UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the
Quarter Ended September 30, 1995 Commission File Number: 0-12437
One American Corp.
(Exact name of registrant as specified in its charter)
Louisiana 72-0948181
(State or other jurisdiction of (IRS Employer Identification No.)
Incorporation of Organization)
2785 LA Hwy. 20 West
P. O. Box 550
Vacherie, Louisiana 70090-0550
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (504) 265-2265
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $5.00 Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common stock $5 Par Value, 1,351,615 shares outstanding as
of November 10, 1995.
<PAGE>
FORM 10-Q Index
Part I
Financial Information
Financial Statements
Consolidated Balance Sheets,
September 30, 1995, December 31, 1994, and September 30, 1994 3
Consolidated Statements of Income
for the three and nine months ended September 30, 1995 and 1994 4
Consolidated Statements of Changes in Stockholders' Equity
for the nine months ended September 30, 1995 and 1994 5
Consolidated Statements of Cash Flows
for the nine months ended September 30, 1995 and 1994 6
Notes to Consolidated Financial Statements 8
Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Average Balance Sheets and Interest Rate Analysis
for the three months ended September 30, 1995, June 30, 1995,
and September 30, 1994 and for the nine months ended
September 30, 1995 and 1994 20
Interest Differentials
for the three months ended September 30, 1995, June 30,1995,
and September 30, 1994 and for the nine months ended
September 30, 1995 and 1994 22
Part II
Other Information
Legal Proceedings 24
Exhibits and Reports on Form 8-K 24
Management's Responsibility for Financial Reporting 25
Signatures 26
<PAGE>
<TABLE>
Consolidated Balance Sheets
One American Corp. and Subsidiaries
(Unaudited) September 30,December 31, September 30,
1995 1994 1994
<S> <S> <S> <S>
Assets
Cash and Due From Banks $10,706,227 $14,192,548 $10,167,119
Interest Bearing Deposits in Other Banks 298,211 255,819 234,233
Federal Funds Sold and Securities
Purchased Under Resale Agreements 5,550,000 8,200,000 3,500,000
Securities:
Held to Maturity (Fair Value of $18,284,225, $18,305,952,
and $18,843,987, respectively) 18,403,963 18,542,895 18,564,440
Available for Sale (Amortized Cost of $115,516,202,
$111,141,141, and $122,108,775, respectively) 112,518,957 108,896,370 114,883,511
Total Securities 130,922,920 127,439,265 133,447,951
Loans 106,181,595 95,669,811 91,155,550
Less: Allowance for Loan Losses (3,166,406) (3,077,187) (2,987,282)
Loans, Net 103,015,189 92,592,624 88,168,268
Bank Premises and Equipment 8,674,930 8,970,002 8,893,922
Other Real Estate 4 93,706 349,116
Accrued Interest Receivable 1,880,775 1,739,912 1,588,082
Other Assets 2,012,708 2,358,418 1,980,195
Total Assets $263,060,964 $255,842,294 $248,328,886
Liabilities
Deposits:
Noninterest Bearing $44,560,315 $42,599,135 $36,823,899
Interest Bearing 189,060,032 188,263,334 186,994,321
Total Deposits 233,620,347 230,862,469 223,818,220
Accrued Interest Payable 486,667 334,532 284,285
Other Liabilities 640,638 654,013 338,442
Total Liabilities 234,747,652 231,851,014 224,440,947
Stockholders' Equity
Common Stock-$5.00 par value;
Authorized-10,000,000 shares;
Issued-1,500,000 shares 7,500,000 7,500,000 7,500,000
Surplus 5,000,000 5,000,000 5,000,000
Retained Earnings 16,736,333 13,597,361 13,203,747
Unrealized Gain (Loss) on Securities Available for Sale, Net (298,488) (1,481,548) (1,191,275)
Treasury Stock - 148,385 shares at cost (624,533) (624,533) (624,533)
Total Stockholders' Equity 28,313,312 23,991,280 23,887,939
Total Liabilities and Stockholders' Equity $263,060,964 $255,842,294 $248,328,886
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Income
One American Corp. and Subsidiaries Three Months Ended Nine Months Ended
(Unaudited) September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Interest Income
Interest and Fees on Loans $2,582,942 $2,245,888 $7,266,481 $6,249,874
Interest on Securities:
Taxable Interest 1,814,757 1,573,553 5,234,062 4,525,726
Nontaxable Interest 159,560 167,350 474,476 506,672
Total Interest on Securities 1,974,317 1,740,903 5,708,538 5,032,398
Other Interest Income 143,296 93,225 459,481 273,199
Total Interest Income 4,700,555 4,080,016 13,434,500 11,555,471
Interest Expense on Deposits 1,679,180 1,324,407 4,800,793 3,908,274
Net Interest Income 3,021,375 2,755,609 8,633,707 7,647,197
Provision for Loan Losses 100,000 75,000 400,000 275,000
Net Interest Income After
Provision for Loan Losses 2,921,375 2,680,609 8,233,707 7,372,197
Other Income
Service Charges on Deposit Accounts 462,069 437,520 1,383,114 1,248,556
Gain or (Loss) on Securities - - 274,625 822,836
Gain on Purchased Assets 174,802 141,973 908,401 881,344
Other Operating Income 197,324 226,766 525,088 422,706
Total Other Income 834,195 806,259 3,091,228 3,375,442
Income Before Other Expenses 3,755,570 3,486,868 11,324,935 10,747,639
Other Expenses
Salaries and Employee Benefits 1,008,180 986,225 2,975,602 2,863,455
Net Occupancy Expense 260,095 196,756 789,648 671,084
Net ORE Expense (6,073) 1,237 (159,996) (244,497)
Other Operating Expenses 737,884 887,716 2,469,358 2,587,233
Total Other Expenses 2,000,086 2,071,934 6,074,612 5,877,275
Income Before Income Taxes 1,755,483 1,414,934 5,250,323 4,870,364
Applicable Income Taxes 521,601 430,044 1,570,704 1,541,099
Net Income $1,233,883 $984,890 $3,679,619 $3,329,265
Net Income Per Share $0.91 $0.73 $2.72 $2.46
Cash Dividends Per Share $0.20 $0.00 $0.40 $0.00
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Changes in Stockholders' Equity
One American Corp. and Subsidiaries
Nine Months Ended September 30, 1995 and 1994
(Unaudited) 1995 1994
<S> <C> <C>
Common Stock
Balance - Beginning and End of Period $7,500,000 $7,500,000
Surplus
Balance - Beginning and End of Period $5,000,000 $5,000,000
Retained Earnings
Balance - Beginning of Period $13,597,361 $9,874,482
Net Income 3,679,619 3,329,265
Cash Dividends (540,647) -
Balance - End of Period $16,736,333 $13,203,747
Unrealized Gain (Loss) on Securities Available for Sale, Net
Balance - Beginning of Period ($1,481,548) $449,279
Net Change in Unrealized Gain (Loss) 1,183,060 (1,640,554)
Balance - End of Period ($298,488) ($1,191,275)
Treasury Stock
Balance - Beginning and End of Period ($624,533) ($624,533)
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows
One American Corp. and Subsidiaries
Nine Months Ended September 30, 1995 and 1994
(Unaudited) 1995 1994
<S>
Cash Flows From Operating Activities <C> <C>
Net Income $3,679,619 $3,329,265
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Gain on Purchased Assets (908,401) (881,344)
Provision for Depreciation 517,504 491,373
Provision for Loan Loss 400,000 275,000
Accretion on Securities (285,400) (163,180)
Provision (Credit) for Deferred Income Taxes 10,258 (82,117)
(Gain) Loss on Sale of Other Real Estate (153,063) (255,354)
(Gain) Loss on Sale of Equipment 5,745 -
(Gain) Loss on Securities (274,624) (822,836)
Changes in Assets and Liabilities:
(Increase) Decrease in Accrued Interest Receivable (140,863) 348,259
(Increase) Decrease in Other Assets (274,004) (610,708)
Increase (Decrease) in Accrued Interest Payable 152,135 40,427
Increase (Decrease) in Other Liabilities 256,949 238,499
Net Cash Provided by Operating Activities 2,985,855 1,907,284
Cash Flows From Investing Activities
Net (Increase) Decrease in Interest Bearing Deposits (42,392) (234,233)
Maturities or Calls of Securities Available for Sale 43,119,982 86,418,755
Maturities or Calls of Securities Held to Maturity 766,960 270,000
Purchases of Securities Available for Sale (44,516,198) (82,650,430)
Purchases of Securities Held to Maturity (501,860) (4,482,969)
Net (Increase) Decrease in Federal Funds Sold 2,650,000 15,375,000
Net (Increase) Decrease in Loans (9,960,470) (11,925,784)
Proceeds from Sale of Other Real Estate 293,071 561,765
