UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the
Quarter Ended March 31, 1996 Commission File Number: 0-12437
One American Corp.
(Exact name of registrant as specified in its charter)
Louisiana 72-0948181
(State or other jurisdiction of (IRS Employer Identification No.)
Incorporation of Organization)
2785 LA Hwy. 20 West
P. O. Box 550
Vacherie, Louisiana 70090-0550
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (504) 265-2265
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $5.00 Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common stock $5 Par Value, 1,351,615 shares outstanding
as of May 9, 1996.
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FORM 10-Q Index
Part I
Financial Information
Financial Statements
Consolidated Balance Sheets,
March 31, 1996, December 31, 1995, and March 31, 1995 3
Consolidated Statements of Income
for the three months ended March 31, 1996 and 1995 4
Consolidated Statements of Changes in Stockholders' Equity
for the three months ended March 31, 1996 and 1995 5
Consolidated Statements of Cash Flows
for the three months ended March 31, 1996 and 1995 6
Notes to Consolidated Financial Statements 8
Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Average Balance Sheets and Interest Rate Analysis
for the three months ended March 31, 1996,
December 31,1995,and March 31, 1995 20
Interest Differentials
for the three months ended March 31, 1996,
December 31,1995,and March 31, 1995 21
Part II
Other Information
Legal Proceedings 22
Exhibits and Reports on Form 8-K 22
Management's Responsibility for Financial Reporting 23
Signatures 24
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<TABLE>
<CAPTION>
Consolidated Balance Sheets
One American Corp. and Subsidiaries Unaudited Unaudited Unaudited
In thousands March 31,December 31,March 31,
1996 1995 1995
<S> <C> <C> <C>
Assets
Cash and Due From Banks $10,903 $14,365 $10,345
Interest Bearing Deposits in Other Banks 910 867 261
Federal Funds Sold and Securities
Purchased Under Resale Agreements 9,150 7,375 13,175
Securities:
Held to Maturity (Fair Value of $-0-, $-0-,
and $18,017, respectively) - - 17,931
Available for Sale (Amortized Cost of $140,566, $132,030
and $107,759, respectively) 140,683 132,592 106,221
Total Securities 140,683 132,592 124,152
Loans 109,267 107,593 98,014
Less: Allowance for Loan Losses (3,281) (3,273) (2,917)
Loans, Net 105,986 104,320 95,097
Bank Premises and Equipment 8,750 8,461 8,928
Accrued Interest Receivable 2,095 2,112 1,500
Other Assets 2,343 1,536 2,015
Total Assets $280,820 $271,628 $255,473
Liabilities
Deposits:
Noninterest Bearing $47,355 $44,920 $40,197
Interest Bearing 200,550 194,803 188,821
Total Deposits 247,905 239,723 229,018
Accrued Interest Payable 512 603 326
Other Liabilities 1,504 1,090 500
Total Liabilities 249,921 241,416 229,844
Stockholders' Equity
Common Stock-$5.00 par value;
Authorized-10,000,000 shares;
Issued-1,500,000 shares 7,500 7,500 7,500
Surplus 5,000 5,000 5,000
Retained Earnings 18,947 17,966 14,769
Unrealized Gain (Loss) on Securities Available for Sale, Net 77 371 (1,015)
Treasury Stock - 148,385 shares at cost (625) (625) (625)
Total Stockholders' Equity 30,899 30,212 25,629
Total Liabilities and Stockholders' Equity $280,820 $271,628 $255,473
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Consolidated Statements of Income
One American Corp. and Subsidiaries
for the three months ended March 31, 1996 and 1995 Unaudited Unaudited
In thousands, except per share data 1996 1995
<S> <C> <C>
Interest Income
Interest and Fees on Loans $2,660 $2,268
Interest on Securities:
Taxable Interest 1,797 1,687
Nontaxable Interest 156 159
Total Interest on Securities 1,953 1,846
Other Interest Income 205 144
Total Interest Income 4,818 4,257
Interest Expense on Deposits 1,780 1,507
Net Interest Income 3,038 2,750
Provision for Loan Losses 30 150
Net Interest Income After
Provision for Loan Losses 3,008 2,601
Other Income
Service Charges on Deposit Accounts 492 465
Gain or (Loss) on Securities 146 2
Gain on Purchased Assets 197 342
Other Operating Income 179 144
Total Other Income 1,014 953
Income Before Other Expenses 4,022 3,554
Other Expenses
Salaries and Employee Benefits 1,023 981
Net Occupancy Expense 272 263
Net ORE Expense (2) (115)
Other Operating Expenses 752 876
Total Other Expenses 2,045 2,005
Income Before Income Taxes 1,977 1,549
Applicable Income Taxes 658 377
Net Income $1,319 $1,172
Net Income Per Share $0.98 $0.87
Cash Dividends Per Share $0.25 $0.00
