10-Q 1 d07922e10vq.txt FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended June 30, 2003 Commission File Number 0-11928 AMERICAN BANCORP, INC. -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) LOUISIANA 72-0951347 ------------------------------- ------------------------------- (State or other jurisdiction of (I R S Employer I. D. Number) incorporation or organization) 321 EAST LANDRY STREET, OPELOUSAS, LA 70570 --------------------------------------------- --------------------------------- (Address of principal executive office) (Zip Code) (337) 948-3056 -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) NOT APPLICABLE -------------------------------------------------------------------------------- (Former name, address, fiscal year, if changed since last report) 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 periods 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 [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Common stock, $5 Par Value----115,987 shares as of July 31, 2003 AMERICAN BANCORP, INC. (PARENT COMPANY ONLY) BALANCE SHEETS (In Thousands)

~~Sept.~~June 30, ~~2002~~2003 Dec. 31, ~~2001~~2002 -------------- ------------- ASSETS (Unaudited) (Note 1) Cash on deposit with subsidiary $ 1226 $ 2450 Investment in subsidiary 1314,~~758~~082 1213,~~235~~577 ~~Dividends receivable 0 0~~ Due from subsidiary 9671 6714 --------~~-----~~ --------~~-----~~ TOTAL ASSETS $ 1314,~~866~~179 $ 1213,~~326~~641 ========~~=====~~ ========~~=====~~ LIABILITIES Accrued income ~~taxes~~tax payable $ 9066 $ 619 Other liabilities 0 0 --------~~-----~~ --------~~-----~~ TOTAL LIABILITIES $ 9066 $ 619 --------~~-----~~ --------~~-----~~ SHAREHOLDERS' EQUITY Common stock, $5 par value; authorized 10,000,000 shares; issued 120,000 shares; ~~116~~115,~~183~~987 and 116,~~589~~283 shares outstanding, respectively $ 600 $ 600 Surplus 2,150 2,150 Retained earnings 10,~~406~~868 910,~~345~~343 Treasury stock, 34,~~817~~013 and 3,~~411~~717 shares at cost, respectively (~~245~~263) (~~213~~245) Net unrealized gain (loss) on securities available for sale, net of tax ~~865~~758 ~~383~~784 --------~~-----~~ --------~~-----~~ TOTAL SHAREHOLDERS' EQUITY $ 1314,~~776~~113 $ 1213,~~265~~632 --------~~-----~~ --------~~-----~~ TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 1314,~~866~~179 $ 1213,~~326~~641 ========~~=====~~ ========~~=====~~

See Notes to Consolidated Financial Statements. AMERICAN BANCORP, INC. CONSOLIDATED BALANCE SHEETS (In Thousands)