Proceeds from Sale of Premises, Equipment, and Other Assets 40,324 1,999
Purchases of Premises and Equipment (268,501) (803,918)
Net Cash Used in Investing Activities ($8,419,084) $2,530,185
(Continued on next page)
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1995 and 1994
(Continued)
(Unaudited) 1995 1994
<S> <C> <C>
Cash Flows From Financing Activities
Net Increase (Decrease) in Demand Deposits, NOW
and Savings Accounts ($7,594,372)($12,970,011)
Net Increase (Decrease) in Certificates of Deposits 10,352,249 2,026,643
Dividends Paid (810,969) (405,484)
Net Cash Provided (Used) By Financing Activities 1,946,908 (11,348,852)
Decrease in Cash and Cash Equivalents (3,486,321) (6,911,383)
Cash and Cash Equivalents - Beginning of Year 14,192,548 17,078,502
Cash and Cash Equivalents - End of Period $10,706,227 $10,167,119
Supplemental Disclosure of Cash Flow Information:
Income Tax Payments $1,396,000 $770,000
Interest Paid on Deposits $4,648,658 $3,867,847
Noncash Investing Activities:
Other Real Estate Acquired in Settlement of Loans $46,306 $15,589
Noncash Financing Activities:
Change in Unrealized Gain (Loss) on
Securities Available for Sale $1,792,516 ($2,485,688)
Change in Deferred Tax Effect on
Unrealized Gain (Loss) on Securities Available for Sale $609,455 ($845,134)
Dividends Declared and Not Paid $270,323 $-
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
One American Corp. and Subsidiaries
Notes to Consolidated Financial Statements
(UNAUDITED)
Summary of Significant Accounting Policies
The accounting principles followed by One American Corp. and
its wholly-owned Subsidiaries, First American Bank and Trust, and
One American Agency, Inc., are those which are generally
practiced within the banking industry. The methods of applying
those principles conform with generally accepted accounting
principles and have been applied on a consistent basis. The
principles which significantly affect the determination of
financial position, results of operations, changes in
stockholders' equity and cash flows are summarized below.
Presentation - The accompanying unaudited consolidated
interim financial statements do not include all of the
information and footnotes required by generally accepting
accounting principles. Management is of the opinion that the
following unaudited interim financial statements reflect all
normal, recurring accrual adjustments necessary to provide a fair
statement of the results for the interim periods presented. It
is noted that the results of the first nine months ended
September 30, 1995 are no indication of the expected results for
the annual period which ends December 31, 1995. Additional
information concerning the audited financial statements and notes
can be obtained from One American Corp.'s annual report and Form
10-K filed for the period ended December 31, 1994.
Principles of Consolidation - The consolidated financial
statements include the accounts of One American Corp. and its
wholly-owned subsidiaries, First American Bank and Trust, and One
American Agency, Inc. All significant intercompany balances and
transactions have been eliminated. Certain reclassification to
previously published financial statements have been made to
comply with current reporting requirements.
One American Corp., a Louisiana corporation, was
incorporated on May 14, 1982. At a special meeting on December
14, 1982, the stockholders of First American Bank and Trust
(Bank) approved a Joint Agreement of Merger and Plan of
Reorganization by and among the Bank, First American Interim Bank
(FAIB) and One American Corp. On January 21, 1983, the Bank was
merged into FAIB and the surviving Bank, First American Bank and
Trust became a wholly-owned subsidiary of One American Corp.,
through a one-for-one exchange for all of the outstanding common
stock of First American Bank and Trust. The organization has
been accounted for as a pooling-of-interest.
On July 14, 1983, One American Agency, Inc. was incorporated
under the laws of the State of Louisiana. The primary business
of the Agency is the sale of insurance. The Agency is a wholly-
owned subsidiary of One American Corp.
Securities - Securities classified as held to maturity are
those debt securities the Bank has both the intent and ability to
hold to maturity regardless of changes in market conditions,
liquidity needs or changes in general economic conditions. These
securities are carried at cost adjusted for amortization of
premium and accretion of discount, computed by various methods
approximating the interest method over their contractual lives.
Securities classified as available for sale are those debt
securities that the Bank intends to hold for an indefinite period
of time but not necessarily to maturity. Any decision to sell a
security classified as available for sale would be based on
various factors, including significant movements in interest
rates, changes in the maturity mix of the Bank's assets and
liabilities, liquidity needs, regulatory capital considerations,
and other similar factors. Securities available for sale are
carried at fair value. Unrealized gains or losses are reported
as increases or decreases in stockholders' equity, net of the
related deferred tax effect. Realized gains or losses,
determined on the basis of the cost of specific securities sold,
are included in earnings. The Bank does not engage in trading
account activities.
Loans - Loans are stated at principal amounts outstanding,
less unearned income and allowance for loan losses. Interest on
commercial loans is accrued daily based on the principal
outstanding. Interest on installment loans is recognized and
included in interest income using the sum of digits method which
does not differ materially from the interest method.
<PAGE>
The Financial Accounting Standards Board has issued
Statement No. 114, "Accounting by Creditors for Impairment of a
Loan," and Statement No. 118, "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosure, " which
were adopted by the Bank on January 1, 1995. The Statements
generally require impaired loans be measured on the present value
of expected future cash flows discounted at the loan's effective
interest rate, or as an expedient, at the loan's observable
market price or the fair value of the collateral if the loan is
collateral dependent. A loan is impaired when it is probable the
creditor will be unable to collect all contractual principal and
interest payments due in accordance with the terms of the loan
agreement.
The company considers smaller balance, homogeneous loans, as
loans which have an inherent, like type relationship to
installment type credits or loans which may be considered
personal loans in nature. Management determines a loan impaired
or the constitute of shortfall when a loan becomes contractually
180 days delinquent as to principal and interest. Also, any
loans which qualify as troubled debt restructurings are
considered impaired. Once a loan has been considered impaired on
the basis of delinquency, the Bank discontinues the accrual of
interest income. The discontinuance of interest income accrual
by regulatory accounting standards is considered non-accrual of
interest income or non-accrual basis. When interest income
accrual is discontinued, previously recognized but uncollected
interest is reversed to income or charged to the allowance for
loan losses. If the underlying collateral value is sufficient to
cover the principal balance and accrued interest, the Bank may
decide to continue the accrual of interest. The potential for
management to charge off an impaired loan is exercised on a case-
by-case basis taking into consideration collateral value, less
estimated selling costs should collateral exist.
The effect of adopting Financial Accounting Statements No.
114 and No. 118 on the Bank's financial condition and results of
operation was immaterial.
