<PAGE>
As filed with the Securities and Exchange Commission on June 24, 1998
Registration No. 333-____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------
IBL Bancorp, Inc.
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(Name of Small Business Issuer in Its Articles of Incorporation)
Louisiana 6711 72-1317594
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(State or Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
23910 Railroad Avenue
Plaquemine, Louisiana 70764
(504) 687-6337
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(Address and Telephone Number of Principal Executive Offices and Principal Place
of Business)
G. Lloyd Bouchereau, Jr.
President and Chief Executive Officer
IBL Bancorp, Inc.
23910 Railroad Avenue
Plaquemine, Louisiana 70764
(504) 687-6337
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(Name, Address, and Telephone Number of Agent for Service)
Copies to:
Gerald F. Heupel, Jr., Esq. John F. Breyer, Jr., Esq.
Raymond A. Tiernan, Esq. Victor L. Cangelosi, Esq.
Elias, Matz, Tiernan & Herrick L.L.P. Breyer & Aguggia LLP
734 15th Street, N.W., 12th Floor 1300 I Street, N.W.
Washington, D.C. 20005 Suite 470 East
(202) 347-0300 Washington, D.C. 20005
(202) 737-7900
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Approximate date of proposed sale to the public: As soon as practicable
after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box. [ X ]
<PAGE>
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
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Title of Each Class of Proposed Maximum Proposed Maximum Amount of
Securities to be Dollar Amount Offering Price Aggregate Registration
Registered to be Registered Per Share Offering Price(1) Fee
- ---------------------- ---------------- ---------------- ------------------ ------------
<S> <C> <C> <C> <C>
Common Stock, par 317,400 shares(2) $10.00 $3,174,000 $936.33
value $.01 per share
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Includes shares that may be issued in the event of a 15% increase in the
maximum size of the offering.
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
Disclosure alternative used (check one): Alternative 1 Alternative 2 X
--- ---
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<PAGE>
PROSPECTUS
IBL BANCORP, INC.
(Proposed Holding Company for The Iberville Building and Loan Association)
Minimum of 204,000 and Maximum of 276,000 Shares of Common Stock
$10.00 per Share
IBL Bancorp, Inc. (the "Company"), a Louisiana corporation, is offering
a minimum of 204,000 shares and a maximum of 276,000 shares of its common
stock, par value $.01 per share (the "Common Stock"), in connection with the
conversion of The Iberville Building and Loan Association ("Iberville" or the
"Association") from a Louisiana-chartered mutual association to a
Louisiana-chartered stock association pursuant to the Association's plan of
conversion (the "Plan" or "Plan of Conversion"). Under certain circumstances,
the Company may increase the amount of Common Stock offered hereby to up to
317,400 shares. The simultaneous conversion of the Association to stock form,
the issuance of the Association's stock to the Company and the offer and sale
of the Common Stock by the Company are referred to herein as the "Conversion."
Nontransferable rights to subscribe for the Common Stock have been
granted, in order of priority, to certain depositors of the Association, to
the Company's Employee Stock Ownership Plan ("ESOP"), to certain other
depositors and borrowers of the Association, and to directors, officers and
employees of the Association, subject to the limitations described herein
(the "Subscription Offering"). Subject to the exercise of such priority
subscription rights, the Company may elect to offer the shares of Common
Stock not subscribed for in the Subscription Offering, if any, for sale in a
community offering (the "Community Offering") commencing prior to or upon
completion of the Subscription Offering (collectively, the "Offerings"). The
purchase price in the Offerings is $10.00 per share (the "Purchase Price").
It is unlikely that an active and liquid trading market for the Common
Stock will develop. See "Risk Factors - Absence of Market for the Common
Stock." FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS, SEE "RISK FACTORS" BEGINNING ON PAGE __.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE OFFICE OF THRIFT SUPERVISION, OR ANY OTHER
FEDERAL AGENCY OR STATE SECURITIES COMMISSION, NOR HAS ANY SUCH
COMMISSION, OFFICE OR AGENCY PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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Estimated
Underwriting Estimated
Subscription Fees and Other Net
Price(1) Expenses(2) Proceeds(3)
------------ -------------- ------------
<S> <C> <C> <C>
Minimum Per Share $ 10.00 $ 1.84 $ 8.16
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Midpoint Per Share $ 10.00 $ 1.56 $ 8.44
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Maximum Per Share $ 10.00 $ 1.36 $ 8.64
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Maximum Per Share, as adjusted $ 10.00 $ 1.18 $ 8.82
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Total Minimum(1) $ 2,040,000 $ 375,000 $ 1,665,000
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Total Midpoint(1) $ 2,400,000 $ 375,000 $ 2,025,000
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Total Maximum(1) $ 2,760,000 $ 375,000 $ 2,385,000
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Total Maximum, as adjusted(4) $ 3,174,000 $ 375,000 $ 2,799,000
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</TABLE>
(Footnotes on next page)
TRIDENT SECURITIES, INC.
The date of this Prospectus is August __, 1998.
<PAGE>
(Footnotes from page 1)
- ----------------------------
(1) Determined in accordance with an independent appraisal prepared by
Ferguson & Company ("Ferguson") dated June 5, 1998, which states that
the estimated pro forma market value of the Common Stock ranged from
$2,040,000 to $2,760,000 (the "Estimated Valuation Range"), or between
204,000 and 276,000 shares of Common Stock at the Purchase Price. See
"The Conversion - Stock Pricing and Number of Shares to be Issued."
(2) Consists of the estimated costs to the Company and the Association
arising from the Conversion, including a marketing fee of $75,000 and
expenses of up to $37,500 to be paid to Trident Securities, Inc.
("Trident") in connection with the Offerings. The fee and expenses to
be paid to Trident may be deemed to be underwriting fees and expenses.
See "The Conversion - Marketing Arrangements." The actual fees and
expenses may vary from the estimates. See "Pro Forma Data."
(3) Actual net proceeds may vary substantially from estimated amounts.
Includes the purchase of shares of Common Stock by the ESOP, which
initially will be deducted from the Company's stockholders' equity. For
the effects of such purchase, see "Capitalization" and "Pro Forma
Data."
(4) Reflects a 15% increase in the Estimated Valuation Range, which may
occur without a resolicitation of subscribers or any right of
cancellation, to reflect changes in market and financial conditions
prior to completion of the Conversion or to fill the order of the ESOP.
The Subscription Offering will close at 12:00 noon, Central Time, on
September __, 1998 (the "Expiration Date"), unless extended by the Company and
the Association, with regulatory approval if necessary, as will the Community
Offering unless extended. Any Community Offering must be completed within 45
days after the close of the Subscription Offering, or ______ _, 1998, unless
extended by the Company and the Association, with regulatory approval if
necessary. No single extension can exceed 90 days, and the extensions may not go
beyond ____ __, 2000. Orders submitted are irrevocable until the completion or
termination of the Conversion; provided that, if the Conversion is not completed
within the 45-day period referred to above, unless such period has been
extended, all subscribers will have their funds returned promptly with interest,
and all withdrawal authorizations will be cancelled. Any extension of the
Offerings will be conducted in accordance with the terms described herein. See
"The Conversion - Subscription Offering and Subscription Rights."
Purchase Limitations. With the exception of the ESOP, the maximum
amount that any person (including all persons on a joint account) may purchase
in any particular priority category in the Offerings is generally limited to
$60,000 or 6,000 shares of Common Stock (subject to adjustment). No person,
together with associates and persons acting in concert with such person, may
purchase in the aggregate more than $100,000 or 10,000 shares of Common Stock in
the Conversion (subject to adjustment). The minimum purchase is 25 shares. See
"The Conversion Limitations on Common Stock Purchases."
Required Approvals. The consummation of the Conversion is subject to
the receipt of various regulatory approvals and the approval of the members of
the Association.
2
<PAGE>
[Map to be inserted which shows the State of Louisiana, with an enlargement of
Iberville and West Baton Rouge Parishes showing Baton Rouge and Plaquemine]
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY.
3
<PAGE>
SUMMARY
This summary is qualified in its entirety by the more detailed
information regarding the Association and the Financial Statements of the
Association and notes thereto appearing elsewhere in this Prospectus.
IBL Bancorp, Inc.
IBL Bancorp, Inc. is a Louisiana corporation organized in June 1998 by
the Association for the purpose of becoming a unitary savings and loan
holding company of the Association. The Company will purchase all of the
capital stock of the Association to be issued in the Conversion in exchange
for 50% of the net Conversion proceeds and will retain the remaining 50% of
the net proceeds as its initial capitalization. Immediately following the
Conversion, the only significant assets of the Company will be the capital
stock of the Association, the Company's loan to the ESOP, and the remainder
of the net Conversion proceeds retained by the Company. The business and
management of the Company will initially primarily consist of the business
and management of the Association. See "Business" and "Regulation - The
Company."
The Company's executive office is located at the home office of the
Association at 23910 Railroad Avenue, Plaquemine, Louisiana 70764, and its
telephone number is (504) 687-6337.
The Iberville Building and Loan Association
Iberville is a Louisiana-chartered mutual building and loan association
that was originally formed in 1915. Iberville conducts business from its
office in Plaquemine, Louisiana. At March 31, 1998, Iberville had $22.8
million of total assets, $21.1 million of total liabilities, including $20.5
million of deposits, and $1.7 million of retained earnings (representing 7.3%
of total assets).
Iberville is primarily engaged in attracting deposits from the general
public through its office and using those and other available sources of
funds to originate loans secured primarily by single-family residences
(one-to-four units) located in its primary market area of Iberville and West
Baton Rouge Parishes in Louisiana. The Association's single-family
residential loans amounted to $11.5 million or 67.2% of the Association's
total loan portfolio and 50.6% of total assets at March 31, 1998. To a lesser
extent, the Association originates consumer loans, which amounted to $4.0
million or 23.3% of the total loan portfolio at such date, and purchases
mortgage-backed securities, which amounted to $4.0 million at March 31, 1998.
Iberville also originates single-family construction loans, commercial real
estate loans and land loans to a limited extent.
Iberville is a community-oriented savings institution which emphasizes
customer service and convenience. As part of this strategy, the Association
has developed a variety of products and services which meet the needs of its
retail customers. The Association generally has sought to achieve long-term
financial strength and stability by (i) increasing the amount and stability
of its net interest income, (ii) managing its assets and liabilities to
reduce its vulnerability to changes in interest rates, and (iii) maintaining
a low level of non-performing assets. In pursuit of these goals, the
Association has adopted a number of complementary business strategies which
emphasize retail lending and deposit products and services traditionally
offered by savings institutions. Highlights of Iberville's business strategy
include the following:
Emphasis on Traditional Lending and Investment Activities. Management
believes that Iberville is more likely to achieve its goals of long-term
financial strength and profitability by emphasizing retail products and
services, as opposed to wholesale or commercial activities. Iberville's
primary lending emphasis is the origination of loans secured by first liens
on single-family residences and, to a lesser extent, consumer loans, such as
home equity and improvement loans and automobile loans. The Association
intends to continue to emphasize the origination of single-family residential
loans and consumer loans. At March 31, 1998, the Association's net loans
amounted to $16.4 million or 72.1% of the Association's total assets. In
addition, $4.0 million or 17.6% of
4
<PAGE>
Iberville's total assets at March 31, 1998 consisted of mortgage-backed
securities, which are backed by single-family residential loans.
Interest Rate Risk Management. Iberville has implemented a strategy
designed to maintain the interest rate maturity of its assets relative to its
liabilities. The primary elements of the strategy include (i) emphasizing the
origination of adjustable-rate mortgages ("ARMs"), (ii) purchasing
adjustable-rate mortgage-backed securities, (iii) since mid-1996, originating
15-year, fixed-rate single-family residential loans to meet customer demand,
and (iv) maintaining lower-costing passbook and negotiable order of
withdrawal ("NOW") accounts. Based upon certain repricing assumptions, the
Association's interest-earning assets repricing or maturing within one year
exceeded its interest-bearing liabilities with similar characteristics by
$3.2 million or 14.1% of total assets at March 31, 1998.
Emphasis on Retail Deposits. The Association's liability strategy
emphasizes retail deposits primarily obtained from persons in its market
area. This strategy is facilitated by the Association's emphasis on
lower-costing passbook savings and NOW accounts, which in the aggregate
amounted to $5.5 million or 27.0% of the Association's total deposits at
March 31, 1998. For the three months ended March 31, 1998, the average rate
paid on the Association's passbook savings and NOW accounts amounted to
2.74%, as compared to the average rate paid on the Association's certificates
of deposits of 4.99% during such period.
Asset Quality. Total non-performing assets were 0.72% of total assets at
March 31, 1998 compared to 1.48% and 1.24% of total assets at December 31,
1997 and 1996, respectively. Non-accruing single-family residential loans and
consumer loans represented 100% of the total non-performing assets at March
31, 1998 and December 31, 1997 and 1996. At March 31, 1998, the Association's
allowance for loan losses equalled $403,000, representing 2.4% of total loans
outstanding and 246% of total non-accruing loans.
Maintain Sufficient Levels of Regulatory Capital. Iberville seeks to
maintain sufficient levels of regulatory capital to give it flexibility in
the changing regulatory environment and to respond to changes in market and
economic conditions. At March 31, 1998, Iberville's tangible, core and
risk-based capital ratios amounted to 7.34%, 7.34% and 15.47%, respectively,
which exceeded the minimum requirements of 1.5%, 3.0% and 8.0% by $1.3
million, $1.0 million and $886,000, respectively. The Conversion will further
increase Iberville's regulatory capital, as the Association's pro forma
tangible capital ratio will increase to 10.20% if shares are sold at the
midpoint of the Estimated Valuation Range. The pro forma capital levels may
initially result in the Company's return on equity being below the industry
average. See "Risk Factors - Low Return on Equity Following the Conversion;
Uncertainty as to Future Growth Opportunities." To manage its capital levels,
the Company intends to consider stock repurchases and/or returns of capital
as soon as permissible following the Conversion. See "Use of Proceeds."
The Association is subject to examination and comprehensive regulation
by the Louisiana Office of Financial Institutions ("OFI"), which is the
Association's chartering authority, and by the Office of Thrift Supervision
("OTS"), which is the Association's primary federal regulator. The
Association is also regulated by the Federal Deposit Insurance Corporation
("FDIC"), which insures its deposits up to applicable limits. Such regulation
and supervision establishes a comprehensive framework of activities in which
an institution may engage and is intended primarily for the protection of
depositors and the Savings Association Insurance Fund ("SAIF") administered
by the FDIC. The Association is also a member of the Federal Home Loan Bank
("FHLB") of Dallas, which is one of the 12 banks which comprise the FHLB
System. The Association is further subject to regulations of the Board of
Governors of the Federal Reserve System ("Federal Reserve Board") governing
reserves required to be maintained against deposits and certain other matters.
Iberville's executive office is located at 23910 Railroad Avenue,
Plaquemine, Louisiana 70764, and its telephone number is (504) 687-6337.
5
<PAGE>
The Conversion
On April 7, 1998, the Board of Directors of the Association adopted the
Plan of Conversion pursuant to which the Association is converting from a
Louisiana-chartered mutual savings and loan association to a
Louisiana-chartered stock savings and loan association, all the common stock
of which will be acquired by the Company in exchange for 50% of the net
Conversion proceeds. The other 50% of the net Conversion proceeds will be
retained by the Company. The Plan of Conversion was subsequently amended by
the Board of Directors on June 16, 1998. The Conversion is subject to OTS and
OFI approval, which have been conditionally received, and is subject to
approval of the Association's members at a special meeting to be held for
this purpose on ____ __, 1998. In addition, the Company has received the
conditional approval of the OTS and the OFI to become a savings and loan
holding company and as such will be subject to regulation by the OTS. See
"Use of Proceeds" and "The Conversion - General." By converting to the stock
form of organization, the Association will be structured in the form used by
many other savings institutions, commercial banks and other business
entities. See "The Conversion - Purposes of Conversion."
The Offerings
Pursuant to the Plan and in connection with the Conversion, the Company
is offering up to 276,000 shares of Common Stock in the Offerings, which may
be increased to up to 317,400 shares if the Estimated Valuation Range is
increased by up to 15%. The Common Stock is first being offered in the
Subscription Offering with nontransferable subscription rights being granted,
in the following order of priority, to (i) depositors of the Association with
account balances of $50.00 or more as of the close of business on December
31, 1996 ("Eligible Account Holders"), (ii) the ESOP, (iii) depositors of the
Association with account balances of $50.00 or more as of the close of
business on June 30, 1998 ("Supplemental Eligible Account Holders"), (iv)
depositors of the Association as of the close of business on _____ __, 1998
(other than Eligible Account Holders and Supplemental Eligible Account
Holders), and borrowers of the Association whose loans are secured by real
estate as of the close of business on _____ __, 1998 ("Other Members"), and
(v) directors, officers and employees of the Association (primarily for the
benefit of any such persons who do not qualify in one of the above
categories). All holders of a joint deposit account are deemed to be a single
person for purposes of the subscription rights created by such joint account.
Subscription rights will expire if not exercised by noon, Central Time, on
September __, 1998, unless extended.
Subject to the prior rights of holders of subscription rights, the
Company may elect to offer any shares of Common Stock not subscribed for in
the Subscription Offering in a Community Offering commencing prior to or upon
completion of the Subscription Offering, with preference given to natural
persons residing in Iberville Parish, Louisiana. Any Community Offering will
commence at such time as the Company delivers a copy of this Prospectus to
members of the general public who do not hold subscription rights. The
Company and the Association reserve the absolute right to reject or accept
any orders in the Community Offering, in whole or in part, either at the time
of receipt of an order or as soon as practicable following the Expiration
Date or any extension thereof.
Payments for subscriptions made by cash, check or money order will be
placed in a segregated account at the Association and will earn interest at
the Association's passbook rate (3.0% as of the date of this Prospectus) from
the date of receipt until the Conversion is completed or terminated. Payments
authorized by withdrawal from deposit accounts at the Association will
continue to earn interest at the contractual rate until the Conversion is
completed or terminated; these funds will be otherwise unavailable to the
depositor until such time. If a withdrawal is authorized to fund the purchase
of Common Stock, the funds will be withdrawn upon consummation of the
Conversion without penalty. Wire transfers into any account and payments from
other private third parties will not be accepted for the purchase of Common
Stock.
The Company and the Association have retained Trident as consultant and
advisor in connection with the Offerings and to assist in soliciting
subscriptions in the Offerings. Trident is not obligated to take or purchase
any shares of Common Stock in the Offerings. See "The Conversion -
Subscription Offering and Subscription Rights," "- Community Offering" and "-
Marketing Arrangements."
6
<PAGE>
Restrictions on Transfer of Subscription Rights
Prior to the completion of the Conversion, no person may transfer or
enter into any agreement or understanding to transfer the legal or beneficial
ownership of the subscription rights issued under the Plan or the shares of
Common Stock to be issued upon their exercise. Each person exercising
subscription rights will be required to certify that the purchase of Common
Stock is solely for the purchaser's own account and that there is no
agreement or understanding regarding the sale or transfer of such shares. See
"The Conversion - Restrictions on Transfer of Subscription Rights and
Shares." Subscription rights are nontransferable and persons found to be
attempting to transfer subscription rights will be subject to the forfeiture
of such rights and possible further sanctions and penalties imposed by the
OTS. The Company and the Association intend to pursue any and all legal and
equitable remedies in the event they become aware of the transfer of
subscription rights and will not honor orders known by them to involve the
transfer of such rights.
Purchase Limitations
With the exception of the ESOP, which intends to purchase up to an
aggregate of 8% of the number of shares of Common Stock issued in the
Conversion, or 16,320 shares and 22,080 shares at the minimum and maximum of
the Estimated Valuation Range, respectively, the maximum amount that any
person (including all persons on a joint account) may purchase in any
priority category in the Subscription Offering, as well as in any Community
Offering, is generally limited to $60,000 or 6,000 shares of Common Stock. No
person, together with associates of or persons acting in concert with such
person, may purchase in the aggregate more than $100,000 or 10,000 shares of
Common Stock sold in the Conversion as a whole, or 3.6% at the maximum of the
Estimated Valuation Range. At any time during the Offerings, and without
further approval by the members of the Association, the Company and the
Association may in their sole discretion increase the individual purchase
limitations up to 5% of the shares offered ($138,000 at the maximum of the
Estimated Valuation Range). If a purchase limitation is increased, persons
who submitted an order for 6,000 shares of Common Stock will be given the
opportunity to increase their order. The purchase limitations may also be
decreased to as low as 1% of the shares offered ($20,400 at the minimum of
the Estimated Valuation Range). In the event of a decrease in the purchase
limitation, any orders in excess of the revised purchase limitation will be
reduced to the extent necessary. The minimum purchase is 25 shares. See "The
Conversion - Limitations on Common Stock Purchases." In the event of an
oversubscription, shares will be allocated in accordance with the Plan as
described in "The Conversion - Subscription Offering and Subscription Rights"
and "- Community Offering."
The term "acting in concert" means (i) knowing participation in a joint
activity or interdependent conscious parallel action towards a common goal
whether or not pursuant to an express agreement; or (ii) a combination or
pooling of voting or other interests in the securities of an issuer for a
common purpose pursuant to any contract, understanding, relationship,
agreement or other arrangement, whether written or otherwise. The Company and
the Association may presume that certain persons are acting in concert based
upon, among other things, joint account relationships, common addresses and
the fact that such persons have filed joint Schedule 13Ds with the Securities
and Exchange Commission ("SEC") with respect to other companies. The term
"associate" of a person is defined in the Plan of Conversion to mean (i) any
corporation or organization (other than the Company, the Association or a
majority-owned subsidiary of the Association or the Company) of which such
person is a director, officer or partner or is, directly or indirectly, the
beneficial owner of 10% or more of any class of equity securities; (ii) any
trust or other estate in which such person has a substantial beneficial
interest or as to which such person serves as trustee or in a similar
fiduciary capacity (excluding tax-qualified employee benefit plans of the
Company or the Association); and (iii) any relative or spouse of such person,
or any relative of such spouse, who either has the same home as such person
or who is a director or officer of the Company or the Association or any of
their subsidiaries.
7
<PAGE>
Stock Pricing and Number of Shares to be Issued in the Conversion
Federal regulations require the aggregate purchase price of the Common
Stock to be consistent with an independent appraisal of the estimated pro
forma market value of the Common Stock. Ferguson, an independent appraiser,
has advised the Association that in its opinion, dated June 5, 1998, the
Estimated Valuation Range ranged from $2,040,000 to $2,760,000, with a
midpoint of $2,400,000. The full text of the appraisal report of Ferguson
describes the procedures followed, the assumptions made, limitations on the
review undertaken and matters considered. The appraisal report has been filed
as an exhibit to the Registration Statement and Application for Conversion of
which this Prospectus is a part, and is available in the manner set forth
under "Additional Information." This appraisal of the Common Stock is not
intended and should not be construed as a recommendation of any kind as to
the advisability of purchasing such stock, nor can any assurance be given
that purchasers of the Common Stock will be able to sell such shares after
the Conversion at or above the Purchase Price.
All shares of Common Stock issued in the Conversion will be sold at the
Purchase Price of $10.00 per share, which was established by the Boards of
Directors of the Company and the Association. The actual number of shares to
be issued in the Conversion will be determined by the Company and the
Association based upon the final updated valuation of the estimated pro forma
market value of the Common Stock, giving effect to the Conversion, at the
completion of the Offerings. The number of shares of Common Stock to be
issued is expected to range from a minimum of 204,000 shares to a maximum of
276,000 shares. Subject to approval of the OTS and the OFI, the Estimated
Valuation Range may be increased or decreased to reflect market and economic
conditions prior to the completion of the Conversion or to fill the order of
the ESOP, and under such circumstances the Company and the Association may
increase or decrease the number of shares of Common Stock to be issued in the
Conversion. No resolicitation of subscribers will be made and subscribers
will not be permitted to modify or cancel their subscriptions unless the
gross proceeds from the sale of the Common Stock are less than the minimum or
more than 15% above the maximum of the current Estimated Valuation Range. An
affirmative response to any resolicitation must be received by the
Association in order to confirm subscriptions. In connection with a
resolicitation, to the extent that subscriptions are cancelled, rescinded or
reduced, all funds delivered to the Company or the Association will be
promptly returned with interest earned from the date of receipt, and
withdrawal authorizations will be reduced or cancelled. See "Pro Forma Data,"
"Risk Factors - Dilutive Effect of Possible Issuance of Additional Shares"
and "The Conversion - Stock Pricing and Number of Shares to be Issued."
Benefits of Conversion to Officers and Directors
General. In connection with the Conversion, the Company's directors and
executive officers as a group (six persons) and their associates have
proposed to purchase 38,000 shares of Common Stock, or 18.6% and 13.8% of the
Common Stock at the minimum and maximum of the Estimated Valuation Range,
respectively.
The ESOP. The Company has adopted the ESOP, a tax-qualified benefit plan
for officers and employees of the Company and the Association, which intends
to purchase 8% of the shares of Common Stock offered in the Conversion, or
16,320 shares ($163,200) and 22,080 shares ($220,800) at the minimum and
maximum of the Estimated Valuation Range, respectively. The Company intends
to use a portion of the net proceeds retained by it to make a loan directly
to the ESOP to enable the ESOP to purchase such shares. In the event that the
total number of shares of Common Stock sold in the Offerings is increased to
an amount greater than the number of shares representing the maximum of the
Estimated Valuation Range, the ESOP will have a priority right to purchase
such increased number up to an aggregate of 8% of the Common Stock. See
"Management - New Stock Benefit Plans - Employee Stock Ownership Plan."
Stock Option Plan. Following consummation of the Conversion, the Company
intends to adopt a stock option plan for the benefit of the directors,
officers and employees of the Company and the Association (the "Stock Option
Plan"), pursuant to which the Company intends to reserve a number of shares
of Common Stock equal to an aggregate of 10% of the Common Stock issued in
the Conversion (27,600 shares at the maximum of the Estimated
8
<PAGE>
Valuation Range) for issuance pursuant to stock options and stock appreciation
rights. The Stock Option Plan will not be implemented prior to the receipt of
stockholder approval of the plan. It is currently expected that stock options
will be granted to each of the four non-employee directors and to Messrs.
Bouchereau and Strickland, although no determination has been made at this time
as to the amount of such stock options. All of the stock options will be granted
at no cost to the recipients, although the recipients will be required to pay
the applicable exercise price at the time of exercise in order to receive the
underlying shares of Common Stock. The Company currently anticipates that it
will not implement the Stock Option Plan until after one year following the
Conversion, although it reserves the right to do so as early as the first
meeting of stockholders following the Conversion, which is expected to be held
in April 1999, if such meeting is at least six months after the Conversion and
the necessary revisions are made to the plan to comply with OTS regulations
applicable to plans implemented within one year of the Conversion. See
"Management - New Stock Benefit Plans - Stock Option Plan."
Recognition and Retention Plan. Following consummation of the
Conversion, the Company intends to adopt a recognition and retention plan for
the benefit of the directors, officers and employees of the Company and the
Association (the "Recognition Plan" or "RRP"). The Recognition Plan will not
be implemented prior to the receipt of stockholder approval of the plan. It
is expected that the Recognition Plan will be submitted to stockholders for
approval at the same time as the Stock Option Plan. Upon the receipt of such
approval, the Recognition Plan is expected to purchase a number of shares of
Common Stock either from the Company or in the open market equal to an
aggregate of 4% of the Common Stock issued in the Conversion (11,040 shares
or $110,400 at the maximum of the Estimated Valuation Range), and to award
such shares to certain directors, officers and employees at no cost to the
recipients. It is currently expected that shares available under the
Recognition Plan will be granted to each of the four non-employee directors
and to Messrs. Bouchereau and Strickland, although no determination has been
made at this time as to the amount of such awards. See "Management - New
Stock Benefit Plans - Recognition Plan."
In the event that the Recognition Plan purchases shares of Common Stock
in the open market with funds contributed by the Company, the cost of such
shares initially will be deducted from the Company's stockholders' equity,
but the number of outstanding shares of Common Stock will not increase and
stockholders accordingly will not experience dilution of their ownership
interest. In the event that the Recognition Plan purchases shares of Common
Stock from the Company with funds contributed by the Company, total
stockholders' equity would neither increase nor decrease, but under such
circumstances stockholders would experience dilution of their ownership
interests (by 3.8% at the maximum of the Estimated Valuation Range) and per
share stockholders' equity and per share net earnings would decrease as a
result of an increase in the number of outstanding shares of Common Stock. In
either case, the Company will incur operating expense and increases in
stockholders' equity as the shares held by the Recognition Plan are granted
and issued in accordance with the terms thereof. For a presentation of the
effects of anticipated purchases of Common Stock by the Recognition Plan, see
"Risk Factors - Dilutive Effect of Possible Issuance of Additional Shares,"
"Risk Factors -Increased Compensation Expense After the Conversion" and "Pro
Forma Data."
Employment Agreements. Upon consummation of the Conversion, the Company
and the Association intend to enter into three-year employment agreements
with Messrs. Bouchereau and Strickland, and each of the officers are
presently expected to have an initial annual salary of less than $100,000. If
the employment of such officers is terminated as a result of a change in
control of the Company, Messrs. Bouchereau and Strickland would each be
entitled to a cash severance amount equal to three times his average annual
compensation over his most recent five taxable years. At least 30 days prior
to each annual anniversary date of the employment agreement, the Boards of
Directors of the Company and the Association shall determine whether or not
to extend the term of the agreements for an additional one year. See
"Management - Employment Agreements."
Prospectus Delivery and Procedure for Purchasing Shares
To ensure that each purchaser receives a Prospectus at least 48 hours
prior to the Expiration Date in accordance with Rule 15c2-8 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), no Prospectus will be
mailed any later than five days prior to such date or hand delivered any
later than two days prior to such date. Execution of the order form will
confirm receipt or delivery of the Prospectus in accordance with Rule
9
<PAGE>
15c2-8. Order forms will only be distributed with a Prospectus. The Company and
the Association will accept for processing only orders submitted on original
order forms. Copies of order forms, order forms unaccompanied by an executed
certification form, payments from other private third parties and wire transfers
into any account will not be accepted for the purchase of Common Stock. Payment
by check, money order, cash or debit authorization to an existing account at
Iberville must accompany the order form.
In order to ensure that Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are properly identified as to their stock
purchase priorities, depositors as of the close of business on the
Eligibility Record Date (December 31, 1996) or the Supplemental Eligibility
Record Date (June 30, 1998), and/or depositors and certain borrowers as of
the close of business on the Voting Record Date, _____ __, 1998, must list
all accounts on the stock order form giving all names on each account and the
account numbers. See "The Conversion - Procedure for Purchasing Shares in the
Subscription and Community Offerings."
Use of Proceeds
The net proceeds from the sale of Common Stock in the Conversion are
estimated to be between $1.7 million and $2.4 million ($2.8 million assuming
a 15% increase in the Estimated Valuation Range), depending on the number of
shares sold and the expenses of the Conversion. See "Pro Forma Data." The
Company will purchase all of the capital stock of the Association to be
issued in the Conversion in exchange for 50% of the net Conversion proceeds
and will retain the remaining 50% of the net proceeds as its initial
capitalization. The Company intends to use a portion of the net proceeds
retained by it to make a loan directly to the ESOP to enable the ESOP to
purchase up to 8% of the Common Stock. The amount of the loan is expected to
be between $163,200 and $220,800 at the minimum and maximum of the Estimated
Valuation Range, respectively. See "Management - New Stock Benefit Plans -
Employee Stock Ownership Plan." The remaining net proceeds retained by the
Company initially may be used to invest in mortgage-backed securities issued
by U.S. Government agencies and government-sponsored enterprises, U.S.
Government and federal agency securities of various maturities, deposits in
either the Association or other financial institutions, or a combination
thereof. Ultimately, the portion of net proceeds retained by the Company may
be used to support the Association's lending activities, to support the
future expansion of operations through establishment of branch offices or
other customer facilities, expansion into other lending markets or
diversification into other banking related businesses (although no such
transactions are specifically being considered at this time), and for other
business and investment purposes, including the payment of regular or special
cash dividends, possible repurchases of the Company's Common Stock or
tax-free returns of capital. See "Dividend Policy." Funds contributed to the
Association from the Company will be used for general business purposes. The
proceeds will be used to support the Association's lending and investment
activities and thereby enhance the Association's capabilities to serve the
borrowing and other financial needs of the communities it serves. See "Use of
Proceeds."
Dividends
The Board of Directors of the Company intends to pay quarterly cash
dividends on the Common Stock at an initial rate of $.15 per share per annum
(representing 1.5% of the Purchase Price), commencing with the first full
calendar quarter following consummation of the Conversion. Declarations of
dividends by the Company's Board of Directors will depend upon a number of
factors, including the amount of the net proceeds retained by the Company in
the Conversion, investment opportunities available to the Company or the
Association, capital requirements, the Company's and the Association's
financial condition and results of operations, tax considerations, statutory
and regulatory limitations, and general economic conditions. There can be no
assurances that dividends will in fact be paid on the Common Stock or that,
if paid, such dividends will not be reduced or eliminated in future periods.
For a more detailed discussion of the factors that may affect the payment of
dividends, see "Dividend Policy."
Risk Factors
See "Risk Factors" for a discussion of certain factors that should be
considered by prospective investors.
10
<PAGE>
SELECTED FINANCIAL DATA
(Unaudited)
(Dollars in Thousands)
The following selected financial and other data of Iberville does not
purport to be complete and is qualified in its entirety by reference to the more
detailed financial information contained elsewhere herein.
<TABLE>
<CAPTION>
March 31, December 31,
1998(1) 1997 1996
--------- ---- -----
<S> <C> <C> <C>
Selected Financial
Condition and Other Data:
Total assets $22,764 $22,395 $21,804
Cash and cash equivalents(2) 1,697 1,110 1,809
Securities available for sale 1,811 1,948 1,427
Securities held to maturity 2,212 2,401 2,750
Loans receivable, net 16,418 16,318 15,194
Real estate owned -- -- --
Deposits 20,534 20,026 20,278
FHLB advances 452 610 --
Total equity 1,671 1,622 1,454
Full service offices 1 1 1
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
March 31, Year Ended December 31,
-------------------- -----------------------
1998(1) 1997(1) 1997 1996
<S> <C> <C> <C> <C>
Selected Operating Data:
Total interest income $ 455 $ 417 $ 1,691 $ 1,645
Total interest expense 230 226 917 908
------- ------- ------- -------
Net interest income 225 191 774 737
Provision for loan losses 12 12 42 39
------- ------- ------- -------
Net interest income after provision
for losses 213 179 732 698
Noninterest income 24 21 98 131
Noninterest expenses 158 147 568 703
------- ------- ------- -------
Income before provision for income taxes 79 53 262 126
Provision for federal income taxes 26 20 98 70
------- ------- ------- -------
Net income 53 33 164 56
Other comprehensive income (loss),
net of tax effects (4) (6) 4 (3)
------- ------- ------- -------
Comprehensive income $ 49 $ 27 $ 168 $ 53
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
(Table continued on next page)
11
<PAGE>
<TABLE>
<CAPTION>
At or For the
Three Months Ended At or For the Year
March 31, Ended December 31,
------------------ -----------------
1998(1) 1997(1) 1997 1996
------- ------- ---- ----
<S> <C> <C> <C> <C>
Selected Ratios (3):
Return on average assets 0.94% 0.60% 0.74% 0.26%
Return on average equity 12.79 8.95 10.30 3.83
Average equity to average assets 7.32 6.73 7.22 6.77
Equity to assets at end of period 7.34 6.74 7.24 6.67
Interest rate spread(4) 3.40 3.26 3.24 3.17
Net interest margin(4) 3.72 3.53 3.55 3.46
Non-performing loans to total
loans at end of period(5) 0.96 2.19 1.93 1.70
Non-performing assets to total
assets at end of period(5) 0.72 1.60 1.48 1.24
Allowance for loan losses to total
non-accruing loans 245.73 106.55 121.69 134.07
Average interest-earning assets to
average interest-bearing liabilities 107.69 106.65 107.42 106.65
Net interest income after provision
for loan losses to total
noninterest expenses 134.81 121.77 128.87 99.29
Noninterest expenses to average
total assets 2.79 2.68 2.58 3.25
</TABLE>
- ------------------------
(1) In the opinion of management, financial information at March 31, 1998
and for the three months ended March 31, 1998 and 1997 reflect all
adjustments (consisting only of normal recurring accruals) which are
necessary for a fair presentation of the information as of such date
and for such periods. The operating and other data for the three months
ended March 31, 1998 may not be indicative of the operations of
Iberville on an annualized basis.
(2) Includes cash and due from banks as well as interest-earning deposits
in other institutions.
(3) With the exception of end of period ratios, all ratios are based on
average monthly balances. The ratios for the three month periods have
been annualized where appropriate.
(4) Interest rate spread represents the difference between the average
yield on interest-earning assets and the average rate on
interest-bearing liabilities. Net interest margin represents net
interest income as a percentage of average interest-earning assets.
(5) Non-performing loans consist of non-accrual loans, and non-performing
assets consist of non-performing loans and, where applicable, real
estate acquired by foreclosure.
12
<PAGE>
SUMMARY OF RECENT DEVELOPMENTS
The selected financial and other data of Iberville set forth below does
not purport to be complete and should be read in conjunction with, and is
qualified in its entirety by, the more detailed information, including the
Financial Statements and related Notes, appearing elsewhere herein.
<TABLE>
<CAPTION>
At At
June 30, December 31,
1998(1) 1997
-------- -------------
(Dollars in Thousands)
<S> <C> <C>
Selected Financial Condition
and Other Data:
Total assets $ $22,395
Cash and cash equivalents(2) 1,110
Securities available for sale 1,948
Securities held to maturity 2,401
Loans receivable, net 16,318
Real estate owned --
Deposits 20,026
FHLB advances 610
Total equity 1,622
Full service offices 1 1
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
1998(1) 1997(1) 1998(1) 1997(1)
------- ------- ------- -------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Selected Operating Data:
Total interest income $ $ $ $
Total interest expense
-------- ------- -------- --------
Net interest income
Provision for loan losses
-------- ------- -------- --------
Net interest income after provision
for loan losses
Noninterest income
Noninterest expenses
-------- ------- -------- --------
Income before provision for income taxes
Provision for federal income taxes
-------- ------- -------- --------
Net income
Other comprehensive income (loss),
net of tax effects
-------- ------- -------- --------
Comprehensive income $ $ $ $
-------- ------- -------- --------
-------- ------- -------- --------
</TABLE>
(Table continued on next page)
13
<PAGE>
<TABLE>
<CAPTION>
At or For the At or For the
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- --------------------------
1998(1) 1997(1) 1998(1) 1997(1)
------- ------- ------- -------
<S> <C> <C> <C> <C>
Selected Ratios (3):
Return on average assets
Return on average equity
Average equity to average assets
Equity to assets at end of period
Interest rate spread(4)
Net interest margin(4)
Non-performing loans to total
loans at end of period(5)
Non-performing assets to total
assets at end of period(5)
Allowance for loan losses to total
non-accruing loans
Average interest-earning assets to
average interest-bearing liabilities
Net interest income after provision for
loan losses to total noninterest expenses
Noninterest expenses to average total assets
</TABLE>
- ------------------
(1) In the opinion of management, financial information at June 30, 1998
and for the three and six months ended June 30, 1998 and 1997 reflect
all adjustments (consisting only of normal recurring accruals) which
are necessary for a fair presentation of the information as of such
date and for such periods. The operating and other data for the three
and six months ended June 30, 1998 may not be indicative of the
operations of Iberville on an annualized basis.
(2) Includes cash and due from banks as well as interest-earning deposits
in other institutions.
(3) With the exception of end of period ratios, all ratios are based on
average monthly balances during the indicated periods and are
annualized where appropriate.
(4) Interest rate spread represents the difference between the average
yield on interest-earning assets and the average rate paid on
interest-bearing liabilities. Net interest margin represents net
interest income as a percent of average interest-earning assets.
(5) Non-performing loans consist of non-accruing loans, and non-performing
assets consist of non-performing loans and real estate acquired by
foreclosure where applicable.
[Discuss results for the three and six months ended June 30, 1998.]
At June 30, 1998, the Association's tangible and core capital
both amounted to $_____ million or ____% of adjusted total assets of $_____
million, and the Association's risk-based capital amounted to $______ million or
______% of adjusted risk-weighted assets of $______ million.
14
<PAGE>
RISK FACTORS
The following risk factors, in addition to those discussed elsewhere in
this Prospectus, should be carefully considered by investors in deciding whether
to purchase the Common Stock offered hereby.
Low Return on Equity Following the Conversion; Uncertainty as to Future Growth
Opportunities
At March 31, 1998, the Association's ratio of equity to assets was
7.3%. The Company's equity position will be significantly increased as a
result of the Conversion. On a pro forma basis as of March 31, 1998, assuming
the sale of Common Stock at the midpoint of the Estimated Valuation Range,
the Company's ratio of equity to assets would be 10.20%. The Company's
ability to leverage this capital will be significantly affected by industry
competition for loans and deposits. The Company currently anticipates that it
will take time to prudently deploy such capital. As a result, the Company's
return on equity initially is expected to be below the industry average after
the Conversion. In an effort to fully deploy post-Conversion capital, in
addition to attempting to increase its loan and deposit growth, the Company
may seek to expand its banking franchise by opening branch offices. Neither
the Company nor the Association has any specific plans, arrangements or
understandings regarding any such expansions or acquisitions at this time.
Absence of Market for the Common Stock
The Company and the Association have never issued capital stock,
other than 100 shares issued in connection with the incorporation of the
Company, which shares will be cancelled upon completion of the Conversion.
Consequently, there is no existing market for the Common Stock. Following the
completion of the Offerings, it is anticipated that the Common Stock will be
traded on the over-the-counter market with quotations available through the
OTC Bulletin Board. Trident has indicated its intention to make a market in
the Common Stock. If the Common Stock cannot be quoted and traded on the OTC
Bulletin Board, it is expected that transactions in the Common Stock will be
reported in the pink sheets published by the National Quotation Bureau, Inc.
Making a market may include the solicitation of potential buyers and sellers
in order to match buy and sell orders. However, Trident will not be subject
to any obligation with respect to such efforts. The development of a liquid
public trading market depends upon the existence of willing buyers and
sellers, the presence of which is not within the control of the Company, the
Association or any market maker. It is unlikely that an active and liquid
trading market for the Common Stock will develop due to the relatively small
size of the Offerings and the small number of stockholders expected following
the Conversion. Accordingly, purchasers should consider the illiquid,
long-term nature of an investment in the Common Stock. Furthermore, there can
be no assurance that purchasers will be able to sell their shares at or above
the Purchase Price. See "Market for Common Stock."
Potential Effects of Changes in Interest Rates and the Current Interest Rate
Environment
The operations of the Association are substantially dependent on its
net interest income, which is the difference between the interest income
earned on its interest-earning assets and the interest expense paid on its
interest-bearing liabilities. Like most savings institutions, the
Association's earnings are affected by changes in market interest rates and
other economic factors beyond its control. While the Association's average
interest rate spread increased to 3.40% in the first quarter of 1998 from
3.26% for the comparable 1997 quarter, no assurance can be given that the
Association's average interest rate spread will not decrease in future
periods. Any future decrease in the Association's average interest rate
spread could adversely affect the Association's net interest income. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Market Risk Analysis."
If an institution's interest-earning assets have longer effective
maturities than its interest-bearing liabilities, the yield on the
institution's interest-earning assets generally will adjust more slowly than
the cost of its interest-bearing liabilities and, as a result, the
institution's net interest income generally would be adversely affected by
material and prolonged increases in interest rates and positively affected by
comparable declines in interest rates.
15
<PAGE>
The Association attempts to reduce the vulnerability of its operations to
changes in interest rates by maintaining significant amounts of assets with
relatively short terms and/or adjustable rates of interest. Based upon
certain repricing assumptions, the Association's interest-earning assets
repricing or maturing within one year exceeded its interest-bearing
liabilities with similar characteristics by $1.6 million or 7.2% of total
assets. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -Market Risk Analysis."
In addition to affecting interest income and expense, changes in
interest rates also can affect the value of the Association's
interest-earning assets, which are comprised of fixed and adjustable-rate
instruments, and the ability to realize gains from the sale of such assets.
Generally, the value of fixed-rate instruments fluctuates inversely with
changes in interest rates. At March 31, 1998, the Association had $1.8
million of investment and mortgage-backed securities available for sale
($209,000 of which had fixed-rates of interest). The Association had $1,500
of net unrealized losses with respect to such securities at March 31, 1998,
which were included as a separate component in the Association's total net
worth, net of tax benefit, as of such date.
The OTS has implemented an interest rate risk component into its
risk-based capital rules, which is designed to calculate on a quarterly basis
the extent to which the value of an institution's assets and liabilities
would change if interest rates increase or decrease. If the net portfolio
value of an institution would decline by more than 2% of the estimated market
value of the institution's assets in the event of a 200 basis point increase
or decrease in interest rates, then the institution is deemed to be subject
to a greater than "normal" interest rate risk and must deduct from its
capital 50% of the amount by which the decline in net portfolio value exceeds
2% of the estimated market value of the institution's assets, as of an
effective date to be determined. As of March 31, 1998, if interest rates
decreased by 200 basis points, the Association's net portfolio value would
decrease by $114,000 or .5% of the estimated portfolio value of the
Association's assets, while the net portfolio value would increase by $91,000
or .4% if interest rates increased by 200 basis points, in each case as
calculated by the OTS. These results are primarily due to the Association's
significant holdings of adjustable-rate loans and mortgage-backed securities.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations - Market Risk Analysis."
Changes in interest rates also can affect the average life of loans
and mortgage-related securities. Decreases in interest rates in recent
periods have resulted in increased prepayments of loans and mortgage-backed
securities, as borrowers refinanced to reduce borrowing costs. Under these
circumstances, the Association is subject to reinvestment risk to the extent
that it is not able to reinvest such prepayments at rates which are
comparable to the rates on the maturing loans or securities. See "Business -
Lending Activities."
In addition, at March 31, 1998, the Association had $20.5 million of
deposits, of which $9.7 million or 47.1% consisted of certificates of deposit
maturing in one year or less. An increase in interest rates could result in a
decline in deposits, a higher average cost of deposits, or both.
Investment in Mortgage-Backed Securities
At March 31, 1998, the Association had $4.0 million of
mortgage-backed securities, representing 17.6% of its total assets.
Mortgage-backed securities generally yield less than the loans which underlie
such securities. In the first quarter of 1998, the average yield on the
Association's mortgage-backed securities was 6.08%, compared to an average
yield of 8.71% on its loan portfolio. The investment in mortgage-backed
securities adversely affects the average yield on the Association's total
interest-earning assets.
Despite the lower yields, the Association intends to maintain its
mortgage-backed securities portfolio, which consists of securities issued by
U.S. Government agencies and government-sponsored enterprises. These
securities offer nominal credit risk due to payment guarantees or credit
enhancements, are an integral part of the Association's strategy of reducing
its risk exposure to increases in interest rates, are more liquid than
individual loans and may be used to collateralize the Association's FHLB
advances.
16
<PAGE>
Risks Related to Consumer Loans
At March 31, 1998, the Association had $4.0 million or 23.3% of its
total loan portfolio in consumer loans. These loans generally involve more
risk than mortgage loans because of the type and nature of the collateral
and, in certain cases, the absence of collateral. The consumer loan portfolio
includes $505,000 of unsecured loans at March 31, 1998. For a further
discussion of the risks associated with consumer loans, see "Business -
Lending Activities -Consumer Loans." A total of $431,000 of consumer loans
were delinquent 30 or more days at March 31, 1998. See "Business - Asset
Quality - Delinquent Loans."
Risks Related to Commercial Real Estate, Construction and Land Loans
Commercial real estate, construction and land lending generally is
considered to involve a higher degree of risk than single-family residential
lending due to a variety of factors, including generally larger loan
balances, the dependency on successful operation of the project for
repayment, loan terms which often do not require full amortization of the
loan over its term, and the need to successfully develop and/or sell the
property. In addition, risk of loss on a construction loan is dependent
largely upon the accuracy of the initial estimate of the property's value at
completion of construction or development and the estimated cost (including
interest) of construction. During the construction phase, a number of factors
could result in delays and cost overruns. If the estimate of value proves to
be inaccurate, the Association may be confronted, at or prior to the maturity
of the loan, with a project, when completed, having a value which is
insufficient to assure full repayment. Commercial real estate loans may
involve large loan balances to single borrowers or groups of related
borrowers, with the repayment of such loans typically dependent on the
successful operations and income stream of the borrower. Such risks can be
significantly affected by economic conditions. In addition, commercial real
estate lending generally requires substantially greater oversight efforts
compared to residential real estate lending. See "Business -Lending
Activities - Commercial Real Estate Loans." As of March 31, 1998, the
Association had $931,000 of commercial real estate loans, $420,000 of
construction loans, and $287,000 of land loans, none of which were
non-performing at March 31, 1998. These loans aggregated $1.6 million or 9.6%
of the Association's total loan portfolio at March 31, 1998. See "Business -
Asset Quality - Non-Performing Assets." For information on the Association's
five largest loans or groups of loans to one borrower, all of which were
performing in accordance with their terms at March 31, 1998, see "Business -
Lending Activities - General."
Strong Competition Within Iberville's Market Area
Competition in the banking and financial services industry is
intense. In its market area, the Association competes with commercial banks,
savings institutions, mortgage brokerage firms, credit unions, finance
companies, mutual funds, insurance companies, and brokerage and investment
banking firms operating locally and elsewhere. Many of these competitors have
substantially greater resources and lending limits than the Association and
may offer certain services that the Association does not or cannot provide.
The profitability of the Association depends upon its continued ability to
successfully compete in its market area.
Geographic Concentration of Loans
Iberville's market area consists primarily of Iberville and West
Baton Rouge Parishes in Louisiana. The Association's real estate loans are
primarily secured by properties located in its market area, and all of the
Association's loans are primarily made to residents of its market area.
Accordingly, the asset quality of the Association's loan portfolio is highly
dependent upon the economy and the unemployment rate in its market area. No
assurance can be given that downturns in the economy in the Association's
market area may not adversely affect the Association's operations in the
future.
17
<PAGE>
Reliance on Key Officers
The Association's executive officers consist of G. Lloyd Bouchereau,
Jr., President and Chief Executive Officer, and Danny M. Strickland, Loan
Officer. These officers have 32 and three years, respectively, of experience
with the Association. The loss of one or both of the executive officers could
have an adverse effect on the Association, particularly the loss of the
President and Chief Executive Officer. While the Company and the Association
intend to enter into three-year employment agreements with Messrs. Bouchereau
and Strickland upon consummation of the Conversion, the Company and the
Association do not have and currently do not intend to obtain key-man life
insurance policies on these officers.
Certain Anti-Takeover Provisions
Provisions in the Company's Governing Instruments and Louisiana Law.
Certain provisions of the Company's Articles of Incorporation and Bylaws, as
well as certain provisions in Louisiana law, will assist the Company in
maintaining its status as an independent publicly owned corporation.
Provisions in the Company's Articles of Incorporation and Bylaws provide,
among other things, (i) that the Board of Directors of the Company shall be
divided into three classes; (ii) that special meetings of stockholders may
only be called by the Board of Directors or the President of the Company or
by holders of at least 50% of the outstanding Common Stock; (iii) that
stockholders generally must provide the Company advance notice of stockholder
proposals and nominations for director and provide certain specified related
information; (iv) for noncumulative voting for the election of directors; (v)
for a period of five years following the Conversion, that no person may
acquire more than 10% of the issued and outstanding shares of any class of
equity security of the Company except under certain circumstances; (vi) the
authority to issue shares of authorized but unissued Common Stock and
preferred stock and to establish the terms of any one or more series of
Preferred Stock, including voting rights; and (vii) for supermajority voting
requirements to remove directors without cause or to amend various provisions
in the Articles of Incorporation or Bylaws. Provisions under Louisiana law
applicable to the Company, among other things, establish certain uniform
price provisions for certain business combinations and provide that persons
who acquire more than 20% of the outstanding voting stock may not vote such
shares unless the disinterested stockholders approve such shares having
voting rights. The above provisions may discourage potential proxy contests
and other potential takeover attempts, particularly those which have not been
negotiated with the Board of Directors, and thus generally may serve to
perpetuate current management. Based on the proposed purchases of directors
and executive officers in the Conversion, the shares to be acquired by the
ESOP, and the proposed purchase of shares by the Recognition Plan assuming
stockholder approval is received, the directors and officers may be in a
position to block certain transactions requiring a supermajority vote, even
if a majority of the stockholders believe such transactions are in their best
interest. See "Proposed Management Purchases" and "Restrictions on
Acquisition of the Company and the Association."
Voting Control of Officers and Directors. Directors and executive
officers of the Company (and their associates) expect to purchase
approximately 18.6% or 13.8% of the shares of Common Stock outstanding based
upon the minimum and the maximum of the Estimated Valuation Range,
respectively. See "Proposed Management Purchases." The directors who act as
trustees of the ESOP are also expected to immediately control the voting of
8% of the shares of Common Stock issued in the Conversion through the ESOP,
at least until an allocation has been made under the ESOP. Under the terms of
the ESOP, after an allocation has been made, the unallocated shares will
generally be voted by the trustees in the same proportion as the allocated
shares are voted by the ESOP participants.
No earlier than the first meeting of stockholders following the
Conversion, which is expected to be held in April 1999, the Company intends
to seek stockholder approval of the Company's proposed Recognition Plan,
which is a non-tax-qualified restricted stock plan for the benefit of
directors, officers and employees of the Company and the Association.
Assuming the receipt of stockholder approval, the Company expects to acquire
Common Stock on behalf of the Recognition Plan, in an amount equal to 4% of
the Common Stock issued in the Conversion, or 8,160 shares and 11,040 shares
at the minimum and maximum of the Estimated Valuation Range, respectively.
These shares will be acquired either through open market purchases, if
permissible, or from authorized but unissued Common Stock. Under the terms of
the Recognition Plan, recipients of awards will be entitled to instruct the
trustee
18
<PAGE>
of the Recognition Plan as to how the underlying shares should be voted, and
the trustee will be entitled to vote all unallocated shares in its
discretion. If the shares are purchased in the open market, directors and
executive officers would have effective control over 22.6% or 17.8% of the
Common Stock outstanding at such time based upon the minimum and the maximum
of the Estimated Valuation Range, respectively, before giving effect to the
potential exercise of additional stock options by directors and officers of
the Company and the Association and shares held by the ESOP. If approved by
stockholders at no earlier than the first meeting of stockholders following
the Conversion, the Company intends to reserve for future issuance pursuant
to the Stock Option Plan a number of authorized shares of Common Stock equal
to an aggregate of 10% of the Common Stock issued in the Conversion (27,600
shares, based on the issuance of the maximum 276,000 shares). See "Management
- - New Stock Benefit Plans." Management's potential voting control could,
together with additional stockholder support, preclude or make more difficult
takeover attempts that certain stockholders deem to be in their best interest
and may tend to perpetuate existing management.
Provisions of Stock Benefit Plans and Employment Agreements. If the
Stock Option Plan and the Recognition Plan are not implemented until more
than one year following completion of the Conversion, such plans will provide
for accelerated vesting in the event of a change in control of the Company.
These plans will be implemented only if approved by stockholders. The ESOP
also provides for accelerated vesting in the event of a change in control. In
addition, upon consummation of the Conversion, the Company and the
Association will enter into employment agreements with their two executive
officers, which agreements will provide for severance pay in the event of a
change in control. These provisions may have the effect of increasing the
cost of acquiring the Company, thereby discouraging future attempts to take
over the Company or the Association. See "Restrictions on Acquisition of the
Company and the Association - Restrictions in the Company's Articles of
Incorporation and Bylaws," "Management - Employment Agreements" and
"Management - New Stock Benefit Plans."
Legislation Limiting Deduction of Bad Debt Reserves
Under Section 593 of the Internal Revenue Code of 1986, as amended
(the "Code"), until the first tax year beginning on or after January 1, 1996,
savings institutions such as the Association generally were permitted to
establish a tax reserve for bad debts and to make annual additions thereto,
which additions, within specified limitations, could be deducted in arriving
at their taxable income. The Association's deduction with respect to
"qualifying loans" was computed using an amount based on the Association's
actual loss experience (the "Experience Method") or a percentage equal to 8%
of the Association's taxable income (the "PTI Method"). Under recently
enacted legislation, the PTI Method was repealed. As a result, the
Association is permitted to deduct only actual bad debts as they occur and
cannot utilize the percentage of taxable income method to make additions to
its bad debt reserves in the future to reduce its effective tax rate. In
addition, the Association is required to recapture for tax purposes (i.e.,
take into income) over a six-year period commencing January 1, 1996, the
excess of the balance of its bad debt reserves as of December 31, 1995 over
the balance of such reserves as of December 31, 1987. The Association's
excess amounted to $85,000 (for which deferred taxes have been provided). See
"Taxation - Federal Taxation."
Regulatory Oversight and Legislation
The Association is subject to extensive regulation, supervision and
examination by the OFI, as its chartering authority, by the OTS as its
primary federal regulator, and by the FDIC as insurer of its deposits up to
applicable limits. The Association is a member of the FHLB System and is
subject to certain limited regulations promulgated by the Federal Reserve
Board. As the holding company of the Association, the Company also will be
subject to regulation and oversight by the OTS. Such regulation and
supervision govern the activities in which an institution can engage and are
intended primarily for the protection of the insurance fund and depositors.
Regulatory authorities have been granted extensive discretion in connection
with their supervisory and enforcement activities which are intended to
strengthen the financial condition of the banking and thrift industries,
including the imposition of restrictions on the operation of an institution,
the classification of assets by the institution and the adequacy of an
institution's allowance for loan losses. Any change in such regulation and
oversight, whether by the OFI, the OTS,
19
<PAGE>
the FDIC or Congress, could have a material impact on the Company, the
Association and their respective operations. See "Regulation."
On September 30, 1996, the Deposit Insurance Funds ("DIF") Act of
1996 was enacted into law. The DIF Act contemplates the development of a
common charter for all federally chartered depository institutions and the
abolition of separate charters for national banks and federal savings
institutions. It is not known what form the common charter may take and what
effect, if any, the adoption of a new charter would have on the financial
condition or results of operations of the Association. See "Regulation - The
Association."
Legislation is proposed periodically providing for a comprehensive
reform of the banking and thrift industries, and has included provisions that
would (i) require federal savings institutions to convert to a national bank
or a state-chartered bank or thrift, (ii) require all savings and loan
holding companies to become bank holding companies, and (iii) abolish the
OTS. It is uncertain when or if any of this type of legislation will be
passed, and, if passed, in what form the legislation would be passed. As a
result, management cannot accurately predict the possible impact of such
legislation on the Association.
In May 1998, the U.S. House of Representatives passed H.R. 10, which
among things would (1) prohibit new unitary thrift holding companies applied
for after March 31, 1998, such as the Company, from engaging in activities
other than those permissible for bank holding companies, (2) prohibit savings
institutions from affiliating with insurance companies and securities firms
unless they are grandfathered unitary thirft holding companies, which the
Company is not, (3) make membership in the FHLB system voluntary as of
January 1, 1999, and (4) allow banks, insurance companies and securities
firms to own one another through financial holding companies regulated by the
Federal Reserve Board. The Company is unable to predict whether this
legislation will be enacted or what the impact of the legislation would be on
the Company.
Possible Increase in Number of Shares Issued in the Conversion
The number of shares to be sold in the Conversion may be increased
as a result of an increase in the Estimated Valuation Range of up to 15% to
reflect changes in market and financial conditions prior to completion of the
Conversion or to fill the order of the ESOP. In the event that the Estimated
Valuation Range is so increased, it is expected that the Company will issue
up to 317,400 shares of Common Stock at the Purchase Price for an aggregate
price of up to $3,174,000. An increase in the number of shares will decrease
net income per share and stockholders' equity per share on a pro forma basis
and will increase the Company's consolidated stockholders' equity and net
income. Such an increase will also increase the Purchase Price as a
percentage of pro forma stockholders' equity per share and net income per
share.
The ESOP currently intends to purchase 8% of the Common Stock, which
purchase may be increased to up to 10% of the Common Stock. In the event that
the number of shares to be sold in the Conversion are increased as a result
of an increase in the Estimated Valuation Range, the ESOP shall have a first
priority to purchase all of such shares sold in the Conversion in excess of
276,000 shares, up to a maximum of 10% of the total number of shares issued
in the Conversion. See "Pro Forma Data" and "The Conversion - Stock Pricing
and Number of Shares to be Issued."
Dilutive Effect of Possible Issuance of Additional Shares
If the Recognition Plan is approved by stockholders of the Company,
the Recognition Plan intends to acquire an amount of Common Stock equal to 4%
of the shares of Common Stock issued in the Conversion. If such shares are
acquired at a per share price equal to the Purchase Price, the cost of such
shares would be $110,400, assuming the Common Stock sold in the Conversion is
equal to the maximum of the Estimated Valuation Range. Such shares of Common
Stock may be acquired in the open market with funds provided by the Company,
if permissible, or from authorized but unissued shares of Common Stock. In
the event that the Recognition Plan acquires authorized but unissued shares
of Common Stock from the Company, the interests of existing stockholders will
be diluted. The
20
<PAGE>
issuance of authorized but unissued shares of Common Stock to such plan in an
amount equal to 4% of the Common Stock issued in the Conversion would dilute
the voting interests of existing stockholders by approximately 3.8%, and net
income per share and stockholders' equity per share would be decreased by a
corresponding amount. See "Pro Forma Data" and "Management - New Stock
Benefit Plans - Recognition Plan."
If the Stock Option Plan is approved by stockholders of the Company,
the Company intends to reserve for future issuance pursuant to such plan a
number of shares of Common Stock equal to an aggregate of 10% of the Common
Stock issued in the Conversion (27,600 shares, based on the issuance of the
maximum 276,000 shares). Such shares may be authorized but previously
unissued shares, treasury shares or shares purchased by the Company in the
open market or from private sources. If only authorized but previously
unissued shares are used under such plan, the issuance of the total number of
shares available under such plan would dilute the voting interests of
existing stockholders by approximately 9.1%, and net income per share and
stockholders' equity per share would be decreased by a corresponding amount.
See "Pro Forma Data" and "Management - New Stock Benefit Plans."
The Company currently intends to submit the Recognition Plan and the
Stock Option Plan to stockholders for approval following the one-year
anniversary of the Conversion. However, the Company reserves the right to
submit such plans to stockholders at the first meeting following the
Conversion, which is expected to be held in April 1999, provided that such
meeting is at least six months following the Conversion. In such event, the
proposed benefit plans would need to be revised to include a mandatory
five-year vesting schedule for stock options and restricted stock awards, a
prohibition on accelerated vesting in the event of retirement or a change in
control, and limitations on the amount of stock options and restricted stock
awards that could be granted to individuals or to non-employee directors as a
group, which provisions are required by current OTS regulations for plans
implemented within one year following the Conversion.
Increased Compensation Expense After the Conversion
In November 1993, the American Institute of Certified Public
Accountants ("AICPA") issued Statement of Position 93-6 entitled "Employers'
Accounting for Employee Stock Ownership Plans" ("SOP 93-6"). SOP 93-6
requires an employer to record compensation expense in an amount equal to the
fair value of shares committed to be released to employees from an employee
stock ownership plan instead of an amount equal to the cost basis of such
shares. If the shares of Common Stock appreciate in value over time, SOP 93-6
will result in increased compensation expense with respect to the ESOP as
compared with prior guidance which required the recognition of compensation
expense based on the cost of shares acquired by the ESOP. It is impossible to
determine at this time the extent of such impact on future net income. See
"Pro Forma Data." In addition, after consummation of the Conversion, the
Company intends to implement, subject to stockholder approval (which approval
cannot be obtained earlier than six months subsequent to the Conversion), the
Recognition Plan. Upon implementation, the release of shares of Common Stock
from the Recognition Plan will result in additional compensation expense. See
"Pro Forma Data" and "Management - New Stock Benefit Plans - Recognition
Plan."
Possible Adverse Income Tax Consequences of the
Distribution of Subscription Rights
The Company and the Association have received an opinion of Ferguson
that subscription rights granted to Eligible Account Holders, Supplemental
Eligible Account Holders and Other Members have no value. However, this
opinion is not binding on the Internal Revenue Service ("IRS"). If the
subscription rights granted to Eligible Account Holders, Supplemental
Eligible Account Holders and Other Members are deemed to have an
ascertainable value, receipt of such rights would be taxable probably only to
those Eligible Account Holders, Supplemental Eligible Account Holders and
Other Members who exercise the subscription rights (either as capital gain or
ordinary income) in an amount equal to such value. Based upon the opinion
from Ferguson, the Company does not believe that the receipt of subscription
rights should be a taxable event. However, whether subscription rights are
considered to have an ascertainable value is an inherently factual
determination. See "The Conversion - Effects of Conversion" and "- Tax
Aspects."
21
<PAGE>
Irrevocability of Orders; Potential Delay in Completion of Offerings
Orders submitted in the Subscription Offering and/or any Community
Offering are irrevocable. Funds submitted in connection with any purchase of
Common Stock in the Offerings will be held by the Company until the
completion or termination of the Conversion, including any extension of the
Expiration Date. Because, among other factors, completion of the Conversion
will be subject to an update of the independent appraisal prepared by
Ferguson, there may be one or more delays in the completion of the
Conversion. Subscribers will have no access to subscription funds and/or
shares of Common Stock until the Conversion is completed or terminated.
PROPOSED MANAGEMENT PURCHASES
The following table sets forth, for each of the Company's directors
and executive officers (and their associates) and for all of the directors
and executive officers as a group, the proposed purchases of Common Stock,
assuming sufficient shares are available to satisfy their subscriptions. The
amounts include shares that may be purchased through individual retirement
accounts.
<TABLE>
<CAPTION>
Number of
Name Shares Amount Percent (1)
- -------------------- -------- -------- -------
<S> <C> <C> <C>
G. Lloyd Bouchereau, Jr.(2) 10,000 $100,000 4.2%
John L. Delahaye(2) 7,500 75,000 3.1
Gary K. Pruitt(2) 7,000 70,000 2.9
Bobby E. Stanley(2) 10,000 100,000 4.2
Edward J. Steinmetz 1,000 10,000 .4
Danny M. Strickland 2,500 25,000 1.0
-------- -------- ----
All directors and executive
officers as a group (six
persons) 38,000 $380,000 15.8%
-------- -------- ----
-------- -------- ----
</TABLE>
- ------------------
(1) Based upon the midpoint of the Estimated Valuation Range.
(2) Includes shares expected to be purchased by associates.
In addition, the ESOP currently intends to purchase 8% of the Common
Stock issued in the Conversion for the benefit of officers and employees.
Stock options and stock grants may also be granted in the future to
directors, officers and employees upon the receipt of stockholder approval of
the Company's proposed stock benefit plans. See "Management - New Stock
Benefit Plans" for a description of these plans.
USE OF PROCEEDS
Although the actual net proceeds from the sale of the Common Stock
cannot be determined until the Conversion is completed, it is presently
anticipated that the net proceeds from the sale of the Common Stock will be
between $1.7 million and $2.4 million ($2.8 million assuming an increase in
the Estimated Valuation Range by 15%). See "Pro Forma Data" and "The
Conversion -Stock Pricing and Number of Shares to be Issued" as to the
assumptions used to arrive at such amounts.
22
<PAGE>
The Company will purchase all of the capital stock of the
Association to be issued in the Conversion in exchange for 50% of the net
Conversion proceeds, and the Company will retain the remaining 50% of the net
proceeds. The Company intends to use a portion of the net proceeds to make a
loan directly to the ESOP to enable the ESOP to purchase up to 8% of the
Common Stock. Based upon the issuance of 204,000 shares or 276,000 shares at
the minimum and maximum of the Estimated Valuation Range, respectively, the
loan to the ESOP would be $163,200 and $220,800, respectively. See
"Management - New Stock Benefit Plans -Employee Stock Ownership Plan." The
remaining net proceeds retained by the Company initially may be used to
invest in mortgage-backed securities issued by U.S. Government agencies and
government-sponsored enterprises, U.S. Government and federal agency
securities of various maturities, deposits in either the Association or other
financial institutions, or a combination thereof. The portion of the net
proceeds retained by the Company may ultimately be used to support the
Association's lending activities, to support the future expansion of
operations through establishment of branch offices or other customer
facilities, expansion into other lending markets or diversification into
other banking related businesses (although no such transactions are
specifically being considered at this time), and for other business and
investment purposes, including the payment of regular or special cash
dividends, possible repurchases of the Common Stock or returns of capital.
Neither the Association nor the Company has any specific plans, arrangements,
or understandings regarding any branch acquisitions or diversification of
activities at this time.
Following the completion of the Conversion (to the extent permitted
by the OTS), and based upon then existing facts and circumstances, the
Company's Board of Directors may determine to repurchase some shares of
Common Stock, subject to any applicable statutory and regulatory
requirements. Such facts and circumstances may include but not be limited to
(i) market and economic factors such as the price at which the stock is
trading in the market, the volume of trading, the attractiveness of other
investment alternatives in terms of the rate of return and risk involved in
the investment, the ability to increase the book value and/or earnings per
share of the remaining outstanding shares, and an improvement in the
Company's return on equity; (ii) the avoidance of dilution to stockholders by
not having to issue additional shares to cover the exercise of stock options
or to fund employee stock benefit plans; and (iii) any other circumstances in
which repurchases would be in the best interests of the Company and its
stockholders. Any stock repurchases will be subject to the determination of
the Company's Board of Directors that the Association will be capitalized in
excess of all applicable regulatory requirements after any such repurchases.
The payment of dividends or repurchase of stock, however, would be prohibited
if the Association's net worth would be reduced below the amount required for
the liquidation account to be established for the benefit of Eligible Account
Holders and Supplemental Eligible Account Holders. As of the date of this
Prospectus, the initial balance of the liquidation account would be
approximately $______ million. See "Dividend Policy," "The Conversion
- -Liquidation Rights" and "- Certain Restrictions on Purchase or Transfer of
Shares After the Conversion."
The Company will be a unitary savings and loan holding company
which, under existing laws, would generally not be restricted as to the types
of business activities in which it may engage, provided that the Association
continues to be a qualified thrift lender ("QTL"). See "Regulation -The
Company" for a description of certain regulations applicable to the Company.
However, the types of businesses in which the Company may engage may be
restricted if pending legislation is adopted. See "Risk Factors - Regulatory
Oversight and Legislation."
The portion of the net proceeds used by the Company to purchase the
capital stock of the Association will be added to the Association's general
funds to be used for general corporate purposes, including increased lending
activities and purchases of investment and mortgage-backed securities. While
the amount of net proceeds received by the Association will further
strengthen the Association's capital position, which already exceeds all
regulatory requirements, it should be noted that the Association is not
converting primarily to raise capital. After the Conversion, the
Association's tangible capital ratio will be 10.20% (based upon the midpoint
of the Estimated Valuation Range). As a result, the Association will be a
well-capitalized institution.
The net proceeds may vary because total expenses of the Conversion
may be more or less than those estimated. The net proceeds will also vary if
the number of shares to be issued in the Conversion is adjusted to reflect a
change in the estimated pro forma market value of the Association. Payments
for shares made through withdrawals from existing deposit accounts at the
Association will not result in the receipt of new funds for
23
<PAGE>
investment by the Association but will result in a reduction of the
Association's interest expense and liabilities as funds are transferred from
interest-bearing certificates or other deposit accounts.
DIVIDEND POLICY
Upon completion of the Conversion, the Board of Directors of the
Company will have the authority to declare dividends on the Common Stock,
subject to statutory and regulatory requirements. The Board of Directors
intends to pay quarterly cash dividends on the Common Stock at an initial
rate of $.15 per share per annum (representing 1.5% of the Purchase Price),
commencing with the first full calendar quarter following consummation of the
Conversion. Notwithstanding the foregoing, the rate of such dividends and the
initial or continued payment thereof will depend upon a number of factors,
including the amount of net proceeds retained by the Company in the
Conversion, investment opportunities available to the Company or the
Association, capital requirements, the Company's and the Association's
financial condition and results of operations, tax considerations, statutory
and regulatory limitations, and general economic conditions. No assurances
can be given that any dividends will be paid or that, if paid, will not be
reduced or eliminated in future periods. Special cash dividends, stock
dividends or tax-free returns of capital may be paid in addition to, or in
lieu of, regular cash dividends (however, the Company and the Association
have committed to the OTS that they will not pay any tax-free return of
capital during the one-year period following consummation of the Conversion).
Dividends from the Company may eventually depend, in part, upon
receipt of dividends from the Association, because the Company initially will
have no source of income other than dividends from the Association, earnings
from the investment of proceeds from the sale of Common Stock retained by the
Company, and interest payments with respect to the Company's loan to the
ESOP. A regulation of the OTS imposes limitations on "capital distributions"
by savings institutions, including cash dividends, payments by a savings
institution to repurchase or otherwise acquire its stock, payments to
stockholders of another savings institution in a cash-out merger and other
distributions charged against capital. As of March 31, 1998, the Association
was a Tier 1 savings institution and is expected to continue to so qualify
immediately following the consummation of the Conversion. Based on the
Association's regulatory capital and its net income for the quarter ended
March 31, 1998, the Association would have been permitted to make a capital
distribution to the Company of up to approximately $493,000 as of April 1,
1998. See "Regulation - The Association - Capital Distributions."
Any payment of dividends by the Association to the Company which
would be deemed to be drawn out of the Association's bad debt reserves would
require a payment of taxes at the then-current tax rate by the Association on
the amount of earnings deemed to be removed from the reserves for such
distribution. The Association does not intend to make any distribution to the
Company that would create such a federal tax liability. See "Taxation."
Unlike the Association, the Company is not subject to the
aforementioned regulatory restrictions on the payment of dividends to its
stockholders, although the source of such dividends may eventually be
dependent, in part, upon dividends from the Association in addition to the
net proceeds retained by the Company and earnings thereon. The Company is
subject, however, to the requirements of Louisiana law, which generally
permits the payment of dividends out of surplus, except when (1) the
corporation is insolvent or would thereby be made insolvent, or (2) the
declaration or payment thereof would be contrary to any restrictions
contained in the articles of incorporation. If there is no surplus available
for dividends, a Louisiana corporation may pay dividends out of its net
profits for the then current or the preceding fiscal year or both, except
that no dividend may be paid if the corporation's assets are exceeded by its
liabilities or if its net assets are less than the amount which would be
needed, under certain circumstances, to satisfy any preferential rights of
stockholders.
MARKET FOR COMMON STOCK
The Company and the Association have never issued capital stock,
other than 100 shares issued in connection with the incorporation of the
Company, which shares will be cancelled upon completion of the Conversion.
Consequently, there is no established market for the Common Stock at this
time. Following the
24
<PAGE>
completion of the Offerings, it is anticipated that the Common Stock will be
traded on the over-the-counter market with quotations available through the
OTC Bulletin Board. Trident has indicated its intention to make a market in
the Common Stock. If the Common Stock cannot be quoted and traded on the OTC
Bulletin Board, it is expected that transactions in the Common Stock will be
reported in the pink sheets published by the National Quotation Bureau, Inc.
Making a market may include the solicitation of potential buyers and sellers
in order to match buy and sell orders. However, Trident will not be subject
to any obligation with respect to such efforts. The development of a liquid
public market depends upon the existence of willing buyers and sellers, the
presence of which is not within the control of the Company, the Association
or any market maker. It is unlikely that an active and liquid trading market
for the Common Stock will develop due to the relatively small size of the
Offerings and the small number of stockholders expected following the
Conversion. Under such circumstances, investors in the Common Stock could
have difficulty disposing of their shares on short notice and should not view
the Common Stock as a short-term investment. Accordingly, purchasers should
consider the illiquid, long-term nature of an investment in the Common Stock.
Furthermore, there can be no assurance that purchasers will be able to sell
their shares at or above the Purchase Price. See "Risk Factors - Absence of
Market for the Common Stock."
REGULATORY CAPITAL
At March 31, 1998, the Association exceeded all of the regulatory
capital requirements applicable to it. The table on the following page sets
forth the Association's historical capital under generally accepted
accounting principles ("GAAP") and regulatory capital at March 31, 1998 and
the pro forma GAAP and regulatory capital of the Association after giving
effect to the Conversion, based upon the sale of the number of shares shown
in the table. The pro forma GAAP and regulatory capital amounts reflect the
receipt by the Association of 50% of the net Conversion proceeds, minus the
amounts to be loaned to the ESOP and contributed to the RRP. The pro forma
risk-based capital amounts assume the investment of the net proceeds received
by the Association in assets which have a risk-weight of 50% under applicable
regulations, as if such net proceeds had been received and so applied at
March 31, 1998.
25
<PAGE>
<TABLE>
<CAPTION>
Pro Forma at March 31, 1998 Based on
-----------------------------------------------------------------------------------
204,000 240,000 276,000 317,400
Shares Sold Shares Sold Shares Sold Shares Sold
Historical at at $10.00 at $10.00 at $10.00 at $10.00
March 31, 1998 Per Share Per Share Per Share Per Share
------------------- -------------------- -------------------- -------------------- --------------------
Percent of Percent Percent Percent Percent
Amount Assets(1) Amount of Assets(1) Amount of Assets(1) Amount of Assets(1) Amount of Assets(1)
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GAAP capital $1,671 7.34% $2,259 9.67% $2,396 10.20% $2,533 10.72% $2,690 11.31%
------ ------ ------ ------ ------ ------ ------ ------ ------ -----
------ ------ ------ ------ ------ ------ ------ ------ ------ -----
Tangible capital:
Actual $1,672 7.34% $2,260 9.68% $2,397 10.20% $2,534 10.73% $2,691 11.31%
Requirement 341 1.50 350 1.50 352 1.50 354 1.50 357 1.50
------ ------ ------ ------ ------ ------ ------ ------ ------ -----
Excess $1,331 5.84% $1,910 8.18% $2,045 8.70% $2,180 9.23% $2,334 9.81%
------ ------ ------ ------ ------ ------ ------ ------ ------ -----
------ ------ ------ ------ ------ ------ ------ ------ ------ -----
Core capital(2):
Actual $1,672 7.34% $2,260 9.68% $2,397 10.20% $2,534 10.73% $2,691 11.31%
Requirement 683 3.00 701 3.00 705 3.00 709 3.00 714 3.00
------ ------ ------ ------ ------ ------ ------ ------ ------ -----
Excess $ 989 4.34% $1,559 6.68% $1,692 7.20% $1,825 7.73% $1,977 8.31%
------ ------ ------ ------ ------ ------ ------ ------ ------ -----
------ ------ ------ ------ ------ ------ ------ ------ ------ -----
Risk-based capital(2):
Actual $1,821 15.47% $2,409 19.82% $2,546 20.80% $2,683 21.77% $2,840 22.87%
Requirement 942 8.00 972 8.00 979 8.00 986 8.00 993 8.00
------ ------ ------ ------ ------ ------ ------ ------ ------ -----
Excess $ 879 7.47% $1,437 11.82% $1,567 12.80% $1,697 13.77% $1,847 14.87%
------ ------ ------ ------ ------ ------ ------ ------ ------ -----
------ ------ ------ ------ ------ ------ ------ ------ ------ -----
</TABLE>
- ------------------------------
(1) Adjusted total or adjusted risk-weighted assets, as appropriate.
(2) Does not reflect the interest rate risk component to be added to the
risk-based capital requirements or, in the case of the core capital
requirement, the 4.0% requirement to be met in order for an institution
to be "adequately capitalized" under applicable laws and regulations.
See "Regulation - The Association - Prompt Corrective Action."
26
<PAGE>
CAPITALIZATION
The following table presents the historical capitalization of the
Association at March 31, 1998, and the pro forma consolidated capitalization of
the Company after giving effect to the Conversion, based upon the sale of the
number of shares shown below and the other assumptions set forth under "Pro
Forma Data."
<TABLE>
<CAPTION>
The Company - Pro Forma
Based Upon Sale at $10.00 Per Share
-----------------------------------------------------------------------
204,000 240,000 276,000 317,400
Shares Shares Shares Shares(1)
(Minimum of (Midpoint of (Maximum of (15% above
The Association Estimated Estimated Estimated Maximum of
- Historical Valuation Valuation Valuation Estimated
Capitalization Range) Range) Range) Valuation Range)
-------------- ---------- ----------- ------------ ----------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Deposits(2) $ 20,534 $ 20,534 $ 20,534 $ 20,534 $ 20,534
Borrowings 452 452 452 452 452
-------- -------- -------- -------- --------
Total deposits and
borrowings $ 20,986 $ 20,986 $ 20,986 $ 20,986 $ 20,986
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Stockholders' equity:
Preferred Stock, $.01 par
value, 2,000,000 shares
authorized; none to be
issued $ -- $ -- $ -- $ -- $ --
Common Stock, $.01
par value, 5,000,000
shares authorized;
shares to be issued as
reflected(3) -- 2 2 3 3
Additional paid-in
capital(3) -- 1,663 2,023 2,382 2,796
Retained earnings(4) 1,672 1,672 1,672 1,672 1,672
Net unrealized loss on
securities available for sale (1) (1) (1) (1) (1)
Less:
Common Stock acquired
by the ESOP(5) -- (163) (192) (221) (254)
Common Stock to be
acquired by the
RRP(6) -- (82) (96) (110) (127)
-------- -------- -------- -------- --------
Total stockholders' equity
(retained earnings,
substantially restricted,
at March 31, 1998) $ 1,671 $ 3,091 $ 3,408 $ 3,725 $ 4,089
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>
(Footnotes on following page)
27
<PAGE>
- ------------------------------
(1) As adjusted to give effect to an increase in the number of shares which
could occur due to an increase in the Estimated Valuation Range of up
to 15% to reflect changes in market and financial conditions prior to
the completion of the Conversion or to fill the order of the ESOP.
(2) Does not reflect withdrawals from deposit accounts for the purchase of
Common Stock in the Conversion. Such withdrawals would reduce pro forma
deposits by the amount of such withdrawals.
(3) The sum of the par value and additional paid-in capital accounts equals
the net Conversion proceeds. No effect has been given to the issuance
of additional shares of Common Stock pursuant to the Company's proposed
Stock Option Plan. The Company intends to adopt a Stock Option Plan and
to submit such plan to stockholders at a meeting of stockholders to be
held at least six months following completion of the Conversion. If the
plan is approved by stockholders, an amount equal to 10% of the shares
of Common Stock will be reserved for issuance under such plan. See "Pro
Forma Data" and "Management - New Stock Benefit Plans - Stock Option
Plan."
(4) The retained earnings of the Association will be substantially
restricted after the Conversion. See "The Conversion - Liquidation
Rights."
(5) Assumes that 8% of the Common Stock will be purchased by the ESOP. The
Common Stock acquired by the ESOP is reflected as a reduction of
stockholders' equity. Assumes the funds used to acquire the ESOP shares
will be borrowed from the Company. See Note 1 to the table set forth
under "Pro Forma Data" and "Management - New Stock Benefit Plans -
Employee Stock Ownership Plan."
(6) Gives effect to the Recognition Plan which is expected to be adopted by
the Company following the Conversion and presented to stockholders for
approval at a meeting of stockholders to be held at least six months
following completion of the Conversion. No shares will be purchased by
the Recognition Plan in the Conversion, and such plan cannot purchase
any shares until stockholder approval has been obtained. If the
Recognition Plan is approved by stockholders, the plan intends to
acquire an amount of Common Stock equal to 4% of the shares of Common
Stock issued in the Conversion, or 8,160, 9,600, 11,040 and 12,696
shares at the minimum, midpoint, maximum and 15% above the maximum of
the Estimated Valuation Range, respectively. The table assumes that
stockholder approval has been obtained and that such shares are
purchased in the open market at the Purchase Price. The Common Stock so
acquired by the Recognition Plan is reflected as a reduction in
stockholders' equity. If the shares are purchased at prices higher or
lower than the Purchase Price, such purchases would have a greater or
lesser impact, respectively, on stockholders' equity. If the
Recognition Plan purchases authorized but unissued shares from the
Company, such issuance would dilute the voting interests of existing
stockholders by approximately 3.8%. See "Pro Forma Data" and
"Management - New Stock Benefit Plans - Recognition Plan."
28
<PAGE>
PRO FORMA DATA
The actual net proceeds from the sale of the Common Stock cannot be
determined until the Conversion is completed. However, net proceeds are
currently estimated to be between $1.7 million and $2.4 million (or $2.8
million in the event the Estimated Valuation Range is increased by 15%) based
upon the following assumptions: (i) all shares of Common Stock will be sold
in the Subscription Offering; and (ii) total expenses, including the
marketing fees to be paid to Trident, will be $375,000. Actual expenses may
vary from those estimated.
Pro forma net income and stockholders' equity have been calculated for
the three months ended March 31, 1998 and the year ended December 31, 1997 as
if the Common Stock to be issued in the Offerings had been sold at the
beginning of the periods. The tables assume that the net proceeds had been
invested at 6.27% for the three months ended March 31, 1998 and 6.14% for the
year ended December 31, 1997, which represent the arithmetic average of the
average yield on total interest-earning assets and the average rate paid on
deposits in each of the periods. The effect of withdrawals from deposit
accounts for the purchase of Common Stock has not been reflected. A combined
effective federal and state income tax rate of 38% has been assumed,
resulting in after-tax yields of 3.89% and 3.81% for the three months ended
March 31, 1998 and the year ended December 31, 1997, respectively. Historical
and pro forma per share amounts have been calculated by dividing historical
and pro forma amounts by the indicated number of shares of Common Stock, as
adjusted to give effect to the shares purchased by the ESOP with respect to
the net income per share calculations. See Notes 2 and 4 to the Pro Forma
Data tables. No effect has been given in the pro forma stockholders' equity
calculations for the assumed earnings on the net proceeds. As discussed under
"Use of Proceeds," the Company intends to retain 50% of the net Conversion
proceeds.
The following pro forma information may not be representative of the
financial effects of the Conversion at the date on which the Conversion
actually occurs and should not be taken as indicative of future results of
operations. Pro forma stockholders' equity represents the difference between
the stated amount of assets and liabilities of the Company computed in
accordance with GAAP. The pro forma stockholders' equity is not intended to
represent the fair market value of the Common Stock and may be different than
amounts that would be available for distribution to stockholders in the event
of liquidation. No effect has been given in the table to the possible
issuance of additional shares equal to 10% of the Common Stock to be reserved
for future issuance pursuant to the Stock Option Plan to be adopted by the
Board of Directors of the Company, nor does book value give any effect to the
liquidation account to be established for the benefit of Eligible Account
Holders and Supplemental Eligible Account Holders or to the bad debt reserve.
See "Management - New Stock Benefit Plans" and "The Conversion Liquidation
Rights." The table below gives effect to the Recognition Plan, which is
expected to be adopted by the Company following the Conversion and presented
(together with the Stock Option Plan) to stockholders for approval no earlier
than the first meeting of stockholders, which is expected to be held in April
1999. If the Recognition Plan is approved by stockholders, the Recognition
Plan intends to acquire an amount of Common Stock equal to 4% of the shares
of Common Stock issued in the Conversion, either through open market
purchases, if permissible, or from authorized but unissued shares of Common
Stock. The tables below assume that stockholder approval has been obtained
and that the shares acquired by the Recognition Plan are purchased in the
open market at $10.00 per share. There can be no assurance that stockholder
approval of the Recognition Plan will be obtained, that the shares will be
purchased in the open market or that the purchase price will be $10.00 per
share.
The tables on the following pages summarize historical consolidated data
of the Association and pro forma data of the Company at or for the dates and
periods indicated based on the assumptions set forth above and in the tables
and should not be used as a basis for projections of the market value of the
Common Stock following the Conversion.
