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, 1997 Commission File Number: 0-2437
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 8, 1997.
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FORM 10-Q Index
Part I
Financial Information
Financial Statements
Consolidated Balance Sheets,
March 31, 1997, December 31, 1996, and March 31, 1996 3
Consolidated Statements of Income
for the three months ended March 31, 1997 and 1996 4
Consolidated Statements of Changes in Stockholders' Equity
for the three months ended March 31, 1997 and 1996 5
Consolidated Statements of Cash Flows
for the three months ended March 31, 1997 and 1996 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
Average Balance Sheets and Interest Rate Analysis
for the three months ended March 31, 1997,
December 31, 1996, March 31, 1996 19
Interest Differentials
for the three months ended March 31, 1997,
December 31, 1996, March 31, 1996 20
Part II
Other Information
Legal Proceedings 21
Exhibits and Reports on Form 8-K 21
Management's Responsibility for Financial Reporting 22
Signatures 23
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<TABLE>
<CAPTION>
Consolidated Balance Sheets
One American Corp. and Subsidiaries Unaudited Unaudited Unaudited
March 31, December 31, March 31,
In thousands 1997 1996 1996
<S> <C> <C> <C>
Assets
Cash and Due From Banks $10,946 $11,176 $10,903
Interest Bearing Deposits in Other Banks 2,283 2,770 910
Federal Funds Sold and Securities
Purchased Under Resale Agreements 10,650 13,325 9,150
Securities:
Available for Sale (Amortized Cost of $114,094, $111,797
and $140,566, respectively) 113,824 111,894 140,683
Total Securities 113,824 111,894 140,683
Loans 141,007 135,859 109,267
Less: Allowance for Loan Losses (3,171) (3,083) (3,281)
Loans, Net 137,836 132,776 105,986
Bank Premises and Equipment 9,682 9,645 8,750
Other Real Estate 51 68 -
Accrued Interest Receivable 2,065 2,031 2,095
Other Assets 2,323 2,426 2,343
Total Assets $289,660 $286,111 $280,820
Liabilities
Deposits
Noninterest Bearing $48,922 $45,907 $47,355
Interest Bearing 204,562 204,797 200,550
Total Deposits 253,484 250,704 247,905
Accrued Interest Payable
Other Liabilities 1,735 1,179 1,504
Total Liabilities 255,800 252,576 249,921
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 22,162 21,596 18,947
Unrealized Gain (Loss) on Securities Available for Sale, Net (177) 64 77
Treasury Stock - 148,385 shares at cost (625) (625) (625)
Total Stockholders' Equity 33,860 33,535 30,899
Total Liabilities and Stockholders' Equity $289,660 $286,111 $280,820
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, 1997 and 1996 Unaudited Unaudited
In thousands, except per share data 1997 1996
<S> <C> <C>
Interest Income
Interest and Fees on Loans $3,159 $2,660
Interest on Securities:
Taxable Interest 1,480 1,797
Nontaxable Interest 134 156
Total Interest on Securities 1,614 1,953
Other Interest Income 234 205
Total Interest Income 5,007 4,818
Interest Expense on Deposits 1,855 1,780
Net Interest Income 3,152 3,038
Provision for Loan Losses 75 30
Net Interest Income After
Provision for Loan Losses 3,077 3,008
Other Income
Service Charges on Deposit Accounts 521 492
Gain or (Loss) on Securities 24 146
Gain on Purchased Assets 111 197
Other Operating Income 190 179
Total Other Income 846 1,014
Income Before Other Expenses 3,923 4,022
Other Expenses
Salaries and Employee Benefits 1,100 1,023
Net Occupancy Expense 293 272
Net ORE Expense (9) (2)
Other Operating Expenses 1,010 752
Total Other Expenses 2,394 2,045
Income Before Income Taxes 1,529 1,977
Applicable Income Taxes 557 658
Net Income $972 $1,319
Net Income Per Share $0.72 $0.98
Cash Dividends Per Share $0.30 $0.25
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, 1997 and 1996 Unaudited Unaudited
In thousands 1997 1996
<S> <C> <C>
Common Stock
Balance - Beginning and End of Period $7,500 $7,500
Surplus
Balance - Beginning and End of Period $5,000 $5,000
Retained Earnings
Balance - Beginning of Period $21,596 $17,966
Net Income 972 1,319
Cash Dividends (406) (338)
Balance - End of Period $22,162 $18,947
Unrealized Gain (Loss) on Securities Available for Sale, Net
Balance - Beginning of Period $64 $371
Net Change in Unrealized Gain (Loss) (241) (294)
Balance - End of Period ($177) $77
Treasury Stock
