SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the
Fiscal Year Ended December 31, 1999
One American Corp 0-12437
Exact name of registrant (Comm. File No.)
as specified in its charter)
Louisiana 72-0948181
(State or other jurisdiction of (I.R.S. Employer
Incorporation of Organization) Identification No.)
2785 LA Hwy 20 West
P.O. Box 550
Vacherie, Louisiana 70090-0550
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (225) 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, $2.50 Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No __ .
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
State the aggregate market value of the voting stock held by
non-affiliates of the registrant: $59,252,340 (2,116,155 Shares
@ $28.00 per share)*
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common stock $2.50 Par Value, 2,655,360 shares outstanding
as of March 9, 2000.
Documents Incorporated by Reference
Document Part of Form 10-K
Definitive Proxy Statement for 2000 Part I and Part III
Annual Meeting of Stockholders
*For purposes of the computation, shares (539,205) owned by
executive officers, directors and 5% shareholders have been
excluded.
<PAGE> 1
Part I
Item 1 Description of Business 3
Supplemental Financial Information:
Average Balance Sheets and Interest Yield Analysis 8
Interest Differential 8
Securities Portfolio 8
Loan Portfolio 8
Non-Performing Loans 8
Summary of Loan Loss Experience 9
Deposits 9
Return on Equity and Assets 9
Item 2 Description of Properties 9
Item 3 Legal Proceedings 10
Item 4 Submission of Matters to a Vote of Security Holders 10
Part II
Item 5 Market for the Registrant's Common Stock
and Related Security Holder Matters 10
Item 6 Selected Financial Data 11
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operation 13
Item 8 Financial Statements and Supplementary Data 27
Item 9 Disagreements on Accounting and Financial Disclosures 51
Part III
Item 10 Directors and Executive Officers of the Registrant 51
Item 11 Executive Compensation 51
Item 12 Security Ownership of Certain Beneficial Owners and
Management 51
Item 13 Certain Relationships and Related Transactions 51
Part IV
Item 14 Exhibits, Financial Statement Schedules and Reports
On Form 8-K 51
Signatures 52
<PAGE> 2
Part I
Item 1. Business
The Registrant
One American Corp., (the "Company") was incorporated in
Louisiana on May 14, 1982. At a special meeting on December 14,
1982, the stockholders of First American Bank and Trust, (the
"Bank") approved a Joint Agreement of Merger and Plan of
Reorganization by and among the Bank, First American Interim
Bank, ("FAIB") and One American Corp. On January 21, 1983, the
Bank was merged into FAIB and the surviving Bank, First American
Bank and Trust became a wholly-owned subsidiary of the Company
through a one-for-one exchange for all of the outstanding common
stock (150,000 shares) of the Bank. The reorganization has been
accounted for as a pooling-of-interests. The Company is now
engaged, through its subsidiary, in the banking business. The
Bank is the Company's principal asset and primary source of
revenue.
The Bank
The Bank (formerly Bank of Vacherie) was incorporated under
the laws of the State of Louisiana on December 3, 1910, and was
licensed by the Louisiana State Banking Department and commenced
operations as a Louisiana State chartered bank on February 11,
1911. The name of the bank was changed from Bank of Vacherie to
First American Bank and Trust on January 17, 1978. The Bank's
securities consist of one class of common stock of which there
were 150,000 shares held 100% by its parent, the Company, as of
March 9, 2000.
The Bank presently has a main office at LA Highway 20 West,
Vacherie, St. James Parish, Louisiana and eighteen (18) branch
offices and one (1) loan production office. Four offices are
located in St. James Parish in the cities of Vacherie (2),
Gramercy, and Lutcher. Two offices are located in Lafourche
Parish in the city of Thibodaux. Six offices are located in St.
Charles Parish in the cities of Boutte, Des Allemands, Luling,
Norco, and St. Rose (2). Two offices are located in Jefferson
Parish, one in the city of Kenner, the other in Metairie. One
office is located in St. John Parish in the city of LaPlace. One
office is located in Tangipahoa Parish in the city of Hammond.
Two offices are located in Assumption Parish, one in the in the
city of Napoleonville, and one in the city of Pierre Part. Under
construction is an office located in Ascension Parish in the city
of Donaldsonville. This facility is scheduled to open in the
second quarter of 2000. One loan production office is located in
St. Tammany Parish in the city of Mandeville. In addition, plans
are in effect to relocate the Luling office as well as the
offices of First American Agency, L.L.C., a subsidiary of the
Bank, into a larger facility. This relocation should be complete
by the second quarter of 2000.