Allowance for Loan Losses - The allowance for loan losses is
an amount which in management's judgment is adequate to absorb
potential losses in the loan portfolio. The allowance for loan
losses is based upon management's review and evaluation of the
loan portfolio. Factors considered in the establishment of the
allowance for loan losses include management's evaluation of
specific loans; the level and composition of classified loans;
historical loss experience; results of examinations by regulatory
agencies; an internal asset review process; expectations of
future economic conditions and their impact on particular
borrowers; and other judgmental factors.
The allowance for loan losses is based on estimates of
potential future losses, and ultimate losses may vary from the
current estimates. These estimates are reviewed periodically,
and as adjustments become necessary, the effect of the change in
estimate is charged to operating expenses in the period incurred.
All losses are charged to the allowance for loan losses when the
loss actually occurs or when management believes that the
collection of the principal is unlikely. Recoveries are credited
to the allowance at the time of recovery.
Bank Premises and Equipment - Bank premises and equipment
are stated at cost less accumulated depreciation. Depreciation
is provided at rates based upon estimated useful service lives
(ten to thirty years for buildings, three to ten years for
equipment) using the straight-line method for financial reporting
purposes and accelerated methods for income tax purposes.
The cost of assets retired or otherwise disposed of and the
related accumulated depreciation are eliminated from the accounts
in the year of disposal and the resulting gains or losses are
included in current operations.
Expenditures for maintenance and repairs are charged to
operations as incurred. Cost of major additions and improvements
are capitalized.
Other Real Estate - Other real estate is comprised of
properties acquired through foreclosure or negotiated settlement.
The carrying value of these properties is lower of cost or fair
value, less estimated selling costs. Loan losses arising from
the acquisition of these properties are charged against the
allowance for loan losses. Any subsequent market reductions
required are charged to other real estate expense. Revenues and
expenses associated with maintaining or disposing of foreclosed
properties are recorded during the period in which they occurred.
<PAGE>
Income Taxes - The provision for income taxes is based on
income as reported in the financial statements after interest
income from state and municipal securities is excluded. Also
certain items of income and expense are recognized in different
time periods for financial statement purposes than for income tax
purposes. Thus provisions for deferred taxes are recorded in
recognition of such timing differences.
Deferred taxes are provided on a liability method whereby
deferred tax assets are recognized for deductible temporary
differences and operating loss and tax credit carryforwards and
deferred tax liabilities are recognized for taxable timing
differences. Temporary differences are the differences between
the reported amounts of assets and liabilities and their bases.
Deferred tax assets are reduced by a valuation allowance when, in
the opinion of management, it is more likely than not that some
portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects
of changes in tax laws and rates on the date of enactment.
The Company and its subsidiaries file a consolidated federal
income tax return. In addition, state income tax returns are
filed individually by the Companies in accordance with state
statutes.
Earnings per Common Share - The Computation of earnings per
share and other per share amounts of common stock is based on the
weighted average number of shares of common stock outstanding
during each period, which is 1,351,615 for the three and nine
month periods ended September 30, 1995 and 1994.
Statement of Cash Flows - For purposes of reporting cash
flows, cash and cash equivalents includes cash on hand and
amounts due from other banks (including cash items in process of
clearing).
Acquisitions - On August 26, 1994, the Bank acquired certain
assets and liabilities of the former Oak Tree Federal Savings
Bank office located in LaPlace, St. John Parish, Louisiana from
the Resolution Trust Corporation (RTC). Pursuant to a Purchase
and Assumption Agreement, the Bank assumed $4,689,917 of deposits
and specific liabilities, and purchased assets having a book
value of $11,997. The Bank purchased the deposits at a premium
of $453,000 or 9.65%. The net premium paid on these deposits is
included in other assets on the balance sheet at September 30,
1995 and is being amortized over fifteen years.
<TABLE>
<CAPTION>
August 26,
1994
<S> <C>
Assets:
Cash $4,224,920
Loans, Net 11,859
Premium Paid on Deposits 453,000
Other Assets 138
Total Assets $4,689,917
Liabilities:
Deposits $4,675,094
Other Liabilities 14,823
Total Liabilities $4,689,917
</TABLE>
The acquisition was accounted for using the purchase method
of accounting, and the results of operations are included in the
consolidated financial statements from the respective date of
acquisition.
<PAGE>
One American Corp. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
September 30, 1995
Third Quarter in Review
Net income for the current quarter of 1995 was $1,233,883
compared to $984,890 for the same quarter of 1994. The increase
in net income is a result of several factors: an increase in net
interest income; an increase in income from gains on purchased
assets; and a reduction in other expenses due to a rebate of FDIC
insurance assessment premiums for the current quarter. Earnings
per common share were $.91 and $.73 for the third quarters of
1995 and 1994, respectively. Return on average assets on an
annualized basis was 1.87% for the current quarter, and 1.57% in
the same quarter of 1994. For third quarters of 1995 and 1994,
return on average equity on an annualized basis was 18.04% and
16.34%, respectively. Cash dividends were $.20 per share for the
current quarter and $.00 for the third quarter of 1994. Other
income was $834,195 in the current quarter and $806,259 in the
third quarter of 1994.
Net interest income (FTE) for the current quarter was
$3,103,573, 9.21% higher than the third quarter of 1994, due to
an increase in the volume of loans which offset an increase in
interest expense. The increased volume of loans is a reult of a
greater loan demand in the Bank's trade area. The net interest
spread (FTE) was 4.30% for the current quarter and same quarter
of 1994.
During the third quarter of 1995, in comparison with the
same quarter of 1994, average loans outstanding increased
$13,805,501 or 15.47% to $103,035,509. Average total deposits
for the current quarter increased $9,360,604 or 4.15% to
$235,113,826 when compared to the average total deposits for the
same quarter of 1994. Average total assets for the current
quarter increased $12,543,817 or 5.00% to $263,486,032 when
respectively compared to the total average assets of the third
quarter of 1994.
Net income for the first nine months of 1995 was $3,679,619,
an increase of $350,354 or 10.52% over the same period of 1994.
Net interest income (FTE) for the first nine months of 1995 was
$8,878,135, an increase of $974, 651 or 12.33% compared to the
same period of 1994. For the first nine months of 1995, in
comparison with the same period in 1994, average loans increased
$15,231,898 or 18.06% to $99,558,013. Average total assets for
the first nine months increased $3,302,111, or 1.29% to
$258,682,000. Earnings per common share were $2.72 and $2.46 for
the first nine months of 1995 and 1994, respectively. Return on
average assets on an annualized basis was 1.90% for the first
nine months of 1995, and 1.74% in the same period of 1994. For
the first nine months of 1995 and 1994, return on average equity
on an annualized basis was 18.51% and 19.74%, respectively. Cash
dividends were $.40 per share for the first nine months of 1995
and $.00 for the same period of 1994.
Earnings Analysis
Net Interest Income - The primary source of earnings for
the Bank is net interest income; the difference between interest
and fees generated from interest-earning assets less interest
expense for interest-bearing liabilities. For analytical
purposes, net interest income is presented on a tax equivalent
basis, using a 34% tax rate. Certain earning assets are exempt
from income taxes, therefore a tax equivalent adjustment is
included so that tax exempt earning assets are tax equivalent and
comparable with other taxable earning assets. The primary
factors that affect net interest income are changes in volume and
mix of earning assets and interest-bearing liabilities, along
with changes in market rates.
Net interest income on a fully tax equivalent basis (FTE)
for the current quarter of 1995 was $3,103,573. Net interest
income (FTE) was $2,941,750 and $2,841,821 respectively, for the
second quarter of 1995 and third quarter of 1994. An increase in
the net interest spread during the current quarter, supported by
a greater increase in yield on earning assets than the increase
in cost of funds accounted for the increase in net interest
income (FTE) of $161,823 over the second quarter of 1995. The
primary cause for the increase in net interest income (FTE) of
<PAGE>
$261,752 for the current quarter compared to the third quarter of
1994 was the increase in volume of loans since the same quarter
of 1994. For the nine month periods of 1995 and 1994, net
interest income (FTE) was $8,878,135 and $7,903,484,
respectively. The increase in net interest income (FTE) over the
nine month period was primarily due to a wider net interest
spread caused by an overall increase in yield in earning assets
which outpaced the cost of funds. Also, increased loan volume
for the periods in mention assisted in the increase in net
interest income.
