SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the
Fiscal Year Ended December 31, 1995
One American Corp 0-12437
(Exact name of registrant as specified in its charter)
(Comm. File No.)
Louisiana 72-0948181
(State or other jurisdiction of (I.R.S. Employer
Incorporation of Organization) Identification No.)
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)265-4061
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 by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
State the aggregate market value of the voting stock held by
non-affiliates of the registrant: $37,845,220.00 (1,351,615
Shares @ $28.00 per share)*
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 March 14, 1996.
Documents Incorporated by Reference
Document Part of Form 10-K
Definitive Proxy Statement for 1996 Part I and Part III
Annual Meeting of Stockholders
*For purposes of the computation, shares owned by executive
officers, directors and 5% shareholders have been excluded.
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Part I
Item 1 Description of Business 4
Supplemental Financial Information:
Average Balance Sheets and Interest Yield Analysis 8
Interest Differential 8
Securities Portfolio 8
Loan Portfolio 9
Non-Performing Loans 9
Summary of Loan Loss Experience 9
Deposits 9
Return on Equity and Assets 10
Item 2 Description of Properties 10
Item 3 Legal Proceedings 10
Item 4 Submission of Matters to a Vote of Security Holders 10
Part II
Item 5 Market for the Registrant's Common Stock
and Related Security Holder Matters 11
Item 6 Selected Financial Data 12
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operation 14
Item 8 Financial Statements and Supplementary Data 29
Item 9 Disagreements on Accounting and Financial Disclosures 53
Part III
Item 10 Directors and Executive Officers of the Registrant 53
Item 11 Executive Compensation 53
Item 12 Security Ownership of Certain Beneficial Owners and
Management 53
Item 13 Certain Relationships and Related Transactions 53
Part IV
Item 14 Exhibits, Financial Statement Schedules and Reports
On Form 8-K 53
Signatures 54
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Part I
Item 1. Business
The Registrant
One American Corp., (the "Company") was incorporated in
Louisiana on May 14, 1982. At a special meeting on December 14,
1982, the stockholders of First American Bank and Trust, (the
"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 the Company
through a one-for-one exchange for all of the outstanding common
stock (150,000 shares) of the Bank. The reorganization has been
accounted for as a pooling-of-interests. The Company is now
engaged, through its subsidiary, in the banking business. The
Bank is the Company's principal asset and primary source of
revenue.
On July 14, 1983, One American Agency, Inc. (the "Agency")
was incorporated under the laws of the State of Louisiana. The
Agency issued all of its outstanding common stock (100 shares) to
the Company, and became a wholly-owned subsidiary of the Company.
Through its subsidiary, the Company is now engaged in the
insurance agency business. The Agency is neither the Company's
principal asset, nor a primary source of revenue.
The Bank
The Bank (formerly Bank of Vacherie) was incorporated under
the laws of the State of Louisiana on December 3, 1910, and was
licensed by the Louisiana State Banking Department and commenced
operations as a Louisiana State chartered bank on February 11,
1911. The name of the bank was changed from Bank of Vacherie to
First American Bank and Trust on January 17, 1978. The Bank's
securities consist of one class of common stock of which there
were 150,000 shares held 100% by its parent, the Company, as of
March 9, 1995.
The Bank presently has a main office at LA Highway 20 West,
Vacherie, St. James Parish, Louisiana, and thirteen branch
offices. Three branches are located in St. James Parish in the
cities of Gramercy, Vacherie, and Lutcher. One branch is located
in Lafourche Parish in the city of Thibodaux. Five branches are
located in St. Charles Parish in the cities of Boutte, Des
Allemands, Luling, Norco, and two in St. Rose. Two branches are
located in Jefferson Parish, one in the city of Kenner, the other
in Metairie. One branch is located in St. John Parish in the
city of LaPlace. The branches located in St. James Parish were
approved on July 9, 1969, November 11, 1974, July 30, 1979, April
16, 1984, respectively, by the Commissioner of Financial
Institutions of the State of Louisiana and by the Federal Deposit
Insurance Corporation. The Thibodaux branch was approved on July
7, 1988, by the Commissioner of Financial Institutions of the
State of Louisiana, and on July 5, 1988, by the Federal Deposit
Insurance Corporation. The five branches located in St. Charles
Parish were acquired from the Federal Deposit Insurance
Corporation on November 2, 1989, and were approved on this date
by the Commissioner of Financial Institutions of the State of
Louisiana, and the Federal Deposit Insurance Corporation. The
two branches located in Jefferson Parish were acquired from the
Federal Deposit Insurance Corporation on February 14, 1991, and
were approved on this date by the Commissioner of Financial
Institutions of the State of Louisiana, and the Federal Deposit
Insurance Corporation. The one branch located in St. John Parish
was acquired from the Resolution Trust Corporation on August 26,
1994, and was approved on this date by the Commissioner of
Financial Institutions of the State of Louisiana, and the Federal
Deposit Insurance Corporation.
The Bank is engaged in primarily the same business
operations as any independent commercial bank, with special
emphasis in retail banking, including the acceptance of checking
and saving deposits, and the making of commercial, real estate,
personal, home improvement, automobile and other installment and
term loans. The Bank also offers, among services, travelers'
cheques, safe deposit boxes, note collection, escrow and other
customary bank services to its customers, with the exception of
trust services. In addition, the Bank offers drive-up teller
services, automated teller machines and night depository
facilities. First American Bank and Trust is insured under the
Federal Deposit Insurance Act; but, is not a member of the
Federal Reserve System.
The three main areas in which the Bank has directed its
lending activity are (1) real estate loans; (2) loans to
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individuals for household, family and other consumer
expenditures; and (3) commercial loans. As of December 31, 1995,
these three categories accounted for approximately 76.9%, 11.4%
and 11.7%, respectively, of the Bank's loan portfolio. (See Note
E in the 1995 Form 10-K section titled "Financial Statements and
Supplementary Data" for a detailed analysis of the loan
portfolio.)
The majority of the Bank's deposits are from individuals,
farmers, and small business-related sources. The average deposit
balance is relatively small. This makes the Bank less subject to
the adverse effects from the loss of a substantial depositor who
may be seeking higher yields in other markets, or have need of
money on deposit in the Bank. In addition to the deposits
mentioned above, the Bank is a depository for some governmental
agencies. The time deposit and money market balances of all
State and Political Subdivisions were $7.2 million, interest
bearing demand deposits of $7.1 million, and non-interest bearing
demand deposits of $1.5 million as of December 31, 1995. These
depositors are considered by management to be important to the
Bank. Although no agreement or understanding exist between these
customers and the Bank, management has no reason to believe that
these time deposit balances will substantially decrease or
increase. In connection with the deposits of these State and
Political Subdivisions, the Bank is required to pledge securities
to secure such deposits (except for the first $100,000 of such
deposits, which is insured by the Federal Deposit Insurance
Corporation).
As of December 31, 1995, the Bank had 13,347 demand deposit
accounts with a total balance of $44.7 million; 1,208 NOW and
Super NOW accounts with a total balance of $24.2 million; 2,704
Insured Money Market Accounts with a balance of $55.9 million;
13,485 savings accounts with a total balance of $32.5 million;
and 5,830 other time deposit accounts with a total balance of
$82.4 million.
There are no securities held by the Bank that are subject to
repurchase agreements.
The Bank holds no patents, registered trademarks, licenses
(other than licenses required to be obtained from appropriate
bank regulatory agencies), franchises or concessions. There has
been no significant change in the kinds of services offered by
the Bank during the last three fiscal years.
The Bank has not engaged in any research activities relating
to the development of new services or the improvement of existing
services except in the normal course of the business activities.
The Bank presently has no plans for any new line of business
requiring the investment of a material amount to total assets.
Most of the Bank's business originates from within the
parishes of St. James, St. Charles, Jefferson, Lafourche, and St.
John, Louisiana; however, some business is obtained from the
parishes immediately surrounding these parishes. There has been
no material effect upon the Bank's capital expenditures,
earnings, or competitive position as a result of federal, state,
or local environmental regulations.
The Agency
The Agency was incorporated under the laws of the State of
Louisiana on July 14, 1983. The Agency was approved and began
operations on November 25, 1983. The Agency's securities consist
of one class, common stock, of which there were 100 shares held
100% by its parent, One American Corp., as of March 14, 1996.
The Agency operates out of the main office of the Bank at LA
Highway 20 West, Vacherie, St. James Parish, Louisiana.
The Agency provides general insurance agent services for the
Company and its subsidiaries. The Agency also provides agent
services in relation to credit life and accident and health
insurance that is directly related to the extension of credit of
other financial services of the Bank.
Competition
The Company's general market area contains approximately 121
thousand households. It's primary market place consists of St.
James Parish, St. John Parish, St. Charles Parish, the northern
part of Lafourche Parish, and the east bank of Jefferson Parish,
all located in Louisiana. These parishes have experienced little
population growth over the last several years.
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In the primary market area, there are several banks and
branches of savings and loan institutions aggressively pursuing
loans, deposits and other accounts.
Interest rates on loans made and deposits received were
mostly deregulated by law in 1983, but are substantially the same
among banks operating in the area served. Competition among
banks for loan customers is generally governed by such factors as
loan terms other than interest charges, restrictions on borrowers
and compensating balances, and the services offered by the bank.
Competition for deposits is governed primarily by the services
offered, including convenience of location.
In addition federal regulations have significantly broadened
the powers of savings and loan institutions with the result that
such institutions may now engage in certain activities formerly
permitted only to banks. The Company has experienced no major
effects from this legislation at this time.
Employees
The Company has approximately 140 full time employees, and
12 part-time employees. Management considers its relationship
with the employees to be good.
Supervision and Regulation
The Company is a bank holding company within the meaning of
the Bank Holding Company Act of 1956 (the "Act"), as amended, is
subject to the provisions of the Act and to regulation by the
Board of Governors of the Federal Reserve System (the "Board").
The Act requires the Company to file with the Board annual
reports containing such information as the Board may require.
The Board is authorized by the Act to examine the Company and all
of its activities. The activities that may be engaged in by the
Company and its subsidiaries are limited by the Act to those
closely related to banking or managing or controlling banks as to
be a proper incident thereto. In determining whether a
particular activity is a proper incident to banking or managing
or controlling banks, the Board must consider whether its
performance by an affiliate of a holding company can reasonably
be expected to produce benefits to the public, such as
convenience, increased competition, or gains in efficiency that
outweigh possible adverse effects, such as undue concentration of
resources, unfair competition, conflicts of interest, or unsound
banking practices.
The Board has adopted regulations implementing the
provisions of the Act with respect to the activities of bank
holding companies. Such regulations reflect a determination by
the Board that the following activities are permissible for bank
holding companies: (1) making, for its own account or for the
account of others, loans such as would be made, for example, by a
mortgage, finance or factoring company; (2) operating as an
industrial bank; (3) servicing loans; (4) acting as a fiduciary;
(5) acting as an investment or financial advisor, including
acting in such capacity for a mortgage investment trust or real
estate investment trust; (6) leasing personal or real property,
where the lease is to serve as the functional equivalent of an
extension of credit to the lessee of the property; (7) investing
in community welfare corporations or projects; (8) providing
bookkeeping and data processing services for a bank holding
company and its subsidiaries, or storing and processing certain
other banking, financial, or related economic data; (9) acting
as an insurance agent, principally insurance issued in connection
with extensions of credit by the holding company or any of its
subsidiaries' (10) underwriting credit life and credit accident
and health insurance related to extensions of credit; (11)
providing courier services for documents and papers related to
banking transaction; (12) providing management consulting advice
to non-affiliated banks; and (13) selling money orders, travelers
cheques and U.S. Savings Bonds. In each case, the Company must
secure the approval of the Board prior to engaging in any of
these activities.
Whether or not a particular non-banking activity is
permitted under the Act, the Board is authorized to require a
holding company to terminate any activity or divest itself of any
non-banking subsidiary if in its judgment the activity or
subsidiaries would be unsound.