~~Sept.~~June 30, ~~2002~~2003 Dec. 31, ~~2001~~2002 -------------- ------------- ASSETS (Unaudited) (Note 1) Cash and due from banks $ 56,~~111~~266 $ 56,~~321~~974 Federal funds sold 69,~~425~~250 810,~~925~~300 --------~~-----~~ --------~~-----~~ Total cash and cash equivalents $ 1115,~~536~~516 $ 1417,~~246~~274 Interest bearing deposits with banks 0 990 Securities held to maturity 21,~~106~~601 2,~~306~~104 Securities available for sale 3637,~~258~~214 3537,~~049~~721 Loans - net of allowance for loan losses 3938,~~664~~361 3739,~~146~~931 Bank premises and equipment 1,~~656~~695 1,~~771~~737 Other real estate 0 0 Accrued interest receivable ~~552~~466 ~~583~~570 Other assets ~~551~~537 ~~390~~382 --------~~-----~~ --------~~-----~~ TOTAL ASSETS $ 9295,~~323~~390 $ 9199,~~590~~719 ========~~=====~~ ========~~=====~~ LIABILITIES Deposits: Non-interest bearing demand deposits $ 2731,~~614~~182 $ 2729,~~780~~462 Interest bearing deposits: NOW accounts 911,~~756~~181 1316,~~370~~889 Money market accounts 3,~~225~~244 23,~~651~~006 Savings 11,~~261~~669 1011,~~626~~277 Time deposits $100,000 or more 8,~~223~~414 78,~~311~~122 Other time deposits 1714,~~047~~618 16,~~950~~022 --------~~-----~~ --------~~-----~~ Total deposits $ 7780,~~126~~308 $ 7884,~~688~~778 Accrued interest payable 7958 ~~131~~75 Other liabilities 911 1,~~342~~234 ~~506~~ --------~~-----~~ --------~~-----~~ TOTAL LIABILITIES $ 7881,~~547~~277 $ 7986,~~325~~087 --------~~-----~~ --------~~-----~~ SHAREHOLDERS' EQUITY Common ~~Stock~~stock, $5 par value; authorized 10,000,000 shares; issued 120,000 shares; ~~116~~115,~~183~~987 and 116,~~589~~283 shares outstanding, respectively $ 600 $ 600 Surplus 2,150 2,150 Retained earnings 10,~~406~~868 910,~~345~~343 Treasury stock, 34,~~817~~013 and 3,~~411~~717 shares at cost, respectively (~~245~~263) (~~213~~245) Unrealized gain (loss) on securities ~~Available~~available for sale, net of tax ~~865~~758 ~~383~~784 --------~~-----~~ --------~~-----~~ TOTAL SHAREHOLDERS' EQUITY $ 1314,~~776~~113 $ 1213,~~265~~632 --------~~-----~~ --------~~-----~~ TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 9295,~~323~~390 $ 9199,~~590~~719 ========~~=====~~ ========~~=====~~

See Notes to Consolidated Financial Statements. AMERICAN BANCORP, INC. (PARENT COMPANY ONLY) INCOME STATEMENT (Unaudited) (In Thousands)

Three Months Ended ~~Nine~~Six Months Ended ~~September~~June 30, ~~September~~June 30, ---------------------------- ----------------~~-----------~~ 2003 2002 ~~2001~~2003 2002 ~~2001~~ -----~~------~~ ----~~-------~~ -----~~------~~ ----~~-------~~ INCOME FROM SUBSIDIARY Dividends from bank subsidiary $ 0 $ 030 $ 300 $ 5230 OPERATING EXPENSES Directors fees 3 3 96 96 Other expenses 0 0 10 10 -----~~------~~ ----~~-------~~ -----~~------~~ ----~~-------~~ TOTAL EXPENSES 3 3 106 106 -----~~------~~ ----~~-------~~ -----~~------~~ ----~~-------~~ Earnings before income tax and equity in undistributed earnings of subsidiary (3) 27 (36) 2024 42 Provision for income taxes 0 0 0 0 -----~~------~~ ----~~-------~~ -----~~------~~ ----~~-------~~ Earnings before equity in undistributed earnings of subsidiary (3) 27 (36) 2024 42 Equity in undistributed earnings of subsidiary ~~372~~251 ~~335~~338 ~~1,041~~531 ~~829~~668 -----~~------~~ ----~~-------~~ -----~~------~~ ----~~-------~~ Net ~~income~~Income $ ~~369~~248 $365 ~~332~~ $ ~~1,061~~525 $692 ~~871~~ =====~~======~~ ====~~=======~~ =====~~======~~ ====~~=======~~

See Notes to Consolidated Financial Statements. AMERICAN BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In Thousands Except for Per Share Data)

