<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-Q
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________to_____________
Commission file number 1-14364
Acadiana Bancshares, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Louisiana 72-1317124
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
107 West Vermilion Street
Lafayette, Louisiana 70502
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(Address of Principal Executive Offices) (Zip Code)
(318) 232-4631
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(Registrant's Telephone Number, Including Area Code)
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 No x
--- ---
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 practicable date:
As of March 31, 1996 and as of the date herof, LBA Savings
Bank, the Registrant's to-be wholly-owned subsidiary, had not yet
completed its mutual-to-stock conversion and reorganization into a
holding company format. Accordingly, no shares of the Registrant's
common stock are issued and outstanding as of the date hereof. The
financial information presented herin is for LBA Savings Bank.
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ACADIANA BANCSHARES, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
PART 1. FINANCIAL INFORMATION
- - - ------ ---------------------
ITEM 1. FINANCIAL STATEMENTS
Consolidated Statements of Financial Condition (As of 3
March 31, 1996 and December 31, 1995)
Consolidated Statements of Operations (For the three 4
months ended March 31, 1996 and 1995)
Consolidated Statements of Equity (For the three months 5
ended March 31, 1996 and 1995)
Consolidated Statements of Cash Flows (For the three 6
months ended March 31, 1996 and 1995)
Notes to Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 10
CONDITION AND RESULTS OF OPERATIONS.
PART II. OTHER INFORMATION
- - - ------- -----------------
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K. 15
Signatures
</TABLE>
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LBA SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands)
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
-------------- -----------------
<S> <C> <C>
ASSETS:
Cash and cash equivalents:
Cash and amounts due from banks . . . . . . . . . . . $ 853 $ 802
Interest bearing deposits . . . . . . . . . . . . . . 11,161 15,679
------ ------
Total . . . . . . . . . . . . . . . . . . . . . . 12,014 16,481
Investment securities:
Available for sale . . . . . . . . . . . . . . . . . 8,467 4,030
Mortgage-backed securities:
Held to maturity (market value of $13,470
and $13,539, respectively) . . . . . . . . . . . . . 13,405 13,492
Available for sale . . . . . . . . . . . . . . . . . 24,626 26,022
Loans receivable, net . . . . . . . . . . . . . . . . . 163,717 157,362
Premises and equipment, net . . . . . . . . . . . . . . 1,990 1,799
Real estate owned, net . . . . . . . . . . . . . . . . 743 845
Federal home loan bank stock, at cost . . . . . . . . . 1,702 1,677
Accrued interest receivable . . . . . . . . . . . . . 1,221 1,187
Other assets . . . . . . . . . . . . . . . . . . . . . 1,984 2,353
------- -------
Total assets . . . . . . . . . . . . . . . . . . . $229,869 $225,248
======= =======
LIABILITIES:
Deposits . . . . . . . . . . . . . . . . . . . . . . . $210,700 $206,343
Advances from federal home loan bank . . . . . . . . . 250 250
Accrued interest payable on deposits . . . . . . . . . 45 31
Advance payments by borrowers for taxes and
insurance . . . . . . . . . . . . . . . . . . . . . . 425 414
Accrued other liabilities . . . . . . . . . . . . . . . 777 513
------- -------
Total liabilities . . . . . . . . . . . . . . . . . $212,197 $207,551
------- -------
EQUITY:
Retained earnings-substantially restricted . . . . . . $ 17,281 $ 16,996
Unrealized gain (loss) on securities available
for sale, net of deferred taxes . . . . . . . . . . . 391 701
------- -------
Total equity . . . . . . . . . . . . . . . . . . . 17,672 17,697
------- -------
Total liabilities and equity . . . . . . . . . . $229,869 $225,248
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
3
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LBA SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands)
<TABLE>
<CAPTION>
For the
Three Months Ended
March 31,
1996 1995
---- ----
<S> <C> <C>
INTEREST INCOME:
Loans . . . . . . . . . . . . . . . . . . . . . . . . $ 3,347 $ 3,171
Mortgage-backed securities . . . . . . . . . . . . . 693 600
Investment securities . . . . . . . . . . . . . . . . 97 311
Interest-bearing deposits . . . . . . . . . . . . . . 173 127
------- -------
Total interest income . . . . . . . . . . . . . 4,310 4,209
------- -------
INTEREST EXPENSE:
Deposits . . . . . . . . . . . . . . . . . . . . . . $ 2,645 $ 2,339
Advances from FHLB . . . . . . . . . . . . . . . . . 5 4
------- -------
Total interest expense . . . . . . . . . . . . 2,650 2,343
------- -------
Net interest income . . . . . . . . . . . . . . . . . . $ 1,660 $ 1,866
Provision for loan losses . . . . . . . . . . . . . . . 45 -
------- -------
Net interest income after provision for loan losses . . 1,615 1,866
------- -----
NON-INTEREST INCOME:
Loan fees and service charges . . . . . . . . . . . . $ 47 $ 24
Servicing fees on loans sold . . . . . . . . . . . . 16 19
Deposit fees and service charges . . . . . . . . . . 134 152
Gain on sale of fixed rate loans . . . . . . . . . . 10 -
Other income . . . . . . . . . . . . . . . . . . . . 47 22
------- -------
Total non-interest income . . . . . . . . . . . $ 254 $ 217
------- -------
NON-INTEREST EXPENSE:
Salaries and employee benefits . . . . . . . . . . . $ 662 $ 607
Occupancy . . . . . . . . . . . . . . . . . . . . . . 59 50
Depreciation . . . . . . . . . . . . . . . . . . . . 67 72
Net costs of real estate owned . . . . . . . . . . . 48 61
SAIF deposit insurance premium . . . . . . . . . . . 117 118
Advertising expense . . . . . . . . . . . . . . . . . 41 36
Consulting expenses . . . . . . . . . . . . . . . . . 72 27
Other expenses . . . . . . . . . . . . . . . . . . . 386 308
------- -------
Total non-interest expense . . . . . . . . . . $ 1,452 $ 1,279
------- -------
Income before income taxes . . . . . . . . . . . . . . 417 804
Income tax expense . . . . . . . . . . . . . . . . . . 132 273
------- -------
Net income . . . . . . . . . . . . . . . . . . . . . . $ 285 $ 531
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
4
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LBA SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EQUITY
(In Thousands)
<TABLE>
<CAPTION>
Unrealized Gain
Retained (Loss) on Securities Total
Earnings Available for Sale Equity
---------------------------------------------------
<S> <C> <C> <C>
BALANCE, DECEMBER 31, 1994 . . . . . $ 17,962 $ (117) $ 17,845
Net Income (Loss) . . . . . . . . . . 531 531
Change in Unrealized Gain (Loss) on
Securities Available for Sale, Net of
Deferred Taxes . . . . . . . . . . . 31 31
--------- --------- ---------
BALANCE, MARCH 31, 1995 . . . . . . . $ 18,493 $ (86) $ 18,407
========= ========= =========
BALANCE, DECEMBER 31, 1995 . . . . . $ 16,996 $ 701 $ 17,697
Net Income (Loss) . . . . . . . . . . 285 285
Change in Unrealized Gain (Loss) on
Securities Available for Sale, Net of
Deferred Taxes . . . . . . . . . . . (310) (310)
--------- --------- ---------
BALANCE, MARCH 31, 1996 . . . . . . $ 17,281 $ 391 $ 17,672
========= ========= =========
</TABLE>
See Notes to Consolidated Financial Statements
5
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LBA SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
----------------------------
March 31, March 31,
1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 285 $ 531
Adjustments of Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation 67 71
Provision for Deferred Income Taxes 0 (2)
Provision for Losses on Loans 45 0
Provision for Losses on Real Estate Owned and Other Property Acquired 47 7
Gain on Sale of Real Estate Owned and Other Property Acquired (13) 0
Loss on Sale of Real Estate Owned and Other Property Acquired 0 7
Gain on Sale of Fixed Rate Loans (10) 0
Loss on Sale of Premises and Equipment 15 0
Gain on Sale of Other Equity Securities (26) 0
Accretion of Discounts, Net of Premium Amortization On Securities (14) (13)
Amortization of Deferred Revenues (26) (28)
Amortization of Unearned Income on Loans (5) (22)
FHLB Stock Dividend Received (25) (24)
Changes in Assets and Liabilities:
Decrease (Increase) in Accrued Interest Receivable (34) (108)
Decrease (Increase) in Other Assets 433 (404)
Increase (Decrease) in Accounts Payable and Accrued Expenses 278 109
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,017 124
