,172 -- 4,969 26,378
Other 99,417 53,755 243,839 136,918
------------ ------------ ------------ ------------
TOTAL NONINTEREST INCOME 592,726 489,263 1,610,757 1,468,911
Noninterest Expense:
Employee compensation and other benefits 1,050,484 891,878 3,075,442 2,587,521
Occupancy, net 160,090 121,162 405,668 334,084
Furniture and equipment 133,049 96,906 349,443 274,378
Data processing 94,346 81,417 272,977 236,781
Advertising 75,957 72,437 222,550 209,154
Other 602,930 499,380 1,763,141 1,405,174
------------ ------------ ------------ ------------
TOTAL NONINTEREST EXPENSE 2,116,856 1,763,180 6,089,221 5,047,092
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES (119,690) 726,662 894,160 1,943,903
Income Tax Expense (Benefit) (210,400) 142,200 (144,200) 335,400
------------ ------------ ------------ ------------
NET INCOME $ 90,710 $ 584,462 $ 1,038,360 $ 1,608,503
============ ============ ============ ============
Average Shares Outstanding:
Basic 489,946 477,161 489,933 455,226
Diluted 493,613 481,070 493,600 457,957
Per Share Data:
Net income:
Basic $ .19 $ 1.22 $ 2.12 $ 3.53
============ ============ ============ ============
Diluted $ .18 $ 1.21 $ 2.10 $ 3.51
============ ============ ============ ============
Dividends declared $ .17 $ .17 $ .51 $ .49
============ ============ ============ ============
</TABLE>
See the accompanying notes to consolidated financial statements.
4
<PAGE> 5
WEST POINTE BANCORP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE
INCOME (UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 2000
-------------------------------------------------------------------------------------------
PREFERRED COMMON COMPREHENSIVE RETAINED TREASURY
STOCK STOCK SURPLUS INCOME EARNINGS STOCK
----------- ----------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Balance - December 31, 1999 $ -- $ 496,169 $12,749,474 $ 6,589,927 $ (337,500)
Issuance of common stock -- 40 2,122 -- --
Net income -- -- -- $1,038,360 1,038,360 --
Other comprehensive
income, net of
tax-unrealized gains
on securities, net of
reclassification
adjustment (1) -- -- -- 904,020 -- --
Comprehensive income ----------
$1,942,380
Dividends paid -- -- -- ========== (249,866) --
----------- ----------- ----------- ------------ ------------
Balance - September 30, 2000 $ -- $ 496,209 $12,751,596 $ 7,378,421 $ (337,500)
=========== =========== =========== ============ ============
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 2000
-------------------------------------
ACCUMULATED
OTHER TOTAL
COMPREHENSIVE STOCKHOLDERS'
INCOME (LOSS) EQUITY
------------- ------------
<S> <C> <C>
Balance - December 31, 1999 $ (2,517,848) $ 16,980,222
Issuance of common stock -- 2,162
Net income -- 1,038,360
Other comprehensive
income, net of
tax-unrealized gains
on securities, net of
reclassification
adjustment (1) 904,020 904,020
Comprehensive income
Dividends paid -- (249,866)
------------ ------------
Balance - September 30, 2000 $ (1,613,828) $ 18,674,898
============ ============
</TABLE>
(1) Disclosure of reclassification adjustment:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30,
2000
-------------
<S> <C>
Unrealized gains arising during the period $909,790
Less reclassification adjustment for gains included in net income (5,770)
--------
Unrealized gains on investment securities $904,020
========
</TABLE>
See the accompanying notes to consolidated financial statements.
5
<PAGE> 6
WEST POINTE BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
----------------------------------------------
2000 1999
------------ --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,038,360 $ 1,608,503
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization:
Bank premises and equipment 373,430 298,891
Discounts and premiums (178,602) (18,211)
Increase in accrued interest receivable (641,082) (506,662)
Increase in accrued interest payable 311,771 76,857
Decrease in income taxes, net (372,863) (115,631)
Gains on sale of investment securities, net (4,969) (26,378)
Losses on sale of other real estate, net 23,426 --
Provision for loan losses 1,228,000 573,132
Net change in other assets and other liabilities (1,713,916) 159,889
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 63,555 2,050,390
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) decrease in time certificates of deposit 167,389 (8,938)
Principal repayments on investment securities 1,942,680 1,840,159
Sales of investment securities available for sale 7,575,238 7,442,659
Maturities of investment securities available for sale 24,119,000 8,232,000
Purchases of investment securities available for sale (43,761,922) (41,436,582)
Net increase in loans (14,912,616) (28,293,214)
Sales of other real estate 373,500 131,553
Purchases of bank premises and equipment (3,737,433) (1,479,844)
Proceeds from sales of bank premises and equipment 1,200 --
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (28,232,964) (53,572,207)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in noninterest bearing deposits 1,871,994 1,174,544
Net increase in interest bearing deposits 21,136,667 45,911,410
Net increase in securities sold under agreements to repurchase 3,834,650 3,296,090
Repayments of other borrowings (100,000) --
Proceeds from FHLB advances 5,000,000 --
Repayments of FHLB advances (5,000,000) --
Proceeds from issuance of common stock 2,162 2,602,908
Dividends paid (249,866) (225,530)
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 26,495,607 52,759,422
------------ ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,673,802) 1,237,605
Cash and cash equivalents - Beginning of year 16,074,057 18,539,262
------------ ------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 14,400,255 $ 19,776,867
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ 10,427,278 $ 7,731,448
Income taxes paid 309,650 451,032
</TABLE>
See the accompanying notes to consolidated financial statements.