Balance - Beginning and End of Period ($625) ($625)
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, 1997 and 1996 Unaudited Unaudited
In thousands 1997 1996
<S> <C> <C>
Cash Flows From Operating Activities
Net Income $972 $1,319
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Gain on Purchased Assets (111) (197)
Provision for Depreciation 182 170
Provision for Loan Losses 75 30
Net Amortization (Accretion) on Securities (27) (34)
Provision (Credit) for Deferred Income Taxes 10 (28)
(Gain) Loss on Sale of Other Real Estate (11) -
(Gain) Loss on Sale of Equipment
(Gain) Loss on Securities (24) (146)
Changes in Assets and Liabilities:
(Increase) Decrease in Accrued Interest Receivable (34) 17
(Increase) Decrease in Other Assets 216 (625)
Increase (Decrease) in Accrued Interest Payable (112) (91)
Increase (Decrease) in Other Liabilities 576 424
Net Cash Provided by Operating Activities 1,712 839
Cash Flows From Investing Activities
Maturities or Calls of Securities Available for Sale 15,549 16,506
Purchases of Securities Available for Sale (17,816) (25,000)
Proceeds from Sale of Securities Available for Sale 24 138
Net (Increase) Decrease in Federal Funds Sold 2,675 (1,775)
Net (Increase) Decrease in Loans (5,024) (1,502)
Proceeds from Sale of Other Real Estate 28 -
Proceeds from Sale of Premises, Equipment, and Other Assets
Purchases of Premises and Equipment (219) (459)
Net Cash Used in Investing Activities (4,783) (12,092)
Cash Flows From Financing Activities
Net Increase (Decrease) in Demand Deposits, NOW and Savings Accounts (1,175) 4,271
Net Increase (Decrease) in Certificates of Deposits 3,955 3,909
Net Increase (Decrease) from Other Borrowings (21) (8)
Dividends Paid (405) (338)
Net Cash Provided (Used) By Financing Activities 2,354 7,834
Decrease in Cash and Cash Equivalents (717) (3,419)
Cash and Cash Equivalents - Beginning of Year 13,946 15,232
Cash and Cash Equivalents - End of Period $13,229 $11,813
Supplemental Disclosure of Cash Flow Information
Income Tax Payments
Interest Paid on Deposits 1,967 1,872
Noncash Investing Activities
Other Real Estate Acquired in Settlement of Loans - 3
Change in Unrealized Gain (Loss) on Securities Available for Sale (365) (445)
Change in Deferred Tax Effect on
Unrealized Gain (Loss) on Securities Available for Sale (124) (151)
Noncash Financing Activities
Dividends Declared and Not Paid 406 338
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, 1997 are no indication of the expected results for the annual
period which ends December 31, 1997. 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, 1996.
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
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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
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.
Impaired loans are being accounted for in accordance with
statement of Financial Accounting Standard (SFAS) No. 114,
"Accounting for Creditors for Impairment of a Loan," as amended
by Statement No. 118, "Accounting by Creditors for Impairment of
a Loan - Income Recognition and Disclosure." The statement
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.
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. Interest
on impaired loans is discontinued when, in management's opinion ,
the borrower may be unable to meet payments as they become due.
Generally, the Bank discontinues the accrual of interest income
when a loan becomes 90 days past due as to principal or interest.
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.
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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
are reduced by a valuation allowance when, in the opinion of
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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 September 23, 1996, the Bank acquired the
First American Bank of Tangipahoa located in Hammond, Tangipahoa
Parish, Louisiana for a purchase price of $1.8 million. Pursuant
to the Merger and Acquisition Agreement, the Bank acquired assets
with a fair value of $6.9 million and assumed $5.7 million of
deposits and specific liabilities. The excess of the purchase
price over the value of the net tangible assets has been assigned
to goodwill 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.
