-----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, BjZ3HQ4gJRTh9oQDAXQ1161ocr6KA8CxHOyqqTTSjpC1u9dTRL7xOnCT6MyyU5LQ pcTUYJPXy62attlWiqK2kg== 0001116502-02-001695.txt : 20021113 0001116502-02-001695.hdr.sgml : 20021113 20021113153241 ACCESSION NUMBER: 0001116502-02-001695 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021113 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: 02819852 BUSINESS ADDRESS: STREET 1: 1 WESTBANK EXPRESSWAY CITY: NEW ORLEANS STATE: LA ZIP: 70114 BUSINESS PHONE: 5043678221 10QSB 1 algiers-10qsb.txt QUARTERLY REPORT 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 September 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 November 8, 2002: 505,520 Transitional Small Business Disclosure Format (check one): Yes No X --- --- ALGIERS BANCORP, INC. QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 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 September 30, 2002 and December 31, 2001........................................... 1 Consolidated Statements Of Operations (Unaudited) For the Three and Nine Months Ended September 30, 2002 and 2001.................................. 3 Consolidated Statements Of Cash Flows (Unaudited) For the Nine Months Ended September 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 September 30, December 31, 2002 2001 ------------ ----------- (Unaudited) (In Thousands) Cash and Cash Equivalents $ 1,945 $ 1,964 Interest-Bearing Deposits in Other Banks 5,650 4,473 Investments Available-for-Sale - at Fair Value (Note 2) 352 367 Loans Receivable - Net 30,108 28,112 Mortgage Loans Held for Resale -- -- Mortgage-Backed Securities - Available-for-Sale - at Fair Value (Note 2) 12,344 14,361 Stock in Federal Home Loan Bank 623 609 Accrued Interest Receivable 233 251 Real Estate Owned - Net 203 203 Office Properties and Equipment, at Cost - Furniture, Fixtures and Equipment, Less Accumulated Depreciation of $687 and $831, respectively 615 690 Prepaid Expenses 79 40 Deferred Taxes 484 623 Other Assets 23 199 ------- ------- Total Assets $52,659 $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
September 30, December 31, 2002 2001 ------------ -------------- LIABILITIES (Unaudited) (In Thousands) Deposits : Interest Bearing $ 44,099 $ 43,411 Non-Interest Bearing 1,340 1,450 Advance Payments from Borrowers for Insurance and Taxes 68 57 Accrued Interest Payable on Depositors' Accounts 13 9 Due to Affiliates -- 345 Other Liabilities 296 79 -------- -------- 45,816 45,351 Minority Interest in Subsidiary -- (210) -------- -------- Total Liabilities 45,816 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 2,716 2,716 Treasury Stock - 142,505 Shares, at Cost (1,821) (1,821) Accumulated Other Comprehensive Income (Loss) 63 (25) -------- -------- 7,072 6,984 -------- -------- Less: Unearned ESOP Shares (214) (214) Unearned MRP Shares (15) (19) -------- -------- (229) (233) -------- -------- Total Stockholders' Equity 6,843 6,751 -------- -------- Total Liabilities and Stockholders' Equity $ 52,659 $ 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 Nine Months Ended September 30, September 30, September 30, September 30, 2002 2001 2002 2001 ------- ------- ------- ------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) (In Thousands) (In Thousands) INTEREST INCOME Loans $ 313 $ 537 $ 1,687 $ 1,369 Mortgage-Backed Securities 198 178 537 692 Investment Securities 2 41 7 187 Other Interest-Earning Assets 24 80 58 230 ------- ------- ------- ------- Total Interest Income 537 836 2,289 2,478 ------- ------- ------- ------- INTEREST EXPENSE Deposits 402 540 1,255 1,622 FHLB Advances -- -- -- 27 ------- ------- ------- ------- Total Interest Expense 402 540 1,255 1,649 ------- ------- ------- ------- NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 135 296 1,034 829 PROVISION FOR LOAN LOSSES -- (60) -- (100) ------- ------- ------- ------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 135 236 1,034 729 ------- ------- ------- ------- NON-INTEREST INCOME Service Charges and Fees 410 138 576 296 Miscellaneous Income 259 11 292 93 ------- ------- ------- ------- Total Non-Interest Income 669 149 868 389 ------- ------- ------- -------
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 Nine Months Ended September 30, September 30, September 30, September 30, 2002 2001 2002 2001 ------- ------- ------- ------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) (In Thousands) (In Thousands) NON-INTEREST EXPENSES Compensation and Benefits $ 228 $ 353 $ 982 $ 997 Occupancy and Equipment 79 118 268 333 Computer 10 21 39 46 Professional Services 42 40 129 108 Real Estate Owned Expenses (2) -- -- -- Loss on Sale of Securities -- -- -- 7 Other 106 134 420 336 ------- ------- ------- ------- Total Non-Interest Expense 463 666 1,838 1,827 ------- ------- ------- ------- INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST 341 (281) 63 (709) FEDERAL INCOME TAX EXPENSE (BENEFIT) 144 (73) 80 (188) ------- ------- ------- ------- INCOME BEFORE MINORITY INTEREST 197 (208) (17) (521) MINORITY INTEREST IN SUBSIDIARY (12) 40 17 106 ------- ------- ------- ------- NET INCOME (LOSS) 185 (168) -- (415) OTHER COMPREHENSIVE INCOME- NET OF INCOME TAX Unrealized Gains (Losses) on Securities 84 24 88 244 ======= ======= ======= ======= COMPREHENSIVE INCOME (LOSS) $ 269 $ (144) $ 88 $ (171) ======= ======= ======= ======= EARNINGS (LOSS) PER SHARE Basic $ 0.38 $ (0.24) $ -- $ (0.52) ======= ======= ======= ======= Fully Diluted $ 0.38 $ (0.24) $ -- $ (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
