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 March 31, 1997
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.
April 7, 1997: 1,564,837 shares of Common stock without par value
Number of pages comprising
this report 11
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 11
American Bancorporation and Subsidiaries
CONSOLIDATED BALANCE SHEET
March 31, December 31,
1997 1996 1996
ASSETS
Cash and due from banks $ 12,323,152 $ 11,064,486 $ 11,550,133
Federal funds sold 10,671,259 9,696,000 17,870,000
Investment securities
available for sale 140,457,032 86,787,536 143,473,608
Loans, net of unearned income 275,627,811 246,112,983 271,449,833
Less allowance for loan losses 3,455,969 3,836,067 3,563,774
272,171,842 242,276,916 267,886,059
Premises and equipment - net 9,871,897 8,787,394 9,730,880
Accrued interest receivable 3,785,600 2,385,108 2,985,322
Excess of cost over net
assets purchased 2,220,547 2,556,023 2,304,416
Other assets 9,515,869 5,724,196 5,832,008
TOTAL ASSETS $461,017,198 $369,277,659 $461,632,426
LIABILITIES
Deposits
Non-interest bearing $ 34,940,131 $ 32,196,705 $ 36,744,316
Interest bearing 293,560,988 277,649,967 283,066,502
TOTAL DEPOSITS 328,501,119 309,846,672 319,810,818
Short-term borrowings 94,528,431 25,257,519 104,096,043
Accrued interest payable 1,515,819 1,140,798 1,488,999
Other liabilities 5,487,609 3,811,364 4,876,191
Long-term debt 933,763 1,044,614 937,681
TOTAL LIABILITIES 430,966,741 341,100,967 431,209,732
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 12,660,051 10,321,337 12,021,258
Unrealized gain (loss) on securities
available for sale, net (735,761) (270,812) 275,269
TOTAL STOCKHOLDERS' EQUITY 30,050,457 28,176,692 30,422,694
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $461,017,198 $369,277,659 $461,632,426
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF OPERATIONS
Three Months ended March 31,
1997 1996
INTEREST INCOME
Loans $5,974,954 $5,579,457
Investment securities
Taxable interest income 2,552,804 1,089,267
Non-taxable interest income 24,201 34,424
2,577,005 1,123,691
Other short-term investments 109,716 172,141
Total interest income 8,661,675 6,875,289
INTEREST EXPENSE
Deposits 2,941,737 2,618,465
Borrowed funds 1,416,710 399,586
Total interest expense 4,358,447 3,018,051
NET INTEREST INCOME 4,303,228 3,857,238
PROVISION FOR LOAN LOSSES - -
Net interest income after
provision for loan losses 4,303,228 3,857,238
OTHER INCOME
Service charges on deposit accounts 187,351 210,890
Securities gains 4,337 -
Insurance commissions 23,380 25,744
Other income 374,332 262,788
Total other income 589,400 499,422
OTHER EXPENSE
Salaries and employee benefits. 1,413,493 1,343,149
Occupancy and equipment expense 586,732 552,897
Other expenses 1,253,897 1,086,550
Total other expense 3,254,122 2,982,596
INCOME BEFORE INCOME TAXES 1,638,506 1,374,064
PROVISION FOR INCOME TAXES 608,504 503,393
NET INCOME $1,030,002 $ 870,671
Average Shares Outstanding 1,564,837 1,564,837
NET INCOME PER SHARE $ 0.66 $ 0.56
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
Three months ended March 31,
1997 1996
Operating Activities:
Net Income $ 1,030,002 $ 870,671
Charges to operations not using
cash in the current period (2,830,153) (899,748)
Net cash applied to operating activities (1,800,151) (29,077)
Investing Activities:
Purchase of branch assets, net of cash acquired - 14,171,001
Investment securities available for sale:
Proceeds from maturities and repayments 2,085,192 5,585,553
Proceeds from sales 43,462,484 -
Purchases (44,280,218) (25,032,094)
Net (increase) decrease in loans (4,285,783) 4,491,256
Purchase of premises and equipment (334,807) (234,480)
Net cash used by investing activities (3,353,132) (1,018,764)
Financing Activities:
Net decrease in non-interest
bearing demand deposits (1,804,184) (572,867)
Net decrease in interest bearing
demand and savings deposits (3,492,761) (1,965,591)
Net increase in time deposits 13,987,247 4,570,693
Net decrease in short-term borrowings (9,567,612) (2,265,147)
Principal repayment of long-term debt (3,920) (2,510)
Cash dividends paid (391,209) (312,969)
Net cash applied to financing activities (1,272,439) (548,391)
Net Decrease in Cash and Cash Equivalents (6,425,722) (1,596,232)
Cash and Cash Equivalents Beginning Balance 29,420,133 22,356,718
Cash and Cash Equivalents Ending Balance $22,994,411 $20,760,486
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Three months ended March 31, 1997 and 1996
1997 1996
Balance at January 1, $30,422,694 $28,012,422
Net Income 1,030,002 870,671
Dividends declared ($0.25 per share 1997,
$0.20 per share 1996) (391,209) (312,967)
Unrealized loss on securities
available for sale (1,011,030) (393,434)
Balance at March 31, $30,050,457 $28,176,692
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 1996 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 $1,030,000
($0.66 per share) for the three months ended March 31, 1997, compared to net
income of $871,000 ($0.56 per share) for the three months ended March 31, 1996.
