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, 1996
Commmission 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 7, 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 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,
1996 1995 1995
ASSETS
Cash and due from banks $ 12,118,420 $ 10,869,474 $ 10,887,718
Federal funds sold 5,791,120 5,477,297 11,469,000
Investment securities
available for sale 130,440,071 4,593,631 68,014,533
Investment securities
held to maturity - 67,529,717 -
Loans, net of unearned income 258,157,544 244,937,335 250,372,023
Less allowance for
loan losses 3,622,241 3,910,783 3,853,633
254,535,303 241,026,552 246,518,390
Premises and equipment - net 9,470,704 8,882,023 8,947,284
Accrued interest receivable 3,604,428 1,871,774 2,065,832
Excess of cost over net
assets purchased 2,388,285 1,888,996 1,830,170
Other assets 6,055,488 5,367,578 4,261,848
TOTAL ASSETS $424,403,819 $347,507,042 $353,994,775
LIABILITIES
Deposits
Non-interest bearing $ 33,467,600 $ 31,569,143 $ 31,792,609
Interest bearing 281,190,194 262,478,166 260,871,998
TOTAL DEPOSITS 314,657,794 294,047,309 292,664,607
Short-term borrowings 74,218,301 19,530,423 27,522,666
Accrued interest payable 1,439,634 1,171,774 1,033,315
Other liabilities 4,188,965 4,145,930 3,714,641
Long-term debt 1,039,364 1,000,000 1,047,124
TOTAL LIABILITIES 395,544,058 319,895,436 325,982,353
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 11,441,021 9,283,939 9,763,633
Unrealized gain (loss)
on securities available
for sale (707,427) 201,500 122,622
TOTAL STOCKHOLDERS' EQUITY 28,859,761 27,611,606 28,012,422
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $424,403,819 $347,507,042 $353,994,775
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF OPERATIONS
Quarter Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
INTEREST INCOME
Loans $5,709,335 $5,549,697 $16,614,538 $16,312,237
Investment securities
Taxable interest income 2,107,059 990,246 4,834,527 3,082,397
Non-taxable interest income 32,188 35,508 100,212 109,231
2,139,247 1,025,754 4,934,739 3,191,628
Other short-term investments 41,070 84,367 319,664 259,941
Total interest income 7,889,652 6,659,818 21,868,941 19,763,806
INTEREST EXPENSE
Deposits 2,760,788 2,505,715 8,095,234 7,220,805
Borrowed funds 933,629 349,020 1,873,140 1,055,514
Total interest expense 3,694,417 2,854,735 9,968,374 8,276,319
NET INTEREST INCOME 4,195,235 3,805,083 11,900,567 11,487,487
PROVISION FOR LOAN LOSSES - 15,000 - 105,000
Net interest income after
provision for loan losses 4,195,235 3,790,083 11,900,567 11,382,487
OTHER INCOME
Service charges on
deposit accounts 224,342 203,441 655,865 535,877
Securities losses (3,794) - (3,794) (106)
Insurance commissions 28,084 32,281 93,927 95,570
Other income 434,132 205,223 1,074,979 610,325
Total other income 682,764 440,945 1,820,977 1,241,666
OTHER EXPENSE
Salaries and employee
benefits 1,390,384 1,300,697 4,101,993 4,004,568
Occupancy and equipment
expense 553,244 536,805 1,665,981 1,577,467
Other expenses 1,449,987 1,087,225 3,692,882 3,477,276
Total other expense 3,393,615 2,924,727 9,460,856 9,059,311
INCOME BEFORE INCOME TAXES 1,484,384 1,306,301 4,260,688 3,564,842
PROVISION FOR INCOME TAXES 551,901 478,412 1,566,156 1,305,336
NET INCOME $ 932,483 $ 827,889 $ 2,694,532 $ 2,259,506
Average Shares Outstanding 1,564,837 1,564,837 1,564,837 1,564,837
NET INCOME PER SHARE $ 0.60 $ 0.53 $ 1.72 $ 1.44
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
Nine months ended September 30,
1996 1995
Operating Activities:
Net Income $ 2,694,532 $ 2,259,506
Charges to operations (using) not using
cash in the current period (885,416) 405,672
Net cash provided by operating activities 1,809,116 2,665,178
Investing Activities:
Purchase of branch assets, net of
cash acquired 14,171,001 -
Investment securities held to maturity:
Proceeds from maturities and repayments - 17,143,484
Proceeds from sales - -
Purchases - (6,433,406)
Investment securities available for sale:
Proceeds from maturities and repayments 16,846,616 995,400
Proceeds from sales 4,053,743 -
Purchases (84,908,587) (2,163,100)
Net increase in loans (7,767,131) (16,002,802)
Purchase of premises and equipment (1,244,261) (660,218)
Net cash used by investing activities (58,848,619) (7,120,642)
Financing Activities:
Net increase in non-interest
bearing demand deposits 698,028 360,230
Net decrease in interest bearing
demand and savings deposits (3,619,623) (13,749,493)
Net increase in time deposits 9,764,952 15,095,915
Net increase in short-term borrowings 46,695,635 6,132,242
Principal repayment of long-term debt (7,761) (1,000,000)
Cash dividends paid (938,906) (665,055)
Net cash provided by financing activities 52,592,325 6,173,839
Net Increase (Decrease) in
Cash and Cash Equivalents (4,447,178) 1,718,375
Cash and Cash Equivalents Beginning Balance $22,356,718 $14,628,396
Cash and Cash Equivalents Ending Balance $17,909,540 $16,346,771
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Nine months ended September 30, 1996 and 1995
1996 1995
Balance at January 1, $28,012,422 $26,193,019
Net Income 2,694,532 2,259,506
Dividends declared ($0.65 per share 1996,
$0.50 per share 1995) (1,017,144) (782,419)
Unrealized loss on securities available for sale (830,049) (58,500)
Balance at September 30, $28,859,761 $27,611,606
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 $2,695,000
($1.72 per share) for the nine months ended September 30, 1996, compared to
net income of $2,260,000 ($1.44 per share) for the nine months ended September
30, 1995. The Company's assets totalled $424,404,000 at September 30, 1996,
compared to $347,507,000 at September 30, 1995.
As the result of Federal legislation enacted to recapitalize the Savings
Association Insurance Fund, the Company took a $245,000 charge against
earnings during the third quarter of 1996. The one-time assessment applies
to approximately $46 million in thrift deposits the Company acquired in recent
years.
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
NINE MONTH COMPARISON
Net Income. Net income for the nine months ended September 30, 1996 amounted
to $2,695,000, compared to $2,260,000 for the nine months ended September 30,
1995. 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, 1996 amounted to $11,901,000 an increase
of $413,000 or 3.6 %, as compared to the nine months ended September 30, 1995.
The increase resulted primarily from a $41,243,000 or 12.8% increase in average
interest earning assets, which was partially offset by a 38 basis point
decrease in the Company's margin.
Interest Income. Total interest income for the nine months ended September 30,
1996 amounted to $21,869,000, an increase of $2,105,000 or 10.7%, as compared
to the same period in 1995. The increase resulted primarily from a $41,243,000
increase in the average volume of earning assets which was partially offset by
a 15 basis point decrease in the average yield on earning assets. Average
loans outstanding increased $8,469,000 or 3.5%. Average commercial loans
increased $11,669,000 or 19.9% while average consumer installment loans
decreased $3,011,000 or 5.4% and average real estate loans decreased $189,000
or 0.1%. The average yield on loans decreased from 9.02% in 1995 to 8.87% in
1996. Average investment securities and other short-term investments
outstanding increased $32,773,000 or 40.1%, while the average yield increased
from 5.64% in 1995 to 6.12% in 1996.
Interest Expense. Total interest expense for the nine months ended September
30, 1996 amounted to $9,968,000, an increase of $1,692,000 or 20.4% as compared
to the nine months ended September 30, 1995. The increase resulted primarily
from a $40,603,000 or 14.3% 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
$2,637,000. Average time deposits increased $17,720,000. Average noninterest
bearing accounts increased $391,000 and represented 10.4% of average total
deposits in 1996. Average borrowings increased $25,588,000.