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Consolidated Statements of Changes in Stockholders' Equity
One American Corp. and Subsidiaries
for the three months ended March 31, 1996 and 1995 Unaudited Unaudited
In thousands 1996 1995
<S> <C> <C>
Common Stock
Beginning and End of Period $7,500 $7,500
Surplus
Beginning and End of Period $5,000 $5,000
Retained Earnings
Balance - Beginning of Period $17,966 $13,597
Net Income 1,319 1,172
Cash Dividends (338) -
Balance - End of Period $18,947 $14,769
Unrealized Gain (Loss) on Securities Available for Sale, Net
Balance - Beginning of Period $371 ($1,482)
Net Change in Unrealized Gain (Loss) (294) 467
Balance - End of Period $77 ($1,015)
Treasury Stock
Balance - Beginning and End of Period ($625) ($625)
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
One American Corp. and Subsidiaries
for the three months ended March 31, 1996 and 1995 Unaudited Unaudited
In thousands 1996 1995
<S> <C> <C>
Cash Flows From Operating Activities
Net Income $1,319 $1,172
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Gain on Purchased Assets (197) (342)
Provision for Depreciation 170 177
Provision for Loan Losses 30 150
Accretion on Securities (34) (77)
Provision (Credit) for Deferred Income Taxes (28) (42)
(Gain) Loss on Sale of Other Real Estate - (106)
(Gain) Loss on Sale of Equipment - 6
(Gain) Loss on Securities (146) (2)
Changes in Assets and Liabilities:
(Increase) Decrease in Accrued Interest Receivable 17 240
(Increase) Decrease in Other Assets (625) 192
Increase (Decrease) in Accrued Interest Payable (91) (9)
Increase (Decrease) in Other Liabilities 416 385
Net Cash Provided by Operating Activities 831 1,744
Cash Flows From Investing Activities
Net (Increase) Decrease in Interest Bearing Deposits (43) (6)
Maturities or Calls of Securities Available for Sale 16,506 17,965
Maturities or Calls of Securities Held to Maturity - 758
Purchases of Securities Available for Sale (25,000) (14,648)
Purchases of Securities Held to Maturity - -
Proceeds from Sale of Securities Available for Sale 138 -
Net (Increase) Decrease in Federal Funds Sold (1,775) (4,975)
Net (Increase) Decrease in Loans (1,502) (2,359)
Proceeds from Sale of Other Real Estate - 200
Proceeds from Sale of Premises, Equipment, and Other Assets - 40
Purchases of Premises and Equipment (459) (182)
Net Cash Used in Investing Activities (12,135) (3,207)
<FN>
(Continued on next page)
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
for the three months ended March 31, 1996 and 1995
In thousands Unaudited Unaudited
(Continued) 1996 1995
<S> <C> <C>
Cash Flows From Financing Activities
Net Increase (Decrease) in Demand Deposits, NOW
and Savings Accounts 4,271 (6,603)
Net Increase (Decrease) in Certificates of Deposits 3,909 4,759
Dividends Paid (338) (541)
Net Cash Provided (Used) By Financing Activities 7,842 (2,385)
Decrease in Cash and Cash Equivalents (3,462) (3,848)
Cash and Cash Equivalents - Beginning of Year 14,365 14,193
Cash and Cash Equivalents - End of Period 10,903 $10,345
Supplemental Disclosure of Cash Flow Information:
Income Tax Payments - -
Interest Paid on Deposits $1,872 $1,516
Noncash Investing Activities:
Other Real Estate Acquired in Settlement of Loans $3 $46
Change in Unrealized Gain (Loss) on
Securities Available for Sale ($445) $707
Change in Deferred Tax Effect on
Unrealized Gain (Loss) on Securities Available for Sale ($151) $240
Noncash Financing Activities:
Dividends Declared and Not Paid $338 $541
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
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One American Corp. and Subsidiaries
Notes to Consolidated Financial Statements
(UNAUDITED)
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.
Presentation - The accompanying unaudited consolidated
interim financial statements do not include all of the
information and footnotes required by generally accepting
accounting principles. Management is of the opinion that the
following unaudited interim financial statements reflect all
normal, recurring accrual adjustments necessary to provide a fair
statement of the results for the interim periods presented. It
is noted that the results of the first three months ended March
31, 1996 are no indication of the expected results for the annual
period which ends December 31, 1996. Additional information
concerning the audited financial statements and notes can be
obtained from One American Corp.'s annual report and Form 10-K
filed for the period ended December 31, 1995.
