-----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, CcbC5Jf9AbOoas85agRSEwT0VIF8U6q/fhHOgwDZ97vS+q43ovaFGMJlCYGgVWui 0UE/xdLPs6ZyAT3ZZ0H2xA== 0001116502-02-001078.txt : 20020812 0001116502-02-001078.hdr.sgml : 20020812 20020812125153 ACCESSION NUMBER: 0001116502-02-001078 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020812 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: 1934 Act SEC FILE NUMBER: 000-20911 FILM NUMBER: 02726275 BUSINESS ADDRESS: STREET 1: 1 WESTBANK EXPRESSWAY CITY: NEW ORLEANS STATE: LA ZIP: 70114 BUSINESS PHONE: 5043678221 10QSB 1 algiersbancorp-10qsb.txt ALGIERSBANCORP-10QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB X QUARTERLY REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE - ----- SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2002 _____ TRANSITION REPORT UNDER SECTION 13(a) 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) 367-8222 Check whether the issuer (1) filed all reports required to be filed by Section 13(a) 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 August 7, 2002: 506,523 Transitional Small Business Disclosure Format (check one): Yes ___ No X ALGIERS BANCORP, INC. QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTER ENDED JUNE 30, 2002
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 June 30, 2002 and December 31, 2001................................................ 1 Consolidated Statements Of Operations (Unaudited) For the Three and Six Months Ended June 30, 2002 and 2001........................................ 3 Consolidated Statements Of Cash Flows (Unaudited) For the Six Months Ended June 30, 2002 and 2001............................................ 5 Notes to Consolidated Financial Statements......................................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................................................... 8 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K............................................... 12 EXHIBIT 99 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002..... 13
i ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION ASSETS
June 30, December 31, 2002 2001 ----------- ------------ (Unaudited) (In Thousands) Cash and Cash Equivalents $ 1,650 $ 1,964 Interest-Bearing Deposits in Other Banks 1,293 4,473 Investments Available-for-Sale - at Fair Value (Note 2) 357 367 Loans Receivable - Net 28,542 28,112 Mortgage Loans Held for Resale -- -- Mortgage-Backed Securities - Available-for-Sale - at Fair Value (Note 2) 16,244 14,361 Stock in Federal Home Loan Bank 618 609 Accrued Interest Receivable 238 251 Real Estate Owned - Net 203 203 Office Properties and Equipment, at Cost - Furniture, Fixtures and Equipment, Less Accumulated Depreciation of $646 and $831, respectively 644 690 Prepaid Expenses 45 40 Deferred Taxes 673 623 Other Assets 36 199 ------- ------- Total Assets $50,543 $51,892 ======= =======
The accompanying notes are an integral part of these consolidated financial statements. 1 ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, December 31, 2002 2001 ----------- ------------ LIABILITIES (Unaudited) (In Thousands) Deposits: Interest Bearing $ 42,389 $ 43,411 Non-Interest Bearing 1,232 1,450 Advance Payments from Borrowers for Insurance and Taxes 41 57 Accrued Interest Payable on Depositors' Accounts 9 9 Due to Affiliates 408 345 Other Liabilities 133 79 -------- -------- 44,212 45,351 Minority Interest in Subsidiary (239) (210) -------- -------- Total Liabilities 43,973 45,141 -------- -------- STOCKHOLDERS' EQUITY Preferred Stock - Par Value $.01; 5,000,000 Shares Authorized; 0 Shares Issued and Outstanding -- -- Common Stock - Par Value $.01 10,000,000 Shares Authorized, 648,025 Issued Shares 6 6 Paid-in Capital in Excess of Par 6,108 6,108 Retained Earnings 2,531 2,716 Treasury Stock - 141,502 Shares, at Cost (1,821) (1,821) Accumulated Other Comprehensive Income (Loss) (21) (25) -------- -------- 6,803 6,984 -------- -------- Less: Unearned ESOP Shares (214) (214) Unearned MRP Shares (19) (19) -------- -------- (233) (233) -------- -------- Total Stockholders' Equity 6,570 6,751 -------- -------- Total Liabilities and Stockholders' Equity $ 50,543 $ 51,892 ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 2 ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2002 2001 2002 2001 ------------------------------ ------------------------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (In Thousands) (In Thousands) INTEREST INCOME Loans $701 $442 $1,374 $ 832 Mortgage-Backed Securities 162 200 339 514 Investment Securities 2 65 5 146 Other Interest-Earning Assets 14 92 34 150 ---- ---- ------ ------ Total Interest Income 879 799 1,752 1,642 ---- ---- ------ ------ INTEREST EXPENSE Deposits 411 551 853 1,082 FHLB Advances -- -- -- 27 ---- ---- ------ ------ Total Interest Expense 411 551 853 1,109 ---- ---- ------ ------ NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 468 248 899 533 PROVISION FOR LOAN LOSSES -- (40) -- (40) ---- ---- ------ ------ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 468 208 899 493 ---- ---- ------ ------ NON-INTEREST INCOME Service Charges and Fees 89 111 166 158 Miscellaneous Income 16 70 33 82 ---- ---- ------ ------ Total Non-Interest Income 105 181 199 240 ---- ---- ------ ------
