-----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, KIbv7ZvPMb91vHgX+leWzba0D+otqduGKqdCJHGC2sjqaw5zSBFX8q7qOczGCRAN g/PNi+/F1jXae7wAp6gdwQ== 0000832818-00-000006.txt : 20000228 0000832818-00-000006.hdr.sgml : 20000228 ACCESSION NUMBER: 0000832818-00-000006 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 20000225 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOL BANCSHARES INC CENTRAL INDEX KEY: 0000832818 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 721121561 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-16934 FILM NUMBER: 552957 BUSINESS ADDRESS: STREET 1: 300 ST CHARLES AVE CITY: NEW ORLEANS STATE: LA ZIP: 70130 BUSINESS PHONE: 5048899400 MAIL ADDRESS: STREET 1: 300 ST CHARLES AVENUE CITY: NEW ORLEANS STATE: LA ZIP: 70130 10-K/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K/A Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1998 Commission file Number 01-16934 BOL BANCSHARES, INC. (Exact name of registrant as specified in its charter.) Louisiana 72-1121561 (State of incorporation) (IRS Employer Identification No.) 300 St. Charles Avenue, New Orleans, La. 70130 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (504)889-9400 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]. State the aggregate market value of the voting stock held by non-affiliates of the Registrant as of December 31, 1998. Approximately $914,857 (a) Indicate the number of shares outstanding of each of the Registrant's classes of common stock as of the latest practical date. Common Stock: $1.00 par value; 179,145 shares outstanding as of February 28, 1999. (a) For the purposes of this computation, shares owned by directors and executive officers have been excluded. Item 6 Selected Consolidated Financial Data of the Company The following selected financial data should be read in conjunction with Management's Discussions and Analysis of Financial Condition and Results of Operations of the Company which follows and the Company's financial statements and related notes included elsewhere herein.
For The Years Ended December 31, 1998 1997 1996 1995 1994 (dollars in thousands, except per share data) Operations: Net Interest Income $7,827 $8,189 $10,133 $9,061 $8,190 Provision for Loan Losses 1,085 3,630 2,040 1,749 805 Non-Interest Income 2,249 2,938 2,440 2,703 3,513 Non-Interest Expense 9,123 10,643 10,647 9,729 10,045 Income Tax Expense 96 (1,171) (20) 141 205 (Benefit) Net Income(Loss) (228) (1,975) (94) 145 648 Per Share: Common Shares Outstanding 179,145 179,145 179,145 179,145 179,258 Net Income (Loss) (1.27) (11.03) (0.52) 0.81 3.61 Cash Dividends - Common 0.00 0.00 0.00 0.00 0.00 Book Value at End of 16.47 16.62 27.64 28.30 27.64 Period Preferred Shares Outstanding 2,302,811 2,302,811 2,302,811 2,302,811 2,309,103 Cash Dividends - Preferred 0.00 0.00 0.00 0.00 0.08 Stock Balances at End of Period: Investment Securities 4,789 10,567 9,060 11,136 15,188 Fed Funds Sold 26,950 21,150 14,400 10,725 6,075 Loans, Net of Unearned 61,542 57,619 69,298 74,943 67,802 Interest Allowance for Loan Losses 1,800 1,800 1,500 1,500 935 Other Real Estate Owned 1,357 1,473 2,273 1,994 2,771 Total Assets 103,886 102,709 106,091 108,589 103,102 Total Deposits 94,583 93,941 95,141 97,386 91,764 Shareholders' Equity 5,185 5,280 7,251 7,368 7,257 Ratios: Return on Average Assets -0.23% -1.95% -0.09% 0.14% 0.61% Return on Average Equity -4.18% -34.49% -1.27% 1.87% 9.34% Primary Capital to Total Assets and Allowance for Possible 5.12% 5.23% 6.93% 6.68% 6.93% Loan Losses Allowance for Possible Loan Losses as a Percentage of Loans, 2.92% 3.12% 2.61% 2.00% 1.38% Net Non-Performing Loans as a Percentage of Loans, Net 0.13% 0.15% 0.47% 0.32% 0.36% (1) Non-Performing Loans as a Percentage of Total Assets 1.38% 1.51% 2.44% 2.05% 2.92% (2) Capital Ratios: Bank Tier 1 Risk Based Capital 10.27% 10.61% 12.32% 11.46% 11.87% Ratio Risk Based Capital Ratio 11.54% 11.88% 13.58% 12.72% 13.12% Tier 1 Leverage Ratio 6.89% 6.84% 8.60% 8.54% 9.43%