6
<PAGE> 7
WEST POINTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A--PRINCIPLES OF ACCOUNTING
The consolidated financial statements of West Pointe Bancorp, Inc.
("West Pointe") or ("the Company") have been prepared in accordance with
generally accepted accounting principles for the banking industry and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for annual reporting. Reference is hereby made to the
notes to consolidated financial statements contained in West Pointe's
registration statement on Form 10. The foregoing consolidated financial
statements are unaudited. However, in the opinion of management, all adjustments
necessary for a fair presentation of the consolidated financial statements have
been made. All such adjustments are of a normal recurring nature. The results of
operations for the interim periods presented herein are not necessarily
indicative of the results to be expected for the full year.
The consolidated financial statements include the accounts of the
Company's subsidiary. West Pointe is a bank holding company that engages in its
business through its sole subsidiary, West Pointe Bank And Trust Company (the
"Bank"), an Illinois chartered commercial bank. All material intercompany
transactions and balances are eliminated.
In preparing the financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the balance sheet and revenues and expenses for
the period. Actual results could differ significantly from those estimates.
NOTE B--BUSINESS SEGMENTS
On January 1, 1998, West Pointe adopted Financial Accounting Standards
No. 131 (SFAS No. 131), "Disclosures about Segments of an Enterprise and Related
Information", which requires business segments to be reported based on the way
management organizes segments within an organization for making operating
decisions and assessing performance. SFAS No. 131 is effective for fiscal years
beginning after December 15, 1997. Management has not included disclosures
regarding specific segments since management makes operating decisions and
assesses performance based on West Pointe as a whole.
NOTE C--NET INCOME PER SHARE
The calculation of net income per share is summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------- -------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Basic
Net Income ................................ $ 90,710 $ 584,462 $1,038,360 $1,608,503
========== ========== ========== ==========
Average common shares outstanding ......... 489,946 477,161 489,933 455,226
========== ========== ========== ==========
Net income per common share - basic ....... $ .19 $ 1.22 $ 2.12 $ 3.53
========== ========== ========== ==========
Diluted
Net Income ................................ $ 90,710 $ 584,462 $1,038,360 $1,608,503
========== ========== ========== ==========
Average common shares outstanding ......... 489,946 477,161 489,933 455,226
Dilutive potential due to stock options ... 3,667 3,909 3,667 2,731
---------- ---------- ---------- ----------
Average common shares outstanding ......... 493,613 481,070 493,600 457,957
========== ========== ========== ==========
Net income per common share - diluted ..... $ .18 $ 1.21 $ 2.10 $ 3.51
========== ========== ========== ==========
</TABLE>
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion describes West Pointe's results of operations
during the three-month and nine-month periods ended September 30, 2000 and 1999,
and its financial condition, asset quality, and capital resources as of
September 30, 2000. This discussion should be read in conjunction with West
Pointe's unaudited consolidated financial statements and notes thereto. The
results of operations for the interim periods presented herein are not
necessarily indicative of the results to be expected for the full year.
FORWARD-LOOKING STATEMENTS
This filing and future filings made by West Pointe with the Securities
and Exchange Commission, as well as other filings, reports and press releases
made or issued by West Pointe, and oral statements made by executive officers or
directors of West Pointe may include forward-looking statements, which are based
on assumptions and describe future plans, strategies, projections and
expectations of West Pointe. These forward-looking statements are generally
identified by use of terms "believe", "expect", "intend", "anticipate",
"estimate", "project", or similar words. West Pointe's ability to predict
results or the actual effect of future plans or strategies is uncertain. Factors
which could have a material adverse effect on West Pointe's operations include,
but are not limited to, changes in interest rates, general economic conditions,
legislative/regulatory changes, monetary and fiscal policies of the U. S.
Government, including policies of the U. S. Treasury and the Federal Reserve
Board, the quality and composition of the loan or investment portfolios, demand
for loan products, deposit flows, competition, demand for financial services in
West Pointe's market areas and accounting principles and guidelines. All of
these uncertainties, as well as others, are present in a banking operation and
stockholders are cautioned that management's view of the future on which it
prices its products, evaluates collateral, sets loan reserves and estimates
costs of operations and regulation may prove to be other than anticipated.
OVERVIEW
Net income for the third quarter of 2000 was $90,710 or $.18 per
diluted common share compared to net income of $584,462 or $1.21 per diluted
common share for the third quarter of 1999. Net income for the first nine months
of 2000 was $1,038,360 or $2.10 per diluted common share compared to net income
of $1,608,503 or $3.51 per diluted common share for the first nine months of
1999. Return on average assets for the third quarter and first nine months of
2000 was .11% and .43%, respectively, compared to .84% and .80% for the third
quarter and first nine months of 1999, respectively. Return on average equity
for the third quarter and first nine months of 2000 was 2.01% and 7.87%,
respectively, compared to 14.28% and 13.24% for the third quarter and first nine
months of 1999, respectively.
The decreases in net income, for the quarters and nine month periods
compared, were primarily attributable to the recording of an additional
provision for loan losses during the third quarter of 2000, coupled with
additional expenses associated with the opening of two new banking locations.
