<PAGE>
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 March 31, 1997
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.)
101 West Vermilion Street
Lafayette, Louisiana 70501
- - ---------------------------------------- ------------------------
(Address of Principal Executive Offices) (Zip Code)
(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 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 practicable date:
As of May 1, 1997, 2,731,250 shares of the Registrant's common stock were
issued and outstanding. Of that total, 218,500 shares are held by the
Registrant's Employee Stock Ownership Plan, of which 202,081 were not
committed to be released.
<PAGE>
ACADIANA BANCSHARES, INC.
TABLE OF CONTENTS
Part I. Financial Information Page
- - ------- --------------------- ----
Item 1. Financial Statements
Consolidated Statements of Financial Condition
(As of March 31, 1997 and December 31, 1996) 3
Consolidated Statements of Operations (For the three
months ended March 31, 1997 and 1996) 4
Consolidated Statements of Stockholders' Equity (For the three
months ended March 31, 1997 and 1996) 5
Consolidated Statements of Cash Flows (For the three
months ended March 31, 1997 and 1996) 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Part II. Other Information
- - -------- -----------------
Item 1. Legal Proceedings 20
Item 2. Changes in Securities 20
Item 3. Defaults Upon Senior Securities 20
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 20
Signatures
2
<PAGE>
ACADIANA BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, except share data)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
---------- ------------
<S> <C> <C>
Assets:
Cash and cash equivalents:
Cash and amounts due from banks.................................. $ 696 $ 1,234
Interest bearing deposits........................................ 10,273 18,550
Total.......................................................... 10,969 19,784
---------- ------------
Investment securities:
Held for trading................................................. 274 --
Available for sale............................................... 24,352 20,539
Mortgage-backed securities:
Held-to-maturity (market value of $12,874 and $12,938,
respectively).................................................. 13,017 13,087
Available for sale............................................... 20,506 21,566
Loans receivable, net.............................................. 185,758 182,724
Premises and equipment, net........................................ 1,926 1,827
Real estate owned, net............................................. 103 75
Federal Home Loan Bank stock, at cost.............................. 1,804 1,778
Accrued interest receivable........................................ 1,486 1,551
Other assets....................................................... 1,492 1,443
---------- ------------
Total Assets................................................... $ 261,687 $ 264,374
---------- ------------
---------- ------------
Liabilities:
Deposits........................................................... $ 191,645 $ 193,450
Advances from Federal Home Loan Bank............................... 22,250 22,250
Accrued interest payable on deposits............................... 66 47
Advance payments by borrowers for taxes and insurance.............. 459 441
Accrued other liabilities.......................................... 1,425 869
Dividends payable.................................................. 226 226
---------- ------------
Total Liabilities.............................................. $ 216,071 $ 217,283
---------- ------------
---------- ------------
Stockholders' Equity:
Preferred Stock of $.01 par value, authorized 5,000,000 shares,
none issued or outstanding
Common Stock of $.01 par value, authorized 20,000,000
shares, issued and outstanding 2,731,250 shares.................. $ 27 $ 27
Paid In Capital.................................................... 31,854 31,827
Retained Earnings.................................................. 17,889 17,344
Unearned Common Stock Held by ESOP................................. (2,425) (2,490)
Unearned Common Stock Held by RRP Trust............................ (1,773) --
Unrealized gain on securities available for sale, net of deferred
taxes............................................................ 44 383
---------- ------------
Total Stockholders' Equity......................................... $ 45,616 $ 47,091
---------- ------------
Total Liabilities and Stockholders' Equity......................... $ 261,687 $ 264,374
---------- ------------
---------- ------------
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
ACADIANA BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1997 and 1996
(In Thousands, except per share data)
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Interest income:
Loans.................................................................... $ 3,756 $ 3,347
Mortgage-backed securities............................................... 611 693
Investment securities.................................................... 384 97
Interest-bearing deposits................................................ 202 173
--------- ---------
Total interest income.................................................. $ 4,953 $ 4,310
--------- ---------
Interest expense:
Deposits................................................................. $ 2,294 $ 2,646
Advances from FHLB....................................................... 301 6
--------- ---------
Total interest expense................................................. 2,595 2,652
--------- ---------
Net interest income........................................................ 2,358 1,658