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Maturities of Securities 0 1,250
Purchases of Securities Available for Sale (4,500) 0
Proceeds form Sale of Fixed Rate Loans 1,494 57
Net Advances on Loans (7,841) (657)
Proceeds from Sale of Premises and Equipment 3 0
Purchase of Premises and Equipment (276) (147)
Proceeds form Sale of Real Estate Owned and Other Property Acquired 58 255
Capital Costs Incurred on Real Estate Owned and Other Property Acquired (2) (11)
Principal Collections on Mortgage-Backed Securities 1,090 749
Proceeds form Redemptions and Sales of Other Equity Securities 122 0
--------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (9,852) 1,496
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Change in Demand, NOW and Savings Deposits 2,645 2,535
Net Change in Time Deposits 1,712 (1,409)
Net Change in Mortgage Escrow Funds 11 15
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NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 4,368 1,141
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,467) 2,761
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 16,481 10,384
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $12,014 $13,145
========= =========
SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITIES:
Acquisition of Real Estate in Settlement of Loans $ - $ -
Unrealized Appreciation (Loss) on Securities $ (469) $ 15
Loans Made to Facilitate Sales of Real Estate Owned $ - $ 188
SUPPLEMENTAL DISCLOSURES:
Cash Paid For:
Interest on Deposits and Borrowings $ 2,637 $ 2,343
Income Taxes $ - $ -
</TABLE>
6
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LBA SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF FINANCIAL STATEMENT PRESENTATION
Acadiana Bancshares, Inc. (the "Company") was incorporated under Louisiana law
in February 1996 by LBA Savings Bank (the "Bank") in connection with the
conversion of the Bank from a Louisiana chartered mutual savings bank to a
Louisiana chartered stock savings bank and the issuance of the Bank's common
stock to the Company and the offer and sale of the Company's common stock by
the Company to certain depositors of the Bank and the Bank's Employee Stock
Ownership Plan (the "ESOP") (the "Conversion"). Upon consummation of the
Conversion, the Company will become a holding company for the Bank. For
purposes of this Form 10-Q, the financial statements of the Company have been
omitted because the Company has not yet issued any stock, has no assets and no
liabilities and has not yet conducted any business other than of an
organizational nature. Alternatively, the unaudited consolidated financial
statements and the Management's Discussion and Analysis of Financial Condition
and Results of Operations presented herein are for the Bank, which will become
the subsidiary of the Company upon consummation of the Conversion. No pro
forma effect has been given to the sale of the Company's common stock in the
Conversion.
The accompanying consolidated financial statements were prepared in accordance
with instructions to Form 10-Q, and therefore, do not include information or
footnotes necessary for a complete presentation of financial position, results
of operations and cash flows in conformity with generally accepted accounting
principles. However, all normal, recurring adjustments which, in the opinion
of management, are necessary for a fair presentation of the financial
statements, have been included. These financial statements should be read in
conjunction with the audited financial statements and the notes thereto for the
period ended December 31, 1995 contained in the Company's Prospectus dated May
14, 1996. The results for the three months ended March 31, 1996 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1996.
BUSINESS
The Company's principal business is conducted through the Bank which conducts
business from its main office and three branch offices, all located in
Lafayette, Louisiana, and one loan production office in Eunice, Louisiana. The
Bank holds deposits from the general public and provides residential real
estate loans and other loans to the Lafayette, Louisiana area. The Bank's
deposits are insured by the Savings Association Insurance Fund ("SAIF") to the
maximum extent permitted by law. The Bank is subject to competition from other
financial institutions and other companies which provide financial services.
