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UNITED STATES
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 NO. 0-26350
ALLEGIANT BANCORP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MISSOURI 43-1519382
(STATE OF INCORPORATION) (IRS EMPLOYER
IDENTIFICATION NO.)
2122 KRATKY ROAD 63114
ST. LOUIS, MISSOURI (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 314-692-8200
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TRUST PREFERRED SECURITIES,
$10 LIQUIDATION VALUE, ISSUED BY ALLEGIANT CAPITAL TRUST I
NAME OF EXCHANGE ON WHICH REGISTERED: AMERICAN STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 DURING THE PRECEDING 12 MONTHS, 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. [ ]
AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT AS OF MARCH 1, 2000:
COMMON STOCK, $0.01 PAR VALUE, $65,809,898.
NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK, AS OF MARCH 1, 2000:
COMMON STOCK, $0.01 PAR VALUE, 6,121,851 SHARES OUTSTANDING
DOCUMENTS INCORPORATED BY REFERENCE
AS PROVIDED HEREIN, PORTIONS OF THE DOCUMENTS BELOW
ARE INCORPORATED BY REFERENCE:
DOCUMENT PART--FORM 10-K
-------- ---------------
1999 ANNUAL REPORT OF THE REGISTRANT
TO ITS SHAREHOLDERS PARTS I, II, IV
REGISTRANT'S PROXY STATEMENT FOR THE 2000
ANNUAL MEETING OF SHAREHOLDERS PART III
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The terms "Allegiant," "company," "we," "our," and "corporation"
as used in this report refer to Allegiant Bancorp, Inc. and its
subsidiaries as a consolidated entity, except where it is made clear
that it means only Allegiant. Also, sometimes we refer to our bank
subsidiary as the "bank."
PART I
ITEM 1. BUSINESS
GENERAL
We are a bank holding company headquartered in St. Louis,
Missouri. Our bank subsidiary, Allegiant Bank, offers full-service
banking and personal trust services to individuals, commercial business
and municipalities in the St. Louis metropolitan area. Our services
include commercial, real estate and installment loans, checking, savings
and time deposit accounts, personal trust and other fiduciary services
and various other financial services such as securities brokerage,
insurance and safe deposit boxes. As of December 31, 1999, we reported,
on a consolidated basis, total assets of $728.5 million, loans of $615.2
million, deposits of $548.5 million and shareholders' equity of $48.0
million.
Since 1989, when we were organized, we have been committed to
building a strong, customer-friendly community bank. As a community
bank, we are able to respond quickly to our customers through local
decision-making and to tailor products and services to meet their needs.
We believe this customer-friendly approach provides us with a
competitive advantage over many of the larger financial institutions in
the St. Louis metropolitan area. In addition, we believe that we have
benefited from recent acquisitions of locally headquartered financial
institutions by larger regional or national out-of-town financial
institutions. Recent acquisitions of financial institutions in our
market area include: Bank America Corporation's acquisition of
Boatmen's Bancshares, Inc.; Union Planters' Corporation's acquisition of
Magna Group, Inc. and Firstar Corporation's acquisition of Mercantile
Bancorporation Inc.
We currently are the second largest publicly traded bank holding
company headquartered in St. Louis. We have expanded rapidly through
internal growth and acquisitions. We believe that market coverage is
necessary, and our goal is to have a banking facility within a 20-minute
drive from all principal sectors of the St. Louis metropolitan area.
In 1989, we acquired Allegiant State Bank located in Northeastern
Missouri. We acquired Allegiant Bank in St. Louis, Missouri in 1990.
In November 1994, we acquired Allegiant Mortgage Company. In January
1995, Allegiant State Bank was merged into Allegiant Bank. We acquired
Reliance Savings and Loan Association of St. Louis County in August 1997
and later merged it with Allegiant Bank.
In September 1997, Allegiant Bank acquired two branches in Union
and Warrenton, Missouri from Roosevelt Bank. In that transaction,
Allegiant Bank assumed approximately $96.1 million of deposit
liabilities, acquired real property and related automated teller
machines, furniture, fixtures, equipment and other operating assets with
an aggregate value of $0.5 million, and approximately $3.0 million of
consumer loans. Allegiant Bank recorded goodwill of $8.8 million in
connection with this branch acquisition. In January 1999, Allegiant
Bank acquired all the assets and liabilities of Allegiant Mortgage
Company which then was dissolved.
1
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In addition to our acquisitions, we have opened several new
branches in Missouri with a view toward covering all sectors of the St.
Louis metropolitan area. Branch openings in the past three years
include Mehlville in 1996, and St. Peters, Affton and Crestwood in 1997.
We also opened a branch in Town & Country in 1998, a downtown St. Louis
branch in March 1999 and a branch in Ballwin in August 1999. We
currently anticipate opening our 16th location, in Chesterfield, in May
2000.
Since the beginning of 1998, we have focused primarily on
improving the profitability of our banking operations. As a result, we
have reduced the amount of one- to four-family mortgages that we hold in
our loan portfolio and increased the amount of higher yielding
commercial loans. We also have hired several banking professionals with
experience in the St. Louis metropolitan area to help us grow our
commercial loans and deposits. We have refined our market focus to
concentrate exclusively on opportunities in the higher growth St. Louis
metropolitan area and, accordingly, we sold three retail banking offices
outside the St. Louis metropolitan area in December 1998. We also have
implemented company-wide, cost-control efforts to enhance efficiencies
throughout our entire operation.
Our management team is comprised of experienced individuals who
average more than 15 years in the banking or financial services
industries. As of March 1, 2000, our directors and executive officers
owned approximately 42% of our outstanding common stock.
The St. Louis metropolitan area is the 17th largest metropolitan
area in the United States with a population of approximately 2.45
million. The St. Louis metropolitan area is home to 19 Fortune 1000
companies, such as Anheuser-Busch Companies, Inc., Monsanto Company,
Ralston Purina Company and Trans World Airlines, Inc. Also the St.
Louis metropolitan area ranks fifth in the United States as a
headquarters location for Fortune 500 companies. In 1998, the St. Louis
area ranked second in Entrepreneur Magazine's listing of the top places
in the United States for small business, marking four straight years on
that publication's top ten list, and Inc. magazine placed St. Louis
among its top ten areas for growing firms.
FINANCIAL SUMMARY OF THE COMPANY
A consolidated financial summary of the Company and its
subsidiaries, included on page 8 in our 1999 Annual Report to
Shareholders, is incorporated herein by reference.
SUBSIDIARIES
The table setting forth the names and locations of the Company's
subsidiaries is included as Exhibit 21.1 hereto.
OPERATIONS
Allegiant Bank offers complete banking and trust services to
individuals, businesses and municipalities in the St. Louis metropolitan
area. Services include commercial, real estate, mortgage, and
installment loans, checking, savings and time deposit accounts, trust
and other fiduciary services and various other customer services such as
brokerage, insurance and safe deposit boxes.
2
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COMPETITION
We operate in a competitive environment. In the St. Louis
metropolitan area, other commercial banks, savings and loan
associations, credit unions, finance companies, mutual funds, insurance
companies, brokerage and investment banking firms and other financial
intermediaries offer similar services. Many of these competitors have
substantially greater resources and lending limits and may offer certain
services we do not currently provide. In addition, some of our nonbank
competitors are not subject to the same extensive regulations that
govern us, Allegiant Bank and our subsidiaries. Our profitability
depends upon the ability of Allegiant Bank to compete in our market
area.
SUPERVISION AND REGULATION
GENERAL. Financial institutions and their holding companies are
extensively regulated under federal and state law. As a result, our
growth and earnings performance can be affected not only by management
decisions and general economic conditions, but also by the requirements
of applicable state and federal statutes and regulations and the
policies of various government regulatory authorities, including the
Missouri Division of Finance, the Federal Reserve Board, the Federal
Deposit Insurance Corporation, the Internal Revenue Service, state
taxing authorities and the Securities and Exchange Commission. We
cannot predict with a high degree of certainty the effect of applicable
statutes, regulations and regulatory policies on us, but believe that it
could be significant.
Federal and state laws and regulations generally applicable to
financial institutions regulate, among other things, the scope of
business, investments, reserves against deposits, capital levels
relative to operations, the nature and amount of collateral for loans,
the establishment of branches, mergers, consolidations and dividends.
The system of supervision and regulation applicable to us establishes a
comprehensive framework for our operations and is intended primarily for
the protection of the FDIC's deposit insurance funds and the depositors
of the bank rather than our shareholders.
This summary of the material elements of this regulatory framework
does not describe all applicable statutes, regulations and regulatory
policies, nor does it restate all of the requirements of the statutes,
regulations and regulatory policies that are described. You should
review the applicable statutes, regulations and regulatory policies.
Any changes in applicable law, regulations or regulatory policies may
have a material effect on our business.
RECENT REGULATORY DEVELOPMENTS. Legislation has recently been
approved by Congress that allows bank holding companies to engage in a
wider range of nonbanking activities, including additional securities
and insurance activities. The expanded powers generally would be
available to a bank holding company only if the bank holding company and
its bank subsidiaries remain well-capitalized and well-managed. At this
time, we are unable to predict the full impact that this legislation may
have on us.
EMPLOYEES
As of December 31, 1999, we had approximately 226 full-time
equivalent employees. None of our employees are subject to a collective
bargaining agreement. We consider our relationship with our employees
and those of Allegiant Bank to be good.
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STATISTICAL DISCLOSURES
The following statistical disclosures, except as noted, are
included in our 1999 Annual Report to Shareholders, and is incorporated
herein by reference.
<TABLE>
<CAPTION>
ANNUAL REPORT
SCHEDULE REFERENCE
-------- -------------
<S> <C>
I. DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY:
INTEREST RATES AND INTEREST DIFFERENTIAL
A. Average Balance Sheets p. 11
B. Analysis of Net Interest Earnings p. 10
C. Taxable-Equivalent Rate-Volume Analysis p. 12
II. INVESTMENT PORTFOLIO
A. Book Value by Type of Security p. 14
B. Maturity Distribution p. 14
III. LOAN PORTFOLIO
A. Types of Loans p. 15
B. Maturities and Sensitivities to Changes in Interest Rates p. 15
C. Risk Elements
1. Non-Accrual, Past Due and Restructured Loans p. 16
2. Potential Problem Loans p. 16
3. Foreign Outstandings n/a
IV. SUMMARY OF LOAN LOSS EXPERIENCE
A. Reserve for Loan Losses p. 18
B. Allocation of the Reserve for Loan Losses p. 17
V. DEPOSITS<F*>
A. Average Balances and Rates Paid by Deposit Category p. 11
B. Maturity Distribution of Certain CDs and Time Deposits p. 19
VI. RETURN ON EQUITY AND ASSETS p. 9
VII. SHORT-TERM BORROWINGS p. 22
<FN>
- --------------------
<F*> There were no interest-bearing deposits with foreign banks at
December 31, 1999, 1998 or 1997.
</TABLE>
4
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ITEM 2. PROPERTIES
Our principal executive, administrative and operational offices
are located at 2122 Kratky Road in St. Louis, Missouri. As of December
31, 1999, Allegiant Bank conducted its business and operations out of 15
locations in the greater St. Louis Metropolitan area. Our physical
properties, which are either owned or leased, are in satisfactory
condition, adequately insured and suitable and adequate for present
operations.
ITEM 3. LEGAL PROCEEDINGS
Various claims and lawsuits, incidental to our ordinary course of
business, are pending against us or Allegiant Bank. In the opinion of
management, after consultation with legal counsel, resolution of these
matters is not expected to have a material effect on our consolidated
financial condition or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted during the quarter ended December
31, 1999 to a vote of our shareholders, through the solicitation of
proxies or otherwise.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
See Part III, Item 10.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
Information concerning our common stock, included on page 44 in
our 1999 Annual Report to Shareholders, is incorporated herein by
reference.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data," included on page 8 in our 1999 Annual
Report to Shareholders, is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," included on pages 9 through 23 of our 1999
Annual Report to Shareholders, is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
"Quantitative and Qualitative Disclosures About Market Risk,"
included under the Section entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Interest
Rate Sensitivity" on pages 19, 20 and 21 of our 1999 Annual Report to
Shareholders, is incorporated herein by reference.
5
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements, included in our
1999 Annual Report to Shareholders, are incorporated herein by
reference.
<TABLE>
<CAPTION>
ANNUAL REPORT
STATEMENT REFERENCE
--------- -------------
<S> <C>
Report of Ernst & Young LLP Independent Auditors Page 24
Consolidated Balance Sheets - December 31, 1999 and 1998 Page 25
Consolidated Statements of Income - Years ended December 31,
1999, 1998 and 1997 Page 26
Consolidated Statements of Shareholders' Equity -
Years ended December 31, 1999, 1998 and 1997 Page 27
Consolidated Statements of Cash Flows - Years ended
December 31, 1999, 1998 and 1997 Page 28
Notes to Consolidated Financial Statements Pages 29-41
</TABLE>
Selected Quarterly Financial Data (unaudited), included as Note 22
on page 41 in our 1999 Annual Report to Shareholders is incorporated
herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Information regarding our change of accountants is contained in
"Independent Public Accountants" in our Proxy Statement for the 2000
Annual Meeting of Shareholders, and is incorporated herein by reference.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding directors is contained under "Election of
Directors" and "Voting Securities and Principal Holders Thereof"
included in our Proxy Statement for the 2000 Annual Meeting of
Shareholders, and is incorporated herein by reference.
The following is a list, as of March 1, 2000, of the names and
ages of our executive officers and all positions and offices with us
presently held by the person named. There is no family relationship
between any of the named persons.
The name, age and position with respect to each of our executive
officers are set forth below:
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Marvin S. Wool, 71, has served as a director since 1990 and as our
chairman and as chairman of Allegiant Bank since March 1992. Mr. Wool
served as our chief executive officer from March 1992 through December
1998. For more than the past five years, Mr. Wool has served as the
president and chief executive officer of Dash Multi-Corp, the holding
company for subsidiary companies located in Georgia, Mississippi,
Missouri, New Jersey and California that are in the chemical, cloth
coating and carpet industries. Mr. Wool also serves as chairman of R-B
Rubber Products, Inc., a publicly-held integrated rubber recycler with
headquarters in McMinnville, Oregon.
Shaun R. Hayes, 40, has served as a director and as our president
since 1989 and president and chief executive officer of Allegiant Bank
since May 1992. Mr. Hayes became our chief executive officer in January
1999.
Thomas A. Daiber, 42, has served as our senior vice president and
chief financial officer and as executive vice president and chief
financial officer of Allegiant Bank since May 1999. Mr. Daiber has been
employed by us since March 1997 and served as our director of internal
auditing prior to being appointed to his current position. Prior to
joining us, Mr. Daiber served as an officer of Pioneer Bank and Trust
Company or its holding company, Forbes First Financial Corporation, for
more than five years.
The executive officers were appointed by and serve at the pleasure
of our board of directors.
Information regarding compliance with Section 16 of the Securities
Exchange Act of 1934, as amended, is contained in "Section 16(a)
Beneficial Ownership Reporting Compliance," included in our Proxy
Statement of the 2000 Annual Meeting of Shareholders, and is
incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information regarding executive compensation is contained in
"Compensation of Executive Officers," included in our Proxy Statement
for the 2000 Annual Meeting of Shareholders, and is incorporated herein
by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding security ownership of certain beneficial
owners and management is contained in "Voting Securities and Principal
Holders Thereof," included in our Proxy Statement for the 2000 Annual
Meeting of Shareholders, and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain relationships and related
transactions is contained in "Certain Relationships and Related
Transactions," included in our Proxy Statement for the 2000 Annual
Meeting of Shareholders, and is incorporated herein by reference.
7
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) Financial Statements: Incorporated herein by
reference, are listed in Item 8 hereof.
(2) Financial Statement Schedules:
Report of BDO Seidman, LLP, relating to our
consolidated financial statements for the year ended
December 31, 1997, is found following the signature pages
hereto.
(3) Exhibits: See Exhibit Index at page 13 hereof.
(b) Reports on Form 8-K
None filed for the quarter ended December 31, 1999.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Company caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized as of the 16th
day of March 2000.
ALLEGIANT BANCORP, INC.
(Registrant)
By /s/ Shaun R. Hayes
---------------------------------------
Shaun R. Hayes, President and
Chief Executive Officer
In accordance with the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Marvin S. Wool Chairman of the Board March 16, 2000
- ---------------------------
Marvin S. Wool
/s/ Shaun R. Hayes President, Chief Executive Officer March 16, 2000
- --------------------------- and Director
Shaun R. Hayes
/s/ Thomas A. Daiber Senior Vice President and Chief March 16, 2000
- --------------------------- Financial Officer
Thomas A. Daiber
/s/ Leland B. Curtis Director March 16, 2000
- ---------------------------
Leland B. Curtis
/s/ Kevin R. Farrell Director March 16, 2000
- ---------------------------
Kevin R. Farrell
9
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/s/ Leon A. Felman Director March 16, 2000
- ---------------------------
Leon A. Felman
/s/ C. Virginia Kirkpatrick Director March 16, 2000
- ---------------------------
C. Virginia Kirkpatrick
/s/ Jack K. Krause Director March 16, 2000
- ---------------------------
Jack K. Krause
/s/ John L. Weiss Director March 16, 2000
- ---------------------------
John L. Weiss
/s/ Lee S. Wielansky Director March 16, 2000
- ---------------------------
Lee S. Wielansky
</TABLE>
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
(BDO Seidman, LLP letterhead)
The Board of Directors
Allegiant Bancorp, Inc.
St. Louis, Missouri
We have audited the consolidated statements of income, shareholders'
equity and cash flows for the year ended December 31, 1997, of Allegiant
Bancorp, Inc. (a Missouri corporation) and subsidiaries. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audit 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 audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the results of Allegiant Bancorp, Inc.'s
operations and Allegiant Bancorp, Inc.'s cash flows for the year then
ended, in conformity with generally accepted accounting principles of
Allegiant Bancorp, Inc. and subsidiaries as of December 31, 1997.
/s/ BDO Seidman, LLP
St. Louis, Missouri
March 13, 1998
11
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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3.1 Articles of Incorporation, as amended, of the Company,
filed as Exhibit 3.1 to the Company's Registration
Statement on Form 10-SB (Reg. No. 0-26350) is hereby
incorporated by reference.
3.1(a) Amendment to Articles of Incorporation, as amended, of
the Company, filed as Exhibit 3 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, is hereby incorporated by reference.
3.2 By-laws of the Company, as currently in effect, filed as
Exhibit 3.2 to the Company's Quarterly Report on Form 10-
Q for the quarter ended June 30, 1999, is hereby
incorporated by reference.
4.1 Form of Stock Certificate for Common Stock, filed as
Exhibit 4.2 to the Company's Registration Statement on
Form 10-SB (Reg. No. 0-26350) is hereby incorporated by
reference.
4.2 Junior Subordinated Indenture, dated as of August 2,
1999, by and between the Company and Bankers Trust
Company, as Trustee, filed as Exhibit 4.1 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999, is hereby incorporated by reference.
10.1 Loan Agreement, dated November 12, 1998, by and between
LaSalle National Bank and the Company, filed as Exhibit
10.1 to the Company's Annual Report on Form 10-K/A for
the year ended December 31, 1998, is hereby incorporated
by reference.
10.2 Pledge Agreement, dated November 12, 1998, by and between
LaSalle National Bank and the Company, filed as Exhibit
10.2 to the Company's Annual Report on Form 10-K/A for
the year ended December 31, 1998, is hereby incorporated
by reference.
10.3 Allegiant Bancorp, Inc. 1994 Stock Option Plan, filed as
Exhibit 10.7 to Company's Registration Statement on Form
10-SB (Reg. No. 0-26350) is hereby incorporated by
reference.<F*>
10.4 Allegiant Bancorp, Inc. 1996 Stock Option Plan, filed as
Exhibit 4.4 to Company's Form S-8 (Reg. No. 0-26350) is
hereby incorporated by reference.<F*>
10.5 Allegiant Bancorp, Inc. Directors Stock Option Plan,
filed as Exhibit 4.5 to Company's Form S-8 (Reg. No.
0-26350) is hereby incorporated by reference.<F*>
10.6 Allegiant Bancorp, Inc. 1989 Stock Option Plan, filed as
Exhibit 4.6 to Company's Form S-8 (Reg. No. 0-26350) is
hereby incorporated by reference.<F*>
10.7 Executive Retention Agreement, dated May 24, 1999, by and
between the Company and Shaun R. Hayes is filed
herewith.<F*>
10.8 Underwriting Agreement, dated as of July 27, 1999, by and
between the Company and Allegiant Capital Trust I and
EVEREN Securities, Inc. and Wheat First Securities, as
representatives of the several underwriters, filed as
Exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1999, is hereby
incorporated by reference.
10.9 Guarantee Agreement, dated as of August 2, 1999, between
the Company, as guarantor, and Bankers Trust Company, as
guarantee trustee, filed as Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1999, is hereby incorporated by reference.
10.10 Amended and Restated Trust Agreement, dated as of August
2, 1999, among the Company, as depositor, Bankers Trust
Company, as property trustee, and Shaun R. Hayes and
Thomas A. Daiber, as administrators, filed as Exhibit
10.3 to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1999, is hereby incorporated
by reference.
<PAGE>
13 Portions of the 1999 Annual Report of the Company to its
Shareholders are filed herewith.
21.1 Subsidiaries of the Company is filed herewith.
23.1 Consent of Ernst & Young LLP is filed herewith.
23.2 Consent of BDO Seidman, LLP is filed herewith.
27.1 Financial Data Schedule is filed herewith (December 31,
1999).
[FN]
- --------------------------
<F*>Management contract or compensatory plan or arrangement.
12
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ALLEGIANT BANCORP, INC.
EXECUTIVE RETENTION AGREEMENT
This Executive Retention Agreement (this "Agreement") has
been entered into as of the 24th day of May, 1999, by and between
Allegiant Bancorp, Inc., a Missouri corporation (the "Company"), and
Shaun R. Hayes, an individual ("Executive").
RECITALS
The Board of Directors of the Company (the "Board"), has
determined that it is in the best interests of the Company and its
stockholders to reinforce and encourage the continued attention and
dedication of the Executive to the Company as a member of the Company's
management and to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility, threat or
occurrence of a Change in Control (as defined below) with respect to the
Company. The Board desires to provide for the continued employment of
the Executive, and the Executive is willing to commit to continue to
serve the Company. Additionally, the Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or threatened
Change in Control, to encourage the Executive's full attention and
dedication to the Company currently and in the event of any threatened
or pending Change in Control, and to provide the Executive with
compensation and benefits arrangements upon a termination of employment
after a Change in Control which ensure that the compensation and
benefits expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter
into this Agreement.
IT IS AGREED AS FOLLOWS:
SECTION 1: DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the
following words and phrases, whether or not capitalized, shall have the
meanings specified below, unless the context plainly requires a different
meaning.
1.1(a) "ANNUAL BASE SALARY" shall mean the rate of
base salary (excluding benefits, bonuses,
incentive compensation or other forms of
compensation or benefits) at which Executive
is being paid as of a particular date.
1.1(b) "BOARD" means the Board of Directors of the
Company.