Provision for loan losses.................................................. 45 45
--------- ---------
Net interest income after provision for loan losses........................ 2,313 1,613
--------- ---------
Non-interest income:
Loan fees and service charges............................................ $ 37 $ 47
Servicing fees on loans sold............................................. 17 16
Deposit fees and service charges......................................... 178 134
Investment securities gains, net......................................... 8 --
Gain (loss) on fixed rate loans.......................................... (1) 10
Other income............................................................. 22 47
--------- ---------
Total non-interest income.............................................. $ 261 $ 254
--------- ---------
Non-interest expense:
Salaries and employee benefits........................................... $ 761 $ 662
Occupancy................................................................ 78 59
Depreciation............................................................. 75 67
Net costs of real estate owned........................................... (24) 48
Federal deposit insurance premiums....................................... 31 117
Advertising expense...................................................... 43 41
Consulting expense....................................................... 21 72
Bank share tax expense................................................... 76 --
Other expenses........................................................... 342 386
--------- ---------
Total non-interest expense............................................. $ 1,403 $ 1,452
--------- ---------
Income before income taxes................................................. $ 1,171 $ 415
Income tax expense......................................................... 400 132
--------- ---------
Net income................................................................. $ 771 $ 283
--------- ---------
--------- ---------
Income per common share.................................................... $ 0.31 N/A
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
ACADIANA BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
UNEARNED
UNEARNED COMMON NET
COMMON STOCK COMMON STOCK UNREALIZED TOTAL
---------------------- PAID IN RETAINED STOCK HELD HELD BY GAIN (LOSS) STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS BY ESOP RRP TRUST ON SECURITIES EQUITY
---------- ---------- --------- -------- ---------- ----------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1995..................... $ 16,996 $ 701 $ 17,697
Net Income................. 285 285
Change in Unrealized Gain
on Securities Available
for Sale, Net of Deferred
Taxes.................... -- (310) (310)
---------- --------- -------- ---------- ----------- --------------- -------------
Balance, March 31, 1996.... $ -- $ -- $ 17,281 $ -- $ 391 $ 17,672
---------- --------- -------- ---------- ----------- --------------- -------------
---------- --------- -------- ---------- ----------- --------------- -------------
Balance, December 31,
1996..................... 2,731,250 $ 27 $ 31,827 $ 17,344 $ (2,490) -- $ 383 $ 47,091
Net Income................. 771 771
Cash Dividends Declared.... (226) (226)
Common Stock Released by
ESOP Trust............... 27 65 92
Common Stock Acquired by
Recognition and Retention
Plan Trust............... (1,830) (1,773)
Common Stock Earned by
Participants of
Recognition and Retention
Plan Trust............... 57
Change in Unrealized Gain
on Securities Available
for Sale, Net of Deferred
Taxes.................... (339) (339)
--------- ---------- --------- -------- ---------- ----------- --------------- -------------
Balance, March 31, 1997.... 2,731,250 $ 27 $ 31,854 $ 17,889 $ (2,425) $(1,773) $ 44 $ 45,616
--------- ---------- --------- -------- ---------- ----------- --------------- -------------
--------- ---------- --------- -------- ---------- ----------- --------------- -------------
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
ACADIANA BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED
------------------------
MARCH 31, MARCH 31,
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)...................................................... $ 771 $ 283
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation......................................................... 75 67
Provision for deferred income taxes.................................. -- --
Provision for losses on loans........................................ 45 45
Provision for losses on real estate owned and other property
acquired........................................................... -- 47
Gain on sale of real estate owned and other property acquired........ (10) (13)
Gain on sale of loans held for sale.................................. (1) (10)
Proceeds from sales of loans held for sale........................... 921 1,494
Originations of loans held for sale.................................. (920) (1,484)
Loss on sale of premises and equipment............................... -- 15
Purchases of securities held for trading............................. (382) --
Proceeds from sales of securities held for trading................... 109 --
Gain on securities held for trading.................................. (1) --
Gain on sale of other equity securities.............................. -- (26)
Accretion of discounts, net of premium amortization on securities.... (20) (14)
Amortization of deferred revenues and unearned income on loans....... (8) (31)
FHLB stock dividend received......................................... (26) (25)
Compensation expense recognized by RRP............................... 57 --
