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, 1996
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 8, 1996: 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,
1996 1995 1995
ASSETS
Cash and due from banks $ 9,770,029 $ 10,891,882 $ 10,887,718
Federal funds sold 1,023,000 4,445,860 11,469,000
Investment securities
available for sale 125,325,363 4,479,931 68,014,533
Investment securities
held to maturity - 72,915,899 -
Loans, net of unearned income 248,260,392 242,611,223 250,372,023
Less allowance for loan losses 3,772,394 3,828,670 3,853,633
244,487,998 238,782,553 246,518,390
Premises and equipment - net 8,862,279 8,669,129 8,947,284
Accrued interest receivable 3,093,076 2,025,456 2,065,832
Excess of cost over net
assets purchased 2,472,154 1,947,822 1,830,170
Other assets 5,871,777 5,304,441 4,261,848
TOTAL ASSETS $400,905,676 $349,462,973 $353,994,775
LIABILITIES
Deposits
Non-interest bearing $ 32,651,603 $ 31,937,884 $ 31,792,609
Interest bearing 278,258,032 262,517,484 260,871,998
TOTAL DEPOSITS 310,909,635 294,455,368 292,664,607
Short-term borrowings 55,973,167 22,226,356 27,522,666
Accrued interest payable 1,156,459 1,254,111 1,033,315
Other liabilities 3,651,856 3,430,453 3,714,641
Long-term debt 1,042,034 1,000,000 1,047,124
TOTAL LIABILITIES 372,733,151 322,366,288 325,982,353
STOCKHOLDERS' EQUITY
Preferred stock - - -
Common stock without par value,
stated value $5, authorized
6,500,000 shares, issued and
outstanding 1,564,837 7,824,185 7,824,185 7,824,185
Additional paid-in capital 10,301,982 10,301,982 10,301,982
Retained earnings 10,899,747 8,769,018 9,763,633
Unrealized gain (loss) on
securities available
for sale, net (853,389) 201,500 122,622
TOTAL STOCKHOLDERS' EQUITY 28,172,525 27,096,685 28,012,422
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $400,905,676 $349,462,973 $353,994,775
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF OPERATIONS
Quarter ended June 30, Six Months ended June 30,
1996 1995 1996 1995
INTEREST INCOME
Loans $5,325,746 $5,516,957 $10,905,203 $10,762,540
Investment securities
Taxable interest income 1,638,201 1,032,235 2,727,468 2,092,151
Non-taxable interest income 33,600 36,446 68,024 73,723
1,671,801 1,068,681 2,795,492 2,165,874
Other short-term investments 106,453 93,094 278,594 175,574
Total interest income 7,104,000 6,678,732 13,979,289 13,103,988
INTEREST EXPENSE
Deposits 2,715,981 2,436,196 5,334,446 4,715,090
Borrowed funds 539,925 364,969 939,511 706,494
Total interest expense 3,255,906 2,801,165 6,273,957 5,421,584
NET INTEREST INCOME 3,848,094 3,877,567 7,705,332 7,682,404
PROVISION FOR LOAN LOSSES - 45,000 - 90,000
Net interest income after
provision for loan losses 3,848,094 3,832,56 77,705,332 7,592,404
OTHER INCOME
Service charges on deposit
accounts 220,633 181,825 431,523 332,436
Securities gains (losses) - (106) - (106)
Insurance commissions 40,099 32,509 65,843 63,289
Other income 378,059 205,571 640,847 405,102
Total other income 638,791 419,799 1,138,213 800,721
OTHER EXPENSE
Salaries and employee benefits 1,368,460 1,307,106 2,711,609 2,703,871
Occupancy and equipment expense 559,840 507,383 1,112,737 1,040,662
Other expenses 1,156,345 1,237,797 2,242,895 2,390,051
Total other expense 3,084,645 3,052,286 6,067,241 6,134,584
INCOME BEFORE INCOME TAXES 1,402,240 1,200,080 2,776,304 2,258,541
PROVISION FOR INCOME TAXES 510,862 438,566 1,014,255 826,924
NET INCOME $ 891,378 $ 761,514 $ 1,762,049 $1,431,617
Average Shares Outstanding 1,564,837 1,564,837 1,564,837 1,564,837
NET INCOME PER SHARE . . $ 0.57 $ 0.49 $ 1.13 $ 0.91
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended June 30,
1996 1995
Operating Activities:
Net Income $ 1,762,049 $ 1,431,617
Charges to operations using
cash in the current period (1,144,958) (440,502)
Net cash provided by operating activities 617,091 991,115
Investing Activities:
Purchase of branch assets,
net of cash acquired 14,171,001 -
Investment securities held to maturity:
Proceeds from maturities and repayments - 10,728,183
Proceeds from sales - -
Purchases - (5,434,656)
Investment securities available for sale:
Proceeds from maturities and repayments 9,078,236 754,100
Proceeds from sales - -
Purchases (68,151,854) (1,808,100)
Net (increase) decrease in loans 2,280,174 (13,743,803)
Purchase of premises and equipment (473,010) (290,048)
Net cash used by investing activities (43,095,453) (9,794,324)
Financing Activities:
Net increase (decrease) in non-interest
bearing demand deposits (117,969) 728,971
Net decrease in interest bearing
demand and savings deposits (5,556,898) (12,068,374)
Net increase in time deposits 8,770,065 13,454,114
Net increase in short-term borrowings 28,450,501 8,828,175
Principal repayment of long-term debt (5,091) (1,000,000)
Cash dividends paid (625,935) (430,331)
Net cash provided by financing
activities 30,914,673 9,512,555
Net Increase (Decrease) in
Cash and Cash Equivalents (11,563,689) 709,346
Cash and Cash Equivalents Beginning Balance 22,356,718 14,628,396
Cash and Cash Equivalents Ending Balance $10,793,029 $15,337,742
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Six months ended June 30, 1996 and 1995
1995 1994
Balance at January 1, $28,012,422 $26,193,019
Net Income 1,762,049 1,431,617
Dividends declared ($0.40 per share 1996,
$0.30 per share 1995) (625,935) (469,451)
Unrealized gain/(loss) on
securities available for sale (976,011) (58,500)
Balance at June 30, $28,172,525 $27,096,685
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 1995 Annual Report to Stockholders should be read
in conjunction with these statements.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL POSITION AND RESULTS OF OPERATIONS
SUMMARY
American Bancorporation (the "Company") recognized net income of $1,762,000
($1.13 per share) for the six months ended June 30, 1996, compared to net
income of $1,432,000 ($0.91 per share) for the six months ended June 30, 1995.
The Company's assets totalled $400,906,000 at June 30, 1996, compared to
$349,463,000 at June 30, 1995.
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 1995 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, 1996 amounted to
$1,762,000, compared to $1,432,000 for the six months ended June 30 1995. The
increase was the result of increases in net interest income and other income
and a decrease in other expenses.
Net Interest Income. Net interest income before provision for loan losses for
the six months ended June 30, 1996 amounted to $7,705,000, an increase of
$23,000 or 0.3%, as compared to the six months ended June 30, 1995. The
increase resulted primarily from a $28,664,000 or 8.9% increase in average
interest earning assets which were partially offset by a 37 basis point
decrease in the Company's margin.
Interest Income. Total interest income for the six months ended June 30, 1996
amounted to $13,979,000 an increase of $875,000 or 6.7%, as compared to the
same period in 1995. The increase resulted primarily from a $28,664,000
increase in the average volume of earning assets which was partially offset by
a 16 basis point decrease in the average yield on earning assets. Average
loans outstanding increased $7,340,000 or 3.1%. Average commercial loans
increased $10,582,000 or 18.2% while average consumer installment loans
decreased $1,813,000 or 3.3% and average real estate loans decreased
$1,429,000 or 1.1%. The average yield on loans decreased from 8.99% in 1995
to 8.83% in 1996. Average investment securities and other short-term
investments outstanding increased $21,324,000 or 25.5% while the average yield
increased from 5.60% in 1995 to 5.86% in 1996.
Interest Expense. Total interest expense for the six months ended June 30,
1996 amounted to $6,274,000, an increase of $852,000 or 15.7% as compared to
the six months ended June 30, 1995. The increase resulted primarily from a
$27,520,000 or 9.7% increase in the average volume of interest bearing
liabilities and a 21 basis point increase in interest rates paid on such
liabilities. Average NOW, money market and savings accounts decreased
$4,621,000. Average time deposits increased $18,047,000. Average noninterest
bearing accounts increased $350,000 and represented 10.4% of average total
deposits in 1996. Average borrowings increased $14,094,000.