29
<PAGE>
<TABLE>
<CAPTION>
At or For the Three Months Ended March 31, 1998
--------------------------------------------------------------------------------
204,000 240,000 276,000 317,400
Shares Sold Shares Sold Shares Sold Shares Sold
at $10.00 at $10.00 at $10.00 at $10.00
Per Share Per Share Per Share Per Share (15%
(Minimum (Midpoint (Maximum above Maximum
of Range) of Range) of Range) of Range)(8)
------------- ------------ ------------ ---------------
(Dollars in Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Gross proceeds $ 2,040 $ 2,400 $ 2,760 $ 3,174
Less offering expenses (375) (375) (375) (375)
--------- --------- --------- ---------
Estimated net Conversion proceeds 1,665 2,025 2,385 2,799
Less: Common Stock acquired by
the ESOP (163) (192) (221) (254)
Common Stock to be acquired by
the RRP (82) (96) (110) (127)
--------- --------- --------- ---------
Estimated adjusted net proceeds(1) $ 1,420 $ 1,737 $ 2,054 $ 2,418
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income:
Historical $ 53 $ 53 $ 53 $ 53
Pro forma adjustments:
Income on adjusted net proceeds(1) 14 17 20 24
ESOP(2) (3) (3) (3) (4)
RRP(3) (3) (3) (3) (4)
--------- --------- --------- ---------
Pro forma $ 61 $ 64 $ 67 $ 69
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income per share(4):
Historical $ .28 $ .24 $ .21 $ .18
Pro forma adjustments:
Income on adjusted net proceeds(1) .07 .07 .07 .08
ESOP(2) (.02) (.01) (.01) (.01)
RRP(3) (.01) (.01) (.01) (.01)
--------- --------- --------- ---------
Pro forma $ .32 $ .29 $ .26 $ .24
--------- --------- --------- ---------
--------- --------- --------- ---------
Pro forma price to earnings ("P/E")
ratio(4) 7.81x 8.62x 9.62x 10.42x
--------- --------- --------- ---------
--------- --------- --------- ---------
Number of shares used in net income
per share calculations(4) 188,088 221,280 254,472 292,643
Stockholders' equity:
Historical $ 1,671 $ 1,671 $ 1,671 $ 1,671
Estimated net Conversion proceeds 1,665 2,025 2,385 2,799
Less: Common Stock acquired
by the ESOP(2) (163) (192) (221) (254)
Common Stock to be acquired
by the RRP(3) (82) (96) (110) (127)
--------- --------- --------- ---------
Pro forma stockholders' equity(5)(6) $ 3,091 $ 3,408 $ 3,725 $ 4,089
--------- --------- --------- ---------
--------- --------- --------- ---------
Stockholders' equity per share(7):
Historical $ 8.19 $ 6.96 $ 6.05 $ 5.26
Estimated net Conversion proceeds 8.16 8.44 8.64 8.82
Less: Common Stock acquired
by the ESOP(2) (.80) (.80) (.80) (.80)
Common Stock to be acquired
by the RRP(3) (.40) (.40) (.40) (.40)
--------- --------- --------- ---------
Pro forma stockholders' equity
per share(3)(5)(6) $ 15.15 $ 14.20 $ 13.49 $ 12.88
--------- --------- --------- ---------
--------- --------- --------- ---------
Pro forma price to book ratio(7) 66.0% 70.4% 74.1% 77.6%
--------- --------- --------- ---------
--------- --------- --------- ---------
Number of shares used in book value
per share calculations(7) 204,000 240,000 276,000 317,400
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
(Footnotes on second following page)
30
<PAGE>
<TABLE>
<CAPTION>
At or For the Year Ended December 31, 1997
-------------------------------------------------------------------------------
204,000 240,000 276,000 317,400
Shares Sold Shares Sold Shares Sold Shares Sold
at $10.00 at $10.00 at $10.00 at $10.00
Per Share Per Share Per Share Per Share (15%
(Minimum (Midpoint (Maximum above Maximum
of Range) of Range) of Range) of Range)(8)
--------------- --------------- -------------- -----------------
(Dollars in Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Gross proceeds $ 2,040 $ 2,400 $ 2,760 $ 3,174
Less offering expenses (375) (375) (375) (375)
--------- --------- --------- ---------
Estimated net Conversion proceeds 1,665 2,025 2,385 2,799
Less: Common Stock acquired by
the ESOP (163) (192) (221) (254)
Common Stock to be acquired by
the RRP (82) (96) (110) (127)
--------- --------- --------- ---------
Estimated adjusted net proceeds(1) $ 1,420 $ 1,737 $ 2,054 $ 2,418
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income:
Historical $ 164 $ 164 $ 164 $ 164
Pro forma adjustments:
Income on adjusted net proceeds(1) 54 66 78 92
ESOP(2) (10) (12) (14) (16)
RRP(3) (10) (12) (14) (16)
--------- --------- --------- ---------
Pro forma $ 198 $ 206 $ 214 $ 224
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income per share(4):
Historical $ .87 $ .73 $ .64 $ .55
Pro forma adjustments:
Income on adjusted net proceeds(1) .28 .29 .30 .31
ESOP(2) (.05) (.05) (.05) (.05)
RRP(3) (.05) (.05) (.05) (.05)
--------- --------- --------- ---------
Pro forma $ 1.05 $ .92 $ .84 $ .76
--------- --------- --------- ---------
--------- --------- --------- ---------
Pro forma P/E ratio(4) 9.52x 10.87x 11.90x 13.16x
--------- --------- --------- ---------
--------- --------- --------- ---------
Number of shares used in net income
per share calculations(4) 189,312 222,720 256,128 294,547
Stockholders' equity:
Historical $ 1,622 $ 1,622 $ 1,622 $ 1,622
Estimated net Conversion proceeds 1,665 2,025 2,385 2,799
Less: Common Stock acquired
by the ESOP(2) (163) (192) (221) (254)
Common Stock to be acquired
by the RRP(3) (82) (96) (110) (127)
--------- --------- --------- ---------
Pro forma stockholders' equity(5)(6) $ 3,042 $ 3,359 $ 3,676 $ 4,040
--------- --------- --------- ---------
--------- --------- --------- ---------
Stockholders' equity per share(7):
Historical $ 7.95 $ 6.76 $ 5.88 $ 5.11
Estimated net Conversion proceeds 8.16 8.44 8.64 8.82
Less: Common Stock acquired
by the ESOP(2) (.80) (.80) (.80) (.80)
Common Stock to be acquired
by the RRP(3) (.40) (.40) (.40) (.40)
--------- --------- --------- ---------
Pro forma stockholders' equity
per share(3)(5)(6) $ 14.91 $ 14.00 $ 13.32 $ 12.73
--------- --------- --------- ---------
--------- --------- --------- ---------
Pro forma price to book ratio(7) 67.1% 71.4% 75.1% 78.6%
--------- --------- --------- ---------
--------- --------- --------- ---------
Number of shares used in book value
per share calculations(7) 204,000 240,000 276,000 317,400
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
(Footnotes on following page)
31
<PAGE>
- --------------------
(1) Estimated adjusted net proceeds consist of the estimated net Conversion
proceeds, minus (i) the proceeds attributable to the purchase by the
ESOP and (ii) the value of the shares to be purchased by the
Recognition Plan after the Conversion, subject to stockholder approval,
at an assumed purchase price of $10.00 per share.
(2) It is assumed that 8% of the shares of Common Stock issued in the
Conversion will be purchased by the ESOP. For purposes of this table,
the funds used to acquire such shares are assumed to have been borrowed
by the ESOP from the Company. The Company and the Association intend to
make quarterly contributions to the ESOP over a ten-year period in an
amount at least equal to the principal and interest requirement of the
debt. The pro forma net income assumes (i) that the loan to the ESOP is
payable over 10 years, with the ESOP shares having an average fair
value of $10.00 per share in accordance with SOP 93-6, entitled
"Employers' Accounting for Employee Stock Ownership Plans," of the
AICPA, (ii) that the loan to the ESOP bears a fixed interest rate of
8.5%, (iii) that the ESOP expense for the period is equivalent to the
principal payment for the period and was made at the end of the period;
(iv) that 408, 480, 552 and 635 shares were committed to be released
with respect to the three months ended March 31, 1998 and 1,632, 1,920,
2,208 and 2,539 shares were committed to be released with respect to
the year ended December 31, 1997, in each case at the minimum,
midpoint, maximum and 15% above the maximum of the Estimated Valuation
Range, respectively; (v) in accordance with SOP 93-6 entitled
"Employers' Accounting for Employee Stock Ownership Plans," only the
ESOP shares committed to be released during the period were considered
outstanding for purposes of the net income per share calculations; and
(vi) the effective tax rate was 38% for the period. See "Risk Factors -
Increased Compensation Expense After the Conversion" and "Management -
New Stock Benefit Plans - Employee Stock Ownership Plan."
(3) The adjustment is based upon the assumed purchases by the Recognition
Plan of 8,160, 9,600, 11,040 and 12,696 shares at the minimum,
midpoint, maximum and 15% above the maximum of the Estimated Valuation
Range, assuming that: (i) stockholder approval of the Recognition Plan
has been received; (ii) the shares were acquired by the Recognition
Plan at the beginning of the periods presented in open market purchases
at the Purchase Price; (iii) the amortized expense for the three months
ended March 31, 1998 and for the year ended December 31, 1997 was 5%
and 20%, respectively, of the amount contributed; and (iv) the
effective tax rate applicable to such employee compensation expense was
38%. If the Recognition Plan purchases authorized but unissued shares
instead of making open market purchases, then (i) the voting interests
of existing stockholders would be diluted by approximately 3.8%, (ii)
the pro forma net income per share for the three months ended March 31,
1998 would be $.32, $.28, $.25 and $.23, and pro forma stockholders'
equity per share at March 31, 1998 would be $14.95, $14.04, $13.36 and
$12.77, in each case at the minimum, midpoint, maximum and 15% above
the maximum of the Estimated Valuation Range, respectively, and (iii)
pro forma net income per share for the year ended December 31, 1997
would be $1.02, $.90, $.82 and $.75, and pro forma stockholders' equity
per share at December 31, 1997 would be $14.72, $13.84, $13.19 and
$12.62, in each case at the minimum, midpoint, maximum and 15% above
the maximum of the Estimated Valuation Range, respectively. See
"Management - New Stock Benefit Plans - Recognition Plan."
(4) Net income per share computations are determined by taking the number
of shares assumed to be sold in the Conversion and, in accordance with
SOP 93-6, subtracting the ESOP shares which have not been committed for
release during the respective period. See Note 2 above. If SOP 93-6 was
not required to be implemented, the pro forma P/E ratio would be 8.33x,
9.35x, 10.31x and 11.49x for the three months ended March 31, 1998 and
10.31x, 11.63x, 12.82x and 14.08x for the year ended December 31, 1997,
in each case at the minimum, midpoint, maximum and 15% above the
maximum of the Estimated Valuation Range, respectively. The P/E ratios
for the three months ended March 31, 1998 are annualized.
(5) No effect has been given to the issuance of additional shares of Common
Stock pursuant to the Stock Option Plan, which is expected to be
adopted by the Company following the Conversion and presented to
32
<PAGE>
stockholders for approval at a meeting of stockholders to be held at
least six months following completion of the Conversion. If the Stock
Option Plan is approved by stockholders, an amount equal to 10% of the
Common Stock issued in the Conversion, or 20,400, 24,000, 27,600 and
31,740 shares at the minimum, midpoint, maximum and 15% above the
maximum of the Estimated Valuation Range, respectively, will be
reserved for future issuance upon the exercise of options to be granted
under the Stock Option Plan. The issuance of authorized but previously
unissued shares of Common Stock pursuant to the exercise of options
under such plan would dilute existing stockholders' interests. Assuming
stockholder approval of the plan, that all the options were exercised
at the beginning of the period at an exercise price of $10.00 per
share, and that the shares to fund the Recognition Plan are acquired
through open market purchases at the Purchase Price, (i) pro forma net
income per share for the three months ended March 31, 1998 would be
$.31, $.27, $.24 and $.22 and pro forma stockholders' equity per share
at March 31, 1998 would be $14.68, $13.82, $13.18, and $12.62, in each
case at the minimum, midpoint, maximum and 15% above the maximum of the
Estimated Valuation Range, respectively, and (ii) pro forma net income
per share for the year ended December 31, 1997 would be $.98, $.87,
$.79 and $.73, and pro forma stockholders' equity per share at December
31, 1997 would be $14.47, $13.63, $13.02 and $12.48, in each case at
the minimum, midpoint, maximum and 15% above the maximum of the
Estimated Valuation Range, respectively.
(6) The retained earnings of the Association will be substantially
restricted after the Conversion. See "Dividend Policy" and "The
Conversion - Liquidation Rights."
(7) Based on the number of shares sold in the Conversion.
(8) As adjusted to give effect to an increase in the number of shares which
could occur due to an increase in the Estimated Valuation Range of up
to 15% to reflect changes in market and financial conditions prior to
completion of the Conversion or to fill the order of the ESOP.
33
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The profitability of Iberville depends primarily on its net interest
income, which is the difference between interest and dividend income on
interest-earning assets, principally loans, mortgage-backed securities and
interest-earning deposits in other institutions, and interest expense on
interest-bearing deposits and FHLB advances. Net interest income is dependent
upon the level of interest rates and the extent to which such rates are
changing. Iberville's profitability also is dependent, to a lesser extent, on
the level of its noninterest income, provision for loan losses, noninterest
expense and income taxes. During the first quarter of 1998 and during 1997,
net interest income after provision for loan losses exceeded total
noninterest expense. In 1996, total noninterest expense was slightly greater
than the Association's net interest income after provision for loan losses,
due to the one-time special SAIF assessment paid in 1996. Total noninterest
expense consists of general, administrative and other expenses, such as
compensation and benefits, occupancy and equipment expenses, deposit
insurance premiums, and miscellaneous other expenses.
The Association had net income of $53,000 in the first quarter of 1998,
$164,000 in 1997 and $56,000 in 1996. Net income was adversely affected in
1996 by the special SAIF assessment paid in 1996, which amounted to $75,000
after taxes. Excluding the impact of the special SAIF assessment, the
increases in net income have been primarily due to increases in net interest
income.
The Association's operations and profitability are subject to changes in
interest rates, applicable statutes and regulations and general economic
conditions, as well as other factors beyond the Association's control.
Market Risk Analysis
Qualitative Analysis
Consistent net interest income is largely dependent upon the achievement
of a positive interest rate spread that can be sustained during periods of
fluctuating market interest rates. Interest rate sensitivity is a measure of
the difference between amounts of interest-earning assets and
interest-bearing liabilities which either reprice or mature within a given
period of time. The difference, or the interest rate repricing "gap,"
provides an indication of the extent to which an institution's interest rate
spread will be affected by changes in interest rates. A gap is considered
positive when the amount of interest-rate sensitive assets repricing or
maturing within a specified period exceeds the amount of interest-rate
sensitive liabilities repricing or maturing within such period, and is
considered negative when the amount of interest-rate sensitive liabilities
repricing or maturing within a specified period exceeds the amount of
interest-rate sensitive assets repricing or maturing within such period.
Generally, during a period of rising interest rates, a negative gap within
shorter maturities would adversely affect net interest income, while a
positive gap within shorter maturities would result in an increase in net
interest income, and during a period of falling interest rates, a negative
gap within shorter maturities would result in an increase in net interest
income while a positive gap within shorter maturities would have the opposite
effect. However, the effects of a positive or negative gap are impacted, to a
large extent, by consumer demand and by discretionary pricing by the
Association's management.
At March 31, 1998, the Association had a positive one-year gap of $3.2
million or 14.1% of total assets, based upon certain repricing assumptions.
The interest rate sensitivity of Iberville's assets and liabilities in the
table set forth below could vary substantially if different assumptions are
used or if actual experience differs from the historical experience on which
the assumptions are based. Certain shortcomings are inherent in the repricing
assumptions table used to calculate the Association's gap, as shown in the
table below, as well as the method of calculating the effect of changes in
interest rates on the Association's net portfolio value, as discussed further
below. Although certain assets and liabilities may have similar maturities or
periods within which they will reprice, they may react differently to changes
in market interest rates. The interest rates on certain types of assets and
liabilities
34
<PAGE>
may fluctuate in advance of changes in market interest rates, while interest
rates on other types may lag behind changes in market rates. In addition,
adjustable-rate assets have features which restrict changes in interest rates
on a short-term basis and over the life of the assets. The proportion of
adjustable-rate loans could be reduced in future periods if market interest
rates should decline and remain at lower levels for a sustained period due to
increased refinancing activity. Further, in the event of a change in interest
rates, prepayment and early withdrawal levels could deviate significantly
from those assumed in the tables. Finally, the ability of many borrowers to
service their adjustable-rate debt may decrease in the event of a sustained
interest rate increase.
The Association attempts to manage its interest rate risk by maintaining
a high percentage of its assets in ARMs and adjustable-rate mortgage-backed
securities. From 1984 until mid-1996, the only residential mortgages
originated by the Association were ARMs. The Association continues to
emphasize the origination of single-family, residential ARMs, but it has also
been originating since mid-1996 15-year, fixed-rate mortgages for retention
in its portfolio. At March 31, 1998, the Association's residential ARMs
amounted to $9.8 million or 57.3% of the total loan portfolio and 43.1% of
total assets. Commercial real estate ARMs were $931,000 or 4.1% of total
assets at March 31, 1998, and adjustable-rate mortgage-backed securities
amounted to $3.0 million or 13.2% of total assets at such date. The interest
rate on ARMs and a portion of the adjustable-rate mortgage-backed securities,
however, adjusts no more frequently than once a year, with the amount of the
change subject to annual limitations, whereas the interest rates on deposits
can change more frequently and are not subject to annual limitations. A
portion of the Association's adjustable-rate mortgage-backed securities have
interest rates which adjust monthly or semi-annually, with limitations on the
amount of the increase.
The Association also emphasizes the origination of consumer loans as most
of these loans have shorter terms and higher yields than residential
mortgages. At March 31, 1998, $1.6 million or 40.7% of the consumer loans
either mature or are deemed to be subject to repricing within one year.
Interest-earning deposits in other institutions, all of which are subject
to repricing within three months, amounted to $1.6 million or 6.8% of total
assets at March 31, 1998.
The Association has increased its transaction accounts to $5.8 million or
28.3% of total deposits at March 31, 1998 from $5.0 million or 24.9% of total
deposits at December 31, 1996. This increase was primarily due to a $608,000
increase in passbook accounts, which the Association considers to be core
deposits. In addition, the Association has increased its noninterest-bearing
checking accounts, which amounted to $432,000 at March 31, 1998.
Of the $14.7 million of certificates of deposit at March 31, 1998, $9.7
million or 65.7% mature within one year. While the Association attempts to
lengthen the maturity of these deposits by offering higher rates on
longer-term certificates, the longer-term certificates are not widely
accepted in the current interest rate environment.
35
<PAGE>
Quantitative Analysis. The following table presents the difference
between Iberville's interest-earning assets and interest-bearing liabilities
within specified maturities at March 31, 1998. This table does not
necessarily indicate the impact of general interest rate movements on
Iberville's net interest income, because the repricing of certain assets and
liabilities is subject to competitive and other limitations. As a result,
certain assets and liabilities indicated as maturing or otherwise repricing
within a stated period may in fact mature or reprice at different times and
at different volumes.
<TABLE>
<CAPTION>
March 31, 1998
--------------------------------------------------------------------------------------
0 Months Over Three Over One Over Three Over Five
Through Through Through Through Through Over Ten
Three Months 12 Months Three Years Five Years Ten Years Years Total
------------ ------------ ------------ ----------- ----------- ----------- -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable(1)(2):
Single-family residential:
Adjustable-rate $2,983 $6,728 $ -- $ -- $ -- $ -- $ 9,711
Fixed-rate 5 10 87 119 703 873 1,797
Construction -- 420 -- -- -- -- 420
Commercial real estate 381 445 105 -- -- -- 931
Land 21 82 -- 19 130 35 287
Consumer 433 1,191 1,461 530 64 310 3,989
Mortgage-backed securities 3 -- 531 453 18 3,003 4,008
Investment securities -- 15 -- -- -- -- 15
FHLB stock 205 -- -- -- -- 163 368
Interest-earning deposits 1,556 -- -- -- -- -- 1,556
------ ------ ------- ------- ------ ------- -------
Total interest-earning assets 5,587 8,891 2,184 1,121 915 4,384 23,082
------ ------ ------- ------- ------ ------- -------
Interest-bearing liabilities:
Passbook, money market and NOW
accounts (3) 269 804 2,144 2,144 -- -- 5,361
Certificates of deposit (4) 3,009 6,658 4,419 623 -- -- 14,709
FHLB Advances 452 -- -- -- -- -- 452
------ ------ ------- ------- ------ ------- -------
Total interest-bearing liabilities 3,730 7,462 6,563 2,767 -- -- 20,522
------ ------ ------- ------- ------ ------- -------
Interest rate sensitivity gap $1,857 $1,429 $(4,379) $(1,646) $ 915 $ 4,384 $ 2,560
------ ------ ------- ------- ------ ------- -------
------ ------ ------- ------- ------ ------- -------
Cumulative interest rate sensitivity gap $1,857 $3,286 $(1,093) $(2,739) $(1,824) $ 2,560
------ ------ ------- ------- ------- -------
------ ------ ------- ------- ------- -------
Percentage of cumulative gap
to total assets 8.2% 14.4% (4.8)% (12.0)% (8.0)% 11.2%
------ ------ ------- ------- ------- -------
------ ------ ------- ------- ------- -------
Cumulative ratio of interest-
earning assets to interest-
bearing liabilities 149.79% 129.36% 93.84% 86.65% 91.11% 112.47%
</TABLE>
(Footnotes are on following page)
36
<PAGE>
- --------------------------
(1) Loans receivable are gross of loans in process, deferred fees, unearned
discounts, and allowance for loan losses.
(2) Adjustable-rate assets are included in the period in which interest
rates are next scheduled to adjust rather than in the period in which
they are due, and fixed-rate assets are included in the periods in
which they are scheduled to mature, without reflecting scheduled
amortization or any estimated prepayments.
(3) Although Iberville's passbook, money market and NOW accounts are
generally subject to immediate withdrawal, management considers a
substantial amount of these accounts to be core deposits having
significantly longer effective maturities based on Iberville's
retention of such deposits in changing interest rate environments. The
decay rate used on these accounts was 20% per year over the first five
years, even though Iberville's total transaction accounts have actually
increased since December 31, 1996. If all of Iberville's passbook,
money market and NOW accounts had been assumed to be subject to
repricing within one year, interest-bearing liabilities which were
estimated to mature or reprice within one year would have exceeded
interest-earning assets with comparable characteristics by $1.0 million
or 4.4% of total assets. Excludes $432,000 of noninterest-bearing
checking accounts.
(4) It is assumed that certificates of deposit will not be withdrawn prior
to maturity. Excludes $32,000 of accrued interest payable.
Management also presently monitors and evaluates the potential impact of
interest rate changes upon the market value of Iberville's portfolio equity
on a quarterly basis, in an attempt to ensure that interest rate risk is
maintained within limits established by the Board of Directors. As discussed
under "Regulation - The Association - Regulatory Capital Requirements," the
OTS adopted a final rule in August 1993 incorporating an interest rate risk
component into the risk-based capital rules. Under the rule, an institution
with a greater than "normal" level of interest rate risk will be subject to a
deduction of its interest rate risk component from total capital for purposes
of calculating the risk-based capital requirement, although the OTS has
indicated that no institution will be required to deduct capital for interest
rate risk until further notice. An institution with a greater than "normal"
interest rate risk is defined as an institution that would suffer a loss of
net portfolio value ("NPV") exceeding 2.0% of the estimated market value of
its assets in the event of a 200 basis point increase or decrease in interest
rates. NPV is the difference between incoming and outgoing discounted cash
flows from assets, liabilities, and off-balance sheet contracts. A resulting
change in NPV of more than 2% of the estimated market value of an
institution's assets will require the institution to deduct from its
risk-based capital 50% of that excess change. The rule provides that the OTS
will calculate the interest rate risk component quarterly for each
institution. Because a 200 basis point increase in interest rates would have
actually increased the Association's NPV and a 200 basis point decrease would
have resulted in the Association's NPV declining by less than 2% of the
estimated market value of the Association's assets as of March 31, 1998, the
Association would not have been subject to any capital deduction as of March
31, 1998 if the regulation had been effective as of such date. The following
table presents the Association's NPV as of March 31, 1998, as calculated by
the OTS, based on information provided to the OTS by the Association.
37
<PAGE>
<TABLE>
<CAPTION>
Change in Change in
Interest Rates NPV as % of NPV as % of
in Basis Points Net Portfolio Value Portfolio Value Portfolio Value
(Rate Shock) Amount $ Change % Change of Assets of Assets(1)
--------------- ------ -------- -------- --------------- ---------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
400 $2,384 $ (99) (4.0)% 10.4% (.4)%
300 2,509 26 1.0 10.9 .1
200 2,574 91 3.7 11.1 .4
100 2,562 79 3.2 11.0 .3
Static 2,483 -- -- 10.6 --
(100) 2,402 (81) (3.3) 10.2 (.3)
(200) 2,369 (114) (4.6) 10.0 (.5)
(300) 2,382 (101) (4.1) 10.0 (.4)
(400) 2,428 (55) (2.2) 10.1 (.2)
</TABLE>
- -----------------
(1) Based on the portfolio value of the Association's assets assuming no
change in interest rates.
As shown by the table above, decreases in interest rates will result in
declines in the Association's net portfolio value based on OTS calculations
as of March 31, 1998, primarily due to the Association's significant holdings
of adjustable-rate loans and mortgage-backed securities. See "Risk Factors -
Potential Effects of Changes in Interest Rates and the Current Interest Rate
Environment."
Changes in Financial Condition
Assets. The Association's total assets increased by $960,000 or 4.4% to
$22.8 million at March 31, 1998 from $21.8 million at December 31, 1996. The
increase was primarily due to a $1.2 million or 8.1% increase in the net loan
portfolio, as commercial real estate loans, single-family residential loans
and automobile loans each increased. The net loan portfolio amounted to $16.4
million or 72.1% of total assets at March 31, 1998.
Mortgage-backed securities amounted to $4.0 million or 17.6% of total
assets at March 31, 1998. All of the Association's mortgage-backed securities
are either insured or guaranteed by the Federal Home Loan Mortgage
Corporation ("FHLMC"), the Federal National Mortgage Association ("FNMA") or
the Government National Mortgage Association ("GNMA"). Mortgage-backed
securities increase the quality of the Association's assets by virtue of the
guarantees that support them, require fewer personnel and overhead costs than
individual residential mortgage loans, are more liquid than individual
mortgage loans and may be used to collateralize borrowings or other
obligations of Iberville. However, mortgage-backed securities typically yield
less than individual residential mortgage loans.
Non-accruing loans totalled $164,000, $332,000 and $270,000 at March 31,
1998 and December 31, 1997 and 1996, respectively, or .96%, 1.93% and 1.70%
of the total loan portfolio at such dates. The Association had no real estate
owned or troubled debt restructurings at any of such dates. At March 31,
1998, Iberville's allowance for loan losses amounted to $403,000 or 2.4% of
the total loan portfolio and 246% of total non-accruing loans. See "Business
- - Asset Quality."
Cash and cash equivalents, which include interest-earning deposits in
other institutions, amounted to $1.7 million or 7.5% of total assets at March
31, 1998, compared to $1.1 million and $1.8 million at December 31, 1997 and
1996, respectively. The decline as of December 31, 1997 was due to the
Association using cash and cash equivalents to fund deposit outflows. The
Association's regulatory liquidity ratio amounted to 8.9% at March 31,
38
<PAGE>
1998. The Association expects that the net Conversion proceeds to be received
by the Association will initially increase the Association's regulatory
liquidity ratio.
Deposits. The Association's deposits increased by $508,000 or 2.5% in the
first quarter of 1998 to $20.5 million at March 31, 1998, after decreasing by
$252,000 or 1.2% in 1997. The increase in the first quarter of 1998 was
primarily due to increases in passbook and NOW accounts, which also increased
in 1997. Total transaction accounts were $5.8 million or 28.3% of total
deposits at March 31, 1998, compared to $5.0 million or 24.9% of total
deposits at December 31, 1996. Certificates of deposit increased slightly in
the first quarter of 1998, after decreasing by $555,000 or 3.7% in 1997. At
March 31, 1998, $9.7 million or 65.7% of the total certificates of deposit
mature in one year or less, and $2.1 million or 14.3% of the total
certificates of deposit had balances of $100,000 or more. The Association
believes that it can adjust the interest rates offered on certificates of
deposit to retain such funds to the extent desired and that it has adequate
resources to fund withdrawals.
Retained Earnings. The Association's retained earnings increased by
$49,000 or 3.0% in the first quarter of 1998 to $1.7 million at March 31,
1998. The increase was due to $53,000 of net income, which was partially
offset by a small unrealized loss on securities available for sale, net of
applicable deferred income tax. The unrealized loss is deducted from retained
earnings in accordance with Statement of Financial Accounting Standards
("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." Retained earnings amounted to 7.3% of total assets at March 31,
1998.
Results of Operations
Net Income. The Association's net income increased by $5,000 or 10.4% in
the first quarter of 1998 and by $108,000 or 193.3% in 1997 over the
respective prior periods. The increase in 1997 was primarily due to a
$156,000 decline in deposit insurance premiums, which resulted from the
one-time, special SAIF assessment paid by the Association on September 30,
1996 in the amount of $123,000 ($75,000 after taxes). A special SAIF
assessment equal to $.657 per $100 of insured deposits was paid by all
savings institutions in order to recapitalize the SAIF, and the regular
premium rate was reduced from 23 basis points to 6.4 basis points effective
January 1, 1997. See "Regulation - The Association - Insurance of Accounts."
The Association's net interest income is determined by its average
interest rate spread (i.e., the difference between the average yields earned
on its interest-earning assets and the average rates paid on its deposits),
the relative amounts of interest-earning assets and interest-bearing
liabilities, and the degree of mismatch in the maturity and repricing
characteristics of its interest-earning assets and interest-bearing
liabilities. The Association's net interest income increased by $34,000 or
17.8% in the first quarter of 1998 and by $37,000 or 5.0% in 1997 over the
respective prior periods. The increases were due to increases in both the
average interest rate spread and net interest-earning assets. In addition,
the increase in the first quarter of 1998 was partly due to the recognition
of $16,000 of income received on a non-accruing loan that was brought current.
The increase in net interest income in the first quarter of 1998 was
mostly offset by increases of $11,000 in total noninterest expense and $7,000
in federal income tax expenses.
Because the Company currently anticipates that it will take time to
prudently deploy the new capital raised in the Conversion, the Company's
return on equity initially is expected to be below the industry average after
the Conversion. See "Risk Factors - Low Return on Equity Following the
Conversion; Uncertainty as to Future Growth Opportunities." The increase in
net income shown under "Pro Forma Data" as a result of the investment of the
net Conversion proceeds is not necessarily indicative of future results of
operations.
39
<PAGE>
Average Balances, Net Interest Income and Yields Earned and Rates Paid.
The following table presents for the periods indicated the total dollar
amount of interest income from Iberville's average interest-earning assets
and the resultant yields, as well as the interest expense on average
interest-bearing liabilities, expressed both in dollars and rates, and the
net interest margin. All average balances are based on monthly balances.
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1998 March 31, 1997 1997
----------------------------- ------------------------ ----------------------------
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate(1) Balance Interest Rate Balance Interest Rate
--------- -------- --------- --------- -------- ------ ------- -------- -------
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable(2) $16,408 $ 374 8.71% $15,168 $ 329 8.68% $15,735 $1,346 8.55%
Mortgage-backed securities 4,143 63 6.08 4,155 62 5.97 4,176 258 6.18
Investment securities(3) 380 6 6.32 359 4 4.46 367 22 5.99
Interest-earning deposits 1,449 12 3.31 1,964 22 4.48 1,519 65 4.28
------- ----- ----- ------- ----- ---- ------- ------ ----
Total interest-earning
assets 22,380 455 7.83 21,646 417 7.71 21,797 1,691 7.76
----- ----- ----- ---- ------ ----
Noninterest-earning assets 253 278 253
------- ------- -------
Total assets $22,633 $21,924 $22,050
------- ------- -------
------- ------- -------
Interest-bearing liabilities:
Deposits(4) $20,240 223 4.41 $20,297 226 4.45 $20,154 910 4.52
FHLB advances 542 7 5.17 -- -- -- 138 7 5.07
------- ----- ----- ------- ----- ---- ------- ------ ----
Total interest-bearing
liabilities 20,782 230 4.43 20,297 226 4.45 20,292 917 4.52
----- ----- ----- ----- ------ ----
Noninterest-bearing liabilities 194 152 166
------- ------- -------
Total liabilities 20,976 20,449 20,458
Stockholders' equity 1,657 1,475 1,592
------- ------- -------
Total liabilities and
stockholders' equity $22,633 $21,924 $22,050
------- ------- -------
------- ------- -------
Net interest income; average
interest rate spread $ 225 3.40% $ 191 3.26% $ 774 3.24%
----- ----- ----- ----- ------ ----
----- ----- ----- ----- ------ ----
Net interest margin(5) 3.72% 3.53% 3.55%
----- ----- ----
----- ----- ----
Average interest-earning
assets to average
interest-bearing liabilities 107.69% 106.65% 107.42%
------ ------ ------
------ ------ ------
1996
-------------------------
Average Yield/
Balance Interest Rate
--------- -------- ------
<S> <C> <C> <C>
Interest-earning assets:
Loans receivable(2) $14,727 $1,269 8.62%
Mortgage-backed securities 4,282 259 6.05
Investment securities(3) 478 32 6.69
Interest-earning deposits 1,815 85 4.68
------- ------ ----
Total interest-earning 21,302 1,645 7.72
assets ------ ----
Noninterest-earning assets 316
-------
Total assets 21,618
-------
Interest-bearing liabilities:
Deposits(4) $19,974 908 4.55
FHLB advances -- -- --
------- ---- ----
Total interest-bearing
liabilities 19,974 908 4.55
---- ----
Noninterest-bearing liabilities 180
-------
Total liabilities 20,154
Stockholders' equity 1,464
-------
Total liabilities and
stockholders' equity $21,618
-------
-------
Net interest income; average
interest rate spread $ 737 3.17%
------ ----
------ ----
Net interest margin(5) 3.46%
----
----
Average interest-earning
assets to average
interest-bearing liabilities 106.65%
------
-----
</TABLE>
(1) The average yield on loans receivable for the first quarter of 1998
excludes the effect of $16,000 of income received on a non-accruing
loan. At March 31, 1998, the weighted average yields earned and rates
paid were as follows: loans receivable, 8.31%; mortgage-backed
securities, 6.05%; investment securities, 5.97%; other interest-earning
assets, 5.96%, total interest-earning assets, 7.72%; deposits, 4.50%;
FHLB advances, 5.55%; total interest-bearing liabilities, 4.52%; and
average interest rate spread, 3.20%.
(2) Includes non-accruing loans.
(3) Includes FHLB stock.
(4) Includes noninterest-bearing checking accounts.
(5) Equals net interest income divided by average interest-earning assets.
40
<PAGE>
Rate/Volume Analysis. The following table describes the extent to which
changes in interest rates and changes in volume of interest-related assets
and liabilities have affected Iberville's interest income and expense during
the periods indicated. For each category of interest-earning assets and
interest-bearing liabilities, information is provided on changes attributable
to (i) changes in volume (change in volume multiplied by prior year rate),
and (ii) changes in rate (change in rate multiplied by prior year volume).
The combined effect of changes in both rate and volume has been allocated
proportionately to the change due to rate and the change due to volume.
<TABLE>
<CAPTION>
Three Months Ended
March 31, Year Ended December 31,
1998 vs. 1997 1997 vs. 1996
------------------------------- --------------------------------
Increase(Decrease) Total Increase(Decrease) Total
Due to Increase Due to Increase
------------------ ----------------
Rate Volume (Decrease) Rate Volume (Decrease)
---- ------ ---------- ---- ------ ----------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable $ 18 $ 27 $ 45 $ (9) $ 86 $ 77
Mortgage-backed securities 1 -- 1 5 (6) (1)
Investment securities(1) 2 -- 2 (3) (7) (10)
Interest-earning deposits (5) (5) (10) (7) (13) (20)
---- ---- ------ ------ ---- -----
Total interest-earning assets 16 22 38 (14) 60 46
---- ---- ------ ------- ---- -----
Interest-bearing liabilities:
Deposits (2) (1) (3) (6) 8 2
FHLB advances -- 7 7 -- 7 7
---- ---- ------ ------ ---- -----
Total interest-bearing liabilities (2) 6 4 (6) 15 9
---- ---- ------ ------ ---- -----
Increase (decrease) in net interest
income $ 18 $ 16 $ 34 $ (8) $ 45 $ 37
---- ---- ------ ------ ---- -----
---- ---- ------ ------ ---- -----
</TABLE>
- --------------
(1) Includes FHLB stock.
Interest Income. Interest and fees on loans increased by $45,000 or 13.7%
in the first quarter of 1998 and by $77,000 or 6.1% in 1997 over the
respective prior periods. The increases were due to increases in the average
loan volume of 8.2% in the first quarter of 1998 and 6.8% in 1997 over the
respective prior periods. The increases in the average balance are primarily
due to increases in commercial real estate, single-family residential and
automobile loans. In addition, the increased income in the first quarter of
1998 was partly due to the recognition of $16,000 received on a non-accruing
loan that was brought current. Excluding the effect of such $16,000, the
average loan yield increased slighly to 8.70% in the first quarter of 1998
from 8.68% in the first quarter of 1997.
Interest on mortgage-backed securities has been relatively
stable, varying by only $1,000. The average balance of mortgage-backed
securities decreased by .3% in the first quarter of 1998 and by 2.5% in 1997
from the respective prior periods, as the amount purchased has declined
slightly. The average yield on mortgage-backed securities increased to 6.08% in
the first quarter of 1998 from 5.97% in the comparable 1997 quarter and
increased to 6.18% in 1997 from 6.05% in 1996. The increases in average yields
were primarily due to upward adjustments in the interest rate on adjustable-rate
mortgage-backed securities.
Interest and dividends on investment securities, which consist of FHLB
stock and a $15,000 U.S. government agency security at March 31, 1998,
increased nominally in the first quarter of 1998 over the comparable
41
<PAGE>
1997 quarter. Interest and dividends on investment securities decreased by
$10,000 or 31.3% in 1997 from 1996, as the average balance declined by 23.2%
and the average yield declined to 5.99% in 1997 from 6.69% in 1996. The
decline in the average balance was due to $185,000 of the Association's
$200,000 investment in a government agency security being called in 1996.
Interest on interest-earning deposits in other institutions decreased by
$10,000 or 45.5% in the first quarter of 1998 and by $20,000 or 23.5% in 1997
from the respective prior periods. The decreases were due to declines in both
the average balance and the average yield. The average balance decreased by
$515,000 or 26.2% in the first quarter of 1998 and by $296,000 or 16.3% in
1997 from the respective prior periods, and the average yield decreased by
117 basis points in the first quarter of 1998 and by 40 basis points in 1997
from the respective prior periods. As the average yields decreased, the
Association shifted a portion of this excess liquidity into higher yielding
loans.
Total interest income increased by $38,000 or 9.1% in the first quarter
of 1998 and by $46,000 or 2.8% in 1997 over the respective prior periods. The
increase in the first quarter of 1998 was due to an increase in the average
yield to 7.83% from 7.71% in the 1997 quarter and to a 3.4% increase in the
average balance of interest-earning assets. The increase in 1997 was due to a
2.3% increase in the average balance and a slight increase in the average
yield.
Interest Expense. Interest on deposits decreased by $3,000 or 1.3% in the
first quarter of 1998 after increasing by $2,000 or .2% in 1997 compared to
the respective prior periods. The decrease in the 1998 quarter was due to a
decline in the average rate paid to 4.41% from 4.45% and to a $57,000 or .3%
decline in the average balance. The average rate paid also declined slightly
in 1997 compared to 1996, but this decline was offset by a $180,000 or .9%
increase in the average balance. The average balance of lower rate passbook
and NOW accounts has increased in recent periods, while the average balance
of money market deposit accounts and certificates of deposit has generally
declined.
The Association had not utilized FHLB advances in recent years until the
fourth quarter of 1997, when the Association used FHLB advances to fund the
purchase of mortgage-backed securities. Because the average rate on the FHLB
advances exceeds the average rate of the Association's deposits, the
Association has been repaying its FHLB advances in recent months as deposits
have increased. Interest on FHLB advances amounted to $7,000 in the first
quarter of 1998 and $7,000 in 1997.
Net Interest Income. Net interest income increased by $34,000 or 17.8% in
the first quarter of 1998 and by $37,000 or 5.0% in 1997 over the respective
prior periods. The average interest rate spread increased to 3.40% in the
1998 quarter from 3.26% in the 1997 quarter and increased to 3.24% in 1997
from 3.17% in 1996. The increased spreads were primarily due to increases in
the average yields on interest-earning assets. In addition, net
interest-earning assets increased in the first quarter of 1998 and in 1997
over the respective prior periods.
Provision for Loan Losses. The Association's provisions for loan losses
were $12,000 in the first quarter of both 1998 and 1997. The provision for
loan losses increased by $3,000 or 8.4% in 1997 over 1996. The allowance for
loan losses amounted to $403,000 at March 31, 1998, representing 2.4% of the
total loan portfolio and 246% of total non-accruing loans at such date. See
"Business - Asset Quality."
Noninterest Income. Service charges and fees, which primarily consist of
charges for checking accounts, overdrafts and late payments, increased by
$4,000 or 21.9% in the first quarter of 1998 after decreasing by $2,000 or
3.3% in 1997 compared to the respective prior periods.
In 1996, the Association owned a 14% interest in General Financial Life
Insurance Company ("General Financial"), a Louisiana-chartered life insurance
company that underwrote mortgage and credit life insurance and annuities. In
March 1996, General Financial was sold and the Association's share of the
proceeds was $106,000, generating a gain on the sale of $34,000. No other
investment securities were sold in the first quarter of 1998 or in 1997 or
1996.
42
<PAGE>
Other noninterest income declined slightly in the first quarter of 1998
after increasing by $4,000 or 16.8% in 1997 compared to the respective prior
periods.
Total noninterest income increased by $4,000 or 17.5% in the first
quarter of 1998 after decreasing by $33,000 or 24.9% in 1997 compared to the
respective prior periods. Excluding the gain on the sale of the interest in
General Financial in 1996, total noninterest income would have increased
slightly in 1997 over 1996.
Noninterest Expense. Compensation and benefits increased by $3,000 or
3.2% in the first quarter of 1998 and by $42,000 or 15.4% in 1997 over the
respective prior periods. The increase in the first quarter of 1998 was
primarily due to normal salary increases. The increase in 1997 was primarily
due to increases of $23,000 in aggregate directors' fees, $9,000 in
contributions to the Association's profit sharing plan, and $6,000 in normal
salary increases. For periods subsequent to the Conversion, the shares of
Common Stock to be purchased by the ESOP and the Recognition Plan will result
in additional compensation expense being recognized over periods of 10 and
five years, respectively. Based on the assumptions set forth under "Pro Forma
Data," the increased compensation expense after taxes is estimated to be
$14,000 per year for each of the ESOP and the Recognition Plan at the maximum
of the Estimated Valuation Range. However, the amount for the ESOP may vary
significantly depending upon the impact of SOP 93-6. See "Risk Factors -
Increased Compensation Expense After the Conversion." In addition, the
exercise of compensatory or non-qualified stock options in the future would
result in additional compensation expense for federal income tax purposes
(but not for financial statement purposes) equal to the difference between
the aggregate market value of the Common Stock received and the aggregate
exercise price.
Occupancy expense decreased by $3,000 or 36.5% in the first quarter of
1998 after increasing by $3,000 or 10.2% in 1997 compared to the respective
prior periods.
Furniture and equipment expense decreased by $1,000 or 13.0% in the first
quarter of 1998 and decreased slightly in 1997 from the respective prior
periods.
Deposit insurance premiums increased by $2,000 or 336.9% in the first
quarter of 1998 after decreasing by $34,000 or 76.4% in 1997 compared to the
respective prior periods. The increase in the first quarter of 1998 was due
to a credit received in the first quarter of 1997. Excluding the credit, the
insurance premium would have decreased slightly in the first quarter of 1998
from the comparable 1997 quarter due to a decline in deposits in 1997. The
lower insurance premium in 1997 compared to 1996 was primarily due to a
decline in the premium rate. After the SAIF was recapitalized on September
30, 1996, the regular premium rate was substantially reduced. See "Regulation
- - The Association - Insurance of Accounts." The special SAIF assessment in
1996 amounted to $123,000, or $75,000 after taxes.
Data processing expense decreased nominally in the first quarter of 1998
and by $8,000 or 12.1% in 1997 from the respective prior periods. The
decrease in 1997 was due to the payment in 1996 of a one-time licensing fee
of $8,400.
Legal and other professional expenses increased by $3,000 or 59.8% in the
first quarter of 1998 and by $3,000 or 5.2% in 1997 over the respective prior
periods. These expenses primarily consist of fees paid to the Association's
auditors and, to a lesser extent, the retainer paid to the Association's
general counsel. See "Management - Certain Transactions."
Marketing expense increased by $1,000 or 20.1% in the first quarter of
1998 after decreasing by $8,000 or 39.5% in 1997 compared to the respective
prior periods. The decrease in 1997 was due to several marketing programs in
1996 that were not repeated in 1997.
Office supplies and postage expense increased by $3,000 or 37.7% in the
first quarter of 1998 after decreasing by $2,000 or 8.7% in 1997 compared to
the respective prior periods.
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<PAGE>
Other noninterest expense increased by $3,000 or 22.3% in the first
quarter of 1998 after decreasing by $8,000 or 11.4% in 1997 compared to the
respective prior periods.
Total noninterest expense increased by $11,000 or 7.6% in the first
quarter of 1998 after decreasing by $135,000 or 19.2% in 1997 compared to the
respective prior periods. The increase in the 1998 quarter was due to
increases in other noninterest expense, compensation and benefits and deposit
insurance premiums. The decrease in 1997 was primarily due to the special
SAIF assessment paid in 1996. Excluding the effects of such one-time
assessment, total noninterest expense would have decreased by $12,000 or 2.1%
in 1997 compared to 1996, primarily due to decreases in regular deposit
insurance premiums and in professional, data processing and other
miscellaneous expenses, partially offset by an increase in compensation and
benefits expense.
Federal Income Tax Expense. The federal income tax expense increased by
$6,000 or 30.0% in the first quarter of 1998 and by $28,000 or 40.4% in 1997
over the respective prior periods. The increases were due to increases in
pre-tax income of 49.1% in the first quarter of 1998 and 108.3% in 1997 over
the respective prior periods. In addition, the decrease in 1997 was partly
due to a lower effective tax rate in 1997 as the result of a $30,000 deferred
tax expense in 1996 relating to the Association's bad debt reserve. For
additional information, see Note J of Notes to Financial Statements.
Liquidity and Capital Resources
Iberville is required under applicable federal regulations to maintain
specified levels of "liquid" investments in qualifying types of U.S.
Government, federal agency and other investments having maturities of five
years or less. Current OTS regulations require that a savings institution
maintain liquid assets of not less than 4% of its average daily balance of
net withdrawable deposit accounts and borrowings payable in one year or less.
At March 31, 1998, Iberville's liquidity was 8.9% or $962,000 in excess of
the minimum OTS requirement.
Cash was generated by Iberville's operating activities during the first
quarter of 1998 and in 1997 and 1996 primarily as a result of net income in
each period. The adjustments to reconcile net income to net cash provided by
operations during the periods presented consisted primarily of the provisions
for loan losses, the provisions for depreciation and amortization, accretion
of the premiums on mortgage-backed securities, amortization of the discount
on consumer loans, the FHLB stock dividends, and increases or decreases in
various receivable and payable accounts. The primary investing activities of
Iberville are the origination of loans and the purchase of mortgage-backed
securities, which are primarily funded with the proceeds from repayments and
prepayments on existing loans and mortgage-backed securities and the maturity
of mortgage-backed securities. Investing activities used net cash in 1997 and
1996, primarily due to increases in the net loan portfolio. In the first
quarter of 1998, investing activities provided net cash as the principal
payments on mortgage-backed securities exceeded the increase in the loan
portfolio. The primary financing activity consists of deposits and FHLB
advances. Financing activities provided net cash in the first quarter of 1998
and in 1996 due to increases in deposits and in 1997 due to an increase in
FHLB advances. Total cash and cash equivalents increased by $587,000 in the
first quarter of 1998, decreased by $698,000 in 1997, and increased by
$851,000 in 1996. Total cash and cash equivalents amounted to $1.7 million at
March 31, 1998.
At March 31, 1998, Iberville had outstanding commitments to originate
$65,000 of single-family residential loans and $106,000 of undisbursed
construction loans. In addition, as of March 31, 1998, the Association had
committed to acquire up to a $500,000 participation interest in a $5.5
million land development loan. The actual participation interest was
subsequently determined to be $385,000. See "Business - Lending Activities -
Land Loans." At the same date, the total amount of certificates of deposit
which were scheduled to mature in the following 12 months was $9.7 million.
Iberville believes that it has adequate resources to fund all of its
commitments and that it can adjust the rate on certificates of deposit to
retain deposits in changed interest rate environments. If Iberville requires
funds beyond its internal funding capabilities, advances from the FHLB of
Dallas are available as an additional source of funds.
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<PAGE>
Iberville is required to maintain regulatory capital sufficient to meet
tangible, core and risk-based capital ratios of at least 1.5%, 3.0% and 8.0%,
respectively. At March 31, 1998, Iberville exceeded each of its capital
requirements, with tangible, core and risk-based capital ratios of 7.34%,
7.34% and 15.47%, respectively. See "Regulatory Capital," Regulation -The
Association - Regulatory Capital Requirements" and Note O of Notes to
Financial Statements.
Assuming the sale of Common Stock at the midpoint of the Estimated
Valuation Range, the Company's ratio of equity to assets would be 10.20% on a
pro forma basis at March 31, 1998. Both the Company and the Association will
be well-capitalized upon consummation of the Conversion. The Company
anticipates that the net Conversion proceeds contributed to the Association
will initially increase the Association's liquidity.
Impact of Inflation and Changing Prices
The financial statements and related financial data presented herein have
been prepared in accordance with GAAP, which generally require the
measurement of financial position and operating results in terms of
historical dollars, without considering changes in relative purchasing power
over time due to inflation. Unlike most industrial companies, virtually all
of Iberville's assets and liabilities are monetary in nature. As a result,
interest rates generally have a more significant impact on Iberville's
performance than does the effect of inflation. Interest rates do not
necessarily move in the same direction or in the same magnitude as the prices
of goods and services, since such prices are affected by inflation to a
larger extent than interest rates.
The Year 2000
The Association has reviewed its computer and data processing issues
relating to the Year 2000. Management believes that most of the Association's
hardware and terminals will not need to be replaced but that certain software
will need to be upgraded. The Association's data processing is handled by an
independent third party data center, and management is monitoring the data
center's progress and timetable to resolving issues relating to the Year
2000. Testing with the data center is scheduled to occur in mid-September
1998. If the data center is able to become Year 2000 compliant in a timely
manner, then management believes that issues related to the Year 2000 will
not have a material adverse effect on the Company's liquidity, capital
resources or consolidated results of operations. The Association currently
expects to be Year 2000 compliant by the end of 1998.
In the event the third party data center is unable to become Year 2000
compliant in a timely manner, the Association is in the process of
establishing a contingency plan to switch to another data center. While the
costs of switching to another data center have not yet been quantified,
management currently does not believe that such costs would have a material
adverse effect on the Company's liquidity, capital resources or consolidated
results of operations.
BUSINESS
Lending Activities
General. At March 31, 1998, Iberville's net loan portfolio totalled $16.4
million, representing approximately 72.1% of Iberville's $22.8 million of
total assets at that date. The principal lending activity of Iberville is the
origination of single-family residential loans and consumer loans. At March
31, 1998, conventional first mortgage, single-family residential loans
(excluding construction loans) amounted to $11.5 million or 67.2% of the
total loan portfolio and consumer loans amounted to $4.0 million or 23.3% of
the total loan portfolio, in each case before net items. To a lesser extent,
the Association originates construction loans, commercial real estate loans
and land loans. At March 31, 1998, construction loans amounted to $420,000 or
2.5% of the total loan portfolio, commercial real estate loans totalled
$931,000 or 5.4% of the total loan portfolio, and land loans amounted to
$287,000 or 1.7% of the total loan portfolio, in each case before net items.
45
<PAGE>
The types of loans that the Association may originate are subject to
federal and state laws and regulations. Interest rates charged by the
Association on loans are affected principally by the demand for such loans
and the supply of money available for lending purposes and the rates offered
by its competitors. These factors are, in turn, affected by general and
economic conditions, the monetary policy of the federal government, including
the Federal Reserve Board, legislative and tax policies, and governmental
budgetary matters.
A savings institution generally may not make loans to one borrower and
related entities in an amount which exceeds the greater of (i) 15% of its
unimpaired capital and surplus, although loans in an amount equal to an
additional 10% of unimpaired capital and surplus may be made to a borrower if
the loans are fully secured by readily marketable securities, and (ii)
$500,000. At March 31, 1998, the Association's limit on loans-to-one borrower
was $500,000 and its five largest loans or groups of loans-to-one borrower,
including related entities, aggregated $342,000, $245,000, $242,000, $238,000
and $200,000. All of the Association's five largest loans or groups of loans
were performing in accordance with their terms at March 31, 1998. The
$342,000 borrowing relationship consists of five loans to a director of the
Association (including a loan to a related company). See "Management
Indebtedness of Management." Subsequent to March 31, 1998, the Association
agreed to a $385,000 participation interest in a $5.5 million land
development loan to an unaffiliated borrower. See "- Land Loans."
Loan Portfolio Composition. The following table sets forth the
composition of Iberville's loan portfolio by type of loan at the dates
indicated.
<TABLE>
<CAPTION>
December 31,
-------------------------------------
March 31, 1998 1997 1996
------------------- ----------------- -----------------
Amount % Amount % Amount %
------- ------ ------ ------- ------ ------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Real estate loans:
Single-family residential $11,508 67.2% $11,531 67.1% $10,752 67.7%
Construction(1) 420 2.5 420 2.4 464 2.9
Commercial real estate 931 5.4 943 5.5 757 4.8
Land 287 1.7 271 1.6 211 1.3
------- ----- ------- ----- ------- ----
Total real estate loans 13,146 76.7 13,165 76.6 12,184 76.7
------- ----- ------- ----- ------- ----
Consumer loans:
Home equity and improvement 1,089 6.4 1,172 6.8 1,221 7.7
Loans secured by savings accounts 774 4.5 786 4.6 670 4.2
Automobile 1,125 6.6 1,066 6.2 814 5.1
Unsecured 505 3.0 525 3.1 490 3.1
Other 496 2.9 464 2.7 511 3.2
------- ----- ------- ----- ------- ----
Total consumer loans 3,989 23.3 4,013 23.4 3,706 23.3
------- ----- ------- ----- ------- ----
Total loans 17,135 100.0% 17,178 100.0% 15,890 100.0%
----- ----- -----
----- ----- -----
Less:
Unearned discounts 200 189 160
Loans in process 106 260 169
Deferred fees and discounts 8 7 5
Allowance for loan losses 403 404 362
------- ------- -------
Total loans receivable, net $16,418 $16,318 $15,194
------- ------- -------
------- ------- -------
</TABLE>
- -----------------
(1) Consists solely of single-family residential construction loans.
46
<PAGE>
Contractual Terms to Final Maturities. The following table sets forth
certain information as of December 31, 1997 regarding the dollar amount of
loans maturing in the Association's portfolio, based on the contractual date
of the loan's final maturity, before giving effect to net items. Demand
loans, loans having no stated schedule of repayments and no stated maturity,
and overdrafts are reported as due in one year or less. The amounts shown
below do not reflect normal principal amortization; rather, the balance of
each loan outstanding at December 31, 1997 is shown in the appropriate year
of the loan's final maturity.
<TABLE>
<CAPTION>
Single-family Commercial
residential Construction real estate Land Consumer Total
------------ -------------- ------------- ------ ---------- ------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Amounts due after December 31, 1997 in:
One year or less $22 $420 $ -- $ 3 $1,057 $ 1,502
After one year through two years 21 -- -- 5 531 557
After two years through three years 49 -- -- -- 565 614
After three years through five years 317 -- 106 40 828 1,291
After five years through ten years 1,899 -- -- 177 790 2,866
After ten years through fifteen years 3,075 -- 235 46 203 3,559
After fifteen years 6,148 -- 602 -- 39 6,789
------- --- ---- ---- ------ -------
Total(1) $11,531 $420 $943 $271 $4,013 $17,178
------- --- ---- ---- ------ -------
------- --- ---- ---- ------ -------
</TABLE>
- -----------------
(1) Gross of unearned discount, loans in process, deferred loan origination
fees and discounts, and the allowance for loan losses.
The following table sets forth the dollar amount of all loans, before
net items, due after one year from December 31, 1997 as shown in the
preceding table, which have fixed interest rates or which have floating or
adjustable interest rates.
<TABLE>
<CAPTION>
Floating or
Fixed-Rate Adjustable-Rate Total
---------- ------------------- -------------
(In Thousands)
<S> <C> <C> <C>
Single-family residential $2,063 $ 9,446 $11,509
Commercial real estate -- 943 943
Land 113 155 268
Consumer 2,260 696 2,956
------ ------- -------
Total $4,436 $11,240 $15,676
------ ------- -------
------ ------- -------
</TABLE>
Scheduled contractual maturities of loans do not necessarily reflect the
actual expected term of Iberville's portfolio. The average life of mortgage
loans is substantially less than their average contractual terms because of
prepayments. The average life of mortgage loans tends to increase when
current mortgage loans rates are higher than rates on existing mortgage loans
and, conversely, decrease when rates on existing mortgage loans are lower
than current mortgage loan rates (due to refinancing of adjustable-rate and
fixed-rate loans at lower rates). Under the latter circumstance, the weighted
average yield on loans decreases as higher yielding loans are repaid or
refinanced at lower rates.
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<PAGE>
Origination of Loans. The lending activities of Iberville are subject to
the written underwriting standards and loan origination procedures
established by Iberville's Board of Directors and management. Loan
originations are obtained through a variety of sources, including referrals
from real estate brokers, builders and existing customers. Written loan
applications are taken by lending personnel, and the loan department
supervises the procurement of credit reports, appraisals and other
documentation involved with a loan. Property valuations are performed by
independent outside appraisers approved by Iberville's Board of Directors.
Under Iberville's real estate lending policy, either a title opinion
signed by an approved attorney or a title insurance policy must be obtained
for each real estate loan. Iberville also requires fire and extended coverage
casualty insurance, in order to protect the properties securing its real
estate loans. Borrowers must also obtain flood insurance policies when the
property is in a flood hazard area as designated by the Department of Housing
and Urban Development. Borrowers may be required to advance funds on a
monthly basis together with each payment of principal and interest to a
mortgage loan account from which Iberville makes disbursements for items such
as real estate taxes, hazard insurance premiums and private mortgage
insurance premiums as they become due.
Iberville's loan approval process is intended to assess the borrower's
ability to repay the loan, the viability of the loan and the adequacy of the
value of the property that will secure the loan. The Association's lending
policies permit the Association's President or loan officer to approve all
types of loans not exceeding $30,000. Loans over $30,000 up to $150,000 may
be approved by the Association's President or loan officer and two other
directors of the Association. Loans in excess of $150,000 and all commercial
real estate loans must be approved by the entire Board of Directors,
excluding Mr. Delahaye who abstains from voting due to his involvement in a
majority of the Association's real estate loan closings.
The following table shows total loans originated and repaid during the
periods indicated. No loans were purchased or sold during the periods shown.
<TABLE><CAPTION>
Three Months Ended
March 31, Year Ended December 31,
------------------------- -----------------------------------
1998 1997 1997 1996 1995
--------- ----------- ---------- --------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Loan originations:
Single-family residential $441 $ 211 $1,638 $1,266 $1,737
Construction(1) -- 140 620 465 112
Commercial real estate -- -- 225 250 155
Land 73 -- 110 90 122
Consumer 413 310 1,545 2,146 1,642
---- ----- ------ ------ ------
Total loans originated 927 661 4,138 4,217 3,768
Loan principal reductions (957) (492) (2,851) (3,359) (2,399)
Increase (decrease) due to
other items, net(2) 130 (80) (163) (180) 14
---- ----- ------ ------ ------
Net increase in loan portfolio $100 $ 89 $1,124 $ 678 $1,383
---- ----- ------ ------ ------
---- ----- ------ ------ ------
</TABLE>
- --------------------
(1) Consists solely of single-family residential construction loans.
(2) Other items, net include the effects relating to unearned discount,
loans in process, deferred loan origination fees and discounts, and the
allowance for loan losses.
Although Louisiana laws and regulations permit state-chartered savings
institutions, such as Iberville, to originate and purchase loans secured by
real estate located throughout the United States, Iberville's present lending
48
<PAGE>
is done primarily within its primary market area, which consists of Iberville
and West Baton Rouge Parishes in Louisiana. The Association's lending
policies provide that a maximum of 10% of the total loan portfolio shall be
secured by properties outside of these two parishes. Subject to Iberville's
loans-to-one borrower limitation, Iberville is permitted to invest without
limitation in residential mortgage loans and up to 400% of its capital in
loans secured by non-residential or commercial real estate. Iberville may
also invest in secured and unsecured consumer loans in an amount not
exceeding 35% of Iberville's total assets. This 35% limitation may be
exceeded for certain types of consumer loans, such as home equity and
property improvement loans secured by residential real property. In addition,
Iberville may invest up to 10% of its total assets in secured and unsecured
loans for commercial, corporate, business or agricultural purposes. At March
31, 1998, Iberville was well within each of the above lending limits.
Single-Family Residential Real Estate Loans. The primary real estate
lending activity of Iberville is the origination of loans secured by first
mortgage liens on single-family residences. At March 31, 1998, $11.5 million
or 67.2% of Iberville's total loan portfolio, before net items, consisted of
conventional first mortgage, single-family residential loans (excluding
construction loans).
The loan-to-value ratio, maturity and other provisions of the loans made
by Iberville generally have reflected the policy of making less than the
maximum loan permissible under applicable regulations, in accordance with
sound lending practices, market conditions and underwriting standards
established by Iberville. Iberville's lending policies on single-family
residential mortgage loans generally limit the maximum loan-to-value ratio to
80% of the lesser of the appraised value or purchase price of the property.
The single-family residential loans which have a loan-to-value ratio in
excess of an 80% require private mortgage insurance. Residential mortgage
loans are amortized on a monthly basis with principal and interest due each
month. The loans generally do not include "due-on-sale" clauses.
Various legislative and regulatory changes have given Iberville the
authority to originate and purchase mortgage loans which provide for periodic
interest rate adjustments subject to certain limitations. Iberville has been
actively marketing ARMs in order to decrease the vulnerability of its
operations to changes in interest rates. At March 31, 1998, single-family
residential ARMs represented $9.8 million or 57.3% of the total loan
portfolio, before net items.
Iberville's single-family residential ARMs are fully amortizing loans
with contractual maturities of up to 30 years. These loans have interest
rates which are scheduled to adjust periodically in accordance with a
designated index. Iberville currently offers ARMs on which the interest rate
adjusts every year based upon the national average contract interest rate for
all major types of lenders on the purchase of previously occupied homes, plus
a specified margin. The margin above the index is generally .25%. There is a
2% cap on the rate adjustment per period and a 13% cap on the maximum
interest rate during the life of the loan. The adjustable-rate loans in
Iberville's loan portfolio are not convertible by their terms into fixed-rate
loans, are not assumable without the Association's consent, do not contain
prepayment penalties and do not produce negative amortization.
The Association qualifies borrowers based on the initial interest rate
on the ARM rather than the fully indexed rate. In a rising interest rate
environment, the interest rate on the ARM will increase on the next
adjustment date, resulting in an increase in the borrower's monthly payment.
To the extent the increased rate adversely affects the borrower's ability to
repay his loan, the Association is exposed to increased credit risk. As of
March 31, 1998, the Association's non-accruing residential loans were
$106,000. See "--Asset Quality."
The demand for adjustable-rate loans in Iberville's primary market area
has been a function of several factors, including the level of interest
rates, and the difference between the interest rates offered by competitors
for fixed-rate loans and adjustable-rate loans. Due to the generally lower
rates of interest prevailing in recent periods, consumer preference for
fixed-rate loans has increased. In mid-1996, the Association began offering
15-year, fixed-rate residential loans for retention in its portfolio, which
loans totalled $1.3 million at March 31, 1998.
49
<PAGE>
Construction Loans. At March 31, 1998, $420,000 or 2.5% of Iberville's
total loan portfolio, before net items, consisted of two loans for the
construction of single-family residences. Construction loans are not being
actively marketed and are offered primarily as a service to existing
customers. The two loans were for $220,000 and $200,000 at March 31, 1998,
gross of the undisbursed portion. The two construction loans each bear a
fixed interest rate during the construction phase based upon the amount of
funds disbursed, and the loans are structured to be converted to
adjustable-rate permanent loans at the end of the construction phase. The
adjustable-interest rate is not determined until the end of the construction
phase, and the Association does not charge an additional loan origination fee
when the construction loan is converted to a permanent loan.
Construction lending is generally considered to involve a higher degree
of risk of loss than long-term financing on improved, owner-occupied real
estate because of the uncertainties of construction, including the
possibility of costs exceeding the initial estimates and the need to obtain a
tenant or purchaser if the property will not be owner-occupied. Iberville
generally attempts to mitigate the risks associated with construction lending
by, among other things, lending primarily in its market area, using
conservative underwriting guidelines, and closely monitoring the construction
process.
Commercial Real Estate Loans. The Association's commercial real estate
loan portfolio primarily consists of loans secured by retail establishments
and two trailer parks located within the Association's primary market area.
Commercial real estate loans amounted to $931,000 or 5.4% of the total loan
portfolio at March 31, 1998. The largest commercial real estate loan at
March 31, 1998 was a loan to a director of the Association secured by a
trailer park and amounted to $217,000 at such date. The average balance of
the commercial real estate loans at March 31, 1998 was approximately $116,000.
Nonresidential real estate loans may have terms up to 30 years and
generally have adjustable rates of interest. The Association uses the same
index for commercial real estate loans as it uses for single-family
residential loans, except that the margin for commercial real estate loans is
1.25% above the index. There is a 2% cap on the rate adjustment per period
and a 13% cap on the maximum interest rate during the life of the loan. As
part of its commitment to loan quality, the Association's senior management
reviews each nonresidential loan prior to approval by the Board of Directors.
All loans are based on the appraised value of the secured property, and
commercial real estate loans are generally not made in amounts in excess of
80% of the appraised value of the secured property. All appraisals are
performed by an independent appraiser designated by the Association and are
reviewed by management. In originating nonresidential loans, the Association
considers the quality of the property, the credit of the borrower, the
historical and projected cash flow of the project, the location of the real
estate and the quality of the property management. A total of $125,000 of
commercial real estate loans were originated in 1997, and none were
originated in the first quarter of 1998.
Commercial real estate lending is generally considered to involve a
higher degree of risk than single-family residential lending. Such lending
typically involves large loan balances concentrated in a single borrower or
groups of related borrowers for rental or business properties. In addition,
the payment experience on loans secured by income-producing properties is
typically dependent on the success of the operation of the related project
and thus is typically affected by adverse conditions in the real estate
market and in the economy. Iberville generally attempts to mitigate the risks
associated with commercial real estate lending by, among other things,
lending primarily in its market area and using low loan-to-value ("LTV")
ratios in the underwriting process.
Land Loans. As of March 31, 1998, the Association's land loans are
secured by vacant lots. These loans are generally for a maximum of seven
years and are fully amortizing. At March 31, 1998, the Association's land
loans amounted to $287,000 or 1.7% of the total loan portfolio. Of such
amount, $166,000 of the land loans had fixed interest rates while $121,000
had adjustable interest rates.
The Association has recently agreed to participate in a $5.5 million
loan with seven other financial institutions to finance the development of
400 acres of land in the Association's market area. The Association has a
$385,000 or 7% interest in the loan, and the funds will be disbursed as the
development progresses. The land will
50
<PAGE>
be developed into an 18-hole golf course and into vacant lots for
single-family residences. The loan bears an interest rate of 1% below a
specified prime rate, and the loan will be repaid as the lots are sold.
Land development and acquisition loans involve significant additional
risks when compared with loans on existing residential properties. These
loans typically involve large loan balances to single borrowers, and the
payment experience is dependent on the successful development of the land and
the sale of the lots. These risks can be significantly impacted by supply and
demand conditions. The Association reviewed a feasibility study and market
analyses with respect to the above project. In addition, the land was already
owned by the developer and serves as collateral for the loan.
Consumer Loans. Subject to restrictions contained in applicable federal
laws and regulations, the Association is authorized to make loans for a wide
variety of personal or consumer purposes. At March 31, 1998, $4.0 million or
23.3% of the Association's total loan portfolio consisted of consumer loans.
The Association originates consumer loans in order to provide a full
range of financial services to its customers and because such loans generally
have shorter terms and higher interest rates than residential mortgage loans.
The consumer loans offered by the Association include home equity and
improvement loans, loans secured by deposit accounts in the Association,
automobile loans, mobile home loans and other miscellaneous loans.
Home equity and improvement loans are originated by the Association for
generally up to 80% of the appraised value, less the amount of any existing
prior liens on the property. The Association secures the loan with a mortgage
on the property (generally a second mortgage) and will originate the loan
even if another institution holds the first mortgage. The loans have a
maximum term of 15 years. At March 31, 1998, home equity and improvement
loans totalled $1.1 million or 6.4% of the Association's total loan portfolio.
The Association offers loans secured by deposit accounts in the
Association, which loans amounted to $774,000 or 4.5% of the Association's
total loan portfolio at March 31, 1998. Such loans are originated for up to
90% of the account balance, with a hold placed on the account restricting the
withdrawal of the account balance. The interest rate on the loan is equal to
the interest rate paid on the account plus 2%, subject to a minimum interest
rate of 7% on the loan.
The Association offers automobile loans on both new and used vehicles,
with most of the loans secured by used vehicles. The automobile loans have
fixed interest rates and terms of up to five years for new vehicles and four
years for used vehicles. Automobile loans amounted to $1.1 million or 6.6% of
the total loan portfolio at March 31, 1998, compared to $814,000 at December
31, 1996.
The unsecured loans originated by the Association are generally for a
maximum of $5,000 and a maximum term of 36 months, although the Association's
policy permits up to a $10,000 unsecured loan for a term of up to 48 months.
These loans bear a fixed interest rate and require monthly payments of
principal and interest. The amount of unsecured loans has been relatively
stable in recent periods, and such loans amounted to $505,000 or 3.0% of the
total loan portfolio at March 31, 1998.
Other consumer loans primarily consist of loans secured by personal
property and mobile home loans. These loans amounted to $496,000 or 2.9% of
the total loan portfolio at March 31, 1998. Mobile home loans totalled
$80,000 at March 31, 1998, and the Association originates these loans only to
a limited extent.
Consumer loans generally have shorter terms and higher interest rates
than mortgage loans but generally involve more credit risk than mortgage
loans because of the type and nature of the collateral and, in certain cases,
the absence of collateral. In addition, consumer lending collections are
dependent on the borrower's continuing financial stability, and thus are more
likely to be adversely affected by job loss, divorce, illness and personal
bankruptcy. In many cases, any repossessed collateral for a defaulted
consumer loan will not provide an adequate source of repayment of the
outstanding loan balance because of improper repair and maintenance of the
underlying
51
<PAGE>
security. The remaining deficiency often does not warrant further substantial
collection efforts against the borrower. The Association believes that the
generally higher yields earned on consumer loans compensate for the increased
credit risk associated with such loans and that consumer loans are important
to its efforts to increase rate sensitivity, shorten the average maturity of
its loan portfolio and provide a full range of services to its customers.
Loan Origination and Other Fees. In addition to interest earned on
loans, the Association receives loan origination fees or "points" for
originating loans. Loan points are a percentage of the principal amount of
the mortgage loan and are charged to the borrower in connection with the
origination of the loan.
In accordance with SFAS No. 91, which deals with the accounting for
non-refundable fees and costs associated with originating or acquiring loans,
the Association's loan origination fees and certain related direct loan
origination costs are offset, and the resulting net amount is deferred and
amortized as interest income over the contractual life of the related loans
as an adjustment to the yield of such loans. At March 31, 1998, the
Association had $8,000 of loan fees which had been deferred and are being
recognized as income over the contractual maturities of the related loans.
Asset Quality
General. When a borrower fails to make a required payment on a loan, the
Association attempts to cure the deficiency by contacting the borrower and
seeking payment. Late charges are generally imposed following the thirtieth
day after a payment is due on mortgage loans and after 15 days on consumer
loans. In most cases, deficiencies are cured promptly. If a delinquency
extends beyond 30 days, the loan and payment history is reviewed and efforts
are made to collect the loan. While the Association generally prefers to work
with borrowers to resolve such problems, when the account becomes 90 days
delinquent, the Association institutes foreclosure or other collection
proceedings, as necessary, to minimize any potential loss.
Loans are placed on non-accrual status when, in the judgment of
management, the probability of collection of interest is deemed to be
insufficient to warrant further accrual. When a loan is placed on non-accrual
status, previously accrued but unpaid interest is deducted from interest
income. As a matter of policy, the Association discontinues the accrual of
interest income when the loan becomes 90 days past due as to principal or
interest. Specific reserves are established when a consumer loan becomes 90
days past due.
Real estate acquired by the Association as a result of foreclosure or by
deed-in-lieu of foreclosure and loans deemed to be in-substance foreclosed
under generally accepted accounting principles are classified as real estate
owned until sold. The Association had no real estate owned at March 31, 1998
or at December 31, 1997 or 1996.
Delinquent Loans. The following table sets forth information concerning
delinquent loans at March 31, 1998, in dollar amount and as a percentage of
Iberville's total loan portfolio. The amounts presented represent the total
outstanding principal balances of the related loans, rather than the actual
payment amounts which are past due. At March 31, 1998, Iberville had no
commercial real estate loans, construction loans or land loans which were
delinquent 30 or more days.
<TABLE>
<CAPTION>
Single-family
Residential Consumer Total
------------- ---------- ------
Amount % Amount % Amount %
------ --- ------ --- ------ --
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Loans delinquent for:
30 - 59 days $ 837 4.9% $319 1.9% $1,156 6.7%
60 - 89 days 136 .8 55 .3 191 1.1
90 days and over 106 .6 58 .3 164 1.0
----- --- --- ---- ----- ----
Total delinquent loans $1,079 6.3% $432 2.5% $1,511 8.8%
----- --- --- ---- ----- ----
----- --- --- ---- ----- ----
</TABLE>
52
<PAGE>
Non-Performing Assets. The following table sets forth the amounts and
categories of Iberville's non-performing assets at the dates indicated.
Iberville did not have any accruing loans 90 days or more delinquent or
troubled debt restructurings at any of the dates presented.
<TABLE>
<CAPTION>
December 31,
March 31, --------------------------
1998 1997 1996
---------- ------------- -----------
(Dollars in Thousands)
<S> <C> <C> <C>
Non-accruing loans:
Single-family residential $ 106 $ 267 $ 214
Consumer 58 65 56
---- ---- ----
Total non-accruing loans 164 332 270
Real estate owned -- -- --
----- ----- -----
Total non-performing assets $ 164 $ 332 $ 270
----- ----- -----
----- ----- -----
Total non-performing loans as a percentage
of total loans 0.96% 1.93% 1.70%
----- ----- -----
----- ----- -----
Total non-performing assets as a
percentage of total assets 0.72% 1.48% 1.24%
----- ----- -----
----- ----- -----
</TABLE>
The $164,000 of non-accruing loans at March 31, 1998 consisted of three
single-family residential loans, of which the largest loan was for $54,000,
and 19 consumer loans.
If the $332,000 of non-accruing loans at December 31, 1997 had been
current in accordance with their terms during 1997, the gross interest income
on such loans would have been $32,000. A total of $29,000 of interest income
on these non-accruing loans was actually recorded in 1997.
Classified Assets. Federal regulations require that each insured savings
institution classify its assets on a regular basis. In addition, in
connection with examinations of insured institutions, federal examiners have
authority to identify problem assets and, if appropriate, classify them.
There are three classifications for problem assets: "substandard," "doubtful"
and "loss." Substandard assets have one or more defined weaknesses and are
characterized by the distinct possibility that the insured institution will
sustain some loss if the deficiencies are not corrected. Doubtful assets have
the weaknesses of substandard assets with the additional characteristic that
the weaknesses make collection or liquidation in full on the basis of
currently existing facts, conditions and values questionable, and there is a
high possibility of loss. An asset classified loss is considered
uncollectible and of such little value that continuance as an asset of the
institution is not warranted. Another category designated "special mention"
also must be established and maintained for assets which do not currently
expose an insured institution to a sufficient degree of risk to warrant
classification as substandard, doubtful or loss. Assets classified as
substandard or doubtful require the institution to establish general
allowances for loan losses. If an asset or portion thereof is classified
loss, the insured institution must either establish specific allowances for
loan losses in the amount of 100% of the portion of the asset classified
loss, or charge-off such amount. General loss allowances established to cover
possible losses related to assets classified substandard or doubtful may be
included in determining an institution's regulatory capital, while specific
valuation allowances for loan losses do not qualify as regulatory capital.
Federal examiners may disagree with an insured institution's classifications
and amounts reserved.
All loans are reviewed on a regular basis under the Association's asset
classification policy. The Association's total classified assets at March 31,
1998 (excluding loss assets specifically reserved for) amounted to $457,000,
all of which was classified as substandard. The largest classified asset at
March 31, 1998 consisted of a $114,000 adjustable-rate residential loan. The
remaining $343,000 of substandard assets at March 31, 1998 consisted of 11
residential mortgage loans totalling $298,000 and eight consumer loans
totalling $45,000.
53
<PAGE>
Allowance for Loan Losses. At March 31, 1998, Iberville's allowance for
loan losses amounted to $403,000 or 2.4% of the total loan portfolio.
Iberville's loan portfolio consists primarily of single-family residential
loans, consumer loans and, to a lesser extent, commercial real estate loans,
construction loans and land loans. The loan loss allowance is maintained by
management at a level considered adequate to cover possible losses that are
currently anticipated based on prior loan loss experience, known and inherent
risks in the portfolio, adverse situations that may affect the borrower's
ability to repay, the estimated value of any underlying collateral, general
economic conditions, and other factors and estimates which are subject to
change over time. Although management believes that it uses the best
information available to make such determinations, future adjustments to
allowances may be necessary, and net income could be significantly affected,
if circumstances differ substantially from the assumptions used in making the
initial determinations.
The following table sets forth an analysis of Iberville's allowance for
loan losses during the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended
March 31, Year Ended December 31,
-------------------------- --------------------------
1998 1997 1997 1996
---------- ---------- --------- -----------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Total loans outstanding at end of period $17,135 $16,060 $17,178 $15,890
------ ------ ------- -------
------ ------ ------- -------
Average loans outstanding $16,408 $15,168 $15,735 $14,727
------ ------ ------- -------
------ ------ ------- -------
Balance at beginning of period $ 404 $ 362 $ 362 $ 318
Charge-offs(1) 13 -- 2 --
Recoveries(2) -- -- 2 5
------ ------ ------- -------
Net charge-offs (recoveries) 13 -- -- (5)
Provision for loan losses 12 12 42 39
------ ------ ------ -------
Balance at end of period $ 403 $ 374 $ 404 $ 362
------ ------ ------- -------
------ ------ ------- -------
Allowance for loan losses as a percent of
total loans outstanding 2.35% 2.33% 2.35% 2.28%
------ ------ ------- -------
------ ------ ------- -------
Ratio of net charge-offs (recoveries) to
average loans outstanding 0.08% --% --% (.03)%
------ ------ ------- -------
------ ------ ------- -------
</TABLE>
(1) All charge-offs during the periods shown were on consumer loans.
(2) Includes $1,000 of recoveries on consumer loans in each of 1997 and
1996. All other recoveries were on mortgage loans.
54
<PAGE>
The following table presents the allocation of Iberville's allowance for
loan losses by type of loan at each of the dates indicated.
<TABLE><CAPTION>
December 31,
March 31, ---------------------------------------------------------
1998 1997 1996
----------------------- ------------------------- ------------------------
Loan Loan Loan
Category Category Category
Amount as a % Amount as a % Amount as a %
of of Total of of Total of of Total
Allowance Loans Allowance Loans Allowance Loans
----------- ---------- ---------- ---------- ----------- -----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Single-family residential $350 67.2% $338 67.1% $294 67.7%
Construction -- 2.4 -- 2.4 -- 2.9
Commercial real estate -- 5.4 -- 5.5 -- 4.8
Land -- 1.7 -- 1.6 -- 1.3
Consumer 53 23.3 66 23.4 68 23.3
---- ----- --- ----- ---- -----
Total $403 100.0% $404 100.0% $362 100.0%
---- ----- --- ----- ---- -----
---- ----- --- ----- ---- -----
</TABLE>
Mortgage-Backed Securities
Mortgage-backed securities represent a participation interest in a pool
of single-family or multi-family mortgages, the principal and interest
payments on which are passed from the mortgage originators, through
intermediaries (generally U.S. Government agencies and government-sponsored
enterprises) that pool and repackage the participation interests in the form
of securities, to investors such as the Association. Such U.S. Government
agencies and government-sponsored enterprises, which guarantee the payment of
principal and interest to investors, primarily include the FHLMC, the FNMA
and the GNMA.
The FHLMC, which is a corporation chartered by the U.S. Government,
issues participation certificates backed principally by conventional mortgage
loans. The FHLMC guarantees the timely payment of interest and the ultimate
return of principal on participation certificates. The FNMA is a private
corporation chartered by the U.S. Congress with a mandate to establish a
secondary market for mortgage loans. The FNMA guarantees the timely payment
of principal and interest on FNMA securities. The GNMA is a government agency
within the Department of Housing and Urban Development which is intended to
help finance government-assisted housing programs. GNMA securities are backed
by loans insured by the Federal Housing Administration ("FHA") or guaranteed
by the Veterans Administration ("VA"), and the timely payment of principal
and interest on GNMA securities are guaranteed by the GNMA and backed by the
full faith and credit of the U.S. Government. Because the FHLMC, the FNMA and
the GNMA were established to provide support for low- and middle-income
housing, there are limits to the maximum size of loans that qualify for these
programs. For example, the FNMA and the FHLMC currently limit their loans
secured by a single-family, owner-occupied residence to $227,000. To
accommodate larger-sized loans, and loans that, for other reasons, do not
conform to the agency programs, a number of private institutions have
established their own home-loan origination and securitization programs.
Mortgage-backed securities typically are issued with stated principal
amounts, and the securities are backed by pools of mortgages that have loans
with interest rates that are within a range and have varying maturities. The
underlying pool of mortgages, i.e., fixed-rate or adjustable-rate, as well as
prepayment risk, are passed on to the certificate holder. The life of a
mortgage-backed pass-through security thus approximates the life of the
underlying mortgages.
55
<PAGE>
At March 31, 1998, the carrying value of the Association's
mortgage-backed securities amounted to $4.0 million, which represented 17.6%
of the Association's $22.8 million of total assets at that date. All of the
Association's $4.0 million of mortgage-backed securities at March 31, 1998
were insured or guaranteed by the GNMA, the FHLMC or the FNMA, and all of the
mortgage-backed securities had adjustable rates of interest at March 31,
1998. The amortized cost of mortgage-backed securities being held to maturity
at March 31, 1998 was $2.2 million with a fair value of $2.2 million. The
amortized cost of mortgage-backed securities available for sale at March 31,
1998 was $1.8 million with a fair value of $1.8 million. For information
regarding the maturities of the Association's mortgage-backed securities, see
Note E of Notes to Financial Statements.
Mortgage-backed securities generally yield less than the loans which
underlie such securities because of their payment guarantees or credit
enhancements which offer nominal credit risk. In addition, mortgage-backed
securities are more liquid than individual mortgage loans and may be used to
collateralize borrowings or other obligations of the Association.
The following table sets forth the composition of Iberville's
mortgage-backed securities portfolio at each of the dates indicated.
<TABLE>
<CAPTION>
December 31,
March 31, ---------------------
1998 1997 1996
------ ------ ------
(In Thousands)
<S> <C> <C> <C>
Mortgage-backed securities held to maturity:
FNMA $ 1,126 $ 1,173 $ 1,226
FHLMC 918 1,050 1,309
GNMA 153 163 200
------ ------ ------
Subtotal 2,197 2,386 2,735
Mortgage-backed securities
available for sale:
FNMA 1,811 1,948 1,427
------ ------ ------
Total $ 4,008 $ 4,334 $ 4,162
------ ------ ------
------ ------ ------
</TABLE>
The following table sets forth the activity in Iberville's
mortgage-backed securities portfolio during the periods indicated.
<TABLE>
<CAPTION>
At or For the At or For the Year
Three Months Ended
Ended March 31, December 31,
-------------------------- -----------------------
1998 1997 1997 1996
------- ------ ------ ------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Mortgage-backed securities at
beginning of period (cost) $ 4,329 $4,164 $ 4,164 $ 3,938
Purchases -- 466 917 1,031
Repayments 312 315 734 786
Premium amortization (7) (4) (18) (19)
------- ------ ------ ------
Mortgage-backed securities at end
of period (cost) $ 4,010 $4,311 $ 4,329 $ 4,164
------- ------ ------ ------
------- ------ ------ ------
Mortgaged-backed securities at end
of period (fair value) $ 4,002 $4,247 $ 4,322 $ 4,164
------- ------ ------ ------
------- ------ ------ ------
Weighted average yield at end of
period 6.05% 6.39% 6.36% 6.31%
------- ------ ------ ------
------- ------ ------ ------
</TABLE>
56
<PAGE>
Investment Securities
The Association has authority to invest in various types of
liquid assets, including United States Treasury obligations, securities of
various federal agencies and of state and municipal governments, certificates
of deposit at federally-insured banks and savings institutions, certain
bankers' acceptances and federal funds. Each purchase of an investment
security is approved by the Board of Directors. The Association's investment
securities are carried in accordance with GAAP. All of the Association's
investment securities were accounted for as held-to-maturity at March 31,
1998.
The following table sets forth certain information relating
to Iberville's investment securities portfolio at the dates indicated.
<TABLE>
<CAPTION>
December 31,
--------------------------------------------------
March 31,
1998 1997 1996
------------------------ ----------------------- ----------------------
Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value
-------------- -------- ------------ ------- ---------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. agency securities $ 15 $ 15 $ 15 $ 15 $ 15 $ 15
</TABLE>
The following table sets forth the amount of Iberville's
investment securities which mature during each of the periods indicated and
the weighted average yields for each range of maturities at March 31, 1998.
None of the investments mature after five years.
<TABLE>
<CAPTION>
At March 31, 1998
------------------------------------------------------------------
Weighted Over One Weighted
One Year or Average Year Through Average
Less Yield Five Years Yield
----------------- ---------- ------------- --------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
U.S. agency securities $ 15 5.15% $ -- --%
</TABLE>
Sources of Funds
General. Deposits are the primary source of Iberville's
funds for lending and other investment purposes. In addition to deposits, the
Association derives funds primarily from principal and interest payments on
loans and mortgage-backed securities. Loan repayments are a relatively stable
source of funds, while deposit inflows and outflows are significantly
influenced by general interest rates and money market conditions. Borrowings
may be used on a short-term basis to compensate for reductions in the
availability of funds from other sources. They may also be used on a
longer-term basis for general business purposes.
57
<PAGE>
Deposits. Iberville's deposits are attracted principally
from within its primary market area. Deposit account terms vary, with the
principal differences being the minimum balance required, the time periods
the funds must remain on deposit and the interest rate.
The Association's deposits are obtained primarily from
residents of Iberville Parish and West Baton Rouge Parish. Management of the
Association estimates that less than 1% of the Association's deposits are
obtained from customers residing outside of Louisiana. The Association does
not pay fees to brokers to solicit funds for deposit with the Association or
actively solicit negotiable-rate certificates of deposit with balances of
$100,000 or more.
Interest rates paid, maturity terms, service fees and
withdrawal penalties are established by the Association on a periodic basis.
Determination of rates and terms are predicated on funds acquisition and
liquidity requirements, rates paid by competitors, growth goals and federal
and state regulations.
The following table sets forth the dollar amount of
deposits in the various types of deposit programs offered by Iberville at the
dates indicated.
<TABLE>
<CAPTION>
December 31,
March 31, ------------------------------------------------
1998 1997 1996
-------------------- ------------------------- --------------------
Amount % Amount % Amount %
------------ ----- ------------- -------- --------- -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Certificate accounts:
2.00% - 3.99% -- --% -- --% $ 81 .4%
4.00% - 5.99% $13,060 63.6 $12,424 62.0 11,564 57.0
6.00% - 7.99% 1,649 8.0 2,213 11.1 3,547 17.5
------ ----- ------ ----- ------ -----
Total certificate
accounts 14,709 71.6 14,637 73.1 15,192 74.9
------ ----- ------ ----- ------ -----
Transaction accounts:
Passbook accounts 3,421 16.7 3,095 15.4 2,813 13.9
Money market accounts 258 1.2 293 1.5 338 1.7
NOW accounts(1) 2,114 10.3 1,968 9.8 1,891 9.3
------ ----- ------ ----- ------ -----
Total transaction
accounts 5,793 28.2 5,356 26.7 5,042 24.9
------ ----- ------ ----- ------ -----
Accrued interest payable 32 .2 33 .2 44 .2
------ ----- ------ ----- ------ -----
Total deposits $20,534 100.0% $20,026 100.0% $20,278 100.0%
====== ===== ====== ===== ====== =====
</TABLE>
- ---------------
(1) Includes noninterest-bearing checking accounts, which amounted to
$432,000 at March 31, 1998.
58
<PAGE>
The following table presents the average balance of each
type of deposit and the average rate paid on each type of deposit for the
periods indicated.
<TABLE>
<CAPTION>
Three Months Ended
March 31, Year Ended December 31,
---------------------------------------------- --------------------------------------------------
1998 1997 1997 1996
--------------------- ---------------------- ---------------------- -------------------------
Average Average Average Average
Average Rate Average Rate Average Rate Average Rate
Balance Paid Balance Paid Balance Paid Balance Paid
--------- ---------- ---------- --------- --------- ----------- --------- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Passbook savings accounts $ 3,233 2.92% $ 2,881 3.01% $ 2,982 3.03% $ 2,859 3.30%
Demand and NOW
accounts(1) 2,031 2.46 2,028 2.64 2,027 2.70 1,911 2.84
Money market deposit
accounts 270 4.91 321 4.64 309 4.61 395 5.68
Certificates of deposit 14,706 4.99 15,067 4.99 14,836 5.06 14,809 4.98
------ ---- ------ ---- ------ ---- ------ ----
Total interest-bearing
deposits(2) $20,240 4.41% $20,297 4.45% $20,154 4.52% $19,974 4.55%
====== ==== ====== ==== ====== ==== ====== ====
</TABLE>
- ---------------
(1) Includes noninterest-bearing checking accounts.
(2) Excludes accrued interest payable.
The following table sets forth the activity in Iberville's
deposits during the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended Year Ended
March 31, December 31,
------------------- ------------------
1998 1997 1997 1996
------ ------ -------- ------
(In Thousands)
<S> <C> <C> <C> <C>
Net increase (decrease) before
interest credited(1) $ 290 $ (96) (1,151) $ (179)
Interest credited 223 227 910 908
---- ---- ------ -----
Net increase (decrease) in
deposits $ 513 $ 131 (241) $ 729
==== ==== ====== =====
</TABLE>
- ---------------
(1) The information provided is net of deposits and withdrawals because the
gross amount of deposits and withdrawals is not readily available.
Iberville attempts to control the flow of deposits by
pricing its accounts to remain generally competitive with other financial
institutions in its market area, but does not necessarily seek to match the
highest rates paid by competing institutions. Iberville has generally not
taken a position of price leadership in its markets, and deposits decreased
in 1997 and 1996 before interest credited partially due to the higher rates
offered by competitors.
59
<PAGE>
The following table shows the interest rate and maturity
information for Iberville's certificates of deposit at March 31, 1998.
