FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the period ended: September 30, 1995
Commission File Number: 0-5893
American Bancorporation
(Exact name of registrant as specified in its charter)
Ohio 31-0724349
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
1025 Main Street, Suite 800, Wheeling, WV 26003
(Address of principal executive offices) (Zip Code)
(304) 233-5006
(Registrant's telephone number, including area code)
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.
October 6, 1995: 1,564,837 shares of Common stock without par value
Number of pages comprising this report: 12
TABLE OF CONTENTS
Part I FINANCIAL INFORMATION
Item 1 Financial Statements
Condensed Consolidated Balance Sheet 3
Condensed Consolidated Statement of Operations 4
Condensed Consolidated Statement of Cash Flows 5
Condensed Consolidated Statement of
Changes in Stockholders' Equity 6
Notes to the Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II OTHER INFORMATION
Item 1 Legal Proceedings None
Item 2 Changes in Securities 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 None
SIGNATURES 12
American Bancorporation and Subsidiaries
CONSOLIDATED BALANCE SHEET
September 30, December 31,
1995 1994 1994
ASSETS
Cash and due from banks $ 10,869,474 $ 11,380,472 $ 10,704,396
Interest-earning deposits and
Federal funds sold 5,477,297 10,504,000 3,924,000
Securities available for sale 4,593,631 3,314,600 3,484,431
Investment securities 67,529,717 81,121,986 78,189,252
Loans, net of unearned income 244,937,335 172,970,130 228,865,744
Less allowance for loan losses 3,910,783 3,454,328 3,736,994
241,026,552 169,515,802 225,128,750
Premises and equipment - net 8,882,023 7,830,010 8,672,714
Accrued interest receivable 1,871,774 1,695,476 2,018,778
Excess of cost over net
assets purchased 1,888,996 1,187,085 2,065,475
Other assets 5,367,578 3,180,765 3,927,839
TOTAL ASSETS $347,507,042 $289,730,196 $338,115,635
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Non-interest bearing $ 31,569,143 $ 30,878,696 $ 31,208,913
Interest bearing 262,478,166 223,208,322 261,131,744
TOTAL DEPOSITS 294,047,309 254,087,018 292,340,657
Short-term borrowings 19,530,423 7,597,156 13,398,181
Accrued interest payable 1,171,774 873,851 1,011,323
Other liabilities 4,145,930 1,750,640 3,172,455
Long-term debt 1,000,000 - 2,000,000
TOTAL LIABILITIES 319,895,436 264,308,665 311,922,616
STOCKHOLDERS' EQUITY
Preferred stock - - -
Common stock without par value,
stated value $5, authorized
6,500,000 shares, issued and
outstanding 1,564,837 at September 30,
1995 and December 31, 1994, and
1,506,612 at September 30, 1994 7,824,185 7,533,060 7,824,185
Additional paid-in capital 10,301,982 9,753,871 10,301,982
Retained earnings 9,283,939 7,770,600 7,806,852
Unrealized gain on securities
available for sale 201,500 364,000 260,000
TOTAL STOCKHOLDERS' EQUITY 27,611,606 25,421,531 26,193,019
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $347,507,042 $289,730,196 $338,115,635
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF OPERATIONS
Quarter Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
INTEREST INCOME
Loans $ 5,549,697 $ 3,856,264 $16,312,237 $10,677,050
Investment securities
Taxable interest income 990,246 1,102,355 3,082,397 3,459,148
Non-taxable interest income 35,508 39,238 109,231 124,910
1,025,754 1,141,593 3,191,628 3,584,058
Other short-term investments 84,367 128,033 259,941 397,360
Total interest income 6,659,818 5,125,890 19,763,806 14,658,468
INTEREST EXPENSE
Deposits 2,505,715 1,715,334 7,220,805 5,104,032
Borrowed funds 349,020 62,449 1,055,514 77,097