Nine Months Ended September 30, September 30, 2002 2001 -------- -------- (Unaudited) (Unaudited) (In Thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) $ -- $ (415) Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities: Depreciation and Amortization 95 152 Provision for Loan Losses -- 100 Premium Amortization Net of Discount Accretion 38 1 Stock Dividend - FHLB (14) (20) ESOP and MRP Expense 4 66 Increase (Decrease) in Accrued Interest Payable 4 (2) Increase (Decrease) Increase in Other Liabilities 217 (25) Decrease in Accrued Interest Receivable 18 111 Decrease in Unearned Interest (1) (6) (Increase) Decrease in Other Assets 176 (18) Increase (Decrease) in Deferred Loan Fees 5 (6) Increase in Prepaid Expenses (39) (99) Increase (Decrease) in Due to Affiliates (345) 169 Increase (Decrease) in Minority Interest 210 (105) (Gain) Loss on Sale of Securities (89) 7 Gain on Sale of Real Estate Owned -- (46) Decrease in Prepaid Income Taxes -- 54 (Increase) Decrease in Deferred Income Taxes 94 (188) -------- -------- Net Cash Provided by (Used in) Operating Activities 373 (270) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Maturities of Investment Securities - Available-for-Sale 15 4,619 Proceeds from Sale of Investment Securities - Available-for-Sale -- 298 Purchases of Mortgage- Backed Securities - Available-for-Sale (4,392) (1,782) Maturities of Mortgage-Backed Securities - Available-for-Sale 2,658 2,428 Proceeds from Sale of Mortgage Backed Securities - Available-for-Sale 3,935 8,322 Principal Collected on Loans 13,512 6,264 Loans Made to Customers (15,512) (16,736) Proceeds from Sale of Real Estate Owned -- 161 Purchase of Furniture and Fixtures (20) (165) -------- -------- Net Cash Provided by Investing Activities 196 3,409 -------- --------
The accompanying notes are an integral part of these consolidated financial statements. 5 ALGIERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
Nine Months Ended September 30, September 30, 2002 2001 ------- ------- (Unaudited) (Unaudited) (In Thousands) CASH FLOWS FROM FINANCING ACTIVITIES Net Increase in Deposits $ 578 $ 6,395 Net Increase (Decrease) in Advances from Borrowers for Taxes and Insurance 11 (12) Repayment of Federal Home Loan Advance -- (3,000) Dividends Paid on Common Stock -- -- ------- ------- Net Cash Provided by Financing Activities 589 3,383 ------- ------- NET INCREASE IN CASH AND CASH EQUIVALENTS 1,158 6,522 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 6,437 2,043 ------- ------- CASH AND CASH EQUIVALENTS - END OF PERIOD $ 7,595 $ 8,565 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash Paid During the Year for: Interest $ 1,251 $ 1,651 Income Taxes $ -- $ -- SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS Dividends Declared $ -- $ -- Real Estate Owned Acquired Through Foreclosure $ -- $ --
The accompanying notes are an integral part of these consolidated financial statements. 6 Algiers Bancorp, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) September 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. On July 31, 2002, Planet Mortgage, LLC was sold and Algiers.Com, Inc. was dissolved. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Algiers Bank & Trust. 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 September 30, 2002 and December 31, 2001, respectively, are summarized as follows (in thousands):
September 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 $ 355 $ -- $ 3 $ 352 $ 370 $ -- $ 3 $ 367 ======= ======= ======= ======= ======= ======= ======= ======= GNMA Certificates $ 1,162 $ 19 $ 3 $ 1,178 $ 1,391 $ 8 $ 4 $ 1,395 FNMA Certificates 8,723 130 48 8,805 10,412 43 65 10,390 FHLMC Certificates 2,361 7 7 2,361 2,592 2 18 2,576 ------- ------- ------- ------- ------- ------- ------- ------- $12,246 $ 156 $ 58 $12,344 $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 $57,600 for the nine months ended September 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 4,205 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 Subsidiary at September 30, 2002 to December 31, 2001 and the results of operations for the three and nine months ended September 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. CHANGES IN FINANCIAL CONDITION Total assets increased $767,000 or 1.48% from $51.9 million at December 31, 2001 to $52.7 million at September 30, 2002. The increase in assets is primarily due to an increase in cash and cash equivalents, interest earning deposits in other banks, loans and deposits, offset by decreases in mortgage backed securities and investments. 