<TABLE>
<CAPTION>
Maturity Date
-----------------------------------------------------------------------
One Year Over 1 Over 2 Over
or Less to 2 Years to 3 Years 3 Years Total
------------ ----------- ------------ ---------- --------
(In Thousands)
<S> <C> <C> <C> <C> <C>
4.00% - 5.99% $ 8,824 $ 2,510 $ 1,212 $ 514 $ 13,060
6.00% - 7.99% 843 240 457 109 1,649
------ ----- ----- ----- ------
Total $ 9,667 $ 2,750 $ 1,669 $ 623 $14,709
====== ===== ===== ===== ======
</TABLE>
The following table sets forth the maturities of
Iberville's certificates of deposit having principal amounts of $100,000 or
more at March 31, 1998.
<TABLE>
<CAPTION>
Certificates of deposit maturing
in quarter ending: Amount
- ------------------------------------------ ----------------
(In Thousands)
<S> <C>
June 30, 1998 $ 535
September 30, 1998 623
December 31, 1998 100
March 31, 1999 418
After March 31, 1999 423
-----
Total certificates of deposit with
balances of $100,000 or more $2,099
=====
</TABLE>
Borrowings. Iberville may obtain advances from the FHLB of
Dallas upon the security of the common stock it owns in that bank and certain
of its residential mortgage loans and mortgage-backed securities, provided
certain standards related to creditworthiness have been met. Such advances
are made pursuant to several credit programs, each of which has its own
interest rate and range of maturities. Such advances are generally available
to meet seasonal and other withdrawals of deposit accounts and to permit
increased lending. See "Regulation - The Association - Federal Home Loan Bank
System."
As of March 31, 1998, the Association was permitted to
borrow up to an aggregate of $11.0 million from the FHLB of Dallas. The
Association had $452,000 of FHLB advances outstanding at March 31, 1998,
compared to $610,000 and $0 at December 31, 1997 and 1996, respectively.
Specific mortgage-backed securities, with a fair value of approximately
$815,000 and a carrying value of $817,000 at March 31, 1998, were pledged to
the FHLB as collateral for the advances.
60
<PAGE>
The following table sets forth certain information
regarding short-term borrowings at or for the dates indicated:
<TABLE>
<CAPTION>
At or For the
Three Months At or for the Year Ended
Ended March 31, December 31,
------------------ ------------------
1998 1997 1997 1996
---- ------ -------- ------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
FHLB advances:
Average balance outstanding $ 542 -- $ 138 --
Maximum amount outstanding
at any month-end during
the period $ 610 -- $ 695 --
Balance outstanding at end
of period $ 452 -- $ 610 --
Average interest rate
during the period 5.17% -- 5.07% --
Weighted average interest rate
at end of period 5.55% -- 5.90% --
</TABLE>
Subsidiary
At March 31, 1998, the Association had no subsidiaries.
Under Louisiana law, a state-chartered association may invest up to 10% of
its assets in service organizations or corporations.
Employees
Iberville had six full-time employees and one part-time
employee at March 31, 1998. None of these employees are represented by a
collective bargaining agent, and Iberville believes that it enjoys good
relations with its personnel.
Market Area
The Association's primary market area for lending and
deposits consists of Iberville and West Baton Rouge Parishes in Louisiana.
These parishes maintain a large commuter population with residents commuting
to jobs in Baton Rouge. The population of Iberville Parish was approximately
the same in 1996 as in 1990, while the population of West Baton Rouge Parish
increased by approximately 4.9% during this period.
Major employers in the two parishes are Dow USA, Iberville
School Systems, Novartis and Georgia Gulf. In addition, the Port of Greater
Baton Rouge is a major port which provides export and import shipping, and
there is a large concentration of petro-chemical complexes and refineries
that utilize the port's facilities. Baton Rouge is also the state capital of
Louisiana.
Competition
Iberville faces significant competition both in attracting
deposits and in making loans. Its most direct competition for deposits has
come historically from commercial banks, credit unions and other savings
institutions located in its primary market area, including many large
financial institutions which have greater financial and
61
<PAGE>
marketing resources available to them. In addition, Iberville faces
significant competition for investors' funds from short-term money market
securities, mutual funds and other corporate and government securities.
Iberville does not rely upon any individual group or entity for a material
portion of its deposits. The ability of the Association to attract and retain
deposits depends on its ability to generally provide a rate of return,
liquidity and risk comparable to that offered by competing investment
opportunities.
Iberville's competition for real estate loans comes
principally from mortgage banking companies, commercial banks, other savings
institutions and credit unions. Iberville competes for loan originations
primarily through the interest rates and loan fees it charges, and the
efficiency and quality of services it provides borrowers. Factors which
affect competition include general and local economic conditions, current
interest rate levels and volatility in the mortgage markets. Competition may
increase as a result of the continuing reduction of restrictions on the
interstate operations of financial institutions and the anticipated slowing
of refinancing activity.
Properties
At March 31, 1998, Iberville conducted its business from
its headquarters at 23910 Railroad Avenue Plaquemine, Louisiana 70764. The
estimated net book value of the electronic data processing and other office
equipment owned by Iberville was $31,000 at March 31, 1998. The following
table sets forth certain information with respect to the office of Iberville
at March 31, 1998.
<TABLE>
<CAPTION>
Net Book Value
Description/Address Leased/Owned of Property Deposits
- -------------------------- -------------- -------------- ----------
(In Thousands)
<S> <C> <C> <C>
Home Office:
23910 Railroad Avenue Owned $ 129 $20,534
Plaquemine, LA 70764
</TABLE>
Legal Proceedings
Iberville is involved in routine legal proceedings
occurring in the ordinary course of business which, in the aggregate, are
believed by management to be immaterial to the financial condition and
results of operations of Iberville.
REGULATION
Set forth below is a brief description of certain laws and
regulations which are applicable to the Company and Iberville. The
description of the laws and regulations hereunder, as well as descriptions of
laws and regulations contained elsewhere herein, does not purport to be
complete and is qualified in its entirety by reference to applicable laws and
regulations.
The Company
Holding Company Acquisitions. Upon consummation of the
Conversion, the Company will become a savings and loan holding company within
the meaning of the Home Owners' Loan Act, as amended ("HOLA"), and will be
required to register with the OTS. The HOLA and OTS regulations generally
prohibit a savings and loan holding company, without prior OTS approval, from
acquiring, directly or indirectly, the ownership or control of any other
savings institution or savings and loan holding company, or all, or
substantially all, of the assets or more
62
<PAGE>
than 5% of the voting shares thereof. These provisions also prohibit, among
other things, any director or officer of a savings and loan holding company,
or any individual who owns or controls more than 25% of the voting shares of
such holding company, from acquiring control of any savings institution not a
subsidiary of such savings and loan holding company, unless the acquisition
is approved by the OTS.
Holding Company Activities. The Company will operate as a
unitary savings and loan holding company. Generally, there are limited
restrictions on the activities of a unitary savings and loan holding company
and its non- savings institution subsidiaries. However, if the Director of
the OTS determines that there is reasonable cause to believe that the
continuation by a savings and loan holding company of an activity constitutes
a serious risk to the financial safety, soundness or stability of its
subsidiary savings institution, the Director may impose such restrictions as
deemed necessary to address such risk, including limiting (i) payment of
dividends by the savings institution; (ii) transactions between the savings
institution and its affiliates; and (iii) any activities of the savings
institution that might create a serious risk that the liabilities of the
holding company and its affiliates may be imposed on the savings institution.
Notwithstanding the above rules as to permissible business activities of
unitary savings and loan holding companies, if the savings institution
subsidiary of such a holding company fails to meet the QTL test, as discussed
under "- The Association - Qualified Thrift Lender Test," then such unitary
holding company also shall become subject to the activities restrictions
applicable to multiple savings and loan holding companies and, unless the
savings institution requalifies as a QTL within one year thereafter, shall
register as, and become subject to the restrictions applicable to, a bank
holding company. See "- The Association - Qualified Thrift Lender Test."
The HOLA requires every savings institution subsidiary of a
savings and loan holding company to give the OTS at least 30 days' advance
notice of any proposed dividends to be made on its guarantee, permanent or
other non-withdrawable stock, or else such dividend will be invalid. See "-
The Association - Capital Distributions."
Affiliate Restrictions. Transactions between a savings
institution and its "affiliates" are subject to quantitative and qualitative
restrictions under Sections 23A and 23B of the Federal Reserve Act and OTS
regulations. Affiliates of a savings institution include, among other
entities, the savings institution's holding company and companies that are
controlled by or under common control with the savings institution.
In general, Sections 23A and 23B and OTS regulations issued
in connection therewith limit the extent to which a savings institution or
its subsidiaries may engage in certain "covered transactions" with affiliates
to an amount equal to 10% of the institution's capital and surplus, in the
case of covered transactions with any one affiliate, and to an amount equal
to 20% of such capital and surplus, in the case of covered transactions with
all affiliates. In addition, a savings institution and its subsidiaries may
engage in covered transactions and certain other transactions only on terms
and under circumstances that are substantially the same, or at least as
favorable to the savings institution or its subsidiary, as those prevailing
at the time for comparable transactions with nonaffiliated companies. A
"covered transaction" is defined to include a loan or extension of credit to
an affiliate; a purchase of investment securities issued by an affiliate; a
purchase of assets from an affiliate, with certain exceptions; the acceptance
of securities issued by an affiliate as collateral for a loan or extension of
credit to any party; or the issuance of a guarantee, acceptance or letter of
credit on behalf of an affiliate.
In addition, under the OTS regulations, a savings
institution may not make a loan or extension of credit to an affiliate unless
the affiliate is engaged only in activities permissible for bank holding
companies; a savings institution may not purchase or invest in securities of
an affiliate other than shares of a subsidiary; a savings institution and its
subsidiaries may not purchase a low-quality asset from an affiliate; and
covered transactions and certain other transactions between a savings
institution or its subsidiaries and an affiliate must be on terms and
conditions that are consistent with safe and sound banking practices. With
certain exceptions, each loan or extension of credit by a savings institution
to an affiliate must be secured by collateral with a market value ranging
from 100% to 130% (depending on the type of collateral) of the amount of the
loan or extension of credit.
The OTS regulations generally exclude all non-bank and
non-savings institution subsidiaries of savings institutions from treatment
as affiliates, except to the extent that the OTS or the Federal Reserve Board
decides to
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treat such subsidiaries as affiliates. The regulation also requires savings
institutions to make and retain records that reflect affiliate transactions
in reasonable detail, and provides that certain classes of savings
institutions may be required to give the OTS prior notice of affiliate
transactions.
Federal Securities Laws. The Company has filed with the SEC
a registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), for the registration of the Common Stock to be issued
pursuant to the Conversion. Upon consummation of the Conversion, the Company
intends to register its Common Stock with the SEC under Section 12(g) of the
Exchange Act, in which case the Company will then be subject to the proxy and
tender offer rules, insider trading reporting requirements and restrictions,
and certain other requirements under the Exchange Act. Pursuant to OTS
regulations and the Plan of Conversion, the Company has agreed to maintain
such registration for a minimum of three years following the Conversion.
The registration under the Securities Act of the shares of
Common Stock to be issued in the Conversion does not cover the resale of such
shares. Shares of Common Stock purchased by persons who are not affiliates of
the Company may be sold without registration. Shares purchased by an
affiliate of the Company will be subject to the resale restrictions of Rule
144 under the Securities Act. If the Company meets the current public
information requirements of Rule 144 under the Securities Act, each affiliate
of the Company who complies with the other conditions of Rule 144 (including
those that require the affiliate's sale to be aggregated with those of
certain other persons) would be able to sell in the public market, without
registration, a number of shares not to exceed, in any three-month period,
the greater of (i) 1% of the outstanding shares of the Company or (ii) the
average weekly volume of trading in such shares during the preceding four
calendar weeks.
The Association
General. As part of the Conversion, the Association will
convert from a Louisiana-chartered mutual savings and loan association to a
Louisiana-chartered stock savings and loan association. The OFI will be the
Association's chartering authority, and the OTS will be the Association's
primary federal regulator. The OFI and the OTS have extensive authority over
the operations of Louisiana-chartered savings institutions. As part of this
authority, Louisiana-chartered savings institutions are required to file
periodic reports with the OFI and the OTS and are subject to periodic
examinations by the OFI, the OTS and the FDIC. The Association also is
subject to regulation and examination by the FDIC, which insures the deposits
of the Association to the maximum extent permitted by law, and requirements
established by the Federal Reserve Board. The investment and lending
authority of savings institutions are prescribed by federal laws and
regulations, and such institutions are prohibited from engaging in any
activities not permitted by such laws and regulations. Such regulation and
supervision is primarily intended for the protection of depositors.
The OTS' enforcement authority over all savings
institutions and their holding companies includes, among other things, the
ability to assess civil money penalties, to issue cease and desist or removal
orders and to initiate injunctive actions. In general, these enforcement
actions may be initiated for violations of laws and regulations and unsafe or
unsound practices. Other actions or inactions may provide the basis for
enforcement action, including misleading or untimely reports filed with the
OTS.
Insurance of Accounts. The deposits of the Association are
insured to the maximum extent permitted by the SAIF, which is administered by
the FDIC, and are backed by the full faith and credit of the U.S. Government.
As insurer, the FDIC is authorized to conduct examinations of, and to require
reporting by, FDIC-insured institutions. It also may prohibit any
FDIC-insured institution from engaging in any activity the FDIC determines by
regulation or order to pose a serious threat to the FDIC. The FDIC also has
the authority to initiate enforcement actions against savings institutions,
after giving the OTS an opportunity to take such action.
Under current FDIC regulations, SAIF-insured institutions
are assigned to one of three capital groups which are based solely on the
level of an institution's capital--"well capitalized," "adequately
capitalized," and "undercapitalized"--which are defined in the same manner as
the regulations establishing the prompt corrective action
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system discussed below. These three groups are then divided into three
subgroups which reflect varying levels of supervisory concern, from those
which are considered to be healthy to those which are considered to be of
substantial supervisory concern. The matrix so created results in nine
assessment risk classifications, with rates ranging prior to September 30,
1996 from .23% for well capitalized, healthy institutions to .31% for
undercapitalized institutions with substantial supervisory concerns. The
insurance premiums for the Association for 1994, 1995 and the first nine
months of 1996 were .23% (per annum) of insured deposits.
The deposits of the Association are currently insured by
the SAIF. Both the SAIF and the Bank Insurance Fund ("BIF") are required by
law to attain and thereafter maintain a reserve ratio of 1.25% of insured
deposits. The BIF achieved a fully funded status first, and therefore as
discussed below, effective January 1, 1996 the FDIC substantially reduced the
average deposit insurance premium paid by BIF-insured banks. On November 14,
1995, the FDIC approved a final rule regarding deposit insurance premiums.
The final rule reduced deposit insurance premiums for BIF member institutions
to zero basis points (subject to a $2,000 minimum) for institutions in the
lowest risk category, while holding deposit insurance premiums for SAIF
members at their then current levels (23 basis points for institutions in the
lowest risk category). The reduction was effective with respect to the
semiannual premium assessment beginning January 1, 1996.
On September 30, 1996, President Clinton signed into law
legislation which eliminated the premium differential between SAIF-insured
institutions and BIF-insured institutions by recapitalizing the SAIF's
reserves to the required ratio. The legislation required all SAIF member
institutions to pay a one-time special assessment to recapitalize the SAIF,
with the aggregate amount to be sufficient to bring the reserve ratio to
1.25% of insured deposits. The legislation also provides for the merger of
the BIF and the SAIF, with such merger being conditioned upon the prior
elimination of the thrift charter.
Implementing FDIC regulations imposed a one-time special
assessment equal to 65.7 basis points for all SAIF-assessable deposits as of
March 31, 1995, which was accrued as an expense on September 30, 1996. The
Association's one-time special assessment amounted to $123,000. Net of
related tax benefits, the one-time special assessment amounted to $75,000.
The payment of the special assessment had the effect of immediately reducing
the Association's capital by such amount. However, management does not
believe that this one-time special assessment had a material adverse effect
on the Association's financial condition.
In the fourth quarter of 1996, the FDIC lowered the
assessment rates for SAIF members to reduce the disparity in the assessment
rates paid by BIF and SAIF members. Beginning October 1, 1996, effective SAIF
rates generally range from zero basis points to 27 basis points, except that
during the fourth quarter of 1996, the rates for SAIF members ranged from 18
to 27 basis points in order to include assessments paid to the Financing
Corporation ("FICO"). From 1997 through 1999, SAIF members will pay 6.4 basis
points to fund the FICO, while BIF member institutions will pay approximately
1.3 basis points. The Association's insurance premiums, which had amounted to
23 basis points, were thus reduced to 6.4 basis points effective January 1,
1997. Based on the Association's $20.9 million of assessable deposits at
December 31, 1996, the premium reduction resulted in a pre-tax cost savings
of approximately $33,000 in 1997 for the Association.
The FDIC may terminate the deposit insurance of any insured
depository institution, including the Association, if it determines after a
hearing that the institution has engaged or is engaging in unsafe or unsound
practices, is in an unsafe or unsound condition to continue operations, or
has violated any applicable law, regulation, order or any condition imposed
by an agreement with the FDIC. It also may suspend deposit insurance
temporarily during the hearing process for the permanent termination of
insurance, if the institution has no tangible capital. If insurance of
accounts is terminated, the accounts at the institution at the time of the
termination, less subsequent withdrawals, shall continue to be insured for a
period of six months to two years, as determined by the FDIC. Management is
aware of no existing circumstances which would result in termination of the
Association's deposit insurance.
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Regulatory Capital Requirements. Federally insured savings
institutions are required to maintain minimum levels of regulatory capital.
The OTS has established capital standards applicable to all savings
institutions. These standards generally must be as stringent as the
comparable capital requirements imposed on national banks. The OTS also is
authorized to impose capital requirements in excess of these standards on
individual institutions on a case-by-case basis.
Current OTS capital standards require savings institutions
to satisfy three different capital requirements. Under these standards,
savings institutions must maintain "tangible" capital equal to at least 1.5%
of adjusted total assets, "core" capital equal to at least 3.0% of adjusted
total assets and "total" capital (a combination of core and "supplementary"
capital) equal to at least 8.0% of "risk-weighted" assets. For purposes of
the regulation, core capital generally consists of common stockholders'
equity (including retained earnings). Tangible capital is given the same
definition as core capital but is reduced by the amount of all the savings
institution's intangible assets, with only a limited exception for purchased
mortgage servicing rights. The Association had no intangible assets at March
31, 1998 which are required to be considered in computing regulatory capital.
Both core and tangible capital are further reduced by an amount equal to a
savings institution's debt and equity investments in subsidiaries engaged in
activities not permissible to national banks (other than subsidiaries engaged
in activities undertaken as agent for customers or in mortgage banking
activities and subsidiary depository institutions or their holding
companies). These adjustments do not affect the Association's regulatory
capital.
In determining compliance with the risk-based capital
requirement, a savings institution is allowed to include both core capital
and supplementary capital in its total capital, provided that the amount of
supplementary capital included does not exceed the savings institution's core
capital. Supplementary capital generally consists of general allowances for
loan losses up to a maximum of 1.25% of risk-weighted assets, together with
certain other items. In determining the required amount of risk-based
capital, total assets, including certain off-balance sheet items, are
multiplied by a risk weight based on the risks inherent in the type of
assets. The risk weights assigned by the OTS for principal categories of
assets are (i) 0% for cash and securities issued by the U.S. Government or
unconditionally backed by the full faith and credit of the U.S. Government;
(ii) 20% for securities (other than equity securities) issued by U.S.
Government-sponsored agencies and mortgage-backed securities issued by, or
fully guaranteed as to principal and interest by, the FNMA or the FHLMC,
except for those classes with residual characteristics or stripped
mortgage-related securities; (iii) 50% for prudently underwritten permanent
single-family first lien mortgage loans not more than 90 days delinquent and
having a loan-to-value ratio of not more than 80% at origination unless
insured to such ratio by an insurer approved by the FNMA or the FHLMC,
qualifying residential bridge loans made directly for the construction of
single-family residences and qualifying multi-family residential loans; and
(iv) 100% for all other loans and investments, including consumer loans,
commercial loans, and single-family residential real estate loans more than
90 days delinquent, and for repossessed assets.
In August 1993, the OTS adopted a final rule incorporating
an interest-rate risk component into the risk- based capital regulation.
Under the rule, an institution with a greater than "normal" level of interest
rate risk will be subject to a deduction of its interest rate risk component
from total capital for purposes of calculating its risk- based capital. As a
result, such an institution will be required to maintain additional capital
in order to comply with the risk-based capital requirement. An institution
with a greater than "normal" interest rate risk is defined as an institution
that would suffer a loss of net portfolio value exceeding 2.0% of the
estimated economic value of its assets in the event of a 200 basis point
increase or decrease (with certain minor exceptions) in interest rates. The
interest rate risk component will be calculated, on a quarterly basis, as
one-half of the difference between an institution's measured interest rate
risk and 2.0% multiplied by the economic value of its assets. The rule also
authorizes the Director of the OTS, or his designee, to waive or defer an
institution's interest rate risk component on a case-by-case basis. The final
rule was originally effective as of January 1, 1994, subject however to a two
quarter "lag" time between the reporting date of the data used to calculate
an institution's interest rate risk and the effective date of each quarter's
interest rate risk component. However, in October 1994 the Director of the
OTS indicated that it would waive the capital deductions for institutions
with a greater than "normal" risk until the OTS published an appeals process.
On August 21, 1995, the OTS released Thrift Bulletin 67 which established (i)
an appeals process to handle "requests for adjustments" to the interest rate
risk component and (ii) a process by which "well-capitalized"
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institutions may obtain authorization to use their own interest rate risk
model to determine their interest rate risk component. The Director of the
OTS indicated, concurrent with the release of Thrift Bulletin 67, that the
OTS will continue to delay the implementation of the capital deduction for
interest rate risk pending the testing of the appeals process set forth in
Thrift Bulletin 67.
Effective November 28, 1994, the OTS revised its interim
policy issued in August 1993 under which savings institutions computed their
regulatory capital in accordance with SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Under the revised OTS policy,
savings institutions must value securities available for sale at amortized
cost for regulatory capital purposes. This means that in computing regulatory
capital, savings institutions should add back any unrealized losses and
deduct any unrealized gains, net of income taxes, on debt securities reported
as a separate component of GAAP capital.
At March 31, 1998, Iberville exceeded all of its regulatory
capital requirements, with tangible, core and risk- based capital ratios of
7.34%, 7.34% and 15.47%, respectively. The following table sets forth
Iberville's compliance with each of the above-described capital requirements
as of March 31, 1998.
<TABLE>
<CAPTION>
Tangible Core Risk-Based
Capital Capital(1) Capital (2)
-------- ---------- -----------
(Dollars in Thousands)
<S> <C> <C> <C>
Capital under GAAP $1,671 $1,671 $1,671
Additional capital items:
Unrealized loss on securities available
for sale, net of taxes 1 1 1
General valuation allowances(3) -- -- 149
------ ------ ------
Regulatory capital 1,672 1,672 1,821
Minimum required regulatory capital(4) 341 683 942
------ ------ ------
Excess regulatory capital $1,331 $ 989 $ 879
====== ====== ======
Regulatory capital as a percentage 7.34% 7.34% 15.47%
Minimum capital required as a
percentage(4) 1.50% 3.00% 8.00%
----- ----- -----
Regulatory capital as a percentage
in excess of requirements 5.84% 4.34% 7.47%
====== ====== ======
</TABLE>
- ---------------
(1) Does not reflect the 4.0% requirement to be met in order for an
institution to be "adequately capitalized." See "- Prompt Corrective
Action."
(2) Does not reflect the interest-rate risk component in the risk-based
capital requirement, the effective date of which has been postponed as
discussed above.
(Footnotes continued on next page)
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(3) General valuation allowances are only used in the calculation of
risk-based capital. Such allowances are limited to 1.25% of
risk-weighted assets.
(4) Tangible and core capital are computed as a percentage of adjusted
total assets of $22.8 million. Risk-based capital is computed as a
percentage of adjusted risk-weighted assets of $11.8 million.
Any savings institution that fails any of the capital
requirements is subject to possible enforcement actions by the OTS or the
FDIC. Such actions could include a capital directive, a cease and desist
order, civil money penalties, the establishment of restrictions on the
institution's operations, termination of federal deposit insurance and the
appointment of a conservator or receiver. The OTS' capital regulation
provides that such actions, through enforcement proceedings or otherwise,
could require one or more of a variety of corrective actions.
Prompt Corrective Action. Under the prompt corrective
action regulations of the OTS, an institution is deemed to be (i) "well
capitalized" if it has total risk-based capital of 10.0% or more, has a Tier
1 risk-based capital ratio of 6.0% or more, has a Tier 1 leverage capital
ratio of 5.0% or more and is not subject to any order or final capital
directive to meet and maintain a specific capital level for any capital
measure, (ii) "adequately capitalized" if it has a total risk-based capital
ratio of 8.0% or more, a Tier 1 risk-based capital ratio of 4.0% or more and
a Tier 1 leverage capital ratio of 4.0% or more (3.0% under certain
circumstances) and does not meet the definition of "well capitalized," (iii)
"undercapitalized" if it has a total risk-based capital ratio that is less
than 8.0%, a Tier 1 risk-based capital ratio that is less than 4.0% or a Tier
1 leverage capital ratio that is less than 4.0% (3.0% under certain
circumstances), (iv) "significantly undercapitalized" if it has a total
risk-based capital ratio that is less than 6.0%, a Tier 1 risk-based capital
ratio that is less than 3.0% or a Tier 1 leverage capital ratio that is less
than 3.0%, and (v) "critically undercapitalized" if it has a ratio of
tangible equity to total assets that is equal to or less than 2.0%. Under
specified circumstances, a federal banking agency may reclassify a well
capitalized institution as adequately capitalized and may require an
adequately capitalized institution or an undercapitalized institution to
comply with supervisory actions as if it were in the next lower category
(except that the FDIC may not reclassify a significantly undercapitalized
institution as critically undercapitalized).
An institution generally must file a written capital
restoration plan which meets specified requirements with its appropriate
federal banking agency within 45 days of the date that the institution
receives notice or is deemed to have notice that it is undercapitalized,
significantly undercapitalized or critically undercapitalized. A federal
banking agency must provide the institution with written notice of approval
or disapproval within 60 days after receiving a capital restoration plan,
subject to extensions by the agency. An institution which is required to
submit a capital restoration plan must concurrently submit a performance
guaranty by each company that controls the institution. In addition,
undercapitalized institutions are subject to various regulatory restrictions,
and the appropriate federal banking agency also may take any number of
discretionary supervisory actions.
At March 31, 1998, the Association was deemed a well
capitalized institution for purposes of the above regulations and as such is
not subject to the above mentioned restrictions.
Safety and Soundness Guidelines. The OTS and the other
federal banking agencies have established guidelines for safety and
soundness, addressing operational and managerial standards, as well as
compensation matters for insured financial institutions. Institutions failing
to meet these standards are required to submit compliance plans to their
appropriate federal regulators. The OTS and the other agencies have also
established guidelines regarding asset quality and earnings standards for
insured institutions. The Association believes that it is in compliance with
these guidelines and standards.
Liquidity Requirements. All savings institutions are
required to maintain an average daily balance of liquid assets equal to a
certain percentage of the sum of its average daily balance of net
withdrawable deposit accounts and borrowings payable in one year or less. The
liquidity requirement may vary from time to time (between 4% and 10%)
depending upon economic conditions and savings flows of all savings
institutions. At the
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present time, the required minimum liquid asset ratio is 4%. At March 31,
1998, the Association's liquidity ratio was 7.5%.
Capital Distributions. OTS regulations govern capital
distributions by savings institutions, which include cash dividends, stock
redemptions or repurchases, cash-out mergers, interest payments on certain
convertible debt and other transactions charged to the capital account of a
savings institution to make capital distributions. Generally, the regulation
creates a safe harbor for specified levels of capital distributions from
institutions meeting at least their minimum capital requirements, so long as
such institutions notify the OTS and receive no objection to the distribution
from the OTS. Savings institutions and distributions that do not qualify for
the safe harbor are required to obtain prior OTS approval before making any
capital distributions.
Generally, a savings institution that before and after the
proposed distribution meets or exceeds its fully phased-in capital
requirements (Tier 1 institutions) may make capital distributions during any
calendar year equal to the higher of (i) 100% of net income for the calendar
year-to-date plus 50% of its "surplus capital ratio" at the beginning of the
calendar year or (ii) 75% of net income over the most recent four-quarter
period. The "surplus capital ratio" is defined to mean the percentage by
which the institution's tangible, core or risk-based capital ratio exceeds
its tangible, core or risk-based capital requirement. Failure to meet minimum
capital requirements will result in further restrictions on capital
distributions, including possible prohibition without explicit OTS approval.
See "Regulatory Capital Requirements."
In order to make distributions under these safe harbors,
Tier 1 and Tier 2 institutions must submit 30 days written notice to the OTS
prior to making the distribution. The OTS may object to the distribution
during that 30-day period based on safety and soundness concerns. In
addition, a Tier 1 institution deemed to be in need of more than normal
supervision by the OTS may be downgraded to a Tier 2 or Tier 3 institution as
a result of such a determination. At March 31, 1998, the Association was a
Tier 1 institution for purposes of this regulation.
On December 5, 1994, the OTS published a notice of proposed
rulemaking to amend its capital distribution regulation. Under the proposal,
institutions would be permitted to only make capital distributions that would
not result in their capital being reduced below the level required to remain
"adequately capitalized," as defined above under "- Prompt Corrective
Action." Because the Association will become a subsidiary of a holding
company, the proposal would require the Association to provide notice to the
OTS of its intent to make a capital distribution. The Association does not
believe that the proposal will adversely affect its ability to make capital
distributions if it is adopted substantially as proposed.
Community Reinvestment Act and the Fair Lending Laws.
Savings institutions have a responsibility under the Community Reinvestment
Act of 1977 ("CRA") and related regulations of the OTS to help meet the
credit needs of their communities, including low- and moderate-income
neighborhoods. In addition, the Equal Credit Opportunity Act and the Fair
Housing Act (together, the "Fair Lending Laws") prohibit lenders from
discriminating in their lending practices on the basis of characteristics
specified in those statutes. An institution's failure to comply with the
provisions of CRA could, at a minimum, result in regulatory restrictions on
its activities, and failure to comply with the Fair Lending Laws could result
in enforcement actions by the OTS, as well as other federal regulatory
agencies and the Department of Justice.
Qualified Thrift Lender Test. All savings institutions are
required to meet a QTL test to avoid certain restrictions on their
operations. Under Section 2303 of the Economic Growth and Regulatory
Paperwork Reduction Act of 1996, a savings institution can comply with the
QTL test by either qualifying as a domestic building and loan association as
defined in Section 7701(a)(19) of the Code or meeting the second prong of the
QTL test set forth in Section 10(m) of the HOLA. A savings institution that
does not meet the QTL test must either convert to a bank charter or comply
with the following restrictions on its operations: (i) the institution may
not engage in any new activity or make any new investment, directly or
indirectly, unless such activity or investment is permissible for a national
bank; (ii) the branching powers of the institution shall be restricted to
those of a national bank; (iii) the institution shall not be eligible to
obtain any new advances from its FHLB, other than special liquidity advances
with
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the approval of the OTS; and (iv) payment of dividends by the institution
shall be subject to the rules regarding payment of dividends by a national
bank. Upon the expiration of three years from the date the savings
institution ceases to be a QTL, it must cease any activity and not retain any
investment not permissible for a national bank and immediately repay any
outstanding FHLB advances (subject to safety and soundness considerations).
Currently, the prong of the QTL test that is not based on
the Code requires that 65% of an institution's "portfolio assets" (as
defined) consist of certain housing and consumer-related assets on a monthly
average basis in nine out of every 12 months. Assets that qualify without
limit for inclusion as part of the 65% requirement are loans made to
purchase, refinance, construct, improve or repair domestic residential
housing and manufactured housing; home equity loans; mortgage-backed
securities (where the mortgages are secured by domestic residential housing
or manufactured housing); stock issued by the FHLB of Dallas; and direct or
indirect obligations of the FDIC. In addition, the following assets, among
others, may be included in meeting the test subject to an overall limit of
20% of the savings institution's portfolio assets: 50% of residential
mortgage loans originated and sold within 90 days of origination; 100% of
consumer and educational loans (limited to 10% of total portfolio assets);
and stock issued by the FHLMC or the FNMA. Portfolio assets consist of total
assets minus the sum of (i) goodwill and other intangible assets, (ii)
property used by the savings institution to conduct its business, and (iii)
liquid assets up to 20% of the institution's total assets. At March 31, 1998,
the qualified thrift investments of the Association were approximately 88.9%
of its portfolio assets.
Federal Home Loan Bank System. The Association is a member
of the FHLB of Dallas, which is one of 12 regional FHLBs that administers the
home financing credit function of savings institutions. Each FHLB serves as a
reserve or central bank for its members within its assigned region. It is
funded primarily from proceeds derived from the sale of consolidated
obligations of the FHLB System. It makes loans to members (i.e., advances) in
accordance with policies and procedures established by the Board of Directors
of the FHLB. At March 31, 1998, the Association had $452,000 of FHLB
advances. See Note G of Notes to Financial Statements.
As a member, the Association is required to purchase and
maintain stock in the FHLB of Dallas in an amount equal to at least 1% of its
aggregate unpaid residential mortgage loans, home purchase contracts or
similar obligations at the beginning of each year. At March 31, 1998, the
Association had $368,000 in FHLB stock, which was in compliance with this
requirement.
The FHLBs are required to provide funds for the resolution
of troubled savings institutions and to contribute to affordable housing
programs through direct loans or interest subsidies on advances targeted for
community investment and low- and moderate-income housing projects. These
contributions have adversely affected the level of FHLB dividends paid in the
past and could do so in the future. These contributions also could have an
adverse effect on the value of FHLB stock in the future. The dividend yield
on the Association's FHLB stock was 6.58% in three months ended March 31,
1998 compared to 5.97% in 1997 and 6.02% in 1996.
Federal Reserve System. The Federal Reserve Board requires
all depository institutions to maintain reserves against their transaction
accounts (primarily NOW and Super NOW checking accounts) and non-personal
time deposits. As of March 31, 1998, no reserves were required to be
maintained on the first $4.4 million of transaction accounts, reserves of 3%
were required to be maintained against the next $46.3 million of net
transaction accounts (with such dollar amounts subject to adjustment by the
Federal Reserve Board), and a reserve of 10% (which is subject to adjustment
by the Federal Reserve Board to a level between 8% and 14%) against all
remaining net transaction accounts. Because required reserves must be
maintained in the form of vault cash or a noninterest- bearing account at a
Federal Reserve Bank, the effect of this reserve requirement is to reduce an
institution's earning assets.
Thrift Charter. Congress has been considering legislation
in various forms that would require savings institutions, such as the
Association, to convert their charters to national or state bank charters.
Recent legislation required the Treasury Department to prepare for Congress a
comprehensive study on the development of a common charter for savings
institutions and commercial banks; and, in the event that the thrift charter
was eliminated by
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January 1, 1999, would require the merger of the BIF and the SAIF into a
single Deposit Insurance Fund on that date. The Association cannot determine
whether, or in what form, such legislation may eventually be enacted and
there can be no assurance that any legislation that is enacted would not
adversely affect the Association and its parent holding company. See also
"Risk Factors - Regulatory Oversight and Legislation" for a discussion of
pending legislation.
Louisiana Regulation. As a Louisiana-chartered savings
association, the Association also is subject to regulation and supervision by
the OFI. The Association is required to file periodic reports with and is
subject to periodic examinations at least once every two years by the OFI.
The lending and investment authority of the Association is prescribed by
Louisiana laws and regulations, as well as applicable federal laws and
regulations, and the Association is prohibited from engaging in any
activities not permitted by such laws and regulations.
The Association is required by Louisiana law and
regulations to comply with certain reserve and capital requirements. At March
31, 1998, the Association was in compliance with all applicable reserve and
capital requirements.
Louisiana law and regulations also restrict the lending and
investment authority of Louisiana-chartered savings institutions. Such laws
and regulations restrict the amount a Louisiana-chartered savings association
can lend to any one borrower to an amount which, in the aggregate, does not
exceed the lesser of (i) 10% of the association's savings deposits or (ii)
the sum of the association's paid-in capital, surplus, reserves for losses,
and undivided profits. Federal law imposes more restrictive limitations. See
"Business -Lending Activities." Notwithstanding the foregoing, Louisiana and
federal law permits any such association to lend to any one borrower an
aggregate amount of at least $500,000.
In addition, Louisiana law restricts the ability of
Louisiana-chartered savings associations to invest in, among other things,
(i) commercial real estate loans (including commercial construction real
estate loans) up to 40% of total assets; (ii) real estate investments for
other than the association's offices up to 10% of total assets; (iii)
consumer loans, commercial paper and corporate debt securities up to 30% of
total assets; (iv) commercial, corporate, business or agricultural loans up
to 10% of total assets; and (v) capital stock, obligations and other
securities of service organizations up to 10% of total assets. Louisiana law
also sets forth maximum loan-to-value ratios with respect to various types of
loans. Applicable federal regulations impose more restrictive limitations in
certain instances. See "Business - Lending Activities - General."
The investment authority of Louisiana-chartered savings
associations is broader in many respects than that of federally-chartered
savings and loan associations. However, state-chartered savings associations,
such as the Association, are generally prohibited from acquiring or retaining
any equity investment, other than certain investments in service
corporations, of a type or in an amount that is not permitted for a
federally-chartered savings association. This prohibition applies to equity
investments in real estate, investments in equity securities and any other
investment or transaction that is in substance an equity investment, even if
the transaction is nominally a loan or other permissible transaction. At
March 31, 1998, the Association was in compliance with such provisions.
Furthermore, effective January 1, 1990, a state-chartered
savings association may not engage as principal in any activity not permitted
for federal associations unless the FDIC has determined that such activity
would pose no significant risk to the affected deposit insurance fund and the
association complies with all applicable capital requirements. When certain
activities are permissible for a federal association, the state association
may engage in the activity in a higher amount if the FDIC has not determined
that such activity would pose a significant risk of loss to the affected
deposit insurance fund and the association meets the fully phased-in capital
requirements. This increased investment authority does not apply to
investments in nonresidential real estate loans. At March 31, 1998, the
Association had no investments which were affected by the foregoing
limitations.
Under Louisiana law, a Louisiana-chartered savings
association may establish or maintain a branch office anywhere in Louisiana
with prior regulatory approval. In addition, an out-of-state savings
association or holding
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company may acquire a Louisiana-chartered savings association or holding
company if the OFI determines that the laws of such other state permit a
Louisiana-chartered savings association or holding company to acquire a
savings association or holding company in such other state. Any such
acquisition would require the out-of-state entity to apply to the OFI and
receive OFI approval.
TAXATION
Federal Taxation
General. The Company and Iberville are subject to the
generally applicable corporate tax provisions of the Code, and Iberville is
subject to certain additional provisions of the Code which apply to thrift
and other types of financial institutions. The following discussion of
federal taxation is intended only to summarize certain pertinent federal
income tax matters relevant to the taxation of the Company and the
Association and is not a comprehensive discussion of the tax rules applicable
to the Company and Iberville.
Fiscal Year. The Company and the Association will file
federal income tax returns on the basis of a calendar year ending on December
31, and it is expected that separate returns will be filed for 1998 and 1999.
Bad Debt Reserves. In August 1996, legislation was enacted
that repealed the reserve method of accounting (including the percentage of
taxable income method) previously used by many savings institutions to
calculate their bad debt reserve for federal income tax purposes. Savings
institutions with $500 million or less in assets may, however, continue to
use the experience method. As a result, the Association must recapture that
portion of its reserve which exceeds the amount that could have been taken
under the experience method for post-1987 tax years. At December 31, 1995,
the Association's post-1987 excess reserves amounted to approximately
$85,000. The recapture will occur over a six-year period, the commencement of
which was January 1, 1996. The legislation also requires savings institutions
to account for bad debts for federal income tax purposes on the same basis as
commercial banks for tax years beginning after December 31, 1995. This change
in accounting method and reversal and excess bad debt reserves is adequately
provided for in the Association's deferred tax liability.
At March 31, 1998, the federal income tax reserves of the
Association included $111,000 for which no federal income tax has been
provided. Because of these federal income tax reserves and the liquidation
account to be established for the benefit of certain depositors of the
Association in connection with the Conversion, the retained earnings of the
Association are substantially restricted.
Distributions. If the Association were to distribute cash
or property to its stockholders, and the distribution was treated as being
from its accumulated bad debt reserves, the distribution would cause the
Association to have additional taxable income. A distribution is deemed to
have been made from accumulated bad debt reserves to the extent that (a) the
reserves exceed the amount that would have been accumulated on the basis of
actual loss experience, and (b) the distribution is a "non-qualified
distribution." A distribution with respect to stock is a non-qualified
distribution to the extent that, for federal income tax purposes, (i) it is
in redemption of shares, (ii) it is pursuant to a liquidation of the
institution, or (iii) in the case of a current distribution, together with
all other such distributions during the taxable year, it exceeds the
institution's current and post-1951 accumulated earnings and profits. The
amount of additional taxable income created by a non-qualified distribution
is an amount that when reduced by the tax attributable to it is equal to the
amount of the distribution.
Minimum Tax. The Code imposes an alternative minimum tax at
a rate of 20%. The alternative minimum tax generally applies to a base of
regular taxable income plus certain tax preferences ("alternative minimum
taxable income" or "AMTI") and is payable to the extent such AMTI is in
excess of an exemption amount. The Code provides that an item of tax
preference is the excess of the bad debt deduction allowable for a taxable
year pursuant to the percentage of taxable income method over the amount
allowable under the experience method. Other items of tax preference that
constitute AMTI include (a) depreciation and (b) 75% of the excess (if any)
of (i) adjusted current earnings as defined in the Code, over (ii) AMTI
(determined without regard to this preference and prior to reduction by net
operating losses).
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Net Operating Loss Carryovers. A financial institution may
carry back net operating losses ("NOLs") to the preceding three taxable years
and forward to the succeeding 15 taxable years. This provision applies to
losses incurred in taxable years beginning after 1986. At March 31, 1998, the
Association had no NOL carryforwards for federal income tax purposes.
Capital Gains and Corporate Dividends-Received Deduction.
Corporate net capital gains are taxed at a maximum rate of 35%. Corporations
which own 20% or more of the stock of a corporation distributing a dividend
may deduct 80% of the dividends received. Corporations which own less than
20% of the stock of a corporation distributing a dividend may deduct 70% of
the dividends received. However, a corporation that receives dividends from a
member of the same affiliated group of corporations may deduct 100% of the
dividends received.
Other Matters. Federal legislation is introduced from time
to time that would limit the ability of individuals to deduct interest paid
on mortgage loans. Individuals are currently not permitted to deduct interest
on consumer loans. Significant increases in tax rates or further restrictions
on the deductibility of mortgage interest could adversely affect the
Association.
The Association's federal income tax returns for the tax
years ended 1995, 1996 and 1997 are open under the statute of limitations and
are subject to review by the IRS. The Association's tax return for 1994 was
audited by the IRS without material adjustment.
State Taxation
The Company is subject to the Louisiana Corporation Income
Tax based on its Louisiana taxable income. The Corporation Income Tax applies
at graduated rates from 4% upon the first $25,000 of Louisiana taxable income
to 8% on all Louisiana taxable income in excess of $200,000. For these
purposes, "Louisiana taxable income" means net income which is earned by the
Company within or derived from sources within the State of Louisiana, after
adjustments permitted under Louisiana law, including a federal income tax
deduction. In addition, the Association will be subject to the Louisiana
Shares Tax which is imposed on the assessed value of a company's stock. The
formula for deriving the assessed value is to calculate 15% of the sum of (a)
20% of a company's capitalized earnings, plus (b) 80% of the company's
taxable stockholders' equity, and to subtract from that figure 50% of the
company's real and personal property assessment. Various items may also be
subtracted in calculating a company's capitalized earnings. The Association
believes that the Louisiana Shares Tax, which applies at rates up to 16% on
the assessed value of its stock, will not result in a material tax liability
following the Conversion.
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MANAGEMENT
Management of the Company
The Board of Directors of the Company is divided into three
classes, each of which contains approximately one-third of the Board. The
directors shall be elected by the stockholders of the Company for staggered
three-year terms, or until their successors are elected and qualified. No
director is related to any other director or executive officer of the
Association by first cousin or closer. The following table sets forth certain
information regarding the directors of the Company, all of whom are also
directors of the Association.
<TABLE>
<CAPTION>
Position with
Iberville and
Principal Occupation Director of Year
During the Iberville Term
Name Age(1) Past Five Years Since Expires
- --------------------------- ----------- ---------------------- ------------ ----------
<S> <C> <C> <C> <C>
G. Lloyd Bouchereau, Jr. 56 Director; President and Chief 1968 1999
Executive Officer of the Association
since 1978 and employed by the
Association since 1966
John L. Delahaye 51 Director; Attorney with the law 1984 2001
firm of Borron & Delahaye in
Plaquemine, Louisiana since 1974
Gary K. Pruitt 56 Director; Secretary-Treasurer of the 1995 2000
Association since 1996; Executive
Director of the Greater Baton
Rouge Port Commission in Port
Allen, Louisiana since 1987
Bobby E. Stanley 57 Director; self employed public 1988 1999
accountant
Edward J. Steinmetz 46 Director; Plant Manager of Ashland 1997 2000
Chemical Co., a methanol plant in
Plaquemine, Louisiana since 1995;
prior thereto, Plant Technical
Manager at Ashland Chemical Co.
Danny M. Strickland 31 Director; Loan Officer of the 1998 2001
Association since 1995; Branch
Manager of Transamerica Financial
Services in Lafayette, Louisiana
from July 1993 to December 1994;
prior thereto, Assistant Branch
Management of Transamerica
Financial Services
</TABLE>
- -------------------
(1) Age as of March 31, 1998.
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Directors of the Company initially will not be compensated by
the Company but will serve with and be compensated by the Association. It is not
anticipated that separate compensation will be paid to directors of the Company
until such time as such persons devote significant time to the separate
management of the Company's affairs, which is not expected to occur until the
Company becomes actively engaged in additional businesses other than holding the
stock of the Association. The Company may determine that such compensation is
appropriate in the future.
The executive officers of the Company are elected annually and
hold office until their respective successors have been elected and qualified or
until death, resignation or removal by the Board of Directors.
Management of the Association
The directors and executive officers of the Association are
the same as the directors and executive officers of the Company. Information
concerning the names, ages, principal occupations during the past five years and
term of office of the directors and executive officers of the Association is set
forth under "- Management of the Company." The Association's mutual Articles of
Incorporation require the Board of Directors to be elected each year. Following
the Conversion, the Association's stock Articles of Incorporation will require
the Board of Directors to be divided into three classes as nearly equal in
number as possible. The members of each class will be elected for a term of
three years or until their successors are elected and qualified, with one class
of directors elected annually.
Board Meetings and Committees
Regular meetings of the Board of Directors of the Association
are held once a month and special meetings of the Board of Directors of the
Association are held from time-to-time as needed. There were 18 meetings of the
Board of Directors of the Association held during 1997. No director attended
fewer than 75% of the total number of meetings of the Board of Directors of the
Association held during 1997 and the total number of meetings held by all
committees of the Board on which the director served during such year.
The Board of Directors does not have any separate executive,
audit, compensation or nominating committees. The Board has an Investment
Committee, which currently consists of all the directors of the Association. The
Investment Committee met twice in 1997 in conjunction with regular Board
meetings.
Directors' Compensation
Each director of the Association receives $600 for each
meeting of the Board of Directors or a committee of the Board. Directors are
paid for up to two excused absences from meetings per year.
Executive Compensation
The following table sets forth the compensation paid by the
Association for services rendered in all capacities during the year ended
December 31, 1997 to the President and Chief Executive Officer of the
Association. No executive officer of the Association received total compensation
in excess of $100,000 during 1997.
<TABLE>
<CAPTION>
Annual Compensation
Name and Principal ----------------------------------------------- All Other
Position Year Salary(1) Bonus Other(2) Compensation(3)
- ------------------------------- ------ ------------- -------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
G. Lloyd Bouchereau, Jr., 1997 $75,600 $6,400 $ -- $10,680
President and Chief 1996 69,600 6,200 -- 10,290
Executive Officer 1995 66,800 7,000 -- 10,050
</TABLE>
(Footnotes on next page)
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- ----------------------
(1) Includes directors' fees of $10,800, $7,200 and $6,800 in 1997, 1996
and 1995, respectively.
(2) Annual compensation does not include amounts attributable to other
miscellaneous benefits received by Mr. Bouchereau. The costs to the
Association of providing such benefits during 1997 did not exceed 10%
of the total salary and bonus paid to or accrued for the benefit of
such individual executive officer.
(3) Consists of amounts allocated, accrued or paid by the Association on
behalf of Mr. Bouchereau pursuant to the Association's Profit Sharing
Plan.
Employment Agreements
In connection with the Conversion, the Company and the
Association (the "Employers") intend to enter into employment agreements with
each of Messrs. Bouchereau and Strickland. The Employers have agreed to employ
the executives for a term of three years, in each case in their current
respective positions. The agreements provide that Messrs. Bouchereau and
Strickland will initially be paid their current salary levels of $67,200 and
$38,400, respectively. The executives' compensation and expenses shall be paid
by the Company and the Association in the same proportion as the time and
services actually expended by the executives on behalf of each respective
Employer. The employment agreements will be reviewed annually, and the term of
the executives' employment agreements shall be extended each year for a
successive additional one-year period upon the approval of the Employers' Boards
of Directors, unless either party elects, not less than 30 days prior to the
annual anniversary date, not to extend the employment term.
Each of the employment agreements shall be terminable with or
without cause by the Employers. The executives shall have no right to
compensation or other benefits pursuant to the employment agreements for any
period after voluntary termination or termination by the Employers for cause,
disability or retirement. The agreements provide for certain benefits in the
event of the executive's death. In the event that (i) either executive
terminates his employment because of failure to comply with any material
provision of the employment agreement or the Employers change the executive's
title or duties or (ii) the employment agreement is terminated by the Employers
other than for cause, disability, retirement or death or by the executive as a
result of certain adverse actions which are taken with respect to the
executive's employment following a change in control of the Company, as defined,
then the executives will be entitled to a cash severance amount equal to three
times his average annual compensation for the last five calendar years (or such
shorter period that he has worked with the Association), plus the continuation
of certain miscellaneous fringe benefits, subject to reduction pursuant to
Section 280G of the Code as set forth below in the event of a change in control.
A change in control is generally defined in the employment
agreements to include any change in control of the Company required to be
reported under the federal securities laws, as well as (i) the acquisition by
any person of 20% or more of the Company's outstanding voting securities and
(ii) a change in a majority of the directors of the Company during any
three-year period without the approval of at least two-thirds of the persons who
were directors of the Company at the beginning of such period.
Each employment agreement provides that, in the event that any
of the payments to be made thereunder or otherwise upon termination of
employment are deemed to constitute "parachute payments" within the meaning of
Section 280G of the Code, then such payments and benefits received thereunder
shall be reduced by the amount which is the minimum necessary to result in the
payments not exceeding three times the recipient's average annual compensation
from the employer which was includable in the recipient's gross income during
the most recent five taxable years (the "Section 280G Limit"). As a result, none
of the severance payments will be subject to a 20% excise tax, and the Employers
will be able to deduct such payments as compensation expense for federal income
tax purposes. If a change in control was to occur in 1998 subsequent to
consummation of the Conversion, the Section 280G Limit for Messrs. Bouchereau
and Strickland would be approximately $218,000 and $108,000, respectively.
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Although the above-described employment agreements could
increase the cost of any acquisition of control of the Company, management of
the Company does not believe that the terms thereof would have a significant
anti-takeover effect. The Company and/or the Association may determine to enter
into similar employment agreements with other officers in the future.
Profit Sharing Plan
The Association maintains an Employee Profit Sharing Plan (the
"Profit Sharing Plan"), which is a tax-qualified defined contribution plan.
Full-time employees who have been credited with at least one year of service and
who have attained age 21 are eligible to participate in the Profit Sharing Plan.
The Association generally contributes each year an amount to the Profit Sharing
Plan equal to 15% of the gross salaries of eligible employees, and the
contributions for 1997 and 1996 were $31,000 and $23,000, respectively.
Employees become vested as to their account balances at the rate of 20% per year
after three years of service and are 100% vested after seven years of service.
Benefits are payable upon retirement, death or disability.
New Stock Benefit Plans
Employee Stock Ownership Plan. The Company has established the
ESOP for employees of the Company and the Association to become effective upon
the Conversion. Full-time employees of the Company and the Association 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.
As part of the Conversion, in order to fund the purchase of up
to 8% of the Common Stock sold in the Offerings, it is anticipated that the ESOP
will borrow funds from the Company. It is anticipated that such loan will equal
100% of the aggregate purchase price of the Common Stock acquired by the ESOP.
The loan to the ESOP will be repaid principally from the Company's and the
Association's contributions to the ESOP over a period of 10 years, and the
collateral for the loan will be the Common Stock purchased by the ESOP. The
interest rate for the ESOP loan is expected to be a fixed rate of 8.5%. The
Company may, in any plan year, make additional discretionary contributions for
the benefit of plan participants in either cash or shares of Common Stock, which
may be acquired through the purchase of outstanding shares in the market or from
individual stockholders, upon the original issuance of additional shares by the
Company or upon the sale of treasury shares by the Company. Such purchases, if
made, would be funded through additional borrowings by the ESOP or additional
contributions from the Company. The timing, amount and manner of future
contributions to the ESOP will be affected by various factors, including
prevailing regulatory policies, the requirements of applicable laws and
regulations and market conditions.
Shares purchased by the ESOP with the proceeds of the loan
will be held in a suspense account and released to participants on a pro rata
basis as debt service payments are made. Shares released from the ESOP will be
allocated to each eligible participant's ESOP account based on the ratio of each
such participant's base compensation to the total base compensation of all
eligible ESOP participants. Forfeitures will be reallocated among remaining
participating employees and may reduce any amount the Company might otherwise
have contributed to the ESOP. Upon the completion of three years of service, the
account balances of participants within the ESOP will become 20% vested and will
continue to vest at the rate of 20% for each additional year of service
completed by the participant, such that a participant will become 100% vested
upon the completion of seven years of service. Credit is given for years of
service with the Association prior to adoption of the ESOP. In the case of a
"change in control," as defined, however, participants will become immediately
fully vested in their account balances. Benefits may be payable upon retirement
or separation from service. The Company's contributions to the ESOP are not
fixed, so benefits payable under the ESOP cannot be estimated.
Messrs. Bouchereau, Stanley and Strickland will serve as
trustees of the ESOP. Under the ESOP, the trustees must generally vote all
allocated shares held in the ESOP in accordance with the instructions of the
participating employees, and unallocated shares will generally be voted in the
same ratio on any matter as those
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<PAGE>
allocated shares for which instructions are given, in each case subject to the
requirements of applicable law and the fiduciary duties of the trustees.
See "Risk Factors - Increased Compensation Expense After the
Conversion" for a discussion of SOP 93-6, which requires that the compensation
expense recorded by employers for leveraged ESOPs be based on the fair value of
the ESOP shares.
GAAP requires that any third party borrowing by the ESOP be
reflected as a liability on the Company's statement of financial condition.
Since the ESOP is borrowing from the Company, such obligation is not treated as
a liability, but will instead be excluded from stockholders' equity. If the ESOP
purchases newly issued shares from the Company, total stockholders' equity would
neither increase nor decrease, but per share stockholders' equity and per share
net earnings would decrease as the newly issued shares are allocated to the ESOP
participants.
The ESOP will be subject to the requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and the
regulations of the IRS and the Department of Labor thereunder.
Stock Option Plan. Following consummation of the Conversion,
the Board of Directors of the Company intends to adopt a Stock Option Plan,
which will be designed to attract and retain qualified personnel in key
positions, provide directors, officers and key employees with a proprietary
interest in the Company as an incentive to contribute to the success of the
Company and reward key employees for outstanding performance. The Stock Option
Plan will provide for the grant of incentive stock options intended to comply
with the requirements of Section 422 of the Code ("incentive stock options"),
non-incentive or compensatory stock options, stock appreciation rights and
limited rights which will be exercisable only upon a change in control of the
Company (collectively "Awards"). Awards may be granted to directors and key
employees of the Company and any subsidiaries. The Stock Option Plan will be
administered and interpreted by a committee of the Board of Directors
("Committee"). Unless sooner terminated, the Stock Option Plan shall continue in
effect for a period of 10 years from the date the Stock Option Plan is adopted
by the Board of Directors. Subject to any applicable OTS regulations, upon
exercise of "Limited Rights" in the event of a change in control, the employee
will be entitled to receive a lump sum cash payment equal to the difference
between the exercise price of the related option and the fair market value of
the shares of Common Stock subject to the option on the date of exercise of the
right in lieu of purchasing the stock underlying the option.
Under the Stock Option Plan, the Committee will determine
which directors, officers and key employees will be granted Awards, whether
options will be incentive or compensatory options, the number of shares subject
to each Award, the exercise price of each option, whether options may be
exercised by delivering other shares of Common Stock and when such options
become exercisable. The per share exercise price of an incentive stock option
must at least equal the fair market value of a share of Common Stock on the date
the option is granted (110% of fair market value in the case of incentive stock
options granted to employees who are 5% stockholders).
At a meeting of stockholders of the Company following the
Conversion, which under applicable OTS regulations may be held no earlier than
six months after the completion of the Conversion, the Board of Directors
intends to present the Stock Option Plan to stockholders for approval and to
reserve an amount equal to 10% of the shares of Common Stock sold in the
Offerings (or 27,600 shares based upon the issuance of 276,000 shares of Common
Stock at the maximum of the Estimated Valuation Range), for issuance under the
1998 Stock Option Plan. OTS regulations provide that, in the event such plan is
implemented within one year following the Conversion, no individual officer or
employee of the Association may receive more than 25% of the options granted
under the Stock Option Plan and non-employee directors may not receive more than
5% individually, or 30% in the aggregate of the options granted under the Stock
Option Plan. OTS regulations also provide that the exercise price of any options
granted under any such plan must be at least equal to the fair market value of
the Common Stock as of the date of grant. Each stock option or portion thereof
will be exercisable at any time on or after it vests and will be exercisable
until 10 years after its date of grant or for periods of up to one year
following the death, disability or other termination of the optionee's
employment or service as a director. However, failure to exercise incentive
stock
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<PAGE>
options within three months after the date on which the optionee's employment
terminates may result in the loss of incentive stock option treatment.
At the time an Award is granted pursuant to the Stock Option
Plan, the recipient will not be required to make any payment in consideration
for such grant. With respect to incentive or compensatory stock options, the
optionee will be required to pay the applicable exercise price at the time of
exercise in order to receive the underlying shares of Common Stock. The shares
reserved for issuance under the Stock Option Plan may be authorized but
previously unissued shares, treasury shares, or shares purchased by the Company
on the open market or from private sources. In the event of a stock split,
reverse stock split or stock dividend, the number of shares of Common Stock
under the Stock Option Plan, the number of shares to which any Award relates and
the exercise price per share under any option or stock appreciation right shall
be adjusted to reflect such increase or decrease in the total number of shares
of Common Stock outstanding. In the event the Company declares a special cash
dividend or return of capital following the implementation of the Stock Option
Plan in an amount per share which exceeds 10% of the fair market value of a
share of Common Stock as of the date of declaration, the per share exercise
price of all previously granted options which remain unexercised as of the date
of such declaration shall, subject to certain limitations, be proportionately
adjusted to give effect to such special cash dividend or return of capital as of
the date of payment of such special cash dividend or return of capital.
Under current provisions of the Code, the federal income tax
treatment of incentive stock options and compensatory stock options is
different. As regards incentive stock options, an optionee who meets certain
holding period requirements will not recognize income at the time the option is
granted or at the time the option is exercised, and a federal income tax
deduction generally will not be available to the Company at any time as a result
of such grant or exercise. With respect to compensatory stock options, the
difference between the fair market value on the date of exercise and the option
exercise price generally will be treated as compensation income upon exercise,
and the Company will be entitled to a deduction in the amount of income so
recognized by the optionee. Upon the exercise of a stock appreciation right, the
holder will realize income for federal income tax purposes equal to the amount
received by him, whether in cash, shares of stock or both, and the Company will
be entitled to a deduction for federal income tax purposes in the same amount.
Recognition Plan. Following consummation of the Conversion,
the Board of Directors of the Company intends to adopt a Recognition Plan for
directors, officers and employees. The objective of the Recognition Plan will be
to enable the Company to provide directors, officers and employees with a
proprietary interest in the Company as an incentive to contribute to its
success. The Company intends to present the Recognition Plan to stockholders for
their approval at a meeting of stockholders which, pursuant to applicable OTS
regulations, may be held no earlier than six months subsequent to completion of
the Conversion.
The Recognition Plan will be administered by a committee of
the Board of Directors, which will have the responsibility to invest all funds
contributed to the trust created for the Recognition Plan (the "Trust"). The
Company will contribute sufficient funds to the Trust so that the Trust can
purchase, following the receipt of stockholder approval, a number of shares
equal to an aggregate of 4% of the Common Stock sold in the Offerings (11,040
shares, based on the sale of 276,000 shares at the maximum of the Estimated
Valuation Range). Shares of Common Stock granted pursuant to the Recognition
Plan generally will be in the form of restricted stock vesting at a rate to be
determined by the Board of Directors or a committee thereof. For accounting
purposes, compensation expense in the amount of the fair market value of the
Common Stock at the date of the grant to the recipient will be recognized pro
rata over the period during which the shares are payable. A recipient will be
entitled to all voting and other stockholder rights, except that the shares,
while restricted, may not be sold, pledged or otherwise disposed of and are
required to be held in the Trust. Under the terms of the Recognition Plan,
recipients of awards will be entitled to instruct the trustees of the
Recognition Plan as to how the underlying shares should be voted, and the
trustees will be entitled to vote all unallocated shares in their discretion. If
a recipient's employment is terminated as a result of death or disability, all
restrictions will expire and all allocated shares will become unrestricted. The
Board of Directors of the Company can terminate the Recognition Plan at any
time, and if it does so, any shares not allocated will revert to the Company.
Recipients of grants under the Recognition Plan will not be required to make any
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payment at the time of grant or when the underlying shares of Common Stock
become vested, other than payment of withholding taxes.
Certain Transactions
John L. Delahaye, a director of the Association, is a partner
in the law firm of Borron & Delahaye, which serves as general counsel to the
Association. During 1997, Borron & Delahaye received a monthly retainer of $400
from the Association and approximately $27,000 of legal fees in connection with
real estate loan closings. All of the loan closing fees were paid by the
borrowers rather than the Association.
Management believes that the above transactions were on terms
at least as favorable to the Association as could be obtained from unaffiliated
third parties.
Indebtedness of Management
In the ordinary course of business, the Association makes
loans available to its directors, officers and employees. Such loans are made on
the same terms as comparable loans to other borrowers. It is the belief of
management that these loans neither involve more than the normal risk of
collectibility nor present other unfavorable features. At March 31, 1998, the
Association had 20 loans outstanding to directors and executive officers of the
Association, or members of their immediate families. These loans totalled
approximately $1.0 million or 60.8% of the Association's retained earnings at
March 31, 1998.
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The following table sets forth certain information with
respect to each current director or executive officer of the Association, or
members of their immediate families, whose aggregate indebtedness exceeded
$60,000 during the period indicated.
<TABLE>
<CAPTION>
Highest
Principal
Year Balance from Principal Interest
Nature of Loan 1/1/97 to Balance at Rate as of
Name and Position Indebtedness Made 3/31/98 3/31/98 3/31/98
- ----------------------------------- ---------------------- ------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
G. Lloyd Bouchereau, Jr., Residential mortgage 1995 $92,602 $76,936 7.92%(1)
President and Chief Executive Residential
Officer mortgage(2) 1978 31,123 29,053 8.50
Second mortgage(2) 1998 37,000 36,724 8.00
Residential
mortgage(2) 1996 11,915 10,897 8.50
Residential
mortgage(2) 1992 62,832 60,237 8.17
Second mortgage(2) 1994 24,975 24,968 10.00
Share loan(2) 1990 20,000 20,000 7.25
Automobile loan(2) 1996 23,008 16,227 8.50
Second mortgage(2) 1997 52,000 51,122 8.50
Residential
mortgage(2) 1977 26,452 23,951 8.50
Share loan(2) 1997 900 801 7.50
Gary K. Pruitt, Residential mortgage 1997 60,000 56,227 7.31(1)
Director
Bobby E. Stanley, Residential mortgage 1986 67,468 60,428 7.12(1)
Director Residential mortgage 1995 25,539 22,775 8.92(1)
Commercial real
estate 1994 224,773 217,970 8.77(1)
Commercial real
estate 1995 10,124 3,580 10.00
Commercial real
estate 1997 38,500 37,220 7.32(1)
Residential
mortgage(2) 1997 140,000 121,868 7.71(1)
Commercial real
estate(2) 1997 125,000 123,445 7.31(1)
</TABLE>
- -------------------
(1) The interest rate adjusts annually.
(2) Represents a loan to an immediate family member.
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THE CONVERSION
THE BOARD OF DIRECTORS OF THE COMPANY AND THE ASSOCIATION HAVE
APPROVED THE PLAN OF CONVERSION, AS HAS THE OTS AND THE OFI, SUBJECT TO APPROVAL
BY THE MEMBERS OF IBERVILLE ENTITLED TO VOTE ON THE MATTER AND THE SATISFACTION
OF CERTAIN OTHER CONDITIONS. SUCH OTS AND OFI APPROVALS, HOWEVER, DO NOT
CONSTITUTE A RECOMMENDATION OR ENDORSEMENT OF THE PLAN BY EITHER OF SUCH
AGENCIES.
General
On April 7, 1998, the Board of Directors of the Association
unanimously adopted the Plan, pursuant to which the Association will be
converted from a Louisiana-chartered mutual savings and loan association to a
Louisiana-chartered stock savings and loan association to be known as "The
Iberville Building and Loan Association," and the Company will offer and sell
the Common Stock. The Plan of Conversion was subsequently amended on June 16,
1998. It is intended that all of the common stock of the Association following
the Conversion will be held by the Company, which is incorporated under
Louisiana law. The Plan has been approved by the OTS and the OFI, subject to,
among other things, approval of the Plan by the members of the Association. A
Special Meeting has been called for this purpose to be held on _______, 1998.
In adopting the Plan, the Board of Directors of the
Association determined that the Conversion was advisable and in the best
interests of its members and the Association and further determined that the
interests of certain holders of its deposit accounts in the net worth of the
Association would be equitably provided for and that the Conversion would not
have any adverse impact on the reserves and net worth of the Association.
The Company has received approval from the OTS and the OFI to
become a savings and loan holding company and to acquire all of the common stock
of the Association to be issued in connection with the Conversion. The Company
plans to retain 50% of the net proceeds from the sale of the Common Stock, with
all the remaining proceeds used to purchase all of the then to be issued and
outstanding capital stock of the Association. Based on the minimum and maximum
of the Estimated Valuation Range, approximately $163,200 and $220,800,
respectively, of the net proceeds retained by the Company are intended to be
used to loan funds to the ESOP to enable the ESOP to purchase up to 8% of the
Common Stock. The Conversion will be effected only upon completion of the sale
of all of the shares of Common Stock to be issued pursuant to the Plan.
The Plan provides generally that, in connection with the
Conversion, the Company will offer shares of Common Stock for sale in the
Subscription Offering to the Association's Eligible Account Holders, ESOP,
Supplemental Eligible Account Holders, Other Members, and officers, directors
and employees of the Association. In addition, subject to the prior rights of
holders of subscription rights, the Company may elect to offer the shares of
Common stock not subscribed for in the Subscription Offering, if any, for sale
in a Community Offering commencing prior to or upon completion of the
Subscription Offering. See "- Subscription Offering and Subscription Rights" and
"- Community Offering." The Company and the Association have the right to accept
or reject, in whole or in part, any orders to purchase shares of Common Stock
received in the Community Offering.
The aggregate price of the shares of Common Stock to be issued
in the Conversion within the Estimated Valuation Range, currently estimated to
be between $2,040,000 and $2,760,000, will be determined based upon an
independent appraisal of the estimated pro forma market value of the Common
Stock. All shares of Common Stock to be issued and sold in the Conversion will
be sold at the same price. The independent appraisal will be affirmed or, if
necessary, updated at the completion of the Offerings. The appraisal has been
performed by Ferguson, a consulting firm experienced in the valuation and
appraisal of savings institutions. See "- Stock Pricing and Number of Shares to
be Issued" for more information as to the determination of the estimated pro
forma market value of the Common Stock.
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The following is a brief summary of pertinent aspects of the
Conversion. The summary is qualified in its entirety by reference to the
provisions of the Plan. A copy of the Plan is available for inspection at the
offices of the Association and at the offices of the OTS. The Plan is also filed
as an exhibit to the Registration Statement of which this Prospectus is a part,
copies of which may be obtained from the SEC. See "Additional Information."
Purposes of Conversion
The Association, as a Louisiana-chartered mutual savings and
loan association, does not have stockholders and has no authority to issue
capital stock. By converting to the capital stock form of organization, the
Association will be structured in the form used by commercial banks, most
business entities and a growing number of savings institutions. The Conversion
will result in an increase in the capital base of the Association and the
Company, which will support the operations of the Association and Company.
The Conversion will permit the Association's customers and
possibly other members of the local community and of the general public to
become equity owners and to share in the future of the Company and the
Association. The Conversion will also provide additional funds for lending and
investment activities, facilitate future access to the capital markets, enhance
the ability of the Company to diversify and expand into other markets and enable
the Association to compete more effectively with other financial institutions.
The holding company form of organization will provide
additional flexibility to diversify the Company's and the Association's business
activities through existing or newly formed subsidiaries, or through acquisition
of or mergers with other financial institutions, as well as other companies.
Although there are no current arrangements, understandings or agreements
regarding any such opportunities, the Company will be in a position after the
Conversion, subject to regulatory limitations and the Company's financial
position, to take advantage of any such opportunities that may arise.
After completion of the Conversion, the unissued common and
preferred stock authorized by the Company's Articles of Incorporation will
permit the Company, subject to market conditions and applicable regulatory
approvals, to raise additional equity capital through further sales of
securities, and to issue securities in connection with possible acquisitions. At
the present time, the Company has no plans with respect to additional offerings
of securities, other than the possible issuance of additional shares to the
Recognition Plan or upon exercise of stock options. Following the Conversion,
the Company will also be able to use stock-related incentive programs to attract
and retain executive and other personnel for itself and its subsidiaries. See
"Management - New Stock Benefit Plans."
Effects of Conversion
General. Prior to the Conversion, each depositor in the
Association has both a deposit account in the institution and a pro rata
ownership interest in the net worth of the Association based upon the balance in
his account, which interest may only be realized in the event of a liquidation
of the Association. However, this ownership interest is tied to the depositor's
account and has no tangible market value separate from such deposit account. Any
person who opens a deposit account obtains a pro rata ownership interest in the
net worth of the Association without any additional payment beyond the amount of
the deposit. A depositor who reduces or closes his account receives a portion or
all of the balance in the account but nothing for his ownership interest in the
net worth of the Association, which is lost to the extent that the balance in
the account is reduced.
Consequently, the depositors of the Association normally have
no way to realize the value of their ownership interest, which has realizable
value only in the unlikely event that the Association is liquidated. In such
event, the depositors of record at that time, as owners, would share pro rata in
any residual surplus and reserves of the Association after other claims,
including claims of depositors to the amount of their deposits, are paid.
When the Association converts to stock form, permanent
nonwithdrawable capital stock will be created to represent the ownership of the
net worth of the Association, and the Association will become a wholly owned
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subsidiary of the Company. The Common Stock of the Association and the Company
is separate and apart from deposit accounts of the Association and cannot be and
is not insured by the FDIC or any other governmental agency. Certificates are
issued to evidence ownership of the permanent stock of the Association and the
Company. The stock certificates are transferable, and therefore the stock may be
sold or traded if a purchaser is available with no effect on any account the
seller may hold in the Association.
Continuity. While the Conversion is being accomplished, the
normal business of the Association of accepting deposits and making loans will
continue without interruption. The Association will continue to be subject to
regulation by the OTS, the OFI and the FDIC. After the Conversion, the
Association will continue to provide services for depositors and borrowers under
current policies by its present management and staff.
The directors and officers of the Association at the time of
the Conversion will continue to serve as directors and officers of the
Association after the Conversion. The directors and officers of the Company
consist of individuals currently serving as directors and officers of the
Association, and they will retain their positions in the Association after the
Conversion.
Effect on Deposit Accounts. Under the Plan, each depositor in
the Association at the time of the Conversion will automatically continue as a
depositor after the Conversion, and each such deposit account will remain the
same with respect to deposit balance, interest rate and other terms, except to
the extent that funds in the account are withdrawn to purchase the Common Stock
and except with respect to voting and liquidation rights. Each such account will
be insured by the FDIC to the same extent as before the Conversion. Depositors
will continue to hold their existing certificates, passbooks and other evidences
of their accounts.
Effect on Loans. No loan outstanding from the Association will
be affected by the Conversion, and the amount, interest rate, maturity and
security for each loan will remain as they were contractually fixed prior to the
Conversion.
Effect on Voting Rights of Members. At present, all depositors
and certain borrowers of the Association are members of, and have voting rights
in, the Association as to all matters requiring membership action. Upon
completion of the Conversion, depositors and borrowers will cease to be members
and will no longer be entitled to vote at meetings of the Association. Upon
completion of the Conversion, all voting rights in the Association will be
vested in the Company as the sole stockholder of the Association. Exclusive
voting rights with respect to the Company will be vested in the holders of
Common Stock. Depositors of and borrowers from the Association will not have
voting rights in the Company after the Conversion, except to the extent that
they become stockholders of the Company.
Tax Effects. Consummation of the Conversion is conditioned on
prior receipt by the Company and the Association of rulings or opinions with
regard to federal and Louisiana income taxation which indicate that the adoption
and implementation of the Plan of Conversion described herein will not be
taxable for federal or Louisiana income tax purposes to the Company and the
Association or the Association's Eligible Account Holders or Supplemental
Eligible Account Holders, except as discussed below. The Association has
received favorable opinions regarding the federal and Louisiana income tax
consequences of the Conversion. See "- Tax Aspects."
Effect on Liquidation Rights. Were the Association to
liquidate, all claims of the Association's creditors (including those of
depositors, to the extent of their deposit balances) would be paid first.
Thereafter, if there were any assets remaining, members of the Association would
receive such remaining assets, pro rata, based upon the deposit balances in
their deposit accounts at the Association immediately prior to liquidation. In
the unlikely event that the Association were to liquidate after the Conversion,
all claims of creditors (including those of depositors, to the extent of their
deposit balances) would also be paid first, followed by distribution of the
"liquidation account" to certain depositors (see "- Liquidation Rights"), with
any assets remaining thereafter distributed to the Company as the holder of the
Association's capital stock. Pursuant to the rules and regulations of the OTS, a
post-Conversion merger, consolidation, sale of bulk assets or similar
combination or transaction with another insured savings
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institution would not be considered a liquidation and, in such a transaction,
the liquidation account would be required to be assumed by the surviving
institution.
Stock Pricing and Number of Shares to be Issued
The Plan of Conversion requires that the purchase price of the
Common Stock must be based on the appraised pro forma market value of the Common
Stock, as determined on the basis of an independent valuation. The Association
has retained Ferguson to make such valuation. For its services in making such
appraisal and assistance in preparing a business plan, Ferguson's fees and
out-of-pocket expenses are estimated to be $23,000. The Association has agreed
to indemnify Ferguson and any employees of Ferguson who act for or on behalf of
Ferguson in connection with the appraisal and the business plan against any and
all loss, cost, damage, claim, liability or expense of any kind (including
claims under federal and state securities laws) arising out of any misstatement
or untrue statement of a material fact or an omission to state a material fact
in the information supplied by the Association to Ferguson, unless Ferguson is
determined to be negligent or otherwise at fault.
An appraisal has been made by Ferguson in reliance upon the
information contained in this Prospectus, including the Financial Statements.
Ferguson also considered the following factors, among others: the present and
projected operating results and financial condition of the Company and the
Association and the economic and demographic conditions in the Association's
existing marketing area; certain historical, financial and other information
relating to the Association; a comparative evaluation of the operating and
financial statistics of the Association with those of other similarly situated
publicly traded savings institutions located in Louisiana and other regions of
the United States; the aggregate size of the offering of the Common Stock; the
impact of the Conversion on the Association's net worth and earnings potential;
the proposed dividend policy of the Company and the Association; and the trading
market for securities of comparable institutions and general conditions in the
market for such securities. In its review of the appraisal provided by Ferguson,
the Board of Directors reviewed the methodologies and the appropriateness of the
assumptions used by Ferguson in addition to the factors enumerated above, and
the Board of Directors believes that such assumptions were reasonable. The
projected operating results reviewed by Ferguson covered periods through March
31, 2001. The financial projections assume (i) a flat interest rate environment
based on interest rates prevailing in late May 1998, (ii) the Association's
lending and investment activities continue to emphasize single-family loan
originations and purchases of mortgage-backed securities, (iii) gradual asset
growth funded primarily by interest-bearing deposits and borrowings, and (iv)
the net Conversion proceeds retained by the Company are primarily invested in
short-term investment securities.
In determining the amount of the Appraisal, Ferguson reviewed
the Association's P/E, price/book ("P/B") and price/assets ("P/A") ratios on a
pro forma basis giving effect to the net Conversion proceeds to the comparable
ratios for a peer group consisting of 12 savings institution holding companies.
The peer group included companies with assets below $100 million, non-performing
assets below 1.5% of total assets, loans receivable equal to at least 60% of
total assets, equity equal to more than 10% of assets but less than 24% of
assets, and positive core earnings for the most recent 12 months and the most
recent quarter. Ten of the resulting peer group members are located in the
Midwest region, one is located in the Northeast region, and one is located in
the Mid-Atlantic region of the country. At the midpoint of the Appraisal, the
Association's pro forma P/E and P/A ratios as of or for the three months ended
March 31, 1998 were 10.87x and 9.80%, respectively, compared to ratios for the
peer group of 21.50x and 20.4%, respectively. Also at the midpoint of the
Appraisal, the Association's pro forma P/B ratio at March 31, 1998 was 71.4%,
compared to 77.4% for recently completed conversions listed on major stock
exchanges and 73.0% for recently completed "Pink Sheet" conversions.
On the basis of the foregoing, Ferguson has advised the
Company and the Association that in its opinion, dated June 5, 1998, the
estimated pro forma market value of the Common Stock ranged from a minimum of
$2,040,000 to a maximum of $2,760,000, with a midpoint of $2,400,000. The Boards
of Directors of the Company and the Association determined that the Common Stock
should be sold at $10.00 per share, resulting in a range of 204,000 to 276,000
shares of Common Stock being offered. The Estimated Valuation Range may be
amended with the approval of the OTS and the OFI, if required, or if
necessitated by subsequent developments in the financial
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<PAGE>
condition of the Company and the Association or market conditions generally, or
to fill the order of the ESOP. In the event the Estimated Valuation Range is
updated to amend the value of the Association below $2,040,000 or above
$3,174,000 (the maximum of the Estimated Valuation Range, as adjusted by 15%),
the new appraisal will be filed with the SEC by post-effective amendment.
Based upon current market and financial conditions and recent
practices and policies of the OTS, in the event the Company receives orders for
Common Stock in excess of $2,760,000 (the maximum of the Estimated Valuation
Range) and up to $3,174,000 (the maximum of the Estimated Valuation Range, as
adjusted by 15%), the Company may be required by the OTS to accept all such
orders. No assurances, however, can be made that the Company will receive orders
for Common Stock in excess of the maximum of the Estimated Valuation Range or
that, if such orders are received, that all such orders will be accepted because
the Company's final valuation and number of shares to be issued are subject to
the receipt of an updated appraisal from Ferguson which reflects such an
increase in the valuation and the approval of such increase by the OTS. In
addition, an increase in the number of shares above 276,000 shares will first be
used, if necessary, to fill the order of the ESOP. There is no obligation or
understanding on the part of management to take and/or pay for any shares in
order to complete the Conversion.
Ferguson's valuation is not intended, and must not be
construed, as a recommendation of any kind as to the advisability of purchasing
such shares. Ferguson did not independently verify the Financial Statements and
other information provided by the Association, nor did Ferguson value
independently the assets or liabilities of the Association. The valuation
considers the Association as a going concern and should not be considered as an
indication of the liquidation value of the Association. Moreover, because such
valuation is necessarily based upon estimates and projections of a number of
matters, all of which are subject to change from time to time, no assurance can
be given that persons purchasing Common Stock in the Conversion will thereafter
be able to sell such shares at prices at or above the Purchase Price or in the
range of the foregoing valuation of the pro forma market value thereof.
Prior to completion of the Conversion, the maximum of the
Estimated Valuation Range may be increased up to 15% and the number of shares of
Common Stock may be increased to up to 317,400 shares to reflect changes in
market and financial conditions or to fill the order of the ESOP, without the
resolicitation of subscribers. See "-
Limitations on Common Stock Purchases" as to the method of distribution and
allocation of additional shares that may be issued in the event of an increase
in the Estimated Valuation Range to fill unfilled orders in the Subscription
Offering.
No sale of shares of Common Stock in the Conversion may be
consummated unless prior to such consummation Ferguson confirms that nothing of
a material nature has occurred which, taking into account all relevant factors,
would cause it to conclude that the Purchase Price is materially incompatible
with the estimate of the pro forma market value of a share of Common Stock upon
consummation of the Conversion. If such is not the case, a new Estimated
Valuation Range may be set and a new Subscription and Community Offering may be
held or such other action may be taken as the Company and the Association shall
determine and the OTS and the OFI may permit or require.
Depending upon market or financial conditions following the
commencement of the Subscription Offering, the total number of shares of Common
Stock may be increased or decreased without a resolicitation of subscribers,
provided that the product of the total number of shares times the Purchase Price
is not below the minimum or more than 15% above the maximum of the Estimated
Valuation Range. In the event market or financial conditions change so as to
cause the aggregate Purchase Price of the shares to be below the minimum of the
Estimated Valuation Range or more than 15% above the maximum of such range,
purchasers will be resolicited (i.e., permitted to continue their orders, in
which case they will need to affirmatively reconfirm their subscriptions prior
to the expiration of the resolicitation offering or their subscription funds
will be promptly refunded with interest at the Association's passbook rate of
interest, or be permitted to modify or rescind their subscriptions). Any change
in the Estimated Valuation Range must be approved by the OTS. If the number of
shares of Common Stock issued in the Conversion is increased due to an increase
of up to 15% in the Estimated Valuation Range to reflect changes in market or
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financial conditions or to fill the order of the ESOP, persons who subscribed
for the maximum number of shares will be given the opportunity to subscribe for
the adjusted maximum number of shares. See "- Limitations on Common Stock
Purchases."
An increase in the number of shares of Common Stock as a
result of an increase in the estimated pro forma market value would decrease
both a subscriber's ownership interest and the Company's pro forma net income
and stockholders' equity on a per share basis while increasing pro forma net
income and stockholders' equity on an aggregate basis. A decrease in the number
of shares of Common Stock would increase both a subscriber's ownership interest
and the Company's pro forma net income and stockholders' equity on a per share
basis while decreasing pro forma net income and stockholders' equity on an
aggregate basis. See "Risk Factors - Possible Increase in Number of Shares
Issued in the Conversion" and "Pro Forma Data."
The appraisal report of Ferguson has been filed as an exhibit
to the Company's Registration Statement and the Association's Application for
Conversion, of which this Prospectus is a part, and is available for inspection
in the manner set forth under "Additional Information."
Subscription Offering and Subscription Rights
In accordance with the Plan of Conversion, rights to subscribe
for the purchase of Common Stock have been granted under the Plan of Conversion
to the following persons in the following order of descending priority: (1)
Eligible Account Holders, (2) the ESOP, (3) Supplemental Eligible Account
Holders, (4) Other Members, and (5) directors, officers and employees of the
Association. All subscriptions received will be subject to the availability of
Common Stock after satisfaction of all subscriptions of all persons having prior
rights in the Subscription Offering and to the maximum and minimum purchase
limitations set forth in the Plan of Conversion and as described below under "-
Limitations on Common Stock Purchases."
Priority 1: Eligible Account Holders. Each Eligible Account
Holder will receive, without payment therefor, first priority, nontransferable
subscription rights to subscribe for in the Subscription Offering up to the
greater of (i) $60,000 of Common Stock, (ii) one-tenth of one percent (0.10%) of
the total offering of shares of Common Stock or (iii) 15 times the product
(rounded down to the next whole number) obtained by multiplying the total number
of shares of Common Stock to be issued by a fraction, of which the numerator is
the amount of the Eligible Account Holder's qualifying deposit and the
denominator of which is the total amount of qualifying deposits of all Eligible
Account Holders, in each case as of the close of business on December 31, 1996
(the "Eligibility Record Date"), subject to the overall purchase limitations.
See "- Limitations on Common Stock Purchases."
If there are not sufficient shares available to satisfy all
subscriptions, shares first will be allocated among subscribing Eligible Account
Holders so as to permit each such Eligible Account Holder, to the extent
possible, to purchase a number of shares sufficient to make his total allocation
equal to the lesser of the number of shares subscribed for or 100 shares.
Thereafter, any shares remaining after each subscribing Eligible Account Holder
has been allocated the lesser of the number of shares subscribed for or 100
shares will be allocated among the subscribing Eligible Account Holders whose
subscriptions remain unfilled in the proportion that the amounts of their
respective eligible deposits bear to the total amount of eligible deposits of
all subscribing Eligible Account Holders whose subscriptions remain unfilled,
provided that no fractional shares shall be issued. Subscription Rights of
Eligible Account Holders will be subordinated to the priority rights of
Tax-Qualified Employee Stock Benefit Plans to purchase shares in excess of the
maximum of the Estimated Valuation Range.
To ensure proper allocation of stock, each Eligible Account
Holder must list on his subscription order form all accounts in which he has an
ownership interest. Failure to list an account could result in fewer shares
being allocated than if all accounts had been disclosed. The subscription rights
of Eligible Account Holders who are also directors or officers of the
Association or their associates will be subordinated to the subscription rights
of other Eligible Account Holders to the extent attributable to increased
deposits in the year preceding December 31, 1996.
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Priority 2: Employee Stock Ownership Plan. The ESOP will
receive, without payment therefor, second priority, nontransferable
subscription rights to purchase, in the aggregate, up to 10% of the Common
Stock, including any increase in the number of shares of Common Stock after
the date hereof as a result of an increase of up to 15% in the maximum of the
Estimated Valuation Range. The ESOP intends to purchase 8% of the shares of
Common Stock, or 16,320 shares and 22,080 shares based on the minimum and
maximum of the Estimated Valuation Range, respectively. Subscriptions by the
ESOP will not be aggregated with shares of Common Stock purchased directly by
or which are otherwise attributable to any other participants in the
Subscription and Community Offerings, including subscriptions of any of the
Association's directors, officers, employees or associates thereof. In the
event that the total number of shares offered in the Conversion is increased
to an amount greater than the number of shares representing the maximum of
the Estimated Valuation Range ("Maximum Shares"), the ESOP will have a
priority right to purchase any such shares exceeding the Maximum Shares up to
an aggregate of 10% of the Common Stock. See " - Limitations on Common Stock
Purchases" and "Risk Factors -Dilutive Effect of Possible Issuance of
Additional Shares."
Priority 3: Supplemental Eligible Account Holders. To the
extent that there are sufficient shares remaining after satisfaction of
subscriptions by Eligible Account Holders and the ESOP, each Supplemental
Eligible Account Holder will receive, without payment therefor, third
priority, nontransferable subscription rights to subscribe for in the
Subscription Offering up to the greater of (i) $60,000 of Common Stock, (ii)
one-tenth of one percent (0.10%) of the total offering of shares of Common
Stock or (iii) 15 times the product (rounded down to the next whole number)
obtained by multiplying the total number of shares of Common Stock to be
issued by a fraction, of which the numerator is the amount of the
Supplemental Eligible Account Holder's qualifying deposit and the denominator
of which is the total amount of qualifying deposits of all Supplemental
Eligible Account Holders, in each case as of the close of business on June
30, 1998 (the "Supplemental Eligibility Record Date"), subject to the overall
purchase limitations. See "-Limitations on Common Stock Purchases."
If there are not sufficient shares available to satisfy all
subscriptions of all Supplemental Eligible Account Holders, available shares
first will be allocated among subscribing Supplemental Eligible Account
Holders so as to permit each such Supplemental Eligible Account Holder, to
the extent possible, to purchase a number of shares sufficient to make his
total allocation equal to the lesser of the number of shares subscribed for
or 100 shares. Thereafter, any shares remaining available will be allocated
among the Supplemental Eligible Account Holders whose subscriptions remain
unfilled in the proportion that the amounts of their respective eligible
deposits bear to the total amount of eligible deposits of all subscribing
Supplemental Eligible Account Holders whose subscriptions remain unfilled,
provided that no fractional shares shall be issued.
Priority 4: Other Members. To the extent that there are
sufficient shares remaining after satisfaction of subscriptions by Eligible
Account Holders, the ESOP and Supplemental Eligible Account Holders, each
Other Member will receive, without payment therefor, fourth priority,
nontransferable subscription rights to subscribe for Common Stock in the
Subscription Offering up to the greater of (i) $60,000 of Common Stock or
(ii) one-tenth of one percent (0.10%) of the total offering of shares of
Common Stock, subject to the overall purchase limitations. See "- Limitations
on Common Stock Purchases."
In the event the Other Members subscribe for a number of
shares which, when added to the shares subscribed for by Eligible Account
Holders, the ESOP and Supplemental Eligible Account Holders, is in excess of
the total number of shares of Common Stock offered in the Conversion,
available shares first will be allocated so as to permit each subscribing
Other Member, to the extent possible, to purchase a number of shares
sufficient to make his total allocation equal to the lesser of the number of
shares subscribed for or 100 shares. Thereafter, any remaining shares will be
allocated among such subscribing Other Members on a pro rata basis in the
same proportion as each Other Member's subscription bears to the total
subscriptions of all subscribing Other Members, provided that no fractional
shares shall be issued.