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.
One American Corp., a Louisiana corporation, was
incorporated on May 14, 1982. At a special meeting on December
14, 1982, the stockholders of First American Bank and Trust
(Bank) approved a Joint Agreement of Merger and Plan of
Reorganization by and among the Bank, First American Interim Bank
(FAIB) and One American Corp. On January 21, 1983, the Bank was
merged into FAIB and the surviving Bank, First American Bank and
Trust became a wholly-owned subsidiary of One American Corp.,
through a one-for-one exchange for all of the outstanding common
stock of First American Bank and Trust. The organization has
been accounted for as a pooling-of-interest.
On July 14, 1983, One American Agency, Inc. was incorporated
under the laws of the State of Louisiana. The primary business
of the Agency is the sale of insurance. The Agency is a wholly-
owned subsidiary of One American Corp.
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. Securities
classified as trading are those securities held for resale in
anticipation of short term market movements. The Bank has no
securities classified as held to maturity or trading.
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
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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.
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. A
loan is considered impaired when it is probable the Bank will not
be able to collect all contractual principal and interest
payments due in accordance with the terms of the loan agreement.
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
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
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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.
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).
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 sheets presented, 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.
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One American Corp. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
March 31, 1996
First Quarter in Review
Net income for the current quarter of 1996 was $1.3 million
compared to $1.2 million for the same quarter of 1995. The
increase in net income is a result of an increase in net interest
income and decrease in provision for loan losses. Earnings per
common share were $.98 and $.87 for the first quarters of 1996
and 1995, respectively. Return on average assets on an
annualized basis was 1.91% for the current quarter, and 1.87% in
the same quarter of 1995. For the first quarters of 1996 and 1995,
return on average equity on an annualized basis was 18.04% and
18.66%, respectively. Cash dividends were $.25 per share for the
current quarter and $.00 for the first quarter of 1995.
Net interest income (FTE) for the current quarter was $3.1
million, 10.4% higher than the first quarter of 1995, due to an
increase in volume of loans which offset an increase in interest
expense. The increased volume of loans is a result of greater
loan demand in the Bank's trade area. The net interest spread
(FTE) was 4.09% for the current quarter and 4.23% for the same
quarter of 1995.
During the first quarter of 1996, in comparison with the
same quarter of 1995, average loans outstanding increased $11.6
million or 12.0% to $107.8 million. Average total deposits for
the current quarter increased $17.5 million or 7.7% to $245.4
million when compared to the average total deposits for the same
quarter of 1995. Average total assets for the current quarter
increased $22.0 million or 8.7% to $276.1 million when
respectively compared to the total average assets of the first
quarter of 1995.
Earnings Analysis
Net Interest Income - The primary source of earnings for
the Bank is net interest income; the difference between interest
and fees generated from interest-earning assets less interest
expense for interest-bearing liabilities. For analytical
purposes, net interest income is presented on a tax equivalent
basis, using a 34% tax rate. Certain earning assets are exempt
from income taxes, therefore a tax equivalent adjustment is
included so that tax exempt earning assets are tax equivalent and
comparable with other taxable earning assets. The primary
factors that affect net interest income are changes in volume and
mix of earning assets and interest-bearing liabilities, along
with changes in market rates.
Net interest income on a fully tax equivalent basis (FTE)
for the current quarter of 1996 was $3.1 million compared to $2.8
million for the same quarter of 1995. A decrease in the net
interest spread during the current quarter, supported by a
greater increase in cost of funds than the increase in yield on
earning assets, offset by an increase in loan volume accounted
for the increase in net interest income (FTE) of $305 thousand
over the same quarter of 1995.
Earning Assets, Interest Bearing Liabilities, and Net
Interest Spread - During the current quarter of 1996, average
earning assets were $256.9 million, an increase of $22.5 million
or 9.6% over the first quarter of 1995. The trend in earning
assets over the quarters compared shows a shift in the mix of
earning assets toward the loan portfolio from the securities
portfolio as shown in the table Earning Asset Structure.
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
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guarantee that the Bank will continue to experience the loan
growth enjoyed over the last twelve months. The current loan
demand, in the Bank's primary market area, appears to be the
result of an improving economic climate and lower interest rates
compared to years past. The trend over the quarters compared
shows the mix of interest bearing liabilities shifted to higher
interest bearing certificates of deposit from lower interest
bearing savings and NOW accounts and money market accounts. As
an additional note, the Bank has benefited by the increase in non-
interest bearing deposits as a percentage of total deposits. The
growth is attributed to a concertive effort by the Bank to
attract a broader core deposit base consisting of commercial and
personal customers.