ESOP contribution.................................................... 92 --
Changes in assets and liabilities:
Decrease (increase) in accrued interest receivable................. 65 (34)
Decrease in other assets........................................... 133 429
Increase in accounts payable and accrued expenses.................. 575 275
----------- -----------
Net cash provided by operating activities.............................. 1,475 1,018
----------- -----------
Cash flows from investing activities:
Proceeds from calls and maturities of securities available for sale.. 1,000 --
Purchases of securities available for sale........................... (4,998) (4,500)
Net advances on loans................................................ (3,148) (6,340)
Proceeds from sale of premises and equipment......................... -- 3
Purchases of premises and equipment.................................. (174) (276)
Proceeds from sale of real estate owned and other property acquired.. 62 58
Capital costs incurred on real estate owned and other property
acquired........................................................... (3) (2)
Principal collections on mortgage-backed securities available for
sale............................................................... 737 1,005
Principal collections on mortgage-backed securities held to maturity. 77 86
Proceeds from redemptions and sales of other equity securities....... -- 122
----------- -----------
Net cash provided by (used in) investing activities.................... (6,447) (9,844)
----------- -----------
Cash flows from financing activities:
Net change in demand, NOW and savings deposits....................... (2,525) 2,645
Net change in time deposits.......................................... 720 1,712
Net change in mortgage escrow funds.................................. 18 2
Acquisition of common stock by RRP................................... (1,830) --
Dividends paid to shareholders....................................... (226) --
----------- -----------
Net cash provided by (used in) financing activities.................... (3,843) 4,359
----------- -----------
Net increase (decrease) in cash and cash equivalents................... (8,815) (4,467)
Cash and cash equivalents at beginning of period....................... 19,784 16,481
----------- -----------
Cash and cash equivalents at end of period............................. $ 10,969 $ 12,014
----------- -----------
----------- -----------
Supplemental schedule of noncash activities:
Acquisition of real estate in settlement of loans.................... $ 67 $ --
Unrealized appreciation (loss) on securities......................... $ (521) $ (469)
Supplemental disclosures:
Cash paid for:
Interest on deposits and borrowings................................ $ 2,576 $ 2,638
Income taxes....................................................... $ -- $ --
</TABLE>
See Notes to Consolidated Financial Statements
6
<PAGE>
ACADIANA BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Summary of Significant Accounting Policies
Basis of Financial Statement Presentation
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 interim financial statements
should be read in conjunction with the audited financial statements and the
notes thereto for Acadiana Bancshares, Inc. (the "Company") previously filed
with the Securities and Exchange Commission in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
Business
The Company's principal business is conducted through its wholly owned
subsidiary, LBA Savings Bank, (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 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"). The Company is subject to examination and comprehensive
regulation by the Federal Reserve.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
the Bank. All significant intercompany balances and transactions have been
eliminated in consolidation.
7
<PAGE>
(2) Loans Receivable
Loans receivable (in thousands) at March 31, 1997 and December 31, 1996
consisted of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ------------
<S> <C> <C>
Mortgage Loans:
Single Family Residential $146,402 $142,965
Single Family Construction 9,773 10,565
Multi-family Residential 851 862
Commercial Real Estate 12,260 12,873
--------- ---------
Total Mortgage loans 169,286 167,265
Commercial Business Loans 8,298 7,363
Consumer Loans:
Savings 2,523 2,709
Indirect Dealers 6,724 7,424
Other 7,247 6,594
--------- ---------
Total Loans 194,078 191,355
Less:
Allowance for Loan Losses (2,583) (2,592)
Unearned Discounts/Deferred Premiums 283 331
Net Deferred Loan Origination Fees (441) (471)
Loans in Process (5,579) (5,899)
--------- ---------
Net Loans $185,758 $182,724
--------- ---------
--------- ---------
</TABLE>
(3) Employee Stock Ownership Plan
In connection with the conversion from mutual to stock form, the Company
established an Employee Stock Ownership Plan ("ESOP") for the benefit of
employees of the Company and the Bank. The ESOP purchased 218,500 shares, or
8% of the total stock sold in the subscription offering, for $2,622,000,
financed by a loan from the Company. The Company will account for its ESOP
in accordance with Statement of Position 93-6, "Employer's Accounting for
Employee Stock Ownership Plans".
The ESOP was effective upon completion of 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.
Shares purchased by the ESOP with the proceeds of the loan are held in a
suspense account and released on a pro rata basis as debt service payments
are made. Shares released are reallocated among participants on the basis of
compensation. Participants
8
<PAGE>
vest in their right to receive their account balances within the ESOP at the
rate of 20% per year starting after one year of service.