Priority 5: Directors, Officers and Employees. To the
extent that there are sufficient shares remaining after satisfaction of all
subscriptions by Eligible Account Holders, the ESOP, Supplemental Eligible
Account Holders
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and Other Members, then directors, officers and employees of the Association
will receive, without payment therefor, fifth priority, nontransferable
subscription rights to subscribe for, in this category, an aggregate of up to
20% of the shares of Common Stock offered in the Subscription Offering. The
ability of directors, officers and employees to purchase Common Stock under
this category is in addition to rights which are otherwise available to them
under the Plan as they may fall within higher priority categories, and the
Plan generally allows such persons to purchase in the aggregate up to 35% of
Common Stock sold in the Conversion. See "- Limitations on Common Stock
Purchases."
In the event of an oversubscription in this category,
subscription rights will be allocated among the individual directors,
officers and employees on a point system basis, whereby such individuals will
receive subscription rights in the proportion that the number of points
assigned to each of them bears to the total points assigned to all directors,
officers and employees, provided that no fractional shares shall be issued.
One point will be assigned for each year of service with the Association, one
point for each salary increment of $5,000 per annum and five points for each
office presently held in the Association, including directorships. For
information as to the number of shares proposed to be purchased by certain of
the directors and officers, see "Proposed Management Purchases."
Expiration Date for the Subscription Offering. The
Subscription Offering will expire at 12:00 noon, Central Time, on September
__, 1998 (the "Expiration Date"), unless extended for up to 45 days or for
such additional periods by the Company and the Association as may be approved
by the OTS and the OFI. The Subscription Offering may not be extended beyond
_______, 2000. Subscription rights which have not been exercised prior to the
Expiration Date (unless extended) will become void.
The Company and the Association will not execute orders
until at least the minimum number of shares of Common Stock (204,000 shares)
have been subscribed for or otherwise sold. If all shares have not been
subscribed for or sold within 45 days after the Subscription Expiration Date,
unless such period is extended with the consent of the OTS and the OFI, all
funds delivered to the Association pursuant to the Subscription Offering will
be returned promptly to the subscribers with interest and all withdrawal
authorizations will be cancelled. If an extension beyond the 45-day period
following the Expiration Date is granted, the Company and the Association
will notify subscribers of the extension of time and of any rights of
subscribers to modify or rescind their subscriptions.
Community Offering
To the extent that shares remain available for purchase
after satisfaction of all subscriptions of Eligible Account Holders, the
ESOP, Supplemental Eligible Account Holders, Other Members and directors,
officers and employees of the Association, the Company and the Association
may elect to offer such shares either prior to or upon completion of the
Subscription Offering to certain members of the general public, with
preference given to natural persons residing in Iberville Parish, Louisiana
(such natural persons referred to as "Preferred Subscribers"). Such persons,
together with associates of and persons acting in concert with such persons,
may purchase up to the greater of (i) $60,000 or 6,000 shares of Common
Stock, or (ii) one-tenth of one percent (0.10%) of the total offering of
shares of Common Stock, subject to the maximum purchase limitations. See "-
Limitations on Common Stock Purchases." This amount may be increased at the
sole discretion of the Company and the Association up to 5% or decreased to
as low as 1% of the total offering of shares in the Subscription Offering.
The opportunity to subscribe for shares of Common Stock in the Community
Offering category is subject to the right of the Company and the Association,
in their sole discretion, to accept or reject any such orders in whole or in
part either at the time of receipt of an order or as soon as practicable
following the Expiration Date.
If there are not sufficient shares available to fill the
orders of Preferred Subscribers after completion of the Subscription and
Community Offerings, such stock will be allocated first to each Preferred
Subscriber whose order is accepted by the Company, in an amount equal to the
lesser of 100 shares or the number of shares subscribed for by each such
Preferred Subscriber, if possible. Thereafter, unallocated shares will be
allocated among the Preferred Subscribers whose accepted orders remain
unsatisfied in the same proportion that the unfilled subscription of each
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(up to 2% of the total offering) bears to the total unfilled subscriptions of
all Preferred Subscribers whose accepted orders remains unsatisfied, provided
that no fractional shares shall be issued. Orders for Common Stock in the
Community Offering will first be filled to a maximum of 2% of the total
number of shares of Common Stock sold in the Conversion and thereafter any
remaining shares shall be allocated on an equal number of shares basis per
order until all orders have been filled. If there are any shares remaining,
shares will be allocated to other members of the general public who subscribe
in the Community Offering applying the same allocation described above for
Preferred Subscribers.
Persons in Nonqualified States or Foreign Countries
The Company and the Association will make reasonable
efforts to comply with the securities laws of all states in the United States
in which persons entitled to subscribe for stock pursuant to the Plan reside.
However, the Company and the Association are not required to offer stock in
the Subscription Offering to any person who resides in a foreign country or
resides in a state of the United States with respect to which: (a) the number
of persons otherwise eligible to subscribe for shares under the Plan who
reside in such jurisdiction is small; (b) the granting of subscription rights
or the offer or sale of shares of Common Stock to such persons would require
any of the Company and the Association or their officers, directors or
employees, under the laws of such jurisdiction, to register as a broker,
dealer, salesman or selling agent or to register or otherwise qualify its
securities for sale in such jurisdiction or to qualify as a foreign
corporation or file a consent to service of process in such jurisdiction; and
(c) such registration, qualification or filing in the judgment of the Company
and the Association would be impracticable or unduly burdensome for reasons
of costs or otherwise. Where the number of persons eligible to subscribe for
shares in one state is small, the Company and the Association will base their
decision as to whether or not to offer the Common Stock in such state on a
number of factors, including but not limited to the size of accounts held by
account holders in the state, the cost of registering or qualifying the
shares or the need to register the Company, its officers, directors or
employees as brokers, dealers or salesmen.
Limitations on Common Stock Purchases
The Plan includes the following limitations on the number
of shares of Common Stock which may be purchased in the Conversion:
(1) No fewer than 25 shares of Common Stock
may be purchased, to the extent such shares are available;
(2) Each Eligible Account Holder may
subscribe for and purchase in the Subscription Offering up to
the greater of (i) $60,000 or 6,000 shares of Common Stock,
(ii) one-tenth of one percent (0.10 %) of the total offering
of shares of Common Stock or (iii) 15 times the product
(rounded down to the next whole number) obtained by
multiplying the total number of shares of Common Stock to be
issued by a fraction, of which the numerator is the amount of
the qualifying deposit of the Eligible Account Holder and the
denominator is the total amount of qualifying deposits of all
Eligible Account Holders, in each case as of the close of
business on the Eligibility Record Date, subject to the
overall limitation in clause (7) below;
(3) The ESOP may purchase in the aggregate
up to 10% of the shares of Common Stock, including any
additional shares issued in the event of an increase in the
Estimated Valuation Range, although at this time it intends to
purchase only 8% of such shares;
(4) Each Supplemental Eligible Account
Holder may subscribe for and purchase in the Subscription
Offering up to the greater of (i) $60,000 or 6,000 shares of
Common Stock, (ii) one-tenth of one percent (0.10%) of the
total offering of shares of Common Stock or (iii) 15 times the
product (rounded down to the next whole number) obtained by
multiplying the total number of shares of Common Stock to be
issued by a fraction, of which the numerator is the amount of
the qualifying deposit of the Supplemental Eligible Account
Holder and the denominator is the total amount of qualifying
deposits of all Supplemental
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Eligible Account Holders, in each case as of the close of
business on the Supplemental Eligibility Record Date, subject
to the overall limitation in clause (7) below;
(5) Each Other Member or any Person
purchasing shares of Common Stock in the Community Offering
may subscribe for and purchase in the Subscription Offering or
Community Offering, as the case may be, up to the greater of
(i) $60,000 or 6,000 shares of Common Stock or (ii) one-tenth
of one percent (0.10%) of the total offering of shares of
Common Stock, subject to the overall limitation in clause (7)
below;
(6) Persons purchasing shares of Common
Stock in the Community Offering may purchase in the Community
Offering up to $60,000 or 6,000 shares of Common Stock,
subject to the overall limitation in clause (7) below;
(7) Except for the ESOP and certain Eligible
Account Holders and Supplemental Eligible Account Holders
whose subscription rights are based upon the amount of their
deposits, the maximum number of shares of Common Stock
subscribed for or purchased in all categories of the
Conversion by any person, together with associates of and
groups of persons acting in concert with such persons, shall
not exceed $100,000 or 10,000 shares of Common Stock issued in
the Conversion, or 3.6% at the maximum of the Estimated
Valuation Range; and
(8) No more than 20% of the total number of
shares offered for sale in the Subscription Offering may be
purchased by directors and officers of the Association in the
fourth priority category in the Subscription Offering. No more
than 35% of the total number of shares offered for sale in the
Conversion may be purchased by directors and officers of the
Association and their associates in the aggregate, excluding
purchases by the ESOP.
Subject to any required regulatory approval and the
requirements of applicable laws and regulations, but without further approval
of the members of the Association, the individual amount permitted to be
subscribed for may be increased up to a maximum of 5% of the number of shares
sold in the Conversion and both the individual and the overall purchase
limitations may be decreased to a minimum of 1% of the number of shares sold
in the Conversion at the sole discretion of the Company and the Association.
If such amount is increased, subscribers for the maximum amount will be, and
certain other large subscribers in the sole discretion of the Company and the
Association may be, given the opportunity to increase their subscriptions up
to the then applicable limit.
In the event of an increase in the total number of shares
of Common Stock offered in the Conversion due to an increase in the Estimated
Valuation Range of up to 15% (the "Adjusted Maximum"), the additional shares
will be allocated in the following order of priority in accordance with the
Plan: (i) to fill the ESOP's subscription of 8% of the Adjusted Maximum
number of shares; (ii) in the event that there is an oversubscription by
Eligible Account Holders, to fill unfulfilled subscriptions of Eligible
Account Holders, inclusive of the Adjusted Maximum; (iii) in the event that
there is an oversubscription by Supplemental Eligible Account Holders, to
fill unfulfilled subscriptions of Supplemental Eligible Account Holders,
inclusive of the Adjusted Maximum; (iv) in the event that there is an
oversubscription by Other Members, to fill unfulfilled subscriptions of Other
Members, inclusive of the Adjusted Maximum; (v) in the event there is an
oversubscription by directors, officers and employees of the Company and the
Association, to fill unfulfilled subscriptions of directors, officers and
employees, inclusive of the Adjusted Maximum; and (vi) to fill unfulfilled
subscriptions in the Community Offering to the extent possible, inclusive of
the Adjusted Maximum.
The term "associate" of a person is defined to mean (i) any
corporation or other organization (other than the Company and the Association
or a majority-owned subsidiary of the Association) of which such person is a
director, officer or partner or is directly or indirectly the beneficial
owner of 10% or more of any class of equity securities; (ii) any trust or
other estate in which such person has a substantial beneficial interest or as
to which such person serves as trustee or in a similar fiduciary capacity,
provided, however, that such term shall not include any
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tax-qualified employee stock benefit plan of the Company and the Association
in which such person has a substantial beneficial interest or serves as a
trustee or in a similar fiduciary capacity; and (iii) any relative or spouse
of such person, or any relative of such spouse, who either has the same home
as such person or who is a director or officer of the Company and the
Association or any of their subsidiaries.
The term "acting in concert" is defined to mean (1) knowing
participation in a joint activity or interdependent conscious parallel action
towards a common goal whether or not pursuant to an express agreement, or (2)
a combination or pooling of voting or other interests in the securities of an
issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or otherwise.
The Company and the Association may presume that certain persons are acting
in concert based upon, among other things, joint account relationships,
common addresses and the fact that such persons have filed joint Schedules
13D with the SEC with respect to other companies.
Marketing Arrangements
The Company and the Association have engaged Trident as a
financial advisor and marketing agent in connection with the offering of the
Common Stock, and Trident has agreed to use its best efforts to solicit
subscriptions and purchase orders for shares of Common Stock in the
Offerings. Trident is a member of the National Association of Securities
Dealers, Inc. ("NASD") and an SEC-registered broker-dealer. Trident is
headquartered in Raleigh, North Carolina, and its telephone number is (919)
781-8900. Trident will provide various services including, but not limited
to, (i) training and educating the Association's directors, officers and
employees regarding the mechanics and regulatory requirements of the stock
sales process; (2) providing its employees to staff the Stock Sales Center to
assist the Association's customers and internal stock purchasers and to keep
records of orders for shares of Common Stock; and (3) targeting the Company's
sales efforts, including assisting in the preparation of marketing materials.
Based upon negotiations between the Company and the Association concerning
fee structure, Trident will receive a fee of $75,000 payable upon
consummation of the Conversion. In the event that a selected dealers
agreement is entered into in connection with a Syndicated Community Offering,
the Association will pay to such selected dealers a fee at the commission
rate to be agreed upon by the Company, the Association and Trident, for
shares sold by an NASD member firm pursuant to a selected dealers agreement.
Fees to Trident and to any other broker-dealer may be deemed to be
underwriting fees, and Trident and such broker-dealers may be deemed to be
underwriters. Trident will also be reimbursed for its reasonable legal fees
and out-of-pocket expenses in an amount not to exceed $37,500, of which
$10,000 has been paid to date. The Company and the Association have agreed to
indemnify Trident and each person, if any, who controls Trident against all
losses, claims, damages or liabilities, joint or several, and all legal and
other expenses reasonably incurred by them in connection with certain claims
that may arise as a result of the Conversion, including liabilities under the
Securities Act, except those that are due to Trident's willful misconduct or
gross negligence.
Directors and executive officers of the Company and the
Association may participate in the solicitation of offers to purchase Common
Stock by mailing written materials to members of the Association and other
prospective investors, responding to inquiries of prospective investors, and
performing ministerial or clerical work. In each jurisdiction in which the
securities laws require that the offer and/or sale of the Common Stock be
made through a broker-dealer registered in such jurisdiction, all written
materials will be mailed under cover of a letter from Trident. Other
employees of the Association may participate in the Offerings in ministerial
capacities or providing clerical work in effecting a sales transaction. Such
other employees have been instructed not to solicit offers to purchase Common
Stock or provide advice regarding the purchase of Common Stock. Questions of
prospective purchasers will be directed to executive officers or registered
representatives. The Company will rely on Rule 3a4-1 under the Exchange Act,
and sales of Common Stock will be conducted within the requirements of Rule
3a4-1, so as to permit officers, directors and employees to participate in
the sale of Common Stock. No officer, director or employee of the Company and
the Association will be compensated in connection with his participation by
the payment of commissions or other remuneration based either directly or
indirectly on the transactions in the Common Stock.
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Procedure for Purchasing Shares in the Subscription and Community Offerings
To ensure that each purchaser receives a prospectus at
least 48 hours before the Expiration Date (unless extended) in accordance
with Rule 15c2-8 of the Exchange Act, no prospectus will be mailed any later
than five days prior to such date or hand delivered any later than two days
prior to such date. Execution of the order form will confirm receipt or
delivery in accordance with Rule 15c2-8. Order forms will only be distributed
with a prospectus.
To purchase shares in the Subscription and Community
Offerings, an executed order form with the required payment for each share
subscribed for, or with appropriate authorization for withdrawal from a
deposit account at the Association (which may be given by completing the
appropriate blanks in the order form), must be received by the Association by
noon, Central Time, on the Expiration Date (unless extended). In addition,
the Company and the Association will require a prospective purchaser to
execute a certification in the form required by applicable OTS regulations in
connection with any sale of Common Stock. Order forms which are not received
by such time or are executed defectively or are received without full payment
(or appropriate withdrawal instructions) are not required to be accepted.
Copies of order forms, order forms unaccompanied by an executed certification
form, payments from other private third parties and wire transfers will not
be accepted. The Company and the Association have the right to waive or
permit the correction of incomplete or improperly executed forms, but do not
represent that they will do so. Once received, an executed order form may not
be modified, amended or rescinded without the consent of the Company and the
Association, unless the Conversion has not been completed within 45 days
after the end of the Subscription Offering, unless such period has been
extended.
In order to ensure that Eligible Account Holders,
Supplemental Eligible Account Holders and Other Members are properly
identified as to their stock purchase priority, depositors as of the close of
business on the Eligibility Record Date (December 31, 1996) or the
Supplemental Eligibility Record Date (June 30, 1998) and depositors and
borrowers as of the close of business on the Voting Record Date (________,
1998) must list all accounts on the stock order form giving all names in each
account and the account numbers.
Payment for subscriptions may be made (i) in cash if
delivered in person at the main office of the Association, (ii) by check or
money order, or (iii) by authorization of withdrawal from deposit accounts
maintained with the Association. Interest will be paid on payments made by
cash, check or money order at the Association's passbook rate of interest
from the date payment is received until completion or termination of the
Conversion. If payment is made by authorization of withdrawal from deposit
accounts, the funds authorized to be withdrawn from a deposit account will
continue to accrue interest at the contractual rates until completion or
termination of the Conversion, but a hold will be placed on such funds,
thereby making them unavailable to the depositor until completion or
termination of the Conversion.
If a subscriber authorizes the Association to withdraw the
amount of the purchase price from his deposit account, the Association will
do so as of the effective date of the Conversion. The Association will waive
any applicable penalties for early withdrawal from certificate accounts. If
the remaining balance in a certificate account is reduced below the
applicable minimum balance requirement at the time that the funds actually
are transferred under the authorization, the certificate will be cancelled at
the time of the withdrawal, without penalty, and the remaining balance will
earn interest at the passbook rate.
The ESOP will not be required to pay for the shares
subscribed for at the time it subscribes, but rather may pay for such shares
of Common Stock subscribed for by it at the Purchase Price upon consummation
of the Subscription and Community Offerings, provided that there is in force
from the time of its subscription until such time, a loan commitment from an
unrelated financial institution or the Company to lend to the ESOP, at such
time, the aggregate Purchase Price of the shares for which it subscribed.
Owners of self-directed individual retirement accounts
("IRAs") may use the assets of such IRAs to purchase shares of Common Stock
in the Subscription and Community Offerings, provided that such IRAs are not
maintained at the Association. Persons with IRAs maintained at the
Association must have their accounts transferred to an
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unaffiliated institution or broker to purchase shares of Common Stock in the
Subscription and Community Offerings. In addition, ERISA provisions and IRS
regulations require that officers, directors and 10% stockholders who use
self-directed IRA funds to purchase shares of Common Stock in the
Subscription and Community Offerings make such purchases for the exclusive
benefit of the IRAs. Any interested parties wishing to use IRA funds for
stock purchases are advised to contact the Stock Sales Center for additional
information and allow sufficient time for the account to be transferred as
required.
Certificates representing shares of Common Stock purchased
will be mailed to purchasers at the last address of such persons appearing on
the records of the Association, or to such other address as may be specified
in properly completed order forms, as soon as practicable following
consummation of the Conversion. Any certificates returned as undeliverable
will be disposed of in accordance with applicable law.
Restrictions on Transfer of Subscription Rights and Shares
Pursuant to the rules and regulations of the OTS, no person
with subscription rights may transfer or enter into any agreement or
understanding to transfer the legal or beneficial ownership of the
subscription rights issued under the Plan or the shares of Common Stock to be
issued upon their exercise. Such rights may be exercised only by the person
to whom they are granted and only for his account. Each person exercising
such subscription rights will be required to certify that he is purchasing
shares solely for his own account and that he has no agreement or
understanding regarding the sale or transfer of such shares. Federal
regulations also prohibit any person from offering or making an announcement
of an offer or intent to make an offer to purchase such subscription rights
or shares of Common Stock prior to the completion of the Conversion.
The Company and the Association will pursue any and all
legal and equitable remedies in the event they become aware of the transfer
of subscription rights and will not honor orders known by them to involve the
transfer of such rights.
Liquidation Rights
In the unlikely event of a complete liquidation of the
Association in its present mutual form, each depositor of the Association
would receive his pro rata share of any assets of the Association remaining
after payment of claims of all creditors (including the claims of all
depositors to the withdrawal value of their accounts). Each depositor's pro
rata share of such remaining assets would be in the same proportion as the
value of his deposit account was to the total value of all deposit accounts
in the Association at the time of liquidation. After the Conversion, each
depositor, in the event of a complete liquidation of the Association, would
have a claim as a creditor of the same general priority as the claims of all
other general creditors of the Association. However, except as described
below, his claim would be solely in the amount of the balance in his deposit
account plus accrued interest. He would not have an interest in the value or
assets of the Association above that amount.
The Plan provides for the establishment, upon the
completion of the Conversion, of a special "liquidation account" for the
benefit of Eligible Account Holders and Supplemental Eligible Account Holders
in an amount equal to the Association's net worth as of the date of its
latest statement of financial condition contained in the final prospectus
utilized in the Conversion. As of the date of this Prospectus, the initial
balance of the liquidation account would be approximately $____ million. Each
Eligible Account Holder and Supplemental Eligible Account Holder, if he were
to continue to maintain his deposit account at the Association, would be
entitled, upon a complete liquidation of the Association after the
Conversion, to an interest in the liquidation account prior to any payment to
the Company as the sole stockholder of the Association. Each Eligible Account
Holder and Supplemental Eligible Account Holder would have an initial
interest in such liquidation account for each deposit account, including
passbook accounts, NOW accounts, money market deposit accounts, and
certificates of deposit, held in the Association at the close of business on
December 31, 1996 or June 30, 1998, as the case may be. Each Eligible Account
Holder and Supplemental Eligible Account Holder will have a pro rata interest
in the total liquidation account for each of his deposit accounts based on
the proportion that the balance of each such deposit account on
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the December 31, 1996 eligibility record date (or the June 30, 1998
supplemental eligibility record date, as the case may be) bore to the balance
of all deposit accounts in the Association on such dates.
If, however, on any December 31 annual closing date of the
Association, commencing December 31, 1998, the amount in any deposit account
is less than the amount in such deposit account on December 31, 1996 or June
30, 1998, as the case may be, or any other annual closing date, then the
interest in the liquidation account relating to such deposit account would be
reduced by the proportion of any such reduction, and such interest will cease
to exist if such deposit account is closed. In addition, no interest in the
liquidation account would ever be increased despite any subsequent increase
in the related deposit account. Any assets remaining after the claims of
general creditors (including the claims of all depositors to the withdrawal
value of their accounts) and the above liquidation rights of Eligible Account
Holders and Supplemental Eligible Account Holders are satisfied would be
distributed to the Company as the sole stockholder of the Association.
Tax Aspects
Consummation of the Conversion is expressly conditioned
upon prior receipt of either a ruling or an opinion of counsel with respect
to federal tax laws, and either a ruling or an opinion with respect to
Louisiana tax laws, to the effect that consummation of the transactions
contemplated hereby will not result in a taxable reorganization under the
provisions of the applicable codes or otherwise result in any adverse tax
consequences to the Association, the Company or to account holders receiving
subscription rights, except to the extent, if any, that subscription rights
are deemed to have fair market value on the date such rights are issued.
Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C.,
has issued an opinion to the Company and the Association to the effect that,
for federal income tax purposes: (i) the Association's change in form from
mutual to stock ownership will constitute a reorganization under Section
368(a)(1)(F) of the Code and neither the Association nor the Company will
recognize any gain or loss as a result of the Conversion; (ii) no gain or
loss will be recognized by the Association or the Company upon the purchase
of the Association's capital stock by the Company; (iii) no gain or loss will
be recognized by Eligible Account Holders and Supplemental Eligible Account
Holders upon the issuance to them of deposit accounts in the Association in
its stock form plus their interests in the liquidation account in exchange
for their deposit accounts in the mutual Association; (iv) assuming the
non-transferable subscription rights to purchase Common Stock have no value,
the tax basis of the depositors' deposit accounts in the Association
immediately after the Conversion will be the same as the basis of their
deposit accounts immediately prior to the Conversion; (v) assuming the
non-transferable subscription rights to purchase Common Stock have no value,
the tax basis of each Eligible Account Holder's and Supplemental Eligible
Account Holder's interest in the liquidation account will be zero; and (vi)
the tax basis to the stockholders of the Common Stock of the Company
purchased in the Conversion will be the amount paid therefor, and the holding
period for the shares of Common Stock purchased by such persons will begin on
the date of consummation of the Conversion if purchased through the exercise
of subscription rights and on the day after the date of purchase if purchased
in the Community Offering. L.A. Champagne & Co., L.L.P., Baton Rouge,
Louisiana, has also rendered an opinion to the effect that the foregoing tax
effects of the Conversion under Louisiana law are substantially the same as
they are under federal law.
In the opinion of Ferguson, the subscription rights do not
have any value, based on the fact that such rights are acquired by the
recipients without cost, are nontransferable and of short duration, and
afford the recipients the right only to purchase the Common Stock at a price
equal to its estimated fair market value, which will be the same price as the
Purchase Price for the unsubscribed shares of Common Stock. If the
subscription rights granted to eligible subscribers are deemed to have an
ascertainable value, receipt of such rights would be taxable probably only to
those eligible subscribers who exercise the subscription rights (either as a
capital gain or ordinary income) in an amount equal to such value, and the
Company and the Association could recognize gain on such distribution.
Eligible subscribers are encouraged to consult with their own tax advisor as
to the tax consequences in the event that such subscription rights are deemed
to have an ascertainable value.
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Unlike private rulings, an opinion is not binding on the
IRS, and the IRS could disagree with conclusions reached therein. In the
event of such disagreement, there can be no assurance that the IRS would not
prevail in a judicial or administrative proceeding.
Delivery of Certificates
Certificates representing Common Stock issued in the
Conversion will be mailed by the Company's transfer agent to the persons
entitled thereto at the addresses of such persons appearing on the stock
order form as soon as practicable following consummation of the Conversion.
Any certificates returned as undeliverable will be held by the Company until
claimed by persons legally entitled thereto or otherwise disposed of in
accordance with applicable law. Until certificates for Common Stock are
available and delivered to subscribers, such subscribers may not be able to
sell the shares of Common Stock for which they have subscribed, even though
trading of the Common Stock may have commenced.
Required Approvals
Various approvals of the OTS and OFI are required in order
to consummate the Conversion. The OTS and OFI have approved the Plan of
Conversion, subject to approval by the Association's members and other
standard conditions. The Company's holding company application is currently
pending.
The Company is required to make certain filings with state
securities regulatory authorities in connection with the issuance of Common
Stock in the Conversion.
Certain Restrictions on Purchase or Transfer of Shares After the Conversion
All shares of Common Stock purchased in connection with the
Conversion by a director or an executive officer of the Company and the
Association will be subject to a restriction that the shares not be sold for
a period of one year following the Conversion, except in the event of the
death of such director or executive officer or pursuant to a merger or
similar transaction approved by the OTS. Each certificate for restricted
shares will bear a legend giving notice of this restriction on transfer, and
appropriate stop-transfer instructions will be issued to the Company's
transfer agent. Any shares of Common Stock issued at a later date within this
one year period as a stock dividend, stock split or otherwise with respect to
such restricted stock will be subject to the same restrictions. The directors
and executive officers of the Company will also be subject to the insider
trading rules promulgated pursuant to the Exchange Act as long as the Common
Stock is registered pursuant to Section 12(g) of the Exchange Act.
Purchases of Common Stock of the Company by directors,
executive officers and their associates during the three-year period
following completion of the Conversion may be made only through a broker or
dealer registered with the SEC, except with the prior written approval of the
OTS. This restriction does not apply, however, to negotiated transactions
involving more than 1% of the Company's outstanding Common Stock or to
certain purchases of stock pursuant to an employee stock benefit plan, such
as the ESOP, or by any non-tax-qualified employee stock benefit plan, such as
the Recognition Plan.
Pursuant to OTS regulations, the Company will generally be
prohibited from repurchasing any shares of the Common Stock within one year
following consummation of the Conversion. During the second and third years
following consummation of the Conversion, the Company may not repurchase any
shares of its Common Stock other than pursuant to (i) an offer to all
stockholders on a pro rata basis which is approved by the OTS; (ii) the
repurchase of qualifying shares of a director, if any; (iii) purchases in the
open market by a tax-qualified or non-tax-qualified employee stock benefit
plan in an amount reasonable and appropriate to fund the plan; or (iv)
purchases that are part of an open-market stock repurchase program not
involving more than 5% of its outstanding capital stock during a 12-month
period, if the repurchases do not cause the Association to become
undercapitalized and the Association provides to the Regional Director of the
OTS no later than 10 days prior to the commencement of a repurchase program
written notice containing a full description of the program to be undertaken
and such program is not
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disapproved by the Regional Director. The OTS may permit stock repurchases in
excess of such amounts prior to the third anniversary of the Conversion if
exceptional circumstances are shown to exist.
RESTRICTIONS ON ACQUISITION OF THE COMPANY
AND THE ASSOCIATION
General
As described below, certain provisions in the Company's
Articles of Incorporation and Bylaws and in the Company's and the
Association's proposed benefit plans, together with provisions of Louisiana
corporate law and OTS regulations, may have anti-takeover effects. In
addition, regulatory restrictions may make it difficult for persons or
companies to acquire control of either the Company or the Association.
Restrictions in the Company's Articles of Incorporation and Bylaws
General. A number of provisions of the Company's Articles
of Incorporation and Bylaws deal with matters of corporate governance and
certain rights of stockholders. The following discussion is a general summary
of certain provisions of the Company's Articles of Incorporation and Bylaws
which might be deemed to have a potential "anti-takeover" effect. These
provisions may have the effect of discouraging a future takeover attempt
which is not approved by the Board of Directors but which individual Company
stockholders may deem to be in their best interests or in which stockholders
may receive a substantial premium for their shares over then current market
prices. As a result, stockholders who might desire to participate in such a
transaction may not have an opportunity to do so. Such provisions will also
render the removal of the current Board of Directors or management of the
Company more difficult. The following description of certain of the
provisions of the Articles of Incorporation and Bylaws of the Company is
necessarily general and reference should be made in each case to such
Articles of Incorporation and Bylaws, which are incorporated herein by
reference. See "Additional Information" as to how to obtain a copy of these
documents.
Limitation on Voting Rights. Article 10.A of the Company's
Articles of Incorporation provides that for a period of five years from the
date of the Conversion, no person shall directly or indirectly offer to
acquire or acquire the beneficial ownership of (i) more than 10% of the
issued and outstanding shares of any class of an equity security of the
Company, or (ii) any securities convertible into, or exercisable for, any
equity securities of the Company if, assuming conversion or exercise by such
person of all securities of which such person is the beneficial owner which
are convertible into, or exercisable for, such equity securities (but of no
securities convertible into, or exercisable for, such equity securities of
which such person is not the beneficial owner), such person would be the
beneficial owner of more than 10% of any class of an equity security of the
Company. The term "person" is broadly defined to prevent circumvention of
this restriction.
The foregoing restrictions do not apply to (i) any offer
with a view toward public resale made exclusively to the Company by
underwriters or a selling group acting on its behalf, (ii) any tax-qualified
employee benefit plan or arrangement established by the Company or the
Association and any trustee of such a plan or arrangement, and (iii) any
other offer or acquisition approved in advance by the affirmative vote of
two-thirds of the Company's entire Board of Directors. In the event that
shares are acquired in violation of Article 10.A, all shares beneficially
owned by any person in excess of 10% shall be considered "Excess Shares" and
shall not be counted as shares entitled to vote and shall not be voted by any
person or counted as voting shares in connection with any matters submitted
to stockholders for a vote, and the Board of Directors may cause such Excess
Shares to be transferred to an independent trustee for sale on the open
market or otherwise, with the expenses of such trustee to be paid out of the
proceeds of sale.
Board of Directors. Article 6.B of the Articles of
Incorporation of the Company contains provisions relating to the Board of
Directors and provides, among other things, that the Board of Directors shall
be divided into
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three classes as nearly equal in number as possible, with the term of office
of one class expiring each year. See "Management - Management of the
Company." The classified Board is intended to provide for continuity of the
Board of Directors and to make it more difficult and time consuming for a
stockholder group to fully use its voting power to gain control of the Board
of Directors without the consent of the incumbent Board of Directors of the
Company. Cumulative voting in the election of directors is not permitted.
Directors may be removed without cause at a duly
constituted meeting of stockholders called expressly for that purpose upon
the vote of the holders of at least 75% of the total votes eligible to be
cast by stockholders, and with cause by the affirmative vote of a majority of
the total votes eligible to be cast by stockholders. Cause for removal shall
exist only if the director whose removal is proposed has been either declared
of unsound mind by an order of a court of competent jurisdiction, convicted
of a felony or of an offense punishable by imprisonment for a term of more
than one year by a court of competent jurisdiction, or deemed liable by a
court of competent jurisdiction for gross negligence or misconduct in the
performance of such director's duties to the Company. Any vacancy occurring
in the Board of Directors for any reason (including an increase in the number
of authorized directors) may be filled by the affirmative vote of a majority
of the remaining directors, whether or not a quorum of the Board of Directors
is present, and a director appointed to fill a vacancy shall serve until the
expiration of the term to which he was appointed.
Article 6.F of the Articles of Incorporation governs
nominations for election to the Board, and requires all nominations for
election to the Board of Directors other than those made by the Board to be
made by a stockholder eligible to vote at an annual meeting of stockholders
who has complied with the notice provisions in that section. Written notice
of a stockholder nomination must be delivered to, or mailed to and received
at, the principal executive offices of the Company not later than 120 days
prior to the anniversary date of the initial mailing of proxy materials by
the Company in connection with the immediately preceding annual meeting of
stockholders of the Company, provided that, with respect to the first
scheduled annual meeting following completion of the Conversion, notice must
be received no later than the close of business on Friday, January 15, 1999.
Each such notice shall set forth (a) the name, age, business address and
residence address of the stockholder who intends to make the nomination and
of the person or persons to be nominated; (b) the principal occupation or
employment of the stockholder submitting the notice and of each person being
nominated; (c) the class and number of shares of the Company's stock
beneficially owned by the stockholder submitting the notice, by any person
who is acting in concert with or who is an affiliate or associate of such
stockholder (as such terms are defined in the Articles of Incorporation), by
any person who is a member of any group with such stockholder with respect to
the Company's stock or who is known by such stockholder to be supporting such
nominee(s) on the date the notice is given to the Company, by each person
being nominated, and by each person who is in control of, is controlled by or
is under common control with any of the foregoing persons (if any of the
foregoing persons is a partnership, corporation, limited liability company,
association or trust, information must be provided regarding the name and
address of, and the class of number of shares of Company stock which are
beneficially owned by, each partner in such partnership, each director,
executive officer and stockholder in such corporation, each member in such
limited liability company or association, and each trustee and beneficiary of
such trust, and in each case each person controlling such entity and each
partner, director, executive officer, stockholder, member or trustee of any
entity which is ultimately in control of such partnership, corporation,
limited liability company, association or trust); (d) a representation that
the stockholder is a holder of record of stock of the Company entitled to
vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice; (e) a
description of all arrangements or understandings between the stockholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
stockholder; (f) such other information regarding the stockholder submitting
the notice, each nominee proposed by such stockholder and any other person
covered by clause (c) of this paragraph as would be required to be included
in a proxy statement filed pursuant to the proxy rules of the SEC; and (g)
the consent of each nominee to serve as a director of the Company if so
elected.
Article 8.A of the Articles of Incorporation provides that
a director or officer of the Company will not be personally liable for
monetary damages for any action taken, or any failure to take any action, as
a director or officer
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except to the extent that by law a director's or officer's liability for
monetary damages may not be limited. This provision does not eliminate or
limit the liability of the Company's directors and officers for (a) any
breach of the director's or officer's duty of loyalty to the Company or its
stockholders, (b) any acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) any unlawful
dividend, stock repurchase or other distribution, payment or return of assets
to stockholders, or (d) any transaction from which the director or officer
derived an improper personal benefit. This provision may preclude stockholder
derivative actions and may be construed to preclude other third-party claims
against the directors and officers.
The Company's Articles of Incorporation also provide that
the Company shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, including actions by or in the right of the Company, whether
civil, criminal, administrative or investigative, by reason of the fact that
such person is or was a director, officer, employee or agent of the Company,
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise. Such indemnification is furnished to the full extent
provided by law against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred in
connection with such action, suit or proceeding. The indemnification
provisions also permit the Company to pay reasonable expenses in advance of
the final disposition of any action, suit or proceeding as authorized by the
Company's Board of Directors, provided that the indemnified person undertakes
to repay the Company if it is ultimately determined that such person was not
entitled to indemnification.
The rights of indemnification provided in the Company's
Articles of Incorporation are not exclusive of any other rights which may be
available under the Company's Bylaws, any insurance or other agreement, by
vote of stockholders or directors (regardless of whether directors
authorizing such indemnification are beneficiaries thereof) or otherwise. In
addition, the Articles of Incorporation authorize the Company to maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Company, whether or not the Company would have the power to
provide indemnification to such person. By action of the Board of Directors,
the Company may create and fund a trust fund or other fund or form of
self-insurance arrangement of any nature, and may enter into agreements with
its officers, directors, employees and agents for the purpose of securing or
insuring in any manner its obligation to indemnify or advance expenses
provided for in the provisions in the Articles of Incorporation and Bylaws
regarding indemnification. These provisions are designed to reduce, in
appropriate cases, the risks incident to serving as a director, officer,
employee or agent and to enable the Company to attract and retain the best
personnel available.
The provisions regarding director elections and other
provisions in the Articles of Incorporation and Bylaws are generally designed
to protect the ability of the Board of Directors to negotiate with the
proponent of an unfriendly or unsolicited proposal to take over or
restructure the Company by making it more difficult and time-consuming to
change majority control of the Board, whether by proxy contest or otherwise.
The effect of these provisions will be to generally require at least two (and
possibly three) annual stockholders' meetings, instead of one, to effect a
change in control of the Board of Directors of the Company even if holders of
a majority of the Company's capital stock believed that a change in the
composition of the Board of Directors was desirable. Because a majority of
the directors at any given time will have prior experience as directors,
these requirements will help to ensure continuity and stability of the
Company's management and policies and facilitate long-range planning for the
Company's business. The provisions relating to removal of directors and
filling of vacancies are consistent with and supportive of a classified board
of directors.
The procedures regarding stockholder nominations will
provide the Board of Directors with sufficient time and information to
evaluate a stockholder nominee to the Board and other relevant information,
such as existing stockholder support for the nominee. The proposed
procedures, however, will provide incumbent directors advance notice of a
dissident slate of nominees for directors, and will make it easier for the
Board to solicit proxies resisting such nominees. This may make it easier for
the incumbent directors to retain their status as directors, even when
certain stockholders view the stockholder nominations as in the best
interests of the Company or its stockholders.
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Authorized Shares. Article 4 of the Articles of
Incorporation authorizes the issuance of 7,000,000 shares of stock, of which
2,000,000 shares shall be shares of serial Preferred Stock, and 5,000,000
shall be Common Stock. The shares of Common Stock and Preferred Stock were
authorized in an amount greater than that to be issued in the Conversion to
provide the Company's Board of Directors with as much flexibility as possible
to effect, among other transactions, financings, acquisitions, stock
dividends, stock splits and employee stock options. However, these additional
authorized shares may also be used by the Board of Directors consistent with
its fiduciary duty to deter future attempts to gain control of the Company.
The Board of Directors also has sole authority to determine the terms of any
one or more series of Preferred Stock, including voting rights, conversion
rates, and liquidation preferences. As a result of the ability to fix voting
rights for a series of Preferred Stock, the Board has the power, to the
extent consistent with its fiduciary duty, to issue a series of Preferred
Stock to persons friendly to management in order to attempt to block a
post-tender offer merger or other transaction by which a third party seeks
control, and thereby assist management to retain its position. The Company's
Board currently has no plans for the issuance of additional shares, other
than the issuance of additional shares pursuant to stock benefit plans.
Special Meetings of Stockholders and Stockholder Proposals.
Article 9.B of the Articles of Incorporation provides that special meetings
of the Company's stockholders may only be called by (i) the President, (ii) a
majority of the Board of Directors, and (iii) by persons who beneficially own
an aggregate of at least 50% of the outstanding voting shares, except as may
otherwise be provided by law. The Articles of Incorporation also provide that
any action permitted to be taken at a meeting of stockholders may be taken
without a meeting if a consent in writing, setting forth the action so taken,
is given by the holders of all outstanding shares entitled to vote and filed
with the Secretary of the Company.
Article 9.D of the Company's Articles of Incorporation
provides that only such business as shall have been properly brought before
an annual meeting of stockholders shall be conducted at the annual meeting.
In order to be properly brought before an annual meeting following completion
of the Conversion, business must be (a) brought before the meeting by or at
the direction of the Board of Directors or (b) otherwise properly brought
before the meeting by a stockholder who has given timely and complete notice
thereof in writing to the Company. For stockholder proposals to be included
in the Company's proxy materials, the stockholder must comply with all the
timing and informational requirements of Rule 14a-8 of the Exchange Act. With
respect to stockholder proposals to be considered at the annual meeting of
stockholders but not included in the Company's proxy materials, the
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Company not later than 120 days prior to
the anniversary date of the initial mailing of proxy materials by the Company
in connection with the immediately preceding annual meeting; provided,
however, that with respect to the first scheduled annual meeting following
completion of the Conversion, such written notice must be received by the
Company not later than the close of business on Friday, January 15, 1999. A
stockholder's notice shall set forth as to each matter the stockholder
proposes to bring before the annual meeting (a) a description of the proposal
desired to be brought before the annual meeting, (b) the name and address, as
they appear on the Company's books, of the stockholder proposing such
business, and, to the extent known, any other stockholders known by such
stockholder to be supporting such proposal, (c) the class and number of
shares of the Company which are beneficially owned by the stockholder
submitting the notice, by any person who is acting in concert with or who is
an affiliate or associate of such stockholder (as such terms are defined in
the Articles of Incorporation), by any person who is a member of any group
with such stockholder with respect to the Company's stock or who is known by
such stockholder to be supporting such proposal on the date the notice is
given to the Company, and by each person who is in control of, is controlled
by or is under common control with any of the foregoing persons (if any of
the foregoing persons is a partnership, corporation, limited liability
company, association or trust, information must be provided regarding the
name and address of, and the class and number of shares of Company stock
which are beneficially owned by, each partner in such partnership, each
director, executive officer and stockholder in such corporation, each member
in such limited liability company or association, and each trustee and
beneficiary of such trust, and in each case each person controlling such
entity and each partner, director, executive officer, stockholder, member or
trustee of any entity which is ultimately in control of such partnership,
corporation, limited liability company, association or trust), (d) the
identification of any person retained or to be compensated by the stockholder
submitting the proposal, or any person acting on his or her behalf, to make
solicitations or recommendations to
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stockholders for the purpose of assisting in the passage of such proposal and
a brief description of the terms of such employment, retainer or arrangement
for compensation, and (e) any material interest of the stockholder in such
business.
The procedures regarding stockholder proposals are designed
to provide the Board with sufficient time and information to evaluate a
stockholder proposal and other relevant information, such as existing
stockholder support for the proposal. The proposed procedures, however, will
give incumbent directors advance notice of a stockholder proposal. This may
make it easier for the incumbent directors to defeat a stockholder proposal,
even when certain stockholders view such proposal as in the best interests of
the Company or its stockholders.
Amendment of Articles of Incorporation and Bylaws. Article
11 of the Company's Articles of Incorporation generally provides that any
amendment of the Articles of Incorporation must be first approved by a
majority of the Board of Directors and then by the holders of at least 75% of
the shares of the Company entitled to vote in an election of directors
("Voting Shares"), except that if the amendment is approved by at least
two-thirds of the Board of Directors, the amendment shall only need
stockholder approval if required by the Louisiana Business Corporation Law
("BCL") and then only by the affirmative vote of the holders of a majority of
the Voting Shares.
The Bylaws of the Company may be amended by a majority of
the Board of Directors or by the affirmative vote of a majority of the Voting
Shares, except that the affirmative vote of at least 75% of the Voting Shares
shall be required to amend, adopt, alter, change or repeal any provision
inconsistent with certain specified provisions of the Bylaws.
Louisiana Corporate Law
In addition to the provisions contained in the Company's
Articles of Incorporation, the BCL includes certain provisions applicable to
Louisiana corporations, such as the Company, which may be deemed to have an
anti-takeover effect. Such provisions include (i) rights of stockholders to
receive the fair value of their shares of stock following a control
transaction from a controlling person or group and (ii) requirements relating
to certain business combinations.
The BCL provides that any person who acquires "control
shares" will be able to vote such shares only if the right to vote is
approved by the affirmative vote of at least a majority of both (1) all the
votes entitled to be cast by stockholders and (2) all the votes entitled to
be cast by stockholders excluding "interested shares." "Control shares" is
defined to include shares that would entitle the holder thereof, assuming the
shares had full voting rights, to exercise voting power within any of the
following ranges: (a) 20% or more but less than one-third of all voting
power; (b) one-third or more but less than a majority of all voting power; or
(c) a majority or more of all voting power. Any acquisition that would result
in the ownership of control shares in a higher range would require an
additional vote of stockholders. "Interested shares" includes control shares
and any shares held by an officer or employee director of the corporation. If
the control shares are provided full voting rights, all stockholders have
dissenters' rights entitling them to receive the "fair cash value" of their
shares, which shall not be less than the highest price paid per share to
acquire the control shares.
The BCL defines a "Business Combination" generally to
include (a) any merger, consolidation or share exchange of the corporation
with an "Interested Shareholder" or affiliate thereof, (b) any sale, lease,
transfer or other disposition, other than in the ordinary course of business,
of assets equal to 10% or more of the market value of the corporation's
outstanding stock or of the corporation's net worth to any Interested
Shareholder or affiliate thereof in any 12-month period, (c) the issuance or
transfer by the corporation of equity securities of the corporation with an
aggregate market value of 5% or more of the total market value of the
corporation's outstanding stock to any Interested Shareholder or affiliate
thereof, except in certain circumstances, (d) the adoption of any plan or
proposal for the liquidation or dissolution of the corporation in which
anything other than cash will be received by an Interested Shareholder or
affiliate thereof, or (e) any reclassification of the corporation's stock or
merger which increases by 5% or more the ownership interest of the Interested
Shareholder or any affiliate thereof. "Interested
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Shareholder" includes any person who beneficially owns, directly or
indirectly, 10% or more of the corporation's outstanding voting stock, or any
affiliate thereof who had such beneficial ownership during the preceding two
years, excluding in each case the corporation, its subsidiaries and their
benefit plans.
Under the BCL, a Business Combination must be approved by
any vote otherwise required by law or the articles of incorporation, and by
the affirmative vote of at least each of the following: (1) 80% of the total
outstanding voting stock of the corporation; and (2) two-thirds of the
outstanding voting stock held by persons other than the Interested
Shareholder. However, the supermajority vote requirement shall not be
applicable if the Business Combination meets certain minimum price
requirements and other procedural safeguards, or if the transaction is
approved by the Board of Directors prior to the time that the Interested
Shareholder first became an Interested Shareholder.
The BCL authorizes the board of directors of Louisiana
business corporations to create and issue (whether or not in connection with
the issuance of any of its shares or other securities) rights and options
granting to the holders thereof (1) the right to convert shares or
obligations into shares of any class, or (2) the right or option to purchase
shares of any class, in each case upon such terms and conditions as the
Company may deem expedient.
Anti-Takeover Effects of the Articles of Incorporation and Bylaws and
Management Remuneration Adopted in the Conversion
The foregoing provisions of the Articles of Incorporation
and Bylaws of the Company and Louisiana law could have the effect of
discouraging an acquisition of the Company or stock purchases in furtherance
of an acquisition, and could accordingly, under certain circumstances,
discourage transactions which might otherwise have a favorable effect on the
price of the Company's Common Stock.
In addition, the proposed employment agreements with the
Association's executive officers and certain provisions in the Association's
proposed stock benefit plans provide for accelerated benefits to participants
in the event of a change in control of the Company or the Association, as
applicable. See "Management - Employment Agreements" and "- New Stock Benefit
Plans." The foregoing provisions and limitations may make it more costly for
companies or persons to acquire control of the Company.
The Board of Directors believes that the provisions
described above are prudent and will reduce vulnerability to takeover
attempts and certain other transactions that are not negotiated with and
approved by the Board of Directors of the Company. The Board of Directors
believes that these provisions are in the best interests of the Company and
its future stockholders. In the Board of Directors' judgment, the Board of
Directors is in the best position to determine the true value of the Company
and to negotiate more effectively for what may be in the best interests of
its stockholders. Accordingly, the Board of Directors believes that it is in
the best interests of the Company and its future stockholders to encourage
potential acquirors to negotiate directly with the Board of Directors and
that these provisions will encourage such negotiations and discourage hostile
takeover attempts. It is also the Board of Directors' view that these
provisions should not discourage persons from proposing a merger or other
transaction at prices reflective of the true value of the Company and where
the transaction is in the best interests of all stockholders.
Despite the Board of Directors' belief as to the benefits
to the Company's stockholders of the foregoing provisions, these provisions
also may have the effect of discouraging a future takeover attempt in which
stockholders might receive a substantial premium for their shares over then
current market prices and may tend to perpetuate existing management. As a
result, stockholders who might desire to participate in such a transaction
may not have an opportunity to do so. The Board of Directors, however, has
concluded that the potential benefits of these provisions outweigh their
possible disadvantages.
The Board of Directors of the Company and the Association
are not aware of any effort that might be made to acquire control of the
Company or the Association.
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Regulatory Restrictions
The Change in Bank Control Act provides that no person,
acting directly or indirectly or through or in concert with one or more other
persons, may acquire control of a savings institution unless the OTS has been
given at least 60 days' prior written notice. The HOLA provides that no
company may acquire "control" of a savings institution without the prior
approval of the OTS. Any company that acquires such control becomes a savings
and loan holding company subject to registration, examination and regulation
by the OTS. Pursuant to federal regulations, control of a savings institution
is conclusively deemed to have been acquired by, among other things, the
acquisition of more than 25% of any class of voting stock of the institution
or the ability to control the election of a majority of the directors of an
institution. Moreover, control is presumed to have been acquired, subject to
rebuttal, upon the acquisition of more than 10% of any class of voting stock,
or of more than 25% of any class of stock, of a savings institution where
certain enumerated "control factors" are also present in the acquisition. The
OTS may prohibit an acquisition if (i) it would result in a monopoly or
substantially lessen competition, (ii) the financial condition of the
acquiring person might jeopardize the financial stability of the institution,
or (iii) the competence, experience or integrity of the acquiring person
indicates that it would not be in the interest of the depositors or of the
public to permit the acquisition of control by such person. The foregoing
restrictions do not apply to the acquisition of a savings institution's
capital stock by one or more tax-qualified employee stock benefit plans,
provided that the plan or plans do not have beneficial ownership in the
aggregate of more than 25% of any class of equity security of the savings
institution.
For three years following the Conversion, OTS regulations
prohibit any person from acquiring, either directly or indirectly, or making
an offer to acquire more than 10% of the stock of any converted savings
institution or its holding company, without the prior written approval of the
OTS, except for (i) any offer with a view toward public resale made
exclusively to the institution or its holding company or to underwriters or a
selling group acting on its behalf, (ii) offers that if consummated would not
result in the acquisition by such person during the preceding 12-month period
of more than 1% of such stock, (iii) offers in the aggregate for up to 24.9%
by the ESOP or other tax-qualified plans of the Company or the Association,
and (iv) an offer to acquire or acquisition of beneficial ownership of more
than 10% of the common stock of the savings institution or its holding
company by a corporation whose ownership is or will be substantially the same
as the ownership of the savings institution, provided that the offer or
acquisition is made more than one year following the date of completion of
the Conversion. Such prohibition also is applicable to the acquisition of the
Common Stock. In the event that any person, directly or indirectly, violates
this regulation, the securities beneficially owned by such person in excess
of 10% shall not be counted as shares entitled to vote and shall not be voted
by any person or counted as voting shares in connection with any matters
submitted to a vote of stockholders. The definition of beneficial ownership
for this regulation extends to persons holding revocable or irrevocable
proxies for the stock of an institution or its holding company under
circumstances that give rise to a conclusive or rebuttable determination of
control under OTS regulations.
In addition to the foregoing, the Plan prohibits any
person, prior to the completion of the Conversion, from offering, or making
an announcement of an intent to make an offer, to purchase subscription
rights for Common Stock. See "The Conversion - Restrictions on Transfer of
Subscription Rights and Shares."
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
General
The Company is authorized to issue 7,000,000 shares of
capital stock, of which 5,000,000 are shares of common stock, par value $.01
per share (the "Common Stock") and 2,000,000 are shares of preferred stock,
par value $.01 per share (the "Preferred Stock"). The Company currently
expects to issue up to a maximum of 276,000 shares of Common Stock and no
shares of Preferred Stock in the Conversion. Each share of the Company's
Common Stock issued in the Conversion will have the same relative rights as,
and will be identical in all respects with, each other share of Common Stock
issued in the Conversion. Upon payment of the Purchase Price for the Common
Stock in
103
<PAGE>
accordance with the Plan of Conversion, all such stock will be duly
authorized, fully paid and nonassessable based on the laws and regulations in
effect as of the date of consummation of the Conversion.
The Common Stock of the Company will represent
nonwithdrawable capital, will not be an account of an insurable type, and
will not be insured by the FDIC.
Common Stock
Dividends. The Company can pay dividends if, as and when
declared by its Board of Directors, subject to compliance with limitations
which are imposed by law. See "Dividend Policy." The holders of Common Stock
of the Company will be entitled to receive and share equally in such
dividends as may be declared by the Board of Directors of the Company out of
funds legally available therefor. If the Company issues Preferred Stock, the
holders thereof may have a priority over the holders of the Common Stock with
respect to dividends.
Voting Rights. Upon completion of the Conversion, the
holders of Common Stock of the Company will possess exclusive voting rights
in the Company. They will elect the Company's Board of Directors and act on
such other matters as are required to be presented to them under Louisiana
law or the Company's Articles of Incorporation or as are otherwise presented
to them by the Board of Directors. Except as discussed in "Restrictions on
Acquisition of the Company and the Association," each holder of Common Stock
will be entitled to one vote per share and will not have any right to
cumulate votes in the election of directors. If the Company issues Preferred
Stock, holders of the Preferred Stock may also possess voting rights.
Liquidation. In the event of any liquidation, dissolution
or winding up of the Association, the Company, as the sole holder of the
Association's capital stock, would be entitled to receive, after payment or
provision for payment of all debts and liabilities of the Association
(including all deposit accounts and accrued interest thereon) and after
distribution of the balance in the special liquidation account to Eligible
Account Holders and Supplemental Eligible Account Holders (see "The
Conversion - Liquidation Rights"), all assets of the Association available
for distribution. In the event of any liquidation, dissolution or winding up
of the Company, the holders of its Common Stock would be entitled to receive,
after payment or provision for payment of all its debts and liabilities, all
of the assets of the Company available for distribution. If Preferred Stock
is issued, the holders thereof may have a priority over the holders of the
Common Stock in the event of liquidation or dissolution.
Preemptive Rights. Holders of the Common Stock of the
Company will not be entitled to preemptive rights with respect to any shares
which may be issued in the future. The Common Stock is not subject to any
required redemption.
Preferred Stock
None of the shares of the Company's authorized Preferred
Stock will be issued in the Conversion. Such stock may be issued with such
preferences and designations as the Board of Directors may from time to time
determine. The Board of Directors can, without stockholder approval, issue
preferred stock with voting, dividend, liquidation and conversion rights
which could dilute the voting strength of the holders of the Common Stock and
may assist management in impeding an unfriendly takeover or attempted change
in control.
EXPERTS
The financial statements of the Association as of December
31, 1997 and 1996 and for each of the years ended December 31, 1997 and 1996
included in this Prospectus have been included herein in reliance upon the
report of L.A. Champagne & Co., L.L.P., independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm
as experts in accounting and auditing.
104
<PAGE>
Ferguson has consented to the publication herein of the
summary of its report to the Association and the Company setting forth its
opinion as to the estimated pro forma market value of the Common Stock to be
outstanding upon completion of the Conversion and its opinion with respect to
subscription rights.
LEGAL MATTERS
The legality of the Common Stock and the federal income tax
consequences of the Conversion will be passed upon for the Association and
the Company by Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C.,
special counsel to the Association and the Company. The Louisiana income tax
consequences of the Conversion will be passed upon for the Association and
the Company by L.A. Champagne & Co., L.L.P., Baton Rouge, Louisiana. Certain
legal matters will be passed upon for Trident by Breyer & Aguggia LLP,
Washington, D.C.
ADDITIONAL INFORMATION
The Company has filed with the SEC a Registration Statement
under the Securities Act with respect to the Common Stock offered hereby. As
permitted by the rules and regulations of the SEC, this Prospectus does not
contain all the information set forth in the Registration Statement. Such
information, including the appraisal report which is an exhibit to the
Registration Statement, can be examined without charge at the public
reference facilities of the SEC located at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies of such material can be obtained from the
SEC at prescribed rates. In addition, the SEC maintains a web site that
contains registration statements and other reports regarding registrants that
file electronically with the SEC (such as the Company). The address of the
SEC's web site is http://www.sec.gov. The statements contained in this
Prospectus as to the contents of any contract or other document filed as an
exhibit to the Registration Statement are, of necessity, brief descriptions
thereof and are not necessarily complete; each such statement is qualified by
reference to such contract or document.
The Association has filed an Application for Conversion
with the OTS and OFI with respect to the Conversion. This Prospectus omits
certain information contained in that application. The application may be
examined at the principal office of the OTS, 1700 G Street, N.W., Washington,
D.C. 20552 and at the Midwest Regional Office of the OTS located at 122 W.
John Carpenter Freeway, Suite 600, Irving, Texas 75039-2010.
In connection with the Conversion, the Company will
register its Common Stock with the SEC under Section 12(g) of the Exchange
Act, and, upon such registration, the Company and the holders of its stock
will become subject to the proxy and tender offer rules, insider trading
reporting requirements and restrictions on stock purchases and sales by
directors, officers and greater than 10% stockholders, and certain other
requirements of the Exchange Act. Under the Plan, the Company has undertaken
that it will not terminate such registration for a period of at least three
years following the Conversion.
105
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
----
Independent Auditor's Report............................................... F-1
Statements of Financial Condition as of March 31, 1998 (unaudited) and
December 31, 1997 and 1996 (audited)..................... F-2
Statements of Income and Comprehensive Income for the three months ended
March 31, 1998 and 1997 (unaudited) and the years ended
December 31, 1997 and 1996 (audited)..................... F-3
Statements of Changes in Equity for the three months ended March 31, 1998
and 1997 (unaudited) and the years ended December 31,
1997 and 1996 (audited).................................. F-5
Statements of Cash Flows for the three months ended March 31, 1998 and
1997 (unaudited) and the years ended December 31, 1997
and 1996 (audited)....................................... F-6
Notes to Financial Statements.............................................. F-8
All financial statement schedules are omitted because the
required information either is not applicable or is shown in the financial
statements or in the notes thereto.
IBL Bancorp, Inc. was incorporated in June 1998. Its
current capitalization is $1,000, and it has engaged in only minimal
activities to date; accordingly, the financial statements of the Company have
been omitted because of their immateriality.
106
<PAGE>
[Letterhead]
INDEPENDENT AUDITOR'S REPORT
Members and Directors
The Iberville Building and Loan Association
We have audited the accompanying statements of financial condition of The
Iberville Building and Loan Association (a mutual association) as of December
31, 1997 and 1996, and the related statements of income and comprehensive
income, changes in equity, and cash flows for the years then ended. These
financial statements are the responsibility of the Association's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Iberville Building and Loan
Association as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
As discussed in Note P, the 1997 and 1996 financial statements have been
restated to present comprehensive income as required under the provisions of
Statement of Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE
INCOME. The financial statements have also been restated to reflect adjustments
in the computation of deferred income taxes, and to include information
regarding the fair value of financial instruments as required by Statement of
Financial Accounting Standards No. 107, DISCLOSURES ABOUT FAIR VALUE OF
FINANCIAL INSTRUMENTS.
/s/ L.A. Champagne & Co., L.L.P.
JANUARY 16, 1998
(EXCEPT FOR NOTES P, Q, AND R AS TO
WHICH THE DATE IS MAY 13, 1998)
F-1
<PAGE>
THE IBERVILLE BUILDING AND LOAN ASSOCIATION
STATEMENTS OF FINANCIAL CONDITION
MARCH 31, 1998, AND DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
December 31,
March 31, -----------------------
1998 1997 1996
(Unaudited) (Restated - Note P)
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Cash and amounts due from depository
institutions.............................. $ 141,432 $ 142,714 $ 71,302
Interest-earning deposits in
other institutions........................ 1,555,814 967,494 1,737,198
---------- ---------- ----------
Total cash............................... 1,697,246 1,110,208 1,808,500
---------- ---------- ----------
Investment securities held-to-maturity
(estimated market value $15,099, $15,085
and $14,967).............................. 15,152 15,152 15,152
Mortgage-backed securities held-to-maturity
(estimated market value $2,191,087,
$2,374,282 and $2,697,348)................ 2,196,928 2,385,948 2,735,107
Mortgage-backed securities available-for-
sale (amortized cost $1,812,919,
$1,943,217 and $1,428,965)................ 1,811,389 1,947,685 1,426,688
---------- ---------- ----------
Total investment securities.............. 4,023,469 4,348,785 4,176,947
---------- ---------- ----------
Loans receivable........................... 16,820,266 16,722,127 15,556,060
Less allowance for loan losses............. 402,621 403,768 361,857
---------- ---------- ----------
Loans receivable, net.................... 16,417,645 16,318,359 15,194,203
---------- ---------- ----------
Premises and equipment, net................ 159,603 163,330 171,656
Federal Home Loan Bank stock, at cost...... 368,400 363,100 342,400
Accrued interest receivable................ 78,473 80,394 77,268
Other assets............................... 18,889 10,822 33,421
---------- ---------- ----------
$22,763,725 $22,394,998 $21,804,395
---------- ---------- ----------
---------- ---------- ----------
LIABILITIES AND EQUITY
Deposits................................... $20,533,840 $20,026,417 $20,278,324
Advances from Federal Home Loan Bank....... 452,100 610,000 -
Advances by borrowers for taxes and
insurance................................. 14,399 15,004 16,680
Federal income taxes payable............... 25,105 47,657 -
Other liabilities and deferrals............ 67,610 73,960 55,457
---------- ---------- ----------
Total liabilities........................ 21,093,054 20,773,038 20,350,461
---------- ---------- ----------
Commitments................................ - - -
---------- ---------- ----------
Retained earnings - substantially
restricted................................ 1,671,681 1,619,011 1,455,267
Accumulated other comprehensive income
(loss).................................... (1,010) 2,949 (1,333)
---------- ---------- ----------
Total equity............................. 1,670,671 1,621,960 1,453,934
---------- ---------- ----------
$22,763,725 $22,394,998 $21,804,395
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
THE IBERVILLE BUILDING AND LOAN ASSOCIATION
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
Three months ended Years ended
March 31, December 31,
----------------------- -----------------------
1998 1997 1997 1996
(Unaudited) (Unaudited) (Restated - Note P)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans......................... $ 373,569 $ 328,533 $ 1,346,487 $ 1,269,276
Mortgage-backed securities.... 63,121 62,391 258,333 259,189
FHLB stock and other
securities................... 5,567 4,335 20,880 31,518
Deposits...................... 12,238 21,989 65,009 84,559
---------- ---------- ---------- ----------
Total interest income....... 454,495 417,248 1,690,709 1,644,542
---------- ---------- ---------- ----------
INTEREST EXPENSE
Deposits...................... 222,871 226,563 909,750 907,946
Advances from Federal Home
Loan Bank.................... 6,923 - 7,003 -
---------- ---------- ---------- ----------
Total interest expense...... 229,794 226,563 916,753 907,946
---------- ---------- ---------- ----------
Net interest income......... 224,701 190,685 773,956 736,596
Provision for losses on loans. 11,960 12,000 42,147 38,868
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOSSES ON LOANS 212,741 178,685 731,809 697,728
---------- ---------- ---------- ----------
NON-INTEREST INCOME
Service charges on deposit
accounts..................... 20,871 17,118 70,888 73,296
Gain on sale of captive life
insurance company............ - - - 34,087
Other......................... 3,701 3,786 27,135 23,223
---------- ---------- ---------- ----------
Total non-interest income... 24,572 20,904 98,023 130,606
---------- ---------- ---------- ----------
NON-INTEREST EXPENSE
Compensation and benefits..... 87,087 84,372 316,209 274,056
Occupancy..................... 4,656 7,332 32,133 29,159
Furniture and equipment....... 6,477 7,446 26,822 27,256
Deposit insurance premium..... 3,124 715 10,347 43,858
Special SAIF assessment....... - - - 122,565
Data processing............... 14,261 14,660 57,305 65,179
Legal and other professional.. 7,200 4,505 24,105 20,922
Advertising................... 5,176 4,310 12,340 20,388
Office supplies and postage... 11,369 8,259 25,763 28,225
Other general and
administrative expenses...... 18,832 15,398 62,930 70,991
---------- ---------- ---------- ----------
Total non-interest expense.. 158,182 146,997 567,954 702,599
---------- ---------- ---------- ----------
</TABLE>
Continued . . .
F-3
<PAGE>
<TABLE>
<CAPTION>
Three months ended Years ended
March 31, December 31,
----------------------- -----------------------
1998 1997 1997 1996
(Unaudited) (Unaudited) (Restated - Note P)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INCOME BEFORE PROVISION FOR
FEDERAL INCOME TAXES......... $ 79,131 $ 52,592 $ 261,878 $ 125,735
PROVISION FOR FEDERAL INCOME
TAXES........................ 26,461 19,760 98,134 69,912
---------- ---------- ---------- ----------
NET INCOME.................... 52,670 32,832 163,744 55,823
---------- ---------- ---------- ----------
Other comprehensive income:
Unrealized holding gains
(losses) on securities
arising during the period.. (5,998) (9,303) 6,745 (4,343)
Income tax expense (benefit)
related to unrealized
holding gains (losses)..... (2,039) (2,993) 2,463 (1,646)
---------- ---------- ---------- ----------
Other comprehensive income
(loss), net of tax effects... (3,959) (6,310) 4,282 (2,697)
---------- ---------- ---------- ----------
Comprehensive income.......... $ 48,711 $ 26,522 $ 168,026 $ 53,126
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
THE IBERVILLE BUILDING AND LOAN ASSOCIATION
STATEMENTS OF CHANGES IN EQUITY
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
Retained Accumulated
Earnings - Other
Substan- Compre-
tially hensive Total
Restricted Income Equity
---------- ---------- ----------
<S> <C> <C> <C>
BALANCE, DECEMBER 31, 1996, AS PREVIOUSLY
REPORTED................................. $ 1,477,100 $ (1,333) $ 1,475,767
Prior period adjustment................... (21,833) - (21,833)
---------- ---------- ----------
BALANCE, DECEMBER 31, 1996, AS RESTATED... 1,455,267 (1,333) 1,453,934
COMPREHENSIVE INCOME (Unaudited)
Net income................................ 32,832 - 32,832
Other comprehensive income, net of tax
Unrealized losses on securities......... - (6,310) (6,310)
---------- ---------- ----------
BALANCE, MARCH 31, 1997 (Unaudited)....... $ 1,488,099 $ (7,643) $ 1,480,456
---------- ---------- ----------
---------- ---------- ----------
BALANCE, DECEMBER 31, 1997, AS PREVIOUSLY
REPORTED................................. $ 1,638,709 $ 2,949 $ 1,641,658
Prior period adjustment................... (19,698) - (19,698)
---------- ---------- ----------
BALANCE, DECEMBER 31, 1997, AS RESTATED... 1,619,011 2,949 1,621,960
COMPREHENSIVE INCOME (Unaudited)
Net income................................ 52,670 - 52,670
Other comprehensive income, net of tax
Unrealized losses on securities......... - (3,959) (3,959)
---------- ---------- ----------
BALANCE, MARCH 31, 1998 (Unaudited)....... $ 1,671,681 $ (1,010) $ 1,670,671
---------- ---------- ----------
---------- ---------- ----------
BALANCE, DECEMBER 31, 1995................ $ 1,399,444 $ 1,364 $ 1,400,808
COMPREHENSIVE INCOME
Net income, as restated................... 55,823 - 55,823
Other comprehensive income, net of tax
Unrealized losses on securities......... - (2,697) (2,697)
---------- ---------- ----------
BALANCE, DECEMBER 31, 1996 (Restated)..... $ 1,455,267 $ (1,333) $ 1,453,934
---------- ---------- ----------
---------- ---------- ----------
BALANCE, DECEMBER 31, 1996, AS PREVIOUSLY
REPORTED................................. $ 1,477,100 $ (1,333) $ 1,475,767
Prior period adjustment................... (21,833) - (21,833)
---------- ---------- ----------
BALANCE, DECEMBER 31, 1996, AS RESTATED... 1,455,267 (1,333) 1,453,934
COMPREHENSIVE INCOME
Net income, as restated................... 163,744 - 163,744
Other comprehensive income, net of tax
Unrealized losses on securities......... - 4,282 4,282
---------- ---------- ----------
BALANCE, DECEMBER 31, 1997 (Restated)..... $ 1,619,011 $ 2,949 $ 1,621,960
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
THE IBERVILLE BUILDING AND LOAN ASSOCIATION
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
Three months ended Years ended
March 31, December 31,
----------------------- -----------------------
1998 1997 1997 1996
(Unaudited) (Unaudited) (Restated - Note P)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income.................... $ 52,670 $ 32,832 $ 163,744 $ 55,823
---------- ---------- ---------- ----------
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation................ 5,745 6,750 23,031 27,182
Provision for loan losses... 12,000 12,000 42,147 38,868
Provision for deferred
federal income tax (tax
credit).................... 1,346 (247) (432) 17,497
Amortization of net premium
on investment and mortgage-
backed securities.......... 7,071 3,700 18,106 21,070
Gain on sale of investment
in captive life insurance
company.................... - - - (34,087)
Net discount charged on
installment loans.......... 11,079 11 28,265 40,756
Net loan fees deferred
(recognized)............... 1,109 (343) 1,975 (141)
Deferred profit recognized
on sale of real estate..... - - (76) (78)
Stock dividends from Federal
Home Loan Bank............. (5,300) (4,800) (20,700) (19,300)
Net decrease (increase) in
interest receivable........ 1,921 (1,659) (3,126) 13,075
Net decrease (increase) in
other assets............... (8,067) 19,291 22,599 22,318
Net decrease in interest
payable.................... (1,503) (10,206) (10,998) (7,951)
Net increase (decrease) in
federal income taxes
payable.................... (22,552) 20,007 47,657 -
Net increase (decrease) in
other liabilities.......... (5,657) 1,343 16,548 (17,589)
---------- ---------- ---------- ----------
Total adjustments......... (2,808) 45,847 164,996 101,620
---------- ---------- ---------- ----------
Net cash provided by operating
activities................... 49,862 78,679 328,740 157,443
---------- ---------- ---------- ----------
</TABLE>
Continued . . .
F-6
<PAGE>
<TABLE>
<CAPTION>
Three months ended Years ended
March 31, December 31,
----------------------- -----------------------
1998 1997 1997 1996
(Unaudited) (Unaudited) (Restated - Note P)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM INVESTING
ACTIVITIES
Net increase in loans
receivable................... $ (123,474) $ (100,827) $(1,196,543) $ (757,297)
Purchases of securities
available-for-sale........... - (310,998) (762,465) (1,031,484)
Principal payments received on
mortgage-backed securities
available-for-sale........... 127,037 191,594 242,415 373,510
Proceeds from disposition of
investment in captive life
insurance company............ - - - 105,614
Purchases of securities
held-to-maturity............. - (154,850) (154,850) -
Proceeds from maturing U. S.
government obligations....... - - - 884,848
Principal payments received on
mortgage-backed securities
held-to-maturity............. 185,210 122,695 491,701 412,263
Purchases of office property
and equipment................ (2,018) - (14,705) (15,425)
---------- ---------- ---------- ----------
Net cash used in investing
activities................... 186,755 (252,386) (1,394,447) (27,971)
---------- ---------- ---------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Net increase (decrease) in
deposit accounts............. 508,926 130,843 (240,909) 728,927
Net increase (decrease) in
advances by borrowers for
taxes and insurance.......... (605) 518 (1,676) (7,149)
Advances from Federal Home
Loan Bank.................... - - 695,000 -
Repayment of advances from
Federal Home Loan Bank....... (157,900) - (85,000) -
---------- ---------- ---------- ----------
Net cash provided by financing
activities................... 350,421 131,361 367,415 721,778
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN
CASH......................... 587,038 (42,346) (698,292) 851,250
Cash - beginning of period.. 1,110,208 1,808,500 1,808,500 957,250
---------- ---------- ---------- ----------
Cash - end of period........ $ 1,697,246 $ 1,766,154 $ 1,110,208 $ 1,808,500
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
THE IBERVILLE BUILDING AND LOAN ASSOCIATION
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998, AND DECEMBER 31, 1997 AND 1996
A: SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies followed by The Iberville
Building and Loan Association (a mutual association) are in accordance
with generally accepted accounting principles and conform to general
practices within the savings and loan industry. The more significant of
the principles used in preparing the financial statements are briefly
described below.
INTERIM PERIOD FINANCIAL INFORMATION
The statement of financial condition as of March 31, 1998, and the
related statements of income and comprehensive income, changes in
equity and cash flows for the three months ended March 31, 1998, and
the related statements of income and comprehensive income and cash
flows for the three months ended March 31, 1997, are unaudited. These
statements have been prepared in accordance with generally accepted
accounting principles including the requirements for presentation of
interim financial statements. Management believes that all normal
recurring adjustments that are necessary for a fair presentation of
interim period financial information have been reflected in these
financial statements.
NATURE OF OPERATIONS
The Association is a state chartered financial institution whose
deposits are insured by the Federal Deposit Insurance Corporation
(FDIC). The Association is subject to regulation by the Office of
Thrift Supervision, the Office of Financial Institutions for the State
of Louisiana, and the FDIC. The Association provides a variety of
banking services to individuals and businesses. Its primary deposit
products are demand deposits and certificates of deposit, and its
primary lending products are real estate mortgage loans and consumer
loans. The Association primarily serves the parishes of Iberville and
West Baton Rouge from its only office location in Plaquemine,
Louisiana.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Material estimates that are particularly susceptible to significant
change relate to the determination of the allowance for losses on
loans. A majority of the Association's loan portfolio consists of
F-8
<PAGE>
A: SIGNIFICANT ACCOUNTING POLICIES (Continued)
single-family residential loans in Iberville and West Baton Rouge
parishes. The ultimate collectibility of a substantial portion of the
Association's loan portfolio is susceptible to changes in local
economic conditions.
While management uses available information to establish the allowance
for losses on loans, future additions to the allowance may be necessary
based on changes in local economic conditions. In addition, regulatory
agencies, as an integral part of their examination process,
periodically review the Association's allowance for losses on loans.
Such agencies may require the Association to recognize additions to the
allowance based on their judgments about information available to them
at the time of their examination. Because of these factors,
management's estimate of credit losses inherent in the loan portfolio
and the related allowance may change in the near term. However, the
amount of the change that is reasonably possible cannot be estimated.
INVESTMENT SECURITIES
TRADING SECURITIES - Debt securities and equity securities with readily
determinable fair values that are acquired with the intention of being
resold in the near term are classified as trading securities and are
recorded at their fair values. Realized and unrealized gains and losses
on trading account securities are recognized in current earnings. The
Association did not hold any securities for trading purposes during the
periods covered by these financial statements.
SECURITIES HELD-TO-MATURITY - Debt securities which the Association
both positively intends and has the ability to hold to maturity are
reported at cost, adjusted for amortization of premiums and accretion
of discounts that are recognized in interest income using the interest
method over the period to maturity.
SECURITIES AVAILABLE-FOR-SALE - Securities not meeting the criteria of
either trading securities or securities held to maturity are classified
as available for sale and carried at fair value. Unrealized holding
gains and losses for these securities are recognized, net of related
tax effects, as a separate component of comprehensive income and
equity. Realized gains and losses on the sale of securities
available-for-sale are determined using the specific-identification
method based on original cost. The amortization of premiums and the
accretion of discounts are recognized in interest income using the
interest method over the period to maturity.
Declines in the fair value of individual held-to-maturity and avail-
able-for-sale securities below their cost that are other than tempor-
ary result in write-downs of the individual securities to their fair
value. The related write-downs are included in earnings as realized
losses.
F-9
<PAGE>
A: SIGNIFICANT ACCOUNTING POLICIES (Continued)
LOANS RECEIVABLE
Loans receivable are stated at unpaid principal balances, less the
allowance for loan losses and net deferred loan origination fees.
Interest on consumer loans with maturities of sixty months or less made
on a discount basis is recognized and included in interest income using
the sum-of-the-months-digits method over the term of the loan. Interest
on all other loans is accrued periodically based on the principal
balance outstanding. Interest accrued on such loans is included in
accrued interest receivable.
When, in the judgement of management, collection of accrued interest on
a loan becomes doubtful, or when a loan becomes ninety day delinquent,
further accrual of interest income is suspended and the loan is placed
on a non-accrual status. Interest accrued on such loans during the
current year, but uncollected, is reversed against operations.
Subsequent payments are generally applied to reduce the principal
amount outstanding.
Impaired loans are carried at either the discounted present value of
expected future cash flows or the fair value of underlying collateral
if the loan is collateral dependent. A loan is considered impaired when
it is probable that principal and interest will not be collected under
the terms of the loan.
ALLOWANCE FOR LOSSES
It is the Association's policy to provide a valuation allowance for
losses on loans. Various factors including the composition of the loan
portfolio, past loan loss experience, current economic conditions and
a specific provision for impaired loans provide a basis for
management's determination of the amount of the valuation allowance for
loan losses. Additions to the allowance are charged against current
operations.
LOAN ORIGINATION FEES
Loan origination fees and certain direct costs of underwriting and
closing loans are deferred and amortized to income over the life of the
related loans using the level yield method.
REAL ESTATE ACQUIRED IN SETTLEMENT OF LOANS
Real estate acquired in settlement of loans is recorded at the lower of
cost, that is, the balance of the loan, or its estimated fair value on
the date acquired. Capital improvements made thereafter to facilitate
sale are added to the carrying value, and adjustments are made to
reflect declines, if any, in net realizable values below the recorded
amounts. Costs of holding real estate acquired in settlement of loans
are reflected in income currently. Gains and losses realized on sales
of such real estate are reflected in current income based on the
property's initial recorded value plus capital improvements.
F-10
<PAGE>
A: SIGNIFICANT ACCOUNTING POLICIES (Continued)
When sales of real estate are facilitated by financing, the adjusted
sales price is determined to be the sum of the cash proceeds, if any,
and the discounted present value of the loan. Gains and losses are
determined with reference to the adjusted sales price, and are
recognized currently except in certain circumstances when the cash paid
in is deemed insufficient, in which case, any gains resulting from the
sale are deferred and recognized as the debt principal is recognized.
PREMISES AND EQUIPMENT
Premises and equipment are stated at cost, less accumulated
depreciation. Depreciation is computed on the straight-line basis or
under various accelerated methods over estimated useful lives as
follows:
<TABLE>
<CAPTION>
<S> <C>
Office building........................... 30-40 years
Furniture, fixtures and equipment......... 5-10 years
</TABLE>
Cost of major additions are capitalized while repair and maintenance
costs are charged to operations as incurred.
RECOGNITION OF FHLB STOCK DIVIDENDS
In accordance with current industry practice, stock dividends from the
FHLB are recorded as income when declared based upon a par value of
$100 per share for the number of shares issued.
INCOME TAXES
Income taxes are provided for the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus
deferred taxes which are determined under the liability method.
Deferred taxes are related primarily to the differences between the
financial and income tax bases of certain assets and liabilities,
including accumulated depreciation on premises and equipment, deferred
loan fees and costs, interest discount and accruals, allowance for
losses on loans, Federal Home Loan Bank stock, and deferred gain on
property sales. Deferred tax assets and liabilities represent the
future tax return consequences of those differences which will either
be taxable or deductible when the assets and liabilities are recovered
or settled.
CASH FLOWS
Cash consists of cash and interest-earning and non interest-earning
deposits due from other financial institutions. For purposes of the
statements of cash flows, the Association considers these highly liquid
deposits including certificates of deposits with maturities of three
months or less when purchased to be "cash." All other debt securities
and investments regardless of maturities are classified as investment
securities.
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS
In the ordinary course of business, the Association enters into
transactions that produce off-balance-sheet financial instruments
F-11
<PAGE>
A: SIGNIFICANT ACCOUNTING POLICIES (Continued)
consisting of letters of credit and other commitments to extend credit.
Such financial instruments are recorded in the financial statements
when they are funded.
ADVERTISING
The Association expenses advertising costs as they are incurred.
Advertising expense is reflected in the accompanying statements of
income and comprehensive income.
B: LOANS RECEIVABLE
Loans receivable as of March 31, 1998, and December 31, 1997 and 1996
consisted of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1998 -----------------------
(Unaudited) 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
First mortgage loans
Single-family residential............ $11,508,304 $11,531,849 $10,752,291
Construction......................... 420,000 420,000 464,500
Commercial real estate............... 931,110 942,556 756,702
Land................................. 287,144 271,163 210,503
---------- ---------- ----------
13,146,558 13,165,568 12,183,996
Less: undisbursed loans in process... 106,098 260,145 169,057
deferred loan fees............. 8,346 7,237 5,262
allowance for losses........... 349,524 337,524 293,524
---------- ---------- ----------
Net first mortgage loans.............. 12,682,590 12,560,662 11,716,153
---------- ---------- ----------
Home equity and improvement loans..... 1,088,499 1,172,307 1,221,468
Share loans........................... 774,185 785,886 669,835
Other consumer and single-pay loans... 2,125,133 2,054,334 1,815,401
Less: unearned discount.............. 199,665 188,586 160,321
---------- ---------- ----------
Net other consumer loans.............. 1,925,468 1,865,748 1,655,080
---------- ---------- ----------
Total consumer loans.................. 3,788,152 3,823,941 3,546,383
Less: allowance for losses........... 53,097 66,244 68,333
---------- ---------- ----------
Net consumer loans.................... 3,735,055 3,757,697 3,478,050
---------- ---------- ----------
Net loans receivable.................. $16,417,645 $16,318,359 $15,194,203
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
At March 31, 1998, and December 31, 1997 and 1996, unpaid balances of
impaired loans upon which the accrual of interest had been suspended
amounted to $163,942, $331,771 and $270,363, respectively. The
allowance for loan losses related to impaired loans determined in
accordance with the provisions of SFAS No. 114 and No. 118 amounted to
$56,427, $62,173 and $57,880 at March 31, 1998, and December 31, 1997
and 1996, respectively. Interest income on impaired loans of $28,915,
$28,864 and $22,909 was recognized for cash payments received in 1998,
1997 and 1996, respectively.
F-12
<PAGE>
B: LOANS RECEIVABLE (Continued)
The Association is not committed to lend additional funds to debtors
whose loans have been classified as nonperforming.
At March 31, 1998, and December 31, 1997 and 1996, the directors,
officers and employees owed the Association $520,502, $642,311 and
$511,604, respectively. Such loans were made in the ordinary course of
business on substantially the same terms, including interest rates and
collateral, as those prevailing at the time in comparable transactions
with others. These loans do not involve more than a normal risk of
collectibility or carry other terms unfavorable to the Association.
C: ALLOWANCE FOR LOSSES
A summary of the changes in the allowance for loan losses for the three
months ended March 31, 1998 and 1997, and the years ended December 31,
1997 and 1996, is as follows:
<TABLE>
<CAPTION>
Three months ended
March 31, Years ended
---------------------- December 31,
1998 1997 -----------------------
(Unaudited) (Unaudited) 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Balance - beginning
of year................. $ 403,768 $ 361,857 $ 361,857 $ 317,857
Provision for loan losses 12,000 12,000 42,147 38,868
Charge-offs.............. (13,147) - (2,089) -
Recoveries............... - - 1,853 5,132
---------- ---------- ---------- ----------
$ 402,621 $ 373,857 $ 403,768 $ 361,857
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
There were no other real estate holdings or related allowance for real
estate losses as of March 31, 1998, or as of December 31, 1997 and
1996.
D: PREMISES AND EQUIPMENT
Premises and equipment as of March 31, 1998, and December 31, 1997 and
1996 are summarized by major classifications as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1998 -----------------------
(Unaudited) 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Land.................................. $ 22,416 $ 22,416 $ 22,416
Office building....................... 255,262 255,262 255,262
Furniture, fixtures and equipment..... 173,156 171,138 156,433
---------- ---------- ----------
450,834 448,816 434,111
Less: accumulated depreciation........ 291,231 285,486 262,455
---------- ---------- ----------
$ 159,603 $ 163,330 $ 171,656
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
F-13
<PAGE>
D: PREMISES AND EQUIPMENT (Continued)
<TABLE>
<CAPTION>
Three months ended
March 31, Years ended
----------------------- December 31,
1998 1997 -----------------------
(Unaudited) (Unaudited) 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Depreciation expense..... $ 5,745 $ 6,750 $ 23,031 $ 27,182
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
E: INVESTMENT SECURITIES
The amortized cost and estimated market value of investments in
securities are as follows as of March 31, 1998, and December 31, 1997
and 1996:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Securities
Available-for-Sale:
March 31, 1998 (Unaudited)
--------------------------
Mortgage-backed securities $1,812,919 $ 5,292 $ 6,822 $ 1,811,389
--------- ---------- ---------- ---------
--------- ---------- ---------- ---------
December 31, 1997
-----------------
Mortgage-backed securities $1,943,217 $ 8,696 $ 4,228 $ 1,947,685
--------- ---------- ---------- ---------
--------- ---------- ---------- ---------
December 31, 1996
-----------------
Mortgage-backed securities $1,428,965 $ 2,893 $ 5,170 $ 1,426,688
--------- ---------- ---------- ---------
--------- ---------- ---------- ---------
Securities
Held-to-Maturity:
March 31, 1998 (Unaudited)
--------------------------
U. S. Treasury securities
and obligations of U.S.
government corporations
and agencies............. $ 15,152 $ - $ 53 $ 15,099
Mortgage-backed securities 2,196,928 14,108 19,949 2,191,087
--------- ---------- ---------- ----------
$2,212,080 $ 14,108 $ 20,002 $ 2,206,186
--------- ---------- ---------- ---------
--------- ---------- ---------- ---------
December 31, 1997
-----------------
U. S. Treasury securities
and obligations of U.S.
government corporations
and agencies............. $ 15,152 $ - $ 67 $ 15,085
Mortgage-backed securities 2,385,948 17,127 28,793 2,374,282
--------- ---------- ---------- ----------
$2,401,100 $ 17,127 $ 28,860 $ 2,389,367
--------- ---------- ---------- ---------
--------- ---------- ---------- ---------
</TABLE>
F-14
<PAGE>
E: INVESTMENT SECURITIES (Continued)
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
December 31, 1996
-----------------
U. S. Treasury securities
and obligations of U.S.
government corporations
and agencies............. $ 15,152 $ - $ 185 $ 14,967
Mortgage-backed securities 2,735,107 10,411 48,170 2,697,348
--------- ---------- ---------- ----------
$2,750,259 $ 10,411 $ 48,355 $ 2,712,315
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
</TABLE>
The following is a summary of maturities of securities held-to-
maturity and available-for-sale as of March 31, 1998 and December 31,
1997:
As of March 31, 1998 (Unaudited)
--------------------------------
<TABLE>
<CAPTION>
Held-to-Maturity Available-for-Sale
---------------------- ----------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Due in one year or less... $ 17,935 $ 17,882 $ - $ -
Due from one to five years 775,130 770,687 293,085 290,654
Due from five to ten years 17,697 18,370 - -
Due after ten years....... 1,401,318 1,399,247 1,519,834 1,520,735
--------- ---------- ---------- ----------
$2,212,080 $ 2,206,186 $ 1,812,919 $ 1,811,389
--------- ---------- ---------- ----------'
--------- ---------- ---------- ----------
</TABLE>
As of December 31, 1997
-----------------------
<TABLE>
<CAPTION>
Held-to-Maturity Available-for-Sale
---------------------- ----------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Due in one year or less... $ 17,652 $ 17,584 $ - $ -
Due from one to five years 352,207 348,449 242,642 244,434
Due from five to ten years 342,198 337,277 - -
Due after ten years....... 1,689,043 1,686,057 1,700,575 1,703,251
--------- ---------- ---------- ----------
$2,401,100 $ 2,389,367 $ 1,943,217 $ 1,947,685
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
</TABLE>
The amortized cost and fair value of mortgage-backed securities are
presented by contractual maturity in the preceding tables. Expected
maturities will differ from contractual maturities because borrowers
may have the right to call or prepay obligations without call or
prepayment penalties.
Mortgage-backed securities with a carrying amount of $212,175, $228,133
and $91,450 were pledged to secure deposits as required or permitted by
law at March 31, 1998, and December 31, 1997 and 1996, respectively.
See also Note G.
F-15
<PAGE>
F: DEPOSITS
An analysis of customers' deposit accounts by interest rates as of
March 31, 1998, and December 31, 1997 and 1996 follows:
<TABLE>
<CAPTION>
1998 December 31,
------------------ 1997 1996
Amount ----------------- ------------------
(Unaudited) % Amount % Amount %
----------- - ------ - ------ -
<S> <C> <C> <C> <C> <C> <C>
Balances by
interest rate
--------------
Passbook and
full-paid
accounts
3.0%............ $ 3,421,037 16.66% $ 3,095,126 15.45% $ 2,813,249 13.88%
---------- ------- ---------- ------- ---------- -------
Certificate
accounts
3.0% to 4.0%.... - 0.00% - 0.00% 81,593 0.40%
4.2% to 5.7%.... 13,060,605 63.61% 11,914,079 59.49% 10,773,925 53.13%
5.8% to 6.7%.... 1,538,731 7.49% 2,613,125 13.05% 4,226,911 20.84%
6.8% to 7.7%.... 110,000 0.54% 110,000 0.55% 110,000 0.54%
---------- ------- ---------- ------- ---------- -------
14,709,336 71.64% 14,637,204 73.09% 15,192,429 74.91%
---------- ------- ---------- ------- ---------- -------
NOW accounts and
money market
accounts
non-interest
bearing........ 432,204 2.10% 403,533 2.02% 365,006 1.80%
2.3% to 3.0%.... 1,939,534 9.45% 1,857,322 9.27% 1,863,410 9.19%
---------- ------- ---------- ------- ---------- -------
2,371,738 11.55% 2,260,855 11.29% 2,228,416 10.99%
---------- ------- ---------- ------- ---------- -------
20,502,111 99.85% 19,993,185 99.83% 20,234,094 99.78%
Accrued interest
payable.......... 31,729 0.15% 33,232 0.17% 44,230 0.22%
---------- ------- ---------- ------- ---------- -------
$20,533,840 100.00% $20,026,417 100.00% $20,278,324 100.00%
---------- ------- ---------- ------- ---------- -------
---------- ------- ---------- ------- ---------- -------
</TABLE>
The aggregate amount of jumbo certificates of deposit with a minimum
denomination of $100,000 was $2,099,468, $2,089,962 and $2,060,430 at
March 31, 1998, and December 31, 1997 and 1996, respectively.
