-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N93edq/92tbcIsi0+j4rsvOEh2ri4EiD9dVAK+3cl/sIF7Fmf0qq5Qa+61MuoO4e IJ6WArec2O+CiDl+EQXgWQ== 0000906280-99-000130.txt : 19990517 0000906280-99-000130.hdr.sgml : 19990517 ACCESSION NUMBER: 0000906280-99-000130 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALGIERS BANCORP INC CENTRAL INDEX KEY: 0001011296 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 721317594 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-20911 FILM NUMBER: 99623327 BUSINESS ADDRESS: STREET 1: 1 WESTBANK EXPRESSWAY CITY: NEW ORLEANS STATE: LA ZIP: 70114 BUSINESS PHONE: 5043678221 10QSB 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB _X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1999 ___ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 0-20911 ALGIERS BANCORP, INC. (Name of small business issuer as specified in its charter) LOUISIANA 72 - 1317594 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) #1 WESTBANK EXPRESSWAY, NEW ORLEANS, LOUISIANA 70114 (Address of principal executive offices) (Zip Code) Issuer's telephone number: (504) 367-8221 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___ Number of shares of Common Stock outstanding on April 20, 1999: 517,248 Transitional Small Business Disclosure Format (check one): Yes ___ No _X_ ALGIERS BANCORP, INC. QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTER ENDED MARCH 31, 1999 TABLE OF CONTENTS PAGE PART I - FINANCIAL INFORMATION Interim Financial Information required by Rule 10-01 of Regulation S-X and Item 303 of Regulation S-B is included in this Form 10-QSB as referenced below: Item 1. Financial Statements Consolidated Statements Of Financial Condition (Unaudited) at March 31, 1999 and December 31, 1998 1 Consolidated Statements Of Income (Unaudited) For the Three Months Ended March 31, 1999 and 1998 3 Consolidated Statements Of Cash Flows (Unaudited) For the Three Months Ended March 31, 1999 and 1998 5 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 14 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION ASSETS
March 31, December 31, 1999 1998 ------------------ ---------------- (Unaudited) (In Thousands) Cash and Cash Equivalents $ 2,062 $ 3,659 Interest-Bearing Deposits in Other Banks 3,079 1,222 Investments Available-for-Sale at Fair Value (Note 2) 4,821 5,304 Loans Receivable - Net 9,131 9,297 Mortgage Loans Held for Resale 312 - Mortgage-Backed Securities - Available-for-Sale at Fair Value (Note 2) 27,310 27,392 Stock in Federal Home Loan Bank 512 512 Accrued Interest Receivable 498 369 Real Estate Owned - Net 62 62 Office Properties and Equipment, at Cost - Furniture, Fixtures and Equipment, Less Accumulated Depreciation of $285 and $258, respectively 854 662 Prepaid Expenses 88 87 Income Tax Receivable 101 28 Other Assets 4 32 ---------- ---------- Total Assets $ 48,834 $ 48,626 ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
March 31, December 31, 1999 1998 ------------------ ---------------- (Unaudited) (In Thousands) LIABILITIES Deposits $ 39,875 $ 39,495 Advance Payments from Borrowers for Taxes and Insurance 63 114 Accrued Interest Payable on Depositors' Accounts 61 23 Dividends Payable 26 32 Deferred Tax Liability 214 212 Income Taxes Payable - - Other Liabilities 66 84 ---------- ----------- 40,305 39,960 Minority Interest in Subsidiary 76 87 ---------- ----------- Total Liabilities 40,381 40,047 ---------- ----------- STOCKHOLDERS' EQUITY Stockholders' Equity Preferred Stock - Par Value $.01; 5,000,000 Shares Authorized; 0 Shares Issued and Outstanding - - Common Stock - $.01 Par Value; 10,000,000 Shares Authorized, 648,025 Issued Shares 6 6 Treasury Stock - 141,677 shares and 128,777 shares, Respectively, at Cost (1,823) (1,675) Paid-in Capital in Excess of Par 6,137 6,137 Retained Earnings 4,363 4,344 Accumulated Other Comprehensive Income 194 191 ---------- ----------- 8,877 9,003 ---------- ----------- Less: Unearned ESOP Shares (376) (376) Unearned MRP Shares (48) (48) ---------- ----------- (424) (424) ---------- ----------- Total Stockholders' Equity 8,453 8,579 ---------- ----------- Total Liabilities and Stockholders' Equity $ 48,834 $ 48,626 ========== ===========
The accompanying notes are an integral part of these consolidated financial statements. ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, March 31, 1999 1998 ------------------ ---------------- (Unaudited) (Unaudited) (In Thousands) INTEREST INCOME Loans $ 230 $ 228 Mortgage-Backed Securities 411 431 Investment Securities 162 94 Other Interest-Earning Assets 54 39 ---------- ----------- Total Interest Income 857 792 ---------- ----------- INTEREST EXPENSE Deposits 465 429 FHLB Advances - - ---------- ----------- Total Interest Expense 465 429 ---------- ----------- NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 392 363 PROVISION FOR LOAN LOSSES - - ---------- ----------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 392 363 ---------- ----------- NON-INTEREST INCOME Gain - Sale of Investments - 15 Service Charges and Fees 17 14 Recapture of Allowance on GIC Bonds - - Recovery of Allowance on GIC Bonds Previously Written Off - - Miscellaneous Income 5 3 ---------- ----------- Total Non-Interest Income 22 32 ---------- -----------