Under SOP 93-6, unearned ESOP shares are not considered outstanding and are
shown as a reduction of stockholders' equity. Dividends on unallocated ESOP
shares are considered to be compensation expense. The Company recognizes
compensation cost equal to the fair value of the ESOP shares during the
periods in which they become committed to be released. To the extent fair
value of the Company's ESOP shares differ from the cost of such shares, this
differential is charged to equity. The Company receives a tax deduction equal
to the cost of the shares released. The loan receivable from the ESOP to the
Company is not shown as an asset and the debt of the ESOP is not shown as a
Company liability.
Compensation cost for the three months ended March 31, 1997 was $92,000 based
on the release of 5,473 shares. At March 31, 1997, there were 10,946 allocated
shares, 5,473 shares had been committed to be released, and 202,081 shares
were held in suspense by the ESOP. The fair value of the unearned ESOP shares
at March 31, 1997, using the quoted market closing price per share, was
approximately $3,467,000.
(4) Earnings Per Share
Earnings per share was based on 2,467,139 weighted average shares outstanding
during the three month period ended March 31, 1997. The weighted average was
calculated by excluding the ESOP shares unearned at the beginning of the
period and excluding the ESOP shares released, which was pro-rated by days,
from the shares outstanding at beginning of period. Earnings per share for
periods preceding the three months ended March 31, 1996 are not applicable,
as the Bank's conversion from mutual-to-stock form and reorganization into a
holding company format was not completed until July 16, 1996.
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings per Share," ("SFAS 128") which is required to be adopted
on December 31, 1997. At that time, the Company will be required to change
the method currently used for calculating primary earnings per share, the
dilutive effect of stock options will be excluded. The Company does not
believe that the effect of SFAS 128 on the calculation of fully diluted
earnings per share for this quarter would be material.
(5) Stock Conversion
On July 16, 1996, (1) LBA Savings Bank converted from a state chartered
mutual savings bank to a state chartered stock savings bank, and (2) Acadiana
Bancshares Corporation acquired all of the common stock of the Bank. The
Company has 20,000,000 shares of .01 par value common stock authorized and
2,731,250 shares issued and outstanding. The public offering resulted in
$31,842,083 in capital stock and paid-in-capital, net of related expenses.
The Company used $15,919,124 for the purchase of 100% of the issued and
outstanding capital stock of the Bank and $2,622,000 for a loan to the
Company's
9
<PAGE>
and Bank's Employee Stock Ownership Plan. The remaining proceeds were
retained by the Company.
(6) Recognition and Retention Plan and Trust and Stock Option Plan
On January 21, 1997, the stockholders of the Company approved the Recognition
and Retention Plan. The plan enables the Company to provide officers, key
employees and directors with a proprietary interest in the Company as an
incentive to contribute to its success. Pursuant to this plan, the Company
acquired 109,250 shares, or 4% of its outstanding common stock in open market
transactions. These shares are accounted for as unearned deferred compensation
and shares granted will be amortized as compensation expense over the vesting
period based on the value at the date of the grant, which was $15.50 per
share. On January 22, 1997, the Board of Directors granted 73,202 shares of
restricted stock with a vesting period of 5 years. Compensation costs for the
three months ended March 31, 1997 was $57,000. At March 31, 1997 no such
shares were vested.
On January 21, 1997, the stockholders of the Company approved the adoption of
the Stock Option Plan. The Stock Option plan authorizes grants totaling
273,125 shares, or 10 percent of the total number of common shares sold in
the Company's initial public offering of its common stock upon the
mutual-to-stock conversion of the Bank. The option exercise price cannot be
less than the fair value of the underlying stock as of the date of the option
grant and the maximum term cannot exceed ten years. On January 22, 1997, the
Board of Directors granted a total of 211,701 options to directors and
officers at an exercise price of $15.50 per share. The Plan is designed to
retain qualified directors and officers for the Company.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General
On July 16, 1996, Acadiana Bancshares, Inc. (the "Company") issued
2,731,250 shares of common stock during the conversion (the "Conversion") of
LBA Savings Bank (the "Bank") from mutual to stock form and reorganization
into a holding company format. Net proceeds of $29.2 million were credited to
stockholders' equity. The Company's ESOP, effective upon completion of the
conversion, purchased 218,500 shares for $2.6 million, financed by a loan
from the Company. The total cash received from the Conversion, net of $6.4
million withdrawn from deposit accounts for purchase of the stock, was $22.8
million. The additional cash was invested in an investment securities
interest-bearing deposits. The effect of the Conversion on the Company's
Statement of Financial condition was that investment securities and
interest-bearing deposits increased as a proportion of total assets. The
resulting effect on the Company's Statement of Operations was an increase in
levels of interest income with no related offsetting change in interest expense.