Maturities of certificates of deposit accounts are as follows:
<TABLE>
<CAPTION>
March 31,
1998 December 31,
(Unaudited) 1997
------------ ------------
<S> <C> <C>
One year or less............. $ 9,667,378 $10,078,592
Over one to two years........ 2,750,009 2,405,992
Over two to three years...... 1,668,889 1,477,653
Over three years............. 623,060 674,967
---------- ----------
$14,709,336 $14,637,204
---------- ----------
---------- ----------
</TABLE>
F-16
<PAGE>
F: DEPOSITS (Continued)
Interest paid on deposits during 1997 and 1996 was $920,214 and
$919,472, respectively, and $224,729 and $234,294 for the three months
ended March 31, 1998 and 1997, respectively.
Officers' and directors' savings accounts amounted to $234,393 at March
31, 1998, and $376,477 and $445,190 at December 31, 1997 and 1996,
respectively.
G: ADVANCES FROM FHLB AND OTHER BORROWED MONEY
Advances from the Federal Home Loan Bank as of March 31, 1998 total
$452,100, carry an interest rate of 5.55% and mature on April 21, 1998.
Advances outstanding as of December 31, 1997, carrying an interest rate
of 5.9% and maturing on January 8, 1998, amounted to $610,000.
These advances are collateralized by pledge of certain FNMA
participation certificates with outstanding principal balances net of
unamortized purchase premiums and discounts of $816,819 at March 31,
1998 and $651,309 at December 31, 1997.
Interest paid on advances from the Federal Home Loan Bank for the three
month period ending March 31, 1998 was $6,923 and $7,003 for the year
ended December 31, 1997.
The Association had no advances from the FHLB or other borrowed money
during 1996, or for the three month period ending March 31, 1997.
Consequently, no interest was paid on borrowings for those periods.
H: LOAN SERVICING
Mortgage loans serviced for others are not included in the accompanying
statements of financial condition. The unpaid principal balances of
these loans at March 31, 1998 and December 31, 1997 and 1996 are
summarized as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1998 -----------------------
(Unaudited) 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Mortgage loans underlying FHLMC
mortgage-backed securities.......... $ 735,465 $ 772,342 $ 936,306
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
Custodial escrow balances maintained in connection with the foregoing
loan servicing were $2,823, $3,229 and $3,184 at March 31, 1998, and
December 31, 1997 and 1996, respectively.
F-17
<PAGE>
I: ACCRUED INTEREST RECEIVABLE
Accrued interest receivable at March 31, 1998, and December 31, 1997
and 1996 is summarized as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1998 -----------------------
(Unaudited) 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Investment securities.......... $ 65 $ 260 $ 1,000
Mortgage-backed securities..... 26,616 28,932 28,460
Loans receivable............... 51,792 51,202 47,808
---------- ---------- ----------
$ 78,473 $ 80,394 $ 77,268
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
J: FEDERAL INCOME TAXES
Income tax expense for the three months ended March 31, 1998 and 1997
and the years ended December 31, 1997 and 1996 is summarized as
follows:
<TABLE>
<CAPTION>
Three months ended Years ended
March 31, December 31,
----------------------- -----------------------
1998 1997 1997 1996
(Unaudited) (Unaudited) (Restated - Note P)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Current expense.......... $ 25,115 $ 20,007 $ 98,566 $ 52,415
Deferred expense
(benefit)............... 1,346 (247) (432) 17,497
---------- ---------- ---------- ----------
$ 26,461 $ 19,760 $ 98,134 $ 69,912
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
Deferred income tax assets and liabilities are reflected in the
accompanying balance sheets as follows:
<TABLE>
<CAPTION>
December 31,
March 31, -----------------------
1998 1997 1996
(Unaudited) (Restated - Note P)
---------- ---------- ----------
<S> <C> <C> <C>
Deferred tax liabilities....... $ (76,615) $ (76,001) $ (64,681)
Deferred tax assets............ 112,451 110,733 91,858
Deferred tax asset valuation
allowance..................... (51,523) (51,112) (41,526)
---------- ---------- ----------
Net deferred tax liability
(included in other liabilities
and deferrals)............... $ (15,687) $ (16,380) $ (14,349)
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
F-18
<PAGE>
J: FEDERAL INCOME TAXES (Continued)
Provision for federal income taxes differs from that computed at the
statutory 34% corporate tax rate, as follows:
<TABLE>
<CAPTION>
Three months ended March 31, Years Ended December 31,
1998 1997 1997 1996
------------------ ------------------ ------------------- -------------------
Effec- Effec- Amount Effec- Amount Effec-
tive tive (Restated - tive (Restated - tive
Amount Rate Amount Rate Note P) Rate Note P) Rate
--------- ------ --------- ------ ---------- ------ ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Tax at statutory rate.... $ 26,905 34% $ 17,881 34% $ 89,039 34% $ 42,750 34%
Increase (decrease) in
taxes:
Effect of graduated tax
rates................ - - (1,086) -2% (1,970) -1% (8,067) -6%
Deferred tax effect
thrift bad debt
reserve adjustment.... - - - - - - 29,058 23%
Other.................. (444) -1% 2,965 6% 11,065 4% 6,171 5%
--------- ------ --------- ------ ---------- ------ ---------- ------
$ 26,461 33% $ 19,760 38% $ 98,134 37% $ 69,912 56%
--------- ------ --------- ------ ---------- ------ ---------- ------
--------- ------ --------- ------ ---------- ------ ---------- ------
</TABLE>
The Association paid income taxes of $50,910 and $41,926 during the
years ended December 31, 1997 and 1996, respectively and $47,667 during
the three month period ending March 31, 1998. No income taxes were paid
during the three month period ending March 31, 1997.
In prior years, the Association was allowed special bad debt
deductions under various income tax provisions. If the amounts that
qualified as deductions for federal income tax purposes are later
used for purposes other than bad debt losses, they become subject to
federal income tax at the then current corporate rate. Retained
earnings at March 31, 1998, and December 31, 1997 and 1996, include
$110,577 for which federal income tax has not been provided. The
unrecorded de ferred liability on this amount is approximately
$37,600. Additionally, With the repeal in 1996 of the thrift bad
debt reserve method that allowed for bad debt deductions based upon
a percentage of taxable income, the Association is required to
recapture over a six year period the $85,465 portion of its bad debt
reserves accumulated under that method that exceeds allowable
reserves under the experience method.
K: COMMITMENTS
The Association is a party to financial instruments with off-balance-
sheet risk in the normal course of business to meet the financing needs
of its customers. These financial instruments consist primarily of
commitments to extend credit. These instruments involve, to varying
degrees, elements of credit risk in excess of the amounts recognized
in the balance sheet. The contract or notional amounts of those
instruments reflect the extent of the involvement the Association has
in particular classes of financial instruments. Commitments to extend
credit are agreements to lend to a customer as long as there is no
violation of any condition established in the contract. The Association
evaluates each customer's credit worthiness on a case-by-case basis.
The Association's exposure to credit loss in the event of
F-19
<PAGE>
K: COMMITMENTS (Continued)
nonperformance by the other party to the financial instruments is
represented by the contractual notional amount of those instruments. As
of March 31, 1998, and December 31, 1997 and 1996, the Association was
committed to grant adjustable-rate mortgage loans with contract
notional amounts of $564,800, $518,400 and $28,000, respectively.
Additionally, the Association had issued lines of credit with contract
notional amounts of the unused portion totalling $85,884, $105,716 and
$108,733 as of March 31, 1998, and December 31, 1997 and 1996,
respectively.
L: PROFIT-SHARING PLAN
The Association provides a non-contributory defined contribution
retirement plan for all eligible employees. Contributions to the plan
are based upon employee compensation at rates not to exceed 15% as
determined annually by the Board of Directors. Contributions to the
plan were $31,151 and $22,575 for the years ended December 31, 1997 and
1996, respectively. No contributions were made to the plan during the
three month periods ended March 31, 1998 and 1997.
M: NONCASH INVESTING AND FINANCING ACTIVITIES
There were no noncash investing and financing activities for the years
ended December 31, 1997 and 1996 or for the three month periods ended
March 31, 1998 and 1997.
N: RELATED PARTY TRANSACTIONS
An Association director is a partner in a local law firm which provides
legal services to the Association. Fees paid to the law firm amounted
to $4,800 and $3,600 for the years ended December 31, 1997 and 1996,
respectively, and $1,200 in each of the three month periods ended March
31, 1998 and 1997.
O: REGULATORY MATTERS
The Association is subject to various regulatory capital
requirements administered by its primary federal regulator, the
Office of Thrift Supervision ("OTS"). Failure to meet the minimum
regulatory capital requirements can trigger certain mandatory, and
possible additional discretionary actions by regulators, that if
undertaken, could have a direct material affect on the Association
and its financial statements. Under the regulatory capital adequacy
guidelines and the regulatory framework for prompt corrective
action, the Association must meet specific capital guidelines
involving quantitative measures of the Association's assets,
liabilities, and certain off-balance sheet items as calculated under
regulatory accounting practices. The Association's capital amounts
and classification under the prompt corrective action guidelines are
also subject to qualitative judgments by the regulators about
components, risk weightings, and other factors.
F-20
<PAGE>
O: REGULATORY MATTERS (Continued)
Quantitative measures established by regulation to ensure capital
adequacy require the Association to maintain minimum amounts and
ratios of: total risk-based capital and Tier I capital to
risk-weighted assets (as defined in the regulations), Tier I capital
to adjusted total assets (as defined), and tangible capital to
adjusted total assets (as defined). As discussed in greater detail
below, as of March 31, 1998 and December 31, 1997 and 1996, the
Association meets the capital adequacy requirements to which it is
subject.
As of March 31, 1998, and December 31, 1997 and 1996, based upon the
most recent regulatory filings with OTS, the Association was
categorized as well capitalized under the regulatory framework for
prompt corrective action. To remain categorized as well capitalized,
the Association will have to maintain minimum total risk-based, Tier
I risk-based, and Tier I leverage ratios as disclosed in the table
below.
The actual and required capital amounts and ratios applicable to the
Association are presented in the table below, including a
reconciliation of capital under generally accepted accounting
principles ("GAAP") to such amounts reported for regulatory purposes.
<TABLE>
<CAPTION>
To Be Well
Capitalized
Minimum For Prompt
for Capital Corrective
Adequacy Action
Actual Purposes Provisions
--------------- --------------- ---------------
Ratio Amount Ratio Amount Ratio Amount
----- ------ ----- ------ ----- ------
(Thousands of dollars)
<S> <C> <C> <C> <C> <C> <C>
March 31, 1998 (Unaudited)
--------------------------
Total equity, and ratio
to total assets................ 7.3% $ 1,671
-----
-----
Unrealized losses on securities
available for sale............. 1
------
Tangible capital, and ratio to
adjusted total assets.......... 7.3% $ 1,672 1.5% $ 341
------ ------- ---- -------
------ ------- ---- -------
Tier 1 (core) capital, and ratio
to adjusted total assets....... 7.3% $ 1,672 3.0% $ 683 5.0% $ 1,138
------ ------- ---- ------- ------ -------
------ ------- ---- ------- ------ -------
Tier 1 (core) capital, and ratio
to risk-weighted assets........ 14.3% $ 1,672 6.0% $ 701
----- ------- ---- -------
----- ---- -------
Allowance for loan losses....... 149
------
Tier 2 capital.................. 149
------
Total risk-based capital, and
ratio to risk-weighted assets.. 15.5% $ 1,821 8.0% $ 942 10.0% $ 1,178
----- ------- ---- ------- ----- -------
----- ------- ---- ------- ----- -------
Total assets.................... $22,764
-------
-------
Adjusted total assets........... $22,765
-------
-------
Risk-weighted assets............ $11,775
-------
-------
</TABLE>
F-21
<PAGE>
O: REGULATORY MATTERS (Continued)
<TABLE>
<CAPTION>
To Be Well
Capitalized
Minimum For Prompt
for Capital Corrective
Adequacy Action
Actual Purposes Provisions
--------------- --------------- ---------------
Ratio Amount Ratio Amount Ratio Amount
----- ------ ----- ------ ----- ------
(Thousands of dollars)
<S> <C> <C> <C> <C> <C> <C>
December 31, 1997 (Restated)
----------------------------
Total equity, and ratio
to total assets................ 7.2% $ 1,622
----
----
Unrealized gains on securities
available for sale............. (3)
------
Tangible capital, and ratio to
adjusted total assets.......... 7.2% $ 1,619 1.5% $ 336
---- -------- ---- --------
---- -------- ---- --------
Tier 1 (core) capital, and ratio
to adjusted total assets....... 7.2% $ 1,619 3.0% $ 672 5.0% $ 1,120
---- ------- ---- -------- ---- -------
---- ------- ---- -------- ---- -------
Tier 1 (core) capital, and ratio
to risk-weighted assets........ 14.1% $ 1,619 6.0% $ 691
---- ------- ---- -------
---- ---- -------
Allowance for loan losses....... 146
------
Tier 2 capital.................. 146
------
Total risk-based capital, and
ratio to risk-weighted assets.. 15.3% $ 1,765 8.0% $ 921 10.0% $ 1,151
---- ------- ---- -------- ---- -------
---- ------- ---- -------- ---- -------
Total assets.................... $22,395
-------
-------
Adjusted total assets........... $22,392
-------
-------
Risk-weighted assets............ $11,513
-------
-------
December 31, 1996 (Restated)
----------------------------
Total equity, and ratio
to total assets................ 6.7% $ 1,454
----
----
Unrealized losses on securities
available for sale............. 1
------
Tangible capital, and ratio to
adjusted total assets.......... 6.7% $ 1,455 1.5% $ 327
----- ------- ---- -------
----- ------- ---- -------
Tier 1 (core) capital, and ratio
to adjusted total assets....... 6.7% $ 1,455 3.0% $ 654 5.0% $ 1,090
----- ------- ---- ------- ---- -------
----- ------- ---- ------- ---- -------
Tier 1 (core) capital, and ratio
to risk-weighted assets........ 13.7% $ 1,455 6.0% $ 636
----- ------- ---- -------
----- ---- -------
Allowance for loan losses....... 134
------
Tier 2 capital.................. 134
------
Total risk-based capital, and
ratio to risk-weighted assets.. 15.0% $ 1,589 8.0% $ 849 10.0% $ 1,061
----- ------- ---- ------- ----- -------
----- ------- ---- ------- ----- -------
Total assets.................... $21,804
-------
-------
Adjusted total assets........... $21,805
-------
-------
Risk-weighted assets............ $10,607
-------
-------
</TABLE>
F-22
<PAGE>
P: RESTATEMENTS AND PRIOR PERIOD ADJUSTMENT
Financial statements as of and for the years ended December 31, 1997
and 1996 have been restated. The accompanying statements now include a
presentation of comprehensive income as required under the provisions
of Statement of Financial Accounting Standards No. ("SFAS") 130
REPORTING OF COMPREHENSIVE INCOME, which is effective for periods
beginning after December 15, 1997, and requires presentation of
comprehensive income for prior periods presented on a comparative
basis.
In addition, disclosure of information about the fair value of
financial instruments under SFAS No. 107 as of December 31, 1997 and
1996, not previously required under the provisions of SFAS No. 126
EXEMPTION FROM CERTAIN REQUIRED DISCLOSURES ABOUT FINANCIAL
INSTRUMENTS FOR CERTAIN NONPUBLIC ENTITIES, is presented in Note Q.
The December 31, 1997 and 1996 financial statements have also been
restated to reflect adjustments to deferred income tax expense and
related assets and liabilities in order to give effect to timing
differences related to the recognition of stock dividends from the
Federal Home Loan Bank and changes to the income tax bad debt reserves
precipitated by income tax law changes in August, 1996. Deferred tax
assets included in other assets have been decreased by $3,318 and
$7,484 in 1997 and 1996, respectively. Deferred tax liabilities
included in other liabilities and deferrals have been increased by
$16,380 and $14,349 in 1997 and 1996, respectively. The provision for
federal income taxes was decreased by $2,135 in 1997 and increased by
$21,833 in 1996. Accordingly, previously reported retained earnings as
of December 31, 1996 was decreased by $21,833, and by $19,698 as of
December 31, 1997.
Q: ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure is made in accordance with the requirements of
SFAS No. 107, DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS.
Financial instruments are defined as cash and contractual rights and
obligations that require settlement, directly or indirectly, in cash.
In cases where quoted market prices are not available, fair values have
been estimated using the present value of future cash flows or other
valuation techniques. The results of these techniques are highly
sensitive to the assumptions used, such as those concerning appropriate
discount rates and estimates of future cash flows, which require
considerable judgement. Accordingly, estimates presented herein are not
necessarily indicative of the amounts the Association could realize in
a current settlement of the underlying financial instruments. SFAS No.
107 excludes certain financial instruments and all nonfinancial
instruments from its disclosure requirements. These disclosures should
not be interpreted as representing an aggregate measure of the
underlying value of the Association.
F-23
<PAGE>
Q: ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
The Association does not maintain any investment or participation in
financial instruments or agreements whose value is linked to, or
derived from, changes in the value of some underlying asset or index.
Such instruments or agreements include futures, forward contracts,
option contracts, interest-rate swap agreements, and other financial
arrangements with similar characteristics, and are commonly referred to
as derivatives.
The estimated fair value of the Association's financial instruments
were as follows:
<TABLE>
<CAPTION>
December 31,
March 31, 1998 -----------------------------------
---------------- 1997 1996
(Unaudited) ---------------- -----------------
Estimated Estimated Estimated
Carrying Fair Carrying Fair Carrying Fair
Amount Value Amount Value Amount Value
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL ASSETS: (All amounts in thousands of dollars)
Cash and amounts due from
depository institutions... $ 141 $ 141 $ 143 $ 143 $ 71 $ 71
Interest-bearing deposits
with other institutions... 1,556 1,556 967 967 1,737 1,737
Investment securities...... 4,023 4,018 4,349 4,337 4,177 4,139
Loans receivable, net...... 16,418 16,936 16,318 16,679 15,194 15,480
Accrued interest receivable 78 78 80 80 77 77
FHLB stock................. 368 368 363 363 342 342
FINANCIAL LIABILITIES:
Deposits................... $20,534 $20,555 $20,026 $20,042 $20,278 $20,328
Advances from FHLB......... 452 452 610 610 - -
Advances by borrowers for
taxes and insurance....... 14 14 15 15 17 17
Other liabilities.......... 80 80 109 109 45 45
</TABLE>
The following significant methods and assumptions were used by the
Association in estimating the fair value of financial instruments.
CASH AND SHORT-TERM INVESTMENTS
The carrying value of highly liquid instruments, such as cash on hand
and amounts due from depository institutions, and interest-earning
deposits in other institutions, provides a reasonable estimate of their
fair value.
INVESTMENT SECURITIES
Fair value estimates for investment securities are based on quoted
market prices, where available. If quoted market prices are not
available, fair values are based on quoted market prices of comparable
instruments. The carrying amount of accrued interest on securities
approximates its fair value.
LOANS RECEIVABLE, NET OF ALLOWANCE
The fair values for loans are estimated through discounted cash flow
analysis, using current rates at which loans with similar terms would
be made to borrowers of similar credit quality. Appropriate adjustments
are made to reflect probable credit losses. The carrying amount of
accrued interest on loans approximated its fair value.
F-24
<PAGE>
Q: ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
FEDERAL HOME LOAN BANK STOCK
The value of Federal Home Loan Bank stock is set by the Bank's board at
$100 per share.
DEPOSITS
SFAS No. 107 specifies that the fair value of deposit liabilities with
no defined maturity is the amount payable on demand at the reporting
date, i.e., their carrying or book value. These deposits, which include
interest and non-interest bearing checking, passbook and full-paid
share savings, and money market accounts, represented approximately
28%, 27% and 25% of total deposits at March 31, 1998 and December 31,
1997 and 1996, respectively. The fair value of fixed-rate certificates
of deposit is estimated using a discounted cash flow calculation that
applies interest rates currently offered on certifi cates of similar
remaining maturities to a schedule of aggregate expected cash flows on
time deposits.
The carrying amount of accrued interest payable on deposits
approximates its fair value.
ADVANCES FROM FEDERAL HOME LOAN BANK
The carrying amounts of borrowings from the Federal Home Loan Bank,
because of their short-term maturity, approximate their fair values.
ADVANCES BY BORROWERS FOR TAXES AND INSURANCE (ESCROWS)
The carrying amount of escrow accounts approximate fair value.
OFF-BALANCE-SHEET INSTRUMENTS
Off-balance-sheet financial instruments include commitments to extend
credit, letters of credit, and other financial guarantees. The fair
value of such instruments is estimated using fees currently charged for
similar arrangements in the marketplace, adjusted for changes in terms
and credit risk as appropriate. The estimated fair value for these
instruments was not significant at March 31, 1998, or December 31, 1997
and 1996. The contract or notional amounts of the Association's
financial instruments with off-balance-sheet risk are disclosed in Note
K.
R: ADOPTION OF PLAN OF CONVERSION (UNAUDITED)
On April 7, 1998, the Board of Directors of The Iberville Building and
Loan Association adopted a Plan of Conversion ("the Plan"), which
proposes the conversion of the Association from a Louisiana-chartered
mutual savings and loan association to a Louisiana-chartered stock
savings and loan association to be known as "The Iberville Building and
Loan Association" (the "Association", in its mutual or stock form, as
the sense of the reference requires) and the concurrent issuance of its
capital stock to IBL Bancorp, Inc. ("the newly formed Holding
Company").
F-25
<PAGE>
R: ADOPTION OF PLAN OF CONVERSION (UNAUDITED) (Continued)
The Plan provides that non-transferable subscription rights to
purchase Common Stock of IBL Bancorp, Inc. will be offered first to
Eligible Account Holders of record as of the close of business on
December 31, 1996; then to Tax-Qualified Employee Stock Ownership
Plan; then to Supplemental Eligible Account Holders of record as of
the close of business on June 30, 1998; then to Other Members which
include other depositors as of a date to be specified and borrowers
on that date whose loans are secured by real estate; and, then to
directors, officers and employees of the Association not otherwise
qualified. Shares of Common Stock remaining unsold after the
Subscription Offering, if any, will be offered for sale to the
public through a Community Offering, as determined by the Boards of
Directors of the Holding Company and the Association in their sole
discretion. The common stock will be offered at a price to be
determined by the Board of Directors based upon an appraisal to be
made by an independent appraisal firm. The exact number of shares to
be offered will be determined by the Board of Directors in
conjunction with the determination of the price at which shares will
be sold. The costs of issuing the common stock will be deferred and
deducted from the sale proceeds. The Association had incurred no
stock issuance costs as of March 31, 1998. If the conversion is
not completed, deferred costs will be charged to operations.
In accordance with OTS Regulations, at the time that the Association
converts from a mutual savings and loan association to a stock savings
and loan association, the Association will establish a liquidation
account with an initial balance equal to the Association's retained
earnings as of the date of the latest balance sheet appearing in the
prospectus. The liquidation account will be maintained for the benefit
of eligible holders who continue to maintain their accounts at the
Association after the Conversion. The liquidation account will be
reduced annually to the extent that the eligible account holders have
reduced their qualifying deposits. Subsequent increases will not
restore an eligible account holder's interest in the liquidation
account. In the event of a complete liquidation of the Association, and
only in such event, each account holder will be entitled to receive a
distribution from the liquidation account in an amount proportionate to
the adjusted qualifying account balances then held. The Association may
not pay dividends or repurchase its common stock if such dividends or
repurchases would reduce its equity below applicable regulatory capital
requirements or the required liquidation account amount.
Under current OTS regulations, limitations have been imposed on all
"capital distributions" by savings institutions, including cash
dividends, stock repurchases and other transactions charged to the
capital account. The regulation establishes a three-tiered system of
restrictions, with the greatest flexibility afforded to savings
institutions which are both well-capitalized and given favorable
qualitative examination ratings by the OTS. Generally, such an
institution which has "capital" in excess of its fully-phased-in
regulatory
F-26
<PAGE>
R: ADOPTION OF PLAN OF CONVERSION (UNAUDITED) (Continued)
capital requirements may, after notifying the OTS, make capital
distributions in any year equal to the higher of (i) net income for the
year-to-date plus 50% of its "surplus capital ratio" at the beginning
of the calendar year or (ii) 75% of net income over the most recent
four quarter period. Other savings institutions would be subject to
more stringent procedural and substantive requirements, the most
restrictive being a requirement for prior OTS approval of any capital
distribution. OTS regulations also preclude stock repurchases during
the first three years following the conversion unless certain criteria
are satisfied.
F-27
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with the Business Corporation Law of the State of
Louisiana, Article 8 of the Corporation's Articles of Incorporation provides as
follows:
ARTICLE 8. INDEMNIFICATION, ETC. OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS.
A. PERSONAL LIABILITY OF DIRECTORS AND OFFICERS. A director or officer
of the Corporation shall not be personally liable for monetary damages for any
action taken, or any failure to take any action, as a director or officer except
to the extent that by law a director's or officer's liability for monetary
damages may not be limited.
B. INDEMNIFICATION. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, including actions by or in the right of
the Corporation, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding to
the full extent permissible under Louisiana law.
C. ADVANCEMENT OF EXPENSES. Reasonable expenses incurred by an officer,
director, employee or agent of the Corporation in defending an action, suit or
proceeding described in Section B of this Article 8 may be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding if authorized by the board of directors (without regard to whether
participating members thereof are parties to such action, suit or proceeding),
upon receipt of an undertaking by or on behalf of such person to repay such
amount if it shall ultimately be determined that the person is not entitled to
be indemnified by the Corporation.
D. OTHER RIGHTS. The indemnification and advancement of expenses
provided by or pursuant to this Article 8 shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any bylaw, insurance or other agreement, vote of
stockholders or directors (regardless of whether directors authorizing such
indemnification are beneficiaries thereof) or otherwise, both as to actions in
their official capacity and as to actions in another capacity while holding an
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
E. INSURANCE. The Corporation shall have the power to purchase and
maintain insurance or other similar arrangement on behalf of any person who is
or was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture or other enterprise,
against any liability asserted against or incurred by him in any such capacity,
or arising out of his status as such, whether or not the
II-1
<PAGE>
Corporation would have the power to indemnify him against such liability under
the provisions of this Article 8.
F. SECURITY FUND; INDEMNITY AGREEMENTS. By action of the Board of
Directors (notwithstanding their interest in the transaction), the Corporation
may create and fund a trust fund or other fund or form of self-insurance
arrangement of any nature, and may enter into agreements with its officers,
directors, employees and agents for the purpose of securing or insuring in any
manner its obligation to indemnify or advance expenses provided for in this
Article 8.
G. MODIFICATION. The duties of the Corporation to indemnify and to
advance expenses to any person as provided in this Article 8 shall be in the
nature of a contract between the Corporation and each such person, and no
amendment or repeal of any provision of this Article 8, and no amendment or
termination of any trust or other fund or form of self-insurance arrangement
created pursuant to Section F of this Article 8, shall alter to the detriment of
such person the right of such person to the advance of expenses or
indemnification related to a claim based on an act or failure to act which took
place prior to such amendment, repeal or termination.
H. PROCEEDINGS INITIATED BY INDEMNIFIED PERSONS. Notwithstanding any
other provision of this Article 8, the Corporation shall not indemnify a
director, officer, employee or agent for any liability incurred in an action,
suit or proceeding initiated (which shall not be deemed to include
counter-claims or affirmative defenses) or participated in as an intervenor or
amicus curiae by the person seeking indemnification unless such initiation of or
participation in the action, suit or proceeding is authorized, either before or
after its commencement, by the affirmative vote of a majority of the directors
in office.
II-2
<PAGE>
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<CAPTION>
<S> <C>
SEC filing fees............................................................................... $ 936
OTS filing fees............................................................................... 8,400
OFI filing fees............................................................................... 1,750
Printing, postage and mailing ................................................................ 50,000
Legal fees.................................................................................... 95,000
Blue Sky filing fees and expenses............................................................. 7,500
Accounting fees and expenses.................................................................. 40,000
Trident Securities:
Underwriting fee........................................................................... 75,000
Out-of-pocket expenses, including legal fees............................................... 37,500
Appraiser's fees and expenses, including business plan........................................ 23,000
Conversion agent fees and expenses............................................................ 7,000
Transfer agent and stock certificates......................................................... 5,000
Miscellaneous................................................................................. 23,914
--------
TOTAL.................................................................................... $375,000
--------
--------
</TABLE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The only securities sold by the Registrant to date consist of 100
shares of common stock issued on June 22, 1998, to its sole incorporator, The
Iberville Building and Loan Association, for $10.00 per share, which shares will
be cancelled upon consummation of the Conversion. Because the shares were sold
to only one entity and were sold only to facilitate the incorporation of the
Registrant, the sale was exempt from registration under the Securities Act of
1933 pursuant to Section 4(2) thereof.
ITEM 27. EXHIBITS
The exhibits and financial statement schedules filed as a part of this
Registration Statement are as follows:
(a) LIST OF EXHIBITS (filed herewith unless otherwise noted)
<TABLE>
<CAPTION>
<S> <C>
1.1 Engagement Letter dated April 23, 1998 with Trident Securities, Inc.
1.2 Form of Agency Agreement with Trident Securities, Inc.
2.1 Plan of Conversion
3.1 Articles of Incorporation of IBL Bancorp, Inc.
3.2 Bylaws of IBL Bancorp, Inc.
4.1 Form of Stock Certificate of IBL Bancorp, Inc.
5.1 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. regarding legality of securities
8.1 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. regarding federal income tax consequences
8.2 Opinion of L.A. Champagne & Co., L.L.P. regarding Louisiana income tax consequences
8.3 Opinion of Ferguson & Company regarding subscription rights
10.1 Form of Employment Agreement between IBL Bancorp, Inc., The Iberville Building and Loan
Association and G. Lloyd Bouchereau, Jr.
10.2 Form of Employment Agreement between IBL Bancorp, Inc., The Iberville Building and Loan
Association and Danny M. Strickland
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
23.1 Consent of L. A. Champagne & Co.
23.2 Consent of Ferguson & Company
23.3 Consent of Elias, Matz, Tiernan & Herrick L.L.P. (included in Exhibits 5.1 and 8.1)
24.1 Power of Attorney (included in the Signature Page to the original filing of this Registration
Statement)
27.1 Financial Data Schedule
99.1 Proxy Statement and form of proxy for solicitation of members of The Iberville Building and
Loan Association
99.2* Appraisal Report of Ferguson & Company
99.3 Stock Order Form
99.4 Marketing Materials
</TABLE>
- --------------------------
* To be filed by amendment.
(b) FINANCIAL STATEMENT SCHEDULES
All schedules have been omitted as not applicable or not required under
the rules of Regulation S-X.
ITEM 28. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any Prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of the securities offered would not exceed that which was
registered) and any deviation from the low or high and the estimated
maximum offering range may be reflected in the form of Prospectus filed
with the Commission pursuant to Rule 424 (b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the
II-4
<PAGE>
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the Offering.
The undersigned Registrant hereby undertakes to furnish stock
certificates to or in accordance with the instructions of the respective
purchasers of the Common Stock, so as to make delivery to each purchaser
promptly following the closing under the Plan of Conversion.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned, in the city of
Plaquemine, State of Louisiana, on June 22, 1998.
IBL BANCORP, INC.
By: /s/ G. Lloyd Bouchereau, Jr.
--------------------------------
G. Lloyd Bouchereau, Jr.
President and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby makes, constitutes and appoints G. Lloyd Bouchereau, Jr. his true and
lawful attorney, with full power to sign for each person and in such person's
name and capacity indicated below, and with full power of substitution, any and
all amendments to this Registration Statement, hereby ratifying and confirming
such person's signature as it may be signed by said attorney to any and all
amendments.
<TABLE>
<CAPTION>
Name Title Date
- ------------------------------------- ------------------------------- --------------------
<S> <C> <C>
/s/ G. Lloyd Bouchereau, Jr. Director, President and June 22, 1998
- ------------------------------------- Chief Executive Officer
G. Lloyd Bouchereau, Jr. (principal financial and
accounting officer)
/s/ John L. Delahaye Director June 22, 1998
- -------------------------------------
John L. Delahaye
/s/ Gary K. Pruitt Director and Secretary- June 22, 1998
- ------------------------------------- Treasurer
Gary K. Pruitt
/s/ Bobby E. Stanley Director June 22, 1998
- -------------------------------------
Bobby E. Stanley
Director June __, 1998
- -------------------------------------
Edward J. Steinmetz
/s/ Danny M. Strickland Director June 22, 1998
- -------------------------------------
Danny M. Strickland
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C>
1.1 Engagement Letter dated April 23, 1998 with Trident Securities, Inc.
1.2 Form of Agency Agreement with Trident Securities, Inc.
2.1 Plan of Conversion
3.1 Articles of Incorporation of IBL Bancorp, Inc.
3.2 Bylaws of IBL Bancorp, Inc.
4.1 Form of Stock Certificate of IBL Bancorp, Inc.
5.1 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. regarding legality of securities
8.1 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. regarding federal income tax consequences
8.2 Opinion of L.A. Champagne & Co., L.L.P. regarding Louisiana income tax consequences
8.3 Opinion of Ferguson & Company regarding subscription rights
10.1 Form of Employment Agreement between IBL Bancorp, Inc., The Iberville Building and Loan
Association and G. Lloyd Bouchereau, Jr.
10.2 Form of Employment Agreement between IBL Bancorp, Inc., The Iberville Building and Loan
Association and Danny M. Strickland
23.1 Consent of L. A. Champagne & Co.
23.2 Consent of Ferguson & Company
23.3 Consent of Elias, Matz, Tiernan & Herrick L.L.P. (included in Exhibits 5.1 and 8.1)
24.1 Power of Attorney (included in the Signature Page to the original filing of this Registration
Statement)
27.1 Financial Data Schedule
99.1 Proxy Statement and form of proxy for solicitation of members of The Iberville Building and
Loan Association
99.2* Appraisal Report of Ferguson & Company
99.3 Stock Order Form
99.4 Marketing Materials
</TABLE>
- ----------------------------
* To be filed by amendment.
<PAGE>
<TABLE>
<S> <C>
No dealer, salesman or any other person has been authorized to
give any information or to make any representation not contained
in this Prospectus in connection with the offering
made hereby, and, if given or made, such information or 276,000 Shares
representation must not be relied upon as having been (Anticipated Maximum)
authorized by the Company, the Association or Trident. This
Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities offered hereby to any
person in any jurisdiction in which such offer or solicitation is
not authorized or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom
it is unlawful to make such offer or solicitation in such IBL BANCORP, INC.
jurisdiction. Neither the delivery of this Prospectus nor any
sale hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the
Company or the Association since any of the dates as of which (Proposed Holding Company for
information is furnished herein or since the date hereof. The Iberville Building and Loan Association)
---------------------
TABLE OF CONTENTS
---------------------
Page
---- COMMON STOCK
Summary......................................... 4
Selected Financial Data......................... 11
Summary of Recent Developments.................. 13
Risk Factors.................................... 15
Proposed Management Purchases................... 22
Use of Proceeds................................. 22
Dividend Policy................................. 24
Market for Common Stock......................... 24 --------------------
Regulatory Capital.............................. 25
Capitalization.................................. 27 PROSPECTUS
Pro Forma Data.................................. 29
Management's Discussion and Analysis --------------------
of Financial Condition and Results of
Operations..................................... 34
Business........................................ 45
Regulation...................................... 62
Taxation........................................ 72
Management....................................... 74
The Conversion................................... 82
Restrictions on Acquisition of the
Company and the Association..................... 97 Trident Securities, Inc.
Description of Capital Stock of the
Company........................................ 103
Experts......................................... 104
Legal Matters................................... 105
Additional Information.......................... 105
Index to Financial Statements................... 106
Until _________, 1998 or 90 days after commencement of the August __, 1998
Syndicated Community Offering, if any, whichever is later, all
dealers effecting transactions in the registered securities,
whether or not participating in this distribution, may be
required to deliver a Prospectus. This is in addition to the
obligation of dealers to deliver a Prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
</TABLE>
<PAGE>
EXHIBIT 1.1
ENGAGEMENT LETTER DATED APRIL 23, 1998
WITH TRIDENT SECURITIES, INC.
<PAGE>
Exhibit 1.1
[Trident Securities Letterhead]
April 23, 1998
Board of Directors
Iberville Building and Loan Association
23910 Railroad Avenue
Plaquemine, Louisiana 70765
RE: Conversion Stock Marketing
Gentlemen:
This letter sets forth the terms of the proposed engagement between TRIDENT
SECURITIES, INC. ("TRIDENT") and Iberville Building and Loan Association (the
"Association") concerning our investment banking services in connection with the
conversion of the Association from a mutual to a capital stock form of
organization.
TRIDENT is prepared to assist the Association in connection with the offering of
shares of common stock of its to-be-formed stock holding company ("Holding
Company") during the subscription offering and community offering as such terms
will be defined in the Association's proposed Plan of Conversion. The specific
terms of the services contemplated hereunder shall be set forth in a definitive
sales agency agreement (the "Agreement") between TRIDENT, the Holding Company
and the Association to be executed on the date the prospectus is declared
effective by the appropriate regulatory authorities. The price of the shares
during the subscription offering and community offering will be the price
established by the Holding Company's and the Association's Board of Directors,
based upon an independent appraisal as approved by the appropriate regulatory
authorities, provided such price is mutually acceptable to TRIDENT, the Holding
Company and the Association.
In connection with the subscription offering and community offering, TRIDENT
will act as financial advisor and exercise its best efforts to assist the
Holding Company in the sale of its common stock during the subscription offering
and community offering. Additionally, TRIDENT may enter into agreements with
other National Association of Securities Dealers, Inc., ("NASD") member firms to
act as selected dealers, assisting in the sale of the common stock. TRIDENT, the
Holding Company and the Association will determine the selected dealers to
assist the Holding Company and the Association during the community offering. At
the appropriate time, TRIDENT in conjunction with its counsel, will conduct an
examination of the relevant documents and records of the Holding Company and the
Association as TRIDENT deems necessary and appropriate. The Holding Company and
the Association will make all documents, records and other information deemed
necessary by TRIDENT or its counsel available to them upon request.
For its services hereunder, TRIDENT will receive the following compensation and
reimbursement from the Holding Company:
<PAGE>
Board of Directors
April 23, 1998
Page 2
1. A management fee in the amount of $75,000.
2. For stock sold by other NASD member firms under selected
dealer's agreements, the commission shall not exceed a fee to
be agreed upon jointly by TRIDENT, the Holding Company and the
Association to reflect market requirements at the time of the
stock allocation in a Syndicated Community Offering.
3. The foregoing fees and commissions are to be payable to TRIDENT
at closing as defined in the Agreement to be entered into
between the Association, the Holding Company and TRIDENT.
4. TRIDENT shall be reimbursed for allocable expenses incurred by
it, including legal fees, whether or not the Agreement is
consummated. TRIDENT's out-of-pocket expenses will not exceed
$10,000 and its legal fees will not exceed $27,500. The
Association will forward to TRIDENT a check in the amount of
$10,000 as an advance payment to defray the allocable expenses
of TRIDENT.
It further is understood that the Holding Company and the Association will pay
all other expenses of the conversion including but not limited to its attorneys'
fees, NASD filing fees, and filing and registration fees and fees of either
TRIDENT's attorneys or the Association's attorneys relating to any required
state securities law filings, telephone charges, air freight, rental equipment,
supplies, transfer agent charges, fees relating to auditing and accounting and
costs of printing all documents necessary in connection with the foregoing.
For purposes of TRIDENT's obligation to file certain documents and to make
certain representations to the NASD in connection with the conversion, the
Association warrants that: (a) the Association has not privately placed any
securities within the last 18 months; (b) there have been no material dealings
within the last 12 months between the Association and any NASD member or any
person related to or associated with any such member; (c) none of the officers
or directors of the Association has any affiliation with the NASD; (d) except as
contemplated by this engagement letter with TRIDENT, the Association has no
financial or management consulting contracts outstanding with any other person;
(e) the Association has not granted TRIDENT a right of first refusal with
respect to the underwriting of any future offering of the Association's or the
Holding Company's stock; and (f) there has been no intermediary between TRIDENT,
the Holding Company and the Association in connection with the public offering
of the Holding Company's shares, and no person is being compensated in any
manner for providing such service.
The Association agrees to indemnify and hold harmless TRIDENT and each person,
if any, who controls the firm against all losses, claims, damages or
liabilities, joint or several and all legal or other expenses reasonably
incurred by them in connection with the investigation or defense thereof
(collectively, "Losses"), to which they may become subject under the securities
laws or under the common law, that arise out of or are based upon the conversion
or the engagement hereunder of
<PAGE>
Board of Directors
April 23, 1998
Page 3
TRIDENT. If the foregoing indemnification is unavailable for any reason, the
Association agrees to contribute to such Losses in the proportion that its
financial interest in the conversion bears to that of the indemnified parties.
If the Agreement is entered into with respect to the common stock to be issued
in the conversion, the Agreement will provide for indemnification, which will be
in addition to any rights that TRIDENT or any other indemnified party may have
at common law or otherwise. The indemnification provision of this paragraph will
be superseded by the indemnification provisions of the Agreement entered into by
the Association and TRIDENT.
This letter is merely a statement of intent and is not a binding legal agreement
except as to paragraph (4) above with regard to the obligation to reimburse
TRIDENT for allocable expenses to be incurred prior to the execution of the
Agreement and the indemnity described in the preceding paragraph. While TRIDENT
and the Association agree in principle to the contents hereof and propose to
proceed promptly, and in good faith, to work out the arrangements with respect
to the proposed offering, any legal obligations between TRIDENT, the Holding
Company and the Association shall be only as set forth in a duly executed
Agreement. Such Agreement shall be in form and content satisfactory to TRIDENT,
the Holding Company and the Association, as well as their counsel, and TRIDENT's
obligations thereunder shall be subject to, among other things, there being in
TRIDENT's opinion no material adverse change in the condition or obligations of
the Association or no market conditions which might render the sale of the
shares by the Holding Company hereby contemplated inadvisable.
Please acknowledge your agreement to the foregoing by signing below and
returning to TRIDENT one copy of this letter along with the advance payment of
$10,000. This proposal is open for your acceptance for a period of thirty (30)
days from the date hereof.
Yours very truly,
TRIDENT SECURITIES, INC.
By: /s/ R. Lee Burrows, Jr.
----------------------------
R. Lee Burrows, Jr.
Managing Director
Agreed and accepted to this 24 day
of April, 1998
Iberville Building and Loan Association
By: /s/ G. Lloyd Bouchereau, Jr.
------------------------------------
G. Lloyd Bouchereau, Jr.
President
RLB/cs
<PAGE>
Exhibit 1.2
IBL BANCORP, INC.
(Proposed Holding Company for The Iberville Building and Loan Association)
Up to 276,000 Shares of Common Stock
(Par Value $.01 Per Share)
$10.00 Per Share
AGENCY AGREEMENT
----------------
August ___, 1998
Trident Securities, Inc.
4601 Six Forks Road, Suite 400
Raleigh, North Carolina 27609
Dear Sirs:
IBL Bancorp, Inc. ("Company"), a Louisiana corporation, and The
Iberville Building and Loan Association ("Association"), a Louisiana chartered
and federally insured mutual savings association, hereby confirm as of the date
above their respective agreements with Trident Securities, Inc. ("Trident"), a
broker-dealer registered with the Securities and Exchange Commission
("Commission") and a member of the National Association of Securities Dealers,
Inc. ("NASD"), as follows:
1. Introduction. The Association intends to convert from a Louisiana
chartered mutual savings association to a Louisiana chartered stock savings
association as a wholly-owned subsidiary of the Company (together with the
Offerings (as defined below) and the issuance of shares of common stock of the
Association to the Company, the "Conversion") pursuant to a plan of conversion
adopted by the Association's Board of Directors on April 7, 1998, and amended on
June 16, 1998 ("Plan"). In accordance with the Plan, the Company is offering up
to 276,000 shares ("Shares") of its common stock, par value $.01 per share
("Common Stock"), pursuant to nontransferable subscription rights in a
subscription offering ("Subscription Offering"), in order of priority, to (i)
the Association's Eligible Account Holders (as defined in the Plan), (ii) the
Association's Employee Stock Ownership Plan ("ESOP"), (iii) the Association's
Supplemental Eligible Account Holders (as defined in the Plan), (iv) the
Association's Other Members (as defined in the Plan), and (v) directors,
officers and employees of the Association. Any Shares not sold in the
Subscription Offering will be offered to the general public in a community
offering, with preference being given to natural persons residing in Iberville
Parish, Louisiana ("Community Offering"). The Community Offering may commence
any time during the Subscription Offering or after the expiration of the
Subscription Offering. The Subscription Offering and the Community
<PAGE>
Trident Securities, Inc.
Page 2
Offering are collectively referred to as the "Offerings." Purchases of Shares in
the Offerings are subject to certain limitations and restrictions as described
in the Plan.
Trident has advised the Company and the Association that it intends to
utilize its best efforts to assist the Company and the Association with the sale
of the Shares in the Subscription Offering and any Community Offering.
2. Representations and Warranties.
(a) The Company and the Association jointly and severally represent and
warrant to Trident that:
(i) The Company has filed with the Commission a registration statement,
including exhibits and an amendment or amendments thereto, on Form SB-2 (No.
333-______), including a Prospectus, for the registration of the Shares under
the Securities Act of 1933, as amended ("Securities Act"); and such registration
statement has been declared effective under the Securities Act and no stop order
has been issued with respect thereto and no proceedings therefor have been
initiated or, to the Company's best knowledge, threatened by the Commission.
Except as the context may otherwise require, such registration statement, as
amended or supplemented, on file with the Commission at the time it became
effective, including the prospectus, financial statements, schedules, exhibits
and all other documents filed as part thereof, as amended and supplemented, is
herein called the "Registration Statement," and the prospectus, as amended or
supplemented, on file with the Commission at the time the Registration Statement
became effective is herein called the "Prospectus," except that if any
prospectus filed by the Company with the Commission pursuant to Rule 424(b) of
the general rules and regulations of the Commission under the Securities Act
(together with the published policies and actions of the Commission thereunder,
the "Securities Act Regulations") differs from the form of prospectus on file at
the time the Registration Statement became effective, the term "Prospectus"
shall refer to the Rule 424(b) prospectus from and after the time it is filed
with the Commission and shall include any amendments or supplements thereto from
and after their dates of effectiveness or use, respectively.
(ii) The Association has filed an Application for Approval of
Conversion on Form AC, including exhibits (as amended or supplemented, the "Form
AC" or the "Conversion Application") with (a) the Office of Thrift Supervision
("OTS") under the Home Owners' Loan Act, as amended ("HOLA"), and the rules and
regulations, including published policies and actions, of the OTS thereunder
("OTS Regulations"), which has been approved by the OTS, and (b) the Louisiana
Office of Financial Institutions ("LOFI") under the applicable provisions of the
Louisiana Savings and Loan Association Law, as amended ("LSLA"), and the rules
and regulations, including published policies and actions, of the LOFI
thereunder ("LOFI Regulations"), which has been approved by the LOFI; and the
Prospectus and the proxy statement for the solicitation of proxies from members
for the special meeting to approve the Plan ("Proxy Statement") included as part
of the Conversion Application have been approved for use by the OTS and the
LOFI. No order has been issued by the
<PAGE>
Trident Securities, Inc.
Page 3
OTS or the LOFI preventing or suspending the use of the Prospectus or the Proxy
Statement and no action by or before the OTS or the LOFI revoking such approvals
is pending or, to the Association's best knowledge, threatened. The Company has
filed with the OTS and LOFI an application on Form H-e(1)-S ("Holding Company
Application") promulgated under the savings and loan holding company provisions
of the HOLA and the regulations promulgated thereunder, and has received
approval of its acquisition of the Association from the OTS and LOFI.
(iii) As of the date hereof, (i) the Registration Statement and the
Prospectus comply as to form in all material respects with the Securities Act
and the Securities Act Regulations, (ii) the Registration Statement does not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and (iii)
the Prospectus does not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. (Representations or warranties in this subsection shall
not apply to statements or omissions made in reliance upon and in conformity
with written information furnished to the Company or the Association by or on
behalf of Trident relating to Trident expressly for use in the Registration
Statement or Prospectus.).
(iv) The Company has been duly incorporated as a Louisiana corporation
and the Association has been duly organized as a mutual savings association
under the laws of Louisiana, and each is validly existing and in good standing
under the laws of Louisiana, with full power and authority to own their property
and conduct their business as described in the Registration Statement and
Prospectus; the Association is a member in good standing of the Federal Home
Loan Bank of Dallas; and the deposit accounts of the Association are insured by
the Savings Association Insurance Fund ("SAIF") administered by the Federal
Deposit Insurance Corporation ("FDIC") up to the applicable legal limits. Each
of the Company and the Association will be duly qualified to do business as a
foreign corporation in each jurisdiction in which its ownership of property or
the conduct of its business requires such qualification, unless the failure to
be so qualified in one or more of such jurisdictions would not have a material
adverse effect on the financial condition, operations, business, properties or
assets of the Company and the Association, taken as a whole.
(v) The Association has good, marketable and insurable title to all
assets material to its business and to those assets described in the Prospectus
as owned by it, free and clear of all liens, charges, encumbrances or
restrictions, except for liens for taxes not yet due, except as described in the
Prospectus and except as to those which do not in the aggregate have a material
adverse effect upon the financial condition, operations, business, properties or
assets of the Association; and all of the leases and subleases material to the
financial condition, operations, business, assets or properties of the
Association, under which it holds properties, including those described in the
Prospectus, are in full force and effect as described therein.
<PAGE>
Trident Securities, Inc.
Page 4
(vi) The Association has no direct or indirect subsidiaries.
(vii) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary actions on the part of each of the Company and the Association,
and this Agreement is a valid and binding obligation of each of the Company and
the Association, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or similar laws relating to or
affecting the enforcement of creditors' rights generally or the rights of
creditors of insured financial institutions and their holding companies, the
accounts of whose subsidiaries are insured by the FDIC, (ii) general equity
principles, regardless of whether such enforceability is considered in a
proceeding in equity or at law, or (iii) laws relating to the safety and
soundness of insured depository institutions and their affiliates, and except to
the extent that the provisions of Sections 8 and 9 hereof may be unenforceable
as against public policy or by applicable law, including without limitation,
Sections 23A and 23B of the Federal Reserve Act, as amended ("Sections 23A and
23B").
(viii) Except as referred to in the Prospectus, there is no litigation
or governmental proceeding pending or, to the best knowledge of the Company or
the Association, threatened against or involving the Company or the Association,
or any of their respective assets which individually or in the aggregate would
have a material adverse effect on the financial condition, results of
operations, business, assets or properties of the Company or the Association,
taken as a whole. (For purposes of this representation, any litigation or
governmental proceeding is not considered "threatened" unless the potential
litigant or governmental authority had manifested to the management of the
Company or the Association, or to their counsel, a present intention to initiate
such litigation or proceeding.).
(ix) The Company and the Association have received the opinions of (a)
Elias, Matz, Tiernan & Herrick L.L.P. with respect to the federal income tax
consequences of the Conversion, to the effect that the Conversion will
constitute a tax-free reorganization under the Internal Revenue Code of 1986, as
amended, and (b) L.A. Champagne & Co., L.L.P. with respect to the Louisiana
income tax consequences of the Conversion, to the effect that the Conversion
will not be a taxable transaction for the Association or the Company under the
laws of Louisiana; and the facts and representations made by the Company and the
Association and relied upon in rendering such opinions are accurate and
complete, and neither the Company nor the Association have taken any action
inconsistent therewith.
(x) Neither the Company nor the Association is in violation of any rule
or regulation of the OTS, the LOFI or the FDIC that could reasonably be expected
to result in any enforcement action against the Company or the Association, or
their officers or directors.
(xi) Ferguson & Co., LLP ("Ferguson"), the firm that prepared the
independent appraisal dated as of May 29, 1998, is independent with respect to
the Company and the Association within
<PAGE>
Trident Securities, Inc.
Page 5
the meaning of the OTS Regulations. The Company and the Association believe
Ferguson to be experienced and expert in rendering appraisals of thrift
institutions, and nothing has come to the attention of the Company and the
Association which has caused them to believe that the appraisal by Ferguson was
not prepared in accordance with the requirements of the OTS Regulations.
(xii) L.A. Champagne & Co., L.L.P., the firm that certified the audited
financial statements of the Association filed as part of the Registration
Statement and the Conversion Application, is independent with respect to the
Company and the Association as required by the Securities Act, the Securities
Act Regulations, the Code of Professional Ethics of the American Institute of
Certified Public Accountants, and Title 12 of the Code of Federal Regulations
Parts 563c and 571, and nothing has come to the attention of the Company and the
Association which has caused them to believe that such firm is not independent
within the meaning of such provisions.
(xiii) The financial statements and related notes which are included in
the Registration Statement and the Prospectus fairly present the financial
condition, income, equity and cash flows of the Association at the respective
dates thereof and for the respective periods covered thereby and comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act Regulations and the OTS Regulations. Such financial statements
have been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout the periods involved, except as set
forth therein, and such financial statements are consistent with financial
statements and other reports filed by the Association with the OTS, except as
GAAP may otherwise require. The financial tables in the Prospectus accurately
present the information purported to be shown thereby at the respective dates
thereof and for the respective periods covered thereby.
(xiv) There has been no material adverse change in the financial
condition, operations, business, assets or properties of the Company and the
Association, taken as a whole, since the latest date as of which such condition
is set forth in the Prospectus, except as disclosed therein; and the
capitalization, assets, properties and business of each of the Company and the
Association conform in all material aspects to the descriptions thereof
contained in the Prospectus. Neither the Company nor the Association has any
material liabilities of any kind, contingent or otherwise, except as disclosed
in the Prospectus.
(xv) There has been no breach or default (or the occurrence of any
event which, with notice or lapse of time or both, would constitute a default)
under, or creation or imposition of any lien, charge or other encumbrance upon
any of the properties or assets of the Company or the Association pursuant to
any of the terms, provisions or conditions of, any agreement, contract,
indenture, bond, debenture, note, instrument or obligation to which the Company
or the Association is a party or by which any of them or any of their respective
assets or properties may be bound or is subject, or violation of any
governmental license or permit or any enforceable published law, administrative
regulation or order or court order, writ, injunction or decree, which breach,
default, lien, charge, encumbrance or violation would have a material adverse
effect on the financial
<PAGE>
Trident Securities, Inc.
Page 6
condition, operations, business, assets or properties of the Company and the
Association, taken as a whole; all agreements which are material to the
financial condition, results of operations or business of the Company and the
Association, taken as a whole, are in full force and effect, and no party to any
such agreement has instituted or, to the best knowledge of the Company and the
Association, threatened any action or proceeding wherein the Company or the
Association would be alleged to be in default thereunder.
(xvi) Neither the Company nor the Association is in violation of its
respective charter, articles of incorporation or bylaws. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby do not conflict with or result in a breach of the charter, articles of
incorporation or bylaws of the Company or the Association (in either mutual or
stock form) or constitute a material breach of or default (or an event which,
with notice or lapse of time or both, would constitute a default) under, give
rise to any right of termination, cancellation or acceleration contained in, or
result in the creation or imposition of any lien, charge or other encumbrance
upon any of the properties or assets of the Company or the Association pursuant
to any of the terms, provisions or conditions of, any material agreement,
contract, indenture, bond, debenture, note, instrument or obligation to which
the Company or the Association is a party (other than the establishment of a
liquidation account pursuant to the Plan) or violate any governmental license or
permit or any law, administrative regulation or order or court order, writ,
injunction or decree (subject to the satisfaction of certain conditions imposed
by the OTS and the LOFI in connection with their approval of the Conversion
Application and the Holding Company Application), which breach, default, lien,
charge, encumbrance or violation would have a material adverse effect on the
financial condition, operations or business of the Company and the Association,
taken as a whole.
(xvii) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, except as otherwise may be
indicated or contemplated therein, neither the Company nor the Association has
issued any securities which will remain issued at the Closing Date or incurred
any liability or obligation, direct or contingent, or borrowed money, except
borrowings or liabilities in the ordinary course of business, or entered into
any other transaction not in the ordinary course of business and not consistent
with prior practices, which is material in light of the business of the Company
and the Association, taken as a whole.
(xviii) The issuance and the sale of the Shares have been duly
authorized by all necessary action of the Company and approved by the OTS and
the LOFI and, when issued and paid for in accordance with the terms of the Plan,
the Shares shall be validly issued, fully paid and nonassessable and shall
conform in all material respects to the description thereof contained in the
Prospectus; the issuance of the Shares is not subject to preemptive rights,
except for subscription rights to the Shares granted pursuant to the Plan; and
good title to the Shares will be transferred by the Company upon issuance
thereof against payment therefor, free and clear of all claims, encumbrances,
security interests and liens against the Company whatsoever. The issuance and
sale of the capital stock of the Association to the Company has been duly
authorized by all necessary
<PAGE>
Trident Securities, Inc.
Page 7
action of the Association and the Company and the OTS and the LOFI (subject to
the satisfaction of various conditions imposed by the OTS and the LOFI in
connection with their approval of the Conversion Application, and imposed by the
OTS in connection with its approval of the Holding Company Application), and
such capital stock, when issued in accordance with the terms of the Plan, will
be fully paid and nonassessable.
(xix) No approval of any regulatory or supervisory or other public
authority is required to be obtained by the Company or the Association in
connection with the execution and delivery of this Agreement or the issuance of
the Shares, except such approvals as have been obtained and except for the
declaration of effectiveness of any required post-effective amendment by the
Commission and approval thereof by the OTS and the LOFI, the issuance of the
Association's Stock Charter by the LOFI and as may be required under the "blue
sky" or securities laws of various jurisdictions.
(xx) All contracts and other documents required to be filed as exhibits
to the Registration Statement, the Conversion Application or the Holding Company
Application have been filed with the Commission or the OTS or both, as the case
may be.
(xxi) The Company and the Association have timely filed all required
federal, state and local tax returns, and no deficiency has been asserted with
respect to such returns by any taxing authorities, and the Company and the
Association have paid all taxes that have become due and, to the best knowledge
of the Company and the Association, have made adequate reserves for accrued tax
liabilities, except where any failure to make such filings, payments and
reserves, or the assertion of such a deficiency, would not have a material
adverse effect on the financial condition or results of operations of the
Company and the Association, taken as a whole.
(xxii) All of the loans represented as assets of the Association as of
the most recent date for which financial condition data is included in the
Prospectus meet or are exempt from all requirements of federal, state or local
law pertaining to lending, including without limitation truth in lending
(including the requirements of Regulation Z and 12 C.F.R. Part 226 and Section
563.99), real estate settlement procedures, consumer credit protection, equal
credit opportunity and all disclosure laws applicable to such loans, except for
violations which, if asserted, would not have a material adverse effect on the
Company and the Association, taken as a whole.
(xxiii) The records of Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members (as those terms are defined in the Plan)
delivered to Trident by the Association or its agent in connection with the
Conversion are accurate, reliable and complete in all material respects.
(xxiv) Neither the Company nor the Association has made any payment of
funds of the Company or the Association prohibited by law, and no funds of the
Company or the Association have been set aside to be used for any payment
prohibited by law.
<PAGE>
Trident Securities, Inc.
Page 8
(xxv) To the best knowledge of the Company and the Association, the
Company and the Association are in compliance with all laws, rules and
regulations relating to environmental protection and neither the Company nor the
Association is subject to liability under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or any similar
law, except for violations which, if asserted, would not have a material adverse
effect on the Company and the Association, taken as a whole. There are no
actions, suits, regulatory investigations or other proceedings pending or, to
the best knowledge of the Company or the Association, threatened against the
Company or the Association relating to environmental protection. To the best
knowledge of the Company and the Association, no disposal, release or discharge
of hazardous or toxic substances, pollutants or contaminants, including
petroleum and gas products, as any of such terms may be defined under federal,
state or local law, has been caused by the Company or the Association or, to the
best knowledge of the Company and the Association, or except as already
disclosed in the Prospectus, has occurred on, in or at any of the facilities or
properties owned or leased by the Company or the Association or in which the
Company or the Association has a security interest, except such disposal,
release or discharge which would not have a material adverse effect on the
financial condition, operations, business, assets or properties of the Company,
the Association or the subsidiary, taken as a whole.
(xxvi) All documents delivered by the Association or the Company or
their representatives in connection with the issuance and sale of the Common
Stock, except for those documents that were prepared by parties other than the
Association, the Company or their representatives, were, on the dates on which
they were delivered, true, complete and correct.
(b) Trident represents and warrants to the Company and the Association
that:
(i) Trident is registered as a broker-dealer with the Commission and no
withdrawal of its registration is pending or, to the best knowledge of Trident,
threatened; and Trident is in good standing with the Commission and the NASD.
(ii) Trident is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, with full corporate power
and authority to provide the services to be furnished to the Company and the
Association hereunder.
(iii) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary action on the part of Trident, and this Agreement is a legal,
valid and binding obligation of Trident, enforceable in accordance with its
terms (except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally or the rights of creditors of
registered broker-dealers the accounts of whom may be protected by the
Securities Investor Protection Corporation or by general equity principles,
regardless of whether such enforceability is considered in a proceeding in
equity
<PAGE>
Trident Securities, Inc.
Page 9
or at law, and except to the extent that the provisions of Sections 8 and 9
hereof may be unenforceable as against public policy).
(iv) Trident and, to Trident's best knowledge, each of its employees,
agents and representatives who shall perform any of the services required
hereunder to be performed by Trident, is duly authorized and has all licenses,
approvals and permits necessary to perform such services. Trident is a
registered selling agent in each jurisdiction, other than Hawaii and South
Dakota, and no withdrawal of its registration is pending or , to the best
knowledge of Trident, threatened; and Trident will remain registered in such
jurisdictions in which the Company is relying on such registration for the sale
of the Shares, and will remain so registered until the Conversion is consummated
or terminated.
(v) The execution and delivery of this Agreement by Trident, the
fulfillment of the terms set forth herein and the consummation of the
transactions contemplated hereby shall not violate or conflict with the charter
or bylaws of Trident or violate, conflict with or constitute a breach of, or
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, any material agreement, indenture or other
instrument by which Trident is bound or under any governmental license or permit
or any law, administrative regulation, authorization, approval or order or court
decree, injunction or order.
(vi) All funds received by Trident to purchase Common Stock will be
handled in accordance with Rule 15c2-4 under the Securities Exchange Act of
1934, as amended ("Exchange Act").
(vii) No action or proceeding against Trident before the Commission,
the NASD, any state securities commission, or any state or federal court is
pending or, to Trident's best knowledge, threatened concerning Trident's
activities as a broker-dealer.
(viii) No action, suit, charge or proceeding is pending or, to the best
knowledge of Trident, threatened against Trident which, if determined adversely
to Trident, would have a material adverse effect on Trident's ability to perform
its obligations under this Agreement.
3. Engagement of Trident; Sale and Delivery of the Shares. On the basis
of the representations and warranties herein contained, but subject to the terms
and conditions herein set forth, the Company and the Association hereby engage
Trident as their agent to utilize its best efforts to assist the Company with
the Company's sale of the Shares in the Offerings, and Trident hereby accepts
such engagement. The engagement of Trident hereunder shall terminate (a)
forty-five (45) days after the Subscription and Community Offering closes,
unless the Company and the Association, with the approval of the OTS, are
permitted to extend such period of time, or (b) upon consummation of the
Conversion, whichever date shall first occur.
<PAGE>
Trident Securities, Inc.
Page 10
In the event the Company is unable to sell a minimum of 204,000 Shares
(or such lesser amount as the OTS may permit) within the period herein provided
(including any permitted extensions), this Agreement shall terminate, and the
Company and the Association shall refund promptly to any persons who have
subscribed for any of the Shares the full amount which they may have received
from such persons, together with interest as provided in the Prospectus, and no
party to this Agreement shall have any obligation to the other party hereunder,
except as set forth in Sections 6, 8, 9, 10 and 11(d) hereof. Appropriate
arrangements for placing the funds received from subscriptions for Shares in
special interest-bearing accounts with the Association until all Shares are sold
and paid for will be made prior to the commencement of the Subscription and
Community Offering, with provision for prompt refund to the purchasers as set
forth above, or for delivery to the Company if all Shares are sold.
If all conditions precedent to the consummation of the Conversion are
satisfied, including the sale of all Shares required by the Plan to be sold, the
Company agrees to issue or have issued such Shares and to release for delivery
certificates to subscribers thereof for such Shares on or as soon as possible
following the Closing Date against payment to the Company by any means
authorized pursuant to the Prospectus, at the principal office of the Company,
23910 Railroad, Avenue, Plaquemine, Louisiana, or at such other place as shall
be agreed upon between the parties hereto. The date upon which the Company shall
release or deliver the Shares sold in the Offerings, in accordance with the
terms hereof, is herein called the "Closing Date."
Trident agrees either (a) upon receipt of an executed order form of a
subscriber to forward the offering price of the Common Stock ordered on or
before twelve noon on the next business day following receipt or execution of an
order form by Trident to the Association for deposit in a segregated account or
(b) to solicit indications of interest in which event (i) Trident will
subsequently contact any potential subscriber indicating interest to confirm the
interest and give instructions to execute and return an order form or to receive
authorization to execute the order form on the subscriber's behalf, (ii) Trident
will mail acknowledgements of receipt of orders to each subscriber confirming
interest on the business day following such confirmation, (iii) Trident will
debit accounts of such subscribers on the third business day ("debit date")
following receipt of the confirmation referred to in (i), and (iv) Trident will
forward completed order forms together with such funds to the Association on or
before twelve noon on the next business day following the debit date for deposit
in a segregated account. Trident acknowledges that if the procedure in (b) is
adopted, subscribers' funds are not required to be in their accounts until the
debit date.
Trident agrees to render to the Company and the Association the
services set forth in Exhibit A hereto. Trident shall receive the following
compensation and expense reimbursement for its services hereunder:
(a) A management fee of $75,000, to be paid to Trident in
next-day funds on the Closing Date.
<PAGE>
Trident Securities, Inc.
Page 11
(b) In the event of a Syndicated Community Offering (as
defined in the Plan), a commission to be agreed upon jointly by
Trident, the Company and the Association for Shares sold by other
member firms of the NASD through a selected dealers arrangement in the
Syndicated Community Offering. Such commission shall reflect market
requirements at the time of the allocation of Shares in the Syndicated
Offering, and shall be paid to Trident in next-day funds on the Closing
Date.
(c) Reimbursement for reasonable out-of-pocket allocable
expenses, including but not limited to travel, food, lodging and legal
fees, incurred by it whether or not the Offerings are successfully
completed; provided, however, that reimbursable legal fees will not
exceed $27,500 and that other reimbursable expenses will not exceed
$10,000, and, provided further, that neither the Company nor the
Association shall reimburse Trident for any of the foregoing expenses
accrued after Trident shall have notified the Company or the
Association of its election to terminate this Agreement pursuant to
Section 11 hereof or after such time as the Company or the Association
shall have given notice in accordance with Section 12 hereof that
Trident is in breach of this Agreement or that the Company and the
Association are terminating this Agreement pursuant to Section 11
hereof. Full reimbursement of Trident shall be made in next-day funds
on the Closing Date or, if the Conversion is not completed and is
terminated for any reason, within ten (10) business days of receipt by
the Company of a written request detailing allocable expenses from
Trident for reimbursement of such expenses. Trident acknowledges
receipt of a $10,000 advance payment from the Association, which shall
be credited against the total reimbursement due Trident hereunder. In
the event this Agreement is terminated pursuant to Section 11 hereof,
Trident shall be reimbursed only for its actual allocable expenses.
(d) Reimbursement for any expenses of the Company and the
Association set forth in Section 6 hereof to the extent paid by Trident
on behalf of the Company and the Association. Full reimbursement shall
be made in next-day funds on the Closing Date or, if the Conversion is
not completed and is terminated for any reason, within ten (10)
business days of receipt by the Company and the Association of a
written request for such reimbursement detailing such reimbursements.
Notwithstanding the limitations on reimbursement of Trident for its
allocable expenses provided in subsection (b) above and notwithstanding any
reimbursement of Trident pursuant to subsection (c) above, in the event that a
resolicitation or other event causes the Offerings to be extended beyond their
original expiration date, Trident shall be reimbursed for its reasonable
allocable expenses incurred during such extended period, provided that the
allowance for allocable expenses provided for in subsection (b) above has been
exhausted and subject to the following: such reimbursement shall be in an amount
equal to the product obtained by dividing $37,500 (the sum of the reimbursable
expenses and legal fees limitation set forth in Section (b) above) by the total
number of days of the unextended Subscription Offering (calculated from the date
of the Prospectus to the intended close of the Subscription Offering as stated
in the Prospectus) and multiplying such
<PAGE>
Trident Securities, Inc.
Page 12
product by the number of days of the extension (that number of days from the
date of the supplemental prospectus used in the extended Subscription Offering
to the closing of the extension of the Subscription Offering described in such
supplemental prospectus).
4. Offering. Subject to the provisions of Section 7 hereof, Trident is
assisting the Company on a best efforts basis in offering a minimum of 204,000
and a maximum of 276,000 Shares, subject to adjustment up to 317,400 Shares
(except as the OTS may permit the number of Shares to be decreased or increased)
in the Offerings. The Shares are to be offered to the public at the price set
forth on the cover page of the Prospectus and the first page of this Agreement.
5. Further Agreements. The Company and the Association jointly and
severally covenant and agree that:
(a) Subsequent to the respective dates as of which information is given
in the Registration Statement and Prospectus and through and including the
Closing Date, except as otherwise may be indicated or contemplated therein,
neither the Company nor the Association will issue any securities which will
remain issued at the Closing Date or incur any liability or obligation, direct
or contingent, or borrow money, except borrowings or liabilities in the ordinary
course of business, or enter into any other transaction not in the ordinary
course of business and consistent with prior practices, which is material in
light of the financial condition, operations, business, properties or assets of
the Company and the Association, taken as a whole.
(b) If any Shares remain unsubscribed following completion of the
Subscription Offering and the Community Offering, the Company (i) will, if
deemed necessary, promptly file with the Commission a post-effective amendment
to such Registration Statement relating to the results of the Subscription and
the Community Offerings, any additional information with respect to the proposed
plan of distribution and any revised pricing information or (ii) if no such
post-effective amendment is required, will file with, or mail for filing to, the
Commission a prospectus or prospectus supplement containing information relating
to the results of the Subscription and Community Offerings and pricing
information pursuant to Rule 424(c) of the Securities Act Regulations, in either
case in a form reasonably acceptable to the Company and Trident.
(c) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company shall be within the range as set forth
in the Prospectus under the caption "Capitalization," and no Common Stock of the
Company shall be outstanding immediately prior to the Closing Date (other than
shares of Common Stock issued in connection with the initial capitalization of
the Company, which shares will be canceled upon consummation of the Conversion);
and the certificates representing the Common Stock will conform in all material
respects with the requirements of applicable laws and OTS Regulations.
(d) At all times subsequent to the date of the Prospectus through and
including the Closing Date, (i) the Registration Statement and the Prospectus
will comply as to form in all material
<PAGE>
Trident Securities, Inc.
Page 13
respects with the Securities Act and the Securities Act Regulations, (ii) the
Registration Statement will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and (iii) the Prospectus will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. (The agreements in
this subsection shall not apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company or the
Association relating to Trident by or on behalf of Trident expressly for use in
the Registration Statement or Prospectus.).
(e) Upon amendment of the Association's charter and bylaws as provided
in the OTS Regulations and completion of the sale and issuance of the Shares by
the Company as contemplated by the Prospectus, (i) the Association will be
converted pursuant to the Plan to a Louisiana chartered capital stock savings
association with full power and authority to own its property and conduct its
business as described in the Prospectus, (ii) all of the authorized and
outstanding capital stock of the Association will be owned of record and
beneficially by the Company, and (iii) the Company will have no direct
subsidiaries other than the Association.
(f) The Company shall deliver to Trident, from time to time, such
number of copies of the Prospectus as Trident reasonably may request. The
Company authorizes Trident to use the Prospectus in any lawful manner in
connection with the offer and sale of the Shares.
(g) The Company will notify Trident immediately, and confirm the notice
in writing, (i) when any post-effective amendment to the Registration Statement
becomes effective or any supplement to the Prospectus has been filed, (ii) of
the issuance by the Commission of any stop order relating to the Registration
Statement or of the initiation or the threat of any proceedings for that
purpose, (iii) of the receipt of any notice with respect to the suspension of
the qualification of the Shares for offering or sale in any jurisdiction, and
(iv) of the receipt of any comments from the staff of the Commission relating to
the Registration Statement. If the Commission enters a stop order relating to
the Registration Statement at any time, the Company will make every reasonable
effort to obtain the lifting of such order at the earliest possible moment.
(h) During the time when a prospectus is required to be delivered under
the Securities Act, the Company will comply with all requirements imposed upon
it by the Securities Act and by the Securities Act Regulations to permit the
continuance of offers and sales of or dealings in the Shares in accordance with
the provisions hereof and the Prospectus. If during the period when the
Prospectus is required to be delivered in connection with the offer and sale of
the Shares any event relating to or affecting the Company and the Association,
taken as a whole, shall occur as a result of which it is necessary, in the
reasonable opinion of counsel for Trident, to amend or supplement the Prospectus
in order to make the Prospectus not false or misleading in light of the
circumstances existing at the time it is delivered to a purchaser of the Shares,
the Company forthwith shall prepare and furnish to Trident a reasonable number
of copies of an amendment or amendments or of a
<PAGE>
Trident Securities, Inc.
Page 14
supplement or supplements to the Prospectus (in form and substance reasonably
satisfactory to counsel for Trident) which shall amend or supplement the
Prospectus so that, as amended or supplemented, the Prospectus shall not contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
existing at the time the Prospectus is delivered to a purchaser of the Shares,
not misleading. The Company will not file or use any amendment or supplement to
the Registration Statement or the Prospectus unless Trident has been first
furnished a copy or if Trident shall reasonably object after having been
furnished such copy. For the purposes of this subsection, the Company and the
Association shall furnish such information with respect to themselves as Trident
from time to time may reasonably request.
(i) The Company and the Association will take all reasonably necessary
action as may be required to qualify or register the Shares for offer and sale
by the Company under the securities or blue sky laws of such jurisdictions as
Trident and the Company or its counsel may agree upon; provided, however, that
the Company shall not be required to offer or sell Shares in any jurisdiction in
which the Company would be required to file any consent to service of process in
such jurisdiction to qualify as a foreign corporation to do business under the
laws of any such jurisdiction, or to register its directors or officers as
brokers, dealers, salesmen or agents therein. In each jurisdiction where such
qualification or registration shall be effected, the Company, unless Trident
agrees that such action is not necessary or advisable in connection with the
distribution of the Shares, shall file and make such statements or reports as
are, or reasonably may be, required by the laws of such jurisdiction.
(j) Appropriate entries will be made in the financial records of the
Association to establish a liquidation account for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders (as those terms are
defined in the Plan) in accordance with the OTS Regulations.
(k) The Company will file a registration statement for the Common Stock
under the Exchange Act prior to completion of the Offerings pursuant to the Plan
and shall request that such registration statement be effective upon completion
of the Conversion. The Company shall maintain the effectiveness of such
registration for a minimum period of three years or for such shorter period as
may be permitted by law.
(l) The Company will make generally available to its security holders
as soon as practicable, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the Securities Act Regulations) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date (as defined in said Rule 158) of the Registration
Statement.
(m) For a period of three (3) years from the date of this Agreement,
the Company will furnish to Trident (i) as soon as publicly available after the
end of each fiscal year, a copy of its annual report to shareholders for such
year; (ii) as soon as publicly available, a copy of each report
<PAGE>
Trident Securities, Inc.
Page 15
or definitive proxy statement of the Company filed with the Commission under the
Exchange Act or mailed to shareholders; and (iii) from time to time, such other
public information concerning the Company as Trident may reasonably request.
(n) The Company shall use the net proceeds from the sale of the Shares
in the manner set forth in the Prospectus.
(o) The Company shall not deliver the Shares until each and every
condition set forth in Section 7 hereof has been satisfied, unless such
condition is waived in writing by Trident.
(p) The Company and the Association shall assist Trident, if necessary,
in connection with the allocation of the Shares pursuant to the Plan in the
event of an oversubscription for the Shares and shall provide Trident with any
necessary information to assist the Company and the Association in the
allocation of the Shares ("Allocation Instructions") in such event, and, to the
best knowledge of the Company and the Association, such information shall be
accurate and reliable in all material respects.
(q) The Company and the Association will take such actions and furnish
such information as are reasonably requested by Trident in order for Trident to
comply with the NASD's "Interpretation Relating to Free-Riding and Withholding."
(r) At the Closing Date, the Company and the Association will have
completed the conditions precedent to, and shall have conducted the Conversion
in all material respects in accordance with, the Plan, OTS Regulations and all
other applicable laws, regulations, published decisions and orders, including
all terms, conditions, requirements and provisions precedent imposed by the OTS.
(s) The Company shall use its best efforts to list the Shares on the
Nasdaq quotation system to be effective on or prior to the Closing Date, as
required by the OTS Regulations.
6. Payment of Expenses. Subject to Section 3(c) hereof, whether or not
the Conversion is consummated, the Company and the Association shall pay the
following expenses: (a) all regulatory filing fees, including but not limited to
those payable to the Commission, OTS, "blue sky" authorities and the NASD
(including fees payable to the NASD for Trident's filing pursuant to the NASD
Corporate Finance Rule), (b) all stock issue and transfer taxes which may be
payable with respect to the sale of the Shares, (c) attorneys' fees incurred by
the Company and the Association, (d) attorneys' fees relating to any required
"blue sky" laws research and filings, (e) telephone charges, (f) air freight,
(g) rental equipment, (h) supplies, (i) transfer agent and registrar fees and
expenses, (j) auditing and accounting fees and expenses, (k) costs of printing
and mailing all documents necessary in connection with the Conversion, and (l)
slide production expenses in connection with any community investor meetings to
be held by Trident.
<PAGE>
Trident Securities, Inc.
Page 16
7. Conditions of Trident's Obligations. Except as may be waived in
writing by Trident, the obligations of Trident as provided herein shall be
subject to the accuracy of the representations and warranties contained in
Section 2 hereof as of the date hereof and as of the Closing Date, to the
performance by the Company and the Association of their obligations hereunder,
and to the following conditions:
(a) At the Closing Date, Trident shall receive the favorable
opinion of Elias, Matz, Tiernan & Herrick L.L.P., counsel for the
Company and the Association, dated the Closing Date, addressed to
Trident, in form and substance reasonably satisfactory to counsel for
Trident and stating that:
(i) the Company has been incorporated and is validly existing
as a corporation under the laws of the State of Louisiana, and its
Articles of Incorporation and Bylaws comply in all materials respects
with Louisiana law.
(ii) the Company has full power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus;
(iii) the Company is not in violation of its Articles of
Association or, to such counsel's Actual Knowledge, its bylaws;
(iv) the Association is validly existing as a mutual savings
association under the laws of Louisiana, with full power and authority
to own its properties and conduct its business as described in the
Prospectus; and, to such counsel's Actual Knowledge, the Association
has obtained all federal and Louisiana banking licenses, permits and
authorizations currently required for the conduct of its business as
described in the Prospectus, all of which are in full force and effect,
except where the failure to obtain such licenses, permits or
authorizations would not have a material adverse effect on the
Association.
(v) the Association is a member of the Federal Home Loan Bank
of Dallas, and the deposit accounts of the Association are insured by
the SAIF up to the applicable legal limits; and no action or proceeding
to suspend or revoke such membership or insurance coverage is pending
or, to such counsel's Actual Knowledge, threatened;
(vi) the activities of the Association as described in the
Prospectus are permitted under the HOLA, OTS Regulations, the LSLA and
LOFI Regulations;
(vii) to such counsel's Actual Knowledge, the Association has
no direct or indirect subsidiary corporations;
<PAGE>
Trident Securities, Inc.
Page 17
(viii) upon consummation of the Conversion, the Company will
have authorized, issued and outstanding Common Stock within the range
set forth in the Prospectus, and the description of the Common Stock in
the Prospectus is accurate in all material respects;
(ix) the Plan complies in all material respects with the HOLA
and the OTS Regulations and has been duly and validly adopted by the
Boards of Directors of the Company and the Association; to such
counsel's Actual Knowledge, the requisite number of votes of the
members of the Association have been cast in favor of the Plan to
approve it under the terms of the Plan and applicable law; and, to such
counsel's Actual Knowledge, no person has sought to obtain regulatory
or judicial review of the final action of the OTS in approving the
Plan;
(ix) the issuance and sale of the Shares have been duly and
validly authorized by all necessary corporate action on the part of the
Company and the Association; the Shares, upon receipt of consideration
and issuance in accordance with the terms of the Plan and this
Agreement, will be validly issued, fully paid, nonassessable and,
except as disclosed in the Prospectus, free of preemptive rights, and
good title thereto shall be transferred by the Company free and clear
of all claims, encumbrances, security interests and liens created by
the Company;
(x) the certificates for the Common Stock are in due and
proper form and comply in all material respects with applicable
Louisiana law and OTS Regulations;
(xi) the issuance and sale of the capital stock of the
Association to the Company have been duly authorized by all necessary
corporate action of the Association and have received the approval of
the OTS, and such capital stock, upon receipt of payment and issuance
in accordance with the terms of the Plan, will be validly issued, fully
paid and nonassessable and good title thereto shall be transferred by
the Association free and clear of all claims, encumbrances, security
interests and liens created by the Association;
(xii) subject to the satisfaction of the conditions to the OTS
and LOFI approval of the Conversion Application, and to the OTS and
LOFI approval of the Holding Company Application, no further approval,
authorization, consent or other order of any federal and Louisiana
regulatory agency is required in connection with the execution and
delivery of this Agreement, the issuance and sale of the Shares and the
consummation of the Conversion, except with respect to the issuance of
the Association's Stock Charter by the LOFI, and except as may be
required under the "blue sky" securities laws of various jurisdictions
and the regulations of the NASD (as to which no opinion need be
rendered);
(xiii) the execution and delivery of this Agreement and the
consummation of the Conversion have been duly and validly authorized by
all necessary corporate action on the part of each of the Company and
the Association; and this Agreement is a legal, valid and
<PAGE>
Trident Securities, Inc.
Page 18
binding obligation of each of the Company and the Association,
enforceable in accordance with its terms, except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship or other laws relating to or
affecting the enforcement of creditors' rights generally or the rights
of creditors of depository institutions whose accounts are insured by
the FDIC or savings and loan holding companies the accounts of whose
subsidiaries are insured by the FDIC; (ii) general equity principles,
regardless of whether such enforceability is considered in a proceeding
in equity or at law, or (iii) laws relating to the safety and soundness
of insured depository institutions and their affiliates, and except to
the extent that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy or applicable law, including but
not limited to Sections 23A and 23B;
(xiv) except as set forth in the Prospectus, there are no
legal or governmental proceedings pending or, to such counsel's Actual
Knowledge, threatened against or involving the assets of the Company or
the Association which would have a material adverse effect on the
Company and the Association, taken as a whole (provided that for this
purpose such counsel need not regard any litigation or governmental
procedure to be "threatened" unless the potential litigant or
government authority has manifested to the management of the Company or
the Association, or to such counsel, a present intention to initiate
such litigation or proceeding);
(xv) the statements in the Prospectus under the captions
"Dividend Policy," "Regulation," "Taxation," " Restrictions on
Acquisition of the Holding Company and the Association," "Description
of Capital Stock of the Company," and "The Conversion," insofar as they
are, or refer to, statements of law or legal conclusions (excluding
financial or statistical data or stock valuation information included
therein, as to which an opinion need not be expressed), have been
prepared or reviewed by such counsel and are accurate and complete in
all material respects;
(xvi) the Form AC has been approved by the OTS and the LOFI,
and the Prospectus and the Proxy Statement have been authorized for use
by the OTS and the LOFI; the OTS and the LOFI have approved the Holding
Company Application; the Registration Statement has been declared
effective by the Commission; the Common Stock is subject to an
effective registration statement filed under the Exchange Act; and no
proceedings are pending by or before the Commission, the OTS or the
LOFI seeking to revoke or rescind the orders declaring the Registration
Statement or the registration statement under the Exchange Act
effective or approving the Conversion Application or, to such counsel's
Actual Knowledge, are contemplated or threatened (provided that for
this purpose such counsel need not regard any such proceeding to be
"threatened" unless the government authority has manifested to the
management of the Company or the Association, or to such counsel, a
present intention to initiate such litigation or proceeding);
<PAGE>
Trident Securities, Inc.
Page 19
(xvii) the execution, delivery and fulfillment of the terms of
this Agreement and the consummation of the Conversion by the Company
and the Association (A) do not conflict with or result in a breach of
the charter, articles of incorporation or bylaws of the Company or the
Association (in either mutual or stock form), or (B) to such counsel's
Actual Knowledge, in any material respect, violate, conflict with or
constitute a breach of, or default (or an event which, with notice or
lapse of time or both, would constitute a default) under (I) any
material agreement, indenture or other instrument filed as an exhibit
to the Registration Statement or (II) any published federal or
Louisiana banking law or regulation (subject to the satisfaction of
certain post-Conversion conditions imposed by the OTS and the LOFI in
connection with their approval of the Conversion Application and the
Holding Company Application), except where such violation, conflict,
breach or default would not have a material adverse effect on the
financial condition, operations, business, assets or properties of the
Company and the Association, taken as a whole;
(xviii) there has been no breach of any provision of the
Company's or the Association's charter or articles of incorporation, as
the case may be, or, to such counsel's Actual Knowledge, bylaws; to
such counsel's Actual Knowledge, there has been no breach or default
(or the occurrence of any event which, with notice or lapse of time or
both, would constitute a default) by the Company or the Association
under any agreement, contract, indenture, bond, debenture, note,
instrument or obligation to which the Company or the Association is a
party or by which any of them or any of their respective assets or
properties may be bound, which breach or default in any case would have
a material adverse effect on the financial condition, operations,
business, assets or properties of the Company and the Association,
taken as a whole;
(xix) at the time the Conversion Application was approved by
the OTS and the LOFI and at the time the Registration Statement was
declared effective by the Commission, the Conversion Application and
the Registration Statement (including the Prospectus and the Proxy
Statement contained therein), complied as to form in all material
respects with the requirements of the Securities Act, the HOLA, the
Securities Act Regulations, the OTS Regulations and the LOFI
Regulations, as the case may be (except as to information provided in
writing by Trident with respect to Trident included therein and
financial statements, notes to financial statements, financial tables
and other financial and statistical data and stock valuation
information included therein, as to which no opinion need be rendered);
to such counsel's Actual Knowledge, all documents and exhibits required
to be filed with the Conversion Application and the Registration
Statement have been so filed; and the descriptions in the Conversion
Application and the Registration Statement of such documents and
exhibits are accurate and complete in all material respects;
(xx) upon the effectiveness of the Association's stock
articles of incorporation and bylaws in accordance with applicable
regulations and completion of the sale by the Company of the Shares as
contemplated by the Prospectus and the Plan, (i) the Association will
be
<PAGE>
Trident Securities, Inc.
Page 20
converted to a permanent capital stock savings association under the
laws of Louisiana with full power and authority to own its property and
conduct its business as described in the Prospectus, and (ii) all of
the outstanding capital stock of the Association will be owned of
record and, to such counsel's Actual Knowledge, beneficially by the
Company, free and clear of all liens, charges, encumbrances and
restrictions; and
(xxi) except with respect to certain post-Conversion reports
or other materials required to be filed by the Company and the
Association and any other actions required to be performed after the
Closing Date, to such counsel's Actual Knowledge, the Company and the
Association have satisfied, in all material respects, all the
conditions of approval of the Conversion Application and the Holding
Company Application contained in the final approval letters of the OTS
and the LOFI.
In rendering such opinion, such counsel may rely as to matters
of fact on certificates of executive officers and directors of the
Company and the Association and certificates of public officials
delivered pursuant hereto. Such counsel may assume that any agreement
is the valid and binding obligation of any parties to such agreement
other than the Company and the Association. Such opinion shall be
governed by, and interpreted in accordance with, the Legal Opinion
Accord ("Accord") of the American Bar Association Section of Business
Law (1991), and, as a consequence, references in such opinion to such
counsel's "Actual Knowledge" shall be as such term is defined in the
Accord (or knowledge based on certificates). The opinion of Elias,
Matz, Tiernan & Herrick L.L.P. shall be limited to matters governed by
federal banking and securities laws and regulations, the State of
Louisiana Business Corporation Law, the LSLA and the LOFI Regulations.
With respect to matters involving the application of Louisiana Law
other than the Louisiana Business Corporation Law, such counsel may
rely, to the extent it deems proper and as specified in its opinion,
upon the opinion of local counsel satisfactory to Trident's counsel.
