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 June 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.
July 10, 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 11
Item 5 Other Information None
Item 6 Exhibits and Reports on Form 8-K None
SIGNATURES 12
American Bancorporation and Subsidiaries
CONSOLIDATED BALANCE SHEET
June 30, December 31,
1995 1994 1994
ASSETS
Cash and due from banks $ 10,891,882 $ 9,701,590 $ 10,704,396
Interest-earning deposits
and Federal funds sold 4,445,860 18,363,000 3,924,000
Securities available for sale 4,479,931 2,463,875 3,484,431
Investment securities 72,915,899 80,814,978 78,189,252
Loans, net of unearned income 242,611,223 152,549,717 228,865,744
Less allowance for loan losses 3,828,670 3,384,901 3,736,994
238,782,553 149,164,816 225,128,750
Premises and equipment - net 8,669,129 7,875,050 8,672,714
Accrued interest receivable 2,025,456 1,538,892 2,018,778
Excess of cost over net
assets purchased 1,947,822 1,217,286 2,065,475
Other assets 5,304,441 3,072,162 3,927,839
TOTAL ASSETS $349,462,973 $274,211,649 $338,115,635
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Non-interest bearing $ 31,937,884 $ 27,822,146 $ 31,208,913
Interest bearing 262,517,484 217,434,205 261,131,744
TOTAL DEPOSITS 294,455,368 245,256,351 292,340,657
Short-term borrowings 22,226,356 1,415,704 13,398,181
Accrued interest payable 1,254,111 832,716 1,011,323
Other liabilities 3,430,453 1,700,475 3,172,455
Long-term debt 1,000,000 - 2,000,000
TOTAL LIABILITIES 322,366,288 249,205,246 311,922,616
STOCKHOLDERS' EQUITY
Preferred stock - - -
Common stock without par value, stated value $5,
authorized 6,500,000 shares, issued and
outstanding 1,564,837 at June 30, 1995
and December 31, 1994, and 1,506,612
at June 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 8,769,018 7,407,472 7,806,852
Unrealized gain on securities
available for sale 201,500 312,000 260,000
TOTAL STOCKHOLDERS' EQUITY 27,096,685 25,006,403 26,193,019
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $349,462,973 $274,211,649 $338,115,635
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF OPERATIONS
Quarter ended June 30, Six Months ended June 30,
1995 1994 1995 1994
INTEREST INCOME
Loans $ 5,516,957 $ 3,423,137 $ 10,762,540 $ 6,820,786
Investment securities
Taxable interest income 1,032,235 1,150,950 2,092,151 2,356,793
Non-taxable
interest income 36,446 40,945 73,723 85,672
1,068,681 1,191,895 2,165,874 2,442,465
Other short-term
investments 93,094 185,361 175,574 269,327
Total interest income 6,678,732 4,800,393 13,103,988 9,532,578
INTEREST EXPENSE
Deposits 2,436,196 1,678,110 4,715,090 3,388,698
Borrowed funds 364,969 7,054 706,494 14,648
Total interest expense 2,801,165 1,685,164 5,421,584 3,403,346
NET INTEREST INCOME 3,877,567 3,115,229 7,682,404 6,129,232
PROVISION FOR LOAN LOSSES 45,000 45,000 90,000 125,000
Net interest income
after provision for
loan losses 3,832,567 3,070,229 7,592,404 6,004,232
OTHER INCOME
Service charges on
deposit accounts 181,825 164,868 332,436 323,273
Securities gains (losses) (106) - (106) 2,634
Insurance commissions 32,509 23,810 63,289 54,719
Other income 205,571 49,485 405,102 113,302
Total other income 419,799 238,163 800,721 493,928
OTHER EXPENSE
Salaries and
employee benefits 1,307,106 1,071,800 2,703,871 2,174,083
Occupancy and
equipment expense 507,383 475,376 1,040,662 935,894
Other expenses 1,237,797 959,977 2,390,051 1,931,921
Total other expense 3,052,286 2,507,153 6,134,584 5,041,898
Income before
income taxes 1,200,080 801,239 2,258,541 1,456,262
PROVISION FOR
INCOME TAXES 438,566 300,554 826,924 543,254
NET INCOME $ 761,514 $ 500,685 $ 1,431,617 $ 913,008
Average Shares
Outstanding 1,564,837 1,506,612 1,564,837 1,506,612
NET INCOME PER SHARE $ 0.49 $ 0.33 $ 0.91 $ 0.61
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended June 30,
1995 1994
Operating Activities:
Net Income $ 1,431,617 $ 913,008
Charges to operations not using
(using) cash in the current period (440,502) 213,060
Net cash provided by
operating activities 991,115 1,126,068
Investing Activities:
Proceeds from maturities