These items were partially offset by increases in noninterest income and reduced
income tax expenses. The additional provision for loan losses resulted from
management's assessment of the loan portfolio and in particular to cover
$633,000 of charge-offs associated with loans to two commercial borrowers.
Total assets at September 30, 2000 increased to $340,835,291 from
$311,754,405 at December 31, 1999.
RESULTS OF OPERATIONS
Table 1 summarizes West Pointe's statement of income and the change in
each category for the periods presented.
8
<PAGE> 9
TABLE 1 - Comparative Statements of Income
<TABLE>
<CAPTION>
Three Months Ended
September 30 Change
------------------------------ --------------------------
2000 1999 Amount Percent
----------- ----------- ----------- -------
<S> <C> <C> <C> <C>
Total interest income
(fully tax-equivalent) ..................... $ 6,205,723 $ 5,050,066 $ 1,155,657 22.9%
Total interest expense .......................... 3,954,884 2,689,205 1,265,679 47.1
----------- ----------- -----------
Net interest income ................... 2,250,839 2,360,861 (110,022) (4.7)
Provision for loan losses ....................... 733,000 226,641 506,359 223.4
Noninterest income:
Service charges on deposits ................ 262,011 205,851 56,160 27.3
Mortgage banking ........................... 46,069 92,003 (45,934) (49.9)
Trust fees ................................. 111,895 80,915 30,980 38.3
Credit card income ......................... 68,162 56,739 11,423 20.1
Investment securities gains ................ 5,172 -- 5,172 NM
Other ...................................... 99,417 53,755 45,662 84.9
----------- ----------- -----------
Total ................................. 592,726 489,263 103,463 21.1
----------- ----------- -----------
Noninterest expense:
Employee compensation and other benefits ... 1,050,484 891,878 158,606 17.8
Occupancy, net ............................. 160,090 121,162 38,928 32.1
Furniture and equipment .................... 133,049 96,906 36,143 37.3
Data processing ............................ 94,346 81,417 12,929 15.9
Advertising ................................ 75,957 72,437 3,520 4.9
Other ...................................... 602,930 499,380 103,550 20.7
----------- ----------- -----------
Total ................................. 2,116,856 1,763,180 353,676 20.1
----------- ----------- -----------
Income (loss) before income taxes ............... (6,291) 860,303 (866,594) (100.7)
Less: tax-equivalent adjustment ................ 113,399 133,641 (20,242) (15.1)
Income tax expense (benefit) .................... (210,400) 142,200 (352,600) (248.0)
----------- ----------- -----------
Net income ...................................... $ 90,710 $ 584,462 $ (493,752) (84.5)%
=========== =========== ===========
</TABLE>
NM-Not Meaningful
<TABLE>
<CAPTION>
Nine Months Ended
September 30 Change
------------------------------ ----------------------------
2000 1999 Amount Percent
------------ ----------- ---------- ---------
<S> <C> <C> <C> <C>
Total interest income
(fully tax-equivalent) .................... $ 17,707,942 $14,301,716 $ 3,406,226 23.8 %
Total interest expense ......................... 10,739,049 7,808,305 2,930,744 37.5
------------ ----------- ------------
Net interest income .................. 6,968,893 6,493,411 475,482 7.3
Provision for loan losses ...................... 1,228,000 573,132 654,868 114.3
Noninterest income:
Service charges on deposits ............... 704,372 589,058 115,314 19.6
Mortgage banking .......................... 170,936 343,569 (172,633) (50.2)
Trust fees ................................ 292,328 215,411 76,917 35.7
Credit card income ........................ 194,313 157,577 36,736 23.3
Investment securities gains ............... 4,969 26,378 (21,409) (81.2)
Other ..................................... 243,839 136,918 106,921 78.1
------------ ----------- -----------
Total ................................ 1,610,757 1,468,911 141,846 9.7
------------ ----------- -----------
Noninterest expense:
Employee compensation and other benefits .. 3,075,442 2,587,521 487,921 18.9
Occupancy, net ............................ 405,668 334,084 71,584 21.4
Furniture and equipment ................... 349,443 274,378 75,065 27.4
Data processing ........................... 272,977 236,781 36,196 15.3
Advertising ............................... 222,550 209,154 13,396 6.4
Other ..................................... 1,763,141 1,405,174 357,967 25.5
------------ ----------- ------------
Total ............................... 6,089,221 5,047,092 1,042,129 20.6
------------ ----------- ------------
Income before income taxes ..................... 1,262,429 2,342,098 (1,079,669) (46.1)
Less: tax-equivalent adjustment ............... 368,269 398,195 (29,926) (7.5)
Income tax expense (benefit) ................... (144,200) 335,400 (479,600) (143.0)
------------ ----------- ------------
Net income ..................................... $ 1,038,360 $ 1,608,503 $ (570,143) (35.4)%
============ =========== ============
</TABLE>
9
<PAGE> 10
NET INTEREST INCOME
Tax-equivalent net interest income decreased $110,022 or 4.7% for the
third quarter of 2000 compared to the same period of 1999 and increased $475,482
or 7.3% for the first nine months of 2000 compared to the same period of 1999.
The decrease in tax-equivalent net interest income for the third quarter of 2000
compared to the same period of 1999 was primarily attributable to a reduced net
interest margin, coupled with the increase in the volume of interest bearing
liabilities, which exceeded the increase in the volume of interest earning
assets. The increase in tax-equivalent net interest income for the first nine
months of 2000 compared to the same period of 1999 resulted from increased
volumes of interest earning assets and interest bearing liabilities.