The accompanying notes are an integral part of these consolidated financial statements. ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, March 31, 1999 1998 ------------------ ---------------- (Unaudited) (Unaudited) (In Thousands) NON-INTEREST EXPENSES Compensation and Benefits $ 148 $ 163 Occupancy and Equipment 83 48 Computer 9 18 Deposit Insurance Premium 14 6 Professional Services 55 28 FHLB Service Charges 2 9 Real Estate Owned Expenses 1 1 (Recovery of) Provision for Losses on Real Estate Owned - (4) Other 59 49 ---------- ----------- Total Non-Interest Expense 371 318 ---------- ----------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 43 77 FEDERAL INCOME TAX EXPENSE 15 26 ---------- ----------- INCOME BEFORE MINORITY INTEREST 28 51 MINORITY INTEREST IN SUBSIDIARY 11 - ---------- ----------- NET INCOME 39 51 OTHER COMPREHENSIVE INCOME - NET OF INCOME TAX Unrealized gains(losses) on Securities 3 (26) ========== =========== COMPREHENSIVE INCOME $ 42 $ 25 ========== =========== EARNINGS PER SHARE Basic $ 0.08 $ 0.09 ========== =========== Fully Diluted $ 0.08 $ 0.09 ========== ===========
The accompanying notes are an integral part of these consolidated financial statements. ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, March 31, 1999 1998 ------------------ ---------------- (Unaudited) (Unaudited) (In Thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 39 $ 51 Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities: Depreciation and Amortization 27 5 Premium Amortization Net of Discount Accretion 17 13 Stock Dividend - FHLB - (7) Gain on Sale of Investments - (15) ESOP and MRP Expense 20 22 Increase in Accrued Interest Payable 38 2 Increase (Decrease) in Other Liabilities (38) 94 Increase in Accrued Interest Receivable (129) - Increase in Income Tax Payable - 25 Recapture of Provision for Real Estate Owned - (4) (Increase) in Real Estate Owned - (63) (Increase) Decrease in Other Assets 28 (57) Decrease in Deferred Loan Fees (1) (18) Increase (Decrease) in Deferred Charges 1 (31) Increase in Mortgages Held for Resale (312) - (Increase) in Accounts Receivable - (92) Increase in Prepaid Income Taxes (73) - (Increase) Decrease in Deferred Income Taxes - - --------- --------- Net Cash Used In Operating Activities (383) (75) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Investment Securities - Available-for-Sale - (2,950) Maturities of Investment Securities - Available-for- Sale 500 1,404 Maturities of Mortgage- Backed Securities - Held-to-Maturity - 814 Purchases of Mortgage- Backed Securities - Available-for-Sale (2,055) - Maturities of Mortgage-Backed Securities - Available-for-Sale 2,110 225 Proceeds from Sale of Mortgage Backed Securities - Available-for-Sale - 401 Principal Collected on Loans 614 254 Loans Made to Customers (447) (774) Purchase of Furniture and Fixtures (283) (16) Proceeds from Sales of Foreclosed Real Estate - 4 (Increase) in Investment in Subsidiary 43 (18) --------- --------- Net Cash Provided by (Used In) Investing Activities 482 (656) --------- ---------
The accompanying notes are an integral part of these consolidated financial statements. ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, March 31, 1999 1998 ------------------ ---------------- (Unaudited) (Unaudited) (In Thousands) CASH FLOWS FROM FINANCING ACTIVITIES Net Increase (Decrease) in Deposits $ 380 $ 1,253 Net Decrease in Advances from Borrowers for Taxes and Insurance (51) (41) Repayment of Federal Home Loan Advance - - Purchase of Treasury Stock (148) (98) Dividends Paid on Common Stock (20) (31) --------- --------- Net Cash Provided by Financing Activities 161 1,083 --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 260 352 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 4,881 2,555 --------- --------- CASH AND CASH EQUIVALENTS - END OF PERIOD $ 5,141 $ 2,907 --------- --------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash Paid During the Year for: Interest $ 427 $ 429 Income Taxes $ 88 $ 92 SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS Dividends Declared $ 26 $ 31