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Under the Act and the Board's regulations, a bank holding
company and its subsidiaries are prohibited from engaging in
certain tie-in arrangements in connection with any extensions of
credit or provision of any property or services.
In addition to the limitation of Louisiana law with respect
to the ownership of banks, as described below, the ownership or
control of voting shares of a second bank by a bank holding
company, such as One American Corp., is restricted by the Act
unless the prior approval of the Board is obtained. The Act
prohibits the Board from approving an application from a bank
holding company to acquire shares of a bank located outside the
state in which the operations of the holding company's
subsidiaries are principally conducted, unless such an
acquisition is specifically authorized by statue of the state in
which the bank whose shares are to be acquired is located.
Under the Louisiana Bank Holding Company Act of 1962, as
amended (the "Louisiana Act"), one-bank holding companies are
authorized to operate in Louisiana provided the activities of the
nonbank subsidiaries are limited to the ownership of real estate
and improvements, computer services, equipment leasing and other
directly related banking activities. The Louisiana Act, as
amended in 1984, authorized multi-banking holding companies
within the state. Certain limitations and restrictions were set,
which expired July 1, 1989. These restrictions limit
acquisitions of additional banks to those which have been in
existence for at least five years. The State Commissioner of
Financial Institutions is authorized to administer the Louisiana
Act by issuance of orders and regulations.
In addition, Louisiana banking laws were changed in 1985 and
1986 to allow interparish banking, limited statewide branching
beginning January 1, 1987, and regional banking beginning July 1,
1987. These changes have allowed Louisiana and the regional
banks and other financial institutions to engage in a wider range
of activities than were previously allowed to such institutions.
The restrictions on state banking were repealed in 1988, with the
intention of allowing state charted banks to branch bank state
wide.
Also effective January 1, 1991, Louisiana's reciprocal
interstate banking laws allowed bank holding companies domiciled
in any state of the United States to acquire Louisiana banks and
bank holding companies, if the state in which the bank holding
company is domiciled allows Louisiana banks and bank holding
companies the same opportunities.
Additional information regarding supervision and regulation
can be found in Form 10-K in the Section titled "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and incorporated herein by reference.
Regulatory Matters
The capital ratios for the Company and the Bank currently
exceed the regulatory capital requirements at December 31, 1995.
The capital ratios are included in the 1995 Form 10-K in the
Section titled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and incorporated herein by
reference.
Capital Adequacy
The Company's dividends are determined by its Board of
Directors. The current policy is to maintain dividends at a
level which ensures the Company and Bank are able to maintain
sufficient regulatory capital levels. The Company's primary
source of funds is the dividend received from the Bank. Under
current regulatory limitations the Bank could pay in dividends
without regulatory approval approximately $7.5 million. The
Company carries no debt, therefore future liquidity needs are
limited to the payment of any declared dividends. The Company
maintains sufficient liquidity to maintain its operations should
a regulatory agency limit the Bank from paying dividends.
The Bank is subject to regulation and regular examination by
the Federal Deposit Insurance Corporation, and the Office of
Financial Institutions of the State of Louisiana. Applicable
regulations relate to reserves, investments, loans, issuance of
securities, the level of capital, establishment of branches and
other aspects of its operations. Should the Bank fail to comply
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with current regulations, the Federal Deposit Insurance
Corporation may initiate sanctions and other administrative
proceedings for failure to comply with current regulations and
may cease deposit insurance.
Statistical Information
The following data contains information concerning the
business and operations of One American Corp. and its
subsidiaries, First American Bank and Trust, and One American
Agency, Inc. This information should be read in conjunction with
Financial Statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Average Balance Sheets and Interest Yield Analysis
The following information called for by Item 1 is included
in the 1995 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Average Balance Sheets and Interest Rate Analysis
for the years ended December 31, 1995, 1994, and 1993
Interest Differential
The following information called for by Item 1 is included
in the 1995 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Interest Differentials
for the years ended December 31, 1995 and 1994
Securities Portfolio
The following information called for by Item 1 is included
in the Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Securities
Also, the following information called for by Item 1 is
included in the 1995 Form 10-K Section titled "Notes to
Consolidated Financial Statements" and is incorporated herein by
reference.
See Note D titled Securities in the 1995 Form 10-K for a
detailed analysis of the security portfolio.
There were no securities held by the Company at December 31,
1995, that exceeded, in aggregate by issuer, 10% of Stockholders'
Equity.
Loan Portfolio
The following information called for by Item 1 is included
in the 1995 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Loans
for the years ended December 31, 1995, 1994, 1993,
1992, and 1991
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Non-Performing Loans
The following information called for by Item 1 is included
in the 1995 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Non-Performing Loans
for the years ended December 31, 1995, 1994, 1993,
1992, and 1991
Summary of Loan Loss Experience
The following information called for by Item 1 is included
in the 1995 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Summary of Loan Loss Experience
for the years ended December 31, 1995, 1994, 1993,
1992, and 1991
Deposits
The following information called for by Item 1 is included
in the 1995 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Average Balance Sheets and Interest Rate Analysis
for the years ended December 31, 1995, 1994, and 1993
Maturities of time deposits of $100,000 or more at December
31, 1995, are summarized below:
In thousands
<TABLE>
<CAPTION>
In thousands
<S> <C>
3 Months or Less $4,378
Over 3 through 6 Months 2,401
Over 6 through 12 Months 2,287
Over 12 Months 1,036
Total $10,102
</TABLE>
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Return on Equity and Assets
The following information called for by Item 1 is included
in the 1995 Form 10-K in the Section titled Item 6. "Selected
Financial Data" and is incorporated herein by reference.
Average Total Assets
December 31, 1995, 1994, 1993, 1992, and 1991
Average Stockholders' Equity
December 31, 1995, 1994, 1993, 1992, and 1991
Selected Ratios
for the years ended December 31, 1995, 1994, 1993,
1992, and 1991
Per Share
for the years ended December 31, 1995, 1994, 1993,
1992, and 1991
Item 2. Description of Properties
One American Corp. is located in Vacherie, Louisiana in the
main office building of First American Bank and Trust. Through its
subsidiary First American Bank and Trust the Company owns the
premises in which its main office, operation center, and twelve of
its branches are located and holds a lease for the one remaining
branch.
The Company considers all properties to be suitable and
adequate for their intended purposes and its lease to be fair and
reasonable.
Item 3. Legal Proceedings
The following information called for by Item 3 is included
in the 1995 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
Subsection titled "Allowance for Loan Losses" and is incorporated
herein by reference.
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 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders
during the fourth quarter of the year ended December 31, 1995.
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Part II
Item 5. Market for Registrant's Common Stock and Related Security
Holder's Matters
Common Stock - One American Corp.'s (the Company) stock is
not listed on any security exchange. Due to the lack of an
active trading market, One American Corp. does not have the
available information to furnish the high and low sales price or
the range of bid and ask quotations for its stock. On September
22, 1993 the stockholders of the Company adopted a resolution to
amend the Articles of Incorporation and to execute a five-for-one
stock split in the form of a dividend. The Restated Articles of
Incorporation provided for an increase in the number of
authorized shares of common stock from 1,000,000 shares to
10,000,000 shares, and to restate the par value per share from
$10.00 to $5.00 per share. The Stockholders' Equity section of
the Balance Sheet reflects this change at December 31, 1993 and
the change is shown retroactive throughout the annual report.
Based upon limited inquiries by management, it is believed that
the stock of the Company traded at the following amounts:
1995 1994
First Quarter $20.00 $15.00
Second Quarter $22.00 $15.00
Third Quarter $23.00 $16.50
Fourth Quarter $26.50 $16.90
There can be no assurance that these limited inquiries
adequately reflect the actual high and low bids or prices for the
stock of the Company.
The Company has 691 stockholders of record as of March 14,
1996.
The following information called for by Item 5 regarding
dividends is included in the 1995 Form 10-K in Item 6. Section
titled "Selected Financial Data" and is incorporated herein by
reference. There are no restrictions on dividends of the Company.
Information - Request for additional information or copies
of Form 10-K filed with the Securities and Exchange Commission in
Washington, DC should be directed to:
J. B. Falgoust
President - Chief Executive Officer
One American Corp.
P. O. Box 550
Vacherie, LA 70090-0550
Transfer Agent and Registrar
First American Bank and Trust
P. O. Box 550
Vacherie, LA 70090-0550
General Counsel
Martin, Himel, Peytavin & Nobile
P. O. Box 278
Lutcher, LA 70071-0278
Independent Accountants
Hannis T. Bourgeois & Co., L. L. P.
2322 Tremont Drive, Suite 200
Baton Rouge, LA 70809
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Item 6. Selected Financial Data
SELECTED QUARTERLY DATA
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
One American Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, 1995, 1994, 1993, 1992, and 1991
In thousands, except per share data
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Assets
Cash and Due from Banks $15,232 $14,448 $17,078 $15,953 $14,265
Securities 139,967 135,639 153,378 158,223 145,617
Loans 104,320 92,593 75,652 66,500 59,247
Other Assets 12,109 13,162 11,602 11,641 12,686
Total Assets $271,628 $255,842 $257,710 $252,317 $231,815
Liabilities and Stockholders' Equity
Deposits $239,724 $230,862 $234,762 $232,501 $214,840
Other Liabilities 1,692 990 749 688 943
Stockholders' Equity 30,212 23,990 22,199 19,128 16,032
Total Liabilities and Stockholders' Equity $271,628 $255,842 $257,710 $252,317 $231,815
Average Total Assets $260,485 $254,367 $248,887 $246,230 $223,631
Average Stockholders' Equity $26,979 $22,950 $19,560 $17,332 $15,023
Selected Ratios:
Loans to Assets 38.41% 36.19% 29.36% 26.36% 25.56%
Loans to Deposits 43.52% 40.11% 32.22% 28.60% 27.58%
Deposits to Assets 88.25% 90.24% 91.10% 92.15% 92.68%
Equity to Assets 11.12% 9.38% 8.61% 7.58% 6.92%
Return on Average Assets 2.01% 1.68% 1.22% 1.40% 0.76%
Return on Average Equity 19.45% 18.58% 15.48% 19.84% 11.34%
Dividend Payout 16.74% 12.68% 13.39% 9.83% 15.86%
Avg. Equity-to-Avg. Assets 10.36% 9.02% 7.86% 7.04% 6.72%
</TABLE>
<TABLE>
<CAPTION>
Condensed Consolidated Statements of Income
for the years ended December 31, 1995, 1994, 1993, 1992, and 1991
In thousands, except per share data
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Interest Income $18,205 $15,693 $15,031 $16,828 $18,060
Interest Expense 6,511 5,326 5,139 6,716 9,878
Net Interest Income 11,694 10,367 9,892 10,112 8,182
Provision for Loan Losses - 350 900 1,200 1,000
Net Interest Income After
Provision for Loan Losses 11,694 10,017 8,992 8,912 7,182
Other Income 4,464 4,045 2,930 3,484 1,812
Other Expenses 8,501 7,990 7,694 7,622 6,626
Income Before Income Taxes 7,657 6,072 4,228 4,774 2,368
Applicable Income Tax Expense 2,410 1,808 1,201 1,335 664
Net Income $5,247 $4,264 $3,027 $3,439 $1,704
Per Share:
Net Income $3.88 $3.15 $2.24 $2.54 $1.26
Cash Dividends $0.65 $0.40 $0.30 $0.25 $0.20
Book Value - End of Year $22.35 $17.75 $16.42 $14.15 $11.86
</TABLE>
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<TABLE>
<CAPTION>
SELECTED QUARTERLY DATA
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
One American Corp. and Subsidiaries
for the quarter periods in the years ended December 31, 1995 and
1994
1995 FOURTH THIRD SECOND FIRST
In thousands QUARTER QUARTER QUARTER QUARTER
<S> <C> <C> <C> <C>
Interest Income $4,770 $4,701 $4,476 $4,258
Interest Expense 1,711 1,679 1,614 1,507
Net Interest Income 3,059 3,022 2,862 2,751
Provision for Loan Losses (400) 100 150 150
Net Interest Income after Provision
for Loan Losses 3,459 2,922 2,712 2,601
Other Income 1,373 834 1,304 953
Other Expenses 2,427 2,000 2,069 2,005
Income before Income Taxes 2,405 1,756 1,947 1,549
Applicable Income Taxes 839 522 672 377
Net Income $1,566 $1,234 $1,275 $1,172
Per Share:
Net Income $1.16 $0.91 $0.94 $0.87
1994 FOURTH THIRD SECOND FIRST
In thousands QUARTER QUARTER QUARTER QUARTER
Interest Income $4,138 $4,080 $3,905 $3,570
Interest Expense 1,418 1,324 1,319 1,265
Net Interest Income 2,720 2,756 2,586 2,305
Provision for Loan Losses 75 75 75 125
Net Interest Income after Provision
for Loan Losses 2,645 2,681 2,511 2,180
Other Income 670 806 1,690 879
Other Expenses 2,114 2,072 2,071 1,734
Income before Income Taxes 1,201 1,415 2,130 1,325
Applicable Income Taxes 267 430 710 401
Net Income $934 $985 $1,420 $924
Per Share:
Net Income $0.69 $0.73 $1.05 $0.68
</TABLE>
12
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
One American Corp. and Subsidiaries
Management's Discussion and
Analysis of Financial Condition and Results of Operations
The Businesses of One American Corp.
