<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE SECURITIES
EXCHANGE AT OF 1934
For the transition period from ____________ to ____________
Commission File Number 0-21165
FIRST ALLEN PARISH BANCORP, INC.
(Exact name of Registrant as specified in its Charter)
Delaware 72-1331593
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
222 South Tenth Street - Oakdale, Louisiana 71463
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (318)335-2031
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 of 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES (X) NO ( )
Indicate the number of shares outstanding of each of the issuer's common stock
as of the latest practicable date.
Class Outstanding at September 30, 1996
--------------------------- ---------------------------------
Common Stock, .01 par value 264,506
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FIRST ALLEN PARISH BANCORP, INC.
TABLE OF CONTENTS
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Page
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Part I - FINANCIAL INFORMATION
Item 1: Financial Statements
Consolidated statements of financial condition 3
Consolidated statements of income 4-5
Consolidated statements of cash flows 6-9
Notes to consolidated financial statements 10-11
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 12-17
Part II - OTHER INFORMATION 18
Signatures 19
</TABLE>
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FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Financial Condition
September 30, 1996 and December 31, 1995
<TABLE>
<CAPTION>
September 30,
1996 December 31,
(Unaudited) 1995
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ASSETS
Cash and cash equivalents
Interest-bearing $ 2,698,929 $ 1,040,626
Non-interest bearing 280,922 321,969
Mortgage-backed and related securities -
held-to-maturity 13,400,627 12,433,279
Mortgage-backed and related securities -
available-for-sale, estimated market
value 2,629,357 2,958,167
Loans receivable, net 11,297,337 11,230,728
Accrued interest receivable 188,312 198,584
Other receivables 151,005 47,120
Foreclosed real estate 61,606 38,568
Federal Home Loan Bank stock, at cost 259,200 259,600
Premises and equipment, at cost, less
accumulated depreciation 291,936 309,796
Other assets 86,089 19,677
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Total assets $31,345,320 $28,858,114
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $26,629,524 $26,582,879
Advances by borrowers for taxes
and insurance 26,504 43,033
Federal income taxes:
Deferred 130,083 116,982
Accrued liabilities 229,507 41,462
Deferred income 16,583 15,172
----------- -----------
Total liabilities 27,032,201 26,799,528
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STOCKHOLDERS' EQUITY
Serial preferred stock (.01 par value,
100,000 shares authorized, none
issued or outstanding) - -
Common stock (.01 par value, 900,000
shares authorized, 264,506 shares
issued and outstanding) 2,645 -
Additional paid-in capital 2,370,283 -
Retained earnings (substantially
restricted) 2,163,443 2,063,367
Unrealized loss on securities
available-for-sale (11,652) (4,781)
Unearned employee stock ownership plan (211,600) -
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Total stockholders' equity 4,313,119 2,058,586
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Total liabilities and stockholders'
equity $31,345,320 $28,858,114
=========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
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FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income
For the three months ended September 30, 1996 and 1995
(Unaudited)
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<CAPTION>
1996 1995
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INTEREST INCOME
Loans receivable:
First mortgage loans $201,015 $218,731
Consumer and other loans 52,261 47,577
Mortgage-backed and related securities 242,513 229,169
Other interest earning assets 27,259 19,809
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Total interest income 523,048 515,286
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INTEREST EXPENSE
Deposits 280,641 285,062
Borrowed funds 1,540 -
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Total interest expense 282,181 285,062
-------- --------
Net interest income 240,867 230,224
RECOVERY FROM LOAN LOSSES (1,722) (11,903)
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Net interest income after recovery from
loan losses 242,589 242,127
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NONINTEREST INCOME
Service charges on deposits 52,401 46,892
Insurance commissions earned 4,122 1,585
Loan origination and servicing fees 6,880 4,397
Net other real estate expenses (1,583) (438)
Gain (loss) on foreclosed real estate 3,300 (1,993)
Other operating revenues 4,044 6,576
-------- --------
Total noninterest income 69,164 57,019
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NONINTEREST EXPENSES
Compensation and employee benefits 110,236 82,063
Occupancy and equipment expenses 13,638 13,924
SAIF deposit insurance premiums 185,554 14,880
Stationery and printing 14,398 10,819
Data processing 10,799 14,803
Other expenses 34,529 33,477
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Total noninterest expenses 369,154 169,966
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Income (loss) before income taxes (57,401) 129,180
INCOME TAX EXPENSE (BENEFIT) (21,320) 51,294
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NET INCOME (LOSS) $(36,081) $ 77,886
======== ========
Net earnings per common share:
Primary and fully diluted (.15) N/A
Weighted average number of shares outstanding
Primary and fully diluted 243,346 N/A
See accompanying notes to consolidated financial statements.