The Company's assets totalled $461,017,000 at March 31, 1997, compared to
$369,278,000 at March 31, 1996.
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 1996 Annual
Report and the financial statements appearing elsewhere herein.
RESULTS OF OPERATIONS
QUARTER COMPARISON
Net Income. Net income for the three months ended March 31, 1997 amounted to
$1,030,000, compared to net income of $871,000 for the three months ended
March 31, 1996. 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 three months ended March 31, 1997 amounted to $4,303,000, an increase of
$446,000 or 11.6% as compared to the three months ended March 31, 1996. The
increase resulted primarily from a $93,591,000 or 27.5% increase in average
interest earning assets which was partially offset by a 57 basis point decrease
in the Company's margin.
Interest Income. Total interest income for the three months ended March 31,
1997 amounted to $8,662,000, an increase of $1,786,000 or 26.0% as compared to
the same period in 1996. The increase resulted primarily from a $93,591,000
or 27.5% increase in the average volume of earning assets which was partially
offset by a 10 basis point decrease in the average yield on earning assets.
Average loans outstanding increased $28,595,000 or 11.5%. Average commercial
loans increased $24,457,000 or 36.7%, average real estate loans increased
$10,315,000 or 8.2% while average installment loans decreased $6,177,000 or
11.2%. The average yield on loans decreased from 9.01% in 1996 to 8.65% in
1997. Average investment securities and other short-term investments
outstanding increased $64,995,000 or 70.4% and the average yield increased
from 5.62% in 1996 to 6.83% in 1997.
Interest Expense. Total interest expense for the three months ended March 31,
1997 amounted to $4,358,000, an increase of $1,340,000 or 44.4%, as compared
to the three months ended March 31, 1996. The increase resulted primarily from
a $93,553,000 or 31.1% increase in the average volume of interest bearing
liabilities and a 40 basis point increase in interest rates paid on such
liabilities. Average NOW, money market and savings accounts decreased
$3,126,000. Average time deposits increased $21,146,000. Average noninterest
bearing accounts increased $2,308,000 and represented 10.3% of average total
deposits in 1997. Average short-term borrowings increased $75,644,000 or
269.8% while the average rate paid on short-term borrowings decreased from
5.41% in 1996 to 5.39% in 1997.
Provision for Loan Losses. There was no loan loss provision for the three
months ended March 31, 1997 or 1996.
Other Income. Other income amounted to $589,000 for the three months ended
March 31, 1997, compared to $499,000 for the same period in 1996.
Other Expense. Total other expense for the three months ended March 31, 1997
amounted to $3,254,000, an increase of $272,000 or 9.1% as compared to the
same period in 1996. Salaries and employee benefits increased $70,000 or 5.2%.
Occupancy and equipment expense increased $34,000 or 6.1%. Other
(miscellaneous) expenses increased $168,000 or 15.4%.
Provision for Income Taxes. The provision for income taxes for the three
months ended March 31, 1997 was $609,000, compared to $503,000 for the same
period in 1996. The increase was due to the increase in the Company's pre-tax
income.
ASSET QUALITY
Nonperforming loans totalled $2,091,000 or 0.8% of total loans at March 31,
1997, compared to $1,963,000 or 0.7% at December 31, 1996. Nonperforming
loans at March 31, 1997 consisted of nonaccrual loans totalling $471,000, 90
day delinquent loans of $975,000, and restructured loans aggregating $645,000.
Other real estate held totalled $601,000 at March 31, 1997, compared to
$607,000 at December 31, 1996.
CAPITAL RESOURCES
Stockholders' equity totalled $30,050,000 at March 31, 1997. The Company's
risk-based capital ratio was 11.8%, of which 10.5% 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 March 31, 1997 the Company's leverage capital ratio was 6.2%,
while the leverage ratio for Wheeling National Bank was 6.1%.
Three months ended March 31,
1997 1996
Average Yield/ Average Yield/
Balance Rate Balance Rate
INTEREST EARNING ASSETS (000's) (000's)
Loans
Commercial $ 91,140 8.91% $ 66,683 9.29%
Real estate 136,199 8.01 125,883 8.54
Installment-net 48,937 8.86 55,114 9.01
Total loans 276,276 8.65 247,680 9.01
Investment securities
Taxable 151,578 6.74 80,716 5.04
Tax-exempt 1,178 8.22 2,125 6.48
Total investment securities 152,756 6.75 82,841 5.43
Other short-term investments 4,543 9.66 9,463 7.28
Total interest earning assets $433,575 7.99 $339,984 8.09
INTEREST BEARING LIABILITIES
Deposits
NOW, Savings and MMDA $125,814 2.62% $128,941 2.61%
Time 163,616 5.17 142,470 4.99
Total deposits 289,430 4.07 271,411 3.86
Short-term borrowings 103,684 5.39 28,040 5.41
Long-term debt 935 7.97 1,045 7.77
Total interest
bearing liabilities $394,049 4.42 $300,496 4.02
MARGIN ANALYSIS
(as a % of earning assets)
Interest income 7.99% 8.09%
Interest expense 4.02 3.55
Net interest income 3.97% 4.54%
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 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 May 13, 1997 /s/ Jeremy C. McCamic
Jeremy C. McCamic
Chairman and
Chief Executive Officer
Date May 13, 1997 /s/ Brent E. Richmond
Brent E. Richmond
Chief Financial and
Accounting Officer
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