Changes in Financial Condition
At March 31, 1997, the consolidated assets of the Company totaled $261.7
million, a decrease of $2.7 million or 1.0% from December 31, 1996. The
primary reasons for the decrease were the utilization of cash to fund net
deposit outflows of $1.8 million, and to purchase 109,250 shares of the
Company's common stock for approximately $1.8 million to fund the new
Recognition and Retention Plan (the "RRP") which was approved by the
stockholders on January 21, 1997.
Loans receivable, net, increased by $3.0 million, or 1.7%, to $185.8
million at March 31, 1997, compared to $182.7 million at December 31, 1996.
The increase was primarily the result of a $2.0 million, or 1.2%, net
increase in total mortgage loans, and a $935,000, or 12.7%, net increase in
total commercial business loans. Total consumer loans experienced a net
decrease of $233,000, or 1.4%, which included a net decrease in indirect
dealer loans of $700,000, or 9.4%.
Interest bearing deposits at other institutions decreased $8.3 million,
or 44.6%, to $10.3 million at March 31, 1997, compared to $18.6 million at
December 31, 1996.
The Company owned $274,000 of investment securities held for trading, as
of March 31, 1997. Investment securities available for sale increased $3.8
million, or 18.6%, to $24.4 million at March 31, 1997, compared to $20.5
million at December 31, 1996. The primary reason for such increase was the
purchases of $5.0 million of investment securities, which was partially
offset by $1.0 million of redemption of investment securities and a decline in
unrealized gains on the investment securities available for sale portfolio of
$99,000.
11
<PAGE>
Mortgage-backed securities held to maturity decreased $70,000, or .5%,
to $13.0 million at March 31, 1997 compared to $13.1 million at December 31,
1996. Such decrease was primarily the result of principal repayments. The
mortgage-backed securities available for sale portfolio decreased $1.1
million, or 4.9%, to $20.5 million at March 31, 1997 as compared to $21.6
million at December 31, 1996. The decrease reflects normal principal
repayments and a $329,000 decline in market values of the securities.
Deposits decreased $1.8 million, or 1.0%, to $191.6 million at March 31,
1997 compared to $193.5 million at December 31, 1996. This decrease was due
primarily to deposit outflows.
Advances from the FHLB of Dallas remained at $22.3 million at March 31,
1997 as compared to December 31, 1996. The Company's current FHLB advances
mature in the year ending December 31, 1998. The Company has the ability to
borrow up to approximately $125.4 million from the FHLB of Dallas, which
together with the current advances, would be secured by mortgage loans under
an existing blanket collateral agreement, and by Federal Home Loan Bank Stock.
Total stockholders' equity decreased $1.5 million, or 3.1%, to $45.6
million at March 31, 1997, compared to $47.1 million at December 31, 1996.
The decrease was primarily attributable to the purchase of common stock
shares for the RRP for approximately $1.8 million, a $339,000 decrease in net
unrealized gains (losses) of securities available for sale, and $226,000 in
dividends declared on common stock, all of which was partially offset by
$771,000 of net income.
The Company's non-performing assets amounted to .31% of total assets at
March 31, 1997 compared to .36% at December 31, 1996. In addition, the ratio
of the Bank's allowance for loan losses to non-performing loans and troubled
debt restructurings was 208.64% at March 31, 1997 compared to 183.96% at
December 31, 1996.
Results of Operations
The Company reported a net income of $771,000 for the three months ended
March 31, 1997, compared to a net income of $283,000 for the three months
ended March 31, 1996. The $448,000, or 172.4%, increase is due primarily to
increase in net interest income of $700,000, together with an increase in
non-interest income of $7,000 and a decrease in non-interest expenses of
$49,000, all of which was partially offset by a corresponding increase in
income taxes of $268,000. The primary reason for the increase in net interest
income relates to the Company's deployment of $29.2 million net proceeds from
the issuance of common stock.