</TABLE>
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FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income
For the nine months ended September 30, 1996 and 1995
(Unaudited)
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<CAPTION>
1996 1995
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INTEREST INCOME
Loans receivable:
First mortgage loans $ 626,619 $ 651,369
Consumer and other loans 148,974 134,512
Mortgage-backed and related securities 721,846 620,162
Other interest earning assets 78,066 77,745
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Total interest income 1,575,505 1,483,788
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INTEREST EXPENSE
Deposits 866,547 783,528
Borrowed funds 1,540 2,587
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Total interest expense 868,087 786,115
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Net interest income 707,418 697,673
RECOVERY FROM LOAN LOSSES (11,183) (20,853)
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Net interest income after recovery from
loan losses 718,601 718,526
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NONINTEREST INCOME
Service charges on deposits 151,191 139,142
Insurance commissions earned 8,538 3,052
Loan origination and servicing fees 20,377 16,308
Net other real estate expenses (1,834) (307)
Gain (loss) on foreclosed real estate 3,386 (741)
Other operating revenues 13,302 12,211
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Total noninterest income 194,960 169,665
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NONINTEREST EXPENSES
Compensation and employee benefits 292,290 248,457
Occupancy and equipment expenses 42,516 39,116
SAIF deposit insurance premiums 216,185 42,584
Stationery and printing 41,685 29,852
Data processing 43,789 45,021
Other expenses 125,020 122,950
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Total noninterest expenses 761,485 527,980
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Income before income taxes 152,076 360,211
INCOME TAX EXPENSE 52,000 132,156
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NET INCOME $ 100,076 $ 228,055
========== ==========
Net earnings per common share:
Primary and fully diluted .42 N/A
Weighted average number of shares outstanding
Primary and fully diluted 243,346 N/A
See accompanying notes to consolidated financial statements.
</TABLE>
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FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the three months ended September 30, 1996 and 1995
(Unaudited)
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1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (36,081) $ 77,886
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Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation of premises and equipment 7,463 7,463
Provision for loan losses (1,722) (11,903)
Gain on sale of foreclosed real estate (3,300) -
Premium amortization net of discount
accretion 29,756 29,105
Deferred income taxes - -
Changes in assets and liabilities -
(Increase) decrease in accrued
interest receivable 7,588 (15,137)
(Increase) decrease in other assets (37,044) 45,824
Decrease in advance payable, Federal
Home Loan Bank - -
Increase in accrued liabilities 177,044 1,679
Increase (decrease) in current
income taxes payable (5,619) 51,294
(Increase) decrease in deferred
income 1,182 (482)
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Total adjustments 175,348 107,843
---------- ----------
Net cash provided by operating
activities 139,267 185,729
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CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease (increase) in mortgage-backed
and related securities (818,706) 398,957
Sale of investment securities - -
Purchase of investment securities - (4,100)
Net increase in loans made to customers (55,686) (34,528)
Proceeds from sale of foreclosed real estate 30,764 -
Purchase of property and equipment - (10,016)
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Net cash provided (used) by
investing activities (843,628) 350,313
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(continued)
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 7
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows (continued)
For the three months ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
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CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) in demand deposits, NOW
accounts, passbook savings accounts,
and certificates of deposits (898,264) (331,734)
Net (decrease) in advances by
borrowers for taxes and insurance (8,894) (6,577)
Issuance of common stock 2,161,328 -
---------- ----------
Net cash provided (used) by
financing activities 1,254,170 (338,311)
---------- ----------
Net increase in cash and
cash equivalents 549,809 197,731
CASH AND CASH EQUIVALENTS, beginning of period 2,430,042 1,543,633
---------- ----------
CASH AND CASH EQUIVALENTS, end of period $2,979,851 $1,741,364
========== ==========
Supplemental Disclosures
Cash paid for:
Interest on deposits, advances, and other
borrowings $ 282,181 $ 285,062
Income taxes 27,300 27,820
Transfers from loans to real estate acquired
through foreclosure 61,348 -
Proceeds from sales of foreclosed real estate
financed through loans 30,000 -
