<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Fiscal Year Ended December 31, 1996 Commission File Number 0-11928
AMERICAN BANCORP, INC.
(Exact name of registrant as specified in its charter)
Louisiana 72-0951347
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
328 East Landry Street
Opelousas, Louisiana 70570
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (318) 948-3056
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $5.00 Par Value
(Title of Class)
Indicate by check mark whether the registrant: (l) 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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates* of the
registrant: $1,752,050
The number of shares outstanding of each of the issuer's classes of common
stock, as of December 31, 1996: Common Stock, $5.00 Par Value, 120,000 shares
outstanding.
Documents Incorporated by Reference
Portions of the annual shareholders' report for the year ended December 31,
1996 are incorporated by reference into Parts I and II.
Portions of the proxy statement for the annual shareholders meeting to be held
April 9, 1997 are incorporated by reference into Part III.
*For purposes of the computation, shares owned by executive officers,
directors, 5% shareholders and shares by non-affiliates whose voting rights
have been assigned to directors have been excluded.
- 1 -
<PAGE> 2
PART I
Item 1. Business
American Bancorp, Inc. (the Corporation) was incorporated under the laws
of the State of Louisiana in 1982. On October 1, 1983, American Bank and Trust
Company (the Bank) was reorganized as a subsidiary of the Corporation. Prior to
October 1, 1983, the Corporation had no material activity. The Corporation is
currently engaged, through its subsidiary, in banking and related business. The
Bank is the Corporation's principal asset and primary source of revenue.
The Bank
The Bank, incorporated under the State Banking Laws on August 1, 1958 is
in the business of gathering funds by accepting checking, savings, and other
time-deposit accounts and reemploying these by making loans and investing in
securities and other interest-bearing assets. The Bank is a full service
commercial bank. Some of the major services which it provides include checking,
NOW accounts, Money Market checking, savings, and other time deposits of
various types, loans for business, agriculture, real estate, personal use, home
improvement, automobile, and a variety of other types of loans and services
including letters of credit, safe deposit boxes, bank money orders, wire
transfer facilities, and electronic banking facilities.
The State of Louisiana, through its various departments and agencies,
deposits public funds with the Bank. As of December 31, 1996, $297,000 in
certificates of deposit were on deposit representing .50% of total deposits
outstanding. The weighted average interest rates on these deposits was 6.0%.
The maturity of these deposits is December 18, 1997.
The Bank's general market area is in St. Landry Parish, which has a
population of approximately 80,300. Its primary market is Opelousas, which has
a population of approximately 19,300, and has experienced little population
growth over the past several years.
The commercial banking business in St. Landry Parish is highly
competitive. The Depository Institutions Deregulation and Monetary Control Act
of 1980 and the Garn-St. Germain Depository Institutions Act of 1982 have
eliminated most, if not all, substantive distinctions between the services of
commercial banks and thrift institutions. The Bank competes with three banks
and two savings and loan institutions located in St. Landry Parish. The
following is a list of banks and savings associations in this market with the
total deposits and assets as of December 31, 1996.
<TABLE>
<CAPTION>
(In thousands of dollars)
Assets Deposits
--------- ---------
<S> <C> <C>
American Bank and Trust Company $ 67,254 $ 59,367
St. Landry Bank and Trust Company $ 209,613 $ 177,779
First National Bank of Lafayette $ 802,654 $ 688,836
St. Landry Homestead $ 113,800 $ 102,638
Washington State Bank $ 71,895 $ 61,447
First Federal Savings & Loan $ 57,641 $ 43,676
</TABLE>
- 2 -
<PAGE> 3
Item 1. Business (continued)
In addition to the institutions listed above, further competition is
provided by banks and other financial institutions located in Lafayette,
Louisiana, which is 20 miles south of Opelousas and Baton Rouge, Louisiana, the
state capital, which is 60 miles east of St. Landry Parish.
Louisiana Banking Law provides that generally Louisiana banks having
capital of one hundred thousand dollars or more may open one or more branch
offices within the State or may acquire one or more banks or any or all
branches thereof, or both. On July 2, 1986, Louisiana passed an interstate
banking law affirmatively permitting Louisiana bank holding companies to
immediately acquire out-of-state bank holding companies and banks. On July 1,
1987, bank holding companies located in a fifteen state region were permitted
to acquire banks or bank holding companies in Louisiana, and beginning January
1, 1991, out-of-state bank holding companies may acquire banks or bank holding
companies provided that the law of the state in which the out-of-state bank
holding company has its principal place of business permits Louisiana bank
holding companies to acquire banks and bank holding companies in that state.
The effect of the new liberalized branching laws and the Louisiana
Interstate Banking Law on the Company cannot be predicted at this time, but
increased competition is expected.
Employees
During 1996, the average number of full-time equivalent employees at the
Bank was 44. This includes the officers of the Corporation that are listed
under Item 1 below.
There are no unions or bargaining units that represent the employees of
the Bank. The relation between management and employees is considered to be
good.
Executive Officers
The executive officers of the Corporation are as follows:
<TABLE>
<CAPTION>
Years of
Officer Name Service Age Position Currently Held
- -------------- -------- --- -------------------------
<S> <C> <C> <C>
Salvador L. Diesi, Sr. 23 66 Chairman of the Board of the
Corporation and the Bank;
President of the Corporation and the Bank
Ronald J. Lashute 24 47 Executive Vice-President and
Chief Executive Officer of the
Bank and Secretary/Treasurer
of the Corporation
</TABLE>
- 3 -
<PAGE> 4
Item 1. Business (continued)
None of the directors and executive officers of the Corporation or the
Bank holds a directorship in any company with a class of securities registered
under Section 12 of the Securities Exchange Act of 1934, as amended, or subject
to the requirements of Section 15(d) of that Act or in any company registered
as an investment company under the Investment Company Act of 1940. Salvador L.
Diesi, Sr. and Ronald J. Lashute are the nephews of J.C. Diesi. No other
family relationships exist among the above named directors or executive
officers of the Corporation.
Supervision and Regulation
The Bank is subject to regulation and regular examinations by the
Louisiana Commissioner of Financial Institutions and by the Federal Deposit
Insurance Corporation. Applicable regulations relate to reserves, investments,
loans, issuance of securities, establishment of branches, and other aspects of
its operations.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") further expanded the regulatory and enforcement powers of bank
regulatory agencies. Among the significant provisions of FDICIA is the
requirement that bank regulatory agencies prescribe standards relating to
internal controls, information systems, loan documentation, credit
underwriting, interest rate exposure, asset growth, compensation, fees and
benefits. FDICIA mandates annual examinations of banks by their primary
regulators.
The Corporation is a bank holding company within the meaning of the Bank
Holding Company Act of 1956, as amended (the Act), and is thereby subject to
the provisions of the Act and to regulation by the Board of Governors of the
Federal Reserve System (the Board).
The Act requires the Corporation to file with the Board an annual report
containing such information as the Board may require. The Board is authorized
by the Act to examine the Corporation and all of its activities. The activities
that may be engaged in by the Corporation and its subsidiary are limited by the
Act to those so closely related to banking or managing or controlling banks as
to be a proper incident thereto. In determining whether a particular activity
is a proper incident to banking or managing or controlling banks, the Board
must consider whether its performance by an affiliate of a holding company can
reasonably be expected to produce benefits to the public, such as greater
convenience, increased competition or gains in efficiency that outweigh
possible adverse effects, such as undue concentration of resources, decreased
or unfair competition, conflicts of interest, or unsound banking practices.
The Board has adopted regulations implementing the provisions of the Act
with respect to the non-banking activities of bank holding companies. Such
regulations reflect a determination by the Board that certain specified
activities are permissible for a bank holding company. An activity not listed
in the regulation may be engaged in if, upon application, the Board determines
that the activity meets the criteria described in the preceding paragraph. In
each case, a bank holding company must secure the approval of the Board prior
to engaging in any of these activities.
Whether or not a particular non-banking activity is permitted under the
Act, the Board is authorized to require a holding company to terminate any
activity, or divest itself of any non-banking subsidiary, if in its judgment
the activity or subsidiaries would be unsound.
- 4 -
<PAGE> 5
Item 1. Business (continued)
Under the Act and the Board's regulations, a bank holding company and
its subsidiaries are prohibited from engaging in certain tie-in arrangements in
connection with any extension of credit or provision of any property or
services.
In some cases, the Company must receive the prior approval of the Board
in order to repurchase or redeem its outstanding equity securities.
With certain exceptions, the Subsidiary Bank is restricted by Sections
22 and 23A of the Federal Reserve Act from extending credit or making loans to
or investments in the Company and certain other affiliates as defined in the
Federal Reserve Act. Such transactions by the Subsidiary Bank with the Company
or any such affiliate are limited in an amount to 10% of the Subsidiary Bank's
capital and surplus. Furthermore, loans and extensions of credit are subject to
various collateral requirements.
The Louisiana bank holding company law, as amended (the "Louisiana
Act"), permits bank holding companies to own more than one bank. In addition, a
bank holding company and its subsidiaries may not engage in any insurance
activity in which a bank may not engage. The Louisiana Commissioner of
Financial Institutions is authorized to administer the Louisiana Act and to
issue orders and regulations.
The Board of Directors of the Corporation have no present plans or
intentions to cause the Corporation to engage in any substantial business
activity which would be permitted to it under the Act or the Louisiana Act but
which is not permitted to the Bank; however, a significant reason for formation
of the one-bank holding company is to take advantage of the additional
flexibility afforded by that structure if the Board of Directors of the
Corporation concludes that such action would be in the best interest of
stockholders.
Statistical Information
The following tables contain additional information concerning the
business and operations of the Registrant and its subsidiary and should be read
in conjunction with the Consolidated Financial Statements of the Registrant and
Management's Discussion and Analysis of Financial Condition and Results of
Operations. The 1996 Annual Report to Shareholders is incorporated herein by
reference under Item 8.
Investment Portfolio
The following table sets forth the carrying amount of Investment
Securities at the dates indicated (in thousands of dollars):
<TABLE>
<CAPTION>
December 31,
-----------------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Securities held to maturity:
U.S. Treasury $ 4,005 $ 5,508 $ 5,499
U.S. Government Agencies 11,513 10,997 10,980
State and Political subdivisions - - -
-------- -------- --------
$ 15,518 $ 16,505 $ 16,479
======== ======== ========
</TABLE>
- 5 -
<PAGE> 6
Item 1. Business (continued)
<TABLE>
<CAPTION>
December 31,
-----------------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Securities available for sale:
Mortgage-backed securities $ 1,787 $ 2,342 $ 2,637
U.S. Treasury securities 1,002 - -
U.S. Government Agencies 3,012 1,536 497
State and Political subdivisions 2,870 1,263 -
------- -------- --------
$ 8,671 $ 5,141 $ 3,134
======= ======== ========
</TABLE>
The following tables set forth the maturities of investment securities
at December 31, 1996, 1995, and 1994 and the weighted average yields of such
securities (in thousands of dollars):
<TABLE>
<CAPTION>
December 31, 1996
----------------------------------------------------------------------------------------
After One After Five
But Within But Within After
Within One Year Five Years Ten Years Ten Years
------------------ ----------------- ------------------ ------------------
Amount Yield Amount Yield Amount Yield Amount Yield
------- ------ -------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Securities held
to maturities:
U.S.
Treasury $ 1,801 6.15% $ 2,204 5.88% $ - - % $ - - %
U.S.
Government
Agencies 4,496 6.64 7,017 6.56 - - - -
State and
Political
Subdivisions - - - - - - - -
------- -------- -------- ------
Total held
to
maturity 6,297 6.50 9,221 6.40 -0- - -0- -
------- -------- -------- ------
Securities
available for
sale:
U.S. Treasury - - 1,002 6.27 - - - -
U.S.
Government
Agencies 1,507 7.03 1,505 6.44 - - - -
Mortgage-backed
securities 124 8.24 906 8.20 757 9.14 - -
State and
Political
Subdivisions - - 1,481 7.81 1,389 7.04 - -
------- -------- -------- ------
Total
available
for sale 1,631 7.12 4,894 7.15 2,146 7.78 -0- -
------- -------- -------- ------
Total
securities $ 7,928 6.63% $ 14,115 6.67% $ 2,146 7.78% $ -0- - %
======= ===== ======== ===== ======== ===== ====== ===
</TABLE>
- 6 -
<PAGE> 7
Item 1. Business (continued)
<TABLE>
<CAPTION>
December 31, 1995
----------------------------------------------------------------------------------------
After One After Five
But Within But Within After
Within One Year Five Years Ten Years Ten Years
------------------ ----------------- ------------------ ------------------
Amount Yield Amount Yield Amount Yield Amount Yield
------- ------ -------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Securities held
to maturities:
U.S.
Treasury $ 3,499 6.32% $ 2,009 6.18% $ - - % $ - - %
U.S.
Government
Agencies 5,002 5.62 5,495 6.37 500 6.36 - -
State and
Political
Subdivisions* - - - - - - - -
------- -------- -------- ------
Total held
to
maturity 8,501 5.91 7,504 6.32 500 6.36 -0- -
------- -------- -------- ------
Securities
available for
sale:
U.S.
Government
Agencies - - 1,536 6.77 - - - -
Mortgage-backed
securities 183 7.92 1,116 8.92 1,043 8.47 - -
State and
Political
Subdivisions* - - 377 7.85 886 6.58 - -
------- -------- -------- ------
Total
available
for sale 183 7.92 3,029 7.69 1,929 7.59 -0- -
------- -------- -------- ------
Total
securities $ 8,684 5.96% $ 10,533 6.70% $ 2,429 7.35% $ -0- - %
======= ===== ======== ===== ======== ===== ====== ===
</TABLE>
- 7 -
<PAGE> 8
Item 1. Business (continued)
<TABLE>
<CAPTION>
December 31, 1994
----------------------------------------------------------------------------------------
After One After Five
But Within But Within After
Within One Year Five Years Ten Years Ten Years
------------------ ----------------- ------------------ ------------------
Amount Yield Amount Yield Amount Yield Amount Yield
------- ------ -------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Securities held
to maturities:
U.S.
Treasury $ 2,000 4.90% $ 3,499 6.16% $ - - % $ - - %
U.S.
Government
Agencies - - 10,980 6.00 - - - -
State and
Political
Subdivisions* - - - - - - - -
------- -------- -------- --------
2,000 4.90 14,479 6.08 -0- - -0- -
------- -------- -------- --------
Securities available
for sale:
U.S.
Treasury - - - - - - - -
U.S.
Government
Agencies - - 500 7.87 - - - -
State and
Political
Subdivisions* - - - - - - - -
Mortgage-backed
securities - - 336 8.81 1,225 8.89 1,073 8.88
------- -------- -------- --------
-0- - 836 8.65 1,225 8.89 1,073 8.88
------- -------- -------- --------
Total
securities $ 2,000 4.90% $ 15,315 6.22% $ 1,225 8.89% $ 1,073 8.88%
======= ==== ======== ==== ======== ==== ======== ====
</TABLE>
* Weighted average yields have been computed on a fully tax-equivalent basis
assuming a rate of 34% for 1996, 1995 and 1994.
- 8 -
<PAGE> 9
Item 1. Business (continued)
Loan Portfolio
The amounts of loans outstanding at the indicated dates are shown in the
following table according to type of loan (in thousands of dollars):
<TABLE>
<CAPTION>
December 31,
-----------------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Commercial, financial and agricultural $ 7,437 $ 6,240 $ 6,543
Real Estate - Construction 285 119 325
Real Estate - Mortgage 16,278 16,473 16,119
Installment 4,925 4,182 4,681
-------- -------- --------
Total 28,925 27,014 27,668
Less:
Allowance for possible loan losses (614) (624) (614)
Unearned income - - (1)
-------- -------- --------
$ 28,311 $ 26,390 $ 27,053
======== ======== ========
</TABLE>
The following table presents information concerning the aggregate amount
of nonperforming loans. Nonperforming loans comprise: (a) loans accounted for
on a nonaccrual basis; (b) loans contractually past due ninety days or more as
to interest or principal payments [but not included in the nonaccrual loans in
(a) above]; (c) other loans whose terms have been restructured to provide a
reduction or deferral of interest or principal because of a deterioration in
the financial position of the borrower [exclusive of loans in (a) or (b)
above]; and (d) loans now current where there are serious doubts as to the
ability of the borrower to comply with present loan requirement terms (in
thousands of dollars):
<TABLE>
<CAPTION>
December 31,
-----------------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Loans accounted for on a nonaccrual basis $ 496 $ 2 $ 4
Restructured loans which are not on
non-accrual 94 112 133
------ ------ ------
590 114 137
Other real estate and repossessed assets
received in complete or partial
satisfaction of loan obligations 14 14 17
------ ------ ------
Total nonperforming assets $ 604 $ 128 $ 154
====== ====== ======
Loans contractually past due ninety days
or more as to principal or interest,
but which were not on non-accrual $ 27 $ 10 $ 9
====== ====== ====
</TABLE>
- 9 -
<PAGE> 10
Item 1. Business (continued)
As of January 1, 1995, the Company adopted SFAS No. 114, "Accounting by
Creditors for Impairment of a Loan," which, as it relates to in-substance
foreclosures, requires that a creditor continue to classify these assets as
loans in the balance sheet unless the creditor receives physical possession of
the collateral. The Company had no in-substance foreclosures at the date of
adoption of SFAS No. 114. At December 31, 1996, the recorded investment in
loans that were considered to be impaired under SFAS No. 114 was $476,490, with
the related allowance for loan losses of $170,000. These loans are included in
nonaccrual loans.
