<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
--------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 0-25808
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GREAT AMERICAN BANCORP, INC.
----------------------------
Delaware 52-1923366
- ----------------------------------------------------------------
State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
1311 S. Neil St., P.O. Box 1010, Champaign, IL 61824-1010
- ---------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(217) 356-2265
- ---------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
(1) [X] Yes [ ] No
(2) [X] Yes [ ] No
The Registrant had 1,732,976 shares of Common Stock issued and
outstanding as of July 31, 1997. These shares include 98,588
shares held by the Registrant's Employee Stock Ownership Plan
("ESOP") and 58,939 shares held by the Registrant's 1995
Incentive Plan that have not been committed to be released to
participants.
<PAGE>
Table of Contents
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
Consolidated Income Statements
Consolidated Statements of Cash Flows
Item 2. Management's Discussion and Analysis or
Plan of Operation
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security
Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
Great American Bancorp, Inc. and Subsidiary
Consolidated Balance Sheets
As of June 30, 1997 and December 31, 1996
(unaudited, in thousands)
June 30, December 31,
1997 1996
Assets -------- --------
Cash and due from banks $ 4,715 $ 6,361
Interest-bearing demand deposits 12,439 20,049
-------- --------
Cash and cash equivalents 17,154 26,410
Interest-bearing time deposits 3,000 2,000
Investment securities
Available for sale 999 --
Held to maturity 6,297 3,400
-------- --------
Total investment securities 7,296 3,400
Loans 100,777 91,817
Allowance for loan losses (446) (374)
-------- --------
Net loans 100,331 91,443
Premises and equipment 7,217 7,306
Federal Home Loan Bank stock 580 454
Other assets 1,399 1,356
-------- --------
Total assets $ 136,977 $ 132,369
======== ========
Liabilities
Deposits
Noninterest bearing $ 4,637 $ 4,253
Interest bearing 101,730 96,461
-------- --------
Total deposits 106,367 100,714
Other liabilities 1,247 1,193
-------- --------
Total liabilities 107,614 101,907
-------- --------
(Continued)
<PAGE>
Great American Bancorp, Inc. and Subsidiary
Consolidated Balance Sheets (Continued)
As of June 30, 1997 and December 31, 1996
(unaudited, in thousands)
Commitments and Contingent Liabilities
Stockholders' Equity
Preferred stock, $0.01 par value
Authorized and unissued --
1,000,000 shares -- --
Common stock, $0.01 par value
Authorized -- 7,000,000 shares
Issued -- 2,052,750 shares
Outstanding -- 1,598,956 and
1,671,691 shares 21 21
Paid-in-capital 19,553 19,486
Retained earnings -- substantially
restricted 15,992 15,938
Net unrealized gain on securities
available for sale 3 --
-------- --------
35,569 35,445
Less:
Treasury stock -- 292,774
and 200,144 shares (4,343) (2,875)
Unearned employee stock ownership
plan shares -- 100,728 and
113,566 shares (1,007) (1,136)
Unearned incentive plan shares --
60,292 and 67,349 shares (856) (972)
-------- --------
Total stockholders' equity 29,363 30,462
-------- --------
Total liabilities and
stockholders' equity $ 136,977 $ 132,369
======== ========
See notes to consolidated financial statements.
<PAGE>
Great American Bancorp, Inc. and Subsidiary
Consolidated Income Statements
For the Six Months Ended June 30, 1997 and 1996
(unaudited, in thousands except share data)
1997 1996
-------- --------
Interest income
Loans $ 4,155 $ 3,420
Investment securities
Taxable 197 225
Tax exempt 7 9
Deposits with financial institutions
and other 566 535
-------- --------
Total interest income 4,925 4,189
-------- --------
Interest expense
Deposits 2,174 1,503
Other 16 14
-------- --------
Total interest expense 2,190 1,517
-------- --------
Net Interest Income 2,735 2,672
Provision for loan losses 78 110
-------- --------
Net Interest Income After
Provision for Loan Losses 2,657 2,562
-------- --------
Noninterest income
Income from joint venture 11 32
Commissions 15 11
Service charges on deposit accounts 209 185
Other customer fees 69 26
Net gains on loan sales 1 23
Other income 35 27
-------- --------
340 304
-------- --------
(Continued)
<PAGE>
Great American Bancorp, Inc. and Subsidiary
Consolidated Income Statements (Continued)
For the Six Months Ended June, 1997 and 1996
(unaudited, in thousands except share data)
Noninterest Expenses
Salaries and employee benefits 1,243 1,148
Net occupancy expenses 232 226
Equipment expenses 143 110
Data processing fees 96 100
Deposit insurance expense 30 99
Printing and office supplies 145 121
Legal and professional fees 120 108
Directors' fees 52 61
Insurance expense 19 20
Marketing and advertising expenses 90 88
Other expenses 165 182
-------- --------
Total noninterest expense 2,335 2,263
-------- --------
Income Before Income Tax 662 603
Income tax expense 278 260
-------- --------
Net income $ 384 $ 343
======== ========
Per Share Data:
Earnings per share
Assuming no dilution
Net income $ 0.24 $ 0.18
Average number ======== ========
of shares 1,628,656 1,872,939
======== ========
Assuming full dilution:
Net income $ 0.21 $ 0.17
Average number ======== ========
of shares 1,801,834 2,055,825
======== ========
Dividends $ 0.20 $ 0.38
======== ========
See notes to consolidated financial statements.