Change in unrealized gain (loss) on securities
available for sale 632 39,460
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 8
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the nine months ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 100,076 $ 227,200
---------- ----------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation of premises and equipment 25,610 23,850
Provision for loan losses (11,183) (20,853)
Gain on sale of foreclosed real estate (3,386) (741)
Premium amortization net of discount
accretion 42,360 120,921
Deferred income taxes 13,101 24,092
Changes in assets and liabilities -
(Increase) decrease in accrued
interest receivable 10,272 (33,655)
(Increase) in other assets (166,433) (84,026)
Decrease in advance payable, Federal
Home Loan Bank - (500,000)
Increase (decrease) in accrued
liabilities 188,045 (5,835)
(Decrease) in current income
taxes payable - (2,225)
(Increase) decrease in deferred income 1,411 (477)
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Total adjustments 99,797 (478,949)
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Net cash provided (used) by
operating activities 199,873 (251,749)
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CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) in mortgage-backed
and related securities (691,632) (1,808,157)
Sale of investment securities 400 -
Purchase of investment securities - (12,100)
Net increase in loans made to customers (105,928) (16,115)
Proceeds from sale of foreclosed real estate 30,850 8,041
Purchase of property and equipment (7,751) (23,612)
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Net cash used by investing
activities (774,061) (1,851,943)
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(continued)
See accompanying notes to consolidated financial statements.
</TABLE>
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FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows (continued)
For the nine months ended September 30, 1996 and 1995
(Unaudited)
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1996 1995
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CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits,
NOW accounts, passbook savings accounts,
and certificates of deposits 46,645 2,452,205
Net increase (decrease) in advances by
borrowers for taxes and insurance (16,529) 668
Issuance of common stock 2,161,328 -
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Net cash provided by
financing activities 2,191,444 2,452,873
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Net increase in cash and
cash equivalents 1,617,256 349,181
CASH AND CASH EQUIVALENTS, beginning of period 1,362,595 1,392,183
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CASH AND CASH EQUIVALENTS, end of period $2,979,851 $ 1,741,364
========== ===========
Supplemental Disclosures
Cash paid for:
Interest on deposits, advances, and
other borrowings $ 868,087 $ 786,115
Income taxes 79,794 83,459
Transfers from loans to real estate
acquired through foreclosure 61,348 -
Proceeds from sales of foreclosed real
financed through loans 30,000 -
Change in unrealized gain (loss) on
securities available for sale (6,871) 116,058
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 10
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
(1) First Allen Parish Bancorp, Inc.
First Allen Parish Bancorp, Inc. (the "Corporation") was
incorporated under the laws of the State of Delaware for the purpose
of becoming the savings and loan holding company of First Federal
Savings and Loan Association of Allen Parish (the "Association"), in
connection with the Association's conversion from a federally
chartered mutual savings association to a federally chartered stock
savings association, pursuant to its Plan of Conversion. On August
9, 1996, the Corporation commenced a Subscription and Community
Offering of its shares in connection with the conversion of the
Association (the "Offering"). The Offering was consummated and the
Corporation acquired the Association on September 27, 1996. It
should be noted that the Corporation had no assets prior to the
conversion and acquisition on September 27, 1996.
The accompanying consolidated financial statements as of and
for the three months ended and nine months ended September 30, 1996
include the accounts of the Corporation and the Association.
(2) Basis of Preparation
The accompanying unaudited consolidated financial statements
were prepared in accordance with instructions for Form 10-QSB. To
the extent that information and footnotes required by generally
accepted accounting principles for complete financial statements are
contained in the audited financial statements included in the
Association's audit report for the year ended December 31, 1995, such
information and footnotes have not been duplicated herein. In the
opinion of management, all adjustments, consisting only of normal
recurring accruals, which are necessary for the fair presentation of
the interim financial statements have been included. The statements
of earnings for the three month and nine month period ended September
30, 1996 are not necessary indicative of the results which may be
expected for the entire year.
(3) Earnings Per Share
On September 27, 1996, 264,506 shares of the Corporation's
stock were issued, including 21,160 shares issued to the ESOP.