1.1(c) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual,
entity or group, or (within the meaning of
Section 13(d)(3) or 14(d)(2), the Exchange
Act), a Person of ownership of 30% or more
of either (a) the then outstanding shares of
common stock of the Company (the "Outstanding
Company Common Stock") or (b) the combined voting
power of the then outstanding voting securities of
the Company entitled to vote generally in the
election of directors (the "Outstanding Company
Voting Securities"); or
(ii) Individuals who, as of the date
hereof, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at
least a majority of the Board; provided,
however, that for purposes of the definition
of "Incumbent Board," any individual becoming
a director subsequent to the date hereof
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whose election, or nomination for election by
the Company's stockholders, was approved by a
vote of at least a majority of the directors
then comprising the Incumbent Board shall be
considered as though such individual were a
member of the Incumbent Board, but excluding,
as a member of the Incumbent Board, any such
individual whose initial assumption of office
occurs as a result of either an actual or
threatened election contest (as such terms
are used in Rule l4a-11 of Regulation l4A
promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies
or consents by or on behalf of a Person other
than the Board; or
(iii) Approval by the stockholders of
the Company (and subsequent consummation) of
a reorganization, merger or consolidation, in
each case, unless, following such
reorganization, merger or consolidation,
(a) more than fifty percent (50%) of,
respectively, the then outstanding shares of
common stock of the corporation resulting
from such reorganization, merger or
consolidation and the combined voting power
of the then outstanding voting securities of
such corporation entitled to vote generally
in the election of directors is then
beneficially owned, directly or indirectly,
by all or substantially all of the
individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such reorganization,
merger or consolidation in substantially the
same proportions as their ownership,
immediately prior to such reorganization,
merger or consolidation, of the Outstanding
Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (b) no
Person (excluding the Company, any employee
benefit plan (or related trust) of the
Company or such corporation resulting from
such reorganization, merger or consolidation
and any Person beneficially owning,
immediately prior to such reorganization,
merger or consolidation, directly or
indirectly, twenty percent (20%) or more of
the Outstanding Company Common Stock or
Outstanding Voting Securities, as the case
may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of
common stock of the corporation resulting
from such reorganization, merger or
consolidation or the combined voting power of
the then outstanding voting securities of
such corporation, entitled to vote generally
in the election of directors and (c) at least
a majority of the members of the board of
directors of the corporation resulting from
such reorganization, merger or consolidation
were members of the Incumbent Board at the
time of the execution of the initial
agreement providing for such reorganization,
merger or consolidation; or
(iv) Approval by the stockholders of
the Company (and consummation) of (a) a
complete liquidation or dissolution of the
Company or (b) the sale or other disposition
of all or substantially all of the assets of
the Company, other than to a corporation,
with respect to which following such sale or
other disposition, (1) more than fifty
percent (50%) of, respectively, the then
outstanding shares of common stock of such
corporation and the combined voting power of
the then outstanding voting securities of
such corporation entitled to vote generally
in the election of directors is then
beneficially owned, directly or indirectly,
by all or substantially all of the
individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such sale or other
disposition in substantially the same
proportion as their
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ownership, immediately prior to such sale or
other disposition, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities, as the case may be, (2) no Person
(excluding the Company and any employee
benefit plan (or related trust) of the
Company or such corporation and any Person
beneficially owning, immediately prior to
such sale or other disposition, directly or
indirectly, twenty percent (20%) or more of
the Outstanding Company Common Stock or
Outstanding Company Voting Securities, as the
case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of
common stock of such corporation and the
combined voting power of the then outstanding
voting securities of such corporation
entitled to vote generally in the election of
directors and (3) at least a majority of the
members of the board of directors of such
corporation were members of the Incumbent
Board at the time of the execution of the
initial agreement or action of the Board
providing for such sale or other disposition
of assets of the Company.
1.1(d) "CHANGE IN CONTROL DATE" shall mean the date
of the Change in Control; provided, however,
that the Change in Control Date shall mean
the date immediately prior to the date the
Executive's employment with the Company was
terminated by the Company if (i) Executive's
employment with the Company was terminated by
the Company prior to the occurrence of a
Change in Control, and (ii) Executive's
employment (either in fact or as reasonably
demonstrated by Executive) was terminated
either at the request of a third party who
has taken steps reasonably calculated to
effect a Change in Control, or otherwise
occurred in connection with or anticipation
of a Change in Control.
1.1(e) "CODE" shall mean the Internal Revenue Code
of 1986, as amended.
1.1(f) "COMPANY" means Allegiant Bancorp, Inc., a
Missouri corporation.
1.1(g) "EFFECTIVE DATE" shall mean February 1, 1999.
1.1(h) "EXCHANGE ACT" means the Securities Exchange
Act of 1934, as amended.
1.1(i) "PERSON" means any "person" within the
meaning of Sections 13(d) and 14(d) of the
Exchange Act.
1.1(j) "TERM" means the period that begins on the
Effective Date and ends on the earlier of:
(i) January 1, 2005, or (ii) the date
Executive's employment terminates.
1.2 GENDER AND NUMBER. When appropriate, pronouns in this
Agreement used in the masculine gender include the feminine gender, words
in the singular include the plural, and words in the plural include the
singular.
1.3 HEADINGS. All headings in this Agreement are included
solely for ease of reference and do not bear on the interpretation of the
text. Accordingly, as used in this Agreement, the terms "Article" and
"Section" mean the text that accompanies the specified Article or Section
of the Agreement.
1.4 APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Missouri,
without reference to its conflict of law principles.
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SECTION 2: EMPLOYMENT; EMPLOYMENT TERMINATION.
2.1 EMPLOYMENT BEFORE A CHANGE IN CONTROL. Executive is
employed by the Company on an at will basis for no definite term. Either
the Company or Executive may terminate Executive's employment at any
time with or without cause by giving notice to the other party. Upon
termination of Executive's employment with the Company prior to a Change
in Control, whether employment is terminated by the Company, by
Executive, or otherwise, this Agreement shall terminate and neither party
shall have any rights or obligations hereunder except to the extent
provided for under Section 3 or otherwise under this Agreement; provided,
however, that Executive shall have all rights under this Agreement as if
a Change in Control occurred on the date immediately before the date
Executive's employment with the Company was terminated by the Company if
(i) Executive's employment with the Company was terminated by the Company
prior to the occurrence of a Change in Control, and (ii) Executive's
employment (either in fact or as reasonably demonstrated by Executive)
was terminated either at the request of a third party who has taken steps
reasonably calculated to effect a Change in Control, or otherwise
occurred in connection with or anticipation of a Change in Control.
2.2 TERMINATION OF EMPLOYMENT AFTER A CHANGE IN CONTROL.
After a Change in Control, the following provisions shall apply.
2.21 DEATH. The Executive's employment shall terminate
automatically upon the Executive's death.
2.22 DISABILITY. If the Company determines in good faith
that the Disability of the Executive has occurred (pursuant to the
definition of Disability set forth below), it may give to the Executive
written notice in accordance with Section 6.1 of its intention to
terminate the Executive's employment. In such event, the Executive's
employment with the Company shall terminate effective on the thirtieth
(30th) day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the thirty (30) days after such
receipt, the Executive shall not have returned to full-time performance
of the Executive's duties. For purposes of this Agreement, "Disability"
shall mean that the Executive has been unable to perform the services
required of the Executive hereunder on a full-time basis (with reasonable
accommodation) for a period of one hundred eighty (180) consecutive
business days by reason of a physical and/or mental condition.
"Disability" shall be deemed to exist when certified by a physician
selected by the Company or its insurers and acceptable to the Executive
or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably). The Executive will
submit to such medical or psychiatric examinations and tests as such
physician deems necessary to make any such Disability determination.
2.23 TERMINATION FOR CAUSE. The Company may terminate the
Executive's employment after a Change in Control for "Cause," which shall
mean termination based upon: (i) the Executive's willful and continued
failure to substantially perform Executive's duties with the Company
(other than as a result of incapacity due to physical or mental
condition), after a demand for substantial performance is delivered to
Executive by the Company, which specifically identifies the manner in
which the Executive has not substantially performed Executive's duties,
(ii) the Executive's commission of an act in connection with Executive's
employment constituting a criminal offense involving moral turpitude,
dishonesty, or breach of trust, (iii) Executive has engaged in any
conduct which would preclude Executive from employment with the Company
or any of its subsidiary banks or corporations, or the Executive is
disqualified or precluded from being employed by or providing any
services to the Company or any of its subsidiary banks or corporations by
reason of any federal or state banking law or regulation or any order or
written request of any regulatory agency which has jurisdiction over
Company or any of its subsidiaries, or (iv) the Executive's material
breach of any provision of this Agreement. For purposes of this Section,
no act, or failure to act on the Executive's part shall be considered
"willful" unless done, or omitted to be done, without good faith and
without reasonable belief that the act or omission was in the best
interest of the Company. Notwithstanding
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the foregoing, the Executive shall not be deemed to have been terminated
for Cause unless and until (i) Executive receives a Notice of Termination
(as defined in Section 2.26) from the Company, (ii) Executive is given
the opportunity, with counsel, to be heard before the Board, and (iii)
the Board finds, in its good faith opinion, the Executive was guilty of
the conduct set forth in the Notice of Termination.
2.24 GOOD REASON. After a Change In Control, the Executive
may terminate Executive's employment with the Company for "Good Reason,"
which shall mean termination based upon:
(i) Any action by the Company which results in a
material diminution in the duties or responsibilities held by
Executive as of the Change in Control Date, excluding for
this purpose any action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice
thereof given by the Executive and any actions which are a
necessary incident of a merger or consolidation (e.g., the
elimination or consolidation of a position) provided the
Executive is assigned duties and responsibilities of an
executive nature in lieu thereof;
(ii) The Company's reduction in the Annual Base
Salary at which the Executive was paid as of the Change in
Control Date;
(iii) (a) the failure by the Company to continue in
effect any benefit or compensation plan, stock ownership
plan, life insurance plan, health and accident plan or
disability plan to which the Executive was entitled as of the
Change in Control Date, (b) the taking of any action by the
Company which would adversely affect the Executive's
participation in, or materially reduce the Executive's
benefits under, any such plan or benefit, or deprive the
Executive of any material fringe benefit enjoyed by the
Executive as of the Change in Control Date, or (c) the
failure by the Company to provide the Executive with the
number of paid vacation days which the Executive was entitled
to receive on an annual basis as of the Change in Control
Date.
(iv) the Company's requiring the Executive to be
regularly based at any office or location outside the greater
metropolitan St. Louis area;
(v) a material breach by the Company of any
provision of this Agreement;
(vi) any purported termination by the Company of
the Executive's employment otherwise than as expressly
permitted by this Agreement;
(vii) within a period ending at the close of
business on the date three (3) years after the Change in
Control Date, if the Company has failed to comply with and
satisfy Section 5.2 on or after the Change in Control Date;
or
(viii) within a period ending at the close of
business on the date eighteen (18) months after the Change in
Control Date, the Executive, in the Executive's sole and
absolute discretion, determines that Executive no longer
wishes to be employed by the Company and notifies the Company
in writing that the Executive is terminating Executive's
employment with the Company as of a date not less than twenty
(20) days, and not more than sixty (60) days (unless the
Company otherwise agrees to a later termination date), after
the date the notice is given.
For purposes of this Section any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
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2.25 TERMINATION WITHOUT CAUSE AFTER A CHANGE IN CONTROL.
After a Change in Control, the Company shall continue to have the right
to terminate Executive's employment without Cause (in which case the
provisions of Section 3.2 apply) and for any or no reason, and nothing in
this Agreement shall be construed as limiting the Company's right to
terminate Executive's employment at any time without cause and for any or
no reason.
2.26 NOTICE OF TERMINATION. Any termination by the Company
for Cause or Disability, or by the Executive for Good Reason, shall be
communicated by Notice of Termination to the other party, given in
accordance with Section 6.1. For purposes of this Agreement, a "Notice
of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment
under the provision so indicated, and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than fifteen
(15) days after the giving of such notice, except as otherwise provided
for in Section 2.24(viii)). The failure by the Executive or the Company
to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company hereunder or preclude the Executive
or the Company from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
2.27 DATE OF TERMINATION. "Date of Termination" means
(i) if the Executive's employment is terminated by the Company for Cause,
or by the Executive for Good Reason, the Date of Termination shall be the
date of receipt of the Notice of Termination or any later date specified
therein, as the case may be, (ii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination
shall be the date of death of the Executive or the Disability Effective
Date, as the case may be, or (iii) if the Executive's employment is
terminated by the Company other than for Cause, death, or Disability, the
Date of Termination shall be the date of receipt of the Notice of
Termination; provided that if within thirty (30) days after any Notice of
Termination is given, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the
dispute is finally determined, either by mutual written agreement of the
parties, or by a final judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal
having been perfected).
SECTION 3: CERTAIN BENEFITS UPON TERMINATION.
3.1 TERMINATION OF EMPLOYMENT PRIOR TO A CHANGE IN CONTROL.
If, prior to a Change in Control: (i) the Company shall terminate
the Executive's employment, or (ii) the Executive shall terminate
employment with the Company, then:
3.1(a) "Accrued Obligations": The Company shall pay to the
Executive the sum of (1) the Executive's Annual Base
Salary through the Date of Termination to the extent
not previously paid, (2) any compensation previously
deferred by the Executive (together with any accrued
interest or earnings thereon) and (3) any accrued
vacation pay; in each case to the extent not
previously paid.
3.1(b) "Other Benefits": To the extent not previously paid
or provided, the Company shall timely pay or provide
to the Executive and/or the Executive's family any
other amounts or benefits required to be paid or
provided for which the Executive and/or the
Executive's family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or
practice or contract or agreement of the Company as
those provided generally to other peer executives and
their families during the ninety (90) day period
immediately preceding the
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Effective Date or, if more favorable to the
Executive, as those provided generally after the
Effective Date to other peer executives of the
Company and their families.
3.2 BENEFITS UPON TERMINATION OF EMPLOYMENT AFTER A
CHANGE IN CONTROL WITHOUT CAUSE OR FOR GOOD REASON. If a Change in Control
occurs while Executive is employed by the Company, and within three (3)
years after a Change in Control: (i) the Company shall terminate the
Executive's employment without Cause, or (ii) the Executive shall
terminate employment with the Company for Good Reason, then upon
satisfaction of the conditions set forth in Section 3.9 below (with
respect to the payments specified in Section 3.2 (b)) the Executive shall
be entitled to the benefits provided below:
3.2(a) "Accrued Obligations": Within thirty (30) days after
the Date of Termination, the Company shall pay to the
Executive the sum of (1) the Executive's Annual Base
Salary through the Date of Termination to the extent
not previously paid, (2) any compensation previously
deferred by the Executive (together with any accrued
interest or earnings thereon) and (3) any accrued
vacation pay; in each case to the extent not
previously paid.
3.2(b) "Severance Amount": Within thirty (30) days after
the Date of Termination and satisfaction of the
provisions of Section 3.9, and subject to the
provisions of Section 3.5, the Company shall pay to
the Executive as severance pay in a lump sum, in
cash, an amount equal to two and ninety-nine one
hundredths (2.99) times Executive's Annual Base
Salary; as such amount may be reduced pursuant to the
provisions of Section 3.5.
3.2(c) "Stock Options": To the extent not otherwise
provided for under the terms of the Company's stock
option plan or the Executive's stock option
agreements (if any), all such stock options shall
become fully exercisable as of the Date of
Termination and, except for "incentive stock options"
within the meaning of Code Section 422 granted prior
to the date hereof, shall remain fully exercisable
for six months following the Date of Termination.
3.2(d) "Other Benefits": To the extent not previously paid
or provided, the Company shall timely pay or provide
to the Executive and/or the Executive's family any
other amounts or benefits required to be paid or
provided for which the Executive and/or the
Executive's family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or
practice or contract or agreement of the Company as
those provided generally to other peer executives and
their families during the ninety (90) day period
immediately preceding the Effective Date or, if more
favorable to the Executive, as those provided
generally after the Effective Date to other peer
executives of the Company and their families; to the
extent permissible under the terms of the applicable
plan and applicable law.
3.3 DEATH; DISABILITY. If the Executive's employment
is terminated by reason of the Executive's death during the Employment
Period (either prior or subsequent to a Change in Control), this
Agreement shall terminate without further obligations to the Executive's
legal representatives under this Agreement, other than for (i) payment of
Accrued Obligations (as defined in Section 3.2(a)) (which shall be paid
to the Executive's estate or beneficiary, as applicable, in a lump sum in
cash within thirty (30) days of the Date of Termination) and (ii) the
timely payment or provision of Other Benefits (as defined in Section
3.1(b)), including death benefits pursuant to the terms of any plan,
policy, or arrangement of the Company.
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If the Executive's employment is terminated by reason of the
Executive's Disability during the Employment Period (either prior or
subsequent to a Change in Control), this Agreement shall terminate
without further obligations to the Executive, other than for (i) payment
of Accrued Obligations (as defined in Section 3.2(a)) (which shall be
paid to the Executive in a lump sum in cash within thirty (30) days of
the Date of Termination) and (ii) the timely payment or provision of
Other Benefits (as defined in Section 3.1(d)) including disability
benefits pursuant to the terms of any plan, policy or arrangement of the
Company.
3.4 TERMINATION FOR CAUSE; OTHER THAN GOOD REASON. If the
Executive's employment shall be terminated for Cause during the
Employment Period (either prior to or subsequent to a Change in Control),
this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive the
Executive's Accrued Compensation (as defined in this Section). If the
Executive terminates employment with the Company during the Employment
Period, (excluding a termination for Good Reason), this Agreement shall
terminate without further obligations to the Executive, other than for
the payment of Accrued Compensation (as defined in this Section) and the
timely payment or provision of Other Benefits (as defined in Section
3.1(d)). In such case, all Accrued Compensation shall be paid to the
Executive in a lump sum in cash within thirty (30) days of the Date of
Termination.
For the purpose of this Section, the term "Accrued Compensation"
means the sum of (i) the Executive's Annual Base Salary through the Date
of Termination to the extent not previously paid, (ii) any compensation
previously deferred by the Executive (together with any accrued interest
or earnings thereon), and (iii) any accrued vacation pay in each case to
the extent not previously paid.
3.5 "EXCESS PARACHUTE PAYMENT": Anything in this Agreement to
the contrary notwithstanding, in the event that an independent accountant
shall determine that any payment or distribution by the Company to or for
the benefit of Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise) (a
"Payment") would be nondeductible by the Company for Federal income tax
purposes because of Code Section 280G or would constitute an "excess
parachute payment" (as defined in Code Section 280G), then the aggregate
present value of amounts payable or distributable to or for the benefit
of Executive pursuant to this Agreement (such payments or distributions
pursuant to this Agreement are hereinafter referred to as "Agreement
Payments") shall be reduced (but not below zero) to the Reduced Amount.
For purposes of this paragraph, the "Reduced Amount" shall be an amount
expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be nondeductible by the
Company because of Code Section 280G or without causing any portion of
the Payment to be subject to the excise tax imposed by Code Section 4999.
If the independent accountant determines that any Payment would
be nondeductible by the Company because of Code Section 280G or that any
portion of the Payment will be subject to the excise tax imposed by Code
Section 4999, the Company shall promptly give Executive notice to that
effect and a copy of the detailed calculation thereof and of the Reduced
Amount. The Executive may then elect, in Executive's sole discretion,
which and how much of the Agreement Payments shall be eliminated or
reduced (as long as after such election the aggregate present value of
the Agreement Payments equals the Reduced Amount), and shall advise the
Company in writing of Executive's election within ten (10) days of
Executive's receipt of such notice. If no such election is made by
Executive within such ten-day period, the Company may elect which and how
much of the Agreement Payments shall be eliminated or reduced (as long as
after such election the aggregate present value of the Agreement Payments
equals the Reduced Amount) and shall notify the Executive promptly of
such election. For purposes of this paragraph, present value shall be
determined in accordance with Code Section 280G(d)(4). All
determinations made by the independent accountant under this Section
shall be binding upon the Company and the Executive and shall be made
within sixty (60) days of a termination of employment of the Executive.
As promptly as practicable following such determination and the elections
hereunder, the Company shall pay to or distribute to or for the benefit
of the Executive such amounts as are then due to the Executive under this
Agreement and shall
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promptly pay to or distribute for the benefit of the Executive in the
future such amounts as become due to the Executive under this Agreement.
As a result of the uncertainty in the application of Code Sections
280G and 4999 at the time of the initial determination by the independent
accountant hereunder, it is possible that Agreement Payments will be made
by the Company which should not have been made ("Overpayment") or that
additional Agreement Payments which have not been made by the Company
should have been made ("Underpayment"), in each case, consistent with the
calculation of the Reduced Amount hereunder. In the event that the
independent accountant, based upon the assertion of a deficiency by the
Internal Revenue Service against the Company or the Executive which the
independent accountant believes has a high probability of success,
determines that an Overpayment has been made, any such Overpayment shall
be treated for all purposes as a loan to the Executive which the
Executive shall repay to the Company together with interest at the
applicable Federal rate provided for in Code Section 7872(f)(2);
provided, however, that no amount shall be payable by the Executive to
the Company if and to the extent such payment would not reduce the amount
which is subject to taxation under Code Section 4999 or if the period of
limitations for assessment of tax under Code Section 4999 against the
Executive shall have expired. In the event that the independent
accountant, based upon controlling precedent, determines that an
Underpayment has occurred, any such Underpayment shall be promptly paid
by the Company to or for the benefit of the Executive together with
interest at the applicable Federal rate provided for in Code
Section 7872(f)(2)(A).
3.6 NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Executive's entitlement to accrued benefits under
any plan, program, policy or practice provided by the Company and for
which the Executive may qualify. Amounts which are vested benefits of
which the Executive is otherwise entitled to receive under any plan,
policy, practice or program of, or any contract or agreement with, the
Company at or subsequent to the Date of Termination, shall be payable in
accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
3.7 FULL SETTLEMENT. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may
have against the Executive or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced
whether or not the Executive obtains other employment.
3.8 RESOLUTION OF DISPUTES. If after a Change in Control there
shall be any dispute between the Company and the Executive (i) in the
event of any termination of the Executive's employment by the Company,
whether such termination was for Cause, or (ii) in the event of any
termination of employment by the Executive, whether Good Reason existed,
then, unless and until there is a final, nonappealable judgment by a
court of competent jurisdiction declaring that such termination was for
Cause or that the determination by the Executive of the existence of Good
Reason was not made in good faith, the Company shall pay all amounts, and
provide all benefits, to the Executive and/or the Executive's family or
other beneficiaries, as the case may be, that the Company would be
required to pay or provide pursuant to this Agreement as though such
termination were by the Company without Cause or by the Executive with
Good Reason; provided, however, that the Company shall not be required to
pay any disputed amounts pursuant to this Section except upon receipt of
an undertaking by or on behalf of the Executive to repay all such amounts
to which the Executive is ultimately adjudged by such court not to be
entitled.
3.9 CONDITIONS TO PAYMENTS. To be eligible to receive (and
continue to receive) and retain the payments and benefits described in
Section 3.2 (b), Executive must execute and deliver to the Company an
agreement, in form and substance satisfactory to the Company, effectively
releasing and giving up all claims Executive may have against the Company
or any of its subsidiaries or affiliates (and each of their
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respective employees, officers, plans or agents) arising out of any facts
or conduct occurring prior to that date. The agreement will be prepared by
the Company and provided to Executive at the time Executive's employment is
terminated or as soon as administratively practicable thereafter. The
agreement will require Executive to consult with Company representatives,
and voluntarily appear as a witness for trial or deposition (and to prepare
for any such testimony) in connection with, any claim which may be asserted
by or against the Company, or any business matter concerning the Company or
any of its transactions or operations.
SECTION 4: NON-COMPETITION. The provisions of this Section 4 and any
related provisions survive termination of this Agreement and/or
Executive's employment with the Company.
4.1 NON-COMPETE AGREEMENT.
4.1(a) It is agreed that during the period beginning on the
date the Executive's employment with the Company
terminates and ending one (1) year thereafter, the
Executive shall not, without prior written approval
of the Board, become an officer, employee, agent,
partner, or director of any business enterprise in
substantial direct competition (as defined in Section
4.1(b)) with the Company; provided that, if the
Executive is terminated by the Company without Cause
or if the Executive terminates Executive's employment
for Good Reason, then Executive will not be subject
to the restrictions of this Section.
4.1(b) For purposes of Section 4.1, a business enterprise
with which the Executive becomes associated as an
officer, employee, agent, partner, or director shall
be considered in substantial direct competition, if
such entity competes with the Company in any business
in which the Company or any of its direct or indirect
subsidiaries is engaged and is within the Company's
market area (as defined herein) as of the date the
Executive's Company employment terminates. The
Company's market area is defined for this purpose, as
the greater metropolitan St. Louis area, including
without limitation the City of St. Louis and the
Counties of St. Louis, St. Charles, and Jefferson, in
Missouri and the Counties of Madison and St. Clair in
Illinois.
4.1(c) The above constraint shall not prevent the Executive
from making passive investments, not to exceed five
percent (5%), in any enterprise.
4.2 CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or
any of its affiliated companies or direct or indirect subsidiaries, and
their respective businesses, which shall have been obtained by the
Executive during the Executive's employment by the Company and which
shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of
the Company, or as may otherwise be required by law or legal process,
use, or communicate or divulge, any such information, knowledge or data
to anyone other than the Company and those designated by it. In no event
shall an asserted violation of the provisions of this Section constitute
a basis for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.
SECTION 5: SUCCESSORS.
5.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal to the
Executive and, without the prior written consent of the Company, the
rights (but not the obligations) shall not be assignable by the
- 10 -
<PAGE>
<PAGE>
Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
5.2 SUCCESSORS OF COMPANY. This Agreement is freely assignable
by the Company. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no
such succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive to terminate the
Agreement at Executive's option on or after the Change in Control Date
for Good Reason. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or
assets which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
SECTION 6: MISCELLANEOUS.
6.1 NOTICE. For purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses as set forth below; provided that
all notices to the Company shall be directed to the attention of the
Chairman of the Board, or to such other address as one party may have
furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
Notice to Executive:
-------------------
Shaun R. Hayes
34 Glen Eagles Drive
St. Louis, MO 63124
Notice to Company:
-----------------
Allegiant Bancorp, Inc.