The accompanying notes are an integral part of these consolidated financial statements. 3 ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2002 2001 2002 2001 ------------------------------ ------------------------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (In Thousands) (In Thousands) NON-INTEREST EXPENSES Compensation and Benefits $ 344 $ 322 $ 754 $ 644 Occupancy and Equipment 99 110 189 215 Computer 12 13 29 25 Professional Services 58 43 87 68 Real Estate Owned Expenses 1 -- 2 -- Loss on Sale of Securities -- -- -- 7 Other 168 114 315 202 ------ ------ ------ ------ Total Non-Interest Expense 682 602 1,376 1,161 ------ ------ ------ ------ LOSS BEFORE INCOME TAXES AND MINORITY INTEREST (109) (213) (278) (428) FEDERAL INCOME TAX BENEFIT (38) (71) (64) (115) ------ ------ ------ ------ LOSS BEFORE MINORITY INTEREST (71) (142) (214) (313) MINORITY INTEREST IN SUBSIDIARY (14) 29 29 66 ------ ------ ------ ------ NET LOSS (85) (113) (185) (247) OTHER COMPREHENSIVE INCOME- NET OF INCOME TAX Unrealized Gains (Losses) on Securities 40 24 4 220 ====== ====== ====== ====== COMPREHENSIVE INCOME (LOSS) $ (45) $ (89) $ (181) $ (27) ====== ====== ====== ====== LOSS PER SHARE Basic $(0.18) $(0.24) $(0.38) $(0.52) ====== ====== ====== ====== Fully Diluted $(0.18) $(0.24) $(0.38) $(0.52) ====== ====== ====== ======
The accompanying notes are an integral part of these consolidated financial statements. 4 ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, June 30, 2002 2001 ----------- ----------- (Unaudited) (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES (In Thousands) Net Loss $ (185) $ (247) Adjustments to Reconcile Net Loss to Net Cash Provided by (Used in) Operating Activities: Depreciation and Amortization 66 102 Provision for Loan Losses -- 40 Premium Amortization Net of Discount Accretion 33 (7) Stock Dividend - FHLB (9) (14) ESOP and MRP Expense -- 44 Increase in Accrued Interest Payable -- 1 Increase (Decrease) Increase in Other Liabilities 54 (27) Decrease in Accrued Interest Receivable 13 59 Increase (Decrease) in Unearned Interest (2) 30 (Increase) Decrease in Other Assets 163 (16) Increase (Decrease) in Deferred Loan Fees (5) 11 Increase in Prepaid Expenses (5) (101) Originations of Loans Held for Sale -- (643) Proceeds from Sales of Loans Held for Sale -- 643 Increase in Due to Affiliates 63 108 Decrease in Minority Interest (29) (66) Loss on Sale of Securities -- 7 Gain on Sale of Real Estate Owned -- (46) Decrease in Prepaid Income Taxes -- 54 Increase in Deferred Income Taxes (52) (115) ------ ------ Net Cash Provided by (Used in) Operating Activities 105 (183) ------ ------ CASH FLOWS FROM INVESTING ACTIVITIES Maturities of Investment Securities - Available-for-Sale 10 1,631 Proceeds from Sale of Investment Securities - Available-for-Sale -- 298 Purchases of Mortgage- Backed Securities - Available-for-Sale (3,884) -- Maturities of Mortgage-Backed Securities - Available-for-Sale 1,973 1,617 Proceeds from Sale of Mortgage Backed Securities - Available-for-Sale -- 8,322 Principal Collected on Loans 10,309 2,722 Loans Made to Customers (10,731) (9,598) Proceeds from Sale of Real Estate Owned -- 161 Purchase of Furniture and Fixtures (20) (113) ------ ------ Net Cash Provided by (Used in) Investing Activities (2,343) 5,040 ------ ------
The accompanying notes are an integral part of these consolidated financial statements. 5 ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Six Months Ended June 30, June 30, 2002 2001 ----------- ----------- (Unaudited) (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES (In Thousands) CASH FLOWS FROM FINANCING ACTIVITIES Net Increase (Decrease) in Deposits $(1,240) $ 3,821 Net Decrease in Advances from Borrowers for Taxes and Insurance (16) (14) Repayment of Federal Home Loan Advance -- (3,000) Dividends Paid on Common Stock -- -- ------- ------- Net Cash Provided by (Used in) Financing Activities (1,256) 807 ------- ------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,494) 5,664 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 6,437 2,043 ------- ------- CASH AND CASH EQUIVALENTS - END OF PERIOD $ 2,943 $ 7,707 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash Paid During the Year for: Interest $ 853 $ 1,108 Income Taxes $ -- $ -- SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS Dividends Declared $ -- $ -- Real Estate Owned Acquired Through Foreclosure $ -- $ 67
