<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, 1999
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
incorporation or organization) Identification No.)
321 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: $4,066,518.
The number of shares outstanding of each of the issuer's classes of common
stock, as of December 31, 1999: Common Stock, $5.00 Par Value, 117,712 shares
outstanding.
Documents Incorporated by Reference
Portions of the annual shareholders' report for the year ended December 31, 1999
are incorporated by reference into Parts I and II.
Portions of the proxy statement for the annual shareholders meeting to be held
April 12, 2000 are incorporated by reference into Part III.
- 1 -
<PAGE> 2
*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.
- 2 -
<PAGE> 3
PART I
Item 1. Business
American Bancorp, Inc. (the Company) 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 Company. Prior to October 1,
1983, the Company had no material activity. The Company is currently engaged,
through its subsidiary, in banking and related business. The Bank is the
Company'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. However, as of December 31, 1999, the State
of Louisiana did not have any funds on deposit with the Bank.
The Bank's general market area is in St. Landry Parish, which has a
population of approximately 81,939. Its primary market is Opelousas, which has a
population of approximately 19,540, 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, 1999.
<TABLE>
<CAPTION>
(In thousands of dollars)
Assets Deposits
---------- ----------
<S> <C> <C>
American Bank and Trust Company $ 80,232 $ 70,434
St. Landry Bank and Trust Company $ 213,121 $ 180,829
St. Landry Homestead $ 154,988 $ 120,471
Washington State Bank $ 78,988 $ 67,032
First Federal Savings & Loan $ 75,680 $ 46,562
</TABLE>
- 3 -
<PAGE> 4
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.
The banking industry is extensively regulated under both federal and state
law. The Company is subject to regulation under the Bank Holding Company Act of
1956 (BHCA) and to supervision by the Board of Governors of the Federal Reserve
System (FRB). The BHCA requires the Company to obtain the prior approval of the
FRB for bank acquisitions and prescribes certain limitations in connection with
acquisitions and the non-banking activities of the Company. The Bank is subject
to regulation and examination by the Louisiana Office of Financial Institutions
and the Federal Deposit Insurance Corporation.
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 banking industry is affected by the monetary and fiscal policies of the
FRB. An important function of the FRB is to regulate the national supply of bank
credit to moderate recessions and to curb inflation. Among the instruments
monetary policy used by the FRB to implement its objectives are: open-market
operations of U.S. Government securities, changes in the discount rate and the
federal funds rate (which is the rate banks charge each other for overnight
borrowings) and changes in reserve requirements on bank deposits.
Employees
During 1999, the average number of full-time equivalent employees at the
Bank was 44. This includes the officers of the Company 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.
- 4 -
<PAGE> 5
Item 1. Business (continued)
Executive Officers
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
Years of
Officer Name Service Age Position Currently Held
- ---------------------- --------- --- --------------------------------
<S> <C> <C> <C>
Salvador L. Diesi, Sr. 26 69 Chairman of the Board of the
Company and the Bank;
President of the Company
and the Bank
Ronald J. Lashute 27 50 Executive Vice-President and
Chief Executive Officer of the
Bank and Secretary/Treasurer
of the Company
</TABLE>
None of the directors and executive officers of the Company 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
Company.
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 Company 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).
- 5 -
<PAGE> 6
Item 1. Business (continued)
The Act requires the Company 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 Company and all of its activities. The activities that
may be engaged in by the Company 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.
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 Company have no present plans or intentions
to cause the Company 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 Company concludes that such action
would be in the best interest of stockholders.
- 6 -
<PAGE> 7
Item 1. Business (continued)
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 1999 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,
-------------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Securities held to maturity:
U.S. Treasury $ 2,300 $ 2,696 $ 3,692
U.S. Government Agencies 500 3,005 10,512
--------- --------- ---------
$ 2,800 $ 5,701 $ 14,204
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
December 31,
-------------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Securities available for sale:
Mortgage-backed securities $ 6,931 $ 4,455 $ 1,210
U.S. Treasury securities 3,501 3,553 2,009
U.S. Government Agencies 12,536 9,002 5,532
State and Political subdivisions 8,306 6,907 3,442
Equity securities 149 97 --
--------- --------- ---------
$ 31,423 $ 24,014 $ 12,193
========= ========= =========
</TABLE>
- 7 -
<PAGE> 8
Item 1. Business (continued)
The following tables set forth the maturities of investment securities at
December 31, 1999, 1998, and 1997 and the weighted average yields of such
securities (in thousands of dollars):
<TABLE>
<CAPTION>
December 31, 1999
-----------------------------------------------------------------------------------
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 $ 200 4.54% $ 2,100 5.44% $ -- --% $ -- --%
U.S. Government
Agencies -- -- 500 6.43 -- -- -- --
--------- ------- --------- --------
Total held
to maturity 200 4.54 2,600 5.63 -0- -- -0- --
--------- ------- --------- --------
Securities
available for
sale:
U.S. Treasury 3,501 5.75 -- -- -- -- -- --
U.S. Government
Agencies -- -- 9,635 6.12 2,901 6.62 -- --
Mortgage-backed
securities -- -- 2,004 6.04 444 5.61 4,483 6.58
State and
Political
Subdivisions 529 7.37 4,093 6.84 3,186 7.23 498 7.43
Equity
securities 149 -- -- -- -- -- -- --
--------- ------- -------- --------
Total
available
for sale 4,179 5.96 15,732 6.30 6,531 6.85 4,981 6.66
--------- --------- --------- --------
Total
securities $ 4,379 5.89% $ 18,332 6.20% $ 6,531 6.85% $ 4,981 6.66%
========= ===== ========= ===== ========= ====== ======== ======
</TABLE>
- 8 -
<PAGE> 9
Item 1. Business (continued)
<TABLE>
<CAPTION>
December 31, 1998
-------------------------------------------------------------------------------------------------
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 $ 2,496 6.25% $ 200 4.54% $ -- --% $ -- --%
U.S. Government
Agencies 506 6.22 1,999 6.91 500 7.03 -- --
--------- --------- --------- ---------
Total held
to maturity 3,002 6.24 2,199 6.69 500 7.03 -0- --
--------- --------- --------- ---------
Securities
available for
sale:
U.S. Treasury -- -- 3,553 5.75 -- -- -- --
U.S. Government
Agencies -- -- 7,966 6.25 1,036 6.06 -- --
Mortgage-backed
securities -- -- 669 6.85 2,301 5.77 1,485 6.82
State and
Political
Subdivisions 222 7.48 3,011 7.16 3,113 7.12 561 7.11
Equity
securities 97 -- -- -- -- -- -- --
--------- --------- --------- ---------
Total
available
for sale 319 7.48 15,199 6.34 6,450 6.47 2,046 6.90
--------- --------- --------- ---------
Total
securities $ 3,321 6.33% $ 17,398 6.38% $ 6,950 6.51% $ 2,046 6.90%
========= ======== ========= ========= ========= ========= ========= =========
</TABLE>
- 9 -
<PAGE> 10
Item 1. Business (continued)
<TABLE>
<CAPTION>
December 31, 1997
-------------------------------------------------------------------------------------------------
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 $ 1,200 5.95% $ 2,492 6.25% $ -- --% $ -- --%
U.S. Government
Agencies 2,498 5.92 7,016 6.49 998 7.16 -- --
--------- --------- --------- ---------
Total held
to maturity 3,698 5.93 9,508 6.43 998 7.16 -0- --
--------- --------- --------- ---------
Securities
available for
sale:
U.S. Treasury 1,001 6.27 1,008 6.28 -- -- -- --
U.S. Government
Agencies -- -- 5,532 6.53 -- -- -- --
Mortgage-backed
securities 4 9.35 407 8.66 68 9.16 731 8.66
State and
Political
Subdivisions 10 6.43 2,006 7.29 1,221 7.01 205 8.68
--------- --------- --------- ---------
Total
available
for sale 1,015 6.28 8,953 6.76 1,289 7.11 936 8.67
--------- --------- --------- ---------
Total
securities $ 4,713 6.01% $ 18,461 6.59% $ 2,287 7.13% $ 936 8.67%
========= ========= ========= ========= ========= ========= ========= =========
</TABLE>
* Weighted average yields have been computed on a fully tax-equivalent basis
assuming a rate of 34% for 1999, 1998 and 1997.
- 10 -
<PAGE> 11
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,
------------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Commercial, financial and agricultural $ 7,326 $ 7,666 $ 7,549
Real Estate - Construction 949 51 359
Real Estate - Mortgage 15,809 15,361 15,543
Installment 4,748 4,981 4,984
---------- ---------- ----------
Total 28,832 28,059 28,435
Less:
Allowance for possible loan losses (579) (596) (600)
Unearned income -- -- --
---------- ---------- ----------
$ 28,253 $ 27,463 $ 27,835
========== ========== ==========
</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,
------------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Loans accounted for on a nonaccrual basis $ 70 $ 145 $ 308
Restructured loans which are not on
non-accrual 39 61 70
---------- ---------- ----------
109 206 378
Other real estate and repossessed assets
received in complete or partial
satisfaction of loan obligations -- -- 7
---------- ---------- ----------
Total nonperforming assets $ 109 $ 206 $ 385
========== ========== ==========
Loans contractually past due ninety days
or more as to principal or interest,
but which were not on non-accrual $ 8 $ 15 $ 9
========== ========== ==========
</TABLE>
- 11 -
<PAGE> 12
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, 1999, the recorded investment in loans
that were considered to be impaired under SFAS No. 114 was $64,000, with the
related allowance for loan losses of $10,000. 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
$9,501, $32,424 and $53,417, for the years 1999, 1998, and 1997, respectively.
Interest income in the amount of $2,733, $4,796 and $5,621 on nonperforming
loans during 1999, 1998 and 1997, respectively, was recorded.
At December 31, 1999, 1998 and 1997 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, 1999, 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 1999, 1998, and 1997; 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>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Amount of loans outstanding
at end of period $ 28,832 $ 28,058 $ 28,435
======== ======== ========
Average amount $ 26,880 $ 28,548 $ 27,797
======== ======== ========
</TABLE>
- 12 -
<PAGE> 13
Item 1. Business (continued)
Allowance for Possible Loan Losses
(In thousands of dollars)
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Beginning balance $ 596 $ 600 $ 614
Provision charged against income -- -- --
-------- -------- --------
$ 596 600 614
-------- -------- --------
Charge-offs:
Commercial, financial and
agricultural loans (13) -- (1)
Real estate mortgage loans -- -- --
Real estate construction loans -- -- --
Installment loans (7) (15) (16)
-------- -------- --------
Total charge-offs (20) (15) (17)
-------- -------- --------
Recoveries:
Commercial, financial and agricultural loans -- -- --
Real estate mortgage loans -- -- --
Real estate construction loans -- -- --
Installment loans 3 11 3
-------- -------- --------
3 11 3
-------- -------- --------
Net (charge-offs) recoveries (17) (4) (14)
-------- -------- --------
Ending balance $ 579 $ 596 $ 600
======== ======== ========
Ratio of net (charge-offs) recoveries
during the period to average loans
outstanding during the period (.06)% (.01)% (.05)%
======== ======== ========
</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, 1999 December 31, 1998
-------------------------- ------------------------
% of Loans % of Loans
Outstanding Outstanding
to Total to Total
Allowance Loans Allowance Loans
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Commercial, financial and
agricultural loans $ 120 25.41% $ 135 27.32%
Real estate construction 5 3.29 1 .18
Real estate mortgage loans 238 54.83 272 54.75
Installment loans 216 16.47 188 17.75
--------- --------- --------- ---------
$ 579 100.00% $ 596 100.00%
========= ========= ========= =========
</TABLE>
- 13 -
<PAGE> 14
Item 1. Business (continued)
Allocation of Allowance for Possible Loan Losses (continued)
(In thousands of dollars)
<TABLE>
<CAPTION>
December 31, 1997
--------------------------------
% of Loans
Outstanding
to Total
Allowance Loans
------------- -------------
<S> <C> <C>
Commercial, financial and
agricultural loans $ 218 26.55%
Real estate construction 5 1.27
Real estate mortgage loans 97 54.66
Installment loans 280 17.52
------ ------
$ 600 100.00%
====== ======
</TABLE>
Deposits
The average amount of deposits, using daily average balances for 1999,
1998, and 1997, is summarized for the periods indicated in the following table
(in thousands of dollars):
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Non-interest bearing demand deposits ... $23,962 $19,070 $16,846
Interest-bearing demand deposits ....... 10,838 11,104 11,752
Savings deposits ....................... 9,714 9,223 8,374
Time deposits .......................... 22,030 19,747 19,003
------- ------- -------
$66,544 $59,144 $55,975
======= ======= =======
</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,
--------------------------------------
1999 1998 1997
-------- -------- ------
<S> <C> <C> <C>
Percentage of net income to:
Average total assets 1.42% 1.47% 1.47%
Average shareholders' equity 11.38% 11.27% 11.70%
Percentage of dividends declared per
common share to net income per
common share 15.74% 14.76% 13.92%
Percentage of average shareholders'
equity to daily average total assets 12.47% 13.06% 12.58%
</TABLE>
- 14 -
<PAGE> 15
Item 1. Business (continued)
Short-Term Borrowing
The Company'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,
--------------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Balance at December 31 $ -- $ -- $ --
Weighted average interest rate at
year end -- % -- % -- %
Maximum amount outstanding at any
month's end $ -- $ -- $ --
Average amount outstanding during
the year $ -- $ 29 $ --
Weighted average interest rate
during the year -- % 6.90% -- %
</TABLE>
Item 2. Properties
The main office of the Company and the Bank are presently located at 321
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 Company obligations under its lease
commitments, see Note 9 to the Consolidated Financial Statements, which are
incorporated herein by reference under Item 8.