of investment securities 8,134,750 16,355,000
Proceeds from repayment
of investment securities 2,593,433 12,110,806
Proceeds from sales of
securities available for sale - 3,017,375
Proceeds from redemption of
investment securities
available for sale 754,100 -
Purchase of securities available
for sale (1,808,100) -
Purchase of investment securities (5,434,656) (20,433,709)
Net change in loans (13,743,803) (2,310,747)
Purchase of premises and equipment (290,048) (280,473)
Net cash provided by (applied to)
investing activities (9,794,324) 8,458,252
Financing Activities:
Net increase in non-interest bearing
demand deposits 728,971 1,901,536
Net increase (decrease) in
interest bearing demand and
savings deposits (12,068,374) (1,551,459)
Net increase (decrease) in
certificates of deposit 13,454,114 (3,133,437)
Net increase (decrease) in
short-term borrowings 8,828,175 (193,043)
Principal repayment of long-term debt (1,000,000) -
Cash dividends paid (430,331) (376,653)
Net cash provided by (applied to)
financing activities 9,512,555 (3,353,056)
Net Increase in Cash and
Cash Equivalents 709,346 6,231,264
Cash and Cash Equivalents
Beginning Balance 14,628,396 21,833,326
Cash and Cash Equivalents
Ending Balance $15,337,742 $28,064,590
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Six months ended June 30, 1995 and 1994
1995 1994
Balance at January 1, $26,193,019 $24,158,048
Net Income 1,431,617 913,008
Dividends declared ($0.30 per share 1995,
$0.25 per share 1994) (469,451) (376,653)
Unrealized gain/(loss) on securities
available for sale (58,500) 312,000
Balance at June 30, $27,096,685 $25,006,403
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 $1,432,000
($0.91 per share) for the six months ended June 30, 1995, compared to net
income of $913,000 ($0.61 per share) for the six months ended June 30, 1994.
The Company's assets totalled $349,463,000 at June 30, 1995, compared to
$274,212,000 at June 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
SIX MONTH COMPARISON
Net Income. Net income for the six months ended June 30, 1995 amounted to
$1,432,000, compared to $913,000 for the six months ended June 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 six months ended June 30, 1995 amounted to $7,682,000, an increase of
$1,553,000 or 25.3%, as compared to the six months ended June 30, 1994. The
increase resulted primarily from a $68,799,000 or 27.1% increase in average
interest earning assets.
Interest Income. Total interest income for the six months ended June 30,
1995 amounted to $13,104,000 an increase of $3,571,000 or 37.5%, as compared
to the same period in 1994. The increase resulted primarily from a
$68,799,000 increase in the average volume of earning assets and a 61 basis
point increase in the average yield on earning assets. Average loans
outstanding increased $89,914,000 or 60.1%. Average real estate loans
increased $71,240,000 or 130.5% and average commercial loans increased
$13,185,000 or 29.3% and average consumer installment loans increased
$5,489,000 or 11.0%. The average yield on loans decreased from 9.12% in 1994
to 8.99% in 1995. Average investment securities and other short-term
investments outstanding decreased $21,115,000 or 20.2% while the average yield
increased from 5.18% in 1994 to 5.60% in 1995.
Interest Expense. Total interest expense for the six months ended June 30,
1995 amounted to $5,422,000, an increase of $2,018,000 or 59.3% as compared
to the six months ended June 30, 1994. The increase resulted primarily from
a $63,987,000 or 29.0% increase in the average volume of interest bearing
liabilities and a 73 basis point increase in interest rates paid on such
liabilities. Average NOW, money market and savings accounts increased
$7,321,000. Average time deposits increased $34,343,000. Average noninterest
bearing accounts increased $3,473,000 and represented 10.8% of average total
deposits in 1995. Average borrowings increased $22,323,000.
Provision for Loan Losses. The loan loss provision was $90,000 for the six
months ended June 30, 1995, compared to $125,000 for the same period in 1994.