2122 Kratky Road
St. Louis, MO 63114
Attn: Chairman of the Board
6.2 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
6.3 WITHHOLDING. The Company may withhold from any amounts
payable under this Agreement such Federal, state or local taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
If any lawsuit is filed to declare this Agreement invalid in whole or in
part, or to enforce any party's rights or obligations under this
Agreement, then the party to this Agreement who prevails in such
litigation with respect to any such issue (other than by reason of a
settlement) shall be entitled to recover from the other party to this
Agreement all court costs, litigation expenses and reasonable attorney's
fees incurred by that prevailing party in defending against and/or
prosecuting that issue (as the case may be).
6.4 WAIVER. The Executive's or the Company's failure to insist
upon strict compliance with any provision hereof or any other provision
of this Agreement or the failure to assert any right the Executive or the
Company may have hereunder, including, without limitation, the right of
the Executive to terminate
- 11 -
<PAGE>
<PAGE>
employment for Good Reason pursuant to Section 2.24, shall not be deemed
to be a waiver of such provision or right or any other provision or right
of this Agreement.
6.5 ENTIRE AGREEMENT; NO AMENDMENT. This Agreement contains the
entire agreement between the parties respecting the subject matter hereof
and supersedes all prior oral or written communications and agreements
between the parties relating to employment or payments in the event
employment terminates. Neither this Agreement, nor any of its terms, may
be changed, added to, amended, waived or varied except in a writing
signed by Executive and the Company.
6.6 TERMINATION. This Agreement terminates on January 1, 2005
or the date Executive's employment with the Company terminates, whichever
first occurs. Termination does not affect accrued rights or obligations
(including but not limited to payment obligations under Section 3), or
(if applicable) the provisions of Section 4 or any related provisions.
IN WITNESS WHEREOF, the Executive and, the Company, pursuant to
the authorization from its Board, have caused this Agreement to be executed
in its name on its behalf, all as of the day and year first above
written.
Date: November 20, 1999 /s/ Shaun R. Hayes
-------------------------------------
Shaun R. Hayes
ALLEGIANT BANCORP, INC.
By: /s/ Marvin S. Wool
----------------------------------
Name: Marvin S. Wool
--------------------------------
Date: March 9, 2000 Title: Chairman
-------------------------------
- 12 -
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Years Ended December 31,
- --------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share data) 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Interest income $ 52,112 $ 49,218 $ 37,765 $ 25,056 $ 19,252
Interest expense 26,601 27,267 21,466 14,999 11,206
- --------------------------------------------------------------------------------------------------------------------------------
Net interest income 25,511 21,951 16,299 10,057 8,046
Provision for loan losses 2,546 2,420 2,397 1,448 977
- --------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision 22,965 19,531 13,902 8,609 7,069
- --------------------------------------------------------------------------------------------------------------------------------
Other income 4,843 9,324 3,298 1,393 654
Other expense 18,762 21,295 13,069 7,019 5,625
- --------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 9,046 7,560 4,131 2,938 2,098
Provision for income taxes 3,644 3,026 1,716 1,175 823
- --------------------------------------------------------------------------------------------------------------------------------
Net income $ 5,402 $ 4,534 $ 2,415 $ 1,808 $ 1,275
================================================================================================================================
Common Share Data:<F1>
Book value per share at year-end $ 7.73 $ 7.36 $ 6.88 $ 4.80 $ 4.25
Basic earnings per share 0.84 0.72 0.54 0.55 0.42
Diluted earnings per share 0.83 0.68 0.49 0.48 0.42
Cash dividends declared per share 0.20 0.12 0.08 0.06 0.04
Market value per share at year-end 9.75 9.48 11.25 8.17 7.28
Dividend payout ratio 18.10% 20.22% 13.77% 10.34% 8.86%
Shares outstanding at year-end 6,208,102 6,536,164 6,111,743 3,405,696 3,281,905
Average shares outstanding 6,450,639 6,250,910 4,885,303 3,708,821 3,086,215
Balance Sheet Data (at year-end):<F2>
Total assets $ 728,492 $ 596,274 $ 608,237 $ 377,564 $ 280,386
Investment securities 60,797 54,780 76,869 60,559 73,211
Total loans 615,191 495,668 484,863 291,926 181,544
Total deposits 548,466 450,766 484,641 308,670 231,309
Indebtedness:
Short-term borrowings 18,861 14,542 15,729 11,637 4,108
Federal Home Loan Bank advances 80,210 66,125 47,475 31,500 21,100
Other borrowings 12,650 13,150 13,650 7,663 8,619
Guaranteed preferred beneficial interest
in subordinated debentures 17,250 - - - -
Shareholders' equity 47,991 48,104 42,071 16,386 13,938
Average assets 650,551 619,016 463,029 308,984 228,130
Average shareholders' equity 49,099 44,721 25,292 14,851 11,737
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin 4.17% 3.82% 3.71% 3.39% 3.71%
Net interest spread 3.68 3.33 3.20 2.92 3.22
Other income to average assets 0.75 1.51 0.71 0.45 0.29
Other expense to average assets 2.88 3.44 2.82 2.27 2.47
Return on average total assets 0.83 0.73 0.52 0.59 0.56
Return on average shareholders' equity 10.60 10.14 9.55 12.17 10.86
Total loans to total deposits at
year-end 112.17 109.96 100.05 94.58 78.49
Average interest earning assets to
average interest bearing liabilities 111.47 110.34 110.33 109.27 109.55
Efficiency ratio 61.81 68.07 66.69 61.30 64.66
Average assets per employee $ 2,904 $ 2,612 $ 2,215 $ 2,835 $ 2,480
Asset Quality Ratios:
Allowance for loan loss to total loans 1.35% 1.30% 1.07% 1.06% 1.17%
Non-performing loans to total loans 0.10 0.36 0.28 0.24 0.17
Allowance for loan loss to total
non-performing loans 1,324.20 362.32 377.12 447.98 691.56
Net charge offs to average loans 0.12 0.25 0.19 0.21 0.19
Non-performing assets to total assets 0.14 0.30 0.28 0.18 0.11
Company Capital Ratios:
Equity to assets ratio 7.55 7.22 5.46 4.81 5.14
Risk-based capital ratio 10.23 8.68 8.14 8.55 11.51
Tier 1 capital ratio 8.80 7.42 6.39 6.10 7.98
Leverage ratio 7.47 5.83 6.15 4.38 5.12
Bank Capital Ratios:
Risk-based capital ratio 11.52 10.93 9.35 10.06 14.40
Tier 1 capital ratio 10.27 9.68 8.27 8.87 13.13
Leverage ratio 8.89 7.61 7.76 6.37 8.63
<FN>
<F1> All share and per share amounts have been restated to reflect: (i) a 10% stock dividend paid in January 1996; (ii) a 10% stock
dividend paid in January 1997; (iii) a five-for-four stock split effected in January 1998; and (iv) a six-for-five stock split
effected in January 1999.
<F2> Information given as of year-end except as otherwise noted.
</TABLE>
8\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
The terms "Allegiant," "company," "we," "our," and "corporation"
as used in this report refer to Allegiant Bancorp, Inc. and its
subsidiaries as a consolidated entity, except where it is made clear
that it means only Allegiant. Also, sometimes we refer to our bank
subsidiary as the "bank."
This report contains certain forward-looking statements with
respect to the financial condition, results of operations and business
of Allegiant and its subsidiaries. These forward-looking statements
involve certain risks and uncertainties. For example, by accepting fixed
rate deposits at different times and for different terms, and lending
funds at fixed rates for fixed periods, a bank accepts the risk that the
cost of funds may rise and the use of funds may be at a fixed rate.
Similarly, the cost of funds may fall, but a bank may have committed by
virtue of the term of a deposit to pay what becomes an above-market
rate. Investments may decline in value in a rising interest rate
environment. Loans, and the reserve for loan losses, have the risk that
the borrower will not repay all funds in a timely manner as well as the
risk of total loss. Collateral may or may not have the value attributed
to it. The loan loss reserve, while believed adequate, may prove
inadequate if one or more large borrowers, or numerous mid-size
borrowers, or a combination of both experience financial difficulty for
individual, national or international reasons. Because the business of
banking is highly regulated, decisions of governmental authorities, such
as the rate of deposit insurance, can have a major effect on operating
results. All these uncertainties, as well as others, are present in a
banking operation and shareholders are cautioned that management's view
of the future may prove to be other than anticipated. Allegiant
undertakes no obligation to release revisions to these forward-looking
statements or reflect events or circumstances after the date of this
report. The data presented in the following pages should be read in
conjunction with the audited consolidated financial statements on pages
24 to 41 of this report.
OVERVIEW
The profitability of our operations depends on our net interest
income, provision for loan losses, other income and other expense. Net
interest income is the difference between the income we receive on our
loan and investment portfolios and our cost of funds, which consists of
interest paid on deposits and borrowings. The provision for loan losses
reflects the cost of credit risk in our loan portfolio. Other income
consists primarily of service charges on deposit accounts and fees for
ancillary banking services and, to a lesser extent, revenues generated
from our mortgage banking, securities brokerage, insurance brokerage and
trust operations. Other expense includes salaries and employee benefits
as well as occupancy, data processing, marketing, professional fees,
insurance and other expenses.
Net interest income is dependent on the amounts and yields of
interest earning assets compared to the amounts and rates on interest
bearing liabilities. Net interest income is sensitive to changes in
market rates of interest and our asset/liability management procedures
are intended to manage the risk presented by changes in market interest
rates. The provision for loan losses is dependent on changes in the
loan portfolio, management's assessment of the collectibility of the
loan portfolio and loss experience, as well as economic and market
factors.
Since the beginning of 1998, we have focused primarily on
improving the profitability of our banking operations. As a result, we
have reduced the amount of one- to four-family mortgages that we hold in
our loan portfolio and increased the amount of higher yielding
commercial loans. We also have hired several banking professionals with
experience in the St. Louis metropolitan area. We have refined our
market focus to concentrate exclusively on opportunities in the higher-
growth St. Louis metropolitan area and, accordingly, we sold three
retail banking offices outside the St. Louis metropolitan area in
December 1998. We have also implemented company-wide cost control
efforts to enhance efficiencies throughout our entire operation.
Our primary financial strategies are to continue to grow our loan
portfolio while maintaining high asset quality, expand our core deposit
base to provide cost-effective and stable source of funding for our loan
portfolio and increase other income while maintaining strong expense
controls. We believe we have maintained high asset quality while
managing growth both internally and by acquisition. We also believe our
history of strong credit quality has resulted from sound credit
practices.
<PAGE>
RESULTS OF OPERATIONS
EARNINGS SUMMARY
We reported record earnings of $5.4 million for 1999, marking the
eighth consecutive year of earnings growth. Consolidated net income
increased 19.1% over the 1998 level of $4.5 million. Basic earnings per
share were $0.84 compared to $0.72 in 1998, an increase of 16.7%.
Diluted earnings per share in 1999 were $0.83 increasing 22.1% compared
to the $0.68 reported for 1998.
We utilized the purchase method of accounting to reflect our
business combinations. The purchase method results in the recording of
goodwill that is amortized as a noncash charge to operating expenses.
Goodwill amortization included as an operating expense totaled $1.0
million in 1999 and $0.9 million in 1998. Cash net income (net income
adjusted to exclude the goodwill amortization) was $6.4 million and $5.4
million for the years ended December 31, 1999 and 1998, respectively.
Diluted cash earnings per share were $0.98 in 1999 compared to $0.81 in
1998.
Return on average assets for 1999 was 0.83%, an improvement from
0.73% recorded for 1998 and 0.52% for 1997. The increase in return on
average assets was primarily the result of improved net interest income
and an improved mix of earning assets. Return on average shareholders'
equity was 10.6% in 1999, compared to 10.1% in 1998 and 9.6% in 1997.
The increase in 1999 was achieved as a result of the growth in net
income while shareholders' equity remained constant compared with 1998
due to our purchase of treasury stock under our share repurchase program
which offset the increase in retained earnings.
Net interest income in 1999 increased 15.9% to $25.5 million from
$22.0 million in 1998. The net interest margin improved by 35 basis
points to 4.17% for 1999 compared to 3.82% for 1998. This improvement
in net interest margin, together with strong earning asset growth,
resulted in the increase in net interest income.
The provision for loan losses totaled $2.5 million in 1999
representing a slight increase compared to the $2.4 million provided in
both 1998 and 1997. The level of the allowance for loan losses was
increased with the allowance representing 1.35% of total loans
outstanding at December 31, 1999, compared to 1.30% and 1.07% of total
loans at December 31, 1998 and 1997, respectively. The allowance has
been increased to reflect the change in the mix of the loan portfolio
toward a greater percentage of commercial loans. This change is
discussed in greater depth under -- "Balance Sheet Analysis - Allowance
for Loan Losses."
1999 Annual Report\9
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS, CONT'D
Non-interest income decreased by 48.0% in 1999 compared to 1998
primarily as a result of gains in 1998 from the sale of mortgage loans
and the sale of three branches in Northeast Missouri. Leasing income
also decreased in 1999 as no new lease financing was originated.
Mortgage banking revenue decreased as a result of the sale of our
subsidiary, Edge Mortgage Services, Inc., in March 1999 and a decline in
mortgage refinancings as a result of higher market interest rates in
1999. Income from service charges on deposit accounts and overdraft
fees increased in 1999 from 1998. See -- "Other Income."
Non-interest expense declined $2.5 million in 1999, to $18.8
million, a decrease of 11.7%. This compared to 1998 non-interest
expense of $21.3 million and $13.1 million in 1997. Salaries and
benefits totaled $9.7 million in 1999 and 1998, while other operating
expenses decreased from $11.6 million in 1998 to $9.0 million in 1999.
See -- "Other Expense."
NET INTEREST INCOME
Net interest income totaled $25.5 million, an increase of $3.6
million or 16.2% in 1999 compared to net interest income of $22.0
million in 1998. Net interest income totaled $16.3 million in 1997.
The net interest spread and the net interest margin each increased by
35 basis points from 1998 following an 11 basis point increase in net
interest margin from 1997 and a 13 basis point increase in net interest
spread from 1997. The increase in net interest income reflected the
greater percentage of higher yielding loans to earning assets and
overall growth in average earning assets and interest bearing
liabilities. The 1999 increase in net interest spread was due to the
yields on earning assets declining only 4 basis points from 1998 and a
decline of 50 basis points on interest bearing liabilities. In 1998,
the spread increased 13 basis points as a result of similar changes on
both sides of the balance sheet, the yield on earning assets decreased
2 basis points and cost of interest bearing liabilities decreased
15 basis points.
The yield on loans declined by 18 basis points in 1999 and
16 basis points in 1998 as market interest rates declined in late 1998 and
early 1999. The declines in loan yields were offset by an increase in
the ratio of loans to total earning assets growing to 90.2% in 1999 from
86.0% in 1998 and 83.2% in 1997. Lower rates were paid on all
categories of interest bearing deposits in 1999 compared to 1998 and
rates were generally flat or lower in 1998 compared to 1997. Total cost
of deposits declined 50 basis points in 1999 and 11 basis points in 1998
due to a reduction of rates paid on money market/NOW accounts, savings
deposits and retail certificates of deposit. Average borrowings
increased $11.5 million in 1999 from 1998 and included $17.2 million of
trust preferred securities issued in August 1999. The effects of
changes in rates and average volumes can been seen in the table titled
"Rate/Volume Analysis" below.
Average earning assets increased $34.0 million or 5.9% during 1999
compared to an increase of $134.6 million or 30.6% in 1998. Average
loans increased 11.1% or $54.5 million compared to growth of $128.0
million or 35.0% in 1998. The growth in average loans was effected by
the bulk sale of mortgage loans that occurred during the second and
third quarters of 1998. These sales, which amounted to $78.4 million,
decreased average loans outstanding for 1998 by approximately $34.3
million compared to 1997. The average of our securities portfolio
(held-to-maturity and available-for-sale) decreased $14.6 million or
20.4% during 1999 compared to an increase of 9.3% in 1998. Average
investment securities represented 9.3% of earning assets during 1999
compared to 12.5% during 1998. This decline in the actual and relative
amounts of investment securities was directly related to the increase in
the percentage of loans to earning assets discussed above. In essence,
strong loan growth necessitated the reduction in the securities
portfolio. Earning assets as a percentage of total assets increased in
1999 to 94.0% from 92.8% in 1998 following a decline from 94.9% in 1997.
The 1998 increase in non-earning assets was the result of opening
additional branch locations as well as 1997 acquisitions, which
increased the number of branches and intangible assets. This increase
was somewhat offset by the sale of branches located outside the
St. Louis metropolitan area which occurred in December 1998.
Average interest bearing liabilities increased $27.9 million or
5.4% in 1999 compared to an increase of $122.0 million or 30.6% in 1998.
Average deposits increased $16.4 million or 3.8% in 1999 compared to an
increase in 1998 of $99.1 million or 30.1%. During 1999, average money
market and NOW accounts increased $52.7 million or 41.6% while
certificates of deposit under $100,000 decreased $48.6 million or 21.6%.
This shift in deposit mix was the result of management's decision to
replace these rate-sensitive certificates of deposit with lower cost
money market deposits. The decline in certificates also was partially
offset by an increase in average brokered deposits of $21.1 million in
1999. The change in deposit mix contributed to a 50 basis point
decrease in the average cost of deposits in 1999 compared to 1998.
During 1998, certificates of deposit over $100,000 declined as a
percentage of total deposits while retail certificates of deposit
increased. Non-interest bearing deposits as a percentage of total
deposits declined only 10 basis points to 10.00% from 10.10%. The
substantial growth in average deposits and the relatively stable mix
allowed for the average cost of interest bearing deposits to decline by
11 basis points.
<PAGE>
Average short-term borrowings increased $6.0 million in 1999
averaging $58.9 million during 1999 compared to $52.9 million during
1998 after remaining flat in 1998 compared to 1997. See -- "Liquidity
Management."
Average long-term debt in 1999 decreased by $1.6 million or 4.1%
following an increase of $22.5 million or 136.5% in 1998. The majority
of the 1998 increase was due to long-term borrowings from the Federal
Home Loan Bank of $26.6 million at year-end 1998, a $17.0 million change
from year-end 1997. We still continue to utilize the Federal Home Loan
Bank as a cost-effective source of funding loans. Additionally, during
November 1998, we refinanced a portion of our long-term debt and our
entire issue of subordinated debentures with a $13.7 million, 7.00%
fixed rate, three-year note.
OTHER INCOME
Other income totaled $4.8 million in 1999 compared to $9.3 million
in 1998 and $3.3 million in 1997. Included in other income in 1998 were
$3.6 million of non-recurring gains, specifically: $2.4 million from the
sale of branch offices; $1.1 million from the sale of mortgage loans;
and $0.1 million from securities transactions. Eliminating all one-time
or discretionary gains, 1998 other income was $5.8 million. The decrease
in other income also included a $1.4 million or 58.9% decrease in
mortgage banking revenue from $2.3 million in 1998 to $0.9 million in
1999. The change included the results of a general slow-down in mortgage
refinancings due to higher mortgage rates in the latter half of 1999 and
the March 1999 sale of Edge Mortgage, a former subsidiary of the
Company. The sale of Edge Mortgage was consistent with our strategic
focus to concentrate our resources on increasing our commercial loan
portfolio. Leasing revenues decreased by $0.5 million in 1999 from 1998
as we terminated production of operating leases in the latter half of
1998. Service charge income increased $0.5 million or 36.1% from 1998 to
1999 as enhanced service charge programs were implemented.
10\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
The following table presents the net interest income, net interest
margin and net interest spread for the three years 1999 through 1997. The
table compares interest income and average interest-earning assets with
interest expense and average interest-bearing liabilities.
<TABLE>
DISTRIBUTION OF AVERAGE ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY AND INTEREST RATES
<CAPTION>
Years Ended December 31,
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Average Int. Earned/ Average Average Int. Earned/ Average
(Dollars in thousands) Balance Paid Yield Balance Paid Yield
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest earning assets:
Loans<F1> $551,189 $48,604 8.82% $493,619 $44,412 9.00%
Taxable investment securities 54,984 3,263 5.93 70,079 4,223 6.03
Non-taxable investment securities<F2> 2,026 98 4.83 1,494 72 4.89
Federal funds sold and other investments 3,028 147 4.86 9,036 511 5.66
- ----------------------------------------------------------------------- ---------------------------
Total interest earning assets 611,227 52,112 8.53 574,228 49,218 8.57
Non-interest earning assets:
Cash and due from banks 12,073 12,230
Premises and equipment 10,537 10,994
Other assets 23,771 27,238
Allowance for loan losses (7,057) (5,674)
- ----------------------------------------------------------------------- ---------------------------
Total assets $650,551 $619,016
======================================================================= ===========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Money market/NOW accounts $179,484 7,165 3.99 $126,829 5,221 4.12
Savings deposits 14,448 308 2.13 16,524 425 2.57
Certificates of deposit 176,106 9,202 5.23 224,661 12,878 5.73
Certificates of deposit over $100,000 33,105 1,587 4.79 39,581 2,198 5.55
IRA certificates 20,291 1,154 5.69 20,584 1,227 5.96
Brokered deposits 21,135 1,179 5.58 - - -
- ----------------------------------------------------------------------- ---------------------------
Total interest bearing deposits 444,569 20,595 4.63 428,179 21,949 5.13
Federal funds purchased, repurchase
agreements and other short-term
borrowings 58,877 3,002 5.10 52,855 2,624 4.96
Other borrowings 37,797 2,271 6.01 39,403 2,694 6.84
Guaranteed preferred beneficial interest in
subordinated debentures 7,079 733 10.35 - - -
- ----------------------------------------------------------------------- ---------------------------
Total interest bearing liabilities 548,322 26,601 4.85 520,437 27,267 5.24
======================================================================= ===========================
Non-interest bearing liabilities and equity:
Demand deposits 49,886 47,560
Other liabilities 3,244 6,298
Shareholders' equity 49,099 44,721
- ----------------------------------------------------------------------- ---------------------------
Total liabilities and shareholders'
equity $650,551 $619,016
======================================================================= ===========================
Net interest income $25,511 $21,951
======================================================================= ===========================
Net interest spread 3.68% 3.33%
Net interest margin 4.17% 3.82%
<PAGE>
<CAPTION>
Years Ended December 31,
- --------------------------------------------------------------------------------------
1997
- --------------------------------------------------------------------------------------
Average Int.Earned/ Avg.
(Dollars in thousands) Balance Paid Yield
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Interest earning assets:
Loans<F1> $365,615 $33,473 9.16%
Taxable investment securities 64,384 3,910 6.07
Non-taxable investment securities<F2> 1,130 56 4.96
Federal funds sold and other investments 8,492 326 3.84
---------------------------
Total interest earning assets 439,621 37,765 8.59
===========================
Non-interest earning assets:
Cash and due from banks 9,341
Premises and equipment 6,869
Other assets 11,065
Allowance for loan losses (3,867)
---------------------------
Total assets $463,029
===========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Money market/NOW accounts $ 95,431 4,092 4.29
Savings deposits 9,665 279 2.89
Certificates of deposit 162,870 9,436 5.79
Certificates of deposit over $100,000 48,358 2,686 5.55
IRA certificates 12,780 760 5.95
Brokered deposits - - -
---------------------------
Total interest bearing deposits 329,104 17,253 5.24
Federal funds purchased, repurchase
agreements and other short-term
borrowings 52,702 2,895 5.49
Other borrowings 16,658 1,318 7.91
Guaranteed preferred beneficial interest in
subordinated debentures - - -
---------------------------
Total interest bearing liabilities 398,464 21,466 5.39
---------------------------
Non-interest bearing liabilities and equity:
Demand deposits 36,966
Other liabilities 2,307
Shareholders' equity 25,292
---------------------------
Total liabilities and shareholders'
equity $463,029
===========================
Net interest income $16,299
===========================
Net interest spread 3.20%
Net interest margin 3.71%
<FN>
<F1> Average balances include non-accrual loans.
<F2> Presented at actual yield rather than tax-equivalent yield.