<PAGE>
Great American Bancorp, Inc. and Subsidiary
Consolidated Income Statements
For the Quarter Ended June 30, 1997 and 1996
(unaudited, in thousands except share data)
1997 1996
-------- --------
Interest income
Loans $ 2,093 $ 1,742
Investment securities
Taxable 115 129
Tax exempt 4 4
Deposits with financial institutions
and other 278 237
-------- --------
Total interest income 2,490 2,112
-------- --------
Interest expense
Deposits 1,122 762
Other 8 7
-------- --------
Total interest expense 1,130 769
-------- --------
Net Interest Income 1,360 1,343
Provision for loan losses 39 60
-------- --------
Net Interest Income After
Provision for Loan Losses 1,321 1,283
-------- --------
Noninterest income
Income from joint venture 6 17
Commissions 7 2
Service charges on deposit accounts 115 98
Other customer fees 35 14
Net gains on loan sales 1 4
Other income 18 4
-------- --------
182 139
-------- --------
(Continued)
<PAGE>
Great American Bancorp, Inc. and Subsidiary
Consolidated Income Statements (Continued)
For the Quarter Ended June, 1997 and 1996
(unaudited, in thousands except share data)
Noninterest Expenses
Salaries and employee benefits 628 573
Net occupancy expenses 115 110
Equipment expenses 69 57
Data processing fees 43 51
Deposit insurance expense 16 48
Printing and office supplies 60 51
Legal and professional fees 59 47
Directors' fees 27 26
Insurance expense 8 11
Marketing and advertising expenses 48 56
Other expenses 97 95
-------- --------
Total noninterest expense 1,170 1,125
-------- --------
Income Before Income Tax 333 297
Income tax expense 140 126
-------- --------
Net income $ 193 $ 171
======== ========
Per Share Data:
Earnings per share
Assuming no dilution
Net income $ 0.12 $ 0.09
Average number ======== ========
of shares 1,612,442 1,879,078
======== ========
Assuming full dilution:
Net income $ 0.11 $ 0.08
Average number ======== ========
of shares 1,780,447 2,056,115
======== ========
Dividends $ 0.10 $ 0.10
======== ========
See notes to consolidated financial statements.
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Great American Bancorp, Inc. and Subsidiary
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1997 and 1996
(unaudited, in thousands)
1997 1996
-------- --------
Operating Activities
Net income $ 384 $ 343
Adjustments to reconcile net
income to net cash provided
by operating activities:
Provision for loan losses 78 110
Depreciation 220 179
Amortization of deferred
loan fees (15) (8)
Deferred income tax 48 (40)
Investment securities accretion,
net (2) --
Net gain on loan sales (1) (23)
Employee stock ownership plan
compensation expense 202 190
Incentive plan expense 109 96
Loans originated for sale (72) (2,812)
Proceeds from sales of loans
originated for resale 73 2,835
Net change in
Other assets (43) (141)
Other liabilities 10 (83)
-------- --------
Net cash provided by
operating activities 991 646
-------- --------
(Continued)
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Great American Bancorp, Inc. and Subsidiary
Consolidated Statements of Cash Flows (Continued)
For the Six Months Ended June 30, 1997 and 1996
(unaudited, in thousands)
Investing Activities
Net change in interest-bearing
time deposits (1,000) --
Purchases of securities held
to maturity (2,995) (2,996)
Purchases of securities available
for sale (993) --
Proceeds from maturities of
securities held to maturity 100 --
Purchase of Federal Home Loan Bank
stock (126) --
Proceeds from sale of Federal Home
Loan Bank stock -- 29
Net change in loans (8,951) (8,605)
Purchase of premises and equipment (131) (151)
-------- --------
Net cash used by
investing activities (14,096) (11,723)
-------- --------
Financing Activities
Net change in
Noninterest-bearing demand, interest-
bearing demand and savings
deposits (161) (1,308)
Certificates of deposit 5,814 4,509
Cash dividends (336) (535)
Purchase of stock for incentive plan -- (1,185)
Purchase of stock under repurchase
programs (1,468) --
-------- --------
Net cash provided by
financing activities 3,849 1,481
-------- --------
Net Change in Cash and Cash Equivalents (9,256) (9,596)
Cash and Cash Equivalents,
Beginning of Period 26,410 25,037
-------- --------
Cash and Cash Equivalents,
End of Period $ 17,154 $ 15,441
======== ========
(Continued)
<PAGE>
Great American Bancorp, Inc. and Subsidiary
Consolidated Statements of Cash Flows (Continued)
For the Six Months Ended June 30, 1997 and 1996
(unaudited, in thousands)
Additional Cash Flows Information
Interest paid $ 2,187 $ 1,570
======== ========
Income tax paid $ 181 $ 502
======== ========
See notes to consolidated financial statements.