The effect of nonperforming loans on interest income has not been
substantial in the past three years. Had interest been accrued on the
nonperforming loans, interest income would have been recorded in the amount of
$59,177, $13,732 and $13,846, for the years 1996, 1995, and 1994, respectively.
Interest income in the amount of $6,633, $7,638 and $6,707 on nonperforming
loans during 1996, 1995 and 1994, respectively, was recorded.
At December 31, 1996, 1995 and 1994 there were no significant
commitments to lend additional funds to debtors whose loans were considered to
be nonperforming.
The Bank places loans on nonaccrual when the borrower is no longer able
to make periodic interest payments due to a deterioration of the borrowers
financial condition.
At December 31, 1996, the Bank has an insignificant amount of loans for
which payments are current, but the borrowers are experiencing financial
difficulties. These loans are subject to constant management attention, and
their classification is reviewed on a monthly basis.
Summary of Loan Loss Experience
The following table summarizes loan balances at the end of each period
and average loans based on daily average balances for 1996, 1995, and 1994;
changes in the allowance for possible loan losses arising from loans charged
off and recoveries on loans previously charged off by loan category; and
additions to the allowance which have been charged to expense (in thousands of
dollars):
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Amount of loans outstanding
at end of period $ 28,926 $ 27,014 $ 27,667
======== ======== ========
Average amount $ 27,635 $ 26,748 $ 26,976
======== ======== ========
</TABLE>
- 10 -
<PAGE> 11
Item 1. Business (continued)
Allowance for Possible Loan Losses
(In thousands of dollars)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Beginning balance $ 624 $ 614 $ 606
Provision charged against income - - 12
------ ------ ------
624 614 618
------ ------ ------
Charge-offs:
Commercial, financial and
agricultural loans - - 1
Real estate mortgage loans - - 13
Real estate construction loans - - -
Installment loans 18 6 1
------ ------ ------
Total charge-offs 18 6 15
------ ------ ------
Recoveries:
Commercial, financial and agricultural loans 5 8 8
Real estate mortgage loans 1 - -
Real estate construction loans - - -
Installment loans 2 8 3
------ ------ ------
8 16 11
------ ------ ------
Net charge-offs (recoveries) 10 (10) 4
------ ------ ------
Ending balance $ 614 $ 624 $ 614
====== ====== ======
Ratio of net charge-offs (recoveries)
during the period to average loans
outstanding during the period .04% (.04)% .01%
====== ====== ======
</TABLE>
The allowance for possible loan losses has been allocated according to
the amount deemed to be reasonably necessary to provide for the possibility of
losses being incurred within the following categories of loans at the date
indicated:
Allocation of Allowance for Possible Loan Losses
(In thousands of dollars)
<TABLE>
<CAPTION>
December 31, 1996 December 31, 1995
----------------------------- -----------------------------
% of Loans % of Loans
Outstanding Outstanding
to Total to Total
Allowance Loans Allowance Loans
--------- -------- --------- ---------
<S> <C> <C> <C> <C>
Commercial, financial and
agricultural loans $ 201 32.74% $ 134 21.47%
Real estate construction 3 .49 5 0.80
Real estate mortgage loans 146 23.78 400 64.10
Installment loans 264 42.99 85 13.63
----- -------- ----- -------
$ 614 100.00% $ 624 100.00%
===== ======== ===== =======
</TABLE>
- 11 -
<PAGE> 12
Item 1. Business (continued)
Allocation of Allowance for Possible Loan Losses (continued)
(In thousands of dollars)
<TABLE>
<CAPTION>
December 31, 1994
----------------------------
% of Loans
Outstanding
to Total
Allowance Loans
--------- --------
<S> <C> <C>
Commercial, financial and
agricultural loans $ 126 20.52%
Real estate construction 5 0.81
Real estate mortgage loans 400 65.15
Installment loans 83 13.52
----- -------
$ 614 100.00%
===== =======
</TABLE>
Deposits
The average amount of deposits, using daily average balances for 1996,
1995, and 1994, is summarized for the periods indicated in the following table
(in thousands of dollars):
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Non-interest bearing demand deposits $ 15,530 $ 15,707 $ 13,494
Interest-bearing demand deposits 11,510 11,480 11,855
Savings deposits 8,597 8,782 8,775
Time deposits 17,659 15,977 15,154
-------- -------- --------
$ 53,296 $ 51,946 $ 49,278
======== ======== ========
</TABLE>
Return on equity and assets
The ratio of Net Income to Average Shareholders' Equity and to Average
Total Assets, and certain other ratios, are as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Percentage of net income to:
Average total assets 1.70% 1.64% 1.75%
Average shareholders' equity 14.32% 15.46% 17.96%
Percentage of dividends declared per
common share to net income per
common share 11.56% 10.59% 8.10%
Percentage of average shareholders'
equity to daily average total assets 11.88% 10.60% 9.76%
</TABLE>
- 12 -
<PAGE> 13
Item 1. Business (continued)
Short-Term Borrowing
The Corporation's short-term borrowing and the average interest rate
thereon at the end of the last three years, are as follows (in thousands of
dollars):
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Balance at December 31 $ - $ - $ -
Weighted average interest rate at
year end - % - % - %
Maximum amount outstanding at any
month's end $ 950 $ 1,650 $ -
Average amount outstanding during
the year $ 66 $ 17 $ -
Weighted average interest rate
during the year 4.55% 11.76% - %
</TABLE>
Item 2. Properties
The main office of the Corporation and the Bank are presently located at
328 East Landry Street, Opelousas, Louisiana, in the downtown business
district. The Bank leases four branch sites. The building in which the main
office is located is free of all mortgages.
For information with respect to the Corporation obligations under its
lease commitments, see Note 11 to the Consolidated Financial Statements, which
are incorporated herein by reference under Item 8.
Item 3. Legal Proceedings
The Corporation is not involved in any legal actions; however, there are
presently pending by the Bank a number of legal proceedings. It is the opinion
of management that the resulting liability, if any, from these actions and
other pending claims will not materially affect the consolidated financial
statements.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders, through the solicitation
of proxies or otherwise.
- 13 -
<PAGE> 14
PART II
Item 5. Market for Registrant's Common Stock and Related Security Holder
Matters
MARKET PRICE AND DIVIDENDS DECLARED
<TABLE>
<CAPTION>
Dividends
Year Quarter High Low Per Share
------ --------- ------ ------ -----------
<S> <C> <C> <C> <C>
1996 First $ 25 $ 20 $ -
Second 20 6 -
Third 25 20 -
Fourth 25 20 1.00
1995 First $ 25 $ 20 $ -
Second 25 20 -
Third 25 20 -
Fourth 25 20 .85
</TABLE>
Note: The primary market area for American Bancorp, Inc.'s common stock
is the Opelousas, Louisiana area with American Bank and Trust Company acting as
registrar and transfer agent. There were approximately 578 shareholders of
record at December 31, 1996.
Source of market price - American Bank & Trust Company acts as the
transfer agent for the Company. The stock is thinly traded and the price ranges
are based on stated sales price to the transfer agent, which does not represent
all sales.
RESTRICTIONS ON CASH DIVIDENDS PAYABLE BY THE REGISTRANT:
The only source of funds by the Company to pay dividends is dividends
paid by the Subsidiary Bank, the payment of which is restricted by applicable
federal and state statutes.
Federal bank regulatory authorities have authority under the Financial
Institutions Supervisory Act to prohibit a bank from engaging in an unsafe or
unsound practice. The payment of a dividend by the Bank could, depending upon
the financial condition of the Bank and other factors be deemed an unsafe or
unsound practice.
Applicable Louisiana law prohibits a state bank subsidiary from paying a
dividend if its surplus remaining after payment of the dividend would be less
than half the aggregate par value of its outstanding stock. In addition, a
state bank subsidiary is required to obtain the prior approval of the
Commissioner of Financial Institutions of Louisiana before declaring or paying
a dividend in a given year if the total of all dividends declared or paid
during that year would exceed the total of its net profits for that year
combined with the net profits from the immediately preceding year.
- 14 -
<PAGE> 15
Item 6. Selected Financial Data
The information called for by Item 6 is included in Registrant's Annual
Report on page 5 in the Section titled "Summary of Operations for the Last Five
Years" and is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The information called for by Item 7 is included in the Registrant's
Annual Report in the section titled "Management's Discussion and Analysis of
Operations" and is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The following consolidated financial statements of the Registrant and
its subsidiary included on pages 28 through 55 in the Annual Report are
incorporated herein by reference:
Consolidated Balance Sheets - December 31, 1996 and 1995
Consolidated Statements of Income - Years Ended December 31, 1996, 1995,
and 1994
Consolidated Statements of Shareholders' Equity - Years Ended December
31, 1996, 1995, and 1994
Consolidated Statements of Cash Flows - Years Ended December 31, 1996,
1995, and 1994
Notes to Consolidated Financial Statements
Item 9. Disagreements in Accounting and Financial Disclosure
There have been no disagreements with an independent accountant on any
matter of accounting principles or practice, financial disclosure, auditing
scope or procedure.
PART III
Item 10. Directors and Executive Officers
With the exception of identification of executive officers of the
Corporation, the information called for by Item 10 is omitted pursuant to
General Instruction G(3) and is included in Registrant's definitive Proxy
Statement filed pursuant to Section 14(a). Executive officers of the
Corporation are identified in Item 1, "Executive Officer," included in Part I
of this report.
Item 11. Management Remuneration and Transactions
The information called for by this item is included in Registrant's
definitive Proxy Statement filed pursuant to Section 14(a) of the Securities
Exchange Act of 1934 and is incorporated herein by reference.
- 15 -
<PAGE> 16
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information called for by this item is included in Registrant's
definitive Proxy Statement filed pursuant to Section 14(a) of the Securities
Exchange Act of 1934 and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
The information called for by this item is included in Registrant's
definitive Proxy Statement filed pursuant to Section 14(a) of the Securities
Exchange Act of 1934 and is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Financial Statements
The following consolidated financial statements of
American Bancorp, Inc. and Subsidiary, included in pages
28 through 55 of the Registrant's Annual Report are
incorporated by reference in Item 8:
Consolidated Balance Sheets - December 31, 1996 and
1995
Consolidated Statements of Income - Years Ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Shareholders' Equity - Years
Ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows - Years Ended
December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
(a) 2. Financial Statement Schedules
The Schedules to the consolidated financial statements
required by Article 9, and all other schedules to the
financial statements of the Registrant required by Article
9 of Regulation S-X are not required under the related
instructions or are inapplicable and therefore have been
omitted.
(a) 3. Exhibits
(13) 1996 Annual Report to Shareholders
(23) Proxy Statement for Annual Meeting of Shareholders
to be held on April 9,1997
(24) Consent of Independent Auditors
- 16 -
<PAGE> 17
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(continued)
(b) Reports on Form 8-K
None
(c) Exhibits
The response to this portion of Item 14 is submitted as a
separate section of this report.
(d) Financial Statement Schedules
The response to this portion of Item 14 is submitted as a
separate section of this report.
- 17 -
<PAGE> 18
Signatures
Pursuant to the requirements of Section 13 or 15(d) 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 Bancorp, Inc.
(Registrant)
By: /s/ Salvador L. Diesi, Sr.
----------------------------------
Salvador L. Diesi, Sr., Chairman
of the Board of the Corporation
and the Bank; President of
the Corporation and the Bank
Dated: March 12, 1997
------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Salvador L. Diesi, Sr. /s/ Joseph J. Artall
- ------------------------------------- ----------------------------------
Salvador L. Diesi, Sr., Chairman of Joseph J. Artall, Director
the Board of the Corporation and the
Bank; President of the Corporation
and the Bank
/s/ Ronald J. Lashute /s/ Walter J. Champagne, Jr.
- ------------------------------------- ----------------------------------
Ronald J. Lashute, Executive Vice- Walter J. Champagne, Jr., Director
President and Chief Executive Officer
of the Bank; Secretary/Treasurer of
the Corporation
/s/ J.C. Diesi
----------------------------------
J.C. Diesi, Director
- 18 -
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description
------ -----------
<S> <C>
13.1 1996 Annual Report to shareholders of American Bancorp, Inc.
23.1 Consent of Independent Auditors
27.1 Financial Data Schedule
99.1 1996 Proxy Statement for annual meeting of shareholders.
</TABLE>
- 19 -
<PAGE> 1
EXHIBIT 13.1
[AMERICAN BANCORP LOGO]
1996 ANNUAL REPORT
AMERICAN BANCORP, INC.
POST OFFICE BOX 1579
OPELOUSAS, LOUISIANA 70570
<PAGE> 2
NATURE OF BUSINESS
American Bancorp, Inc. is a one-bank holding company whose sole subsidiary
is American Bank and Trust Company, a commercial bank whose general business is
that of providing banking services to the Opelousas, Louisiana area. The Bank
serves the needs of the area through 46 employees at six banking locations. The
main office is located at the corner of Landry Street and Union Street in
Opelousas. Branch banking-offices are located in the parish of St. Landry in
the communities of Lawtell, Krotz Springs, Port Barre and an office on Creswell
Lane in South Opelousas. In addition, the Bank has a branch located on Moss
Street, in Lafayette, Louisiana.
MARKET PRICE AND DIVIDENDS DECLARED
<TABLE>
<CAPTION>
DIVIDENDS
YEAR QUARTER HIGH LOW PER SHARE
- ---- ------- ---- --- ---------
<S> <C> <C> <C> <C>
1996 First $ 25 $ 20 $ --
Second 20 6 --
Third 25 20 --
Fourth 25 20 1.00
1995 First $ 25 $ 20 $ --
Second 25 20 --
Third 25 20 --
Fourth 25 20 .85
</TABLE>
Note: The primary market area for American Bancorp, Inc.'s common stock is the
Opelousas, Louisiana area with American Bank and Trust Company acting as
registrar and transfer agent. There were approximately 578 shareholders of
record at December 31, 1996.
Source of market price - American Bank & Trust Company acts as the
transfer agent for the Company. The stock is thinly traded and the price ranges
are based on stated sales price to the transfer agent, which does not represent
all sales.
ANNUAL SHAREHOLDERS' MEETING
The annual meeting of the shareholders of American Bancorp, Inc. will be
held on April 9, 1997 in the Board of Directors Room at the Operations Center
located at 328 East Landry Street, Opelousas, Louisiana.
FORM 10-K ANNUAL REPORT
American Bancorp, Inc. files an annual report with the Securities and
Exchange Commission on Form 10-K. A copy of the report filed on Form 10-K will
be sent free of charge to any shareholder by writing to: Ronald J. Lashute,
Chief Executive Officer and Executive Vice-President, American Bank and Trust
Company, Post Office Box 1579, Opelousas, Louisiana 70570.
-1-
<PAGE> 3
FINANCIAL SUMMARY
(In thousands of dollars except per share data and ratios)
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- --------
<S> <C> <C> <C>
FOR THE YEAR
Net income ....................................... $ 1,038 $ 963 $ 962
Return on average shareholders' equity ........... 14.32% 15.46% 17.96%
Return on average total assets ................... 1.70% 1.64% 1.75%
AT YEAR END
Total assets ..................................... $ 67,254 $ 63,070 $ 65,141
Total earning assets ............................. $ 60,666 $ 55,080 $ 55,190
Total loans ...................................... $ 28,311 $ 26,390 $ 27,053
Total deposits ................................... $ 59,367 $ 55,655 $ 59,230
Total shareholders' equity ....................... $ 7,656 $ 6,785 $ 5,818
Common shares outstanding ........................ 120,000 120,000 120,000
PER SHARE
Net income ....................................... $ 8.65 $ 8.03 $ 8.02
Book value ....................................... $ 63.80 $ 56.55 $ 48.49
Cash dividends declared .......................... $ 1.00 $ .85 $ .65
CAPITAL RATIOS
Total risk-based capital ratio ................... 24.48% 23.17% 19.76%
Leverage ratio ................................... 12.44% 11.36% 10.38%
</TABLE>
-2-
<PAGE> 4
C O N T E N T S
PAGE
Financial Summary .................................................... 2
A Message to the Shareholders ........................................ 4
Management's Discussion and Analysis of Financial
Condition and Results of Operations ............................... 5 - 27
Independent Auditors' Report ......................................... 28
Consolidated balance sheets .......................................... 29 and 30
Consolidated statements of income .................................... 31
Consolidated statements of changes in shareholders' equity ........... 33 and 34
Consolidated statements of cash flows ................................ 35 and 36
Notes to consolidated financial statements ........................... 37 - 55
Officers and directors of American Bank and Trust Company ............ 56
Officers and directors of American Bancorp, Inc. ..................... 57
-3-
<PAGE> 5
TO THE SHAREHOLDERS
Fiscal year 1996 was an impressive year for American Bancorp, Inc. and
American Bank & Trust Co., it's sole subsidiary. Net income surpassed last
year's results as well as that of many previous years.