8 Interest-earning deposits in other banks and investments was $6.0 million at September 30, 2002 and $4.8 million at December 31, 2001. These funds were provided by maturities of securities. The mortgage-backed securities portfolio decreased $2.1 million or 14.0% from $14.4 million at December 31, 2001 to $12.3 million at September 30, 2002, due to the sale of mortgage-backed securities for $3.9 million, maturities of $2.7 million, offset by purchases of $4.4 million. Mortgage-backed securities amounted to $12.3 million or 23.4% of total assets at September 30, 2002, compared to $14.4 million or 27.7% of total assets at December 31, 2001. The Bank's loan portfolio increased $2.0 million or 7.1% over the past nine months from $28.1 million at December 31, 2001 to $30.1 million at September 30, 2002. Total deposits increased $578,000 or 1.3% to $45.4 million at September 30, 2002 from $44.9 million at December 31, 2001. The increase was primarily in certificate of deposit accounts. Total stockholders' equity increased by $92,000 during the past nine months. This increase was primarily due to an increase in accumulated other comprehensive income of $88,000 for the period. Stockholders' equity at September 30, 2002 totaled $6.8 million or 12.99% of total assets compared to $6.7 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 nine months ended September 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 income for the three months ended September 30, 2002 increased $353,000 or 210.1% compared to the three months ended September 30, 2001. The increase was due to an increase of $520,000 or 349.0% in non-interest income, a decrease of $138,000 or 25.6% in interest expense, and a decrease of $203,000 or 30.5% in non-interest expense, partially offset by a decrease of $299,000 or 35.8% in interest income. Total interest income decreased by $299,000 or 35.8% during the three months ended September 30, 2002 compared to the three months ending September 30, 2001, due to a decrease in the yield on interest earning assets from 6.97 % in the quarter ended September 30, 2001 to 4.39% in the comparable period of 2002 and an increase in the average interest-earning assets of $929,000 or 1.9%. The increase 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 $138,000 or 25.6% in the three months ending September 30, 2002 compared to the three months ending September 30, 2001, primarily due to a decrease in the average rate on interest-bearing liabilities to 3.7% from 5.1% over the same period in 2001, partially offset by an increase in average interest-bearing liabilities of $865,000 or 2.0% in the quarter ended September 30, 2002 over the comparable 2001 period. 9 The decreased net interest income of $161,000 was due to a decrease in the average interest rate spread to 0.68% in the quarter ending September 30, 2002 from 1.88% in the same quarter in 2001, partially offset by an increase of $64,000 or 1.2% in net average interest-earning assets in the quarter ended September 30, 2002 over the comparable 2001 period. The average yield on interest-earning assets decreased to 4.39% during the three months ended September 30, 2002 compared to 6.97% during the three months ended September 30, 2001. The decreased yield on assets was primarily due to a decrease in the average rate earned on loans, investment securities, and other interest earning assets. The average rate on deposits decreased from 5.2% during the quarter ended September 30, 2001 to 3.7% during the same quarter of 2002. During the quarter ended September 30, 2002 compared to the same period of 2001, non-interest income increased $520,000 due to an increase of $272,000 in service charges and fees and an increase of $248,000 in miscellaneous income, related to the sale of Planet Mortgage. The Bank had no provision or credit for loan losses in the three months ended September 30, 2002 compared to a provision or credit for loan losses of $60,000 in the same period in 2001. Total non performing loans at September 30, 2002 was $215,000 and September 30, 2001 was $305,000. The allowance for loan losses at September 30,2002 was $644,000 and September 30, 2001 was $620,000. The $203,000 decrease in total non-interest expense in the three months ended September 30, 2002 was due to a $125,000 decrease in compensation and benefits, a $30,000 decrease in other expenses, a $39,000 decrease in occupancy and equipment, and a $11,000 decrease in computer expenses, partially offset by an $2,000 increase in professional services. The $217,000 or 297.3% decrease in income tax benefit was primarily due to an increase