The Bank is subject to the examination and comprehensive regulation by the
Office of Financial Institutions of the State of Louisiana ("OFI"), which is
the Bank's chartering
7
<PAGE> 8
authority and primary regulator. The Bank is also subject to regulation by the
Federal Deposit Insurance Corporation ("FDIC"), as the administrator of the
SAIF. The Bank is a member of the Federal Home Loan Bank of Dallas ("FHLB").
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of periods ending prior to December 31,
1995 include the accounts of the Bank's wholly-owned subsidiary which was
liquidated in December 1995. All significant intercompany transactions have
been eliminated in consolidation. Additionally, certain reclassifications may
have been made in order to conform with current year's presentation. The
accompanying consolidated financial statements have been prepared on the
accrual basis.
COMMON STOCK ACQUIRED BY THE EMPLOYEE STOCK OWNERSHIP PLAN
The Company has established the ESOP for employees of the Company and the Bank
to become effective upon the Conversion. Full-time employees of the Company
and the Bank who have been credited with at least 1,000 hours of service during
a 12-month period and who have attained age 21 are eligible to participate in
the ESOP. The Company will make scheduled discretionary cash contributions to
the ESOP sufficient to amortize the principal and interest on the loan, which
matures in 2006. The Company will account for its ESOP in accordance with
Statement of Position 93-6, "Employer's Accounting for Employee Stock Ownership
Plans". As shares are committed to be released to participants, the Company
will report compensation expense equal to the average market price of the
shares during the period.
8
<PAGE> 9
(2) LOANS RECEIVABLE
Loans receivable (in thousands) at March 31, 1996 and December 31, 1995,
consisted of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Mortgage Loans:
Single Family Residential $129,950 $127,597
Single Family Construction 8,279 7,304
Multi-family Residential 1,175 1,202
Commercial Real Estate 13,501 13,370
------------ ------------
Total Mortgage loans 152,905 149,473
Commercial Business Loans 3,514 1,349
Consumer Loans:
Savings 2,652 2,632
Indirect Auto 7,740 5,472
Other 5,544 5,597
------------ ------------
Total Loans 172,355 164,523
Less:
Allowance for Loan Losses (2,362) (2,329)
Unearned Discounts/Deferred Premiums 131 (296)
Net Deferred Loan Origination Fees
(491) (244)
Loans in Process (5,916) (4,292)
------------ ------------
Net Loans 163,717 157,362
============ ============
</TABLE>
(3) EARNINGS PER SHARE
Earnings per share for the three months ended March 31, 1996 is not applicable,
as the Bank's conversion from mutual-to-stock form and reorganization into a
holding company format was not completed as of March 31, 1996.
9
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
CHANGES IN FINANCIAL CONDITION
At March 31, 1996, the total assets of the Bank amounted to $229.9
million, an increase of $4.6 million or 2.1% from December 31, 1995.
The primary reason for the $4.6 million increase in total assets
during the first three months of 1996 was an increase in loans receivable, net,
of $6.4 million or 4%, to $163.7 million at March 31, 1996, compared to $157.3
million at December 31, 1995. This increase in loans receivable, net, was due
to an increased demand for residential loans in the local area.
During the three months ended March 31, 1996, investment securities
increased by $4.4 million or 110.1%, to $8.5 million at March 31, 1996 compared
to $4 million at December 31, 1995. Meanwhile, cash and cash equivalents
decreased by $4.5 million or 27.1% to $12 million compared to $16.5 million at
December 31, 1995.
Deposits increased by $4.4 million or 2.1%, from $206.3 million at
December 31, 1995 to $210.7 million at March 31, 1996.
The Bank's equity was $17.7 million at March 31, 1996 and was
relatively unchanged from December 31, 1995 as a result of the Bank's net
income during the first quarter of 1996 being partially offset by a $309,000
decrease in the Bank's unrealized gain on securities available for sale, net of
deferred taxes.
The Bank's non-performing assets amounted to 0.71% of total assets at
March 31, 1996 compared to 0.70% at December 31, 1995. In addition, the ratio
of the Bank's allowance for loan losses to non-performing loans and troubled
debt restructurings was 151.25% at March 31, 1996 compared to 143.94% at
December 31, 1995.