The accompanying notes are an integral part of these consolidated financial statements. ALGIERS BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) March 31, 1999 Note 1 - Basis of Presentation - Algiers Bancorp, Inc. was organized as a Louisiana corporation on February 5, 1996 for the purpose of engaging in any lawful act or activity for which a corporation may be formed under the Louisiana Business Corporation Law, as amended. Other than steps related to the reorganization described below, the Corporation was essentially inactive until July 8, 1996, when it acquired Algiers Homestead Association in a business reorganization of entities under common control in a manner similar to a pooling of interest. Algiers Homestead Association is engaged in the savings and loan industry. The acquired association became a wholly-owned subsidiary of the Corporation through the issuance of 1,000 shares of common stock to the Corporation in exchange for 50% of the net proceeds received by the Corporation in the reorganization. On December 23, 1996, Algiers Bancorp, Inc. entered into a limited liability company partnership when it acquired a majority interest in Jefferson Community Lending, LLC. Jefferson Community Lending, LLC is engaged in the business of consumer lending. During 1998, the Corporation initiated a restructuring plan to reduce costs and increase future operating efficiency by consolidating the operations of Jefferson Community Lending, LLC. Accordingly, net assets of Jefferson Community Lending, LLC have been reduced to $-0- at December 31, 1998. During 1998, the Algiers Bancorp, Inc. formed Algiers Com, Inc., a subsidiary that owns a 51% interest in Planet Mortgage, LLC. Planet Mortgage, LLC is engaged in the solicitation of mortgage loans through its Internet site. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Algiers Homestead Association and Algiers Com, Inc. and its majority-owned subsidiary, Jefferson Community Lending, LLC. In consolidation, significant inter-company accounts, transactions, and profits have been eliminated. Note 2 - Available for Sale Securities - Investments and mortgage-backed securities available-for-sale at March 31,1999 and December 31, 1998, respectively, are summarized as follows (in thousands):
March 31, 1999 ------------------------------------------------------------ Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value --------- ----------- ---------- --------- Investments $ 4,782 $ 39 $ - $ 4,821 ======== =========== ========== ========= GNMA Certificates $ 7,080 $ 90 $ - $ 7,170 FNMA Certificates 15,039 156 - 15,195 FHLMC Certificates 4,915 30 - 4,945 -------- ----------- ---------- --------- $ 27,034 $ 276 $ - $ 27,310 ======== =========== ========== =========
December 31, 1998 ------------------------------------------------------------ Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value --------- ----------- ---------- --------- Investments $ 5,292 $ 39 $ 27 $ 5,304 ========= ======= ======== ======== GNMA Certificates $ 6,885 $ 90 $ - $ 6,975 FNMA Certificates 16,320 156 - 16,476 FHLMC Certificates 3,911 30 - 3,941 --------- ------- -------- -------- $ 27,116 $ 276 $ - 27,392 ========= ======= ======== ========
Note 3 - Employee Stock Ownership Plan - The Company sponsors a leveraged employee stock ownership plan (ESOP) that covers all employees who have at least one year of service with the Company. The ESOP shares initially were pledged as collateral for the ESOP debt. The debt is being repaid based on a ten-year amortization and the shares are being released for allocation to active employees annually over the ten- year period. The shares pledged as collateral are deducted from stockholders' equity as unearned ESOP shares in the accompanying Consolidated Statements of Financial Condition. As shares are released from collateral, the Company reports compensation expense equal to the current market price of the shares. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings; dividends on unallocated ESOP shares are recorded as a reduction of unearned ESOP shares. ESOP compensation expense was $16,850 for the three months ended March 31, 1999 based on the annual release of shares. Note 4 - Management Recognition Plan - On July 18, 1997, the Association established a Recognition and Retention Plan as an incentive to retain personnel of experience and ability in key positions. The Association approved a total of 25,921 shares of stock to be acquired for the Plan, of which 4,205 have been allocated for distribution to key employees and directors. As shares are acquired for the Plan, the purchase price of these shares is recorded as unearned compensation, a contra equity account. As the shares are distributed, the contra equity account is reduced. Plan share awards are earned by recipients at a rate of 20% of the aggregate number of shares covered by the Plan over five years. If the employment of an employee or service as a non-employee director is terminated prior to the fifth anniversary of the date of grant of plan share award for any reason, the recipient shall forfeit the right to any shares subject to the award which have not been earned. The total cost associated with the Plan is based on the market price of the stock as of the date on which the Plan shares were granted. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS GENERAL The following discussion compares the consolidated financial condition of Algiers Bancorp, Inc. and Subsidiaries at March 31, 1999 to December 31, 1998 and the results of operations for the three months ended March 31, 1999 with the same period in 1998. Currently, the business and management of Algiers Bancorp, Inc. is primarily the business and management of the Association. This discussion should be read in conjunction with the interim consolidated financial statements and footnotes included herein. This quarterly report includes statements that may constitute forward- looking statements, usually containing the words "believe," "estimate," "project," "expect," "intend" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause future results to vary from current expectations include, but are not limited to, the following: changes in economic conditions (both generally and more specifically in the markets in which the Company operates); changes in interest rates, deposit flows, loan demand, real estate values and competition; changes in accounting principles, policies or guidelines and in government legislation and regulation (which change from time to time and over which the Company has no control); and other risks detailed in this quarterly report and in the Company's other public filings. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. CHANGES IN FINANCIAL CONDITION Total assets increased $208,000 or .43% from $48.6 million at December 31, 1998 to $48.8 million at March 31, 1999. The increase in assets is primarily due to an increase in deposits, loans and investment securities available for sale. Interest-earning deposits in other banks and investments was $7.9 million at March 31, 1999 and $6.5 million at December 31, 1998. This increase was due to an increase in balances held by FHLB. The mortgage-backed securities portfolio decreased $82,000 or .3% from $27.4 million at December 31, 1998 to $27.3 million at March 31, 1999, as the amount of mortgage-backed securities maturing increased and new mortgage-backed securities purchased increased slightly. Mortgage-backed securities amounted to $27.3 million or 55.9% of total assets at March 31, 1999, compared to $27.4 million or 56.3% of total assets at December 31, 1998. The Association's loan portfolio decreased $166,000 or 1.8% over the past three months from $9.3 million at December 31, 1998 to $9.1 million at March 31, 1999. Total deposits increased $380,000 or .96% to $39.9 million at March 31, 1999 from $39.5 million at December 31, 1998. The increase was primarily in certificate of deposit accounts. Total stockholders' equity declined by $126,000 during the past three months. Net income was $39,000, and was offset by the purchase of $148,000 of treasury stock, and a $26,000 dividend declared on common stock. Stockholders' equity at March 31, 1999 totaled $8.5 million or 17.3% of total assets compared to $8.6 million or 17.6% of total assets at December 31, 1998. RESULTS OF OPERATIONS The profitability of the Company depends primarily on its net interest income, which is the difference between interest and dividend income on interest-earning assets, principally mortgage-backed securities, loans and investment securities, and interest expense on interest-bearing deposits and borrowings. Net interest income is dependent upon the level of interest rates and the extent to which such rates are changing. The Company's profitability also is dependent, to a lesser extent, on the level of its non-interest income, provision for loan losses, non-interest expense and income taxes. For the three months ended March 31, 1999, net interest income before provision for loan losses was more than total non-interest expense. Total non-interest expense consists of general, administrative and other expenses, such as compensation and benefits, occupancy and equipment expense, federal insurance premiums, and miscellaneous other expenses. The Company's net income for the three months ended March 31, 1999 decreased $12,000 or 23.5% compared to the three months ended March 31, 1998. The decrease was due to an increase of $65,000 or 8.2% in interest income, an increase of $53,000 or 16.7% in non-interest expense partially offset by a $36,000 or 8.4% increase in interest expense and a decrease of $10,000 or 31.2% in non-interest income. Total interest income increased by $65,000 or 8.2% during the three months ended March 31, 1999 compared to the three months ending March 31, 1998, due to an increase in the average yield on interest-earning assets from 7.36% in the first three months of 1998 to 7.71% in the first three months of 1999. The higher yield was partially offset by a $145,000 or 3.2% decrease in average interest-earning assets. The decrease in the average balance was primarily due to the Company's repurchase of $148,000 of common stock since December 31, 1998 and the payment of dividends on common stock of $20,000. Total interest expense increased by $36,000 or 8.4% in the three months ending March 31, 1999 compared to the three months ending March 31, 1998, primarily due to an increase in average deposits of $3.5 million or 9.7% in the first three months of 1999 over the comparable 1998 period. The higher average balance was partially offset by a decrease in the average rate on interest-bearing