Three Months Ended ~~Nine~~Six Months Ended ~~September~~June 30, ~~September~~June 30, --------------------~~-----~~ --------------------~~-----~~ 2003 2002 ~~2001~~2003 2002 ~~2001~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ INTEREST INCOME: Interest and fees on loans $ ~~773~~724 $ ~~803~~741 $ 21,~~245~~446 $ 21,~~313~~472 Interest on investment securities: Taxable ~~347~~223 ~~381~~414 ~~1,136~~512 ~~1,156~~789 Tax-exempt ~~129~~116 ~~114~~126 ~~375~~238 ~~325~~246 Other interest 3438 4320 8967 ~~192~~55 ------~~-----~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ TOTAL INTEREST INCOME 1,~~283~~101 1,~~341~~301 32,~~845~~263 32,~~986~~562 ------~~-----~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ INTEREST EXPENSE: Interest on deposits 183 239 ~~394~~382 ~~758~~519 ~~1,196~~ Interest on short-term borrowings 0 0 0 0 ------~~-----~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ TOTAL INTEREST EXPENSE 183 239 ~~394~~382 ~~758~~519 ~~1,196~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ NET INTEREST INCOME 918 1,~~044~~062 ~~947 3~~1,~~087~~881 2,~~790~~043 Provision for possible loan losses 1110 10 3221 3121 ------~~-----~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ Net interest income after provision for possible loan losses 908 1,~~033~~052 ~~937 3~~1,~~055~~860 2,~~759~~022 ------~~-----~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ NON-INTEREST INCOME: Service charges on deposit accounts ~~141~~131 ~~140~~132 ~~407~~264 ~~407~~266 Investment securities gains (losses) 0 0 0 0 Other 2336 1527 ~~101~~71 6478 ------~~-----~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ TOTAL NON-INTEREST INCOME ~~164~~167 ~~155~~159 ~~508~~335 ~~471~~344 ------~~-----~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ NON-INTEREST EXPENSE: Salaries and employee benefits ~~386~~379 ~~324~~365 ~~1,109~~766 ~~1,049~~723 Net occupancy expense ~~149~~147 ~~150~~141 ~~429~~292 ~~463~~280 Net cost of operation of O.R.E.O 0 0 0 0 Other ~~167~~238 ~~171~~211 ~~596~~466 ~~549~~429 ------~~-----~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ TOTAL NON-INTEREST EXPENSE ~~702~~764 ~~645~~717 21,~~134~~524 21,~~061~~432 ------~~-----~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ INCOME BEFORE INCOME TAXES ~~495~~311 ~~447~~494 ~~1,429~~671 ~~1,169~~934 Provision for income taxes ~~126~~63 ~~115~~129 ~~368~~146 ~~298~~242 ------~~-----~~ ------~~-----~~ ------~~-----~~ ------~~-----~~ NET INCOME $ ~~369~~248 $ ~~332~~365 $ ~~1,061~~525 $ ~~871~~692 ======~~=====~~ ======~~=====~~ ======~~=====~~ ======~~=====~~ Net income per share of common stock $ 32.1713 $ 23.8414 $ 94.1252 $ 75.4395 ======~~=====~~ ======~~=====~~ ======~~=====~~ ======~~=====~~

See Notes to Consolidated Financial Statements. AMERICAN BANCORP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY For the Six Month Periods Ended June 30, 2003 & 2002 (Unaudited) (In Thousands)

ACCUMULATED OTHER ~~STOCK~~COMMON RETAINED COMPREHENSIVE TREASURY COMPREHENSIVE ~~AMOUNT~~STOCK SURPLUS EARNINGS INCOME STOCK INCOME TOTAL ------- ------- -------- ------------- --------- ------------- --------~~----~~ Balance December 31, ~~2000~~2001 $ 600 $ 2,150 $ 89,~~442~~345 $ 19383 $ (~~135~~213) $ 0 $ 1112,~~076~~265 Comprehensive income: Net income (loss) -- -- ~~871~~692 -- -- ~~871~~692 ~~871~~692 Other comprehensive income, net of tax: Change in unrealized gains (losses) on securities available for sale -- -- -- ~~604~~265 -- ~~604~~265 ~~604~~265 --------~~----~~ Total comprehensive income -- -- -- -- -- $ ~~1,475~~957 ========~~====~~ Purchase of treasury stock -- -- -- -- (5124) (5124) Dividends paid -- -- 0 -- -- 0 -- --~~---~~ ----~~---~~ -------- ------- ----- -----~~----~~ --------~~----~~ Balance, ~~September~~June 30, ~~2001~~2002 $ 600 $ 2,150 $ 910,~~313~~037 $ ~~623~~648 $ (~~186~~237) $ 1213,~~500~~198 ====~~===~~ ======= ======== =====~~=======~~ =====~~====~~ ========~~====~~ Balance December 31, ~~2001~~2002 $ 600 $ 2,150 $ 910,~~345~~343 $ ~~383~~784 $ (~~213~~$245) $ 0 $ 1213,~~265~~632 Comprehensive income: Net income (loss) -- -- ~~1,061~~525 -- -- ~~1,061~~525 ~~1,061~~525 Other comprehensive income, net of tax: Change in unrealized gains (losses) on securities available for sale -- -- -- ~~482~~(26) -- ~~482~~(26) ~~482~~(26) --------~~----~~ Total comprehensive income -- -- -- -- -- $ ~~1,543~~499 ========~~====~~ Purchase of treasury stock -- -- -- -- (3218) (3218) Dividends paid -- -- -- -- -- -- ----- ------- -------- -----~~-------~~ -----~~----~~ --------~~----~~ Balance, ~~September~~June 30, ~~2002~~2003 $ 600 $ 2,150 $ 10,~~406~~868 $ ~~865~~758 $ (~~245~~263) $ 1314,~~776~~113 ====~~===~~ ======= ======== =====~~=======~~ =====~~====~~ ========~~====~~