Current Accounting Developments - The Financial Accounting
Standards Board has issued Statement No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities." This statement became effective for transfers
and servicing of financial assets and extinguishments of
liabilities occurring after December 31, 1996. This statement
provides accounting and reporting standards for transfers and
servicing of financial assets and extinguishments of liabilities.
The statement generally requires that after a transfer of
financial assets, an entity would recognize all financial assets
and servicing it controls and liabilities it has incurred, and
would not recognize financial assets when control has been
surrendered or liabilities when they have been extinguished. The
Bank has addressed the impact of the application of this
statement, and considers it to be immaterial.
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One American Corp. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
March 31, 1997
First Quarter in Review
Net income for the current quarter of 1997 was $972 thousand
compared to $1.3 million for the same quarter of 1996. The
decrease in net income is a result of an increase in other
expenses. Earnings per common share were $.72 and $.98 for the
first quarters of 1997 and 1996, respectively. Return on average
assets on an annualized basis was 1.36% for the current quarter,
and 1.91% in the same quarter of 1996. For the first quarters of
1997 and 1996, return on average equity on an annualized basis
was 12.00% and 18.04%, respectively. Cash dividends were $.30
per share for the current quarter and $.25 for the first quarter
of 1996.
Net interest income (FTE) for the current quarter was $3.2
million, comparable to that of the first quarter of 1996. The
net interest spread (FTE) was 4.10% for the current quarter and
4.07% for the same quarter of 1996.
During the first quarter of 1997, in comparison with the
same quarter of 1996, average loans outstanding increased $28.4
million or 26% to $136.2 million. Average total deposits for the
current quarter increased $6.9 million or 3% to $251.9 million
when compared to the average total deposits for the same quarter
of 1996. Average total assets for the current quarter increased
$10.0 million or 4% to $286.1 million when respectively compared
to the total average assets of the first quarter of 1996.
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 1997 was $3.2 million comparable to
that of the same quarter of 1996. A slight increase in the net
interest spread during the current quarter, supported by a
greater increase in the volume of loans than the increase in
volume of interest bearing liabilities accounted for the increase
in net interest income (FTE) of $104 thousand over the same
quarter of 1996.
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Earning Assets, Interest Bearing Liabilities, and Net
Interest Spread - During the current quarter of 1997, average
earning assets were $265.6 million, an increase of $8.6 million
or 3% over the first quarter of 1996. 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's continued strategy is 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 continues to produce levels of loan demand which has
enhanced the Bank's earning asset structure. Management
continues to believe that greater levels of loan demand will
exist in the near future due to opportunities that were non-
existent in the Bank's primary market area. 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. The trend over the
quarters compared shows the mix of interest bearing liabilities
shifting to higher interest bearing certificates of deposit from
lower interest bearing money market accounts. As an additional
note, the Bank continues to benefit from the increase in non-
interest bearing deposits while at the same time maintains the
relationship 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 1997, the average yield on
earning assets was 7.76%, while the average cost of interest
bearing funds was 3.66%, producing a net interest spread (FTE) of
4.10%. The net interest margin (FTE) was 4.92% for the current
quarter of 1997. In comparison, the net interest margin (FTE)
for the same quarter of 1996 was 4.87%.
The cost of interest bearing liabilities during the first
quarter of 1996 was 3.57%, while the yield on average earning
assets was 7.64%, producing a net interest spread of 4.07%. The
9 basis point increase in the average cost of interest bearing
liabilities from the first quarter of 1996 to the same quarter of
1997, was less than the 12 basis point increase in the yield on
interest earning assets for the respective quarters. Also, a
larger volume of dollars were funded into loans which in addition
to the slight spread improvement provided for the improvement in
net interest income (FTE).
The table of Average Balance Sheets and Interest Rate
Analysis for the quarterly periods ended March 31, 1997, December
31, 1996, and March 31, 1996, 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 $75 thousand and $30 thousand
for the first quarters of 1997 and 1996, respectively. Net
charge-offs (recoveries) were $(13) thousand for the current
quarter, versus $22 thousand for the same quarter of 1996. As a
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percentage of average loans, net charge-offs (recoveries) were
insignificant in the current and first quarter of 1996. Gross
charge-offs as a percentage of average loans were also
insignificant in the current and first quarter of 1996.
Recoveries as a percentage of gross charge-offs for the current
quarter were 112.3% versus 66.7% for the same quarter of 1996.