12
<PAGE>
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 MARCH 31,
----------------------------------------------------------------------------------
1997 1996
----------------------------------------------------------------------------------
YIELD/COST
AT AVERAGE AVERAGE
MARCH 31, AVERAGE YIELD/ AVERAGE YIELD/
1997 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................. 7.82% $ 158,904 $ 3,203 8.06% $ 143,392 $2,988 8.34%
Commercial business loans.................. 9.57% 7,863 181 9.21% 1,475 32 8.68%
Consumer and other loans................... 9.20% 16,528 372 9.00% 15,134 327 8.64%
------ ------ ------- ------
Total loans.............................. 8.02% 183,295 3,756 8.20% 160,001 3,347 8.37%
Mortgage-backed securities................... 7.12% 34,235 611 7.14% 39,088 693 7.09%
Investment securities (1).................... 7.02% 21,982 384 6.99% 6,046 97 6.42%
Other earning assets......................... 5.27% 16,425 202 4.92% 14,048 173 4.93%
------- ------ ------- -----
Total interest-earning assets............ 7.77% 255,937 4,953 7.74% 219,183 4,310 7.87%
------ -----
Noninterest-earning assets..................... 5,686 6,802
------------ ---------- -------- --------- --------- -------- -------
Total assets............................. $ 261,623 $ 225,985
---------- ---------
---------- ---------
Interest-bearing liabilities:
Deposits:
Demand deposits.............................. 1.97% $ 16,460 61 1.48% $ 15,862 $ 74 1.87%
Passbook savings deposits.................... 2.53% 24,086 131 2.18% 27,666 173 2.50%
Certificates of deposit...................... 5.91% 146,563 2,102 5.74% 158,835 2,399 6.04%
-------- ----- ------- ------
Total deposits............................. 5.22% 187,109 2,294 4.90% 202,363 2,646 5.23%
Advance from FHLB.............................. 5.44% 22,250 301 5.41% 250 6 9.60%
------- ----- ------- ------
Total interest-bearing liabilities......... 5.25% 209,359 2,595 4.96% 202,613 2,652 5.24%
----- ------
Noninterest-bearing demand deposits.............. 3,368 3,263
Other noninterest-bearing liabilities............ 2,278 1,879
Total liabilities.......................... 215,005 207,755
Stockholders' equity............................. 46,618 18,230
Total liabilities and stockholders'
equity................................... $261,623 $ 225,985
---------- ---------
---------- ---------
Net interest-earning assets.................... $ 46,578 $ 16,570
---------- --------
------------ ---------- -------- --------- --------- --------
Net interest income/interest rate spread....... 2.52% $ 2,358 2.78% $ 1,658 2.63%
Net interest margin............................ 3.69% 3.03%
------------ ---------- -------- --------- --------- -------- -------
------------ ---------- -------- --------- --------- -------- -------
Ratio of average interest-earning assets to
average interest-bearing liabilities......... 122.25% 108.18%
-------- --------
-------- --------
</TABLE>
- - ------------------------
(1) Includes FHLB Stock.
13
<PAGE>
Net Interest Income
Net interest income increased $700,000, or 42.2%, in the three months ended
March 31, 1997, to $2.4 million, compared to $1.7 million in the three months
ended March 31, 1996. The increase was due to a $643,000, or 14.9%, increase
in interest income together with a decrease in interest expense of a $57,000,
or 2.1%. The increase in interest income was the result of a $36.8, or 16.8%,
increase in the average balance of interest-earning assets which was
partially offset by an 13 basis point (100 basis point being equal to 1%)
decrease in the yield thereon. The decrease in interest expense was the
result of a 28 basis point decrease in yield on average interest-bearing
liabilities, which was partially offset by a $6.7 million, or 3.3%, increase
in the average balance of interest-bearing liabilities. The Company's
interest rate spread (the difference between the weighted average yield on
interest-earning assets and the weighted average cost of interest-bearing
liabilities) and net interest margin (net interest income as a percentage of
average interest-earning assets) amounted to 2.78% and 3.69%, respectively,
during the three months ended March 31, 1997 compared to 2.63% and 3.03%,
respectively, for the comparable period in 1996.