<PAGE>
Great American Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements
1. Background Information
Great American Bancorp, Inc. (the "Company") was incorporated
on February 23, 1995 and on June 30, 1995 acquired all of the
outstanding shares of common stock of First Federal Savings
Bank of Champaign-Urbana, ("the "Bank") upon the Bank's
conversion from a federally chartered mutual savings bank to a
federally chartered stock savings bank. The Company purchased
100% of the outstanding capital stock of the Bank using 50% of
the net proceeds from the Company's initial stock offering
which was completed on June 30, 1995. The Company sold
2,052,750 shares of common stock in the initial offering at
$10 per share. The Company began trading on the NASDAQ Stock
Market on June 30, 1995 under the symbol "GTPS".
2. Statement of Information Furnished
The accompanying unaudited consolidated financial statements
have been prepared in accordance with Form 10-QSB instructions
and Item 310(b) of Regulation S-B, and in the opinion of
management contain all adjustments necessary to present fairly
the financial position as of June 30, 1997 and December 31,
1996, the results of operations for the six months ended and
three months ended June 30, 1997 and 1996, and the cash flows
for the six months ended June 30, 1997 and 1996. All adjustments
to the financial statements were normal and recurring in nature.
These results have been determined on the basis of generally
accepted accounting principles. Reclassifications of certain amounts
in the 1996 financial statements have been made to conform to the 1997
presentation. The results of operations for the six months ended June 30,
1997 are not necessarily indicative of the results to be expected for the
entire fiscal year.
The consolidated financial statements are those of the Company
and the Bank. These consolidated financial statements should
be read in conjunction with the audited financial statements
and notes thereto included in the Company's 1996 Annual Report
to Shareholders.
<PAGE>
PART I -- Item 2.
GREAT AMERICAN BANCORP, INC.
Management's Discussion and Analysis
or Plan of Operation
Great American Bancorp, Inc. (the "Company") is the holding company for
First Federal Savings Bank of Champaign-Urbana (the "Bank"). The Bank
operates a wholly owned subsidiary, Park Avenue Service Corporation
("PASC"). PASC offers full service brokerage activities through Scout
Brokerage Services, Inc., a subsidiary of United Missouri Bank, and also
engages in the sale of fixed-rate and variable-rate tax deferred annuities and
real estate development ventures.
Financial Condition
The Company's total assets increased from $132,369,000 at December 31, 1996 to
$136,977,000 at June 30, 1997, an increase of $4,608,000 or 3.5%. This
growth was mainly due to increases in total investment securities and net
loans offset by a decrease in cash and cash equivalents.
Total investment securities increased by $3,896,000, from $3,400,000 at
December 31, 1996 to $7,296,000 at June 30, 1997 due mainly to security
purchases of $3,988,000. The securities purchased were all callable Agency
securities with maturities ranging from one to two and one-half years.
Net loans increased by $8,888,000, or 9.7%, from $91,443,000 at December 31,
1996 to $100,331,000 at June 30, 1997. The growth in loans occurred mainly in
one-to four-family, multi-family residential, and commercial real estate
loans. One-to four-family residential loans increased $3,307,000, or 6.4%
from $51,710,000 at December 31, 1996 to $55,017,000 at June 30, 1997. Multi-
family loans increased from $9,446,000 at December 31, 1996 to $13,515,000 at
June 30, 1997, an increase of $4,069,000, or 43.1%. The majority of this
increase related to one loan secured by several apartment buildings.