Earning Assets, Interest Bearing Liabilities, and Net
Interest Spread - During the third quarter of 1995, average
earning assets were $244,388,527, an increase of $4,529,298 or
1.89% over the second quarter of 1995 and a increase of
$10,213,205 or 4.36% from the third quarter of 1994. The trend
in earning assets over the quarters compared shows a shift in the
mix of earning assets toward the loan portfolio from the
securities portfolio as shown in the table Earning Asset
Structure on page 13. Management has strategized to increase the
Bank's earning asset mix to include a greater percentage of
higher yielding loans over lower yielding securities. The Bank's
primary market area of the past produced lower levels of loan
demand than those levels of loan demand provided today given
opportunities from new markets associated with past out - of -
market acquisitions. Management believes the greater loan demand
will exist in the near future due to opportunities that were non-
existent over the last decade caused by economic challenges
experienced in the southeast portion of the state of Louisiana.
However, there is no guarantee that the Bank will continue to
experience the loan growth enjoyed over the last twelve months.
The current loan demand, in the Bank's primary market area,
appears to be the result of an improving economic climate and
lower interest rates compared to years past. The trend over the
quarters compared shows the mix of interest bearing liabilities
shifted to higher interest bearing certificates of deposit from
lower interest bearing savings and NOW accounts and money market
accounts. As an additional note, the Bank has benefited by the
increase in non-interest bearing deposits as a percentage of
total deposits. The growth is attributed to a concerted effort
by the Bank to attract a broader core deposit base consisting of
commercial and personal customers.
For the third quarter of 1995, the average yield on earning
assets was 7.85%, while the average cost of interest bearing
funds was 3.56%, producing a net interest spread (FTE) of 4.30%.
The net interest margin (FTE) was 5.09% for the third quarter of
1995. In comparison, the net interest margin (FTE) for the
second quarter of 1995 was 4.92%. The increase in net interest
margin resulted from an increased yield on earning assets, an
increase in the volume of loans, and an increase in the volume of
noninterest bearing liabilities.
The net interest margin (FTE) for the third quarter of 1994
was 4.87% compared to 5.09% for the current quarter of 1995. The
cost of interest bearing liabilities during the third quarter of
1994 was 2.84%, while the yield on average earning assets was
7.14%, producing a net interest spread of 4.30%. The 72 basis
point increase in the average cost of interest bearing
liabilities from the third quarter of 1994 to the third quarter
of 1995, was offset by the 71 basis point increase in the yield
on interest earning assets for the respective quarters, which
provided for the stable net interest spread at the close of the
third quarter of 1995.
The net interest margin (FTE) was 4.95% for the first nine
months of 1995 and 4.49% for the same period in 1994. Net
interest spread (FTE) for the first nine months of 1995 was 4.23%
a 25 basis point increase from the same period last year. The
yield on average earning assets was 7.63%, 92 basis points
greater than the same period of 1994. The costs of interest
bearing liabilities increased 69 basis points to 3.40%.
The table of Average Balance Sheets and Interest Rate
Analysis for the three month and nine month periods ended
September 30, 1995, June 30, 1995, and September 30, 1994 on
pages 20 and 21, and the corresponding table of Interest
Differentials on page 22 detail the effect a change in average
balance outstanding of assets and liabilities and the change
interest yield and interest costs have on net interest income for
the respective periods. Also, the tables of Earning Asset
Structure and Deposit Structure on page 13 show a more condensed,
descriptive analysis of the common size percentage changes in
earning assets and deposit mix over the quarterly periods
analyzed.
<PAGE>
Provision for Loan Losses
Provision for Loan Losses was $100,000 and $150,000 for the
third and second quarters of 1995 respectively. Provision for
loan losses was $75,000 for the third quarter of 1994.
Provision for loan losses was $400,000 and $275,000 for the first
nine months of 1995 and 1994, respectively.
Net charge-offs (recoveries) were $(820) for the current
quarter, versus net charge-offs of $1,521 for the second quarter
of 1995 and $25,881 for the third quarter of 1994. As a
percentage of average loans, net charge-offs (recoveries) were
insignificant in the current and second quarter of 1995, and
third quarter of 1994. Gross charge-offs as a percentage of
average loans were also insignificant in the current and second
quarter of 1995, and third quarter of 1994. Recoveries as a
percentage of gross charge-offs for the current quarter were
108.62% versus 88.95% and 50.76% respectively for the second
quarter of 1995 and third quarter of 1994.
<TABLE>
<CAPTION>
Earning Asset Structure
Third Quarter 1995 Second Quarter 1995 Third Quarter 1994
% of % of % of
Average Earning Average Earning Average Earning
Balances Assets Balances Assets Balances Assets
<S> <C> <C> <C> <C> <C> <C>
Interest Bearing Deposits $246,168 0.1% $270,170 0.1% $234,026 0.1%
Federal Funds Sold and Securities 8,557,446 3.5% 10,492,825 4.4% 7,754,076 3.3%
Securities
Taxable 121,610,136 49.7% 119,103,682 49.7% 125,644,976 53.7%
Non-Taxable 10,939,267 4.5% 10,669,791 4.4% 11,312,236 4.8%
Loans - Net 103,035,509 42.2% 99,322,761 41.4% 89,230,008 38.1%
Total Earning Assets $244,388,526 100.0% $239,859,229 100.0% $234,175,322 100.0%
Deposit Structure
Third Quarter 1995 Second Quarter 1995 Third Quarter 1994
Average % of Average % of Average % of
Balances Deposits Balances Deposits Balances Deposits
Noninterest Bearing Deposits $45,670,877 19.4% $42,914,358 18.6% $38,441,383 17.0%
NOW Accounts 22,185,704 9.4% 22,456,142 9.7% 22,467,812 10.0%
Savings Accounts 32,687,341 13.9% 32,146,385 13.9% 32,774,938 14.5%
Money Market Deposit Accounts 54,944,929 23.4% 56,388,346 24.5% 61,416,322 27.2%
Certificates of Deposits less than $100,000 71,231,415 30.3% 68,440,442 29.6% 63,280,508 28.0%
Total Core Deposits 226,720,266 96.4% 222,345,673 96.3% 218,380,963 96.7%
Certificates of Deposits greater than $100,000 8,393,560 3.6% 8,560,953 3.7% 7,372,259 3.3%
Total Deposits $235,113,826 100.0% $230,906,626 100.0% $225,753,222 100.0%
Interest Bearing Liabilities as a percentage
of Earning Assets 77.5% 78.4% 80.0%
Core Deposits as a percentage
of Total Average Assets 86.0% 85.7% 87.0%
</TABLE>
<PAGE>
Other Income
Other income including gains and losses from security
transactions for the current quarter was $834,195, a decrease of
$469,940 or 36.03% from $1,304,135 for the prior quarter.
Exclusive of security transactions, other income for the current
quarter decreased $197,487 or 23.67% over the second quarter of
1995.
Gain on purchased assets was $174,802 for the current
quarter, a decrease of $217,028 or 55.39% from the second quarter
of 1995 and an increase of $32,829 or 23.12% when compared to the
third quarter of 1994. These gains are recognition of the
collection of principal on certain doubtful loans acquired as a
result of the bank acquisitions. The Bank continues to pursue
the collection of these doubtful loans. However, the amount of
future gains, if any are indeterminable.
Other operating income for the current quarter was $197,324,
compared to $226,766 for the third quarter of 1994. Included in
other operating income are fees from Bankcard services, safe
deposit box rentals, and other operating fees. Other operating
fees were slightly greater last year.