See Notes to Consolidated Financial Statements. AMERICAN BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands)

~~Nine~~Six Months Ended ~~September~~June 30, -------------------------~~------~~ 2003 2002 ~~2001~~ ---------~~---~~ ---------~~-----~~ OPERATING ACTIVITIES Net income $ ~~1,061~~525 $ ~~871~~692 Adjustments to reconcile net income to net cash provided by operating activities: Discount accretion, net of premium amortization on investment securities (~~194~~80) (~~119~~124) Depreciation ~~124~~of ~~130~~property and equipment 86 82 Amortization of computer software 3626 023 Provision for loan loss 3121 3121 (Gain) loss on disposal of assets 0 0 (Increase) decrease in assets: Other real estate owned 0 0 Accrued interest receivable 31104 95(25) Other assets (5455) ~~130~~15 Increase (decrease) in liabilities: Accrued interest payable (5117) (945) Other liabilities ~~587~~(294) ~~584~~184 --------~~----~~ --------~~----~~ Net cash provided by operating activities $ ~~1,571~~316 $ ~~1,713~~823 --------~~----~~ --------~~----~~ INVESTING ACTIVITIES (Increase) decrease in interest bearing deposits with banks $ 99-- $ ~~199~~99 Proceeds from sales & maturities of securities available for sale ~~securities 14~~13,~~814~~898 127,~~646~~738 Proceeds from sales & maturities of securities held to maturity ~~securities~~500 1,800 ~~2,700~~ Purchases of securities available for sale ~~securities~~ (1513,~~095~~348) (1511,~~831~~129) Purchases of securities held to maturity ~~securities~~0 (1,~~603~~303) (~~511) (~~Increase) decrease in loans (21,549) (41,~~602~~238) Purchases of property & equipment (~~152~~164) (~~446~~126) ~~Proceeds from sale of property & equipment 0 0~~ Other 0(7) 0(4) --------~~----~~ --------~~----~~ Net cash provided by (used in) investing activities $ (2,~~686)~~428 $ (54,~~845~~163) --------~~----~~ --------~~----~~ FINANCING ACTIVITIES Increase (decrease) in demand deposits, transaction accounts and savings $ (23,~~572~~372) $ (42,~~091~~858) Increase (decrease) in time deposits (1,~~010~~113) ~~3,039~~55 Dividends paid 0 0 Purchase of treasury stock (3317) (5124) --------~~----~~ --------~~----~~ Net cash provided by (used in) financing activities $ (14,~~595~~502) $ (12,~~103~~827) --------~~----~~ --------~~----~~ Increase (decrease) in cash and cash equivalents $ (21,~~710~~758) $ (56,~~235~~167) Cash and cash equivalents at beginning of year 17,274 14,246 ~~11,676~~ --------~~----~~ --------~~----~~ Cash and cash equivalents at end of period $ 1115,~~536~~516 $ 68,~~441~~079 ========~~====~~ ========~~====~~ SUPPLEMENTAL DISCLOSURES: Cash payments for: Interest expense $ ~~810~~399 $ ~~1,205~~564 ========~~====~~ ========~~====~~ Income taxes $ ~~364~~117 $ ~~130~~217 ========~~====~~ ========~~====~~

