<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------------------------
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 June 30, 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.
- - -------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Louisiana 72-1317124
- - --------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
107 West Vermilion Street
Lafayette, Louisiana 70502
- - --------------------------------- --------------------
(Address of Principal (Zip Code)
Executive Offices)
(318)232-4631
----------------------------------------------------
(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 August 5, 1996, 2,731,250 shares of the Registrant's common
stock were issued and outstanding. Of that total, 218,000 shares are
held by the Registrant's Employee Stock Ownership Plan, of which none
were committed to be released.
<PAGE> 2
ACADIANA BANCSHARES, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
- - ------ ---------------------
Item 1. Financial Statements
Consolidated Statements of Financial Condition 3
(As of June 30, 1996 and December 31, 1995)
Consolidated Statements of Operations (For the three 4
months and six months ended June 30, 1996 and 1995)
Consolidated Statements of Equity (For the six months 5
ended June 30, 1996 and 1995)
Consolidated Statements of Cash Flows (For the six 6
months ended June 30, 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 17
Item 2. Changes in Securities 17
Item 3. Defaults Upon Senior Securities 17
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 5. Other Information 17
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 18
</TABLE>
<PAGE> 3
LBA SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- ----------
<S> <C> <C>
ASSETS:
Cash and cash equivalents:
Cash and amounts due from banks $ 816 $ 802
Interest bearing deposits 38,530 15,679
---------- ----------
Total 39,346 16,481
Investment securities:
Available for sale 18,350 4,030
Mortgage-backed securities:
Held-to maturity (market value of $13,093
and $13,539, respectively) 13,289 13,492
Available for sale 23,107 26,022
Loans receivable, net 172,616 157,362
Premises and equipment, net 1,937 1,799
Real estate owned, net 422 845
Federal Home Loan Bank stock, at cost 1,727 1,677
Accrued interest receivable 1,405 1,187
Other assets 2,105 2,353
---------- ----------
Total assets $274,304 $225,248
========== ==========
LIABILITIES:
Deposits $211,965 $206,343
Advances from Federal Home Loan Bank 10,250 250
Accrued interest payable on deposits 43 31
Advance payments by borrowers for taxes
and insurance 410 414
Accrued other liabilities 722 513
Stock subscriptions 33,162 -
---------- ----------
Total liabilities $256,552 $207,551
---------- ----------
EQUITY:
Retained earnings $ 17,627 $ 16,996
Unrealized gain on securities
available for sale, net of deferred taxes 124 701
---------- ----------
Total equity $ 17,751 $ 17,697
---------- ----------
Total liabilities and equity $274,304 $225,248
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE> 4
LBA SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
---------------------- ---------------------
1996 1995 1996 1995
--------- -------- -------- --------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans $3,509 $3,188 $6,856 $6,359
Mortgage-backed securities 664 589 1,356 1,188
Investment securities 210 300 308 612
Interest-bearing deposits 75 169 248 296
--------- -------- -------- --------
Total interest income $4,458 $4,246 $8,768 $8,455
--------- -------- -------- --------
INTEREST EXPENSE:
Deposits $2,633 $2,504 5,278 $4,843
Advances from FHLB 66 5 72 9
--------- -------- -------- --------
Total interest expense 2,699 2,509 5,350 4,852
--------- -------- -------- --------
Net interest income 1,759 1,737 3,418 3,603
Provision for loan losses 45 - 90 -
--------- -------- -------- --------
Net interest income after provision
for loan losses 1,714 1,737 3,328 3,603
--------- -------- -------- --------
NON-INTEREST INCOME:
Loan fees and service charges $ 36 $ 32 $ 84 $ 56
Servicing fees on loans sold 14 17 30 36
Deposit fees and service charges 136 145 269 298
Gain (loss) on fixed rate loans (13) - (3) -
Other income 74 28 121 49
--------- -------- -------- --------
Total non-interest income $ 247 $ 222 $ 501 $ 439
--------- -------- -------- --------
Non-interest expense:
Salaries and employee benefits $ 623 $ 605 $1,286 $1,212
Occupancy 77 57 135 107
Depreciation 83 69 150 142