Commercial real estate loans increased $1,155,000 or 12.3% from $9,363,000 at
December 31, 1996 to $10,518,000 at June 30, 1997. Security purchases and
loan growth were funded by an increase in deposits and by a reduction in cash
and cash equivalents.
Total deposits increased from $100,714,000 at December 31, 1996 to
$106,367,000 at June 30, 1997, an increase of $5,653,000, or 5.6%. The
increase in total deposits was mainly due to an increase in certificates of
deposit. Certificates of deposit increased by $5,814,000, or 9.6% from
$60,529,000 at December 31, 1996 to $66,343,000 at June 30, 1997. The growth
was mainly in certificates of deposit maturing in eighteen months to two and
one-half years.
<PAGE>
Total stockholders' equity decreased $1,099,000 from $30,462,000 at
December 31, 1996 to $29,363,000 at June 30, 1997. Book value per
share increased from $18.22 at December 31, 1996 to $18.36 at June 30,
1997. The decrease in stockholders' equity is summarized as follows (in
thousands):
Stockholders' equity, December 31, 1996 $ 30,462
Net income 384
Purchase of stock under repurchase programs (1,468)
Dividends declared (329)
Incentive plan shares allocated 109
ESOP shares allocated 202
Increase in unrealized loss on securities
available for sale, net of income
tax effect 3
------
Stockholders' equity, June 30, 1997 $ 29,363
======
On June 26, 1997, the Company announced that it had received regulatory
clearance to purchase up to 5%, or 87,999 shares, of the Company's common
stock. This repurchase program was to commence as soon as practicable
subsequent to the release of the Company's earnings for the quarter ended June
30, 1997. As of the date of the filing of this report, the Company had not
completed this stock repurchase. The repurchased shares will be held as
treasury shares to be used for general corporate purposes.
Results of Operations
Comparison of Six Month Periods Ended June 30, 1997 and 1996
Net income was $384,000 for the six months ended June 30, 1997,
compared to $343,000 for the six months ended June 30, 1996. This
represents a $41,000, or 12.0% increase. Primary earnings per share
were $0.24 for the six months ended June 30, 1997, compared to $0.18
for the six months ended June 30, 1996. Fully diluted earnings per
share were $0.21 in 1997, compared to $0.17 in 1996.
Net income in 1997 was higher than net income in 1996 due to increases
in net interest income and noninterest income offset by an increase in
noninterest expense.
Net interest income was $2,735,000 for the six months ended June 30, 1997,
compared to $2,672,000 for the same period in 1996, an increase of
$63,000 or 2.4%. Interest income was $4,925,000 for the six months
ended June 30, 1997, compared to $4,189,000 for the same period in 1996,
an increase of $736,000, or 17.6%, primarily the result of higher interest
income on loans. Interest income on loans for the six months ended June 30,
<PAGE>
1997 was $4,155,000, $735,000 or 21.5%, greater than the $3,420,000 recorded
for the same period in 1996.
The increase in interest income on loans was due to higher average total loans
in 1997. Average total net loans for the six months ended June 30, 1997 were
$97,238,000, compared to $79,442,000 for the same period in 1996, an increase
of $17,796,000, or 22.4%. While average total balances of all loan categories
increased, the majority of this increase was in mortgage loans and consumer
loans. Total mortgage loans averaged $77,807,000 for the six months ended
June 30, 1997, compared to $61,202,000 for the six months ended June 30, 1996,
an increase of $16,605,000, or 27.1%. Average total consumer loans were
$10,828,000 during the six months ended June 30, 1997, an increase of
$1,090,000, or 11.2% over the $9,738,000 average total balance during the same
period in 1996. Average commercial loans increased by $221,000, or 2.5% from
$8,785,000 for the six months ended June 30, 1996 to $9,006,000 during the
same period in 1997. The growth in mortgage loans was primarily in
multi-family residential loans and commercial real estate loans and was due to
increased marketing efforts targeted toward these types of loans. The
increase in consumer loans was due to several consumer loan promotions held
during 1996 and 1997. The average yield on loans was 8.62% for the six months
ended June 30, 1997, compared to 8.63% for the six months ended June 30, 1996.