One American Corp. is comprised of two subsidiaries, First
American Bank and Trust and One American Agency.
First American Bank and Trust is engaged in primarily the
same business operations as any independent commercial bank, with
special emphasis in retail banking, including the acceptance of
checking and saving deposits, and the making of commercial, real
estate, personal, home improvement, automobile and other
installment and term loans. The Bank also offers, among
services, travelers' cheques, safe deposit boxes, note
collection, escrow and other customary bank services to its
customers, with the exception of trust services. In addition,
the Bank offers drive-up teller services, automated teller
machines and night depository facilities. First American Bank
and Trust is insured under the Federal Deposit Insurance Act;
but, is not a member of the Federal Reserve System.
One American Agency provides general insurance agent
services for the Company and its subsidiaries. The Agency also
provides agent services in relation to credit life and accident
and health insurance that is directly related to the extension of
credit of other financial services of the Bank.
Overview of 1995
One American Corp. enjoyed net income for the year 1995 of
$5.2 million compared to $4.3 million for the same period of
1994. An improved net interest margin and lower provision for
loan losses provided for the majority of increase over last year.
These improvements coupled with higher operating income offset
slightly by higher operating expenses provided the remaining
factors contributing to the $1.0 million increase in One American
Corp.'s net income for the year ended 1995. Earnings per common
share were $3.88 and $3.15 for the years ended 1995 and 1994,
respectively. Return on average assets was 2.01% for the current
year, and 1.68% in the same period of 1994. For the years ended
1995 and 1994, return on average equity was 19.45% and 18.58%,
respectively.
Net interest income for 1995 was $11.7 million, 13% greater
than $10.4 million from the year 1994, due to a wider net
interest margin. The net interest margin on a fully tax
equivalent basis (FTE) was 4.96% for the current year versus
4.56% for the same period of 1994.
During the year 1995, in comparison with the same period of
1994, average loans outstanding increased $14.7 million or 17%
due to an increased loan demand. Average total deposits for the
year 1995 increased $2.0 million or 1% when compared to the
average total deposits for the same period of 1994. Average
total assets for the current year increased $6.1 million or 2%
when compared to the total average assets of the year 1994.
Average shareholders' equity for 1995 was $27.0 million, an
increase of 18% over the average shareholders' equity for 1994.
Earnings Analysis
Net Interest Income - Net interest income is the difference
between interest and fees generated from interest earning assets
and the interest expense for interest bearing liabilities and is
the primary source of earnings for the Bank. For analytical
purposes, net interest income is presented on a tax equivalent
basis. A 34% tax rate is used for 1995, 1994, and 1993. Certain
earning assets are exempt from income taxes, therefore, a tax
equivalent adjustment is included so that tax exempt earning
assets will be compatible with other earning assets. The primary
factors that affect net interest income are the changes in volume
and mix of earning assets and interest-bearing liabilities, along
with the change in market rates.
13
<PAGE>
Net interest income on a fully tax equivalent basis (FTE)
increased $1.3 million or 12%. Net interest income (FTE) for
1995 was $12.0 million compared to $10.7 million for the prior
year. When comparing the results of 1994 to 1993, net interest
income (FTE) increased $447 thousand or 4% to $10.7 million from
$10.3 million.
Earning Assets, Interest Bearing Liabilities, and Net
Interest Spread - Average earning assets increased $6.6 million
or 3% to $241.4 million during 1995. Average earning assets were
$234.8 million in 1994 and $228.4 million in 1993. The trend in
earning assets over the years 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
16. 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 years 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 concertive effort by the Bank to
attract a broader core deposit base consisting of commercial and
personal customers.
For the year ended 1995, the average yield on earning assets
was 7.68%, while the average cost of interest bearing funds was
3.45%, producing a net interest spread (FTE) of 4.23%. The net
interest margin (FTE) was 4.98% for the year ended 1995. In
comparison, the net interest margin (FTE) for the year ended 1994
was 4.56%. 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 table of Average Balance Sheets and Interest Rate
Analysis for the periods ended December 31, 1995, December 31,
1994, and December 31, 1993 on pages 25 and 26, and the
corresponding table of Interest Differentials on page 27 detail
the effect a change in average balances outstanding and the
change in interest yield and costs have on net interest income
for the respective periods. Also, the tables of Earning Asset
Structure and Deposit Structure on page 16 show a more condensed,
descriptive analysis of the common size percentage changes in
average earning assets and average deposit mix over the annual
periods analyzed.
Provision for Loan Losses
Provision for loan losses was $0 for 1995, a decrease of
$350 thousand from the provision for loan losses of $350 thousand
for 1994. Net charge offs (recoveries) were $(196) thousand for
1995, an increase in recoveries from $(10) thousand for 1994. As
a percentage of average loans net charge offs (recoveries) were
(.19)% in 1995 and (.02)% in 1994. Gross charge offs were .43%
in 1995 and .13% in 1994. Recoveries as a percentage of gross
charge offs were 144.63% in 1995 and 108.93% in 1994.
The provision for loan losses in 1993 was $900 thousand. In
1993 net charge offs were $219 thousand, or .32% of average
loans. Gross charge offs were .48% of average loans and
recoveries were 61.89% of gross charge offs. More specifics can
be found in the sections entitled Allowance for Loan Losses and
Non-performing Assets.
Other Income
Other income for 1995 was $4.5 million, compared to $4.0
million in 1994. Exclusive of security transactions other income
increased $800 thousand.
Service charges on deposit accounts were $1.8 million for
1995, an increase of $145 thousand or 9% over 1994. Service
charges on deposit accounts were $1.7 million in 1994. The
primary reasons for the increase in 1995 was an increased number
of deposit accounts.
14
<PAGE>
Gain on purchased assets increased $88 thousand to $1.1
million for 1995 when compared to the prior year. These gains
are recognition of collection of principal on certain doubtful
loans acquired in the Bank acquisitions (See Note B). 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 1995 was $1.0 million compared to
the 1994 total of $459 thousand. Included in other operating
income are fees from bankcard services, safe deposit box rentals,
and other operating fees associated with the daily operations of
the Bank. A portion of the increase in other operating income
was non-recurring. Specifically, the Bank received class action
damage restitution in the amount of $169 thousand resulting from
Guaranteed Investment Contracts which were written down based on
regulatory directives in 1992. More specifics can be found on
the Guaranteed Investment Contracts in the section entitled Non-
performing Assets. Also, in the fourth quarter of 1995 the Bank
received a settlement on a prior pending contingency of which a
portion of the settlement in the amount of $168 thousand was
realized as other income.
Net gains on investment securities decreased other income by
$381 thousand for 1995, compared to a net gain on investment
securities of $823 thousand for 1994. The Bank recovered $442
thousand as gains from security transactions during the year
1995. These securities included Louisiana Agricultural Finance
Authority Bonds and Louisiana Housing Finance Authority Bonds
that 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.
Other Expenses
Other expenses totaled $8.5 million in 1995, a 6% increase
over the 1994 total of $8.0 million. Salaries and employee
benefits increased $373 thousand or 10%, to $4.2 million for 1995
when compared to $3.9 million for 1994. A portion of the
increase in salaries and employee benefits, $235 thousand, was
from a performance compensation program instituted by the Bank in
1995. A fraction of additional earnings over the past year were
shared with employees on a goal achieved basis. Net occupancy
expense was $1.2 million for 1995, versus $1.1 million for 1994,
an increase of $59 thousand or 5%. The Bank incurred periodical
maintenance expenses on some of its buildings during 1995 which
may not occur on a regular basis. Other operating expenses
totaled $3.3 million for 1995 compared to $3.5 million for 1994,
a decrease of $197 thousand or 6%. For a further analysis of
other operating expenses see Note K.
Net other real estate expense produced a benefit of $159
thousand for 1995. This is a decrease in benefit from 1994 of
$276 thousand. Net other real estate and repossession expense is
the 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.
Expenses from other real estate totaled $12 thousand, which were
offset by the income generated from the operations of other real
estate of $18 thousand, and net gains on the sale of other real
estate and repossessed assets of $153 thousand.
For 1994, net other real estate expense produced a benefit
of $435 thousand. Expenses from other real estate totaled $16
thousand, which were offset by income from the operations of
other real estate of $21 thousand, and net gains on the sale of
other real estate and repossessed assets of $430 thousand.
Management continues to convert these non-performing assets to
investable funds at a value which management feels is beneficial
to the earnings of the Bank. Also, management recognizes that
the contribution of the non-recurring income offset by 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.
Applicable Income Taxes
Applicable income taxes for 1995 was $2.4 million, $1.8
million and $1.2 million for 1994 and 1993, respectively,
producing an effective tax rate of 31%, 30%, and 28%
respectively. The Company's effective income tax expense as a
percentage of pretax income is different from statutory rates
because of tax-exempt income and the related nondeductible
interest expense. A portion of the Company's interest income is
from investments in state and municipal bonds and is generally
exempt from federal income taxes. Interest expense on funds used
for tax-exempt investments is generally nondeductible for federal
income taxes.
15
<PAGE>
Table 1-
<TABLE>
<CAPTION>
Average Earning Asset Structure
1995 1994 1993
% 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 $387 0.2% $172 0.1% $0 0.0%
Federal Funds Sold 9,588 4.0% 9,303 4.0% 9,661 4.2%
Securities
Taxable 119,173 49.3% 127,372 54.2% 133,548 58.5%
Non-Taxable 10,902 4.5% 11,371 4.8% 11,638 5.1%
Loans - Net 101,318 42.0% 86,625 36.9% 73,580 32.2%
Total Average Earning Assets $241,368 100.0% $234,843 100.0% $228,427 100.0%
Average Deposit Structure
1995 1994 1993
Average % of Average % of Average % of
Balances Deposits Balances Deposits Balances Deposits
<S> <C> <C> <C> <C> <C> <C>
Noninterest Bearing Deposits $43,622 18.8% $39,534 17.1% 35,671 15.6%
NOW Accounts 22,469 9.7% 22,869 9.9% 21,830 9.6%
Savings Accounts 32,189 13.8% 32,741 14.2% 29,854 13.1%
Money Market Deposit Accounts 56,457 24.3% 65,046 28.3% 69,050 30.3%
Certificates of Deposits less than $100,000 69,521 29.8% 62,883 27.3% 65,328 28.6%
Total Average Core Deposits 224,258 96.4% 223,073 96.8% 221,733 97.2%
Certificates of Deposits greater than $100,000 8,269 3.6% 7,447 3.2% 6,457 2.8%
Total Average Deposits $232,527 100.0% $230,520 100.0% $228,190 100.0%
Average Interest Bearing Liabilities
as a percentage of Earning Assets 78.3% 81.3% 84.3%
Average Core Deposits
as a percentage of Total Average Assets 86.1% 87.7% 89.1%
</TABLE>
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. At December 31, 1995,
average core deposits were approximately $224.3 million or 96% of
total average deposits and 86% of total average assets. For a
comparison with prior period year ends, see the table entitled
Average Deposit Structure on page 16. 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.