Earnings per share amounts for the three month and nine month
period ended September 30, 1996 are based upon an average of
243,346 shares. The shares issued to the Employee Stock Ownership
Plan (ESOP) are not included in this computation until they are
allocated to plan participants.
<PAGE> 11
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
(4) Stockholders' Equity and Stock Conversion
The Association converted from a federally chartered mutual
savings association to a federally chartered stock savings
association pursuant to its Plan of Conversion which was approved by
the Association's members on September 18, 1996. The conversion was
effective on September 27, 1996 and resulted in the issuance of
264,506 shares of common stock (par value $0.01) at $10 per share for
a gross sales price of $2,645,060. Costs related to conversion
(primarily underwriters' commissions, printing, and professional
fees) approximated $272,131 and were deducted to arrive at the net
proceeds of $2,372,929. The Corporation established an employee
stock ownership trust which purchased 21,160 shares of common stock
of the Corporation at the issuance price of $10 per share with funds
borrowed from the holding company.
(5) Employee Stock Ownership Plan (ESOP)
All employees meeting age and service requirements are eligible
to participate in an ESOP established on January 1, 1996.
Contributions made by the Association to the ESOP are allocated to
participants by a formula based on compensation. Participant
benefits become 100 percent vested after five years. The ESOP
purchased 21,160 shares in the Association's conversion.
<PAGE> 12
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis
of Financial Condition and Results of Operations
General
First Allen Parish Bancorp, Inc. (the "Corporation") was
incorporated under the laws of the state of Delaware to become a
savings bank holding company with First Federal Savings and Loan
Association of Allen Parish (the "Association") of Oakdale, Louisiana,
as its subsidiary. The Corporation was incorporated at the direction
of the Board of Directors of the Association, and on September 27, 1996,
acquired all of the capital stock of the Association upon its conversion
from mutual to stock form (the "conversion"). Prior to the conversion,
the Corporation did not engage in any material operations and at
September 30, 1996, had no significant assets other than the investment
in the capital stock of the Association and the First Allen Parish
Bancorp loan to the employee stock ownership plan (ESOP), representing
a portion of the net proceeds from the conversion retained at the
holding company level.
First Federal Savings and Loan Association of Allen Parish was
originally founded in 1962 as a federally chartered mutual savings and
loan association located in Oakdale, Louisiana. On September 18, 1996,
the Association members voted to convert the Association to a federal
stock institution. The Association conducts its business through its
main office in Oakdale, Louisiana. Deposits are insured by the Savings
Association Insurance Fund (SAIF) to the maximum allowable.
The Association has been, and intends to continue to be, a community
oriented financial institution offering selected financial services to
meet the needs of the communities it serves. The Association attracts
deposits from the general public and historically has used such
deposits, together with other funds, to originate loans secured by real
estate, including one- to four-family residential mortgage loans,
commercial real estate loans, land loans, construction loans and loans
secured by other properties. The Association also originates consumer
and other loans consisting primarily of loans secured by automobiles,
manufactured homes, loans secured by deposits (share loans) and lines
of credit.
The most significant outside factors influencing the operations of
the Association and other financial institutions include general
economic conditions, competition in the local market place and the
related monetary and fiscal policies of agencies that regulate
financial institutions. More specifically, the cost of funds primarily
consisting of insured deposits is influenced by interest rates on
competing investments and general market rates of interest, while
lending activities are influenced by the demand for real estate
financing and other types of loans, which in turn is affected by the
interest rates at which such loans may be offered and other factors
affecting loan demand and funds availability.
<PAGE> 13
Deposits of the Association are currently insured by the SAIF of the
FDIC. The FDIC also maintains another insurance fund, the Bank
Insurance Fund, which primarily insures commercial bank deposits.
Applicable law requires that both the SAIF and BIF funds be
recapitalized to a ratio of 1.25% of reserves to deposits, and the FDIC
announced that the BIF reached the required reserve ratio during May
1995. The SAIF, however, was not expected to achieve that reserve
ratio before 2002. Due to the disparity in reserve ratios, on November
14, 1995, the FDIC reduced annual assessments for BIF-insured
institutions to the legal minimum of $2,000 while SAIF-insured
institutions continued to pay assessments based on a schedule of from
$0.23 to $.031 per $100 of deposits.