<TABLE>
<CAPTION>
Earning Asset Structure First Fourth First
In thousands Quarter 1997 Quarter 1996 Quarter 1996
% 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 $3,739 1.5% $2,107 0.8% $2,449 1.0%
Federal Funds Sold 14,362 5.4% 10,373 4.0% 13,469 5.2%
Securities
Taxable 101,838 38.3% 103,122 40.0% 122,656 47.7%
Non-Taxable 9,400 3.5% 9,448 3.7% 10,530 4.1%
Loans - Net 136,214 51.3% 132,900 51.5% 107,824 42.0%
Total Earning Assets $265,553 100.0% $257,950 100.0% $256,928 100.0%
<CAPTION>
Deposit Structure First Fourth First
In thousands Quarter 1997 Quarter 1996 Quarter 1996
Average % of Average % of Average % of
Balances Deposits Balances Deposits Balances Deposits
<S> <C> <C> <C> <C> <C> <C>
Noninterest Bearing Deposits $46,807 18.5% $45,238 18.5% $45,296 18.5%
NOW Accounts 26,909 10.7% 24,055 9.8% 26,499 10.8%
Savings Accounts 31,938 12.7% 31,898 13.1% 32,103 13.1%
Money Market Deposit Accounts 52,421 20.8% 51,944 21.4% 56,090 22.9%
Certificates of Deposits less than $100,000 81,873 32.5% 79,649 32.6% 74,913 30.6%
Total Core Deposits 239,948 95.2% 232,784 95.4% 234,901 95.9%
Certificates of Deposits greater than $100,000 11,968 4.8% 11,272 4.6% 10,163 4.1%
Total Deposits $251,916 100.0% $244,056 100.0% $245,064 100.0%
Interest Bearing Liabilities as a percentage
of Earning Assets 77.2% 77.1% 77.8%
Core Deposits as a percentage
of Total Average Assets 83.9% 83.8% 85.1%
</TABLE>
Other Income
Other income including gains and losses from security
transactions for the current quarter was $846 thousand, a
decrease of $168 thousand or 17% compared to the same quarter of
1996. Exclusive of security transactions, other income for the
current quarter decreased $46 thousand or 5% from the first
quarter of 1996.
Gain on purchased assets was $111 thousand for the current
quarter, a decrease of $86 thousand or 44% from the same quarter
of 1996. These gains are recognition of the collection of
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principal on certain doubtful loans acquired as a result of past
bank acquisitions. The Bank continues to pursue the collection
of these doubtful loans. However, the amount of future gains, if
any are indeterminable.
Gains from security transactions involving available - for -
sale securities were $24 thousand for the current quarter,
compared to $146 thousand for the first quarter of 1996. The
Bank recovered $24 thousand as gains from security transactions
during the first quarter of 1997 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 $2.4 million for the first quarter of
1997, an increase of $349 thousand or 17% from the same quarter
of 1996. Salaries and employee benefits were $1.1 million for
the current quarter compared to $1.0 million for the same of
quarter of 1996. Net occupancy expense was $293 thousand for the
current quarter, compared to $272 thousand for the first quarter
of 1996. Other operating expenses were $1.0 million for the
current quarter, an increase of $258 thousand or 34% compared to
the same quarter of 1996 due mainly to one time occurrences which
occurred during the current quarter. The one time occurrences
related specifically to legal and professional expenses
associated with impaired credits.
Applicable Income Taxes
Applicable income taxes for the current quarter were $557
thousand compared to $658 thousand for the first quarter of 1996.
Effective tax rates are 36% and 34%, respectively. The Bank
experienced an additional tax expense during the first quarter of
1997 due to the adjustment of certain deferred tax assets which
increased the effective tax position. The increase in effective
tax position is somewhat overstated due to the adjustment
previously mentioned. Management expects the resulting entries
to adjust the effective tax position to coincide by year end with
that of similar prior periods. 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 $239.9 million
or 95% of total average deposits and 84% of total average assets.
For a comparison with prior period quarters see the table
entitled Deposit Structure. Other sources of liquidity are
maturities in the investment portfolio and loan maturities and
repayments. Management continually evaluates the maturities and
14
<PAGE>
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, 1997. The table
indicates that the Company's earning assets exceed its interest
bearing liabilities out to the one year point in time, suggesting
an increase 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
15
<PAGE>
offer long term, fixed rate loans to its customer base with
minimal additional interest rate risk exposure.