Total tax-equivalent interest income increased $1,155,657 or 22.9% for
the third quarter of 2000 compared to the same period of 1999 and increased
$3,406,226 or 23.8% for the first nine months of 2000 compared to the same
period of 1999. The increases in interest income were primarily attributable to
increases in interest and fees on loans and interest income on investment
securities. These increases resulted from increased volumes of loans and
investment securities and from higher rates earned on these categories.
Total interest expense increased $1,265,679 or 47.1% for the third
quarter of 2000 compared to the same period of 1999 and increased $2,930,744 or
37.5% for the first nine months of 2000 compared to the same period of 1999. The
increases in interest expense were primarily attributable to increases in
interest expense on interest bearing deposit accounts, particularly certificates
of deposit. These increases resulted from increased volumes of deposits and
higher rates paid.
The net interest margin was 2.91% for the third quarter of 2000
compared to 3.61% for the third quarter of 1999. The net interest margin for the
first nine months of 2000 was 3.07% compared to 3.43% for the first nine months
of 1999. The reductions in the net interest margins for the periods compared
occurred as the costs of funds, driven by increasing interest rates and a
competitive rate environment, increased at a greater rate than the yields on
earning assets. The increases in the yields on earning assets were attributable
to a combination of increased rates earned on West Pointe's investment and loan
portfolios. The increased costs of funds were associated with higher rates paid
on all categories of deposits and borrowings.
PROVISION FOR LOAN LOSSES
The provision for loan losses was $733,000 and $1,228,000 for the third
quarter and first nine months of 2000, respectively, compared to $226,641 and
$573,132 for the third quarter and first nine months of 1999, respectively. The
provision for loan losses represents management's judgment of the cost
associated with credit risk inherent in the loan portfolio. Factors which
influence management's determination of the provision for loan losses include,
among other things, size and quality of the loan portfolio measured against
prevailing economic conditions, regulatory guidelines, a review of individual
loans and historical loan loss experience. The increases in the provision for
loan losses for the quarter and nine-month period ending September 30, 2000
compared to the same periods of 1999 were primarily attributable to the
additional provision described under "OVERVIEW" and from overall growth in the
loan portfolio. Activity in the allowance for loan losses and nonperforming loan
data are presented under "ASSET QUALITY."
NONINTEREST INCOME
Total noninterest income was $592,726 for the third quarter of 2000
compared to $489,263 for the third quarter of 1999. Noninterest income was
$1,610,757 for the first nine months of 2000 compared to $1,468,911 for the same
period of 1999. Service charges on deposit accounts increased $56,160 for the
third quarter of 2000 compared to the third quarter of 1999 and increased
$115,314 for the nine-month periods compared. The increases in service charges
on deposit accounts for the periods compared were primarily attributable to the
growth in the volume of deposit accounts on which service charges are assessed.
Income from mortgage banking services decreased $45,934 for the third quarter of
2000 compared to the third quarter of 1999 and decreased $172,633 for the
nine-month periods compared. The increasing rate environment, evident during the
first nine months of 2000, was the primary factor leading to the reduction in
mortgage banking income for the periods compared as mortgage loan
10
<PAGE> 11
origination activities slowed. Income from trust fees increased $30,980 for the
third quarter of 2000 compared to the third quarter of 1999 and increased
$76,917 for the nine-month periods compared. The increases in income from trust
fees were primarily attributable to one-time fees charged in connection with the
administration of certain estates coupled with fees charged in connection with a
new short-term fiduciary relationship. Credit card income increased $11,423
during the third quarter of 2000 compared to the third quarter of 1999 and
increased $36,736 for the nine month periods compared. The modest increases in
credit card income were primarily due to additional merchant related revenues
and additional revenues related to West Pointe's "debit" card product. Net
security gains during the third quarter and the first nine months of 2000
totaled $5,172 and $4,969, respectively. No security gains or losses were
recorded during the third quarter of 1999. Net security gains recorded during
the first nine months of 1999 totaled $26,378. Net security gains in 2000
resulted from management's decision to reconfigure certain segments of the
available-for-sale portion of the investment portfolio. Net security gains in
1999 resulted from opportunities in the market place to take such gains. Other
noninterest income includes such items as interchange fees on automated teller
machine (ATM) transactions, safe deposit box rental fees, check printing fees
and other miscellaneous fees. Other noninterest income increased $45,662 for the
third quarter of 2000 compared to the third quarter of 1999 and increased
$106,921 for the nine-month periods compared. The increases in other noninterest
income for the 2000 periods compared to the 1999 periods primarily resulted from
growth in fee income associated with ATM's.