16
<PAGE>
Interest Rate Risk
Interest rate risk is the measurement of risk exposure or
changes in net interest income and subsequently net income given
changes in the external interest rate markets. This possible
risk exposure is produced by the different repricing intervals of
interest earning assets and interest bearing liabilities, given
changes in the mix of such assets and liabilities, and the growth
of such assets and liabilities. One measurement of interest rate
risk is gap analysis. The gap matches the repricing of interest
rate sensitive assets and liabilities for selective intervals.
GAP analysis, is a static measurement based on an individual
point in time. This interest rate risk measurement process may
not indicate actual rate exposure given contractual maturities
and repricing period inconsistencies. Management also measures
interest rate risk exposure by process of dynamic income
simulation. The latter process measures possible levels of
exposure more accurately given the ability to better identify
contractual maturities and repricing periods.
For gap analysis, a decay rate methodology is used to arrive
at the principal and interest cash flows used in the market value
calculations given FDIC regulatory guidelines as set forth in
FDICIA 305. First, rate sensitive and non-rate sensitive
balances are separated. Higher decay rates force rate sensitive
cash flows to occur within one year. Decay rates are then input
for the non-rate sensitive funds. These decay rates spread the
non-rate sensitive balances out as far as the FDIC regulatory
guidelines allow in FDICIA 305. Decay rates assumptions
implemented are based on a flat rate environment and at
management's discretion.
The Bank has established decay rate assumptions given data
collection over the last 10 or so years on MMDA, Savings
Accounts, Now Accounts, and Non-interest Bearing Accounts. The
assumptions are based on account type sensitivity patterns given
the change in the Bank's benchmark for pricing and the change in
relationship each account type has to total deposits. Decay
rates are updated at each modeling session if warranted by rate
changes in the market or changes in non-rate sensitivity patterns
given the account type. The identification of the non-rate
sensitive portion of such accounts provides a more complete
picture of the actual core deposit base which may not reprice in
the same manner as the rate sensitive portion.
Table 2, Interest Rate Sensitivity Table, on page 18
presents the Bank's interest rate sensitivity position at
December 31, 1995. Table 2 indicates that the Company's interest
bearing liabilities exceed its earning assets out to the one year
point in time suggesting a decrease in net interest income in a
flat rate environment. This may not be the case in reality given
that mentioned above as it pertains to GAP analysis.
In May 1994 the Bank enhanced its interest rate management
tools by becoming a member of the Federal Home Loan Bank of
Dallas (FHLB). The FHLB provides the Bank the ability to further
match the rates and maturities of its funding with those of
earning assets. Also, the FHLB provides the Bank the ability to
offer long term, fixed rate loans to its customer base with
minimal additional interest rate risk exposure.
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 December 31, 1995, were $11.3
million and $3.8 million at December 31, 1994. The Bank has
letters of credit of $576 thousand issued at December 31, 1995.
Additionally, the Bank has deposit customers who have credit
lines available to them through their deposit accounts. At
December 31, 1995 the available portion of these credit lines was
$603 thousand. These credit lines are immediately cancelable by
the Bank. The credit lines provide a source of income to the
Bank through service fees charged and interest earned on balances
outstanding. The credit lines are reviewed regularly and do not
pose a material credit risk to the Bank. 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.
The Bank began issuing credit cards during the third quarter
of 1992. As of December 31, 1995, the aggregate credit available
is $2.9 million, and $1.9 million at December 31, 1994.
Applicants are reviewed through normal lending policies and
credit reviews.
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
17
<PAGE>
delinquent according to the loan repayment schedule. Put back
options due to delinquencies no longer exist between the Bank and
the long-term mortgage companies.
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 balance sheets as that risk may apply to interest
rate exchange agreements, financial futures, or financial
options.
<TABLE>
<CAPTION>
Table 2-
Interest Rate Sensitivity Table
December 31, 1995
In thousands
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 $48,213 $20,293 $53,355 $10,731 $- $132,592
Loans, Net of Unearned Income 12,471 21,335 49,395 20,592 527 104,320
Federal Funds Sold 7,375 - - - - 7,375
Other Assets 867 - - - 26,474 27,341
Total Assets $68,926 $41,628 $102,750 $31,323 $27,001 $271,628
Liabilities
NOW and Super NOW Deposits $3,927 $9,227 $522 $10,486 - $24,162
Insured Money Market Accounts 4,957 13,682 37,271 - - 55,910
Savings Deposits 6,459 14,211 1,614 10,013 - 32,297
Certificates of Deposits 25,512 37,857 19,065 - - 82,434
Noninterest Bearing Deposits 9,592 20,581 1,965 12,783 - 44,921
Other Liabilities - - - 350 1,342 1,692
Stockholders' Equity - - - - 30,212 30,212
Total Liabilities and
Stockholders' Equity $50,447 $95,558 $60,437 $33,632 $31,554 $271,628
Interest Rate Sensitivity Gap$18,479 ($53,930) $42,313 ($2,309) ($4,553) -
Cumulative Interest Rate
Sensitivity Gap $18,479 ($35,451) $6,862 $4,553 -
GAP / Assets 6.8% -19.9% 15.6% -0.9% -1.7%
Cumulative GAP / Assets 6.8% -13.1% 2.5% 1.7% 0.0%
</TABLE>
18
<PAGE>
Loans
An analysis of the loan portfolio at December 31, 1995,
1994, 1993, 1992, and 1991, is as follows:
<TABLE>
<CAPTION>
In thousands 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Real Estate
Construction $1,662 $1,241 $499 $473 $464
Mortgage 81,082 74,403 61,690 52,775 43,032
Farm Loans 1,101 1,646 749 324 1,171
Commercial and Industrial 11,531 6,921 5,063 4,750 6,695
Individuals 11,457 10,569 9,927 10,161 9,144
All Other Loans 793 901 479 163 18
Total Loans 107,626 95,681 78,407 68,646 60,524
Unearned Income (33) (11) (38) (110) (188)
Allowance for Loan Losses (3,273) (3,077) (2,717) (2,036) (1,089)
Total Loans, Net $104,320 $92,593 $75,652 $66,500 $59,247
</TABLE>
The following is the detail of maturities and sensitivity of
loans to changes in interest rates at December 31, 1995:
<TABLE>
<CAPTION>
In thousands Amount
<S> <C>
Fixed Rate Loans
Maturity
1 Year or Less $27,037
Over 1 through 5 Years 50,953
Over 5 Years 21,241
Total Fixed Rate Loans 99,231
Variable Rate Loans
Repricing Frequency
1 Year or Less 7,862
Over 1 through 5 Years 6
Over 5 Years -
Total Fixed Rate Loans 7,868
Nonaccrual Loans (Various) 527
Total Loans $107,626
</TABLE>
Note: The information necessary for a breakdown of maturity of
the various types of loans is not readily available. The Company
has no foreign loans.
Securities
During December 1995, management had a one time opportunity
to reclassify Available for Sale and Held to Maturity securities
in the security portfolio. Management reclassified securities
classified at the time as Held to Maturity to Available for Sale.
Therefore, the Bank's entire security portfolio is classified as
Available for Sale.
Included in the category of Securities of Other US
Government Agencies at December 31, 1995 is $19.6 million par
value of structured notes, with an amortized cost of $19.6
million and a fair value of $19.2 million, resulting in an
unrealized loss in the amount of $400 thousand. 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
19
<PAGE>
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 shock and income
simulation 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 $3.3 million at year end
1995 or 3.04% of net loans outstanding. At year end 1994, the
allowance for loan losses was $3.1 million or 3.22% of net loans
outstanding. 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 given, the smaller loan -
to - deposit relationships of the past.
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 thousand judgment in favor of the Bank. The Fifth
Circuit Court of Appeal of Louisiana upheld the district court
judgment in favor of the Bank. The insurer applied for a writ of
certiorari to the Louisiana Supreme Court of Appeal. The
Louisiana Supreme Court denied the writ of certiorari, thus
making the district court judgment final. The $500 thousand
judgment was received during the fourth quarter of 1995 and
placed into Allowance for Loan Losses in the form of a recovery.
20
<PAGE>
Table 3, Activity in Allowance for Loan Losses, below
presents an analysis of activity in the allowance for loan losses
for the past five years.
Table 3-
<TABLE>
<CAPTION>
In thousands 1995 1994 1993 1992 1991
<S> <C> <C> <C>
Activity in Allowance for Loan Losses
Beginning Balance $3,077 $2,717 $2,036 $1,089 $1,116
Loans Charged Off:
Real Estate 295 54 451 282 34
Commercial, Industrial and
Agricultural 103 47 61 248 1,011
Individual and Others 40 10 62 25 76
Total Charged Off 438 111 574 555 1,121
Loan Recoveries:
Real Estate 98 40 39 108 3
Commercial, Industrial and
Agricultural 523 58 234 173 70
Individual and Others 13 23 82 21 21
Total Recoveries 634 121 355 302 94
Net Loans Charged Off (196) (10) 219 253 1,027
Provision charged to
Expense - 350 900 1,200 1,000
Ending Balance $3,273 $3,077 $2,717 $2,036 $1,089
Ending Balance
Loans-Net $107,593 $95,670 $78,369 $68,536 $60,336
Daily Average Loans 101,318 86,625 73,580 62,777 63,780
Ratio of Net Charge-Offs
to Total Loans -0.18% -0.01% 0.28% 0.37% 1.70%
Ratio of Net Charge-Offs
to Average Loans -0.19% -0.01% 0.30% 0.40% 1.61%
</TABLE>
The allowance for loan losses has been allocated according to
the type of loan described in the table below, at December 31,
1995, 1994, 1993, 1992, and 1991:
<TABLE>
<CAPTION>
In thousands 1995 1994 1993 1992 1991
<S> <C> <C> <C>
Real Estate $2,052 $2,433 $2,155 $1,579 $783
Commercial, Industrial and
Agricultural 415 276 201 151 142
Individual and Others 23 368 361 306 164
Unallocated 783 - - - -
Total Allowance $3,273 $3,077 $2,717 $2,036 $1,089
</TABLE>
21
<PAGE>
Non-performing Assets
Non-performing assets include nonaccrual and impaired loans
and other real estate. Loans are considered nonaccrual when the
principal or 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
December 31, 1995, were $527 thousand, and $432 thousand at
December 31, 1994. Loans past due 90 days and still accruing at
December 31, 1995 and 1994 were $441 thousand and $313 thousand,
respectively. At December 31, 1995, nonaccrual loans were .49%
of gross loans outstanding and 16.09% of the allowance for loan
losses. At December 31, 1994, these ratios were .45% and 14.03%,
respectively.
The following table presents information on the amount of
non-performing loans at December 31, 1995, 1994, 1993, 1992 and
1991:
<TABLE>
<CAPTION>
In thousands 1995 1994 1993 1992 1991
<S> <C> <C> <C>
Non-accrual $527 $432 $240 $505 $986
Past due 90 days or more 441 313 331 484 709
Restructured and Impaired 3,600 156 273 33 -
Total $4,568 $901 $844 $1,022 $1,695
</TABLE>
In the process of reviewing the loan portfolio, management
acknowledges certain potential problem loans which are not
classified as impaired, non-accrual, greater than 90 days
delinquent, or restructured. Management does not feel that any
of these potential problem loans are reasonably likely to have or
will have a material effect on the Company's liquidity, capital
resources, or results of operations.
Other real estate is properties held for sale acquired
though foreclosure or negotiated settlements of debt. Other real
estate decreased $90 thousand during 1995. At December 31, 1995
and 1994, other real estate was insignificant and $94 thousand,
respectively.