<TABLE>
<CAPTION>
Interest Rate Sensitivity Table
March 31, 1997
In thousands
0-90 91-365 1 Year - Over 5 Non-
Days Days 5 Years Years Sensitive Total
<S> <C> <C> <C> <C> <S><C>
Assets
Securities $32,384 $29,526 $45,556 $6,358 - $113,824
Loans, Net of Unearned Income 23,546 35,582 55,509 21,496 1,703 137,836
Federal Funds Sold 10,650 - - - - 10,650
Other Assets 2,283 - - - 25,067 27,350
Total Assets $68,863 $65,108 $101,065 $27,854 $26,770 $289,660
Liabilities
NOW and Super NOW Deposits $1,646 $4,938 $13,975 $5,143 - $25,702
Insured Money Market Accounts 204 24,869 25,608 - - 50,681
Savings Deposits 1,620 4,858 19,451 6,484 - 32,413
Certificates of Deposits 26,906 46,032 20,531 2,297 - 95,766
Noninterest Bearing Deposits 2,622 7,959 28,572 9,769 - 48,922
Other Liabilities 24 72 442 204 1,574 2,316
Stockholders' Equity - - - - 33,860 33,860
Total Liabilities and
Stockholders' Equity $33,022 $88,728 $108,579 $23,897 $35,434 $289,660
Interest Rate Sensitivity Gap $35,841 ($23,620) ($7,514) $3,959 ($8,664) -
Cumulative Interest Rate
Sensitivity Gap $35,841 $12,221 $4,707 $8,664 -
GAP / Assets 12.4% -8.2% -2.6% 1.4% -3.0%
Cumulative GAP / Assets 12.4% 4.2% 1.6% 3.0% 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, 1997 and 1996, were $9.0
million and $10.4 million, respectively. The Bank had letters of
credit of $597 thousand issued at March 31, 1997 compared to $791
thousand at March 31, 1996. Additionally, the Bank has deposit
customers who have credit lines available to them through their
deposit accounts. At March 31, 1997 the available portion of
these credit lines was $573 thousand compared to $693 thousand at
March 31, 1996. These credit lines are immediately cancelable by
the Bank. The credit lines provide a source of income to the
16
<PAGE>
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, 1997, the aggregate credit available was $3.2
million, and $2.8 million at March 31, 1996. 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.
Securities
Included in the category of Securities of Other US
Government Agencies at March 31, 1997 is $18.5 million par value
of structured notes, with an amortized cost of $18.5 million and
a fair value of $18.2 million, resulting in an unrealized loss in
the amount of $300 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 40 - 50% of the 10 year CMT plus 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 majority
of the 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 $3.2 million at March 31,
1997 or 2% of loans outstanding. At March 31, 1996, the
allowance for loan losses was $3.3 million or 3% 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
17
<PAGE>
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, 1997, were $1.7 million, compared to $303
thousand at March 31, 1996. Loans past due 90 days and still
accruing at March 31, 1997 and 1996 were $398 thousand and $804
thousand, respectively. For March 31, 1997 and 1996, nonaccrual
loans were 1.2% and .3% of gross loans outstanding and 53% and 9%
of the allowance for loan losses, respectively.
Impaired loans having recorded investments of $4.3 million
at March 31, 1997 compared to $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 is $2.2 million at March 31, 1997 compared to $1.3
million at March 31, 1996. Interest received on impaired loans
amounted to $98 thousand at March 31, 1997 compared to $102
thousand at March 31, 1996. Non-accrual loans not included in
impaired loans was immaterial at March 31, 1997 and 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 1996.
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 $318 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
18
<PAGE>
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 $2.03 million as partial payments of the $2.35
million in original par value. Of the $2.03 million, $1.56
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 $1.56 million in gains
recognized since the write down, $24 thousand was recognized in
1997, $227 thousand was recognized in 1996, and $1.31 million was
recognized prior to 1996. The Bank continues to pursue the
collection of principal on these securities. However, the amount
of any future fulfillment of these collection actions remain
uncertain.