In September 1996, Congress enacted legislation to recapitalize the
SAIF by a one-time assessment on all SAIF-insured deposits held as of
March 31, 1995. The assessment will be 65.7 basis points per $100 in
deposits, payable by November 30, 1996. For the Association, the
assessment has resulted in a one-time charge to earnings during the
three months ended September 30, 1996 in the amount of $170,020 or
($112,213 when adjusted for taxes), based on the Association's deposits
on March 31, 1995 of $25,878,177. In addition, beginning January 1,
1997, pursuant to the legislation, interest payments on bonds ("FICO
Bonds") issued in the late 1980s by the Financing Corporation ("FICO")
to recapitalize the now defunct Federal Savings and Loan Insurance
Corporation will be paid jointly by BIF-insured institutions and SAIF
insured institutions. The FICO assessment will be 1.29 basis points per
$100 in BIF deposits and 6.44 basis points per $100 in SAIF deposits.
Beginning January 1, 2000, the FICO interest payments will be paid pro
rata by banks and thrifts based on deposits (approximately 2.4 basis
points per $100 in deposits). The BIF and SAIF will be merged on
January 1, 1999, provided the bank and savings association charters are
merged by that date. In that event, pro-rata FICO sharing will begin
on January 1, 1999.
While the legislation has reduced the disparity between premiums paid
on BIF deposits and SAIF deposits, and has relieved the thrift industry
of a portion of the contingent liability represented by the FICO bonds,
the premium disparity between SAIF-insured institutions, such as the
Association, and BIF-insured institutions will continue until at least
January 1, 1999. Under the legislation, the Association anticipates
that its ongoing annual SAIF premiums will be approximately $17,000.
The Congress is also considering requiring all federal thrift
institutions, such as the Association, to either convert to a national
bank or a state chartered depository institution by January 1, 1998.
In addition, the Corporation may no longer be regulated as a thrift
holding company, but rather as a bank holding company. The Office of
Thrift Supervision (OTS) also would be abolished and its functions
transferred among the federal banking regulators.
Certain aspects of the legislation remain to be resolved and
therefore no assurance can be given as to whether or in what form the
legislation will be enacted or its effect on the Corporation and the
Association.
<PAGE> 14
Recently enacted legislation contains a provision that would repeal
the tax bad debt reserve currently available to Thrifts including the
percentage of taxable income method for tax years beginning after
December 31, 1995. The Association will have to change to the
experience method of computing it's bad debt reserve. The legislation
will require a Thrift to recapture the portion of its bad debt reserve
that exceeds the base year reserve, defined as the tax reserve as of
the last taxable year beginning before 1988.
Financial Condition
Consolidated assets of First Allen Parish Bancorp, Inc. were
$31,345,320 as of September 30, 1996, an increase of $2,487,206 as
compared to December 31, 1995. At September 30, 1996, total
stockholders' equity was $4,313,119, an increase of $2,254,533 when
compared to stockholders' equity at December 31, 1995. The increase in
assets and stockholders' equity was a result of issuance of 264,506
shares of .01 par value common stock at ten dollars per share.
Interest-bearing and non-interest bearing deposits and Federal Home
Loan Bank stock increased to $3,239,051 at September 30, 1996 from
$1,622,195 at December 31, 1995, an increase of $1,616,856. Mortgage
backed securities increased $638,538 to a total of $16,029,984 at
September 30, 1996, from a total of $15,391,446 as of December 31,
1995.
Loans receivable increased to $11,297,337 on September 30, 1996 from
$11,230,728 on December 31, 1995, an increase of $66,609.
Deposits totaled $26,629,524 on September 30, 1996 from $26,582,879
on December 31, 1995, an increase of $46,645.
Other liabilities increased to $229,507 on September 30, 1996 from
$41,462 on December 31, 1995, an increase of $188,045. The increase is
due primarily to the $170,020 one-time assessment to recapitalize the
SAIF as dictated by legislation.
Comparison of Operating Results for the Three Months Ended September
30, 1996 and 1995
General. Net income decreased $113,967 or 146%, to a loss of $36,081
for the three months ended September 30, 1996 from $77,886 for the
three months ended September 30, 1995. This decrease was primarily due
to the increase in the SAIF deposit insurance premium and a decrease in
income tax expense.
Net Interest Income. Total net interest income increased $10,643 or
5% to $240,867 for the three months ended September 30, 1996 from
$230,224 for the three months ended September 30, 1995. This increase
was primarily the result of increases in the average yield on and the
average balance of mortgage-backed securities from 1995 to 1996 and a
decrease in the average balance of deposits as well as average cost for
deposits.