The Bank also has approximately $619 thousand 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 $2.35 million 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 thousand. 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 $1.73 million as partial payments of the $2.35
million in original par value. Of the $1.73 million, $1.26
million were recognized as gains on securities available for sale
since the original write down. The remaining $470 thousand was
applied against the book value. Of the $1.26 million in gains
recognized since the write down, $440 thousand was recognized in
1995 and $822 thousand was recognized in the year 1994. 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
22
<PAGE>
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, based on recent regulatory
examinations 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
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, the Bank's ratios for
the reporting periods exceed regulatory minimums.
The Company's dividends are determined by its Board of
Directors. The current policy is to maintain dividends at a
level which ensures the Company and Bank are able to maintain
sufficient regulatory capital levels. The Company's primary
source of funds is dividends received from the Bank. Under
current dividend limitations the Bank could pay dividends of
approximately $7.5 million without regulatory approval. The
Company carries no debt; therefore, future liquidity needs are
limited to the payment of any declared dividends. The Company
maintains sufficient liquidity to maintain its operations should
a regulatory agency limit the Bank from paying dividends.
Table 4-
Capital Adequacy Ratios
<TABLE>
<CAPTION>
In thousands December 31,
1995 1994
<S> <C> <C>
Tier 1 Capital:
Stockholders' Equity $29,841 $25,473
Tier 2 Capital:
Allowance for Loan Losses 1,615 1,360
Total Capital $31,456 $26,833
Risk-Weighted Ratios:
Tier 1 Capital 23.40% 23.42%
Total Capital 24.66% 24.67%
Leverage Ratio 11.22% 10.01%
Stockholders' Equity 10.99% 9.96%
</TABLE>
23
<PAGE>
Capital Expenditures
The Bank made capital improvements to several offices during
1995. The Bank anticipates constructing a new office in LaPlace,
St John Parish, Louisiana in 1996. This office will replace an
existing facility which is currently leased from a third party.
The construction of this facility should greatly enhance the
ability to serve the current and future customer base within this
market.
The Bank made capital improvements in electronic data
processing in 1994 concerning the adoption of check imaging
technology. Imaging can be defined as a process whereby a
similar reproduction is made of an original document. This
process is possible through the use of digital technology, which
captures the image of the document and stores the image on an
optical disk. One optical disk has the capacity to store the
images of thousands of items. Once stored on disk, the document
is available for reproduction many times. On July 12, 1994, the
Bank entered into an agreement with Bankline MidAmerica, Inc. for
the purpose of purchasing imaging software in the amount of $120
thousand. Also, the Bank entered into an agreement with AT&T -
Global Information Systems for the purpose of purchasing imaging
hardware in the amount of $334 thousand. The Bank feels that the
investment in this fixed asset will provide a benefit for both
the Bank and the Bank's customer base.
24
<PAGE>
Table 5-
<TABLE>
<CAPTION>
AVERAGE BALANCE SHEETS AND INTEREST RATE ANALYSIS
In thousands
1995 1994 1993
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Interest Bearing Deposit Accounts $387 $23 5.95% $172 $7 4.08% $0 $0 0.00%
Federal Funds Sold and Securities
Purchased under Resale Agreements 9,588 559 5.83% 9,303 369 3.97% 9,661 282 2.92%
Securities:
Taxable 119,173 7,040 5.91% 127,372 6,122 4.81% 133,548 6,406 4.80%
Non-Taxable* 10,902 963 8.83% 11,371 1,022 8.99% 11,638 1,105 9.49%
Loans - Net 101,318 9,948 9.82% 86,625 8,521 9.84% 73,580 7,614 10.35%
Total Earning Assets $241,368 $18,533 7.68%$234,843 $16,041 6.83%$228,427 $15,407 6.74%
Allowance for Loan Losses (3,046) (2,908) (2,537)
Nonearning Assets 22,163 22,432 22,997
Total Assets $260,485 $254,367 $248,887
Liabilities and Stockholders' Equity
NOW Accounts $22,469 $491 2.19% $22,869 $828 3.62% $21,830 $458 2.10%
Savings Accounts 32,189 812 2.52% 32,741 492 1.50% 29,854 738 2.47%
Money Market Deposit Accounts 56,457 1,604 2.84% 65,046 1,729 2.66% 69,050 1,767 2.56%
Certificates of Deposits less than $100,000 69,521 3,217 4.63% 62,883 2,033 3.23% 65,328 1,984 3.04%
Certificates of Deposits greater than $100,000 8,269 387 4.68% 7,447 244 3.28% 6,457 192 2.97%
Total Interest Bearing Liabilities $188,905 $6,511 3.45%$190,986 $5,326 2.79%$192,519 $5,139 2.67%
Noninterest Bearing Deposits 43,622 39,534 35,671
Other Liabilities 979 897 1,137
Stockholders' Equity 26,979 22,950 19,560
Total Liabilities and Stockholders' Equity $260,485 $254,367 $248,887
Net Interest Income - Tax Equivalent Basis* $12,022 $10,715 $10,268
Tax Equivalent Adjustment (328) (347) (376)
Net Interest Income $11,694 $10,368 $9,892
Net Interest Income - Spread* 4.23% 4.04% 4.07%
Net Interest Income as a % of Total Earning Assets* 4.98% 4.56% 4.50%
*Tax Equivalent Basis - 34% Rate for the periods dated
</TABLE>
25
<PAGE>
Table 6 -
<TABLE>
<CAPTION>
INTEREST DIFFERENTIALS
In thousands
1995/1994 1994/1993
Change due to Total Change due to Total
Volume Rate Change Volume Rate Change
<S> <C> <C> <C> <C> <C> <C>
Interest Earning Assets:
Interest Bearing Deposit Accounts $9 $7 $16 $0 $7 $7
Federal Funds Sold 11 179 190 (10) 97 87
Securities:
Taxable (394) 1,312 918 (296) 12 (284)
Non-Taxable* (42) (17) (59) (25) (58) (83)
Loans 1,445 (18) 1,427 1,350 (443) 907
Total Interest Income 1,029 1,463 2,492 1,019 (385) 634
Interest Bearing Liabilities:
NOW Accounts (14) (323) (337) 22 348 370
Savings Accounts (8) 328 320 71 (317) (246)
Money Market Deposit Accounts (228) 103 (125) (102) 64 (38)
Certificates of Deposits less than $100,000 215 969 1,184 (74) 123 49
Certificates of Deposits greater than $100,000 27 116 143 29 23 52
Total Interest Expense (8) 1,193 1,185 (54) 241 187
Increase (Decrease) in
Interest Differential $1,037 $270 $1,307 $1,073 ($626) $447
*Tax Equivalent Basis - 34% Rate for the periods dated
</TABLE>
26
<PAGE>
Item 8. Financial Statements and Supplementary Data
One American Corp. and Subsidiaries
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 annual
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 in this annual 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 the 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 monitor compliance with and assess the
effectiveness of the system of internal accounting controls while
coordinating 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 controls 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, 1995 and 1994,
were examined by Hannis T. Bourgeois & Co., L. L. P., independent
public accountants, who rendered an independent professional
opinion on the financial statements prepared by management.
27
<PAGE>
Report of Independent Auditor
January 19, 1996
To the Shareholders
and Board of Directors of
One American Corp. and Subsidiaries
Vacherie, Louisiana
We have audited the accompanying Consolidated Balance Sheets
of One American Corp. and Subsidiaries as of December 31, 1995
and 1994, and the related Consolidated Statements of Income,
Changes in Stockholders' Equity, and Cash Flows for each of the
three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company'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 One American Corp. and Subsidiaries as of December 31, 1995
and 1994, and the results of their operations, changes in their
stockholders' equity and their cash flows for each of the three
years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.
Respectfully submitted,
/s/ Hannis T. Bourgeois & Co., L. L. P.
Hannis T. Bourgeois & Co., L. L. P.
Baton Rouge, Louisiana
28
<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets
One American Corp. and Subsidiaries
December 31, 1995 and 1994
In thousands 1995 1994
<S> <C> <C>
Assets
Cash and Due From Banks - Note C $14,365 $14,193
Interest Bearing Deposits in Other Banks 867 255
Federal Funds Sold and Securities
Purchased Under Resale Agreements 7,375 8,200
Securities - Note D:
Held to Maturity (Fair Value of $-0-
and $18,306, respectively) - 18,543
Available for Sale (Amortized Cost of $132,030
and $111,142, respectively) 132,592 108,896
Total Securities 132,592 127,439
Loans - Note E 107,593 95,670
Less: Allowance for Loan Losses - Note F (3,273) (3,077)
Loans, Net 104,320 92,593
Bank Premises and Equipment - Note G 8,461 8,970
Other Real Estate - 94
Accrued Interest Receivable 2,112 1,740
Other Assets 1,536 2,358
Total Assets $271,628 $255,842
Liabilities
Deposits - Note H:
Noninterest Bearing $44,921 $42,599
Interest Bearing 194,803 188,263
Total Deposits 239,724 230,862
Accrued Interest Payable 603 335
Other Liabilities 1,089 655
Total Liabilities 241,416 231,852
Stockholders' Equity
Common Stock-$5.00 par value;
Authorized-10,000,000 shares;
Issued-1,500,000 shares - Note I 7,500 7,500
Surplus 5,000 5,000
Retained Earnings 17,966 13,597
Unrealized Gain (Loss) on Securities Available for Sale, Net - Note D 371 (1,482)
Treasury Stock - 148,385 shares at cost (625) (625)
Total Stockholders' Equity 30,212 23,990
Total Liabilities and Stockholders' Equity $271,628 $255,842
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Income
One American Corp. and Subsidiaries
for the years ended December 31, 1995, 1994, and 1993
In thousands, except per share data 1995 1994 1993
<S> <C> <C> <C>
Interest Income
Interest and Fees on Loans $9,948 $8,521 $7,614
Interest on Securities:
Taxable Interest 7,040 6,108 6,406
Nontaxable Interest 636 674 729
Total Interest on Securities 7,676 6,782 7,135
Other Interest Income 581 390 282
Total Interest Income 18,205 15,693 15,031
Interest Expense on Deposits - Note H 6,511 5,326 5,139
Net Interest Income 11,694 10,367 9,892
Provision for Loan Losses - Note F - 350 900
Net Interest Income After
Provision for Loan Losses 11,694 10,017 8,992
Other Income
Service Charges on Deposit Accounts 1,849 1,704 1,550
Gain or (Loss) on Securities - Note D 442 823 199
Gain on Purchased Assets - Note B 1,147 1,059 845
Other Operating Income 1,026 459 336
Total Other Income 4,464 4,045 2,930
Income Before Other Expenses 16,158 14,062 11,922
Other Expenses
Salaries and Employee Benefits - Note J 4,224 3,851 3,883
Net Occupancy Expense 1,150 1,110 876
Net ORE Expense (159) (435) (289)
Other Operating Expenses - Note K 3,286 3,464 3,224
Total Other Expenses 8,501 7,990 7,694
Income Before Income Taxes 7,657 6,072 4,228
Applicable Income Taxes - Note L 2,410 1,808 1,201
Net Income $5,247 $4,264 $3,027
Net Income Per Share $3.88 $3.15 $2.24
Cash Dividends Per Share $0.65 $0.40 $0.30
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Changes in Stockholders' Equity
One American Corp. and Subsidiaries
for the years ended December 31, 1995, 1994, and 1993
In thousands 1995 1994 1993
<S> <C> <C> <C>
Common Stock
Balance - Beginning of Period $7,500 $7,500 $3,000
Transferred Due to Stock Split - - 4,500
Balance - End of Period $7,500 $7,500 $7,500
Surplus
Balance - Beginning of Period $5,000 $5,000 $2,500
Transferred from Retained Earnings - - 2,500
Balance - End of Period $5,000 $5,000 $5,000
Retained Earnings
Balance - Beginning of Period $13,597 $9,874 $14,252
Transferred to Surplus - - (2,500)
Transferred Due to Stock Split - - (4,500)
Net Income 5,247 4,264 3,027
Cash Dividends (878) (541) (405)
Balance - End of Period $17,966 $13,597 $9,874
Unrealized Gain (Loss) on Securities Available for Sale, Net
Balance - Beginning of Period ($1,482) $448 $0
Net Change in Unrealized Gain (Loss) 1,853 (1,930) 448
Balance - End of Period $371 ($1,482) $448
Treasury Stock
Balance - Beginning and End of Period ($625) ($625) ($625)
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
One American Corp. and Subsidiaries
for the years ended December 31, 1995, 1994, and 1993
In thousands 1995 1994 1993
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net Income $5,247 $4,264 $3,027
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Gain on Purchased Assets (1,147) (1,059) (845)
Provision for Depreciation 686 655 641
Provision for Loan Losses - 350 900
Accretion on Securities (412) (264) (204)
Provision (Credit) for Deferred Income Taxes (90) (97) (271)
(Gain) Loss on Sale of Other Real Estate (153) (430) (323)