For the current quarter of 1996, the average yield on
earning assets was 7.65%, while the average cost of interest
bearing funds was 3.57%, producing a net interest spread (FTE) of
4.08%. The net interest margin (FTE) was 4.87% for the current
quarter of 1996. In comparison, the net interest margin (FTE)
for the same quarter of 1995 was 4.86%.
The cost of interest bearing liabilities during the first
quarter of 1995 was 3.25%, while the yield on average earning
assets was 7.47%, producing a net interest spread of 4.23%. The
32 basis point increase in the average cost of interest bearing
liabilities from the first quarter of 1995 to the same quarter of
1996, was greater than the 18 basis point increase in the yield
on interest earning assets for the respective quarters, which
provided for the reduction in net interest spread at the close of
the first quarter of 1996.
The table of Average Balance Sheets and Interest Rate
Analysis for the three month periods ended March 31, 1996,
December 31, 1995, and March 31, 1995, and the corresponding
table of Interest Differentials detail the effect a change in
average balance outstanding of assets and liabilities and the
change interest yield and interest costs have on net interest
income for the respective periods. Also, the tables of Earning
Asset Structure and Deposit Structure show a more condensed,
descriptive analysis of the common size percentage changes in
earning assets and deposit mix over the quarterly periods
analyzed.
Provision for Loan Losses
Provision for Loan Losses was $30 thousand and $150 thousand
for the first quarters of 1996 and 1995, respectively. Net
charge-offs (recoveries) were $22 thousand for the current
quarter, versus net charge-offs of $310 thousand for the same
quarter of 1995. As a percentage of average loans, net charge-
offs (recoveries) were insignificant in the current and .3% in
the first quarter of 1995. Gross charge-offs as a percentage of
average loans were also insignificant in the current and .4% in
the first quarter of 1995. Recoveries as a percentage of gross
charge-offs for the current quarter were 66.7% versus 15.3% for
the same quarter of 1995.
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<TABLE>
<CAPTION>
Earning Asset Structure First Fourth First
In thousands Quarter 1996 Quarter 1995 Quarter 1995
% 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 $2,449 1.0% $790 0.3% $257 0.1%
Federal Funds Sold 13,469 5.2% 10,143 4.1% 9,184 3.9%
Securities
Taxable 122,656 47.7% 118,098 47.9% 117,858 50.3%
Non-Taxable 10,530 4.1% 11,142 4.5% 10,854 4.6%
Loans - Net 107,825 42.0% 106,530 43.2% 96,241 41.1%
Total Earning Assets $256,929 100.0% $246,703 100.0% $234,394 100.0%
</TABLE>
<TABLE>
<CAPTION>
Deposit Structure First Fourth First
In thousands Quarter 1996 Quarter 1995 Quarter 1995
Average % of Average % of Average % of
Balances Deposits Balances Deposits Balances Deposits
<S> <C> <C> <C> <C> <C> <C>
Noninterest Bearing Deposits $45,295 18.5% $46,004 19.5% $39,642 17.4%
NOW Accounts 26,499 10.8% 22,331 9.4% 22,908 10.0%
Savings Accounts 32,103 13.1% 32,475 13.7% 31,442 13.8%
Money Market Deposit Accounts 56,090 22.9% 54,128 23.0% 60,813 26.7%
Certificates of Deposits less than $100,000 75,258 30.7% 72,532 30.7% 65,805 28.9%
Total Core Deposits $235,245 95.9% $227,470 96.3% $220,610 96.8%
Certificates of Deposits greater than $100,000 10,163 4.1% 8,800 3.7% 7,335 3.2%
Total Deposits $245,408 100.0% $236,270 100.0% $227,945 100.0%
Interest Bearing Liabilities as a percentage
of Earning Assets 77.9% 77.1% 80.3%
Core Deposits as a percentage
of Total Average Assets 85.2% 85.6% 86.8%
</TABLE>
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Other Income
Other income including gains and losses from security
transactions for the current quarter was $1.0 million, an
increase of $61 thousand or 6% compared to the same quarter of
1995. Exclusive of security transactions, other income for the
current quarter decreased $83 thousand or 9% from the first
quarter of 1995.
Gain on purchased assets was $197 thousand for the current
quarter, a decrease of $145 thousand or 42% from the first
quarter of 1995. These gains are recognition of the collection
of principal on certain doubtful loans acquired as a result of
the bank acquisitions. The Bank continues to pursue the
collection of these doubtful loans. However, the amount of
future gains, if any are indeterminable.