(1) Non-performing loans are comprised of non-accrual loans and restructured loans. As of dates reported, the Company did not have any restructured loans. (2) Non-performing assets are comprised of non-performing loans, ORE and other repossessed assets. Item 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE COMPANY The following discussion and analysis presents the more significant factors affecting the financial condition and results of operations for the years ending December 31, 1998, 1997 and 1996. The consolidated financial statements and related notes should be read in conjunction with this review. Overview The Company has remained constant in total assets in the past five years. The Company had total assets of $103,886,000 at December 31, 1998, and $103,102,000 at December 31, 1994. The Company currently operates through five locations in the metropolitan New Orleans area and two locations in St. Tammany Parish. Historically, credit card loans have been an important part of the Company's total loan portfolio. At December 31, 1994, credit card loans were $37,382,000 which was 55.13% of the Company's loan portfolio of $67,802,000. At December 31, 1998, credit card loans totaled $25,200,000, or 40.96% of the Company's total loans. The decrease in the Company's credit card loans is largely attributable to competition from other banks and nontraditional credit card issuers (e.g. AT&T and GMAC), and the loss of proprietary business. The Company's current strategy is to continue to grow its traditional banking operations primarily in the metropolitan New Orleans area and to expand its credit card lending and proprietary accounts. This will be accomplished through an aggressive Marketing campaign and the acquisition of several Visa & MasterCard portfolios. During 1998 the Company purchased Visa & MasterCard portfolios totaling $4,792,000, at a premium of $673,000. The Company focuses on providing its customers with the financial sophistication and breadth of products of a regional bank while successfully retaining the local appeal and level of service of a community bank. Results of Operations Net Income The Company's net loss for 1998 was $228,000, or $(1.27) per share, compared to a net loss of $1,975,000 or $(11.03) per share in 1997. This $1,747,000 decrease was primarily due to the decrease in losses suffered by the Company from its credit card portfolio with charge-offs of $1,878,000 in 1998 compared to $3,996,000 in 1997. Net charge-offs totaled $1,086,000 in 1998 as compared to $3,330,000 in 1997 resulting in a decrease of $2,244,000. The Company's net loss was $1,975,000, or $(11.03) per share in 1997, compared to net loss of $94,000 or $(0.52) per share in 1996, a significant decrease. This $1,881,000 decrease was primarily due to the increase in losses suffered by the Company from its credit card portfolio. The Reserve for Loan Losses increased to $1,800,000 in 1997 from $1,500,000 in 1996 due to $300,000 charged to operations in order to comply with FDIC regulations with respect to charge-offs in the credit card portfolio. Net charge-offs totaled $3,330,000 in 1997 as compared to $2,040,000 in 1996. This $1,290,000 increase in net charge-offs occurred mainly in the Company's credit card portfolio and is a result of the economy and overburdened credit card debt of consumers. These losses are, however, consistent with the experience of many banks nationwide with respect to their credit card portfolios. The Company's net loss was $94,000, or $(0.52) per share in 1996, compared to net income of $144,000 or $.80 per share in 1995, a significant decrease. This $238,000 decrease was primarily due to the increase in losses suffered by the Company from its credit card portfolio. Net charge- offs totaled $2,040,000 in 1996 as compared to $1,183,000 in 1995. This $857,000 increase in net charge-offs occurred mainly in the Company's credit card portfolio and is a result of the economy and overburdened credit card debt of consumers. These losses are, however, consistent with the experience of