Regulatory Matters
The Bank is subject to various capital requirements
administered by the federal Banking agencies. Failure to meet
minimum capital requirements can initiate certain mandatory - and
possibly discretionary - actions by regulators that, if
undertaken, could have a material effect on the Bank's financial
statements. Various regulations require the Bank to meet
specific capital adequacy guidelines that involve quantitative
measures of the Bank's assets, liabilities, and certain off -
balance - sheet items as calculated under regulatory accounting
practices. The Bank's capital classification is also subject to
qualitative judgments by the regulators about components, risk
weightings, and other factors. Quantitative measures established
by regulation to ensure capital adequacy require the Bank to
maintain minimum amounts and ratios as set forth in the section
entitled Capital Adequacy below.
Management is unaware, regulatory or otherwise, of any known
trends, events or uncertainties which are reasonably likely to
have or will have a material effect on the Company's liquidity,
capital resources, or results of operations.
Capital Adequacy
The strength of a company is measured by the company's
capital, earnings history, asset quality, and management.
Capital can be increased by the retention of earnings and
issuance of equity stock. Management feels the current trend of
earnings and dividend distribution is sufficient to maintain its
capital adequacy requirements.
The Bank is required to maintain minimum amounts of capital
to total risk-weighted assets, as defined by the regulators. The
guidelines require total capital of 8.00%, half of which must be
18
<PAGE>
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,
1997 1996 1996
<S> <C> <C> <C>
Tier 1 Capital:
Stockholders' Equity $33,125 $32,549 $30,417
Tier 2 Capital:
Allowance for Loan Losses 1,728 1,706 1,438
Total Capital $34,853 $34,255 $31,855
Risk-Weighted Ratios:
Tier 1 Capital 24.2% 24.1% 26.6%
Total Capital 25.5% 25.3% 27.9%
Leverage Ratio 11.6% 11.8% 11.1%
Stockholders' Equity 11.4% 11.4% 10.8%
Regulatory Risk-Based Capitalization Requirements
Significantly Critically
Well Adequately 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 of approximately $6.4 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.
20
<PAGE>
<TABLE>
<CAPTION>
AVERAGE BALANCE SHEETS AND INTEREST RATE ANALYSIS
In thousands
First Quarter 1997 Fourth Quarter 1996 First Quarter 1996
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 $3,739 $48 5.25% $2,107 $21 3.98% $2,449 $34 5.50%
Federal Funds Sold and Securities
Purchased under Resale Agreements 14,362 185 5.23% 10,373 150 5.79% 13,469 172 5.11%
Securities:
Taxable 101,838 1,480 5.89% 103,122 1,532 5.96% 122,656 1,801 5.89%
Non-Taxable* 9,400 202 8.73% 9,448 203 8.64% 10,530 231 8.78%
Loans - Net 136,214 3,160 9.41% 132,900 3,197 9.65% 107,824 2,660 9.90%
Total Earning Assets 265,553 5,076 7.76% 257,950 5,103 7.93% 256,928 4,897 7.64%
Allowance for Loan Losses (3,142) (3,320) (3,258)
Nonearning Assets 23,675 23,291 22,465
Total Assets $286,086 $277,921 $276,135
Liabilities and Stockholders' Equity
NOW Accounts $26,909 140 2.11% $24,055 128 2.13% $26,499 144 2.17%
Savings Accounts 31,938 199 2.52% 31,898 205 2.58% 32,103 202 2.53%
Money Market Deposit Accounts 52,421 362 2.80% 51,944 373 2.88% 56,090 391 2.80%
Certificates of Deposits less than $100,000 81,873 1,004 4.97% 79,649 1,011 5.09% 74,913 929 4.98%
Certificates of Deposits greater than $100,000 11,968 139 4.72% 11,272 135 4.79% 10,163 109 4.29%
Total Interest Bearing Deposits 205,110 1,844 3.65% 198,818 1,852 3.74% 199,768 1,775 3.56%