NONINTEREST EXPENSE
Total noninterest expense was $2,116,856 for the third quarter of 2000
compared to $1,763,180 for the third quarter of 1999. For the first nine months
of 2000, noninterest expense was $6,089,221 compared to $5,047,092 for the same
period of 1999. The increases in noninterest expense were primarily attributable
to increases in employee compensation and benefits, the largest component of
noninterest expense. Employee compensation and other benefit expenses increased
$158,606 for the third quarter of 2000 compared to the third quarter of 1999 and
increased $487,921 for the nine-month periods compared. The increases in
employee compensation and benefits for the quarters and nine-month periods
compared were primarily attributable to normal merit increases and staff
additions associated with the opening of two additional banking locations. Net
occupancy and furniture and equipment expenses increased $38,928 and $36,143,
respectively, during the third quarter of 2000 compared to the third quarter of
1999 and increased $71,584 and $75,065, respectively, for the nine-month periods
compared. The increases for the periods compared related primarily to occupancy
and furniture and equipment expenses associated with the opening of the Dupo,
Illinois banking location and a second Belleville, Illinois banking location in
the fourth quarter of 1999 and the second quarter of 2000, respectively. Overall
increases in maintenance and repair costs associated with all banking locations
also contributed to the increases. Data processing expenses increased $12,929
for the third quarter of 2000 compared to the third quarter of 1999 and
increased $36,196 for the nine-month periods compared. The increases in data
processing expenses for the periods compared resulted primarily from normal
growth in operations. Advertising expenses increased $3,520 for the third
quarter of 2000 compared to the third quarter of 1999 and increased $13,396 for
the nine-month periods compared. Expanded advertising activities and new
campaigns related to the branch openings contributed to these increases. Other
noninterest expenses increased $103,550 for the third quarter of 2000 compared
to the third quarter of 1999 and increased $357,967 for the nine-month periods
compared. Other noninterest expenses includes such items as legal and
professional fees, FDIC insurance premiums, mortgage banking expenses, postage
costs and certain credit card program expenses. The increases in other
noninterest expenses for the periods compared were partially attributable to
increased legal and professional fees and increased FDIC insurance premiums.
Numerous other categories of noninterest expenses also contributed to the
increases.
INCOME TAX EXPENSE
West Pointe recorded an income tax benefit of $210,400 for the third
quarter of 2000 compared to income tax expense of $142,200 for the third quarter
of 1999. For the first nine months of 2000, West Pointe recorded an income tax
benefit of $144,200 compared to income tax expense of $335,400 for the same
period of 1999. The income tax benefits recorded during 2000 occurred as the
levels of tax-exempt interest income for both Federal and State purposes
exceeded the levels of income before income taxes. The additional provision for
loan losses, recorded during the third quarter of 2000, reduced income before
income taxes, which in turn, intensified the level of the income tax benefits.
11
<PAGE> 12
FINANCIAL CONDITION
GENERAL
Certain components of West Pointe's consolidated balance sheet at
September 30, 2000 compared to December 31, 1999 are presented in summary form
in Table 2. Total assets increased $29,080,886 to $340,835,291 compared to
$311,754,405 at December 31, 1999. This increase primarily resulted from an
increase in the volume of loans and investment securities.
TABLE 2 - Selected Comparative Balance Sheet Items
<TABLE>
<CAPTION>
September 30 December 31
2000 1999
--------------------- ---------------------
<S> <C> <C>
Total assets ........................................................... $340,835,291 $311,754,405
Loans .................................................................. 187,884,007 174,192,437
Investments ............................................................ 120,392,564 108,625,911
Federal funds sold ..................................................... 3,900,000 3,600,000
Deposits ............................................................... 302,150,976 279,142,315
Repurchase agreements .................................................. 10,772,850 6,938,200
Other borrowings ....................................................... 1,737,500 1,837,500
Federal Home Loan Bank advances ........................................ 5,000,000 5,000,000
Stockholders' equity ................................................... 18,674,898 16,980,222
</TABLE>
LOANS
Loans increased 7.9%, or $13,691,570, from year-end 1999 to September
30, 2000. The majority of this increase was derived from growth in the
commercial and residential real estate segments of the portfolio. West Pointe
also experienced modest growth in the commercial, financial and agricultural and
consumer segments of the portfolio. Growth in these segments was partially
offset by a reduction in the volume of real estate construction loans.
Table 3 presents the composition of the loan portfolio by type of
borrower and major loan category and the percentage of each to the total
portfolio for the periods presented.
TABLE 3 - Loan Portfolio Composition
<TABLE>
<CAPTION>
September 30 December 31
2000 1999
---------------------------------- -------------------------------
Commercial borrowers: Amount Percent Amount Percent
--------------------- ------------------- ------- --------------- -------
<S> <C> <C> <C> <C>
Commercial, financial and
agricultural .................................. $ 46,949,115 25.0% $ 44,469,418 25.5%
Commercial real estate ............................. 68,589,038 36.5 61,284,167 35.2
Real estate construction ........................... 9,194,322 4.9 11,074,257 6.4
------------ ----- ------------ -----
Total commercial ......................... 124,732,475 66.4 116,827,842 67.1
------------ ----- ------------ -----
Consumer borrowers:
-------------------
1-4 family residential
real estate ................................... 51,949,173 27.6 47,136,881 27.0
Other consumer loans ............................... 11,202,359 6.0 10,227,714 5.9
------------ ----- ------------ -----
Total consumer ........................... 63,151,532 33.6 57,364,595 32.9
------------ ----- ------------ -----
Total loans .............................. $187,884,007 100.0% $174,192,437 100.0%
============ ===== ============ =====
</TABLE>
12
<PAGE> 13
INVESTMENTS
Total investments increased to $120,392,564 at September 30, 2000
compared to $108,625,911 at year-end 1999. At September 30, 2000, approximately
97% of West Pointe's investment portfolio is classified as available for sale.