Item 3. Legal Proceedings
The Company 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.
- 15 -
<PAGE> 16
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>
1999 First $ 60 $ 60 $ -
Second 61 61 -
Third 61 61 -
Fourth 62 62 1.45
1998 First $ 53 $ 53 $ -
Second 55 55 -
Third 57 57 -
Fourth 60 30 1.25
</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 516 shareholders of
record at December 31, 1999.
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.
- 16 -
<PAGE> 17
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 56 in the Annual Report are incorporated
herein by reference:
Consolidated Balance Sheets - December 31, 1999 and 1998
Consolidated Statements of Income - Years Ended December 31, 1999,
1998, and 1997
Consolidated Statements of Shareholders' Equity - Years Ended
December 31, 1999, 1998, and 1997
Consolidated Statements of Cash Flows - Years Ended December 31, 1999,
1998, and 1997
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 Company,
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 Company 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.
- 17 -
<PAGE> 18
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 56 of
the Registrant's Annual Report are incorporated by reference in
Item 8:
Consolidated Balance Sheets - December 31, 1999 and 1998
Consolidated Statements of Income - Years Ended December 31,
1999, 1998 and 1997
Consolidated Statements of Shareholders' Equity - Years
Ended December 31, 1999, 1998 and 1997
Consolidated Statements of Cash Flows - Years Ended
December 31, 1999, 1998 and 1997
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) 1999 Annual Report to Shareholders
(22) Proxy Statement for Annual Meeting of Shareholders to be
held on April 12, 2000
(23) Consent of Independent Auditors
(27) Financial data schedule
- 18 -
<PAGE> 19
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.
- 19 -
<PAGE> 20
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 Company
and the Bank; President of
the Company and the Bank
Date: March 08, 2000
----------------------------------
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/ Jasper J. Artall
- ------------------------------------ ----------------------------------
Salvador L. Diesi, Sr., Chairman of Jasper J. Artall, Director
the Board of the Company and the
Bank; President of the Company
and the Bank
Date: March 08, 2000 Date: March 08, 2000
------------------------------ -----------------------------
/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 Company
Date: March 08, 2000 Date: March 08, 2000
------------------------------ -----------------------------
/s/ J. C. Diesi
----------------------------------
J. C. Diesi, Director
Date: March 08, 2000
----------------------------
- 20 -
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description
- ------ ----------------------------------
<S> <C>
13.1 1999 Annual Report to shareholders
of American Bancorp, Inc.
22.1 1999 Proxy Statement for annual
meeting of shareholders.
23.1 Consent of Independent Auditors.
27.1 Financial Data Schedule.
</TABLE>
- 21 -
<PAGE> 1
EXHIBIT 13.1
[LOGO]
1999 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 44 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>
1999 First $ 60 $ 60 $ -
Second 61 61 -
Third 61 61 -
Fourth 62 62 1.45
1998 First $ 53 $ 53 $ -
Second 55 55 -
Third 57 57 -
Fourth 60 30 1.25
</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 516 shareholders of
record at December 31, 1999.
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 12, 2000 in the Board of Directors Room at the Operations Center
located at 321 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>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
FOR THE YEAR
Net income ................................... $ 1,086 $ 1,008 $ 948
Return on average shareholders' equity ....... 11.38% 11.27% 11.70%
Return on average total assets ............... 1.42% 1.47% 1.47%
AT YEAR END
Total assets ................................. $ 80,232 $ 73,666 $ 64,621
Total earning assets ......................... $ 71,670 $ 67,114 $ 57,377
Total loans .................................. $ 28,253 $ 27,463 $ 27,835
Total deposits ............................... $ 70,434 $ 63,819 $ 55,857
Total shareholders' equity ................... $ 9,506 $ 9,446 $ 8,513
Common shares outstanding .................... 117,712 118,449 119,962
PER SHARE
Net income ................................... $ 9.21 $ 8.47 $ 7.90
Book value ................................... $ 80.75 $ 79.75 $ 70.96
Cash dividends declared ...................... $ 1.45 $ 1.25 $ 1.10
CAPITAL RATIOS
Total risk-based capital ratio ............... 29.82% 28.72% 27.38%
Leverage ratio ............................... 13.11% 13.36% 12.97%
</TABLE>
-2-
<PAGE> 4
C O N T E N T S
<TABLE>
<CAPTION>
PAGE
<S> <C>
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
Consolidated statements of cash flows ............................ 34
Notes to consolidated financial statements ....................... 35 - 54
Officers and directors of American Bank & Trust Company .......... 55
Officers and directors of American Bancorp, Inc. ................. 56
</TABLE>
-3-
<PAGE> 5
TO THE SHAREHOLDERS
Last year's performance for American Bancorp, Inc. and American Bank &Trust
Co., its sole subsidiary, proved to be most successful. Growth and income goals
of the company were exceeded.In fact, last year's net income of $1,085,545 was
the best in the history of the bank. As a result of earnings, return on average
assets was 1.42% and return on equity was 11.38%.
Earnings this past year was $9.21 per share compared to $8.47 in 1998. The
book value of the company's stock was increased to end the year at $80.75 per
share. Dividends paid to the shareholders in 1999 was $1.45 per share
representing a 16% increase over dividends paid in 1998 and a 70% increase from
the dividend paid in 1995.
Exceptional growth last year was a major contributing factor to the bank's
increased earnings. As a result of growth, average assets during 1999 were
$76,452,000, up from $68,472,000 in 1998. This represents an increase of 11.7%
or $7,980,000.
As the bank's assets and earnings have continued to grow, asset quality
remains remarkably good. At December 31, 1999, nonperforming assets were only
.14% of the total assets and net charge off loans as a percentage of average
total loans was only .06%. The bank also remains well capitalized with a
leverage capital ratio at year end of 13.11%.
The results of past performance has positioned the company to move forward
in the New Millennium with a strong capital base and the resources necessary to
provide the products and services that new technology has to offer. A new
computer system with enhanced software will be installed at the bank during the
first half of 2000, thus enabling the bank to offer increased customer service.
In Lafayette, the year 2000 will bring construction of a new full service
banking facility allowing the relocation of the Lafayette Branch.
We appreciate the continuing support from you our shareholders and
customers, and promise to manage the company with the same work ethic that you
have come to expect from our management and dedicated staff of employees.
/S/ SALVADOR L. DIESI
Salvador L. Diesi, Sr., Chairman of the Board
and President
/s/ RONALD J. LASHUTE
Ronald J. Lashute, Chief Executive Officer and
Executive Vice-President of American
Bank &Trust Co.
-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,
-------------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating Data:
Net interest income ..................... $ 3,308 $ 3,211 $ 3,085 $ 2,976 $ 3,065
Provision for possible loan
losses ............................... $ -- $ -- $ -- $ -- $ --
Net income .............................. $ 1,086 $ 1,008 $ 948 $ 1,038 $ 963
Per share data:
Weighted average number of
shares outstanding ................... 117,884 118,965 119,997 120,000 120,000
Net income .............................. $ 9.21 $ 8.47 $ 7.90 $ 8.65 $ 8.03
Cash dividends declared ................. $ 1.45 $ 1.25 $ 1.10 $ 1.00 $ .85
Book value at end of year ............... $ 80.75 $ 79.75 $ 70.96 $ 63.80 $ 56.55
Balance sheet totals:
Average assets .......................... $ 76,452 $ 68,472 $ 64,384 $ 61,012 $ 58,733
Average shareholders' equity ............ $ 9,536 $ 8,942 $ 8,099 $ 7,251 $ 6,230
Relationship between significant financial ratios:
Percentage of net income
to average total assets ........... 1.42% 1.47% 1.47% 1.70% 1.64%
Percentage of net income
to average shareholders'
equity ............................ 11.38% 11.27% 11.70% 14.32% 15.46%
Percentage of dividends
declared per common share
to net income per common
share ............................. 15.74% 14.76% 13.92% 11.56% 10.59%
Percentage of average share-
holders' equity to average
total assets ...................... 12.47% 13.06% 12.58% 11.88% 10.60%
Tier 1 risk-based capital ratio ......... 28.57% 27.47% 26.13% 23.23% 21.92%
Total risk-based capital ratio .......... 29.82% 28.72% 27.38% 24.48% 23.17%
Leverage ratio .......................... 13.11% 13.36% 12.97% 12.44% 11.36%
</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 $1,085,545 in 1999 compared to
$1,007,868 in 1998 and $947,536 in 1997. Interest income has increased over the
last three years. The increase for 1999 was $.163 million and an increase of
$.174 million from 1997 to 1998. Interest expense also increased in 1999. The
increase for 1999 was $.66 million and an increase of $.49 million from 1997 to
1998. Net income before taxes has been increasing over the past three years.
Average total assets continue to increase. These assets have grown 11.7%,
6.4% and 5.5% in 1999, 1998, and 1997, respectively. This increase is a result
of the growth of non-interest bearing demand deposits and time deposits in 1999
and 1998. Non-interest bearing demand deposits increased $4.892 million in 1999
or 25.65% over the 1998 balance and an increase of $2.224 million in 1998 or
13.2% over the 1997 balance. Time deposits increased $2.283 million or 11.56% in
1999 over the 1998 amounts and $.744 million or 3.9% in 1998 over the 1997
amounts.
The year end balance sheet reflects an increase of $6.565 million or 8.91%
in total assets. Cash reflected an increase of $1.716 million or 39.60% from
1998. During the same period, total securities increased by $4.508 million or
15.17%. In addition, total deposits increased $6.615 million or 10.37% in
comparing 1999 to 1998. For the same period, there was an increase of $.060
million in stockholders' equity.
STATEMENT OF INCOME ANALYSIS
Net interest income on a taxable-equivalent basis was $3.499 million in
1999, an increase of $.175 million, or 5.26% compared to 1998. In 1998, net
interest income was $3.324 million, an increase of $.165 million, or 5.22% over
the prior year. The net interest margin for 1999 was 5.00% compared to 5.32% in
1998 and 5.39% for 1997. 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 short-term investments and
securities available for sale had a positive effect on the change in net
interest margin from 1998 to 1999. However, this effect was partially negated by
the decrease in average rates earned on these assets. The increase in the
average balance on time and saving deposits also had an impact on the change in
the net interest margin from 1998 to 1999.
Provision for Possible Loan Losses. The provision for possible loan losses was
$-0- in 1999, 1998 and 1997. As a percentage of outstanding loans, the allowance
for possible loans losses was 2.01%, 2.12% and 2.11% at December 31, 1999, 1998
and 1997, 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.
-6-
<PAGE> 8
NON-INTEREST INCOME. Non-interest income increased $80,161 or 13.09% from 1998
to 1999. There was only a slight increase of $5,987 or 1.00% from 1997 to 1998.
The increase in 1999 was due to NSF charges of the Bank's customers. 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. Non-interest expense increased $104,494 or 4.34% in 1999
from 1998. The increase from 1997 to 1998 was $68,470 or 2.93%. There is no one
particular expense category that has experienced a large increase in 1999. The
increase is spread over a large number of accounts. In comparing 1999 to 1998
and 1997, there were immaterial variances between years. These increases are
mainly due to increases in overall salaries for the three year period.