Provision for Loan Losses. There was no loan loss provision for the six
months ended June 30, 1996, compared to $90,000 for the same period in 1995.
Other Income. Other income amounted to $1,138,000 for the six months ended
June 30, 1996, an increase of $337,000 or 42.1%, as compared to the same
period in 1995. The 1996 amount includes a gain on other real estate totalling
$139,000.
Other Expense. Total other expense for the six months ended June 30, 1996
amounted to $6,067,000, a decrease of $67,000 or 1.1%, as compared to the
same period in 1995. Salaries and employee benefits increased $8,000 or 0.3%.
Occupancy and equipment expense increased $72,000 or 6.9%. Other
(miscellaneous) expenses decreased $147,000 or 6.2%.
Provision for Income Taxes. The provision for income taxes for the six months
ended June 30, 1996 was $1,014,000 , an increase of $187,000 or 22.7% as
compared to the same period in 1995. 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, 1996 amounted to
$891,000, compared to net income of $762,000 for the quarter ended June 30,
1995. The increase was the result of an increase in other income which was
partially offset by an increase in other expenses and a decrease in net
interest income.
Net Interest Income. Net interest income before provision for loan losses for
the quarter ended June 30, 1996 amounted to $3,848,000, a decrease of $29,000
or 0.8% as compared to the quarter ended June 30, 1995. The decrease resulted
primarily from a 55 basis point decrease in the Company's margin which was
partially offset by a $39,569,000 or 12.2% increase in average interest
earning assets.
Interest Income. Total interest income for the quarter ended June 30, 1996
amounted to $7,104,000 an increase of $425,000 or 6.4% as compared to the same
period in 1995. The increase resulted primarily from a $39,569,000 or 12.2%
increase in the average volume of earning assets which was partially offset
by a 43 basis point decrease in the average yield on earning assets. Average
loans outstanding increased $4,451,000 or 1.8%. Average commercial loans
increased $11,901,000 or 20.2% while average real estate loans decreased
$4,097,000 or 3.2% and average consumer installment loans decreased
$3,353,000 or 6.0%. The average yield on loans decreased from 9.13% in 1995 to
8.66% in 1996. Average investment securities and other short-term investments
outstanding increased $35,118,000 or 42.7% while the average yield increased
from 5.64% in 1995 to 6.06% in 1996.
Interest Expense. Total interest expense for the quarter ended June 30, 1996
amounted to $3,256,000, an increase of $455,000 or 16.2%, as compared to the
quarter ended June 30, 1995. The increase resulted primarily from a
$39,351,000 or 13.8% increase in the average volume of interest bearing
liabilities and an 8 basis point increase in interest rates paid on such
liabilities.
Provision for Loan Losses. There was no loan loss provision for the quarter
ended June 30, 1996, compared to $45,000 for the same period in 1995.
Other Income. Other income amounted to $639,000 for the quarter ended June
30, 1996, compared to $420,000 for the same period in 1995. The 1996 amount
includes a gain on other real estate totalling $139,000.
Other Expense. Total other expense for the quarter ended June 30, 1996
amounted to $3,085,000, an increase of $32,000 or 1.1% as compared to the same
period in 1995. Salaries and employee benefits increased $61,000 or 4.7%.
Occupancy and equipment expense increased $52,000 or 10.3%. Other
(miscellaneous) expenses decreased $81,000 or 6.6%.
Provision for Income Taxes. The provision for income taxes for the quarter
ended June 30, 1996 was $511,000, compared to $439,000 for the same period in
1995. The increase was due to the increase in the Company's pre-tax income.
ASSET QUALITY
Nonperforming loans totalled $2,045,000 or 0.8% of total loans at June 30,
1996, compared to $2,065,000 or 0.8% at December 31, 1995. Nonperforming
loans at June 30, 1996 consisted of nonaccrual loans totalling $755,000, 90
day delinquent loans of $585,000, and restructured loans aggregating $705,000.
Other real estate held totalled $585,000 at June 30, 1996, compared to
$575,000 at December 31, 1995.