Total interest expense 2,854,735 1,777,783 8,276,319 5,181,129
NET INTEREST INCOME 3,805,083 3,348,107 11,487,487 9,477,339
PROVISION FOR LOAN LOSSES 15,000 45,000 105,000 170,000
Net interest income after
provision for loan losses 3,790,083 3,303,107 11,382,487 9,307,339
OTHER INCOME
Service charges on
deposit accounts. 203,441 164,938 535,877 488,211
Securities gains (losses) - - (106) 2,634
Insurance commissions 32,281 23,316 95,570 78,035
Other income 205,223 62,621 610,325 175,923
Total other income 440,945 250,875 1,241,666 744,803
OTHER EXPENSE
Salaries and employee
benefits 1,300,697 1,081,506 4,004,568 3,255,589
Occupancy and equipment
expense 536,805 471,523 1,577,467 1,407,417
Other expenses 1,087,225 1,105,159 3,477,276 3,037,080
Total other expense 2,924,727 2,658,188 9,059,311 7,700,086
Income before income taxes 1,306,301 895,794 3,564,842 2,352,056
PROVISION FOR INCOME TAXES 478,412 344,339 1,305,336 887,593
NET INCOME $ 827,889 $ 551,455 $ 2,259,506 $ 1,464,463
Average Shares Outstanding 1,564,837 1,506,612 1,564,837 1,506,612
NET INCOME PER SHARE $ 0.53 $ 0.37 $ 1.44 $ 0.97
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
Nine months ended September 30,
1995 1994
Operating Activities:
Net Income $ 2,259,506 $ 1,464,463
Charges to operations not using
cash in the current period 405,672 252,622
Net cash provided by
operating activities 2,665,178 1,717,085
Investing Activities:
Proceeds from maturities of
investment securities 12,584,750 16,355,000
Proceeds from repayment of
investment securities 4,558,734 13,735,900
Proceeds from sales of securities
available for sale - 3,017,375
Proceeds from redemption of
investment securities available
for sale 995,400 -
Purchase of securities available
for sale (2,163,100) -
Purchase of investment securities (6,433,406) (23,172,683)
Net change in loans (16,002,802) (22,706,733)
Purchase of premises and equipment (660,218) (656,002)
Proceeds from sale of premises
and equipment - 290,468
Net cash applied to
investing activities (7,120,642) (13,136,675)
Financing Activities:
Net increase in non-interest bearing
demand deposits 360,230 4,958,086
Net decrease in interest bearing
demand and savings deposits (13,749,493) (1,421,291)
Net increase in
certificates of deposit 15,095,915 2,510,512
Net increase in short-term borrowings 6,132,242 5,988,409
Principal repayment of long-term debt (1,000,000) -
Cash dividends paid (665,055) (564,980)
Net cash provided by (applied to)
financing activities 6,173,839 11,470,736
Net Increase in Cash and
Cash Equivalents 1,718,375 51,146
Cash and Cash Equivalents
Beginning Balance $14,628,396 $21,833,326
Cash and Cash Equivalents
Ending Balance $16,346,771 $21,884,472
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Nine months ended September 30, 1995 and 1994
1995 1994
Balance at January 1, $26,193,019 $24,158,048
Net Income 2,259,506 1,464,463
Dividends declared ($0.50 per share 1995,
$0.375 per share 1994) (782,419) (564,980)
Unrealized gain/(loss) on securities
available for sale (58,500) 364,000
Balance at September 30, $27,611,606 $25,421,531
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The unaudited interim condensed consolidated financial statements reflect
all adjustments which, in the opinion of management, are necessary to a fair
presentation of the financial position and results of operations. All
adjustments are of a normal recurring nature. The notes to the financial
statements contained in the 1994 Annual Report to Stockholders should be read
in conjunction with these statements.