<PAGE> 15
Provision for Losses on Loans. The Association maintains an
allowance for loan losses based upon management's periodic evaluation
of known and inherent risk in the loan portfolio, the Association's
past loss experience, adverse situations that may affect the borrower's
ability to repay loans, estimated value of the underlying collateral
and current and expected market conditions. The Association did not
establish a provision for loan losses for the three months ended
September 30, 1996 and 1995, since during these periods the Association
experienced recoveries on loans for which reserves had previously been
established. The recovery of $1,722 and $11,903 for the three months
ended September 30, 1996 and 1995, respectively was primarily due to
recoveries on consumer loans.
Non-Interest Income. Non-interest income increased $12,145 or 21%
to $69,164 for the three months ended September 30, 1996 from $57,019
for the three months ended September 30, 1995. This increase was due
to a $5,509 increase in service charges on deposits, a $2,537 increase
in insurance commissions earned, a $2,483 increase in loan origination
and servicing fees, an $1,145 increase in net other real estate
expenses, a $5,293 increase in the gain on the sale of real estate
owned and a $2,532 decrease in other operating revenues.
Non-Interest Expense. Non-interest expense increased $199,188 or
117% to $369,154 for the three months ended September 30, 1996 from
$169,966 for the three months ended September 30, 1995. This increase
was primarily due to an increase of $28,173 in compensation and
employee benefits, a $286 decrease in occupancy and equipment expenses,
$3,579 increase in stationery and printing, a $170,674 increase in SAIF
deposit insurance premiums, a $4,004 decrease in data processing and a
$1,052 increase in other expenses.
Income Tax Expense. Income tax expense decreased $72,614 or 142% to
an income tax benefit of $21,320 for the three months ended September
30, 1996 from an income tax expense of $51,294 for the three months
ended September 30, 1995.
Comparison of Operating Results for the Nine Months Ended September 30,
1996 and 1995
General. Net income decreased $127,979 or 56% to $100,076 for the
nine months ended September 30, 1996 from $228,055 for the nine months
ended September 30, 1995. This decrease was primarily due to the
increase in the SAIF deposit insurance premium and an increase in non
interest income.
Net Interest Income. Net interest income increased $9,745, or 1% to
$707,418 for the nine months ended September 30, 1996 from $697,673 for
the nine months ended September 30, 1995.
Provisions for Losses on Loans. The Association did not establish
a provision for loan loss for the nine months ended September 30, 1996
and 1995 since during these periods the Association experienced
recoveries on loans for which reserves had previously been established.
<PAGE> 16
Non-Interest Income. Non-interest income increased $25,295 or 15%
to $194,960 for the nine months ended September 30, 1996 from $169,665
for the nine months ended September 30, 1995. This increase was due to a
$12,049 increase in service charges on deposits, a $5,486 increase in
insurance commissions earned, a $4,069 increase in loan origination and
servicing fees, a $1,527 increase in net other real estate expenses, a
$4,127 increase in gain on foreclosed real estate, and a $1,091
increase in other operating revenues.
Non-Interest Expense. Non-interest expense increased $233,505 or 44%
to $761,485 for the nine months ended September 30, 1996 from $527,980
for the nine months ended September 30, 1995. This increase was due to
a $43,833 increase in compensation and employee benefits, a $3,400
increase in occupancy and equipment expenses, an $11,833 increase in
stationery and printing, a $173,601 increase in the SAIF deposit
insurance premium, a $1,232 decrease in data processing and a $2,070
increase in other expenses.
Income Tax Expense. Income tax expense decreased $80,156 or 61% to
$52,000 for the nine months ended September 30, 1996 from $132,156 for
the nine months ended September 30, 1995.
Non-Performing Assets
At September 30, 1996, non-performing assets were approximately
$173,000 compared to $200,000 on December 31, 1995. At September 30,
1996, the Association's allowance for loan losses was 267% of non
performing loans compared 197% at December 31, 1995.
Loans are considered non-performing when the collection of principal
and/or interest is not probable, or in the event payments are more than
90 days delinquent.