For purposes of such opinion, no proceeding shall be deemed to be
pending, no order or stop order shall be deemed to be issued, and no
action shall be deemed to be instituted unless, in each case, a
director or executive officer of the Company or the Association, or its
counsel, shall have received a copy of such proceeding, order, stop
order or action. Such opinion may be limited to statutes, regulations
and judicial interpretations and to facts as they exist as of the date
of such opinions. In rendering such opinion, such counsel need assume
no obligation to revise or supplement it should such statutes,
regulations and judicial interpretations be changed by legislative or
regulatory action, judicial decision or otherwise. Such counsel need
express no view, opinion or belief with respect to whether any proposed
or pending legislation, if enacted, or any proposed or pending
regulations or policy statements issued by any regulatory agency,
whether or not promulgated pursuant to any such legislation, would
affect the validity of the execution and delivery by the Company and
the Association of this Agreement or the issuance of the Shares.
<PAGE>
Trident Securities, Inc.
Page 21
(b) At the Closing Date, Trident shall receive the letter of
Elias, Matz, Tiernan & Herrick L.L.P., counsel for the Company and the
Association, dated the Closing Date, addressed to Trident, in form and
substance reasonably satisfactory to counsel for Trident and to the
effect that: (i) based on such counsel's participation in conferences
with representatives of the Company and the Association, their counsel,
the independent appraiser, the independent certified public accountants
for the Company and the Association, Trident and its counsel, review of
various documents and applicable law (including the requirements of
Form SB-2 and the character of the Registration Statement contemplated
thereby) and the experience such counsel has gained in its practice
under the Securities Act, nothing has come to such counsel's attention
that would lead it to believe that (i) the Registration Statement
(except as to information regarding Trident contained therein and
except as to the financial statements, notes to financial statements,
financial tables, pro forma and other financial and statistical data
and stock valuation information contained therein, as to which such
counsel need express no view), at the time it became effective and at
the time any post-effective amendment thereto became effective,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they
were made, not misleading, and (ii) the Prospectus (except as to
information regarding Trident contained therein and except as to
financial statements, notes to financial statements, financial tables,
pro forma and other financial and statistical data and stock valuation
information contained therein as to which such counsel need express no
view), as of its date and as of the Closing Date, contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. In issuing such letter,
such counsel may indicate that it has not confirmed the accuracy or
completeness of or otherwise verified the factual information contained
in the Registration Statement or the Prospectus, that it does not
assume any responsibility for the accuracy or completeness thereof, and
that it is relying as to factual matters on certificates of officers
and other factual representations by the Company and the Association.
(c) Counsel for Trident shall have been furnished such
documents as they reasonably may require for the purpose of enabling
them to review or pass upon the sale of the Shares as herein
contemplated and related proceedings, and for the purpose of evidencing
the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained, including
but not limited to, resolutions of the Board of Directors of the
Company and the Association regarding the authorization of this
Agreement and the transactions contemplated hereby.
(d) Prior to and at the Closing Date, in the reasonable
opinion of Trident, (i) there shall have been no material adverse
change in the financial condition, business, operations, assets or
properties of the Company and the Association, taken as a whole, since
the latest date as of which such condition is set forth in the
Prospectus, except as referred to or
<PAGE>
Trident Securities, Inc.
Page 22
contemplated therein; (ii) there shall have been no transaction entered
into by the Company or the Association after the latest date as of
which the financial condition of the Company or the Association is set
forth in the Prospectus other than transactions referred to or
contemplated therein, transactions in the ordinary course of business,
and transactions which are not material to the Company and the
Association, taken as a whole; (iii) none of the Company or the
Association shall have received from the OTS or the Commission any
directive (oral or written) to make any change in the method of
conducting their respective businesses which is material to the
business of the Company and the Association, taken as a whole, with
which they have not complied; (iv) no action, suit or proceeding, at
law or in equity or before or by any federal or state commission, board
or other administrative agency, shall be pending or threatened against
the Company or the Association or affecting any of their respective
assets, wherein an unfavorable decision, ruling or finding would have a
material adverse effect on the business, operations, financial
condition or income of the Company and the Association, taken as a
whole; and (v) the Shares shall have been qualified or registered for
offering and sale by the Company under the securities or "blue sky"
laws of such jurisdictions as Trident and the Company shall have agreed
upon.
(e) At the Closing Date, Trident shall receive a certificate
of the principal executive officer and the principal financial officer
of each of the Company and the Association, dated the Closing Date, to
the effect that: (i) he has examined the Prospectus and, to the best
knowledge of such officers, the Prospectus does not contain an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading with respect to the Company
or the Association; (ii) no event has occurred since the date of the
Prospectus which should have been set forth in an amendment or
supplement to the Prospectus which has not been so set forth, including
specifically, but without limitation, any material adverse change in
the business, financial condition, operations, assets or properties of
the Company or the Association and, the conditions set forth in clauses
(ii) through (iv) inclusive of subsection (d) of this Section 7 have
been satisfied; (iii) no order has been issued by the Commission, the
OTS or the LOFI to suspend the Offerings or the effectiveness of the
Prospectus, and, to the best knowledge of such officer, no action for
such purposes has been instituted or threatened by the Commission, the
OTS or the LOFI; (iv) to the best knowledge of such officer, no person
has sought to obtain review of the final actions of the OTS approving
the Plan; and (v) all of the representations and warranties contained
in Section 2 of this Agreement are true and correct, with the same
force and effect as though expressly made on the Closing Date.
(f) At the Closing Date, Trident shall, if it has not already
received, receive, among other documents, (i) copies of the letters
from the OTS and the LOFI authorizing the use of the Prospectus and the
Proxy Statement, (ii) a copy of the order of the Commission declaring
the Registration Statement effective; (iii) a copy of the certificate
from the OTS evidencing the corporate existence of the Association;
(iv) a copy of the certificate from the
<PAGE>
Trident Securities, Inc.
Page 23
FDIC evidencing the insured status of the Association, (v) a copy of
the letter from the appropriate Louisiana authority evidencing the
incorporation (and, if generally available from such authority, good
standing) of the Company; (vi) a copy of the Company's articles of
incorporation certified by the appropriate Louisiana governmental
authority; and (vii) a copy of the letter from the LOFI approving the
Association's Stock Articles of Incorporation.
(g) As soon as available after the Closing Date, Trident shall
receive a certified copy of the Association's Stock Articles of
Incorporation as executed by the LOFI.
(h) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from L.A. Champagne & Co., L.L.P.,
independent certified public accountants, addressed to Trident, in
substance and form reasonably satisfactory to counsel for Trident, with
respect to the financial statements of the Association and certain
financial information contained in the Prospectus.
(i) At the Closing Date, Trident shall receive a letter in
form and substance reasonably satisfactory to counsel for Trident from
L.A. Champagne & Co., L.L.P., independent certified public accountants,
dated the Closing Date and addressed to Trident, confirming the
statements made by them in the letter delivered by them pursuant to the
preceding subsection as of a specified date not more than five (5)
business days prior to the Closing Date.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident and its counsel. Any
certificates signed by an officer or director of the Company or the Association
prepared for Trident's reliance and delivered to Trident or to counsel for
Trident shall be deemed a representation and warranty by the Company and the
Association to Trident as to the statements made therein. If any condition to
Trident's obligations hereunder to be fulfilled prior to or at the Closing Date
is not so fulfilled, Trident may terminate this Agreement or, if Trident so
elects, may waive in writing any such conditions which have not been fulfilled,
or may extend the time of their fulfillment.
8. Indemnification.
(a) The Company and the Association jointly and severally agree to
indemnify and hold harmless Trident, its officers, directors and employees and
each person, if any, who controls Trident within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act:
(i) Against any and all loss, liability, claim, damage and expense
whatsoever and shall further promptly reimburse such persons for any
legal or other expenses reasonably incurred by each or any of them in
investigating, preparing to defend or defending against any action,
proceeding or claim (whether commenced or
<PAGE>
Trident Securities, Inc.
Page 24
threatened) (A) arising out of or based upon any breach of any
representation or warranty of the Company or the Association contained
in this Agreement, (B) arising out of or based upon the failure of the
Company or the Association to fulfill any covenant or obligation set
forth in this Agreement, (C) arising out of or based upon any untrue or
alleged untrue statement of a material fact or the omission or alleged
omission of a material fact required to be stated or necessary to make
the statements, in light of the circumstances under which they were
made, not misleading in (i) the Registration Statement or the
Prospectus (ii) any application (including the Form AC) or other
document or communication (in this Section 8 collectively called
"Application") prepared or executed by or on behalf of the Company or
the Association or based upon written information furnished by or on
behalf of the Company or the Association, filed in any jurisdiction to
register or qualify the Shares under the securities laws thereof or
filed with the OTS or Commission with respect to the offering of the
Shares, unless such statement or omission was made in reliance upon and
in conformity with information furnished in writing to the Company or
the Association with respect to Trident by or on behalf of Trident
expressly for use in the Prospectus or any amendment or supplement
thereof or in any Application, as the case may be, or (D) arising out
of or based upon the engagement of Trident under this Agreement. In no
event, however, shall the Company and the Association be liable to
Trident under this Section 8(a) if the loss, liability, claim, damage
or expense is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have principally and
directly resulted from Trident's gross negligence or willful
misconduct. This indemnity shall be in addition to any liability that
the Company or the Association may otherwise have to Trident;
(ii) Against any and all loss, liability, claim, damage and expense
whatsoever to the extent that the aggregate amount paid in settlement
of any litigation, investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever
based upon any untrue statement or omission referred to in subsection
(i) of this Section 8(a), or any alleged untrue statement or omission
referenced in such subsection, if such settlement is effected with the
prior written consent of the Company and the Association; and
(iii) Against any and all loss, liability, claim, damage and expense
whatsoever arising out or based upon (A) any Allocation Instructions
(as defined in Section 5(p) hereof) or (B) any records of Eligible
Account Holders, Supplemental Eligible Account Holders and Other
Members (as those terms are defined in the Plan) delivered to Trident
by the Association or its agents for use during the Conversion.
(b) Trident agrees to indemnify and hold harmless the Company and the
Association, their respective officers, directors and employees and each person,
if any, who controls the Company and the Association within the meaning of
Section 15 of the Securities Act or Section 20(a) of the
<PAGE>
Trident Securities, Inc.
Page 25
Exchange Act, to the same extent as the foregoing indemnity from the Company and
the Association to Trident, but only with respect to (A) statements or
omissions, if any, made in the Prospectus or any amendment or supplement
thereof, in any Application or to a purchaser of the Shares in reliance upon,
and in conformity with, information furnished in writing to the Company or the
Association with respect to Trident by or on behalf of Trident expressly for use
in the Prospectus or any amendment or supplement thereof or in any Application,
(B) any breach of any representation or warranty by Trident contained in this
Agreement, or (C) any liability of the Company or the Association found in a
final judgement by a court of competent jurisdiction (not subject to further
appeal) to have principally and directly resulted from gross negligence or
willful misconduct of Trident. This indemnity shall be in additional to any
liability that Trident may have to the Company of the Association otherwise.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of any action, proceeding or claim (whether commenced or threatened),
such indemnified party will, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the indemnifying party of
such action, proceeding or claim; but the omission so as to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with the other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so as to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than the reasonable cost of investigation except as otherwise
provided herein. In the event the indemnifying party elects to assume the
defense of any such action and retain counsel acceptable to the indemnified
party, the indemnified party may retain additional counsel, but shall bear the
fees and expenses of such counsel unless (i) the indemnifying party shall have
specifically authorized the indemnified party to retain such counsel or (ii) the
parties to such suit include such indemnifying party and the indemnified party,
and such indemnified party shall have been advised by counsel that one or more
material legal defenses may be available to the indemnified party which may not
be available to the indemnifying party, in which case the indemnifying party
shall not be entitled to assume the defense of such suit notwithstanding the
indemnifying party's obligation to bear the fees and expenses of such counsel.
In no event shall the indemnifying parties be liable for the fees and expenses
of more than one separate firm of attorneys (and any special counsel that said
firm may retain) for all indemnified parties in connection with any one action,
proceeding, claim or suit or separate but similar or related actions,
proceedings or claims in the same jurisdiction arising out of the same general
allegations or circumstances. An indemnifying party against whom indemnity may
be sought shall not be liable to indemnify an indemnified party under this
Section 8 if any settlement of any such action is effected without such
indemnifying party's consent.
<PAGE>
Trident Securities, Inc.
Page 26
(d) To the extent applicable, this Section 8 is subject to and limited
by public policy and the provisions of applicable law, including but not limited
to, Sections 23A and 23B.
9. Contribution. (a) In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 8 above is for any reason held to be unavailable to Trident, the Company
and/or the Association other than in accordance with its terms, the Company and
the Association or Trident shall contribute to the aggregate losses,
liabilities, claims, damages, and expenses of the nature contemplated by said
indemnity agreement incurred by the Company and the Association or Trident (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Association, on the one hand, and Trident, on the other,
from the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above, but
also the relative fault of the Company or the Association, on the one hand, and
Trident, on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Association, on the one hand, and Trident, on the other,
shall be deemed to be in the same proportion as the total net proceeds from the
Conversion received by the Company and the Association bear to the total fees
received by Trident under this Agreement. The relative fault of the Company or
the Association, on the one hand, and Trident, on the other, shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Association
or by Trident and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(b) The Company and the Association and Trident agree that it would not
be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by the indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, Trident shall not be required
to contribute any amount in excess of the amount by which fees owed Trident
pursuant to this Agreement exceeds the amount of any damages which Trident has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
(c) To the extent applicable, this Section 9 is subject to and limited
by public policy and the provisions of applicable law, including but not limited
to Sections 23A and 23B.
<PAGE>
Trident Securities, Inc.
Page 27
10. Survival of Agreements, Representations and Warranties, and
Indemnities. The respective indemnities of the Company and the Association and
Trident and the representation and warranties of the Company and the Association
and of Trident set forth in or made pursuant to this Agreement shall remain in
full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of Trident or the Company or
the Association or any controlling person or indemnified party referred to in
Section 8 hereof, and shall survive any termination or consummation of this
Agreement and/or the issuance of the Shares, and any legal representative of
Trident, the Company, the Association and any such controlling persons shall be
entitled to the benefit of the respective agreements, indemnities, warranties
and representations.
11. Termination. Trident may terminate this Agreement by giving the
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) If any domestic or international event or act or occurrence has
materially disrupted the United States securities markets such as to make it, in
Trident's reasonable opinion, impracticable to proceed with the offering of the
Shares; or if trading on the New York Stock Exchange shall have been suspended;
or if the United States shall have become involved in a war or major
hostilities; or if a general banking moratorium has been declared by a state or
federal authority which has material adverse effect on the Association or the
Conversion; or if a moratorium in foreign exchange trading by major
international banks or persons has been declared; or if there shall have been a
material change in the capitalization, condition or business of the Company and
the Association, taken as a whole, or if the Association shall have sustained a
material or substantial loss by fire, flood, accident, hurricane, earthquake,
theft, sabotage or other calamity or malicious act, whether or not said loss
shall have been insured; or if there shall have been a material change in the
condition or prospects of the Company or the Association.
(b) Any party hereto may terminate this Agreement by giving notice
pursuant to Section 12 hereof of a material breach of this Agreement by the
other party at any time after this Agreement becomes effective.
(c) If this Agreement is terminated as provided in this Section 11, the
party terminating this Agreement shall notify the non-terminating party promptly
by telephone or telegram, confirmed by letter.
(d) If this Agreement is terminated by Trident for any of the reasons
set forth in subsection (a) above, the Company and the Association shall pay
Trident the full amount, if any, payable pursuant to Section 3(c), 3(d), 6, 8(a)
and 9 of this Agreement.
(e) The Association may terminate the Conversion in accordance with the
terms of the Plan. Such termination shall be without liability to any party,
except that the Company and the Association shall be required to fulfill their
obligations pursuant to Sections 3(c), 3(d), 6, 8(a), 9 and 10 of this
Agreement.
<PAGE>
Trident Securities, Inc.
Page 28
12. Notices. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to Trident shall be
mailed, delivered or telegraphed and confirmed to Trident Securities, Inc., 4601
Six Forks Road, Suite 400, Raleigh, North Carolina 27609, Attention: Mr. R. Lee
Burrows, Jr. (with a copy to Breyer & Aguggia LLP, 1300 I Street, N.W., Suite
470 East, Washington, D.C. 20005, Attention: John F. Breyer, Jr., Esquire) and
if sent to the Company or the Association, shall be mailed, delivered or
telegraphed and confirmed to The Iberville Building and Loan Association, 23910
Railroad Avenue, Plaquemine, Louisiana 70764, Attention: G. Lloyd Bouchereau,
Jr., President (with a copy to Elias, Matz, Tiernan & Herrick L.L.P., 734 15th
Street, N.W., 12th Floor, Washington, D.C. 20005, Attention: Gerald F. Heupel,
Jr., Esquire).
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, Trident, the Company, the Association and the controlling
and other persons referred to in Section 8 hereof, and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
14. Partial Invalidity. In the event that any term, provision or
covenant of this Agreement or the application thereof to any circumstance or
situation shall be invalid or unenforceable, in whole or in part, the remainder
of this Agreement and the application of such term, provision or covenant to any
other circumstance or situation shall not be affected thereby, and each term,
provision or covenant of this Agreement shall be valid and enforceable to the
full extent permitted by law. If, however, any term, provision or covenant of
this Agreement is declared invalid as unenforceable by a court of competent
jurisdiction, then the parties hereto shall in good faith amend this agreement
to include an alternative provision that accomplishes a similar result.
15. Construction. Unless preempted by federal law, this Agreement shall
be governed by and construed in accordance with the substantive laws of North
Carolina.
16. Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
17. Amendment. This Agreement may be amended only by a subsequent
writing signed by all parties hereto.
* * *
[signature page follows]
<PAGE>
Trident Securities, Inc.
Page 29
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
IBL BANCORP, INC.
By:
--------------------------------------
G. Lloyd Bouchereau, Jr.
President and Chief Executive Officer
THE IBERVILLE BUILDING AND LOAN ASSOCIATION
By:
--------------------------------------
G. Lloyd Bouchereau, Jr.
President and Chief Executive Officer
Agreed to and accepted as of
the date first written above:
TRIDENT SECURITIES, INC.
By:
--------------------------
Name:
Title:
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EXHIBIT 2.1
PLAN OF CONVERSION
<PAGE>
PLAN OF CONVERSION
OF
THE IBERVILLE BUILDING AND LOAN
ASSOCIATION
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION
NUMBER PAGE
<S> <C>
1. Introduction.........................................................................................2
2. Definitions..........................................................................................3
3. General Procedure for the Conversion.................................................................7
4. Total Number of Shares and Purchase Price of Conversion Stock........................................8
5. Subscription Rights of Eligible Account Holders .....................................................9
6. Subscription Rights of the Tax-Qualified Employee Stock Benefit Plans................................10
7. Subscription Rights of Supplemental Eligible Account Holders.........................................11
8. Subscription Rights of Other Members.................................................................12
9. Subscription Rights of Directors, Officers and Employees.............................................12
10. Community Offering, Syndicated Community Offering and Other Offerings................................13
11. Limitations on Subscriptions and Purchases of Conversion Stock.......................................15
12. Timing of Subscription Offering, Manner of Exercising Subscription
Rights and Order Forms.............................................................................17
13. Payment for Conversion Stock.........................................................................18
14. Account Holders in Nonqualified States or Foreign Countries..........................................19
15. Voting Rights of Stockholders........................................................................20
16. Liquidation Account..................................................................................20
17. Transfer of Deposit Accounts.........................................................................22
18. Requirements Following Conversion for Registration,
Market Making and Stock Exchange Listing...........................................................22
19. Directors and Officers of the Association............................................................22
20. Requirements for Stock Purchases by Directors and Officers Following
the Conversion......................................................................................22
21. Restrictions on Transfer of Stock....................................................................23
22. Restrictions on Acquisition of Stock of the Holding Company..........................................23
23. Adoption of Capital Stock Articles of Incorporation and Bylaws.......................................24
24. Tax Rulings or Opinions..............................................................................24
25. Stock Compensation Plans and Employment Agreements...................................................24
26. Dividend and Repurchase Restrictions on Stock........................................................25
27. Payment of Fees to Brokers...........................................................................26
28. Effective Date.......................................................................................26
29. Amendment or Termination of the Plan.................................................................26
30. Interpretation of the Plan...........................................................................26
</TABLE>
1
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PLAN OF CONVERSION
OF
THE IBERVILLE BUILDING AND LOAN ASSOCIATION
1. INTRODUCTION.
For purposes of this section, all capitalized terms have the meanings
ascribed to them in Section 2.
On April 7, 1998, the Board of Directors of Iberville Building & Loan
Association, Plaquemine, Louisiana, adopted this Plan of the Conversion, which
provides for the conversion of the Association from a Louisiana-chartered mutual
savings and loan association to a Louisiana-chartered stock savings and loan
association to be known as "The Iberville Building and Loan Association" (the
"Association", in its mutual or stock form, as the sense of the reference
requires) and the concurrent issuance of its capital stock to IBL Bancorp, Inc.
(the "Holding Company"). This Plan provides that non-transferable subscription
rights to purchase Conversion Stock will be offered first to Eligible Account
Holders of record as of the Eligibility Record Date, then to Tax-Qualified
Employee Stock Benefit Plans, then to Supplemental Eligible Account Holders, if
applicable, then to Other Members, and then to Directors, Officers and
Employees. Shares of Conversion Stock remaining unsold after the Subscription
Offering, if any, will be offered for sale to the public through a Community
Offering and/or Syndicated Community Offering, as determined by the Boards of
Directors of the Holding Company and the Association in their sole discretion.
The Conversion is intended to provide a larger capital base to support
the Association's lending and investment activities, possible diversification
into other related financial services activities and future growth through
possible branch acquisitions. In addition, the Conversion is intended to further
enhance the Association's capabilities to serve the borrowing and other
financial needs of the communities it serves. The use of the Holding Company
will provide greater organizational flexibility and possible diversification.
In adopting this Plan of the Conversion, the Board of Directors of the
Association determined that the Conversion was advisable and in the best
interests of its Members and the Association and further determined that the
interests of certain holders of its Deposit Accounts in the net worth of the
Association would be equitably provided for and that the Conversion would not
have any adverse impact on the reserves and net worth of the Association.
This Plan is subject to the approval of the Office of Thrift
Supervision ("OTS") and the Louisiana Office of Financial Institutions ("OFI")
and must be adopted by a majority of the total number of votes eligible to be
cast by Voting Members of the Association at a Special Meeting to be called for
that purpose.
2
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Each holder of a Deposit Account in the Association prior to the
Conversion will continue to hold an account with an identical balance in the
converted Association. In addition, the converted Association will succeed to
all of the rights, interests, duties, and obligations of the present
Association, including all rights and interests in and to its assets and
properties, whether real, personal or mixed.
After the Conversion, the Association will be regulated by the OFI, as
its chartering authority, by the OTS as its primary federal regulator, and by
the FDIC, which insures the Association's deposits. After the Conversion, the
Holding Company will be regulated by the OTS. In addition, the Association will
continue to be a member of the Federal Home Loan Bank System and all insured
savings deposits will continue to be insured by the FDIC up to the maximum
provided by law.
The Plan of Conversion was amended by the Board of Directors of the
Association on June 16, 1998.
2. DEFINITIONS.
As used in this Plan, the terms set forth below have the following
meaning:
2.1 ACTUAL PURCHASE PRICE means the price per share at which the
Conversion Stock is ultimately sold by the Holding Company to Participants in
the Subscription Offering and Persons in the Community Offering and/or
Syndicated Community Offering in accordance with the terms hereof. The Actual
Purchase Price will be equal to or less than the Maximum Purchase Price.
2.2 AFFILIATE means a Person who, directly or indirectly, through one
or more intermediaries, controls or is controlled by or is under common control
with the Person specified.
2.3 ASSOCIATE, when used to indicate a relationship between Persons,
means (i) a corporation or organization (other than the Association, a
majority-owned subsidiary of the Association or the Holding Company) of which
such Person is a director, officer or partner or is, directly or indirectly, the
beneficial owner of 10% or more of any class of equity securities, (ii) any
trust or other estate in which such Person has a substantial beneficial interest
or as to which such Person serves as trustee or in a similar fiduciary capacity,
provided, however, that such term shall not include any Tax-Qualified Employee
Stock Benefit Plan of the Holding Company or the Association in which such
Person has a substantial beneficial interest or serves as a trustee or in a
similar fiduciary capacity, and (iii) any relative or spouse of such Person, or
any relative of such spouse, who has the same legal residence as such Person or
who is a director or officer of the Association or the Holding Company or any of
the subsidiaries of the Holding Company or the Association.
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2.4 ASSOCIATION means The Iberville Building and Loan Association in
its mutual form or stock form, as the sense of the reference requires.
2.5 BIF means the Bank Insurance Fund or any successor thereto.
2.6 CODE means the Internal Revenue Code of 1986, as amended.
2.7 COMMUNITY OFFERING means the offering for sale by the Holding
Company of any shares of Conversion Stock not subscribed for in the Subscription
Offering to such Persons within or without the State of Louisiana as may be
selected by the Holding Company and the Association within their sole discretion
and to whom a copy of the Prospectus is delivered by or behalf of the Holding
Company.
2.8 CONTROL (including the terms "controlling," "controlled by," and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
2.9 CONVERSION means (i) the adoption of a stock articles of
incorporation to authorize the issuance of shares of capital stock and otherwise
to conform to the requirements of a stock savings and loan association chartered
under the laws of Louisiana and applicable regulations, (ii) the issuance of
Conversion Stock by the Holding Company as provided herein and (iii) the
purchase by the Holding Company of all of the capital stock of the Association
to be issued by the Association in connection with its conversion from mutual to
stock form.
2.10 CONVERSION STOCK means the common stock of the Holding Company to
be issued and sold pursuant to the Plan of the Conversion, which stock cannot
and will not be insured by the FDIC or by either the SAIF or the BIF, each as
administered by the FDIC.
2.11 DEPOSIT ACCOUNT means savings and demand accounts, including
passbook accounts, money market deposit accounts and negotiable order of
withdrawal accounts, and certificates of deposit and other authorized accounts
of the Association held by a Member.
2.12 DIRECTOR, OFFICER AND EMPLOYEE means the terms as applied
respectively to any person who is a director, officer or employee of the
Association or any subsidiary thereof.
2.13 ELIGIBLE ACCOUNT HOLDER means any Person holding a Qualifying
Deposit at the close of business on the Eligibility Record Date for purposes of
determining Subscription Rights and establishing subaccount balances in the
liquidation account to be established pursuant to Section 16 hereof.
2.14 ELIGIBILITY RECORD DATE means the date for determining Qualifying
Deposits of Eligible Account Holders and is the close of business on December
31, 1996.
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2.15 ESTIMATED PRICE RANGE means the range of the estimated aggregate
pro forma market value of the total number of shares of Conversion Stock to be
issued in the Conversion, as determined by the Independent Appraiser in
accordance with Section 4 hereof.
2.16 FDIC means the Federal Deposit Insurance Corporation or any
successor thereto.
2.17 HOLDING COMPANY means the corporation organized under the laws of
the State of Louisiana to hold all of the capital stock of the Association.
2.18 INDEPENDENT APPRAISER means the independent investment banking or
financial consulting firm retained by the Association to prepare an appraisal of
the estimated pro forma market value of Conversion Stock.
2.19 MAXIMUM PURCHASE PRICE means the price per share to be paid
initially by Participants for shares of Conversion Stock subscribed for in the
Subscription Offering and by Persons for shares of Conversion Stock ordered in
the Community Offering and/or Syndicated Community Offering.
2.20 MEMBER means any Person qualifying as a member of the Association
in accordance with its mutual articles of incorporation and bylaws and the laws
of Louisiana.
2.21 OFI means the Louisiana Office of Financial Institutions or any
successor thereto.
2.22 OFFICER means the chairman of the board of directors, president,
vice-president, secretary, treasurer or principal financial officer, comptroller
or principal accounting officer and any other person performing similar
functions with respect to any organization whether incorporated or
unincorporated.
2.23 ORDER FORM means the form or forms to be provided by the Holding
Company, containing all such terms and provisions as set forth in Section 12
hereof, to a Participant or other Person by which Conversion Stock may be
ordered in the Subscription Offering, the Community Offering and/or the
Syndicated Community Offering.
2.24 OTHER MEMBER means a Voting Member who is not an Eligible Account
Holder or Supplemental Eligible Account Holder.
2.25 OTS means the Office of Thrift Supervision or any successor
thereto.
2.26 PARTICIPANT means any Eligible Account Holder, Tax-Qualified
Employee Stock Benefit Plan, Supplemental Eligible Account Holder, Other Member
or Director, Officer and Employee.
5
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2.27 PERSON means an individual, a corporation, a limited liability
company, a partnership, a limited liability partnership, an association, a joint
stock company, a trust, an unincorporated organization or a government or any
political subdivision thereof or any other organization. All holders of a joint
Deposit Account shall be deemed to be a single Person for purposes of the
subscription rights created by such joint account.
2.28 PLAN AND PLAN OF CONVERSION mean this Plan of Conversion as
adopted by the Board of Directors of the Association and any amendment hereto
approved as provided herein.
2.29 PROSPECTUS means the one or more documents to be used in offering
Conversion Stock in the Subscription Offering and, to the extent applicable,
Community Offering and Syndicated Community Offering and for providing
information to Participants and other Persons in connection with such offerings.
2.30 QUALIFYING DEPOSIT means the aggregate balance of all Deposit
Accounts in the Association of (i) an Eligible Account Holder at the close of
business on the Eligibility Record Date, provided such aggregate balance is not
less than $50, and (ii) a Supplemental Eligible Account Holder at the close of
business on the Supplemental Eligibility Record Date, if applicable, provided
such aggregate balance is not less than $50.
2.31 SAIF means the Savings Association Insurance Fund or any successor
thereto.
2.32 SEC means the Securities and Exchange Commission.
2.33 SPECIAL MEETING means the Special Meeting of Members of the
Association to be called for the purpose of submitting this Plan to the Voting
Members for their approval, including any adjournments of such meeting.
2.34 SUBSCRIPTION OFFERING means the offering of shares of Conversion
Stock through Subscription Rights to Participants pursuant to this Plan of the
Conversion.
2.35 SUBSCRIPTION RIGHTS means non-transferable rights to subscribe for
Conversion Stock granted to Participants pursuant to the terms of this Plan.
2.36 SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER, IF APPLICABLE, means any
Person, except Directors and Officers of the Association and their Associates,
holding a Qualifying Deposit at the close of business on the Supplemental
Eligibility Record Date.
2.37 SUPPLEMENTAL ELIGIBILITY RECORD DATE means the date for
determining Qualifying Deposits of Supplemental Eligible Account Holders and
shall be required if the Eligibility Record Date is more than 15 months prior to
the date of the latest amendment to the Application for Conversion filed prior
to approval of such application by the OTS and OFI. If applicable, the
Supplemental Eligibility Record Date shall be the last day of the
6
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calendar quarter preceding the OTS' approval of the Application for Conversion
submitted by the Association pursuant to this Plan of the Conversion.
2.38 SYNDICATED COMMUNITY OFFERING means the offering for sale by a
syndicate of broker-dealers to the general public of shares of Conversion Stock
not purchased in the Subscription Offering and the Community Offering.
2.39 TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLAN means any defined
benefit plan or defined contribution plan, such as an employee stock ownership
plan, stock bonus plan, profit-sharing plan or other plan, which is established
for the benefit of the employees of the Holding Company and/or the Association
and which, with its related trust, meets the requirements to be "qualified"
under Section 401 of the Code as from time to time in effect. A
"Non-Tax-Qualified Employee Stock Benefit Plan" is any defined benefit plan or
defined contribution stock benefit plan which is not so qualified.
2.40 VOTING MEMBER means a Person who at the close of business on the
Voting Record Date is entitled to vote as a Member of the Association in
accordance with its mutual articles of incorporation and bylaws.
2.41 VOTING RECORD DATE means the date for determining the eligibility
of Members to vote at the Special Meeting.
3. GENERAL PROCEDURE FOR THE CONVERSION.
(a) An Application for Conversion, including the Plan, will be
submitted, together with all requisite material, to the OTS and OFI for
approval. The Association also will cause notice of the adoption of the Plan by
the Board of Directors of the Association to be given by publication in a
newspaper having general circulation in each community in which an office of the
Association is located and will cause copies of the Plan to be made available at
each office of the Association for inspection by Members. The Association will
again cause to be published, in accordance with the requirements of applicable
regulations of the OTS, a notice of the filing with the OTS of an application to
convert from mutual to stock form and will post the notice of the filing of its
Application for Conversion in each of its offices.
(b) Promptly following approval of the Association's Application for
Conversion by the OTS and OFI, this Plan will be submitted to the Members for
their consideration and approval at the Special Meeting. The Association shall
mail to all Members as of the Voting Record Date, at their last known address
appearing on the records of the Association, a form of proxy together with, at
the Association's option, a proxy statement in either long or summary form
describing the Plan which will be submitted to a vote of the Voting Members at
the Special Meeting. The Holding Company shall also mail to all Participants
either a Prospectus and Order Form for the purchase of Conversion Stock or a
letter informing them of their right to receive a Prospectus and Order Form and
a postage prepaid card to request
7
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such materials, in each case subject to the provisions of Section 14 hereof. In
addition, all Participants will receive, or be given the opportunity to request
by either returning a postage prepaid card which will be distributed with the
proxy statement or letter or sending another written communication, a copy of
the articles of incorporation and bylaws of the Holding Company. The Association
may not use previously-executed general proxies from its Members to approve the
Plan. If the Plan is approved by the affirmative vote of a majority of the total
number of votes eligible to be cast by Voting Members at the Special Meeting,
the Association shall take all other necessary organizational steps pursuant to
applicable laws and regulations to amend its articles of incorporation and
bylaws to authorize the issuance of its capital stock to the Holding Company at
the time the Conversion of the Association to stock form is consummated.
(c) As soon as practicable after the adoption of the Plan by the Board
of Directors of the Association, the Association shall cause the Holding Company
to be incorporated under Louisiana law and the Board of Directors of the Holding
Company shall adopt the Plan by at least a two-thirds vote. The Holding Company
shall submit or cause to be submitted an Application H-(e)1 or H-(e)1-S to the
OTS for approval of the acquisition of the Association and a Registration
Statement to the SEC to register Conversion Stock under the Securities Act of
1933, as amended, and shall further register Conversion Stock under any
applicable state securities laws. Upon registration and after the receipt of all
required regulatory approvals, the Conversion Stock shall be first offered for
sale in a Subscription Offering to Eligible Account Holders, Tax-Qualified
Employee Stock Benefit Plans, Supplemental Eligible Account Holders, if any, and
to Other Members and to Directors, Officers and Employees. It is anticipated
that any shares of Conversion Stock remaining unsold after the Subscription
Offering will be sold through a Community Offering and/or a Syndicated Community
Offering. The purchase price per share for Conversion Stock shall be a uniform
price determined in accordance with Section 4 hereof. The Holding Company shall
purchase all of the capital stock of the Association with an amount of the net
proceeds received by the Holding Company from the sale of Conversion Stock as
shall be determined by the Boards of Directors of the Holding Company and the
Association and as shall be approved by the OTS and the OFI.
(d) The Holding Company and the Association may retain and pay for the
services of financial and other advisors and investment bankers to assist in
connection with any or all aspects of the Conversion, including in connection
with the Subscription Offering, Community Offering and/or any Syndicated
Community Offering, the payment of fees to brokers and investment bankers for
assisting Persons in completing and/or submitting Order Forms. All fees,
expenses, retainers and similar items shall be reasonable.
4. TOTAL NUMBER OF SHARES AND PURCHASE PRICE OF CONVERSION STOCK.
(a) The aggregate price at which all shares of Conversion Stock shall
be sold shall be based on a pro forma valuation of the aggregate market value of
Conversion Stock
8
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prepared by the Independent Appraiser. The valuation shall be based on financial
information relating to the Holding Company and the Association, economic and
financial conditions, a comparison of the Holding Company and the Association
with selected publicly-held financial institutions and holding companies and
with comparable financial institutions and holding companies and such other
factors as the Independent Appraiser may deem to be important. The valuation
shall be stated in terms of an Estimated Price Range, the maximum of which shall
generally be no more than 15% above the average of the minimum and maximum of
such price range and the minimum of which shall generally be no more than 15%
below such average. The valuation shall be updated during the Conversion as
market and financial conditions warrant and as may be required by the OTS and
the OFI.
(b) Based upon the independent valuation, the Boards of Directors of
the Holding Company and the Association shall fix the Maximum Purchase Price and
the number (or range) of shares of Conversion Stock to be offered in the
Subscription Offering, Community Offering and/or Syndicated Community Offering.
The Actual Purchase Price and the total number of shares of Conversion Stock to
be issued in the Subscription Offering, Community Offering and/or Syndicated
Community Offering shall be determined by the Boards of Directors of the Holding
Company and the Association upon conclusion of such offerings in consultation
with the Independent Appraiser and any financial advisor or investment banker
retained by the Association in connection with such offerings.
(c) Subject to the approval of the OTS and the OFI, the Estimated Price
Range may be increased or decreased to reflect market, financial and economic
conditions prior to completion of the Conversion or to fill the order of the
ESOP, and under such circumstances the Holding Company may increase or decrease
the total number of shares of Conversion Stock to be issued in the Conversion to
reflect any such change. Notwithstanding anything to the contrary contained in
this Plan and subject to any required approval of the OTS and OFI, no
resolicitation of subscribers shall be required and subscribers shall not be
permitted to modify or cancel their subscriptions unless the gross proceeds from
the sale of Conversion Stock issued in the Conversion are less than the minimum
or more than 15% above the maximum of the Estimated Price Range set forth in the
Prospectus. In the event of an increase in the total number of shares offered in
the Conversion due to an increase in the Estimated Price Range, the priority of
share allocation shall be as set forth in this Plan.
5. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS.
(a) Each Eligible Account Holder shall receive, without payment,
Subscription Rights to purchase up to the greater of (i) $60,000 of Conversion
Stock (or such maximum purchase limitation as may be established for the
Community Offering and/or Syndicated Community Offering), (ii) one-tenth of 1%
of the total offering of shares of Conversion Stock in the Subscription
Offering, and (iii) 15 times the product (rounded down to the next whole number)
obtained by multiplying the total number of shares of Conversion Stock
9
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offered in the Subscription Offering by a fraction, of which the numerator is
the amount of the Qualifying Deposits of the Eligible Account Holder and the
denominator is the total amount of all Qualifying Deposits of all Eligible
Account Holders, in each case subject to Sections 11 and 14 hereof.
(b) In the event of an oversubscription for shares of Conversion Stock
pursuant to Section 5(a), shares shall first be allocated among subscribing
Eligible Account Holders so as to permit each such Eligible Account Holder, to
the extent possible, to purchase a number of shares which will make his or her
total allocation equal to the lesser of the number of shares subscribed for or
100 shares. Any available shares remaining after each subscribing Eligible
Account Holder has been allocated the lesser of the number of shares subscribed
for or 100 shares shall be allocated among the subscribing Eligible Account
Holders in the proportion which the Qualifying Deposit of each such subscribing
Eligible Account Holder bears to the total Qualifying Deposits of all such
subscribing Eligible Account Holders, provided that no fractional shares shall
be issued. Subscription Rights of Eligible Account Holders shall be subordinated
to the priority rights of Tax-Qualified Employee Stock Benefit Plans of the
Holding Company and the Association to purchase shares in excess of the Maximum
Shares, as defined in Section 6 below. The Subscription Rights of Eligible
Account Holders who are also Directors or Officers of the Association and their
Associates shall be subordinated to those of other Eligible Account Holders to
the extent that they are attributable to increased deposits during the one-year
period preceding the Eligibility Record Date.
6. SUBSCRIPTION RIGHTS OF THE TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLANS.
Tax-Qualified Employee Stock Benefit Plans of the Holding Company and
the Association shall receive, without payment, Subscription Rights to purchase
in the aggregate up to 10% of the Conversion Stock, including any shares of
Conversion Stock to be issued in the Conversion as a result of an increase in
the Estimated Price Range after commencement of the Subscription Offering and
prior to completion of the Conversion. The subscription rights granted to
Tax-Qualified Employee Stock Benefit Plans shall be subject to the availability
of shares of Conversion Stock after taking into account the shares of Conversion
Stock purchased by Eligible Account Holders, provided, however, that in the
event that the total number of shares offered in the Conversion is increased to
an amount greater than the number of shares representing the maximum of the
Estimated Price Range as set forth in the Prospectus ("Maximum Shares"), the
Tax-Qualified Employee Stock Benefit Plans shall have a priority right to
purchase any such shares exceeding the Maximum Shares up to an aggregate of 10%
of the Conversion Stock. Shares of Conversion Stock purchased by any individual
participant ("Plan Participant") in a Tax-Qualified Employee Stock Benefit Plan
using funds therein pursuant to the exercise of subscription rights granted to
such Participant in his individual capacity as a Participant and/or purchases by
such Plan Participant in the Community Offering shall not be deemed to be
purchases by a Tax-Qualified Employee Stock Benefit Plan for purposes of
calculating the maximum
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amount of Conversion Stock that Tax-Qualified Employee Stock Benefit Plans may
purchase pursuant to the first sentence of this Section 6 if the individual Plan
Participant controls or directs the investment authority with respect to such
account or subaccount. Consistent with applicable laws and regulations and
policies and practices of the OTS and OFI, Tax-Qualified Employee Stock Benefit
Plans may use funds contributed by the Holding Company and/or borrowed from an
independent financial institution to exercise such Subscription Rights, and the
Holding Company and the Association may, after completion of the Conversion,
make scheduled discretionary contributions thereto, provided that such
contributions do not cause the Holding Company or the Association to fail to
meet any applicable regulatory capital requirements.
7. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS
(a) In the event that the Eligibility Record Date is more than 15
months prior to the date of the latest amendment to the Application for
Conversion filed prior to OTS approval, then, and only in that event, a
Supplemental Eligibility Record Date shall be set and each Supplemental Eligible
Account Holder shall receive, without payment, Subscription Rights to purchase
up to the greater of (i) $60,000 of Conversion Stock (or such maximum purchase
limitation as may be established for the Community Offering and/or Syndicated
Community Offering), (ii) one-tenth of 1% of the total offering of shares in the
Subscription Offering, and (iii) 15 times the product (rounded down to the next
whole number) obtained by multiplying the total number of shares of Conversion
Stock offered in the Subscription Offering by a fraction, of which the numerator
is the amount of the Qualifying Deposits of the Supplemental Eligible Account
Holder and the denominator is the total amount of all Qualifying Deposits of all
Supplemental Eligible Account Holders, in each case subject to Sections 11 and
14 hereof and to the availability of shares of Common Stock for purchase after
taking into account the shares of Conversion Stock purchased by Eligible Account
Holders and Tax-Qualified Employee Stock Benefit Plans through the exercise of
Subscription Rights under Sections 5 and 6 hereof.
(b) In the event of an oversubscription for shares of Conversion Stock
pursuant to Section 7(a), available shares shall be allocated among subscribing
Supplemental Eligible Accounts so as to permit each such Supplemental Eligible
Account Holder, to the extent possible, to purchase a number of shares which
will make his or her total allocation (including the number of shares, if any,
allocated in accordance with Section 5(a)) equal to the lesser of the number of
shares subscribed for or 100 shares. Any available shares remaining after each
subscribing Supplemental Eligible Account Holder has been allocated the lesser
of the number of shares subscribed for or 100 shares shall be allocated among
the subscribing Supplemental Eligible Account Holders whose orders are unfilled
in the proportion which the Qualifying Deposit of each such subscribing
Supplemental Eligible Account Holder bears to the total Qualifying Deposits of
all such subscribing Supplemental Eligible Account Holders, provided that no
fractional shares shall be issued.
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8. SUBSCRIPTION RIGHTS OF OTHER MEMBERS.
(a) Each Other Member shall receive, without payment, Subscription
Rights to purchase up to the greater of (i) $60,000 of Conversion Stock (or such
maximum purchase limitation as may be established for the Community Offering
and/or Syndicated Community Offering) and (ii) one-tenth of 1% of the total
offering of shares in the Subscription Offering, in each case subject to
Sections 11 and 14 hereof and the availability of shares of Conversion Stock for
purchase after taking into account the shares of Conversion Stock purchased by
Eligible Account Holders, Tax-Qualified Employee Stock Benefit Plans and
Supplemental Eligible Account Holders, if any, through the exercise of
Subscription Rights under Sections 5, 6 and 7 hereof.
(b) If, pursuant to this Section 8, Other Members subscribe for a
number of shares of Conversion Stock in excess of the total number of shares of
Conversion Stock remaining, available shares shall be allocated so as to permit
each such Other Member, to the extent possible, to purchase a number of shares
which will make his or her total allocation equal to the lesser of the number of
shares subscribed for or 100 shares. Any remaining shares shall be allocated
among subscribing Other Members whose orders are unfilled on a pro rata basis in
the same proportion as each such Other Member's subscription bears to the total
subscriptions of all such subscribing Other Members, provided that no fractional
shares shall be issued.
9. SUBSCRIPTION RIGHTS OF DIRECTORS, OFFICERS AND EMPLOYEES.
(a) To the extent that there are sufficient shares remaining after
satisfaction of all subscriptions under the above categories, Directors,
Officers and Employees of the Association shall receive, without payment,
Subscription Rights to purchase in this category, in the aggregate, up to 20% of
the shares of Conversion Stock offered in the Subscription Offering.
(b) In the event of oversubscription pursuant to Section 9(a),
Subscription Rights for the purchase of such shares shall be allocated among the
individual Directors, Officers and Employees of the Association on a point
system basis, whereby a point will be assigned for each year of employment and
for each salary increment of $5,000 per annum and five points for each office
held in the Association, including a directorship. If any such Director, Officer
or Employee does not subscribe for his or her full allocation of shares, any
shares not subscribed for may be purchased by other Directors, Officers and
Employees in proportion to their respective subscriptions, provided that no
fractional shares shall be issued.
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10. COMMUNITY OFFERING, SYNDICATED COMMUNITY OFFERING AND OTHER OFFERINGS.
(a) If less than the total number of shares of Conversion Stock are
sold in the Subscription Offering, it is anticipated that all remaining shares
of Conversion Stock shall, if practicable, be sold in a Community Offering
and/or a Syndicated Community Offering. Subject to the requirements set forth
herein, the manner in which the Conversion Stock is sold in the Community
Offering and/or the Syndicated Community Offering shall achieve the widest
possible distribution of such stock.
(b) In the event of a Community Offering, all shares of Conversion
Stock which are not subscribed for in the Subscription Offering shall be offered
for sale by means of a direct community marketing program, which may provide for
the use of brokers, dealers or investment banking firms experienced in the sale
of financial institution securities. Any available shares in excess of those not
subscribed for in the Subscription Offering will be available for purchase by
members of the general public to whom a Prospectus is delivered by the Holding
Company or on its behalf with preference given to natural persons residing in
parishes in Louisiana in which the Association has a branch office ("Preferred
Subscribers"). A Prospectus and Order Form shall be furnished to such Persons as
the Holding Company and the Association may select in connection with the
Community Offering, and each order for Conversion Stock in the Community
Offering shall be subject to the absolute right of the Holding Company and the
Association to accept or reject any such order in whole or in part either at the
time of receipt of an order or as soon as practicable following completion of
the Community Offering. Available shares will be allocated first to each
Preferred Subscriber whose order is accepted in an amount equal to the lesser of
100 shares or the number of shares subscribed for by each such person, if
possible. Thereafter, unallocated shares shall be allocated among Preferred
Subscribers whose accepted orders remain unsatisfied in the same proportion that
the unfilled order of each (up to 2% of the total offering) bears to the total
unfilled orders of all Preferred Subscribers whose accepted orders remain
unsatisfied, provided that no fractional shares shall be issued. Thereafter, any
remaining shares shall be allocated among Preferred Subscribers whose accepted
orders remain unsatisfied on an equal number of shares basis per order until all
orders have been filled. If there are any shares remaining after all accepted
orders by Preferred Subscribers have been satisfied, such remaining shares shall
be allocated to other members of the general public who purchase shares in the
Community Offering, applying the same allocation described above for Preferred
Subscribers.
(c) The amount of Conversion Stock that any Person may purchase in the
Community Offering shall not exceed the greater of (i) $60,000 or (ii) one-tenth
of 1% of the total offering of shares in the Subscription Offering, provided,
however, that this amount may be increased to up to 5% of the total offering of
shares in the Subscription Offering, subject to any required regulatory approval
but without the further approval of Members; provided, however, that orders for
Conversion Stock in the Community Offering shall first be filled to a maximum of
2% of the total number of shares of Conversion Stock sold in the
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Conversion and thereafter any remaining shares shall be allocated on an equal
number of shares basis per order until all orders have been filled. The Holding
Company and the Association may commence the Community Offering concurrently
with, at any time during, or as soon as practicable after the end of, the
Subscription Offering, and the Community Offering must be completed within 45
days after the completion of the Subscription Offering, unless extended by the
Holding Company and the Association with any required regulatory approval.
(d) Subject to such terms, conditions and procedures as may be
determined by the Holding Company and the Association, all shares of Conversion
Stock not subscribed for in the Subscription Offering or ordered in the
Community Offering may be sold by a syndicate of broker-dealers to the general
public in a Syndicated Community Offering. Each order for Conversion Stock in
the Syndicated Community Offering shall be subject to the absolute right of the
Holding Company and the Association to accept or reject any such order in whole
or in part either at the time of receipt of an order or as soon as practicable
after completion of the Syndicated Community Offering. The amount of Conversion
Stock that any Person may purchase in the Syndicated Community Offering shall
not exceed $60,000, provided, however, that this amount may be increased to up
to 5% of the total offering of shares in the Subscription Offering, subject to
any required regulatory approval but without the further approval of Members;
provided further that orders for Conversion Stock in the Syndicated Community
Offering shall first be filled to a maximum of 2% of the total number of shares
of Conversion Stock sold in the Conversion and thereafter any remaining shares
shall be allocated on an equal number of shares basis per order until all orders
have been filled. The Holding Company and the Association may commence the
Syndicated Community Offering concurrently with, at any time during, or as soon
as practicable after the end of, the Subscription Offering and/or Community
Offering, and the Syndicated Community Offering must be completed within 45 days
after the completion of the Subscription Offering, unless extended by the
Holding Company and the Association with any required regulatory approval.
(e) If for any reason a Syndicated Community Offering of shares of
Conversion Stock not sold in the Subscription Offering and the Community
Offering cannot be effected, or in the event that any insignificant residue of
shares of Conversion Stock is not sold in the Subscription Offering, Community
Offering or Syndicated Community Offering, the Holding Company and the
Association shall use their best efforts to obtain other purchasers for such
shares in such manner and upon such conditions as may be satisfactory to the OTS
and OFI.
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11. LIMITATIONS ON SUBSCRIPTIONS AND PURCHASES OF CONVERSION STOCK.
(a) The maximum number of shares of Conversion Stock which may be
purchased in the Conversion by Tax-Qualified Employee Stock Benefit Plans shall
not exceed 10% of the total number of shares of Conversion Stock sold in the
Conversion, including any shares which may be issued in the event of an increase
in the maximum of the Estimated Price Range to reflect changes in market,
financial and economic conditions after commencement of the Subscription
Offering and prior to completion of the Conversion; provided, however, that
purchases of Conversion Stock which are made by a Plan Participant pursuant to
the exercise of subscription rights granted to such Plan Participant in his
individual capacity as a Participant or purchases by a Plan Participant in the
Community Offering using the funds thereof held in Tax-Qualified Employee Stock
Benefit Plans shall not be deemed to be purchases by a Tax-Qualified Employee
Stock Benefit Plan for purposes of this Section 11(a).
(b) Except in the case of Tax-Qualified Employee Stock Benefit Plans in
the aggregate as set forth in Section 11(a) hereof, and certain Eligible Account
Holders and Supplemental Eligible Account Holders, if any, as set forth in
Sections 5(a)(iii) and 7(a)(iii) hereof, and in addition to the other
restrictions and limitations set forth herein, the maximum amount of Conversion
Stock which any Person together with any Associate or group of Persons acting in
concert may, directly or indirectly, subscribe for or purchase in the Conversion
(including without limitation the Subscription Offering, Community Offering
and/or Syndicated Community Offering) shall not exceed $100,000 of Conversion
Stock. The Holding Company and the Association may presume that certain persons
are acting in concert based upon, among other things, joint account
relationships, common addresses and the fact that such persons have filed joint
Schedule 13Ds or 13Gs with the SEC with respect to other companies.
(c) The number of shares of Conversion Stock which Directors and
Officers and their Associates may purchase in the aggregate in the Conversion
shall not exceed 35% of the total number of shares of Conversion Stock sold in
the Conversion, including any shares which may be issued in the event of an
increase in the maximum of the Estimated Price Range to reflect changes in
market, financial and economic conditions after commencement of the Subscription
Offering and prior to completion of the Conversion.
(d) No Person may purchase fewer than 25 shares of Conversion Stock in
the Conversion, to the extent such shares are available; provided, however, that
if the Actual Purchase Price is greater than $20.00 per share, such minimum
number of shares shall be adjusted so that the aggregate Actual Purchase Price
for such minimum shares will not exceed $500.00.
(e) For purposes of the foregoing limitations and the determination of
Subscription Rights, (i) Directors, Officers and Employees shall not be deemed
to be
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Associates or a group acting in concert solely as a result of their capacities
as such, (ii) shares purchased by Tax-Qualified Employee Stock Benefit Plans
shall not be attributable to the individual trustees or beneficiaries of any
such plan for purposes of determining compliance with the limitations set forth
in Section 11(b) or Section 11(c) hereof, except as set forth below, and (iii)
shares purchased by a Tax-Qualified Employee Stock Benefit Plan pursuant to
instructions of an individual in an account in such plan in which the individual
has the right to direct the investment, including any plan of the Association
qualified under Section 401(k) of the Code, shall be aggregated and included in
that individual's purchases and not attributed to the Tax-Qualified Employee
Stock Benefit Plan.
(f) Subject to any required regulatory approval and the requirements of
applicable laws and regulations, but without further approval of the Members of
the Association, the Holding Company and the Association may increase or
decrease any of the individual or aggregate purchase limitations set forth
herein to a percentage which does not exceed 5% of the total offering of shares
in the Subscription Offering whether prior to, during or after the Subscription
Offering, Community Offering and/or Syndicated Community Offering. In the event
that an individual purchase limitation is increased after commencement of the
Subscription Offering or any other offering, the Holding Company and the
Association shall permit any Person who subscribed for the maximum number of
shares of Conversion Stock to purchase an additional number of shares, so that
such Person shall be permitted to subscribe for the then maximum number of
shares permitted to be subscribed for by such Person, subject to the rights and
preferences of any Person who has priority Subscription Rights. In the event
that any of the individual or aggregate purchase limitations are decreased after
commencement of the Subscription Offering or any other offering, the orders of
any Person who subscribed for more than the new purchase limitation shall be
decreased by the minimum amount necessary so that such Person shall be in
compliance with the then maximum number of shares permitted to be subscribed for
by such Person.
(g) The Holding Company and the Association shall have the right to
take all such action as they may, in their sole discretion, deem necessary,
appropriate or advisable in order to monitor and enforce the terms, conditions,
limitations and restrictions contained in this Section 11 and elsewhere in this
Plan and the terms, conditions and representations contained in the Order Form,
including, but not limited to, the absolute right (subject only to any necessary
regulatory approvals or concurrences) to reject, limit or revoke acceptance of
any subscription or order and to delay, terminate or refuse to consummate any
sale of Conversion Stock which they believe might violate, or is designed to, or
is any part of a plan to, evade or circumvent such terms, conditions,
limitations, restrictions and representations. Any such action shall be final,
conclusive and binding on all Persons, and the Holding Company and the
Association and their respective Boards shall be free from any liability to any
Person on account of any such action.
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12. TIMING OF SUBSCRIPTION OFFERING, MANNER OF EXERCISING SUBSCRIPTION
RIGHTS AND ORDER FORMS.
(a) The Subscription Offering may be commenced concurrently with or at
any time after the mailing to Voting Members of the proxy statement to be used
in connection with the Special Meeting. The Subscription Offering may be closed
before the Special Meeting, provided that the offer and sale of Conversion Stock
shall be conditioned upon the approval of the Plan by the Voting Members at the
Special Meeting.
(b) The exact timing of the commencement of the Subscription Offering
shall be determined by the Holding Company and the Association in consultation
with the Independent Appraiser and any financial or advisory or investment
banking firm retained by them in connection with the Conversion. The Holding
Company and the Association may consider a number of factors, including, but not
limited to, their current and projected future earnings, local and national
economic conditions, and the prevailing market for stocks in general and stocks
of financial institutions in particular. The Holding Company and the Association
shall have the right to withdraw, terminate, suspend, delay, revoke or modify
any such Subscription Offering, at any time and from time to time, as they in
their sole discretion may determine, without liability to any Person, subject to
compliance with applicable securities laws and any necessary regulatory approval
or concurrence.
(c) The Holding Company and the Association shall, promptly after the
SEC has declared the Prospectus effective and all required regulatory approvals
have been obtained, distribute or make available the Prospectus, together with
Order Forms for the purchase of Conversion Stock, to all Participants for the
purpose of enabling them to exercise their respective Subscription Rights,
subject to Section 14 hereof. The Holding Company and the Association may elect
to mail a Prospectus and Order Form only to those Participants who request such
materials by returning a postage-paid card to the Holding Company and the
Association by a date specified in the letter informing them of their
Subscription Rights. Under such circumstances, the Subscription Offering shall
not be closed prior to the expiration of 30 days after the mailing by the
Holding Company and the Association of the postage-paid card to Participants.
(d) A single Order Form for all Deposit Accounts maintained with the
Association by an Eligible Account Holder and any Supplemental Eligible Account
Holder may be furnished irrespective of the number of Deposit Accounts
maintained with the Association on the Eligibility Record Date and Supplemental
Eligibility Record Date, respectively.
(e) The recipient of an Order Form shall have no less than 20 days and
no more than 45 days from the date of mailing of the Order Form (with the exact
termination date to be set forth on the Order Form) to properly complete and
execute the Order Form and deliver it to the Association. The Holding Company
and the Association may extend such period by such amount of time as they
determine is appropriate. Failure of any Participant to deliver a properly
executed Order Form to the Association, along with payment (or
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authorization for payment by withdrawal) for the shares of Conversion Stock
subscribed for, within the time limits prescribed, shall be deemed a waiver and
release by such Person of any rights to subscribe for shares of Conversion
Stock. Each Participant shall be required to confirm to the Holding Company and
the Association by executing an Order Form that such Person has fully complied
with all of the terms, conditions, limitations and restrictions in the Plan.
(f) The Holding Company and the Association shall have the absolute
right, in their sole discretion and without liability to any Participant or
other Person, to reject any Order Form, including, but not limited to, any Order
Form that is: (i) improperly completed or executed; (ii) not timely received;
(iii) not accompanied by the proper payment (or authorization of withdrawal for
payment) or, in the case of institutional investors in the Community Offering,
not accompanied by an irrevocable order together with a legally binding
commitment to pay the full amount of the purchase price prior to 48 hours before
the completion of the Conversion; or (iv) submitted by a Person whose
representations the Holding Company and the Association believe to be false or
who they otherwise believe, either alone, or acting in concert with others, is
violating, evading or circumventing, or intends to violate, evade or circumvent,
the terms and conditions of the Plan. The Holding Company and the Association
may, but will not be required to, waive any irregularity on any Order Form or
may require the submission of corrected Order Forms or the remittance of full
payment for shares of Conversion Stock by such date as they may specify. The
interpretation of the Holding Company and the Association of the terms and
conditions of the Order Forms shall be final and conclusive.
13. PAYMENT FOR CONVERSION STOCK.
(a) Payment for shares of Conversion Stock subscribed for by
Participants in the Subscription Offering and payment for shares of Conversion
Stock ordered by Persons in the Community Offering shall be equal to the Maximum
Purchase Price per share multiplied by the number of shares which are being
subscribed for or ordered, respectively. Such payment may be made in cash, if
delivered in person, or by check or money order at the time the Order Form is
delivered to the Association. The Association may also elect to receive payment
for shares of Conversion Stock by wire transfer. In addition, the Holding
Company and the Association may elect to provide Participants and/or other
Persons who have a Deposit Account with the Association the opportunity to pay
for shares of Conversion Stock by authorizing the Association to withdraw from
such Deposit Account an amount equal to the aggregate Maximum Purchase Price of
such shares. If the Actual Purchase Price is less than the Maximum Purchase
Price, the Association shall refund the difference to all Participants and other
Persons, unless the Holding Company and the Association choose to provide
Participants and other Persons the opportunity on the Order Form to elect to
have such difference applied to the purchase of additional whole shares of
Conversion Stock.
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(b) Consistent with applicable laws and regulations and policies and
practices of the OTS and OFI, payment for shares of Conversion Stock subscribed
for by Tax-Qualified Employee Stock Benefit Plans may be made with funds
contributed by the Holding Company and/or funds obtained pursuant to a loan from
an unrelated financial institution pursuant to a loan commitment which is in
force from the time that any such plan submits an Order Form until the closing
of the transactions contemplated hereby.
(c) If a Participant or other Person authorizes the Association to
withdraw the amount of the Maximum Purchase Price from his or her Deposit
Account, the Association shall have the right to make such withdrawal or to
freeze funds equal to the aggregate Maximum Purchase Price upon receipt of the
Order Form. Notwithstanding any regulatory provisions regarding penalties for
early withdrawals from certificate accounts, the Association may allow payment
by means of withdrawal from certificate accounts without the assessment of such
penalties. In the case of an early withdrawal of only a portion of such account,
the certificate evidencing such account shall be cancelled if any applicable
minimum balance requirement ceases to be met. In such case, the remaining
balance will earn interest at the regular passbook rate. However, where any
applicable minimum balance is maintained in such certificate account, the rate
of return on the balance of the certificate account shall remain the same as
prior to such early withdrawal. This waiver of the early withdrawal penalty
applies only to withdrawals made in connection with the purchase of Conversion
Stock and is entirely within the discretion of the Holding Company and the
Association.
(d) The Association shall pay interest, at not less than the passbook
rate, for all amounts paid in cash, by check or money order to purchase shares
of Conversion Stock in the Subscription Offering and the Community Offering from
the date payment is received until the date the Conversion is completed or
terminated.
(e) The Association shall not knowingly loan funds or otherwise extend
credit to any Participant or other Person to purchase Conversion Stock.
(f) Each share of Conversion Stock shall be non-assessable upon payment
in full of the Actual Purchase Price.
14. ACCOUNT HOLDERS IN NONQUALIFIED STATES OR FOREIGN COUNTRIES.
The Holding Company and the Association shall make reasonable efforts
to comply with the securities laws of all jurisdictions in the United States in
which Participants reside. However, no Participant will be offered or receive
any Conversion Stock under the Plan if such Participant resides in a foreign
country or resides in a jurisdiction of the United States with respect to which
all of the following apply: (a) there are few Participants otherwise eligible to
subscribe for shares under this Plan who reside in such jurisdiction; (b) the
granting of Subscription Rights or the offer or sale of shares of Conversion
Stock to such
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Participants would require the Holding Company or the Association or their
respective Directors and Officers, under the laws of such jurisdiction, to
register as a broker-dealer, salesman or selling agent or to register or
otherwise qualify Conversion Stock for sale in such jurisdiction, or the Holding
Company or the Association would be required to qualify as a foreign corporation
or file a consent to service of process in such jurisdiction; and (c) such
registration, qualification or filing, in the judgment of the Holding Company
and the Association, would be impracticable or unduly burdensome for reasons of
cost or otherwise.
15. VOTING RIGHTS OF STOCKHOLDERS.
Following consummation of the Conversion, voting rights with respect to
the Association shall be held and exercised exclusively by the Holding Company
as holder of all of the Association's outstanding voting capital stock, and
voting rights with respect to the Holding Company shall be held and exercised
exclusively by the holders of the Holding Company's voting capital stock.
16. LIQUIDATION ACCOUNT.
(a) At the time of the Conversion, the Association shall establish a
liquidation account in an amount equal to the Association's net worth as
reflected in its latest statement of financial condition contained in the final
Prospectus utilized in the Conversion. The function of the liquidation account
will be to preserve the rights of certain holders of Deposit Accounts in the
Association who maintain such accounts in the Association following the
Conversion to a priority to distributions in the unlikely event of a liquidation
of the Association subsequent to the Conversion.
(b) The liquidation account shall be maintained for the benefit of
Eligible Account Holders and Supplemental Eligible Account Holders, if any, who
maintain their Deposit Accounts in the Association after the Conversion. Each
such account holder will, with respect to each Deposit Account held, have a
related inchoate interest in a portion of the liquidation account balance, which
interest will be referred to in this Section 16 as the "subaccount balance." All
Deposit Accounts having the same social security number will be aggregated for
purposes of determining the initial subaccount balance with respect to such
Deposit Accounts, except as provided in Section 16(d) hereof.
(c) In the event of a complete liquidation of the Association
subsequent to the Conversion (and only in such event), each Eligible Account
Holder and Supplemental Eligible Account Holder, if any, shall be entitled to
receive a liquidation distribution from the liquidation account in the amount of
the then current subaccount balances for Deposit Accounts then held (adjusted as
described below) before any liquidation distribution may be made with respect to
the capital stock of the Association. No merger, consolidation, sale of bulk
assets or similar combination transaction with another SAIF-insured institution
in which the Association is not the surviving entity shall be considered a
complete liquidation
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for this purpose. In any such transaction, the liquidation account shall be
assumed by the surviving entity.
(d) The initial subaccount balance for a Deposit Account held by an
Eligible Account Holder and Supplemental Eligible Account Holder, if any, shall
be determined by multiplying the opening balance in the liquidation account by a
fraction, of which the numerator is the amount of the Qualifying Deposits of
such account holder and the denominator is the total amount of Qualifying
Deposits of all Eligible Account Holders and, if applicable, Supplemental
Eligible Account Holders. For Deposit Accounts in existence at both the
Eligibility Record Date and the Supplemental Eligibility Record Date, if
applicable, separate initial subaccount balances shall be determined on the
basis of the Qualifying Deposits in such Deposit Accounts on each such record
date. Initial subaccount balances shall not be increased, and shall be subject
to downward adjustment as provided below.
(e) If the aggregate deposit balance in the Deposit Account(s) of any
Eligible Account Holder or Supplemental Eligible Account Holder at the close of
business on any December 31 annual closing date, commencing December 31, 1998,
is less than the lesser of (a) the aggregate deposit balance in such Deposit
Account(s) at the close of business on any other annual closing date subsequent
to such record dates or (b) the aggregate deposit balance in such Deposit
Account(s) as of the Eligibility Record Date or the Supplemental Eligibility
Record Date, if any, the subaccount balance for such Deposit Account(s) shall be
adjusted by reducing such subaccount balance in an amount proportionate to the
reduction in such deposit balance. In the event of such a downward adjustment,
the subaccount balance shall not be subsequently increased, notwithstanding any
increase in the deposit balance of the related Deposit Account(s). The
subaccount balance of an Eligible Account Holder or Supplemental Eligible
Account Holder, if any, will be reduced to zero if the Account Holder ceases to
maintain a Deposit Account at the Association that has the same social security
number as appeared on his or her Deposit Account(s) at the Eligibility Record
Date or, if applicable, the Supplemental Eligibility Record Date.
(f) Subsequent to the Conversion, the Association may not pay cash
dividends generally on deposit accounts and/or capital stock of the Association,
or repurchase any of the capital stock of the Association, if such dividend or
repurchase would reduce the Association's regulatory capital below the aggregate
amount of the then current subaccount balances for Deposit Accounts then held;
otherwise, the existence of the liquidation account shall not operate to
restrict the use or application of any of the net worth accounts of the
Association.
(g) For purposes of this Section 16, a Deposit Account includes a
predecessor or successor account which is held only by an account holder with
the same social security number.
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17. TRANSFER OF DEPOSIT ACCOUNTS.
Each Deposit Account in the Association at the time of the consummation
of the Conversion shall become, without further action by the holder, a Deposit
Account in the Association equivalent in withdrawable amount to the withdrawal
value (as adjusted to give effect to any withdrawal made for the purchase of
Conversion Stock), and subject to the same terms and conditions (except as to
voting and liquidation rights) as such Deposit Account in the Association
immediately preceding consummation of the Conversion. Holders of Deposit
Accounts in the Association shall not, as such holders, have any voting rights.
18. REQUIREMENTS FOLLOWING CONVERSION FOR REGISTRATION,
MARKET MAKING AND STOCK EXCHANGE LISTING.
In connection with the Conversion, the Holding Company shall register
its common stock pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended, and shall undertake not to deregister such stock for a period of
three years thereafter. The Holding Company also shall use its best efforts to
(i) encourage and assist a market maker to establish and maintain a market for
its common stock; and (ii) list its common stock on a national or regional
securities exchange or to have quotations for its common stock disseminated on
the Nasdaq System.
19. DIRECTORS AND OFFICERS OF THE ASSOCIATION.
Each person serving as a Director or Officer of the Association at the
time of the Conversion shall continue to serve as a Director or Officer of the
Association for the balance of the term for which the person was elected prior
to the Conversion, and until a successor is elected and qualified.
20. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING
THE CONVERSION.
For a period of three years following the Conversion, the Directors and
Officers of the Holding Company and the Association and their Associates may not
purchase, without the prior written approval of the OTS, the common stock of the
Holding Company except from a broker-dealer registered with the Securities and
Exchange Commission. This prohibition shall not apply, however, to (i) a
negotiated transaction arrived at by direct negotiation between buyer and seller
and involving more than 1% of the outstanding common stock of the Holding
Company, and (ii) purchases of stock made by and held by any Tax-Qualified
Employee Stock Benefit Plan (and purchases of stock made by and held by any
Non-Tax Qualified Employee Stock Benefit Plan following the receipt of
stockholder approval of such plan) that may be attributable to individual
Officers or Directors.
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The foregoing restriction on purchases of common stock of the Holding
Company shall be in addition to any restrictions that may be imposed by federal
and state securities laws.
21. RESTRICTIONS ON TRANSFER OF STOCK.
All shares of Conversion Stock which are purchased by Persons other
than Directors and Officers shall be transferable without restriction, except in
connection with a transaction proscribed by Section 22 of this Plan. Shares of
Conversion Stock purchased by Directors and Officers of the Holding Company and
the Association on original issue from the Holding Company (by subscription or
otherwise) shall be subject to the restriction that such shares shall not be
sold or otherwise disposed of for value for a period of one year following the
date of purchase, except for any disposition of such shares following the death
of the original purchaser or pursuant to any merger or similar transaction
approved by the OTS. The shares of Conversion Stock issued by the Holding
Company to Directors and Officers shall bear the following legend giving
appropriate notice of such one-year restriction:
"The shares of stock evidenced by this Certificate are
restricted as to transfer for a period of one year from the date of
this Certificate pursuant to Part 563b of the Rules and Regulations of
the Office of Thrift Supervision. These shares may not be transferred
during such one-year period without a legal opinion of counsel for the
Company that said transfer is permissible under the provisions of
applicable law and regulation. This restrictive legend shall be deemed
null and void after one year from the date of this Certificate."
In addition, the Holding Company shall give appropriate instructions to
the transfer agent for its common stock with respect to the applicable
restrictions relating to the transfer of restricted stock. Any shares issued at
a later date as a stock dividend, stock split or otherwise with respect to any
such restricted stock shall be subject to the same holding period restrictions
as may then be applicable to such restricted stock.
The foregoing restriction on transfer shall be in addition to any
restrictions on transfer that may be imposed by federal and state securities
laws.
22. RESTRICTIONS ON ACQUISITION OF STOCK OF THE HOLDING COMPANY.
Upon consummation of the Conversion, the articles of incorporation of
the Holding Company shall prohibit any Person together with Associates or group
of Persons acting in concert from offering to acquire or acquiring, directly or
indirectly, beneficial ownership of more than 10% of any class of equity
securities of the Holding Company, or of securities convertible into more than
10% of any such class, for five years following completion of the Conversion.
The articles of incorporation of the Holding Company also shall provide that
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all equity securities beneficially owned by any Person in excess of 10% of any
class of equity securities during such five-year period shall be considered
"excess shares," and that excess shares shall not be counted as shares entitled
to vote and shall not be voted by any Person or counted as voting shares in
connection with any matters submitted to the stockholders for a vote. The
foregoing restrictions shall not apply to (i) any offer with a view toward
public resale made exclusively to the Holding Company by underwriters or a
selling group acting on its behalf, (ii) the purchase of shares by a
Tax-Qualified Employee Stock Benefit Plan established for the benefit of the
employees of the Holding Company and its subsidiaries which is exempt from
approval requirements under the provisions of Section 574.3(c)(1)(vi) of the
Regulations Applicable to all Savings Associations or any successor thereto, and
(iii) any offer or acquisition approved in advance by the affirmative vote of
two-thirds of the entire Board of Directors of the Holding Company. Directors,
Officers or Employees of the Holding Company or the Association or any
subsidiary thereof shall not be deemed to be Associates or a group acting in
concert with respect to their individual acquisitions of any class of equity
securities of the Holding Company solely as a result of their capacities as
such.
23. ADOPTION OF CAPITAL STOCK ARTICLES OF INCORPORATION AND BYLAWS.
As part of the Conversion, the Association shall take all appropriate
steps to adopt a new stock articles of incorporation and bylaws to read in the
form prescribed and authorized for a Louisiana-chartered savings and loan
association in stock form.
24. TAX RULINGS OR OPINIONS.
Consummation of the Conversion is expressly conditioned upon prior
receipt by the Association of either a ruling or an opinion of counsel with
respect to federal tax laws, and either a ruling or an opinion with respect to
Louisiana tax laws, to the effect that consummation of the transactions
contemplated hereby will not result in a taxable reorganization under the
provisions of the applicable codes or otherwise result in any adverse tax
consequences to the Holding Company, the Association and its account holders
receiving Subscription Rights before or after the Conversion, except in each
case to the extent, if any, that Subscription Rights are deemed to have fair
market value on the date such rights are issued.
25. STOCK COMPENSATION PLANS AND EMPLOYMENT AGREEMENTS.
(a) The Holding Company and the Association are authorized to adopt
Tax- Qualified Employee Stock Benefit Plans in connection with or subsequent to
the Conversion, including without limitation an employee stock ownership plan.
Subsequent to the Conversion, the Holding Company and the Association are
authorized to adopt Non-Tax Qualified Employee Stock Benefit Plans, including
without limitation, stock option plans and restricted stock plans, provided
however that, with respect to any such plan implemented
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<PAGE>
during the one-year period subsequent to the date of consummation of the
Conversion, any such plan: (i) shall be disclosed in the proxy solicitation
materials for the Special Meeting of Members and in the Prospectus; (ii) in the
case of stock option plans, shall have a total number of shares of common stock
for which options may be granted of not more than 10% of the amount of shares
issued in the Conversion; (iii) in the case of management or employee stock
benefit plans, shall have a total number of shares of common stock of not more
than 4% of the amount of shares issued in the Conversion; (iv) shall be
submitted for approval by the holders of the common stock of the Holding Company
no earlier than six months following consummation of the Conversion; and (v)
shall comply with all other applicable requirements of the OTS.
(b) The Holding Company and the Association are authorized to enter
into employment agreements with their executive officers.
26. DIVIDEND AND REPURCHASE RESTRICTIONS ON STOCK.
(a) The Holding Company generally may not repurchase any shares of its
capital stock during the first year following consummation of the Conversion,
except as may be otherwise approved by the OTS. During the second and third
years following consummation of the Conversion, the Holding Company may not
repurchase any of its capital stock from any person, other than pursuant to (i)
an offer to repurchase made by the Holding Company on a pro rata basis to all of
its stockholders and which is approved by the OTS, (ii) the repurchase of
qualifying shares of a director, if any, (iii) purchases in the open market by a
Tax-Qualified or Non-Tax Qualified Employee Stock Benefit Plan in an amount
reasonable and appropriate to fund the plan, or (iv) a repurchase program not
involving more than 5% of its outstanding capital stock during a 12-month
period, if the repurchases do not cause the Association to become
undercapitalized and the Association provides to the Regional Director of the
OTS no later than 10 days prior to the commencement of a repurchase program
written notice containing a full description of the program to be undertaken and
such program is not disapproved by the Regional Director, except as may be
otherwise approved by the OTS.
(b) Notwithstanding anything to the contrary set forth herein, the
Holding Company may repurchase its capital stock to the extent and subject to
the requirements set forth in Section 563b.3(g)(3) of the Regulations Applicable
to all Savings Associations, or any successor thereto, or as otherwise may be
approved by the OTS.
(c) The Association may not declare or pay a cash dividend on, or
repurchase any of, its capital stock if the effect thereof would cause the
regulatory capital of the Association to be reduced below the amount required
for the liquidation account. Any dividend declared or paid on, or repurchase of,
the Association's capital stock shall be made in compliance with Section 563.134
of the Regulations Applicable to all Savings Associations, or any successor
thereto.
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<PAGE>
27. PAYMENT OF FEES TO BROKERS.
The Holding Company and the Association may elect to offer to pay fees
on a per share basis to securities brokers who assist Persons in determining to
purchase shares in the Subscription Offering, Community Offering and/or
Syndicated Community Offering.
28. EFFECTIVE DATE.
The effective date of the Conversion shall be the date of the closing
of the sale of all shares of Conversion Stock. The closing of the sale of all
shares of Conversion Stock sold in the Subscription Offering, Community Offering
and/or Syndicated Community Offering shall occur simultaneously and shall be
conditioned upon the prior receipt of all requisite regulatory and other
approvals.
29. AMENDMENT OR TERMINATION OF THE PLAN.
If deemed necessary or desirable by the Boards of Directors of the
Holding Company and the Association, this Plan may be substantively amended, as
a result of comments from regulatory authorities or otherwise, at any time prior
to the solicitation of proxies from Members to vote on the Plan and at any time
thereafter with the concurrence of the OTS and OFI. Any amendment to this Plan
made after approval by the Members with the concurrence of the OTS and OFI shall
not necessitate further approval by the Members unless otherwise required by the
OTS and OFI. This Plan shall terminate if the sale of all shares of Conversion
Stock is not completed within 24 months from the date of the Special Meeting
(subject to extension by the OTS). Prior to the Special Meeting, this Plan may
be terminated by the Boards of Directors of the Holding Company and the
Association without approval of the OTS and OFI; after the Special Meeting, the
Boards of Directors may terminate this Plan only with the approval of the OTS
and OFI.
30. INTERPRETATION OF THE PLAN.
All interpretations of this Plan and application of its provisions to
particular circumstances by a majority of each of the Boards of Directors of the
Holding Company and the Association shall be final, subject to the authority of
the OTS and OFI.
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<PAGE>
EXHIBIT 3.1
ARTICLES OF INCORPORATION OF IBL BANCORP, INC.
<PAGE>
ARTICLES OF INCORPORATION
OF
IBL BANCORP, INC.
ARTICLE 1. NAME. The name of the corporation is IBL Bancorp, Inc.
(hereinafter referred to as the "Corporation").
ARTICLE 2. NATURE OF BUSINESS. The purpose of the Corporation is to
engage in any lawful act or activity for which a corporation may be formed under
the Louisiana Business Corporation Law, as amended (the "BCL"). The Corporation
is incorporated under the provisions of the BCL.
ARTICLE 3. DURATION. The term of the existence of the Corporation shall
be perpetual.
ARTICLE 4. CAPITAL STOCK.
A. AUTHORIZED AMOUNT. The total number of shares of capital stock which
the Corporation has authority to issue is 7,000,000, of which 2,000,000 shall be
serial preferred stock, par value $.01 per share (hereinafter the "Preferred
Stock"), and 5,000,000 shall be common stock, par value $.01 per share
(hereinafter the "Common Stock"). Except to the extent required by governing
law, rule or regulation, the shares of capital stock may be issued from time to
time by the Board of Directors without further approval of stockholders. The
Corporation shall have the authority to purchase its capital stock out of funds
lawfully available therefor.
B. COMMON STOCK. Except as provided in this Article 4 (or in any
resolution or resolutions adopted by the Board of Directors pursuant hereto),
the exclusive voting power shall be vested in the Common Stock, with each holder
thereof being entitled to one vote for each share of such Common Stock standing
in the holder's name on the books of the Corporation, except as provided in
Article 10. Subject to any rights and preferences of any class of stock having
preference over the Common Stock, holders of Common Stock shall be entitled to
such dividends as may be declared by the Board of Directors out of funds
lawfully available therefor. Upon any liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary, holders of
Common Stock shall be entitled to receive pro rata the remaining assets of the
Corporation after the holders of any class of stock having preference over the
Common Stock have been paid in full any sums to which they may be entitled.
C. AUTHORITY OF BOARD TO FIX TERMS OF PREFERRED STOCK. The Board of
Directors shall have the full authority permitted by law to divide the
authorized and unissued shares of Preferred Stock into series and to fix by
resolution full, limited, multiple or fractional, or no voting rights, and such
designations, preferences, qualifications, privileges, limitations,
restrictions, options, conversion rights, and other special or relative rights
of the Preferred Stock or any series thereof that may be desired.
<PAGE>
ARTICLE 5. INCORPORATOR. The name and mailing address of the sole
incorporator is as follows:
<TABLE>
<CAPTION>
Number and
Class of
Shares
Name Address Subscribed For
- ------------------------------------- -------------------------------------------- -------------------------
<S> <C> <C>
The Iberville Building and 23910 Railroad Avenue 100 shares of
Loan Association Plaquemine, Louisiana 70764 Common Stock
</TABLE>
ARTICLE 6. DIRECTORS. The business and affairs of the Corporation shall
be managed by or under the direction of a Board of Directors.
A. NUMBER. Except as otherwise increased from time to time by the
exercise of the rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation to elect
additional directors, the number of directors of the Corporation shall be no
less than five and no more than 15, as specified in the Corporation's Bylaws, as
may be amended from time to time.
B. CLASSIFICATION AND TERM. The Board of Directors, other than those
who may be elected by the holders of any class or series of stock having
preference over the Common Stock as to dividends or upon liquidation, shall be
divided into three classes as nearly equal in number as possible, with one class
to be elected annually. At each annual meeting of stockholders, the directors
elected to succeed those in the class whose terms are expiring shall be elected
for a term of office to expire at the third succeeding annual meeting of
stockholders and when their respective successors are elected and qualified.
Notwithstanding the foregoing, and except as otherwise required by law, whenever
the holders of any one or more series of Preferred Stock shall have the right,
voting separately as a class, to elect one or more directors of the Corporation,
the terms of the director or directors elected by such holders shall expire at
the next succeeding annual meeting of stockholders and vacancies created with
respect to any directorship of the directors so elected may be filled in the
manner specified by the terms of such Preferred Stock.
C. NO CUMULATIVE VOTING. Stockholders of the Corporation shall not be
permitted to cumulate their votes for the election of directors.
D. VACANCIES. Except as otherwise fixed pursuant to the provisions of
Article 4 hereof relating to the rights of the holders of any class or series of
stock having preference over the Common Stock as to dividends or upon
liquidation to elect directors, any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, shall be filled by a majority vote of the directors then in office,
whether or not a quorum is present, or by a sole remaining director, and any
director so
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<PAGE>
chosen shall serve until the term of the class to which he was appointed shall
expire and until his successor is elected and qualified. When the number of
directors is changed, the Board of Directors shall determine the class or
classes to which the increased or decreased number of directors shall be
apportioned, provided that no decrease in the number of directors shall shorten
the term of any incumbent director.
E. REMOVAL. Subject to the rights of any class or series of stock
having preference over the Common Stock as to dividends or upon liquidation to
elect directors, any director (including persons elected by directors to fill
vacancies in the Board of Directors) may be removed from office without cause by
an affirmative vote of not less than 75% of the total votes eligible to be cast
by stockholders at a duly constituted meeting of stockholders called expressly
for such purpose and may be removed from office with cause by an affirmative
vote of not less than a majority of the total votes eligible to be cast by
stockholders. Cause for removal shall exist only if the director whose removal
is proposed has been either declared of unsound mind by an order of a court of
competent jurisdiction, convicted of a felony or of an offense punishable by
imprisonment for a term of more than one year by a court of competent
jurisdiction, or deemed liable by a court of competent jurisdiction for gross
negligence or misconduct in the performance of such director's duties to the
Corporation. At least 30 days prior to such meeting of stockholders, written
notice shall be sent to the director whose removal will be considered at the
meeting.
F. NOMINATIONS OF DIRECTORS. Nominations of candidates for election as
directors at any annual meeting of stockholders may be made (a) by, or at the
direction of, a majority of the Board of Directors or (b) by any stockholder
entitled to vote at such annual meeting. Only persons nominated in accordance
with the procedures set forth in this Article 6.F shall be eligible for election
as directors at an annual meeting. Ballots bearing the names of all the persons
who have been nominated for election as directors at an annual meeting in
accordance with the procedures set forth in this Article 6.F shall be provided
for use at the annual meeting.
Nominations, other than those made by or at the direction of the Board
of Directors, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation as set forth in this Article 6.F. To be timely, a
stockholder's notice shall be delivered to, or mailed and received at, the
principal executive offices of the Corporation not later than 120 days prior to
the anniversary date of the initial mailing of proxy materials by the
Corporation in connection with the immediately preceding annual meeting of
stockholders of the Corporation; provided, however, that with respect to the
first scheduled annual meeting following the completion of the conversion of The
Iberville Building and Loan Association, Plaquemine, Louisiana (the
"Association") from the mutual form to the stock form (which meeting is expected
to be held in April 1999), notice by the stockholder must be so delivered or
received no later than the close of business on Friday, January 15, 1999. Such
stockholder's notice shall set forth (a) the name, age, business address and
residence address of the stockholder who intends to make the nomination and of
the person or persons to be nominated; (b) the principal occupation or
employment of the stockholder submitting the
3
<PAGE>
notice and of each person being nominated; (c) the class and number of shares of
Corporation stock which are Beneficially Owned (as defined in Article 9.A(e)
hereof) by the stockholder submitting the notice, by any Person who is Acting in
Concert with or who is an Affiliate or Associate of such stockholder (as such
capitalized terms are defined in Article 9.A hereof), by any Person who is a
member of any group with such stockholder with respect to the Corporation stock
or who is known by such stockholder to be supporting such nominee(s) on the date
the notice is given to the Corporation, by each person being nominated, and by
each Person who is in control of, is controlled by or is under common control
with any of the foregoing Persons (if any of the foregoing Persons is a
partnership, corporation, limited liability company, association or trust,
information shall be provided regarding the name and address of, and the class
of number of shares of Corporation stock which are Beneficially Owned by, each
partner in such partnership, each director, executive officer and stockholder in
such corporation, each member in such limited liability company or association,
and each trustee and beneficiary of such trust, and in each case each Person
controlling such entity and each partner, director, executive officer,
stockholder, member or trustee of any entity which is ultimately in control of
such partnership, corporation, limited liability company, association or trust);
(d) a representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice; (e) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the stockholder; (f) such other information regarding the stockholder submitting
the notice, each nominee proposed by such stockholder and any other Person
covered by clause (c) of this paragraph as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and Exchange
Commission; and (g) the consent of each nominee to serve as a director of the
Corporation if so elected. At the request of the Board of Directors, any person
nominated by, or at the direction of, the Board for election as a director at an
annual meeting shall furnish to the Secretary of the Corporation that
information required to be set forth in a stockholder's notice of nomination
which pertains to the nominee.
The Board of Directors may reject any nomination by a stockholder not
timely made in accordance with the requirements of this Article 6.F. If the
Board of Directors, or a designated committee thereof or other authorized
individual, determines that the information provided in a stockholder's notice
does not satisfy the informational requirements of this Article 6.F in any
material respect, the Secretary of the Corporation or a duly authorized
representative of the Corporation shall promptly notify such stockholder of the
deficiency in the notice. The stockholder shall have an opportunity to cure the
deficiency by providing additional information to the Secretary within such
period of time, not to exceed five days from the date such deficiency notice is
given to the stockholder, as the Board of Directors or such committee or other
authorized individual shall reasonably determine. If the deficiency is not cured
within such period, or if the Board of Directors or such committee or other
authorized individual reasonably determines that the additional information
provided by the stockholder, together with information previously
4
<PAGE>
provided, does not satisfy the requirements of this Article 6.F in any material
respect, then the Board of Directors may reject such stockholder's nomination.
The Secretary of the Corporation or a duly authorized representative of the
Corporation shall notify a stockholder in writing whether his nomination has
been made in accordance with the time and informational requirements of this
Article 6.F. Notwithstanding the procedures set forth in this paragraph, if
neither the Board of Directors nor such committee or other authorized individual
makes a determination as to the validity of any nominations by a stockholder,
the presiding officer of the annual meeting shall determine and declare at the
annual meeting whether the nomination was made in accordance with the terms of
this Article 6.F. If the presiding officer determines that a nomination was made
in accordance with the terms of this Article 6.F, he shall so declare at the
annual meeting and ballots shall be provided for use at the meeting with respect
to such nominee. If the presiding officer determines that a nomination was not
made in accordance with the terms of this Article 6.F, he shall so declare at
the annual meeting and the defective nomination shall be disregarded.
Notwithstanding the foregoing, and except as otherwise required by law,
whenever the holders of any one or more series of Preferred Stock shall have the
right, voting separately as a class, to elect one or more directors of the
Corporation, the provisions of this Article 6.F shall not apply with respect to
the director or directors elected by such holders of Preferred Stock.
G. DISCHARGE OF DUTIES. In discharging the duties of their respective
positions, the Board of Directors, committees of the Board of Directors and
individual directors shall, in considering the best interests of the
Corporation, consider the effects of any action upon the employees of the
Corporation and its subsidiaries, the depositors and borrowers of any insured
institution subsidiary, the communities in which offices or other establishments
of the Corporation or any subsidiary are located and all other pertinent
factors.
ARTICLE 7. PREEMPTIVE RIGHTS. No holder of the capital stock of the
Corporation shall be entitled as such, as a matter of right, to subscribe for or
purchase any part of any new or additional issue of stock of any class
whatsoever of the Corporation, or of securities convertible into stock of any
class whatsoever, whether now or hereafter authorized, or whether issued for
cash or other consideration or by way of a dividend.
ARTICLE 8. INDEMNIFICATION, ETC. OF OFFICERS, DIRECTORS, EMPLOYEES AND
AGENTS.