See Notes to Consolidated Financial Statements. AMERICAN BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2003 NOTE 1 - A BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted principles of accounting for instructions to Form 10-Q and Article 10 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 2003 are not necessarily indicative of the results that may be expected for the year ended December 31, 2003. The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in American Bancorp, Inc.'s annual report on Form 10-K for the year ended December 31, 2002. NOTE 2 - IMPAIRED LOANS In accordance with Statement of Financial Accounting Standards (SFAS) No.114, interest payments received on impaired loans are applied to principal if there is doubt as to the collectibility of the principal; otherwise, these receipts are recorded as interest income. As it relates to in-substance foreclosures, SFAS No. 114 requires that a creditor continue to follow loan classification on the balance sheet unless the creditor receives physical possession of the collateral. The Company had no in-substance foreclosures in foreclosed assets to transfer to nonperforming loans and no related reserve for losses to transfer to the reserve for possible loan losses. NOTE 3 - RELATED PARTIES Directors, executive officers, and 10 % shareholders and their related interests had loans outstanding totaling $ 1,215,000 at June 30, 2003. NOTE 4- EARNINGS PER SHARE The earnings per share computations are based on weighted average number of shares outstanding during each quarter of 115,989 and 116,286 for the quarters ended June 30, 2003 and 2002, respectively and during each six month period of 116,034 and 116,403 for the six month periods ended June 30, 2003 and 2002, respectively. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's Discussion presents a review of the major factors and trends affecting the performance of the Company and its bank subsidiary and should be read in conjunction with the accompanying consolidated financial statements and notes. OVERVIEW The Company reported net income of $ 525,000 for the first six months of 2003 compared to $ 692,000 for the same period of 2002. On a per share basis, the net income was $ 4.52 for the first six months of 2003 compared to $ 5.95 for the same period of 2002. The Company recorded a provision for possible loan losses of $ 21,000 and $ 21,000 for the six months ended June 30, 2003 and 2002, respectively. Net interest income decreased 7.9% to $ 1,881,000 for the first six months of 2003 compared to $ 2,043,000 for the same period of 2002. Total assets were $ 95,390,000 at June 30, 2003, a decrease of $ 4,329,000 from December 31, 2002. Loans decreased by $ 1,570,000 or 3.9% from $ 39,931,000 at December 31, 2002 to $ 38,361,000 at June 30, 2003. Deposits decreased by $ 4,470,000 or 5.3% from $ 84,778,000 at December 31, 2002 to $ 80,308,000 at June 30, 2003. RESULTS OF OPERATIONS NET INTEREST INCOME. Net interest income for the six months ended June 30, 2003 totaled $ 1,881,000, a $ 162,000 decrease from the same period in 2002. The greatest contributing factors to this decrease were decreases in the yields on investment securities and loans, which were partially offset by decreases in the interest paid on interest bearing deposits and increases in the average balance of loans. The overall effect of volume and rate changes on net interest income during the six month period ended June 30, 2003 was unfavorable. PROVISION FOR POSSIBLE LOAN LOSSES. The Company recorded provisions for possible loan losses of $ 21,000 and $ 21,000 for the first six months of 2003 and 2002, respectively. As a percentage of outstanding loans, the allowance for possible loan losses was 1.7% and 1.5% at June 30, 2003 and December 31, 2002, respectively. The provision is determined by the level of net charge offs, the size of the loan portfolio, the level of nonperforming loans, anticipated economic conditions, and review of financial condition of specific customers. NONINTEREST INCOME. For the first six months of 2003 noninterest income decreased $ 9,000 or 2.6% compared to the same period of 2002. Other noninterest income decreased by $ 7,000 or 9.0% compared to the same period of 2002. Most of this decrease is the result of a decrease in income earned from mortgage applications for the first six months of 2003. There were no securities gains in the six month periods ended June 30, 2003 and 2002. NONINTEREST EXPENSE. For the first six months of 2003 noninterest expense increased $ 92,000 or 6.4% compared to the same period in 2002. Salaries and employee benefits, the largest component of noninterest expense, increased by $ 43,000 or 5.9% for the first six months of 2003 as compared to the same period in 2002. This increase was attributed mostly to increases in salaries and adjustments to accruals for deferred compensation. Net occupancy expense also increased by $ 12,000 or 4.3% for the first six months of 2003 as compared to the same period in 2002. INCOME TAXES. The Company recorded provisions for income taxes of $ 146,000 for the six month period ended June 30, 2003 as compared to $ 242,000 for the same period of 2002. FINANCIAL CONDITION LOANS. Loans were $ 38,361,000 at June 30, 2003; down by $ 1,570,000 or 3.9% from December 31, 2002. TABLE I - COMPOSITION OF LOAN PORTFOLIO (In thousands)