Gains from security transactions involving held - to -
maturity securities were $0 for the current and second quarter of
1995 and $0 for the third quarter of 1994. Gains from security
transactions involving available - for - sale securities were $0
for the current quarter, compared to $272,454 for the second
quarter of 1995 and $0 for the third quarter of 1994. The Bank
recovered $272,454 as gains from security transactions during the
second quarter of 1995 from Louisiana Agricultural Finance
Authority Bonds and Louisiana Housing Finance Authority Bonds
which were partially written off in accordance with regulatory
directives in May of 1992. More specifics can be found on the
gains recognized from the Guaranteed Investment Contracts in the
discussion section entitled Non-performing Assets.
For the first nine months of 1995, total other income
decreased $284,214 or 8.42% to $3,091,228 compared to the same
period last year. The decrease in total other income represents
an increase of $134,558 or 10.78% in service charges on deposit
accounts, an increase in other operating income of $102,382 or
24.22%, an increase of $27,057 or 3.07% from gain on purchased
assets, offset by a decrease of $548,211 or 66.62% from gains on
security transactions. Any gains associated with held - to -
maturity securities were a result of calls on said securities.
Other Expenses
Other expenses were $2,000,086 for the third quarter of 1995
compared to $2,069,133 for the second quarter of 1995, and
$2,071,934 for the third quarter of 1994. Salaries and employee
benefits were $1,008,180 for the current quarter compared to
$985,992 and $986,225 for the second of 1995 and third quarter of
1994. Net occupancy expense was $260,095 for the current
quarter, compared to $266,563 for the second quarter of 1995 and
$196,756 for the third quarter of 1994. Other operating expenses
were $737,884 for the current quarter, and $855,972 and $887,716,
for the second quarter of 1995 and third quarter of 1994,
respectively.
Net other real estate expense (benefit) was $(6,073) for the
current quarter. This compares to $(39,393) for the second
quarter of 1995 and $1,237, for the third quarter of 1994. Net
other real estate and repossession expense (benefit) is the
difference between operating expense of other real estate and
repossessed assets less the income generated by other real estate
and the net gains from the sale of other real estate and
repossessed assets. For the nine months ended September 30,
1995, other real estate expenses (benefit) totaled $(159,996)
compared to $(244,497) for the same nine month period of 1994.
The 1995 benefit consisted of other real estate expenses totaling
$10,717, which were offset by the income generated from the
operations of other real estate of $17,644, and net gains on the
sale of other real estate and repossessed assets of $153,069.
Management continues to convert these non performing assets to
investable funds at a value which it feels is beneficial to the
earnings of the Bank. Also, management recognizes that the
contribution of the non-recurring income offset of net gains on
the sale of other real estate is going to be less in years to
come due to the reduction of such assets.
<PAGE>
Applicable Income Taxes
Applicable income taxes for the current quarter were
$521,601 compared to $672,424 and $430,044 respectively for the
second quarter of 1995 and third quarter of 1994. Effective tax
rates are 29.71%, 34.55% and 30.39%, respectively. For the first
nine months of 1995 and 1994, applicable income taxes were
$1,570,704 and $1,541,099 respectively, with respective tax rates
of 29.92% and 31.64%. The Company's effective income tax expense
as a percentage of pretax income is different from statutory
rates due to tax-exempt interest income earned from investments
in state and municipal bonds. Interest income from state and
municipal bonds is generally exempt from federal income taxes.
Liquidity
Liquidity management is the process of ensuring that the
Company's asset and liability structure is the proper mix to meet
the withdrawals of its' depositors, and to fund loan commitments
and other funding requirements. Management's primary source of
funds is the Bank's core deposit base. During the current
quarter, average core deposits were approximately $226,720,266 or
96.4% of total average deposits and 86.05% of total average
assets. For a comparison with prior period quarters see the
table entitled Deposit Structure on page 13. Other sources of
liquidity are maturities in the investment portfolio and loan
maturities and repayments. Management continually evaluates the
maturities and mix of its earning assets and interest-bearing
liabilities to monitor its ability to meet current and future
obligations and to achieve maximum net interest income. Due to
the stability of the core deposit base as noted above and the
maturities of the investment portfolio, management does not
anticipate any difficulties in meeting the needs of its
depositors nor the ability to fund future loan commitments.
Interest Rate Sensitivity
Interest rate sensitivity is the sensitivity of net interest
income to changes in the market interest rates. This sensitivity
is produced by the different repricing intervals of interest
earning assets and interest bearing liabilities, changes in the
mix of these assets and liabilities, and the growth of these
assets and liabilities. A measurement of interest rate
sensitivity is the interest rate gap. The gap matches the
repricing of interest rate sensitive assets and liabilities for
selective intervals. The Interest Rate Sensitivity Table on page
16 shows the Company has a cumulative negative gap through one
year, predominately in the 0 to 90 days category. Management is
aware of the interest rate risk in this category, and believes
these deposit liabilities are primarily core deposits and
considers the Company's interest rate risk minimal. Management
regularly reviews the Bank's interest rate exposure and liquidity
position. By making adjustments to its mix of assets and
liabilities, as well as adjustments to its cost of funds during
the year, management strives to minimize interest rate
sensitivity. During 1994 the Bank enhanced its interest rate
risk management tools by becoming a member of the Federal Home
Loan Bank of Dallas. The Federal Home Loan Bank of Dallas
provides the Bank the ability to further match the rates and
maturities of its funding with those of earning assets.
<PAGE>
<TABLE>
Interest Rate Sensitivity Table
September 30, 1995
(Dollars in Thousands)
<CAPTION>
0-90 91-365 1 Year - Over 5 Non-
Days Days 5 Years Years Sensitive Total
<S> <C> <C> <C> <C> <C> <C>
Assets
Securities 48,482 32,312 39,212 10,917 - 130,923
Loans, Net of Unearned Income 12,238 20,633 49,673 19,877 594 103,015
Federal Funds Sold 5,550 - - - - 5,550
Other Assets 298 - - - 23,275 23,573
Total Assets 66,568 52,945 88,885 30,794 23,869 263,061
Liabilities
NOW and Super NOW Deposits 22,346 - - - - 22,346
Insured Money Market Accounts 53,767 - - - - 53,767
Savings Deposits 32,388 - - - - 32,388
Certificates of Deposits over $100,000 4,380 4,584 1,286 - - 10,250
Other Certificates of Deposits 28,644 27,278 14,374 13 - 70,309
Noninterest Bearing Deposits - - - - 44,560 44,560
Other Liabilities - - - - 1,128 1,128
Stockholders' Equity - - - - 28,313 28,313
Total Liabilities and
Stockholders' Equity 141,525 31,862 15,660 13 74,001 263,061
Interest Rate Sensitivity Gap (74,957) 21,083 73,225 30,781 (50,132) -
Cumulative Interest Rate
Sensitivity Gap (74,957) (53,874) 19,351 50,132 -
</TABLE>
Financial Instruments
In the normal course of business the Company enters into
agreements which, for accounting purposes, are considered off -
balance sheet activities. These agreements are loans and lines
of credit commitments to customers to extend credit at specified
rates, duration and purpose. The commitments adhere to normal
lending policy, collateral requirements, and credit reviews.