INCOME TAXES. The Company recorded income tax expense of $402,933 in 1999
compared to $407,896 in 1998 and $405,265 in 1997.
Net future deductible temporary differences at December 31, 1999 was
$101,411. The allowance for loan losses represents $40,063 and the deferred
executive compensation represents $46,660 of the future deductible temporary
differences. The provision for possible loan losses which contributed to the
allowance has been recognized as expense for financial reporting purposes but is
not deductible for federal income tax purposes until the loans are charged off.
The deferred executive compensation is an expense for financial reporting
purposes but is not deductible until actually paid. Valued at the 34% federal
statutory tax rate, the net future deductible amounts, if ultimately recognized,
would generate tax benefits of $30,353. These benefits are recorded as a
deferred tax asset at December 31, 1999.
BALANCE SHEET AND CAPITAL FUNDS ANALYSIS
Investment securities are a major use of funds by the Bank. The balance at
December 31, 1999 was $34,222,304 which represented a $4,508,086 or 15.17%
increase from the $29,714,218 balance outstanding at December 31, 1998.
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 are 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. While a substantial portion of the investment portfolio is
pledged on public deposits (36%), this is less than 1998 pledged percentage of
39%. The amount of public funds on deposit has been increasing slightly for the
last three years and management anticipates this source of deposits will not
grow substantially in the future.
The Bank's primary use of funds is to meet loan demand. Loans, net of
unearned income, were $28,832,360 at December 31, 1999, compared to $28,058,357
at December 31, 1998. This $774,003 or 2.76% increase is the result of increased
market share in the market area.
-7-
<PAGE> 9
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, 1999, total deposits increased $6,615,384 or 10.37% from
December 31, 1998. The most significant change in deposits from 1998 to 1999
were increases in NOW and non-interest bearing demand deposit accounts of
$2,644,175 or 24.11% and $2,776,805 or 13.21%, respectively. The increase in NOW
accounts is attributable to an increase in deposits in 1999 as compared to 1998
by a local public body. The increase in non-interest bearing accounts is
attributable to an increase in commercial accounts in 1999.
Shareholders' equity increased $60,168 or .64% from December 31, 1998 to
December 31, 1999. Retained earnings increased $914,862 or 14.02% in 1999.
However, the accumulated other comprehensive income at 1998 of $256,187 became a
loss of $553,801 in 1999 due to the effect of interest rate hikes on the
investment portfolio. 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 $170,683 or $1.45 per share in
1999 and $148,134 or $1.25 per share in 1998. Dividends of $132,000 or $1.10 per
share were declared in 1997.
NONPERFORMING ASSETS AND PAST DUE LOANS. Nonperforming assets are loans carried
on a nonaccrual basis, those classified as restructured 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 small number of installment loans.
Nonperforming assets at December 31, 1999 were $109,029, a decrease of
$96,520 or 46.96% from December 31, 1998. The most significant decrease in
nonperforming assets from 1998 to 1999 was in the loans on nonaccrual status.
This resulted primarily from collections on a group of automobile loans
purchased in 1996. The Bank has experienced little activity in other real estate
for the three year period ended December 31, 1999. Management anticipates this
favorable trend to continue.
Loans are considered to be impaired when it is probable that all amounts
due in accordance with the contractual terms will not be collected. Included in
nonaccrual loans are loans that are considered to be impaired, which totaled
$69,889 at December 31, 1999 and $144,797 at December 31, 1998. The allowance
for loan losses related to these loans was $10,000 and $100,000 at December 31,
1999 and 1998, respectively.
-8-
<PAGE> 10
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 fund 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, 1999, the Parent
Company received $230,000 from the Bank in dividends. The majority of these
funds were used to pay dividends to stockholders and to repurchase outstanding
Company stock.
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.
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.
Regulations applicable to state banks and their holding companies prescribe
minimum capital levels. These levels are based on established guidelines which
relate required capital standards to both risk-weighted assets (risk-based
capital ratios) and total assets (leverage ratio). In accordance with risk-based
guidelines, assets and off-balance-sheet financial instruments are assigned
weights to measure their levels of risk. The total Tier 1 risk-based capital
ratio for the Bank was 28.57% at year end 1999 and 27.47% at year end 1998.
Leverage ratios were 13.11% and 13.36% at December 31, 1999 and 1998,
respectively. The Bank presently meets or exceeds all required risk-based
capital standards and anticipates no difficulty in maintaining those standards.
-9-
<PAGE> 11
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 13 to the consolidated
financial statements provides information regarding the fair values of financial
instruments as of December 31, 1999.
MARKET RISK. Market risk is the effect that interest rate changes in market
interest rates have on a Bank's earnings and its underlying economic value.
Changes in interest rates affect a Bank's earnings by changing its net interest
income and the level of other sensitive income and operating expenses. The
underlying economic value of the Company's assets, liabilities, and off-balance
sheet instruments also are affected by changes in interest rates. These changes
occur because the present value of future cash flows, and in some cases the cash
flows themselves, change when interest rates change. The combined effects of the
changes in these present values reflect the change in the Bank's underlying
economic value.
Table 14 presents the Bank's Interest Rate Sensitivity Analysis. The table
is prepared utilizing present value calculations. Present value is the future
cash flows of a financial instrument, or portfolio of financial instruments,
discounted to the present. The discount rate is constructed by the use of the
build-up approach or the risk premium approach.
The build-up approach views the discount rate as consisting of four
components. They are risk-free rate, credit risk, operating expense, and
prepayment option price. Risk-free rate forms the foundation of the discount
rate and is derived from the Treasury yield curve. The credit risk component is
the annualized yield needed to cover the loss of value expected over the entire
life of a portfolio. The operating expense component represents an annualized
cost rate derived from operating expense allocations. This component is used to
adjust the risk-free rate in order to compensate for operating expenses. The
prepayment option price is the final component, and represents a basis point
adjustment to the risk-free rate to reflect the value of imbedded prepayment
options.
The risk premium approach views the discount rate as the sum of two
components: the risk-free rate, and a risk premium. The risk-free rate is the
same as defined above. The risk premium is the annualized yield needed to cover
the risk reflected in the portfolio. This risk premium incorporates all forms of
risk in a single spread to the Treasury yield curve. Consistent with an entry
rate concept of selecting a discount rate, the marginal pricing rate for each
account serves as the basis for determining an appropriate risk premium to the
Treasury yield curve. This risk premium is calculated by subtracting the value
on the Treasury yield curve which corresponds to the average maturity of the
account from the account's marginal pricing rate.
The build-up approach is used for loans, deposits, and short-term borrowing.
The risk premium approach is used for securities and short-term investments.
The cash flows for all assets and liabilities are estimated based upon
reasonable assumptions on the time remaining until maturity, repricing
frequency, decay factors, and prepayment rates. These assumptions are either
based on historical trends or available industry accepted information.
-10-
<PAGE> 12
The effect of an increase in 200 basis points from December 31, 1999 rates
would be a reduction of $.788 million in total market value of shareholders'
equity or a 6.89% decrease in the market value of the portfolio equity. A
decrease of 200 basis points from December 31, 1999 rates would result in an
increase of $.541 million or a 4.73% increase in the market value of the
portfolio equity.
The effect on earnings is also reflected in Table 14. A 200 basis point
increase on the assets and liabilities outstanding as of December 31, 1999 would
result in an increase in net income of $.130 million or a 11.21% increase in net
income. A 200 basis point decrease on the assets and liabilities outstanding as
of December 31, 1999 would have the opposite effect and would result in a
decrease of net income in the amount of $.135 million or a 11.63% decrease in
net income.
Computation of prospective effects of hypothetical interest rate changes are
based on many assumptions, including relative levels of market interest rates,
loan prepayments, and deposits decay. They should not be relied upon as
indicative of actual results. Further, the computations do not contemplate
certain actions that management could undertake in response to changes in
interest rates.
The Bank does not invest in derivatives and has none in its securities
portfolio.
YEAR 2000. Many computer systems and software programs which run date-sensitive
applications utilize two digits to define an applicable year rather than using
four digits. The Year 2000 issue results from the possibility that these systems
may read the "00" during the year 2000 as the year 1900. This problem effects
all companies and organizations using computerized information systems.
American Bancorp, Inc. formed the "Y2K (Year 2000) Steering Committee" in
1997 to address the Year 2000 issue. The objectives of this committee were to
detail a plan of action for conversion of its computer applications to Year 2000
compliant applications, to ensure compliance with all "Federal Financial
Institutions Examination Council" ("FFIEC") regulations regarding the Year 2000,
and to ensure uninterrupted service to its customers. The Bank undertook an
extensive awareness campaign both internally and externally in an effort to
maintain heightened awareness of Year 2000 implications to its employees, Board
of Directors, suppliers and customers.
The Bank developed a comprehensive inventory and risk assessment plan to
identify all systems and processes which could potentially be effected by the
century date change. Because core processing systems are acquired from third
party vendors, the Bank had very little control over the remediation of these
systems. However, the Bank maintained close contact with its core system and all
other vendors identified in the inventory and risk assessment, complying with
FFIEC guidelines regarding assessment of the status of these third party
vendor's Year 2000 readiness efforts. As of December 31, 1999, all of the Bank's
core processing systems had been replaced or upgraded with Year 2000 compliant
systems and software. All systems and processes have been tested.
As of December 31, 1999, the Bank incurred costs related to the Year 2000
issue of approximately $10,000 and no additional expenditures are anticipated
for the 2000 fiscal year.
-11-
<PAGE> 13
THE DISCUSSION ABOVE ENTITLED "YEAR 2000," INCLUDES CERTAIN "FORWARD LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995 ("PSLRA"). THIS STATEMENT IS INCLUDED FOR THE EXPRESS PURPOSE OF
AVAILING AMERICAN BANCORP, INC. OF THE PROTECTIONS OF THE SAFE HARBOR PROVISIONS
OF THE PSLRA. MANAGEMENT'S ABILITY TO PREDICT RESULTS OR EFFECTS OF YEAR 2000
ISSUES IS INHERENTLY UNCERTAIN, AND IS SUBJECT TO FACTORS THAT MAY CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED. FACTORS THAT COULD AFFECT THE
ACTUAL RESULTS INCLUDE THE POSSIBILITY THAT REMEDIATION EFFORTS AND CONTINGENCY
PLANS WILL NOT OPERATE AS INTENDED, THE COMPANY'S FAILURE TO TIMELY OR
COMPLETELY IDENTIFY ALL SOFTWARE AND HARDWARE APPLICATIONS REQUIRING
REMEDIATION, UNEXPECTED COSTS, AND THE UNCERTAINTY ASSOCIATED WITH THE IMPACT OF
YEAR 2000 ISSUES ON THE BANKING INDUSTRY AND ON THE COMPANY'S CUSTOMERS,
VENDORS, AND OTHERS WITH WHOM IT CONDUCTS BUSINESS. READERS ARE CAUTIONED NOT TO
PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING STATEMENTS.
-12-
<PAGE> 14
TABLE 1
SUMMARY OF CONSOLIDATED NET INTEREST INCOME
Fully taxable equivalent basis (In thousands)
<TABLE>
<CAPTION>
1999
-------------------------------------
AVERAGE AVERAGE
BALANCE INTEREST RATE
------- -------- ---------
<S> <C> <C> <C>
ASSETS
Short-term investments $ 9,782 $ 492 5.03%
Loans, net of unearned income (1) (2) 26,880 2,450 9.11
Securities available for sale (1) (3) 28,672 1,781 6.21
Securities held to maturity 4,689 288 6.14
---------- ----------
Total interest earning assets 70,023 5,011 7.16%
Allowance for possible loan losses (592) ---------- ---------
Cash and due from banks 4,912
Other assets 2,109
----------
Total assets $ 76,452
==========
LIABILITIES
Interest-bearing demand deposits $ 10,838 $ 211 1.95%
Savings deposits 9,714 263 2.71
Time deposits 22,030 1,038 4.71
Short-term borrowings -- -- --
---------- ----------
Total interest-bearing liabilities 42,582 1,512 3.55%
---------- ---------
Non-interest bearing demand deposits 23,962
Other liabilities 372
----------
Total liabilities 66,916
SHAREHOLDERS' EQUITY
Shareholders' equity 9,536
----------
Total liabilities and shareholders' equity $ 76,452
==========
Total interest expense related to earning assets 2.16%
---------
Net interest income $ 3,499
==========
Net interest margin
5.00%
==========
</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 1999, 1998, and 1997.