Other operating income for the current quarter was $179
thousand, compared to $144 thousand for the same quarter of 1995.
Included in other operating income are fees from Bankcard
services, safe deposit box rentals, and other operating fees.
Other operating fees were slightly greater last year.
Gains from security transactions involving available - for -
sale securities were $146 thousand for the current quarter,
compared to $2 thousand for the first quarter of 1995. The Bank
recovered $138 thousand as gains from security transactions
during the first quarter of 1996 from Louisiana Agricultural
Finance Authority Bonds and Louisiana Housing Finance Authority
Bonds which were partially written off in accordance with
regulatory directives in May of 1992. More specifics can be
found on the gains recognized from the Guaranteed Investment
Contracts in the discussion section entitled Non-performing
Assets.
Other Expenses
Other expenses were $2.0 million for the first quarter of
1996 and same quarter of 1995. Salaries and employee benefits
were $1.0 million for the current quarter compared to $981
thousand for the same of quarter of 1995. Net occupancy expense
was $272 thousand for the current quarter, compared to $263
thousand for the first quarter of 1995. Other operating expenses
were $752 thousand for the current quarter, and $876 for the
first quarter of 1995.
Net other real estate expense (benefit) was $(2) thousand
for the current quarter. This compares to $(115) thousand for
the first quarter of 1995. Net other real estate and
repossession expense (benefit) is the difference between
operating expense of other real estate and repossessed assets
less the income generated by other real estate and the net gains
from the sale of other real estate and repossessed assets.
Management continues to convert these non performing assets to
investable funds at a value which it feels is beneficial to the
earnings of the Bank.
Applicable Income Taxes
Applicable income taxes for the current quarter were $658
thousand compared to $377 thousand for the first quarter of 1995.
Effective tax rates are 33% and 24%, respectively. The Bank
experienced a tax benefit during the first quarter of 1995 due to
the write off of certain doubtful loans which reduced the
effective tax position. The Company's effective income tax
expense as a percentage of pretax income is different from
statutory rates due to tax-exempt interest income earned from
investments in state and municipal bonds. Interest income from
state and municipal bonds is generally exempt from federal income
taxes.
Liquidity
Liquidity management is the process of ensuring that the
Company's asset and liability structure is the proper mix to meet
the withdrawals of its' depositors, and to fund loan commitments
and other funding requirements. Management's primary source of
funds is the Bank's core deposit base. During the current
quarter, average core deposits were approximately $235.2 million
or 96% of total average deposits and 85% of total average assets.
For a comparison with prior period quarters see the table
entitled Deposit Structure. Other sources of liquidity are
14
<PAGE>
maturities in the investment portfolio and loan maturities and
repayments. Management continually evaluates the maturities and
mix of its earning assets and interest-bearing liabilities to
monitor its ability to meet current and future obligations and to
achieve maximum net interest income. Due to the stability of the
core deposit base as noted above and the maturities of the
investment portfolio, management does not anticipate any
difficulties in meeting the needs of its depositors nor the
ability to fund future loan commitments.
Interest Rate Sensitivity
Interest rate 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.
The Interest Rate Sensitivity Table presents the Bank's
interest rate sensitivity position at March 31, 1996. The table
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.
15
<PAGE>
<TABLE>
<CAPTION>
Interest Rate Sensitivity Table
March 31, 1996
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 $48,880 $25,593 $55,238 $10,972 - $140,683
Loans, Net of Unearned Income 17,912 22,750 44,952 20,069 303 105,986
Federal Funds Sold 9,150 - - - - 9,150
Other Assets 910 - - - 24,091 25,001
Total Assets $76,852 $48,343 $100,190 $31,041 $24,394 $280,820
Liabilities
NOW and Super NOW Deposits $4,422 $10,240 $749 $10,447 - $25,858
Insured Money Market Accounts 3,737 10,876 40,990 - - 55,603
Savings Deposits 6,194 13,887 1,017 11,651 - 32,749
Certificates of Deposits 21,904 49,575 14,860 - - 86,339
Noninterest Bearing Deposits 10,072 21,750 2068 13,465 - 47,355
Other Liabilities 12 34 205 94 1,672 2,017
Stockholders' Equity - - - - 30,899 30,899
Total Liabilities and
Stockholders' Equity $46,341 $106,362 $59,889 $35,657 $32,571 $280,820
Interest Rate Sensitivity Gap $30,511 ($58,019) $40,301 ($4,616) ($8,177) -
Cumulative Interest Rate
Sensitivity Gap $30,511 ($27,508) $12,794 $8,178 -
GAP / Assets 10.9% -20.7% 14.4% -1.6% -2.9%
Cumulative GAP / Assets 10.9% -9.8% 4.6% 2.9% 0.0%
</TABLE>
Financial Instruments
In the normal course of business the Company enters into
agreements which, for accounting purposes, are considered off -
balance sheet activities. These agreements are loans and lines
of credit commitments to customers to extend credit at specified
rates, duration, and purpose. The commitments adhere to normal
lending policy, collateral requirements, and credit reviews.