(Gain) Loss on Sale of Equipment 6 - 12
(Gain) Loss on Securities (442) (823) (199)
Changes in Assets and Liabilities:
(Increase) Decrease in Accrued Interest Receivable (372) 196 361
(Increase) Decrease in Other Assets (41) (824) 27
Increase (Decrease) in Accrued Interest Payable 268 91 (44)
Increase (Decrease) in Other Liabilities 638 13 38
Net Cash Provided by Operating Activities 4,188 2,072 $3,120
Cash Flows From Investing Activities
Net (Increase) Decrease in Interest Bearing Deposits (612) (256) -
Maturities or Calls of Securities Available for Sale 65,451 111,943 -
Maturities or Calls of Securities Held to Maturity 767 350 134,949
Purchases of Securities Available for Sale (67,651) (103,105) -
Purchases of Securities Held to Maturity (502) (4,433) (124,540)
Proceeds from Sale of Securities Available for Sale 442 470 5,245
Net (Increase) Decrease in Federal Funds Sold 825 10,675 (9,725)
Net (Increase) Decrease in Loans (10,626) (16,247) (9,532)
Proceeds from Sale of Other Real Estate 293 991 527
Proceeds from Sale of Premises, Equipment, and Other Assets 215 2 4
Purchases of Premises and Equipment (398) (1,043) (845)
Net Cash Used in Investing Activities (11,796) (653) (3,917)
<FN>
(Continued on next page)
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
for the years ended December 31, 1995, 1994, and 1993
In thousands
(Continued) 1995 1994 1993
<S> <C> <C> <C>
Cash Flows From Financing Activities
Net Increase (Decrease) in Demand Deposits, NOW
and Savings Accounts (3,367) (4,784) 7,518
Net Increase (Decrease) in Certificates of Deposits 12,227 886 (5,258)
Dividends Paid (1,080) (406) (338)
Net Cash Provided (Used) By Financing Activities 7,780 (4,304) 1,922
Decrease in Cash and Cash Equivalents 172 (2,885) 1,125
Cash and Cash Equivalents - Beginning of Year 14,193 17,078 15,953
Cash and Cash Equivalents - End of Period $14,365 $14,193 $17,078
Supplemental Disclosure of Cash Flow Information:
Income Tax Payments $2,032 $1,987 $1,453
Interest Paid on Deposits $6,243 $5,235 $5,184
Noncash Investing Activities:
Other Real Estate Acquired in Settlement of Loans $46 $16 $326
Change in Unrealized Gain (Loss) on
Securities Available for Sale $2,807 ($2,925) $679
Change in Deferred Tax Effect on
Unrealized Gain (Loss) on Securities Available for Sale $954 ($995) $231
Transfer of Securities from Held to Maturity to Available for Sale $18,384 - - -
Noncash Financing Activities:
Dividends Declared and Not Paid $338 $541 $405
Transfer from Retained Earnings to Surplus - - $2,500
Transfer from Retained Earnings Due to Stock Split - - $4,500
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
33
<PAGE>
One American Corp. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995, 1994, and 1993
NOTE A
Summary of Significant Accounting Policies
The accounting principles followed by One American Corp.
(the Company) and its wholly-owned Subsidiaries, First American
Bank and Trust (the Bank), 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.
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 reclassifications to
previously published financial statements have been made to
comply with current reporting requirements.
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 reported amounts of revenues and expenses during
the period. Actual results could differ from those estimates.
Securities - Securities are being accounted for in
accordance with Statement of Financial Accounting Standards
(SFAS) No. 115, "Accounting for Investments in Debt and Equity
Securities," which requires the classification of securities as
held to maturity, trading, or available for sale.
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-the-digits method,
which does not differ materially from the interest method.
The Bank generally discontinues the accrual of interest
income when a loan becomes 90 days past due as to principal or
interest. Interest on impaired loans is discontinued when, in
management's opinion, the borrower may be unable to meet payments
as they become due. When a loan is placed on non-accrual status,
previously recognized but uncollected interest is reversed to
income or charged to the allowance for loan losses. Interest
income is subsequently recognized only to the extent cash
payments are received.
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
34
<PAGE>
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
collectibility 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. Costs 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 expenses. 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 are
incurred.
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 expenses 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 utilizing a liability method in
accordance with SFAS No. 109 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 temporary differences. Temporary
differences are the differences between the reported amounts of
assets and liabilities and their tax 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 year, which is 1,351,615 for all periods presented.
These items have been retroactively restated as discussed in Note
I.
Statements of Cash Flows - For purposes of reporting cash
flows, cash and cash equivalents include cash on hand and amounts
due from banks (including cash items in process of clearing).
Current Accounting Developments - The Financial Accounting
Standards Board has issued Statement No. 114, "Accounting by
Creditors for Impairment of a Loan," amended by Statement No.
118, "Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosure," which became effective for years
beginning after December 15, 1994. The statements generally
require impaired loans to 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.
35
<PAGE>
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.
Reference should be made to Note E regarding the application of
these statements.
NOTE B
Acquisitions
On August 26, 1994, the Bank acquired certain assets and
liabilities of the former Oak Tree Federal Savings Bank office
located in LaPlace, Louisiana from the Resolution Trust
Corporation (RTC). Pursuant to a Purchase and Assumption
Agreement, the Bank assumed $4.7 million of deposits and specific
liabilities, and purchased assets having a book value of $12
thousand. The Bank purchased the deposits at a premium of $453
thousand or 9.65%. The net premium paid on these deposits is
included in other assets on the balance sheet at December 31,
1995 and 1994, and is being amortized over fifteen years. This
acquisition was accounted for using the purchase method of
accounting, and the results of operations are included in the
consolidated financial statements from the date of acquisition.
Gain on purchased assets is recognized from acquired loans
from previous bank acquisitions on a cost recovery method as
principal payments are made and is included in the financial
statements as Gain on Purchased Assets.
NOTE C
Cash and Due from Banks
The Bank is required to maintain average cash reserve
balances. The amounts of those reserves at December 31, 1995 and
1994, were approximately $2.4 million and $2.1 million,
respectively.
36
<PAGE>
NOTE D
Securities
Amortized costs and fair values of securities available for
sale as of December 31, 1995 and 1994 are summarized as follows:
<TABLE>
<CAPTION>
1995
Gross Gross
Amortized Unrealized Unrealized Fair
In thousands Cost Gains Losses Value
<S> <C> <C> <C> <C>
U. S. Treasury Securities $44,630 $318 ($2) $44,946
Securities of Other U. S. Government Agencies 64,227 141 (543) 63,825
Mortgage-Backed Securities 11,254 223 (25) 11,452
Obligations of State and Political Subdivisions 11,133 452 (2) 11,583
Equity Securities 786 - - 786
Totals $132,030 $1,134 ($572) $132,592
1994
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
U. S. Treasury Securities $58,871 $0 ($584) $58,287
Securities of Other U. S. Government Agencies 39,740 11 (1,387) 38,364
Mortgage-Backed Securities 11,757 95 (381) 11,471
Obligations of State and Political Subdivisions 774 - - 774
Totals $111,142 $106 ($2,352) $108,896
</TABLE>
Included in the category of Securities of Other US
Government Agencies at December 31, 1995 and 1994 is $19.6
million par value of structured notes, with an amortized cost at
December 31, 1995 of $19.6 million and a fair value of $19.2
million. The resulting unrealized loss in the amount $400
thousand accounts for approximately 70% of the Bank's gross
unrealized loss on securities at December 31, 1995. At December
31, 1994, the amortized cost of these securities was $19.6
million with a fair value of $18.5 million. The resulting $1.1
million loss accounted for approximately 50% of the Bank's gross
unrealized loss on securities at that time. The structured
notes, which are issued by US government agencies, are debt
securities whose cash flows are dependent on one or more indices
in ways that create interest rate risk. 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 shock and income simulation 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.
The Bank also has approximately $619 thousand 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 $2.35 million 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 thousand. 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
37
<PAGE>
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 $1.73 million as partial payments of the $2.35
million in original par value. Of the $1.73 million, $1.26
million was recognized as gains on securities available for sale
since the original write down. The remaining $470 thousand was
applied against the book value. Of the $1.26 million in gains
recognized since the write down, $440 thousand was recognized in
1995 and $822 thousand was recognized in the year 1994. 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.
The following table shows the amortized cost, fair value,
maturity distribution, and weighted average yield of the
securities available for sale as of December 31, 1995.
Maturities may differ from contractual maturities in mortgage-
backed securities because the mortgages underlying the securities
may be called or repaid without any penalties.
<TABLE>
<CAPTION>
Amortized Fair Average
In thousands Cost Value Yield
<S> <C> <C> <C>
U. S. Treasury Securities
Within 1 Year $29,637 $29,797 5.98%
After 1 but Within 5 Years 14,993 15,149 6.27%
After 5 but Within 10 Years - - 0.00%
After 10 Years - - 0.00%
44,630 44,946 6.08%
Securities of Other U. S. Government Agencies
Within 1 Year 8,599 8,595 5.36%
After 1 but Within 5 Years 55,628 55,230 5.65%
After 5 but Within 10 Years - - 0.00%
After 10 Years - - 0.00%
64,227 63,825 5.61%
Mortgage-Backed Securities
Within 1 Year $1 $1 9.46%
After 1 but Within 5 Years 120 125 9.76%
After 5 but Within 10 Years 1,965 2,040 9.18%
After 10 Years 9,168 9,286 7.01%
11,254 11,452 7.43%
Obligations of State and Political Subdivisions*
Within 1 Year 670 670 10.20%
After 1 but Within 5 Years 5,690 5,919 9.05%
After 5 but Within 10 Years 4,116 4,326 8.36%
After 10 Years 657 664 8.48%
11,133 11,583 8.83%
Equity Securities 786 786 3.64%
786 786 3.64%
Totals $132,030 $132,592 6.20%
* Tax Equivalent Basis - 34% in 1995
</TABLE>
38
<PAGE>
Securities available for sale with a carrying amount of
$20.1 million and $25.5 million at December 31, 1995 and 1994,
respectively, were pledged as collateral on public deposits and
for other purposes as required or permitted by law.
The Bank has invested in Federal Home Loan Bank of Dallas
stock which is included in Equity Securities and is reflected at
the lower of cost or fair value in these financial statements.
The cost of these securities was $786 thousand and $774 thousand,
which approximates fair value, at December 31, 1995 and 1994,
respectively.
Gross realized gains and losses from the sale of securities
for the years ended December 31, 1995, 1994, and 1993 are as
follows:
<TABLE>
<CAPTION>
In thousands 1995 1994 1993
<S> <C> <C> <C>
Realized gains $442 $823 $203
Realized losses - - (4)
Total Realized Gain (Loss) $442 $823 $199
</TABLE>
Amortized costs and fair values of securities being held to
maturity as of December 31, 1994 are summarized as follows:
<TABLE>
<CAPTION>
1994
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U. S. Treasury Securities $7,257 $9 ($155) $7,111
Obligations of State and Political Subdivisions 11,286 156 (247) 11,195
Totals $18,543 $165 ($402) $18,306
</TABLE>
Securities being held to maturity with a carrying amount of
$3.4 million at December 31, 1994, were pledged as collateral on
public deposits and for other purposes as required or permitted
by law.
