UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-18127
AMERICAN BANCORP OF NEVADA
(Exact name of registrant as specified in its charter)
Nevada 94-2792608
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4425 Spring Mountain Road, Las Vegas, Nevada 89102
(Address of principal executive offices) (Zip Code)
(702) 362-7222
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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 March 31, 1995:
Common stock, $.05 per value 3,168,027
Class Number of Shares
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
PAGE NO.
Condensed Consolidated Statements of Income
Quarters ended March 31, 1995 and 1994
Condensed Consolidated Statements of Condition
March 31, 1995 and December 31, 1994
Condensed Consolidated Statements of Cash Flows
Quarters ended March 31, 1995 and 1994
Notes to Condensed Consolidated Financial Statements
Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II - OTHER INFORMATION
Signatures
<PAGE>
PART I - FINANCIAL INFORMATION
AMERICAN BANCORP OF NEVADA AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
QUARTERS ENDED MARCH 31, 1995 AND 1994
(Dollars in thousands except for earnings per share)
(Unaudited)
For the Three
Months Ended
March 31,
1995 1994
INTEREST INCOME
Interest and Fees on Loans $2,618 $1,765
Interest on Investment Securities 1,661 1,212
Interest on Federal Funds Sold 86 50
Total Interest Income 4,365 3,027
INTEREST EXPENSE
Interest on Deposits 1,088 596
Interest on Securities Sold Under
Agreements to Repurchase 168 74
Total Interest Expense 1,256 670
NET INTEREST INCOME 3,109 2,357
Provision for Loan Losses 95 60
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 3,014 2,297
TOTAL NON-INTEREST INCOME: 346 507
TOTAL NON-INTEREST EXPENSE: (2,048) (2,012)
INCOME BEFORE TAXES 1,312 792
PROVISION FOR INCOME TAXES 373 210
NET INCOME $ 939 $ 582
NET INCOME PER SHARE $ .29 $ .19
The accompanying notes are an integral part of these statements.
<PAGE>
AMERICAN BANCORP OF NEVADA AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
AT MARCH 31, 1995 AND DECEMBER 31, 1994
(Dollars in Thousands)
(Unaudited)
March 31, December 31,
1995 1994
ASSETS
Cash and Due From Banks $ 25,105 $ 22,216
Federal Funds Sold 10,200 0
Securities 115,292 116,663
Net Loans 85,931 75,378
Premises and Fixed Assets 9,359 9,566
Other Assets 3,288 3,596
TOTAL ASSETS $249,175 $227,419
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $204,269 $192,811
Securities Sold Under
Agreements to Repurchase 21,454 13,780
Other Liabilities 1,281 697
TOTAL LIABILITIES 227,004 207,288
STOCKHOLDERS' EQUITY
Common Stock 119 119
Surplus 20,148 20,084
Retained Earnings 2,990 2,051
Unrealized Loss on Available
for Sale Securities (951) (1,988)
Less Treasury Stock (135) (135)
Total Stockholders' Equity 22,171 20,131
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $249,175 $227,419
The accompanying notes are an integral part of these statements.
<PAGE>
AMERICAN BANCORP OF NEVADA AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
QUARTERS ENDED MARCH 31, 1995 AND 1994
(Dollars in Thousands)
(Unaudited)
For the Three
Months Ended
March 31,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest received $ 4,107 $ 2,969
Other income 346 352
Interest paid (1,236) (674)
Cash paid to suppliers and employees (1,799) (1,986)
Income taxes paid (92)
Net cash provided by operating
activities 1,418 569
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales and maturities of
investment securities 15,781 29,336
Purchase of investment securities (12,786) (32,553)
Net decrease (increase) in loans made
to customers (10,570) 2,815
Capital expenditures 44 (46)
Other 5 110
Net cash used in investing activities (7,526) (338)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 11,458 14,169
Net increase (decrease) in federal
funds purchased and securities sold
under repurchase agreements 7,674 (5,034)
Other 65 34
Net cash provided by financing
activities 19,197 9,169
NET INCREASE IN CASH AND DUE
FROM BANKS AND FEDERAL FUNDS SOLD 13,089 9,400
CASH AND DUE FROM BANKS AND FEDERAL
FUNDS SOLD AT JANUARY 1 22,216 22,473
CASH AND DUE FROM BANKS AND FEDERAL
FUNDS SOLD AT MARCH 31 $35,305 $31,873
(Continued)
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
For the Three
Months Ended
March 31,
1995 1994
RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Net income $ 939 $ 582
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization of
property and equipment 163 164
Amortization of investment security
premiums and accretion of discounts (71) (45)
Provision for loan loss 95 60
Deferred loan fees (83) (10)
Loss (gain) on sale of investment
securities 17 (155)
Decrease (increase) in other assets (225) (140)
Increase (decrease) in other
liabilities 583 113
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ 1,418 $ 569
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
Stock issued in connection with
stock split $39,600
The accompanying notes are an integral part of these statements.