Other Income. Other income amounted to $801,000 for the six months ended
June 30, 1995, an increase of $307,000 or 62.1%, as compared to the same
period in 1994.
Other Expense. Total other expense for the six months ended June 30, 1995
amounted to $6,135,000, an increase of $1,093,000 or 21.7%, as compared to the
same period in 1994. Salaries and employee benefits increased $530,000 or
24.4%. Occupancy and equipment expense increased $105,000 or 11.2 %. Other
(miscellaneous) expenses increased $458,000 or 23.7%.
Provision for Income Taxes. The provision for income taxes for the six
months ended June 30, 1995 was $827,000 , an increase of $284,000 or 52.2%
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 June 30, 1995 amounted to
$762,000, compared to net income of $501,000 for the quarter ended June 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 June 30, 1995 amounted to $3,878,000, an increase of
$762,000 or 24.5% as compared to the quarter ended June 30, 1994. The
increase resulted primarily from a $68,660,000 or 26.9% increase in average
interest earning assets.
Interest Income. Total interest income for the quarter ended June 30, 1995
amounted to $6,679,000 an increase of $1,878,000 or 39.1% as compared to the
same period in 1994. The increase resulted primarily from a $68,660,000 or
26.9% increase in the average volume of earning assets and a 73 basis point
increase in the average yield on earning assets. Average loans outstanding
increased $90,826,000 or 60.2%. Average real estate loans increased
$71,472,000 or 128.6%, average commercial loans increased $12,976,000 or
28.3% and average installment loans increased $6,378,000 or 12.9%. The
average yield on loans increased from 9.08% in 1994 to 9.13% in 1995. Average
investment securities and other short-term investments outstanding decreased
$22,166,000 or 21.2% while the average yield increased from 5.27% in 1994 to
5.64% in 1995.
Interest Expense. Total interest expense for the quarter ended June 30,
1995 amounted to $2,801,000, an increase of $1,116,000 or 66.2%, as compared
to the three months ended June 30, 1994. The increase resulted primarily from
a $64,156,000 or 29.1% increase in the average volume of interest bearing
liabilities and an 88 basis point increase in interest rates paid on such
liabilities.
Provision for Loan Losses. The loan loss provision was $45,000 for the
quarters ended June 30, 1995 and June 30, 1994.
Other Income. Other income amounted to $420,000 for the quarter ended June
30, 1995, compared to $238,000 for the same period in 1994.
Other Expense. Total other expense for the quarter ended June 30, 1995
amounted to $3,052,000, an increase of $545,000 or 21.7% as compared to the
same period in 1994. Salaries and employee benefits increased $235,000 or
22.0%. Occupancy and equipment expense increased $32,000 or 6.7%. Other
(miscellaneous) expenses increased $278,000 or 28.9%.
Provision for Income Taxes. The provision for income taxes for the quarter
ended June 30, 1995 was $439,000, compared to $301,000 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 $1,711,000 or 0.7% of total loans at June 30,
1995, compared to $2,590,000 or 1.1% at December 31, 1994. Nonperforming
loans at June 30, 1995 consisted of nonaccrual loans totalling $581,000,
90 day delinquent loans of $419,000, and restructured loans aggregating
$711,000. Other real estate held totalled $600,000 at June 30, 1995, compared
to $682,000 at December 31, 1994.
CAPITAL RESOURCES
Stockholders' equity totalled $27,097,000 at June 30, 1995. The Company's
risk-based capital ratio was 12.7%, of which 11.4% constituted common
stockholder equity, while risk-based capital ratios for the Company's two bank
subsidiaries, Wheeling National Bank and Columbus National Bank, were 14.3%
and 10.4%, respectively, with common stockholders' equity of 13.0% and 9.2%,
respectively. At June 30, 1995 the Company's leverage capital ratio was 7.0%,
while the leverage ratios for Wheeling National Bank and Columbus National
Bank were 8.2% and 5.5%, respectively.