many banks nationwide with respect to their credit card portfolios. Net Interest Income Margin Interest income decreased $484,000 or 4.70% to $9,814,000 in 1998 from $10,298,000 in 1997. This decrease is mainly due to a 31.30% decrease in interest income on proprietary credit card loans. Total interest expense decreased $121,000 or 5.78% to $1,987,000 in 1998 from $2,108,000 in 1997. Interest income decreased $2,028,000 or 16.46% to $10,298,000 in 1997 from $12,326,000 in 1996. This decrease is mainly due to a 55.72% decrease in interest income on proprietary credit card loans. Total interest expense decreased $85,000 or 3.83% to $2,108,000 in 1997, from $2,193,000 in 1996. Interest income increased $836,000 or 7.28% to $12,326,000 in 1996 from $11,490,000 in 1995. This increase is mainly due to a 56.24% increase in interest income on proprietary credit card loans and the continued growth in the credit card portfolio. Total interest expense decreased $236,000 or 9.72% to $2,193,000 in 1996, from $2,429,000 in 1995. This decrease is mainly due to a 17.10% decrease in interest paid on deposits due to an average interest rate paid of 3.27% in 1996 as compared to 3.60% in 1995. Interest earned on Federal Funds Sold increased 14.04% in 1998 to $1,145,000 from $1,004,000 in 1997. The average Federal Funds Sold for 1998 was $21,566,000 and $18,372,000 in 1997. The average interest rate earned on Federal Funds Sold in 1998 was 5.31% as compared to 5.46% in 1997. Interest earned on investment securities decreased 22.98% due to a decrease in the average balance to $4,789,000 in 1998 from $10,567,000 in 1997 with an average rate earned of 5.86% in 1998 and 5.78% in 1997. Interest earned on Federal Funds Sold increased 72.81% in 1997, to $1,004,000 from $581,000 in 1996, due to an average interest rate earned of 5.47% as compared to 5.28% in 1996. The average Federal Funds Sold for 1997, was $18,372,000 and $10,997,000 in 1996. Interest earned on investment securities increased 15.46% due to a increase in the average balance to $10,232,000 in 1997, from $9,353,000 in 1996, with an average rate earned of 5.78% in 1997, and 5.47% in 1996. Commercial loans average balance increased $2,262,000 or 8.42% to $29,121,000 on December 31, 1996, from $26,859,000 on December 31, 1995 due to the Company's continued positive experiences in generating new commercial loans. Interest income on commercial loans increased $212,000 to $2,807,000 in 1996, from $2,595,000 in 1995. The average interest rate charged on commercial loans in 1996, was 9.64% as opposed to 9.66% in 1995. Interest earned on Federal Funds Sold increased 1.96% in 1996, to $581,000 from $570,000 in 1995, due to an average interest rate earned of 5.29% as compared to 5.80% in 1995. The average Federal Funds Sold for 1996, was $10,997,000 and $9,830,000 in 1995. Interest earned on investment securities decreased 26.84% due to a decrease in the average balance to $9,353,000 in 1996, from $13,336,000 in 1995, with an average rate earned of 5.62% in 1996, and 5.39% in 1995. Noninterest Income and Expense The amount of noninterest income and noninterest expenses of a banking organization relate closely to the size of the total assets and deposits and the number of deposit accounts. The amount of noninterest expense represents the cost of operating the banking organization. The major components of noninterest income are service charges related to deposit accounts, cardholder and other credit card fees, Ore income, gain on sale of ORE and other noninterest income as reflected in the below table. Total noninterest income decreased to $2,249,000 in 1998 from $2,938,000 in 1997 or a 23.43% decrease. The gain on sale of ORE income decreased to $20,000 in 1998 from $61,000 in 1997. Total noninterest income increased to $2,938,000 in 1997 from $2,441,000 in 1996 or a 20.36% increase. A judgment rendered against the Bank in 1994, for $390,000 was reversed. The gain on sale of ORE income increased to $61,000 in 1997 from $7,000 in 1996.