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1996
AND 1995.
The Bank reported net income of $285,000 and $531,000 for the three
months ended March 31, 1996 and 1995 respectively. The $246,000 or 46.3%
decrease in net income in the three months ended March 31, 1996 compared to the
three months ended March 31, 1995 was due primarily to a $207,000 decrease in
net interest income, a $45,000 increase in the provision for loan losses, and a
$173,000 increase in noninterest expenses which were partially offset by a
$141,000 decrease in the provision for income taxes.
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Average Balances, Net Interest Income, and Yields Earned and Rates Paid.
The following table sets forth, for the periods indicated interest income of
the Bank from interest-earning assets and the resultant average yields; (ii)
the total dollar amount of interest ex rate; (iii) net interest income; (iv)
interest rate spread; and (v) net interest margin. Non-accrual loans have been
included in the on non-accrual loans has been included for purposes of
determining interest income only to the extent that cash payments are actually
received.
<TABLE>
<CAPTION>
Three Months Ended March 31,
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1996 1995
------------------------------------ ----------------------------------
Yield/Cost at Average Average
March 31, Average Yield/ Average Yield/
1996 Balance Interest Cost Balance Interest Cost
------------- ---------- ---------- --------- ---------- ---------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable:
Real estate mortgage loans 8.04% $143,131 $2,988 8.35% $137,783 $2,858 8.30%
Commercial business loans 9.28% 1,550 32 8.26% 1,476 32 8.67%
Consumer and other loans 9.14% 15,009 327 8.71% 11,939 281 9.41%
---------- ---------- --------- ---------- ----------
Total loans 8.17% 159,690 3,347 8.38% 151,198 3,171 8.39%
Mortgage-backed securities 7.36% 39,088 693 7.09% 33,024 600 7.27%
Investment securities (1) 6.92% 6,080 97 6.38% 20,612 312 6.05%
Other earning assets 5.22% 14,048 174 4.95% 9,440 127 5.38%
---------- ---------- ---------- ----------
Total interest-earning assets 7.83% 218,906 4,311 7.88% 214,274 4,210 7.86%
---------- ----------
Noninterest-earning assets 6,770 7,916
---------- ----------
Total Assets $225,676 $222,190
========== ==========
Interest-bearing liabilities:
Deposits:
Demand deposits 1.64% $16,440 74 1.80% $ 16,884 72 1.71%
Passbook savings deposits 2.53% 27,666 172 2.49% 32,029 198 2.47%
Certificates of deposit 6.20% 158,835 2,399 6.04% 151,862 2,069 5.45%
---------- ---------- --------- ---------- ---------- --------
Total deposits 5.24% 202,941 2,645 5.21% 200,775 2,339 4.66%
Advance from FHLB 8.70% 250 5 8.00% 250 5 8.00%
---------- ---------- --------- ---------- ---------- --------
Total interest-bearing liabilities 5.24% 203,191 2,650 5.22% 201,025 2,344 4.66%
---------- ----------
Noninterest-bearing demand deposits 2,684 1,806
Other noninterest-bearing liabilities 1,571 1,486
---------- ----------
Total liabilities 207,446 204,317
----------
Equity 18,230 17,873
---------- ----------
Total liabilities and equity $225,676 $222,190
========== ==========
Net interest-earning assets $ 15,715 $13,249
========== ==========
Net interest income/interest rate spread 2.59% $1,661 2.66% $1,866 3.20%
============= ========== ========= ========== ========
Net interest margin 3.04% 3.48%
========= ========
Ratio of average interest-earning assets
to average interest-bearing liabilities 107.73% 106.59%
========== ==========
</TABLE>
(1)Includes FHLB Stock.