~~Sept.~~June 30, ~~2002~~2003 Dec. 31, ~~2001~~2002 -------------- ------------- Commercial, financial and agricultural loans $ 78,~~739~~306 $ 68,~~738~~288 Real estate construction loans 21,~~004~~363 1,~~690~~750 Real estate mortgage loans 2423,~~735~~660 2324,~~604~~906 Consumer loans 5,~~811~~680 5,~~719~~614 Industrial revenue bonds 0 0 -------~~-----~~ -------~~-----~~ TOTAL LOANS $ 4039,~~289~~009 $ 3740,~~751~~558 Allowance for possible loan losses ~~625~~648 ~~605~~627 Unearned income 0 0 -------~~-----~~ -------~~-----~~ $ 3938,~~664~~361 $ 3739,~~146~~931 =======~~=====~~ =======~~=====~~

SECURITIES HELD TO MATURITY. Securities held to maturity were $1,601,000 at June 30, 2003; which is down by $503,000 or 23.9% from December 31, 2002. SECURITIES AVAILABLE FOR SALE. Securities available for sale were $37,214,000 at June 30, 2003; which is down by $507,000 or 1.3% from December 31, 2002. COMPREHENSIVE INCOME. Total comprehensive income for the quarters ended June 30, 2003 and 2002 was $328,000 and $893,000, respectively. TABLE II - INVESTMENT SECURITIES (In thousands) A comparison of the book values and the estimated market values of investment securities is as follows:

~~Sept.~~June 30, ~~2002~~2003 ---------------------------------------------------~~------------~~ HELD- TO- MATURITY AVAILABLE- FOR- SALE ~~AMORT~~AMORTIZED MARKET ~~AMORT~~AMORTIZED MARKET COST VALUE COST VALUE ------------ ---------~~---~~ ------------ ------------ U.S. Treasury $ 21,~~106~~601 $ 21,~~151~~632 $ -- $ -- U.S. Government Agencies 0 0 1412,~~940~~878 1513,~~237~~031 Mortgaged-backed ~~securities~~ 0 0 710,~~786~~699 810,~~047~~861 State & Political Subdivisions 0 0 12,~~038~~304 1213,~~790~~138 Equity ~~securities~~ 0 0 184 184 ------~~------~~ ------~~------~~ -------~~-----~~ -------~~-----~~ TOTAL $ 21,~~106~~601 $ 21,~~151~~632 $ 3436,~~948~~065 $ 3637,~~258~~214 ======~~======~~ ======~~======~~ =======~~=====~~ =======~~=====~~