Noninterest Income December 31, 1998 1997 1996 (Dollars in Thousands) Service Charges 653 618 643 NSF Charges 666 725 783 Gain on Sale of Securities - 16 - Cardholder & Other Credit 456 388 448 Card Income Membership Fees 224 245 218 Other Comm & Fees 34 101 112 ORE Income 13 11 24 Gain on Sale of ORE 20 61 7 Reversal of Litigation Settlement - 390 - Other Income 185 383 205 Total Non-Interest Income $2,249 $2,938 $2,440
Provision for Income Taxes The income tax provision (benefit) for the Company and the Bank on a consolidated basis, for the year 1998 was $96,000 as compared to $(1,171,000) in 1997 and $(20,000)in 1996. The provision for income taxes consists of provisions for federal taxes only. Louisiana does not have an income tax for corporations. Capital Adequacy The FDIC's regulations require that a state-chartered bank, such as the Bank of Louisiana maintain a minimum Tier 1 risk based capital ratio of 4% and a risk based capital ratio of 8%. The Bank, however, is required to maintain a Tier 1 leverage ratio of 7.00% as part of a Memorandum of Understanding signed in 1996 which replaces the Memorandum of Understanding dated November 8, 1994. See "Supervision and Regulation Enforcement Action". The Bank's "primary capital ratio" is the sum of shareholders' equity divided by total assets. The Bank's capital to asset ratio was 5.23% at December 31, 1998, 6.84% at December 31, 1997, and 8.60% at December 31, 1996. The Bank intends on increasing capital by implementing an extensive marketing program and to obtain additional proprietary accounts which will maximize the highest yield possible and thereby improve earnings. Shareholders' Equity Shareholders' equity decreased $95,000 or 1.79% to $5,185,000 at December 31, 1998 from $5,280,000 at December 31, 1997. This decrease in shareholders' equity since December 31, 1997, was attributable to the net loss of $228,000 and an increase in accumulated other comprehensive income of $134,000. Shareholders' equity decreased $1,971,000 or 27.19% to $5,280,000 at December 31, 1997 from $7,251,000 at December 31, 1996. This decrease in shareholders' equity since December 31, 1996, was attributable to $1,975,000 in losses. Shareholders' equity decreased $117,000 or 1.59% to $7,251,000 at December 31, 1996, from $7,368,000 at December 31, 1995, because of fluctuations in shareholders' equity. Realized shareholder's equity (shareholders' equity excluding net unrealized holdings gains or losses on investment securities classified as available-for-sale) at December 31, 1996 was $7,256,000. The $117,000 decrease in shareholders' equity since December 31, 1995, was attributable to $94,000 in losses and a $23,000 decline in net unrealized value of investment securities, net of tax, classified as available-for-sale. The leverage ratio (Tier 1 capital to total assets) at December 31, 1998, was 6.89% compared to 6.84% at December 31, 1997, which are compared to the minimum capital requirement of 4.00%. The leverage ratio (Tier 1 capital to total assets) at December 31, 1997, was 6.84% compared to 8.60% at December 31, 1996, which are compared to the minimum capital requirement of 4.00%. At December 31, 1998, based on the Federal Reserve Board's guidelines, the Company's Tier 1 risk based capital ratio was 10.27, and the risk based capital ratio was 11.54%. At December 31, 1997, based on the Federal Reserve Board's guidelines, the Company's Tier 1 risk based capital ratio was 10.61, and the risk based capital ratio was 11.88%. At December 31, 1996, based on the Federal Reserve Board's guidelines, the Company's Tier 1 capital ratio was 12.32%, and the total risk-based capital ratio was 13.58%. The ratio of average shareholders' equity to average assets was 5.45% in 1998, 5.66% in 1997, and 7.06% in 1996. Item 14 Exhibits, Financial Statement Schedules, and Reports on Form 8-K
BOL BANCSHARES, INC. & SUBSIDIARY CONSOLIDATED BALANCE SHEETS ASSETS December 31, 1998 1997 Cash and Due from Banks Non-Interest Bearing Balances and Cash $6,692,995 $7,734,005 Federal Funds Sold 26,950,000 21,150,000 Investment Securities Securities Held-to-Maturity (Fair Value of $4,514,374 in 1998 and $9,510,313 in 1997) 4,497,942 9,478,718 Securities Available-for-Sale, at Fair Value 291,400 1,088,663 Loans - Less Allowance for Loan Losses of $1,800,000 in 1998 and 1997, and Unearned Discounts of $215,256 in 1998 and $1,847 in 1997 59,741,831 55,819,114 Property, Equipment and Leasehold Improvements (Net of Depreciation and Amortization) 2,505,740 2,697,583 Other Real Estate 1,356,893 1,473,160 Other Assets 1,311,319 1,658,277 Deferred Taxes 454,129 618,684 Income Taxes Receivable - 876,831 Letters of Credit 84,052 113,532 $103,886,301 $102,708,567
The accompanying notes are an integral part of these financial statements.