of $570,000 in pre-tax income for the three months ended September 30, 2002 compared to a pre-tax loss for the 2001 period. The Company's net income for the nine months ended September 30, 2002 increased $415,000 or 100% compared to the nine months ended September 30, 2001. The increase was primarily due to an increase of $479,000 or 123.1% in non-interest income and a decrease of $394,000 or 23.9% in interest expense, partially offset by a an decrease of $189,000 or 7.6% in interest income and a $11,000 or 0.6% increase in non-interest expense. Total interest income decreased by $189,000 or 7.6% during the nine months ending September 30, 2002 compared to the nine months ending September 30, 2001, due to an increase in the average interest-earning assets of $70,000, or 0.1%, partially offset by a decrease in the yield on interest earning assets from 6.9% in the nine months ended September 30, 2001 to 6.4% 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 $394,000 or 23.9% in the nine months ending September 30, 2002 compared to the nine months ending September 30, 2001, primarily due to a decrease in the average rate on interest-bearing liabilities to 3.9% from 5.2% over the same period in 2001, partially offset by an increase in average interest-bearing liabilities of $329,000 or 0.8% in the period ended September 30, 2002 over the comparable 2001 period. The increased net interest income of $205,000 was due to an increase in the average interest rate spread to 2.4% in the first nine months of 2002 from 1.7% in the first nine months of 2001, partially offset by a decrease of $259,000 or 4.7% in net average interest-earning assets in the nine months ended September 30, 2002 over the comparable period 2001. The average yield on interest earning assets decreased to 6.4% during the nine months ended September 30, 2002 compared to 6.9% during the nine months ended September 30, 2001. The decreased yield on assets was primarily due to a decrease in the yield on loans. The average rate on deposits decreased from 5.2% during the first nine months of 2001 to 3.9% during the first nine months of 2002. 10 During the nine months ended September 30, 2002 compared to the same period of 2001, non-interest income increased $479,000 due to an increase of $280,000 in service charges and fees and an increase of 199,000 in miscellaneous income. The Bank had no provision for loan losses for the nine months ended September 30, 2002 and a $100,000 provision in the same period in 2001. Total non-performing loans at September 30, 2002 and September 30, 2001 was $215,000 and $305,000, respectively and the allowance for loan losses at September 30, 2002 and September 30, 2001 was $644,000 and $620,000, respectively. The $11,000 increase in total non-interest expense in the nine months ended September 30, 2002 was due to a $84,000 increase in other expenses, a $21,000 increase in professional services, partially offset by a $15,000 decrease in compensation and benefits, a $65,000 decrease in occupancy and equipment, and a $7,000 decrease in computer expenses. The $268,000 or 142.6% decrease in income tax benefit was primarily due to an increase of $683,000 in pre-tax income for the nine months ended September 30, 2002 as compared to a pre-tax loss for the 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 September 30, 2002, the Bank's liquidity was 42.5%. 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 September 30, 2002, the Bank's tangible and core capital both amounted to $6.5 million or 12.4% of adjusted total assets of $52.5 million, and the Bank's risk-based capital amounted to $6.9 million or 20.4% of adjusted risk-weighted assets of $33.5 million. As of September 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 $ 6,544 $ 6,544 $ 6,544 Additional Capital Items: General Valuation Allowance -- -- 369 Unrealized (Gain) Loss Securities - Available for Sale (63) (63) (63) ------- ------- ------- Regulatory Capital 6,481 6,481 6,850 Minimum Capital Requirement 787 1,574 2,684 ------- ------- ------- Regulatory Capital Excess $ 5,694 $ 4,907 $ 4,166 Regulatory Capital as a Percentage 12.35 % 12.35 % 20.42 % 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 September 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: One report on Form 8-K was filed by the Registrant during the quarter ended September 30, 2002. (*) Incorporated herein by reference to the Company's Form 8-K filed by the Company with the SEC on August 1, 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: November 8, 2002 By: /s/ Francis M. Minor ------------------------ Francis M. Minor Acting President 13 CERIFICATION 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 September 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: November 8, 2002 By: /s/ Francis M. Minor ------------------------ Francis M. Minor Acting President -----END PRIVACY-ENHANCED MESSAGE-----