<PAGE>
AMERICAN BANCORP OF NEVADA AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(Unaudited)
FINANCIAL INFORMATION
NOTE A - PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the parent holding
company and its wholly owned subsidiaries, American Bank of Commerce
("Bank"), AmBank Mortgage Company ("Mortgage Company") and AmBank
Financial Company ("Finance Company"). Material intercompany balances
and transactions have been eliminated.
NOTE B - BASIS OF PRESENTATION
In the opinion of management, all adjustments (consisting only of
normal recurring adjustments considered necessary for a fair
presentation) have been reflected in the financial statements. The
results of operations for the quarter ended March 31, 1995, are not
necessarily indicative of the results to be expected for the full year.
NOTE C - INCOME PER SHARE
Net Income per common share is based upon the weighted average number
of common and common equivalent shares outstanding, 3,219,363 and
3,146,274 for March 31, 1995 and 1994, respectively.
The weighted average number of common shares, common shares outstanding
and the earnings per share have been adjusted to reflect a 4 for 3
stock split declared on March 20, 1995. Record date and payment date
are April 4, 1995 and April 11, 1995, respectively.
ITEM II
AMERICAN BANCORP OF NEVADA AND SUBSIDIARIES
The following is management's discussion and analysis of certain
significant factors which have affected the company's financial position
and operating results during the period in the accompanying condensed
consolidated financial statements.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
For the Three Months Ended March 31, 1995
Asset Growth
Total assets increased $21,756,000 or 9.57%, during the first three months
of 1995. The primary elements of this growth were a 15.08% increase in
Net Loans and a $10,200,000 increase in Fed Funds Sold. Net loans
increased $11,369,000 during the first three months of 1995. Asset growth
was driven by the increase in Deposits and Securities Sold Under
Agreements to Repurchase of $19,132,000, or 9.26%. Both deposits and loan
continue to increase as a result of the Bank's aggressive business
development efforts, successful operation and increased recognition
throughout the business community.
Interest Income
Total interest income increased $1,338,000, or 44.20%, in the first
quarter of 1995 as compared to the first quarter of 1994. It is
anticipated that interest income will be affected by the higher interest
rates expected during 1995. Total interest income is composed of the
following categories:
<PAGE>
Interest and Fees on Loans: Interest and fee income increased by
$853,000, or 48.33%, in the first three months of 1995 as compared to the
same period of 1994. This increase is composed of a $28,000 increase in
fee income and an $825,000 increase in interest on loans. Fee income
increased due to an increase in loan demand. Interest on loans increased
due to an increase in average loan volume of $17,370,000 to $81,133,000
and an increase in the yield from 8.69% in 1994 to 11.01% in 1995, a net
increase of 2.32%.
Interest on Investment Securities: The Bank continues to invest its
excess funds in interest bearing securities. Interest on securities
increased by $449,000, or 37.05%, in the first quarter of 1995 as compared
to the same period in 1994. This was the result of an increase of
$7,940,000 in average volume of investments to $113,765,000 and an
increase in yield from 4.58% to 5.69%. The tax-equivalent yield increased
from 5.14% to 6.14%. The Bank's current investment strategy is to
maintain an investment portfolio with rather short maturities. It is
recognized that short term maturities produce lower yields; however,
longer term results are currently offset by the relative flatness of the
yield curve.
Interest on Federal Funds Sold: Interest earned on Fed Funds Sold
increased $36,000, or 72.0%, in the first three months of 1995 as compared
to the first three months of 1994. This increase was due to a rise in the
average interest rate from 3.05% to 5.73% for Fed Funds Sold.
Management's goal is to maintain a level of Federal Funds that will enable
the Bank to fund increases in loan demand and to meet depositors' needs.
Interest Expense
Total interest expense increased $586,000, or 87.46%, during the first
three months of 1995 as compared to the first three months of 1994.
Interest on deposits increased by $492,000, or 82.55% due to an increase
in the average rate paid on deposits from 2.58% in 1994 to 3.59% in 1995
and, the average balances increased $28,801,000 to $121,263,000. Interest
on securities sold under agreements to repurchase increased $94,000, or
127.00% as the average volume increased $4,457,000 to $16,843,000 and the
average interest rate increased from 2.39% to 3.99%. Management believes
that the average volume of deposits and repurchase agreements will
increase during 1995, and that interest rates will continue to be higher
than 1994's levels for the foreseeable future.
Interest Rate Risk
Management attempts to protect earnings from wide shifts in interest rates
by employing the following strategies:
Loans: Approximately 88% of the bank's loan portfolio is written on an
adjustable basis that floats with the Bank's base rate. Thus,
approximately $76,762,000 reprices immediately upon a change in base.
Investments: The majority of the investment portfolio of the Bank is of a
fixed rate nature. This enables Management to provide an underlying level
of income irrespective of changes in rates. Additionally, approximately
90% of the portfolio matures within three years. This strategy of
maintaining short maturities provides maximum flexibility in dealing with
fluctuating interest rates.
Deposits: Management discourages use of long term Certificates of Deposit
by consistently paying at or below market rates and not offering greater
than one year maturities. However, an attempt is currently underway to
recapture some of the jumbo-short term Certificates of Deposit market.