LIABILITIES AND STOCKHOLDERS' EQUITY December 31, 1998 1997 LIABILITIES Deposits Non-Interest Bearing $36,826,094 $35,124,103 Interest Bearing 57,757,018 8,816,434 Notes Payable 2,272,387 2,283,508 Other Liabilities 1,035,457 412,886 Accrued Litigation Settlement 200,000 150,000 Letters of Credit Outstanding 84,052 113,532 Accrued Interest 525,969 528,269 Total Liabilities 98,700,977 97,428,732 STOCKHOLDERS' EQUITY Preferred Stock - Par Value $1 2,302,811 Shares Issued and Outstanding in 2,302,811 2,302,811 1998 and 1997 Common Stock - Par Value $1 179,145 Shares Issued and Outstanding in 1998 179,145 179,145 and 1997 Accumulated Other Comprehensive Income 133,187 (569) Capital in Excess of Par - Retired Stock 14,888 14,888 Retained Earnings 2,555,293 2,783,560 Total Stockholders' Equity 5,185,324 5,279,835 $103,886,301 $102,708,567
The accompanying notes are an integral part of these financial statements.
BOL BANCSHARES, INC. & SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (LOSS) For the Years Ended December 31, 1998 1997 1996 INTEREST INCOME $9,813,783 $10,297,883 $12,326,563 INTEREST EXPENSE 1,986,681 2,108,592 2,193,255 Net Interest Income 7,827,102 8,189,291 10,133,308 PROVISION FOR LOAN LOSSES 1,085,625 3,630,273 2,039,779 Net Interest Income After Provision for Loan Losses 6,741,477 4,559,018 8,093,529 OTHER INCOME Service Charges on Deposit Accounts 1,318,419 1,398,552 1,481,144 Other Non-Interest Income 930,992 1,133,436 958,796 Reversal of Litigation - 390,000 - Settlement Gain on Sale of Securities - 15,860 - Total Other Income 2,249,411 2,937,848 2,439,940 OTHER EXPENSES Salaries and Employee 3,669,949 3,974,048 4,189,606 Benefits Occupancy Expense 1,956,172 1,937,416 1,848,469 Loss on Litigation 50,000 150,000 - Other Non-Interest Expense 3,447,384 4,581,491 4,609,011 Total Other Expenses 9,123,505 10,642,955 10,647,086 INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) (132,617) (3,146,089) (113,617) INCOME TAX EXPENSE (BENEFIT) 95,650 (1,170,803) (20,028) NET INCOME (LOSS) ($228,267)($1,975,286) ($93,589) EARNINGS (LOSS) PER SHARE OF COMMON STOCK $(1.27) ($11.03) ($0.52)
The accompanying notes are an integral part of these financial statements. BOL BANCSHARES, INC. & SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the Years Ended December 31, 1998 1997 1996 NET INCOME (LOSS) $(228,267) ($1,975,286) ($93,589) OTHER COMPREHENSIVE INCOME, NET OF TAX: Unrealized Holding Gains (Losses)on Investment Securities Available-for-Sale Arising During the Period 133,806 3,919 (21,960) Less: Reclassification Adjustment for Gains Included in Net Income (50) (81) (1,483) OTHER COMPREHENSIVE INCOME 133,756 3,838 (23,443) COMPREHENSIVE INCOME (LOSS) $(94,511) ($1,971,448) ($117,032)
The accompanying notes are an integral part of these financial statements. BOL BANCSHARES, INC. & SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Accumul- Capital ated In Other Excess of Preferred Common Comprehen Par Retained -sive Income Retired Earnings Total Stock Stock Stock BALANCE - December $2,302,811 $179,145 $19,036 $14,888 $4,852,435 $7,368,315 31, 1995 Other Comprehensive Income, Net of Applicable Deferred Income Taxes - - (23,443) - - (23,443) Net (Loss) for the - - - - (93,589) (93,589) Year 1996 BALANCE - December 2,302,811 179,145 (4,407) 14,888 4,758,846 7,251,283 31, 1996 Other ComprehensiveIncome, Net of Applicable Deferred Income Taxes - - 3,838 - - 3,838 Net (Loss) for the - - - - (1,975,286) (1,975,286) Year 1997 BALANCE - December 2,302,811 179,145 (569) 14,888 2,783,560 5,279,835 31, 1997 Other Comprehensive Income, Net of Applicable Deferred Income Taxes - - 133,756 - - 133,756 Net Loss for the - - - - (228,267) (228,267) Year 1998 BALANCE - December $2,302,811 $179,145 $133,187 $14,888 $2,555,293 $5,185,324 31, 1998