Available loan commitments at September 30, 1995 were $6,015,321,
compared to $5,933,466 at June 30, 1995, and $5,325,687 at
September 30, 1994. The Bank had letters of credit of $826,042
issued at September 30, 1995 compared to $854,300 at June 30,
1995, and $417,660 at September 30, 1994. Additionally, the Bank
has deposit customers who have credit lines available to them
through their deposit accounts. At September 30, 1995, the
available portion of these credit lines were $627,552. At June
30, 1995, and September 30, 1994, the available portion of these
credit lines were $630,937 and $496,042, respectively. The Bank
reserves the right to rescind these credit lines. These credit
lines provide a source of income to the Bank through service fees
charged and interest earned on balances outstanding. These lines
are regularly reviewed and do not pose a material credit risk to
the Bank. The Bank began issuing credit cards during the third
quarter of 1992. As of September 30, 1995, the aggregate credit
available was $2,581,578. At June 30, 1995 and September 30,
1994, the aggregate available credit was $2,316,016 and
$1,969,999, respectively. To date the Bank does not have
instruments outstanding that can be specifically described as a
financial guarantee which guarantees the performance of a
customer to a third party other than the financial standby
letters of credit described above.
Additionally the Bank has privity to agreements to fund and
sell long term mortgages to third party mortgage companies. In
the past, some of the mortgage loans were sold with recourse of
six months which provided the mortgage companies an option to put
back the mortgage loan to the Bank if the borrower became 60 days
delinquent according to the loan repayment schedule. Put back
options no longer exist between the Bank and the long term
mortgage companies.
<PAGE>
The Bank is not a party to financial instruments defined as
interest rate exchange agreements, financial futures, or
financial options. Therefore, the Bank is not exposed to
interest rate risk in excess of the amount recognized in the
consolidated statements of financial condition as that risk may
apply to interest rate exchange agreements, financial futures, or
financial options.
Securities
Included in the category of Securities of Other US
Government Agencies at September 30, 1995 is $19,600,000 par
value of structured notes, with an amortized cost of $19,611,451
and a fair value of $18,951,575, resulting in an unrealized loss
in the amount of $659,876. The structured notes, which are
issued by US government sponsored agencies, are debt securities
whose cash flows are dependent on one or more indices in ways
that create interest rate risk. The majority of the securities
held as structured notes are considered deleveraged bonds. The
rate on these securities are a fraction of (40 - 50%) a certain
index (10 year CMT or Prime) plus a certain number of basis
points (60 - 170 basis points). These securities are variable in
nature and reprice on a monthly, quarterly, or semi-annual basis.
However, the majority of the securities reprice quarterly. The
prime related securities mature during the second quarter of
1996, while the 10 year CMT securities mature during the first
and second quarter of 1998. A fluctuation in interest rates
should in no way effect the principal balance of these securities
at maturity. Management understands the risks associated with
these types of instruments and has the capability to effectively
monitor the notes activity. Although classified in the available
for sale category, it is management's intention to hold the
structured notes until the notes mature at par value. Based on
the variable nature of said securities and the securities
percentage relationship to earning assets, a +/- 200 basis point
interest rate risk shock on the security class showed minimal
impact on earnings. Further, management is of the opinion that
earning trends indicate the ability to accept any adverse risk
associated with the possible sale of said securities should the
decision to hold the structured notes to maturity change.
Allowance for Loan Losses
The allowance for loan losses was $3,166,406 at September
30, 1995 or 2.98% of loans outstanding. At June 30, 1995, the
allowance for loan losses was $3,065,586 or 3.02% of loans
outstanding and $2,987,282 or 3.28% of loans outstanding at
September 30, 1994. The allowance for loan losses account
represents amounts available for possible future losses based on
modeling and management's evaluation of the loan portfolio. To
ascertain the potential losses in the portfolio, management
reviews past due loans on a monthly basis. Additionally, the
loan review department performs an ongoing review of the loan
portfolio. Loans are reviewed for compliance to the Bank's
lending policy and the borrower's current financial condition and
ability to meet scheduled repayment terms. Based on these
functions and management's knowledge of the Bank's borrowers, the
allowance for loan losses in management's judgment, is adequate
to absorb potential loan losses based on current review of the
quality of the loan portfolio. The Bank has established the
balances in allowance for loan losses in order to accept any
adverse loan relationships which have the potential to occur. As
the Bank's loan - to - deposit relationship continues to
increase, so does the potential to experience adverse loans at a
rate uncommon to the Bank's historical loan loss basis give, the
smaller loan - to - deposit relationships of the past.
Nonperforming Assets
Nonperforming assets include nonaccrual and restructured
loans and other real estate. Generally, loans are considered
nonaccrual when the interest becomes 90 days past due or when
there is uncertainty about the repayment of principal and
interest in accordance with the terms of the loans. Nonaccrual
loans at September 30, 1995, were $593,672, compared to $155,632
at June 30, 1995. At September 30, 1994, nonaccrual loans were
$199,970. Loans past due 90 days and still accruing at September
30, 1995 and June 30, 1994 were $493,940 and $294,216,
respectively. At September 30, 1994, loans past due 90 days and
still accruing were $491,532. At September 30, 1995, nonaccrual
loans were .56% of gross loans outstanding and 18.75% of the
allowance for loan losses. For June 31, 1995 and September 30,
1994, nonaccrual loans were .15% and .22% of gross loans
outstanding and 5.08% and 6.69% of the allowance for loan losses,
respectively.
<PAGE>
Other real estate is properties held for sale acquired
though foreclosure or negotiated settlements of debt. Other real
estate was insignificant at the close of the current and second
quarter of 1995. At December 31, 1994 and September 30, 1994,
other real estate was $93,706 and $349,116, respectively.
The Bank also has approximately $785,592 in par value of
Louisiana Agricultural Finance Authority Bonds and Louisiana
Housing Finance Authority Bonds with a book value of $1, on
nonaccrual status. Under a directive from state regulatory
agencies the original $2,350,000 in par value of the Guaranteed
Investment Contracts were placed on nonaccrual status in May,
1992. Due to the directive, the bonds were written down to $.20
on the dollar or $470,000. While management has written down
these bonds in accordance with regulatory policy as mentioned
above, management continues to feel that the fair value was not
representative of the potential liquidation value of these bonds.
Management is of the opinion that the permanent impairment of the
bonds was not in excess of the prescribed regulatory write downs.
A class action suit was filed on behalf of the bondholders. In
summary, the suit sought a determination of the priority
treatment the bondholders would receive under California statutes
in the liquidation of Executive Life Insurance Company. Under
Priority 5 the Guaranteed Investment Contracts (GICs), which
support the municipal bonds, would be treated as insurance
policies and would have the same payout ratio as other policies.
Under Priority 6, the GICs would have the status of a general
unsecured creditor. On November 15, 1992, the Superior Court in
California ruled the GICs were a Priority 5. As a result of
pending litigation, continued settlement proposals are taking
place between the guarantors of the bonds and the bondholders.
To date, the Bank has recovered approximately $1,564,408 as
partial payments of the $2,350,000 in original par value. Of the
$1,564,408, $1,094,409 were recognized as gains on securities
available for sale since the original write down. The remaining
$469,999 was applied against the book value leaving the bonds
with a carrying value of $1. Of the $1,094,409 in gains
recognized since the write down, $821,955 were recognized in the
year 1994 and $272,454 has been recognized thus far in the
current year. The Bank continues to pursue the collection of
principal on these securities. However, the amount of any future
fulfillment of these collection actions remain uncertain.
Regulatory Matters
The Bank is subject to various capital requirements
administered by the federal Banking agencies. Failure to meet
minimum capital requirements can initiate certain mandatory - and
possibly discretionary - actions by regulators that, if
undertaken, could have a material effect on the Bank's financial
statements. Various regulations require the Bank to meet
specific capital adequacy guidelines that involve quantitative
measures of the Bank's assets, liabilities, and certain off -
balance - sheet items as calculated under regulatory accounting
practices. The Bank's capital classification is also subject to
qualitative judgments by the regulators about components, risk
weightings, and other factors. Quantitative measures established
by regulation to ensure capital adequacy require the Bank to
maintain minimum amounts and ratios as set forth in the section
entitled Capital Adequacy below.