(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> 15
<TABLE>
<CAPTION>
1998 1997
------------------------------------- -------------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE
------- -------- --------- ------- -------- ---------
<S> <C> <C> <C> <C> <C>
$ 5,732 $ 309 5.39% $ 4,612 $ 251 5.44%
28,548 2,639 9.24 27,797 2,572 9.25
19,113 1,237 6.47 10,922 756 6.92
9,092 585 6.43 15,270 977 6.40
-------- -------- -------- --------
62,485 4,770 7.63% 58,601 4,556 7.77%
(602) -------- -------- (604) -------- --------
4,093 3,963
2,496 2,424
-------- --------
$ 68,472 $ 64,384
======== ========
$ 11,104 $ 216 1.95% $ 11,752 $ 229 1.95%
9,223 250 2.71 8,374 227 2.71
19,747 978 4.95 19,003 941 4.95
29 2 6.90 -- -- --
-------- -------- -------- -------
40,103 1,446 3.61% 39,129 1,397 3.57%
19,070 -------- -------- 16,846 ------- --------
357 310
-------- --------
59,530 56,285
8,942 8,099
-------- --------
$ 68,472 $ 64,384
======== ========
2.31% 2.38%
-------- --------
$ 3,324 $ 3,159
======== ========
5.32% 5.39%
======== ========
</TABLE>
-14-
<PAGE> 16
TABLE 2
RATE/VOLUME ANALYSIS
Fully taxable equivalent basis (In thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1999/1998
----------------------------------------
INCREASE (DECREASE)
DUE TO CHANGE IN: (1)
------------------------
AVERAGE AVERAGE NET
BALANCE RATE CHANGE
--------- --------- ---------
<S> <C> <C> <C>
Interest income:
Short-term investments .................. $ 211 $ (28) $ 183
Loans, net of unearned income (2) ....... (153) (36) (189)
Securities available for sale (3) ....... 606 (62) 544
Securities held to maturity ............. (277) (20) (297)
----- ----- -----
Total interest income ................ 387 (146) 241
----- ----- -----
Interest expense:
Demand deposits ......................... (5) -- (5)
Savings deposits ........................ 13 -- 13
Time deposits ........................... 108 (50) 58
Short-term borrowing .................... -- -- --
----- ----- -----
Total interest expense ............... 116 (50) 66
----- ----- -----
Taxable-equivalent net interest income ..... $ 271 $ (96) $ 175
===== ===== =====
</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> 17
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1998/1997
----------------------------------------
INCREASE (DECREASE)
DUE TO CHANGE IN: (1)
------------------------
AVERAGE AVERAGE NET
BALANCE RATE CHANGE
--------- --------- ---------
<S> <C> <C>
$ 61 $ (3) $ 58
69 (2) 67
549 (68) 481
(396) 4 (392)
----- ---- -----
283 (69) 214
----- ---- -----
(13) -- (13)
23 -- 23
37 -- 37
1 1 2
----- ---- -----
48 1 49
----- ---- -----
$ 235 $(70) $ 165
===== ==== =====
</TABLE>
-16-
<PAGE> 18
TABLE 3
SECURITIES PORTFOLIO
(In thousands)
<TABLE>
<CAPTION>
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------------------------- -------------------------------------
HELD TO AVAILABLE HELD TO AVAILABLE
MATURITY FOR SALE TOTAL MATURITY FOR SALE TOTAL
-------- --------- -------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury ................. $ 2,300 $ 3,501 $ 5,801 $ 2,696 $ 3,553 $ 6,249
U.S. Government and
Agencies ................... 500 12,536 13,036 3,005 9,002 12,007
Mortgage-Backed
Securities ................. -- 6,931 6,931 -- 4,455 4,455
State and Political
Subdivisions ............... -- 8,306 8,306 -- 6,907 6,907
Equity Securities ............. -- 149 149 -- 97 97
------- ------- ------- ------- ------- -------
$ 2,800 $31,423 $34,223 $ 5,701 $24,014 $29,715
======= ======= ======= ======= ======= =======
</TABLE>
-17-
<PAGE> 19
-18-
<PAGE> 20
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, 1999:
Held to maturity:
U.S. Treasury ................ $ 200 4.54% $ 2,100 5.44% $ -- --%
U.S. Government
and Agencies ............... -- -- 500 6.43 -- --
------- ---- ------- ---- ------- ----
Total held to maturity ...... 200 4.54% 2,600 5.63% -- --%
------- ---- ------- ---- ------- ----
Available for sale:
U.S. Treasury .................. 3,501 5.75% -- --% -- --%
U.S. Government
and Agencies ................. -- -- 9,635 6.12 2,901 6.62
Mortgage-Backed
Securities (2) ............... -- -- 2,004 6.04 444 5.61
State and
Political
Subdivisions (1) ............. 529 7.37 4,093 6.84 3,186 7.23
Equity Securities ............ 149 -- -- -- -- --
------- ---- ------- ---- ------- ----
Total available for sale .... 4,179 5.96% 15,732 6.30% 6,531 6.85%
------- ---- ------- ---- ------- ----
Total securities ............ $ 4,379 5.89% $18,332 6.20% $ 6,531 6.85%
======= ==== ======= ==== ======= ====
</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> 21
<TABLE>
<CAPTION>
AFTER TEN TOTAL
YEARS AMT. YIELD AMOUNT YIELD
---------- ------- -------- -------
<S> <C> <C> <C>
$ -- --% $ 2,300 5.36%
-- -- 500 6.43
------- ------- -------- -------
-- --% 2,800 5.55%
------- ------- -------- -------
-- --% 3,501 5.75%
-- -- 12,536 6.24
4,483 6.58 6,931 6.36
498 7.43 8,306 7.06
-- -- 149 --
------- ------- -------- -------
4,981 6.66% 31,423 6.43%
------- ------- -------- -------
$ 4,981 6.66% $ 34,223 6.36%
======= ======= ======== =======
</TABLE>
-20-
<PAGE> 22
TABLE 5
LOAN PORTFOLIO
The amounts of loans outstanding for the three years ended December 31, 1999 are
shown in the following table according to type of loan (in thousands).
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Commercial, financial and agricultural ... $ 7,326 $ 7,666 $ 7,549
Real Estate - Construction ............... 949 51 359
Real Estate - Mortgage ................... 15,809 15,361 15,543
Installment .............................. 4,748 4,981 4,984
-------- -------- --------
Total ............................ 28,832 28,059 28,435
Less:
Allowance for possible loan losses ..... (579) (596) (600)
Unearned income ........................ -- -- --
-------- -------- --------
$ 28,253 $ 27,463 $ 27,835
======== ======== ========
</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, 1999 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 ..................... $ 4,064 $ 2,180 $ 1,082 $ 7,326
Real Estate - mortgage and
construction ...................... 3,080 3,816 9,862 16,758
------- ------- ------- -------
Total ........................... $ 7,144 $ 5,996 $10,944 $24,084
======= ======= ======= =======
Interest Rate Sensitivity of Loans:
With predetermined interest rates ... $ 4,648 $ 5,263 $ 7,419 $17,330
With floating interest rates (2) .... 2,496 733 3,525 6,754
------- ------- ------- -------
Total ........................... $ 7,144 $ 5,996 $10,944 $24,084
======= ======= ======= =======
</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> 23
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 $109,029 at year ended 1999, a $96,519 (47.0%)
decrease from the prior year. Nonperforming assets totaled $205,549 at December
31, 1998, which was a decrease of $179,580 (46.63%) from December 31, 1997. The
composition of nonperforming assets for the past three years are illustrated
below.
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Nonperforming loans:
Loans on nonaccrual ................. $ 69,889 $144,797 $308,059
Restructured loans which are not
on nonaccrual ..................... 39,140 60,751 70,170
-------- -------- --------
Total nonperforming loans ....... 109,029 205,548 378,229
Other real estate and repossessed
assets received in complete or
partial satisfaction of loan
obligations ........................ -- 1 6,900
-------- -------- --------
Total nonperforming assets ..... $109,029 $205,549 $385,129
======== ======== ========
Loans contractually past due 90
days or more as to principal or
interest but which are not on
nonaccrual ........................ $ 8,119 $ 14,718 $ 8,649
======== ======== ========
</TABLE>
At December 31, 1999, 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 were approximately $6,912,000, while the loans to the legal
profession were approximately $2,633,000. There were no significant
nonperforming loans outstanding in these two concentrations.
-22-
<PAGE> 24
TABLE 8
ALLOWANCE FOR POSSIBLE LOAN LOSSES
(In Thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
Beginning balance .......................................... $ 596 $ 600 $ 614
----- ----- -----
Provision charged against income ........................... -0- -0- -0-
----- ----- -----
Charge-offs:
Commercial, financial and agricultural loans ............. (13) -- (1)
Real estate mortgage loans ............................... -- -- --
Real estate construction loans ........................... -- -- --
Installment loans ........................................ (7) (15) (16)
----- ----- -----
Total charge-offs ...................................... (20) (15) (17)
----- ----- -----
Recoveries:
Commercial, financial and agricultural loans ............. -- -- --
Real estate mortgage loans ............................... -- -- --
Real estate construction loans ........................... -- -- --
Installment loans ........................................ 3 11 3
----- ----- -----
Total recoveries ..................................... 3 11 3
----- ----- -----
Net (charge-offs) recoveries ............................... (17) (4) (14)
----- ----- -----
Ending balance ............................................. $ 579 $ 596 $ 600
===== ===== =====
Ratio of net (charge-offs) recoveries during
the period to average loans outstanding
during the period ........................................ (.06)% (.01)% (.05)%
===== ===== =====
</TABLE>
-23-
<PAGE> 25
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, 1999 DECEMBER 31, 1998
----------------------- -----------------------
% OF LOANS % OF LOANS
OUTSTANDING OUTSTANDING
TO TOTAL TO TOTAL
ALLOWANCE LOANS ALLOWANCE LOANS
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Commercial, financial and
agricultural loans ........ $120 25.41% $135 27.32%
Real estate construction ..... 5 3.29 1 .18
Real estate mortgage loans ... 238 54.83 272 54.75
Installment loans ............ 216 16.47 188 17.75
---- ------ ---- ------
$579 100.00% $596 100.00%
==== ====== ==== ======
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1997
------------------------
% OF LOANS
OUTSTANDING
TO TOTAL
ALLOWANCE LOANS
--------- -----------
<S> <C> <C>
Commercial, financial and
agricultural loans ........ $218 26.55%
Real estate construction ..... 5 1.27
Real estate mortgage loans ... 97 54.66
Installment loans ............ 280 17.52
---- ------
$600 100.00%
==== ======
</TABLE>
-24-
<PAGE> 26
TABLE 10
DEPOSITS
The following table presents the average balance and an average rate paid
on deposits (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------------------
1999 1998 1997
------------------- ------------------- ----------------
Average Average Average Average Average Average
Balance Rate Balance Rate Balance Rate
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Non-interest bearing
demand deposits ....... $23,962 --% $19,070 --% $16,846 --%
Interest bearing
demand deposits ....... 10,838 1.95 11,104 1.95 11,752 1.95
Savings deposits ........ 9,714 2.71 9,223 2.71 8,374 2.71
Time deposits ........... 22,030 4.71 19,747 4.95 19,003 4.95
Short-term borrowings ... -- -- 29 6.90 -- --
------- ------- -------
Total ............. $66,544 $59,173 $55,975
======= ======= =======
</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,
----------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Maturing in:
3 months or less .................... $3,076 $2,587 $2,289
Over 3 months less than 6 months .... 1,084 920 700
Over 6 months less than 12 months ... 458 500 300
Over 12 months ...................... -- -- 217
------ ------ ------
Total ......................... $4,618 $4,007 $3,506
====== ====== ======
</TABLE>
-25-
<PAGE> 27
TABLE 12
RISK-BASED CAPITAL
(In thousands)
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1999 1998
-------- --------
<S> <C> <C>
Risk-weighted assets .......................... $ 35,073 $ 33,315
======== ========
Capital:
Tier I ..................................... $ 10,022 $ 9,153
Tier II .................................... 438 416
-------- --------
Total capital ........................... $ 10,460 $ 9,569
======== ========
Ratios:
Tier I capital to risk-weighted assets ..... 28.57% 27.47%
Tier II capital to risk-weighted assets .... 1.25 1.25
-------- --------
Total capital to risk-weighted assets ... 29.82% 28.72%
======== ========
Leverage - Tier I capital to total
average assets .......................... 13.11% 13.36%
======== ========
</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,
----------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Return on average total assets ........... 1.42% 1.47% 1.47%
Return on average shareholders' equity ... 11.38% 11.27% 11.70%
Dividend payout ratio .................... 15.74% 14.76% 13.92%
Average equity to average assets ratio ... 12.47% 13.06% 12.58%
</TABLE>
-26-
<PAGE> 28
TABLE 14
INTEREST RATE SENSITIVITY ANALYSIS
DECEMBER 31, 1999
(In thousands)
<TABLE>
<CAPTION>
RATES
---------------------
FORECAST +200 BP -200 BP
-------- ------- -------
<S> <C> <C> <C>
Economic value at risk:
Total assets ............................ $80,232
Bank equity ............................. $ 9,468
Market value of portfolio equity ........ $11,431 $10,643 $11,972
Market value to book value
of equity ............................ 1.21 1.12 1.26
Amount of change in market value of
portfolio equity ..................... $ (788) $ 541
Percent change in market value of
portfolio equity ..................... (6.89)% 4.73%
Total securities market value premium
percentage ........................... (2.47)% (8.36)% 4.01%
Net loans present value premium
percentage ........................... .80% (1.99)% 3.63%
Total deposits present value premium
percentage ........................... 2.51% 4.48% (.03)%
Earnings at risk:
January 1 to December 31, 2000 -
Interest margin on earning assets ... 4.91% 5.18% 4.64%
Amount of change in interest
margin on earning assets ......... .27% (.27)%
Net interest income ................. $ 3,452 $ 3,647 $ 3,250
Amount of change in net
interest income .................. $ 195 $ (202)
Percent change in net interest
income ........................... 5.64% (5.85)%
Net income .......................... $ 1,160 $ 1,290 $ 1,025
Amount change in net income ......... $ 130 $ (135)
Percent change in net income ........ 11.21% (11.63)%
</TABLE>
-27-
<PAGE> 29
[BROUSSARD, POCHE, LEWIS & BREAUX, L.L.P. 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, 1999 and 1998, and 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, 1999. These
consolidated 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 consolidated financial position of
American Bancorp, Inc. and subsidiary as of December 31, 1999 and 1998, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1999, in conformity with generally
accepted accounting principles.