While interest income on loans was higher, interest income on investment
securities and deposits with financial institutions and other remained level
at $770,000 for the six months ended June 30, 1997, compared to $769,000 for
the six months ended June 30, 1996. The average total balance of investment
securities and deposits with financial institutions and other increased
slightly from $28,134,000 for the six months ended June 30, 1996 to
$28,696,000 for the six months ended June 30, 1997, an increase of $562,000,
or 2.0%. The average yield on investment securities and deposits with
financial institutions and other declined slightly from 5.48% for the six
months ended June, 1996 to 5.41% for the same period ended in 1997.
Interest expense increased by $673,000, or 44.4% from $1,517,000 for the
six months ended June 30, 1996 to $2,190,000 for the same period in
1997. The increase was mainly attributable to growth in deposits during
1996 and in 1997. Average total deposits increased from $80,243,000 in
the first six months of 1996 to $101,178,000 during the same period in
1997, an increase of $20,935,000, or 26.1%. Most of this growth occurred in
certificates of deposit, mainly certificates maturing in eighteen months to
two and one-half years. The average rates on deposits were 4.33% and 3.76%
for the six months ended June 30, 1997 and 1996, respectively.
Net interest income as a percent of average interest earning assets was
4.38% for the six months ended June 30, 1997 versus 4.98% for the
same period in 1996. The spread between the yield on interest earning
assets and the rate on interest bearing liabilities was 3.54% and 4.04%
for the six months ended June 30, 1997 and 1996, respectively.
The provision for loan losses was $78,000 for the six months ended June 30,
1997, compared to $110,000 for the same period in 1996. The lower provision
for 1997 reflects management's decision to decrease the monthly provision for
loan losses as a result of decreased charge-off activity occurring in the
first six months of 1997, compared to the same period in 1996. Loans
charged-off in the six months ended June 30, 1997, were comprised of consumer
<PAGE>
loans with four different borrowers totaling $6,000. Recoveries in 1997 were
$1,000, with net charge-offs totaling $5,000. Total charge-offs in the first
six months of 1996 were $118,000 and recoveries totaled $4,000, equaling net
charge-offs of $114,000.
Non-performing loans, which are loans past due 90 days or more and
non-accruing loans, totaled $317,000 at June 30, 1997, compared to $227,000 at
June 30, 1996. Non-performing loans at June 30, 1997 consisted of four
residential mortgage loans totaling $97,000, five consumer loans totaling
$34,000, and four commercial loans totaling $186,000. Approximately $62,000
of total non-performing loans were unsecured. The ratios of the Company's
allowance for loan losses to total loans and allowance for loan losses to
non-performing loans were .44% and 140.69%, respectively, at June 30, 1997,
compared to .30% and 115.42%, respectively, at June 30, 1996.
Noninterest income totaled $340,000 for the six months ended June 30,
1997, compared to $304,000 for the same period in 1996, an increase of
$36,000, or 11.8%. The increase in noninterest income was mainly due to
increases in service charges on deposit accounts and other customer fees,
offset by a decline in net gains on loan sales. Service charges on deposit
accounts increased $24,000 in 1997 due mainly to an increase in fees charged
for returned checks. The Company increased the per item fee for returned
checks in late 1996. Other customer fees increased $43,000 in 1997 primarily
due to higher ATM fees, and credit card fee income. The Company sold
$2,812,000 of loans in 1996 recording net gains of $23,000 versus $72,000 in
loans in 1997 for net gains of $1,000.
Noninterest expense was $2,335,000 for the six months ended June 30,
1997, compared to $2,263,000 recorded for the six months ended June 30, 1996,
an increase of $72,000, or 3.2%. The increase was mainly due to higher
salaries and employee benefits expenses and equipment expenses, offset by a
decrease in deposit insurance expense. Salaries and employee benefits expense
was $95,000, or 8.3% higher in the first six months ended June 30, 1997, as
compared to the same period in 1996, due to the hiring of additional staff,
including a commercial loan officer, normal pay increases and higher
compensation expense recorded for stock based benefit plans implemented in
February, 1996. Equipment expenses were $33,000, or 30.0% higher in the first
six months of 1997 due to an increase in depreciation expense mainly related
to the purchase of check processing and imaging equipment in January, 1997.
The Bank began to process checks in-house in January, 1997. Previously, a
correspondent bank provided this service.
Total income taxes increased by $18,000, or 6.9% from $260,000 for the
six months ended June 30, 1996 to $278,000 for the same period in
1997. The increase in income taxes was mainly due to the increased
earnings. The effective tax rates for the six months ended June 30,
1997 and 1996, were 41.99% and 43.12%, respectively.
Results of Operations
Comparison of Three Month Periods Ended June 30, 1997 and 1996.