</TABLE>
1999 Annual Report\11
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS, CONT'D
The following table sets forth for the periods indicated, the changes in
interest income and interest expense which were attributable to changes
in average volume and changes in average rates:
<TABLE>
RATE/VOLUME ANALYSIS
<CAPTION>
Twelve Months Ended December 31, 1999 Twelve Months Ended December 31, 1998
Compared to the Compared to the
Twelve Months Ended December 31, 1998 Twelve Months Ended December 31, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
(In thousands) Volume Rate Net Change Volume Rate Net Change
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTEREST EARNED ON:
Loans $ 5,096 $ (904) $ 4,192 $11,534 $(595) $10,939
Taxable investment securities (891) (69) (960) 340 (27) 313
Non-taxable investment securities 26 - 26 16 - 16
Federal funds sold and
other investments (300) (64) (364) 24 161 185
- -----------------------------------------------------------------------------------------------------------------------------------
Total interest income 3,931 (1,037) 2,894 11,914 (461) 11,453
- -----------------------------------------------------------------------------------------------------------------------------------
INTEREST PAID ON:
Money market/NOW accounts 2,114 (169) 1,945 1,297 (169) 1,128
Savings deposits (50) (67) (117) 180 (34) 146
Certificates of deposit (2,618) (1,058) (3,676) 3,539 (97) 3,442
Certificates of deposit
over $100,000 (333) (278) (611) (488) - (488)
IRA certificates (18) (55) (73) 465 2 467
Brokered deposits 1,179 - 1,179 - - -
Federal funds purchased, repurchase
agreements and other short-term
borrowings 307 70 377 8 (278) (270)
Other borrowings (106) (317) (423) 1,577 (201) 1,376
Guaranteed preferred beneficial interest
in subordinated debentures 733 - 733 - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total interest expense 1,208 (1,874) (666) 6,578 (777) 5,801
- -----------------------------------------------------------------------------------------------------------------------------------
Net interest income $ 2,723 $ 837 $ 3,560 $ 5,336 $ 316 $ 5,652
===================================================================================================================================
</TABLE>
OTHER INCOME, CONT'D
In December 1998, we sold our branches located outside the greater
metropolitan St. Louis area in order to focus on and expand our market
share in our principal trade area. This sale generated a reduction in
loans of $13.5 million, a reduction in deposits of $40.0 million and a
pre-tax gain of $2.4 million.
Also during 1998, we completed two significant sales of a large
portion of our one- to four-family adjustable rate mortgage loans. These
sales generated a pre-tax gain of $1.1 million. While we sold some of
our mortgage loans in previous years, the 1998 bulk sales reflected a
shift in our strategy from originating and holding mortgage loans to
increasing our lending emphasis on more profitable commercial loan
relationships.
Mortgage banking revenues decreased 58.9% in 1999 to $0.9 million.
This compares to $2.3 million in 1998 which represented an increase of
76.9% compared to 1997. The decrease in 1999 reflected a general slow-
down in mortgage refinancings and the March 1999 sale of Edge. The
increase in 1998 was attributable to a favorable economic environment
of low unemployment and stable, low long-term interest rates.
Leasing revenues totaled $1.1 million in 1999, a decrease of 29.5%
compared to $1.5 million in 1998 and $0.4 million in 1997. We entered
the retail leasing business during 1997 and the 1998 results reflected a
full year of business operation compared to a partial year in 1997.
During the latter part of 1998, we decided to curtail this line of
business because of declining profit margins.
Service charges on deposit accounts increased to $1.9 million in
1999 compared to $1.4 million in 1998 and $913,000 in 1997. The
increases were due to additional branch locations generating a larger
base of transaction deposits as well as the benefit of Allegiant Bank's
revised fee structure.
Brokerage revenues remained flat at $0.3 million in 1999 and 1998,
representing an increase of 50.0% compared to $0.2 million in 1997.
OTHER EXPENSES
Total operating expenses decreased $2.5 million or 11.7% during
1999, totaling $18.8 million compared to $21.3 million in 1998. Our
efficiency ratio for 1999 was 61.8%, an improvement from 68.1% in 1998
and 66.7% in 1997. The improvement reflected our commitment to
improving our overall efficiency by continuing to emphasize revenue
growth while decreasing our current level of operating expense.
Salaries and employee benefits remained unchanged at $9.7 million
in 1999 and 1998 following an increase from $6.2 million in 1997. The
increase from 1997 was due to additional staffing resulting from
acquisitions and new locations. Average full-time equivalent employees
for 1999 was 224 compared to 237 in 1998 and 146 in 1997. At December
31, 1999, we had 225 full-time equivalent employees compared to 215 at
year-end 1998 and 209 at year-end 1997.
Furniture and equipment expenses decreased $105,000 to $1.7
12\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
million in 1999. This followed an increase of $809,000 in 1998. The
increase in 1998 was the result of acquisitions in 1997 and branch
openings in 1998 and 1997.
Occupancy expenses totaled $1.3 million, a decrease of $179,000 or
11.8% during 1999 following an increase of 106.4% in 1998. The 1998
increase in occupancy expenses to $1.5 million from $738,000 in 1997 was
attributable to acquisitions and branch openings, as discussed above.
Depreciation of the assets held for operating leases decreased
$479,000 in 1999 compared to 1998. As discussed under -- "Other Income,"
the retail leasing business was started in late 1997 so that 1998
reflected a full year of operations. During the latter part of 1998,
this line of business was curtailed resulting in lower depreciation
expense in 1999.
Expense for the amortization of goodwill totaled $980,000 in 1999
and $910,000 in 1998 compared to $552,000 in 1997. This increase was the
result of acquisitions and deposit purchases during 1997 and reflected a
full year of amortization during 1998 and 1999.
In 1999, operating losses totaled $80,000 compared to $450,000 in
1998 and $870,000 in 1997. Of the amount in 1997, $752,000 was
considered systemic and non-recurring due to integration of two branch
acquisitions and difficulties associated with upgrading our computer
systems to an entirely new operating system. Excluding non-recurring
items in 1998, the increase in operating losses in 1998 was $332,000.
The 1998 operating losses were related to inconsistent operating
procedures as a result of the expansion of the number of branches and
number of employees. Throughout 1998 and 1999, we have reengineered
several operational processes in an effort to improve quality and
control. As a result of training and improved operating procedures, we
reduced other operating losses to $80,000 in 1999.
Other non-interest expense decreased $1.1 million or 22.0% in 1999
compared to 1998. Other non-interest expense increased $1.8 million in
1998 from 1997. The growth in 1998 expenses was associated with an
increase in employees, an increase in the number of deposit and loan
accounts, and an increase in physical locations compared to prior years.
The decrease in 1999 was the result of tighter expense control and
implementation of operating efficiencies following the sale of our three
Northeast Missouri branches in December 1998. Specific cost savings
realized in 1999 compared to 1998 included a decrease in supplies
expense of $215,000 as a result of the implementation of a centralized
purchasing function. Telephone expense decreased $118,000 as telephone
contracts were reviewed and renegotiated. Legal, accounting and
professional fee expense decreased $432,000 in 1999 compared to 1998 as
expenses in 1998 included costs associated with establishing a real
estate investment trust and the costs associated with changing
independent accounting firms.
The following table sets forth our summary of other income and
expenses for the years indicated:
<TABLE>
<CAPTION>
Years Ended December 31,
- ------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OTHER INCOME:
Service charges on deposits $ 1,888 $ 1,387 $ 913
Leasing revenues 1,077 1,527 433
Mortgage banking revenues 944 2,299 1,300
Brokerage division revenues 306 312 169
Gain on sale of branches - 2,370 -
Gain on sale of mortgage loans - 1,112 27
Gain on the sale of securities - 68 2
Other non-interest income 628 249 454
- ------------------------------------------------------------------------------------------
Total other income $ 4,843 $ 9,324 $ 3,298
==========================================================================================
OTHER EXPENSES:
Salaries and employee benefits $ 9,717 $ 9,663 $ 6,192
Furniture and equipment 1,650 1,752 943
Occupancy 1,344 1,523 738
Goodwill amortization 980 910 358
Depreciation of operating leases 861 1,340 394
Supplies 274 489 428
Operating losses - other 80 450 870
Operating losses - overdrawn customer accounts 35 272 68
Other non-interest expense 3,821 4,896 3,078
- ------------------------------------------------------------------------------------------
Total other expenses $18,762 $21,295 $13,069
==========================================================================================
</TABLE>
<PAGE>
BALANCE SHEET ANALYSIS
SECURITIES PORTFOLIO
Our securities portfolio consists of securities classified as
held-to-maturity and available-for-sale. We designate these securities
upon purchase into one of these two categories. At December 31, 1999
held-to-maturity securities amounted to $11.7 million representing those
securities we intend to hold to maturity. Securities designated as
available-for-sale totaled $49.1 million representing securities which
we may sell to meet liquidity needs or in response to significant
changes in interest rates or prepayment patterns.
For purposes of this discussion, held-to-maturity and available-
for-sale securities are referred to as the securities portfolio. At
December 31, 1999 the securities portfolio totaled $60.8 million, an
increase of 11.0% from the preceding year. While year-end balances for
1999 were higher than 1998, the percentage of securities to earning
assets declined to 9.0% in 1999 compared to 12.5% in 1998. This decline
reflected management's decision to allow the proceeds of maturing
securities to be reinvested in higher yielding commercial loans.
1999 Annual Report\13
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS, CONT'D
The carrying value and approximate fair value of investment
securities at December 31, 1999, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
Securities Available-for-Sale
December 31, 1999
- ---------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. government and
agency securities $34,553 $ 3 $(1,032) $33,524
State and municipal securities 598 - (14) 584
Mortgage-backed securities 7,558 13 (132) 7,439
Federal Home Loan Bank stock 7,124 - - 7,124
Other securities 458 - - 458
- ---------------------------------------------------------------------------------------------------
Total $50,291 $16 $(1,178) $49,129
===================================================================================================
<CAPTION>
Securities Held-to-Maturity
December 31, 1999
- ---------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. government and
agency securities $ 5,500 $ 1 $ (15) $ 5,486
State and municipal securities 4,210 4 (418) 3,796
Mortgage-backed securities 1,958 44 - 2,002
Federal Home Loan Bank stock - - - -
Other securities - - - -
- ---------------------------------------------------------------------------------------------------
Total $11,668 $49 $(433) $11,284
===================================================================================================
<CAPTION>
Securities Available-for-Sale
December 31, 1998
- ---------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. government and
agency securities $29,269 $217 $ (51) $29,435
State and municipal securities 598 9 - 607
Mortgage-backed securities 8,360 38 (65) 8,333
Federal Home Loan Bank stock 3,574 - - 3,574
Other securities 791 - - 791
- ---------------------------------------------------------------------------------------------------
Total $42,592 $264 $(116) $42,740
===================================================================================================
<CAPTION>
Securities Held-to-Maturity
December 31, 1998
- ---------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. government and
agency securities $ 7,585 $ 30 $(21) $ 7,594
State and municipal securities 858 28 - 886
Mortgage-backed securities 3,597 55 - 3,652
Federal Home Loan Bank stock - - - -
Other securities - - - -
- ---------------------------------------------------------------------------------------------------
Total $12,040 $113 $(21) $12,132
===================================================================================================
<PAGE>
<CAPTION>
Securities Available-for-Sale
December 31, 1997
- ---------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. government and
agency securities $26,545 $106 $ (9) $26,642
State and municipal securities 597 - - 597
Mortgage-backed securities 9,243 33 (1) 9,275
Federal Home Loan Bank stock 7,033 - - 7,033
Other securities 1,371 - - 1,371
- ---------------------------------------------------------------------------------------------------
Total $44,789 $139 $(10) $41,918
===================================================================================================
<CAPTION>
Securities Held-to-Maturity
December 31, 1997
- ---------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. government and
agency securities $21,712 $ 50 $(131) $21,631
State and municipal securities 966 24 - 990
Mortgage-backed securities 9,273 253 (1) 9,525
Federal Home Loan Bank stock - - - -
Other securities - - - -
- ---------------------------------------------------------------------------------------------------
Total $31,951 $327 $(132) $32,146
===================================================================================================
</TABLE>
Maturities and yield information of the investment securities portfolio
as of December 31, 1999 were as follows:
<TABLE>
SECURITIES PORTFOLIO--MATURITIES AND YIELDS<F1>
<CAPTION>
Weighted Over One Weighted
One Year Average Through Average
(Dollars in thousands) or Less Yield Five Years Yield
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Governmental securities $ 1,500 6.26% $ - -%
U.S. agency securities 9,992 5.76 20,543 5.62
Municipal securities 85 3.41 161 2.06
Mortgage-backed securities 4,328 6.85 4,603 5.94
Federal Home Loan Bank stock - - - -
Other securities 458 6.00 - -
- -------------------------------------------------------- -----------
Total securities $16,363 6.09 $25,307 5.65
======================================================== ===========
Total securities portfolio
<CAPTION>
Over Five Weighted Weighted
Through Average Over Ten Average
(Dollars in thousands) Ten Years Yield Years Yield
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Governmental securities $ - -% $ - -%
U.S. agency securities 6,989 6.17 - -
Municipal securities 1,128 4.29 3,419 6.20
Mortgage-backed securities 380 7.60 87 7.60
Federal Home Loan Bank stock 7,124 6.35 - -
Other securities - - - -
- -------------------------------------------------------- -----------
Total securities $15,621 6.15 $ 3,506 6.23
======================================================== ===========
Total securities portfolio $60,797 5.93
<FN>
<F1> Maturities are shown in this table by expected maturity. Expected maturities differ from contractual maturities due to the
right to call or prepay obligations.
</TABLE>
14\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
LOANS
Loans historically have been the primary component of earning
assets. At December 31, 1999 loans totaled $615.2 million, an increase
of 24.1% from year-end 1998. Average loans increased 11.1% during 1999
compared to a 35.0% increase in 1998. Substantially all of these loans
were originated in our primary market areas. We have no foreign loans
and a minor amount of participations purchased.
An increase in commercial loans comprised the majority of our loan
growth in 1999 and 1998. Commercial real estate loans increased $38.6
million or 19.6% to $235.2 million at year-end 1999 compared to $196.5
million at year-end 1998. Construction loans increased $28.7 million or
78.5% in 1999, totaling $65.3 million at year-end 1999 compared to $36.6
million at year-end 1998. The increase in construction loans in 1999
was primarily due to an increase in loans to St. Louis area home
builders. Traditional commercial loans increased $24.0 million or 19.0%
in 1999 to $150.3 million at December 31, 1999. Growth in these
commercial categories reflected management's decision to focus on the
more profitable commercial relationships and reduce the amount of one-
to four-family mortgage loans carried on our balance sheet. The growth
in the commercial sectors was accomplished by hiring additional
commercial lending personnel and directing existing staff toward
commercial relationship procurement. As a result of this emphasis,
commercial real estate loans comprised 38.2% of the loan portfolio in
1999 and 39.7% in 1998 compared to 27.9% in 1997. Traditional commercial
loans comprised 24.4% of the portfolio in 1999 and 25.5% in 1998
compared to 22.7% in 1997.
The decline in one- to four-family residential loans since 1997
partially offset the commercial loan growth. Residential loans declined
from $196.0 million at December 31, 1997 to $116.3 million at year-end
1998. This decline was primarily the result of the 1998 bulk sale of
$78.4 million in loans. One- to four-family residential loans increased
21.5% to $141.3 million at December 31, 1999, as we retained a larger
percentage of the adjustable rate mortgages. One- to four-family
residential loans represented 23.0% of total loans at year-end 1999 and
23.5% at year-end 1998 compared to 40.4% of total loans at year-end
1997.
Consumer loans increased $3.2 million dollars or 10.5% during
1999, reaching $24.2 million at December 31, 1999 compared to $20.9
million and $16.8 million at December 31, 1998 and 1997, respectively.
Consumer loans do not comprise a large percentage of our loan portfolio
(3.9% at December 31, 1999), but are an important product which allows
us to meet the lending needs of individuals within the St. Louis
community.
The following table summarizes the composition of our loan
portfolio at the dates indicated:
<TABLE>
LOAN PORTFOLIO -- TYPES OF LOANS
<CAPTION>
December 31,
- -----------------------------------------------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial, financial, agricultural,
municipal and industrial
development $150,259 $126,239 $109,937 $ 75,129 $ 40,518
Real estate-construction 65,310 36,590 27,181 8,763 8,777
Real estate-mortgage
One- to four-family residential 141,264 116,291 195,964 121,386 71,260
Multi-family and commercial 235,158 196,545 135,452 74,721 52,795
Consumer and other 24,152 20,908 16,821 12,084 8,379
Less unearned income (952) (904) (493) (157) (185)
- -----------------------------------------------------------------------------------------------------------------------------------
Total loans<F1> $615,191 $495,669 $484,862 $291,926 $181,544
===================================================================================================================================
<FN>
<F1> We had no outstanding foreign loans at the dates reported.
<PAGE>
LOAN PORTFOLIO -- MATURITIES AND SENSITIVITIES OF LOANS
<CAPTION>
December 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Maturing in Maturing After One Year Maturing After
One Year or Less Through Five Years Five Years
- -----------------------------------------------------------------------------------------------------------------------------------
(In thousands) Fixed-rate Variable Fixed-rate Variable Total
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Commercial, financial,
agricultural, municipal
and industrial development $ 94,322 $ 34,479 $14,991 $ 1,557 $ 4,910 $150,259
Real estate-construction 43,432 13,192 7,653 700 333 65,310
Real estate-mortgage
One- to four-family residential 61,978 30,337 15,719 5,216 28,014 141,264
Multi-family and commercial 88,756 105,222 25,095 5,705 10,380 235,158
Consumer and other 8,381 11,923 3,296 552 - 24,152
Less unearned income (952) - - - - (952)
- -----------------------------------------------------------------------------------------------------------------------------------
Total loans $295,917 $195,153 $66,754 $13,730 $43,637 $615,191
===================================================================================================================================
</TABLE>
1999 Annual Report\15
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS, CONT'D
ASSET QUALITY
Non-performing assets, consisting of loans past due 90 days or
greater, non-accrual loans, restructured loans and other real estate
owned decreased to $1.0 million at December 31, 1999 compared to $1.8
million at December 31, 1998 and $1.7 million at December 31, 1997. At
December 31, 1999 non-performing assets represented 0.14% of total
assets compared to 0.30% of total assets at December 31, 1998 and 0.28%
of total assets at December 31, 1997. Non-accrual loans were $0.6
million at December 31, 1999 compared to $1.5 million at December 31,
1998 and $0.6 million at December 31, 1997. Loans delinquent 90 days or
more decreased from $818,000 at year-end 1997 to $69,000 and $73,000 at
December 31, 1998 and 1999, respectively. Other real estate owned at
December 31, 1999 totaled $402,000 and consisted primarily of assets
repossessed through a loan foreclosure in December 1999. Other real
estate was $0 and $330,000 at December 31, 1998 and 1997, respectively.
We have two loan relationships, not included in the past-due,
restructured or non-accrual categories, where known information about
credit problems causes management to be uncertain as to the ability of
the borrowers to comply with the present loan repayment terms over the
next six months. These two loan relationships totaled $8.7 million at
December 31, 1999. Principal and interest payments on such loans were
current at December 31, 1999.
We continually analyze our loan portfolio to identify potential
risk elements. The loan portfolio is reviewed by lending management and
our internal loan review staff. As an integral part of their examination
process, the various regulatory agencies periodically review our reserve
for loan losses. We believe that our allowance for loan losses at
December 31, 1999 was adequate to absorb potential losses inherent in
the loan portfolio.
The following table summarizes, for the periods presented, non-
performing assets by category:
<TABLE>
RISK ELEMENTS -- NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS
<CAPTION>
December 31,
- -----------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands) 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial, financial, agricultural, municipal and
industrial development:
Past due 90 days or more $ - $ - $ 341 $ 5 $ 113
Non-accrual 379 962 360 207 109
Restructured terms - - - - -
Real estate-construction:
Past due 90 days or more - - - 264 36
Non-accrual - - 108 84 20
Restructured terms - - - - 3
Real estate-mortgage:
One- to four-family residential:
Past due 90 days or more 22 69 456 - -
Non-accrual 178 378 70 - -
Restructured terms - - - - -
Multi-family and commercial:
Past due 90 days or more - - - - -
Non-accrual - 307 - - -
Restructured terms - - - - -
Consumer and other, net of unearned income:
Past due 90 days or more - - 21 23 12
Non-accrual 49 62 21 109 15
Restructured terms - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total non-performing loans 628 1,778 1,377 692 308
- -----------------------------------------------------------------------------------------------------------------------------------
Other real estate 402 - 330 - 10
- -----------------------------------------------------------------------------------------------------------------------------------
Total non-performing assets $ 1,030 $ 1,778 $ 1,707 $ 692 $ 318
===================================================================================================================================
Balance sheet information (at year-end):
Total assets $ 728,492 $596,274 $608,237 $377,564 $280,386
Loans outstanding 615,191 495,669 484,862 291,926 181,544
Shareholders' equity 47,991 48,104 42,071 16,386 13,938
Allowance for loan losses 8,315 6,442 5,193 3,100 2,130
Ratios:
Non-performing loans to total loans 0.10% 0.36% 0.28% 0.24% 0.17%
Non-performing assets to total assets 0.14 0.30 0.28 0.18 0.11
Non-performing loans to shareholders' equity 1.31 3.70 3.27 4.22 2.21
Allowance for loan losses to total loans 1.35 1.30 1.07 1.06 1.17
Allowance for loan losses to non-performing loans 1,324.20 362.32 377.12 447.98 691.56
</TABLE>
16\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
ALLOWANCE FOR LOAN LOSSES
Our allowance for loan losses increased 29.1% from $6.4 million at
December 31, 1998 to $8.3 million on December 31, 1999. This followed
an increase of 24.1% in 1998 compared to 1997. The provision charged to
expense was $2.5 million in 1999, similar to the $2.4 million expensed
in 1998. The 1999 provision allowed the level of the allowance to
increase to 1.35% of total loans at December 31, 1999 compared to 1.30%
at December 31, 1998. As previously discussed, we have shifted our
lending focus to higher yielding commercial relationships. This shift,
while providing higher earnings potential, does entail greater risk than
traditional residential mortgage loans. Because of this shift, the
overall level of the allowance for loan losses was increased. Further,
additional weight has been given to the increased risks associated with
the commercial real estate portfolio. Specific allowances have been
increased on certain commercial real estate loans based on individual
reviews of these loans and an estimate of the borrower's ability to
repay the loan given the availability of collateral, other sources of
cash flow and collection options available to us. The specific review
of these commercial real estate loans resulted in the increase in the
percentage of allowance allocated to this loan category. Net charge-
offs for 1999 were 12 basis points of average loans outstanding compared
to 25 basis points in 1998 and 19 basis points in 1997. At year-end
1999, our allowance represented 1,324.2% of non-performing loans
compared to 362.3% at year-end 1998 and 377.1% at year-end 1997.
The allowance for loan losses is provided at a level considered
adequate to provide for potential loan losses and, among other things,
is based on management's evaluation of the anticipated impact on the
loan portfolio of current economic conditions, changes in the character
and size of the loan portfolio, evaluation of potential problem loans
identified based on existing circumstances known to management and
recent loan loss experience. We continually monitor the quality of our
loan portfolio to ensure timely charge-off of problem loans and to
determine the adequacy of the level of the allowance for loan losses.
We presently believe that our asset quality, as measured by the
statistics in the following table, continues to be very high and that
our allowance was adequate to absorb potential losses inherent in the
portfolio at December 31, 1999.