NOTE E
Loans
An analysis of the loan portfolio at December 31, 1995 and
1994, is as follows:
<TABLE>
<CAPTION>
In thousands 1995 1994
<S> <C> <C>
Real Estate - Construction $1,662 $1,241
Real Estate - Mortgage 81,082 74,403
Loans to Farmers 1,101 1,646
Commercial and Industrial Loans 11,531 6,921
Loans to Individuals 11,457 10,569
All Other Loans 793 901
Total Loans $107,626 $95,681
Unearned Income (33) (11)
Total Loans, Net $107,593 $95,670
</TABLE>
The Bank had loans on a non-accrual basis totaling
approximately $527 thousand and $431 thousand at December 31,
1995 and 1994, respectively. The Bank recognized $29 thousand in
interest income during 1995 and $20 thousand in interest income
during 1994 on these loans. Had the loans been performing,
39
<PAGE>
approximately $32 thousand and $33 thousand in additional income
would have been recognized for the years ended December 31, 1995
and 1994. Loans contractually past due 90 days or more in
addition to loans on non-accrual, were $441 thousand and $313
thousand at December 31, 1995 and 1994.
Impaired loans having recorded investments of $3.6 million
at December 31, 1995 has been recognized in conformity with FASB
Statement No. 114 as amended by FASB Statement No. 118. The
total allowance for loan losses related to these loans was $1.4
million at December 31, 1995. Interest received on impaired
loans amounted to $399 thousand at December 31, 1995.
The Bank is permitted, under the laws of the State of
Louisiana, to make extensions of credit to its executive officers
and directors and their affiliates in the ordinary course of
business. An analysis of the aggregate loans, for December 31,
1995 and 1994, are as follows:
<TABLE>
<CAPTION>
In thousands 1995 1994
<S> <C> <C>
Balance - Beginning of Year $2,197 $2,492
New Loans 954 430
Repayments (1,196) (725)
Balance - End of Year $1,955 $2,197
Maximum Balance During the Year $2,197 $2,539
</TABLE>
NOTE F
Allowance for Loan Losses
Following is a summary of the activity in the allowance for
loan losses:
<TABLE>
<CAPTION>
In thousands 1995 1994 1993
<S> <C> <C> <C>
Balance - Beginning of Year $3,077 $2,717 $2,036
Current Provision from Income - 350 900
Recoveries on Loans Charged-Off 634 121 355
Loans Charged-Off (438) (111) (574)
Balance - End of Year $3,273 $3,077 $2,717
Ratio of Allowance for Loan Losses to
Non-accrual Loans at End of Year 621.06% 712.87% 1132.19%
Ratio of Allowance for Loan Losses to
Impaired Loans at End of Year 90.92% - -
Ratio of Allowance for Loan Losses to Loans
Outstanding at End of Year 3.04% 3.22% 3.47%
Ratio of Net Loans Charged-Off to
Loans Outstanding at End of Year (.18%) (.02%) 0.32%
</TABLE>
40
<PAGE>
NOTE G
Bank Premises and Equipment
Bank premises and equipment costs and the related
accumulated depreciation at December 31, 1995 and 1994, are as
follows:
<TABLE>
<CAPTION>
In thousands 1995 1994
<S> <C> <C>
Land $2,342 $2,342
Bank Premises 6,999 6,999
Furniture and Equipment 4,322 4,171
$13,663 $13,512
Accumulated Depreciation (5,202) (4,542)
Total $8,461 $8,970
</TABLE>
Depreciation charged to operating expenses for the three
years ended December 31, 1995, 1994, and 1993, respectively, was
$686 thousand, $655 thousand, and $641 thousand.
NOTE H
Deposits
Following is a detail of deposits as of December 31, 1995
and 1994:
<TABLE>
<CAPTION>
In thousands 1995 1994
<S> <C> <C>
Demand Deposit Accounts $44,921 $42,599
NOW and Super NOW Accounts 24,160 20,966
Insured Money Market Accounts 55,909 64,878
Savings Accounts 32,299 32,213
Certificates of Deposit over $100,000 10,102 7,827
Other Certificates of Deposit 72,333 62,379
Total $239,724 $230,862
</TABLE>
Interest expense on Certificates of Deposit over $100
thousand at December 31, 1995, 1994, and 1993, amounted to $387
thousand, $244 thousand and $192 thousand, respectively.
Public Fund deposits at December 31, 1995 and 1994, were
$15.7 million and $19.4 million, respectively.
NOTE I
Stockholders' Equity and Regulatory Matters
Dividends are paid by the Company from its assets which are
provided primarily by dividends from the Bank. Dividends are
payable only out of retained earnings and current earnings of the
Company. Certain restrictions exist regarding the ability of the
Bank to transfer funds to the Company in the form of cash
dividends. Regulatory approval is required to pay dividends in
excess of the Bank's earnings in the current year plus retained
net profits for the preceding year. As of January 1, 1995, the
Bank had retained earnings of $19.7 million of which $7.5 million
was available for distribution without prior regulatory approval.
The Bank is also required to maintain minimum amounts of
capital to total risk weighted assets, as defined by the banking
regulators. At December 31, 1995, the Bank is required to have
minimum Tier 1 and Total Capital ratios of 4.00% and 8.00%,
respectively. The Bank's actual ratios at that date were 23.40%
and 24.66%, respectively. The Bank's Leverage Ratio at December
31, 1995, was 11.22%.
Under current regulations, the Bank is limited in the amount
it may loan to its affiliates. Loans to a single affiliate may
not exceed 10%, and loans to all affiliates may not exceed 20% of
the Bank's capital and surplus.
On September 22, 1993 the stockholders of the Company
adopted a resolution to amend the Articles of Incorporation and
41
<PAGE>
to execute a five-for-one stock split in the form of a dividend.
The Restated Articles of Incorporation provided for an increase
in the number of authorized shares of common stock from 1,000,000
shares to 10,000,000 shares, and to restate the par value per
share from $10.00 to $5.00 per share. All earnings per share
information presented has been retroactively restated to reflect
this change.
NOTE J
Employee Benefit Plans
The Bank maintains a Salary Deferral Plan qualified under
Internal Revenue Service Code Section 401(k) for all employees
who are 21 years of age and have completed one year of service.
Covered employees may elect to contribute 1% to 15% of gross pay
to the plan. The majority of the plans assets are invested in
mutual funds. As part of the plan, the Bank has, at its
discretion, the ability to match the contributions or make
supplemental contributions. No amounts were contributed by the
Bank for either 1995 or 1994.
The Bank maintains a noncontributory defined benefit pension
plan covering all employees who qualify as to age and length of
service. Current policy is to fund annual pension costs as they
accrue. Pension expense was $164 thousand, $133 thousand and
$123 thousand for the years ended December 31, 1995, 1994, and
1993, respectively. The majority of the plans assets are invested
in money market funds or mutual funds. The following table sets
forth the plan's funded status at December 31, 1995 and 1994.
<TABLE>
<CAPTION>
In thousands 1995 1994
<S> <C> <C>
Actuarial Present Value of Benefit Obligations:
Vested Benefits $2,455 $2,417
Accumulated Benefits $3,305 $2,837
Projected Benefits ($4,456) ($3,666)
Plan Assets at Fair Value 4,881 3,984
Projected Benefit Obligation Less
Than (In Excess Of) Plan Assets 425 318
Unrecognized Net (Gain) Loss 207 281
Unrecognized Net Obligation (Asset) (256) (275)
Prepaid Pension Expense $376 $324
</TABLE>
Assumptions used by the Company in the determination of
pension plan information consisted of the following:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Discount Rate 8.25% 8.25%
Rate of Increase in Compensation Levels 5.50% 5.50%
Expected Long-Term Rate of Return
on Plan Assets 9.00% 9.00%
</TABLE>
42
<PAGE>
Net pension expense for 1995, 1994, and 1993 included the
following components:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Service Cost $245 $249 $220
Interest Cost 297 256 226
Return on Assets (724) 14 (400)
Net Amortization and Deferral 346 (386) 77
Total $164 $133 $123
</TABLE>
The Bank's employee benefit program also includes self-
funded health and dental insurance plans for all full-time
employees. The costs of these plans are completely funded by the
Bank. The employees can also elect to purchase dependent
coverage under the plans. The Bank pays a premium to a reinsurer
for coverage on losses and claims that exceed $20,000 per
individual per plan year. Amounts paid by the Bank in
association with these plans totaled $529 thousand and $507
thousand for the years ended December 31, 1995 and 1994,
respectively. The Bank had set aside reserves in the amount of
$540 thousand for payment of unreported claims with dates of
service through December 31, 1995.
NOTE K
Other Operating Expenses
The analysis of other operating expenses for the years ended
December 31, 1995, 1994, and 1993, are as follows:
<TABLE>
<CAPTION>
In thousands 1995 1994 1993
<S> <C> <C> <C>
Advertising and Public Relations $344 $331 $301
Director Fees 152 161 187
Equipment Expense 888 821 786
Regulatory Assessments 267 603 606
Legal and Professional 266 337 267
Postage and Shipping 167 159 156
Service Charges-Other Institutions 112 113 104
Stationery, Printing, and Supplies 328 274 256
Telephone 159 210 198
Other 584 455 363
Total $3,267 $3,464 $3,224
</TABLE>
43
<PAGE>
NOTE L
Income Taxes
The total provision for income taxes charged to income
amounted to $2.4 million for 1995, $1.8 million for 1994, and
$1.2 million for 1993. The provisions represent effective tax
rates of 31% for 1995 and 30% for 1994 and 28% for 1993.
Following is a reconciliation between income tax expense based on
the federal statutory tax rates and income taxes reported in the
statements of income.
<TABLE>
<CAPTION>
In thousands 1995 1994 1993
<S> <C> <C> <C>
Income Taxes Based on Statutory Rates -
34% in 1995, 1994, and 1993 $2,603 $2,064 $1,438
Tax Exempt Income (216) (229) (248)
Other - Net 23 (27) 11
Total $2,410 $1,808 $1,201
</TABLE>
The components of consolidated income tax expense (benefits)
are:
<TABLE>
<CAPTION>
In thousands 1995 1994 1993
<S> <C> <C> <C>
Provision for Current Taxes $2,500 $1,905 $1,472
Provision (Credit) for Deferred Taxes (90) (97) (271)
Total $2,410 $1,808 $1,201
</TABLE>
A deferred income tax asset of $471 thousand and $1.3
million is included in other assets at December 31, 1995 and
1994, respectively. The deferred tax provision (credit) consists
of the following timing differences:
<TABLE>
<CAPTION>
In thousands 1995 1994 1993
<S> <C> <C> <C>
Depreciation Expense for Tax Reporting
in Excess of Amount for Financial Reporting $14 $6 $9
Provision for Loan Losses for Financial
Reporting in Excess of Amount for
Tax Reporting (63) (128) (280)
Other Real Estate Write-Offs for Financial
Reporting in Excess of Amount for
Tax Reporting - - 1
Accretion Income for Financial Reporting
in Excess of Tax Reporting (4) 25 (1)
Increase in Insurance Reserve 147 _ _
Increase in Prepaid Pension 110 - -
Total ($90) ($97) ($271)
</TABLE>
44
<PAGE>
The net deferred tax asset consists of the following
components at December 31, 1995 and 1994:
<TABLE>
<CAPTION>
In thousands 1995 1994
<S> <C> <C>
Depreciation ($351) ($337)
Provision for Loan Losses 1,014 951
Accretion Income (38) (42)
Insurance Reserve 147 -
Prepaid Pension (110) -
Unrealized (Gain) Loss on Securities
Available for Sale (191) 763
Total Deferred Tax Asset $471 $1,335
</TABLE>
NOTE M
Short-Term Borrowings
The Bank maintains an open line of credit with the Federal
Home Loan Bank of Dallas. The total line of credit available
with Federal Home Loan Bank of Dallas amounts to approximately
$5.7 million at December 31, 1995. This amount is computed based
on the Bank's stock position less current advances, not to exceed
65% of the Bank's outstanding 1-4 family mortgage loans. The
agreement provides for interest based upon the federal funds rate
on outstanding balances for short term purposes and a certain
spread above the treasury yield curve for longer term advances.