11
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NET INTEREST INCOME. Net interest income amounted to $1.6 million
during the three months ended March 31, 1996, a $207,000, or 11.0%, decrease
from the same period in 1995. A $101,000 increase in interest income during
the first quarter of 1996 compared to the first quarter of 1995 was more than
offset by a $307,000 increase in interest expense. The increase in interest
income was due to a $4.6 million increase in the average balance of total
interest-earnings assets during the three months ended March 31, 1996 compared
to the same period in 1995. The increase in interest expense was due to a 55
basis point increase in the average rate paid on the Bank's deposits together
with a $2.2 million increase in the average balance of deposits during the
first quarter of 1996 compared to the first quarter of 1995. The Bank's
interest rate spread was 2.66% for the three months ended March 31, 1996
compared to 3.20% for the same period in 1995 while its net interest margin was
3.04% during the first quarter of 1996 compared to 3.48% during the first
quarter of 1995. The Bank's ratio of average interest-earning assets to
average interest-bearing liabilities was 107.73% for the three months ended
March 31, 1996 compared to 106.59% for the three months ended March 31, 1995.
PROVISION FOR LOAN LOSSES. The Bank's provision for loan losses was
$45,000 during the three months ended March 31, 1996 compared to no provision
during the first quarter of 1995. The Bank recorded such provision in the 1996
period to adjust the Bank's allowance for loan losses to a level deemed
appropriate by management based upon assessment of the volume and type of
lending presently being conducted by the Bank, industry standards and economic
conditions in the Bank's market area.
NON-INTEREST INCOME. Non-interest income increased by $37,000, or
17.1%, to $254,000 during the three months ended March 31, 1996 compared to
$217,000 for the same period in 1995. Such increase was due primarily to an
increase in other income and a gain on sale of fixed rate loans.
NON-INTEREST EXPENSE. Non-interest expenses increased by $173,000, or
13.5%, to $1.5 million during the three months ended March 31, 1996 compared to
$1.3 million during the same period in 1995. The primary reasons for the
increases in the 1996 period were increased fees and expenses related to the
Bank's indirect automobile lending program, which did not exist during the 1995
period, increased costs of salaries and employee benefits and increased
consulting costs due primarily to consulting services relating to a
reorganization of the Bank's operations which was recently undertaken. The
reorganization, implemented in April 1996, was undertaken by the Bank in an
effort to improve its operating efficiencies and resulted in the termination of
certain employees and reassignment of duties for certain others at the Bank.
Such reorganization is not expected to have a material effect on the Bank's
results of operations.
INCOME TAX EXPENSE. Income tax expense amounted to $132,000 for the
three months ended March 31, 1996 compared to $273,000 for the same period in
1995. Such decrease in income tax expense in the 1996 period reflects the
decrease in income before taxes.
12
<PAGE> 13
LIQUIDITY AND CAPITAL RESOURCES
The Bank's liquidity, represented by cash and cash equivalents, is a
product of its operating, investing and financing activities. The Bank's
primary sources of funds are deposits, borrowings, amortization, prepayments
and maturities of outstanding loans and mortgage-backed securities, sales of
loans, maturities of investment securities and other short-term investments and
funds provided from operations. While scheduled payments from the amortization
of loans and mortgage-backed securities and maturing investment securities and
short-term investments are relatively predictable sources of funds, deposit
flows and loan prepayments are greatly influenced by general interest rates,
economic conditions and competition. In addition, the Bank invests excess
funds in overnight deposits and other short-term interest-earning assets which
provide liquidity to meet lending requirements. The Bank has been able to
generate sufficient cash through its deposits as well as borrowings (primarily
consisting of advances from the FHLB of Dallas). At March 31, 1996, the Bank
had $250,000 of outstanding advances from the FHLB of Dallas, and no other
borrowings.
Liquidity management is both a daily and long-term function of
business management. Excess liquidity is generally invested in short-term
investments such as overnight deposits. On a longer-term basis, the Bank
maintains a strategy of investing in various lending products. The Bank uses
its sources of funds primarily to meet its ongoing commitments, to pay maturing
savings certificates and savings withdrawals, fund loan commitments and
maintain a portfolio of mortgage-backed and investment securities. At March
31, 1996, the total approved loan commitments outstanding amounted to $3.77
million and the undisbursed loans in process totalled $5.92 million. At the
same date, commitments under unused lines of credit and standby letters of
credit amounted to $405,000 and $138,000 respectively. Certificates of deposit
scheduled to mature in one year or less at March 31, 1996 totalled $79.0
million. Management believes that a significant portion of maturing deposits
will remain with the Bank. The Bank anticipates that even with interest rates
at lower levels than have been experienced in recent years, which has caused a
disintermediation of funds, it will continue to have sufficient funds to meet
its current commitments.