/s/ BROUSSARD, POCHE, LEWIS & BREAUX
Lafayette, Louisiana
January 28, 2000
-28-
<PAGE> 30
AMERICAN BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ASSETS 1999 1998
------------ ------------
<S> <C> <C>
Cash and due from banks .......................... $ 6,048,962 $ 4,333,107
Federal funds sold ............................... 8,104,742 8,550,000
------------ ------------
Total cash and cash equivalents ............... 14,153,704 12,883,107
Interest-bearing deposits with banks ............. 1,090,000 1,387,000
Securities held to maturity (estimated
market values $2,771,757 and $5,744,057,
respectively) ................................. 2,799,634 5,700,657
Securities available for sale .................... 31,422,670 24,013,561
Loans, net of unearned income ($-0- and
$-0-, respectively) ........................... 28,832,360 28,058,357
Less: allowance for possible loan losses ... (579,047) (595,762)
------------ ------------
28,253,313 27,462,595
Bank premises and equipment ...................... 1,108,299 1,113,368
Other real estate, net of allowances of
$-0- and $112,799, respectively ............... -0- 1
Accrued interest receivable ...................... 616,515 608,776
Other assets ..................................... 787,605 497,239
------------ ------------
$ 80,231,740 $ 73,666,304
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
-29-
<PAGE> 31
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY 1999 1998
--------------- ---------------
<S> <C> <C>
LIABILITIES
Deposits:
Non-interest bearing demand deposits ........... $ 23,803,087 $ 21,026,282
Interest bearing deposits:
NOW accounts ................................. 13,613,375 10,969,200
Money Market accounts ........................ 2,351,346 2,059,420
Savings ...................................... 9,399,019 9,159,284
Time deposits $100,000 or more ............... 4,617,950 4,006,621
Other time deposits .......................... 16,649,590 16,598,176
--------------- ---------------
Total deposits ............................. 70,434,367 63,818,983
Accrued interest payable ....................... 132,163 144,268
Other liabilities .............................. 159,535 257,546
--------------- ---------------
Total liabilities .......................... 70,726,065 64,220,797
--------------- ---------------
SHAREHOLDERS' EQUITY
Common stock, $5 par value; 10,000,000
shares authorized; 120,000 shares
issued, 117,712 and
118,449 shares outstanding, respectively ....... 600,000 600,000
Surplus .......................................... 2,150,000 2,150,000
Retained earnings ................................ 7,438,877 6,524,015
Accumulated other comprehensive income
(loss), net of tax of $(285,291)
and $131,975, respectively ..................... (553,801) 256,187
Treasury stock, 2,288 and 1,551 shares at
cost, respectively ............................. (129,401) (84,695)
------------ ------------
Total shareholders' equity ................... 9,505,675 9,445,507
------------ ------------
$ 80,231,740 $ 73,666,304
============ ============
</TABLE>
-30-
<PAGE> 32
AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Interest income:
Interest and fees on loans ............... $ 2,433,152 $ 2,642,229 $ 2,573,981
Interest on investment securities-
Taxable ............................... 1,556,496 1,478,482 1,509,350
Tax-exempt ............................ 338,148 226,872 147,928
Federal funds sold ....................... 411,878 240,724 208,636
Deposits with banks ...................... 79,744 68,220 42,634
------------ ------------ ------------
Total interest income .............. 4,819,418 4,656,527 4,482,529
Interest expense:
Interest on deposits ..................... 1,511,660 1,445,816 1,397,264
------------ ------------ ------------
Net interest income ......................... 3,307,758 3,210,711 3,085,265
Provision for possible loan losses .......... -0- -0- -0-
------------ ------------ ------------
Net interest income after provision
for possible loan losses ................. 3,307,758 3,210,711 3,085,265
------------ ------------ ------------
Non-interest income:
Service charges on deposit accounts ...... 559,418 508,135 498,551
Other .................................... 133,128 104,250 107,847
------------ ------------ ------------
Total non-interest income .......... 692,546 612,385 606,398
------------ ------------ ------------
Non-interest expense:
Salary and employee benefits ............. 1,301,324 1,198,730 1,143,226
Net occupancy expense .................... 287,674 293,939 295,030
Equipment expense ........................ 224,367 246,471 267,191
Net cost (revenue) from other
real estate ........................... (40,434) 299 (610)
Other .................................... 738,895 667,893 634,025
------------ ------------ ------------
Total non-interest expense ......... 2,511,826 2,407,332 2,338,862
------------ ------------ ------------
Income before income taxes .................. 1,488,478 1,415,764 1,352,801
Provision for income taxes .................. 402,933 407,896 405,265
------------ ------------ ------------
Net income ......................... $ 1,085,545 $ 1,007,868 $ 947,536
============ ============ ============
Net income per common share ................. $ 9.21 $ 8.47 $ 7.90
============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
-31-
<PAGE> 33
-32-
<PAGE> 34
AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Years Ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
COMMON STOCK RETAINED
SHARES AMOUNT SURPLUS EARNINGS
-------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Balance, December 31, 1996 ....................... 120,000 $ 600,000 $ 2,150,000 $ 4,848,745
Comprehensive income
Net income for 1997 ........................... -- -- -- 947,536
Other comprehensive income, net of tax:
Changes in unrealized holding gains
(losses) on securities available
for sale, net of tax of $51,729 .......... -- -- -- --
Total comprehensive income ............... -- -- -- --
Purchase of treasury stock ....................... -- -- -- --
Dividends paid in 1997 ........................... -- -- -- (132,000)
------------ ------------ ------------ ------------
Balance, December 31, 1997 ....................... 120,000 600,000 2,150,000 5,664,281
Comprehensive income .............................
Net income for 1998 ........................... -- -- -- 1,007,868
Other comprehensive income, net of tax:
Changes in unrealized holding gains
(losses) on securities available .........
for sale, net of tax of $131,975 ......... -- -- -- --
Total comprehensive income ............... -- -- -- --
Purchase of treasury stock ....................... -- -- -- --
Dividends paid in 1998 ........................... -- -- -- (148,134)
------------ ------------ ------------ ------------
Balance, December 31, 1998 ....................... 120,000 600,000 2,150,000 6,524,015
Comprehensive income
Net income for 1999 ........................... -- -- -- 1,085,545
Other comprehensive income, net of tax:
Changes in unrealized holding gains
(losses) on securities available
for sale, net of tax of $(285,291) ....... -- -- -- --
--
Total comprehensive income ............... -- -- --
Purchase of treasury stock ....................... -- -- -- --
Dividends paid in 1999 ........................... -- -- -- (170,683)
------------ ------------ ------------ ------------
Balance, December 31, 1999 ....................... 120,000 $ 600,000 $ 2,150,000 $ 7,438,877
============ ============ ============ ============
<CAPTION>
ACCUMULATED
OTHER
COMPREHENSIVE TREASURY COMPREHENSIVE
INCOME STOCK INCOME TOTAL
------------- ----------- ------------ ------------
Balance, December 31, 1996 ....................... $ 57,649 $ -- $ -- $ 7,656,394
Comprehensive income
Net income for 1997 ........................... -- -- 947,536 947,536
Other comprehensive income, net of tax:
Changes in unrealized holding gains
(losses) on securities available
for sale, net of tax of $51,729 .......... 42,768 -- 42,768 42,768
------------
Total comprehensive income ............... -- -- $ 990,304 --
============
Purchase of treasury stock ....................... -- (2,014) (2,014)
Dividends paid in 1997 ........................... -- -- (132,000)
------------ ------------ ------------
Balance, December 31, 1997 ....................... 100, 417 (2,014) $ -- 8,512,684
Comprehensive income .............................
Net income for 1998 ...........................
Other comprehensive income, net of tax: ....... -- -- 1,007,868 1,007,868
Changes in unrealized holding gains
(losses) on securities available .........
for sale, net of tax of $131,975 ......... 155,770 -- 155,770 155,770
------------
Total comprehensive income ............... -- -- $ 1,163,638 --
============
Purchase of treasury stock ....................... -- (82,681) (82,681)
Dividends paid in 1998 ........................... -- -- (148,134)
------------ ------------ ------------
Balance, December 31, 1998 ....................... 256,187 (84,695) $ -- 9,445,507
Comprehensive income .............................
Net income for 1999 ........................... -- -- 1,085,545 1,085,545
Other comprehensive income, net of tax:
Changes in unrealized holding gains
(losses) on securities available
for sale, net of tax of $(285,291) ....... (809,988) -- (809,988) (809,988)
------------
Total comprehensive income ............... -- -- $ 275,557 --
============
Purchase of treasury stock ....................... -- (44,706) (44,706)
Dividends paid in 1999 ...........................
-- -- (170,683)
Balance, December 31, 1999 ....................... ------------ ------------ ------------
$ (553,801) $ (129,401) $ 9,505,675
============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements ...
-33-
<PAGE> 35
AMERICAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
1999 1998 1997
--------------- --------------- ---------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income ............................... $ 1,085,545 $ 1,007,868 $ 947,536
Adjustments to reconcile net income
to net cash provided by operating
activities:
Premium amortization, net of
discount accretion on investment
securities ......................... (49,466) 5,846 8,294
Depreciation .......................... 129,296 165,247 198,377
(Gain) loss on disposal of assets ..... -- -- 9,862
(Increase) decrease in assets:
Other real estate owned ............ -- 6,899 6,900
Accrued interest receivable ........ (7,739) 11,201 (52,194)
Other assets ....................... 126,902 (21,372) (5,802)
Increase (decrease) in liabilities:
Accrued interest payable ........... (12,105) 24,101 1,192
Other liabilities .................. (98,011) 45,983 19,317
--------------- --------------- ---------------
Net cash provided by operating
activities ................... 1,174,422 1,245,773 1,133,482
--------------- --------------- ---------------
INVESTING ACTIVITIES
(Increase) decrease in interest-bearing
deposits with banks ................... 297,000 (693,000) 397,000
Proceeds from maturities
of available for sale securities ...... 5,421,738 4,364,835 1,689,443
Proceeds from maturities
of held to maturity securities ........ 5,000,000 8,700,000 4,300,000
Purchase of available for sale
securities ............................ (14,008,754) (15,951,986) (5,177,099)
Purchase of held to maturity
securities ............................ (2,098,859) (199,844) (2,986,173)
(Increase) decrease in loans ............. (790,718) 372,343 476,533
Purchases of property and equipment ...... (124,227) (51,206) (99,249)
Other .................................... -- (9,336) (6,281)
--------------- --------------- ---------------
Net cash used in investing
activities ...................... (6,303,820) (3,468,194) (1,405,826)
--------------- --------------- ---------------
FINANCING ACTIVITIES
Increase (decrease) in liabilities:
Demand deposits, transaction
accounts and savings .................... 5,952,640 6,412,096 (3,830,567)
Time deposits ............................. 662,744 1,550,141 320,682
Dividends paid .............................. (170,683) (148,134) (132,000)
Purchase of treasury stock .................. (44,706) (82,681) (2,014)
--------------- --------------- ---------------
Net cash provided by (used in)
financing activities .................... 6,399,995 7,731,422 (3,643,899)
--------------- --------------- ---------------
Increase (decrease) in cash and cash
equivalents ............................... 1,270,597 5,509,001 (3,916,243)
Cash and cash equivalents at
beginning of year ......................... 12,883,107 7,374,106 11,290,349
--------------- --------------- ---------------
Cash and cash equivalents at end
of year ................................... $ 14,153,704 $ 12,883,107 $ 7,374,106
=============== =============== ===============
SUPPLEMENTAL DISCLOSURES
Cash payments for:
Interest expense ........................ $ 1,523,315 $ 1,308,437 $ 1,396,072
=============== =============== ===============
Income taxes ............................ $ 363,552 $ 410,200 $ 433,000
=============== =============== ===============
</TABLE>
See Notes to Consolidated Financial Statements.