Available loan commitments at March 31, 1996, were $10.4 million
and $6.8 million at March 31, 1995. The Bank had letters of
credit of $791 thousand issued at March 31, 1996 compared to $332
thousand at March 31, 1995. Additionally, the Bank has deposit
customers who have credit lines available to them through their
deposit accounts. At March 31, 1996 the available portion of
these credit lines was $693 thousand compared to $502 thousand at
March 31, 1995. 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 March 31, 1996, the aggregate credit available was $2.8
million, and $2.2 million at March 31, 1995. Applicants are
reviewed through normal lending policies and credit reviews.
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.
16
<PAGE>
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 March 31, 1996 is $28.6 million par value
of structured notes, with an amortized cost of $28.6 million and
a fair value of $28.2 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 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 related 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 March 31,
1996 or 3.0% of loans outstanding. At March 31, 1995, the
allowance for loan losses was $2.9 million or 3.0% of 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.
Nonperforming Assets
Nonperforming assets include nonaccrual and impaired loans
and other real estate. Generally, loans are considered
nonaccrual when the interest becomes 90 days past due or when
there is uncertainty about the repayment of principal and
interest in accordance with the terms of the loans. Nonaccrual
loans at March 31, 1996, were $303 thousand, compared to $244
thousand at March 31, 1995. Loans past due 90 days and still
accruing at March 31, 1996 and 1995 were $804 thousand and $358
thousand, respectively. For March 31, 1996 and 1995, nonaccrual
loans were .3% and .3% of gross loans outstanding and 9.2% and
8.4% of the allowance for loan losses, respectively.
Impaired loans having recorded investments of $2.9 million
at March 31, 1996 have been recognized in conformity with SFAS No.
114 as amended by SFAS No. 118. The total allowance for loan
losses related to these loans was $1.3 million at March 31, 1996.
Interest received on impaired loans amounted to $102 thousand at
March 31, 1996.
Other real estate is properties held for sale acquired
though foreclosure or negotiated settlements of debt. Other real
estate was insignificant at the close of the current and first
quarter of 1995.
17
<PAGE>
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.
The Bank also has approximately $480 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 $1.87 million as partial payments of the $2.35
million in original par value. Of the $1.87 million, $1.4
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 $1.4 million in gains
recognized since the write down, $139 thousand was recognized in
1996, $440 thousand was recognized in 1995, and $822 thousand was
recognized prior to 1995. The Bank continues to pursue the
collection of principal on these securities. However, the amount
of any future fulfillment of these collection actions remain
uncertain.
Regulatory Matters
The Bank is subject to various capital requirements
administered by the federal Banking agencies. Failure to meet
minimum capital requirements can initiate certain mandatory - and
possibly discretionary - actions by regulators that, if
undertaken, could have a material effect on the Bank's financial
statements. Various regulations require the Bank to meet
specific capital adequacy guidelines that involve quantitative
measures of the Bank's assets, liabilities, and certain off -
balance - sheet items as calculated under regulatory accounting
practices. The Bank's capital classification is also subject to
qualitative judgments by the regulators about components, risk
weightings, and other factors. Quantitative measures established
by regulation to ensure capital adequacy require the Bank to
maintain minimum amounts and ratios as set forth in the section
entitled Capital Adequacy below.
Management is unaware, regulatory or otherwise, of any known
trends, events or uncertainties which are reasonably likely to
have or will have a material effect on the Company's liquidity,
capital resources, or results of operations.
Capital Adequacy
The strength of a company is measured by the company's
capital, earnings history, asset quality, and management.
Capital can be increased by the retention of earnings and
issuance of equity stock. Management feels the current trend of
earnings and dividend distribution is sufficient to maintain its
capital adequacy requirements.
18
<PAGE>
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 below, the Company's
ratios for the reporting periods exceed regulatory minimums.