The held-to-maturity portion of the portfolio consists solely of Federal Home
Loan Mortgage Corporation and Federal National Mortgage Association
mortgage-backed securities.
The investment portfolio provides a balance to interest rate and credit
risk in other categories of the balance sheet while providing a vehicle for the
investment of available funds not needed to fund loan demand. The investment
portfolio also supplies securities as required collateral for certain deposits
and for securities sold under agreements to repurchase. Additional information
regarding West Pointe's securities sold under agreements to repurchase is
presented and discussed under "Borrowings."
Available-for-sale investment securities are recorded at fair value.
Net unrealized losses on available-for-sale investment securities totaled
$2,602,948 at September 30, 2000, compared to net unrealized losses of
$4,061,045 at December 31, 1999.
Table 4 presents the composition of investment securities at their
carrying values for the periods presented.
TABLE 4 - Investment Securities Portfolio Composition
<TABLE>
<CAPTION>
September 30 December 31
2000 1999
------------ ------------
<S> <C> <C>
Held-to maturity securities:
Mortgage-backed securities .................................................... $ 3,309,453 $ 4,513,819
------------ ------------
Available-for-sale securities:
Obligations of U. S. government corporations and agencies .......................... 70,277,206 61,089,388
Mortgage-backed securities ......................................................... 11,753,522 7,346,741
Obligations of states and political subdivisions ................................... 33,952,333 34,591,644
Equity securities .................................................................. 1,100,050 1,084,319
------------ ------------
Total available-for-sale ...................................................... $117,083,111 $104,112,092
============ ============
</TABLE>
DEPOSITS
West Pointe's deposit base is its primary source of liquidity and
consists of deposits originating within the communities served by its banking
locations. Deposits are West Pointe's primary and most reliable funding source
for interest earning assets.
Total deposits increased $23,008,661 to $302,150,976 at September 30,
2000 from year-end 1999. The time deposit component of the deposit portfolio
increased $20,581,710 from year-end 1999. The increase in time deposits
primarily resulted from promotional activities relating to West Pointe's new
banking locations in Dupo and Belleville, Illinois. In connection with the
opening of these locations, West Pointe featured its 12-month and 18-month
certificates of deposit. In addition to the increase in time deposits,
noninterest bearing demand and interest bearing demand deposits also increased
$1,871,994 and $1,391,617, respectively, from year-end 1999. West Pointe
continues to emphasize sales efforts and offers competitive pricing of deposits.
The increases in time deposits and interest bearing demand deposits were
partially offset by a modest reduction of $836,660 in savings and money market
deposits. The decrease in savings and money market deposits was attributable to
a shift towards higher yielding time deposits.
13
<PAGE> 14
Table 5 sets forth the composition of deposits and the percentage of
each category to total deposits for the periods presented.
TABLE 5 - Deposit Liability Composition
<TABLE>
<CAPTION>
September 30 December 31
2000 1999
-------------------------------- ---------------------------------
Amount Percent Amount Percent
------------ ------------ ------------- --------
<S> <C> <C> <C> <C>
Noninterest bearing demand deposits ............... $ 29,222,612 9.7% $ 27,350,618 9.8%
Interest bearing demand deposits .................. 43,264,428 14.3 41,872,811 15.0
Savings and money market deposits ................. 54,813,397 18.1 55,650,057 19.9
Time deposits $100,000 or more .................... 46,328,819 15.3 45,906,985 16.5
Time deposits less than $100,000 .................. 128,521,720 42.6 108,361,844 38.8
------------ ----- ------------ -----
Total deposits ............................... $302,150,976 100.0% $279,142,315 100.0%
============ ===== ============ =====
</TABLE>
BORROWINGS
Total borrowings amounted to $17,510,350 at September 30, 2000, an
increase of $3,734,650 from $13,775,700 at year-end 1999. At September 30, 2000
and December 31, 1999, borrowings consisted of securities sold under agreements
to repurchase (repurchase agreements), Federal Home Loan Bank advances and a
short-term borrowing with an unaffiliated bank.
Repurchase agreements increased $3,834,650 from year-end 1999. These
borrowings serve as an alternative funding source to deposits. The majority of
the increase in repurchase agreements was in the form of cash management
repurchase agreement accounts. Such accounts involve the daily transfer of
excess funds from noninterest bearing deposit accounts into interest bearing
cash management repurchase agreement accounts. Cash management repurchase
agreement accounts are marketed to commercial and individual deposit customers
and are considered to be a stable source of funds. Repurchase agreements, other
than cash management repurchase agreements, generally represent an alternative
to short-term certificates of deposit.
At September 30, 2000 and December 31, 1999 the Bank had one $5,000,000
Federal Home Loan Bank advance, which reflected an interest rate of 5.63% and
had a scheduled maturity of December 13, 2004. This advance is callable on
December 13, 2000 and quarterly thereafter.
At September 30, 2000, other borrowings consisted of a $1,737,500
borrowing under a line of credit with an unaffiliated bank. This line of credit
allows for borrowings, by West Pointe, of up to $2,500,000. The line of credit
matures on December 7, 2000, and bears interest at a rate of 50 basis points
under the prime lending rate. West Pointe originally borrowed $1,837,500 in
December 1999. At that time, in order to increase the Bank's capital position,
$1,500,000 of the borrowing was contributed to the Bank as additional paid in
capital. The remaining proceeds from the original borrowing were used to
repurchase 6,250 shares of West Pointe's common stock. Since the date of the
original borrowing and through September 30, 2000, West Pointe made two
principal payments totaling $100,000.