NOTE A - NEW FINANCIAL ACCOUNTING STANDARD ISSUED
In May, 1995 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 122, "Accounting for Mortgage
Servicing Rights". SFAS No. 122 amends SFAS No. 65 "Accounting for Certain
Mortgage Banking Activities" by requiring that a mortgage banking enterprise
that acquires mortgage servicing rights through either the purchase or
origination of mortgage loans recognize those rights as separate assets by
allocating the total cost of the mortgage loans to the mortgage servicing
rights and the loans (without the mortgage servicing rights) based on their
relative fair values. In addition, SFAS No. 122 requires that a mortgage
banking enterprise assess its capitalized mortgage servicing rights for
impairment based on the fair value of those rights. The standard will be
applied prospectively in 1996. Management does not believe that adoption
will have a material effect on the Company's financial statements.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL POSITION AND RESULTS OF OPERATIONS
SUMMARY
American Bancorporation (the "Company") recognized net income of $2,260,000
($1.44 per share) for the nine months ended September 30, 1995, compared to
net income of $1,464,000 ($0.97 per share) for the nine months ended September
30, 1994. The Company's assets totalled $347,507,000 at September 30, 1995,
compared to $289,730,000 at September 30, 1994.
The following is a discussion of significant factors influencing operating
performance and change in financial position during the interim periods
presented. The discussion should be read in connection with the 1994 Annual
Report and the financial statements appearing elsewhere herein.
RESULTS OF OPERATIONS
NINE MONTH COMPARISON
Net Income. Net income for the nine months ended September 30, 1995 amounted
to $2,260,000, compared to $1,464,000 for the nine months ended September 30,
1994. The increase was the result of increases in net interest income and
other income which were partially offset by an increase in other expenses.
Net Interest Income. Net interest income before provision for loan losses for
the nine months ended September 30, 1995 amounted to $11,487,000 an increase
of $2,010,000 or 21.2 %, as compared to the nine months ended September 30,
1994. The increase resulted primarily from a $65,655,000 or 25.5% increase
in average interest earning assets, which was partially offset by a 17 basis
point decrease in the Company's margin.
Interest Income. Total interest income for the nine months ended September
30, 1995 amounted to $19,764,000 an increase of $5,105,000 or 34.8%, as
compared to the same period in 1994. The increase resulted primarily from a
$65,655,000 increase in the average volume of earning assets and a 56 basis
point increase in the average yield on earning assets. Average loans
outstanding increased $86,045,000 or 55.4%. Average real estate loans
increased $69,246,000 or 121.1% and average commercial loans increased
$11,690,000 or 24.9% and average consumer installment loans increased
$5,109,000 or 10.0%. The average yield on loans decreased from 9.17% in 1994
to 9.02% in 1995. Average investment securities and other short-term
investments outstanding decreased $20,390,000 or 20.0%, while the average
yield increased from 5.20% in 1994 to 5.64% in 1995.
Interest Expense. Total interest expense for the nine months ended September
30, 1995 amounted to $8,276,000, an increase of $3,095,000 or 59.7% as
compared to the nine months ended September 30, 1994. The increase resulted
primarily from a $61,144,000 or 27.4% increase in the average volume of
interest bearing liabilities and a 78 basis point increase in interest rates
paid on such liabilities. Average NOW, money market and savings accounts
increased $5,422,000. Average time deposits increased $35,829,000. Average
noninterest bearing accounts increased $3,495,000 and represented 10.8% of
average total deposits in 1995. Average borrowings increased $19,893,000.
Provision for Loan Losses. The loan loss provision was $105,000 for the nine
months ended September 30, 1995, compared to $170,000 for the same period in
1994.
Other Income. Other income amounted to $1,242,000 for the nine months ended
September 30, 1995, an increase of $497,000 or 66.7%, as compared to the same
period in 1994.
Other Expense. Total other expense for the nine months ended September 30,
1995 amounted to $9,059,000, an increase of $1,359,000 or 17.7%, as compared
to the same period in 1994. Salaries and employee benefits increased $749,000
or 23.0%. Occupancy and equipment expense increased $170,050 or 12.1%. Other
(miscellaneous) expenses increased $440,000 or 14.5%.
Provision for Income Taxes. The provision for income taxes for the nine
months ended September 30, 1995 was $1,305,000, an increase of $418,000 or
47.1%, as compared to the same period in 1994. The increase was due to the
increase in the Company's pre-tax income.