Management is unaware, regulatory or otherwise, of any known
trends, events or uncertainties which are reasonably likely to
have or will have a material effect on the Company's liquidity,
capital resources, or results of operations.
Capital Adequacy
The strength of a company is measured by the company's
capital, earnings history, asset quality, and management.
Capital can be increased by the retention of earnings and
issuance of equity stock. Management feels the current trend of
earnings and dividend distribution is sufficient to maintain its
capital adequacy requirements.
The Bank is required to maintain minimum amounts of capital
to total risk-weighted assets, as defined by the regulators. The
guidelines require total capital of 8.00%, half of which must be
Tier 1 capital. The computation of risk-weighted ratios follow
the transitional rule, which currently does not include the
unrealized gain (loss) on securities available for sale in Tier 1
capital.
The leverage ratio consists of Tier 1 capital as a
percentage of average total assets. The minimum leverage ratio
for all banks and bank holding companies is 3.00%. This minimum
<PAGE>
ratio is dependent upon the strength of the individual bank or
holding company and may be increased by regulatory authorities on
an individual basis. The 3.00% minimum was established to make
certain that all banks have a minimum capital level to support
their assets, regardless of risk profile. The regulators have
not yet established minimum leverage ratios for the Company. As
shown in the table Capital Adequacy Ratios below, the Company's
ratios for the reporting periods exceed regulatory minimums.
<TABLE>
Capital Adequacy Ratios
(Dollars in Thousands) September 30, December 31, September 30,
1995 1994 1994
<S> <C> <C> <C>
Tier 1 Capital:
Stockholders' Equity $28,611 $25,473 $25,079
Tier 2 Capital:
Allowance for Loan Losses 1,536 1,360 1,304
Total Capital $30,147 $26,833 $26,383
Risk-Weighted Ratios:
Tier 1 Capital 23.60% 23.42% 24.04%
Total Capital 24.87% 24.67% 25.29%
Leverage Ratio 10.86% 10.01% 10.01%
Stockholders' Equity 10.88% 9.96% 10.10%
</TABLE>
The Company's dividends are determined by its Board of
Directors. The current policy is to maintain dividends at a
level which ensures that the Company is able to maintain
sufficient regulatory capital levels. The Company's primary
source of funds is the dividend received from the Bank. Under
current dividend limitations, the Bank could pay in dividends
without regulatory approval approximately $5,629,724. The
Company carries no debt, therefore future liquidity needs are
limited to the payment of any declared dividends. Should a
regulatory agency limit the Bank from paying dividends, the
Company maintains sufficient liquidity to maintain its
operations.
<PAGE>
<TABLE>
AVERAGE BALANCE SHEETS AND INTEREST RATE ANALYSIS
<CAPTION>
Third Quarter 1995 Second Quarter 1995
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest Bearing Deposit Accounts $246,168 $3,862 6.29% $270,170 $4,065 6.03%
Federal Funds Sold and Securities
Purchased under Resale Agreements 8,557,446 126,534 5.93% 10,492,825 155,885 5.96%
Securities:
Taxable 121,610,136 1,827,657 6.03% 119,103,682 1,744,329 5.87%
Non-Taxable* 10,939,267 241,758 8.86% 10,669,791 236,215 8.88%
Loans - Net 103,035,509 2,582,942 10.05% 99,322,761 2,415,448 9.75%
Total Earning Assets $244,388,526 $4,782,753 7.86%$239,859,229 $4,555,942 7.62%
Allowance for Loan Losses (3,108,887) (2,966,898)
Nonearning Assets 22,206,393 22,684,003
Total Assets $263,486,032 $259,576,334
Liabilities and Stockholders' Equity
NOW Accounts $22,185,704 $119,248 2.16% $22,456,142 $123,061 2.20%
Savings Accounts 32,687,341 207,777 2.55% 32,146,385 202,765 2.53%
Money Market Deposit Accounts 54,944,929 388,021 2.83% 56,388,346 398,059 2.83%
Certificates of Deposits less than $100,000 71,231,415 844,886 4.76% 68,440,442 787,170 4.61%
Certificates of Deposits greater than $100,000 8,393,560 119,248 5.70% 8,560,953 103,137 4.83%
Total Interest Bearing Liabilities $189,442,949 $1,679,180 3.56%$187,992,268 $1,614,192 3.44%
Noninterest Bearing Deposits 45,670,877 42,914,358
Other Liabilities 1,020,785 979,344
Stockholders' Equity 27,351,421 27,690,364
Total Liabilities and Stockholders' Equity $263,486,032 $259,576,334
Net Interest Income - Tax Equivalent Basis* 3,103,573 2,941,750
Tax Equivalent Adjustment (82,197) (77,202)
Net Interest Income $3,021,376 $2,864,548
Net Interest Income - Spread* 4.30% 4.18%
Net Interest Income as a % of Total Earning Assets* 5.09% 4.92%
*Tax Equivalent Basis - 34% Rate for the periods dated
</TABLE>
<PAGE>
<TABLE>
AVERAGE BALANCE SHEETS AND INTEREST RATE ANALYSIS
<CAPTION>
Third Quarter 1994
AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE
<S> <C> <C> <C>
Assets
Interest Bearing Deposit Accounts $234,026 $2,504 4.29%
Federal Funds Sold and Securities
Purchased under Resale Agreements 7,754,076 85,996 4.45%
Securities:
Taxable 125,644,976 1,578,279 5.04%
Non-Taxable* 11,312,236 253,561 8.99%
Loans - Net 89,230,008 2,245,888 10.10%
Total Earning Assets $234,175,322 $4,166,228 7.14%
Allowance for Loan Losses (2,967,456)
Nonearning Assets 19,734,348
Total Assets $250,942,214
Liabilities and Stockholders' Equity
NOW Accounts $22,467,812 $120,501 2.15%
Savings Accounts 32,774,938 208,542 2.55%
Money Market Deposit Accounts 61,416,322 414,922 2.71%
Certificates of Deposits less than $100,000 63,280,508 515,811 3.27%
Certificates of Deposits greater than $100,000 7,372,259 64,631 3.52%
Total Interest Bearing Liabilities $187,311,839 $1,324,407 2.84%
Noninterest Bearing Deposits 38,441,383
Other Liabilities 1,080,292
Stockholders' Equity 24,108,700
Total Liabilities and Stockholders' Equity $250,942,214
Net Interest Income - Tax Equivalent Basis* 2,841,821
Tax Equivalent Adjustment (86,217)
Net Interest Income $2,755,604
Net Interest Income - Spread* 4.30%
Net Interest Income as a % of Total Earning Assets* 4.87%
*Tax Equivalent Basis - 34% Rate for the periods dated
</TABLE>
<PAGE>
<TABLE>
AVERAGE BALANCE SHEETS AND INTEREST RATE ANALYSIS
<CAPTION>
September 30, 1995 September 30, 1994
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest Bearing Deposit Accounts $251,406 $11,427 6.08% $145,805 $3,581 3.28%
Federal Funds Sold and Securities
Purchased under Resale Agreements 9,409,202 411,773 5.85% 9,732,198 264,892 3.64%
Securities:
Taxable 119,538,470 5,270,343 5.89% 129,918,783 4,525,726 4.66%
Non-Taxable* 10,821,364 718,904 8.88% 11,396,755 767,685 9.01%
Loans - Net 99,558,013 7,266,481 9.76% 84,326,115 6,249,874 9.91%
Total Earning Assets $239,578,455 $13,678,928 7.63%$235,519,656 $11,811,758 6.71%
Allowance for Loan Losses (2,991,104) (2,869,649)
Nonearning Assets 22,094,649 22,729,883
Total Assets $258,682,000 $255,379,890
Liabilities and Stockholders' Equity
NOW Accounts $22,514,071 $370,263 2.20% $23,303,477 $372,136 2.14%
Savings Accounts 32,096,490 604,946 2.52% 32,874,281 620,454 2.52%
Money Market Deposit Accounts 57,339,532 1,222,526 2.85% 66,326,231 1,297,299 2.62%
Certificates of Deposits less than $100,000 68,521,229 2,318,410 4.52% 62,488,851 1,436,958 3.07%