For the year, net earnings were $1,038,309 or $8.65 per share. Return on
average assets for 1996 was 1.70% and return on average equity was 14.32%.
We were fortunate to obtain all of our goals during 1996. American
Bancorp's average assets for the year were $61,012,000 an increase of 3.88%
over 1995. The company's leverage capital ratio increased to 12.44% from
11.36%. The Board of Directors raised the company's cash dividend to $1.00 per
share in 1996 representing an increase of 100% over the 1993 dividend.
The Bank also has a 7% increase in loan volume during the year. Loan
quality remained good with net charged off loans of only $9,783 with a reserve
for loan losses at year end in the amount of $614,339.
In keeping up with the latest in technology, the company added two new
electronic banking services during the year. American Advantage, our 24 hour
telephone banking service, is now serving our customers around the clock 365
days of the year. We have also added a cash management service for our
corporate customers through means of electronic payroll and billing. We plan to
continue offering our customers the most recent products and services
technology has developed.
We enter the new year with the same principles in mind of setting goals
for the company, conducting business in a safe and sound manner, and increasing
shareholder value. The continued support of the shareholders, customers, and
employees of the bank, will ensure our continued success.
/s/ SALVADOR L. DIESI, SR.
- ---------------------------------------------
Salvador L. Diesi, Sr., Chairman of the Board
and President
/s/ RONALD J. LASHUTE
- ----------------------------------------------
Ronald J. Lashute, Chief Executive Officer and
Executive Vice-President
-4-
<PAGE> 6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
SUMMARY OF OPERATIONS FOR THE LAST FIVE YEARS
(In thousands of dollars except per share data and ratios)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------
1996 1995 1994 1993 1992
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Operating Data:
Net interest income ................... $ 2,976 $ 3,065 $ 2,567 $ 2,442 $ 2,450
Provision for possible loan
losses ............................. -- -- 12 36 36
Net income ............................ 1,038 963 962 725 809
Per share data:
Weighted average number of
shares outstanding ................. 120,000 120,000 120,000 120,000 120,000
Net income ............................ $ 8.65 $ 8.03 $ 8.02 $ 6.04 $ 6.75
Cash dividends declared ............... 1.00 .85 .65 .50 --
Book value at end of year ............. 63.80 56.55 48.49 41.12 35.58
Balance sheet totals:
Average assets ........................ $ 61,012 $ 58,733 $ 54,863 $ 52,937 $ 52,461
Average shareholders' equity .......... 7,251 6,230 5,356 4,599 3,852
Relationship between significant financial
ratios:
Percentage of net income
to average total assets ......... 1.70% 1.64% 1.75% 1.37% 1.54%
Percentage of net income
to average shareholders'
equity .......................... 14.32% 15.46% 17.96% 15.76% 21.01%
Percentage of dividends
declared per common share
to net income per common
share ........................... 11.56% 10.59% 8.10% 8.28% .00%
Percentage of average share-
holders' equity to average
total assets .................... 11.88% 10.60% 9.76% 8.69% 7.34%
Tier 1 risk-based capital ratio ....... 23.23% 21.92% 18.51% 17.96% 15.89%
Total risk-based capital ratio ........ 24.48% 23.17% 19.76% 19.21% 17.14%
Leverage ratio ........................ 12.44% 11.36% 10.38% 9.31% 8.13%
</TABLE>
-5-
<PAGE> 7
Management's discussion and analysis of financial condition and results of
operations should be read in conjunction with the accompanying financial
statements and notes.
OVERVIEW
The Company reported net income of $1,038,309 in 1996 compared to $963,456
in 1995 and $962,484 in 1994. Interest income has increased over the last three
years. The primary increase has been in interest income on loans and investment
securities. The interest on these items increased $107,243 in 1996 and $710,376
in 1995. Interest expense also increased in 1996. The increase for 1996 was
$171,750 and an increase of $210,831 from 1994 to 1995. The most significant
change on the income statement was in provision for income taxes. The Company
had been in the position of having net operating losses available for
carryfoward. All such losses were realized in 1994 and, consequently, the
Company went from a tax benefit to a tax expense in 1995 and 1996. The tax
benefit in 1994 was $56,432 while the tax provision for 1995 was $449,793 and
for 1996 it was $335,198.
Average total assets continue to increase. These assets have grown 7.1%
and 3.9% in 1995 and 1996, respectively. This increase is a result of a steady
growth of non-interest bearing demand deposits in 1995 and time deposits in
1996. Non-interest bearing demand deposits increased $2,213,000 in 1995 or
16.4% and a slight decrease of $177,000 in 1996 or 1.13%. Time deposits
increased $1,682,000 or 10.5% in 1996 over the 1995 amounts.
The year end balance sheet reflects an increase of $1,921,243 or 7.3% in
loans due to an increase in loan demand. In addition, total deposits increased
$3,711,915 or 6.67% in comparing 1996 to 1995. These increases are related to
improved financial results of the market areas served by the Bank. For the same
period, there was an increase of $870,895 in stockholders' equity.
STATEMENT OF INCOME ANALYSIS
Net interest income on a taxable-equivalent basis was $3.05 million in
1996, a decrease of $.04 million, or 1.3% compared to 1995. In 1994, net
interest income was $2.5 million, an increase of $.139 million, or 5.8% over
the prior year. The net interest margin for 1996 was 5.49% compared to 5.79% in
1995 and 5.09% for 1994. Table 1 summarizes average balances, income and
average yields on earning assets and expense and average rates paid on interest
bearing liabilities. Table 2 analyzes the change in net interest income for the
two most recent annual intervals.
The increase in the average balances of loans and securities available for
sale had a positive effect on the net interest margin. However, this effect was
partially negated by the decrease in average rates earned on these assets. The
increase in the average balance as well as an increase in the average rate paid
on time deposits also had a significant impact on the decrease in the net
interest margin from 1995 to 1996. The decrease in the average rate of $.091
million on earning assets and the increase of $.093 million in interest
expenses negatively impacted the Company's net interest income.
-6-
<PAGE> 8
PROVISION FOR POSSIBLE LOAN LOSSES. The provision for possible loan losses was
$-0- in 1995 and 1996, and $12,000 in 1994. As a percentage of outstanding
loans, the allowance for possible loans losses was 2.12%. 2.31% and 2.22% at
December 31, 1996, 1995 and 1994, respectively. The annual provision is
determined by the level of net charge offs, the size of the loan portfolio, the
level of nonperforming loans, anticipated economic conditions, and review of
financial condition of specific customers.
NON-INTEREST INCOME. There have been immaterial variances in most non-interest
income accounts for the three year period ended 1996. The Bank's management
realizes that non-interest income will become increasingly important as
deregulation continues to impact the net interest margin; therefore, we are
continuously evaluating new opportunities for fee revenues through proper
pricing of services and the development of new sources of non-interest revenue.
NON-INTEREST EXPENSE. In comparing 1996 to 1995, there were immaterial
variances resulting in a reduction in other expense of $59,407 due primarily to
a reduction in FDIC assessments. The other categories in non-interest expense
experienced normal variation between 1996, 1995 and 1994.
INCOME TAXES. The Company recorded income tax expense of $335,198 in 1996 as
compared to an expense of $449,793 in 1995. Effective January 1, 1992, the
Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." Due to limitations related to the valuation of
deferred tax assets, there was no cumulative effect adjustment at adoption.
During 1994, the Bank recorded a deferred tax benefit equal to its deferred tax
asset. The Bank's net deferred tax asset at December 31, 1994 was fully
supported by the Bank's carryback potential, plus one year of future expected
earnings. At December 1996, the valuation reserve was removed resulting in a
reduction in income tax expense of $61,938.
This change in accounting principle enabled the Company to more clearly
reflect the impact of net operating loss carryforwards on results of
operations. Previously, these tax benefits were required to be reported as
extraordinary income. The only income tax expense paid for 1994 was related to
alternative minimum tax calculations.
BALANCE SHEET AND CAPITAL FUNDS ANALYSIS
Investment securities are a major use of funds by the Bank. The balance at
December 31, 1995 was $24,188,809 which represented a $2,543,269 or 11.75%
increase from the $21,645,540 balance outstanding at December 31, 1995.
Investment securities serve several purposes. A portion of investment
securities provides liquidity or secondary reserves, which management can use
if necessary to meet loan demand or deposit withdrawals. Investment securities,
especially obligations of state and political subdivisions, provide for
schools, road construction, sewers, and various other projects. The Bank
invests a portion of these funds in the market area as a service to the
community in which it operates. The remainder of these funds is invested in
obligations of the United States Government or its agencies. It is management's
policy to minimize risk in investments and provide liquidity by investing in
short-term maturities with quality ratings. A substantial portion of the
investment portfolio is pledged on public deposits (61%), this is slightly more
than 1995 pledged percentage of 55%. The amount of pledged securities have been
fairly constant for the last three years and management anticipates this source
of deposits will remain relatively constant in the future.
-7-
<PAGE> 9
On January 1, 1994, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," which requires the classification of securities into one of
three categories: trading, available for sale or held to maturity. Management
determines the appropriate classification of debt securities at the time of
purchase and re-evaluates this classification periodically.
Prior to January 1, 1994, the Company classified securities as held for
sale (available for sale) and investment securities (held to maturity) based on
criteria which did not differ significantly from that required by the new
standard. Held for sale securities were recorded at the lower of cost or fair
value.
In December 1995, the Financial Accounting Standards Board issued "A Guide
to Implementation of Statement 115 on Accounting for Certain Investments in
Debt and Equity Securities" (Guide). This guide provided for a one time
opportunity to reclassify securities without impairing the individual
classifications. The Company elected to leave all investment classifications as
previously recorded on acquisition. The Company will continue to determine the
appropriate classification at the time of purchase.
The Bank's primary use of funds is to meet loan demand. Loans, net of
unearned income, were $28,925,810 at December 31, 1996, compared to $27,014,350
December 31, 1995. This $1,911,460 or 7.08% increase is the result of improved
economic conditions in the market area.
The Bank attracts deposits from consumers and businesses, and also
utilizes its access to the money markets to purchase funds to support the asset
side of the balance sheet. The two primary sources of funds may be classified
as "interest-bearing deposits" and "non-interest bearing deposits."
"Interest-bearing deposits" consist of time deposits, savings accounts, NOW
accounts and Money Market deposit accounts. The largest source of "non-interest
bearing deposits" is demand deposits, which consist of gross demand deposits
less reciprocal balances with our correspondent banks.
As of December 31, 1996, total deposits increased $3,711,915 or 6.67% from
December 31, 1995. The most significant changes in deposits from 1995 to 1996
were increases in time deposits of $100,000 or more of $1,649,682, a 59.6%
increase, and an increase in other time deposits of $1,318,861, a percentage
increase of 10.14%. The increase in time deposits of $100,000 or more is
attributable to the Bank becoming a joint fiscal agent for a local public body.
Shareholders' equity increased $870,895 or 12.83% from December 31, 1995
to December 31, 1996. The equity or book value of the Bank is the shareholders'
investment in the Bank resulting from the sale of stock and the accumulation of
earnings retained by the Bank. The strength of the Bank and its ability to grow
depends to a great extent on management's ability to maintain a corresponding
growth in shareholders' equity.
We declared cash dividends in the amount of $120,000 or $1.00 per share in
1996 and $102,000 or $.85 per share in 1995. Dividends of $78,000 or $.65 per
share were declared in 1994.
-8-
<PAGE> 10
NONPERFORMING ASSETS AND PAST DUE LOANS. Nonperforming assets are loans carried
on a nonaccrual basis, those classified as restructed loans (loans with
below-market interest rates or other concessions due to the deteriorated
financial condition of the borrower), repossessed real estate, property in the
process of being repossessed and repossessed movable property. A loan is placed
on nonaccrual when, in management's judgment, the borrower's financial
condition has deteriorated to the point that his ability to service the
principal and/or interest is in doubt. At that time, any accrued interest on
the loan is reversed and accruing of interest is discontinued. The Company's
nonperforming assets consist primarily of a pool of automobile loans by
individual borrowers outside of the Bank's market area.
Nonperforming assets at December 31, 1996 were $603,920, an increase of
$476,061 from December 31, 1995. The most significant increase in nonperforming
assets from 1995 to 1996 was in the loans on nonaccrual status. This resulted
primarily from the financial nonperformance of a group of automobile loans
purchased in 1996. Other real estate and repossessed assets remained constant
at $13,800 at December 31, 1996 and 1995. The Bank has experienced little
variance in other real estate since 1994. Management anticipates this favorable
trend to continue.
As of January 1, 1995, the Company adopted SFAS No. 114, "Accounting by
Creditors for Impairment of a Loan," which, as it relates to in-substance
foreclosures, requires that a creditor continue to classify these assets as
loans on the balance sheet unless the creditor receives physical possession of
the collateral. The Company had no in-substance foreclosures in 1996 or 1995.
At December 31, 1996, the recorded investment in loans that were considered to
be impaired under SFAS No. 114 was $496,490, with the related reserve for
possible loan losses of $170,000. These loans are included in nonaccrual loans
in Table 7.
LIQUIDITY. Liquidity is the ability to ensure that adequate funds are available
to satisfy contractual liabilities, fund operations, meet withdrawal
requirements of depositors, and provide for customers' credit needs in a timely
manner. The liquidity position of the Bank is founded on a stable base of core
deposits. The primary source of liquidity for the Bank is its short-term
investments. The Bank has overnight funds lines with correspondent banks
providing additional sources of liquidity. Securities available for sale also
provide a major source of liquidity to the Bank, as do the cash flows from
repayments and maturities of its loan portfolio. The franchise from which the
Bank operates allows access to a broad base of retail customers, and management
has been successful at attracting additional deposits when a continuing need
for further funding has arisen. The Bank's core deposit base is supplemented by
public fund time deposits and federal funds obtained through correspondent
relationships.
At the Parent Company (American Bancorp, Inc.) level, cash is needed to
fund operations and to pay dividends. During December 31, 1996, the Parent
Company received $123,000 from the Bank in dividends. The majority of these
funds were used to pay dividends to stockholders.
The purpose of liquidity management is to assure that the Bank has the
ability to raise funds to support asset growth, meet deposit withdrawal,
maintain reserve requirements and otherwise operate the Bank on a continuing
basis. Liquidity for the Bank is provided by the acquisition of additional
funds in the form of deposits, borrowing such as federal funds, investment
maturities and sales, and loan maturities and repayments.
-9-
<PAGE> 11
In recognition of the increased pace of deregulation and increasing
competition, the Bank will continue to increase its competitive position in the
area to assure the availability of funds. The Bank's reputation, capital
position and base of deposits will help to insure flexibility and liquidity.
CAPITAL ADEQUACY. The management of capital is a continuous process which
consists of providing capital for anticipated growth of the Bank. An evaluation
of capital adequacy cannot be made solely in terms of total capital or related
ratios. A more comprehensive indication of financial strength is management's
ability to generate capital through the retention of earnings. The Bank's main
source of capital during the last several years has been cumulative earnings
derived through profitable operations.
In 1992, the Federal Deposit Insurance Corporation (FDIC) issued
regulations for the classification of banks based on their capital levels
pursuant to the Federal Deposit Insurance Corporation Improvement Act passed by
Congress in 1991. The rules place each bank into one of the nine risk
categories for assessing risk-based deposit premiums based on capital ratios
and on other supervisory information. Three capital categories are used for
capital ratios ranging from "well capitalized" to "undercapitalized." The
regulations define "well capitalized" banks as those bank with at least 6% Tier
1 risk-based capital ratio, 10% total risk-based capital ratio and a 5%
leverage ratio. Banks are also assigned to one of three supervisory subgroups
ranging from "healthy" to "substantial supervisory concern." The Bank is
included in the top rating categories for both capital ratios and the
supervisory subgroup. At December 31, 1996, the Bank had a Tier 1 risk-based
capital ratio of 23.23% and 24.48% total risk-based capital ratio. The leverage
ratio has increased to 12.44% at December 31, 1996. The Bank presently meets or
exceeds all required risk-based capital standards and anticipates no difficulty
in maintaining those standards.
FAIR VALUES OF FINANCIAL INSTRUMENTS. Statement of Financial Accounting
Standards No. 107, "Disclosures About Fair Values of Financial Instruments"
requires disclosure of estimated fair values of financial instruments.
Financial instruments are defined as cash and contractual rights and
obligations that require settlement, directly or indirectly, in cash. Note 14
to the consolidated financial statements provides information regarding the
fair values of financial instruments as of December 31, 1996.
INTEREST RATE SENSITIVITY. Interest rate risk is the potential impact of
changes in interest rates on net interest income and results from mismatches in
repricing opportunities of assets and liabilities over a period of time. Static
Gap analysis is used to estimate the effects of changing interest rates and
various balance sheet strategies on the level of net interest income.
Management may alter the mix of floating and fixed rate assets and liabilities,
change pricing schedules, and adjust maturities through sales and purchases of
securities available for sale. Table 14 presents the Bank's interest rate
sensitivity position at December 31, 1996.