A. PERSONAL LIABILITY OF DIRECTORS AND OFFICERS. A director or officer
of the Corporation shall not be personally liable for monetary damages for any
action taken, or any failure to take any action, as a director or officer except
to the extent that by law a director's or officer's liability for monetary
damages may not be limited.
B. INDEMNIFICATION. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, including actions by or in the right of
the Corporation, whether civil,
5
<PAGE>
criminal, administrative or investigative, by reason of the fact that such
person is or was a director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding to the full extent
permissible under Louisiana law.
C. ADVANCEMENT OF EXPENSES. Reasonable expenses incurred by an officer,
director, employee or agent of the Corporation in defending an action, suit or
proceeding described in Section B of this Article 8 may be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding if authorized by the board of directors (without regard to whether
participating members thereof are parties to such action, suit or proceeding),
upon receipt of an undertaking by or on behalf of such person to repay such
amount if it shall ultimately be determined that the person is not entitled to
be indemnified by the Corporation.
D. OTHER RIGHTS. The indemnification and advancement of expenses
provided by or pursuant to this Article 8 shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any bylaw, insurance or other agreement, vote of
stockholders or directors (regardless of whether directors authorizing such
indemnification are beneficiaries thereof) or otherwise, both as to actions in
their official capacity and as to actions in another capacity while holding an
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
E. INSURANCE. The Corporation shall have the power to purchase and
maintain insurance or another similar arrangement on behalf of any person who is
or was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture or other enterprise,
against any liability asserted against or incurred by him in any such capacity,
or arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under the provisions of this
Article 8.
F. SECURITY FUND; INDEMNITY AGREEMENTS. By action of the Board of
Directors (notwithstanding their interest in the transaction), the Corporation
may create and fund a trust fund or other fund or form of self-insurance
arrangement of any nature, and may enter into agreements with its officers,
directors, employees and agents for the purpose of securing or insuring in any
manner its obligation to indemnify or advance expenses provided for in this
Article 8.
G. MODIFICATION. The duties of the Corporation to indemnify and to
advance expenses to any person as provided in this Article 8 shall be in the
nature of a contract
6
<PAGE>
between the Corporation and each such person, and no amendment or repeal of any
provision of this Article 8, and no amendment or termination of any trust or
other fund or form of self-insurance arrangement created pursuant to Section F
of this Article 8, shall alter to the detriment of such person the right of such
person to the advance of expenses or indemnification related to a claim based on
an act or failure to act which took place prior to such amendment, repeal or
termination.
H. PROCEEDINGS INITIATED BY INDEMNIFIED PERSONS. Notwithstanding any
other provision of this Article 8, the Corporation shall not indemnify a
director, officer, employee or agent for any liability incurred in an action,
suit or proceeding initiated (which shall not be deemed to include
counter-claims or affirmative defenses) or participated in as an intervenor or
amicus curiae by the person seeking indemnification unless such initiation of or
participation in the action, suit or proceeding is authorized, either before or
after its commencement, by the affirmative vote of a majority of the directors
in office.
ARTICLE 9. MEETINGS OF STOCKHOLDERS AND STOCKHOLDER PROPOSALS
A. DEFINITIONS.
(a) ACQUIRE. The term "Acquire" includes every type of
acquisition, whether effected by purchase, exchange, operation of law or
otherwise.
(b) ACTING IN CONCERT. The term "Acting in Concert" means (a)
knowing participation in a joint activity or conscious parallel action towards a
common goal whether or not pursuant to an express agreement, or (b) a
combination or pooling of voting or other interests in the securities of an
issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or otherwise.
(c) AFFILIATE. An "Affiliate" of, or a Person "affiliated
with," a specified Person, means a Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Person specified.
(d) ASSOCIATE. The term "Associate" used to indicate a
relationship with any Person means:
(i) Any corporation, partnership, limited liability
company or other organization (other than the Corporation or a
Subsidiary of the Corporation), or any subsidiary or parent
thereof, of which such Person is a director, officer, partner
or member or is, directly or indirectly, the Beneficial Owner
of 10% or more of any class of equity securities;
(ii) Any trust or other estate in which such Person
has a 10% or greater beneficial interest or as to which such
Person serves as trustee or in a similar fiduciary capacity,
provided, however, such term shall not include any
7
<PAGE>
employee stock benefit plan of the Corporation or a Subsidiary
of the Corporation in which such Person has a 10% or greater
beneficial interest or serves as a trustee or in a similar
fiduciary capacity;
(iii) Any relative or spouse of such Person (or any
relative of such spouse) who has the same home as such Person
or who is a director or officer of the Corporation or a
Subsidiary of the Corporation (or any subsidiary or parent
thereof); or
(iv) Any investment company registered under the
Investment Company Act of 1940 for which such Person or any
Affiliate or Associate of such Person serves as investment
advisor.
(e) BENEFICIAL OWNER (INCLUDING BENEFICIALLY OWNED). A Person
shall be considered the "Beneficial Owner" of any shares of stock (whether or
not owned of record):
(i) With respect to which such Person or any
Affiliate or Associate of such Person directly or indirectly
has or shares (A) voting power, including the power to vote or
to direct the voting of such shares of stock, and/or (B)
investment power, including the power to dispose of or to
direct the disposition of such shares of stock;
(ii) Which such Person or any Affiliate or Associate
of such Person has (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding
or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, and/or (B) the right to
vote pursuant to any agreement, arrangement or understanding
(whether such right is exercisable immediately or only after
the passage of time); or
(iii) Which are Beneficially Owned within the meaning
of (i) or (ii) of this Article 9.A(e) by any other Person with
which such first-mentioned Person or any of its Affiliates or
Associates either (A) has any agreement, arrangement or
understanding, written or oral, with respect to acquiring,
holding, voting or disposing of any shares of stock of the
Corporation or any Subsidiary of the Corporation or acquiring,
holding or disposing of all or substantially all, or any
Substantial Part, of the assets or business of the Corporation
or a Subsidiary of the Corporation, or (B) is Acting in
Concert. For the purpose only of determining whether a Person
is the Beneficial Owner of a percentage specified in this
Article 9 of the outstanding Voting Shares, such shares shall
be deemed to include any Voting Shares which may be issuable
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants, options or otherwise and which are deemed to be
Beneficially Owned by such Person
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<PAGE>
pursuant to the foregoing provisions of this Article 9.A(e),
but shall not include any other Voting Shares which may be
issuable in such manner.
(f) OFFER. The term "Offer" shall mean every offer to buy or
acquire, solicitation of an offer to sell, tender offer or request or invitation
for tender of, a security or interest in a security for value; provided that the
term "Offer" shall not include (i) inquiries directed solely to the management
of the Corporation and not intended to be communicated to stockholders which are
designed to elicit an indication of management's receptivity to the basic
structure of a potential acquisition with respect to the amount of cash and or
securities, manner of acquisition and formula for determining price, or (ii)
non-binding expressions of understanding or letters of intent with the
management of the Corporation regarding the basic structure of a potential
acquisition with respect to the amount of cash and or securities, manner of
acquisition and formula for determining price.
(g) PERSON. The term "Person" shall mean any individual,
partnership, corporation, limited liability company, association, trust, group
or other entity. When two or more Persons act as a partnership, limited
partnership, limited liability company, syndicate, association or other group
for the purpose of acquiring, holding or disposing of shares of stock, such
partnership, syndicate, associate or group shall be deemed a "Person."
(h) SUBSTANTIAL PART. The term "Substantial Part" as used with
reference to the assets of the Corporation or of any Subsidiary means assets
having a value of more than 10% of the total consolidated assets of the
Corporation and its Subsidiaries as of the end of the Corporation's most recent
fiscal year ending prior to the time the determination is being made.
(i) SUBSIDIARY. "Subsidiary" means any corporation of which a
majority of any class of equity security is owned, directly or indirectly, by
the Person in question.
(j) VOTING SHARES. "Voting Shares" shall mean shares of the
Corporation entitled to vote generally in an election of directors.
(k) CERTAIN DETERMINATIONS WITH RESPECT TO ARTICLE 9. A
majority of the directors shall have the power to determine for the purposes of
this Article 9, on the basis of information known to them and acting in good
faith: (A) the number of Voting Shares of which any Person is the Beneficial
Owner, (B) whether a Person is an Affiliate or Associate of another, (C) whether
a Person has an agreement, arrangement or understanding with another as to the
matters referred to in the definition of "Beneficial Owner" as hereinabove
defined, and (D) such other matters with respect to which a determination is
required under this Article 9.
(l) DIRECTORS, OFFICERS OR EMPLOYEES. Directors, officers or
employees of the Corporation or any Subsidiary thereof shall not be deemed to be
a group with respect to
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their individual acquisitions of any class of equity securities of the
Corporation solely as a result of their capacities as such.
B. SPECIAL MEETINGS OF STOCKHOLDERS. Except as otherwise required by
law and subject to the rights of the holders of any class or series of Preferred
Stock, special meetings of the stockholders of the Corporation may be called
only by (i) the Board of Directors pursuant to a resolution approved by the
affirmative vote of a majority of the directors then in office, (ii) the
President, or (iii) by Persons who Beneficially Own an aggregate of at least 50%
of the outstanding Voting Shares.
C. ACTION WITHOUT A MEETING. Any action permitted to be taken by the
stockholders at a meeting may be taken without a meeting if consent in writing
setting forth the action so taken shall be signed by all of the stockholders who
would be entitled to vote at a meeting for such purpose and filed with the
Secretary of the Corporation as part of the corporate records.
D. STOCKHOLDER PROPOSALS. At an annual meeting of stockholders, only
such new business shall be conducted, and only such proposals shall be acted
upon, as shall have been brought before the annual meeting by, or at the
direction of, (a) the Board of Directors or (b) any stockholder of the
Corporation who complies with all the requirements set forth in this Article
9.D.
Proposals, other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to the Secretary
of the Corporation as set forth in this Article 9.D. For stockholder proposals
to be included in the Corporation's proxy materials, the stockholder must comply
with all the timing and informational requirements of Rule 14a-8 of the Exchange
Act (or any successor regulation). With respect to stockholder proposals to be
considered at the annual meeting of stockholders but not included in the
Corporation's proxy materials, the stockholder notice shall be delivered to, or
mailed and received at, the principal executive offices of the Corporation not
later than 120 days prior to the anniversary date of the initial mailing of
proxy materials by the Corporation in connection with the immediately preceding
annual meeting of stockholders of the Corporation; provided, however, that with
respect to the first scheduled annual meeting following the completion of the
conversion of the Association from the mutual form to the stock form (which
meeting is expected to be held in April 1999), notice by the stockholder must be
so delivered or received no later than the close of business on Friday, January
15, 1999. Such stockholder's notice shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (a) a description of the
proposal desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (b) the name and address, as
they appear on the Corporation's books, of the stockholder proposing such
business and, to the extent known, any other stockholders known by such
stockholder to be supporting such proposal, (c) the class and number of shares
of the Corporation's capital stock which are Beneficially Owned by the
stockholder submitting the notice, by any Person who is Acting in Concert with
or who is an Affiliate
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or Associate of such stockholder, by any Person who is a member of any group
with such stockholder with respect to the Corporation stock or who is known by
such stockholder to be supporting such proposal on the date the notice is given
to the Corporation, and by each Person who is in control of, is controlled by or
is under common control with any of the foregoing Persons (if any of the
foregoing Persons is a partnership, corporation, limited liability company,
association or trust, information shall be provided regarding the name and
address of, and the class and number of shares of Corporation stock which are
Beneficially Owned by, each partner in such partnership, each director,
executive officer and stockholder in such corporation, each member in such
limited liability company or association, and each trustee and beneficiary of
such trust, and in each case each Person controlling such entity and each
partner, director, executive officer, stockholder, member or trustee of any
entity which is ultimately in control of such partnership, corporation, limited
liability company, association or trust), (d) the identification of any person
retained or to be compensated by the stockholder submitting the proposal, or any
person acting on his or her behalf, to make solicitations or recommendations to
stockholders for the purpose of assisting in the passage of such proposal and a
brief description of the terms of such employment, retainer or arrangement for
compensation, and (e) any material interest of the stockholder in such business.
The Board of Directors may reject any stockholder proposal not timely
made in accordance with the terms of this Article 9.D. If the Board of
Directors, or a designated committee thereof or other authorized individual,
determines that the information provided in a stockholder's notice does not
satisfy the information requirements of this Article 9.D in any material
respect, the Secretary of the Corporation or a duly authorized representative of
the Corporation shall promptly notify such stockholder of the deficiency in the
notice. The stockholder shall have an opportunity to cure the deficiency by
providing additional information to the Secretary within such period of time not
to exceed five days from the date such deficiency notice is given to the
stockholder as the Board of Directors or such committee or other authorized
individual shall reasonably determine. If the deficiency is not cured within
such period, or if the Board of Directors or such committee or other authorized
individual determines that the additional information provided by the
stockholder, together with information previously provided, does not satisfy the
requirements of this Article 9.D in any material respect, then the Board of
Directors may reject such stockholder's proposal. The Secretary of the
Corporation or a duly authorized representative of the Corporation shall notify
a stockholder in writing whether his proposal has been made in accordance with
the time and informational requirements of this Article 9.D. Notwithstanding the
procedures set forth in this paragraph, if neither the Board of Directors nor
such committee or other authorized individual makes a determination as to the
validity of any stockholder proposal, the presiding officer of the annual
meeting shall determine and declare at the annual meeting whether the
stockholder proposal was made in accordance with the terms of this Article 9.D.
If the presiding officer determines that a stockholder proposal was made in
accordance with the terms of this Article 9.D, he shall so declare at the annual
meeting and ballots shall be provided for use at the meeting with respect to any
such proposal. If the presiding officer determines that a stockholder proposal
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was not made in accordance with the terms of this Article 9.D, he shall so
declare at the annual meeting and any such proposal shall not be acted upon at
the annual meeting.
This provision shall not prevent the consideration and approval or
disapproval at the annual meeting of reports of officers, directors and
committees of the Board of Directors, but in connection with such reports, no
new business shall be acted upon at such annual meeting unless stated, filed and
received as herein provided.
ARTICLE 10. RESTRICTIONS ON OFFERS AND ACQUISITIONS OF THE
CORPORATION'S EQUITY SECURITIES.
A. RESTRICTIONS. The definitions and other provisions set forth in
Article 9.A are also applicable to this Article 10. Except as set forth in
Article 10.B, for a period of five years from the completion of the
reorganization of the Association from the mutual holding company structure to
the stock holding company structure, no Person shall directly or indirectly
Offer to Acquire or Acquire the Beneficial Ownership of (i) more than 10% of the
issued and outstanding shares of any class of an equity security of the
Corporation, or (ii) any securities convertible into, or exercisable for, any
equity securities of the Corporation if, assuming conversion or exercise by such
Person of all securities of which such Person is the Beneficial Owner which are
convertible into, or exercisable for, such equity securities (but of no
securities convertible into, or exercisable for, such equity securities of which
such Person is not the Beneficial Owner), such Person would be the Beneficial
Owner of more than 10% of any class of an equity security of the Corporation.
B. EXCLUSIONS. The foregoing restrictions shall not apply to (i) any
Offer with a view toward public resale made exclusively to the Corporation by
underwriters or a selling group acting on its behalf, (ii) any employee benefit
plan or arrangement established by the Corporation or the Association and any
trustee of such a plan or arrangement, and (iii) any other Offer or acquisition
approved in advance by the affirmative vote of two-thirds of the Corporation's
entire Board of Directors.
C. REMEDIES. In the event that shares are acquired in violation of this
Article 10, all shares Beneficially Owned by any Person in excess of 10% shall
be considered "Excess Shares" and (i) shall not be counted as shares entitled to
vote and shall not be voted by any Person or counted as Voting Shares in
connection with any matters submitted to stockholders for a vote, (ii) the
Corporation is authorized to refuse to recognize a transfer or attempted
transfer of any shares of the Corporation's equity securities to any Person who
is the Beneficial Owner, or as the result of such transfer would become the
Beneficial Owner, of Excess Shares, and (iii) the Board of Directors may cause
such Excess Shares to be transferred to an independent trustee for sale on the
open market or otherwise, with the expenses of such trustee to be paid out of
the proceeds of the sale.
For purposes of ensuring compliance with Article 10.A, in the event any
partnership, corporation, limited liability company, association or trust is
deemed to Beneficially Own
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more than 5% of any class of the Corporation's stock, either by itself or
together with one or more other Persons who is an Affiliate of or Acting in
Concert with such entity or who is a member of any group with such entity with
respect to the Corporation's stock, then the Corporation shall be entitled upon
written request to such entity to receive information regarding the name and
address of, and the class and number of shares of Corporation stock which are
Beneficially Owned by, each partner in such partnership, each director,
executive officer and stockholder in such corporation, each member in such
limited liability company or association, and each trustee and beneficiary of
such trust, and in each case each Person controlling such entity and each
partner, director, executive officer, stockholder, member or trustee of any
entity which is ultimately in control of such partnership, corporation, limited
liability company, association or trust.
E. SEVERABILITY. In the event any provision (or portion thereof) of
this Article 10 shall be found to be invalid, prohibited or unenforceable for
any reason, the remaining provisions (or portions thereof) of this Article 10
shall remain in full force and effect, and shall be construed as if such
invalid, prohibited or unenforceable provision had been stricken herefrom or
otherwise rendered inapplicable, it being the intent of this Corporation and its
stockholders that each such remaining provision (or portion thereof) of this
Article 10 remain, to the fullest extent permitted by law, applicable and
enforceable as to all stockholders.
ARTICLE 11. AMENDMENT OF ARTICLES AND BYLAWS.
A. ARTICLES. The Corporation reserves the right to amend, alter, change
or repeal any provision contained in these Articles of Incorporation, in the
manner now or hereafter prescribed by law, and all rights conferred upon
stockholders herein are granted subject to this reservation. No amendment,
addition, alteration, change or repeal of these Articles of Incorporation shall
be made unless it is first approved by the Board of Directors of the Corporation
pursuant to a resolution adopted by the affirmative vote of a majority of the
directors then in office, and thereafter is approved by the holders of at least
75% of the Voting Shares (as defined in Article 9 hereof and after giving effect
to Article 10.C hereof), voting together as a single class, as well as such
additional vote of the Preferred Stock as may be required by the provisions of
any series thereof. Notwithstanding the preceding sentence, any amendment to
these Articles of Incorporation recommended for adoption by at least two-thirds
of the entire Board of Directors (including any vacancies) shall, to the extent
the Business Corporation Law of the State of Louisiana requires stockholder
approval of such amendment, require the affirmative vote of a majority of the
Voting Shares (as defined in Article 9 hereof and after giving effect to Article
10.C hereof), voting together as a single class, as well as such additional vote
of the Preferred Stock as may be required by the provisions of any series
thereof.
B. BYLAWS. The Board of Directors, to the extent permitted by law, or
stockholders may adopt, alter, amend or repeal the Bylaws of the Corporation.
Such action by the Board of Directors shall require the affirmative vote of a
majority of the directors
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then in office at any regular or special meeting of the Board of Directors. Such
action by the stockholders shall require the affirmative vote of the holders of
a majority of the Voting Shares of the Corporation (as defined on Article 9
hereof and after giving effect to Article 10.C hereof), voting together as a
single class, as well as such additional vote of the Preferred Stock as may be
required by the provisions of any series thereof, provided that the affirmative
vote of the holders of at least 75% of the Voting Shares of the Corporation (as
defined in Article 9 hereof and after giving effect to Article 10.C hereof),
voting together as a single class, as well as such additional vote of the
Preferred Stock as may be required by the provisions of any series thereof,
shall be required to amend, adopt, alter, change or repeal any provision
inconsistent with Sections 4.1, 4.2, 4.3 and 4.4 of the Bylaws and Articles VIII
and XII of the Bylaws.
THE UNDERSIGNED, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the Louisiana Business
Corporation Law, as amended, through these Articles of Incorporation, has caused
these Articles of Incorporation to be signed by its President and Chief
Executive Officer, who hereby declares and certifies that the facts herein
stated are true and who has hereunto set his hand this 16th day of June 1998.
ATTEST (SEAL) THE IBERVILLE BUILDING AND LOAN
ASSOCIATION
/s/ Gary K. Pruitt By: /s/ G. Lloyd Bouchereau, Jr.
- ------------------------- -------------------------------
Gary K. Pruitt, Secretary G. Lloyd Bouchereau, Jr., President
and Chief Executive Officer
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ACKNOWLEDGMENT
STATE OF LOUISIANA
IBERVILLE PARISH
On this 16th day of June 1998, before me appeared G. Lloyd Bouchereau,
Jr., to me personally known, who, being by me duly sworn, did say that he is the
President and Chief Executive Officer of The Iberville Building and Loan
Association (the sole incorporator of IBL Bancorp, Inc.), that the seal affixed
to the above and foregoing instrument is the corporate seal of said Association
and that the instrument was signed and sealed on behalf of the Association by
authority of its Board of Directors; and said G. Lloyd Bouchereau, Jr.
acknowledged the instrument to be the free act and deed of the Association.
/s/ Gary K. Pruitt
------------------
Gary K. Pruitt
SWORN TO AND SUBSCRIBED before me this 16th day of June 1998.
/s/ John L. Delahaye
--------------------
NOTARY PUBLIC
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EXHIBIT 3.2
BYLAWS OF IBL BANCORP, INC.
<PAGE>
BYLAWS
OF
IBL BANCORP, INC.
ARTICLE I. OFFICES
1.1 REGISTERED OFFICE AND REGISTERED AGENT. The registered office of
IBL Bancorp, Inc. (the "Corporation") shall be located in the State of Louisiana
at such place as may be fixed from time to time by the Board of Directors upon
filing of such notices as may be required by law, and the registered agent shall
have a business office identical with such registered office.
1.2 OTHER OFFICES. The Corporation may have other offices within or
outside the State of Louisiana at such place or places as the Board of Directors
may from time to time determine.
ARTICLE II. STOCKHOLDERS' MEETINGS
2.1 MEETING PLACE. All meetings of the stockholders shall be held at
the principal place of business of the Corporation, or at such other place
within or without the State of Louisiana as shall be determined from time to
time by the Board of Directors, and the place at which any such meeting shall be
held shall be stated in the notice of the meeting.
2.2 ANNUAL MEETING TIME. The annual meeting of the stockholders for the
election of directors and for the transaction of such other business as may
properly come before the meeting shall be held each year on the fourth Wednesday
of April at the hour of 10:00 a.m., if not a legal holiday, and if a legal
holiday, then on the day following, at the same hour, or at such other date and
time as may be determined by the Board of Directors and stated in the notice of
such meeting.
2.3 ORGANIZATION AND CONDUCT. Each meeting of the stockholders shall be
presided over by the President, or if the President is not present, by such
other person as the directors may determine. The Secretary, or in her absence a
temporary Secretary, shall act as secretary of each meeting of the stockholders.
In the absence of the Secretary and any temporary Secretary, the chairman of the
meeting may appoint any person present to act as secretary of the meeting. The
chairman of any meeting of the stockholders, unless prescribed by law or
regulation or unless the Board of Directors has otherwise determined, shall
determine the order of the business and the procedure at the meeting, including
such regulation of the manner of voting and the conduct of discussions as shall
be deemed appropriate by him in his sole discretion.
<PAGE>
2.4 NOTICE.
(a) Notice of the time and place of the annual meeting of
stockholders shall be given by delivering personally or by mailing a written or
printed notice of the same, at least 10 days and not more than 60 days prior to
the meeting, to each stockholder of record entitled to vote at such meeting.
When any stockholders' meeting, either annual or special, is adjourned for 30
days or more, or if a new record date is fixed for an adjourned meeting of
stockholders, notice of the adjourned meeting shall be given as in the case of
an original meeting. It shall not be necessary to give any notice of the time
and place of any meeting adjourned for less than 30 days or of the business to
be transacted thereat (unless a new record date is fixed therefor), other than
an announcement at the meeting at which such adjournment is taken.
(b) At least 15 days and not more than 60 days prior to the
meeting, a written or printed notice of each special meeting of stockholders,
stating the place, day and hour of such meeting, and the purpose or purposes for
which the meeting is called, shall be either delivered personally or mailed to
each stockholder of record entitled to vote at such meeting.
2.5 VOTING RECORD. At least five days before each meeting of
stockholders, a complete record of the stockholders entitled to vote at such
meeting, or any adjournment thereof, shall be made, arranged in alphabetical
order, with the number and class of shares held by each stockholder, which
record shall be kept on file at the registered office of the Corporation and
shall be subject to inspection by any stockholder at any time during usual
business hours. The record shall be kept open at the time and place of such
meeting for the inspection by any stockholder.
2.6 QUORUM. Except as otherwise required by law or the Corporation's
Articles of Incorporation or these Bylaws:
(a) A quorum at any annual or special meeting of stockholders
shall consist of stockholders representing, either in person or by proxy, a
majority of the outstanding capital stock of the Corporation entitled to vote at
such meeting.
(b) The votes of a majority in interest of those present at
any properly called meeting or adjourned meeting of stockholders, at which a
quorum as defined above is present, shall be sufficient to transact business.
2.7 VOTING OF SHARES.
(a) Except as otherwise provided in these Bylaws or to the
extent that voting rights of the shares of any class or classes are limited or
denied by the Articles of Incorporation, each stockholder, on each matter
submitted to a vote at a meeting of
2
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stockholders, shall have one vote for each share of stock registered in his name
on the books of the Corporation.
(b) Directors are to be elected by a plurality of votes cast
by the shares entitled to vote in the election at a meeting at which a quorum is
present. Stockholders shall not be permitted to cumulate their votes for the
election of directors. If, at any meeting of the stockholders, due to a vacancy
or vacancies or otherwise, directors of more than one class of the Board of
Directors are to be elected, each class of directors to be elected at the
meeting shall be elected in a separate election by a plurality vote.
2.8 FIXING OF RECORD DATE. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to receive payment of any dividend, the Board
of Directors shall fix in advance a record date for such determination of
stockholders, such date to be not more than 60 days and, in case of a meeting of
stockholders, not less than 10 days prior to the date on which the particular
action requiring such determination of stockholders is to be taken.
2.9 PROXIES. A stockholder may vote either in person or by proxy
executed in writing by the stockholder, or his duly authorized attorney-in-fact.
No proxy shall be valid after 11 months from the date of its execution, unless
otherwise provided in the proxy.
2.10 VOTING OF SHARES IN THE NAME OF TWO OR MORE PERSONS. Where shares
are held jointly or as tenants in common by two or more persons as fiduciaries
or otherwise, if only one or more of such persons is present in person or by
proxy, all of the shares standing in the names of such persons shall be deemed
to be represented for the purpose of determining a quorum and the Corporation
shall accept as the vote of all such shares the votes cast by him or a majority
of them and if in any case such persons are equally divided upon the manner of
voting the shares held by them, the vote of such shares shall be divided equally
among such persons, without prejudice to the rights of such joint owners or the
beneficial owners thereof among themselves, unless either (a) the Corporation
receives written notice to the contrary from a nonsigning registered holder
before the proxy is voted, or (b) there shall have been filed with the Secretary
of the Corporation a copy, certified by an attorney-at-law to be correct, of the
relevant portions of the agreements under which such shares are held or the
instrument by which the trust or estate was created or the decree of court
appointing them, or of a decree of court directing the voting of such shares,
and the persons specified as having such voting power in the latest such
document so filed, and only such persons, shall be entitled to vote such shares
but only in accordance therewith.
2.11 VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the name
of another corporation may be voted by an officer, agent or proxy as the bylaws
of such corporation may prescribe, or, in the absence of such provision, in
accordance with the Louisiana Business Corporation Law, as amended ("BCL").
Shares held by an administrator, executor, guardian or conservator may be voted
by him, either in person or by proxy, without a transfer of such shares into his
name. Shares standing in the name of a trustee may be
3
<PAGE>
voted by him, either in person or by proxy. Shares standing in the name of a
receiver may be voted by such receiver, and shares held by or under the control
of a receiver may be voted by such receiver without the transfer thereof into
his name if authority to do so is contained in an appropriate order of the court
or other public authority by which such receiver was appointed. A stockholder
whose shares are pledged shall be entitled to vote such shares until the shares
have been transferred into the name of the pledgee or nominee, and thereafter
the pledgee or nominee shall be entitled to vote the shares so transferred
2.12 INSPECTORS. For each meeting of stockholders, the Board of
Directors may appoint one or more inspectors of election. If for any meeting the
inspector(s) appointed by the Board of Directors shall be unable to act or the
Board of Directors shall fail to appoint any inspector, one or more inspectors
may be appointed at the meeting by the chairman thereof. Such inspectors shall
conduct the voting in each election of directors and, as directed by the Board
of Directors or the chairman of the meeting, the voting on each matter voted on
at such meeting, and after the voting shall make a certificate of the vote
taken. Inspectors need not be stockholders.
ARTICLE III. CAPITAL STOCK
3.1 CERTIFICATES. Certificates of stock shall be issued in numerical
order, and each stockholder shall be entitled to a certificate signed by the
President or a Vice President, and the Secretary or the Treasurer, and may be
sealed with the seal of the Corporation or a facsimile thereof. The signatures
of such officers may be facsimiles if the certificate is manually signed on
behalf of a transfer agent, or registered by a registrar, other than the
Corporation itself or an employee of the Corporation. If an officer who has
signed or whose facsimile signature has been placed upon such certificate ceases
to be an officer before the certificate is issued, it may be issued by the
Corporation with the same effect as if the person were an officer on the date of
issue. Each certificate of stock shall state:
(a) that the Corporation is incorporated under the laws of
the State of Louisiana;
(b) the name of the person to whom issued;
(c) the number and class of shares and the designation of the
series, if any, which such certificate represents;
(d) the par value of each share represented by such
certificate, or a statement that such shares are without par value; and
(e) such other information as may be required by the BCL.
4
<PAGE>
3.2 TRANSFERS.
(a) Transfers of stock shall be made only upon the stock
transfer books of the Corporation, kept at the registered office of the
Corporation or at its principal place of business, or at the office of its
transfer agent or registrar, and before a new certificate is issued the old
certificate shall be surrendered for cancellation. The Board of Directors may,
by resolution, open a share register in any state of the United States, and may
employ an agent or agents to keep such register, and to record transfers of
shares therein.
(b) Shares of stock shall be transferred by delivery of the
certificates therefor, accompanied either by an assignment in writing on the
back of the certificate or an assignment separate from the certificate, or by a
written power of attorney to sell, assign and transfer the same, signed by the
holder of said certificate. No shares of stock shall be transferred on the books
of the Corporation until the outstanding certificates therefor have been
surrendered to the Corporation.
3.3 REGISTERED OWNER. Registered stockholders shall be treated by the
Corporation as the holders in fact of the stock standing in their respective
names and the Corporation shall not be bound to recognize any equitable or other
claim to or interest in any share on the part of any other person, whether or
not it shall have express or other notice thereof, except as expressly provided
below or by the laws of the State of Louisiana. The Board of Directors may adopt
by resolution a procedure whereby a stockholder of the Corporation may certify
in writing to the Corporation that all or a portion of the shares registered in
the name of such stockholder are held for the account of a specified person or
persons. The resolution shall set forth:
(a) The classification of stockholder who may certify;
(b) The purpose or purposes for which the certification may be
made;
(c) The form of certification and information to be contained
therein;
(d) If the certification is with respect to a record date or
closing of the stock transfer books, the date within which the certification
must be received by the Corporation; and
(e) Such other provisions with respect to the procedure as are
deemed necessary or desirable.
Upon receipt by the Corporation of a certification complying with the
above requirements, the persons specified in the certification shall be deemed,
for the purpose or purposes set forth in the certification, to be the holders of
record of the number of shares specified in place of the stockholder making the
certification.
5
<PAGE>
3.4 MUTILATED, LOST OR DESTROYED CERTIFICATES. In case of any
mutilation, loss or destruction of any certificate of stock, another may be
issued in its place upon receipt of proof of such mutilation, loss or
destruction. The Board of Directors may impose conditions on such issuance and
may require the giving of a satisfactory bond or indemnity to the Corporation in
such sum as they might determine, or establish such other procedures as they
deem necessary.
3.5 FRACTIONAL SHARES OR SCRIP. The Corporation may (a) issue fractions
of a share which shall entitle the holder to exercise voting rights, to receive
dividends thereon, and to participate in any of the assets of the Corporation in
the event of liquidation; (b) arrange for the disposition of fractional
interests by those entitled thereto; (c) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such shares are
determined; or (d) issue scrip in registered or bearer form which shall entitle
the holder to receive a certificate for a full share upon the surrender of such
scrip aggregating a full share.
3.6 SHARES OF ANOTHER CORPORATION. Shares owned by the Corporation in
another corporation, domestic or foreign, may be voted by such officer, agent or
proxy as the Board of Directors may determine or, in the absence of such
determination, by the President of the Corporation.
ARTICLE IV. BOARD OF DIRECTORS
4.1 NUMBER AND POWERS. The management of all the affairs, property and
interest of the Corporation shall be vested in a Board of Directors. The Board
of Directors shall be divided into three classes as nearly equal in number as
possible. The initial Board of Directors shall consist of six persons. The
classification and term of the directors shall be as set forth in the
Corporation's Articles of Incorporation, which provisions are incorporated
herein with the same effect as if they were set forth herein. Directors need not
be stockholders or residents of the State of Louisiana. In addition to the
powers and authorities expressly conferred upon it by these Bylaws and the
Articles of Incorporation, the Board of Directors may exercise all such powers
of the Corporation and do all such lawful acts and things as are not by statute
or by the Articles of Incorporation or by these Bylaws directed or required to
be exercised or done by the stockholders.
4.2 CHANGE OF NUMBER. The number of directors may at any time be
increased or decreased by a vote of a majority of the Board of Directors,
provided that no decrease shall have the effect of shortening the term of any
incumbent director except as provided in Sections 4.3 and 4.4 hereunder.
Notwithstanding anything to the contrary contained within these Bylaws, the
number of directors may not be less than 5 nor more than 15.
4.3 VACANCIES. All vacancies in the Board of Directors shall be filled
in the manner provided in the Corporation's Articles of Incorporation, which
provisions are incorporated herein with the same effect as if they were set
forth herein.
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4.4 REMOVAL OF DIRECTORS. Directors may be removed in the manner
provided in the Corporation's Articles of Incorporation, which provisions are
incorporated herein with the same effect as if they were set forth herein.
4.5 REGULAR MEETING. Regular meetings of the Board of Directors or any
committee may be held without notice at the principal place of business of the
Corporation or at such other place or places, either within or without the State
of Louisiana, as the Board of Directors or such committee, as the case may be,
may from time to time designate. The annual meeting of the Board of Directors
shall be held without notice immediately after the adjournment of the annual
meeting of stockholders.
4.6 SPECIAL MEETINGS.
(a) Special meetings of the Board of Directors may be called
at any time by the President or by a majority of the authorized number of
directors, to be held at the principal place of business of the Corporation or
at such other place or places as the Board of Directors or the person or persons
calling such meeting may from time to time designate. Notice of all special
meetings of the Board of Directors shall be given to each director by five days'
service of the same by telegram, by letter, or personally. Such notice need not
specify the business to be transacted at, nor the purpose of, the meeting.
(b) Special meetings of any committee may be called at any
time by such person or persons and with such notice as shall be specified for
such committee by the Board of Directors, or in the absence of such
specification, in the manner and with the notice required for special meetings
of the Board of Directors.
4.7 QUORUM. A majority of the Board of Directors shall be necessary at
all meetings to constitute a quorum for the transaction of business.
4.8 WAIVER OF NOTICE. Attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director attends
for the express purpose of objecting to the transaction of any business because
the meeting is not lawfully called or convened. A waiver of notice signed by the
director or directors, whether before or after the time stated for the meeting,
shall be equivalent to the giving of notice.
4.9 REGISTERING DISSENT. A director who is present at a meeting of the
Board of Directors at which action on a corporate matter is taken shall be
presumed to have assented to such action unless his dissent is entered in the
minutes of the meeting, or unless he files his written dissent to such action
with the person acting as the secretary of the meeting before the adjournment
thereof, or unless he delivers his dissent in writing to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
7
<PAGE>
4.10 EXECUTIVE, AUDIT AND OTHER COMMITTEES. Standing or special
committees may be appointed from its own number by the Board of Directors from
time to time, and the Board of Directors may from time to time invest such
committees with such powers as it may see fit, subject to such conditions as may
be prescribed by the Board. An Executive Committee may be appointed by
resolution passed by a majority of the full Board of Directors. It shall have
and exercise all of the authority of the Board of Directors, except in reference
to amending the Articles of Incorporation, adopting a plan of merger or
consolidation, recommending the sale, lease or exchange or other dispositions of
all or substantially all the property and assets of the Corporation otherwise
than in the usual and regular course of business, recommending a voluntary
dissolution or a revocation thereof, or amending these Bylaws. An Audit
Committee shall be appointed by resolution passed by a majority of the full
Board of Directors, and at least a majority of the members of the Audit
Committee shall be directors who are not also officers of the Corporation. The
Audit Committee shall recommend independent auditors to the Board of Directors
annually and shall review the Corporation's budget, the scope and results of the
audit performed by the Corporation's independent auditors and the Corporation's
system of internal control and audit with management and such independent
auditors, and such other duties as may be assigned to it by the Board of
Directors. All committees appointed by the Board of Directors shall keep regular
minutes of the transactions of their meetings and shall cause them to be
recorded in books kept for that purpose in the office of the Corporation. The
designation of any such committee, and the delegation of authority thereto,
shall not relieve the Board of Directors, or any member thereof, of any
responsibility imposed by law.
4.11 REMUNERATION. No stated fee shall be paid to directors, as such,
for their service, but by resolution of the Board of Directors, a fixed sum and
expenses of attendance, if any, may be allowed for attendance at each regular or
special meeting of such Board; provided, that nothing herein contained shall be
construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor. Members of standing or special
committees may be allowed like compensation for attending committee meetings.
4.12 ACTION BY DIRECTORS WITHOUT A MEETING. Any action which may be
taken at a meeting of the directors, or of a committee thereof, may be taken
without a meeting if a consent in writing, setting forth the action so taken or
to be taken, shall be signed by all of the directors, or all of the members of
the committee, as the case may be. Such consent shall have the same effect as a
unanimous vote.
4.13 ACTION OF DIRECTORS BY COMMUNICATIONS EQUIPMENT. Any action which
may be taken at a meeting of directors, or of a committee thereof, may be taken
by means of a conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other at the
same time.
4.14 CHAIRMAN OF THE BOARD OF DIRECTORS. The Board of Directors may
elect from among its members a Chairman of the Board and a Vice Chairman of the
Board of
8
<PAGE>
Directors. The Chairman of the Board of Directors (or, in his absence, the Vice
Chairman of the Board, if one has been elected) shall preside at all meetings of
the Board of Directors. The Chairman of the Board (and the Vice Chairman of the
Board, if one has been elected) shall perform such other duties as may be
assigned from time to time by the Board of Directors.
ARTICLE V. OFFICERS
5.1 DESIGNATIONS. The officers of the Corporation shall be the Chairman
of the Board, a President, a Secretary and a Treasurer, as well as such Vice
Presidents (including Executive and Senior Vice Presidents), Assistant
Secretaries and Assistant Treasurers as the Board may designate, who shall be
elected for one year by the directors at their first meeting after the annual
meeting of stockholders, and who shall hold office until their successors are
elected and qualify. Any two or more offices may be held by the same person,
except that the offices of President and Secretary may not be held by the same
person.
5.2 POWERS AND DUTIES. The officers of the Corporation shall have such
authority and perform such duties as the Board of Directors may from time to
time authorize or determine. In the absence of action by the Board of Directors,
the officers shall have such powers and duties as generally pertain to their
respective offices.
5.3 DELEGATION. In the case of absence or inability to act of any
officer of the Corporation and of any person herein authorized to act in his
place, the Board of Directors may from time to time delegate the powers or
duties of such officer to any other officer or any director or other person whom
it may select.
5.4 VACANCIES. Vacancies in any office arising from any cause may be
filled by the Board of Directors at any regular or special meeting of the Board.
5.5 OTHER OFFICERS. Directors may appoint such other officers and
agents as it shall deem necessary or expedient, who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board of Directors.
5.6 TERM - REMOVAL. The officers of the Corporation shall hold office
until their successors are chosen and qualify. Any officer or agent elected or
appointed by the Board of Directors may be removed at any time, with or without
cause, by the affirmative vote of a majority of the whole Board of Directors,
but such removal shall be without prejudice to the contract rights, if any, of
the person so removed.
5.7 BONDS. The Board of Directors may, by resolution, require any and
all of the officers to give bonds to the Corporation, with sufficient surety or
sureties, conditioned for
9
<PAGE>
the faithful performance of the duties of their respective offices, and to
comply with such other conditions as may from time to time be required by the
Board of Directors.
ARTICLE VI. FISCAL YEAR; ANNUAL AUDIT
The fiscal year of the Corporation shall end on the 31st day of
December of each year. The Corporation shall be subject to an annual audit as of
the end of its fiscal year by independent public accountants appointed by and
responsible to the Board of Directors. The appointment of such accountants shall
be subject to annual ratification by the stockholders.
ARTICLE VII. DIVIDENDS AND FINANCE
7.1 DIVIDENDS. Dividends may be declared by the Board of Directors and
paid by the Corporation out of the unreserved and unrestricted earned surplus of
the Corporation, or out of the unrestricted capital surplus of the Corporation,
subject to the conditions and limitations imposed by the laws of the State of
Louisiana. The Board of Directors may declare dividends payable to the holders
of record at the close of business on any business day not more than 60 days
prior to the date on which the dividend is paid.
7.2 RESERVES. Before making any distribution of earned surplus, there
may be set aside out of the earned surplus of the Corporation such sum or sums
as the directors from time to time in their absolute discretion deem expedient
as a reserve fund to meet contingencies, or for equalizing dividends, or for
maintaining any property of the Corporation, or for any other purpose. Any
earned surplus of any year not distributed as dividends shall be deemed to have
thus been set apart until otherwise disposed of by the Board of Directors.
7.3 DEPOSITORIES. The monies of the Corporation shall be deposited in
the name of the Corporation in such bank or banks or trust company or trust
companies as the Board of Directors shall designate, and shall be drawn out only
by check or other order for payment of money signed by such persons and in such
manner as may be determined by resolution of the Board of Directors.
ARTICLE VIII. PERSONAL LIABILITY OF DIRECTORS AND OFFICERS
Directors and officers of the Corporation shall not be personally
liable for monetary damages for any action taken, or any failure to take any
action, as a director or officer to the extent set forth in the Corporation's
Articles of Incorporation, which provisions are incorporated herein with the
same effect as if they were set forth herein.
10
<PAGE>
ARTICLE IX. NOTICES
Except as may otherwise be required by law, any notice to any
stockholder or director may be delivered personally or by mail. If mailed, the
notice shall be deemed to have been delivered when deposited in the United
States mail, addressed to the addressee at his last known address in the records
of the Corporation, with postage thereon prepaid.
ARTICLE X. SEAL
The corporate seal of the Corporation shall be in such form and bear
such inscription as may be adopted by resolution of the Board of Directors, or
by usage of the officers on behalf of the Corporation.
ARTICLE XI. BOOKS AND RECORDS
The Corporation shall keep correct and complete books and records of
account and shall keep minutes and proceedings of meetings of its stockholders
and Board of Directors; and it shall keep at its registered office or principal
place of business, or at the office of its transfer agent or registrar, a record
of its stockholders, giving the names and addresses of all stockholders and the
number and class of the shares held by each. Any books, records and minutes may
be in written form or any other form capable of being converted into written
form within a reasonable time.
ARTICLE XII. AMENDMENTS
These Bylaws may be altered, amended or repealed only as set forth in
the Corporation's Articles of Incorporation, which provisions are incorporated
herein with the same effect as if they were set forth herein.
11
<PAGE>
Exhibit 4.1
FORM OF STOCK CERTIFICATE OF IBL BANCORP, INC.
<PAGE>
(FORM OF STOCK CERTIFICATE - FRONT SIDE)
NUMBER SHARES
COMMON STOCK CUSIP
(Par Value $.01 Per Share) See reverse for
certain definitions
IBL BANCORP, INC.
INCORPORATED UNDER THE LAWS OF LOUISIANA
This certifies that ___________________________________ is the
registered holder of _________________ fully paid and non-assessable shares of
the Common Stock, par value $.01 per share, of IBL Bancorp, Inc., Plaquemine,
Louisiana (the "Corporation").
The shares evidenced by this Certificate are transferable in person or
by a duly authorized attorney or legal representative, upon surrender of this
Certificate properly endorsed. This Certificate and the shares represented
hereby are subject to all the provisions of the Articles of Incorporation and
Bylaws of the Corporation and any and all amendments thereto.
This Certificate is not valid unless countersigned by the Transfer
Agent and registered by the Registrar.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed by the facsimile signatures of its duly authorized officers and has
caused its facsimile seal to be affixed hereto.
Dated:
(SEAL)
- ---------------------------------- --------------------------------
Gary K. Pruitt G. Lloyd Bouchereau, Jr.
Secretary President and Chief Executive
Officer
<PAGE>
(FORM OF STOCK CERTIFICATE - BACK SIDE)
The Corporation is authorized to issue more than one class of stock,
including a class of preferred stock which may be issued in one or more
series. The Corporation will furnish to any stockholder, upon written request
and without charge, a full statement of the designations, preferences,
limitations and relative rights of the shares of each class authorized to be
issued and, with respect to the issuance of any preferred stock to be issued
in series, the relative rights and preferences between the shares of each
series so far as the rights and preferences have been fixed and determined
and the authority of the Board of Directors to fix and determine the relative
rights and preferences of subsequent series.
The Articles of Incorporation of the Corporation include a provision
which generally prohibits any person (including an individual, company or
group acting in concert) from directly or indirectly offering to acquire or
acquiring the beneficial ownership of more than 10% of any class of equity
securities of the Corporation. In the event that stock is acquired in
violation of this 10% limitation, which will expire upon the fifth
anniversary of the completion of the conversion of The Iberville Building and
Loan Association from mutual form to stock form, the excess shares will no
longer be counted in determining the total number of outstanding shares for
purposes of any matter involving stockholder action and the Board of
Directors of the Corporation may cause such excess shares to be transferred
to an independent trustee for sale in the open market or otherwise, with the
expenses of such sale to be paid out of the proceeds of the sale.
The following abbreviations, when used in the inscription on the
face of this Certificate, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
UNIF GIFT MIN ACT - ______________ Custodian ______________ under
(Cust) (Minor)
Uniform Gifts to Minors Act ________________________
(State)
Additional abbreviations may also be used though not in the above list.
<PAGE>
For value received,__________________ hereby sell, assign and transfer
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAXPAYER IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------------------------------
- -----------------------------------------------------------
unto ________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP
CODE, OF ASSIGNEE
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
_______________________________ shares of Common Stock represented by this
Certificate, and do hereby irrevocably constitute and appoint _______________
as Attorney, to transfer the said shares on the books of the within named
Corporation, with full power of substitution.
Dated __________________________, _____
----------------------------------
Signature
----------------------------------
Signature
Notice: The signature(s) to this assignment must correspond with the name(s)
written upon the face of this Certificate in every particular, without
alteration or enlargement or any change whatsoever.
<PAGE>
Exhibit 5.1
Law Offices
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
-----
Telephone: (202) 347-0300
Facsimile: (202) 347-2172
WWW.EMTH.COM
TIMOTHY B. MATZ JEFFREY D. HAAS
STEPHEN M. EGE KEVIN M. HOULIHAN
RAYMOND A. TIERNAN KENNETH B. TABACH
W. MICHAEL HERRICK PATRICIA J. WOHL
GERARD L. HAWKINS JEFFREY R. HOULE
NORMAN B. ANTIN FIORELIO J. VICENCIO*
JOHN P. SOUKENIK* DAVID TEEPLES*
GERALD F. HEUPEL, JR. CRISTIN ZEISLER
JEFFREY A. KOEPPEL ANDREW ROSENSTEIN
DANIEL P. WEITZEL ____________
PHILIP ROSS BEVAN
HUGH T. WILKINSON June 24, 1998 OF COUNSEL
ALLIN P. BAXTER
JACK I. ELIAS
SHERYL JONES ALU
*NOT ADMITTED IN D.C. VIA EDGAR
Board of Directors
IBL Bancorp, Inc.
23910 Railroad Avenue
Plaquemine, Louisiana 70764
Gentlemen:
We have acted as special counsel to IBL Bancorp, Inc. (the "Company") in
connection with the preparation and filing with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, of the
Registration Statement on Form SB-2 (the "Registration Statement"), relating to
the issuance of up to 317,400 shares of the Company's common stock, par value
$.01 per share (the "Common Stock"), in connection with the conversion of The
Iberville Building and Loan Association (the "Association") from mutual to stock
form.
In this regard, we have examined the Articles of Incorporation and
Bylaws of the Company, resolutions of the Board of Directors of the Company and
the Association, the Plan of Conversion, and such other documents and matters of
law as we deemed appropriate for the purposes of rendering this opinion. The
opinion which we render herein is limited to federal laws and regulations and
the laws of the State of Louisiana which are in effect on the date hereof.
Based upon the foregoing, we are of the opinion as of the date hereof
that the Common Stock has been duly and validly authorized, and when issued in
accordance with
<PAGE>
Board of Directors
June 24, 1998
Page 2
the terms of the Plan of Conversion, upon receipt of the consideration required
therefor, will be legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Company's Registration Statement and to the references to this firm under the
headings "The Conversion - Tax Aspects" and "Legal Matters" in the Prospectus
contained in the Registration Statement.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
By: /s/ Gerald F. Heupel, Jr.
--------------------------------
Gerald F. Heupel, Jr., a Partner
<PAGE>
EXHIBIT 8.1
OPINION OF ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
REGARDING FEDERAL INCOME TAX CONSEQUENCES
<PAGE>
Exhibit 8.1
Law Offices
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
-----
Telephone: (202) 347-0300
Facsimile: (202) 347-2172
WWW.EMTH.COM
TIMOTHY B. MATZ JEFFREY D. HAAS
STEPHEN M. EGE KEVIN M. HOULIHAN
RAYMOND A. TIERNAN KENNETH B. TABACH
W. MICHAEL HERRICK PATRICIA J. WOHL
GERARD L. HAWKINS JEFFREY R. HOULE
NORMAN B. ANTIN FIORELIO J. VICENCIO*
JOHN P. SOUKENIK* DAVID TEEPLES*
GERALD F. HEUPEL, JR. CRISTIN ZEISLER
JEFFREY A. KOEPPEL ANDREW ROSENSTEIN
DANIEL P. WEITZEL ____________
PHILIP ROSS BEVAN
HUGH T. WILKINSON June 23, 1998 OF COUNSEL
ALLIN P. BAXTER
JACK I. ELIAS
SHERYL JONES ALU
*NOT ADMITTED IN D.C. VIA EDGAR
Boards of Directors
IBL Bancorp, Inc.
The Iberville Building and Loan Association
23910 Railroad Avenue
Plaquemine, Louisiana 70764
Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences of the conversion of The Iberville Building and Loan Association
("the "Association"), a Louisiana- chartered building and loan association, from
mutual to stock form (the "Conversion"). In the Conversion, all of the
Association's to-be-issued capital stock will be acquired by IBL Bancorp, Inc.
(the "Company"), a newly organized Louisiana-chartered corporation. For the
reasons set forth below, and based on your representations in a letter dated
June 22, 1998 ("Representation Letter"), it is our opinion that the proposed
Conversion will qualify as a reorganization within the meaning of Section
368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the "Code"). Our
opinion also addresses certain other income tax consequences which follow from
this conclusion.
This Opinion Letter, including the opinions contained herein, is
governed by, and should be interpreted in accordance with, the Legal Opinion
Accord (the "Accord") of the American Bar Association Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, and herein, and this Opinion Letter
should be read in conjunction with the Accord. Our opinions herein are limited
to the Code and the regulations
<PAGE>
Board of Directors
June 23, 1998
Page 2
promulgated thereunder (the "Subject Laws"). We express no opinion as to other
federal laws and regulations or as to laws and regulations of Louisiana or other
jurisdictions or as to factual or legal matters other than as set forth herein.
We have reviewed the Company's Registration Statement on Form SB-2
relating to the proposed issuance of up to 276,000 shares of common stock, par
value $.01 per share ("Common Stock"), subject to adjustment by the Company in
connection with the Conversion, the Prospectus contained therein, the Articles
of Incorporation and Bylaws of the Company, the existing mutual and proposed
stock Articles of Incorporation of the Association, the Plan of Conversion of
the Association, the Association's Application for Conversion and such other
corporate records and documents as we have deemed relevant and necessary for the
purposes of this opinion. In our examination of documents, we have assumed,
without independent verification, the genuineness of all signatures and the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified, conformed or
reproduced copies, and the authenticity of such originals of such latter
documents. As to matters of fact which are material to this opinion, we have
relied upon the accuracy of the factual matters set forth in the Company's
Registration Statement on Form SB-2, the Association's Application for
Conversion and the Representation Letter.
FACTS
The Association is a Louisiana-chartered mutual building and loan
association which conducts business from its office in Plaquemine, Louisiana. At
March 31, 1998, the Association had total assets of approximately $22.8 million,
deposits of approximately $20.5 million and equity of approximately $1.7
million. The Association is a member of the Federal Home Loan Bank ("FHLB")
System, and its deposits are insured by the Savings Association Insurance Fund
("SAIF"), administered by the Federal Deposit Insurance Corporation.
As a mutual association, the Association has no capital stock. Each
depositor has both a deposit account in the institution and a pro rata ownership
interest in the net worth of the institution based on the balance in his or her
deposit account. This ownership interest is tied directly to the depositors'
deposit accounts, and the depositors ordinarily cannot realize the value of
their ownership, except in the unlikely event that the Association were to be
liquidated. In such event, the depositors would share pro rata in any residual
net worth after other claims, including those of depositors for the amount of
their deposits, are paid.
The Company is a recently formed Louisiana corporation which will
acquire all of the to-be-outstanding capital stock of the Association upon
consummation of the Conversion and, thereby, become a unitary holding company.
The Company will purchase all of the capital stock of the Association with a
portion of the net proceeds from the Conversion.
<PAGE>
Board of Directors
June 23, 1998
Page 3
On April 7, 1998, the Board of Directors of the Association adopted a
Plan of Conversion, which was subsequently amended on June 16, 1998. The purpose
of the Conversion is to enable the Association to issue and sell shares of its
capital stock to the Company and thereby enhance the equity capital base of the
Association, which will support continuing deposit growth of the Association,
possible diversification or opening of branch offices, and further enhance the
Association's capabilities to serve the borrowing and other financial needs of
the communities it serves. The use of the holding company format will provide
greater organizational flexibility and possible diversification.
The Company is concurrently filing a Registration Statement on Form SB-2
to register its Common Stock under the Securities Act of 1933 pursuant to which
it will offer for sale shares of its Common Stock. The Common Stock will be
offered for sale in a Subscription Offering pursuant to subscription rights
which will not be transferable and will be issued without payment therefor. The
recipients will not be entitled to receive cash or other property in lieu of
such rights. It is anticipated that any shares of Common Stock remaining unsold
after the Subscription Offering will be sold through a Community Offering. All
shares of Common Stock will be sold at a uniform price based upon an independent
valuation.
The Conversion will be effected only upon completion of the sale of all
shares of Common Stock of the Company to be issued pursuant to the Plan of
Conversion. Management has informed us that the Company has no plan or intention
to dispose of any shares of the capital stock of the Association, to cause the
Association to be merged with any other corporation, or to liquidate the
Association.
The Conversion will not affect the business of the Association. Mortgage
and other loans of the Association will remain unchanged and retain their same
characteristics after the Conversion. Management has informed us that there is
no plan or intention for the Association to sell or otherwise dispose of any of
its assets following the Conversion, except for dispositions in the ordinary
course of business.
Each deposit account in the Association at the time of the consummation
of the Conversion shall become, without any action by the account holder, a
deposit account in the converted Association equivalent in withdrawable amount,
and subject to the same terms and conditions (except as to voting and
liquidation rights), as the deposit account in the Association immediately prior
to the Conversion. In addition, at the time of the Conversion, the Association
shall establish a liquidation account in an amount equal to the Association's
net worth as reflected in the final prospectus utilized in the Conversion. The
liquidation account will be maintained for the benefit of all Eligible Account
Holders and Supplemental Eligible Account Holders who maintain their deposit
accounts in the Association after the Conversion. Each such account holder will,
with respect to each deposit account, have an inchoate interest in a portion of
the liquidation account which is the
<PAGE>
Board of Directors
June 23, 1998
Page 4
account holder's subaccount balance. An account holder's subaccount balance in
the liquidation account will be determined at the time of the Conversion and can
never increase thereafter. It will, however, be decreased to reflect subsequent
withdrawals that reduce, as of annual closing dates, the amount in each
depositor's account below the amount in the account at the time of the
Conversion. In the event of a complete liquidation of the Association, each
Eligible Account Holder and Supplemental Eligible Account Holder will be
entitled to receive a liquidation distribution in the amount of the balance of
his or her subaccount in the liquidation account before any distribution may be
made with respect to the capital stock of the Association.
LAW AND ANALYSIS
Section 368(a)(1)(F) of the Code provides that a mere change in the
identity, form or place of organization of one corporation, however effected, is
a reorganization. If a transaction qualifies as an "F"-type reorganization, it
will generally be nontaxable to the corporation and its shareholders under
related provisions of the Code.
In Rev. Rul. 80-105, 1980-1 C.B. 78, the Internal Revenue Service
considered the federal income tax consequences of the conversion of a federal
mutual savings and loan association to a state stock savings and loan
association. The ruling concluded that the conversion qualified as a mere change
in identity, form or place of organization within the meaning of Section
368(a)(1)(F). The rationale for this conclusion is not clearly expressed in the
ruling, but two factors are stressed. First, the changes at the corporate level
other than the place of organization and form of organization were regarded as
insubstantial. The converted association continued its business in the same
manner; it had the same savings accounts and loans. The converted association
continued its membership in the Federal Savings and Loan Insurance Corporation
(replaced subsequently by the SAIF) and remained subject to the regulations of
the Federal Home Loan Bank Board, which was replaced subsequently by the Office
of Thrift Supervision. Second, the ruling states that the ownership rights of
the depositors in the mutual company are "more nominal than real." Although the
ruling does not explain the significance of this statement, subsequent
administrative interpretations have indicated that the Internal Revenue Service
believes these nominal rights are preserved in the liquidation account that is
typically established for the depositors' benefit. This approach enables the
Internal Revenue Service to distinguish the tax treatment of conversion
transactions from the tax treatment of acquisitive transactions in which mutual
companies acquire stock companies. See Paulsen v. Com'r, 469 U.S.
131 (1985); Rev. Rul. 69-6 1969-1 C.B. 104.
The Internal Revenue Service has extended the holding of Rev. Rul.
80-105 to transactions similar to the one contemplated by the Association and
the Company, in which a conversion from mutual to stock form occurs
simultaneously with the creation of a holding company. See e.g. private letter
rulings numbered 9140014 and 9144031. While these rulings have no precedential
value, they
<PAGE>
Board of Directors
June 23, 1998
Page 5
do indicate the current views of the Internal Revenue Service on the issues
presented. Hanover Bank v. U.S., 369 U.S. 672, 686 (1962).
In our opinion and based on your Representation Letter, the conversion
of the Association from a Louisiana-chartered mutual savings and loan
association to a Louisiana-chartered stock savings and loan association, and the
sale of its capital stock to the Company, will constitute a reorganization
within the meaning of Section 368(a)(1)(F) of the Code because the transaction
represents a mere change in the form of organization of a single corporation.
There will be no change in the Association's business or operations, nor in its
loans and deposits, all of which will become loans and deposits of the converted
savings and loan association. The only significant difference between the assets
of the Association before and after the Conversion will be the infusion of new
capital. An infusion of capital occurs in all conversion transactions, however,
and had no effect upon the Internal Revenue Service's analysis in Rev. Rul.
80-105. The ownership rights of the depositors of the mutual savings and loan
association, which have nominal value, will be preserved through their interests
in the liquidation account in the converted savings and loan association. This
account will be substantially the same as the liquidation account described in
Rev. Rul. 80-105.
Because the Association's change in form from mutual to stock ownership
will constitute a reorganization under Section 368(a)(1)(F) of the Code, and
neither the Association nor the Company will recognize any gain or loss as a
result of the Conversion pursuant to Section 361 of the Code and Rev. Rul.
80-105, it is also our opinion that (1) no gain or loss will be recognized by
the Association or the Company upon the purchase of the Association's capital
stock by the Company; (2) no gain or loss will be recognized by Eligible Account
Holders and Supplemental Eligible Account Holders upon the issuance to them of
deposit accounts in the Association in its stock form plus their interests in
the liquidation account in exchange for their deposit accounts in the
Association; (3) assuming the non-transferable subscription rights to purchase
Company Common Stock have no value, the tax basis of the depositors' deposit
accounts in the Association immediately after the Conversion will be the same as
the basis of their deposit accounts immediately prior to the Conversion; (4)
assuming the non-transferable subscription rights to purchase Company Common
Stock have no value, the tax basis of each Eligible Account Holder's and
Supplemental Eligible Account Holder's interest in the liquidation account will
be zero; and (5) the tax basis to the stockholders of the Common Stock of the
Company purchased in the Conversion will be the amount paid therefor, and the
holding period for such shares will begin on the date of consummation of the
Conversion if purchased through the exercise of subscription rights and on the
day after the date of purchase if purchased in the Community Offering.
It is further our opinion that the Eligible Account Holders and
Supplemental Eligible Account Holders will recognize gain, if any, upon the
issuance to them of withdrawable savings accounts in the Association following
the Conversion, interests in the liquidation account and non-transferable
<PAGE>
Board of Directors
June 23, 1998
Page 6
subscription rights to purchase Company Common Stock in exchange for their
savings accounts and proprietary interests in the Association, but only to the
extent of the value, if any, of the subscription rights.
The opinions expressed above are limited to the income tax consequences
of the Conversion under the Subject Laws. Further, our opinions are based on
research of the Code, applicable Treasury Regulations, current published
administrative decisions of the Internal Revenue Service, existing judicial
decisions as of the date hereof, and your Representation Letter. No assurance
can be given that legislative, administrative or judicial decisions or
interpretations may not be forthcoming that will significantly change the
opinions set forth herein. We express no opinions other than those stated
immediately above as our opinions. We hereby consent to the filing of this
opinion as an exhibit to the Company's Registration Statement and the
Association's Application for Conversion.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
By: /s/ Gerald F. Heupel, Jr.
---------------------------------
Gerald F. Heupel, Jr., a Partner
<PAGE>
EXHIBIT 8.2
OPINION OF L.A. CHAMPAGNE & CO., L.L.P. REGARDING
LOUISIANA INCOME TAX CONSEQUENCES
<PAGE>
Exhibit 8.2
L.A. CHAMPAGNE & CO., L.L.P.
Certified Public Accounts
Wendel Foushee, CPA 4911 Bennington Avenue Members - SEC and
Charles S. Comeaux, Baton Rouge, Louisiana 70808-3153 Private Companies
Jr., CPA (504) 925-1120 Practice Sections
Michael A. Tham, CPA Facsimile (504) 927-8124 of the American
Robert L. Stamey, CPA Institute of CPAs
- --------------
Ronald J. Marroy, CPA EID #72-0454386
Raymond P. Prince, CPA
Sylvia M. Kidder, CPA
Randal A. McDonald, CPA
June 23, 1998
Board of Directors
The Iberville Building and Loan Association
P.O. Box 563
Plaquemine, LA 70764
Gentlemen:
You have requested our opinion regarding certain Louisiana state income tax
consequences of the conversion of The Iberville Building and Loan
Association(the "Association"), a Louisiana-chartered savings and loan
association, from mutual to stock form(the "Conversion"). In the Conversion, all
of the Association's to-be-issued capital stock will be acquired by IBL Bancorp,
Inc.(the "Company"), a newly-formed Louisiana- chartered corporation.
We have not reviewed all of the legal documents necessary to effectuate the
Conversion or the acquisition of the Association's Capital stock by the Company.
An inherent assumption of this opinion is that all steps required by federal and
state law and regulatory authorities will be effectuated consistent with the
information submitted to us.
BACKGROUND
We have reviewed the federal income tax opinion (the "Opinion") prepared by the
firm of Elias, Matz, Tiernan & Herrick L.L.P. dated June 23, 1998 which was
addressed and furnished to you. We have also reviewed the representations of the
managements of the Company and the Association dated June 22, 1998(the
"Representations") and supplied to the aforementioned authors of the Opinion. We
have relied on the facts and representations stated in the Opinion and
Representations as to the manner in which the proposed transactions will be
accomplished and the federal income tax aspects of the transactions as detailed
in the Opinion. By this reference, such federal tax opinion and its related
references are incorporated herein.
<PAGE>
Board of Directors
The Iberville Building and Loan Association
June 23, 1998
Page 2
LOUISIANA LAW AND ANALYSIS
Louisiana income tax statutes are included in Title 47, Sub-Title II, Chapter 1,
of the Louisiana Revised Statutes of 1950. Corporation income tax laws are
contained within part II A. therein. Individual income tax statutes are
contained within Part III therein.
Pursuant to Louisiana Revised Statutes(La. R.S.)47:287.501(B)(1), building and
loan associations(among others) are exempted from imposition of any and all
Louisiana income tax.
Louisiana corporate gross income and allowable deductions are defined as federal
gross income and deductions, subject to certain modifications. La. R.S.
287.61-63. Modifications to federal taxable income are contained in La. R.S.
287.71-86 and 287.701-785. Absent any specific modifications contained within
these sections, Louisiana corporate taxable income is equivalent to federal
taxable income. Since gains and losses realized by parties to a reorganization,
as defined by federal statutes, are not specifically identified as modifications
to federal gross income or deductions, the State of Louisiana has effectively
incorporated the corporate reorganization provisions of the Internal Revenue
Code of 1986, as amended(the "Code") with respect to parties to a
reorganization. Since gains and losses realized by corporate shareholders in a
reorganization are not specifically identified as modifications to federal gross
income or deductions, nor are there any modifications with respect to the
determination of basis or the holding period of stock received in a
reorganization, the State of Louisiana has effectively incorporated the
corporate reorganization provisions of the Code with respect to corporate
depositors and shareholders.
La. R.S. 47:290 provides that such part(Part III) is intended to conform the
Louisiana individual income tax law with the Code, except as otherwise expressly
provided. La. R.S. 47:293(1) defines Louisiana adjusted gross income as adjusted
gross income as reported for federal purposes. La. R.S. 47:296(6) defines
Louisiana taxable income as Louisiana adjusted gross income with specific
modifications listed therein. None of the modifications listed therein relate to
the Louisiana taxation of realized gains or losses in connection with corporate
reorganizations, nor the determination of basis or the holding period of stock
received in
<PAGE>
Board of Directors
The Iberville Building and Loan Association
June 23, 1998
Page 3
a reorganization. The State of Louisiana has, therefore, effectively adopted the
corporate reorganization provisions of the Code to the extent these provisions
affect individual depositors and shareholders.
La. R.S. 47:162C. states that fiduciaries are subject to all the provisions of
Louisiana law that relate to individuals. Based upon the above analysis of
individuals, the same conclusions would apply with respect to fiduciary
depositors and shareholders.
La. R.S. 47:203 states that partnerships shall compute taxable income in the
same manner as in the case of individuals, with certain listed modifications. As
none of the modifications relate to reorganization provisions of the Code, and
based upon the above analysis of individuals, the same conclusions would apply
with respect to depositors and shareholders which are partnerships.
Title 12, Chapter 22, part X, Section 1368 of the Louisiana Revised Statutes of
1950 states that for Louisiana income tax purposes, limited liability companies
shall be treated and taxed in the same manner as treated and taxed for federal
purposes. Therefore, regardless of corporate or partnership federal income tax
treatment, based upon the above analysis of each, the same conclusion would
apply with respect to depositors and shareholders that are limited liability
companies.
OPINIONS
In rendering our opinion herein, we have relied upon the Opinion prepared by
Elias, Matz, Tiernan & Herrick L.L.P.
Because savings and loans are not subject to Louisiana income taxes, no income
will be recognized for Louisiana income tax purposes by The Iberville Building
and Loan Association as a result of the Conversion and the sale of its capital
stock to the Company.
Because the Association's change in form from a mutual to stock ownership will
constitute a reorganization under Section 368(a)(1)(F) of the Code, and neither
the Association nor the Company will recognize any gain or loss as a result of
the Conversion pursuant to Section 361 of the Code and Revenue Ruling 80-105, it
is also our opinion that for Louisiana income tax purposes: (1) no gain or loss
will be recognized by the
<PAGE>
Board of Directors
The Iberville Building and Loan Association
June 23, 1998
Page 4
Association or the Company upon the purchase of the Association's capital stock
by the Company; (2) no gain or loss will be recognized by Eligible Account
Holders and Supplemental Eligible Account Holders upon the issuance to them of
deposit accounts in the Association(in its stock form) plus their interest in
the liquidation account in exchange for the deposit accounts in the mutual
association; (3) assuming the non-transferable subscription rights to purchase
Company Common Stock have no value, the tax bases of the depositors' deposit
accounts in the Association immediately after the Conversion will be the same as
the bases of their accounts immediately prior to the Conversion; (4) assuming
the non-transferable subscription rights to purchase Company Common Stock have
no value, the tax basis of each Eligible Account Holder's and Supplemental
Eligible Account Holder's interest in the liquidation account will be zero; and
(5) the tax basis to the holders of the Common Stock of the Company purchased in
the Conversion will be the amount paid therefor, and the holding period of such
shares will begin on the date of consummation of the Conversion if purchased
through the exercise of subscription rights and on the day after the date of
purchase if purchased through the Community Offering.
It is further our opinion that the Eligible Account Holders and Supplemental
Eligible Account Holders will recognize gain, if any, upon the issuance to them
of withdrawable savings accounts in the Association following the Conversion,
interests in the liquidation account and non-transferable subscription rights to
purchase Company Common Stock in exchange for their savings accounts and
proprietary interests in the Association, but only to the extent of the value,
if any, of the subscription rights.
CONCLUSIONS
This opinion sets forth our views based upon the completeness and accuracy of
the information made available to us and any assumptions of fact that were
included. Our opinion relies upon the relevant provisions of the Internal
Revenue Code, the Louisiana Revised Statutes, the regulations thereunder, and
judicial and administrative interpretations thereof, which are subject to change
or modifications by subsequent legislative, regulatory, administrative or
judicial decisions. Any such changes could be retroactive in effect and,
therefore, could affect the validity of our opinions. We undertake no
responsibility to update our opinion in the event of any such change or
modifications.
<PAGE>
Board of Directors
The Iberville Building and Loan Association
June 23, 1998
Page 5
We hereby consent to the filing of this opinion as an exhibit to the Company's
Registration Statement on Form SB-2 and the Association's Application for
Conversion, and we also consent to the references to us under the headings "The
Conversion - Tax Aspects" and "Legal and Tax Opinions" in the Prospectus
contained in such filings.
Sincerely,
/s/ L. A. CHAMPAGNE & CO., L.L.P.
- ---------------------------------
L. A. CHAMPAGNE & CO., L.L.P.
<PAGE>
EXHIBIT 8.3
OPINION OF FERGUSON & COMPANY REGARDING SUBSCRIPTION RIGHTS
<PAGE>
Exhibit 8.3
FERGUSON FINANCIAL
& COMPANY INSTITUTION
CONSULTING
Suite 305
860 W. Airport Frwy
Hurst, Texas 76054
(817) 577-9558
(817) 577-3054 Fax
June 22, 1998
Board of Directors
Iberville Building and Loan Association
23910 Railroad Avenue
Plaquemine, LA 70764
Plan of Conversion, Subscription Rights
Dear Directors:
Terms used in this letter not otherwise defined herein have the same
meanings for such terms in the Plan of Conversion adopted by the Board of
Directors of Iberville Building and Loan Association ("Iberville" or the
"Association"), under which the Association will convert from a mutual
savings association to a stock savings association and issue all of the
Association's stock to IBL Bancorp, Inc. (the "Holding Company").
Simultaneously, the Holding Company will issue shares of common stock.
We understand that in accordance with the Plan of Conversion,
Subscription Rights to purchase shares of Common Stock in the Holding Company
are to be issued to (1) Eligible Account Holders, (2) The Association's tax
qualified employee plans, (3) Supplemental Eligible Account Holders, and (4)
Other Members. Based solely upon our observation that the Subscription Rights
will be available to such parties without cost, will be legally non-transferable
and of short duration, and will afford such parties the right only to purchase
shares of Common Stock at the same price to be paid by members of the general
public in the Community Offering, but without undertaking any independent
investigation of state or federal laws or the position of the Internal Revenue
Service with respect to such issue, in our opinion:
(1) the Subscription Rights will have no ascertainable market value;
and
(2) the price at which the Subscription Rights are exercisable will not
be more or less than the pro forma market value of the shares
upon issuance.
Changes in the local and national economy, the legislative and
regulatory environment, the stock market, interest rates and other external
forces (e.g., natural disasters or significant global events) occur from time to
time and may materially affect the value of thrift stocks as a whole or the
Holding Company's value. Accordingly, no assurance can be given that persons who
subscribe to shares of Common Stock in the Conversion will thereafter be able to
sell such shares at the same price paid in the Subscription Offering.
Sincerely,
/s/ Robin L. Fussell
-------------------------
Robin L. Fussell
Principal
<PAGE>
EXHIBIT 10.1
FORM OF EMPLOYMENT AGREEMENT TO BE ENTERED INTO AMONG
IBL BANCORP, INC., THE IBERVILLE BUILDING AND LOAN ASSOCIATION
AND G. LLOYD BOUCHEREAU, JR.
<PAGE>
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this ____ day of ______ 1998, between IBL
Bancorp, Inc., a Louisiana corporation (the "Corporation"), The Iberville
Building and Loan Association, a Louisiana-chartered savings and loan
association and a wholly owned subsidiary of the Corporation (the
"Association"), and G. Lloyd Bouchereau, Jr. (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of the Corporation and
the Association (together the "Employers");
WHEREAS, the Employers desire to be ensured of the Executive's
continued active participation in the business of the Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive in the event that his employment with the
Employers is terminated under specified circumstances;
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereby agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) AVERAGE ANNUAL COMPENSATION. The Executive's "Average Annual
Compensation" for purposes of this Agreement shall be deemed to mean the average
level of compensation paid to the Executive by the Employers or any subsidiary
thereof during the most recent five taxable years preceding the Date of
Termination (or such shorter period as the Executive was employed), including
Base Salary and bonuses under any employee benefit plans of the Employers but
excluding any compensation resulting from the exercise of stock options or the
vesting of restricted stock awards.
(b) BASE SALARY. "Base Salary" shall have the meaning set forth in
Section 3(a) hereof.
(c) CAUSE. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or
<PAGE>
final cease-and-desist order or material breach of any provision of this
Agreement. For purposes of this paragraph, no act or failure to act on the
Executive's part shall be considered "willful" unless done, or omitted to be
done, by the Executive not in good faith and without reasonable belief that the
Executive's action or omission was in the best interest of the Employers.
(d) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean a change in control of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), or any successor thereto, whether or not the Corporation is registered
under Exchange Act; provided that, without limitation, such a change in control
shall be deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding securities; or (ii)
during any period of three consecutive years, individuals who at the beginning
of such period constitute the Board of Directors of the Corporation cease for
any reason to constitute at least a majority thereof unless the election, or the
nomination for election by stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
(e) CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(f) DATE OF TERMINATION. "Date of Termination" shall mean the date
specified in the Notice of Termination.
(g) DISABILITY. Termination by the Employers of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits under
the applicable long-term disability plan maintained by the Employers or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
(h) GOOD REASON. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive following a
Change in Control of the Corporation based on:
(i) Without the Executive's express written consent,
the failure to elect or to re-elect or to appoint
or to re-appoint the Executive to the offices of
President and Chief Executive Officer of the
Employers or a material adverse change made by the
Employers in the Executive's functions, duties or
responsibilities as President and Chief Executive
Officer of the Employers;
2
<PAGE>
(ii) Without the Executive's express written consent, a
material reduction by the Employers in the
Executive's Base Salary as the same may be
increased from time to time or, except to the
extent permitted by Section 3(b) hereof, a
material reduction in the package of fringe
benefits provided to the Executive, taken as a
whole;
(iii) Without the Executive's express written consent,
the Employers require the Executive to work in an
office which is more than 30 miles from the
location of the Employers' current principal
executive office, except for required travel on
business of the Employers to an extent
substantially consistent with the Executive's
present business travel obligations;
(iv) Any purported termination of the Executive's
employment for Cause, Disability or Retirement
which is not effected pursuant to a Notice of
Termination satisfying the requirements of
paragraph (j) below; or
(v) The failure by the Employers to obtain the
assumption of and agreement to perform this
Agreement by any successor as contemplated in
Section 9 hereof.
(i) IRS. IRS shall mean the Internal Revenue Service.
(j) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Employers for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated,
(iii) specifies a Date of Termination, which shall be not less than thirty (30)
nor more than ninety (90) days after such Notice of Termination is given, except
in the case of the Employers' termination of the Executive's employment for
Cause; and (iv) is given in the manner specified in Section 10 hereof.
(k) RETIREMENT. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including early
retirement, generally applicable to the Employers' salaried employees.
2. TERM OF EMPLOYMENT.
(a) The Employers hereby employ the Executive as President and Chief
Executive Officer and the Executive hereby accepts said employment and agrees to
render such
3
<PAGE>
services to the Employers on the terms and conditions set forth in this
Agreement. Unless extended as provided in this Section 2, this Agreement shall
terminate three (3) years after the date first above written. Prior to the first
annual anniversary of the date first above written and each annual anniversary
thereafter, the Boards of Directors of the Employers shall consider, review
(taking into account all relevant factors, including the Executive's
performance) and, if appropriate, explicitly approve a one-year extension of the
remaining term of this Agreement. The term of this Agreement shall continue to
extend each year if the Boards of Directors so approve such extension unless the
Executive gives written notice to the Employers of the Executive's election not
to extend the term, with such notice to be given not less than thirty (30) days
prior to any such anniversary date. If the Boards of Directors elect not to
extend the term, they shall give written notice of such decision to the
Executive not less than thirty (30) days prior to any such anniversary date. If
any party gives timely notice that the term will not be extended as of any
annual anniversary date, then this Agreement shall terminate at the conclusion
of its remaining term. References herein to the term of this Agreement shall
refer both to the initial term and successive terms.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Employers as is consistent with his title of
President and Chief Executive Officer.
3. COMPENSATION AND BENEFITS.
(a) The Employers shall compensate and pay the Executive for his
services during the term of this Agreement at a minimum base salary of $______
per year ("Base Salary"), which may be increased from time to time in such
amounts as may be determined by the Boards of Directors of the Employers. In
addition to his Base Salary, the Executive shall be entitled to receive during
the term of this Agreement such bonus payments as may be determined by the
Boards of Directors of the Employers.
(b) During the term of the Agreement, the Executive shall be entitled
to participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other
plans, benefits and privileges given to employees and executives of the
Employers, to the extent commensurate with his then duties and responsibilities,
as fixed by the Boards of Directors of the Employers. The Employers shall not
make any changes in such plans, benefits or privileges which would adversely
affect the Executive's rights or benefits thereunder, unless such change occurs
pursuant to a program applicable to all executive officers of the Employers and
does not result in a proportionately greater adverse change in the rights of or
benefits to the Executive as compared with any other executive officer of the
Employers. Nothing paid to the Executive under any plan or arrangement presently
in effect or made available in the future shall be deemed to be in lieu of the
salary payable to the Executive pursuant to Section 3(a) hereof.
4
<PAGE>
(c) During the term of this Agreement, the Executive shall be entitled
to paid annual vacation in accordance with the policies as established from time
to time by the Boards of Directors of the Employers. The Executive shall not be
entitled to receive any additional compensation from the Employers for failure
to take a vacation, nor shall the Executive be able to accumulate unused
vacation time from one year to the next, except to the extent authorized by the
Boards of Directors of the Employers.
4. EXPENSES. The Employers shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of, or in connection with the business of the Employers, including,
but not by way of limitation, automobile and traveling expenses, and all
reasonable entertainment expenses (whether incurred at the Executive's
residence, while traveling or otherwise), subject to such reasonable
documentation and other limitations as may be established by the Boards of
Directors of the Employers. If such expenses are paid in the first instance by
the Executive, the Employers shall reimburse the Executive therefor.
5. TERMINATION.
(a) The Employers shall have the right, at any time upon prior Notice
of Termination, to terminate the Executive's employment hereunder for any
reason, including without limitation termination for Cause, Disability or
Retirement, and the Executive shall have the right, upon prior Notice of
Termination, to terminate his employment hereunder for any reason.
(b) In the event that (i) the Executive's employment is terminated by
the Employers for Cause, Disability or Retirement or in the event of the
Executive's death, or (ii) the Executive terminates his employment hereunder
other than for Good Reason, the Executive shall have no right pursuant to this
Agreement to compensation or other benefits for any period after the applicable
Date of Termination.
(c) In the event that (i) the Executive's employment is terminated by
the Employers for other than Cause, Disability, Retirement or the Executive's
death or (ii) such employment is terminated by the Executive (a) due to a
material breach of this Agreement by the Employers, which breach has not been
cured within fifteen (15) days after a written notice of non-compliance has been
given by the Executive to the Employers, or (b) for Good Reason, then the
Employers shall, subject to the provisions of Section 6 hereof, if applicable,
(A) Pay to the Executive, in thirty-six (36) equal monthly installments
beginning with the first business day of the month following the Date of
Termination, a cash severance amount equal to three (3) times the Executive's
Average Annual Compensation over the most recent five taxable years, and
5
<PAGE>
(B) Maintain and provide for a period ending at the earlier of (i) the
expiration of the remaining term of employment pursuant hereto prior to the
Notice of Termination or (ii) the date of the Executive's full-time employment
by another employer (provided that the Executive is entitled under the terms of
such employment to benefits substantially similar to those described in this
subparagraph (B)), at no cost to the Executive, the Executive's continued
participation in all group insurance, life insurance, health and accident,
disability and other employee benefit plans, programs and arrangements in which
the Executive was entitled to participate immediately prior to the Date of
Termination (other than stock option plans, employee stock ownership plans,
restricted stock plans and qualified retirement plans of the Employers),
provided that in the event that the Executive's participation in any plan,
program or arrangement as provided in this subparagraph (B) is barred or during
such period any such plan, program or arrangement is discontinued or the
benefits thereunder are materially reduced, the Employers shall arrange to
provide the Executive with benefits substantially similar to those which the
Executive was entitled to receive under such plans, programs and arrangements
immediately prior to the Date of Termination.
6. LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES. If the payments
and benefits pursuant to Section 5 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Employers, would constitute a "parachute payment" under Section 280G of the
Code, the payments and benefits pursuant to Section 5 hereof shall be reduced,
in the manner determined by the Executive, by the amount, if any, which is the
minimum necessary to result in no portion of the payments and benefits under
Section 5 being non-deductible to either of the Employers pursuant to Section
280G of the Code and subject to the excise tax imposed under Section 4999 of the
Code. The determination of any reduction in the payments and benefits to be made
pursuant to Section 5 shall be based upon the opinion of independent tax counsel
selected by the Employers and paid by the Employers. Such counsel shall be
reasonably acceptable to the Employers and the Executive; shall promptly prepare
the foregoing opinion, but in no event later than thirty (30) days from the Date
of Termination; and may use such actuaries as such counsel deems necessary or
advisable for the purpose. The Employers shall pay to the Executive the maximum
amount of payments and benefits pursuant to Section 5, as selected by the
Executive, which such opinion indicates that there is a high probability do not
result in any of such payments and benefits being non-deductible to the
Employers and subject to the imposition of the excise tax imposed under Section
4999 of the Code. Nothing contained herein shall result in a reduction of any
payments or benefits to which the Executive may be entitled upon termination of
employment under any circumstances other than as specified in this Section 6, or
a reduction in the payments and benefits specified in Section 5 below zero.
6
<PAGE>
7. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
8. WITHHOLDING. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
9. ASSIGNABILITY. The Employers may assign this Agreement and its
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which the Employers may hereafter merge or
consolidate or to which the Employers may transfer all or substantially all of
its assets, if in any such case said corporation, bank or other entity shall by
operation of law or expressly in writing assume all obligations of the Employers
hereunder as fully as if it had been originally made a party hereto, but may not
otherwise assign this Agreement or its rights and obligations hereunder. The
Executive may not assign or transfer this Agreement or any rights or obligations
hereunder.
10. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Employers: Board of Directors
IBL Bancorp, Inc.
23910 Railroad Avenue
Plaquemine, Louisiana 70764
To the Executive: G. Lloyd Bouchereau, Jr.
IBL Bancorp, Inc.
23910 Railroad Avenue
Plaquemine, Louisiana 70764
11. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or officers as may be
specifically designated by the Boards of Directors of the Employers to sign on
its behalf. No waiver by any party
7
<PAGE>
hereto at any time of any breach by any other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.
12. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of
Louisiana.
13. NATURE OF OBLIGATIONS. Nothing contained herein shall create or
require the Employers to create a trust of any kind to fund any benefits which
may be payable hereunder, and to the extent that the Executive acquires a right
to receive benefits from the Employers hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employers.
14. INTERPRETATION AND HEADINGS. This agreement shall be interpreted in
order to achieve the purposes for which it was entered into. The section
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
15. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. REGULATORY ACTIONS. The following provisions shall be applicable
to the parties to the extent that they are required to be included in
employment agreements between a savings association and its employees
pursuant to Section 563.39(b) of the Regulations Applicable to all Savings
Associations, 12 C.F.R. Section 563.39(b), or any successor thereto, and
shall be controlling in the event of a conflict with any other provision of
this Agreement, including without limitation Section 5 hereof.
(a) If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Employers' affairs
pursuant to notice served under Section 8(e)(3) or Section 8(g)(1) of the
Federal Deposit Insurance Act ("FDIA") (12 U.S.C. Sections 1818(e)(3) and
1818(g)(1)), the Employers' obligations under this Agreement shall be
suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Employers may,
in their discretion: (i) pay the Executive all or part of the compensation
withheld while its obligations under this Agreement were suspended, and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.
8
<PAGE>
(b) If the Executive is removed from office and/or permanently
prohibited from participating in the conduct of the Employers' affairs by an
order issued under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C.
Sections 1818(e)(4) and (g)(1)), all obligations of the Employers under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the Executive and the Employers as of the date of termination shall
not be affected.
(c) If the Association is in default, as defined in Section 3(x)(1)
of the FDIA (12 U.S.C. Section 1813(x)(1)), all obligations under this
Agreement shall terminate as of the date of default, but vested rights of the
Executive and the Employers as of the date of termination shall not be
affected.
(d) All obligations under this Agreement shall be terminated
pursuant to 12 C.F.R. Section 563.39(b)(5) (except to the extent that it is
determined that continuation of the Agreement for the continued operation of
the Employers is necessary): (i) by the Director of the Office of Thrift
Supervision ("OTS"), or his/her designee, at the time the Federal Deposit
Insurance Corporation ("FDIC") enters into an agreement to provide assistance
to or on behalf of the Association under the authority contained in Section
13(c) of the FDIA (12 U.S.C. Section 1823(c)); or (ii) by the Director of the
OTS, or his/her designee, at the time the Director or his/her designee
approves a supervisory merger to resolve problems related to operation of the
Association or when the Association is determined by the Director of the OTS
to be in an unsafe or unsound condition, but vested rights of the Executive
and the Employers as of the date of termination shall not be affected.
18. Regulatory Prohibition. Notwithstanding any other provision of
this Agreement to the contrary, any payments made to the Executive pursuant
to this Agreement, or otherwise, are subject to and conditioned upon their
compliance with Section 18(k) of the FDIA (12 U.S.C. Section 1828(k)) and the
regulations promulgated thereunder.
9
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
Attest: IBL BANCORP, INC.
By:
- ---------------------------- -----------------------------------
Gary K. Pruitt, Secretary Bobby E. Stanley, Director
Attest: THE IBERVILLE BUILDING AND LOAN
ASSOCIATION
By:
- ---------------------------- -----------------------------------
Gary K. Pruitt, Secretary Bobby E. Stanley, Director
EXECUTIVE
By:
-----------------------------------
G. Lloyd Bouchereau, Jr.
10
<PAGE>
EXHIBIT 10.2
FORM OF EMPLOYMENT AGREEMENT TO BE ENTERED INTO AMONG
IBL BANCORP, INC., THE IBERVILLE BUILDING AND LOAN ASSOCIATION
AND DANNY M. STRICKLAND
<PAGE>
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this ____ day of ______ 1998, between IBL
Bancorp, Inc., a Louisiana corporation (the "Corporation"), The Iberville
Building and Loan Association, a Louisiana-chartered savings and loan
association and a wholly owned subsidiary of the Corporation (the
"Association"), and Danny M. Strickland (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of the Corporation and
the Association (together the "Employers");
WHEREAS, the Employers desire to be ensured of the Executive's
continued active participation in the business of the Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive in the event that his employment with the
Employers is terminated under specified circumstances;
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereby agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) AVERAGE ANNUAL COMPENSATION. The Executive's "Average Annual
Compensation" for purposes of this Agreement shall be deemed to mean the average
level of compensation paid to the Executive by the Employers or any subsidiary
thereof during the most recent five taxable years preceding the Date of
Termination (or such shorter period as the Executive was employed), including
Base Salary and bonuses under any employee benefit plans of the Employers but
excluding any compensation resulting from the exercise of stock options or the
vesting of restricted stock awards.
(b) BASE SALARY. "Base Salary" shall have the meaning set forth in
Section 3(a) hereof.
(c) CAUSE. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this Agreement.
For
<PAGE>
purposes of this paragraph, no act or failure to act on the Executive's part
shall be considered "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive's
action or omission was in the best interest of the Employers.
(d) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean a change in control of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), or any successor thereto, whether or not the Corporation is registered
under Exchange Act; provided that, without limitation, such a change in control
shall be deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding securities; or (ii)
during any period of three consecutive years, individuals who at the beginning
of such period constitute the Board of Directors of the Corporation cease for
any reason to constitute at least a majority thereof unless the election, or the
nomination for election by stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
(e) CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(f) DATE OF TERMINATION. "Date of Termination" shall mean the date
specified in the Notice of Termination.