The following table summarizes the allocation of the allowance for
loan losses by major category and identifies the percentage of each loan
category to the total loan portfolio balance:
<TABLE>
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
<CAPTION>
December 31,
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Percent Percent Percent
Allocated of Allocated of Allocated of
(Dollars in thousands) Reserves Total Reserves Total Reserves Total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Commercial, financial, agricultural,
municipal and industrial
development $2,082 25.04% $1,327 20.60% $1,352 26.04%
Real estate-construction 649 7.80 347 5.39 303 5.83
Real estate-mortgage
One- to four-family residential 1,712 20.59 1,222 18.97 636 12.25
Multi-family and commercial 3,208 38.58 2,883 44.75 1,572 30.27
Consumer and other 239 2.88 162 2.51 179 3.45
Unallocated 425 5.11 501 7.78 1,151 22.16
- ------------------------------------------------------------------------------------------------------------------------------------
Total $8,315 100.00% $6,442 100.00% $5,193 100.00%
====================================================================================================================================
<PAGE>
<CAPTION>
December 31,
- ------------------------------------------------------------------------------------------------------
1996 1995
- ------------------------------------------------------------------------------------------------------
Percent Percent
Allocated of Allocated of
(Dollars in thousands) Reserves Total Reserves Total
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial, financial, agricultural,
municipal and industrial
development $ 833 26.87% $ 467 21.92%
Real estate-construction 124 4.00 281 13.19
Real estate-mortgage
One- to four-family residential 439 14.16 305 14.32
Multi-family and commercial 714 23.03 513 24.09
Consumer and other 142 4.58 90 4.23
Unallocated 848 27.36 474 22.25
- ------------------------------------------------------------------------------------------------------
Total $3,100 100.00% $2,130 100.00%
======================================================================================================
</TABLE>
1999 Annual Report\17
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS, CONT'D
The following table summarizes, for the periods indicated, activity in
the allowance for loan losses, including amounts of loans charged off,
amounts of recoveries and additions to the allowance charged to
operating expenses:
<TABLE>
SUMMARY OF LOAN LOSS EXPERIENCE AND RELATED INFORMATION
<CAPTION>
Years Ended December 31,
- ------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Allowance for loan losses (beginning of year) $ 6,442 $ 5,193 $ 3,100 $ 2,130 $ 1,455
Loans charged off:
Commercial, financial, agricultural,
municipal and industrial development (504) (632) (536) (113) (183)
Real estate-construction - (7) (22) (250) (82)
Real estate-mortgage
One- to four-family residential (160) (307) (88) (37) -
Multi-family and commercial (23) (133) - (75) -
Consumer and other (173) (147) (113) (68) (58)
- ------------------------------------------------------------------------------------------------------------------------------------
Total loans charged off (860) (1,226) (759) (545) (323)
- ------------------------------------------------------------------------------------------------------------------------------------
Recoveries of loans previously charged off:
Commercial, financial, agricultural,
municipal and industrial development 67 4 12 54 11
Real estate-construction - 6 - - -
Real estate-mortgage
One- to four-family residential 95 14 10 3 -
Multi-family and commercial 10 20 20 - -
Consumer and other 16 11 30 10 10
- ------------------------------------------------------------------------------------------------------------------------------------
Total recoveries 188 55 52 67 21
- ------------------------------------------------------------------------------------------------------------------------------------
Net loans charged off (672) (1,171) (707) (478) (302)
- ------------------------------------------------------------------------------------------------------------------------------------
Acquired subsidiary balance - - 403 - -
Provision for loan losses 2,545 2,420 2,397 1,448 977
- ------------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses (end of year) $ 8,315 $ 6,442 $ 5,193 $ 3,100 $ 2,130
====================================================================================================================================
Loans outstanding:
Average $548,165 $493,619 $365,615 $232,314 $158,503
End of year 615,191 495,669 484,862 291,926 181,544
Ratios:
Net charge-offs to average loans 0.12% 0.25% 0.19% 0.21% 0.19%
Net charge-offs to provision for loan losses 26.39 48.39 29.50 33.01 30.91
Provision for loan losses to average loans 0.46 0.49 0.66 0.62 0.62
Allowance for loan losses to total loans 1.35 1.30 1.07 1.06 1.17
</TABLE>
18\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
DEPOSITS
As shown below, total deposits increased $97.7 million or 21.7% in
1999 compared to 1998. The increase in deposits included $48.0 million
in brokered certificates of deposit which were utilized as a cost-
effective method of funding a portion of our loan growth in 1999. Money
market accounts increased $36.9 million or 29.8% to $160.7 million at
December 31, 1999. We continue to attract money market deposits with
competitive interest rates and have increased these core deposits to
29.3% of total deposits from 27.5% at December 31, 1998.
Average deposits for 1999 were $494.5 million compared to $475.7
million in 1998. The increase in average deposits included a $52.7
million increase in money market accounts and a decrease in certificates
of deposit of $34.2 million. Changes in the mix of average deposits were
the result of a reduction in emphasis on certificates of deposit under
$100,000 along with management's decision to replace these deposits with
more cost effective deposits.
<TABLE>
DEPOSIT LIABILITY COMPOSITIONS
<CAPTION>
December 31,
- -----------------------------------------------------------------------------------------------------------------------------------
1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Percent Avg. Percent Avg.
(Dollars in thousands) Amount of Total Rate Amount of Total Rate
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Demand deposits $ 51,845 9.45% -% $ 55,417 12.29% -%
Money market and
NOW accounts 185,193 33.77 3.99 142,902 31.70 4.12
Savings deposits 13,052 2.38 2.13 14,917 3.31 2.57
Certificates of deposit 181,700 33.13 5.23 187,886 41.68 5.73
Certificates of deposit
over $100,000 47,550 8.67 4.79 31,173 6.92 5.55
IRA Certificates 21,126 3.85 5.69 18,471 4.10 5.96
Brokered deposits over $100,000 48,000 8.75 5.58 - - -
- ------------------------------------------------------------------------ ----------------------------
Total Deposits $548,466 100.00% 4.63 $450,766 100.00% 5.13
======================================================================== ============================
</TABLE>
AMOUNTS AND MATURITIES OF BROKERED DEPOSITS AND TIME DEPOSITS OF
$100,000 OR MORE
(In thousands) December 31, 1999
- ---------------------------------------------------------
Three months or less $36,220
Over three months through six months 33,724
Over six months through twelve months 16,167
Over twelve months 9,439
- ---------------------------------------------------------
Total $95,550
=========================================================
INTEREST RATE SENSITIVITY
Our asset/liability strategy is to minimize the sensitivity of
earnings to changes in interest rates while maintaining an acceptable
net interest margin. Allegiant Bank's asset/liability committee monitors
the interest rate sensitivity of the balance sheet on a monthly basis.
The committee reviews asset and liability repricing in the context of
current and future interest rate scenarios affecting the economic
climate in our market areas.
Our pricing policy is that all earning assets and interest bearing
liabilities be either based on floating rates or have a fixed rate not
exceeding five years. Real estate mortgage loans held by us, while
having long final maturities, are comprised of one-, two- or three-year
adjustable rate loans. The adjustable basis of these loans
significantly reduces interest rate risk.
1999 Annual Report\19
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS, CONT'D
The following table illustrates our estimated interest rate
sensitivity and periodic and cumulative gap positions calculated as of
December 31, 1999:
<TABLE>
<CAPTION>
Time to Maturity or Repricing
- -----------------------------------------------------------------------------------------------------------------------------------
0 to 3 4 to 12 1 to 5 Over
(Dollars in thousands) Months Months Years 5 Years Total
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Rate Sensitive Assets (RSA):
Loans $312,621 $ 90,225 $210,509 $ 1,836 $615,191
Investment securities 7,036 9,285 25,306 19,170 60,797
Federal funds sold 9,927 - - - 9,927
- -----------------------------------------------------------------------------------------------------------------------------------
Total RSA $329,584 $ 99,510 $235,815 $ 21,006 $685,915
===================================================================================================================================
Rate Sensitive Liabilities (RSL):
Money market accounts $160,701 $ - $ - $ - $160,701
NOW accounts 24,492 - - - 24,492
Savings 13,052 - - - 13,052
Time deposits 36,838 100,022 65,688 457 203,006
Time deposits over $100,000 13,064 24,895 9,261 330 47,550
Brokered deposits 23,000 25,000 - - 48,000
Repurchase agreements 17,787 93 480 - 18,361
Short-term borrowings-other - 500 - - 500
Short-term FHLB borrowings 32,500 24,500 - - 57,000
Long-term FHLB borrowings 6 20 22,249 935 23,210
Long-term borrowings-other - - 11,798 17,922 29,720
- -----------------------------------------------------------------------------------------------------------------------------------
Total RSL $321,441 $175,031 $109,476 $ 19,644 $625,592
===================================================================================================================================
Periodic Information:
GAP (RSA-RSL) $ 8,143 $(75,520) $126,339 $ 1,362
RSA/RSL 102.53% 56.85% 215.40% 106.94%
RSA/total assets 45.24 13.66 32.37 2.88
RSL/total assets 44.12 24.03 15.03 2.70
GAP/total assets 1.12 (10.37) 17.34 0.19
GAP/RSA 2.47 (75.89) 53.58 6.48
Cumulative Information:
Cumulative RSA $329,584 $429,094 $664,909 $685,915
Cumulative RSL 321,441 496,472 605,948 625,592
GAP (RSA-RSL) 8,143 (67,378) 58,961 60,323
RSA/RSL 102.53% 86.43% 109.73% 109.64%
RSA/total assets 45.24 58.90 91.27 94.16
RSL/total assets 44.12 68.15 83.18 85.87
GAP/total assets 1.12 (9.25) 8.09 8.28
GAP/RSA 2.47 (15.70) 8.87 8.79
</TABLE>
We measure the impact of interest rate changes on our income
statement through the use of gap analysis. The gap represents the net
position of assets and liabilities subject to repricing in specified
time periods. During any given time period, if the amount of rate-
sensitive liabilities exceeds the amount of rate-sensitive assets, a
company would generally be considered negatively gapped and would
benefit from falling rates over that period of time. Conversely, a
positively gapped company would generally benefit from rising rates.
We have structured our assets and liabilities to mitigate the risk
of either a rising or falling interest rate environment. Depending upon
our assessment of economic factors such as the magnitude and direction
of projected interest rates over the short and long term, we generally
operate within guidelines set by our asset/liability policy and attempt
to maximize our returns within an acceptable degree of risk. Our
intention is to maintain a gap position at the one-year horizon of
between 0.75% and 1.25%. Our position at December 31, 1999 was 0.86%.
We manage our gap position at the one-year horizon as well as monitor
the cumulative gap position for succeeding time frames.
Interest rate changes do not affect all categories of assets and
liabilities equally or simultaneously. There are other factors that are
difficult to measure and predict that would influence the effect of
interest rate fluctuations on our income statement. For example, a
rapid drop in interest rates might cause our borrowers to repay their
loans at a more rapid pace and certain mortgage-related investments to
be prepaid more quickly than projected. This could mitigate some of the
benefits of falling rates as are expected when negatively gapped.
Conversely, a rapid rise in rates could give us an opportunity to
increase our margins and stifle the rate of repayment on our mortgage-
related loans which would increase our returns.
20\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
The following table shows the "rate shock" results of a simulation
model that attempts to measure the effect of rising and falling interest
rates over a two-year horizon in a rapidly changing rate environment.
+200 Basis -200 Basis
Points Points
- ------------------------------------------------------------------------
Percentage change in net
income due to an immediate
200 basis point change in
interest rates over a two-year
time horizon +17.5% -21.0%
We use a sensitivity model that simulated these interest rate
changes on our earning assets and interest-bearing liabilities. This
process allows us to explore the complex relationships among the
financial instruments in various interest rate environments.
The preceding sensitivity analysis is based on numerous
assumptions including: the nature and timing of interest rate levels
including the shape of the yield curve; prepayments on loans and
securities; changes in deposit levels; pricing decisions on loans and
deposits; reinvestment/replacement of asset and liability cash flows;
and others. While assumptions are developed based upon current economic
and local market conditions, we cannot make any assurances as to the
predictive nature of these assumptions including how client preferences
or competitor influences might change.
Interest rate exposure is measured by the potential impact on our
income statement of changes in interest rates. We use information from
our gap analysis and rate shock calculations as input to help manage our
exposure to changing interest rates.
We use our rate shock information to tell us how much exposure we
have to rapidly changing rates. Based on historical information and our
assessment of future interest rate trends, we do not believe it is
likely that rapidly rising rates would have a significant positive
impact on our results of operations. Conversely, we also believe there
is minimal likelihood that rapidly falling rates would have a
significant negative impact on our results of operations.
We believe that more likely scenarios include gradual changes in
interest rate levels. We continue to monitor our gap and rate shock
analyses to detect changes to our exposure to fluctuating rates. We
have the ability to shorten or lengthen maturities on newly acquired
assets, sell investment securities, or seek funding sources with
different maturities in order to change our asset and liability
structure for the purpose of mitigating the effect of interest rate
risk.
The following table provides additional information about our
financial instruments at December 31, 1999. For loans, securities and
liabilities with contractual maturities, the table presents principal
cash flow and related weighted-average interest rates by contractual
maturities. Core deposits that have no contractual maturity are subject
to immediate withdrawal or repricing.
<TABLE>
<CAPTION>
Year of Contractual Maturity
- ------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands) 2000 2001 2002 2003 2004 Thereafter Total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
RATE-SENSITIVE ASSETS:
Fixed rate loans $ 77,997 $46,728 $101,747 $24,180 $22,497 $13,730 $286,880
Average interest rate 8.57% 8.35% 8.27% 8.34% 8.03% 8.29% 8.35%
Variable rate loans $217,921 $21,557 $ 26,837 $ 7,470 $10,889 $43,637 $328,312
Average interest rate 9.04% 8.92% 8.47% 8.79% 8.52% 7.78% 8.79%
Fixed rate securities $5,881 $ 7,065 $ 5,484 $ 7,854 $ 4,630 $16,340 $ 47,254
Average interest rate 6.17% 6.65% 6.76% 6.82% 7.17% 6.88% 6.76%
Variable rate securities $4,000 - - - - - $ 4,000
Average interest rate 4.86% - - - - - 4.86%
Federal funds sold and other
overnight investments $ 9,927 - - - - - $ 9,927
Average interest rate 6.17% - - - - - 6.17%
RATE-SENSITIVE LIABILITIES:
Non interest-bearing deposits $ 51,845 - - - - - $ 51,845
Savings and interest-bearing checking $358,946 - - - - - $358,946
Average interest rate 3.96% - - - - - 3.96%
Time deposits $228,382 $56,378 $ 10,390 $ 5,610 $ 2,871 $ 787 $304,419
Average interest rate 5.29% 5.52% 5.68% 5.64% 5.40% 6.51% 5.35%
Fixed interest rate borrowings $ 55,861 $12,650 $ 625 $ 1,500 - $41,085 $111,721
Average interest rate 5.20% 7.00% 5.87% 5.62% - 5.27% 5.44%
</TABLE>
1999 Annual Report\21
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS, CONT'D
LIQUIDITY MANAGEMENT
Long-term liquidity is a function of the core deposit base and an
adequate capital base. We are committed to growth of our core deposit
base and maintenance of our capital base. The growth of the deposit
base is internally generated through product pricing and product
development. In addition, we incrementally generate funds through
brokered certificates of deposit. During 1999, both of these elements
contributed to developing and maintaining long-term liquidity. Our
capital position has been maintained through earnings retention and
raising of capital. See -- "Capital Resources."
Short-term liquidity needs arise from continuous fluctuations in
the flow of funds on both sides of the balance sheet resulting from
growth and seasonal and cyclical customer demands. The securities
portfolio provides stable long-term earnings as well as being a primary
source of liquidity. The designation of securities as available-for-
sale and held-to-maturity does not impact the portfolio as a source of
liquidity due to the ability to transact repurchase agreements using
those securities.
We anticipate continued loan demand in our market area as the
banking industry continues to consolidate. We have utilized, and expect
to continue to utilize, Federal Home Loan Bank borrowings to fund a
portion of future loan growth. We had an $85.2 million secured credit
facility with the Federal Home Loan Bank as of December 31, 1999, of
which $80.2 million was outstanding at year-end 1999.
Average short-term borrowings increased to $58.9 million in 1999
compared to $52.9 million in 1998. The increase reflects our strategy
of utilizing Federal Home Loan Bank borrowings, as well as Federal funds
purchased for short periods of time, to fund loan growth while
continuing to systematically build our deposit base. The average short-
term borrowings were virtually unchanged in comparing 1998 levels to
1997 levels. We experienced strong loan demand during 1999 and 1998 and
anticipate the continuation of this demand during 2000. We anticipate
similar use of the Federal Home Loan Bank credit facility in the
foreseeable future.
We experienced net growth in assets of 22.2% during 1999, while
deposits increased 21.7% during the same period. We
The following table summarizes short-term borrowings for the
periods indicated:
<TABLE>
AVERAGE SHORT-TERM BORROWINGS
<CAPTION>
Years Ended December 31,
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Average Average Average Average Average Average
(Dollars in thousands) Balance Rate Balance Rate Balance Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Federal funds purchased $ 4,167 5.31% $ 1,272 5.56% $ 2,851 5.14%
Securities sold under agreement
to repurchase and other
short-term borrowings 54,710 5.08 51,583 4.95 49,851 5.51
- -------------------------------------------------------- ----------- -----------
Total $58,877 5.10 $52,855 4.96 $52,702 5.49
======================================================== =========== ===========
Total maximum short-term borrowings
outstanding at any month-end
during the year $77,637 $63,449 $71,496
</TABLE>
22\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
continue to emphasize growth in deposits while utilizing the Federal
Home Loan Bank, Federal funds purchased and brokered certificates of
deposit as necessary to balance liquidity and cost effectiveness. We
closely monitor our level of liquidity to meet expected future needs.
CAPITAL RESOURCES
Total shareholders' equity was $48.0 million at December 31, 1999,
compared to $48.1 million at year-end 1998. The increase in total
equity as the result of earnings retention was offset by the treasury
stock purchased in 1999 and dividends paid of $1.2 million. At December
31, 1999, we had repurchased a total of 419,260 shares of our common
stock at a cost of $4.2 million. The shares repurchased included
235,715 shares in a privately negotiated transaction and 183,545 under
the open market share repurchase program announced in September 1999.
In 2000, we intend to repurchase up to approximately an additional
135,500 shares to reach the 319,000 shares approved under the repurchase
program.
Our capital requirements have been historically financed through
offerings of debt and equity securities, retained earnings and
borrowings from a commercial bank. Allegiant Bank also utilizes its
borrowing capacity with the Federal Home Loan Bank. The principal
amount of our term loan was $13.2 million as of December 31, 1999, and
matures in November 2001.
During 1999 we purchased brokered certificates of deposit in order
to fund loan growth and meet other liquidity needs. At December 31,
1999, we had $48.0 million outstanding which matures on various dates
through May 15, 2000. We may use brokered deposits in the future as a
source of liquidity.
In August 1999, we and our wholly-owned subsidiary, Allegiant
Capital Trust I, a Delaware statutory business trust, issued $17.2
million of trust preferred securities. Allegiant Capital Trust invested
all the proceeds from the sale of the trust preferred securities in our
junior subordinated debentures. We used a portion of the net proceeds
of $16.2 million from the sale of the junior subordinated debentures to
infuse $8.0 million of capital into Allegiant Bank, to repay
approximately $2.5 million of corporate indebtedness consisting of $2.0
million under a revolving line of credit and a $0.5 million principal
repayment on term debt. We also may use the proceeds for general
corporate purposes, including possible future repurchase of our common
stock.
Dividends paid during 1999 were $0.20 per share, an increase of
66.7% compared to the $0.12 per share paid during 1998 which was a 50.0%
increase over the $0.08 per share paid in 1997. Our dividend payout
ratio was 18.1% in 1999 compared to 20.2% during 1998 and 13.8% in 1997.
We also analyze our capital and the capital position of our bank
in terms of regulatory risked-based capital guidelines. This analysis
of capital is dependent upon a number of factors including asset
quality, earnings strength, liquidity, economic conditions and
combinations thereof. The Federal Reserve Board has issued standards
for measuring capital adequacy for bank holding companies. These
standards are designed to provide risk-responsive capital guidelines and
to incorporate a consistent framework for use by financial institutions.
Our management believes that, as of December 31, 1999, we and our
subsidiaries met all capital adequacy requirements. We will seek to
maintain a strong equity base while executing our controlled expansion
plans.
As of December 31, 1999 and 1998, Allegiant's and Allegiant Bank's
capital ratios were as follows:
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
- ---------------------------------------------------------------------------------------------------------------------
Allegiant Allegiant Bank Allegiant Allegiant Bank
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total capital (to risk-weighted assets) 10.23% 11.52% 8.68% 10.93%
Tier 1 capital (to risk-weighted assets) 8.80 10.27 7.42 9.68
Tier 1 capital (to average assets) 7.47 8.89 5.83 7.61
</TABLE>
IMPACT OF YEAR 2000
In prior years, we discussed the nature and progress of our plans
to become Year 2000 ready. In late 1999, we completed out remediation
and testing of systems. As a result of those planning and
implementation efforts, we experienced no significant disruptions in
mission critical information technology and non-information technology
systems and believe those systems successfully responded to the Year
2000 date change. We expensed approximately $0.2 million during 1999 in
connection with remediating our systems. We are not aware of any
material problems resulting from Year 2000 issues, either with our
products, our internal systems, or the products and services of third
parties. We will continue to monitor our mission critical computer
applications and those of its suppliers and vendors throughout the year
2000 to ensure that any latent Year 2000 matters that may arise are
addressed promptly.
1999 Annual Report\23
<PAGE>
<PAGE>
STATEMENT BY MANAGEMENT
The financial statements and related financial information
presented herein were prepared by management in accordance with
accounting principles generally accepted in the United States and
include amounts that are based on management's best estimates and
judgements. We maintain an accounting system and related controls that
are sufficient to provide reasonable assurance that assets are
safeguarded and that transactions are properly authorized and recorded.
The concept of reasonable assurance is based on the recognition that the
cost of an accounting and control system must be related to the benefits
derived. The accounting system and related controls are monitored by an
internal audit program and by our independent auditors in accordance
with auditing standards generally accepted in the United States. Our
internal auditor and independent auditors meet regularly with the audit
committee of our board of directors to ensure that respective
responsibilities are being properly discharged and to discuss the
results of examinations.
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Allegiant Bancorp, Inc.
We have audited the accompanying consolidated balance sheets of
Allegiant Bancorp, Inc. as of December 31, 1999 and 1998 and the related
consolidated statements of income, shareholders' equity and cash flows
for both of the years ended December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audits. The consolidated statements of income,
shareholders' equity and cash flows for the year ended December 31, 1997
were audited by other auditors whose report dated March 13, 1998
expressed an unqualified opinion on those statements.
We conducted our audits in accordance with auditing standards
generally accepted in the United States. 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 financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Allegiant Bancorp, Inc. at December 31, 1999 and 1998 and the
consolidated results of its operations and its cash flows for the years
then ended in conformity with accounting principles generally accepted
in the United States.
/s/ Ernst & Young LLP
St. Louis, Missouri
January 19, 2000
24/Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
December 31,
- --------------------------------------------------------------------------------------------------
(Dollars in thousands) 1999 1998
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Cash and due from banks $ 16,842 $ 13,693
Federal funds sold and other overnight investments 9,927 3,430
Investment securities
Available-for-sale (at estimated market value) 49,129 42,740
Held-to-maturity (estimated market value of $11,284
and $12,132, respectively) 11,668 12,040
Loans, net of allowance for loan losses of $8,315
and $6,442, respectively 606,876 489,227
Premises and equipment 9,896 11,010
Accrued interest and other assets 12,430 11,438
Cost in excess of fair value of net assets acquired 11,724 12,696
- --------------------------------------------------------------------------------------------------
Total assets $728,492 $596,274
==================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Non-interest bearing $ 51,845 $ 55,417
Interest bearing 449,071 364,176
Certificates of deposit over $100,000 or more 47,550 31,173
- --------------------------------------------------------------------------------------------------
Total deposits 548,466 450,766
- --------------------------------------------------------------------------------------------------
Short-term borrowings 75,861 53,542
Long-term debt 35,860 40,275
Guaranteed preferred beneficial interest in
subordinated debentures 17,250 -
Accrued expenses and other liabilities 3,064 3,587
- --------------------------------------------------------------------------------------------------
Total liabilities 680,501 548,170
- --------------------------------------------------------------------------------------------------
Shareholders' equity:
Common Stock, $.01 par value -- authorized 20,000,000 shares;
issued 6,208,102 shares and 6,536,164 shares, respectively 66 65
Capital surplus 42,373 41,898
Retained earnings 10,482 6,058
Accumulated other comprehensive income (loss) (754) 83
Treasury stock, at cost, 419,260 shares (4,176) -
- --------------------------------------------------------------------------------------------------
Total shareholders' equity 47,991 48,104
- --------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $728,492 $596,274
==================================================================================================
See accompanying notes to consolidated financial statements.
</TABLE>
1999 Annual Report\25
<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Years Ended December 31,
- -----------------------------------------------------------------------------------------------------------------
(In thousands, except per share data) 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest income:
Interest and fees on loans $48,604 $44,412 $33,473
Investment securities 3,361 4,295 3,966
Federal funds sold and other overnight investments 147 511 326
- -----------------------------------------------------------------------------------------------------------------
Total interest income 52,112 49,218 37,765
- -----------------------------------------------------------------------------------------------------------------
Interest expense:
Interest on deposits 20,595 21,948 17,253
Interest on short-term borrowings 3,002 2,625 2,895
Interest on long-term debt 2,271 2,694 1,318
Interest on guaranteed beneficial interest in
subordinated debentures 733 - -
- -----------------------------------------------------------------------------------------------------------------
Total interest expense 26,601 27,267 21,466
- -----------------------------------------------------------------------------------------------------------------
Net interest income 25,511 21,951 16,299
Provision for loan losses 2,546 2,420 2,397
- -----------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 22,965 19,531 13,902
- -----------------------------------------------------------------------------------------------------------------
Other income:
Service charges on deposits 1,888 1,387 913
Net gain on sale of securities - 68 2
Other income 2,955 7,869 2,383
- -----------------------------------------------------------------------------------------------------------------
Total other income 4,843 9,324 3,298
- -----------------------------------------------------------------------------------------------------------------
Other expenses:
Salaries and employee benefits 9,717 9,663 6,192
Occupancy and furniture and equipment 2,994 3,275 1,681
Other expense 6,051 8,357 5,196
- -----------------------------------------------------------------------------------------------------------------
Total other expenses 18,762 21,295 13,069
- -----------------------------------------------------------------------------------------------------------------
Income before income taxes 9,046 7,560 4,131
Provision for income taxes 3,644 3,026 1,716
- -----------------------------------------------------------------------------------------------------------------
Net income $ 5,402 $ 4,534 $ 2,415
=================================================================================================================
Basic earnings per share $ 0.84 $ 0.72 $ 0.54
Diluted earnings per share 0.83 0.68 0.49
See accompanying notes to consolidated financial statements.