~~Dec.~~December 3031, ~~2001~~2002 ---------------------------------------------------~~------------~~ HELD- TO- MATURITY AVAILABLE- FOR- SALE ~~AMORT~~AMORTIZED MARKET ~~AMORT~~AMORTIZED MARKET COST VALUE COST VALUE ------------ ---------~~---~~ ------------ ------------ U.S. Treasury $ 2,~~306~~104 $ 2,~~354~~148 $ --0 $ --0 U.S. Government Agencies 0 0 1415,~~070~~937 1416,~~290~~199 Mortgaged-backed ~~securities~~ 0 0 8,~~992~~481 98,~~133~~724 State & Political Subdivisions 0 0 11,~~258~~930 1112,~~477~~614 Equity ~~securities~~ 0 0 ~~149~~184 ~~149~~184 ------~~------~~ ------~~------~~ -------~~-----~~ -------~~-----~~ TOTAL $ 2,~~306~~104 $ 2,~~354~~148 $ 3436,~~469~~532 $ 3537,~~049~~721 ======~~======~~ ======~~======~~ =======~~=====~~ =======~~=====~~

TABLE III - NONPERFORMING ASSETS Nonperforming assets include nonaccrual loans, loans which are contractually 90 days or more past due, restructured loans, and foreclosed assets. Restructured loans are loans which, due to a deteriorated financial condition of the borrower, have a below market yield. Interest payments received on nonperforming loans are applied to reduce principal if there is doubt as to the collectibility of the principal; otherwise, these receipts are recorded as interest income. Certain nonperforming loans that are current as to principal and interest payments are classified as nonperforming because there is a question concerning full collectibility of both principal and interest. Nonperforming assets totaled $3,000 at both June 30, 2003 and December 31, 2002. The composition of nonperforming assets is illustrated below:

~~Non-performing~~Nonperforming loans: ~~Sept.~~June 30, ~~2002~~2003 Dec. 31,~~2001~~2002 ~~(In thousands)~~ -------------- ------------- (In thousands) Loans on ~~non-accrual~~nonaccrual $ --3 $ 83 Restructured loans which are not on ~~non-accrual~~nonaccrual 0 240 ------~~-------~~ ------~~-------~~ Total ~~non-performing~~nonperforming loans 03 323 Other real estate and repossessed assets received in complete or partial satisfaction of loan ~~obligation~~obligations 0 0 ------~~-------~~ ------~~-------~~ TOTAL ~~NON-PERFORMING~~NONPERFORMING ASSETS $ --3 $ 323 ======~~=======~~ ======~~=======~~ Loans past due 90 days or more as to principal or interest, but which are not on ~~non-accrual~~nonaccrual $ 5042 $ 164 ======~~=======~~ ======~~=======~~

TABLE IV - ANALYSIS OF ALLOWANCE FOR LOAN LOSSES (In thousands)

~~Sept.~~June 30, ~~2002~~2003 Dec. 31,2002 ~~2001~~ -------------- ------------- Beginning balance $ ~~605~~627 $ ~~579~~605 Charge-offs: Commercial, financial and agricultural loans --0 ~~(3)~~0 Real estate - construction loans --0 --(4) Real estate - mortgage loans (31) --0 Installment loans to individuals (94) (1516) --------~~-----~~ --------~~-----~~ Total charge-offs (125) (1820) --------~~-----~~ --------~~-----~~ Recoveries: Commercial, financial and agricultural loans --0 --0 Real estate - construction loans --0 --0 Real estate - mortgage loans --0 --0 Installment loans to individuals --5 20 --------~~-----~~ --------~~-----~~ Total recoveries 5 0 2 --------~~-----~~ --------~~-----~~ Net (charge-offs) recoveries ~~(12)~~0 (1620) --------~~-----~~ --------~~-----~~ Provision charged against income 3221 42 --------~~-----~~ --------~~-----~~ Balance at end of period $ ~~625~~648 $ ~~605~~627 ========~~=====~~ ========~~=====~~ Ratio of net (charge-offs) recoveries during the period to average loans outstanding during the period (0.~~03)~~00% (-0.05)% ========~~=====~~ ========~~=====~~

The present level of the allowance for loan losses is considered adequate to absorb future potential loan losses. In making this determination, management considered asset quality, the level of net loan charge-offs, as well as current economic conditions and market trends. TABLE V - ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES (In thousands) The allowance for possible loan losses has been allocated according to the amounts deemed to be reasonably necessary to provide for the possibility of losses being incurred within the following categories of loans.