Interest Income
The Company's total interest income was $5.0 million for the three
months ended March 31, 1997, compared to $4.3 million for the three months
ended March 31, 1996. The reasons for the $643,000, or 14.9%, increase in
interest income were a 409,000, or 12.2%, increase in interest income from
loans, a $290,000, or 299.0%, increase in interest income from investment
securities, and a $29,000 or 16.8%, increase in interest income from
interest-bearing deposits, all of which was partially offset by an $82,000,
or 11.8%, decrease in interest income from mortgage-backed securities. The
increase in interest income from loans was the result of a $23.3 million
increase in the average balance of loans, which was partially offset by a 17
basis point decrease in the yield thereon. The increase in interest income
from investment securities was the result of a $15.9 million increase in the
average balance of investments and a 57 basis point increase in the yield
thereon. The increase in interest income from other earning assets,
substantially all of which are interest-bearing deposits at the FHLB, was the
result of a $2.4 million increase in the average balance of other earning
assets which was partially offset by a 1 basis point decrease in the yield
thereon. The decrease in interest income on mortgage-backed securities was
the result of a decrease in the average balance of mortgage-backed securities
of $4.9 million which was partially offset by an increase of 5 basis points
in the yield thereon.
Interest Expense
The Company's total interest expense was $2.6 million during the three
months ended March 31, 1997, compared to $2.7 million for the three months
ended March 31, 1996. The $57,000, or 2.1%, decrease in interest expense was
comprised of a decrease of $352,000 of interest expense on deposits, which
was substantially offset by an increase of
14
<PAGE>
$295,000 of interest expense on advances from the FHLB. The decrease in
interest expense on deposits was the result of a decrease of $15.3 million,
or 7.5%, in average balances in interest bearing deposits together with a
decrease of 33 basis points in the cost thereon. The increase in interest
expense on advances from the FHLB was the result of an increase in average
balances on advances from the FHLB of $22.0 million.
Provision For Loan Losses
The provision for loan losses was $45,000 in the three months ended
March 31, 1997 as compared to $45,000 for the same period in 1996.
Noninterest Income
Noninterest income increased $7,000, or 2.8%, in the three months ended
March 31, 1997 to $261,000, compared to $254,000 for the three months ended
March 31, 1996. Such increase was due primarily to a $1,000, or 6.3%,
increase in servicing fees on loans sold, a $44,000, or 32.8%, increase on
deposit fees and service charges which relates primarily to an increase in
per item charges, and an increase of $8,000 in the gains from sales of
investment securities produced from investments held for trading, all of
which were partially offset by a decrease of $10,000, or 21.3%, in loan fees
and service charges, an $11,000, or 110.0%, decrease in gains from the sale
of loans, and a $25,000, or 53.2% decrease in other income. The decrease in
gains from the sale of loans reflects the Company's decision to hold certain
newly originated fixed rate loans for its portfolio resulting in a decline in
the volume of sales of loans. The decrease in loan fees and service charges
reflects a volume related decrease in late charges on delinquent loans.
Noninterest Expense
Noninterest expense decreased $49,000, or 3.4%, in the three months
ended March 31, 1997 to $1.4 million, compared to $1.5 million in the three
months ended March 31, 1996. Such decrease was due primarily to an $86,000,
or 73.5%, decrease in federal deposit insurance premiums, primarily due to
lower rates, a $72,000, decrease in net costs of real estate owned,
reflecting the Company's decrease in repossessed assets, a $51,000, or 70.8%,
decrease in consulting expenses, and a $44,000, or 11.4%, decrease in other
expenses, all of which were partially offset by a $99,000, or 15.0%, increase
in salaries and employee benefits, reflecting the costs of the ESOP and the
RRP Plans, which did not exist in 1996, a $19,000, or 32.2%, increase in
occupancy expenses relating to repairs and maintenance at the main office and
branch facilities, and a new state shares tax expense of $76,000, which is
based on the equity of the Bank, and was not applicable to the Company in
1996. The increase of $99,000, or 15.0%, in salaries and employee benefits
for the three months ended March 31, 1997, as compared to the three months
ended March 31, 1996, included the costs relating to the ESOP and the RRP,
together totaling $149,000, which costs were not applicable to the prior year
three month period because these plans were not in effect during that prior
period.
15
<PAGE>
Income Tax Expense
Income tax expense increased by $268,000, or 203.0%, in the three months
ended March 31, 1997 to $400,000, as compared to an income tax expense of
$132,000 for the three months ended March 31, 1996. The increase in income
tax expense reflects an increase in income before income taxes.