Offering rates for Certificates of Deposits over $100,000 and less than
one year maturity are reviewed weekly for adjustments. The competitive
rates we now offer have increased the balances in these accounts by
$2,100,000 or 33%. At March 31, 1995, approximately 64% of time deposits
had a maturity of three months or less.
The above factors, taken into consideration together with the fact that
the Bank maintains approximately 38% non-interest bearing deposits,
provides management the opportunity to maintain favorable net interest
margins under most normal interest rate scenarios.
<PAGE>
Provision for Loan Losses
The provision for loan losses in the first quarter of 1995 was $95,000,
$35,000 more than the first quarter of 1994. Net charged off loans and
leases were $6,000 through March 31, 1995, and ($11,000) at March 31,
1994. The allowance for loan losses was .94% of loans outstanding, as
compared to 1.14% at the end of the first quarter in 1994. The decrease
in the allowance is due to the decrease in substandard and doubtful
accounts, as a percentage of net loans, since first quarter, 1994.
At March 31, 1995, $-0- in loans was accounted for on a non-accrual basis
and $-0- in loans were past due 90 days or more.
At March 31, 1995, management classified 10 loans as substandard, for an
aggregate of $415,273. This amount represents .48% of outstanding loans.
The Bank anticipates no loss of principal on these substandard loans and,
at the present, none are classified as doubtful.
The loan portfolio is concentrated in the southern Nevada area, and
includes concentrations in real estate and construction lending. Although
there has been some softening in the past year, the local economy remains
vibrant.
Management conducts a portfolio concentration review on a quarterly basis
and, through this review, controls the degree of speculative and/or large
home construction lending to acceptable levels. Commercial real estate is
generally limited to owner-occupied properties. Appraisal reviews are
performed to support the values at which loans are carried in the
portfolio and an analysis of the adequacy of the loan loss reserve is
conducted quarterly. Management allocates risk percentages to pass
credits and classified credits to ensure that an excess reserve is
provided for any unexpected problems that may arise within the portfolio.
Management feels that the current Allowance for Loan Losses of $816,412 is
adequate to meet anticipated loan losses.
Non-Interest Income
Total non-interest income for the first three months of 1995 decreased
$161,000, or 31.76%, over the same period of 1994. The decrease was
primarily due to an decrease in gain on sale of securities and an decrease
in fee income from mortgage placement services.
Non-Interest Expense
Total non-interest expense increased by $36,000, or 1.79%, during the
first quarter of 1995 as compared to the first quarter of 1994. This
increase is due to increased salary and employee benefit expenses from
normal salary increases and additional advertising expenses.
<PAGE>
Liquidity
Management of the Company strives to obtain the highest possible earnings
while maintaining a strong liquidity position. The policy of shorter
maturities of the Bank's security portfolio and the need for cash in
Federal Funds Sold to meet daily cash requirements continues to be met.
Management continuously monitors outstanding loan commitments and letters
of credit for funding needs. At March 31, 1995, outstanding loan
commitments were $41,186,000 and letters of credit were $2,386,000. The
measures of solid liquidity practices such as Total Deposits to Total
Assets and Loans to Deposits are monitored constantly for any adverse
trends. Cash flow from operations continues to remain positive and
Management expects this trend to continue. Cash flow from investing
activities was negative as there was an increase in net loans made to
customers. Cash flow from financing activities was positive due to the
increase in deposits and this trend is expected to continue. Management
believes that liquidity will remain strong in both the near-term and the
long-term.
Capital Resources
During 1995, management plans to construct approximately 13,000 square
feet of leasable office space at its headquarters site at Spring Mountain
Road and Arville. The Bank anticipates opening another branch office in
1996, although at this time it has not been decided whether the office
will be owned or leased. In either case, the impact of capital is not
expected to be significant.
Bank regulatory agencies adopted Risk-Based capital guidelines and a new
Leverage ratio which became effective December 31, 1992. The standards
redefine capital which is compared with risk-weighted assets, representing
the value of assets and off-balance-sheet exposures weighted to reflect
relative measures of risk. At March 31, 1995, the Bank's Tier 1 Core
Capital to risk weighted assets was 16.80%, Total Capital to risk weighted
assets was 17.40%, and the Leverage ratio was 9.89%, all above the current
minimum guidelines of 4.0%, 8.00%, and 4.0%, respectively, established by
regulatory authorities.
In addition, the Federal Deposit Insurance Corporation Improvement Act of
1991 (FDICIA) defined five levels of capital for financial institutions:
Well-capitalized, Adequately capitalized, Undercapitalized, Significantly
undercapitalized and Critically undercapitalized. A bank falls into one
of these levels based on its risk-based ratio and leverage ratio. At
March 31, 1995, the Bank falls in the Well-capitalized category.
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
AMERICAN BANCORP OF NEVADA
DATED: May 10, 1995 /s/ James V. Bradham
James V. Bradham
President and
Chief Executive Officer
DATED: May 10, 1995 /s/ Patricia L. Kirkwood
Patricia L. Kirkwood
Executive Vice President and
Cashier
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