Net costs of real estate owned 33 (3) 82 58
SAIF deposit insurance premium 118 124 234 235
Advertising expense 65 64 106 100
Consulting expense 27 16 99 43
Other expenses 388 313 774 621
--------- -------- -------- --------
Total non-interest expense $1,414 $1,245 $2,866 $2,518
--------- -------- -------- --------
Income before income taxes $ 547 $ 714 $ 963 $1,524
Income tax expense 200 245 332 518
--------- -------- -------- --------
Net income $ 347 $ 469 $ 631 $1,006
========= ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE> 5
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 1,006 1,006
Change in unrealized loss on
Securities Available for Sale, Net
of Deferred Taxes 68 68
--------- -------- ---------
BALANCE, JUNE 30, 1995 $18,968 $(49) $18,919
========= ======== =========
BALANCE, DECEMBER 31, 1995 $16,996 $701 $17,697
Net income 631 631
Change in unrealized gain on
Securities Available for Sale, Net
of Deferred Taxes (577) (577)
--------- -------- ---------
BALANCE, JUNE 30, 1996 $17,627 $124 $17,751
========= ======== =========
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE> 6
LBA SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
For the Six Months Ended
--------------------------
June 30, June 30,
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 631 $ 1,006
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 149 141
Provision for deferred income taxes (29) (342)
Provision for losses on loans 90 -
Provision for losses on real estate owned and other property acquired 126 11
Gain on sale of real estate owned and other property acquired (61) -
Loss on sale of real estate owned and other property acquired - 8
Gain on sale of fixed rate loans (3) -
Loss on sale of premises and equipment 12 -
Gain on sale of other equity securities (26) (10)
Accretion of discounts, net of premium amortization on securities (25) (27)
Amortization of deferred revenues (68) (55)
Amortization of unearned income on loans (10) (22)
FHLB stock dividend received (50) (51)
Changes in assets and liabilities:
Decrease (increase) in accrued interest receivable (218) 42
Decrease (increase) in other assets 478 (562)
Increase (decrease) in accounts payable and accrued expenses 222 53
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,218 192
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from calls and maturities of securities - 11,500
Purchases of securities available for sale (14,500) -
Proceeds from sale of fixed rate loans 3,034 57
Net advances on loans (18,314) (1,153)
Proceeds from sale of premises and equipment 9 -
Purchases of premises and equipment (308) (162)
Proceeds from sale of real estate owned and other property acquired 393 324
Capital costs incurred on real estate owned and other property acquired (18) (14)
Principal collections on mortgage-backed securities 2,449 1,634
Proceeds from redemptions and sales of other equity securities 122 60
-------- --------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (27,133) 12,246
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in demand, NOW and savings deposits 5,368 (4,730)
Net change in time deposits 254 5,439
Net change in mortgage escrow funds (4) 48
Net change in short-term borrowings 10,000 -
Stock subscriptions received 33,162 -
-------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 48,780 757
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 22,865 13,195
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 16,481 10,384
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $39,346 $23,579
======== ========
SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITIES:
Acquisition of real estate in settlement of loans $ - $ -
Unrealized appreciation (loss) on securities $ (874) $ 103
Loans made to facilitate sales of real estate owned $ - $ 188
SUPPLEMENTAL DISCLOSURES:
Cash paid for:
Interest on deposits and borrowings $ 5,337 $ 4,850
Income taxes $ 321 $ 465
</TABLE>
6
<PAGE> 7
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 on July 15, 1996, the Company became the 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, as of June 30, 1996, had not yet issued
any stock, had no assets and no liabilities and had 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 became 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 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 six months ended June 30, 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.