-10-
<PAGE> 12
This profile, usually referred to as a Gap analysis, is based on a point
in time and may not be meaningful because assets and liabilities must be
categorized according to contractual maturities and repricing periods rather
than estimating these characteristics, as is done in simulation models. Also,
the Gap analysis does not consider subsequent changes in interest rate levels
or spreads between asset and liability categories. Although Table 14 indicates
that the Company is liability-sensitive (interest-bearing liabilities exceed
earning assets) up to one year, this may not be true in practice. The 1 - 30
day deposit category includes NOW, money market and savings accounts which have
indeterminate maturities. These deposits and non-interest bearing demand
deposits, which comprise our core deposits, account for 68.4% of total
deposits. The NOW, money market and savings accounts do not necessarily reprice
in a direct relationship to changes in interest rates.
In addition to core deposits, which serve to lessen the volatility of net
interest income in changing rate conditions, the Company's loan portfolio
contains fixed-rate commercial loans that have actual maturities and cash flows
that vary with the level of interest rates. These earning assets are reported
in the after one year category, when in fact a portion of these balances may be
subject to repricing within one year or less. Depending on market interest
rates, actual cash flows from these loans will vary from the contractual
maturities due to payoffs and refinancing activity.
-11-
<PAGE> 13
TABLE 1
SUMMARY OF CONSOLIDATED NET INTEREST INCOME
Fully taxable equivalent basis (In thousands)
<TABLE>
<CAPTION>
1996
----------------------------------
AVERAGE AVERAGE
BALANCE INTEREST RATE
-------- -------- -------
<S> <C> <C> <C>
ASSETS
Short-term investments $ 4,623 $ 247 5.34%
Loans, net of unearned income (1) (2) 27,635 2,596 9.39
Securities available for sale (3) 16,635 1,041 6.26
Securities held to maturity 6,537 490 7.50
-------- --------
Total interest earning assets 55,430 4,374 7.89%
-------- -----
Allowance for possible loan losses (621)
Cash and due from banks 3,775
Other assets 2,428
--------
Total assets $ 61,012
========
LIABILITIES
Interest-bearing demand deposits $ 11,510 $ 222 1.93%
Savings deposits 8,597 234 2.72
Time deposits 17,659 870 4.93
Short-term borrowings 66 3 4.55
-------- --------
Total interest-bearing liabilities 37,832 1,329 3.51%
-------- -----
Non-interest bearing demand deposits 15,530
Other liabilities 399
--------
Total liabilities 53,761
SHAREHOLDERS' EQUITY
Shareholders' equity 7,251
--------
Total liabilities and shareholders' equity $ 61,012
========
Total interest expense related to earning assets 2.40%
-----
Net interest income $ 3,045
========
Net interest margin 5.49%
====
</TABLE>
(1) Interest income earned on nontaxable investment securities and certain
loans are exempt from taxation. However, an adjustment has been made for
the tax preference item related to nontaxable securities purchased after
December 31, 1982. An incremental tax rate of 34% is used to compute the
taxable equivalent adjustment for 1996, 1995, and 1994.
(2) For purposes of yield computations, non-accrual loans are included in loans
outstanding.
(3) Yield computations are based on historical cost of securities available
for sale.
-13-
<PAGE> 14
<TABLE>
<CAPTION>
1995 1994
- --------------------------------------- ---------------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE
- ------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
$ 4,930 $ 271 5.50% $ 6,609 $ 272 4.12%
26,748 2,573 9.62 26,976 2,281 8.46
3,843 312 8.12 2,905 257 8.85
17,779 1,087 6.11 13,257 670 5.05
- -------- -------- -------- --------
53,300 4,243 7.96% 49,747 3,480 7.00%
-------- ----- -------- ----
(621) (614)
3,815 3,567
2,239 2,163
- -------- --------
$ 58,733 $ 54,863
======== ========
$ 11,855 $ 218 1.84%
$ 11,480 $ 217 1.89% 8,775 239 2.72
8,782 239 2.72 15,154 491 3.24
15,977 700 4.38 - - 0.00
17 2 11.76 -------- --------
- -------- -------- 35,784 948 2.65%
36,256 1,158 3.19% -------- ----
-------- ----- 13,494
15,707 229
540 --------
- -------- 49,507
52,503
5,356
6,230 --------
- -------- $ 54,863
$ 58,733 ========
========
2.17% 1.91%
----- ----
$ 3,085
======== $ 2,532
5.79% ========
=====
5.09%
====
</TABLE>
-14-
<PAGE> 15
TABLE 2
RATE/VOLUME ANALYSIS
Fully taxable equivalent basis (In thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1996/1995
---------------------------------
INCREASE (DECREASE)
DUE TO CHANGE IN: (1)
---------------------------------
AVERAGE AVERAGE NET
BALANCE RATE CHANGE
<S> <C> <C> <C>
----- ----- -----
Interest income:
Short-term investments ............ $ (17) $ (7) $ (24)
Loans, net of unearned income (2) . 84 (61) 23
Securities available for sale (3) . 920 (191) 729
Securities held to maturity ....... (765) 168 (597)
----- ----- -----
Total interest income .......... 222 (91) 131
----- ----- -----
Interest expense:
Demand deposits ................... 1 4 5
Savings deposits .................. (5) -- (5)
Time deposits ..................... 78 92 170
Short-term borrowing .............. 4 (3) 1
----- ----- -----
Total interest expense ......... 78 93 171
----- ----- -----
Taxable-equivalent net interest income $ 144 $(184) $ (40)
===== ===== =====
</TABLE>
(1) The change in interest due to both rate and volume has been allocated to
rate and volume changes in proportion to the relationship of the absolute
dollar amounts of the change in each.
(2) Non-accrual loans are included in loans outstanding.
(3) Yield computations are based on historical cost of securities available
for sale.
-15-
<PAGE> 16
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995/1994
- -------------------------------------------------
INCREASE (DECREASE)
DUE TO CHANGE IN: (1)
- -------------------------------------------------
AVERAGE AVERAGE NET
BALANCE RATE CHANGE
- ------- ------- -------
<S> <C> <C>
$ (81) $ 80 $ (1)
(21) 313 292
80 (25) 55
253 164 417
- ----- ----- -----
231 532 763
- ----- ----- -----
(6) 5 (1)
-- -- --
31 178 209
1 1 2
- ----- ----- -----
26 184 210
- ----- ----- -----
$ 205 $ 348 $ 553
===== ===== =====
</TABLE>
-16-
<PAGE> 17
TABLE 3
SECURITIES PORTFOLIO
(In thousands)
<TABLE>
<CAPTION>
DECEMBER 31, 1996 DECEMBER 31, 1995
------------------------------- --------------------------------
HELD TO AVAILABLE HELD TO AVAILABLE
MATURITY FOR SALE TOTAL MATURITY FOR SALE TOTAL
--------- ------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury ............... $ 4,005 $ 1,002 $ 5,007 $ 5,508 $ -- $ 5,508
U.S. Government and
Agencies .................... 11,513 3,012 14,525 10,997 1,536 12,533
Mortgage-Backed
Securities .................. -- 1,787 1,787 -- 2,342 2,342
State and Political
Subdivisions ................ -- 2,870 2,870 -- 1,263 1,263
------- ------- ------- ------- ------- -------
$15,518 $ 8,671 $24,189 $16,505 $ 5,141 $21,646
======= ======= ======= ======= ======= =======
</TABLE>
-17-
<PAGE> 18
TABLE 4
MATURITY DISTRIBUTION AND SECURITIES PORTFOLIO YIELDS
(In thousands)
<TABLE>
<CAPTION>
AFTER AFTER
ONE BUT FIVE BUT
WITHIN ONE WITHIN FIVE WITHIN TEN
YEAR AMT YIELD YEARS AMT. YIELD YEARS AMT. YIELD
------- ----- ----------- ----- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
December 31, 1996:
Held to maturity:
U.S. Treasury ............................................. $ 1,801 6.15% $ 2,204 5.88% $ -- -- %
U.S. Government
and Agencies ........................................... 4,496 6.64 7,017 6.56 -- --
------- ---- ------- ---- ------- ----
Total held to maturity ............................. 6,297 6.50% 9,221 6.40% -0- -- %
------- ---- ------- ---- ------- ----
Available for sale:
U.S. Treasury ............................................. -- -% 1,002 6.27% -- -- %
U.S. Government
and Agencies ........................................... 1,507 7.03 1,505 6.44 -- --
Mortgage-Backed
Securities (2) ......................................... 124 8.24 906 8.20 757 9.14
State and
Political
Subdivisions (1) ....................................... -- -- 1,481 7.81 1,389 7.04
------- ---- ------- ---- ------- ----
Total available for sale ............................ 1,631 7.12% 4,894 7.15% 2,146 7.78%
------- ---- ------- ---- ------- ----
Total securities .................................... $ 7,928 6.63% $14,115 6.67% $ 2,146 7.78%
======= ==== ======= ==== ======= ====
</TABLE>
(1) Tax exempt yields are expressed on a fully taxable equivalent basis.
(2) Distributed by contractual maturity without regard to repayment schedules
or projected payments.
-19-
<PAGE> 19
<TABLE>
<CAPTION>
AFTER TEN TOTAL
YEARS AMT YIELD AMOUNT YIELD
- ---------- ---- ------- -----
<S> <C> <C> <C>
$- - % $ 4,005 6.01%
- - 11,513 6.60
- ---------- ---- ------- -----
-0- - % 15,518 6.44%
- ---------- ---- ------- -----
- - % 1,002 6.27%
- - 3,012 6.74
- - 1,787 8.60
- - 2,870 7.21
- ---------- ---- ------- -----
-0- - % 8,671 7.22%
- ---------- ---- ------- -----
$ -0- - % $24,189 6.72%
========== ==== ======= =====
</TABLE>
-20-
<PAGE> 20
TABLE 5
LOAN PORTFOLIO
The amounts of loans outstanding for the three years ended December 31, 1996
are shown in the following table according to type of loan (in thousands).
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Commercial, financial and agricultural $ 7,437 $ 6,240 $ 6,543
Real Estate - Construction ........... 285 119 325
Real Estate - Mortgage ............... 16,278 16,473 16,119
Installment .......................... 4,925 4,182 4,681
-------- -------- --------
Total ........................ 28,925 27,014 27,668
Less:
Allowance for possible loan losses . (614) (624) (614)
Unearned income .................... -- -- (1)
-------- -------- --------
$ 28,311 $ 26,390 $ 27,053
======== ======== ========
</TABLE>
TABLE 6
LOAN MATURITY AND INTEREST RATE SENSITIVITY
The following table shows the amount of commercial, financial and agricultural
loans, real estate-construction loans and real estate mortgage loans, exclusive
of installment loans, outstanding as of December 31, 1996 which, based on
remaining scheduled repayments of principal, are due in the amounts indicated.
Also, the amounts due after one year are classified according to the
sensitivity to the changes in interest rates (in thousands).
<TABLE>
<CAPTION>
ONE YEAR OVER ONE
OR TO OVER
LESS (1) 5 YEARS 5 YEARS TOTAL
------- ------- ------- -------
<S> <C> <C> <C> <C>
Maturity of Loans:
Commercial, financial and
agricultural ........................................... $ 3,799 $ 2,902 $ 1,094 $ 7,795
Real Estate - mortgage and
construction ........................................... 2,033 8,390 5,828 16,251
------- ------- ------- -------
Total ................................................ $ 5,832 $11,292 $ 6,922 $24,046
======= ======= ======= =======
Interest Rate Sensitivity of Loans:
With predetermined interest rates ........................ $ 2,643 $ 8,282 $ 508 $11,433
With floating interest rates (2) ......................... 3,189 3,010 6,414 12,613
------- ------- ------- -------
Total ................................................ $ 5,832 $11,292 $ 6,922 $24,046
======= ======= ======= =======
</TABLE>
(l) Includes demand loans, loans having no stated schedule of repayments and no
stated maturity, and overdrafts.
(2) The floating interest rate loans generally fluctuate according to a formula
based on a prime rate.
-21-
<PAGE> 21
TABLE 7
NONPERFORMING ASSETS
Nonperforming assets include nonaccrual loans, loans which are contractually 90
days past due, restructured loans, and foreclosed assets. Restructured loans
are loans which, due to a deteriorated financial condition of the borrower,
have a below-market yield. Interest payments received on nonperforming loans
are applied to reduce principal if there is doubt as to the collectibility of
the principal; otherwise, these receipts are recorded as interest income.
Certain nonperforming loans that are current as to principal and interest
payments are classified as nonperforming because there is a question concerning
full collection of both principal and interest.
Nonperforming assets totaled $603,920 at year ended 1996, a $476,061 (372.33%)
increase from the prior year. Nonperforming assets totaling $127,859 at
December 31, 1995 was down $25,296 (16.52%) from December 31, 1994. The
composition of nonperforming assets for the past three years are illustrated
below.
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Nonperforming loans:
Loans on nonaccrual ............. $496,490 $ 2,051 $ 3,722
Restructured loans which are not
on nonaccrual ................. 93,630 112,008 132,690
-------- -------- --------
Total nonperforming loans ... 590,120 114,059 136,412
Other real estate and repossessed
assets received in complete or
partial satisfaction of loan
obligations .................... 13,800 13,800 16,744
-------- -------- --------
Total nonperforming assets . $603,920 $127,859 $153,156
======== ======== ========
Loans contractually past due 90
days or more as to principal or
interest but which are not on
nonaccrual .................... $ 27,434 $ 9,504 $ 9,377
======== ======== ========
</TABLE>
At December 31, 1996, the Bank has loans outstanding to multiple numbers of
borrowers engaged in the medical industry and the legal profession. The loans
to the medical industry totaled $4,981,898, while the loans to the legal
profession were $2,912,835. There were no significant nonperforming loans
outstanding in these two concentrations.
-22-
<PAGE> 22
TABLE 8
ALLOWANCE FOR POSSIBLE LOAN LOSSES
(In Thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1996 1995 1994
----- ----- -----
<S> <C> <C> <C>
Beginning balance $ 624 $ 614 $ 606
----- ----- -----
Provision charged against income -0- -0- 12
----- ----- -----
Charge-offs:
Commercial, financial and agricultural loans -- -- 1
Real estate mortgage loans -- -- 13
Real estate construction loans -- -- --
Installment loans 18 6 1
----- ----- -----
Total charge-offs 18 6 15
----- ----- -----
Recoveries:
Commercial, financial and agricultural loans 5 8 8
Real estate mortgage loans 1 -- --
Real estate construction loans -- -- --
Installment loans 2 8 3
----- ----- -----
Total recoveries 8 16 11
----- ----- -----
Net charge-offs (recoveries) 10 (10) 4
----- ----- -----
Ending balance $ 614 $ 624 $ 614
===== ===== =====
Ratio of net charge-offs (recoveries) during
the period to average loans outstanding
during the period .04% (.04)% .01%
===== ===== =====
</TABLE>
-23-
<PAGE> 23
TABLE 9
ALLOCATION FOR POSSIBLE LOAN LOSSES
(In thousands)
The allowance for possible loan losses has been allocated according to the
amount deemed to be reasonably necessary to provide for the possibility of
losses being incurred within the following categories of loans at the date
indicated.