ASSET QUALITY
West Pointe's asset quality management program, particularly with
regard to loans, is designed to analyze potential risk elements and to support
the growth of a high quality loan portfolio. The existing loan portfolio is
monitored via West Pointe's loan rating system. The loan rating system is used
to determine the adequacy of the allowance for loan losses. West Pointe's loan
analysis process proactively identifies, monitors and works with borrowers for
whom there are indications of future repayment difficulties. West Pointe's
lending philosophy is to invest in the communities served by its banking centers
so that it can effectively monitor and control credit risk.
At September 30, 2000, nonperforming assets totaled $717,404, or .21%
of total assets, compared to nonperforming assets at year-end 1999 of $2,691,801
or .86% of total assets. Nonperforming assets, at December 31,
14
<PAGE> 15
1999, included $348,792 relating to foreclosed property, which was disposed of
prior to June 30, 2000. The foreclosed property dispositions did not produce
material losses. As of September 30, 2000, nonperforming assets included $98,050
relating to foreclosed property. Management does not anticipate any significant
losses upon disposition of the remaining foreclosed property. Nonperforming
loans in the commercial, financial and agricultural and commercial real estate
segments of the portfolio decreased $1,408,836 and $131,459 from December 31,
1999, respectively. In addition, nonperforming loans secured by 1-4 family
residential real estate decreased $193,776 since year-end 1999. The decrease in
nonperforming loans was primarily due to charge-offs of certain nonperforming
loans and from efforts to reduce nonperforming loan levels. Management is in
various stages of workout or liquidation of the remaining nonperforming loans.
Table 6 sets forth a summary of West Pointe's loan portfolio mix and
nonperforming assets.
TABLE 6 - Loan Portfolio Mix and Nonperforming Assets
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
------------------------------------ -------------------------------------
Loans and Loans and
Foreclosed Non-performing Foreclosed Non-performing
Property Assets Property Assets
------------- ------------------ ------------ ------------------
<S> <C> <C> <C> <C>
Commercial borrowers:
---------------------
Commercial, financial and
agricultural .................................. $ 46,949,115 $ 347,151 $ 44,469,418 $ 1,755,987
Commercial real estate ............................. 68,589,038 -- 61,284,167 131,459
Real estate construction ........................... 9,194,322 -- 11,074,257 --
------------ ------------ ------------ ------------
Total commercial ......................... 124,732,475 347,151 116,827,842 1,887,446
Consumer borrowers:
-------------------
1-4 family residential
real estate ................................... 51,949,173 183,952 47,136,881 377,728
Other consumer loans ............................... 11,202,359 88,251 10,227,714 77,835
------------ ------------ ------------ ------------
Total consumer ........................... 63,151,532 272,203 57,364,595 455,563
------------ ------------ ------------ ------------
Total loans .............................. 187,884,007 619,354 174,192,437 2,343,009
Foreclosed property ................................ 98,050 98,050 348,792 348,792
------------ ------------ ------------ ------------
Total .................................... $187,982,057 $ 717,404 $174,541,229 $ 2,691,801
============ ============ ============ ============
Nonaccrual loans ................................... $ 289,975 $ 1,552,319
Accruing loans past due
90 days or more ............................... 329,379 790,690
Troubled debt restructurings ....................... -- --
------------ ------------
Total nonperforming loans ..................... 619,354 2,343,009
Foreclosed property ................................ 98,050 348,792
------------ ------------
Total nonperforming assets .................... $ 717,404 $ 2,691,801
============ ============
Nonperforming loans to total loans ................. .33% 1.35%
Nonperforming assets to total loans
and foreclosed property ....................... .38% 1.54%
Nonperforming assets to total assets ............... .21% .86%
</TABLE>
Net charge-offs for the third quarter of 2000 totaled $648,666 compared
to $35,641 for the third quarter of 1999. During the first nine months of 2000,
net charge-offs totaled $1,074,862 compared to $341,132 for the first nine
months of 1999. Charge-offs recorded during the first nine months of 2000 in the
commercial, financial and agricultural segment of the loan portfolio totaled
$973,357, the majority of which was associated with two commercial borrowers.
Although dialogue between the respective borrowers and management continues, the
collection process has continued beyond a reasonable period of time. As a result
of sufficient uncertainties, management made a determination to charge-off the
respective loans. Charge-offs, in the real estate segment of the portfolio
totaling $98,859, were associated with several borrowers. A recovery associated
with one particular commercial borrower accounted for the majority of the
recoveries recorded during the first nine months of 2000.
15
<PAGE> 16
West Pointe's allowance for loan losses at September 30, 2000,
increased to $1,840,159 from $1,687,021 at December 31, 1999. The increase in
the allowance for loan losses was primarily due to overall growth in the loan
portfolio, coupled with management's decision to replenish the allowance with
the additional provision for loan losses, made in connection with the
aforementioned charge-offs. At September 30, 2000, the allowance for loan losses
represented 297.11% of nonperforming loans compared to 72.00% and 71.11% at
December 31, 1999 and September 30, 1999, respectively. The ratio of the
allowance for loan losses to total loans was .98% at September 30, 2000 compared
to .97% at December 31, 1999 and .94% at September 30, 1999. Managements
believes that the allowance for loan losses at September 30, 2000 was adequate
to absorb potential losses inherent in the loan portfolio. However, past loan
loss experience as it relates to current portfolio mix, evaluation of potential
losses in the portfolio, subsequent changes in economic conditions and other
factors may require changes in the levels of the allowance for loan losses.