Certificates of Deposits greater than $100,000 8,091,502 284,648 4.70% 7,670,759 181,427 3.16%
Total Interest Bearing Liabilities $188,562,824 $4,800,793 3.40%$192,663,599 $3,908,274 2.71%
Noninterest Bearing Deposits 42,722,927 39,342,479
Other Liabilities 893,459 880,737
Stockholders' Equity 26,502,790 22,493,075
Total Liabilities and Stockholders' Equity $258,682,000 $255,379,890
Net Interest Income - Tax Equivalent Basis* 8,878,135 7,903,484
Tax Equivalent Adjustment (244,428) (256,287)
Net Interest Income $8,633,707 $7,647,197
Net Interest Income - Spread* 4.23% 4.00%
Net Interest Income as a % of Total Earning Assets* 4.95% 4.49%
*Tax Equivalent Basis - 34% Rate for the periods dated
</TABLE>
<PAGE>
<TABLE>
INTEREST DIFFERENTIALS
<CAPTION>
Nine Months Ended
Third Quarter 1995 Third Quarter 1995 September 30, 1995
vs vs vs
Second Quarter 1995 Third Quarter 1994 September 30, 1994
Change due to Total Change due to Total Change due to Total
Volume Rate Change Volume Rate Change Volume Rate Change
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Earning Assets:
Interest Bearing Deposit Accounts ($361) $158 ($203) $130 $1,228 $1,358 $2,594 $5,252 $7,846
Federal Funds Sold (28,753) (598) (29,351) 8,910 31,628 40,538 (8,791) 155,672 146,881
Securities:
Taxable 36,708 46,620 83,328 (50,683) 300,061 249,378 (361,599)1,106,216 744,617
Non-Taxable* 5,966 (423) 5,543 (8,360) (3,443) (11,803) (38,758) (10,023) (48,781)
Loans 90,291 77,203 167,494 347,480 (10,426) 337,054 1,128,920 (112,313)1,016,607
Total Interest Income 103,851 122,960 226,811 297,477 319,048 616,525 722,366 1,144,804 1,867,170
Interest Bearing Liabilities:
NOW Accounts (1,482) (2,331) (3,813) (1,513) 260 (1,253) (12,606) 10,733 (1,873)
Savings Accounts 3,412 1,600 5,012 (557) (208) (765) (14,680) (828) (15,508)
Money Market Deposit Accounts (10,189) 151 (10,038) (43,720) 16,819 (26,901) (175,774) 101,001 (74,773)
Certificates of Deposits less than $100,000 32,100 25,616 57,717 64,809 264,266 329,075 138,717 742,735 881,452
Certificates of Deposits greater than $100,000 (2,017) 18,128 16,111 8,954 45,663 54,617 9,951 93,270 103,221
Total Interest Expense 21,824 43,164 64,989 27,973 326,800 354,773 (54,392) 946,911 892,519
Increase (Decrease) in
Interest Differential $82,027 $79,796 $161,823 $269,504 ($7,752)$261,752 $776,758 $197,893 $974,651
*Tax Equivalent Basis - 34% Rate for the periods dated
</TABLE>
<PAGE>
Part II
Item 1. Legal Proceedings
During 1991, the Company filed suit against its insurer,
Fidelity & Deposit Co. of Maryland, under the forgery or
alteration clause of its financial institution bond. The suit
was the result of having obtained counterfeit collateral from
foreclosure on a charged-off loan. The Twenty-ninth Judicial
District Court for the Parish of St. Charles, State of Louisiana
awarded a $500,000 judgment in favor of the Bank, which has not
been recorded in these financial statements . The Fifth Circuit
court of Appeal of Louisiana upheld the district court judgment
in favor of the Bank. The insurer has applied for a writ of
certiorari to the Louisiana Supreme Court, asking the court to
reverse the decision of the Fifth Circuit Court of Appeal. The
Louisiana Supreme Court has not yet decided whether it will hear
the case.
In addition, during the normal course of business, the
Company is involved in various legal proceedings. In the opinion
of management and counsel, any liability resulting from such
proceedings would not have a material adverse effect on the
Company's financial statements.
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
None
Management's Responsibility for Financial Reporting
The management of One American Corp. and Subsidiaries is
responsible for the preparation of the financial statements,
related financial data and other information in this quarterly
report. The financial statements are prepared in accordance with
generally accepted accounting principles and include some amounts
that are necessarily based on management's informed estimates and
judgments, with consideration given to materiality. All
financial information contained in this quarterly report is
consistent with that in the financial statements.
Management fulfills its responsibility for the integrity,
objectivity, consistency and fair presentation of the financial
statements and financial information through an accounting system
and related internal accounting controls that are designed to
provide reasonable assurance that assets are safeguarded and that
transactions are authorized and recorded in accordance with
established policies and procedures. The concept of reasonable
assurance is based on the recognition that the cost of a system
of internal accounting controls should not exceed the related
benefits. As an integral part of the system of internal
accounting controls, One American Corp. and Subsidiaries has a
professional staff who monitors compliance with and assess the
effectiveness of the system of internal accounting controls and
coordinate audit coverage with the independent public
accountants.
The Audit Committee of the Board of Directors, composed
solely of outside directors, meets periodically with management,
and the independent public accountants to review matters relating
to financial reporting, internal accounting control and the
nature, extent and results of the audit effort. The independent
public accountants have direct access to the Audit Committee with
or without management present.
The financial statements as of December 31, 1994, were
examined by Hannis T. Bourgeois & Co., L. L. P. independent
public accounts, who rendered an independent professional opinion
on the financial statements prepared by management. The
financial statements as of September 30, 1995, have not been
reviewed by Hannis T. Bourgeois & Co., L. L. P.
Signatures
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
One American Corp.
By:____________________________
J. B. Falgoust, President
_______________________________
Date
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<PERIOD-TYPE> 9-MOS
<CASH> 10706227
<INT-BEARING-DEPOSITS> 598211
<FED-FUNDS-SOLD> 5550000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 112518957
<INVESTMENTS-CARRYING> 18403963
<INVESTMENTS-MARKET> 18284225
<LOANS> 106181595
<ALLOWANCE> 3166406
<TOTAL-ASSETS> 263060964
<DEPOSITS> 233620347
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1127305
<LONG-TERM> 0
<COMMON> 7500000
0
0
<OTHER-SE> 20813312
<TOTAL-LIABILITIES-AND-EQUITY> 263060964
<INTEREST-LOAN> 7266481
<INTEREST-INVEST> 5708538
<INTEREST-OTHER> 459481
<INTEREST-TOTAL> 13434500
<INTEREST-DEPOSIT> 11427
<INTEREST-EXPENSE> 4800793
<INTEREST-INCOME-NET> 8633707
<LOAN-LOSSES> 400000
<SECURITIES-GAINS> 274624
<EXPENSE-OTHER> 6074612
<INCOME-PRETAX> 5250323
<INCOME-PRE-EXTRAORDINARY> 5250323
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3679619
<EPS-PRIMARY> 2.72
<EPS-DILUTED> 2.72
<YIELD-ACTUAL> 7.63
<LOANS-NON> 593672
<LOANS-PAST> 493940
<LOANS-TROUBLED> 298197
<LOANS-PROBLEM> 2673247
<ALLOWANCE-OPEN> 3077187
<CHARGE-OFFS> 389526
<RECOVERIES> 78745
<ALLOWANCE-CLOSE> 3166406
<ALLOWANCE-DOMESTIC> 2897043
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 269363
</TABLE>