~~Sept.~~June 30, ~~2002~~2003 ~~Dec.~~December 31, ~~2001~~2002 ---------------------------~~---~~ --------------------------~~----~~ % OF LOANS % OF LOANS TO TOTAL TO TOTAL AMOUNT LOANS AMOUNT LOANS ------------ --------------- ------------ -------------- Commercial, financial and agricultural loans $ ~~134~~150 1921% $ ~~113~~156 1821% Real estate - construction loans 1211 53% 814 4% Real estate - mortgage loans ~~248~~254 61% ~~257~~249 6361% Consumer loans ~~231~~233 15% ~~227~~208 1514% Industrial revenue bonds 0 0% 0 0% --------~~----~~ --------~~----~~ $ ~~625~~648 100% $ ~~605~~627 100% ========~~====~~ ========~~====~~

DEPOSITS. As of June 30, 2003 total deposits have decreased by $4,470,000 or 5.3% from December 31, 2002. Noninterest bearing deposits increased by $1,720,000 or 5.8% from December 31, 2002 to June 30, 2003. Interest bearing deposits decreased by $6,190,000 or 11.2% from December 31, 2002 to June 30, 2003. CAPITAL. Shareholders' equity totaled $14,113,000 at June 30, 2003, compared to $13,632,000 at December 31, 2002. The increase is primarily the result of net income during the current period which was partially offset by an unrealized reduction in the market value of securities available for sale. Risk-based capital and leverage ratios for the Company and the bank subsidiary exceed the ratios required for the designation as a "well-capitalized" institution under regulatory guidelines. TABLE VI - CAPITAL RATIOS

------------- ------------- AMERICAN BANK & TRUST COMPANY ~~Sept.~~June 30, ~~2002~~2003 Dec. 31, ~~2001~~2002 ~~(Bank subsidiary)~~ -------------- ------------- (Bank subsidiary) Risk-based capital: Tier 1 risk-based capital ratio 2829.1526% 2726.1699% Total risk-based capital ratio 2930.4051% 28.4124% Leverage ratio 1413.0589% 1413.1478%

PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In the normal course of business, the bank becomes involved in legal proceedings. It is the opinion of management that the resulting liability, if any, for pending litigation is negligible. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer 32.1 Certification pursuant to 18 U.S.C. Section 1350 by the Company's Principal Executive Officer 32.2 Certification pursuant to 18 U.S.C. Section 1350 by the Company's Principal Financial Officer 32.3 Disclosure of approval by the Company's Audit Committee for the performance of nonaudit services by the Company's Independent Auditors 32.4 Disclosures on controls pursuant to 18 U.S.C. Section 1350 by the Company's Principal Executive Officer 32.5 Disclosures on controls pursuant to 18 U.S.C. Section 1350 by the Company's Principal Financial Officer (b) Reports on Form 8-K NONE 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 to sign on behalf of the registrant. AMERICAN BANCORP, INC. -------------------------- (Registrant) August 7, 2003 /s/ Salvador L. Diesi, Sr. -------------------------------- ------------------------------- DATE Salvador L. Diesi, Sr. Chairman of the Board/President August 7, 2003 /s/ Ronald J. Lashute -------------------------------- ------------------------------- DATE Ronald J. Lashute Secretary/Treasurer of the Board INDEX TO EXHIBITS

EXHIBIT NUMBER DESCRIPTION ------- ----------- 9931.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer 32.1 Certification pursuant to 18 U.S.C. Section 1350 by the Company's Principal Executive Officer 9932.2 Certification pursuant to 18 U.S.C. Section 1350 by the Company's Principal Financial Officer 9932.3 Disclosure of approval by the Company's Audit Committee for the performance of ~~non-audit~~nonaudit services by the Company's Independent Auditors ~~pursuant to U~~32.~~S.C. Section 1350 99.~~4 ~~Disclosure~~Disclosures on controls pursuant to 18 U.S.C. Section 1350 by the Company's Principal Executive Officer 9932.5 ~~Disclosure~~Disclosures on controls pursuant to 18 U.S.C. Section 1350 by the Company's Principal Financial Officer

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