<TABLE>
<CAPTION>
DECEMBER 31, 1996 DECEMBER 31, 1995
---------------------- -----------------------
% OF LOANS % OF LOANS
OUTSTANDING OUTSTANDING
TO TOTAL TO TOTAL
ALLOWANCE LOANS ALLOWANCE LOANS
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Commercial, financial and
agricultural loans .............. $201 32.74% $134 21.47%
Real estate construction ........... 3 .49 5 0.80
Real estate mortgage loans ......... 146 23.78 400 64.10
Installment loans .................. 264 42.99 85 13.63
---- ------ ---- ------
$614 100.00% $624 100.00%
==== ====== ==== ======
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1994
----------------------
% OF LOANS
OUTSTANDING
TO TOTAL
ALLOWANCE LOANS
--------- -----------
<S> <C> <C>
Commercial, financial and
agricultural loans .............. $126 20.52%
Real estate construction ........... 5 0.81
Real estate mortgage loans ......... 400 65.15
Installment loans .................. 83 13.52
---- ------
$614 100.00%
==== ======
</TABLE>
-24-
<PAGE> 24
TABLE 10
DEPOSITS
The following table presents the average balance and an average rate paid on
deposits (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------------------------
1996 1995 1994
--------------------------------------------------------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE RATE BALANCE RATE BALANCE RATE
------- ------- ------- ------- ------- -------
<S> <C> <C> <C>
Non-interest bearing
demand deposits ........ $15,530 -% $15,707 -% $13,494 -%
Interest bearing
demand deposits ........ 11,510 1.93 11,480 1.89 11,855 1.84
Savings deposits ......... 8,597 2.72 8,782 2.72 8,775 2.72
Time deposits ............ 17,659 4.93 15,977 4.38 15,154 3.24
Short-term borrowings .... 66 4.55 17 11.76 - -
------- ------- -------
Total ....... $53,362 $51,963 $49,278
======= ======= =======
</TABLE>
TABLE 11
CERTIFICATES OF DEPOSIT OF $100,000 OR MORE, MATURITY DISTRIBUTION
The following table provides the maturities of time certificates of deposit of
the Bank in amounts of $100,000 or more (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Maturing in:
3 months or less ......................... $2,801 $ 601 $1,204
Over 3 months less than 6 months ......... 717 800 667
Over 6 months less than 12 months ........ 897 550 --
Over 12 months ........................... -- 814 497
------ ------ ------
Total .............................. $4,415 $2,765 $2,368
====== ====== ======
</TABLE>
-25-
<PAGE> 25
TABLE 12
RISK-BASED CAPITAL
(In thousands)
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1996 1995
---------------------------
<S> <C> <C>
Risk-weighted assets .................................. $ 32,671 $ 30,441
========== ==========
Capital:
Tier I ............................................. $ 7,588 $ 6,671
Tier II ............................................ 408 381
---------- ----------
Total capital ................................... $ 7,996 $ 7,052
========== ==========
Ratios:
Tier I capital to risk-weighted assets ............. 23.23% 21.92%
Tier II capital to risk-weighted assets ............ 1.25 1.25
---------- ----------
Total capital to risk-weighted assets ........... 24.48% 23.17%
========== ==========
Leverage - Tier I capital to total
average assets .................................. 12.44% 11.36%
========== ==========
</TABLE>
TABLE 13
RETURN ON EQUITY AND ASSETS
The following table shows consolidated operating and capital ratios for each of
the last three years:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Return on average total assets ................... 1.70% 1.64% 1.75%
Return on average shareholders' equity ........... 14.32% 15.46% 17.96%
Dividend payout ratio ............................ 11.56% 10.59% 8.10%
Average equity to average assets ratio ........... 11.88% 10.60% 9.76%
</TABLE>
-26-
<PAGE> 26
TABLE 14
INTEREST RATE SENSITIVITY
(In thousands)
<TABLE>
<CAPTION>
BY REPRICING DATES AT DECEMBER 31, 1996
----------------------------------------------------------------------------------
NON-
0-90 91-180 181-365 AFTER INTEREST
DAYS DAYS DAYS 1 YEAR BEARING TOTAL
-------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Short-term investments .............. $ 7,572 $ -- $ 396 $ 198 $ -- $ 8,166
Investment securities ............... 1,507 1,842 500 20,340 -- 24,189
Loans ............................... 10,938 2,673 5,178 9,522 -- 28,311
Other assets ........................ -- -- -- -- 6,588 6,588
-------- -------- -------- -------- -------- --------
20,017 4,515 6,074 30,060 6,588 67,254
-------- -------- -------- -------- -------- ========
SOURCES OF FUNDS
NOW, money market
and savings
deposits ......................... 14,988 -- 4,630 4,287 -- 23,905
Time deposits
$100,000 or more ................. 2,801 717 897 -- -- 4,415
Other time deposits ................. 4,653 4,451 3,913 1,302 -- 14,319
Non-interest bearing
demand ........................... -- -- -- -- 16,727 16,727
Other liabilities ................... -- -- -- -- 232 232
Shareholders' equity ................ -- -- -- -- 7,656 7,656
-------- -------- -------- -------- -------- --------
22,442 5,168 9,440 5,589 24,615 67,254
-------- -------- -------- -------- -------- ========
Interest rate
sensitivity gap ..................... $ (2,425) $ (653) $ (3,366) $ 24,471 $(18,027)
======== ======== ======== ======== ========
Cumulative interest
rate sensitivity gap ................ $ (2,425) $ (3,078) $ (6,444) $ 18,027 $ -0-
======== ======== ======== ======== ========
Cumulative interest
rate sensitivity gap
as a percent of
total assets ........................ (3.61)% (4.58)% (9.58)% 26.80%
======== ======== ======== ========
</TABLE>
-27-
<PAGE> 27
[BROUSSARD, POCHE, LEWIS & BREAUX LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
American Bancorp, Inc.
Opelousas, Louisiana
We have audited the accompanying consolidated balance sheets of American
Bancorp, Inc. and subsidiary as of December 31, 1996 and 1995, the related
consolidated statements of income, changes in shareholders' equity and cash
flows for each of the three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of American Bancorp,
Inc. and subsidiary as of December 31, 1996 and 1995, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles.
/s/ BROUSSARD, POCHE, LEWIS & BREAUX
Lafayette, Louisiana
January 27, 1997
-28-
<PAGE> 28
AMERICAN BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
ASSETS 1996 1995
------------ ------------
<S> <C> <C>
Cash and due from banks ................................... $ 4,215,349 $ 5,533,738
Short-term investments:
Federal funds sold ..................................... 7,075,000 6,350,000
Interest-bearing deposits with banks ................... 1,091,000 694,000
------------ ------------
8,166,000 7,044,000
Securities held to maturity (estimated
market values $15,561,983 and $16,619,377,
respectively) .......................................... 15,517,896 16,504,999
Securities available for sale ............................. 8,670,913 5,140,541
Loans, net of unearned income ($-0- and
$45, respectively) ..................................... 28,925,810 27,014,350
Less: allowance for possible loan losses ............ (614,339) (624,122)
------------ ------------
28,311,471 26,390,228
Bank premises and equipment ............................... 1,336,399 1,435,446
Other real estate, net of allowances of
$99,000 and $99,000, respectively ...................... 13,800 13,800
Accrued interest receivable ............................... 567,783 551,527
Other assets .............................................. 454,448 456,009
------------ ------------
$ 67,254,059 $ 63,070,288
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
-29-
<PAGE> 29
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
1996 1995
---------- ----------
<S> <C> <C>
LIABILITIES
Deposits:
Non-interest bearing demand deposits ............ $16,727,523 $16,929,190
Interest bearing deposits:
NOW accounts ................................. 13,575,732 12,552,285
Money Market accounts ........................ 2,021,474 1,893,000
Savings ...................................... 8,307,930 8,514,812
Time deposits $100,000 or more ............... 4,414,899 2,765,217
Other time deposits .......................... 14,319,075 13,000,214
---------- ----------
Total deposits ............................ 59,366,633 55,654,718
Accrued interest payable ........................... 118,975 103,274
Other liabilities .................................. 112,057 526,797
---------- ----------
Total liabilities ......................... 59,597,665 56,284,789
---------- ----------
SHAREHOLDERS' EQUITY
Common stock, $5 par value; 10,000,000
shares authorized; 120,000 shares
issued and outstanding .......................... 600,000 600,000
Surplus ............................................ 2,150,000 2,150,000
Retained earnings .................................. 4,848,745 3,930,436
Available for sale, net of tax of $29,698
and $54,123, respectively ....................... 57,649 105,063
---------- ----------
Total shareholders' equity ................. 7,656,394 6,785,499
---------- ----------
$67,254,059 $63,070,288
=========== ===========
</TABLE>
-30-
<PAGE> 30
AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Interest income:
Interest and fees on loans .................. $ 2,589,227 $ 2,569,393 $ 2,315,178
Interest on investment securities-
Taxable .................................. 1,351,094 1,349,650 925,036
Tax-exempt ............................... 118,525 32,560 1,013
Federal funds sold .......................... 186,011 220,667 104,249
Deposits with banks ......................... 60,875 50,014 168,490
----------- ----------- -----------
Total interest income ................. 4,305,732 4,222,284 3,513,966
Interest expense:
Interest on deposits ........................ 1,329,455 1,157,705 946,874
----------- ----------- -----------
Net interest income ............................ 2,976,277 3,064,579 2,567,092
Provision for possible loan losses ............. -- -- 12,000
----------- ----------- -----------
Net interest income after provision
for possible loan losses .................... 2,976,277 3,064,579 2,555,092
----------- ----------- -----------
Non-interest income:
Service charges on deposit accounts ......... 539,449 554,024 567,645
Other ....................................... 127,104 123,376 125,862
----------- ----------- -----------
Total non-interest income ............. 666,553 677,400 693,507
----------- ----------- -----------
Non-interest expense:
Salary and employee benefits ................ 1,104,448 1,166,288 1,150,031
Net occupancy expense ....................... 288,498 314,064 306,142
Equipment expense ........................... 263,411 237,132 219,430
Net cost (revenue) from other
real estate .............................. (4,051) (4,737) (2,268)
Other ....................................... 617,017 615,983 669,212
----------- ----------- -----------
Total non-interest expense ............ 2,269,323 2,328,730 2,342,547
----------- ----------- -----------
Income before income taxes ..................... 1,373,507 1,413,249 906,052
Provision for income taxes ..................... 335,198 449,793 (56,432)
----------- ----------- -----------
Net income ............................ $ 1,038,309 $ 963,456 $ 962,484
=========== =========== ===========
Net income per common share .................... $ 8.65 $ 8.03 $ 8.02
=========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
-31-
<PAGE> 31
AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
COMMON STOCK
SHARES AMOUNT SURPLUS
------- ---------- ----------
<S> <C> <C> <C>
Balance, December 31, 1993 .................. 120,000 $ 600,000 $2,150,000
Net income for 1994 ......................... -- -- --
Dividends paid in 1994 ...................... -- -- --
Change in unrealized holding gains
(losses) on securities available
for sale, net of tax ...................... -- -- --
------- ---------- ----------
Balance, December 31, 1994 .................. 120,000 600,000 2,150,000
Net income for 1995 ......................... -- -- --
Dividends paid in 1995 ...................... -- -- --
Change in unrealized holding gains
(losses) on securities available
for sale, net of tax ..................... -- -- --
------- ---------- ----------
Balance, December 31, 1995 .................. 120,000 600,000 2,150,000
Net income for 1996 ......................... -- -- --
Dividends paid in 1996 ...................... -- -- --
Change in unrealized holding gains
(losses) on securities available
for sale, net of tax ...................... -- -- --
------- ---------- ----------
Balance, December 31, 1996 .................. 120,000 $ 600,000 $2,150,000
======= ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
-33-
<PAGE> 32
<TABLE>
<CAPTION>
NET UNREALIZED
APPRECIATION
ON SECURITIES
AVAILABLE RETAINED
FOR SALE EARNINGS TOTAL
- ----------- ----------- -----------
<S> <C> <C>
$ -- $ 2,184,496 $ 4,934,496
-- 962,484 962,484
-- (78,000) (78,000)
(667) -- (667)
- ----------- ----------- -----------
(667) 3,068,980 5,818,313
-- 963,456 963,456
-- (102,000) (102,000)
105,730 -- 105,730
- ----------- ----------- -----------
105,063 3,930,436 6,785,499
-- 1,038,309 1,038,309
-- (120,000) (120,000)
(47,414) -- (47,414)
- ----------- ----------- -----------
$ 57,649 $ 4,848,745 $ 7,656,394
=========== =========== ===========
</TABLE>
-34-
<PAGE> 33
AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income .................................... $ 1,038,309 $ 963,456 $ 962,484
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for loan losses .................. -- -- 12,000
Premium amortization, net of
discount accretion on investment
securities .............................. (9,613) (9,863) (3,144)
Depreciation ............................... 198,895 177,106 174,281
(Gain) loss on sale of assets .............. 345 2,943 (938)
(Increase) decrease in assets:
Accrued interest receivable ............. (16,256) (121,824) (151,669)
Other assets ............................ 1,561 (134,918) 121,759
Increase (decrease) in liabilities:
Accrued interest payable ................ 15,701 23,241 17,978
Other liabilities ....................... (414,740) 460,259 (60,951)
------------ ------------ ------------
Net cash provided by operating
activities ........................ 814,202 1,360,400 1,071,800
------------ ------------ ------------
INVESTING ACTIVITIES
Proceeds from sales and maturities
of available for sale securities ........... 594,999 384,850 985,660
Proceeds from sales and maturities
of held to maturity securities ............. 8,000,000 6,500,000 3,422,153
Purchase of available for sale
securities ................................. (4,114,176) (2,234,432) (500,000)
Purchase of held to maturity
securities ................................. (7,086,352) (6,511,313) (10,479,766)
(Increase) decrease in loans .................. (1,921,243) 662,774 (632,529)
Purchases of property and equipment ........... (100,194) (237,411) (49,183)
Other ......................................... 24,459 -- --
------------ ------------ ------------
Net cash used in investing
activities ........................... (4,602,507) (1,435,532) (7,253,665)
------------ ------------ ------------
</TABLE>
See Notes to Consolidated Financial Statements.
-35-
<PAGE> 34
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
FINANCING ACTIVITIES
Increase (decrease) in liabilities:
Demand deposits, transaction
accounts and savings ............... 743,373 (3,643,438) 11,403,263
Time deposits ......................... 2,968,543 67,985 1,150,605
Dividends paid ........................... (120,000) (102,000) (78,000)
------------ ------------ ------------
Net cash provided by (used in)
financing activities ............ 3,591,916 (3,677,453) 12,475,868
------------ ------------ ------------
Increase (decrease) in cash and cash
equivalents .............................. (196,389) (3,752,585) 6,294,003
Cash and cash equivalents at
beginning of year ........................ 12,577,738 16,330,323 10,036,320
------------ ------------ ------------
Cash and cash equivalents at end
of year .................................. $ 12,381,349 $ 12,577,738 $ 16,330,323
============ ============ ============
SUPPLEMENTAL DISCLOSURES
Cash payments for:
Interest expense ...................... $ 1,313,754 $ 1,134,464 $ 928,896
============ ============ ============
Income taxes .......................... $ 708,049 $ 8,003 $ 6,886
============ ============ ============
</TABLE>
-36-
<PAGE> 35
AMERICAN BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Accounting Policies
American Bancorp, Inc. (the Corporation) and its subsidiary,
American Bank and Trust Company (the Bank), follow generally
accepted accounting principles and reporting practices applicable to
the banking industry. Descriptions of significant accounting
policies are summarized below:
Consolidation:
The consolidated financial statements include the accounts of the
respective parent Corporation and its subsidiary. All significant
intercompany accounts and transactions have been eliminated.
Use of estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the consolidated financial statements and accompanying notes.
Actual results could differ from those estimates.
Securities:
At January 1, 1994, the Bank adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." SFAS No. 115
requires the classification of securities into one of three
categories: trading, available for sale, or held to maturity.
Management determines the appropriate classification of debt
securities at the time of purchase and re-evaluates this
classification periodically. Trading account securities are held
for resale in anticipation of short-term market movements. Debt
securities are classified as held to maturity when the Bank has
the positive intent and ability to hold the securities to
maturity. Securities not classified as held to maturity or
trading are classified as available for sale.
Trading account securities are carried at market value and are
included in short-term investments. Gains and losses, both
realized and unrealized, are reflected in earnings. Held to
maturity securities are stated at amortized cost. Available for
sale securities are stated at fair value, with unrealized gains
and losses, net of tax, reported in a separate component of
shareholders' equity.
The amortized cost of debt securities classified as held to
maturity or available for sale is adjusted for amortization of
premiums and accretion of discounts to maturity or, in the case
of mortgage-backed securities, over the estimated life of the
security. Amortization, accretion and accruing interest are
included in interest income on securities. Realized gains and
losses, and declines in value judged to be other than temporary,
are included in net securities gains. The cost of securities sold
is determined on the specific identification method.
-37-
<PAGE> 36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Loans:
Loans that management has the intent and ability to hold for the
foreseeable future or until maturity or pay-off are reported at
their outstanding principal adjusted for any charge-offs, the
allowance for loan losses and unearned income. Interest on loans
and accretion of unearned income are computed by methods which
approximate a level rate of return on recorded principal.
Loan fees and costs associated with originating loans are
recognized in the period in which they originate as the amounts
involved are immaterial to the basic financial statements. The
Company has adopted the policy of deferring all material loan
fees and costs associated with originating loans as required by
Statement of Financial Accounting Standards No. 91.
Commercial loans are placed in nonaccrual status when, in
management's opinion, there is doubt concerning full
collectibility of both principal and interest. All commercial
nonaccrual loans are considered to be impaired in accordance with
SFAS No. 114, "Accounting by Creditors for Impairment of a Loan."
Consumer loans are generally charged off when any payment of
principal or interest is more than 120 days delinquent. Interest
payments received on nonaccrual loans are applied to principal if
there is doubt as to the collectibility of the principal;
otherwise, these receipts are recorded as interest income. A loan
remains in nonaccrual status until it is current as to principal
and interest, and the borrower demonstrates its ability to
fulfill the contractual obligation.
Allowance for possible loan losses:
The allowance for possible loan losses is maintained to provide
for possible losses inherent in the loan portfolio. On January 1,
1995, the Company adopted SFAS No. 114, as amended by SFAS No.
118, "Accounting for Creditors for Impairment of a Loan - Income
Recognition and Disclosures." In accordance with SFAS No. 114,
the 1996 allowance for possible loan losses related to loans that
are identified as impaired is based on discounted cash flows
using the loan's initial effective interest rate or the fair
value of the collateral for certain collateral dependent loans.
Prior to 1995, the allowance for possible loan losses related to
these loans was based on undiscounted cash flows or the fair
value of the collateral for collateral dependent loans.
The allowance is based on management's estimate of future losses;
actual losses may vary from the current estimate. The estimate is
reviewed periodically, taking into consideration the risk
characteristics of the loan portfolio, past loss experience,
general economic conditions and other factors which deserve
current recognition. As adjustments to the estimate of future
losses become necessary, they are reflected as a provision
(positive or negative) for possible loan losses in current-period
earnings. However, because factors such as loan growth, the
future collectibility of loans and the amounts and timing of
future cash flows expected to be received on impaired loans are
uncertain, the level of future provisions (positive or negative),
if any, generally cannot be predicted. Actual loan losses are
deducted from and subsequent recoveries are added to the reserve.