<PAGE>
Net Income for the quarter ended June 30, 1997 was $193,000 compared to
$171,000 for the quarter ended June 30, 1996, an increase of $22,000, or
12.9%. Primary earnings per share for the quarter were $0.12 in 1997,
compared to $0.09 in 1996, while fully diluted earnings per share were $0.11
in 1997, compared to $0.08 in 1996.
Net income for the quarter ended June 30, 1997 was higher due to increases in
net interest income and noninterest income offset by an increase in
noninterest expense.
Net interest income was $1,360,000 for the quarter ended June 30, 1997,
compared to $1,343,000 for the same quarter in 1996, an increase of $17,000,
or 1.3%. Interest income was $2,490,000 for the three months ended June 30,
1997, compared to $2,112,000 for the same period in 1996, an increase of
$378,000, or 17.9%.
Interest income on loans for the three months ended June 30, 1997 was
$2,093,000, $351,000, or 20.2% greater than the $1,742,000 recorded for the
same period in 1996. The increase in interest income on loans was due to
higher average total balances of all loan categories in 1997. Average total
loans for the quarter ended June 30, 1997 were $98,807,000 compared to
$81,647,000 for the same period in 1996, an increase of $17,160,000, or 21.0%.
The majority of this increase was in mortgage loans and consumer loans. Total
mortgage loans averaged $78,614,000 for the second quarter of 1997 compared to
$62,957,000 for the same period in 1996, an increase of $15,657,000, or 24.9%.
Average total consumer loans were $11,140,000 for the second quarter of 1997,
compared to $9,842,000 for the same period in 1996, an increase of $1,298,000,
or 13.2%. Average commercial loans increased by $336,000, or 3.7% from
$9,138,000 for the three months ended June 30, 1996 to $9,474,000 for the same
period in 1997. The average yield on loans declined from 8.55% for the
quarter ended June 30, 1996 to 8.50% for the quarter ended June 30, 1997.
Interest income on investment securities and deposits with financial
institutions and other increased by $27,000, or 7.3%, from $370,000 for the
quarter ended June 30, 1996 to $397,000 for the same period in 1997. The
increase was mainly due to higher overall average balances. The average
balance of investment securities and deposits with financial institutions and
other increased from $27,129,000 for the three months ended June 30, 1996 to
$29,124,000 for the same period in 1996, an increase of $1,995,000, or 7.4%.
The average yield on investment securities and deposits with financial
institutions and other remained level at 5.46% for the quarter ended June 30,
1997, compared 5.47% for the same period in 1996.
Interest expense increased by $361,000, or 46.9%, from $769,000 for the three
months ended June 30, 1996 to $1,130,000 for the same period in 1997. The
increase was mainly due to higher average total deposits in 1997, primarily
certificates of deposit with maturities ranging from eighteen months to two
and one-half years. Average total deposits increased from $81,359,000 for the
quarter ended June 30, 1996 to $102,786,000 for the same period in 1997, an
increase of $21,427,000, or 26.3%. Average total certificates of deposit
increased from $45,202,000 for the quarter ended June 30, 1996 to $65,932,000
for the quarter ended June 30, 1997, an increase of $20,730,000, or 45.9%.
The average rates on deposits were also higher at 4.38% for the quarter ended
June 30, 1997, compared to 3.76% for the same period in 1996.
<PAGE>
Net interest income as a percent of average interest earning assets was 4.26%
for the three months ended June 30, 1997 versus 4.96% for the same period in
1996. The spread between the yield on interest earning assets and the rate on
interest bearing liabilities was 3.42% and 4.00% for the three months ended
June 30, 1997 and 1996, respectively.
The provision for loan losses was $39,000 for the three months ended June 30,
1997, compared to $60,000 for the same period in 1996. The lower provision
for 1997 was mainly due to decreased charge-off activity occurring in the
second quarter of 1997, as compared to 1996. Charge-offs for the quarter
ended June 30, 1997 were $1,000, with recoveries of $1,000, equaling net
charge-offs of zero. Charge-offs for the second quarter of 1996 were $94,000,
with recoveries of $4,000, equaling net charge-offs of $90,000.
Noninterest income was $182,000 for the second quarter of 1997, compared to
$139,000 for the quarter ended June 30, 1996, an increase of $43,000, or
30.9%. The increase in noninterest income was mainly due to an increase in
service charges on deposit accounts of $17,000, and an increase of $21,000 in
other customer fees.