Capital Resources
The Association is subject to three capital to asset requirements in
accordance with Office of Thrift Supervision (OTS) regulations. The
following table is a summary of the Association's regulatory capital
requirements versus actual capital as of September 30, 1996:
<TABLE>
<CAPTION>
Actual Required Excess
Amount/Percent Amount/Percent Amount/Percent
<S> <C> <C> <C>
Tangible $4,324,000/13.79% $470,000/1.50% $3,854,000/12.29%
Core Leverage
Capital 4,324,000/13.64% 947,000/3.00% 3,377,000/10.64%
Risk-Based
Capital 4,457,000/37.12% 961,000/8.00% 3,496,000/29.12%
</TABLE>
<PAGE> 17
Liquidity
The Association's principal sources of funds are deposits, principal
and interest payments on loans, deposits in other insured institutions,
and investment securities. While scheduled loan repayments and
maturing investments are relatively predictable, deposit flows and
early loan payments are more influenced by interest rates, general
economic conditions and competition. Additional sources of funds may be
obtained from the Federal Home Loan Bank of Dallas by utilizing
numerous available products to meet funding needs.
The Association is required to maintain minimum levels of liquid
assets as defined by regulations. The required percentage is currently
five percent of net withdrawable savings deposits and borrowings
payable on demand or in one year or less. The Association has
maintained its liquidity ratio at levels exceeding the minimum
requirement. The eligible liquidity ratios at December 31, 1995, and
September 30, 1996, were 8.17% and 11.37%, respectively.
For purposes of the cash flows, all short-term investments with a
maturity of three months or less at date of purchase are considered
cash equivalents. Cash and cash equivalents for the periods ended
September 30, 1996 and 1995 were $2,979,851 and $1,741,364,
respectively. The increase was primarily due to the net cash used in
investing activities for loan originations, asset purchases, purchase
of mortgage-backed securities and sale of real estate owned and net
cash provided by financing activities from issuance of $264,506 shares
of .01 par value common stock at ten dollars per share.
<PAGE> 18
<TABLE>
<CAPTION>
PART II - OTHER INFORMATION
<S> <C>
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other information
None
Item 6. Exhibits and Reports on Form 8-K
Exhibits:
27 - Financial Data Schedule
Reports on Form 8-K:
None.
</TABLE>
<PAGE> 19
SIGNATURES
Pursuant to the requirement 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.
First Allen Parish Bancorp, Inc.
Registrant
<TABLE>
<S> <C>
Date: November 8, 1996 /s/Charles L. Galligan
---------------- Charles L. Galligan, President
and Chief Executive Officer (Duly
Authorized Officer)
Date: November 8, 1996 /s/Betty J. Parker
---------------- Betty J. Parker, Treasurer and
Chief Financial Officer
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTMEBER 30, 1996 CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT
OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 280,922
<INT-BEARING-DEPOSITS> 2,698,929
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,629,357
<INVESTMENTS-CARRYING> 13,938,346
<INVESTMENTS-MARKET> 13,926,694
<LOANS> 11,297,337
<ALLOWANCE> 327,259
<TOTAL-ASSETS> 31,345,320
<DEPOSITS> 26,629,524
<SHORT-TERM> 0
<LIABILITIES-OTHER> 402,677
<LONG-TERM> 0
0
0
<COMMON> 2,645
<OTHER-SE> (223,252)
<TOTAL-LIABILITIES-AND-EQUITY> 31,345,320
<INTEREST-LOAN> 775,593
<INTEREST-INVEST> 721,846
<INTEREST-OTHER> 78,066
<INTEREST-TOTAL> 1,575,505
<INTEREST-DEPOSIT> 866,547
<INTEREST-EXPENSE> 868,087
<INTEREST-INCOME-NET> 707,418
<LOAN-LOSSES> (11,183)
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 761,485
<INCOME-PRETAX> 152,076
<INCOME-PRE-EXTRAORDINARY> 152,076
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 100,076
<EPS-PRIMARY> .42
<EPS-DILUTED> .42
<YIELD-ACTUAL> 7.24
<LOANS-NON> 70,960
<LOANS-PAST> 0
<LOANS-TROUBLED> 61,002
<LOANS-PROBLEM> 226,557
<ALLOWANCE-OPEN> 340,656
<CHARGE-OFFS> 18,397
<RECOVERIES> 5,000
<ALLOWANCE-CLOSE> 327,259
<ALLOWANCE-DOMESTIC> 45,460
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 281,799
</TABLE>