-38-
<PAGE> 37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Bank premises and equipment:
Bank premises and equipment are stated at cost less accumulated
depreciation. Depreciation is computed primarily by the
straight-line method. Useful lives utilized for purposes of
computing depreciation are as follows: buildings, 10 to 30 years;
furniture and equipment, 3 to 10 years. Maintenance, repairs and
minor improvements are charged to operating expenses. Gains or
losses on dispositions are reflected currently in the Statement
of Income.
The Company adopted SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed
of," as of January 1, 1996. The impact on the Company's financial
position and results of operations for the year ended December
31, 1996 was not material.
Foreclosed assets:
Collateral acquired through foreclosure or in settlement of loans
is classified as either other real estate owned ("OREO") or other
assets and is carried at its fair value, net of estimated costs
to sell, or the remaining investment in the loan, whichever is
lower. At acquisition, any excess of the recorded loan value over
the estimated fair value of the collateral is charged against the
allowance for possible loan losses. After acquisition, valuation
allowances are established with a charge to current earnings to
adjust the reported value of foreclosed assets to reflect changes
in the estimate of a property's fair value or selling costs.
Revenues and expenses associated with the management of
foreclosed assets prior to sale are included in current earnings.
Income taxes:
The Company files a consolidated federal income tax return with
the subsidiary Bank. The Company accounts for income taxes using
the liability method. Under this method, deferred tax assets and
liabilities are based on the temporary differences between the
financial reporting basis and tax basis of the Company's assets
and liabilities at enacted tax rates expected to be in effect
when such amounts are realized or settled.
-39-
<PAGE> 38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cash and cash equivalents:
Cash and cash equivalents include cash and due from banks,
federal funds sold and interest bearing deposits in banks.
Recent pronouncements:
The FASB has also issued SFAS No. 122, "Accounting for Mortgage
Servicing Rights and Excess Servicing Receivables and for
Securitization of Mortgages Loans." The new statement amends
Statement No. 65, "Accounting for Certain Mortgage Banking
Activities," and primarily eliminates the distinction between
purchased mortgage servicing rights and mortgage servicing rights
on loans originated by the financial institution. SFASNo. 122 is
effective for fiscal years beginning December 15, 1995. The
adoption of this statement did not have a material impact on the
Company's consolidated financial statements.
In October 1995, the FASB issued SFASNo. 123, "Accounting for
Stock-Based Compensation." This statement establishes financial
accounting and reporting standards for stock-based employee
compensation plans and is effective for fiscal years beginning
after December 31, 1995. The adoption of this statement did not
have a material impact on the Company's consolidated financial
statements.
In June 1996, the FASB issued SFASNo. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities." This statement provides accounting and reporting
standards for transfers and servicing of financial assets and
extinguishments of liabilities and is effective for fiscal years
occurring after December 31, 1996. The adoption of this statement
will not have a material impact on the Company's consolidated
financial statements.
Reclassifications:
Certain amounts in the 1995 and 1994 financial statements have
been reclassified to conform with the financial statement
presentation for 1996 for comparability. These reclassifications
had no effect on net income as previously reported for the 1995
and 1994 fiscal years.
Note 2. Restrictions on Cash and Due From Bank Accounts
The Bank is required to maintain average reserve balances by the
Federal Reserve Bank. The average amount of these reserve balances
was $456,000 and $484,000 for the years ended December 31, 1996 and
1995, respectively.
-40-
<PAGE> 39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3. Investment Securities
The carrying amounts of investment securities as shown in the
consolidated balance sheets of the Bank and their approximate market
values at December 31 were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------------------------------------------
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Securities held to maturity:
U.S. Treasury Securities ....... $ 4,005,216 $ 7,359 $ 4,953 $ 4,007,622
U.S. Government and Agencies ... 11,512,680 74,124 32,443 11,554,361
----------- ----------- ----------- -----------
$15,517,896 $ 81,483 $ 37,396 $15,561,983
=========== =========== =========== ===========
Securities available for sale:
Mortgage-Backed Securities ..... $ 1,722,323 $ 68,810 $ 3,979 $ 1,787,154
U.S. Treasury Securities ....... 996,305 6,114 -- 1,002,419
U.S. Government and Agencies.... 3,000,115 15,473 4,014 3,011,574
State and Political Subdivisions 2,864,823 29,349 24,406 2,869,766
----------- ----------- ----------- -----------
$ 8,583,566 $ 119,746 $ 32,399 $ 8,670,913
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1995
-----------------------------------------------------
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Securities held to maturity:
U.S. Treasury Securities ....... $ 5,507,763 $ 57,641 $ 2,841 $ 5,562,563
U.S. Government and Agencies ... 10,997,236 86,368 26,790 11,056,814
----------- ----------- ----------- -----------
$16,504,999 $ 144,009 $ 29,631 $16,619,377
=========== =========== =========== ===========
Securities available for sale:
Mortgage-Backed Securities .. $ 2,247,622 $ 100,366 $ 6,300 $ 2,341,688
U.S. Government and Agencies 1,500,000 35,834 -- 1,535,834
State and Political Subdivisions 1,233,733 29,286 -- 1,263,019
----------- ----------- ----------- -----------
$ 4,981,355 $ 165,486 $ 6,300 $ 5,140,541
=========== =========== =========== ===========
</TABLE>
Securities with book values of $14,775,340 and $11,938,802 at December 31, 1996
and 1995, respectively, were pledged to secure public deposits and other
transactions as required by law.
There were no gross-realized gains or gross-realized losses on sales of
securities for the fiscal years ended December 31, 1996, 1995 or 1994.
-41-
<PAGE> 40
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The maturities of investment securities at December 31, 1996 were as
follows:
<TABLE>
<CAPTION>
SECURITIES TO BE HELD
TO MATURITY
-------------------------
AMORTIZED FAIR
YEARS TO MATURITY COST VALUE
----------- -----------
<S> <C> <C>
Less than one ..................... $ 6,297,189 $ 6,294,218
Greater than one but less than five 9,220,708 9,267,765
Greater than five but less than ten -- --
Greater than ten .................. -- --
----------- -----------
$15,517,897 $15,561,983
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
SECURITIES AVAILABLE
FOR SALE
------------------------
AMORTIZED FAIR
YEARS TO MATURITY COST VALUE
----------- ----------
<S> <C> <C>
Less than one ..................... $1,623,891 $1,631,724
Greater than one but less than five 4,855,891 4,892,661
Greater than five but less than ten 2,103,784 2,146,528
Greater than ten .................. -- --
---------- ----------
$8,583,566 $8,670,913
========== ==========
</TABLE>
-42-
<PAGE> 41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4. Loans
Major classifications of subsidiary bank's loan portfolio at
December 31, are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Commercial, financial and
agricultural ........... $ 7,437,376 $ 6,239,611 $ 6,542,510
Real estate construction... 285,247 119,530 325,136
Real estate mortgage....... 16,277,777 16,472,824 16,119,511
Installment ............... 4,925,410 4,182,430 4,681,454
------------ ------------ ------------
28,925,810 27,014,395 27,668,611
Unearned income ........... -- (45) (1,299)
------------ ------------ ------------
Net loans .............. 28,925,810 27,014,350 27,667,312
Allowance for possible loan
losses ................. (614,339) (624,122) (614,310)
------------ ------------ ------------
$ 28,311,471 $ 26,390,228 $ 27,053,002
============ ============ ============
</TABLE>
The following is a summary of loans classified by type at December
31, 1996:
<TABLE>
<S> <C>
Commercial, financial and
agricultural .................................. $ 7,437,376
Real estate construction ......................... 285,247
Real estate mortgage ............................. 9,293,413
-----------
Total commercial .............................. 17,016,036
-----------
Residential mortgage ............................. 6,984,364
Installment ...................................... 4,925,410
-----------
11,909,774
Less unearned income ............................. --
-----------
Total consumer ................................ 11,909,774
-----------
Total loans ................................... $28,925,810
===========
</TABLE>
-43-
<PAGE> 42
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following summarizes the non-performing elements of the loan portfolio and
total foreclosed assets at December 31:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Nonperforming loans:
Loans on nonaccrual ................... $496,490 $ 2,051 $ 3,722
Restructured loans which
are not on nonaccrual .............. 93,630 112,008 132,690
-------- -------- --------
Total nonperforming loans. 590,120 114,059 136,412
Other real estate and
repossessed assets received
in complete or partial
satisfaction of loan
obligations ........................... 13,800 13,800 16,744
-------- -------- --------
Total nonperforming assets $603,920 $127,859 $153,156
======== ======== ========
Loans contractually past
due 90 days or more as
to principal or interest,
but which are not on
nonaccrual ......................... $ 27,434 $ 9,504 $ 9,377
======== ======== ========
</TABLE>
As discussed in Note 1, the Company adopted SFAS No. 114 effective January 1,
1995. The adoption of SFAS No. 114 did not have a material impact on the
financial condition or operating results of the Company. At December 31, 1996,
the recorded investment in loans that were considered to be impaired under SFAS
No. 114 was $496,490. Included in this amount was $476,026 of impaired loans
for which the related allowance for loan losses was $170,000 and $20,464 of
impaired loans that do not have an allowance for loan losses. The average
recorded investment in impaired loans during the year ended December 31, 1996
was approximately $287,886. Interest payments received on impaired loans are
applied to principal if there is doubt as to the collectibility of the
principal; otherwise, these receipts are recorded as interest income. For the
year ended December 31, 1996, the Company did not recognize interest income on
impaired loans.
As it relates to in-substance foreclosures, SFAS No. 114 requires that a
creditor continue to follow loan classification on the balance sheet unless the
creditor receives physical possession of the collateral. The Company has had no
in-substance foreclosures for any of the periods presented.
Interest income in the amount of $59,177 for 1996, $13,732 for 1995 and $13,846
for 1994 would have been recorded on nonperforming loans if they had been
classified as performing. The Company recorded $6,633, $7,638 and $6,707 of
interest income on nonperforming loans during 1996, 1995 and 1994,
respectively.
-44-
<PAGE> 43
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of the allowance for loan losses for the
three years ended December 31, 1996:
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Balance, beginning of year .... $ 624,122 $ 614,310 $ 605,653
Provisions charged to operating
expense .................... - - 12,000
Recoveries on loans ........... 7,946 15,382 11,177
Loans charged off ............. (17,729) (5,570) (14,520)
--------- --------- ---------
Balance, end of year .......... $ 614,339 $ 624,122 $ 614,310
========= ========= =========
</TABLE>
Note 5. Related Party Transactions
In the ordinary course of business, loans have been made to
directors and executive officers and their associates. Such loans
to these related parties were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons. Loans to these
related parties were approximately $1,259,914 and $1,169,728 at
December 31, 1996 and 1995, respectively. The following provides an
analysis of the activity with respect to loans to related parties:
<TABLE>
<S> <C> <C>
Balance at January 1, 1995 ....................... $ 1,169,728
New loans made ................................... 1,904,697
Repayment on loans ............................... (1,814,511)
-----------
Balance at December 31, 1996 ..................... $ 1,259,914
===========
</TABLE>
Note 6. Bank Premises and Equipment
Bank premises and equipment, at cost, consisted of the following as
of December 31:
<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Land ........................ $ 384,387 $ 384,387 $ 384,387
Premises and leasehold
improvements ............. 1,784,621 1,781,317 1,779,258
Furniture and equipment ..... 1,190,307 1,151,645 1,077,041
---------- ---------- ----------
3,359,315 3,317,349 3,240,686
Less accumulated depreciation
and amortization ......... 2,022,916 1,881,903 1,865,546
---------- ---------- ----------
Total .................. $1,336,399 $1,435,446 $1,375,140
========== ========== ==========
</TABLE>
Depreciation and amortization expense included in non-interest
expense was $198,895 in 1996, $177,106 in 1995, and $174,281 in
1994.
-45-
<PAGE> 44
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7. Concentrations of Credit Risk
All of the Bank's loans, commitments and standby letters of credit
have been granted to customers in the Bank's market area of South
Louisiana. Investments in state and municipal securities also
involve governmental entities within the Bank's market area. The
concentrations of credit by type of loan are set forth in Note 4.
The distribution of commitments to extend credit approximates the
distribution of loans outstanding. Standby letters of credit were
granted primarily to commercial borrowers. The Bank, as a matter of
policy, does not extend credit to any single borrower or group of
related borrowers in excess of $1,375,000.
At December 31, 1996, the Bank has loans outstanding to multiple
numbers of borrowers engaged in the medical industry and the legal
profession. The loans to the medical industry totaled $4,981,898,
while the loans to the legal profession were $2,912,835. There were
no significant nonperforming loans outstanding in these two
concentrations.
Note 8. Earnings Per Share
The earnings per share computation are based on 120,000 weighted
average number of shares outstanding during each year.
Note 9. Employee Benefit Plan
The Bank maintains a 401(k) Savings Plan available to employees with
over one year of service. The Bank matches 50% of the salary
deferral, up to a maximum of 2% of compensation, which becomes
vested after five years of service. Total contributions to the plan
by the Bank were $9,491 for 1996 and $11,201 for 1995. The Bank
entered into a non-qualified deferred compensation plan for certain
executives of the Company in 1995. The total deferred compensation
expense for 1996 and 1995 was $10,109 and $3,147, respectively.
-46-
<PAGE> 45
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10. Income Taxes
The Company adopted SFAS No. 109 effective January 1, 1992.
Income tax expense includes amounts currently payable and amounts
deferred to or from other years as a result of differences in the
timing of recognition of income and expense for financial
reporting and deferral tax purposes. The components of income tax
expense are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C>
Current federal income tax
expense ...................... $ 318,215 $ 429,877 $ --
Deferred federal income tax
expense (benefit) ............ 16,983 19,916 (56,432)
--------- --------- ---------
$ 335,198 $ 449,793 $ (56,432)
========= ========= =========
Included in shareholders' equity:
Deferred tax expense
(benefit) related to the
change in net unrealized
gain (loss) on securities
available for sale ............ $ (24,425) $ 54,467 $ (344)
========= ========= =========
</TABLE>
The reconciliation of the federal statutory income tax rate to
the Company's effective rate is summarized as follows for the
years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
-------------------- ------------------- --------------------
AMOUNT RATE AMOUNT RATE AMOUNT RATE
--------- ---- --------- ---- --------- ----
<S> <C> <C> <C> <C> <C> <C>
Tax based on
federal
statutory rate .. $ 466,992 34.0% $ 480,505 34.0% $ 308,058 34.0%
Effect of tax-
exempt income ... (52,782) (3.8) (81,919) (5.8) (19,055) (2.1)
Change in deferral
valuation reserve (61,938) (4.5) -- -- -- --
Other .............. (17,074) (1.3) 51,207 3.6 (67,922) (7.5)
Net operating
loss utilized ... -- -- -- -- (277,513) (30.6)
--------- ---- --------- ---- --------- ----
$ 335,198 24.4% $ 449,793 31.8% $ (56,432) (6.2)%
========= ==== ========= ==== ========= ====
</TABLE>
-47-
<PAGE> 46
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deferred tax assets and liabilities included in other assets or
other liabilities at December 31 consist of the following:
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Deferred tax assets:
Allowance for loan losses ..................... $ 14,022 $ 14,022
Foreclosed assets ............................. 33,660 32,640
Other ......................................... 8,362 4,069
Investment tax credit carryforward ............ - 61,938
--------- ---------
Total deferred tax assets .................. 56,044 112,669
--------- ---------
Deferred tax liabilities:
Net unrealized appreciation
on available for sale securities ........... 29,698 54,123
Accumulated depreciation ...................... 36,511 14,215
--------- ---------
Total deferred tax liabilities ............. 66,209 68,338
--------- ---------
Net deferred tax asset, (tax liabilities) ........ (10,165) 44,331
Deferred tax valuation reserve ................... - (61,938)
--------- ---------
Total net deferred tax asset (liability) ... $ (10,165) $ (17,607)
========= =========
</TABLE>
Management estimates realizability of the net deferred tax asset
based on the Company's ability to generate taxable income in the
future. A deferred tax valuation reserve is established, if
needed, to limit the net deferred tax asset to its realizable
value.
Note 11. Lease Commitments
The Company leases land, buildings, and equipment under cancelable
and noncancelable leases. The leased properties are used primarily
for banking purposes.
Future minimum payments, by year and in the aggregate, for
noncancelable operating leases with initial or remaining terms of
one year or more consisted of the following at December 31, 1995:
<TABLE>
<CAPTION>
YEAR ENDING AMOUNT
- ------------- --------
<C> <C>
1997 ........................................... $ 58,538
1998 ........................................... 60,738
1999 ........................................... 43,200
2000 ........................................... 43,200
2001 ........................................... 43,200
--------
Total future minimum lease payments ............ $248,876
========
</TABLE>
-48-
<PAGE> 47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
All leases contain options to extend the lease term upon
expiration and will probably be exercised.
The total rental expense on operating leases for the years ended
December 31, 1996, 1995, and 1994, amount to $58,538, $58,538 and
$54,756, respectively.
One of the bank's branch offices is leased from a corporation in
which some of the lessor's shareholders are directors of the bank.