CAPITAL RESOURCES
Stockholders' equity totalled $28,173,000 at June 30, 1996. The Company's
risk-based capital ratio was 12.4%, of which 11.2% constituted common
stockholder equity, while the risk-based capital ratio for the Company's bank
subsidiary, Wheeling National Bank, was 12.3%, with common stockholders'
equity of 11.1%. At June 30, 1996 the Company's leverage capital ratio was
6.7%, while the leverage ratio for Wheeling National Bank was 6.6%.
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1996 1995 1996 1995
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)
<C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans
Commercial $ 70,781 9.23% $ 58,880 9.95% $ 68,732 9.26% $ 58,150 10.04%
Real estate 122,935 7.95 127,032 8.50 124,409 8.25 125,838 8.10
Installment-net 52,341 8.96 55,694 8.87 53,728 8.98 55,541 9.15
Total loans 246,057 8.66 241,606 9.13 246,869 8.83 239,529 8.99
Investment securities
Taxable 112,179 5.84 76,062 5.43 96,447 5.66 77,400 5.41
Tax-exempt 2,025 6.64 1,972 7.39 2,075 6.56 2,009 7.34
Total investment securities 114,204 5.86 78,034 5.48 98,522 5.67 79,409 5.45
Other short-term investments 3,241 13.14 4,293 8.67 6,352 8.77 4,141 8.48
Total interest earning assets $363,502 7.82 $323,933 8.25 $351,743 7.95 $323,079 8.11
INTEREST BEARING LIABILITIES
Deposits
NOW, Savings and MMDA $130,305 2.62% $131,124 2.65% $129,623 2.61% $134,244 2.68%
Time 148,114 5.03 130,716 4.79 145,292 5.01 127,245 4.58
Total deposits 278,419 3.90 261,840 3.72 274,915 3.88 261,489 3.61
Short-term borrowings 44,487 4.65 21,758 6.30 36,264 4.95 22,047 5.91
Long-term debt 1,043 8.61 1,000 8.90 1,044 8.19 1,167 9.45
Total interest
bearing liabilities $323,949 4.02 $284,598 3.94 $312,223 4.02 $284,703 3.81
MARGIN ANALYSIS
(as a % of earning assets)
Interest income 7.82% 8.25% 7.95% 8.11%
Interest expense 3.58 3.46 3.57 3.36
Net interest income 4.24% 4.79% 4.38 4.75%
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.
</TABLE>
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securities Holders
The Annual Meeting of Shareholders was held May 15, 1996. Proxies were
solicited pursuant to Regulation 14 of the 1934 Act. Shares represented in
person or by proxy totalled 1,292,775 or 82.61% 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: 1,274,090 Against: 8,627 Abstain: 10,058
2. To elect Jay T. McCamic and Robert C. Mead directors for a
three year term.
Vote For Vote Withheld Abstain
Jay T. McCamic 1,287,360 5,415 0
Robert C. Mead 1,287,360 5,415 0
Continuing in the position of director were the following:
Term Expiring
Jeremy C. McCamic 1997
Jolyon W. McCamic 1997
Jack O. Cartner 1998
Paul W. Donahie 1998
John J. Malik, Jr. 1998
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 13, 1996 /s/ Jeremy C. McCamic
Jeremy C. McCamic
Chairman and
Chief Executive Officer
Date: August 13, 1996 /s/ Brent E. Richmond
Brent E.Richmond
Chief Financial and
Accounting Officer
<TABLE> <S> <C>
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<PERIOD-START> JAN-01-1996
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 9,770,029
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 1,023,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 125,325,363
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 125,325,363
<LOANS> 248,260,392
<ALLOWANCE> 3,772,394
<TOTAL-ASSETS> 400,905,676
<DEPOSITS> 310,909,635
<SHORT-TERM> 55,973,167
<LIABILITIES-OTHER> 4,808,315
<LONG-TERM> 1,042,034
<COMMON> 7,824,185
0
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<INTEREST-OTHER> 106,453
<INTEREST-TOTAL> 7,104,000
<INTEREST-DEPOSIT> 2,715,981
<INTEREST-EXPENSE> 3,255,906
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<EPS-PRIMARY> 0.57
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<LOANS-NON> 755,000
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