Federally-insured state-chartered banks are required to maintain
minimum levels of regulatory capital. Under current FDIC regulations, insured
state-chartered banks generally must maintain (i) a ratio of Tier 1 leverage
capital to total assets of at least 3.0% (4.0% to 5.0% for all but the most
highly rated banks) and (ii) a ratio of Tier 1 capital risk weighted assets of
at least 4.0% and a ratio of total capital risk weighted assets of at least
8.0%. At March 31, 1996, the Bank was in compliance with applicable regulatory
capital requirements.
13
<PAGE> 14
The following reflects the Bank's actual levels of regulatory capital
and applicable regulatory capital requirements at March 31, 1996.
<TABLE>
<CAPTION>
Required Actual Excess
----------------- ------------------- ------------------
Percent Amount Percent Amount Percent Amount
------- ------ ------- ------ ------- ------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Tier 1 leverage capital ratios 4.00% $9,078 7.61 % $17,280 3.61 % $ 8,202
Risk-based capital ratios
Tier 1 4.00 4,742 14.57 % 17,280 10.57 % 12,538
Total 8.00 9,485 15.83 % 18,773 7.83 % 9,288
</TABLE>
The Company, as a separately incorporated holding company, will have no
significant operations other than serving as sole stockholder of the Bank. On
an unconsolidated basis, the Company initially shall have no paid employees.
The Company's assets will consist of its investment in the Bank, the Company's
loan to the Bank's ESOP and 50% of the net proceeds retained from the
Conversion, and its sources of income will consist primarily of earnings from
the investment of such funds as well as any dividends from the Bank. The only
expenses expected to be incurred initially by the Company will relate to its
reporting obligations under the Securities Exchange Act of 1934, as amended
("Exchange Act"), and related expenses as a publicly traded company. The
Company will be directly reimbursed by the Bank for all such expenses. Upon
consummation of the Conversion, management believes that the Company will have
adequate liquidity available to respond to liquidity demands.
14
<PAGE> 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security-Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
a) Not applicable.
b) No Form 8-K reports were filed during the quarter.
15
<PAGE> 16
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.
ACADIANA BANCSHARES, INC.
Date: June 25, 1996 By: /s/GERALD G. REAUX, JR.
Gerald G. Reaux, Jr., President
and Chief Executive Officer
Date: June 25, 1996 By: /s/EMILE E. SOULIER, III
Emile E. Soulier, III, Vice-President
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 853
<INT-BEARING-DEPOSITS> 11,161
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 33,093
<INVESTMENTS-CARRYING> 13,405
<INVESTMENTS-MARKET> 13,470
<LOANS> 166,081
<ALLOWANCE> 2,364
<TOTAL-ASSETS> 229,869
<DEPOSITS> 210,700
<SHORT-TERM> 0
<LIABILITIES-OTHER> 777
<LONG-TERM> 250
0
0
<COMMON> 0
<OTHER-SE> 17,672
<TOTAL-LIABILITIES-AND-EQUITY> 229,869
<INTEREST-LOAN> 3,347
<INTEREST-INVEST> 97
<INTEREST-OTHER> 866
<INTEREST-TOTAL> 4,310
<INTEREST-DEPOSIT> 2,645
<INTEREST-EXPENSE> 2,650
<INTEREST-INCOME-NET> 1,660
<LOAN-LOSSES> 45
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,452
<INCOME-PRETAX> 417
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 285
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 7.88
<LOANS-NON> 879
<LOANS-PAST> 0
<LOANS-TROUBLED> 684
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,329
<CHARGE-OFFS> 53
<RECOVERIES> 43
<ALLOWANCE-CLOSE> 2,364
<ALLOWANCE-DOMESTIC> 426
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,938
</TABLE>