(g) DISABILITY. Termination by the Employers of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits under
the applicable long-term disability plan maintained by the Employers or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
(h) GOOD REASON. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive following a
Change in Control of the Corporation based on:
(i) Without the Executive's express written consent,
the failure to elect or to re-elect or to appoint
or to re-appoint the Executive to the office of
Loan Officer of the Employers or a material
adverse change made by the Employers in the
Executive's functions, duties or responsibilities
as Loan Officer of the Employers;
(ii) Without the Executive's express written consent, a
material reduction by the Employers in the
Executive's Base Salary as the same may be
2
<PAGE>
increased from time to time or, except to the extent
permitted by Section 3(b) hereof, a material
reduction in the package of fringe benefits provided
to the Executive, taken as a whole;
(iii) Without the Executive's express written consent,
the Employers require the Executive to work in an
office which is more than 30 miles from the
location of the Employers' current principal
executive office, except for required travel on
business of the Employers to an extent
substantially consistent with the Executive's
present business travel obligations;
(iv) Any purported termination of the Executive's
employment for Cause, Disability or Retirement
which is not effected pursuant to a Notice of
Termination satisfying the requirements of
paragraph (j) below; or
(v) The failure by the Employers to obtain the
assumption of and agreement to perform this
Agreement by any successor as contemplated in
Section 9 hereof.
(i) IRS. IRS shall mean the Internal Revenue Service.
(j) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Employers for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated,
(iii) specifies a Date of Termination, which shall be not less than thirty (30)
nor more than ninety (90) days after such Notice of Termination is given, except
in the case of the Employers' termination of the Executive's employment for
Cause; and (iv) is given in the manner specified in Section 10 hereof.
(k) RETIREMENT. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including early
retirement, generally applicable to the Employers' salaried employees.
2. TERM OF EMPLOYMENT.
(a) The Employers hereby employ the Executive as Loan Officer and the
Executive hereby accepts said employment and agrees to render such services to
the Employers on the terms and conditions set forth in this Agreement. Unless
extended as provided in this Section 2, this Agreement shall terminate three (3)
years after the date first
3
<PAGE>
above written. Prior to the first annual anniversary of the date first above
written and each annual anniversary thereafter, the Boards of Directors of the
Employers shall consider, review (taking into account all relevant factors,
including the Executive's performance) and, if appropriate, explicitly approve a
one-year extension of the remaining term of this Agreement. The term of this
Agreement shall continue to extend each year if the Boards of Directors so
approve such extension unless the Executive gives written notice to the
Employers of the Executive's election not to extend the term, with such notice
to be given not less than thirty (30) days prior to any such anniversary date.
If the Boards of Directors elect not to extend the term, they shall give written
notice of such decision to the Executive not less than thirty (30) days prior to
any such anniversary date. If any party gives timely notice that the term will
not be extended as of any annual anniversary date, then this Agreement shall
terminate at the conclusion of its remaining term. References herein to the term
of this Agreement shall refer both to the initial term and successive terms.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Employers as is consistent with his title of Loan
Officer.
3. COMPENSATION AND BENEFITS.
(a) The Employers shall compensate and pay the Executive for his
services during the term of this Agreement at a minimum base salary of $______
per year ("Base Salary"), which may be increased from time to time in such
amounts as may be determined by the Boards of Directors of the Employers. In
addition to his Base Salary, the Executive shall be entitled to receive during
the term of this Agreement such bonus payments as may be determined by the
Boards of Directors of the Employers.
(b) During the term of the Agreement, the Executive shall be entitled
to participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other
plans, benefits and privileges given to employees and executives of the
Employers, to the extent commensurate with his then duties and responsibilities,
as fixed by the Boards of Directors of the Employers. The Employers shall not
make any changes in such plans, benefits or privileges which would adversely
affect the Executive's rights or benefits thereunder, unless such change occurs
pursuant to a program applicable to all executive officers of the Employers and
does not result in a proportionately greater adverse change in the rights of or
benefits to the Executive as compared with any other executive officer of the
Employers. Nothing paid to the Executive under any plan or arrangement presently
in effect or made available in the future shall be deemed to be in lieu of the
salary payable to the Executive pursuant to Section 3(a) hereof.
(c) During the term of this Agreement, the Executive shall be entitled
to paid annual vacation in accordance with the policies as established from time
to time by the Boards of Directors of the Employers. The Executive shall not be
entitled to receive any additional compensation from the Employers for failure
to take a vacation, nor shall the
4
<PAGE>
Executive be able to accumulate unused vacation time from one year to the next,
except to the extent authorized by the Boards of Directors of the Employers.
4. EXPENSES. The Employers shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of, or in connection with the business of the Employers, including,
but not by way of limitation, automobile and traveling expenses, and all
reasonable entertainment expenses (whether incurred at the Executive's
residence, while traveling or otherwise), subject to such reasonable
documentation and other limitations as may be established by the Boards of
Directors of the Employers. If such expenses are paid in the first instance by
the Executive, the Employers shall reimburse the Executive therefor.
5. TERMINATION.
(a) The Employers shall have the right, at any time upon prior Notice
of Termination, to terminate the Executive's employment hereunder for any
reason, including without limitation termination for Cause, Disability or
Retirement, and the Executive shall have the right, upon prior Notice of
Termination, to terminate his employment hereunder for any reason.
(b) In the event that (i) the Executive's employment is terminated by
the Employers for Cause, Disability or Retirement or in the event of the
Executive's death, or (ii) the Executive terminates his employment hereunder
other than for Good Reason, the Executive shall have no right pursuant to this
Agreement to compensation or other benefits for any period after the applicable
Date of Termination.
(c) In the event that (i) the Executive's employment is terminated by
the Employers for other than Cause, Disability, Retirement or the Executive's
death or (ii) such employment is terminated by the Executive (a) due to a
material breach of this Agreement by the Employers, which breach has not been
cured within fifteen (15) days after a written notice of non-compliance has been
given by the Executive to the Employers, or (b) for Good Reason, then the
Employers shall, subject to the provisions of Section 6 hereof, if applicable,
(A) Pay to the Executive, in thirty-six (36) equal monthly installments
beginning with the first business day of the month following the Date of
Termination, a cash severance amount equal to three (3) times the Executive's
Average Annual Compensation over the most recent five taxable years, and
(B) Maintain and provide for a period ending at the earlier of (i) the
expiration of the remaining term of employment pursuant hereto prior to the
Notice of Termination or (ii) the date of the Executive's full-time employment
by another employer (provided that the Executive is entitled under the terms of
such employment to benefits substantially similar to those described in this
subparagraph (B)), at no cost to the Executive, the
5
<PAGE>
Executive's continued participation in all group insurance, life insurance,
health and accident, disability and other employee benefit plans, programs and
arrangements in which the Executive was entitled to participate immediately
prior to the Date of Termination (other than stock option plans, employee stock
ownership plans, restricted stock plans and qualified retirement plans of the
Employers), provided that in the event that the Executive's participation in any
plan, program or arrangement as provided in this subparagraph (B) is barred or
during such period any such plan, program or arrangement is discontinued or the
benefits thereunder are materially reduced, the Employers shall arrange to
provide the Executive with benefits substantially similar to those which the
Executive was entitled to receive under such plans, programs and arrangements
immediately prior to the Date of Termination.
6. LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES. If the payments
and benefits pursuant to Section 5 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Employers, would constitute a "parachute payment" under Section 280G of the
Code, the payments and benefits pursuant to Section 5 hereof shall be reduced,
in the manner determined by the Executive, by the amount, if any, which is the
minimum necessary to result in no portion of the payments and benefits under
Section 5 being non-deductible to either of the Employers pursuant to Section
280G of the Code and subject to the excise tax imposed under Section 4999 of the
Code. The determination of any reduction in the payments and benefits to be made
pursuant to Section 5 shall be based upon the opinion of independent tax counsel
selected by the Employers and paid by the Employers. Such counsel shall be
reasonably acceptable to the Employers and the Executive; shall promptly prepare
the foregoing opinion, but in no event later than thirty (30) days from the Date
of Termination; and may use such actuaries as such counsel deems necessary or
advisable for the purpose. The Employers shall pay to the Executive the maximum
amount of payments and benefits pursuant to Section 5, as selected by the
Executive, which such opinion indicates that there is a high probability do not
result in any of such payments and benefits being non-deductible to the
Employers and subject to the imposition of the excise tax imposed under Section
4999 of the Code. Nothing contained herein shall result in a reduction of any
payments or benefits to which the Executive may be entitled upon termination of
employment under any circumstances other than as specified in this Section 6, or
a reduction in the payments and benefits specified in Section 5 below zero.
7. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
6
<PAGE>
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
8. WITHHOLDING. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
9. ASSIGNABILITY. The Employers may assign this Agreement and its
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which the Employers may hereafter merge or
consolidate or to which the Employers may transfer all or substantially all of
its assets, if in any such case said corporation, bank or other entity shall by
operation of law or expressly in writing assume all obligations of the Employers
hereunder as fully as if it had been originally made a party hereto, but may not
otherwise assign this Agreement or its rights and obligations hereunder. The
Executive may not assign or transfer this Agreement or any rights or obligations
hereunder.
10. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Employers: Board of Directors
IBL Bancorp, Inc.
23910 Railroad Avenue
Plaquemine, Louisiana 70764
To the Executive: Danny M. Strickland
IBL Bancorp, Inc.
23910 Railroad Avenue
Plaquemine, Louisiana 70764
11. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or officers as may be
specifically designated by the Boards of Directors of the Employers to sign on
its behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
7
<PAGE>
12. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of
Louisiana.
13. NATURE OF OBLIGATIONS. Nothing contained herein shall create or
require the Employers to create a trust of any kind to fund any benefits which
may be payable hereunder, and to the extent that the Executive acquires a right
to receive benefits from the Employers hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employers.
14. INTERPRETATION AND HEADINGS. This agreement shall be interpreted in
order to achieve the purposes for which it was entered into. The section
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
15. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. REGULATORY ACTIONS. The following provisions shall be applicable
to the parties to the extent that they are required to be included in
employment agreements between a savings association and its employees
pursuant to Section 563.39(b) of the Regulations Applicable to all Savings
Associations, 12 C.F.R. Section 563.39(b), or any successor thereto, and
shall be controlling in the event of a conflict with any other provision of
this Agreement, including without limitation Section 5 hereof.
(a) If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Employers' affairs
pursuant to notice served under Section 8(e)(3) or Section 8(g)(1) of the
Federal Deposit Insurance Act ("FDIA") (12 U.S.C. Sections 1818(e)(3) and
1818(g)(1)), the Employers' obligations under this Agreement shall be
suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Employers may,
in their discretion: (i) pay the Executive all or part of the compensation
withheld while its obligations under this Agreement were suspended, and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.
(b) If the Executive is removed from office and/or permanently
prohibited from participating in the conduct of the Employers' affairs by an
order issued under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C.
Sections 1818(e)(4) and (g)(1)), all obligations of the Employers under this
Agreement shall terminate as of the effective date of the order,
8
<PAGE>
but vested rights of the Executive and the Employers as of the date of
termination shall not be affected.
(c) If the Association is in default, as defined in Section 3(x)(1)
of the FDIA (12 U.S.C. Section 1813(x)(1)), all obligations under this
Agreement shall terminate as of the date of default, but vested rights of the
Executive and the Employers as of the date of termination shall not be
affected.
(d) All obligations under this Agreement shall be terminated
pursuant to 12 C.F.R. Section 563.39(b)(5) (except to the extent that it is
determined that continuation of the Agreement for the continued operation of
the Employers is necessary): (i) by the Director of the Office of Thrift
Supervision ("OTS"), or his/her designee, at the time the Federal Deposit
Insurance Corporation ("FDIC") enters into an agreement to provide assistance
to or on behalf of the Association under the authority contained in Section
13(c) of the FDIA (12 U.S.C. Section 1823(c)); or (ii) by the Director of the
OTS, or his/her designee, at the time the Director or his/her designee
approves a supervisory merger to resolve problems related to operation of the
Association or when the Association is determined by the Director of the OTS
to be in an unsafe or unsound condition, but vested rights of the Executive
and the Employers as of the date of termination shall not be affected.
18. REGULATORY PROHIBITION. Notwithstanding any other provision of
this Agreement to the contrary, any payments made to the Executive pursuant
to this Agreement, or otherwise, are subject to and conditioned upon their
compliance with Section 18(k) of the FDIA (12 U.S.C. Section 1828(k)) and the
regulations promulgated thereunder.
9
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
Attest: IBL BANCORP, INC.
By:
- ---------------------------- -----------------------------------
Gary K. Pruitt, Secretary Bobby E. Stanley, Director
Attest: THE IBERVILLE BUILDING AND LOAN
ASSOCIATION
By:
- ---------------------------- -----------------------------------
Gary K. Pruitt, Secretary Bobby E. Stanley, Director
EXECUTIVE
By:
-----------------------------------
Danny M. Strickland
10
<PAGE>
Exhibit 23.1
[L.A. CHAMPAGNE & CO., L.L.P. Letterhead]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use of our report on the financial statements of The
Iberville Building and Loan Association (the "Association") dated January 16,
1998, except for Notes P, Q and R for which the date is May 13, 1998, in the
prospectus for IBL Bancorp, Inc. (the "Company") constituting part of the
Company's Registration Statement on Form SB-2 and the Association's Application
for Conversion. We also consent to the reference to us under the heading
"Experts" in the Prospectus contained in the Form SB-2 and the Application for
Conversion.
/s/L.A. Champagne & Co. L.L.P.
- ------------------------------
June 23, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF FERGUSON & COMPANY
<PAGE>
Exhibit 23.3
FERGUSON FINANCIAL
& COMPANY INSTITUTION
CONSULTING
Suite 305
860 W. Airport Frwy
Hurst, Texas 76054
(817) 577-9558
(817) 577-3054 Fax
June 24, 1998
Board of Directors
Iberville Building and Loan Association
23910 Railroad Avenue
Plaquemine, LA 70764
Directors:
We hereby consent to the use of our firm's name in the Form AC
Application for Conversion of Iberville Building and Loan Association,
Plaquemine, Louisiana, and any amendments thereto, and in the Form SB-2
Registration Statement of IBL Bancorp, Inc. and any amendments thereto. We also
hereby consent to the inclusion of, summary of, and references to our Appraisal
Report and our opinion concerning subscription rights in such filings including
the Prospectus of IBL Bancorp, Inc.
/s/ Robin L. Fussell
----------------------
Robin L. Fussell
Principal
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1998
<PERIOD-START> JAN-01-1997 JAN-01-1998
<PERIOD-END> DEC-31-1997 MAR-31-1998
<CASH> 143 141
<INT-BEARING-DEPOSITS> 967 1,556
<FED-FUNDS-SOLD> 0 0
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 1,948 1,811
<INVESTMENTS-CARRYING> 2,401 2,212
<INVESTMENTS-MARKET> 2,389 2,206
<LOANS> 16,722 16,820
<ALLOWANCE> 404 403
<TOTAL-ASSETS> 22,395 22,764
<DEPOSITS> 20,026 20,534
<SHORT-TERM> 610 452
<LIABILITIES-OTHER> 137 107
<LONG-TERM> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 1,622 1,671
<TOTAL-LIABILITIES-AND-EQUITY> 22,395 22,764
<INTEREST-LOAN> 1,347 374
<INTEREST-INVEST> 344 80
<INTEREST-OTHER> 98 25
<INTEREST-TOTAL> 1,789 479
<INTEREST-DEPOSIT> 910 223
<INTEREST-EXPENSE> 7 7
<INTEREST-INCOME-NET> 872 249
<LOAN-LOSSES> 42 12
<SECURITIES-GAINS> 0 0
<EXPENSE-OTHER> 568 158
<INCOME-PRETAX> 262 79
<INCOME-PRE-EXTRAORDINARY> 262 79
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 164 53
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
<YIELD-ACTUAL> 3.55 3.72
<LOANS-NON> 328 163
<LOANS-PAST> 0 0
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 194 135
<ALLOWANCE-OPEN> 362 404
<CHARGE-OFFS> 0 13
<RECOVERIES> 0 0
<ALLOWANCE-CLOSE> 404 403
<ALLOWANCE-DOMESTIC> 109 94
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 295 310
</TABLE>
<PAGE>
Exhibit 99.1
THE IBERVILLE BUILDING AND LOAN ASSOCIATION
23910 Railroad Avenue
Plaquemine, Louisiana 70764
(504) 687-6337
NOTICE OF SPECIAL MEETING OF MEMBERS
To Be Held On September __, 1998
NOTICE IS HEREBY GIVEN that a special meeting ("Special Meeting") of the
members of The Iberville Building and Loan Association ("Iberville" or the
"Association") will be held at the Association's office located at 23910
Railroad Avenue, Plaquemine, Louisiana 70764 on September __, 1998, at __:00
a.m., Central Time, to consider and vote upon:
1. The approval of a Plan of Conversion ("Plan of Conversion")
pursuant to which the Association would be converted from a
Louisiana-chartered mutual savings and loan association to a
Louisiana-chartered stock savings and loan association and issue
all of its capital stock to a holding company, IBL Bancorp, Inc.,
and the transactions provided for in such Plan of Conversion,
including the adoption of a new stock Restated Articles of
Incorporation and new Bylaws of the Association; and
2. Such other business as may properly come before the Special
Meeting or any adjournment thereof. Except with respect to
procedural matters incident to the conduct of the meeting,
management is not aware of any other such business.
The Board of Directors has fixed _____ __, 1998 as the voting record
date for the determination of members entitled to notice of and to vote at the
Special Meeting and at any adjournment thereof. Only those members of the
Association of record as of the close of business on that date who continue to
be members on the date of the Special Meeting will be entitled to vote at the
Special Meeting or at any such adjournment.
By Order of the Board of Directors
G. Lloyd Bouchereau, Jr., President and
Chief Executive Officer
Plaquemine, Louisiana
August __, 1998
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU SIGN, DATE AND MARK THE
ENCLOSED PROXY CARD IN FAVOR OF THE ADOPTION OF THE PLAN OF CONVERSION AND
RETURN IT IN THE ENCLOSED SELF-ADDRESSED, POSTAGE-PAID ENVELOPE. THIS WILL NOT
PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE SPECIAL MEETING. PROXIES
MUST BE RECEIVED BY THE HOMESTEAD AT LEAST FIVE DAYS PRIOR TO THE SPECIAL
MEETING IN ORDER TO BE VOTED AT THE SPECIAL MEETING.
<PAGE>
THE IBERVILLE BUILDING AND LOAN ASSOCIATION
---------------
PROXY STATEMENT
---------------
SPECIAL MEETING OF MEMBERS
To Be Held On September __, 1998
INTRODUCTION
This Proxy Statement is being furnished to members of The Iberville
Building and Loan Association the ("Association") as of the close of business on
_____ __, 1998 in connection with the solicitation by the Board of Directors of
the Association of proxies to be voted at the Special Meeting of Members of the
Association (the "Special Meeting") to be held on September __, 1998, at the
Association's office located at 23910 Railroad Avenue, Plaquemine, Louisiana
70764 at __:00 p.m., Central Time, and at any adjournments thereof. This Special
Meeting is being held for the purpose of considering and voting upon the Plan of
Conversion under which the Association would be converted from a Louisiana-
chartered mutual savings and loan association to a Louisiana-chartered stock
savings and loan association, with the concurrent sale of all of the
Association's capital stock to IBL Bancorp, Inc. (the "Company"), and the sale
by the Company of shares of its Common Stock to the public in a Subscription
Offering and, if necessary, in a Community Offering. The simultaneous conversion
of the Association to stock form, the issuance of the Association's capital
stock to the Company, and the offer and sale of the Common Stock by the Company,
all pursuant to the Plan, are referred to herein as the "Conversion." References
to the Association shall include the Association in either its mutual or stock
form as indicated by the context.
Voting in favor of or against the Plan of Conversion includes a vote
for or against the adoption of the new stock Restated Articles of Incorporation
and Bylaws of the Association.
Voting in favor of the Plan of Conversion will not obligate any person
to purchase Common Stock. A copy of the Company's Prospectus accompanies this
Proxy Statement and is incorporated herein by reference. See "Incorporation of
Information by Reference," "How to Obtain Additional Information" and "Available
Information."
2
<PAGE>
VOTING RIGHTS AND VOTE REQUIRED FOR APPROVAL
Depositors and mortgage loan borrowers as of the close of business on
_____ __, 1998 ("Voting Record Date") who continue to be depositors or mortgage
loan borrowers on the date of the Special Meeting or any adjournment thereof
("Members") will be entitled to vote on the Plan of Conversion. If there are not
sufficient votes for approval of the Plan at the time of the Special Meeting,
the Special Meeting may be adjourned to permit further solicitation of proxies.
At the Special Meeting, each depositor Member will be entitled to cast
one vote for every $100 of the total withdrawal value of all of his or her
accounts in the Association as of the Voting Record Date up to a maximum of 500
votes, and each borrower Member will be entitled to cast one vote in the
aggregate for all loans as a borrower in addition to the votes such Member may
be entitled to cast as a depositor, up to an aggregate maximum of 500 votes. As
of the Voting Record Date, the Association had approximately _____ Members who
are entitled to cast a total of approximately _______ depositors' votes and
approximately _____ borrowers' votes, for a total of approximately _______ votes
at the Special Meeting.
This Proxy Statement and related materials are first being mailed to
Members on or about August __, 1998.
The affirmative vote of a majority of the total outstanding votes
eligible to be cast at the Special Meeting is required for approval of the Plan
of Conversion.
PROXIES
The Board of Directors of the Association is soliciting the proxy which
accompanies this Proxy Statement furnished to Members for use at the Special
Meeting and any adjournment thereof. Each proxy solicited hereby, if properly
executed, duly returned before the Special Meeting and not revoked prior to or
at the Special Meeting, will be voted at the Special Meeting in accordance with
the Member's instructions indicated thereon. If no contrary instructions are
given, the executed proxy will be voted in favor of the Plan of Conversion.
Proxies must be received by the Secretary of the Association at least five days
prior to the date of the Special Meeting in order to be voted at the Special
Meeting. If any other matters properly come before the Special Meeting, the
persons named as proxies will vote upon such matters according to their
discretion. Except with respect to procedural matters incident to the conduct of
the meeting, no additional matters are expected to come before the Special
Meeting.
Any Member giving a proxy may revoke it at any time before it is voted
by delivering to the Secretary of the Association either a written revocation of
the proxy, or a duly executed proxy bearing a later date, or by voting in person
at the Special Meeting. Proxies are being solicited only for use at the Special
Meeting and any and all adjournments thereof and will not be used for any other
meeting.
3
<PAGE>
Proxies may be solicited by officers, directors and employees of the
Association personally, by telephone or further correspondence without
additional compensation.
Deposits held in a trust or other fiduciary capacity may be voted by
the trustee or other fiduciary to whom voting rights are delegated under the
trust instrument or other governing document or applicable law. In the case of
individual retirement accounts ("IRA") and Keogh trusts established at the
Association, the beneficiary may direct the trustee's vote on the Plan of
Conversion by returning a completed proxy card to the Association. If no proxy
card is returned, the trustee will vote in favor of approval of the Plan of
Conversion on behalf of such beneficiary.
The Board of Directors urges each Member as of the close of business on
_____ __, 1998 to mark, sign, date and return the enclosed proxy card in the
enclosed postage-paid envelope as soon as possible, even if you do not intend to
purchase Common Stock. This will ensure that your vote will be counted.
INCORPORATION OF INFORMATION BY REFERENCE
The Company's Prospectus dated August __, 1998 is incorporated herein
by reference. The Prospectus sets forth a description of the Plan of Conversion
and the related offering of common stock by the Company under the caption "The
Conversion." Such caption also describes the effects of the Conversion on the
members of the Association, including the tax consequences of the Conversion and
the establishment of a liquidation account for the benefit of certain depositors
of the Association. Upon consummation of the Conversion, the articles of
incorporation of the Association will be restated to reflect the Conversion, to
provide for the issuance of capital stock and to provide for a liquidation
account.
Information regarding the Company and the Association is set forth in
the Prospectus under the captions "Summary - IBL Bancorp, Inc." and "- The
Iberville Building and Loan Association." The Prospectus also describes the
business and financial condition of the Association under the captions
"Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and the historical financial statements of the
Association are included in the Prospectus. See also "Selected Financial Data"
and "Summary of Recent Developments" in the Prospectus. Information regarding
the use of proceeds of the offerings conducted in connection with the
Conversion, the historical capitalization of the Association and the pro forma
capitalization of the Company, and other pro forma data are set forth in the
Prospectus under the captions "Use of Proceeds," "Capitalization" and "Pro Forma
Data," respectively.
The Prospectus also provides information regarding the names, ages,
business experience and compensation of the Association's directors and
executive officers, as well as the benefit plans and proposed employment
agreements. See "Management" in the Prospectus.
4
<PAGE>
REVIEW OF OTS ACTION
Any person aggrieved by a final action of the OTS which approves, with
or without conditions, or disapproves a plan of conversion may obtain review of
such action by filing in the court of appeals of the United States for the
circuit in which the principal office or residence of such person is located, or
in the United States Court of Appeals for the District of Columbia, a written
petition praying that the final action of the OTS be modified, terminated or set
aside. Such petition must be filed within 30 days after the publication of
notice of such final action in the Federal Register, or 30 days after the
mailing by the applicant of the notice to members as provided for in 12 C.F.R.
section 563b.6(c), whichever is later. The further procedure for review is as
follows: A copy of the petition is forthwith transmitted to the OTS by the clerk
of the court and thereupon the OTS files in the court the record in proceeding,
as provided in Section 2112 of Title 28 of the United States Code. Upon the
filing of the petition, the court has jurisdiction, which upon the filing of the
record is exclusive, to affirm, modify, terminate, or set aside in whole or in
part, the final action of the OTS. Review of such proceedings is as provided in
Chapter 7 of Title 5 of the United States Code. The judgment and decree of the
court is final, except that they are subject to review by the Supreme Court upon
certiorari as provided in Section 1254 of Title 28 of the United States Code.
HOW TO OBTAIN ADDITIONAL INFORMATION
You may request in writing a copy of the Plan of Conversion from the
Association. Any such requests should be directed to Gary K. Pruitt, Secretary,
The Iberville Building and Loan Association, 23910 Railroad Avenue, Plaquemine,
Louisiana 70764. So that you have sufficient time to receive and review the
requested materials, it is recommended that any such requests be sent so that
they are received by the Association by _:00 p.m., Central Time, on September
__, 1998.
AVAILABLE INFORMATION
The Association has filed with the OTS an Application for Conversion
pursuant to which it will convert to stock form in accordance with the terms of
the Plan. This Proxy Statement and the Prospectus omit certain information
contained in such Application. The Application may be inspected at the offices
of the OTS, 1700 G Street, N.W., Washington, D.C. 20055 and at the office of the
Regional Director of the OTS located at 122 West John Carpenter Freeway, Suite
600, Irving, Texas 75039.
The Company has filed with the SEC a Registration Statement on Form
SB-2 (File No. 333-_____) under the Securities Act with respect to the Common
Stock being offered in the Conversion. This Proxy Statement and the Prospectus
do not contain all the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the SEC. Such information may be inspected at the public reference facilities
5
<PAGE>
maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, and copies may be obtained at prescribed rates from the Public Reference
Section of the SEC at the same address. In addition, the SEC maintains a web
site that contains registration statements and other reports regarding
registrants that file electronically with the SEC (such as the Company). The
address of the SEC's web site is http://www.sec.gov. The statements contained in
the Prospectus as to the contents of any contract or other document filed as an
exhibit to the Registration Statement are, of necessity, brief descriptions
thereof and are not necessarily complete; each such statement is qualified by
reference to such contract or document.
--------------
PLEASE REMEMBER TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD
IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO THAT YOUR IMPORTANT VOTE WILL BE
COUNTED AT THE SPECIAL MEETING.
--------------
THIS PROXY STATEMENT IS NEITHER AN OFFER TO SELL NOR THE SOLICITATION
OF ANY OFFER TO BUY STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS.
6
<PAGE>
THE IBERVILLE BUILDING AND LOAN ASSOCIATION REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
IBERVILLE BUILDING AND LOAN ASSOCIATION (THE "ASSOCIATION") FOR USE ONLY AT A
SPECIAL MEETING OF MEMBERS TO BE HELD ON SEPTEMBER __, 1998 AND ANY ADJOURNMENT
THEREOF.
The undersigned, being a member of the Association, hereby authorizes
the Board of Directors of the Association or any successors in their respective
positions, as proxy, with full powers of substitution, to represent the
undersigned at the Special Meeting of Members of the Association to be held at
the Association's main office located at 23910 Railroad Avenue, Plaquemine,
Louisiana 70764 on September __, 1998, at __:00 a.m., Central Time, and at any
adjournment of said meeting, and thereat to act with respect to all votes that
the undersigned would be entitled to cast, if then personally present, as set
forth below:
(1) To vote FOR or AGAINST a Plan of Conversion pursuant to which the
Association would be converted from a Louisiana-chartered mutual savings and
loan association to a Louisiana-chartered stock savings and loan association and
issue all of its capital stock to a holding company, IBL Bancorp, Inc. and the
transactions provided for in such Plan of Conversion, including the adoption of
a new stock Restated Articles of Incorporation and new Bylaws for the
Association.
FOR \ \ AGAINST \ \
(2) To vote, in its discretion, upon such other business as may
properly come before the Special Meeting or any adjournment thereof. Except with
respect to procedural matters incident to the conduct of the meeting, management
is not aware of any other such business.
This proxy, if executed, will be voted FOR adoption of the Plan of
Conversion if no choice is made herein. Please date and sign this proxy on the
reverse side and return it in the enclosed envelope.
(Continued and to be signed on other side)
<PAGE>
(Continued from other side)
Any Member giving a proxy may revoke it at any time before it is voted
by delivering to the Secretary of the Association either a written revocation of
the proxy, or a duly executed proxy bearing a later date, or by voting in person
at the Special Meeting.
The undersigned hereby acknowledges receipt of a Notice of Special
Meeting of the Members of the Association called for the ____ day of September,
1998 and a Proxy Statement for the Special Meeting prior to the signing of this
Proxy.
Date: , 1998
--------------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature
Note: Please sign exactly your name appears
on this Proxy. Only one signature is
required in the case of a joint account.
When signing in a representative capacity,
please give title.
<PAGE>
Exhibit 99.3
<TABLE>
<S> <C> <C>
STOCK ORDER FORM
IBL, INC.
Stock Sales Center
23910 Railroad Avenue
Plaquemine, Louisiana 70114
(504) 687-6337
-----------------------------
Expiration Date:
September __, 1998
12:00 noon, Central Time
-----------------------------
IMPORTANT - PLEASE NOTE: A properly completed original stock order form must be used to subscribe
for common stock. Faxes or copies of this form will not be accepted.
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Number of Shares Subscription Price (2) Total Payment Due
----------------------------------------------------- -----------------------------
X $10.00 = $
----------------------------------------------------- -----------------------------
The minimum purchase is 25 shares. The maximum number of shares that any person may purchase cannot exceed 6,000 shares, and
the maximum number that any person, together with associates of and persons acting in concert with such person, may purchase
cannot exceed 10,000 shares (subject to adjustment).
- ------------------------------------------------------------------------------------------------------------------------------------
Method of Payment
Account Number(s) Withdrawal Amount(s)
(3) / / Enclosed is a check or money order made payable to ----------------------------------------------------------------------
IBL Bancorp, Inc. (the "Company") in the amount of $
--------------------------------------- -----------------------------------------------------------------------
$
--------------------------------------- -----------------------------------------------------------------------
Cash can be used only if presented
in person at the Association's office. -----------------------------------------------------------------------
Total Withdrawal Amount
--------------------
(4) / / The undersigned authorizes withdrawal from the following account(s)
at the Association. There is no penalty for early withdrawal used for
this payment.
Purchaser Information Account Title (Names on Account) Account Number
--------------------------------------------------------
(5a) / / Check here if you are a director, officer or employee of The
Iberville Building and Loan Association (the "Association") or --------------------------------------------------------
a member of such person's immediate family.
--------------------------------------------------------
(5b) / / Eligible Account Holder - Check here if you were a depositor of
at least $50.00 at the Association on December 31, 1996. --------------------------------------------------------
If additional space is needed, please
(5c) / / Supplemental Eligible Account Holder - Check here if you were a use the back of this order form.
depositor of at least $50.00 at the Association on June 30, 1998.
(5d) / / Other Member - Check here if you were a depositor of or mortgage
loan borrower from the Association on _____ __, 1998.
Enter information for all accounts that you had at the Association as of the
dates specified above for which you checked the appropriate box.
Stock Registration
(6) Form of Stock Ownership:
/ / Individual / / Co-Ownership (Louisiana residents) / / Joint tenants (non-Louisiana) / / UTMA
/ / Fiduciary (i.e., trust, estate, etc.) / / Corporation or partnership / / Tenants in common (non-Louisiana) / / Other ___
(7) Name(s) in which your stock is to be registered (Please print clearly):
- ------------------------------------------------------------------------------------------------------------------------------------
Name Social Security No. or Tax ID No.
- ------------------------------------------------------------------------------------------------------------------------------------
Name
- ------------------------------------------------------------------------------------------------------------------------------------
Street Address/City/State/Zip Code Parish of Residence
- ------------------------------------------------------------------------------------------------------------------------------------
----------------------------------- ---------------------------------
(8) Telephone Information Daytime Phone Evening Phone
( ) ( )
----------------------------------- ---------------------------------
NASD or Group Affiliation
(9) / / Check here if you are a member of the National Association of Securities Dealers, Inc. ("NASD"), a person associated
with an NASD member, a member of the immediate family of any such person to whose support such person contributes, directly or
indirectly, or the holder of an account in which an NASD member or person associated with an NASD member has a beneficial
interest. To comply with conditions under which an exemption from the NASD's Interpretation With Respect to Free-Riding and
Withholding is available, you agree, if you have checked the NASD Affiliation box, (i) not to sell, transfer or hypothecate the
stock for a period of 90 days following issuance, and (ii) to report this subscription in writing to the applicable NASD member
within one day of payment therefor.
(10) / / Check here, and complete the reverse side of this Form, if you or any associate (as defined on the reverse side of this
Form) or persons acting in concert with you have submitted other orders for shares in the Subscription and/or Community Offerings.
Acknowledgement
(11) / / To be effective, this fully completed Stock Order Form must be actually received by the Association no later than 12:00
noon, Central Time, on September __, 1998, unless extended; otherwise, this Stock Order Form and all subscription rights will be
void. Completed Stock Order Forms, together with the required payment or withdrawal authorization, may be delivered to the
Association or may be mailed to the Association in the enclosed postage-paid envelope or to the address indicated above. Do not
mail cash.
It is understood that this Stock Order Form will be accepted in accordance with, and subject to, the terms and conditions of the
Plan of Conversion of the Association described in the accompanying Prospectus, receipt of which is hereby acknowledged at least
48 hours prior to delivery of this Stock Order Form to the Association.
The undersigned agrees that after receipt by the Association, this Stock Order Form may not be modified, withdrawn or cancelled
without the Association's consent, and if authorization to withdraw from the undersigned's deposit accounts at the Association
has been given as payment for shares, the amount authorized for withdrawal shall not otherwise be available for withdrawal by the
undersigned.
Under penalty of perjury, I certify that the Social Security or Tax ID Number and the information provided under numbers 7 and 9
of this Stock Order Form are true, correct and complete and that I am not subject to backup withholding because: (i) I am exempt
from backup withholding; (ii) I have not been notified by the Internal Revenue Service ("IRS") that I am subject to backup
withholding as a result of failure to report all interest or dividends; or (iii) the IRS has notified me that I am no longer
subject to backup withholding.
- ------------------------------------------------------------------------------------------------------------------------------------
(12) Signature Date Signature Date
- ------------------------------------------------------------------------------------------------------------------------------------
A Signed Certification Must Accompany All Stock Order Forms (See Reverse Side).
</TABLE>
<PAGE>
CERTIFICATION FORM
I ACKNOWLEDGE THAT THE SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE
("COMMON STOCK"), OF IBL BANCORP, INC. (THE "COMPANY"), THE PROPOSED HOLDING
COMPANY FOR THE IBERVILLE BUILDING AND LOAN ASSOCIATION (THE "ASSOCIATION"),
ARE NOT A DEPOSIT ACCOUNT, ARE NOT FEDERALLY INSURED, AND ARE NOT GUARANTEED
BY THE COMPANY, THE ASSOCIATION OR THE FEDERAL GOVERNMENT.
If anyone asserts that the shares of Common Stock are federally insured or
guaranteed, or are as safe as an insured deposit, I should call the Office of
Thrift Supervision, Midwest Regional Director, 112 W. John Carpenter Freeway,
Dallas, Texas 75039-2010 at (972) 281-2000.
I further certify that, before purchasing the shares of Common Stock of
the Company, I received a copy of the Prospectus dated August __, 1998 which
discloses the nature of the shares of Common Stock being offered thereby and
describes the following risks involved in an investment in the Common Stock
under the heading "Risk Factors" beginning on page __ of the Prospectus:
1. Low Return on Equity Following the Conversion; Uncertainty as to Future
Growth Opportunities
2. Absence of Market for the Common Stock
3. Potential Effects of Changes in Interest Rates and the Current Interest Rate
Environment
4. Investment in Mortgage-Backed Securities
5. Risks Related to Consumer Loans
6. Risks Related to Commercial Real Estate, Construction and Land Loans
7. Strong Competition Within Iberville's Market Area
8. Geographic Concentration of Loans
9. Reliance on Key Officers
10. Certain Anti-Takeover Provisions
11. Legislation Limiting Deduction of Bad Debt Reserves
12. Regulatory Oversight and Supervision
<PAGE>
13. Possible Increase in Number of Shares Issued in the Conversion
14. Dilutive Effect of Possible Issuance of Additional Shares
15. Increased Compensation Expense After the Conversion
16. Possible Adverse Income Tax Consequences of the Distribution of
Subscription Rights
17. Irrevocability of Orders; Potential Delay in Completion of Offerings
Signature:
---------------------------------------------------
Signature:
---------------------------------------------------
Date:
----------------------
<PAGE>
STOCK ORDER FORM INSTRUCTIONS AND GUIDE
STOCK OWNERSHIP GUIDE
Individual
Include the first name, middle initial, and last name of the stockholder. Avoid
the use of an initial in place of the first name. Please omit words that do not
affect ownership rights such as "Mr.," "Mrs.," Dr.," "special account," "single
person," etc.
Co-Ownership
Co-Ownership may be used to identify two or more owners under the laws of the
State of Louisiana.
Joint Tenants
For non-Louisiana residents, joint tenants with right of survivorship may be
specified to identify two or more owners. When stock is held by joint tenants
with right of survivorship, ownership is intended to pass automatically to the
surviving joint tenant(s) upon the death of any joint tenant. All parties must
agree to the transfer or sale of shares held by joint tenants.
Tenants in Common
For non-Louisiana residents, tenants in common may also be specified to
identify two or more owners. When stock is held as tenants in common, upon
the death of one co-tenant, ownership of the stock will be held by the
surviving co-tenant(s) and by the heirs of the deceased co-tenant. All
parties must agree to the transfer or sale of shares held in this form of
ownership.
Uniform Transfer to Minors Act ("UTMA")
Stock may be held in the name of a custodian for a minor under the Uniform
Transfer to Minors Acts of the individual states. There may be only one
custodian and one minor designated on a stock certificate. The standard
abbreviation of custodian is "CUST," while the "Uniform Transfer to Minors Act"
is abbreviated "UTMA." Standard U.S. Postal Service state abbreviations should
be used to describe the appropriate state. For example, stock held by John P.
Jones under the Louisiana Uniform Transfer to Minors Act will be abbreviated:
JOHN P. JONES, CUST SUSAN A. JONES, UTMA, LA.
Fiduciaries
Information provided with respect to stock to be held in a fiduciary capacity
must contain the following:
* The name(s) of the fiduciary. If an individual, list the first name,
middle initial, and last name. If a corporation, list the corporate
title (name). If an individual and a corporation, list the
corporation's title before the individual.
* The fiduciary capacity, such as administrator, executor, personal
representative, conservator, trustee, committee, etc.
* A description of the document governing the fiduciary relationship,
such as a trust agreement or court order. Without a designation
establishing a fiduciary relationship, your stock may not be registered
in a fiduciary capacity.
* The date of the document governing the relationship, except that the
date of a trust created by a will need not be included in the
description.
* The name of the maker, donor or testator and the name of the
beneficiary.
An example of fiduciary ownership: John D. Smith, Trustee Under Agreement
Dated 10-1-92 for Tom A. Smith.
STOCK ORDER FORM INSTRUCTIONS
Items 1 and 2--
Fill in the number of shares that you wish to purchase and the total payment
due. The amount due is determined by multiplying the number of shares by the
subscription price of $10.00 per share. The minimum number of shares that may be
subscribed for is 25. IBL Bancorp, Inc. has reserved the right to reject any
order received in the Community Offering, in whole or in part.
<PAGE>
Item 3--
Payment for shares may be made in cash (only if delivered by you in person to
any of the Association's offices) or by check or money order made payable to The
Iberville Building and Loan Association. Your funds will earn interest at the
Association's passbook rate until the conversion is completed or terminated. DO
NOT MAIL CASH! Please check this box if your method of payment is by check or
money order.
Item 4--
If you wish to pay for your stock by a withdrawal from a deposit account at the
Association, please check this box and insert the account number(s) and the
amount of your withdrawal authorization for each account. There will be no
penalty assessed for early withdrawals from certificate accounts used for stock
purchases. This form of payment may not be used if your account is an Individual
Retirement Account. Please contact the Stock Sales Center for information
regarding purchase from an Individual Retirement Account.
Item 5--
a. Please check this box if you are a director, officer or employee of The
Iberville Building and Loan Association or a member of such person's immediate
family.
b. If you were a depositor on the Eligibility Record Date (December 31, 1996),
the Supplemental Eligibility Record Date (June 30, 1998) and/or the voting
record date for Other Members (_____ __, 1998), you must list all names on the
account(s) and all account number(s) of accounts you had at those dates in order
to ensure proper identification of your purchase rights.
c. If you were a borrower from the Association with mortgage loan(s) outstanding
on _____ __, 1998, you must list each loan number in order to ensure proper
identification of your purchase rights.
Items 6, 7 and 8--
The stock transfer industry has developed a uniform system of stockholder
registration that we will use in the issuance of your IBL Bancorp, Inc. common
stock. Please complete Items 6, 7, and 8 as fully and accurately as possible,
and be certain to supply the social security or tax ID number of the person who
is subscribing for shares. Failure to provide the social security or tax ID
number may result in the loss of your purchase priority. In addition, please
list your daytime and evening telephone number(s). We will need to call you if
we cannot execute your order as given. If you have any questions or concerns
regarding the registration of your stock, please consult your legal advisor.
Stock ownership must be registered in one of the ways described under "Stock
Ownership Guide" above.
Item 9--
Please check this box if you are a member of the NASD or if this item otherwise
applies to you.
Item 10--
Please check this box if you or any associate or person acting in concert with
you has submitted another order for shares and complete Item 10 below.
"Associate" is defined as: (i) any corporation or organization (other than the
Association or a majority-owned subsidiary of the Association) of which such
person is a director, officer or a partner or is, directly or indirectly, the
beneficial owner of 10% or more of any class of equity securities; (ii) any
trust or other estate in which such person has a substantial beneficial interest
or as to which such person serves as a trustee or in a similar fiduciary
capacity; provided, however, such term shall not include IBL Bancorp, Inc.'s or
the Association's employee benefit plans in which such person has a substantial
beneficial interest or serves as a trustee or in a similar fiduciary capacity;
and (iii) any relative or spouse of such person, or any relative of such spouse,
who either has the same home as such person or who is a director or officer of
IBL Bancorp, Inc. or the Association. Directors of IBL Bancorp, Inc. or the
Association are not treated as associates solely because of their Board
membership.
Items 11 and 12--
Please sign and date the Stock Order Form where indicated. Review the Stock
Order Form carefully before you sign, including the Acknowledgement. Normally,
one signature is required. An additional signature is required only when payment
is to be made by withdrawal from a deposit account that requires multiple
signatures to withdraw funds. You may mail your completed Stock Order Form in
the envelope that has been provided, or you may deliver your Stock Order Form to
Citizens. Your Stock Order Form, properly completed, and payment in full (or
withdrawal authorization) must be received by the Association no later than
12:00 noon, Central Time, on September __, 1998 or it will become void. If you
need further assistance, please call the Stock Sales Center at (504) ___-____
between 9:00 a.m. and 4:00 p.m., Central Time, Monday through Friday.
<PAGE>
Items (5(b), 5(c) and 5(d)--continued
Account Title (Name(s) on Account) Account Number
Item (10)--continued
List below all other orders submitted by you or your associates (as defined
above) or by persons acting in concert with you.
Name(s) listed on other Order Form(s) Number of Shares Ordered
<PAGE>
Exhibit 99.4
IBL Bancorp, Inc.
Proposed Holding Company for
The Iberville Building and Loan Association
Plaquemine, LA
Proposed Marketing Materials
<PAGE>
Marketing Materials for
IBL Bancorp, Inc.
Plaquemine, Louisiana
Table of Contents
-----------------
I. Press Release
A. Explanation
B. Schedule
C. Distribution List
D. Press Release Examples
II. Advertisements
A. Explanation
B. Schedule
C. Advertisement Examples
III. Question and Answer Brochure
A. Explanation
B. Quantity and Method of Distribution
C. Example
IV. Officer and Director Support Brochure
A. Explanation
B. Method of Distribution
C. Example
V. IRA Mailing
A. Explanation
B. Quantity and Method of Distribution
C. IRA Mailing Example
VI. Counter Cards and Lobby Posters
A. Explanation
B. Quantity
VII. Invitations
A. Explanation
B. Quantity - Method of Distribution
C. Examples
VIII. Prospect Letters
A. Explanation
B. Method of Distribution
C. Examples
<PAGE>
IX Cover Letters for Initial Mailing
A. Explanation
B. Method of Distribution
C. Examples
X. Proxygram
A. Explanation
B. Example
<PAGE>
I. Press Releases
A. Explanation
In an effort to assure that all customers, community members and other
interested investors receive prompt accurate information in a simultaneous
manner, Trident advises the Association to forward press releases to area
newspapers, radio stations, etc. at various points during the Conversion
process.
Only press releases approved by Conversion Counsel and the OTS, if
necessary, will be forwarded for publication in any manner.
B. Schedule
1. OTS Approval of Conversion
2. Close of Stock Offering
<PAGE>
National and Local Distribution List
National Thrift News Wall Street Journal
- -------------------- -------------------
212 West 35th Street World Financial Center
13th Floor 200 Liberty
New York, New York 10001 New York, NY 10004
Richard Chang
American Banker SNL Securities
- --------------- -------------------
One State Street Plaza Post Office Box 2124
New York, New York 10004 Charlottesville, Virginia 22902
Michael Weinstein
Barrons Investors Business Daily
- ------- ------------------------
Dow Jones & Company 12655 Beatrice Street
Barrons Statistical Information Post Office Box 661750
200 Burnett Road Los Angeles, California 90066
Chicopee, Massachusetts 01020
New York Times
- --------------
229 West 43rd Street
New York, NY 10036
Business Wire
- -------------
212 South Tryon
Suite 1460
Charlotte, North Carolina 28281
* Press releases will be distributed to all the applicable local media.
<PAGE>
Press Release FOR IMMEDIATE RELEASE
For More Information Contact:
G. Lloyd Bouchereau, Jr.
President and Chief Executive Officer
Iberville Building and Loan Association
(504) 687-6337
THE IBERVILLE BUILDING AND LOAN ASSOCIATION
CONVERSION FROM MUTUAL FORM OF ORGANIZATION
TO STOCK HOLDING COMPANY APPROVED
G. Lloyd Bouchereau, Jr., President and Chief Executive Officer of
Iberville Building and Loan Association ("Iberville" or the "Association"),
Plaquemine, Louisiana, announced today that the Association has received
approval from the Office of Thrift Supervision in Washington, D.C. and the
Louisiana Office of Financial Institutions to convert from the mutual form of
organization to the stock holding company form of organization. In
connection with the conversion, the Association has formed a company, IBL
Bancorp, Inc. (the "Company"), to serve as the holding company of the
Association.
Pursuant to a plan of conversion, the Company is offering up to 276,000
shares, subject to adjustment, of its common stock, at a price of $10.00 per
share. Certain depositors and borrowers as of specified record dates, the
Association's Employee Stock Ownership Plan, and directors, officers and
employees of the Association will have an opportunity to purchase stock
through a Subscription Offering that closes on September __, 1998. Any
shares not subscribed for in the Subscription Offering are expected to be
offered to persons who reside in Louisiana or to whomever else the prospectus
is delivered to in a Community Offering, with first preference given to
natural persons who reside in Iberville Parish, Louisiana. The Subscription
Offering and any Community Offering (together, the "Offering") will be
managed by Trident Securities, Inc. of Raleigh, North Carolina.
<PAGE>
Prospectuses describing, among other things, the terms of the Offering
were mailed to certain customers of the Association on August __, 1998.
Certain customers will also have the opportunity to vote on the conversion of
the Association through a proxy solicitation that will run concurrently with
the stock offering.
As a result of the conversion, the Association will operate as a
subsidiary of the Company. According to Mr. Bouchereau, "Our day to day
operations will not change as a result of the conversion and deposits will
continue to be insured by the FDIC up to the applicable legal limits."
Customers with questions concerning the conversion should call the Stock
Information Center at (504) ___-____, or visit the Association's office in
Plaquemine, Louisiana.
This is neither an offer to sell nor a solicitation of an offer to buy the
stock of IBL Bancorp, Inc. The offer is made only by the Prospectus. The
shares of Common Stock are not deposits or savings accounts and will not be
insured by the Federal Deposit Insurance Corporation or any other government
agency.
<PAGE>
Press Release FOR IMMEDIATE RELEASE
For More Information Contact:
G. Lloyd Bouchereau, Jr.
President and Chief Executive Officer
Iberville Building and Loan Association
(504) 687-6337
IBL BANCORP, INC. COMPLETES STOCK OFFERING
Plaquemine, Louisiana - (September __, 1998) G. Lloyd Bouchereau, Jr.,
President and Chief Executive Officer of Iberville Building and Loan
Association ("Iberville" or the "Association" ), announced today that IBL
Bancorp, Inc. (the "Company"), the holding company for the Association,
recently completed its stock offering on September __, 1998 in connection
with the Association's Conversion from the mutual form of organization to the
stock holding company form of organization. A total of _______ shares were
sold at $10.00 per share in connection with the stock offering, subject to
final approval of the independent appraisal by the Office of Thrift
Supervision.
On ________, 1998, the Association's Plan of Conversion will be
submitted to the voting members of the Association for their approval at a
Special Meeting of Members.
Mr. Bouchereau indicated that the officers and board of directors of the
Association want to express their thanks for the response to the stock
offering and that the Association looks forward to serving the needs of its
customers and stockholders as a community-based stock institution. The
offering was managed by Trident Securities, Inc. The stock will commence
trading on the Electronic Bulletin Board under the symbol "_____" on or about
___________, 1998.
<PAGE>
II. Advertisements
A. Explanation
The intended use of the attached advertisement "A" is to notify the
Association's customers and members of the local community that the
Conversion offering is underway.
The intended use of advertisement "B" is to remind the Association's
customers of the closing date of the subscription offering.
Trident may feel it is necessary to run more ads in order to remind
customers and community members of the close of the Subscription/Community
Offering.
Alternatively, Trident may, depending upon the response from the
customer base, choose to run fewer ads or no ads at all.
<PAGE>
Advertisement (A)
This announcement is neither an offer to sell nor a solicitation of an offer
to buy these securities. The offer is made only by the Prospectus. These
shares have not been approved or disapproved by the Securities and Exchange
Commission, the Office of Thrift Supervision, the Louisiana Office of
Financial Institutions or the Savings Association Insurance Fund of the
Federal Deposit Insurance Corporation, nor has such commission, office or
corporation passed upon the accuracy or adequacy of the prospectus. Any
representation to the contrary is a criminal offense.
New Issue _______, 1998
276,000 Shares
These shares are being offered pursuant
to a Plan of Conversion whereby
Iberville Building and Loan Association
Plaquemine, Louisiana will
convert from the mutual form of organization
to a Louisiana stock association
and become a wholly-owned subsidiary of
IBL Bancorp, Inc.
Common Stock
_______________
Price $10.00 Per Share
_______________
TRIDENT SECURITIES, INC.
For a copy of the prospectus call (504) ___- ________.
<PAGE>
Advertisement (B)
IBERVILLE BUILDING AND LOAN ASSOCIATION'S CUSTOMERS
AND MEMBERS OF THE GENERAL PUBLIC
_____________, 1998 IS THE DEADLINE TO
ORDER STOCK OF IBL BANCORP, INC.
Customers of Iberville Building and Loan Association
have the opportunity to invest in Iberville Building and Loan Association
by subscribing for common stock in its proposed holding company
IBL BANCORP, INC.
A Prospectus relating to these securities is
available at our office or by calling our
Stock Information Center at (504) ___ - _____________.
This announcement is not an offer to sell or a solicitation of an offer
to buy the stock of IBL Bancorp, Inc. The offer is made only by the
Prospectus. The shares of Common Stock are not deposits or savings accounts
and will not be insured by the Federal Deposit Insurance Corporation or any
other government agency.
<PAGE>
III. Question and Answer Brochure
A. Explanation
The Question and Answer brochure is an essential marketing piece in any
Conversion. It serves to answer some of the most commonly asked questions
in "plain, everyday language". Although most of the answers are taken
verbatim from the Prospectus, it saves the individual from searching for
the answer to a simple question.
B. Method of Distribution
There are four primary methods of distribution of the Question and Answer
brochure. However, regardless of the method the brochures are always
accompanied by a Prospectus.
1. A Question and Answer brochure is sent out in the initial mailing to
all members of the Association.
2. Question and Answer brochures are available at the Association.
3. Question and Answer brochures are distributed in information packets
at community meetings.
4. Question and Answer brochures are sent out in a standard information
packet to all interested investors who phone the Stock Information
Center requesting information.
<PAGE>
QUESTIONS AND ANSWERS
REGARDING
THE PLAN OF CONVERSION
On April 7, 1998, the Board of Directors of Iberville Building and Loan
Association ("Iberville" or the "Association") unanimously adopted the Plan
of Conversion (the "Plan of Conversion") pursuant to which the Association
will convert from mutual to stock form and the Association will reorganize as
a wholly owned subsidiary of a new company -- IBL Bancorp, Inc. (the
"Company").
Iberville's Board of Directors has unanimously voted to convert the
savings association from its present mutual form to a stock institution,
subject to approval of the conversion by Iberville's members and regulatory
authorities. Complete details on the conversion, including reasons for
conversion, are contained in the Prospectus and Proxy Statement. We urge you
to read them carefully.
This brochure is provided to answer basic questions you might have about
the conversion. Remember, the conversion will not affect the rate on any of
your savings accounts, deposit certificates, or loans.
For complete information regarding the Conversion, see the Prospectus
dated _________________, 1998. Copies of the Prospectus may be obtained by
calling the Stock Information Center at (504) ____ - ______________________.
1. Q. What is a "Conversion"?
A. Conversion is a change in the legal form of organization. Following
completion of the conversion from a Louisiana mutual savings and loan
association to a Louisiana stock savings and loan association,
Iberville intends to still be known as "The Iberville Building and
Loan Association" (the "Association"). Iberville currently operates
as a state mutual savings and loan association with no shareholders.
Through the conversion, Iberville will form a holding company, IBL
Bancorp, which will ultimately own all of the outstanding stock of
the Association. IBL Bancorp will issue stock in the conversion, as
described below, and will be a publicly-owned company.
2. Q. Why is Iberville converting?
A. The stock form of ownership is used by most business corporations
and financial institutions. Iberville has reached an important
point in its development with its decision to convert to the stock
form of ownership. Iberville's management believes the continued
diversification of the institution's asset and deposit base and the
establishment of new banking services should enhance long-term
operating potential. The capital raised by issuing stock will:
1
<PAGE>
* Enhance the Association's capital position.
* Facilitate future access to the capital markets.
* Provide additional funds for increased lending and investment
opportunities.
3. Q. Will the conversion have any effect on savings accounts, certificates
of deposit or loans with Iberville?
A. No. The conversion will not change the amount, interest rate or
withdrawal rights of savings and checking accounts or certificates
of deposit (except to the extent such funds are used to purchase
Common Stock). The rights and obligations of borrowers under their
loan agreements will not be affected.
However, upon consummation of the conversion, Iberville's deposit
account holders and certain borrowers will no longer have voting
rights unless they purchase common stock in IBL Bancorp, and the
liquidation rights of depositors will be evidenced by an interest
in a liquidation account.
4. Q. Will the conversion cause any changes in personnel or management?
A. No. The conversion will not cause any changes in personnel or
management. The normal day-to-day operations will continue as
before.
5. Q. Did the Board of Directors of Iberville approve the conversion?
A. Yes. The Board of Directors unanimously adopted the Plan of
Conversion on April 7, 1998, and the Board of Directors amended the
Plan on June 16, 1998.
THE SUBSCRIPTION AND COMMUNITY OFFERING
6. Q. Who is entitled to buy IBL Bancorp common stock?
A. Subscription rights to buy common stock have been granted in order
of priority to (i) depositors of the Association as of December 31,
1996 with a $50.00 minimum deposit at that date (the "Eligible
Account Holders"); (ii) IBL Bancorp's employee stock ownership plan
(the "ESOP"), a tax qualified employee stock benefit plan; (iii)
depositors of the Association with $50.00 or more on deposit as of
June 30, 1998 (the "Supplemental Eligible Account Holders"); (iv)
depositors and mortgage loan borrowers of the Association as of
________, 1998 ("Other Members"); and (v) directors, officers and
employees of the Association; subject to the purchase limitations
set forth in the Plan of Conversion.
2
<PAGE>
Shares that are not subscribed for during the subscription
offering, if any, may be offered to the general public ("Other
Subscribers") through a community offering with preference given to
natural persons who are residents of Iberville Parish, Louisiana
(the "Community Offering").
7. Q. How do I subscribe for shares of stock?
A. Eligible customers wishing to exercise their subscription rights
must return the enclosed Stock Order Form to Iberville. The Stock
Order Form must be completed and returned along with full payment
or appropriate instructions authorizing a withdrawal from a deposit
account at Iberville on or prior to the close of the Subscription
Offering, which is 12:00 noon, Central Time, on September __, 1998,
unless extended. Members of the public who wish to order stock
directly from Iberville in any Community Offering should return
their Stock Order Form and accompanying payment to Iberville prior
to 12:00 noon, Central Time on September __, 1998, unless extended.
8. Q. How can I pay for my subscription?
A. First, you may pay for your stock by check or money order. These
funds will earn interest at Iberville's passbook rate from the day
we receive them until the completion or termination of the
conversion. The passbook rate was __% as of August __, 1998.
Second, you may authorize us to withdraw funds from your Iberville
savings account or certificate of deposit without early withdrawal
penalty. These funds will continue to earn interest at the rate in
effect for your account until completion of the Offering, at which
time your funds will be withdrawn for your purchase. Funds
remaining in this account (if any) will continue at the contractual
rate unless the withdrawal reduces the account balance below the
applicable minimum, in which case you will receive interest at the
passbook rate. A hold will be placed on your account for the
amount you specify for stock payment. You will not have access to
these funds from the day we receive your order until the completion
or termination of the conversion.
If you want to use Individual Retirement Account deposits held at
Iberville to purchase stock, call our Stock Information Center at
(504) ___-____ for assistance. There will be no early withdrawal
or IRS penalties incurred by these transactions.
9. Q. When must I place my order for shares of stock?
A. To exercise subscription rights in the subscription offering, a
Stock Order Form must be received by Iberville with full payment
for all shares subscribed for not later than 12:00 noon, Central
Time, on September __, 1998.
Non-customers desiring to order shares through any community
offering must order shares before the close of the community
offering, which will be at 12:00 noon, Central Time, on September
__, 1998, unless extended.
3
<PAGE>
10. Q. How many shares of stock are being offered?
A. IBL Bancorp, Inc. is offering a minimum of 204,000 shares and a
maximum of 276,000 shares (subject to adjustment) of common stock
at a price of $10.00 per share. The actual number of shares will
be dependent upon the independent appraiser's final determination
of the consolidated pro forma market value of the common stock
issued in the conversion.
11. Q. What is the minimum and maximum number of shares that I can
purchase during the offering period?
A. The minimum number of shares that may be purchased is 25 shares. No
Stock Order Form will be accepted for less than $250.00. The
maximum number of shares may not exceed 6,000 shares for any
individual or 10,000 shares for their associates or any group
acting in concert as defined in Iberville's Plan of Conversion.
12. Q. How was it determined that between 204,000 shares and 276,000
shares of stock would be issued at $10.00 per share?
A. The share range was determined through an appraisal of Iberville by
Ferguson & Company, an independent appraisal firm specializing in
the thrift industry.
13. Q. Must I pay a commission on the stock for which I subscribe?
A. No. You will not pay a commission on stock purchased in the
Subscription Offering or any Community Offering. Conversion
expenses, including commissions, will be deducted from the proceeds
of the Offering upon completion of the conversion.
14. Q. Will I receive interest on funds I submit for stock purchases?
A. Yes. Iberville will pay its current passbook rate from the date
funds are received (with a completed Stock Order Form) during the
Offerings until completion of the conversion. That rate was _____%
as of August __, 1998.
15. Q. If I have misplaced my Stock Order Form, what should I do?
A. Iberville will mail you another order form or you may obtain one
from the Iberville main office. If you need assistance in
obtaining or completing a Stock Order Form, an Iberville employee
or a Trident Securities, Inc. representative will be happy to help
you.
16. Q. Will there be any dividends paid on the stock?
A. The Company currently intends to pay a cash dividend at an annual
rate of approximately 1.5% of the purchase price of $10.00 per
share , or $0.15 per share. The
4
<PAGE>
payment of cash dividends on the Common Stock will be subject to
the requirements of applicable law and the determination by the
Board of Directors of the Company that the net income, capital and
financial condition of the Company, banking industry trends and
general economic conditions justify the payment of dividends. In
addition, from time to time in an effort to manage capital to a
reasonable level, the Board may determine if it is prudent to pay
periodic special cash dividends. Periodic special cash dividends,
if paid, may be paid in addition to, or in lieu of, regular cash
dividends. Like all possible dividends, there can be no assurance
that periodic special cash dividends will be paid or, that, if
paid, will continue to be paid.
17. Q. How much stock do the directors and officers of Iberville intend to
purchase through the Subscription Offering?
A. Directors and executive officers intend to purchase approximately
$380,000 (15.8% at the midpoint of the Offering) of the stock to be
offered in the conversion. The purchase price paid by directors
and officers will be the same as that paid by customers and the
general public.
18. Q. Are the subscription rights transferable to another party?
A. No. Pursuant to federal regulations, subscription rights granted
to Eligible Account Holders, Supplemental Eligible Account Holders,
Other Members and directors, officers and employees may be
exercised only by the person(s) to whom they are granted. Any
person found to be transferring subscription rights will be subject
to the forfeiture of such rights.
19. Q. I closed my account several months ago. Someone told me that I am
still eligible to buy stock. Is that true?
A. If you were an account holder on the Eligibility Record Date
(December 31, 1996), or the Supplemental Eligibility Record Date
(June 30, 1998), you are entitled to purchase stock without regard
to whether you continued to hold your Iberville account.
20. Q. May I obtain a loan from Iberville using stock as collateral to pay
for my shares?
A. No. Federal regulations do not allow Iberville to make loans for
this purpose, but other financial institutions could make a loan
for this purpose.
21. Q. Will the FDIC (Federal Deposit Insurance Corporation) insure the
shares of stock?
A. No. The shares are not and may not be insured by the FDIC.
However, the Savings Association Insurance Fund of the FDIC will
continue to insure savings accounts and certificates of deposit up
to the applicable limits allowed by law.
22. Q. Will there be a market for the stock following the conversion?
5
<PAGE>
A. Neither the Company nor the Association has ever issued stock
before, and due to the relatively small size of the Offering, it is
unlikely that an active and liquid trading market will develop or
be maintained. It is anticipated that quotations will be available
through the OTC Bulletin Board. The Company will request that
Trident Securities undertake to match offers to buy and offers to
sell the Common Stock, and Trident Securities intends to make a
market in the Common Stock. However, purchasers of Common Stock
should have a long-term investment intent and recognize that the
absence of an active and liquid trading market may make it
difficult to sell the Common Stock and may have an adverse effect
on the price.
23. Q. Can I purchase stock using funds in an Iberville IRA account?
A. If you have an IRA at Iberville, you will need to transfer the
account to an independent trustee authorized to hold self-directed
IRA accounts. Please call the Stock Information Center for the
necessary forms. Because it takes several days to process the
necessary IRA forms, it is necessary that any request to transfer
your account be received by ______________, 1998 to accommodate
your order.
ABOUT VOTING "FOR" THE PLAN OF CONVERSION
24. Q. Am I eligible to vote at the Special Meeting of Members to be held
to consider the Plan of Conversion?
A. At the Special Meeting of Members to be held on ___________, 1998,
you are eligible to vote if you are one of the "Voting Members,"
who are holders of Iberville's deposit accounts or mortgage loans
as of the close of business on __________, 1998 (the "Voting Record
Date") for the Special Meeting. However, Association members of
record as of the close of business on the Voting Record Date who
cease to be depositors or borrowers prior to the date of the
Special Meeting are no longer members and will not be entitled to
vote at the Special Meeting. If you are a Voting Member, you
should have received a proxy statement and proxy card with which to
vote.
25. Q. How many votes do I have as a Voting Member?
A. Each account holder as of the close of business on _______, 1998 is
entitled to one vote for each $100 on deposit in such account.
Each borrower who holds eligible borrowings as of such date is
entitled to cast one vote in addition to the number of votes, if
any, he or she is entitled to vote as an account holder. No member
may cast more than 500 votes.
26. Q. If I vote "against" the Plan of Conversion and it is approved, will
I be prohibited from buying stock during the subscription offering?
6
<PAGE>
A. No. Voting against the Plan of Conversion in no way restricts you
from purchasing stock in either the subscription offering or any
community offering.
27. Q. What happens if Iberville does not get enough votes to approve the
Plan of Conversion?
A. Iberville's Conversion would not take place and Iberville Building
and Loan Association would remain a mutual savings and loan
association.
28. Q. As a qualifying depositor or borrower of Iberville, am I required
to vote?
A. No. However, failure to return your proxy card will have the same
effect as a vote "Against" the Plan of Conversion.
29. Q. What is a Proxy Card?
A. A Proxy Card gives you the ability to vote without attending the
Special Meeting in person. You may attend the meeting and vote in
person, even if you have returned your proxy card, if you choose to
do so. However, if you are unable to attend, you still are
represented by proxy.
30. Q. How does the conversion affect me?
A. The conversion is intended, among other things, to assist Iberville
in maintaining and expanding its services to Iberville's customers
and community. By purchasing stock, you will also have the
opportunity to invest in IBL Bancorp, Inc., the holding company
that will own all of the stock of Iberbille. However, there is no
obligation to purchase stock; the purchase of stock is strictly
optional.
31. Q. How can I get further information concerning the stock offering?
A. You may call the Stock Information Center, collect at (504)
___-____ for further information or a copy of the Prospectus, Stock
Order Form, Proxy Statement and Proxy Card.
THIS INFORMATION DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY IBL BANCORP, INC. COMMON STOCK. OFFERS TO BUY OR TO SELL
MAY BE MADE ONLY BY THE PROSPECTUS. IF YOU ARE CONSIDERING PURCHASING STOCK,
YOU SHOULD READ THE PROSPECTUS PRIOR TO MAKING AN INVESTMENT DECISION.
COPIES OF THE PROSPECTUS MAY BE OBTAINED BY CALLING THE STOCK INFORMATION
CENTER AT (504) ___-____ __________________.
THE SHARES OF IBL BANCORP, INC. COMMON STOCK BEING OFFERED ARE NOT
SAVINGS OR DEPOSIT ACCOUNTS AND ARE NOT INSURED BY THE SAVINGS ASSOCIATION
INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
7
<PAGE>
IV. Officer and Director Support Brochure
A. Explanation
An Officer and Director Brochure merely highlights in brochure form the
purchase commitments shown in the Prospectus.
B. Quantity
An Officer and Director brochure is proposed to be sent out in the initial
mailing to all customers of the Association along with the Prospectus.
<PAGE>
DIRECTOR AND EXECUTIVE OFFICER
PURCHASE COMMITMENT
The following table sets forth, for each of the directors and executive
officers of The Iberville Building and Loan Association (and their
associates) and for all of the directors and executive officers as a group,
the proposed purchases of Common Stock, assuming sufficient shares are
available to satisfy their subscriptions. The amounts include shares that
may be purchased through individual retirement accounts.
<TABLE>
<CAPTION>
Number of
Name Shares Amount Percent(1)
---- --------- ------ ----------
<S> <C> <C> <C>
G. Lloyd Bouchereau, Jr.(2) 10,000 $100,000 4.2%
John L.Delahaye(2) 7,500 75,000 3.1
Gary K. Pruitt(2) 7,000 70,000 2.9
Bobby E.Stanley(2) 10,000 100,000 4.2
Edward J. Steinmetz 1,000 10,000 0.4
Danny M. Strickland 2,500 25,000 1 0
------ ------ ----
All directors and executive
officers as a group (six persons) 38,000 $380,000 15.8%
------ ------ ----
------ ------ ----
</TABLE>
_______________
(1) Based upon the midpoint of the Estimated Valuation Range.
(2) Includes shares expected to be purchased by associates.
In addition, an Employee Stock Ownership Plan currently intends to
purchase 8% of the Common Stock issued in the Conversion for the benefit of
officers and employees. Stock options and stock grants may also be granted
in the future to directors, officers and employees upon the receipt of
stockholder approval of the Company's proposed stock benefit plans. See
"Management - New Stock Benefit Plans" in the Prospectus for a description of
these plans.
<PAGE>
V. IRA Mailing
A. Explanation
A special IRA mailing is proposed to be sent to all IRA customers of the
Association in order to alert the customers that funds held in an IRA can
be used to purchase stock. Since this transaction is not as simple as
designating funds from a certificate of deposit like a normal stock
purchase, this letter informs the customer that this process is slightly
more detailed and involves a personal visit to the Association.
B. Quantity
One IRA letter is proposed to be mailed to each IRA customer of the
Association. These letters would be mailed following OTS approval for the
Conversion after each customer has received the initial mailing containing
a Proxy Statement and a Prospectus.
C. Example - See following page.
<PAGE>
Iberville Building and Loan Association Letterhead
________, 1998
Dear Individual Retirement Account Participant:
As you know, Iberville Building and Loan Association ("Iberville" or the
"Association") is in the process of converting from the mutual form of
organization to the stock form of organization and has formed IBL Bancorp,
Inc. (the "Company") to own all of the stock of the Association. Through the
Conversion, certain current and former customers have the opportunity to
purchase shares of common stock of the Company in a Subscription Offering.
The Company currently is offering up to 276,000 shares, subject to
adjustment, of the Company at a price of $10.00 per share.
As the holder of an individual retirement account ("IRA") at the
Association, you have an opportunity to become a stockholder in the Company
using some or all of the funds being held in your IRA. If you desire to
purchase shares of common stock of the Company through your IRA, the
Association can assist you in self-directing those funds. This process can
be done without an early withdrawal penalty and generally without a negative
tax consequence to your retirement account.
If you are interested in receiving more information on self-directing
your IRA, please contact our Stock Information Center at (504) ___-
____________. Because it may take several days to process the necessary IRA
forms, any request to transfer the account should be made by _______, 1998 to
accommodate your interest.
Sincerely,
G. Lloyd Bouchereau, Jr.
President and Chief Executive Officer
This letter is neither an offer to sell nor a solicitation of an offer to buy
IBL Bancorp, Inc. Common Stock. The offer is made only by the Prospectus,
which was recently mailed to you. The shares of IBL Bancorp, Inc. Common
Stock are not deposits or savings accounts and will not be insured by the
Federal Deposit Insurance Corporation or any other governmental agency.
<PAGE>
VI. Counter Cards and Lobby Posters
A. Explanation
Counter cards and lobby posters serve two purposes: (1) As a notice to
the Association's customers and members of the local community that the
stock sale is underway and (2) to remind the customers of the end of the
Subscription Offering. Trident has learned in the past that many people
forget the deadline for subscribing and therefore we suggest the use of
these simple reminders.
B. Quantity
Approximately 2 - 3 Counter cards will be used at teller windows and on
customer service representatives' desk.
Approximately 1 - 2 Lobby posters will be used at the office of the
Association
C. Example
<PAGE>
C. POSTER
OR
COUNTER CARD
IBL Bancorp, Inc.
Proposed Holding Company for
Iberville Building and Loan Association
"STOCK OFFERING MATERIALS
AVAILABLE HERE"
Subscription Offering Ends
_______, 1998
<PAGE>
VII. Invitations
A. Explanation
In order to educate the public about the stock offering, Trident
suggests holding several Community Meetings in various locations. In an
effort to target a group of interested investors, Trident requests that
each Director of the Association submit a list of friends that he would
like to invite to a Community Meeting.
Prospectuses are given to each prospect at the Community meeting.
B. Quantity and Method of Distribution
Each Director submits a list of their prospects. An invitation is
mailed to each director's prospect.
<PAGE>
The Directors, Officers & Employees
of
Iberville Building and Loan Association
cordially invite you
to attend a brief presentation
regarding the stock offering of
IBL Bancorp, Inc.
Please join us at
Place
Address
on
Date
at Time
for hors d'oeuvres
R.S.V.P.
(504)___ - _________________
<PAGE>
VIII. Prospect Letters
A. Explanation
Once the application for Conversion has been approved by the OTS, Trident
will send out a series of three letters to the targeted prospects. These
letters are used to help facilitate the marketing effort to this group. All
prospects will receive a Prospectus as soon as they are available.
B. Method of Distribution
Each Director submits his list of prospects. Each prospect is sent the
series of three letters all during the Subscription and Community Offering.
C. Examples
1. Introductory letter
2. A. Thank you letter
or
B. Sorry you were unable to attend letter
3. Final reminder letter
<PAGE>
Example 1
(Introductory Letter)
(Iberville Building and Loan Association Letterhead)
_______, 1998
Name
Address
City, State, Zip
Dear Name:
You have probably read recently in the newspaper that Iberville Building
and Loan Association ("Iberville" or the "Association") will soon be
converting from mutual to stock form. This Conversion is the biggest step in
the history of the Association in that it allows customers, employee benefit
plans, community members, employees, officers and directors the opportunity
to subscribe for stock in our new holding company - IBL Bancorp, Inc. (the
"Company").
I have enclosed a Prospectus and a Stock Order Form that will allow you
to subscribe for shares and possibly become a charter stockholder of the
Company should you so desire. In addition, we will be holding several
presentations for friends of the Association in order to review the
Conversion and the merits of becoming a charter stockholder of the Company.
You will receive an invitation shortly.
I hope that if you have any questions you will feel free to call me or
the Association's Stock Information Center at (504) ___ - _____________. I
look forward to seeing you at our presentation.
Sincerely,
G. Lloyd Bouchereau, Jr.
President and CEO
The shares of Common Stock offered in the Conversion are not deposits or
savings accounts and are not insured by the Federal Deposit Insurance
Corporation, the Savings Association Insurance Fund or any other
governmental agency.
This is not an offer to sell or a solicitation of an offer to buy stock. The
offer will be made only by the Prospectus.
<PAGE>
Example 2A
(Thank You Letter)
(Iberville Building and Loan Association Letterhead)
___________, 1998
Name
Address
City, State, Zip
Dear Name:
On behalf of the Board of Directors and management of Iberville Building
and Loan Association, I would like to thank you for attending our recent
presentation regarding the stock offering by IBL Bancorp, Inc. We are
enthusiastic about the stock offering and look forward to completing the
Subscription and Community Offerings on _______, 1998.
I hope that you will join me in being a charter stockholder, and once
again thank you for your interest.
Sincerely,
G. Lloyd Bouchereau, Jr.
President and Chief Executive Officer
The shares of Common Stock offered in the Conversion are not savings accounts
or deposits and are not insured by the Federal Deposit Insurance Corporation,
the Savings Association Insurance Fund or any other governmental agency.
This is not an offer to sell or a solicitation of an offer to buy stock. The
offer will be made only by the Prospectus.
<PAGE>
Example 2B
(Sorry You Were Unable to Attend)
(Iberville Building and Loan Association Letterhead)
_______________, 1998
Name
Address
City, State, Zip
Dear Name:
I am sorry you were unable to attend our recent presentation regarding
Iberville Building and Loan Association's Conversion from the mutual form of
organization to the stock holding company form of organization. The Board of
Directors and management are committed to building long term stockholder
value, and as a group we are investing over $380,000 of our own funds in IBL
Bancorp, Inc. We are enthusiastic about the stock offering and look forward
to completing the Subscription and Community Offerings on _______, 1998.
We have established a Stock Information Center to answer any questions
regarding the stock offering. Should you require any assistance between now
and _______, I encourage you either to stop by Iberville Building and Loan
Association or to call our Stock Information Center at (504) ___ -
____________.
I hope you will join me in becoming a charter stockholder of IBL
Bancorp, Inc.
Sincerely,
G. Lloyd Bouchereau, Jr.
President and Chief Executive Officer
The shares of Common Stock offered in the Conversion are not savings accounts
or deposits and are not insured by the Federal Deposit Insurance Corporation,
the Savings Association Insurance Fund or any other governmental agency.
This is not an offer to sell or a solicitation of an offer to buy stock. The
offer will be made only by the Prospectus.
<PAGE>
Example 3
(Final Reminder Letter)
(Iberville Building and Loan Association Letterhead)
___________, 1998
Name
Address
City, State, Zip
Dear Name:
Just a quick note to remind you that the deadline is quickly approaching
for purchasing stock in IBL Bancorp, Inc., the proposed holding company for
Iberville Building and Loan Association. I hope you will join me in becoming
a charter stockholder in Louisiana's newest publicly owned financial
institution holding company.
The deadline for subscribing for shares to become a stockholder is
_______, 1998. If you have any questions, I hope you will call our Stock
Information Center at (504) ___ - ________.
Once again, I look forward to having you join me as a stockholder of IBL
Bancorp, Inc.
Sincerely,
G. Lloyd Bouchereau, Jr.
President and Chief Executive Officer
The shares of Common Stock offered in the Conversion are not savings accounts
or deposits and are not insured by the Federal Deposit Insurance Corporation,
the Savings Association Insurance Fund or any other governmental agency.
This is not an offer to sell or a solicitation of an offer to buy stock. The
offer will be made only by the Prospectus.
<PAGE>
IX. Cover Letters for Initial Mailing
A. Explanation
These cover letters are used as an introduction for the Offering and
Proxy materials mailed to potential investors.
B. Method of Distribution
Appropriate Cover Letters will be sent out in the initial mailing.
B. Examples
<PAGE>
(Iberville Building and Loan Association Letterhead)
August __, 1998
Dear Valued Customer:
Iberville Building and Loan Association is pleased to announce that it
has received regulatory approval to proceed with our plan to convert from the
mutual form of organization to the stock holding company form of
organization. This stock conversion is the most significant event in the
history of Iberville Building and Loan Association in that it allows
customers, community members, directors, officers and employees an
opportunity to own stock in IBL Bancorp, Inc., the proposed stock holding
company for Iberville Building and Loan Association.
We want to assure you that the Conversion will not affect the terms,
balances, interest rates or existing FDIC insurance coverage on deposits at
Iberville, or the terms or conditions of any loans to existing borrowers
under their individual contractual arrangements with Iberville. Let us also
assure you that the Conversion will not result in any changes in the
management, personnel or the Board of Directors of Iberville.
As one of our valued members, you have the opportunity to invest in
Iberville's future by purchasing stock in IBL Bancorp, Inc. during the
Subscription Offering, without paying a sales commission.
If you decide to exercise your subscription rights to purchase shares,
you must return the properly completed stock order form together with full
payment for the subscribed shares so that it is received by Iberville no
later than 12:00 noon, Central Time on September __, 1998.
Enclosed is a proxy card. Your Board of Directors solicits your vote
"FOR" Iberville's Plan of Conversion. A vote in favor of the Plan does not
obligate you to purchase stock. Please sign and return your proxy card
promptly; your vote is important to us.
We have also enclosed a Prospectus and a Proxy Statement which fully
describes Iberville, its management, board and financial strength and the
Plan of Conversion. Please review it carefully before you vote or invest.
For your convenience, we have established a Stock Information Center. If you
have any questions, please call the Stock Information Center collect at (504)
___-____.
We look forward to continuing to provide quality financial services to
you in the future.
Sincerely,
G. Lloyd Bouchereau, Jr.
President
Enclosures
This does not constitute an offer to sell, or the solicitation of an offer to
buy, shares of IBL Bancorp, Inc. common stock offered in the Conversion.
Such offer and solicitation is made only by means of the Prospectus. There
shall be no sale of stock in any state in which any offer, solicitation of an
offer or sale of stock would be unlawful.
THE STOCK IS NOT INSURED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY.
<PAGE>
(Iberville Building and Loan Association Letterhead)
May __, 1998
Dear Friend:
Iberville Building and Loan Association is pleased to announce that it
has received regulatory approval to proceed with our plan to convert from a
mutual form of organization to the stock holding company form of
organization. This stock conversion is the most significant event in the
history of Iberville Building and Loan Association in that it allows
customers, community members, directors, officers and employees an
opportunity to own stock in IBL Bancorp, Inc., the proposed stock holding
company for Iberville Building and Loan Association.
We want to assure you that the Conversion will not affect the terms,
balances, interest rates or existing FDIC insurance coverage on deposits at
Iberville, or the terms or conditions of any loans to existing borrowers
under their individual contractual arrangements with Iberville. Let us also
assure you that the Conversion will not result in any changes in the
management, personnel or the Board of Directors of Iberville.
Our records indicate that you were a depositor of Iberville on either
December 31, 1996 or June 30, 1998 but that you were not a member on ____,
1998. Therefore, under applicable law, you are entitled to subscribe for
Common Stock in the Subscription Offering but are not able to vote on the
Plan of Conversion. Orders submitted by you and others in the Subscription
Offering are contingent upon the approval of the Plan of Conversion at a
special meeting of members to be held on ______, 1998 and upon receipt of all
required regulatory approvals.
If you decide to exercise your subscription rights to purchase shares,
you must return the properly completed stock order form together with full
payment for the subscribed shares so that it is received by Iberville no
later than 12:00 noon, Central Time on September __, 1998.
Enclosed is a Prospectus which fully describes Iberville, its
management, board and financial strength. Please review it carefully before
you invest. For your convenience, we have established a Stock Information
Center. If you have any questions, please call the Stock Information Center
collect at (504) ___-____.
We look forward to continuing to provide quality financial services to
you in the future.
Sincerely,
G. Lloyd Bouchereau, Jr.
President
Enclosures
This does not constitute an offer to sell, or the solicitation of an offer to
buy, shares of IBL Bancorp, Inc. common stock offered in the Conversion.
Such offer and solicitation is made only by means of the Prospectus. There
shall be no sale of stock in any state in which any offer, solicitation of an
offer or sale of stock would be unlawful.
THE STOCK IS NOT INSURED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY.
<PAGE>
TRIDENT SECURITIES, INC.
4601 SIX FORKS ROAD, SUITE 400
RALEIGH, NORTH CAROLINA 27609
TELEPHONE (919) 781-8900
FACSIMILE (919) 787-1670
August __, 1998
To Members and Certain Former Members of
Iberville Building and Loan Association
At the request of IBL Bancorp, Inc. and Iberville Building and Loan
Association, we have enclosed a Prospectus and a Stock Order Form for your
use should you decide to subscribe for shares of common stock of Iberville
Bancorp, Inc. being issued in connection with the conversion of Iberville
Building and Loan Association from the mutual form of organization to the
stock holding company structure, which includes the formation of IBL Bancorp,
Inc. as the new holding company for Iberville Building and Loan Association.
If you decide to exercise your subscription rights to purchase shares,
you must return the properly completed Stock Order Form together with full
payment for the subscribed shares (or appropriate instructions authorizing
withdrawal in such amount from your authorized deposit account(s) at
Iberville) so that it is received no later than noon, Central Time, on
September __, 1998.
IBL Bancorp, Inc. has asked us to forward these documents to you in view
of certain requirements of the securities laws in your state. If you have
any questions, you may contact the Stock Information Center at (504) ___-____.
Very truly yours,
Trident Securities, Inc.
This document does not constitute an offer to sell, or the solicitation of an
offer to buy, shares of IBL Bancorp, Inc. common stock offered in the
conversion, nor does it constitute the solicitation of a proxy in connection
with the conversion. Such offers and solicitations of proxies are made only
by means of the Prospectus and Proxy Statement, respectively. There shall be
no sale of stock in any state in which any offer, solicitation of an offer or
sale of stock would be unlawful.
THE STOCK WILL NOT BE INSURED BY THE FDIC OR ANY GOVERNMENTAL AGENCY.
<PAGE>
Subscription Rights
Special Notice
Any transfer of, or attempt to transfer, a subscription right to
any other person is illegal and subject to civil fines and/or
penalties and even criminal fines and/or penalties. The Iberville
Building and Loan Association intends to prosecute vigorously any
transfer of, or attempt to transfer, subscription rights that comes to
its attention.
If you are (or have been) contacted by anyone offering to give
you money to buy stock in exchange for transferring the stock to them
later or to share in any way the proceeds upon the sale of the stock,
or to transfer your subscription rights in any other way, please call
us immediately at (504) ___-____.
<PAGE>
(Iberville Building and Loan Association Letterhead)
August __, 1998
Dear Voting Member:
The Iberville Building and Loan Association is pleased to announce that
it has received regulatory approval to proceed with our plan to convert from
the mutual form of organization to the stock holding company form of
organization. This stock conversion is a significant event in the history of
The Iberville Building and Loan Association.
We want to assure you that the Conversion will not affect the terms,
balances, interest rates or existing FDIC insurance coverage on deposits at
Iberville, or the terms or conditions of any loans to existing borrowers
under their individual contractual arrangements with Iberville. Let us also
assure you that the Conversion will not result in any changes in the
management, personnel or the Board of Directors of Iberville.
Enclosed is a proxy card. Your Board of Directors solicits your vote
"FOR" Iberville's Plan of Conversion. Please sign and return your proxy card
promptly; your vote is important to us.
We have also enclosed a Prospectus for your information and a Proxy
Statement which fully describes Iberville, its management, board and
financial strength and the Plan of Conversion. Please review it carefully
before you vote. If you have any questions, please call collect at (504)
___-____.
Although you may vote on the Conversion, IBL Bancorp, Inc. (the
"Company") is unfortunately unable to either offer or sell its common stock
to you (i) because the number of eligible subscribers in your state makes
registration or qualification of the common stock or the filing of a consent
to service of process under the securities laws of your state impracticable,
for reasons of cost or otherwise; (ii) because the number of eligible
subscribers in your state makes registration or qualification of the Company,
Iberville or their officers, directors, employees and persons acting on their
behalf as broker-dealers or salesmen in your state impracticable, for reasons
of cost or otherwise, or (iii) because you reside in a foreign country.
Accordingly, neither this letter, the enclosed materials nor the materials
that you may request should be considered an offer to sell or a solicitation
of an offer to buy the Company's common stock.
We look forward to continuing to provide quality financial services to
you in the future.
Sincerely,
G. Lloyd Bouchereau, Jr.
President
Enclosures
This does not constitute an offer to sell, or the solicitation of an
offer to buy, shares of IBL Bancorp, Inc. common stock offered in the
Conversion. Such offer and solicitation is made only by means of the
Prospectus. There shall be no sale of stock in any state in which any offer,
solicitation of an offer or sale of stock would be unlawful.
<PAGE>
IX. Proxygram
A. Explanation
A proxygram is used when the majority of votes needed to adopt the Plan of
Conversion is still outstanding. The proxygram is mailed to those "target
vote" depositors who have not previously returned their signed proxy.
The target vote depositors are determined by the Conversion agent and
registrar.
B. Example
<PAGE>
B. Example
- -------------------------------------------------------------------------------
P R O X Y G R A M
Ponchatoula Homestead Savings, F.A.
Homestead Mutual Holding Company
YOUR VOTE ON OUR PLAN OF CONVERSION HAS NOT BEEN RECEIVED.
YOUR VOTE IS VERY IMPORTANT, PARTICULARLY SINCE FAILURE TO VOTE IS EQUIVALENT
TO VOTING AGAINST THE PLAN.
VOTING FOR THE CONVERSION WILL NOT AFFECT THE INSURANCE OF YOUR ACCOUNT. IT
WILL CONTINUE TO BE INSURED UP TO $100,000 BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION.
YOU MAY PURCHASE STOCK IF YOU WISH, BUT VOTING DOES NOT OBLIGATE YOU TO BUY
STOCK.
PLEASE ACT PROMPTLY! SIGN THE ENCLOSED PROXY CARD AND MAIL, OR DELIVER, THE
PROXY CARD TO PONCHATOULA HOMESTEAD SAVINGS, F.A. TODAY. PLEASE VOTE ALL
PROXY CARDS RECEIVED.
WE RECOMMEND THAT YOU VOTE "FOR" THE PLAN OF CONVERSION AND AGREEMENT AND
PLAN OF REORGANIZATION. THANK YOU.
THE BOARD OF DIRECTORS AND MANAGEMENT OF
PONCHATOULA HOMESTEAD SAVINGS, F.A.
AND HOMESTEAD MUTUAL HOLDING COMPANY
- -------------------------------------------------------------------------------
IF YOU RECENTLY MAILED THE PROXY, PLEASE ACCEPT OUR THANKS AND DISREGARD
THIS REQUEST.
FOR FURTHER INFORMATION CALL (504) ___-____.