Table 7 presents information pertaining to the activity in and an
analysis of West Pointe's allowance for loan losses for the periods presented.
TABLE 7 - Allowance For Loan Losses
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
---------------------------- ----------------------------
2000 1999 2000 1999
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Balance at beginning of period ............................. $1,755,825 $1,383,000 $1,687,021 $1,342,000
Loans charged off:
Commercial, financial and agricultural ................ 636,567 261 973,357 265,537
Real estate:
Commercial ....................................... 7,658 -- 16,966 44,540
Residential ...................................... -- 9,986 81,893 27,809
---------- ---------- ---------- ----------
Total real estate ........................... 7,658 9,986 98,859 72,349
---------- ---------- ---------- ----------
Consumer .............................................. 1,358 10,647 30,394 12,073
Credit cards .......................................... 9,236 19,788 9,236 27,897
---------- ---------- ---------- ----------
Total charge-offs ........................... 654,819 40,682 1,111,846 377,856
---------- ---------- ---------- ----------
Recoveries of loans previously charged off:
Commercial, financial and agricultural ................ -- 507 30,000 9,159
Real estate:
Residential ...................................... 1,654 -- 1,654 --
Consumer .............................................. -- 4,074 656 27,014
Credit cards .......................................... 4,499 460 4,674 551
---------- ---------- ---------- ----------
Total recoveries ............................ 6,153 5,041 36,984 36,724
---------- ---------- ---------- ----------
Net charge-offs ............................................ 648,666 35,641 1,074,862 341,132
Provision for loan losses .................................. 733,000 226,641 1,228,000 573,132
---------- ---------- ---------- ----------
Balance at end of period ................................... $1,840,159 $1,574,000 $1,840,159 $1,574,000
========== ========== ========== ==========
Net charge-offs (annualized) as a
percent of average total loans ........................ 1.39% .09% .79% .30%
Allowance for loan losses to total loans ................... .98% .94% .98% .94%
Allowance for loan losses to
nonperforming loans ................................... 297.11% 71.11% 297.11% 71.11%
</TABLE>
16
<PAGE> 17
CAPITAL RESOURCES
CAPITAL RESOURCES
Total stockholders' equity increased $1,694,676 from $16,980,222 at
December 31, 1999 to $18,674,898 at September 30, 2000. Net income for the
nine-month period ended September 30, 2000 was $1,038,360.
Financial institutions are required to maintain ratios of capital to
assets in accordance with guidelines promulgated by the federal banking
regulators. The guidelines are commonly known as "Risk-Based Guidelines" as they
define the capital level requirements of a financial institution based upon the
level of credit risk associated with holding various categories of assets. The
Risk-Based Guidelines require minimum ratios of Tier 1 and Total Capital to
risk-weighted assets of 4% and 8%, respectively. At September 30, 2000, West
Pointe's Tier 1 and Total capital ratios were 9.29% and 10.13%, respectively. In
addition to the Risk-Based Guidelines, the federal banking agencies have
established a minimum leverage ratio guideline for financial institutions (the
"Leverage Ratio Guideline"). The Leverage Ratio Guideline provides for a minimum
ratio of Tier 1 capital to average assets of 4%. West Pointe's leverage ratio at
September 30, 2000, was 6.02%. Accordingly, West Pointe has satisfied these
regulatory guidelines.
West Pointe recently completed construction of a new branch office
located in Belleville, Illinois, consisting of approximately 15,600 square feet.
Construction costs of this new branch office totaled approximately $2,512,171.
The new branch office opened for business on June 16, 2000. West Pointe does not
expect to incur any significant additional capital expenditures in the near
future regarding this facility.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no material change to the market risk position from that
disclosed as of December 31, 1999, the end of the last fiscal year.
17
<PAGE> 18
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings
before any court, administrative agency or any tribunal, nor is the
Company aware of any litigation which is threatened against it in any
court, administrative agency, or other tribunal. The Bank is subject to
various claims, lawsuits and administrative proceedings arising in the
ordinary course of business from time to time. Based upon its
evaluation of available information, management does not believe that
any pending claims, lawsuits or administrative proceedings are likely,
individually or in the aggregate, to have a material adverse effect
upon the Bank's financial position, results of operations or cash
flows.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: See Exhibit Index on page 20 hereof.
(b) Reports on Form 8-K: No reports on Form 8-K were filed by West
Pointe during the third quarter of 2000.
18
<PAGE> 19
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.
WEST POINTE BANCORP, INC.
-----------------------------------
(Registrant)
DATE: November 9, 2000 By: /s/ Terry W. Schaefer
----------------------- --------------------------------
Terry W. Schaefer
President and Chief
Executive Officer
DATE: November 9, 2000 By: /s/ Bruce A. Bone
----------------------- --------------------------------
Bruce A. Bone
Senior Vice President and
Chief Financial Officer
19
<PAGE> 20
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
11.1 Computation of Net Income Per Share (incorporated by reference to Note
C of West Pointe's unaudited interim consolidated financial statements
included herein).
27.1 Financial Data Schedule.
20