</TABLE>
26\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
Accumulated
Other Total
Common Stock Compre- Share- Compre-
--------------------- Treasury Capital Retained hensive holders' hensive
(Dollars in thousands) Shares Par Stock Surplus Earnings Income Equity Income
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance January 1, 1997 3,405,696 $34 $ - $15,972 $ 357 $ 23 $16,386
Net income - - - - 2,415 - 2,415 $2,415
Change in net unrealized
gains (losses) on
available-for-sale securities - - - - - 62 62 62
- ----------------------------------------------------------------------------------------------------------------------------------
Comprehensive income $2,477
==================================================================================================================================
Cash dividends declared - - - - (331) - (331)
Issuance of Common Stock for:
Rights offerings 1,523,037 15 - 11,226 - - 11,241
Acquisition of
Reliance Financial, Inc. 898,689 9 - 10,578 - - 10,587
Exercise of stock
warrants/options 260,414 3 - 1,509 - - 1,512
Various stock issuance plans 23,907 - - 199 - - 199
- ----------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1997 6,111,743 61 - 39,484 2,441 85 42,071
- ----------------------------------------------------------------------------------------------------------------------------------
Net income - - - - 4,534 - 4,534 $4,534
Change in net unrealized
gains (losses) on
available-for-sale securities - - - - - (2) (2) (2)
- ----------------------------------------------------------------------------------------------------------------------------------
Comprehensive income $4,532
==================================================================================================================================
Cash dividends declared - - - - (917) - (917)
Issuance of Common Stock for:
Exercise of stock
warrants/options 384,785 4 - 2,112 - - 2,116
Various stock issuance plans 39,636 - - 302 - - 302
- ----------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1998 6,536,164 65 - 41,898 6,058 83 48,104
- ----------------------------------------------------------------------------------------------------------------------------------
Net income - - - 5,402 - 5,402 $5,402
Change in net unrealized
gains (losses) on
available-for-sale securities - - - - (837) (837) (837)
- ----------------------------------------------------------------------------------------------------------------------------------
Comprehensive income $4,565
==================================================================================================================================
Issuance of Common Stock for:
Exercise of stock
warrants/options 86,703 1 - 423 - - 424
Various stock issuance plans 4,495 - - 52 - - 52
Repurchase of common stock (419,260) - (4,176) - - - (4,176)
Cash dividends declared - - - - (978) - (978)
- ----------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1999 6,208,102 $66 $(4,176) $42,373 $10,482 $ (754) $47,991
==================================================================================================================================
<CAPTION>
Years Ended December 31,
- ----------------------------------------------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Reclassification adjustments:
Unrealized gains (losses) on
available-for-sale securities $(837) $39 $63
Less:
Reclassification adjustment for gains
realized included in net income - 41 1
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized gains (losses) on
available-for-sale securities $(837) $(2) $62
==================================================================================================================================
See accompanying notes to consolidated financial statements.
</TABLE>
1999 Annual Report\27
<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Years Ended December 31,
- -----------------------------------------------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 5,402 $ 4,534 $ 2,415
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 2,610 4,366 1,057
Provision for loan losses 2,546 2,420 2,397
Net realized gains on securities available-for-sale - (68) (2)
Deferred tax benefit (934) (496) (685)
Net gain on sale of mortgage loans - (1,112) -
Net gain on disposition of branches - (2,370) -
Other changes in assets and liabilities:
Accrued interest receivable and other assets (999) 811 (1,077)
Accrued expenses and other liabilities (523) (745) 623
- -----------------------------------------------------------------------------------------------------------------------------------
Cash provided by operating activities 8,102 7,340 4,728
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Net cash received in acquisition of Reliance Financial, Inc. - - 1,533
Net cash received in acquisition of branches - - 83,596
Net cash paid in disposition of branches - (22,662) -
Proceeds from maturities of securities held-to-maturity 4,043 22,885 17,019
Purchase of investment securities held-to-maturity (3,671) (2,974) (10,396)
Proceeds from maturities of securities available-for-sale 16,225 87,840 25,020
Proceeds from sales of securities available-for-sale - 8,989 2,949
Purchase of investments securities available-for-sale (23,924) (94,586) (39,211)
Loans made to customers, net of repayments (120,195) (102,815) (175,387)
Proceeds from sale of mortgage loans - 78,374 -
Purchases of assets held for operating leases, net 1,414 (2,959) (2,992)
Additions to premises and equipment (524) (3,186) (4,710)
- -----------------------------------------------------------------------------------------------------------------------------------
Cash used in investing activities (126,632) (31,094) (102,579)
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Net increase in deposits 97,700 5,201 57,518
Net increase in short-term borrowings 16,819 338 17,442
Proceeds from issuance of long-term debt 1,085 31,150 8,625
Repayment of long-term debt - (13,650) (13)
Proceeds from issuance of guaranteed preferred
beneficial interest in subordinated debentures 17,250 - -
Proceeds from issuance of common stock 476 2,283 12,753
Repurchase of common stock (4,176) - -
Payment of dividends (978) (917) (331)
- -----------------------------------------------------------------------------------------------------------------------------------
Cash provided by financing activities 128,176 24,405 95,994
- -----------------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents 9,646 651 (1,857)
Cash and cash equivalents, beginning of year 17,123 16,472 18,329
- -----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year $ 26,769 $ 17,123 $ 16,472
===================================================================================================================================
See accompanying notes to consolidated financial statements.
</TABLE>
28\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. ACCOUNTING POLICIES:
Basis of Presentation. The accompanying consolidated financial
statements include the accounts of Allegiant Bancorp, Inc. and its
subsidiaries. The financial statements have been prepared in accordance
with accounting principles generally accepted in the United States and
reporting practices applicable to the banking industry. All significant
intercompany transactions and balances have been eliminated. The
significant accounting policies are summarized below.
Business. Our bank subsidiary, Allegiant Bank, operates within
one segment, the banking industry, and provides a full range of banking
services to individual and corporate customers in the St. Louis,
Missouri metropolitan area. Our bank is subject to intense competition
from other financial institutions. Our bank also is subject to the
regulations of certain federal and state agencies and undergoes periodic
examination by those regulatory authorities.
Accounting Estimates. The preparation of financial statements in
accordance with accounting principles generally accepted in the United
States requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from estimates.
Reclassifications. Certain reclassifications have been made to
the 1997 and 1998 financial statements to conform to the 1999
presentation. These reclassifications had no effect on net income.
Investment Securities. Securities are classified as held-to-
maturity or available-for-sale. Only those securities which management
has the intent and ability to hold to maturity are classified as held-
to-maturity and are reported at amortized cost. Securities that are
purchased with the intent to hold for an indefinite period of time,
including securities that management intends to use as part of its
asset/liability strategy or that may be sold to meet liquidity needs,
are classified as available-for-sale securities. Available-for-sale
securities are reported at fair value with unrealized gains and losses,
net of related deferred income taxes, reported in other comprehensive
income. Interest and dividends on securities, including amortization of
premium and accretion of discounts, are reported in interest income
using the interest method. Realized securities gains or losses are
reported in the Consolidated Statements of Income. Gains and losses on
securities are determined on an identified certificate basis.
Loans Held-for-Sale. In our lending activities, we originate
residential mortgage loans intended for sale in the secondary market.
Loans held-for-sale are carried at the lower of cost or fair value,
which is determined on an aggregate basis. Gains or losses on the sale
of loans held-for-sale are determined on a specific identification
method.
Loans. Interest income on loans is generally accrued on a simple
interest basis. Loan fees and direct costs of loan originations are
deferred and amortized over the estimated life of the loans under
methods approximating the interest method.
When, in management's opinion, the collection of interest on a
loan will not be collected in the normal course of business, or when
either principal or interest is past due over 90 days, that loan is
generally placed on a non-accrual status. When a loan is placed on non-
accrual status, accrued interest for the current year is reversed and
charged against current earnings, and accrued interest from prior years
is charged against the reserve for loan losses. Interest payments
received on non-accrual loans are applied to principal if there is doubt
as to the collectibility of such principal; otherwise, these receipts
are recorded as interest income. A loan remains on non-accrual status
until the loan is current as to payment of both principal and interest,
and/or the borrower demonstrates the ability to pay and remain current.
All non-accrual and renegotiated loans are considered impaired.
Impaired loans are measured based on the present value of expected
future cash flows discounted at the loan's effective interest rate, or
at the loan's observable market price, or the fair value of the
collateral, if the loan is collateral dependent.
Allowance for loan losses. We maintain an allowance to absorb
possible loan losses inherent in the portfolio. Credit losses are
charged and recoveries are credited to the reserve. Provisions for
credit losses are credited to the allowance in an amount that we
consider necessary to maintain an appropriate allowance given the risk
identified in the portfolio. The allowance is based on ongoing monthly
assessments of the possible estimated losses inherent in the loan
portfolio. Our monthly evaluation of the adequacy of the allowance is
comprised of the following elements.
Larger commercial loans and any additional loans that exhibit
potential or observed credit weaknesses are subject to individual
review. Where appropriate, specific allowances are made for individual
loans based on our estimate of the borrower's ability to repay the loan
given the availability of collateral, other sources of cash flow and
collection options available to us.
<PAGE>
Included in the review of individual loans are those that are
impaired as provided in Statement of Financial Accounting Standards
("SFAS") No. 114, Accounting by Creditors for Impairment of a Loan. Any
reserves for impaired loans are measured based on the present value of
expected future cash flows discounted at the loans' effective interest
rate or fair value of the underlying collateral. We evaluate the
collectibility of both principal and interest when assessing the need
for loss accrual.
Loans are graded on a risk rating system that encompasses ten
categories. Collateral protection and the borrower's ability to repay
loan obligations define each category. Historic loss rates and observed
industry standards are utilized to determine the appropriate allocation
percentage for each loan grade.
Homogenous loans, such as consumer installment or home equity
credit, are given a standard risk rating that is adjusted on a
delinquency basis. Residential mortgage loans are not individually risk
rated, but are identified as a "pool" of loans. Delinquent mortgage
loans are segregated and reserve allocations are determined based on the
same factors utilized for risk rated loans.
An unallocated allowance is maintained to recognize the
imprecision in estimating and measuring loss when evaluating reserves
for individual loans or pool of loans.
Historical loss rates for commercial and consumer loans may be
adjusted for significant factors that, in our judgement, reflect the
impact of any current conditions on loss recognition. Factors that we
consider in the analysis include the effects of the national and local
economies, trends in the nature and volume of loans (delinquencies,
charge-offs, nonaccrual and problem loans), changes in the internal
lending policies and credit standards, collection practices and
examination results from bank regulatory agencies and our internal loan
reviews.
Allowance for individual loans are reviewed monthly and adjusted
as necessary based on changing borrower and/or collateral conditions and
actual collection and charge-off experience.
Premises and Equipment. Premises and equipment are stated at cost
less accumulated depreciation. The provision for depreciation is
computed using the straight-line method over the estimated useful lives
of the individual assets for book purposes and accelerated methods for
tax purposes. Ordinary maintenance and repairs are charged to expense
as incurred.
Real Estate Owned. Real estate acquired in foreclosure or other
settlement of loans is initially recorded at the lower of fair market
1999 Annual Report\29
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONT'D
value of the assets received (less estimated selling costs) or the
recorded investment in the loan at the date of transfer. Any adjustment
to fair market value at the date of transfer is charged against the
allowance for loan losses. Subsequent write-downs are charged to
operating expense including charges relating to operating, holding or
disposing of the property.
Cost in Excess of Fair Value of Net Assets Acquired. Intangible
assets consist primarily of goodwill. Goodwill, the excess of cost over
the fair value of net assets acquired in business combinations accounted
for as purchases, is amortized using the straight-line method over the
estimated period to be benefited, but not exceeding 15 years.
Management reviews goodwill for impairment if there is a significant
event that detrimentally affects operations. Impairment is measured
using estimates of the undiscounted future earnings potential of the
entity or assets acquired.
Income Taxes. Income taxes are accounted for under the liability
method in which deferred income taxes are recognized as a result of
temporary differences between the financial reporting basis and the tax
basis of our assets and liabilities.
Cash Equivalents. For purposes of the Consolidated Statements of
Cash Flows, we consider cash and due from banks, federal funds sold and
other overnight investments to be cash equivalents.
New Accounting Pronouncements. In June 1998, the FASB issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities,
which established accounting and reporting standards for derivative
instruments and hedging activities and requires recognition of all
derivatives as either assets or liabilities measured at fair value. The
accounting for changes in the fair value of a derivative depends on the
intended use of the derivative and the resulting designation. SFAS
No. 137, Accounting for Derivative Instruments and Hedging Activities --
Deferral of the Effective Date of SFAS No. 133, amends SFAS No. 133 to
be effective for us beginning January 1, 2001. Although we have not
completed our analysis of these pronouncements, we do not anticipate
that the adoption of SFAS No. 133, as amended by SFAS No. 137, will
have a significant effect on our results of operations or financial
position.
NOTE 2. ACQUISITIONS AND DIVESTITURES:
In August 1997, we acquired all the outstanding capital stock of
Reliance Financial, Inc. in exchange for 599,126 shares of our common
stock. In September 1997, we purchased two bank branch offices from
Roosevelt Bank. As part of the agreement, we assumed deposits of $96.1
million in exchange for loans of $3.0 million, premises and equipment of
$537,000 and cash of $84.0 million. Total goodwill recorded by us in
connection with this acquisition was $8.8 million. Both acquisitions
were recorded using the purchase method of accounting. Results of
operations of companies and branches acquired in purchase business
combinations are included from the date of acquisition.
In December 1998, we sold three out-of-market branches to another
financial institution. The book value of assets disposed of totaled
$17.5 million, the book value of liabilities transferred totaled $40.0
million and the net cash paid for the divestiture was $22.7 million. A
$2.4 million gain was recognized from the sale.
30\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
NOTE 3. INVESTMENT SECURITIES:
Debt and equity securities have been classified in the
Consolidated Balance Sheets according to management's intent to have
these securities available-for-sale or held-to-maturity. The carrying
amount of securities and their approximate fair values were as follows:
<TABLE>
<CAPTION>
Securities Available-for-Sale
December 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. government and
agency securities $34,553 $ 3 $(1,032) $33,524
State and municipal securities 598 - (14) 584
Mortgage-backed securities 7,558 13 (132) 7,439
Federal Home Loan Bank
stock 7,124 - - 7,124
Other securities 458 - - 458
- -----------------------------------------------------------------------------------------------------------------------------------
Total $50,291 $ 16 $(1,178) $49,129
===================================================================================================================================
<CAPTION>
Securities Held-to-Maturity
December 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. government and
agency securities $ 5,500 $ 1 $ (15) $ 5,486
State and municipal securities 4,210 4 (418) 3,796
Mortgage-backed securities 1,958 44 - 2,002
Federal Home Loan Bank
stock - - - -
Other securities - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total $11,668 $ 49 $(433) $11,284
===================================================================================================================================
<CAPTION>
Securities Available-for-Sale
December 31, 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. government and
agency securities $29,269 $217 $ (51) $29,435
State and municipal securities 598 9 - 607
Mortgage-backed securities 8,360 38 (65) 8,333
Federal Home Loan Bank
stock 3,574 - - 3,574
Other securities 791 - - 791
- -----------------------------------------------------------------------------------------------------------------------------------
Total $42,592 $264 $(116) $42,740
===================================================================================================================================
<CAPTION>
Securities Held-to-Maturity
December 31, 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. government and
agency securities $ 7,585 $ 30 $(21) $ 7,594
State and municipal securities 858 28 - 886
Mortgage-backed securities 3,597 55 - 3,652
Federal Home Loan Bank
stock - - - -
Other securities - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total $12,040 $113 $(21) $12,132
===================================================================================================================================
</TABLE>
1999 Annual Report\31
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONT'D
Proceeds from the sale of securities totaled $8.9 million in 1998.
There were gross realized gains and losses on the sale of securities
available-for-sale of $71,000 and $3,000, respectively, in 1998. There
were no sales in 1999.
Held-to-maturity and available-for-sale securities with a carrying
value of $36.6 million and $33.6 million at December 31, 1999 and 1998,
respectively, were pledged to secure public deposits and short-term
borrowings.
The contractual maturities of securities (other than Federal Home
Loan Bank stock and other securities), available-for-sale and securities
held-to-maturity at December 31, 1999 were as follows:
<TABLE>
<CAPTION>
December 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Securities Available-for-Sale Securities Held-to-Maturity
- -----------------------------------------------------------------------------------------------------------------------------------
Amortized Fair Amortized Fair
(In thousands) Cost Value Cost Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Due in one year or less $ 4,294 $ 4,296 $ 5,585 $ 5,571
Due from one year to five years 23,688 23,003 176 163
Due from five years to ten years 7,386 7,034 729 701
Due after ten years 198 190 3,220 2,847
- -----------------------------------------------------------------------------------------------------------------------------------
Subtotal 35,566 34,523 9,710 9,282
Mortgage-backed securities 7,558 7,439 1,958 2,002
- -----------------------------------------------------------------------------------------------------------------------------------
Total $43,124 $41,962 $11,668 $11,284
===================================================================================================================================
</TABLE>
NOTE 4. LOANS:
The components of loans in the Consolidated Balance Sheets were as
follows:
<TABLE>
<CAPTION>
December 31,
- -----------------------------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial $150,259 $126,239 $109,937
Real estate-construction 65,310 36,590 27,181
Real estate-mortgage
One- to four-family residential 141,264 116,291 195,964
Multi-family and commercial 235,158 196,545 135,452
Consumer and other 24,152 20,908 16,821
Net deferred loan fees, premiums and discounts (952) (904) (493)
- -----------------------------------------------------------------------------------------------------------------
Total loans 615,191 495,669 484,862
Allowance for loan losses (8,315) (6,442) (5,193)
- -----------------------------------------------------------------------------------------------------------------
Net loans $606,876 $489,227 $479,669
=================================================================================================================
</TABLE>
An analysis of the change in the allowance for loan losses follows:
<TABLE>
<CAPTION>
December 31,
- -----------------------------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, beginning of year $6,442 $ 5,193 $3,100
Acquired subsidiary balance - - 403
Loans charged off (860) (1,226) (759)
Recoveries 188 55 52
- -----------------------------------------------------------------------------------------------------------------
Net loans charged off (672) (1,171) (707)
Provision for loan losses 2,545 2,420 2,397
- -----------------------------------------------------------------------------------------------------------------
Balance, end of year $8,315 $ 6,442 $5,193
=================================================================================================================
</TABLE>
<PAGE>
The recorded investment in loans that were considered to be
impaired under SFAS No. 114, as amended by SFAS No. 118, was $628,000 in
1999, $1.8 million in 1998 and $1.7 million in 1997 (these impaired
loans were all classified as non-accrual loans). The related allowance
for these impaired loans was $82,000 in 1999, $269,000 in 1998 and
$86,000 in 1997. Interest income that would have been recognized for
non-accrual loans was $84,000 in 1999, $72,000 in 1998 and $57,000 in
1997. Cash basis income on non-accrual loans was not significant for
1999, 1998 or 1997. Other real estate owned and foreclosed assets were
approximately $402,000, $0 and $33,000 at December 31, 1999, 1998 and
1997, respectively.
We and Allegiant Bank have entered into transactions with our
directors, significant shareholders and affiliates (related parties).
Such transactions were made in the ordinary course of business on
substantially the same terms and conditions, including interest rates
and collateral, as those prevailing at the same time for comparable
transactions with other customers, and did not, in the opinion of
management, involve more than normal credit risk or present other
unfavorable features. The aggregate amount of loans to such related
parties at December 31, 1999, 1998 and 1997 was $35.5 million, $35.9
million and $16.4 million, respectively. During 1999, $11.5 million of
new loans and $11.9 million of repayments were made on related party
loans. As of December 31, 1999, no related party loans were past due 90
days or more. At December 31, 1998, our bank had $166,000 in related
party loans that were past due more than 90 days.
32\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
NOTE 5. PREMISES AND EQUIPMENT:
Components of premises and equipment as of December 31, 1999 and
1998 were as follows:
<TABLE>
<CAPTION>
December 31,
- -----------------------------------------------------------------------------------------------
(In thousands) 1999 1998
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Land $ 2,654 $ 2,546
Bank premises 5,601 5,657
Furniture, equipment and automobiles 6,802 6,537
- -----------------------------------------------------------------------------------------------
Total cost 15,057 14,740
Less accumulated depreciation (5,161) (3,730)
- -----------------------------------------------------------------------------------------------
Net book value $ 9,896 $11,010
===============================================================================================
</TABLE>
The bank leases various banking facilities and one piece of
equipment under agreements which expire at various dates through
September 2012. These agreements have options to renew. Future minimum
lease payments required under operating leases which have initial or
remaining non-cancelable terms in excess of one year as of December 31,
1999 were approximately as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
- ----------------------------------------------------------------------
(In thousands) Minimum Rental
- ----------------------------------------------------------------------
<S> <C>
2000 $ 352
2001 372
2002 362
2003 292
2004 292
2005 and later 1,207
- ----------------------------------------------------------------------
Total $2,877
======================================================================
</TABLE>
Rental expense for all operating leases was $352,000 in 1999,
$327,000 in 1998 and $210,000 in 1997.
NOTE 6. DEPOSITS:
Deposits consisted of the following:
<TABLE>
<CAPTION>
December 31,
- -----------------------------------------------------------------------------------------------
(In thousands) 1999 1998
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Non-interest bearing $ 51,845 $ 55,417
Interest bearing demand 24,492 19,075
Money market accounts 160,701 123,827
Savings 13,052 14,917
Time and IRA certificates under $100,000 202,826 206,357
- -----------------------------------------------------------------------------------------------
Total core deposits 452,916 419,593
Time certificates over $100,000 47,550 31,173
Brokered deposits over $100,000 48,000 -
- -----------------------------------------------------------------------------------------------
Total deposits $548,466 $450,766
===============================================================================================
</TABLE>
AMOUNTS AND MATURITIES OF BROKERED DEPOSITS AND TIME DEPOSITS
<TABLE>
<CAPTION>
(In thousands) December 31, 1999
- ----------------------------------------------------------------------
<S> <C>
2000 $223,510
2001 55,236
2002 10,496
2003 5,477
2004 2,871
2005 and later 787
- ----------------------------------------------------------------------
Total $298,376
======================================================================
</TABLE>
<PAGE>
NOTE 7. INCOME TAXES:
Our results include income tax expense (benefit) as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
- -----------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Current $4,578 $3,522 $2,401
Deferred (934) (496) (685)
- -----------------------------------------------------------------------------
Total $3,644 $3,026 $1,716
=============================================================================
</TABLE>
The tax effects of temporary differences that gave rise to the
deferred tax assets and liabilities are presented below:
<TABLE>
<CAPTION>
December 31,
- -----------------------------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Deferred tax assets:
Reserve for loan losses $3,000 $2,217 $1,536
Deferred loan fees 175 - 194
Deferred compensation - - 74
Accrued expenses - - 63
Investments in debt and equity securities - SFAS No. 115 465 (50) 44
Other - 116 72
- -----------------------------------------------------------------------------------------------------------------
Total deferred tax assets 3,640 2,283 1,983
- -----------------------------------------------------------------------------------------------------------------
Deferred tax liabilities:
Depreciation (203) (119) (461)
Discount accretion (23) (83) -
Other (57) (10) (29)
- -----------------------------------------------------------------------------------------------------------------
Total deferred tax liabilities (283) (212) (490)
- -----------------------------------------------------------------------------------------------------------------
Net deferred tax assets $3,357 $2,071 $1,493
=================================================================================================================
</TABLE>
A valuation allowance would be provided on deferred tax assets
when it is more likely than not that some portion of the assets will not
be realized. We had not established a valuation allowance as of
December 31, 1999, 1998 or 1997, due to management's belief that all
criteria for recognition had been met, including the existence of a
history of taxes paid sufficient to support the realization of the
deferred tax assets.
1999 Annual Report\33
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONT'D
Income tax expense as reported differs from the amounts computed
by applying the statutory federal income tax rate to pre-tax income as
follows:
<TABLE>
<CAPTION>
Years Ended December 31,
- -----------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Computed expected tax expense $3,166 $2,646 $1,405
Tax-exempt income (93) (157) (38)
State and local income taxes,
net of federal tax benefits 137 314 258
Goodwill amortization 392 318 24
Other, net 42 (95) 67
- -----------------------------------------------------------------------------------------------
Total tax expense $3,644 $3,026 $1,716
===============================================================================================
</TABLE>
NOTE 8. SHORT-TERM BORROWINGS:
Short-term borrowings were as follows at year end:
<TABLE>
<CAPTION>
December 31,
- -----------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Securities sold under
agreements to repurchase $18,361 $14,042 $ 8,252
Federal funds purchased - - 6,500
Federal Home Loan Bank advances 57,000 39,500 37,850
Other short-term borrowings 500 - 977
- -----------------------------------------------------------------------------------------------
Total short-term borrowings $75,861 $53,542 $53,579
===============================================================================================
</TABLE>
As collateral for the Federal Home Loan Bank advances, our bank
has entered into a blanket agreement that pledges first mortgage loans
with principal balances aggregating 130% of the outstanding advances.