Other Borowings 749 12 6.39% 768 12 6.37% 345 5 5.81%
Total Interest Bearing Liabilities 205,858 1,855 3.66% 199,586 1,864 3.75% 200,113 1,780 3.57%
Noninterest Bearing Deposits 46,807 45,238 45,296
Other Liabilities 1,039 1,257 1,412
Stockholders' Equity 32,382 31,840 29,314
Total Liabilities and Stockholders' Equity $286,086 $277,921 $276,135
Net Interest Income - Tax Equivalent Basis* 3,220 3,239 3,117
Tax Equivalent Adjustment (69) (69) (78)
Net Interest Income $3,152 $3,170 $3,038
Net Interest Income - Spread* 4.10% 4.18% 4.07%
Net Interest Income as a % of Total Earning Assets* 4.92% 5.04% 4.87%
*Tax Equivalent Basis - 34% Rate for the periods dated
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
INTEREST DIFFERENTIALS
In thousands
First Quarter 1997 First Quarter 1997
vs vs
Fourth Quarter 1996 First Quarter 1996
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 $16.2 $11.3 $27.5 $17.7 ($2.9) $14.8
Federal Funds Sold 57.6 (22.2) 35.4 11.4 2.2 13.6
Securities:
Taxable (19.1) (32.2) (51.3) (305.7) (15.0) (320.7)
Non-Taxable* (1.0) (0.1) (1.1) (24.7) (3.4) (28.1)
Loans 79.7 (117.2) (37.5) 700.4 (200.9) 499.5
Total Interest Income 133.4 (160.4) (27.0) 399.1 (220.0) 179.1
Interest Bearing Liabilities:
NOW Accounts 15.2 (3.4) 11.8 2.2 (6.1) (3.9)
Savings Accounts 0.3 (7.1) (6.8) (1.0) (2.6) (3.6)
Money Market Deposit Accounts 3.4 (14.1) (10.7) (25.6) (3.3) (28.9)
Certificates of Deposits less than $100,000 28.2 (35.5) (7.3) 86.3 (11.9) 74.4
Certificates of Deposits greater than $100,000 8.3 (3.6) 4.7 19.3 11.4 30.7
Other Borrowings (0.3) (0.1) (0.4) 5.9 0.9 6.8
Total Interest Expense 55.1 (63.8) (8.7) 87.1 (11.6) 75.5
Increase (Decrease) in
Interest Differential $78.3 ($96.6) ($18.3) $312.0 ($208.4) $103.6
*Tax Equivalent Basis - 34% Rate for the periods dated
</TABLE>
22
<PAGE>
Part II
Item 1. Legal Proceedings
In February 1997, a party filed a $5.1 million suit against
the Bank in the Twenty-fourth Judicial Court for the Parish of
Jefferson, State of Louisiana. On the 25th of April, 1997, the
party dismissed with prejudice the said suit.
During the normal course of business, the Company is
involved in various other 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
23
<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, 1996, 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. The
financial statements as of March 31, 1997, have not been reviewed
by Hannis T. Bourgeois & Co., L. L. P.
24
<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 8. 1997
Date
25
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<PERIOD-TYPE> 3-MOS
<CASH> 10946
<INT-BEARING-DEPOSITS> 2283
<FED-FUNDS-SOLD> 10650
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 113824
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 141007
<ALLOWANCE> 3171
<TOTAL-ASSETS> 289660
<DEPOSITS> 253484
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2316
<LONG-TERM> 0
<COMMON> 7500
0
0
<OTHER-SE> 26360
<TOTAL-LIABILITIES-AND-EQUITY> 289660
<INTEREST-LOAN> 3159
<INTEREST-INVEST> 1614
<INTEREST-OTHER> 186
<INTEREST-TOTAL> 5007
<INTEREST-DEPOSIT> 48
<INTEREST-EXPENSE> 1855
<INTEREST-INCOME-NET> 3152
<LOAN-LOSSES> 75
<SECURITIES-GAINS> 24
<EXPENSE-OTHER> 2393
<INCOME-PRETAX> 1529
<INCOME-PRE-EXTRAORDINARY> 1529
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 972
<EPS-PRIMARY> .72
<EPS-DILUTED> .72
<YIELD-ACTUAL> 7.76
<LOANS-NON> 1703
<LOANS-PAST> 391
<LOANS-TROUBLED> 706
<LOANS-PROBLEM> 1477
<ALLOWANCE-OPEN> 3083
<CHARGE-OFFS> 106
<RECOVERIES> 119
<ALLOWANCE-CLOSE> 3171
<ALLOWANCE-DOMESTIC> 2188
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 983
</TABLE>