Note 12. Other Operating Expenses
The composition of other operating expenses for each of the three
years for the period ended December 31 are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
FDIC and Louisiana assessments $ 16,046 $ 71,669 $115,652
Office supplies .............. 76,439 68,812 64,456
Postage ...................... 52,358 57,043 51,493
Other insurance .............. 29,440 31,638 45,481
ATM expenses ................. 25,836 28,466 45,246
Director fees ................ 70,400 61,100 49,200
Other ........................ 346,498 297,255 297,684
------- ------- -------
$617,017 $615,983 $669,212
======== ======== ========
</TABLE>
-49-
<PAGE> 48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 13. American Bancorp, Inc. (Parent Company Only)
The following financial statements of American Bancorp, Inc.
(Parent Company Only) include the Bank under the equity method of
accounting.
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1996 1995
---------- ----------
<S> <C> <C>
ASSETS
Cash on deposit with subsidiary .................... $ 4,768 $ 1,533
Investment in subsidiary ........................... 7,646,142 6,776,482
Due from American Bank ............................. 36,128 427,962
---------- ----------
Total assets .................................... $7,687,038 $7,205,977
========== ==========
LIABILITIES
Accrued income taxes payable ....................... $ 30,644 $ 420,477
---------- ----------
Total liabilities ................................ 30,644 420,477
---------- ----------
SHAREHOLDERS' EQUITY
Common stock: $5 par value, 10,000,000
shares authorized; 120,000 shares
issued and outstanding .......................... 600,000 600,000
Surplus ............................................ 2,150,000 2,150,000
Retained earnings .................................. 4,848,745 3,930,437
Net unrealized loss on securities
available for sale, net of tax of $29,698
and $54,123, respectively ....................... 57,649 105,063
---------- ----------
Total shareholders' equity ................... 7,656,394 6,785,500
---------- ----------
Total liabilities and shareholders' equity ... $7,687,038 $7,205,977
========== ==========
</TABLE>
-50-
<PAGE> 49
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
American Bancorp, Inc. (Parent Company Only)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Income:
Dividends from bank subsidiary ........... $ 123,000 $ -- $ --
Expenses:
Other expenses ........................... 1,765 5,880 814
---------- ---------- ----------
Earnings before income taxes
and equity in undistributed
earnings of subsidiary ................... 121,235 (5,880) (814)
Provision for income taxes .................. -- 9,400 (200,182)
---------- ---------- ----------
Earnings before equity in
undistributed earnings of
subsidiary ............................... 121,235 (15,280) 199,368
Equity in undistributed
earnings of subsidiary ................... 917,074 978,737 763,116
---------- ---------- ----------
Net income ............................ $1,038,309 $ 963,457 $ 962,484
========== ========== ==========
</TABLE>
-51-
<PAGE> 50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
American Bancorp, Inc. (Parent Company Only)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income .................................. $ 1,038,309 $ 963,456 $ 962,484
Adjustments to reconcile net
income to net cash provided
by operating activities:
Equity in undistributed
earnings of subsidiary ............. (917,074) (978,737) (763,116)
(Increase) decrease in other assets ... 391,833 (305,781) (122,182)
Increase (decrease) in income taxes
payable............................. (389,833) 420,478 --
----------- ----------- -----------
Net cash provided by
operating activities ............ 123,235 99,416 77,186
----------- ----------- -----------
FINANCING ACTIVITIES
Dividends paid to shareholders .............. (120,000) (102,000) (78,000)
----------- ----------- -----------
Net cash used by
financing activities ............ (120,000) (102,000) (78,000)
----------- ----------- -----------
Increase (decrease) in cash
and cash equivalents ............ 3,235 (2,584) (814)
Cash and cash equivalents at
beginning of year ........................... 1,533 4,117 4,931
----------- ----------- -----------
Cash and cash equivalents at
end of year ................................. $ 4,768 $ 1,533 $ 4,117
=========== =========== ===========
</TABLE>
Note 14. Financial Instruments
Generally accepted accounting principles require disclosure of fair
value information about financial instruments for which it is
practicable to estimate fair value, whether or not the financial
instruments are recognized in the financial statements. When quoted
market prices are not available, fair values are based on estimates
using present value or other valuation techniques. Those techniques
are significantly affected by the assumptions used, including the
discount rate and estimates of future cash flows. The derived fair
value estimates cannot be substantiated through comparison to
independent markets and, in many cases, could not be realized in
immediate settlement of the instrument. Certain financial instruments
and all non-financial instruments are excluded from these disclosure
requirements.
-52-
<PAGE> 51
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Further, the disclosures do not include estimated fair values for
items which are not financial instruments but which represent
significant value to the Bank, among them, core deposit intangibles,
loan servicing rights and other fee-generating businesses.
Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Company.
The carrying amount of cash and short-term investments and demand
deposits approximates the estimated fair value of these financial
instruments. The estimated fair value of securities is based on quoted
market prices, dealer quotes and prices obtained from independent
pricing services. The estimated fair value of loans and interest
bearing deposits is based on present values using applicable
risk-adjusted spreads to the appropriate yield curve to approximate
current interest rates applicable to each category of these financial
instruments.
Interest rates were not adjusted for changes in credit risk of
performing commercial loans for which there are no known credit
concerns. Management segregates loans into appropriate risk categories
and believes the risk factor embedded in the interest rates results in
a fair valuation of these loans on an entry-value basis.
Variances between the carrying amount and the estimated fair value of
loans reflect both credit risk and interest rate risk. The Bank is
protected against changes in credit risk by the allowance for possible
loan losses of $614,339 at December 31, 1996.
The fair value estimates presented are based on information available
to management as of December 31, 1996. Although management is not
aware of any factors that would significantly affect the estimated
fair value amounts, these amounts have not been revalued for purposes
of these financial statements since that date. Therefore, current
estimates of fair value may differ significantly from the amounts
presented. None of the assets or liabilities included in the table
below are held for trading purposes.
The Bank issues financial instruments in the normal course of business
to meet the financing needs of its customers and to reduce exposure to
fluctuations in interest rates. These financial instruments include
commitments to extend credit and letters of credit and involve, to
varying degrees, elements of credit and interest rate risk in excess
of the amount recognized on the balance sheet.
-53-
<PAGE> 52
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
CARRYING FAIR
AMOUNT VALUE
----------- -----------
<S> <C> <C>
ASSETS
Cash and short-term investments ........... $12,381,349 $12,381,349
Securities held to maturity ............... $15,517,896 $15,561,983
Securities available for sale ............. $ 8,670,913 $ 8,670,913
Commercial loans .......................... $17,016,036 $17,060,580
Consumer loans ............................ $11,909,774 $11,887,634
LIABILITIES
Demand deposits ........................... $16,727,523 $16,727,523
NOW accounts .............................. $13,575,732 $13,575,732
Money market accounts ..................... $ 2,021,474 $ 2,021,474
Savings ................................... $8,307,930, $ 8,421,721
Time Deposits ............................. $18,733,974 $18,705,443
</TABLE>
Commitments to extend credit are legally binding, conditional
agreements generally having fixed expiration or termination dates and
specified interest rates and purposes. These commitments generally
require customers to maintain certain credit standards. Collateral
requirements and loan-to-value ratios are the same as those for funded
transactions and are established based on management's credit
assessment of the customer. Commitments may expire without being drawn
upon. Therefore, the total commitment amount does not necessarily
represent future funding requirements. The Bank's experience has been
that most loan commitments are drawn upon by customers.
The Bank issues letters of credit and financial guarantees (standby
letters of credit) whereby it agrees to honor certain financial
commitments in the event its customers are unable to perform. The
majority of the standby letters of credit consist of performance
guarantees. Management conducts regular reviews of all outstanding
standby letters of credit, and the results of these reviews are
considered in assessing the adequacy of the Bank's reserve for
possible loan losses. The Bank has not incurred any losses in its
commitments in 1995 or 1994. Management does not anticipate any
material losses related to these instruments.
The estimated fair values of off-balance-sheet financial instruments
are not material. A summary of the notional amounts of the Bank's
financial instruments with off-balance-sheet risk at December 31, 1996
and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Commitments to extend credit ................ $1,149,800 $3,657,383
Credit card arrangements .................... $1,097,857 $1,010,652
Standby letters of credit ................... $ 152,768 $ 38,277
</TABLE>
-54-
<PAGE> 53
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 15. Regulatory Matters
The Bank is subject to the dividend restrictions set forth by the
Louisiana Commissioner of Financial Institutions. Under such
restrictions, the Bank may not, without the prior approval of the
Commissioner of Financial Institutions, declare dividends in excess of
the sum of the current year and prior year earnings less dividends
paid during these periods. The dividends as of December 31, 1996, that
the Bank could declare without the approval of the Commissioner of
Financial Institutions, amounted to $1,895,784. The Bank is also
required to maintain minimum amounts of capital to total "risk
weighted" assets, as defined by the banking regulators. At December
31, 1996, the Bank is required to have minimum Tier 1 and Total
capital ratios of 4% and 8%, respectively. The Bank's actual ratios at
that date were 23.23% and 24.48%, respectively. The Bank's leverage
ratio were 12.44% and 11.36% as of December 31, 1996 and 1995,
respectively.
Under Section 18J of the Federal Deposit Insurance Act, which is
subject to Section 23A of the Federal Reserve Act, the Bank cannot
make loans, extensions of credit, repurchase agreements, investments,
and advances, which exceed 10 percent of its capital stock and
surplus, to an affiliate. Such loans must be collateralized by assets
with market values of 100% to 130% of loan amounts, depending upon the
mature of the collateral.
Note 16. Contingencies
In the ordinary course of business, the Bank has various outstanding
commitments and contingent liabilities that are not reflected in the
accompanying consolidated financial statements. In addition, the Bank
is a defendant in certain claims and legal actions arising in the
ordinary course of business. In the opinion of management, after
consultation with legal counsel, the ultimate disposition of these
matters is not expected to have a material adverse effect on the
consolidated financial condition of the Bank.
-55-
<PAGE> 54
OFFICERS AND DIRECTORS OF
AMERICAN BANK AND TRUST COMPANY
CHAIRMAN OF THE BOARD AND PRESIDENT
Salvador L. Diesi, Sr.
CHIEF EXECUTIVE OFFICER AND EXECUTIVE VICE-PRESIDENT
Ronald J. Lashute
SENIOR VICE-PRESIDENT
Walter J. Champagne, Jr.
VICE-PRESIDENTS
Charlene Louviere Joan T. Muller, Chief
Angel Powell Financial Officer,
Peter Strawitz, III Cashier
ASSISTANT VICE-PRESIDENTS
David Gremillion Dawn D. Stolzenthaler
ASSISTANT CASHIERS
Elaine D. Ardoin Cindy Melancon
Audrey Cormier Bonnie Pavy
Bernadine Hargroder Stephanie Richard
Sally Hooks Audrey Thibodeaux
DIRECTORS
Joseph J. Artall Salvador L. Diesi, Sr.
Walter J. Champagne, Jr. Alvin Haynes II
Attaway Darbonne Charles Jagneaux
J.C. Diesi Sylvia Sibille
OFFICES LOCATED IN
OPELOUSAS KROTZ SPRINGS
LAFAYETTE PORT BARRE
LAWTELL
-56-
<PAGE> 55
OFFICERS AND DIRECTORS OF
AMERICAN BANCORP, INC.
CHAIRMAN OF THE BOARD AND PRESIDENT
Salvador L. Diesi, Sr.
SECRETARY/TREASURER
Ronald J. Lashute
BOARD OF DIRECTORS OCCUPATION AND MAIN AFFILIATION
Joseph J. Artall Farmer.
Walter J. Champagne, Jr. General Merchandising and Agriculture
Walter J. Champagne Company.
J.C. Diesi Automobile Dealer; Diesi
Pontiac-Cadillac-Buick, Inc.
Salvador L. Diesi, Sr. Chairman of the Board and President,
American Bancorp, Inc. and American
Bank & Trust Company; Wholesale Beer
Distributor, Premium Brands, Inc.;
Gas Station, Convenience Store, and
Video Poker; Little Capitol of
Louisiana, Inc.; Commercial real
estate, farming interest; and Attorney at
Law.
Ronald J. Lashute Chief Executive Officer of American
Bank & Trust Company and
Secretary/Treasurer of American Bancorp, Inc.
-57-
<PAGE> 1
EXHIBIT 23.1
[BROUSSARD, POCHE', LEWIS & BREAUX LETTERHEAD]
CONSENT OF INDEPENDENT AUDITORS
As Independent Auditors, we hereby consent to the incorporation by reference in
this Form 10-K of American Bancorp, Inc. for the years ended December 31,
1996, 1995 and 1994, of our report dated January 27, 1997, which appears on
Pages 28 through 55 of the annual report to shareholders.
/s/ BROUSSARD, POCHE', LEWIS & BREAUX
Lafayette, Louisiana
January 27, 1997
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 4,215
<INT-BEARING-DEPOSITS> 1,091
<FED-FUNDS-SOLD> 7,075
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 8,671
<INVESTMENTS-CARRYING> 15,518
<INVESTMENTS-MARKET> 15,562
<LOANS> 28,926
<ALLOWANCE> 614
<TOTAL-ASSETS> 67,254
<DEPOSITS> 59,367
<SHORT-TERM> 0
<LIABILITIES-OTHER> 231
<LONG-TERM> 0
0
0
<COMMON> 600
<OTHER-SE> 7,056
<TOTAL-LIABILITIES-AND-EQUITY> 67,254
<INTEREST-LOAN> 2,589
<INTEREST-INVEST> 1,470
<INTEREST-OTHER> 247
<INTEREST-TOTAL> 4,306
<INTEREST-DEPOSIT> 1,329
<INTEREST-EXPENSE> 1,329
<INTEREST-INCOME-NET> 2,977
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 617
<INCOME-PRETAX> 1,374
<INCOME-PRE-EXTRAORDINARY> 1,374
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,038
<EPS-PRIMARY> 8.65
<EPS-DILUTED> 0
<YIELD-ACTUAL> 5.49
<LOANS-NON> 496
<LOANS-PAST> 27
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 624
<CHARGE-OFFS> 18
<RECOVERIES> 8
<ALLOWANCE-CLOSE> 614
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 614
</TABLE>
<PAGE> 1
EXHIBIT 99.1
AMERICAN BANCORP, INC.
PROXY STATEMENT FOR ANNUAL MEETING
TO BE HELD APRIL 9, 1997
GENERAL
The accompanying proxy is solicited by and on behalf of the Board of
Directors of American Bancorp, Inc. (the Corporation), for use at the annual
meeting of shareholders to be held April 9, 1997, at the time and place set
forth in the accompanying Notice of Meeting. The principal executive offices
of the Corporation and its wholly-owned subsidiary, American Bank & Trust
Company (the Bank), are located at 328 East Landry Street, Opelousas, Louisiana
70570. The date on which this Proxy Statement and the enclosed form of proxy
were first sent to shareholders is approximately March 25, 1997.
Only shareholders of record at the close of business on February 28,
1997, are entitled to notice of and to vote at the meeting. On that date, the
Corporation had outstanding 120,000 shares of common stock, each of which is
entitled to one vote on all matters presented to the shareholders at the
meeting. To the knowledge of the Corporation, all persons beneficially owning
more than five percent (5%) of its outstanding voting securities are listed in
the section entitled "Shareholders Owning 5% or More of Outstanding Shares" on
page 4 of this Proxy Statement.
The shares represented by any proxy in the enclosed form, if it is
properly executed and received at or prior to the meeting, will be voted in
accordance with the specifications made thereon. Proxies received on which no
specification is made will be voted for election as directors of the five
nominees named herein and in favor of the remaining proposals as set forth on
the enclosed proxy. Proxies are revocable by written notice to the Secretary
of the Board of Directors, Ronald J. Lashute, at any time prior to their
exercise or by submitting a later dated proxy. Written revocations of proxy
may be presented in person or mailed to: Ronald J. Lashute, Executive
Vice-President and Chief Executive Officer, American Bank & Trust Company, P.
O. Box 1579, Opelousas, Louisiana 70571-1579. Proxies will be deemed revoked
by attendance and voting at the annual meeting.
All expenses of preparing, printing, and mailing the proxy and all
materials and expenses incurred in solicitation will be borne by the
Corporation. Proxies also may be solicited in person or by telephone or
telegraph by directors, officers, and other employees of the Corporation or the
Bank, none of whom will receive additional compensation for such services, but
who may be reimbursed for any actual expenses incurred, which expenses are
estimated not to exceed the aggregate sum of $2,000. The Corporation also may
request brokerage houses, custodians, and nominees, if any such persons are
listed as record owners of the Corporation's common stock, to forward these
materials to the beneficial owners of the stock held of record by them and pay
the reasonable expenses of such persons for forwarding the material.
<PAGE> 2
SECURITY OWNERSHIP OF MANAGEMENT
The five members of the Board of Directors of the Corporation and the
two executive officers of the Corporation (both of whom also serve on the Board
of Directors), as a group own, directly or indirectly, 49,918 (41.6%) shares of
the common stock of the Corporation. See "Election of Directors" for the stock
ownership of individual directors.
ELECTION OF DIRECTORS
The Articles of Incorporation of the Corporation provide that the
number of directors will be set by the Bylaws. The Bylaws provide for a board
of not less than five nor more than twenty directors. The Bylaws currently set
the Board of Directors at five members.