Noninterest expense was $1,170,000, $45,000, or 4.0% greater for the quarter
ended June 30, 1997, compared to $1,125,000 recorded for the same period in
1996. The increase in noninterest expense was primarily attributable to an
increase in salaries and employee benefits expense, which was $628,000,
$55,000, or 9.6% higher for the second quarter of 1997, compared to $573,000
recorded for the same period in 1996.
Total income taxes for the three months ended June 30, 1997 was $140,000,
compared to $126,000 recorded for the same period in 1996, an increase of
$14,000, or 11.1%. The increase in income taxes was mainly due to the
increased earnings. The effective tax rates for the three months ended June
30, 1997 and 1996, were 42.04% and 42.42%, respectively.
Liquidity and Capital Resources
The Bank's primary sources of funds are deposits and principal and
interest payments on loans. While maturities and scheduled amortization
of loans are predictable sources of funds, deposit flows and mortgage
prepayments are greatly influenced by general interest rates, economic
conditions, and competition. The Office of Thrift Supervision ("OTS"), the
Company's and the Bank's primary regulator, requires the Bank to maintain
minimum levels of liquid assets. Currently, the required ratio is 5%. The
Bank's liquidity ratios were 18.29% and 18.87% at June 30, 1997 and December
31, 1996, respectively, well above the required minimum.
A review of the Consolidated Statements of Cash Flows included in the
accompanying financial statements shows that the Company's cash and cash
equivalents ("cash") decreased $9,256,000 for the six months ended June 30,
1997, compared to a decrease of $9,596,000 for the six months
ended June 30, 1996. During the six months ended June 30, 1997, cash was
primarily provided from earnings and increases in certificates of deposit.
During 1997, cash was primarily used to fund loan originations, purchase
securities held to maturity and available for sale, purchase interest-bearing
time deposits, purchase treasury stock under repurchase programs, and to pay
<PAGE>
dividends. During the six months ended June 30, 1996, cash was primarily
provided from earnings, proceeds from the sale of loans, and an increase in
certificates of deposit. During the first six months of 1996, cash was
primarily used to fund loan originations, purchase securities held to
maturity, fund a decrease in noninterest-bearing demand and interest-bearing
demand and savings deposits, purchase stock for stock based benefit plans, and
to pay dividends.
The Bank's primary investment activities during the six months ended June 30,
1997 was the origination of loans, the purchase of securities held to maturity
and available for sale, and the purchase of interest-bearing time deposits.
During the six months ended June 30, 1997 and June 30, 1996, the Bank
originated mortgage loans in the amounts of $20,927,000 and $18,186,000,
respectively, commercial loans in the amounts of $9,570,000 and $8,613,000,
respectively, and consumer loans in the amounts of $6,204,000 and $6,791,000,
respectively. Approximately $8,800,000 of the total mortgage loans originated
in 1997 were participated to other financial institutions at the time of
origination.
As of June 30, 1997, the Bank had outstanding commitments (including
undisbursed loan proceeds) of $1,731,000. The Bank anticipates it will
have sufficient funds available to meet its current loan origination
commitments. Certificates of deposit which are scheduled to mature in
one year or less from June 30, 1997 totaled $40,572,000. Management
believes a significant portion of such deposits will remain with the
Bank.
The OTS capital regulations require savings institutions to meet three
capital standards: a 1.5% tangible capital standard; a 3% leverage
(core capital) ratio and an 8% risk-based capital standard. The core
capital requirement is effectively 4%, since OTS regulations stipulate
that, effective December 19, 1992, an institution with less than 4% core
capital will be deemed to be "undercapitalized." As of June 30, 1997,
the Bank's capital percentages for tangible capital of 16.78%, core
capital of 16.78%, and risk-based capital of 29.53% significantly exceed
the regulatory requirement for each category.
Accounting Changes
In March 1997, the FASB issued SFAS No. 128, "Earnings per share", which
supersedes APB No. 15, "Earnings Per Share". SFAS 128 establishes standards
for computing and presenting earnings per share and applies to entities with
publicly held common stock or potential common stock (i.e. securities such as
options, warrants, convertible securities, or contingent stock agreements).
The statement replaces the presentation of primary earnings per share with a
presentation of basic earnings per share and requires dual presentation of
basic and diluted earnings per share on the face of the income statement.
SFAS 128 is effective for financial statements issued for periods ending after
12/15/97. Earlier application is not permitted; however, restatement of all
prior-period earnings per share data presented will be required. If the
Company had been subject to the requirements of SFAS 128 for the three months
and the six months ended June 30, 1997 and June 30, 1996, earnings per common
share and earnings per common share - assuming dilution, would have been
unchanged from the amounts presented in the accompanying financial statements.