The accompanying notes are an integral part of these financial statements. BOL BANCSHARES, INC. & SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE F INCOME TAXES The components of the provision for income tax expense (benefit) are:
1998 1997 1996 Current $- $(876,831) $(59,302) Reduction for Excess Provision in Prior Year: - (11,060) (16,151) Deferred 95,650 (282,912) 55,425 Total Provision for Income Tax $95,650 $(1,170,803) $(20,028)
A reconciliation of income tax at the statutory rate to income tax expense at the Company's effective rate is as follows:
1998 1997 1996 Computed Tax at the Expected Statutory Rate $(45,090) $(1,069,670) $(38,630) Reduction for Excess Provision in Prior Year - (11,060) (16,151) Tax Exempt Income - (98,835) - Other Adjustments 139,584 8,762 34,753 Income Tax Expense (Benefit) for Operations $ 95,650 $(1,170,803) $(20,028) 1998 1997 1996 Income Taxes Currently Receivable: Current Income Tax Expense (Benefit) from Operations $ - $(876,831) $(75,453) Other Adjustments - - 16,151 Prepaid Tax - - (187,728) Income Tax Receivable $- $(876,831) $(247,030)
Certain income and expense items are accounted for differently for financial reporting purposes than for income tax purposes. Provisions for deferred taxes are made in recognition of these temporary differences and are measured using the income tax rates applicable to the period when the differences are expected to be realized or settled. There were net deferred tax assets of $454,129 and $618,684 as of December 31, 1998 and December 31, 1997, respectively. The major temporary differences which created deferred tax assets and liabilities are as follows:
1998 1997 Unrealized Gain on Securities FASB 115 Adjustment $(44,110) $ 29,441 Allowance for Loan Loss 19,573 119,303 Accumulated Depreciation (114,456) (123,455) Other Real Estate 30,034 169,619 Deferred Gain on sale of Other Real Estate 166,852 - Accruals not Deductible Until Paid 53,086 126,435 Net Operating Loss and Tax Credit Carryforward 262,145 237,573 Contributions Carryforward 13,005 8,768 Accrued Litigation Settlement 68,000 51,000 $454,129 $ 618,684
The net operating loss carryforwards of $72,269 and $578,692 expire in the years 2013 and 2012, respectively. BOL BANCSHARES, INC. & SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE T CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY BOL BANCSHARES, INC. CONDENSED BALANCE SHEETS
December 31, 1998 1997 ASSETS Due from Banks $599,241 $586,622 Due from Subsidiary 118,738 - Securities Available-for-Sale, at Fair Value 271,400 - Other Assets 31,959 921,438 Investment in Bank of Louisiana 6,905,656 7,168,026 $7,926,994 $8,676,086 LIABILITIES AND STOCKHOLDERS' EQUITY Notes Payable $2,272,386 $2,283,508 Accrued Expenses 10,000 - Due to Subsidiary - 750,130 Accrued Interest 390,673 362,613 Shareholders' Equity 5,253,935 5,279,835 $7,926,994 $8,676,086
BOL BANCSHARES, INC. & SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE T CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY (Continued) BOL BANCSHARES, INC. STATEMENTS OF INCOME (LOSS)
December 31, 1998 1997 1996 INCOME Dividend Income - Bank of $387,500 $0 $0 Louisiana Interest Income 18,223 19,753 26,273 Miscellaneous Income - 3,327 19 405,723 23,080 26,292 EXPENSES Interest 211,837 219,357 223,515 Other Expenses 35,218 23,951 15,427 247,055 243,308 238,942 INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED EARNINGS (LOSS) OF SUBSIDIARY 158,668 (220,228) (212,650) Equity in Undistributed Earnings (Loss) of Subsidiary (262,939) (1,829,936) 46,760 INCOME (LOSS) BEFORE INCOME TAX BENEFIT (104,271) (2,050,164) (165,890) INCOME TAX BENEFIT 77,803 74,878 72,301 NET INCOME (LOSS) $(26,468) ($1,975,286) ($93,589)
BANK OF LOUISIANA SUPPLEMENTARY INFORMATION SCHEDULE I BALANCE SHEETS UNCONSOLIDATED