RESULTS OF OPERATIONS
QUARTER COMPARISON
Net Income. Net income for the quarter ended September 30, 1995 amounted to
$828,000, compared to net income of $551,000 for the quarter ended September
30, 1994. The increase was the result of increases in net interest income and
other income which were partially offset by an increase in other expenses.
Net Interest Income. Net interest income before provision for loan losses for
the quarter ended September 30, 1995 amounted to $3,805,000, an increase of
$457,000 or 13.6%, as compared to the quarter ended September 30, 1994. The
increase resulted primarily from a $59,368,000 or 22.6% increase in average
interest earning assets, which was partially offset by a 37 basis point
decrease in the Company's margin.
Interest Income. Total interest income for the quarter ended September 30,
1995 amounted to $6,660,000, an increase of $1,534,000 or 29.9%, as compared
to the same period in 1994. The increase resulted primarily from a $59,368,000
or 22.6% increase in the average volume of earning assets and a 47 basis point
increase in the average yield on earning assets. Average loans outstanding
increased $78,307,000 or 47.1%. Average real estate loans increased
$65,258,000 or 104.7 %, average commercial loans increased $8,699,000 or 17.2%
and average installment loans increased $4,350,000 or 8.2%. The average yield
on loans decreased from 9.27% in 1994 to 9.07% in 1995. Average investment
securities and other short-term investments outstanding decreased $18,939,000
or 19.6% while the average yield increased from 5.25% in 1994 to 5.70% in 1995.
Interest Expense. Total interest expense for the quarter ended September 30,
1995 amounted to $2,855,000 an increase of $1,077,000 or 60.6%, as compared to
the same period in 1994. The increase resulted primarily from a $55,457,000
or 24.4% increase in the average volume of interest bearing liabilities and a
91 basis point increase in interest rates paid on such liabilities.
Provision for Loan Losses. The loan loss provision was $15,000 for the quarter
ended September 30, 1995, compared to $45,000 for the same period in 1994.
Other Income. Other income amounted to $441,000 for the quarter ended
September 30, 1995, compared to $251,000 for the same period in 1994.
Other Expense. Total other expense for the quarter ended September 30, 1995
amounted to $2,925,000, an increase of $267,000 or 10.0%, as compared to the
same period in 1994. Salaries and employee benefits increased $219,000 or
20.3%. Occupancy and equipment expense increased $65,000 or 13.8%. Other
(miscellaneous) expenses decreased $18,000 or 1.6%. During the quarter the
Company received a refund of $151,000 from the Federal Deposit Insurance
Corporation for deposit premiums for the period June 1, 1995 to September
30, 1995.
Provision for Income Taxes. The provision for income taxes for the quarter
ended September 30, 1995 was $478,000, compared to $344,000 for the same period
in 1994. The increase was due to the increase in the Company's pre-tax
income.
ASSET QUALITY
Nonperforming loans totalled $1,994,000 or 0.8% of total loans at September 30,
1995, compared to $2,590,000 or 1.1% at December 31, 1994. Nonperforming
loans at September 30, 1995 consisted of nonaccrual loans totalling $789,000,
90 day delinquent loans of $511,000, and restructured loans aggregating
$694,000. Other real estate held totalled $579,000 at September 30, 1995,
compared to $682,000 at December 31, 1994.
CAPITAL RESOURCES
Stockholders' equity totalled $27,612,000 at September 30, 1995. The Company's
risk-based capital ratio was 13.0%, of which 11.7% constituted common
stockholder equity, while risk-based capital ratios for the Company's two
bank subsidiaries, Wheeling National Bank and Columbus National Bank, were
14.6% and 10.6%, respectively, with common stockholders' equity of 13.3% and
9.4%, respectively. At September 30, 1995 the Company's leverage capital
ratio was 7.4%, while the leverage ratios for Wheeling National Bank and
Columbus National Bank were 8.6% and 5.8%, respectively.