NOTE 9. LONG-TERM DEBT:
Long-term debt consisted of the following at year-end:
<TABLE>
<CAPTION>
December 31,
- -----------------------------------------------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Notes payable to a financial institution, interest payable
quarterly (7% on December 31, 1999), matures on
November 12, 2001, secured by Bank stock $12,650 $13,650 $ -
Note payable to a financial institution - - 10,400
Notes payable to FHLB, interest payable monthly at rates
varying from 5.05% to 6.95%, principal balance due at maturity
ranging from December 13, 2002 to December 31, 2019,
secured by stock in FHLB and certain loans 23,210 26,625 9,625
Subordinated debentures with certain shareholders,
interest payable quarterly at prime plus 3% (with a
minimum floor of 10%), called in 1998 - - 3,250
- -----------------------------------------------------------------------------------------------------------------------------------
Total long-term debt $35,860 $40,275 $23,275
===================================================================================================================================
</TABLE>
Under the terms of the current notes payable to a financial
institution, we and/or our subsidiaries are required to maintain certain
financial ratios and are limited with respect to cash dividends, capital
expenditures and the incurrence of additional indebtedness without prior
approval. Principal payments are required as follows: $500,000 payable
on October 1, 2000; $1.0 million payable on October 1, 2001; and the
balance outstanding payable on November 12, 2001.
<PAGE>
A summary of annual principal reductions of long-term debt as of
December 31, 1999 was as follows:
<TABLE>
<CAPTION>
Annual
Principal
Year (In thousands) Reductions
- ------------------------------------------------------------------
<S> <C>
2001 $12,650
2002 625
2003 1,500
2004 -
2005 and later 21,085
- ------------------------------------------------------------------
Total $35,860
==================================================================
</TABLE>
34\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
NOTE 10. CAPITAL SECURITIES OF SUBSIDIARY TRUST:
During 1999, we formed Allegiant Capital Trust I, a statutory
business trust. We purchased all the common securities of Allegiant
Capital Trust for $672,080. Allegiant Capital Trust sold 1,725,000
preferred securities, having a liquidation value of $10 per security,
for $17.3 million. The sole assets of Allegiant Capital Trust are our
subordinated debentures totaling $17.9 million which are due August 2,
2029. The distributions payable on the preferred securities are fixed
at 9.875%. All accounts of Allegiant Capital Trust are included in our
consolidated financial statements. The preferred securities are
entitled "Guaranteed preferred beneficial interest in subordinated
debentures" for financial reporting purposes. The preferred securities
are traded on the American Stock Exchange under the symbol ACT.pr. Cash
distributions on the securities are made to the extent interest on the
debentures is received by Allegiant Capital Trust. The securities are
redeemable in whole at any time on or after August 2, 2004, or earlier
in the event of certain changes or amendments to regulatory requirements
or federal tax rules.
NOTE 11. COMMON STOCK AND EARNINGS PER SHARE:
On July 1, 1998, our board of directors declared a six-for-five
stock split (in the form of a stock dividend) of our common stock to
shareholders of record on January 8, 1999, payable January 29, 1999.
Common stock was credited and capital surplus was charged for the
aggregate par value of shares that were issued. The stated par value of
each share was not changed from $.01.
On September 19, 1997, our board of directors declared a five-for-
four stock split (in the form of a stock dividend) of our common stock
to shareholders of record on January 7, 1998, payable on January 21,
1998. Common stock was credited and capital surplus was charged for the
aggregate par value of the shares that were issued. The stated par
value of each share was not changed from $0.01.
On September 19, 1996, our board of directors declared a 10% stock
dividend to shareholders of record on January 2, 1997, payable on
January 15, 1997. The transaction was valued based on the closing
market price of our common stock at the date of declaration.
All per share data in this report have been restated to reflect
the aforementioned stock splits and stock dividend.
Basic earnings per share is computed by dividing income available
to common shareholders by the weighted average number of common shares
outstanding during the year. Diluted earnings per share gives effect to
all dilutive potential common shares that were outstanding during the
year.
The components of basic and diluted earnings per share as prescribed
by SFAS No. 128 were as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
- -----------------------------------------------------------------------------------------------------------------
(In thousands,
except per share data) 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net income $ 5,402 $ 4,534 $ 2,415
=================================================================================================================
Denominator:
Weighted average shares outstanding 6,450,639 6,256,715 4,481,724
Effect of dilutive securities:
Stock options and warrants 59,406 390,450 403,579
- -----------------------------------------------------------------------------------------------------------------
Denominator for diluted earnings per
share-adjusted weighted average shares 6,510,045 6,647,165 4,885,303
=================================================================================================================
Basic earnings per share $ 0.84 $ 0.72 $ 0.54
Diluted earnings per share 0.83 0.68 0.49
</TABLE>
NOTE 12. EMPLOYEE BENEFITS:
Pension Plan. We have a defined contribution pension plan in
effect for substantially all full-time employees. Salaries and employee
benefits expense includes $209,000 in 1999, $124,000 in 1998 and $39,000
in 1997 for such plans. Contributions under the defined contribution
plan are made at the discretion of our management and board of
directors.
Phantom Stock Plan. In December 1994, our board of directors
approved a Phantom Stock Plan for our president. All benefits under the
Phantom Stock Plan have been paid and the plan terminated in 1999. The
annual provision under this plan for the years ended December 31, 1999,
1998 and 1997 were approximately $0, $47,000 and $225,000,
respectively. Deferred compensation for this plan included in accrued
expenses and other liabilities totaled $0, $365,000 and $318,000 at
December 31, 1999, 1998 and 1997, respectively.
<PAGE>
NOTE 13. STOCK OPTION PLANS AND DIRECTORS STOCK PURCHASE PLAN:
We have reserved 1,454,000 shares of our common stock for issuance
under various stock option plans offered to our directors and certain of
our key employees. Options are granted, by action of our board of
directors, to acquire stock at 110% of fair market value at the date of
the grant, for a term of up to ten years.
1999 Annual Report\35
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONT'D
At December 31, 1999, approximately 397,000 shares remained available
for option grants under these programs. The following tables summarize
option activity over the last three years and the current options
outstanding and exercisable:
<TABLE>
<CAPTION>
Years Ended December 31,
- ---------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ---------------------------------------------------------------------------------------------------------------
Weighted- Weighted- Weighted-
Average Average Average
Shares Option Price Shares Option Price Shares Option Price
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding, beginning of year 431,336 $10.02 681,726 $ 6.42 605,483 $ 5.11
Granted 120,598 10.99 146,386 14.84 284,273 9.20
Exercised (34,666) 4.13 (378,767) 4.51 (204,580) 5.79
Canceled (6,896) 4.19 (18,009) 11.28 (3,450) 10.00
- ---------------------------------------------------------------------------------------------------------------
Outstanding, end of year 510,372 10.59 431,336 10.02 681,726 6.42
===============================================================================================================
Weighted-average fair value of
options granted during the year $ 2.51 $ 3.59 $ 2.74
===============================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
- --------------------------------------------------------------------------------------------------------------------------------
Weighted
Number Average Weighted Number Weighted
Range of Outstanding at Remaining Average Exercisable at Average
Exercise Price December 31, 1999 Contractual Life Exercise Price December 31, 1999 Exercise Price
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 3.30 - $ 7.92 90,142 1.3 years $ 6.95 90,412 $ 6.95
8.78 - 10.45 157,284 1.9 years 8.70 128,914 9.30
10.75 - 18.57 262,946 3.9 years 12.92 141,315 13.49
- --------------------------------------------------------------------------------------------------------------------------------
3.30 - 18.57 510,372 2.9 years 10.59 360,641 10.35
================================================================================================================================
</TABLE>
We have a directors stock purchase plan whereby our outside directors
may elect to use their directors' fees to purchase shares of our common
stock at market value. In 1999, 26,000 shares were purchased at an average
price of $9.94. In 1998, 12,000 shares were purchased at an average price
of $11.50 and in 1997, 13,000 shares were purchased at an average price of
$10.74.
We apply Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations in accounting for
our plans. Accordingly, no compensation expense has been recognized for
our stock-based compensation plans. Had compensation cost for our stock-
based compensation plans been determined based upon the fair value of the
grant date for the awards under these plans consistent with the methodology
prescribed under SFAS No. 123, Accounting for Stock-Based Compensation, our
net income and earnings per share would have been reduced to the pro forma
amounts indicated below:
<TABLE>
<CAPTION>
Years Ended December 31,
- --------------------------------------------------------------------------------
(In thousands, except
per share data) 1999 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net income
As reported $5,402 $4,534 $2,415
Pro forma 5,223 4,208 1,988
Basic earnings per share
As reported 0.84 0.72 0.54
Pro forma 0.81 0.67 0.44
Diluted earnings per share
As reported 0.83 0.68 0.49
Pro forma 0.80 0.63 0.41
</TABLE>
The fair value of each option granted is estimated on the date of the
grant using the Black-Scholes option-pricing model using the following
weighted-average assumptions:
<PAGE>
<TABLE>
<CAPTION>
Years ended December 31,
- --------------------------------------------------------------------------------
1999 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Dividend yield 2.00% 1.80% 0.90%
Volatility 28.80 30.80 16.38
Risk-free interest rate 5.41% 5.02% 6.44%
Expected life 5 years 5 years 5 years
</TABLE>
36\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
NOTE 14. CONCENTRATIONS OF CREDIT:
Substantially all of our loans, commitments and commercial and
standby letters of credit have been granted to customers that are
depositors of Allegiant Bank and in our market area. Investments in state
and municipal securities also involve governmental entities within our
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. Commercial and standby letters of
credit were granted primarily to commercial borrowers.
NOTE 15. FINANCIAL INSTRUMENTS:
Allegiant Bank is a party to financial instruments with off-balance
sheet risk in the normal course of business to meet the financing needs of
its customers. These financial instruments include commitments to extend
credit, standby letters of credit and financial guarantees. These
instruments involve, to varying degrees, elements of credit and interest-
rate risk in excess of the amount recognized in the Consolidated Balance
Sheets. The contract or notional amounts of these instruments reflect the
extent of the bank's involvement in particular classes of financial
instruments.
Allegiant Bank's exposure to credit loss in the event of non-
performance by the other party to the financial instrument for commitments
to extend credit, standby letters of credit and financial guarantees
written is represented by the contractual or notional amount of those
instruments. The bank uses the same credit policies in making commitments
and conditional obligations as it does for on-balance-sheet instruments.
A summary of the notional amounts of Allegiant Bank's financial
instruments with off-balance sheet risk at December 31, 1999, 1998 and 1997
follows:
<TABLE>
<CAPTION>
December 31,
- --------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Commitments to extend credit $109,913 $82,530 $84,604
Standby letters of credit 4,213 6,496 3,868
</TABLE>
Commitments to extend credit are agreements to lend to a customer as
long as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Since many of the commitments are
expected to expire without being drawn upon, the total commitment amounts
do not necessarily represent future cash requirements. Allegiant Bank
evaluates each customer's creditworthiness on a case-by-case basis. The
amount of collateral obtained, if it is deemed necessary by the bank upon
extension of credit, is based on management's credit evaluation of the
counterparts. Collateral held varies but may include accounts receivable,
inventory, property, plant, equipment and real estate.
Standby letters of credit and financial guarantees written are
conditional commitments issued by the bank to guarantee the performance of
a customer to a third party. Those guarantees are primarily issued to
support contractual obligations of Allegiant Bank customers. The credit
risk involved in issuing letters of credit is essentially the same as that
involved in extending loan facilities to customers.
The carrying amount and estimated fair values of our financial
instruments were as follows:
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
- --------------------------------------------------------------------------------------------------------------
Carrying Fair Carrying Fair
(In thousands) Amount Value Amount Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL ASSETS:
Cash and due from banks, federal
funds sold and other
overnight investments $ 26,769 $ 26,769 $ 17,123 $ 17,123
Securities available-for-sale 49,129 49,129 42,740 42,740
Securities held-to-maturity 11,668 11,284 12,040 12,132
Loans, net of allowance 606,876 605,751 489,227 492,746
FINANCIAL LIABILITIES:
Deposits $548,466 $545,869 $450,766 $452,788
Short-term borrowings 75,861 75,859 53,542 53,566
Long-term debt 35,860 35,368 40,275 40,219
Guaranteed preferred beneficial
interest in subordinated debentures 17,250 15,932 - -
</TABLE>
The following methods and assumptions were used by us in estimating
fair values of financial instruments as disclosed herein:
Cash and Short-Term Instruments: The carrying amounts of cash and due
from banks and federal funds sold approximate their fair value.
<PAGE>
Securities: Fair values for held-to-maturity and available-for-sale
securities are based on quoted market prices or dealer quotes, where
available. If quoted market prices are not available for a specific
security, fair values are based on quoted market prices of comparable
instruments.
Loans: For variable-rate loans that reprice frequently and with no
significant change in credit risk, fair values are based on carrying
values. The fair values for fixed-rate loans are estimated using
discounted cash flow analyses and applying interest rates currently being
offered for loans with similar terms to borrowers of similar credit
quality. The fair values for non-performing loans are estimated using
assumptions regarding current assessments of collectibility and historical
loss experience.
Deposits: The fair values disclosed for deposits generally payable on
demand, such as non-interest bearing checking accounts, savings accounts,
NOW accounts and market rate deposit accounts, are by definition, equal to
the amount payable on demand at the reporting date. The carrying amounts
for variable-rate, fixed-term market rate deposit accounts and certificates
of deposit approximate their fair values at the reporting date. Fair
values for fixed-rate certificates of deposit are estimated using a
discounted cash flow calculation that applies interest rates currently
being offered on certificates of similar remaining maturities to a schedule
of aggregated monthly maturities on time deposits.
1999 Annual Report\37
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONT'D
Short-Term Borrowings: The carrying amounts of federal funds
purchased, borrowings under repurchase agreements and other short-term
borrowings approximate their fair values at the reporting date.
Long-Term Debt: The fair values of our long-term debt and guaranteed
preferred beneficial interest in subordinated debentures are based on
quoted market prices for similar issues or estimates using discounted cash
flow analyses, based on our current incremental borrowing rates for similar
types of debt instruments.
Off-Balance Sheet Financial Instruments: The fair value of
commitments to extend credit and standby letters of credit are estimated
using the fees currently charged to enter into similar agreements, taking
into account the remaining terms of the agreements, the likelihood of the
counterparties drawing on such financial instruments and the present
creditworthiness of such counterparties. We believe such commitments have
been made on terms which are competitive in the markets in which we
operate; however, no premium or discount is offered thereon and
accordingly, we have not assigned a value to such instruments for the
purposes of this disclosure.
Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial instrument.
These estimates do not reflect any premium or discount that could result
from offering for sale at one time our entire holdings of a particular
financial instrument. Because no market exists for a significant portion of
our financial instruments, fair value estimates are based on judgments
regarding future expected loss experience, current economic conditions,
risk characteristics of various financial instruments and other factors.
These estimates are subjective in nature and involve uncertainties and
matters of significant judgment and, therefore, cannot be determined with
precision. Changes in assumptions could significantly affect the
estimates.
Fair value estimates are based on existing on- and off-balance sheet
financial instruments without attempting to estimate the value of
anticipated future business and the value of assets and liabilities that
are not considered financial instruments. In addition, the tax
ramifications related to the realization of the unrealized gains and losses
can have a significant effect on fair value estimates and have not been
considered in many of the estimates.
NOTE 16. REGULATORY MATTERS:
We and Allegiant Bank are subject to various regulatory capital
requirements administered by federal and state banking agencies. Failure
to meet minimum capital requirements can initiate certain mandatory, and
possibly additional discretionary, actions by regulators that, if
undertaken, could have a direct material effect on our financial
statements. Under capital adequacy guidelines and the regulatory framework
for prompt corrective action, we and Allegiant Bank must meet specific
capital guidelines that involve quantitative measures of our and the bank's
assets, liabilities and certain off-balance sheet items as calculated under
regulatory accounting practices. Our and Allegiant Bank's capital amounts
and classifications also are subject to qualitative judgments by the
regulators about components, risk weightings and other factors.
Quantitative measures established by regulators to ensure capital
adequacy require us and Allegiant Bank to maintain minimum amounts and
ratios (set forth in the table below) of total and Tier 1 capital (as
defined in the regulations) to risk-weighted assets (as defined), and of
Tier 1 capital (as defined) to average assets (as defined). Management
believes that, as of December 31, 1999 we and Allegiant Bank met all
capital adequacy requirements to which they are subject.
As of December 31, 1999, the date of the most recent notification
from the regulatory agencies, the Bank was categorized as well capitalized
under the regulatory framework.
<PAGE>
The actual and required capital amounts and ratios as of December 31,
1999 and 1998 for Allegiant and Allegiant Bank are listed in the following
table:
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
- --------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1999:
Total Capital (to Risk-Weighted Assets)
Allegiant Bancorp, Inc. $61,885 10.23% $48,404 8.00% $ N/A N/A
Allegiant Bank 69,107 11.52 47,974 8.00 59,967 10.00%
Tier 1 Capital (to Risk-Weighted Assets)
Allegiant Bancorp, Inc. 53,269 8.80 24,202 4.00 N/A N/A
Allegiant Bank 61,601 10.27 23,987 4.00 35,980 6.00
Tier 1 Capital (to Average Assets)
Allegiant Bancorp, Inc. 53,269 7.47 28,523 4.00 N/A N/A
Allegiant Bank 61,601 8.89 27,716 4.00 34,645 5.00
As of December 31, 1998:
Total Capital (to Risk-Weighted Assets)
Allegiant Bancorp, Inc. $41,272 8.68% $38,059 8.00% $ N/A N/A
Allegiant Bank 51,931 10.93 37,999 8.00 47,499 10.00%
Tier 1 Capital (to Risk-Weighted Assets)
Allegiant Bancorp, Inc. 35,319 7.42 19,030 4.00 N/A N/A
Allegiant Bank 45,991 9.68 18,999 4.00 28,499 6.00
Tier 1 Capital (to Average Assets)
Allegiant Bancorp, Inc. 35,319 5.83 24,221 4.00 N/A N/A
Allegiant Bank 45,991 7.61 24,185 4.00 30,232 5.00
</TABLE>
38\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
NOTE 17. RESTRICTIONS ON CASH AND DUE FROM BANKS:
At December 31, 1999, $6.1 million in cash and due from bank balances
were maintained in accordance with the guidelines set forth by the Federal
Reserve Bank to maintain certain average reserve balances.
NOTE 18. OTHER INCOME AND EXPENSES:
A summary of the components of other income and other expenses
exceeding 1% of revenues in each of the years presented is as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
- -------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Other Income:
Leasing revenue $1,077 $1,527 $ 433
Mortgage banking revenue 944 2,299 1,300
Gain on sale of branches - 2,370 -
Gain on sale of mortgage loans - 1,112 27
Other Expenses:
Furniture and equipment 1,650 1,752 943
Occupancy 1,344 1,523 738
Goodwill amortization 980 910 358
Depreciation of operating leases 861 1,340 394
Supplies 274 489 428
Operating losses - other 80 450 870
Operating losses - overdrawn customer accounts 35 272 68
</TABLE>
NOTE 19. PARENT COMPANY CONDENSED FINANCIAL INFORMATION:
Following are our condensed financial statements (parent company
only) for the periods indicated:
<TABLE>
BALANCE SHEETS
<CAPTION>
December 31,
- --------------------------------------------------------------------------------
(In thousands) 1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Cash $ 4,962 $ 1,044
Investment securities 43 -
Loans and lease financing receivables 73 -
Investment in subsidiaries 73,201 60,046
Other assets 1,222 1,707
- --------------------------------------------------------------------------------
Total assets $79,501 $62,797
================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Short-term borrowings $ 500 $ -
Long-term debt 12,650 13,650
Other liabilities 438 1,043
Balances due to nonbank subsidiaries 17,922 -
- --------------------------------------------------------------------------------
Total liabilities 31,510 14,693
Total shareholders' equity: 47,991 48,104
- --------------------------------------------------------------------------------
Total liabilities and
shareholders' equity $79,501 $62,797
================================================================================
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF INCOME
<CAPTION>
Years Ended December 31,
- --------------------------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCOME:
Management and service fees from subsidiaries $ 1,116 $ - $ -
Dividends from subsidiaries - 1,000 1,475
Other operating income 53 - -
- --------------------------------------------------------------------------------------------------------------
Total Income 1,169 1,000 1,475
- --------------------------------------------------------------------------------------------------------------
EXPENSE:
Interest on long-term debt 1,699 1,183 812
Salaries and employee benefits 800 1,674 350
Other operating expenses 832 799 248
- --------------------------------------------------------------------------------------------------------------
Total Expense 3,331 3,656 1,410
- --------------------------------------------------------------------------------------------------------------
Income (loss) before income tax benefit and equity in
undistributed income of subsidiaries (2,162) (2,656) 65
Income tax benefit 866 1,448 490
- --------------------------------------------------------------------------------------------------------------
Income (loss) before equity in undistributed income of
subsidiaries (1,296) (1,208) 555
Equity in undistributed income of subsidiaries 6,698 5,742 1,860
- --------------------------------------------------------------------------------------------------------------
Net income $ 5,402 $ 4,534 $2,415
==============================================================================================================
</TABLE>
1999 Annual Report\39
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONT'D
<TABLE>
STATEMENTS OF CASH FLOWS
<CAPTION>
Years Ended December 31,
- --------------------------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 5,402 $ 4,534 $ 2,415
Adjustment to reconcile net income to net cash
used by operating activities
Net income of subsidiaries (6,698) (6,742) (3,335)
Dividends from subsidiaries - 1,000 1,475
Net loss on disposition of subsidiary 20 - -
Other, net (118) 346 (558)
- --------------------------------------------------------------------------------------------------------------
Cash used by operating activities (1,394) (862) (3)
- --------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Contributions of capital to subsidiaries (8,000) (1,000) (13,979)
Net cash received in disposition of subsidiary 1,348 - -
Other, net (108) (15) -
- --------------------------------------------------------------------------------------------------------------
Cash used in investing activities (6,760) (1,015) (13,979)
- --------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Payment of dividends (978) (917) (331)
Proceeds from issuance of common stock 476 2,418 12,753
Repurchase of common stock (4,176) - -
Net decrease in short-term borrowings (500) - -
Proceeds from issuance of long-term debt - 13,650 3,000
Repayment of long-term debt - (13,650) -
Proceeds from issuance of guaranteed preferred
beneficial interest in subordinated debentures 17,250 - -
- --------------------------------------------------------------------------------------------------------------
Cash provided by financing activities 12,072 1,366 15,422
- --------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 3,918 (511) 1,440
Cash and cash equivalents, beginning of year 1,044 1,555 115
- --------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year $ 4,962 $ 1,044 $ 1,555
==============================================================================================================
</TABLE>
NOTE 20. RESTRICTIONS ON SUBSIDIARY DIVIDENDS:
Subsidiary bank dividends are the principal source of funds for
payment of dividends by us to our shareholders. The payment of dividends
by Allegiant Bank is subject to regulation by the Federal Deposit Insurance
Corporation. Allegiant Bank is also subject to regulation by the State of
Missouri. These payments are not restricted as to the amount of dividends
that can be paid, other than what prudent and sound banking principles
permit and what must be retained to meet minimum legal capital
requirements. Accordingly, approximately $18.6 million at December 31,
1999, in addition to net income in 2000, could be paid without prior
regulatory approval.
Extensions of credit by subsidiaries to us are permitted by
regulatory authorities but are limited in amount and subject to collateral
requirement. At December 31, 1999 approximately $5.1 million would have
been available under Federal Reserve guidelines.