liabilities to 4.69% from 4.76% over the same period in 1998. The increased net interest income of $29,000 was due to an increase in the average interest rate spread to 3.02% in the first three months of 1999 from 2.64% in the first three months of 1998. The higher spread was partially offset by a decrease of $3.7 million or 8.3% in net average interest-earning assets in the three months ended March 31, 1999 over the comparable 1998 period. The average yield on interest-earning assets increased to 7.71% during the three months ended March 31, 1999 compared to 7.36% during the three months ended March 31, 1998. The increased yield on assets was primarily due to an increase in the average rate earned on investments. In the three months ending March 31, 1999, the Company used a portion of its maturing mortgage-backed securities and interest-earning deposits in other banks to fund the repurchase of 148,000 of its outstanding common stock. The average rate on deposits decreased from 4.76% during the first three months of 1998 to 4.69% during the first three months of 1999. During the quarter ended March 31, 1999 compared to the same period of 1998, non-interest income decreased $10,000 due to a decrease of $2,000 in miscellaneous income, a decrease of $15,000 in gain on sale of investments, partially offset by a $3,000 increase in service charges and fees. The Association had no provision or credit for loan losses in the three months ended March 31, 1999 and 1998. Total non-performing loans at March 31, 1999 and December 31, 1998 was $737,000 and the allowance for loan losses at March 31, 1999 and December 31, 1998 was $526,000. The $53,000 increase in total non-interest expense in the three months ended March 31, 1999 was due to a $35,000 increase in occupancy and equipment expense, a $27,000 increase in professional services offset by a $15,000 decrease in compensation and benefits, and a $9,000 decrease in computer expenses. The $11,000 or 42.3% decrease in income tax expense was primarily due to a decrease of $34,000 or 44.1% in pre-tax income for the three months ended March 31, 1999 from the comparable 1998 period. LIQUIDITY AND CAPITAL RESOURCES The Association is required under applicable federal regulations to maintain specified levels of "liquid" investments in qualifying types of U.S. Government, federal agency and other investments having maturities of five years or less. Current OTS regulations require that a savings institution maintain liquid assets of not less than 4% of its average daily balance of net withdrawable deposit accounts and borrowings payable in one year or less. At March 31, 1999, the Association's liquidity was 12.98% or $3.5 million in excess of the minimum OTS requirement of 4%. The Association is required to maintain regulatory capital sufficient to meet tangible, core and risk-based capital ratios of 1.5%, 3.0%, and 8.0%, respectively. At March 31, 1999, the Association's tangible and core capital both amounted to $7.5 million or 15.55% of adjusted total assets of $48.0 million, and the Association's risk-based capital amounted to $7.6 million or 55.11% of adjusted risk-weighted assets of $13.8 million. As of March 31, 1999, the Association's unaudited regulatory capital requirements are as indicated in the following table:
Tangible Core Risk-Based Capital Capital Capital ------------ ---------- ----------- (Dollars in Thousands) GAAP Capital $ 7,676 $ 7,676 $ 7,676 Additional Capital Items: General Valuation Allowances -- -- 151 Unrealized Gain on Securities - Available-For-Sale (207) (207) (207) ----------- ---------- ---------- Regulatory Capital 7,469 7,469 7,620 Minimum Capital Requirement 720 1,441 1,106 Regulatory Capital Excess $ 6,749 $ 6,028 $ 6,514 ----------- ---------- ---------- Regulatory Capital as a Percentage 15.55% 15.55% 55.11% Minimum Capital Required as a Percentage 1.50% 3.00% 8.00% ----------- ---------- ---------- Regulatory Capital as a Percentage in Excess of Requirements 14.50% 12.55% 47.11% ----------- ---------- ----------
Based on the above capital ratios, the Association meets the criteria for a "well capitalized" institution at March 31, 1999. The Association's management believes that under the current regulations, the Association will continue to meet its minimum capital requirements in the foreseeable future. However, events beyond the control of the Association, such as increased interest rates or a downturn in the economy of the Association's area, could adversely affect future earnings. THE YEAR 2000 The Company utilizes and is dependent upon data processing systems and software to conduct its business. The approach of the Year 2000 presents a problem in that many computer programs have been written using two digits rather than four digits to define the appropriate year. Computer programs that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the Year 2000. For example, computer systems may compute payment, interest, delinquency or other figures important to the