7
<PAGE> 8
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 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 the 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 June 30, 1996 and December 31, 1995
consisted of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
--------------- ---------------
<S> <C> <C>
Mortgage Loans:
Single Family Residential $ 134,962 $ 127,597
Single Family Construction 11,998 7,304
Multi-family Residential 1,157 1,202
Commercial Real Estate 13,333 13,370
-------------- ---------------
Total Mortgage loans 161,450 149,473
Commercial Business Loans 5,095 1,349
Consumer Loans:
Savings 2,836 2,632
Indirect Auto 8,385 5,472
Other 5,876 5,597
-------------- ---------------
Total Loans 183,642 164,523
Less:
Allowance for Loan Losses (2,419) (2,329)
Unearned Discounts/Deferred Premiums 201 (296)
Net Deferred Loan Origination Fees (475) (244)
Loans in Process (8,333) (4,292)
-------------- ---------------
Net Loans 172,616 157,362
============== ===============
</TABLE>
(3) EARNINGS PER SHARE
Earnings per share for the three and six months ended June 30, 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 June 30,
1996.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
CHANGES IN FINANCIAL CONDITION
At June 30, 1996, the total assets of the Bank amounted to $274.3
million as compared to $225.2 million at December 31, 1995. This represents an
increase in total assets of $49.1 million, or 21.8%, $33.2 million of which was
due to stock subscriptions received as a result of the conversion offering of
Acadiana Bancshares, Inc.
During the six months ended June 30, 1996, cash and cash equivalents
increased $22.9 million or 138.7%, investment securities increased $14.3
million or 355.3%, and net loans receivable increased $15.3 million or 9.7%.
During the same period, advances from Federal Home Loan Bank increased $10
million, the funds of which were used to purchase investment securities.
Deposits increased $5.6 million, or 2.7%, to $212.0 million at June
30, 1996, as compared to $206.3 at December 31, 1995.
The Bank's equity was $17.8 million at June 30, 1996 and was
relatively unchanged from December 31, 1995 as a result of the Bank's net
income during the six months being partially offset by a $577,000 decrease in
the Bank's unrealized gain on securities available for sale, net of deferred
taxes.
The Bank's non-performing assets amounted to $1.3 million, or 0.47%,
of total assets at June 30, 1996 compared to $1.5 million, or 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 158.94% at
June 30, 1996 compared to 143.94% at December 31, 1995.
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1996
AND 1995.
The Bank reported net income of $347,000 and $469,000 for the three
months ended June 30, 1996 and 1995, respectively. The $122,000 or 26.0%
decrease in net income in the three months ended June 30, 1996 compared to the
three months ended June 30, 1995 was due primarily to a $169,000 increase in
non-interest expense and a $45,000 increase in the Bank's provision for loan
losses, which were partially offset by a $22,000 increase in net interest
income, a $25,000 increase in noninterest income and a $45,000 decrease in the
provision for income taxes.