The accompanying notes are an integral part of these consolidated financial statements. 6 Algiers Bancorp, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 30, 2002 Note 1 - Basis of Presentation - Algiers Bancorp, Inc. (the "Company") 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 Company was essentially inactive until July 8, 1996, when it acquired Algiers Bank & Trust (the "Bank") in a business reorganization of entities under common control in a manner similar to a pooling of interest. The Bank is engaged in the savings and loan industry. The acquired Bank became a wholly-owned subsidiary of the Company through the issuance of 1,000 shares of common stock to the Company in exchange for 50% of the net proceeds received by the Company in the reorganization. During 1998, the Company 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 Bank & Trust and Algiers.Com, Inc. 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 June 30, 2002 and December 31, 2001, respectively, are summarized as follows (in thousands):
June 30, 2002 December 31, 2001 ------------- ----------------- Gross Gross Gross Gross Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair Cost Gains Losses Value Cost Gains Losses Value ---- ----- ------ ----- ---- ----- ------ ----- Investments $ 360 $-- $ 3 $ 357 $ 370 $-- $ 3 $ 367 ======= === === ======= ======= === === ======= GNMA Certificates $ 1,224 $13 $ 3 $ 1,234 $ 1,391 $ 8 $ 4 $ 1,395 FNMA Certificates 13,066 29 60 13,035 10,412 43 65 10,390 FHLMC Certificates 1,984 1 10 1,975 2,592 2 18 2,576 ------- --- --- ------- ------- --- --- ------- $16,274 $43 $73 $16,244 $14,395 $53 $87 $14,361 ======= === === ======= ======= === === =======
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 and have attained the age of 21. The ESOP shares are 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. 7 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 $38,400 for the six months ended June 30, 2002 based on the annual release of shares. Note 4 - Management Recognition Plan - On July 18, 1997, the Company established a Recognition and Retention Plan (the "Plan") as an incentive to retain personnel of experience and ability in key positions. The Bank approved a total of 25,921 shares of stock to be acquired for the Plan, of which 4,555 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 June 30, 2002 to December 31, 2001 and the results of operations for the three and six months ended June 30, 2002 with the same period in 2001. Currently, the business and management of Algiers Bancorp, Inc. is primarily the business and management of the Bank. 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. 8 CHANGES IN FINANCIAL CONDITION Total assets decreased $1,349,000 or 2.60% from $51.9 million at December 31, 2001 to $50.5 million at June 30, 2002. The decrease in assets is primarily due to a decrease in cash and cash equivalents, interest earning deposits in other banks, investments, and deposits, offset by increases in mortgage backed securities and loans. Interest-earning deposits in other banks and investments was $1.7 million at June 30, 2002 and $4.8 million at December 31, 2001. These funds were reinvested in mortgage backed securities and loans. The mortgage-backed securities portfolio increased $1.9 million or 13.1% from $14.4 million at December 31, 2001 to $16.2 million at June 30, 2002, due to the purchase of mortgage-backed securities for $3.9 million offset by mortgage backed securities maturing of $2.0 million. Mortgage-backed securities amounted to $16.2 million or 32.1% of total assets at June 30, 2002, compared to $14.4 million or 27.7% of total assets at December 31, 2001. The Bank's loan portfolio increased $430,000 or 1.5% over the past six months from $28.1 million at December 31, 2001 to $28.5 million at June 30, 2002. Total deposits decreased $1.2 million or 2.8% to $43.6 million at June 30, 2002 from $44.8 million at December 31, 2001. The decrease was primarily in certificate of deposit accounts. Total stockholders' equity decreased by $181,000 during the past six months. This decrease was due to a net loss for the period of $185,000, offset by an increase in accumulated other comprehensive income of $4,000. Stockholders' equity at June 30, 2002 totaled $6.6 million or 13.00% of total assets compared to $6.8 million or 13.01% of total assets at December 31, 2001. 