<TABLE>
<CAPTION>
Three months ended September 30, Nine months ended September 30,
1995 1994 1995 1994
Average Yield/ Average Yield/ Average Yield/ Average Yield/
Balance Rate Balance Rate Balance Rate Balance Rate
INTEREST EARNING ASSETS (000's) (000's) (000's) (000's)
<S> <C> <C> <C> <C> <C> <C>
Loans
Commercial $ 59,408 9.78% $ 50,709 8.43% $ 58,569 9.95% $ 46,879 8.27%
Real estate 127,565 8.34 62,307 8.71 126,414 8.18 57,168 8.66
Installment-net 57,714 9.26 53,364 9.29 56,265 9.19 51,156 9.48
Total loans 244,687 9.07 166,380 9.27 241,248 9.02 155,203 9.17
Investment securities
Taxable 71,719 5.52 82,617 5.34 75,506 5.44 87,232 5.29
Tax-exempt 1,912 7.43 2,172 7.23 1,977 7.37 2,291 7.27
Total investment securities 73,631 5.57 84,789 5.39 77,483 5.49 89,523 5.34
Other short-term investments 4,212 8.01 11,993 4.27 4,165 8.32 12,515 4.23
Total interest earning assets $322,530 8.26 $263,162 7.79 $322,896 8.16 $257,241 7.60
INTEREST BEARING LIABILITIES
Deposits
NOW, Savings and MMDA $128,479 2.64% $126,857 2.56% $132,323 2.67% $126,901 2.56%
Time 132,622 5.00 93,821 3.85 129,037 4.72 93,208 3.82
Total deposits 261,101 3.84 220,678 3.11 261,360 3.68 220,109 3.09
Short-term borrowings 21,009 6.25 6,975 3.58 21,701 6.02 2,919 3.52
Long-term debt 1,000 8.41 - 0.00 1,111 9.14 - 0.00
Total interest
bearing liabilities $283,110 4.03 $227,653 3.12 $284,172 3.88 $223,028 3.10
MARGIN ANALYSIS
(as a % of earning assets)
Interest income 8.26% 7.79% 8.16% 7.60%
Interest expense 3.54 2.70 3.42 2.69
Net interest income 4.72% 5.09% 4.74% 4.91%
<FN>
<F1>
Averages stated are month end average balances. Installment loans are stated
net of unearned income. Average loans include nonaccrual loans. Yields do not
reflect tax equivalent adjustments.
</FN>
</TABLE>
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
B. Reports on Form 8-K:
Date Item Description
None
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.
AMERICAN BANCORPORATION
(Registrant)
Date November 13, 1995 /s/ Jeremy C. McCamic
Jeremy C. McCamic
Chairman and
Chief Executive Officer
Date November 13, 1995 /s/ Brent E. Richmond
Brent E. Richmond
Chief Financial and
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 10,869,474
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5,477,297
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 4,593,631
<INVESTMENTS-CARRYING> 67,529,717
<INVESTMENTS-MARKET> 66,843,000
<LOANS> 244,937,335
<ALLOWANCE> 3,910,783
<TOTAL-ASSETS> 347,507,042
<DEPOSITS> 294,047,309
<SHORT-TERM> 19,530,423
<LIABILITIES-OTHER> 5,317,704
<LONG-TERM> 1,000,000
<COMMON> 7,824,185
0
0
<OTHER-SE> 19,787,421
<TOTAL-LIABILITIES-AND-EQUITY> 347,507,042
<INTEREST-LOAN> 16,312,237
<INTEREST-INVEST> 3,191,628
<INTEREST-OTHER> 259,941
<INTEREST-TOTAL> 19,763,806
<INTEREST-DEPOSIT> 7,220,805
<INTEREST-EXPENSE> 8,276,319
<INTEREST-INCOME-NET> 11,487,487
<LOAN-LOSSES> 105,000
<SECURITIES-GAINS> (106)
<EXPENSE-OTHER> 9,059,311
<INCOME-PRETAX> 3,564,842
<INCOME-PRE-EXTRAORDINARY> 2,259,506
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,259,506
<EPS-PRIMARY> 1.44
<EPS-DILUTED> 1.44
<YIELD-ACTUAL> 4.74
<LOANS-NON> 789,000
<LOANS-PAST> 511,000
<LOANS-TROUBLED> 694,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