10
<PAGE> 11
Average Balances, Net Interest Income, and Yields Earned and Rates
Paid. The following table sets forth, for the periods indicated,
information regarding (i) the dollar amount of interest income of the
Bank from interest-earning assets and the resultant average yields; (ii)
the total dollar amount of interest expense on interest-bearing
liabilities and the resultant rate; (iii) net interest income; (iv)
interest rate spread; and (v) net interest margin. Non-accrual loans
have been included in the appropriate average balance loan category, but
interest 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 June 30,
-------------------------------------------------------------------
1996 1995
Yield/ -------------------------------- ----------------------------------
Cost at Average Average
June 30, 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 7.96% $147,599 $3,073 8.33% $139,528 $2,914 8.35%
Commercial business loans 9.37% 3,363 75 8.92% 1,485 $ 34 9.16%
Consumer and other loans 9.23% 16,917 361 8.54% 11,199 $ 240 8.57%
--------- ------- --------- --------
Total loans 8.12% 167,879 $3,509 8.36% 152,212 $3,188 8.38%
Mortgage-backed securities 7.35% 37,311 664 7.12% 32,295 $ 589 7.30%
Investment securities (1) 7.04% 12,373 210 6.79% 19,548 $ 300 6.14%
Other earning assets 5.21% 5,084 75 5.90% 11,985 $ 169 5.64%
--------- ------- --------- --------
Total interest-earning assets 7.84% 222,647 $4,458 8.01% 216,040 $4,246 7.86%
Noninterest-earning assets 12,556 ------- 7,950 --------
--------- ---------
Total Assets $235,203 $223,990
========= =========
Interest-bearing liabilities:
Deposits:
Demand deposits 1.63% $ 16,585 75 1.81% $ 16,156 $ 71 1.76%
Passbook savings deposits 2.53% 28,755 180 2.50% 29,883 $ 187 2.50%
Certificates of deposit 6.18% 158,693 2,378 5.99% 155,031 $2,246 5.79%
--------- ------- --------- --------
Total deposits 5.18% 204,033 2,633 5.16% 201,070 $2,504 4.98%
Advance from FHLB 5.75% 4,551 66 5.80% 250 $ 5 8.00%
--------- ------- --------- --------
Total interest-bearing liabilities 5.20% 208,584 2,699 5.18% 201,320 $2,509 4.99%
Noninterest-bearing demand deposits 3,218 ------- 2,579 --------
Other noninterest-bearing liabilities 5,648 1,708
--------- ---------
Total liabilities 217,450 205,607
---------
Equity 17,753 18,383
--------- ---------
Total liabilities and equity $235,203 $223,990
========= =========
Net interest-earning assets $ 14,063 $ 14,720
========= =========
Net interest income/interest rate spread 2.64% $1,759 2.83% $1,737 2.88%
======= ======= ====== ======== ======
Net interest margin 3.16% 3.22%
====== ======
Ratio of average interest-earning assets
to average interest-bearing liabilities 106.74% 107.31%
======= ========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------------------------------------------------------
1996 1995
----------------------------------- ------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
--------- -------- -------- --------- -------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable:
Real estate mortgage loans $145,365 $6,061 8.34% $138,655 $5,772 8.33%
Commercial business loans 2,456 107 8.71% 1,481 66 8.91%
Consumer and other loans 15,963 688 8.62% 11,569 521 9.01%
--------- -------- --------- --------
Total loans 163,784 6,856 8.37% 151,705 6,359 8.38%
Mortgage-backed securities 38,200 1,356 7.10% 32,660 1,188 7.27%
Investment securities (1) 9,228 308 6.68% 20,098 612 6.09%
Other earning assets 9,566 248 5.19% 10,712 296 5.53%
--------- -------- --------- --------
Total interest-earning assets 220,778 8,768 7.94% 215,175 8,455 7.86%
Noninterest-earning assets 9,662 -------- 7,916 --------
--------- ---------
Total Assets $230,440 $223,091
======== =========
Interest-bearing liabilities:
Deposits:
Demand deposits $ 16,371 149 1.82% $ 16,274 143 1.76%
Passbook savings deposits 28,211 352 2.50% 30,956 385 2.49%
Certificates of deposit 158,764 4,777 6.02% 153,447 4,315 5.62%
--------- -------- --------- --------
Total deposits 203,346 5,278 5.19% 200,677 4,843 4.83%
Advance from FHLB 2,401 72 6.00% 250 9 7.20%
--------- -------- --------- --------
Total interest-bearing liabilities 205,747 5,350 5.20% 200,927 4,852 4.83%
-------- --------
Noninterest-bearing demand deposits 3,092 2,439
Other noninterest-bearing liabilities 3,610 1,597
--------- ---------
Total liabilities 212,449 204,963
---------
Equity 17,991 18,128
--------- ---------
Total liabilities and equity $230,440 $223,091
========= =========
Net interest-earning assets $ 15,031 $ 14,248
========= =========
Net interest income/interest rate spread $3,418 2.74% $3,603 3.03%
========= ======= ======== ======
Net interest margin 3.10% 3.35%
======= ======
Ratio of average interest-earning assets
to average interest-bearing liabilities 107.31% 107.09%
========= ========
</TABLE>
(1)Includes FHLB stock.