-34-
<PAGE> 36
AMERICAN BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Accounting Policies
American Bancorp, Inc. (the Company) 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:
Description of business:
The Company is a bank holding company headquartered in Opelousas,
Louisiana, operating principally in the community banking business
segment by providing banking services to commercial and retail
customers through its wholly owned subsidiary, the Bank.
The Bank is community oriented and focuses primarily on offering
competitive commercial and consumer loan and deposit services to
individuals and small to middle market businesses.
Comprehensive income:
The Company adopted Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income" (SFASNo. 130), effective January
1, 1998 and has provided the required information for all periods
presented. SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its major components.
Comprehensive income includes net income and other comprehensive
income which, in the case of the Company, includes only realized gains
and losses on securities available-for-sale.
Consolidation:
The consolidated financial statements include the accounts of the
respective parent Company and its subsidiary. All significant
intercompany accounts and transactions have been eliminated.
Cash and cash equivalents:
For the purpose of reporting cash flows, cash and cash equivalents
include cash in hand, amounts due from banks, and federal funds sold.
Generally, federal funds are purchased or sold for one-day periods.
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.
-35-
<PAGE> 37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Securities:
Management determines the appropriate classification of debt
securities (trading, available for sale, or held to maturity) at the
time of purchase and re-evaluates this classification periodically.
Securities classified as trading account assets are held for sale 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.
Securities classified as trading account assets are carried at market
value and are included in short-term investments. Gains and losses,
both realized and unrealized, are reflected in earnings as other
operating income. Securities classified as held to maturity are stated
at amortized costs. Securities classified as available for sale are
stated at fair value, with unrealized gains and losses, net of tax,
reported in shareholders' equity and included in other comprehensive
income.
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 using the level-yield method. Realized gains and losses,
and declines in value judged to be other than temporary, are included
in net securities gains (losses). The cost of securities sold is
determined on the specific identification method.
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.
-36-
<PAGE> 38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Allowance for possible loan losses:
The allowance for possible loan losses is maintained to provide for
possible losses inherent in the loan portfolio. The allowance 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.
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 for possible loan losses
in current-period earnings. Actual loan losses are deducted from, and
subsequent recoveries are added to, the allowance.
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.
Foreclosed assets:
Foreclosed assets include real estate and other collateral acquired
upon the default of loans and loans classified as in-substance
foreclosures. A loan is classified as in-substance foreclosure when
the Bank has taken possession of the collateral regardless of whether
formal foreclosure proceedings have taken place. Foreclosed assets and
excess bank-owned property are recorded at the fair value of the
assets less estimated selling costs. Losses arising from the initial
reduction of an outstanding loan amount to fair value are deducted
from the allowance for loan losses. Losses arising from the transfer
of bank premises and equipment to excess bank-owned property are
charged to expense. A valuation reserve for foreclosed assets and
excess bank-owned property is maintained for subsequent valuation
adjustments on a specific-property basis. Income and expenses
associated with foreclosed assets and excess bank-owned property 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.
-37-
<PAGE> 39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Recent pronouncements:
In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share" and SFAS No. 129, "Disclosure of Information
About Capital Structure" which are effective for quarters ending after
December 15, 1997, and fiscal years ending after December 15, 1997,
respectively. The implementation of these statements did not have a
material effect on its results of operations or financial statement
disclosures.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income" and SFAS No. 131, "Disclosures About Segments of an Enterprise
and Related Information." SFAS No. 130 establishes standards for
reporting and display of comprehensive income in the financial
statements. Comprehensive income is the total of net income and all
other non-owner changes in equity. SFAS No. 131 requires that
companies disclose segment data based on how management makes
decisions about allocating resources to segments and measuring their
performance. SFAS Nos. 130 and 131 are effective for 1998. Adoption of
these standards did not have a material effect on the Company's
financial statements, financial position or results of operations.
In March 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of
Position (SOP) 98-1, "Accounting for the Cost of Computer Software
Developed or Obtained for Internal Use." SOP 98-1 is effective for
financial statements for years beginning after December 15, 1998. The
adoption of SOP 98-1 did not have a material impact on the financial
condition or operating results of the Company.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which is effective for financial
statements for years beginning after June 15, 1999. Because of the
limited use of derivatives, management does not anticipate that the
adoption of SFAS No. 133 will have a material impact on the financial
condition or operating results of the Company. The Company expects to
adopt this accounting standard on January 1, 2000.
In December 1998, the FASB issued No. 134, "Accounting for
Mortgage-Backed Securities Retained After the Securitization of
Mortgage Loans Held for Sale by a Mortgage Banking Enterprise," which
is effective for financial statements beginning after December 15,
1998. In February 1999, the FASB issued No. 135, "Recession of
FASB Statement No. 75 and Technical Corrections," which is effective
for fiscal years ending after February 15, 1999. Adoption of these
standards did not have a material effect on the Company's financial
statements, financial position or results of operations.
In June 1999, the FASB issued No. 136, "Transfers to Assets to a
Not-for-Profit Organization or Charitable Trust that Raises or Holds
Contributions for Others," which is effective for fiscal years
beginning after June 15, 1999. The FASB issued No. 137, "Accounting
for Derivative Instruments and Hedging Activities-Deferral of the
Effective Date of FASB Statement No. 133," in June 1999. This
statement is effective for all fiscal quarters of all fiscal years
beginning after June 15, 2000. Adoption of these standards is not
expected to have a material effect on the Company's financial
statements, financial position or results of operations.
-38-
<PAGE> 40
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Reclassifications:
Certain amounts in the 1998 and 1997 financial statements have been
reclassified to conform with the financial statement presentation for
1999 for comparability. These reclassifications had no effect on net
income as previously reported for the 1998 and 1997 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
$731,000 and $632,000 for the years ended December 31, 1999 and 1998,
respectively.
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, 1999
-----------------------------------------------------
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Securities held to maturity:
U.S. Treasury Securities ............ $ 2,299,634 $ -- $ 24,132 $ 2,275,502
U.S. Government and Agencies ........ 500,000 -- 3,745 496,255
----------- ----------- ----------- -----------
$ 2,799,634 $ -0- $ 27,877 $ 2,771,757
=========== =========== =========== ===========
Securities available for sale:
Mortgage-Backed Securities .......... $ 7,146,769 $ 19,315 $ 235,394 $ 6,930,690
U.S. Treasury Securities ............ 3,503,378 1,832 3,955 3,501,255
U.S. Government and Agencies ........ 12,912,224 -- 376,686 12,535,538
State and Political Subdivisions .... 8,549,991 5,551 249,755 8,305,787
Equity Securities ................... 149,400 -- -- 149,400
----------- ----------- ----------- -----------
$32,261,762 $ 26,698 $ 865,790 $31,422,670
=========== =========== =========== ===========
</TABLE>
-39-
<PAGE> 41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3. Investment Securities (continued)
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------------
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Securities held to maturity:
U.S. Treasury Securities ................. $ 2,695,449 $ 22,691 $ 838 $ 2,717,302
U.S. Government and Agencies ............. 3,005,208 21,547 -- 3,026,755
----------- ----------- ----------- -----------
$ 5,700,657 $ 44,238 $ 838 $ 5,744,057
=========== =========== =========== ===========
Securities available for sale:
Mortgage-Backed Securities ............... $ 4,425,163 $ 45,982 $ 15,760 $ 4,455,385
U.S. Treasury Securities ................. 3,508,363 44,545 -- 3,552,908
U.S. Government and Agencies ............. 8,932,763 71,699 2,810 9,001,652
State and Political Subdivisions ......... 6,662,209 254,273 9,766 6,906,716
Equity Securities ........................ 96,900 -- -- 96,900
----------- ----------- ----------- -----------
$23,625,398 $ 416,499 $ 28,336 $24,013,561
=========== =========== =========== ===========
</TABLE>
Securities with book values of $12,222,416 and $11,604,616 at December 31, 1999
and 1998, 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, 1999, 1998 or 1997.
-40-
<PAGE> 42
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The maturities of investment securities at December 31, 1999 were as
follows:
<TABLE>
<CAPTION>
SECURITIES TO BE HELD
TO MATURITY
------------------------
AMORTIZED FAIR
YEARS TO MATURITY COST VALUE
----------- -----------
<S> <C> <C>
Less than one ............................... $ 199,926 $ 197,626
Greater than one but less than five ......... 2,599,708 2,574,131
Greater than five but less than ten ......... -- --
Greater than ten ............................ -- --
----------- -----------
$ 2,799,634 $ 2,771,757
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
SECURITIES AVAILABLE
FOR SALE
------------------------
AMORTIZED FAIR
YEARS TO MATURITY COST VALUE
----------- -----------
<S> <C> <C>
Less than one ............................... $ 4,032,618 $ 4,030,331
Greater than one but less than five ......... 16,103,167 15,732,159
Greater than five but less than ten ......... 6,814,193 6,530,121
Greater than ten ............................ 5,311,784 5,130,059
----------- -----------
$32,261,762 $31,422,670
=========== ===========
</TABLE>
Note 4. Loans
Major classifications of subsidiary Bank's loan portfolio at December 31,
are as follows:
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Commercial, financial and
agricultural .............. $ 7,325,960 $ 7,666,021
Real estate construction ..... 948,827 50,622
Real estate mortgage ......... 15,808,978 15,361,086
Installment .................. 4,748,595 4,980,628
------------ ------------
28,832,360 28,058,357
Unearned income .............. -- --
------------ ------------
Net loans ................. 28,832,360 28,058,357
Allowance for possible loan
losses .................... (579,047) (595,762)
------------ ------------
$ 28,253,313 $ 27,462,595
============ ============
</TABLE>
-41-
<PAGE> 43
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of loans classified by type at December 31, 1999
and 1998:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Commercial, financial and
agricultural ......... $ 7,325,960 $ 7,666,021
Real estate construction 948,827 50,622
Real estate mortgage .... 7,991,175 8,164,528
----------- -----------
Total commercial ..... 16,265,962 15,881,171
----------- -----------
Residential mortgage .... 7,817,803 7,196,558
Installment ............. 4,748,595 4,980,628
----------- -----------
Total consumer ....... 12,566,398 12,177,186
----------- -----------
Total loans .......... $28,832,360 $28,058,357
=========== ===========
</TABLE>
The following summarizes the non-performing elements of the loan portfolio
and total foreclosed assets at December 31:
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Nonperforming loans:
Loans on nonaccrual ........................... $ 69,889 $144,797 $308,059
Restructured loans which
are not on nonaccrual ...................... 39,140 60,751 70,170
-------- -------- --------
Total nonperforming loans ......... 109,029 205,548 378,229
Other real estate and
repossessed assets received
in complete or partial
satisfaction of loan
obligations ................................... -- 1 6,900
-------- -------- --------
Total nonperforming assets ....... $109,029 $205,549 $385,129
======== ======== ========
Loans contractually past
due 90 days or more as
to principal or interest,
but which are not on
nonaccrual ................................. $ 8,119 $ 14,718 $ 8,649
======== ======== ========
</TABLE>
-42-
<PAGE> 44
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
At December 31, 1999, the recorded investment in loans that were considered to
be impaired under SFAS No. 114 was $69,889. Included in this amount was $64,000
of the impaired loans for which the related allowance for loan losses was
$10,000 and $5,889 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, 1999 was approximately $52,000. 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, 1999, the Company did not
recognized income on impaired loans.