ASSETS December 31, 1998 1997 Cash and Due from Banks Non Interest Bearing Balances and Cash $6,692,995 $7,734,005 Federal Funds Sold 26,950,000 21,150,000 Investment Securities Securities Held-to-Maturity (Fair Value of $4,514,374 in 1998 and $9,510,313 in 1997) 4,497,942 9,478,718 Securities Available-for-Sale, at Fair 20,000 1,088,663 Value Loans: Less Allowance for Loan Losses of $1,800,000 in 1998 and 1997 and Unearned Discount of $215,256 in 1998 and $1,847 in 1997 59,741,831 55,819,114 Property, Equipment and Leasehold Improvements (Net of Depreciation and Amortization) 2,505,740 2,697,583 Other Real Estate 1,356,893 1,473,160 Other Assets 1,279,358 1,613,670 Deferred Taxes 522,741 618,684 Due from Parent - 801,953 Letters of Credit 84,052 113,532 Total Assets $103,651,552 $102,589,082 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits Non-Interest Bearing $36,943,605 $35,128,504 Interest Bearing 58,238,748 59,398,655 Other Liabilities 1,025,457 412,886 Letters of Credit Outstanding 84,052 113,532 Due to Parent 118,738 51,823 Accrued Litigation Settlement 200,000 150,000 Accrued Interest 135,296 165,656 Total Liabilities 96,745,896 95,421,056 STOCKHOLDERS' EQUITY Common Stock - 143,000 Shares Issued and Outstanding 1,430,000 1,430,000 Accumulated Other Comprehensive Income - (569) Surplus 4,616,796 4,616,796 Retained Earnings 858,860 1,121,799 Total Stockholders' Equity 6,905,656 7,168,026 Total Liabilities and Stockholders' Equity $103,651,352 $102,589,082
See independent auditor's report on supplementary information. BANK OF LOUISIANA SUPPLEMENTARY INFORMATION SCHEDULE II STATEMENTS OF INCOME (LOSS) UNCONSOLIDATED
For The Years Ended December 31, 1998 1997 1996 INTEREST INCOME $9,813,783 $10,297,883 $12,326,563 INTEREST EXPENSE 1,793,067 1,908,988 1,996,013 Net Interest Income 8,020,716 8,388,895 10,330,550 PROVISION FOR LOAN LOSSES 1,085,625 3,630,273 2,039,779 Net Interest Income After Provision For Loan Losses 6,936,373 4,758,622 8,290,771 OTHER INCOME Service Charges on Deposit Accounts 1,318,419 1,398,552 1,481,144 Other Non-Interest Income 930,992 1,130,109 958,777 Reversal of Litigation Settlement - 390,000 - Gain on Securities 201,799 15,860 - 2,451,210 2,934,521 2,439,921 OTHER EXPENSES Salaries and Employee Benefits 3,669,949 3,974,048 4,189,606 Occupancy Expense 1,956,172 1,937,416 1,848,469 Equity in Loss of Unconsolidated Subsidiary - - - Loss on Litigation 50,000 150,000 - Other Non-Interest Expense 3,412,166 4,557,540 4,593,584 9,088,287 10,619,004 10,631,659 INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) 298,014 (2,925,861) 99,033 INCOME TAX EXPENSE (BENEFIT) 173,453 (1,095,925) 52,273 NET INCOME (LOSS) $124,561 ($1,829,936) $46,760 EARNINGS (LOSS) PER SHARE OF COMMON STOCK $ .87 ($12.80) $0.33
See independent auditor's report on supplementary information. BANK OF LOUISIANA SUPPLEMENTARY INFORMATION SCHEDULE III STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY UNCONSOLIDATED
Accumulated Other Common Comprehensive Retained Stock Income Surplus Earnings Total BALANCE - December $1,430,000 $19,036 $4,616,796 $2,904,975 $8,970,807 31, 1995 Net Income for the Year - - - 46,760 46,760 1996 Other Comprehensive Income, Net of Applicable Deferred Income Taxes - (23,443) - - (23,443) BALANCE - December $1,430,000 ($4,407) $4,616,796 $2,951,735 $8,994,124 31, 1996 Net Loss for the Year - - - (1,829,936) (1,829,936) 1997 Other Comprehensive Income, Net of Applicable Deferred Income Taxes - 3,838 - - 3,838 BALANCE - December $1,430,000 ($569) $4,616,796 $1,121,799 $7,168,026 31, 1997 Net Income for the Year - - - 124,561 124,561 1998 Cash dividends declared for the Year ($2.71 per - - - (387,500) (387,500) share) Other Comprehensive Income, Net of Applicable Deferred Income Taxes - 569 - - 569 BALANCE - December $1,430,000 $0 $4,616,796 $ 858,860 $6,905,656 31, 1998
See independent auditor's report on supplementary information. -----END PRIVACY-ENHANCED MESSAGE-----