11
<PAGE> 12
NET INTEREST INCOME. Net interest income amounted to $1.8 million
during the three months ended June 30, 1996, a $22,000 or 1.3%, increase from
the same period in 1995. A $212,000 increase in interest income during the
second quarter of 1996 compared to the second quarter of 1995 was partially
offset by a $190,000 increase in interest expense. The increase in interest
income was due to a $6.6 million increase in the average balance of total
interest-earnings assets during the three months ended June 30, 1996 compared
to the same period in 1995. The increase in interest expense was primarily due
to a 18 basis point increase in the average rate paid on the Bank's deposits
together with a $3.0 million increase in the average balance of deposits during
the second quarter of 1996 compared to the second quarter of 1995. The Bank's
interest rate spread was 2.83% for the three months ended June 30, 1996
compared to 2.88% for the same period in 1995 while its net interest margin was
3.16% during the second quarter of 1996 compared to 3.22% during the second
quarter of 1995. The Bank's ratio of average interest-earning assets to
average interest-bearing liabilities was 106.74% for the three months ended
June 30, 1996 compared to 107.31% for the three months ended June 30, 1995.
For the six months ended June 30, 1996, net interest income decreased $185,000,
or 5.1%, to $3.4 million, compared to $3.6 million in the six months ended June
30, 1995. The decrease was due to a $498,000, or 10.3%, increase in interest
expense which was partially offset by a $313,000, or 3.7%, increase in interest
income. The increase in interest income was the result of $5.6 million, or
2.6%, increase in the average balance of interest-earning assets and a 8 basis
point increase in the yield earned thereon. The increase in interest expense
was the result of a $4.8 million, or 2.4%, increase in the average balance of
interest-bearing liabilities and a 37 basis point increase in the cost thereon.
The Bank's interest rate spread and net interest margin amounted to 2.74% and
3.10%, respectively, during the six months ended June 30, 1996 compared to
3.03% and 3.35%, respectively, for the comparable period in 1995.
INTEREST INCOME. The Bank's total interest income was $4.5 million
for the three months ended June 30, 1996, compared to $4.2 million for the
three months ended June 30, 1995. The reason for the $212,000, or 5.0%,
increase in interest income was a $321,000, or 10.1%, increase in interest
income from loans and a $75,000, or 12.7%, increase in interest income from
mortgage-backed securities, which were partially offset by a $90,000, or
30.0%, decrease in interest income from investment securities and a $94,000, or
55.6%, decrease in interest income from interest-bearing deposits. The
increase in interest income from loans was the result of a $15.7 million, or
10.3% increase in the average balance of loans, which was partially offset by a
2 basis point decrease in the average yield earned thereon. The increase in
the average balance of loans reflects the Bank's increased efforts to originate
new loans, particularly consumer and commercial business loans. The increase
in interest income on mortgage-backed securities was the result of a $5.0
million, or 15.5%, increase in the average balance of mortgage-backed
securities, which were partially offset by a 18 basis point decrease in the
yield earned thereon. The decrease in interest income from investment
securities was the result of a $7.2 million, or 36.7%, decrease in the average
balance of investment securities which was
12
<PAGE> 13
partially offset by a 65 basis point increase in the yield earned thereon. The
decrease in interest income on other earning assets, substantially all of which
are interest-bearing deposits at the Federal Home Loan Bank of Dallas
("FHLB"), was the result of a $6.9 million, or 57.6%, decrease in the average
balance of other earning assets, which were partially offset by a 26 basis
point increase in the yield earned thereon.
For the six months ended June 30, 1996, the Bank's total interest income was
$8.8 million, compared to $8.5 million for the six months ended June 30, 1995.