Interest income in the amount of $9,501 for 1999, $32,424 for 1998 and $53,417
for 1997 would have been recorded on nonperforming loans if they had been
classified as performing. The Company recorded $2,733, $4,796 and $5,621 of
interest income on nonperforming loans during 1999, 1998 and 1997, respectively.
The following is a summary of the allowance for loan losses for the three
years ended December 31, 1999:
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Balance, beginning of year .... $ 595,762 $ 599,593 $ 614,339
Provisions charged to operating
expense .................... -- -- --
Recoveries on loans ........... 2,938 11,370 2,250
Loans charged off ............. (19,653) (15,201) (16,996)
--------- --------- ---------
Balance, end of year .......... $ 579,047 $ 595,762 $ 599,593
========= ========= =========
</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
$2,291,812 and $1,400,278 at December 31, 1999 and 1998, respectively. The
following provides an analysis of the activity with respect to loans to
related parties:
<TABLE>
<S> <C>
Balance at January 1, 1999 ........ $ 1,400,278
New loans made .................... 2,601,001
Repayment on loans ................ (1,709,467)
-----------
Balance at December 31, 1999 ...... $ 2,291,812
===========
</TABLE>
-43-
<PAGE> 45
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 6. Bank Premises and Equipment
Bank premises and equipment, at cost, consisted of the following as of
December 31:
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Land ........................ $ 384,387 $ 384,387 $ 384,387
Premises and leasehold
improvements ............. 1,811,929 1,789,144 1,788,590
Furniture and equipment ..... 1,242,411 1,216,548 1,228,258
Construction in progress .... 52,704 -- --
---------- ---------- ----------
3,491,431 3,390,079 3,401,235
Less accumulated depreciation
and amortization ......... 2,383,132 2,276,711 2,173,826
---------- ---------- ----------
Total .................. $1,108,299 $1,113,368 $1,227,409
========== ========== ==========
</TABLE>
Depreciation and amortization expense included in non-interest expense was
$129,296 in 1999, $165,247 in 1998, and $198,377 in 1997.
Note 7. Deposits
Deposit account balances at December 31, 1999 and 1998, are summarized as
follows:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Non-interest bearing .. $23,803,087 $21,026,282
Interest bearing demand 15,964,721 13,028,620
Savings deposits ...... 9,399,019 9,159,284
Time deposits ......... 21,267,540 20,604,797
----------- -----------
$70,434,367 $63,818,983
=========== ===========
</TABLE>
Time deposits maturing in years ending December 31, as of December 31,
1999:
<TABLE>
<S> <C>
2000 ......... $19,796,299
2001 ......... 1,207,886
2002 ......... 263,355
-----------
$21,267,540
===========
</TABLE>
The Bank held related party deposits of approximately $1,572,000 and
$1,697,000 at December 31, 1999 and 1998.
-44-
<PAGE> 46
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8. 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 3% of compensation for 1999 and 1998, which becomes vested after
five years of service. Total contributions to the plan by the Bank were
$19,735 for 1999 and $30,528 for 1998. The Bank entered into a
non-qualified deferred compensation plan for certain executives of the
Company in 1995. The total deferred compensation expense for 1999 and 1998
was $12,384 and $11,574, respectively.
Note 9. 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, 1999:
<TABLE>
<CAPTION>
Year Ending Amount
- ------------- ----------
<S> <C>
2000 .......................................... $ 68,360
2001 .......................................... 45,871
2002 .......................................... 45,871
2003 .......................................... 40,771
2004 .......................................... 35,671
----------
Total future minimum lease payments $ 236,544
==========
</TABLE>
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, 1999, 1998, and 1997, amount to $68,360, $63,409 and $60,096,
respectively.
One of the bank's branch offices is leased from a corporation which is
owned by a shareholder and director of the Bank. Lease expense related to
this property totaled $20,671 for the 1999 fiscal year.
-45-
<PAGE> 47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10. 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>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
FDIC and Louisiana assessments .... $ 26,948 $ 24,707 $ 21,636
Advertising ....................... 56,479 63,622 26,670
Office supplies ................... 82,594 70,465 79,418
Postage ........................... 57,560 56,269 52,202
Other insurance ................... 15,503 12,727 16,390
ATM expenses ...................... 35,940 27,029 25,803
Director fees ..................... 92,650 87,700 89,750
Other ............................. 371,221 325,374 322,156
-------- -------- --------
$738,895 $667,893 $634,025
======== ======== ========
</TABLE>
Note 11. 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>
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Current federal income tax
expense ...................... $ 376,331 $ 418,969 $ 408,433
Deferred federal income tax
expense (benefit) ............ 26,602 (11,073) (3,168)
--------- --------- ---------
$ 402,933 $ 407,896 $ 405,265
========= ========= =========
Included in shareholders' equity:
Deferred tax expense
(benefit) related to the
change in net unrealized
gain (loss) on securities
available for sale ............ $(417,266) $ 80,246 $ 22,031
========= ========= =========
</TABLE>
-46-
<PAGE> 48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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>
1999 1998 1997
---------------------- ---------------------- ----------------------
AMOUNT RATE AMOUNT RATE AMOUNT RATE
--------- ---- --------- ---- --------- ----
<S> <C> <C> <C> <C> <C> <C>
Tax based on
federal
statutory rate ....... $ 506,083 34.0% $ 481,360 34.0% $ 459,953 34.0%
Effect of tax-
exempt income ........ (116,718) (7.8) (82,593) (5.8) (60,149) (4.4)
Other ................... 13,568 .9 9,129 .6 5,461 .4
--------- ---- --------- ---- --------- ----
$ 402,933 27.1% $ 407,896 28.8% $ 405,265 30.0%
========= ==== ========= ==== ========= ====
</TABLE>
Deferred tax assets and liabilities included in other assets or other
liabilities at December 31 consist of the following:
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Deferred tax assets:
Allowance for loan losses ......... $ 14,022 $ 14,022
Foreclosed assets ................. -- 38,352
Deferred executive compensation ... 16,331 12,119
Net unrealized loss on available
for sale securities ............ 285,291 --
Other ............................... 5,141 --
--------- ---------
Total deferred tax assets ........ 320,785 64,493
--------- ---------
Deferred tax liabilities:
Net unrealized appreciation
on available for sale securities -- 131,975
Accumulated depreciation .......... 28,322 30,719
--------- ---------
Total deferred tax liabilities . 28,322 162,694
--------- ---------
Net deferred tax asset (liability) ... $ 292,463 $ (98,201)
========= =========
</TABLE>
Management estimates realizability of a 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 12. Earnings Per Share
The earnings per share computations are based on weighted average number of
shares outstanding during each year of 117,884, 118,965 and 119,997 for the
years ended December 31, 1999, 1998 and 1997, respectively.
-47-
<PAGE> 49
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 13. 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. 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 $579,047 at December 31, 1999.
The fair value estimates presented are based on information available
to management as of December 31, 1999. 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.
-48-
<PAGE> 50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
CARRYING FAIR
AMOUNT VALUE
----------- -----------
<S> <C> <C>
ASSETS
Cash equivalents............................. $14,153,704 $14,153,704
Interest-bearing deposits with banks......... $ 1,090,000 $ 1,090,000
Securities held to maturity.................. $ 2,799,634 $ 2,771,757
Securities available for sale................ $31,422,670 $31,422,670
Commercial loans............................. $ 7,325,960 $ 7,264,750
Consumer loans............................... $ 4,748,595 $ 4,649,440
Real estate loans............................ $16,757,805 $17,144,810
LIABILITIES
Demand deposits.............................. $23,803,087 $23,803,087
NOW accounts................................. $13,613,375 $13,613,375
Money market accounts........................ $ 2,351,346 $ 2,351,346
Savings...................................... $ 9,399,019 $ 9,399,019
Time Deposits................................ $21,267,540 $21,275,173
</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. Outstanding
loan commitments at December 31, 1999 were $4,303,248 and $4,902,427
at December 31, 1998.
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 letters of credit balance was $307,116 and
$153,007 at December 31, 1999 and 1998, respectively. The Bank has not
incurred any losses in its commitments in 1999 or 1998. Management
does not anticipate any material losses related to these instruments.
-49-
<PAGE> 51
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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, 1999
and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Commitments to extend credit................... $4,303,248 $4,902,427
Credit card arrangements....................... $1,865,133 $1,902,592
Standby letters of credit...................... $ 307,116 $ 153,007
</TABLE>
Note 14. 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, 1999, that
the Bank could declare without the approval of the Commissioner of
Financial Institutions, amounted to $1,774,596. 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, 1999, the Bank is required to have minimum Tier 1 risk-based, Tier
1 leverage capital, and Total capital ratios of 4%, 4% and 8%,
respectively. The Bank's actual ratios at that date were 28.57%,
13.11% and 29.82%, respectively. At December 31, 1998, the Bank's
actual ratios were 27.47%, 13.36%, and 28.72%, 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
nature of the collateral.
As of December 31, 1999 and 1998, the most recent notifications from
the Federal Deposit Insurance Corporation categorized the Bank as well
capitalized under the regulatory framework for prompt action. To be
categorized as well capitalized, the Bank must maintain minimum Total
risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as indicated
above. There are no conditions or events since those notifications
that management believes have changed the Bank's category.
-50-
<PAGE> 52
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 15. 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,
------------------------------
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
Cash on deposit with subsidiary..................... $ 32,370 $ 30,816
Investment in subsidiary............................ 9,467,820 9,409,206
Due from American Bank.............................. 33,110 20,331
------------ ------------
Total assets..................................... 9,533,300 $ 9,460,353
============ ============
LIABILITIES
Accrued income taxes payable........................ $ 27,625 $ 14,846
------------ ------------
Total liabilities................................. 27,625 14,846
------------ ------------
SHAREHOLDERS' EQUITY
Common stock: $5 par value, 10,000,000
shares authorized; 120,000 shares
issued, 117,712 and
118,449 shares outstanding, respectively......... 600,000 600,000
Surplus............................................. 2,150,000 2,150,000
Retained earnings................................... 7,438,877 6,524,015
Net unrealized loss on securities
available for sale, net of tax of $(285,291)
and $131,975, respectively....................... (553,801) 256,187
Treasury stock, 2,288 and 1,551 shares
at cost, respectively.............................. (129,401) (84,695)
------------ ------------
Total shareholders' equity.................... 9,505,675 9,445,507
------------ ------------
Total liabilities and shareholders' equity.... $ 9,533,300 $ 9,460,353
============ ============
</TABLE>
-51-
<PAGE> 53
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
American Bancorp, Inc. (Parent Company Only)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Income:
Dividends from bank subsidiary.... $ 230,000 $ 216,134 $ 185,000
---------- ---------- ----------
Expenses:
Directors fees.................... 12,000 8,400 -
Other expenses.................... 1,057 967 890
---------- ---------- ----------
13,057 9,367 890
---------- ---------- ----------
Earnings before income taxes
and equity in undistributed
earnings of subsidiary............ 216,943 206,767 184,110
Provision for income taxes........... - - -
---------- ---------- ----------
Earnings before equity in
undistributed earnings of
subsidiary........................ 216,943 206,767 184,110
Equity in undistributed
earnings of subsidiary............ 868,602 801,101 763,426
---------- ---------- ----------
Net income..................... $1,085,545 $1,007,868 $ 947,536
========== ========== ==========
</TABLE>
-52-
<PAGE> 54
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
American Bancorp, Inc. (Parent Company Only)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income.................................. $ 1,085,545 $ 1,007,868 $ 947,536
Adjustments to reconcile net
income to net cash provided
by operating activities:
Equity in undistributed
earnings of subsidiary............. (868,602) (801,101) (763,426)
(Increase) decrease in other assets... (12,779) (8,769) 24,567
Increase (decrease) in income taxes
payable............................... 12,779 8,769 (24,567)
----------- ----------- -----------
Net cash provided by
operating activities............ 216,943 206,767 184,110
----------- ----------- -----------
FINANCING ACTIVITIES
Dividends paid to shareholders.............. (170,683) (148,134) (132,000)
----------- ----------- -----------
Net cash used by
financing activities............ (170,683) (148,134) (132,000)
----------- ----------- -----------
INVESTING ACTIVITIES
Purchase of treasury stock.................. (44,706) (82,681) (2,014)
----------- ----------- -----------
Net cash used by
investing activities............. (44,706) (82,681) (2,014)
----------- ----------- -----------
Increase (decrease) in cash
and cash equivalents............. 1,554 (24,048) 50,096
Cash and cash equivalents at
beginning of year........................... 30,816 54,864 4,768
----------- ----------- -----------
Cash and cash equivalents at
end of year................................. $ 32,370 $ 30,816 $ 54,864
=========== =========== ===========
</TABLE>
-53-
<PAGE> 55
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 16. Concentrations of Credit Risk
Substantially, 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, 1999, 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 were approximately
$6,912,000, while the loans to the legal profession were approximately
$2,633,000. There were no significant nonperforming loans outstanding
in these two concentrations.