<TABLE>
<CAPTION>
Capital Adequacy Ratios
In Thousands March 31, December 31, March 31,
1996 1995 1995
<S> <C> <C> <C>
Tier 1 Capital:
Stockholders' Equity $29,232 $29,841 $26,645
Tier 2 Capital:
Allowance for Loan Losses 1,635 1,615 1,394
Total Capital $30,867 $31,456 $28,039
Risk-Weighted Ratios:
Tier 1 Capital 22.6% 23.4% 23.9%
Total Capital 23.9% 24.7% 25.1%
Leverage Ratio 10.5% 11.2% 10.5%
Stockholders' Equity 10.4% 11.0% 10.4%
Regulatory Risk-Based Capitalization Requirements
Significantly Critically
Well Adequaltely Under Under Under
Capitalized Capitalized Capitalized Capitalized Capitalized
Risk-Weighted Ratios:
Tier 1 Capital 6.0% 4.0% < 4.0% < 3.0%
Total Capital 10.0% 8.0% < 8.0% < 6.0%
Leverage Ratio 5.0% 4.0% < 4.0% < 3.0% <= 2.0%
tangible
equity
</TABLE>
The Company's dividends are determined by its Board of
Directors. The current policy is to maintain dividends at a
level which ensures that the Company is able to maintain
sufficient regulatory capital levels. The Company's primary
source of funds is the dividend received from the Bank. Under
current dividend limitations, the Bank could pay in dividends
without regulatory approval approximately $7.4 million. The
Company carries no debt, therefore future liquidity needs are
limited to the payment of any declared dividends. Should a
regulatory agency limit the Bank from paying dividends, the
Company maintains sufficient liquidity to maintain its
operations.
19
<PAGE>
<TABLE>
<CAPTION>
AVERAGE BALANCE SHEETS AND INTEREST RATE ANALYSIS
for the quarterly periods ended March 31, 1996, December 31, 1995, and March 31, 1995
In thousands
First Quarter 1996 Fourth Quarter 1995 First Quarter 1995
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 $2,449 $33.6 5.50% $790 $11.3 5.67% $257 $3.5 5.52%
Federal Funds Sold and Securities
Purchased under Resale Agreements 13,469 171.6 5.11% 10,143 146.7 5.74% 9,184 129.3 5.71%
Securities:
Taxable 122,656 1,800.9 5.89% 118,098 1,769.7 5.95% 117,858 1,698.4 5.84%
Non-Taxable* 10,530 230.5 8.78% 11,142 245.5 8.74% 10,854 240.9 9.00%
Loans - Net 107,824 2,660.0 9.90% 106,530 2,672.1 9.95% 96,241 2,246.7 9.47%
Total Earning Assets 256,927 4,896.6 7.65% 246,703 4,845.3 7.79% 234,394 4,318.8 7.47%
Allowance for Loan Losses (3,258) (3,211) (2,895)
Nonearning Assets 22,465 22,396 22,621
Total Assets $276,135 $265,888 $254,120
Liabilities and Stockholders' Equity
NOW Accounts $26,499 $143.6 2.17% $22,331 $120.4 2.14% $22,908 $128.0 2.27%
Savings Accounts 32,103 202.2 2.53% 32,475 206.9 2.53% 31,442 194.4 2.51%
Money Market Deposit Accounts 56,090 391.1 2.80% 54,128 381.4 2.80% 60,813 436.5 2.91%
Certificates of Deposits less than $100,000 75,258 934.2 4.98% 72,532 899.2 4.92% 65,805 670.5 4.13%
Certificates of Deposits greater than $100,000 10,163 108.7 4.29% 8,800 102.9 4.64% 7,335 78.1 4.32%
Total Interest Bearing Liabilities 200,113 1,779.8 3.57% 190,266 1,710.8 3.57% 188,303 1,507.5 3.25%
Noninterest Bearing Deposits 45,296 46,004 39,642
Other Liabilities 1,412 1,211 708
Stockholders' Equity 29,314 28,407 25,467
Total Liabilities and Stockholders' Equity $276,135 $265,888 $254,120
Net Interest Income - Tax Equivalent Basis* 3,116.8 3,134.5 2,811.3
Tax Equivalent Adjustment (78.4) (83.5) (81.9)
Net Interest Income $3,038.4 $3,051.0 $2,729.4
Net Interest Income - Spread* 4.09% 4.23% 4.23%
Net Interest Income as a % of Total Earning Assets* 4.87% 5.04% 4.86%
*Tax Equivalent Basis - 34% Rate for the periods dated
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
INTEREST DIFFERENTIALS
In thousands
First Quarter 1996 First Quarter 1996
vs vs
Fourth Quarter 1995 First Quarter 1995
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 $23.7 ($1.4) $22.3 $29.9 $0.2 $30.1
Federal Funds Sold 48.1 (23.2) 24.9 60.3 (18.0) 42.3
Securities:
Taxable 68.3 (37.1) 31.2 69.1 33.4 102.5
Non-Taxable* (13.5) (1.5) (15.0) (7.2) (3.2) (10.4)
Loans 32.5 (44.6) (12.1) 270.4 142.9 413.3
Total Interest Income 159.1 (107.8) 51.3 422.4 155.3 577.8
Interest Bearing Liabilities:
NOW Accounts 22.5 0.7 23.2 20.1 (4.5) 15.6
Savings Accounts (2.4) (2.3) (4.7) 4.1 3.7 7.8
Money Market Deposit Accounts 13.8 (4.1) 9.7 (33.9) (11.5) (45.4)
Certificates of Deposits less than $100,000 33.8 1.2 35.0 96.3 167.4 263.7
Certificates of Deposits greater than $100,000 15.9 (10.1) 5.8 30.1 0.5 30.6
Total Interest Expense 83.6 (14.6) 69.0 116.7 155.6 272.3
Increase (Decrease) in
Interest Differential $75.5 ($93.2) ($17.7) $305.8 ($0.3) $305.5
*Tax Equivalent Basis - 34% Rate for the periods dated
</TABLE>
21
<PAGE>
Part II
Item 1. Legal Proceedings
During the normal course of business, the Company is
involved in various legal proceedings. In the opinion of
management and counsel, any liability resulting from such
proceedings would not have a material adverse effect on the
Company's financial statements.