The reason for the $313,000, or 3.7%, increase in interest income was a
$497,000, or 7.8%, increase in interest income from loans and a $168,000, or
14.1%, increase in interest income from mortgage-backed securities, which were
partially offset by a $304,000, or 49.7%, decrease in interest income from
investment securities and a $47,000, or 15.9%, decrease in interest income from
interest-bearing deposits. The increase in interest income from loans was the
result of a $12.1 million, or 8.0%, increase in the average balance of loans,
with a decrease of only 1 basis point in the average yield earned thereon. The
increase in interest income from mortgage-backed securities was the result of a
$5.5 million, or 17.0%, increase in the average balance of mortgage-backed
securities, which was partially offset by a 17 basis point decrease in the
yield earned thereon. The decrease in interest income from investment
securities was the result of a $10.9 million, or 54.1%, decrease in the average
balance of investment securities, which was partially offset by a 59 basis
point increase in the yield earned thereon. The decrease in interest income on
other earning assets was the result of a $1.1 million, or 10.7%, decrease in
the average balance of other earning assets with a 34 basis point decrease in
the yield earned thereon.
INTEREST EXPENSE. The Bank's total interest expense was $2.7 million
during the three months ended June 30, 1996, compared to $2.5 million for the
three months ended June 30, 1995. The primary reason for the $190,000, or
7.6%, increase in interest expense was a $129,000, or 5.2%, increase in
interest expense paid on deposits, due to a $3.0 million, or 1.5%, increase in
the average balance of deposits together with a 18 basis point increase in the
average cost thereof.
For the six months ended June 30, 1996, the Bank's total interest expense was
$5.4 million, compared to $4.9 million for the six months ended June 30, 1995.
The primary reason for the $498,000, or 10.3%, increase in interest expense was
a $435,000, or 9.0%, increase in interest expense paid on deposits, due to a
$2.7 million increase in the average balance of deposits together with a 36
basis point increase in the average cost thereof.
During both the three month and six month periods ending June 30, 1996, the
increases in the average balance of deposits was due primarily to increased
balances of relatively higher paying certificates of deposits and reflects the
Bank's continued reliance on certificates of deposits as a source of funds.
PROVISION FOR LOAN LOSSES. The Bank's provision for loan losses was
$45,000 during the three months ended June 30, 1996 compared to no provision
during the second quarter of 1995. The Bank recorded such provision in the
1996 period to adjust the
13
<PAGE> 14
Bank's allowance for loan losses to a level deemed appropriate by management
based upon its assessment of, among other things, the volume and type of
lending presently being conducted by the Bank, industry standards and economic
conditions in the Bank's market area.
For the six months ended June 30, 1996, the Bank's provision for loan losses
was $90,000 compared to no provision for the six months ended June 30, 1995.
The increase was primarily due to a 1996 adjustment for the Bank's allowance
for loan losses, industry standards, and economic conditions in the Bank's
market area.
NON-INTEREST INCOME. Non-interest income increased by $25,000, or
11.3%, to $247,000 during the three months ended June 30,1996 compared to
$222,000 for the same period in 1995. Such increase was due primarily to an
increase in other income.
For the six month period ended June 30, 1996, noninterest income increased by
$62,000, or 14.1%, to $501,000, compared to $439,000 for the six month period
ended June 30, 1995. Such increase was due primarily to a $72,000, or 146.9%,
increase in other income and a $28,000, or 50.0%, increase in loan fees and
service charges, which were partially offset by a $29,000, or 9.7%, decrease in
deposit fees and service charges and a $6,000, or 16.7%, decrease in servicing
fees on loans sold.