Liquidity and Capital Resources
The Company's primary liquidity, represented by cash and cash
equivalents, is a product of its operating, investing and financing
activities. Excess liquidity includes the Company's portfolios of investment
securities held for sale and mortgage-backed securities held for sale. The
Company's primary sources of funds are deposits, borrowings, and
amortization, prepayments and maturities from its loan portfolio and its held
to maturity investment securities and mortgage-backed securities portfolios,
and other funds provided from operations. While scheduled payments from the
amortization of loans and mortgage-backed securities and maturing investment
securities are relatively predictable sources of funds, deposit flows, loan
prepayments, and mortgage-backed securities prepayments are greatly
influence by general interest rates, economic conditions and competition.
The Company has the ability to borrow up to approximately $125.4 million from
the FHLB through its subsidiary Bank. At March 31, 1997, the Bank had
$22,250,000 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 and maintain a portfolio
of mortgage-backed and investment securities. At March 31, 1997, the total
approved loan commitments outstanding amounted to $11.8 million and the
undisbursed loans in process totaled $6.3 million. At the same date,
commitments under unused lines of credit and standby letters of credit
amounted to $637,000 and $400,000 respectively. Certificates of deposit
scheduled to mature in one year or less at March 31, 1997 totaled $80.2
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 a 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
16
<PAGE>
8.0%. At March 31, 1997 the Bank was in compliance with all applicable
regulatory capital requirements.
The following reflects the Bank's actual levels of regulatory capital
and applicable regulatory capital requirements at March 31, 1997.
<TABLE>
<CAPTION>
Required Actual Excess
----------------- -------------------- -----------------
Percent Amount Percent Amount Percent Amount
------- ------ ------- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
(Dollars in Thousands)
Tier 1 leverage capital ratios 4.00% $9,966 13.75% $34,250 9.75% 24,284
Risk-based capital ratios
Tier 1 4.00 5,192 26.38% 34,250 22.38% 29,058
Total 8.00 10,385 27.64% 35,885 19.64% 25,500
</TABLE>
The Company, as a separately incorporated holding company, has no
significant operations other than serving as sole stockholder of the Bank. On
an unconsolidated basis, the Company has no paid employees. The Company's
assets 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 consists primarily of earnings from the investment of such
funds as well as any dividends from the Bank. The expenses expected to be
incurred 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. Management believes that the
Company has adequate liquidity available to respond to liquidity demands.
17
<PAGE>
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.
On January 21, 1997, the Company held a special meeting of the
stockholders for the following purposes: (1) to consider and approve
the adoption of the Company's Stock Option Plan; (2) to consider and
approve the adoption of the Company's Recognition and Retention Plan
and Trust. Votes were cast as follows:
Stock Option Plan Recognition and Retention Plan
----------------- -------------------------------
For 1,906,276 1,886,670
Against 132,460 186,764
Abstain 11,996 7,454
Broker non-votes 423,471 393,315
Total Votes Cast 2,474,203 2,474,203
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.
18
<PAGE>
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: May 9, 1997 By: /s/ Gerald G. Reaux, Jr.
-------------------------------------
Gerald G. Reaux, Jr., President and
Chief Executive Officer
Date: May 9, 1997 By: /s/ Emile E. Soulier, III
-------------------------------------
Emile E. Soulier, III, Vice-President
and Chief Financial Officer
19
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 696
<INT-BEARING-DEPOSITS> 10,273
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 274
<INVESTMENTS-HELD-FOR-SALE> 44,858
<INVESTMENTS-CARRYING> 13,017
<INVESTMENTS-MARKET> 12,874
<LOANS> 188,341
<ALLOWANCE> 2,583
<TOTAL-ASSETS> 261,687
<DEPOSITS> 191,645
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,176
<LONG-TERM> 22,250
0
0
<COMMON> 27
<OTHER-SE> 45,589
<TOTAL-LIABILITIES-AND-EQUITY> 261,687
<INTEREST-LOAN> 3,756
<INTEREST-INVEST> 384
<INTEREST-OTHER> 813
<INTEREST-TOTAL> 4,953
<INTEREST-DEPOSIT> 2,294
<INTEREST-EXPENSE> 2,595
<INTEREST-INCOME-NET> 2,358
<LOAN-LOSSES> 45
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,403
<INCOME-PRETAX> 1,171
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 771
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0
<YIELD-ACTUAL> 7.77
<LOANS-NON> 706
<LOANS-PAST> 0
<LOANS-TROUBLED> 532
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,592
<CHARGE-OFFS> 71
<RECOVERIES> 17
<ALLOWANCE-CLOSE> 2,583
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,583
</TABLE>