Provision for Loan Losses. There was no loan loss provision for the nine
months ended September 30, 1996, compared to $105,000 for the same period in
1995.
Other Income. Other income amounted to $1,821,000 for the nine months ended
September 30, 1996, an increase of $579,000 or 46.7%, as compared to the same
period in 1995.
Other Expense. Total other expense for the nine months ended September 30,
1996 amounted to $9,461,000, an increase of $402,000 or 4.4%, as compared to
the same period in 1995. Salaries and employee benefits increased $97,000 or
2.4%. Occupancy and equipment expense increased $89,000 or 5.6%. Other
(miscellaneous) expenses increased $216,000 or 6.2%, including a one-time
charge of $245,000 as previously discussed (see "Summary").
Provision for Income Taxes. The provision for income taxes for the nine months
ended September 30, 1996 was $1,566,000, an increase of $261,000 or 20.0%, 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 September 30, 1996 amounted to
$932,000, compared to net income of $828,000 for the quarter ended September
30, 1995. 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, 1996 amounted to $4,195,000, an increase of
$390,000 or 10.3%, as compared to the quarter ended September 30, 1995. The
increase resulted primarily from a $66,401,000 or 20.6% increase in average
interest earning assets, which was partially offset by a 41 basis point
decrease in the Company's margin.
Interest Income. Total interest income for the quarter ended September 30,
1996 amounted to $7,890,000, an increase of $1,230,000 or 18.5%, as compared
to the same period in 1995. The increase resulted primarily from a $66,401,000
or 20.6% increase in the average volume of earning assets which was partially
offset by a 15 basis point decrease in the average yield on earning assets.
Average loans outstanding increased $10,729,000 or 4.4%. Average commercial
loans increased $13,845,000 or 23.3 %, and average real estate loans increased
$2,291,000 or 1.8% while average installment loans decreased $5,407,000 or
9.4%. The average yield on loans decreased from 9.07% in 1995 to 8.94% in
1996. Average investment securities and other short-term investments
outstanding increased $55,671,000 or 71.5% while the average yield increased
from 5.70% in 1995 to 6.53% in 1996.
Interest Expense. Total interest expense for the quarter ended September 30,
1996 amounted to $3,694,000 an increase of $840,000 or 29.4%, as compared to
the same period in 1995. The increase resulted primarily from a $66,767,000
or 23.6% increase in the average volume of interest bearing liabilities and a
19 basis point increase in interest rates paid on such liabilities.
Provision for Loan Losses. There was no loan loss provision for the quarter
ended September 30, 1996, compared to $15,000 for the same period in 1995.
Other Income. Other income amounted to $683,000 for the quarter ended
September 30, 1996, compared to $441,000 for the same period in 1995.
Other Expense. Total other expense for the quarter ended September 30, 1996
amounted to $3,394,000, an increase of $469,000 or 16.0%, as compared to the
same period in 1995. Salaries and employee benefits increased $90,000 or
6.9%. Occupancy and equipment expense increased $16,000 or 3.1%. Other
(miscellaneous) expenses increased $363,000 or 33.4%, including a one-time
charge of $245,000 as previously discussed (see "Summary").
Provision for Income Taxes. The provision for income taxes for the quarter
ended September 30, 1996 was $552,000, compared to $478,000 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 $1,854,000 or 0.7% of total loans at September 30,
1996, compared to $2,065,000 or 0.8% at December 31, 1995. Nonperforming
loans at September 30, 1996 consisted of nonaccrual loans totalling $493,000,
90 day delinquent loans of $672,000, and restructured loans aggregating
$689,000. Other real estate held totalled $577,000 at September 30, 1996,
compared to $575,000 at December 31, 1995.