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 six months ended June 30, 2002, net interest income before provision for loan losses was less 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 loss for the three months ended June 30, 2002 decreased $28,000 or 24.8% compared to the three months ended June 30, 2001. The decrease was due to an increase of $80,000 or 10.0% in interest income and a decrease of $140,000 or 25.4% in interest expense, partially offset by a decrease of $76,000 or 42.0% in non-interest income and a $80,000 or 13.2% increase in non-interest expense. Total interest income increased by $80,000 or 10.0% during the three months ended June 30, 2002 compared to the three months ending June 30, 2001, due to an increase in the yield on interest earning assets from 6.85 % in the quarter ended June 30, 2001 to 7.63% in the comparable period of 2002 partially offset by a decrease in the average interest-earning assets of $605,000 or 1.3%. The decrease in the average balance was primarily due to increases in loans partially offset by decreases in interest bearing deposits in other banks and principal pay-downs on mortgage backed securities and investments exceeding repurchases. Total interest expense decreased by $140,000 or 25.4% in the three months ending June 30, 2002 compared to the three months ending June 30, 2001, primarily due to a decrease in the average rate on interest-bearing liabilities to 3.9% from 5.3% over the same period in 2001 partially offset by an increase in average interest-bearing liabilities of $662,000 or 1.6% in the quarter ended June 30, 2002 over the comparable 2001 period. 9 The increased net interest income of $220,000 was due to an increase in the average interest rate spread to 3.73% in the quarter ending June 30, 2002 from 1.54% in the same quarter in 2001 and an increase of $1.3 million or 24.5% in net average interest-earning assets in the quarter ended June 30, 2002 over the comparable 2001 period. The average yield on interest-earning assets increased to 7.63% during the three months ended June 30, 2002 compared to 6.85% during the three months ended June 30, 2001. The increased yield on assets was primarily due to an increase in the average rate earned on loans and mortgaged-backed securities. The average rate on deposits decreased from 5.3% during the quarter ended June 30, 2001 to 3.9% during the same quarter of 2002. During the quarter ended June 30, 2002 compared to the same period of 2001, non-interest income decreased $76,000 due to a decrease of $22,000 in service charges and fees and a decrease of $54,000 in miscellaneous income. The Bank had no provision or credit for loan losses in the three months ended June 30, 2002 compared to a provision or credit for loan losses of $40,000 in the same period in 2001. Total non performing loans at June 30, 2002 was $187,000 and June 30, 2001 was $102,000. The allowance for loan losses at June 30,2002 was $383,000 and June 30, 2001 was $300,000. The $80,000 increase in total non-interest expense in the three months ended June 30, 2002 was due to a $22,000 increase in compensation and benefits, a $15,000 increase in professional services, and a $54,000 increase in other expenses, partially offset by a decrease of $11,000 in occupancy and equipment. The $33,000 or 46.5% decrease in income tax benefit was primarily due to a decrease of $61,000 in pre tax loss for the three months ended June 30, 2002 from the comparable 2001 period. The Company's net loss for the six months ended June 30, 2002 decreased $62,000 or 25.1% compared to the six months ended June 30, 2001. The increase was primarily due to an increase of $110,000 or 6.7% in interest income and a decrease of $256,000 or 23.1% in interest expense, partially offset by a an decrease of $41,000 or 17.1% in non-interest income and a $215,000 or 18.5% increase in non-interest expense. Total interest income increased by $110,000 or 6.7% during the six months ending June 30, 2002 compared to the six months ending June 30, 2001, due to an increase in the average interest-earning assets of $3,000, which is so negligible that it results in an effective yield of 0.0%, and an increase in the yield on interest earning assets from 7.0% in the six months ended June 30, 2001 to 7.5% in the comparable period of 2002. The increase in the average balance was primarily due to increases in loans, partially offset by principal pay-downs on mortgage backed securities and investments exceeding repurchases and decreases in interest bearing deposits in other banks. Total interest expense decreased by $256,000 or 23.1% in the six months ending June 30, 2002 compared to the six months ending June 30, 2001, primarily due to a decrease in the average rate on interest-bearing liabilities to 4.0% from 5.3% over the same period in 2001 partially offset by an increase in average interest-bearing liabilities of $1.1 million or 2.5% in the period ended June 30, 2002 over the comparable 2001 period. The increased net interest income of $366,000 was due to an increase in the average interest rate spread to 3.5% in the first six months of 2002 from 1.7% in the first six months of 2001 and a decrease of $1.1 million or 20.1% in net average interest-earning assets in the six months ended June 30, 2002 over the comparable period 2001. The average yield on interest earning assets increased to 7.5% during the six months ended June 30, 2002 compared to 7.0% during the six months ended June 30, 2001. The increased yield on assets was primarily due to an increase in the yield on loans. The average rate on deposits decreased from 5.3% during the first six months of 2001 to 4.0% during the first six months of 2002. 