<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved in various legal actions incident to
its business, none of which is believed by management to be
material to the financial condition of the Company.
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security
Holders
At the annual meeting of stockholders held on April
29, 1997, the Company's stockholders approved the
following items:
1. elected Clinton C. Atkins to a three-year term as
director:
Broker
For Withheld Non-Votes
----- --------- ---------
Number 1,590,178 11,481 0
Percent 99% 1% 0%
2. elected Ronald Kiddoo to a three-year term as director:
Broker
For Withheld Non-Votes
----- --------- ---------
Number 1,590,628 11,031 0
Percent 99% 1% 0%
3. approved the appointment of Geo. S. Olive & Co., LLC,
as independent auditors of Great American Bancorp, Inc.
for the fiscal year ending December 31, 1997:
Broker
For Against Abstain Non-votes
----- ------- ------- ---------
Number 1,587,254 12,205 2,200 0
Percent 99.1% .76% .14% 0%
The following directors held terms of office which continued
after the meeting:
Mr. George R. Rouse
Dr. Morgan C. Powell
Mr. James Acheson<PAGE>
<PAGE>
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
3.1 Certificate of Incorporation of Great American
Bancorp, Inc.*
3.2 By-laws of Great American Bancorp, Inc.*
11.0 Computation of earnings per share (filed herewith)
b. Report on Form 8-K
1. On April 23, 1997, the Registrant filed a Current
Report on Form 8-K reporting information under Items
5 and 7, incorporating by reference a press release
dated April 15, 1997 relating to the Registrant's
unaudited results for the first quarter of 1997.
_______________
* Incorporated herein by reference into this document from Form
S-1 Registration Statement, as amended, filed on March 24, 1995,
Registration No. 33-90614.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Great American Bancorp, Inc.
Dated: August 1, 1997 /s/ George R. Rouse
--------------------- ----------------------------
George R. Rouse
President and
Chief Executive Officer
Dated: August 1, 1997 /s/ Jane F. Adams
---------------------- ----------------------------
Jane F. Adams
Chief Financial Officer,
Secretary and Treasurer
<PAGE>
Exhibit 11.0
Statement Regarding Computation of Earnings Per Share
For the Six Months Ended June 30, 1997 and 1996
(unaudited)
1997 1996
--------- ---------
Assuming no dilution:
Net income (in thousands) $ 384 $ 343
========= =========
Weighted average number
of shares:
Average shares outstanding 1,607,055 1,869,863
Average incremental shares
related to stock options 21,601 3,075
--------- ---------
1,628,656 1,872,939
========= =========
Earnings per share assuming
no dilution $ 0.24 $ 0.18
========= =========
Assuming full dilution:
Net income (in thousands) $ 384 $ 343
========= =========
Weighted average number
of shares:
Average shares issued 2,052,750 2,052,750
Average incremental shares
related to stock options 21,601 3,075
Average treasury shares (272,517) --
--------- ---------
1,801,834 2,055,825
========= =========
Earnings per share assuming
full dilution $ 0.21 $ 0.17
========= =========
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from SEC
Form 10-QSB and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,715
<INT-BEARING-DEPOSITS> 15,439
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 999
<INVESTMENTS-CARRYING> 6,297
<INVESTMENTS-MARKET> 6,303
<LOANS> 100,777
<ALLOWANCE> 446
<TOTAL-ASSETS> 136,977
<DEPOSITS> 106,367
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,247
<LONG-TERM> 0
0
0
<COMMON> 21
<OTHER-SE> 29,342
<TOTAL-LIABILITIES-AND-EQUITY> 136,977
<INTEREST-LOAN> 4,155
<INTEREST-INVEST> 204
<INTEREST-OTHER> 566
<INTEREST-TOTAL> 4,925
<INTEREST-DEPOSIT> 2,174
<INTEREST-EXPENSE> 2,190
<INTEREST-INCOME-NET> 2,735
<LOAN-LOSSES> 78
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<EXPENSE-OTHER> 2,335
<INCOME-PRETAX> 662
<INCOME-PRE-EXTRAORDINARY> 662
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 384
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.21
<YIELD-ACTUAL> 4.38
<LOANS-NON> 20
<LOANS-PAST> 297
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1,753
<ALLOWANCE-OPEN> 374
<CHARGE-OFFS> 6
<RECOVERIES> 1
<ALLOWANCE-CLOSE> 446
<ALLOWANCE-DOMESTIC> 446
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