NON-INTEREST EXPENSE. Non-interest expense increased by $169,000 or
13.6%, to $1.4 million during the three months ended June 30, 1996 compared to
$1.2 million during the same period in 1995. The primary reasons for the
increase in the 1996 period were a $36,000, or 120.0%, increase of net costs of
real estate owned, a $20,000, or 3.51%, increase in occupancy expense, a
$18,000, or 3.0%, increase in salaries and employee benefits, a $14,000, or
20.3% increase in depreciation, and a $75,000, or 24.0%, increase in other
expenses, which were partially offset by a $6,000, or 4.8%, decrease in SAIF
deposit insurance premiums.
In the six month period ended June 30, 1996, noninterest expense increased
$348,000, or 13.8%, to $2.8 million, compared to $2.5 million for the six
months ended June 30, 1995. Such decrease was due primarily to a $153,000, or
24.6%, increase in other expenses, a $74,000, or 6.1%, increase in salaries
and employee benefits, a $28,000, or 26.2%, increase in occupancy expense, a
$24,000, or 41.4%, increase of net cost of real estate owned, and a $56,000, or
130.2%, increase in consulting expenses.
INCOME TAX EXPENSE. Income tax expense amounted to $200,000 for the
three months ended June 30, 1996 compared to $245,000 for the same period in
1995. Such decrease in income tax expense in 1996 period reflects the decrease
in income before taxes.
In the six month period ended June 30, 1996, income tax expense decreased
$186,000, or 35.9%. The decrease in income tax expense reflects a decrease in
income before taxes.
14
<PAGE> 15
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 June 30, 1996, the Bank
had $10,250,000 of outstanding advances from the FHLB of Dallas, $ 10.0 million
of which are short-term advances, 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 June 30,
1996, the total approved loan commitments outstanding amounted to $4.4 million
and the undisbursed loans in process totalled $8.3 million. At the same date,
commitments under unused lines of credit and standby letters of credit amounted
to $393,000 and $118,000 respectively. Certificates of deposit scheduled to
mature in one year or less at June 30, 1996 totalled $88.6 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 as 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 June 30, 1996, the Bank was in compliance with all applicable
regulatory capital requirements.
15
<PAGE> 16
The following reflects the Bank's actual levels of regulatory capital
and applicable regulatory capital requirements at June 30, 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% $ 9,404 7.50% $ 17,627 3.50% $ 8,223
Risk-based capital ratios
Tier 1 4.00 5,245 13.44% 17,627 9.44% 12,382
Total 8.00 10,490 14.70% 19,276 6.70% 8,786
</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.
16
<PAGE> 17
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.
17
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities and 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: August 5, 1996 By: /s/ Gerald G. Reaux, Jr.
-------------------------------------
Gerald G. Reaux, Jr., President and
Chief Executive Officer
Date: August 5, 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 816
<INT-BEARING-DEPOSITS> 38,530
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 41,457
<INVESTMENTS-CARRYING> 13,289
<INVESTMENTS-MARKET> 13,093
<LOANS> 175,035
<ALLOWANCE> 2,419
<TOTAL-ASSETS> 274,304
<DEPOSITS> 211,965
<SHORT-TERM> 10,000
<LIABILITIES-OTHER> 722
<LONG-TERM> 250
0
0
<COMMON> 0
<OTHER-SE> 17,751
<TOTAL-LIABILITIES-AND-EQUITY> 274,304
<INTEREST-LOAN> 6,856
<INTEREST-INVEST> 308
<INTEREST-OTHER> 1,604
<INTEREST-TOTAL> 8,768
<INTEREST-DEPOSIT> 5,278
<INTEREST-EXPENSE> 5,350
<INTEREST-INCOME-NET> 3,418
<LOAN-LOSSES> 90
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,866
<INCOME-PRETAX> 963
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 631
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 7.84
<LOANS-NON> 889
<LOANS-PAST> 0
<LOANS-TROUBLED> 633
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,329
<CHARGE-OFFS> 88
<RECOVERIES> 88
<ALLOWANCE-CLOSE> 2,419
<ALLOWANCE-DOMESTIC> 408
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,011
</TABLE>