10 During the six months ended June 30, 2002 compared to the same period of 2001, non-interest income decreased $41,000 due to a decrease of $49,000 in miscellaneous income partially offset by a $8,000 increase in service charges and fees. The Bank had no provision for loan losses for the six months ended June 30, 2002 and a $40,000 provision in the same period in 2001. Total non-performing loans at June 30, 2002 and December 31, 2001 was $187,000 and $479,000, respectively and the allowance for loan losses at June 30, 2002 and December 31, 2001 was $383,000 and $415,000, respectively. The $215,000 increase in total non-interest expense in the six months ended June 30, 2002 was due to a $110,000 increase in compensation and benefits related to the increased loan business, a $113,000 increase in other expenses, and an increase of $19,000 in professional services, partially offset by a $26,000 decrease in occupancy and equipment. The $51,000 or 44.4% decrease in income tax benefit was primarily due to a decrease of $113,000 in pre-tax income for the six months ended June 30, 2002 from the comparable 2001 period. LIQUIDITY AND CAPITAL RESOURCES All savings institutions are required to maintain an average daily balance of liquid assets in accordance with management's policy. The average daily balance is based on a certain percentage of the sum of its daily balance of net withdrawable deposit accounts and borrowings payable in one year or less. The liquidity requirement may vary from time to time depending upon economic conditions and savings flows of the savings institution. At June 30, 2002, the Bank's liquidity was 41.9%. The Bank 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 June 30, 2002, the Bank's tangible and core capital both amounted to $6.4 million or 12.6% of adjusted total assets of $50.3 million, and the Bank's risk-based capital amounted to $6.7 million or 21.4% of adjusted risk-weighted assets of $31.4 million. As of June 30, 2002, the Bank's unaudited regulatory capital requirements are as indicated in the following table:
Tangible Core Risk-Based Capital Capital Capital -------- ------- ---------- (Dollars in Thousands) GAAP Capital 6,334 6,334 6,334 Additional Capital Items: General Valuation Allowance - - 369 Unrealized Loss on Securities - Available for Sale 22 22 22 ----- ----- ----- Regulatory Capital 6,356 6,356 6,725 Minimum Capital Requirement 755 1,510 2,509 ----- ----- ----- Regulatory Capital Excess 5,601 4,846 4,216 Regulatory Capital as a Percentage 12.63 % 12.63 % 21.44 % Minimum Capital Required as a Percentage 1.50 % 3.00 % 8.00 %
11 Based on the above capital ratios, the Bank meets the criteria for a "well capitalized" institution at June 30, 2002. The Bank's management believes that under the current regulations, the Bank will continue to meet its minimum capital requirements in the foreseeable future. However, events beyond the control of the Bank, such as increased interest rates or a downturn in the economy of the Bank's area, could adversely affect future earnings. COMMON STOCK REPURCHASE PLAN The OTS granted the Company permission on September 3, 1998 to repurchase approximately 14% of the Company's outstanding common stock. 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 exhibits are filed herewith: Exhibit No. Description ----------- ----------- 2.1* Plan of Conversion 3.1* Articles of Incorporation of Algiers Bancorp, Inc. 3.2* Bylaws of Algiers Bancorp, Inc. 4.1* Stock Certificate of Algiers Bancorp, Inc. (*) Incorporated herein by reference to the Company's Form SB-2 (Registration No. 333-2770) filed by the Company with the SEC on March 26, 1996, as subsequently amended. (b) Reports on Form 8-K: No reports on Form 8-K was filed by the Registrant during the quarter ended June 30, 2002. 12 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: August 9, 2002 By: /s/ Francis M. Minor ----------------------------------- Francis M. Minor Executive Vice-President 13 EX-99 3 certification.txt CERTIFICATION EXHIBIT 99 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Algiers Bancorp, Inc. (the "Company") on Form 10-QSB for the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof ("the Report"), I Francis M. Minor, Executive Vice-President of the Company, certify that: 1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: August 9, 2002 By: /s/ Francis M. Minor ---------------------------------- Francis M. Minor Executive Vice-President -----END PRIVACY-ENHANCED MESSAGE-----