Note 17. 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.
-54-
<PAGE> 56
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,
Mark J. LeBlanc Cashier
ASSISTANT VICE-PRESIDENTS
David Gremillion Christopher Choate
J. Karla Manuel
ASSISTANT CASHIERS
Elaine D. Ardoin Elizabeth Miller
Audrey Cormier Bonnie Pavy
Sally Hooks Stephanie Richard
Cindy Whitmore Audrey Thibodeaux
DIRECTORS
Jasper Artall Salvador L. Diesi, Sr.
Walter J. Champagne, Jr. Alvin Hayes II
Attaway Darbonne Charles Jagneaux
J. C. Diesi Sylvia Sibille
OFFICES LOCATED IN
OPELOUSAS KROTZ SPRINGS
LAFAYETTE PORT BARRE
LAWTELL
-55-
<PAGE> 57
OFFICERS AND DIRECTORS OF
AMERICAN BANCORP, INC.
CHAIRMAN OF THE BOARD AND PRESIDENT
Salvador L. Diesi, Sr.
SECRETARY/TREASURER
Ronald J. Lashute
<TABLE>
<CAPTION>
BOARD OF DIRECTORS OCCUPATION AND MAIN AFFILIATION
<S> <C>
Jasper J. Artall Farmer.
Walter J. Champagne, Jr. Farmer.
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 Executive Officer and Executive Vice President
of American Bank & Trust Company and
Secretary/Treasurer of American Bancorp, Inc.
</TABLE>
-56-
<PAGE> 1
EXHIBIT 22.1
AMERICAN BANCORP, INC.
PROXY STATEMENT FOR ANNUAL MEETING
TO BE HELD APRIL 12, 2000
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 12, 2000, 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 321 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 29, 2000.
Only shareholders of record at the close of business on February 15,
2000, are entitled to notice of and to vote at the meeting. On that date, the
Corporation had outstanding 117,712 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 proposal 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 at or before the annual meeting. 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 any
other materials and all 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, 46,101 (39.2%) 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 designated in the Bylaws, or if not so designated,
will be the number elected from time to time by the shareholders. The Bylaws
provide for a board of five directors.
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 15, 2000.
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 Jasper J. Artall and 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 15, 2000
NAME AND ADDRESS AGE OR EMPLOYMENT DIRECTOR NUMBER PERCENTAGE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jasper J. Artall 58 Farmer 1998 200 .17%
P. O. Box 201
Melville, LA 71353
Walter J. Champagne, Jr. 79 Retired; Farming interest; 1958 2,045 1.7%
P. O. Box 8 and Vice-Pres./Bank
Port Barre, LA 70577
J.C. Diesi (1,3) 79 Diesi Pontiac-Cadillac- 1958 12,009 10.2%
115 W. Smiley Street Buick, Inc., (Automobile
Opelousas, LA 70570 Dealer & Service)
Salvador L. Diesi, Sr. 69 Chairman of the Board and 1973 15,419 13.1%
(1,2,3,4) President, American
1327 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 50 Executive Vice-President 1994 16,428 14.0%
(2,3,5) and Chief Executive
2018 Jasmine Drive Officer of the Bank and
Opelousas, LA 70570 Secretary, Treasurer of
the Corporation
-------- ------
Total for directors (five persons) 46,101 39.2%
======== ======
</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 15,419 shares held by Salvador L. Diesi, Sr., 10,137 shares
(8.6%) are held by Corporations of which Mr. Diesi owns 51% or more.
(5) Of the 16,428 shares held by Ronald J. Lashute, 16,000 shares (13.6% of
the Corporation's outstanding common stock) are owned by The Diesi Family
Trust. Mr. Ronald J. Lashute 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." The trust provides that as to each beneficiary, it
will remain in effect for the life of the beneficiary or the maximum
period allowed by Louisiana law, whichever is longer.
-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: Jasper 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 15, 2000, 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. 15,419 shares 13.1%
1327 Dietlein Blvd. Direct and Indirect (1)
Opelousas, LA 70570
Common stock J.C. Diesi 12,009 shares 10.2%
115 W. Smiley St. Direct
Opelousas, LA 70570
Common stock Ronald J. Lashute 16,428 shares 14.0%
2018 Jasmine Drive Direct and Indirect (2)
Opelousas, LA 70570
Common stock Bobby Dupre 6,022 shares 5.1%
444 King Street Direct and Indirect (3)
Opelousas, LA 70570
</TABLE>
(1) Mr. Salvador L. Diesi, Sr. directly owns 5,282 shares or 4.5% of the
outstanding shares of the Corporation. In addition, he owns 10,137 shares,
which is equal to 8.6% of the outstanding shares of the Corporation,
indirectly, through his associations with his businesses.
(2) Mr. Ronald J. Lashute directly owns 428 shares or .4% of the outstanding
shares of the Corporation. Mr. Lashute is the trustee of The Diesi Family
Trust. The Trust owns 16,000 shares or 13.6% of the outstanding shares of
the Corporation. The Trust is for the benefit of the grandchildren of Frank
(a former director of the Corporation) and Marie Diesi.
(3) Mr. Bobby Dupre directly owns 2,164 shares or 1.8% of the outstanding
shares of the Corporation. In addition, he owns 3,858 or 3.3% of the
outstanding shares of the Corporation indirectly, through his associations
with his businesses.
-4-
<PAGE> 5
BOARD MEETINGS AND COMMITTEES
During 1999, the Board of Directors of the Corporation held a total of two
regular and special meetings. Each director attended seventy-five percent or
more of the aggregate number of meetings of the Board of Directors of the
Corporation and committees of the Board of Directors of the Corporation on which
he served. During 1999, the Board of Directors of the Bank held a total of
twelve regular and special meetings. Each director of the Bank 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 he served.
The Board of Directors of the Corporation has no audit, nominating or
compensation committees or committees performing similar functions.
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 seven (7) times in 1999 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., Chairman and
Sylvia Sibille met one (1) time in 1999. 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. 69 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 50 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. Both Mr. Salvador L. Diesi, Sr. and Mr. Ronald
Lashute have been officers of the Corporation and the Bank for more than five
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 received a board fee of $200 per month in
1999 for their services. In 1999, each director of the Bank received a board fee
of $600 per month. In addition, each director of the Bank received a cash bonus
of $3,200 in 1999. Directors serving on the Bank's Loan Discount Committee
received $150 per month in 1999.
COMPENSATION
The following table sets forth all compensation paid, distributed or
accrued for the account of the persons listed below for the fiscal year ended
December 31, 1999 by the Bank to the Executive Officers of the Corporation and
the Bank.
-6-
<PAGE> 7
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
NAME AND SALARY AND
PRINCIPAL DIRECTOR BONUS OTHER ANNUAL ALL OTHER
POSITION YEAR FEES($) ($)(1) COMPENSATION($)(2) COMPENSATION($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Salvador L. Diesi, 1999 39,217 (4) 3,200 -- 337 (3)
Sr., Chairman of 1998 38,618 (5) 3,200 -- 337 (3)
the Board and 1997 36,268 (6) 3,100 -- 337 (3)
President of the
Corporation and
the Bank
Ronald J. Lashute 1999 84,091 (7) 8,100 -- 9,854 (10)
Executive Vice- 1998 79,095 (8) 7,100 -- 9,136 (11)
President and 1997 74,284 (9) 6,142 -- 8,687 (12)
Chief Executive
Officer of the
Bank and Secre-
tary/Treasurer
of the Corporation
</TABLE>
(1) The Bank had a cash bonus plan in 1999, 1998, and 1997, 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 $61,266, $54,711 and $49,950,
respectively, for those years. In addition, cash bonuses of $3,200 in 1999,
$3,100 in 1998, and $3,000 in 1997 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 and bonus reported for the named executive officer.
(3) These figures represent term life insurance premiums paid by the Bank.
(4) This amount includes $817 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 $818 that was contributed by the Bank for the account
of Mr. Diesi in accordance with the terms of the 401(k) plan.
(6) This amount includes $818 that was contributed by the Bank for the account
of Mr. Diesi in accordance with the terms of the 401(k) plan.
(7) This amount includes $2,383 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 $2,256 that was contributed by the Bank for the
account of Mr. Lashute in accordance with the terms of the 401(k) Plan.
(9) This amount includes $2,168 that was contributed by the Bank for the
account of Mr. Lashute in accordance with the terms of the 401(k) Plan.
(10) This amount includes $9,302 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.
(11) This amount includes $8,694 of deferred compensation accrued under a
supplemental executive retirement plan and $442 in term life insurance
premiums paid by the Bank.
(12) This amount includes $8,125 of deferred compensation accrued under a
supplemental executive retirement plan and $562 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 during
1999, 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 do not involve more than the normal risk of collectibility or present
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.
-8-
<PAGE> 9
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,
1999, the Bank paid Little Capitol of Louisiana, Inc. $20,671 under the terms of
the lease. The initial lease expired on May 31, 1997, but was renewed through
May 31, 2002.
During 1999, the Bank had its vehicles repaired at Diesi
Pontiac-Cadillac-Buick, Inc. and paid an aggregate amount of $4,234 for such
repairs. 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 1999. At the 2000 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, 2000, 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 decides 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 2001 ANNUAL MEETING
Shareholders who desire to present a proposal for inclusion in the proxy
material relating to the 2001 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 30, 2000. Shareholders who desire to present a
proposal at the 2000 annual meeting other than one that will be included in the
Corporation's proxy materials must notify the Corporation (by notice to Mr.
Lashute at the address listed on the first page of this proxy statement) no
later than February 12, 2001. If a shareholder who wishes to present a proposal
fails to notify the Corporation by this date, the proxies solicited for the
meeting will have discretionary authority to vote on the shareholder's proposal
if it is properly brought before the meeting. If a shareholder makes a timely
notification, the proxies may still exercise discretionary voting authority
under circumstances consistent with the SEC's proxy rules.
-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 1999 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-
<PAGE> 1
EXHIBIT 23.1
[BROUSSARD, POCHE, LEWIS & BREAUX, L.L.P. 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, 1999,
1998 and 1997, of our report dated January 28, 2000, which appears on Pages 28
through 56 of the annual report to shareholders.
/s/ BROUSSARD, POCHE, LEWIS & BREAUX, L.L.P.
Lafayette, Louisiana
January 28, 2000
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 6,049
<INT-BEARING-DEPOSITS> 1,090
<FED-FUNDS-SOLD> 8,105
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 31,423
<INVESTMENTS-CARRYING> 2,800
<INVESTMENTS-MARKET> 2,772
<LOANS> 28,832
<ALLOWANCE> 579
<TOTAL-ASSETS> 80,232
<DEPOSITS> 70,434
<SHORT-TERM> 0
<LIABILITIES-OTHER> 292
<LONG-TERM> 0
0
0
<COMMON> 600
<OTHER-SE> 8,906
<TOTAL-LIABILITIES-AND-EQUITY> 80,232
<INTEREST-LOAN> 2,433
<INTEREST-INVEST> 1,895
<INTEREST-OTHER> 491
<INTEREST-TOTAL> 4,819
<INTEREST-DEPOSIT> 1,512
<INTEREST-EXPENSE> 1,512
<INTEREST-INCOME-NET> 3,308
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 739
<INCOME-PRETAX> 1,488
<INCOME-PRE-EXTRAORDINARY> 1,488
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,086
<EPS-BASIC> 9.21
<EPS-DILUTED> 0
<YIELD-ACTUAL> 5.00
<LOANS-NON> 70
<LOANS-PAST> 8
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 596
<CHARGE-OFFS> 20
<RECOVERIES> 3
<ALLOWANCE-CLOSE> 579
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 579
</TABLE>