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 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> <C> <C>
Loans
Commercial $ 58,880 9.95% $ 45,904 8.08% $ 58,150 10.04% $ 44,965 8.19%
Real estate 127,032 8.50 55,560 8.64 125,838 8.10 54,598 8.63
Installment-net 55,694 8.87 49,316 9.53 55,541 9.15 50,052 9.58
Total loans 241,606 9.13 150,780 9.08 239,529 8.99 149,615 9.12
Investment securities
Taxable 76,062 5.43 86,087 5.35 77,400 5.41 89,539 5.26
Tax-exempt 1,972 7.39 2,249 7.28 2,009 7.34 2,350 7.29
Total investment securities 78,034 5.48 88,336 5.40 9,409 5.45 91,889 5.32
Other short-term investments 4,293 8.67 16,157 4.59 4,141 8.48 12,776 4.22
Total interest earning assets $323,933 8.25 $255,273 7.52 $323,079 8.11 $254,280 7.50
INTEREST BEARING LIABILITIES
Deposits
NOW, Savings and MMDA $131,124 2.65% $127,408 2.54% $134,244 2.68 $126,923 2.55%
Time 130,716 4.79 92,107 3.78 127,245 4.58 92,902 3.81
Total deposits 261,840 3.72 219,515 3.06 261,489 3.61 219,825 3.08
Short-term borrowings 21,758 6.30 927 3.04 22,047 5.91 891 3.29
Long-term debt 1,000 8.90 - 0.00 1,167 9.45 - 0.00
Total interest
bearing liabilities $284,598 3.94 $220,442 3.06 $284,703 3.81 $220,716 3.08
MARGIN ANALYSIS
(as a % of earning assets)
Interest income 8.25% 7.52% 8.11% 7.50%
Interest expense. . . . . 3.46 2.64 3.36 2.68
Net interest income . . . . 4.79% 4.88% 4.75 4.82%
</TABLE>
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.
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securities Holders
The Annual Meeting of Shareholders was held May 17, 1995. Proxies were
solicited pursuant to Regulation 14 of the 1934 Act. Shares represented in
person or by proxy totalled 730,247 or 46.67% of the shares then outstanding.
Shareholders approved by affirmative vote the following proposals:
1. To fix the number of positions for director at 9, with 2 vacancies that
may be filled by the Board of Directors:
Vote For: 722,412 Against: 6,656 Abstain: 1,179
2. To elect Jack O. Cartner, Paul W. Donahie and John J. Malik, Jr.
directors for a three year term and to elect Robert C. Mead director
for a one year term:
Vote For Vote Withheld Abstain
Jack O. Cartner 724,431 5,816 0
Paul W. Donahie 724,431 5,816 0
John J. Malik, Jr. 724,431 5,816 0
Robert C. Mead 724,431 5,816 0
Continuing in the position of director were the following:
Term Expiring
John E. Wait 1996
Jeremy C. McCamic 1997
Jolyon W. McCamic 1997
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: August 9, 1995 /s/ Jeremy C. McCamic
Jeremy C. McCamic
Chairman and
Chief Executive Officer
Date: August 9, 1995 /s/ Brent E. Richmond
Brent E. Richmond
Chief Financial and
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 10,891,882
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 4,445,860
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 4,479,931
<INVESTMENTS-CARRYING> 72,915,899
<INVESTMENTS-MARKET> 72,089,000
<LOANS> 242,611,223
<ALLOWANCE> 3,828,670
<TOTAL-ASSETS> 349,462,973
<DEPOSITS> 294,455,368
<SHORT-TERM> 22,226,356
<LIABILITIES-OTHER> 4,684,564
<LONG-TERM> 1,000,000
<COMMON> 7,824,185
0
0
<OTHER-SE> 19,272,500
<TOTAL-LIABILITIES-AND-EQUITY> 349,462,973
<INTEREST-LOAN> 10,762,540
<INTEREST-INVEST> 2,165,874
<INTEREST-OTHER> 175,574
<INTEREST-TOTAL> 13,103,988
<INTEREST-DEPOSIT> 4,715,090
<INTEREST-EXPENSE> 5,421,584
<INTEREST-INCOME-NET> 7,682,404
<LOAN-LOSSES> 90,000
<SECURITIES-GAINS> (106)
<EXPENSE-OTHER> 6,134,584
<INCOME-PRETAX> 2,258,541
<INCOME-PRE-EXTRAORDINARY> 1,431,617
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,431,617
<EPS-PRIMARY> 0.91
<EPS-DILUTED> 0.91
<YIELD-ACTUAL> 475
<LOANS-NON> 581,000
<LOANS-PAST> 419,000
<LOANS-TROUBLED> 711,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