CAPITAL RESOURCES
Stockholders' equity totalled $28,860,000 at September 30, 1996. The Company's
risk-based capital ratio was 12.1%, of which 10.9% constituted common
stockholder equity, while the risk-based capital ratio for the Company's bank
subsidiary, Wheeling National Bank, was 11.8%, with common stockholders'
equity of 10.6%. At September 30, 1996 the Company's leverage capital ratio
was 6.4%, while the leverage ratio for Wheeling National Bank was 6.2%.
<TABLE>
<CAPTION>
Three months ended September 30, Nine months ended September 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)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Loans
Commercial $ 73,253 9.08% $ 59,408 9.78% $ 70,239 9.20% $ 58,569 9.95%
Real estate 129,856 8.35 127,565 8.34 126,225 8.28 126,414 8.18
Installment-
net 52,307 8.94 57,714 9.26 53,254 8.97 56,265 9.19
Total loans 255,416 8.94 244,687 9.07 249,718 8.87 241,248 9.02
Investment securities
Taxable 129,000 6.53 71,719 5.52 107,298 6.01 75,506 5.44
Tax-exempt 1,882 6.84 1,912 7.43 2,011 6.64 1,977 7.37
Total investment securities 130,882 6.54 73,631 5.57 109,309 6.02 77,483 5.49
Other short-term investments 2,632 6.24 4,212 8.01 5,112 8.34 4,165 8.32
Total interest
earning assets $388,930 8.11 $322,530 8.26 $364,139 8.01 $322,896 8.16
INTEREST BEARING LIABILITIES
Deposits
NOW, Savings and MMDA $129,811 2.66% $128,479 2.64% $129,686 2.63% $132,323 2.67%
Time 149,688 5.07 132,622 5.00 146,757 5.03 129,037 4.72
Total deposits 279,499 3.95 261,101 3.84 276,443 3.90 261,360 3.68
Short-term borrowings 69,338 5.25 21,009 6.25 47,288 5.10 21,701 6.02
Long-term debt 1,040 8.88 1,000 8.41 1,043 8.42 1,111 9.14
Total interest
bearing liabilities $349,877 4.22 $283,110 4.03 $324,774 4.09 $284,172 3.88
MARGIN ANALYSIS
(as a % of earning assets)
Interest income 8.11% 8.26% 8.01% 8.16%
Interest expense 3.80 3.54 3.65 3.42
Net interest income 4.31% 4.72% 4.36% 4.74%
<FN>
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 14, 1996 /S/ JEREMY C. MCCAMIC
Jeremy C. McCamic
Chairman and
Chief Executive Officer
Date November 14, 1996 /S/ BRENT E. RICHMOND
Brent E. Richmond
Chief Financial and
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-TYPE> 9-MOS
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 12,118,420
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5,791,120
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 130,440,071
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 130,440,071
<LOANS> 258,157,544
<ALLOWANCE> 3,622,241
<TOTAL-ASSETS> 424,403,819
<DEPOSITS> 314,657,794
<SHORT-TERM> 74,218,301
<LIABILITIES-OTHER> 5,628,599
<LONG-TERM> 1,039,364
<COMMON> 7,824,185
0
0
<OTHER-SE> 21,035,576
<TOTAL-LIABILITIES-AND-EQUITY> 424,403,819
<INTEREST-LOAN> 16,614,538
<INTEREST-INVEST> 4,934,739
<INTEREST-OTHER> 319,664
<INTEREST-TOTAL> 21,868,941
<INTEREST-DEPOSIT> 8,095,234
<INTEREST-EXPENSE> 9,968,374
<INTEREST-INCOME-NET> 11,900,567
<LOAN-LOSSES> 0
<SECURITIES-GAINS> (3,794)
<EXPENSE-OTHER> 9,460,856
<INCOME-PRETAX> 4,260,688
<INCOME-PRE-EXTRAORDINARY> 2,694,532
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,694,532
<EPS-PRIMARY> 1.72
<EPS-DILUTED> 1.72
<YIELD-ACTUAL> 4.36
<LOANS-NON> 493,000
<LOANS-PAST> 672,000
<LOANS-TROUBLED> 689,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
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