The information below lists each nominee for director of the
Corporation, each of whom currently serves as a director, setting forth his
address, age, principal occupation or employment, and amount and percentage of
beneficial ownership of common stock of the Corporation as of February 28,
1997. Each person listed below has been named as a nominee for election as
director at the meeting to which this Proxy Statement relates. Directors are
elected to hold office until the next annual meeting of shareholders unless
they sooner become disqualified, or until such time as their successors are
elected and have qualified. Unless otherwise indicated, all nominees have been
with the same organization in essentially the same position as listed below for
the past five years, and the nominees beneficially own, with sole voting and
investment power, the shares listed below. The nominees, except Ronald J.
Lashute, are also members of the Board of Directors of the Corporation's
subsidiary, American Bank & Trust Company. The year listed under the heading
"First Elected Director" indicates the year in which the nominee or director
was first elected as a director of the Bank prior to formation of the
Corporation or the year in which the nominee or director was first elected as a
director of the Corporation. Those persons listed on the table below, except
Ronald J. Lashute, first became directors of the Corporation on June 30, 1982.
Ronald J. Lashute has been an executive officer of the Corporation and the Bank
since 1990. See "Executive Officers."
None of the directors of the Corporation holds a directorship in any
other company with a class of securities registered under Section 12 of the
Securities Exchange Act of 1934 as amended, or subject to the requirements of
Section 15(d) of that Act or in any company registered as an investment company
under the Investment Company Act of 1940.
-2-
<PAGE> 3
<TABLE>
<CAPTION> SHARES
BENEFICIALLY
FIRST OWNED AS OF
PRINCIPAL OCCUPATION ELECTED FEBRUARY 28, 1997
NAME AGE OR EMPLOYMENT DIRECTOR NUMBER PERCENTAGE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Joseph J. Artall 90 Farmer 1958 4,620 3.9%
P. O. Box 486
Melville, LA 71353
Walter J. Champagne, Jr. 76 Walter J. Champagne Co., 1958 2,045 1.7%
P. O. Box 8 (Gen. Merchandising &
Port Barre, LA 70577 Agric.) Vice-Pres./Bank
J.C. Diesi (1,3) 76 Diesi Pontiac-Cadillac- 1958 11,626 9.7%
148 W. Smiley Street Buick, Inc., (Automobile
Opelousas, LA 70570 Dealer & Service)
Salvador L. Diesi, Sr. 66 Chairman of the Board and 1973 31,199 26.0%
(1,2,3,4) President, American
1355 Dietlein Blvd. Bancorp, Inc. and
Opelousas, LA 70570 American Bank & Trust
Company; Wholesale Beer
Distributor, Premium
Brands, Inc.; Gas Station,
Convenience Store, and
Video Poker; Little
Capitol of Louisiana,
Inc.; Commercial real
estate, farming interest;
and Attorney at Law
Ronald J. Lashute 47 Executive Vice-President 1994 428 .3%
(2,3) and Chief Executive
2057 Jasmine Drive Officer of the Bank and
Opelousas, LA 70570 Secretary, Treasurer of
the Corporation
-------- -----
Total for directors (five persons) 49,918 41.6%
======== =====
</TABLE>
(1) J.C. Diesi is Salvador L. Diesi's uncle.
(2) Executive Officer of the Corporation who participates in major
policy making functions.
(3) Ronald J. Lashute is a cousin of Salvador L. Diesi, Sr. and a nephew
of J.C. Diesi.
(4) Of the 31,199 shares held by Salvador L. Diesi, Sr., 9,917 shares
(8.3%) are held by a Corporation of which Mr. Diesi owns 51% and
16,000 shares (13.3% of the Corporation's outstanding common stock)
are owned by the Diesi Family Trust. Mr. Salvador L. Diesi, Sr. is
the trustee of The Diesi Family Trust and has sole voting authority
with respect to the shares of the Corporation's common stock held by
the said trust. See "Shareholder's Owning 5% or More of Outstanding
Shares."
-3-
<PAGE> 4
If elected by the shareholders to serve as the Corporation's Board of
Directors, the nominees listed above plan to direct the Chairman of the Board
of the Corporation, as the sole shareholder of the Bank, to vote the stock of
the Bank owned by the Corporation in favor of the following persons to serve as
the Board of Directors of the Bank: Joseph J. Artall, Walter J. Champagne, Jr.,
J. C. Diesi, Salvador L. Diesi, Charles Jagneaux, Alvin Haynes, II, Sylvia
Sibille and Attaway Darbonne. Each of these persons has served on the Board of
Directors of the Bank for the past year.
SHAREHOLDERS OWNING 5% OR MORE OF OUTSTANDING SHARES
The following table sets forth as of February 28, 1997, information
concerning the beneficial ownership of voting stock of American Bancorp, Inc.,
by persons who are known to the Corporation to be beneficial owners of 5% or
more of the Corporation's outstanding shares of voting common stock:
<TABLE>
<CAPTION>
PERCENTAGE
AMOUNT AND OF CLASS
NAME AND ADDRESS OF NATURE OF BENEFICIAL OF SHARES
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OWNED
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Salvador L. Diesi, Sr. 31,199 shares 26.0%
1355 Dietlein Blvd. Direct and Indirect (1)
Opelousas, LA 70570
Common stock J.C. Diesi 11,626 shares 9.7%
148 W. Smiley St. Direct
Opelousas, LA 70570
</TABLE>
(1) Mr. Salvador L. Diesi, Sr. directly owns 5,282 shares or 4.40% of the
outstanding shares of the Corporation. In addition, he owns 9,917
shares, which is equal to 8.3% of the outstanding shares of the
Corporation, indirectly, through his associations with his business.
Mr. Salvador L. Diesi, Sr. is also the trustee of the Diesi Family
Trust. The Trust owns 16,000 or 13.3% of the outstanding shares of the
Corporation. The Trust is for the benefit of the grandchildren of Frank
(a former director of the Bank) and Marie Diesi.
-4-
<PAGE> 5
BOARD MEETINGS AND COMMITTEES
During 1996, the Board of Directors of the Corporation held a total of
four regular and special meetings. All of the directors attended seventy-five
percent or more of the aggregate number of meetings of the Board of Directors
of the Corporation. During 1996, the Board of Directors of the Bank held a
total of thirteen regular and special meetings. All of the directors of the
Bank, except Mr. Joe Artall, attended seventy-five percent or more of the
aggregate number of meetings of the Board of Directors of the Bank and
committees of the Board of Directors of the Bank on which they serve. Mr.
Artall attended eight of the thirteen meetings.
The Board of Directors of the Corporation has no committees.
The Board of Directors of the Bank has established the following
committees:
The Loan Discount Committee reviews and approves all large loans. This
committee met six (6) times in 1996 and is composed of Salvador L. Diesi, Sr.,
Chairman, J.C. Diesi, Charles Jagneaux, Alvin Haynes, II, Walter J. Champagne,
Jr. and Attaway Darbonne.
The Audit Committee, composed of Walter J. Champagne, Jr., Sylvia
Sibille and Joseph J. Artall, met one (1) time in 1996. The duties of the
Audit Committee include, but are not limited to the following:
1. Review the Bond Portfolio, Time and Savings Deposits, Demand
Deposits and Loan Portfolio.
2. Analyze the Statement of Condition and the Statement of Income
and Expenses.
3. Review the audit report of the external auditors, F.D.I.C. and
State Examiners Reports.
4. Review the Bank's insurance policies including the Blanket Bond
and Liability Policy.
5. Report results of its review to the Board of Directors.
-5-
<PAGE> 6
EXECUTIVE OFFICERS
The Executive Officers of the Corporation are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION CURRENTLY HELD
- --------------------------------------------------------------------------------
<S> <C> <C>
Salvador L. Diesi, Sr. 66 Chairman of the Board of the
Corporation and the Bank since
April 14, 1993 and President of
the Corporation and the Bank since
April 13, 1983.
Ronald J. Lashute 47 Secretary/Treasurer of the
Corporation and Executive
Vice-President and Chief Executive
Officer of the Bank since March
1990; Director of the Corporation
since December 1994.
</TABLE>
Executive Officers are chosen by the Board of Directors to hold office
at the pleasure of the Board. Mr. Salvador L. Diesi, Sr. has been an officer
of the Corporation and the Bank for more than five years. Mr. Ronald Lashute
has been on the staff of the Corporation and, prior to its formation, the Bank
for 23 years.
The family relationships among the executive officers of the Corporation
are indicated in the list of directors. See "Election of Directors."
COMPENSATION AND OTHER TRANSACTIONS
DIRECTORS FEES
Directors of the Corporation receive no compensation for their services.
In 1996, each director of the Bank received a board fee of $400 per month for
the months of January and February, and $500 per month for the months of March
through December. In addition, each director of the Bank received a cash bonus
of $3,000 in 1996. Directors serving on the Bank's Loan Discount Committee
received $50 per meeting attended in 1996. The Bank's Audit Committee met once
in 1996 and received no compensation for that meeting.
COMPENSATION
The following table sets forth all compensation paid, distributed or
accrued for the account of the persons listed below for the fiscal year ended
December 31, 1996 by the Bank to the Executive Officers of the Corporation and
the Bank.
-6-
<PAGE> 7
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
NAME AND SALARY AND
PRINCIPAL DIRECTOR BONUS OTHER ANNUAL ALL OTHER
POSITION YEAR FEES($) ($)(1) COMPENSATION($)(2) COMPENSATION($)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Salvador L. Diesi, 1996 33,922 (4) 3,100 - 337 (3)
Sr., Chairman of 1995 32,590 (4) 3,100 - 276 (3)
the Board and 1994 33,690 (4) 2,500 - 1,581 (3)
President of the
Corporation and
the Bank
Ronald J. Lashute 1996 73,248 (5) 5,933 - 8,145 (8)
Executive Vice- 1995 71,615 (6) 5,683 - 2,639 (9)
President and 1994 69,286 (7) 4,962 - 291 (3)
Chief Executive
Officer of the
Bank and Secre-
tary/Treasurer
of the Corporation
</TABLE>
(1) The Bank had a cash bonus plan in 1996, 1995, and 1994, whereby a bonus
was declared by the Board of Directors. The total amount of the Bonus
paid to all eligible employees of the Bank was $49,471, $50,364 and
$38,160, respectively, for those years. In addition, cash bonuses of
$3,000 in 1996 and 1995 and $2,500 in 1994 were paid to each director
of the Bank. Cash bonuses paid to the Executive Officers of the Bank
are noted in the table above.
(2) No amounts for perquisites and other personal benefits, such as company
automobiles, which may accrue to the named executive officers and which,
in the opinion of management, are job related and appropriate in
connection with the conduct of the Corporation's and the Bank's affairs,
are shown. The aggregate amount of such compensation does not exceed
10% of the total of annual salary or bonus reported for the named
executive officer.
(3) These figures represent term life insurance premiums paid by the Bank.
(4) This amount includes $540 that was contributed by the Bank for the
account of Mr. Diesi in accordance with the terms of a 401(k) Plan
established by the Bank for the benefit of its employees in January 1993
(the 401(k) Plan).
(5) This amount includes $1,436 that was contributed by the Bank for the
account of Mr. Lashute in accordance with the terms of the 401(k) Plan.
(6) This amount includes $1,303 that was contributed by the Bank for the
account of Mr. Lashute in accordance with the terms of the 401(k) Plan.
(7) This amount includes $1,359 that was contributed by the Bank for the
account of Mr. Lashute in accordance with the terms of the 401(k) Plan.
-7-
<PAGE> 8
(8) This amount includes $7,593 of deferred compensation accrued under a
supplemental executive retirement plan established by the Bank on
September 1, 1995. This amount also includes $552 in term life
insurance premiums paid by the Bank.
(9) This amount includes $2,363 of deferred compensation accrued under a
supplemental executive retirement plan and $276 in term life insurance
premiums paid by the Bank.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires officers,
directors and beneficial owners of more than 10% of the outstanding shares of
the Corporation to file with the Securities and Exchange Commission (the SEC)
certain reports describing their stock ownership and changes in their stock
ownership. They must also furnish the Corporation with copies of these forms.
Based solely on its review of the copies of such forms received by it and
written representations from certain reporting persons that they have complied
with the relevant filing requirements, the Corporation believes that filing
requirements under Section 16(a) were met on a timely basis.
LEGAL PROCEEDINGS
No director, officer or affiliate of the Corporation, or owner of more
than five (5%) of the outstanding shares of the Corporation, is a party adverse
to the Corporation or its subsidiary in any currently pending legal proceeding,
nor does any such party have a material interest adverse to the Corporation or
the Bank in any currently pending legal proceeding.
OTHER TRANSACTIONS
The Bank has had, and expects to have in the future, banking
transactions in the ordinary course of business with directors, officers and
principal stockholders of the Corporation and of the Bank and their associates,
affiliates or members of their immediate families. The transactions have been
and will continue to be made on the same terms, including interest rates and
collateral on loans, as those prevailing at the same time for comparable
transactions with others and not involving more than the normal risk of
collectibility or presenting other unfavorable features.
In addition, the Bank has had other transactions, as indicated below,
with certain directors of the Bank. Such transactions were made in the
ordinary course of business and were on terms competitive with those existing
in the community at the time made.
The Bank is obligated under a lease for the South Branch location with
Little Capitol of Louisiana, Inc., which corporation is owned by Salvador L.
Diesi, Sr. and a trust set up by Frank (a former director of the Bank) and
Marie Diesi for the benefit of their grandchildren. For the year ended
December 31, 1996, the Bank paid Little Capitol of Louisiana, Inc. $18,000
under the terms of the lease. The initial lease expired on May 31, 1992, but
was renewed through May 31, 1997.
-8-
<PAGE> 9
During 1996, the Bank had its vehicles repaired at Diesi Pontiac-
Cadillac-Buick, Inc. and paid an aggregate amount of $1,577 for such repairs.
Also in 1996, the Bank purchased a car for $28,076 from Diesi Pontiac-Cadillac-
Buick, Inc. Mr. J.C. Diesi, a Director of the Corporation, is an owner of the
car dealership.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Broussard, Poche', Lewis & Breaux has served as the Corporation's
independent Certified Public Accountants for the fiscal years ending December
31, 1986 to 1996. At the 1997 Annual Shareholders Meeting, the following
resolution will be subject to ratification by a simple majority vote of shares
represented at the meeting:
RESOLVED, That the selection of Broussard, Poche', Lewis & Breaux, as
the independent Certified Public Accountants of American Bancorp, Inc.
and its sole subsidiary, American Bank and Trust Company, for the fiscal
year ending December 31, 1997, is hereby ratified.
If ratification is not achieved, the selection of an independent
Certified Public Accountant will be reconsidered and made by the Board of
Directors. Even if selection is ratified, the Board of Directors reserves the
right, and in its discretion, may direct the appointment of any other
independent Certified Public Accounting firm at any time if the Board decided
that such a change would be in the best interests of the Corporation and its
shareholders.
A representative of Broussard, Poche', Lewis & Breaux is expected to
attend the Annual Shareholder's Meeting with the opportunity to make a
statement, if desired, and is expected to be available to respond to
shareholder's inquiries.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Shareholders who desire to present a proposal for inclusion in the proxy
material relating to the 1998 annual meeting of shareholders of American
Bancorp, Inc. must forward such proposals to Ronald Lashute at the address
listed on the first page of this Proxy Statement in time to arrive at the
Corporation prior to November 26, 1997.
-9-
<PAGE> 10
OTHER MATTERS
QUORUM AND VOTING OF PROXIES
The presence, in person or by proxy, of a majority of the outstanding
shares of common stock of the Corporation is necessary to constitute a quorum.
If a quorum is present, the vote of a majority of the shares present or
represented by proxy will decide all questions properly brought before the
meeting, except that directors will be elected by plurality vote. A
shareholder's abstention or refusal to vote on a particular matter will not
affect the presence of a quorum or reduce the voting power present. (In effect,
therefore, an abstention is counted as a vote against a matter.) A non-vote
(including broker non-votes) will have no affect on the items to be addressed
at the meeting.
All proxies received in the form enclosed will be voted as specified,
and, in the absence of instruction to the contrary, will be voted FOR the
election of the nominees named above, and FOR the ratification of independent
Certified Public Accountants.
The Corporation does not know of any matters to be presented at the
annual meeting other than those mentioned above. However, if any other matters
properly come before the meeting or any adjournment thereof, it is the
intention of the persons named on the enclosed proxy to vote the shares
represented by them in accordance with their best judgment, unless authority to
do so is withheld.
ADDITIONAL CORPORATE INFORMATION
ANY SHAREHOLDER MAY, BY WRITTEN REQUEST, OBTAIN WITHOUT CHARGE AN
ADDITIONAL COPY OF THE CORPORATION'S 1996 ANNUAL REPORT OR A COPY OF THE
CORPORATION'S FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
REQUESTS SHOULD BE ADDRESSED TO RONALD LASHUTE, EXECUTIVE VICE-PRESIDENT AND
CHIEF EXECUTIVE OFFICER, AMERICAN BANK AND TRUST COMPANY, P. O. BOX 1579,
OPELOUSAS, LOUISIANA 70571-1579.
-10-