operations of the Company based on the wrong date. This could result in internal system failure or miscalculations, and also creates risks for the Company from third parties with whom the Company deals on financial transactions. Risks to the Company if its computer system is not Year 2000 compliant include the inability to process customer deposits or checks drawn on the Association, inaccurate interest accruals, and maturity dates of loans and time deposits, and the inability to update accounts for daily transactions. Other risks to the Company exist if certain of its vendors', suppliers' and customers' computer systems are not Year 2000 compliant. These risks include the interruption of business in the event of power outages, the inability of loan customers to comply with repayment terms if their businesses are interrupted, the inability to make payment for checks drawn on the Association, receive payment for checks deposited by the Association's customers, or invest excess funds if the FHLB or correspondent banks are not Year 2000 compliant. The Company has structured its Year 2000 compliance plans in accordance with the OTS and FDIC guidelines. As part of its Year 2000 compliance plan, the Company has identified mission critical systems and is developing contingency plans relating to a "worst case scenario" relative to the Year 2000 issue. The Company's most important mission critical system is the software and hardware responsible for maintaining and processing the general ledger, deposits and loan accounts. This system and other internal systems used by the Company have been tested as part of the Company's Year 2000 compliance plan and have been certified Year 2000 compliant. The Company's Year 2000 plan also addresses contingencies related to increased liquidity and currency demands which may arise in the latter part of 1999. The Company has communicated with its key vendors and suppliers to determine their Year 2000 compliance and to determine the potential impact of such third parties' failure to remediate their own Year 2000 issues. The Company has been assured that such third parties either are already Year 2000 compliant or are in the process of modifying, upgrading or replacing their computer applications to ensure Year 2000 compliance. In light of its compliance efforts, the Company does not believe that the Year 2000 issue is likely to have a material adverse effect on the Company's liquidity, capital resources or results of operations. However,there can be no assurance that all of the Company's systems will be Year 2000 compliant, or that the failure of any such system will not have a material adverse effect on the Company's business, financial condition or operating results. In addition, to the extent that the Year 2000 issue has a material adverse effect on the business, financial condition or operating results of third parties with whom the Company has material relationship, such as other financial institutions, the Year 2000 issue could have a material adverse effect on the Company's business, financial condition and operating results. COMMON STOCK REPURCHASE PLAN On March 12, 1997, the Company received permission from the Office of Thrift Supervision ("OTS") to repurchase up to 32,401 shares or 5.0% of the Company's then outstanding common stock. Pursuant to the plan, the Company purchased 29,901 shares of its common stock on April 1, 1997 and 2,500 shares of its common stock on May 7, 1997. These two purchases have fulfilled the number of shares approved by the OTS. On October 15, 1997, the Company received permission from the OTS to repurchase up to 30,781 shares or 5.0% of the Company's then outstanding common stock. Several purchases of the Company's common stock were made and the 5.0% repurchase was completed on April 3, 1998. The OTS granted the Company permission on September 3, 1998 to repurchase approximately 14% of the Company's outstanding common tock. The approval included 21,419 shares to fund the 1997 Management Recognition and Retention Plan and shares for general corporate purposes. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K: (a) The following exhibit is filed herewith: EXHIBIT NO. DESCRIPTION ----------- ----------- 27.1 Financial Data Schedule (b) Reports on Form 8-K: No reports on Form 8-K were filed by the Registrant during the quarter ended March 31, 1999. 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. ALGIERS BANCORP, INC. Date: May 14, 1999 By: /s/ Hugh E. Humphrey, Jr. ---------------------------------- Hugh E. Humphrey, Jr., Chairman of the Board, President and Chief Executive Officer Date: May 14, 1999 By: /s/ Francis M. Minor, Jr. ---------------------------------- Francis M. Minor, Jr. Chief Financial Officer EX-27.1 2
9 1000 3-MOS DEC-31-1999 MAR-31-1999 2,062 3,079 0 0 4,821 0 0 9,657 526 48,834 39,875 0 430 0 6 0 0 8,441 48,834 230 573 54 857 465 465 392 0 0 371 43 43 0 0 39 .08 .08 0 0 0 0 0 526 0 0 526 0 0 0
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