Drawings on the line were $350 thousand and $0 at December 31,
1995 and 1994 respectively. The line is collateralized by a
blanket lien on 1-4 family mortgage loans.
NOTE N
Off-Balance Sheet Instruments
The Company 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
include commitments to extend credit, financial guarantees, and
letters of credit. Those instruments involve, to varying
degrees, elements of credit risk in excess of the amount
recognized in the balance sheets.
The Company's exposure to credit loss in the event of
nonperformance by the other party to the financial instrument for
commitments to extend credit and letters of credit is represented
by the contractual amount of those instruments. The Bank uses
the same credit policies in making commitments and conditional
obligations as they do for on-balance sheet instruments.
In the normal course of business the Company has made
commitments to extend credit of $15.3 million at December 31,
1995. This amount includes unfunded loan commitments aggregating
$14.8 million and letters of credit of $576 thousand.
NOTE O
Concentrations of Credit
All of the Bank's business activities are with customers in
the Bank's market area, which consists primarily of the southeast
region of the State of Louisiana. Investments in state and
municipal securities also involve governmental entities within
the Bank's market area. The concentrations of credit by type of
loan are shown in Note E. Most of the Bank's credits are to
individuals and small businesses secured by real estate. The
Bank, as a matter of policy, does not extend credit to any single
borrower or group of related borrowers in excess of $2 million.
45
<PAGE>
NOTE P
Fair Value of Financial Instruments
The following methods and assumptions were used to estimate
the fair value of each class of financial instruments for which
it is practicable to estimate that value:
Cash and Short-Term Investments - For those short-term
instruments, the carrying amount is a reasonable estimate of fair
value.
Securities - Fair value of securities held to maturity and
available for sale is based on quoted market prices or dealer
quotes. If a quoted market price is not available, fair value is
estimated using quoted market prices for similar securities.
Loans - The fair value for loans is estimated using
discounted cash flow analyses, with interest rates currently
being offered for similar loans to borrowers with similar credit
rates. Loans with similar classifications are aggregated for
purposes of the calculations. The allowance for loan loss which
was used to measure the credit risk, is subtracted from loans.
Deposits - The fair value of demand deposits, savings
accounts, and certain money market deposits is the amount payable
on demand at the reporting date. The fair value of fixed-
maturity certificates of deposit is estimated using discounted
cash flow analyses, with interest rates currently offered for
deposits of similar remaining maturities.
Commitments to Extend Credit and Standby Letters of Credit -
The fair value of commitments is estimated using the fees
currently charged to enter into similar agreements, taking into
account the remaining terms of the agreements and the present
creditworthiness of the parties. For fixed-rate loan
commitments, fair value also considers the difference between
current levels of interest rates and the committed rates. The
fair value of letters of credit is based on fees currently
charged for similar agreements at the reporting date.
The estimated approximate fair values of the Bank's
financial instruments as of December 31, 1995 and 1994 are as
follows:
<TABLE>
<CAPTION>
In thousands 1995 1994
Carrying Carrying
Amount Fair Value Amount Fair Value
<S> <C> <C> <C> <C>
Financial Assets:
Cash and
Short-Term Investments $22,607 $22,607 $22,648 $22,648
Securities 132,592 132,592 127,439 127,202
Loans - Net 104,320 104,416 92,593 90,980
$259,519 $259,615 $242,680 $240,830
Financial Liabilities:
Deposits $239,724 $239,817 $230,862 $231,882
Unrecognized Financial Instruments
Commitments to Extend Credit
and Letters of Credit $0 $2 $0 $2
</TABLE>
46
<PAGE>
NOTE Q
Contingencies
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.
47
<PAGE>
NOTE R
Parent Company Financial Statements
The financial statements for One American Corp. (Parent
Company Only) are presented below:
<TABLE>
<CAPTION>
BALANCE SHEETS
December 31, 1995 and 1994
In thousands
1995 1994
<S> <C> <C>
Assets
Cash $1,252 $931
Receivables from Subsidiaries 361 -
Income Tax Receivable - 13
Investment in Subsidiaries:
First American Bank and Trust 29,125 23,460
One American Agency, Inc. 160 128
29,285 23,588
Total Assets $30,898 $24,532
Liabilities
Accrued Dividend Payable $338 $542
Income Taxes Payable 348 -
686 542
Stockholders' Equity
Common Stock 7,500 7,500
Surplus 5,000 5,000
Retained Earnings 18,337 12,115
Treasury Stock - 148,385 shares at cost (625) (625)
Total Stockholders' Equity 30,212 23,990
Total Liabilities and Stockholders' Equity$30,898 $24,532
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
for the years ended December 31, 1995, 1994, and 1993
In thousands 1995 1994 1993
<S> <C> <C> <C>
Income
Interest Income $17 $11 $8
Dividends from Subsidiaries:
First American Bank and Trust 1,425 600 525
One American Agency, Inc. - - -
Total Income 1,442 611 533
Expenses
Operating Expenses 53 48 67
Total Expenses 53 48 67
Income before Income Taxes and Equity in
Undistributed Net Income of Subsidiaries 1,389 563 466
Income Tax Expense (Benefit) (12) (13) (20)
Income before Equity in Undistributed
Net Income of Subsidiaries 1,401 563 486
Equity in Undistributed Net Income of
Subsidiaries 3,846 3,688 2,541
Net Income $5,247 $4,264 $3,027
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
for the years ended December 31, 1995, 1994, and 1993
In thousands 1995 1994 1993
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net Income $5,247 $4,264 $3,027
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Equity in Undistributed Net Income of Subsidiaries (3,846) (3,688) (2,541)
Changes in Assets and Liabilities:
(Increase) Decrease in Receivables from Subsidiaries (361) 45 (23)
(Increase) Decrease in Income Tax Receivables 13 (13) -
Increase (Decrease) in Income Taxes Payable 348 (25) 20
Net Cash Provided by Operating Activities 1,401 583 483
Cash Flows From Financing Activities:
Dividends Paid (1,080) (406) (338)
Net Cash Used in Financing Activities (1,080) (406) (338)
Net Increase in Cash 321 177 145
Cash - Beginning of Year 931 754 609
Cash - End of Year $1,252 $931 $754
Noncash Financing Activities:
Dividends Declared and Not Paid $338 $541 $406
Change in Unrealized Gain (Loss) on Securities Available
For Sale, Net $1,853 ($1,930) $449
Transfer From Retained Earnings to Surplus - - $2,500
Transfer From Retained Earnings Due to Stock Split - - $4,500
</TABLE>
50
<PAGE>
Item 9. Disagreements on Accounting and Financial Disclosures
Not Applicable.
Part III
Items 10, 11, 12, and 13.
The information required by items 10, 11, 12 and 13 is
included in the Company's Proxy Statement, for the 1996 Annual
Meeting of Stockholders and is incorporated herein by reference.
Part IV
Item 14. Exhibits, Financial Statements Schedules and Reports on
Form 8-K
(a) Financial Statements
1. The financial statements of One American
Corp. in the Company's 1995 Form 10-K are
incorporated by reference in Item 8.
2. Other financial statement schedules are
either omitted because they are inapplicable or
included in the financial statements or related
notes.
(b) Reports on Form 8-K
There were no Forms 8-K filed in the quarter ended
December 31, 1995.
(c) Exhibits
3. Articles of Incorporation and by-laws of
One American Corp. are incorporated by reference to
the Company's Registration Statement on Form S-14
filed October 29, 1982, with the Security and
Exchange Commission.
22. Subsidiaries of the Registrant
First American Bank and Trust, incorporated
under the laws of the State of Louisiana
One American Agency, Inc.,
incorporated under the laws of the State of
Louisiana
23. Definitive Proxy Statement for the 1996
Annual Meeting of Stockholders' of One American
Corp.
51
<PAGE>
Signatures
Pursuant to the requirements of Section 13 or 15(d) 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.
/s/ J. B. Falgoust
J. B. Falgoust
President
Dated March 14, 1996
Pursuant to the requirements of the Securities Act of 1934,
this report has been signed by the following persons in the
capacities indicated on March 14, 1996:
/s/ J. B. Falgoust, President, (principal executive, financial and
accounting officer) and Director
J. B. Falgoust
/s/ Craig G. Brazan, Director
Craig G. Brazan
/s/ E. V. Cazenave, Jr., Director
E. V. Cazenave, Jr.
/s/ Michael J. Cazenave, Director
Michael J. Cazenave
/s/ Dean T. Falgoust, Director
Dean T. Falgoust
/s/ Preston L. Falgoust, Director
Preston L. Falgoust
/s/ Luke T. Granier, Jr., Director
Luke T. Granier, Jr.
/s/ Marcel T. Graugnard, Jr., Director
Marcel T. Graugnard, Jr.
/s/ Honora F. Gravois, Director
Honora F. Gravois
/s/ Anthony J. Nobile, Director
Anthony J. Nobile
/s/ Dr. Carl J. Poche, Director
Dr. Carl J. Poche
/s/ Craig A. Vitrano, Director
Craig A. Vitrano
/s/ David J. Vial, Director
David J. Vial
/s/ Albert J. Waguespack, Director
Albert J. Waguespack
/s/ Francis A. Waguespack, Jr., Director
Francis A. Waguespack, Jr.
52
<PAGE>
Signatures
Pursuant to the requirements of Section 13 or 15(d) 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.
______________________
J. B. Falgoust
President
Dated_________________
Pursuant to the requirements of the Securities Act of 1934,
this report has been signed by the following persons in the
capacities indicated on March 14, 1996.
______________________________,President, (principal executive,financial
J. B. Falgoust and accounting officer) and Director
______________________________,Director
Craig G. Brazan
______________________________,Director
E. V. Cazenave, Jr.
______________________________,Director
Michael J. Cazenave
______________________________,Director
Dean T. Falgoust
______________________________,Director
Preston L. Falgoust
______________________________,Director
Luke T. Granier, Jr.
______________________________,Director
Marcel T. Graugnard, Jr.
______________________________,Director
Honora F. Gravois
______________________________,Director
Anthony J. Nobile
______________________________,Director
Dr. Carl J. Poche
______________________________,Director
Dr. David J. Vial
______________________________,Director
Dr. Craig A. Vitrano
______________________________,Director
Albert J. Waguespack
______________________________,Director
Francis A. Waguespack, Jr.
53
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<PERIOD-TYPE> 12-MOS
<CASH> 14365
<INT-BEARING-DEPOSITS> 867
<FED-FUNDS-SOLD> 7375
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 132592
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 107593
<ALLOWANCE> 3273
<TOTAL-ASSETS> 271628
<DEPOSITS> 239724
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1692
<LONG-TERM> 0
<COMMON> 7500
0
0
<OTHER-SE> 22712
<TOTAL-LIABILITIES-AND-EQUITY> 271628
<INTEREST-LOAN> 9948
<INTEREST-INVEST> 7040
<INTEREST-OTHER> 558
<INTEREST-TOTAL> 18205
<INTEREST-DEPOSIT> 23
<INTEREST-EXPENSE> 6511
<INTEREST-INCOME-NET> 11694
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 442
<EXPENSE-OTHER> 8501
<INCOME-PRETAX> 7657
<INCOME-PRE-EXTRAORDINARY> 7657
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5247
<EPS-PRIMARY> 3.88
<EPS-DILUTED> 3.88
<YIELD-ACTUAL> 7.68
<LOANS-NON> 527
<LOANS-PAST> 441
<LOANS-TROUBLED> 1778
<LOANS-PROBLEM> 1822
<ALLOWANCE-OPEN> 3077
<CHARGE-OFFS> 438
<RECOVERIES> 634
<ALLOWANCE-CLOSE> 3273
<ALLOWANCE-DOMESTIC> 2490
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 783
</TABLE>