NOTE 21. SUPPLEMENTAL DISCLOSURE FOR THE CONSOLIDATED STATEMENT OF CASH
FLOWS:
Supplemental disclosures of noncash investing and financing
activities, and additional disclosures including details of cash and cash
equivalents from acquisitions accounted for as purchases and dispositions
of branches, were as follows:
<PAGE>
<TABLE>
<CAPTION>
Years Ended December 31,
- --------------------------------------------------------------------------------------------------------------
(In thousands) 1999 1998 1997
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fair value of assets purchased $ 473 $ 17,492 $ 46,682
Liabilities assumed (transferred) 99 (40,154) 119,691
Issuance of common stock - - 10,587
- --------------------------------------------------------------------------------------------------------------
Net cash received (paid) for acquisitions and dispositions 374 (22,662) 83,596
Cash and cash equivalents acquired 974 - 1,533
- --------------------------------------------------------------------------------------------------------------
$ 1,348 $(22,662) $ 85,129
==============================================================================================================
Cash paid during the year for:
Interest on deposits and borrowings $25,619 $ 28,096 $ 20,930
Income taxes 4,081 3,345 2,768
Noncash transactions:
Transfers to other real estate owned in settlement of loans $ 402 $ - $ 330
Loans securitized - - 7,102
Common stock issued in acquisition of Reliance Financial, Inc. - - 10,587
Conversion of directors' fees to common stock 258 135 136
Conversion of employee stock bonus to common stock - - 63
</TABLE>
40\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
NOTE 22. SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED):
The following is a summary of quarterly operating results for the
years ended December 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999
- -----------------------------------------------------------------------------------------------------------------------------
(In thousands, except First Second Third Fourth
per share data) Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income $11,925 $12,308 $13,250 $14,629
Interest expense 6,088 6,150 6,798 7,565
- -----------------------------------------------------------------------------------------------------------------------------
Net interest income 5,837 6,158 6,452 7,064
Provision for loan losses 562 450 580 954
Other income 1,254 1,188 1,207 1,194
Other expense 4,858 4,654 4,705 4,545
Income taxes 669 897 945 1,133
- -----------------------------------------------------------------------------------------------------------------------------
Net income $ 1,002 $ 1,345 $ 1,429 $ 1,626
=============================================================================================================================
Earnings per share:
Basic $ 0.15 $ 0.20 $ 0.22 $ 0.27
Diluted 0.15 0.20 0.22 0.26
<CAPTION>
1998
- -----------------------------------------------------------------------------------------------------------------------------
(In thousands, except First Second Third Fourth
per share data) Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income $12,270 $12,288 $12,452 $12,208
Interest expense 6,841 7,052 6,835 6,539
- -----------------------------------------------------------------------------------------------------------------------------
Net interest income 5,429 5,236 5,617 5,669
Provision for loan losses 400 315 465 1,240
Securities transactions 12 46 4 6
Other income 1,097 2,130 1,946 4,083
Other expense 5,118 5,295 5,112 5,770
Income taxes 393 725 783 1,125
- -----------------------------------------------------------------------------------------------------------------------------
Net income $ 627 $ 1,077 $ 1,207 $ 1,623
=============================================================================================================================
Earnings per share:
Basic $ 0.10 $ 0.17 $ 0.19 $ 0.26
Diluted 0.09 0.16 0.18 0.25
</TABLE>
1999 Annual Report\41
<PAGE>
<PAGE>
ALLEGIANT BANCORP, INC.
OFFICERS
Marvin S. Wool
Chairman, Chief Executive Officer
and President
Dash Multi-Corp
Chairman
Allegiant Bancorp, Inc.
and Allegiant Bank
Shaun R. Hayes
President and Chief Executive Officer
Allegiant Bancorp, Inc.
and Allegiant Bank
Thomas A. Daiber
Executive Vice President and
Chief Financial Officer
Allegiant Bank
Senior Vice President and CFO
Allegiant Bancorp, Inc.
Kevin R. Farrell
President and Chief Executive Officer
St. Louis Steel Products
Corporate Secretary
Allegiant Bancorp, Inc.
Jeffrey R. Heutel
Senior Vice President - Risk Management
Karen E. Box
Senior Vice President and
Director Human Resources
Christy M. Siburt
Executive Assistant and Secretary
Allegiant Bank
Vice President, Investor Relations
Allegiant Bancorp, Inc.
ALLEGIANT BANCORP, INC. BOARD OF DIRECTORS
[PHOTO]
Kevin R. Farrell
President and Chief
Executive Officer
St. Louis Steel Products
[PHOTO]
Leland B. Curtis
Partner/Principal-Attorney
Curtis Oetting Heinz
Garrett & Soule
[PHOTO]
Shaun R. Hayes
President and Chief
Executive Officer
Allegiant Bancorp, Inc.
President and Chief
Executive Officer
Allegiant Bank
[PHOTO]
Leon A. Felman
President and Chief
Executive Officer
Sage Systems, Inc.
Private Investor
[PHOTO]
C. Virginia Kirkpatrick
President and Chief
Executive Officer
CVK Personnel
Management and
Training
[PHOTO]
John K. Krause
President
Jenkin-Guerin, Inc.
[PHOTO]
Lee S. Wielansky
Director
Regency Realty
Corporation
Vice Chairman
Allegiant Bank
[PHOTO]
John L. Weiss
President
Brentwood Volvo
General Manager
Southpoint Toyota
[PHOTO]
Marvin S. Wool
Chairman, Chief Executive
Officer and President
Dash Multi-Corp
Chairman
Allegiant Bancorp, Inc.
and Allegiant Bank
ALLEGIANT BANK SENIOR
MANAGEMENT GROUP
Karen E. Box
Senior Vice President and
Director Human Resources
Thomas A. Daiber
Executive Vice President and
Chief Financial Officer
Allegiant Bank
Senior Vice President and CFO
Allegiant Bancorp, Inc.
David Franke
Vice President - Internal Auditor
Paul F. Glarner
Executive Vice President and
Chief Lending Officer
Shaun R. Hayes
President and Chief Executive Officer
Allegiant Bancorp, Inc. and Allegiant Bank
Jeffrey R. Heutel
Senior Vice President - Risk Management
Michael G. Jung
Senior Vice President - Corporate Banking
Richard E. Markow
President - Trust Division
Kimberli A. Palmer
Senior Vice President -
Information Technology/Operations
James L. Schaller
Senior Vice President - Retail Banking
Craig A. Schriewer
Vice President - Real Estate Lending
David B. Schroeder
Senior Vice President - Corporate Banking
Jeffrey S. Schatz
Executive Vice President and
Chief Operations Officer
Christy M. Siburt
Executive Assistant and Secretary
Allegiant Bank
Vice President, Investor Relations
Allegiant Bancorp, Inc.
[PHOTO]
Back Row: Thomas A. Daiber, Shaun R. Hayes, Jeffrey S. Schatz, Karen E. Box.
Front Row: Paul F. Glarner, Kimberli A. Palmer, James L. Schaller, Jeffrey R.
Heutel, Christy M. Siburt
ALLEGIANT BANK EXECUTIVE MANAGEMENT COMMITTEE
Karen E. Box
Senior Vice President and
Director Human Resources
Thomas A. Daiber
Executive Vice President and
Chief Financial Officer
Allegiant Bank
Senior Vice President and CFO
Allegiant Bancorp, Inc.
Paul F. Glarner
Executive Vice President and
Chief Lending Officer
Shaun R. Hayes
President and Chief
Executive Officer
Allegiant Bancorp, Inc.
and Allegiant Bank
Jeffrey R. Heutel
Senior Vice President -
Risk Management
Kimberli A. Palmer
Senior Vice President -
Information Technology/Operations
James L. Schaller
Senior Vice President -
Retail Banking
Jeffrey S. Schatz
Executive Vice President and
Chief Operations Officer
Christy M. Siburt
Executive Assistant and Secretary
Allegiant Bank
Vice President, Investor Relations
Allegiant Bancorp, Inc.
ALLEGIANT BANK DIRECTORS
Keith Barket
President
Barket Realty
Frank J. Cusumano
Consultant
Kemoll's Restaurant
Thomas A. Daiber
Executive Vice President and
Chief Financial Officer
Allegiant Bank
Senior Vice President and CFO
Allegiant Bancorp, Inc.
William Davidson
President
Davidson & Associates
Kevin R. Farrell
President and Chief
Executive Officer
St. Louis Steel Products
William H. Gibson, Jr.
Retired Chief of Dental Health Care
St. Louis County
Department of Health
Paul F. Glarner
Executive Vice President and
Chief Lending Officer
Sidney H. Guller
Chairman Essex Industries, Inc.
Shaun R. Hayes
President and Chief
Executive Officer
Allegiant Bancorp, Inc.
and Allegiant Bank
C. Virginia Kirkpatrick
President and Chief
Executive Officer
CVK Personnel Management
and Training
Brian Matthews
Chief Exeutive Officer
CDM/Primary Network
William H. Nottke
President and CEO
Riverdale Packaging and
Riverdale Display
Jon M. Pyzyk
President and Chief
Executive Officer
Kohner Properties
Fr. Richard J. Quirk
Basilica of St. Louis,
in Residence
Jeffrey S. Schatz
Executive Vice President and
Chief Operations Officer
John L. Weiss
President
Brentwood Volvo
General Manager
Southpoint Toyota
Lee S. Wielansky
Director
Regency Realty Corporation
Vice Chairman
Allegiant Bank
Marvin S. Wool
Chairman, Chief Executive
Officer and President
Dash Multi-Corp
Chairman
Allegiant Bancorp, Inc.
and Allegiant Bank
42\Allegiant Bancorp, Inc.
<PAGE>
<PAGE>
BANKING CENTER DIRECTORS 2000
ST. LOUIS CITY
John Fox Arnold
Chairman/Attorney,
Lashly & Baer
Stephen Bahn
Principal, Voss Bahn
Commercial RE Services
Freeman Bosley, Jr.
Attorney, Caldwell,
Hughes & Singleton
Robert B. Glarner, Jr.
Vice President, National Paper
& Printing Supplies, Inc.
Glenn Heitmann
(Chairman)
President and CEO,
Heitmann & Associates, Inc.
Robert J. Lienhop
CEO, Hall Technologies, Inc.
Yogi Patel, Ph.D.
Barnes-Jewish Hospital
Robert Wood
President, Robert Wood Realty
W. Paul Zemitzsch
President, Sequel LLC
Co-Owner, CompCheck
Corporation
KRATKY
Myron Applebaum
President, Applebaum
& Associates
Patrick Barrett
(Chairman)
President, Neonatal Division
Biomedical Systems
Ellen D. Crowley
Vice President, Financial
Management Partners
John Bowman
Former President, Reliance
Federal Savings Bank
John Kuhlman
President, Kuhlman
Design Group
Mark Mehlman
President, Mehlman
Realty Company
Jacque Phillips
President, Accu-Care
Home Nurses Inc.
Milton (Peter) D.
Rothschild
President, Rothschild
Development, Ltd.
CENTRAL
Steve Adelman
President, Adelman
Management Corporation
Judith L. Brown
Broker/Owner, ReMax Associates
Ron L. Chitwood
President, C-K Plastics, Inc.
Lawrence H. Greenberg
President, Greenberg
& Associates
Paul Henderson
President, The Henderson
Group, Inc.
George Hensley, Jr.
President, Hensley
Construction Inc.
Kerry Klarfeld
President, Capital Investments
Bruce Kupper
CEO, Kupper Parker
Communications
Neal Losse
President, Opinions, Inc.
Constantine (Gus) Pulos
Attorney, Pulos Blankenship
& Jianakoplos PC
John L. Weiss (Chairman)
President, Brentwood Volvo
General Manager,
Southpoint Toyota
David Wright
Vice President, Kaplan
Real Estate Co.
SOUTHWEST
Bill Bounds (Chairman)
Accountant, Humes
& Barrington PC
James Bowen
Private Investor
Philip G. Brumbaugh
CPA, Philip G. Brumbaugh,
CPA, CVA
Deborah Fink, D.M.D.
Orthodontist
Kenneth Glass
(Co-Chairman)
President, Safeguard
Business Systems
Richard Goldberg
President, The Goldberg Group
John Meek
COO, Paramount
Environments, Inc.
Mark Nelson
President, Abrasive
Blasting & Coatings
David Sabino
CPA, Sabino,
Stringer & Associates
Robert Taylor
President, St. Louis Electronics
John Van Hoogstraat
Owner, Royal Gate Dodge
George (Butch) Welsch
President, Welsch Heating
& Cooling Co.
ST. CHARLES
Lisa Galli
Owner/President,
B&L Enterprises
Mark Kaufer
Owner, Premium Homes
Stephen Lundergan
(Chairman)
President, Richland
& Associates
Jim Muehling
General Contractor, J.R.
Muehling Construction
R. Tim Short
Architect/Developer
Carolyn E. Strong
Owner, Sundermeier RV Park
& Conference Center
Owner, Banquet Center of the
Little Hills
TRUST
Daniel Bruntrager
Partner, Bruntrager & Billings
Stephen B. Daiker
Attorney, Byran Cave LLP
Bradley Faerber
CPA, Lopata Flegel
Hoffman & Co.
Sheldon Harber
Financial Planner,
Asset Strategies Inc.
Ben Keller
Attorney, Rosenblum
Goldenhersh Silverstein
& Zafft P.C.
Charles Lowenhaupt
Attorney, Lowenhaupt
and Chasnoff LLC
Charles McCarter
Attorney, McCarter
& Greenley
Matthew G. Perlow
Attorney, Blackwell Sanders
Peper Martin
Harvey G. Schneider
Attorney, Evans & Dixon
Bradford L. Stevens
(Chairman)
Attorney, Dankenbring
Greiman Osterholt & Hoffmann
WEST
H. Bart Baker
Producer, Lockton Companies
B. Thomas Beattie
Broker, Beattie & Hawkins
William Benedict
Doctor, University Internists
of St. Louis
Robert Chambers
(Chairman)
President, KW Chambers
Jon Dalton
Partner, Bryan Cave LLP
Mark Dunham
President & CEO,
Premier Marketing
John Eilerman
President, McBride and Son
Harry Freeman
Vice President, Mayer Homes
Steve R. Garner
President, Town &
Village Properties
Michael L. Hammack
President, Catco, Inc.
Mike Hejna
President, Gundaker
Commercial Group
Jackie Joyner-Kersee
President, JJK & Associates
Andrew Katzman
Owner, ARK Investments
Vince Nangle
CPA, Nangle & Associates
John O'Connell
Vice President - Finance,
Hayden Homes
Gary Parker
Director Industrial Services,
Sansone Group
Tom Shelby
CEO, Camie-Campbell
International Inc.
Kenneth Stricker
Vice President and CFO,
The Jones Company
WARRENTON
Susan D. Albers, D.C.
Chiropractic Physician
Wesley C. Dalton
Attorney
Karen L. Gregory
Principal, Rebecca Boone
Elementary
Toni Hawley
Director of Economic
Development, Warrenton
Area Economic Development
Thomas Nittler
(Chairman)
Vice President - Finance,
Warrenton Products, Inc.
T. Eric Pitman
Vice President, Pitman-Brown
Funeral Homes
Gregory Renaud
President, Cut-N-Trim
Landscaping, Inc.
Scott A. Sanders
Certified Public Accountant
Janet Schamma
Retired Allegiant Bank
Warren Wobbe
Innsbrook Corporation
Real Estate Division
UNION BOARD
Dan Briegel
Attorney/Partner, Briegel
Davis, Arand & Fischer
Jerome Dwyer
Co-Owner/Partner,
Franklin County Medical
Outreach Center
Neil Kruel (Chairman)
President, A.J. Kruel
Corporation
Harvey Mefford
Retired
Rod Schwentker
Owner Pro-Body Works
Fred Springmeyer
Vice President - Sales,
CK Plastics
Virginia Young
Corporate Secretary -
Martak Appliance
ALLEGIANT BANK OFFICERS
James R. Allen
AVP - Real Estate Lending
Melanie Arnold
VP - Loan Administration
Bobbie Baker
Retail Banking Officer -
Downtown
Robert Baroni
VP - Retail Banking
Brian A. Barry
AVP - Network Services
Karen E. Box
Sr. VP - Human Resources
Virginia Burdick
VP - Retail Operations
Milburn Cain
VP -Private Banking/
Banking Center Directors
Charles A. Callahan
Collections Manager
Jeff L. Camilleri
VP - Business Development
Kevin L. Carter
VP - Corporate Banking
Kendrick Coleman
Information Technology Officer
Geraldine Cross
AVP - Retail Banking Officer -
Grand
Thomas A. Daiber
EVP - Chief Financial Officer
Brian M. Davies
AVP - Corporate Banking
Donald M. Davis
Sr. VP - Business
Development Officer
Alan Denk
VP - Corporate Banking
Sherri L. Dunsing
VP - Mortgage Operations
Cynthia L. Eveker
VP - Accounting Manager
Matthew S. Fagin
VP - Corporate Banking
Mary E. Fleming
President - Real Estate
Investment Trust/
Assistant Corporate Secretary
Phyllis A. Flowers
AVP - Training and
Development
David Franke
VP - Internal Auditor
Aaron S. Gardner
Corporate Banking Officer
Jeffrey Gass
VP - Accounting Manager
Paul F. Glarner
EVP - Chief Lending Officer
Marla J. Griffin
AVP - Operations
Carol Hancock
VP - Mortgage Sales
D. Mike Harper
VP - Consumer Lending
Shaun R. Hayes
President and Chief
Executive Officer
Jeffrey R. Heutel
Sr. VP - Risk Management
Craig Hingle
AVP - Corporate Banking
Melissa A. Hinton
AVP - Retail Banking Officer -
Des Peres
Carolyn L. Howell
AVP - Deposit Application
Support
Michael G. Jung
Sr. VP - Corporate Banking
Eric Kappelmann
VP - Corporate Banking
Jason Koelling
Corporate Banking Officer
Jeanette Larson
VP - Compliance
Nora K. Macalady
VP - Primetime/Marketing
Richard E. Markow
President - Trust Division
Timothy M. Meyer
VP - Loan Review
Karen Miller
AVP - Retail Banking Officer -
Crestwood
Tim Millerick
AVP - DP/Application Support
Herbert W. Morisse
VP - Trust Officer
Timothy Murphy
VP - Real Estate Lending
James A. O'Donnell
VP - Corporate Banking
Kevin Overschmidt
Retail Banking Officer - Union
Kimberli A. Palmer
Sr. VP - Information
Technology/Operations
Lorrie Phelan
AVP - Retail Banking Officer -
South County
Stacey Ponticello
AVP - Retail Banking Officer -
Warrenton
Lori C. Pugh
AVP - Retail Banking Officer -
St. Peters
Tracy Remillard
Call Center Manager
Penny Rogers
Retail Banking Officer -
Westport
Deborah Sanguinette
AVP - Consumer Lending
James L. Schaller
Sr. VP - Retail Banking
Jeffrey S. Schatz
Executive Vice President and
Chief Operations Officer
Craig A. Schriewer
VP - Real Estate Lending
David B. Schroeder
Sr. VP - Corporate Banking
Timothy Shipley
AVP - Cash Management
Officer
Christy M. Siburt
Corporate Secretary/
Executive Assistant
Ray Sleeth
VP - Retail Banking Officer -
Affton
Diane E. Spal
AVP - Retail Banking Officer -
Ballwin
Preston Smith
Loan and E-Commerce
Product Manager
Joseph M. Thompson
AVP - Asset Liability Manager
James Valk
VP - Corporate Banking
Beth A. Weldon
AVP - Retail Banking Officer -
Hazelwood
Frank W. Wohlrab
VP - Corporate Banking
Marvin S. Wool
Chairman
1999 Annual Report\43
<PAGE>
<PAGE>
SHAREHOLDER INFORMATION
CORPORATE HEADQUARTERS
Allegiant Bancorp, Inc.
2122 Kratky Road
St. Louis, MO 63114
314/692-8200
www.allegiantbank.com
ANNUAL MEETING
The 2000 annual meeting of shareholders of Allegiant Bancorp, Inc. will
be held on April 20, 2000 at 4:00 p.m. at The St. Louis Science Center,
5050 Oakland Ave., St. Louis, MO 63110.
INVESTOR RELATIONS
Security analyst and other investor inquiries should be directed to:
Allegiant Bancorp, Inc.
Investor Relations Department
2122 Kratky Road
St. Louis, MO 63114
314/216-7446
A copy of the Company's Annual Report on Form 10-K as filed with the
Securities and Exchange Commission is available on request by writing
to:
Allegiant Bancorp, Inc.
Shareholder Information
2122 Kratky Road
St. Louis, MO 63114
TRANSFER AGENT
Communications regarding share transfer, lost certificates, change of
address and dividend inquiries should be directed to:
UMB Bank
928 Grand Blvd.
P.O. Box 410064
Kansas City, MO 64141
MARKET MAKERS
Stifel Nicolaus & Co. Inc. First Union Securities
501 N. Broadway 77 West Wacker Dr.
St. Louis, MO 63102 Chicago, IL 60601
314/342-2261 800/527-8222
A.G. Edwards and Sons Knight Securities LLP
1 North Jefferson 525 Washington Blvd.
St. Louis, MO 63103 Jersey City, NJ 07130
314/955-3000
Corporate Counsel Auditors
Thompson Coburn LLP Ernst & Young LLP
DIVIDEND REINVESTMENT
The company offers a dividend reinvestment and stock purchase plan to
registered shareholders. Information about the plan may be obtained by
writing to:
Allegiant Bancorp, Inc.
Shareholder Information
2122 Kratky Road
St. Louis, MO 63114
COMMON STOCK SHARE DATA (SYMBOL: "ALLE")
Our common stock (symbol: "ALLE") has been traded on the Nasdaq National
Market since May 5, 1996. From January 1, 1996 to such date it was
traded on the Nasdaq Small Cap Market. As of March 1, 2000, the number
of shareholders of our common stock was approximately 3,500. The
following table sets forth the high and low trading prices, as well as
dividends per share for the periods shown, as reported by Nasdaq. Such
prices reflect interdealer prices, without retail mark-up, markdown or
commission, and have adjusted to reflect all stock splits and stock
dividends.
<TABLE>
<CAPTION>
Dividends
Declared
High Low and Paid
- -------------------------------------------------------------------------
<S> <C> <C> <C>
1999
First Quarter $12.875 $8.958 $0.050
Second Quarter $12.000 $8.500 $0.050
Third Quarter $11.500 $9.000 $0.050
Fourth Quarter $10.000 $8.500 $0.050
1998
First Quarter $21.042 $11.000 $0.025
Second Quarter $19.167 $13.333 $0.025
Third Quarter $15.000 $10.417 $0.033
Fourth Quarter $10.833 $9.167 $0.042
</TABLE>
44\Allegiant Bancorp, Inc.
<PAGE>
Exhibit 21.1
SUBSIDIARIES OF THE REGISTRANT
(as of March 1, 2000)
Allegiant Bank Missouri
Allegiant Investment Company Delaware
Allegiant Real Estate Investment Trust Delaware
Allegiant Insurance Services Co. Missouri
Kratky Road, Inc. Missouri
Allegiant Capital Trust I Delaware
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Allegiant Bancorp, Inc.
St. Louis, Missouri
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (File Nos. 333-13451 and 333-26433) and on Form
S-3 (File No. 333-65699) of Allegiant Bancorp, Inc. (the Company) of our
report dated January 19, 2000, relating to the consolidated financial
statements of the Company as of and for the years ended December 31,
1999 and 1998, incorporated by reference in this Annual Report (Form 10-K)
for the year ended December 31, 1999.
/s/ Ernst & Young, LLP
St. Louis, Missouri
March 16, 2000
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
(BDO Seidman, LLP letterhead)
Allegiant Bancorp, Inc.
St. Louis, Missouri
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (File Nos. 333-13451 and 333-26433) and on Form
S-3 (File No. 333-65699) of Allegiant Bancorp, Inc. (the Company) of our
report dated March 13, 1998, relating to the consolidated financial
statements of the Company as of and for the year ended December 31, 1997,
appearing in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999.
/s/ BDO Seidman, LLP
St. Louis, Missouri
March 13, 2000
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains information extracted from
Allegiant Bancorp, Inc.'s annual report on Form 10-K
for the year ended December 31, 1999 and is qualified
in its entirety by reference to such report.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 16,842
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 9,927
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 49,129
<INVESTMENTS-CARRYING> 11,668
<INVESTMENTS-MARKET> 11,284
<LOANS> 615,191
<ALLOWANCE> 8,315
<TOTAL-ASSETS> 728,492
<DEPOSITS> 548,466
<SHORT-TERM> 75,861
<LIABILITIES-OTHER> 3,064
<LONG-TERM> 35,860
0
17,250
<COMMON> 66
<OTHER-SE> 47,925
<TOTAL-LIABILITIES-AND-EQUITY> 728,492
<INTEREST-LOAN> 48,604
<INTEREST-INVEST> 3,361
<INTEREST-OTHER> 147
<INTEREST-TOTAL> 52,112
<INTEREST-DEPOSIT> 20,595
<INTEREST-EXPENSE> 26,601
<INTEREST-INCOME-NET> 25,511
<LOAN-LOSSES> 2,546
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 18,762
<INCOME-PRETAX> 9,046
<INCOME-PRE-EXTRAORDINARY> 5,402
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,402
<EPS-BASIC> 0.84
<EPS-DILUTED> 0.83
<YIELD-ACTUAL> 8.53
<LOANS-NON> 606
<LOANS-PAST> 22
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 6,442
<CHARGE-OFFS> 860
<RECOVERIES> 188
<ALLOWANCE-CLOSE> 8,315
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