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
None
22
<PAGE>
Management's Responsibility for Financial Reporting
The management of One American Corp. and Subsidiaries is
responsible for the preparation of the financial statements,
related financial data and other information in this quarterly
report. The financial statements are prepared in accordance with
generally accepted accounting principles and include some amounts
that are necessarily based on management's informed estimates and
judgments, with consideration given to materiality. All
financial information contained in this quarterly report is
consistent with that in the financial statements.
Management fulfills its responsibility for the integrity,
objectivity, consistency and fair presentation of the financial
statements and financial information through an accounting system
and related internal accounting controls that are designed to
provide reasonable assurance that assets are safeguarded and that
transactions are authorized and recorded in accordance with
established policies and procedures. The concept of reasonable
assurance is based on the recognition that the cost of a system
of internal accounting controls should not exceed the related
benefits. As an integral part of the system of internal
accounting controls, One American Corp. and Subsidiaries has a
professional staff who monitors compliance with and assess the
effectiveness of the system of internal accounting controls and
coordinate audit coverage with the independent public
accountants.
The Audit Committee of the Board of Directors, composed
solely of outside directors, meets periodically with management,
and the independent public accountants to review matters relating
to financial reporting, internal accounting control and the
nature, extent and results of the audit effort. The independent
public accountants have direct access to the Audit Committee with
or without management present.
The financial statements as of December 31, 1995, were
examined by Hannis T. Bourgeois & Co., L. L. P. independent
public accounts, who rendered an independent professional opinion
on the financial statements prepared by management. The
financial statements as of March 31, 1996, have not been reviewed
by Hannis T. Bourgeois & Co., L. L. P.
23
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
One American Corp.
By:/s/ J.B. Falgoust
J. B. Falgoust, President
May 9, 1996
Date
24
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-30-1996
<PERIOD-TYPE> 3-MOS
<CASH> 10903
<INT-BEARING-DEPOSITS> 910
<FED-FUNDS-SOLD> 9150
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 140683
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 109267
<ALLOWANCE> 3281
<TOTAL-ASSETS> 280820
<DEPOSITS> 247905
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2016
<LONG-TERM> 0
<COMMON> 7500
0
0
<OTHER-SE> 23399
<TOTAL-LIABILITIES-AND-EQUITY> 280820
<INTEREST-LOAN> 2660
<INTEREST-INVEST> 1953
<INTEREST-OTHER> 205
<INTEREST-TOTAL> 4818
<INTEREST-DEPOSIT> 34
<INTEREST-EXPENSE> 1780
<INTEREST-INCOME-NET> 3038
<LOAN-LOSSES> 30
<SECURITIES-GAINS> 146
<EXPENSE-OTHER> 2045
<INCOME-PRETAX> 1977
<INCOME-PRE-EXTRAORDINARY> 1977
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1319
<EPS-PRIMARY> .98
<EPS-DILUTED> .98
<YIELD-ACTUAL> 7.65
<LOANS-NON> 303
<LOANS-PAST> 804
<LOANS-TROUBLED> 1853
<LOANS-PROBLEM> 1047
<ALLOWANCE-OPEN> 3273
<CHARGE-OFFS> 67
<RECOVERIES> 45
<ALLOWANCE-CLOSE> 3281
<ALLOWANCE-DOMESTIC> 1300
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1981
</TABLE>