The branches located in St. James Parish were approved on
July 9, 1969, November 11, 1974, July 30, 1979, April 16, 1984,
respectively, by the Commissioner of Financial Institutions of
the State of Louisiana and by the Federal Deposit Insurance
Corporation. The two Thibodaux branches were approved on July 7,
1988 and September 2, 1997, respectively by the Federal Deposit
Insurance Corporation and on July 5, 1988 and August 29, 1997,
respectively, by the Commissioner of Financial Institutions of
the State of Louisiana. The six branches located in St. Charles
Parish were acquired from the Federal Deposit Insurance
Corporation on November 2, 1989 and were approved on that date by
the Commissioner of Financial Institutions of the State of
Louisiana and the Federal Deposit Insurance Corporation. The two
branches located in Jefferson Parish were acquired from the
Federal Deposit Insurance Corporation on February 14, 1991 and
were approved on that date by the Commissioner of Financial
Institutions of the State of Louisiana and the Federal Deposit
Insurance Corporation. The one branch located in St. John Parish
was acquired from the Resolution Trust Corporation on August 26,
1994 and was approved on that date by the Commissioner of
Financial Institutions of the State of Louisiana and the Federal
Deposit Insurance Corporation. The one branch located in
Tangipahoa Parish was acquired from First American Bank of
Tangipahoa on September 23, 1996, and was approved on that date
by the Commissioner of Financial Institutions of the State of
Louisiana and the Federal Deposit Insurance Corporation. The
Napoleonville branch was approved on August 4, 1997 by the
Commissioner of Financial Institutions of the State of Louisiana
and on July 24, 1997 by the Federal Deposit Insurance
Corporation. The Pierre Part branch was approved by the
Commissioner of Financial Institutions of the State of Louisiana
and the Federal Deposit Insurance Corporation on April 24, 1998
and April 23, 1998, respectively. The Donaldsonville branch was
approved on December 16, 1998 by the Federal Deposit Insurance
Corporation and on December 28, 1998 by the Commissioner of
Financial Institutions of the State of Louisiana. The Mandeville
loan production office was approved on October 2, 1997 by the
Commissioner of Financial Institutions of the State of Louisiana.
<PAGE> 3
The Bank is engaged in primarily the same business
operations as any independent commercial bank, with special
emphasis in retail banking, including the acceptance of checking
and saving deposits, and the making of commercial, real estate,
personal, home improvement, automobile and other installment and
term loans. The Bank also offers travelers' cheques, safe
deposit boxes, note collection, escrow and other customary bank
services to its customers with the exception of trust services.
In addition, the Bank offers drive-up teller services, automated
teller machines and night depository facilities. Through its
wholly-owned subsidiary, First American Agency, L.L.C. (the
Agency), the Bank provides general insurance agent services
related to property and casualty, credit life, accident and
health, and general liability insurance as well. First American
Bank and Trust is insured under the Federal Deposit Insurance
Act, but is not a member of the Federal Reserve System.
The three main areas in which the Bank has directed its
lending activity are (1) real estate loans; (2) loans to
individuals for household, family, and other consumer
expenditures; and (3) commercial loans. As of December 31, 1999,
these three categories accounted for approximately 85.1%, 7.4%,
and 7.5%, respectively, of the Bank's loan portfolio. (See Note
E in the 1999 Form 10-K section titled "Financial Statements and
Supplementary Data" for a detailed analysis of the loan
portfolio.)
The majority of the Bank's deposits are from individuals,
farmers, and small business-related sources. The average deposit
balance is relatively small. This makes the Bank less subject to
the adverse effects from the loss of a substantial depositor who
may be seeking higher yields in other markets, or have need of
money on deposit in the Bank. In addition to the deposits
mentioned above, the Bank is a depository for some governmental
agencies. At December 31, 1999, State and Political Subdivisions
maintained time deposits and money market deposits account
balances of $7.0 million, interest bearing demand deposits of
$4.5 million, and non-interest bearing demand deposits of $1.6
million. Although no agreement or understanding exist between
these particular customers and the Bank regarding time deposits,
management has no reason to believe that these time deposit
balances will substantially decrease or increase. In connection
with the deposits of these State and Political Subdivisions, the
Bank is required to pledge securities to secure such deposits
(except for the first $100,000 of such deposits, which is insured
by the Federal Deposit Insurance Corporation).
As of December 31, 1999, the Bank had 15,348 demand deposit
accounts with a total balance of $56.2 million, 1,091 NOW and
Super NOW accounts with a total balance of $21.5 million, 2,686
Insured Money Market Accounts with a balance of $69.7 million,
14,715 savings accounts with a total balance of $31.6 million,
and 7,923 other time deposit accounts with a total balance of
$122.9 million.
There are no securities held by the Bank that are subject to
repurchase agreements.
The Bank holds no patents, registered trademarks, licenses
(other than licenses required to be obtained from appropriate
bank regulatory agencies), franchises or concessions. In 1998,
First American Agency, L.L.C., a wholly-owned subsidiary of the
Bank, was formed. Through this subsidiary the Bank provides
insurance services in its market area. Other than this entry
into the insurance business, there has been no significant change
in the kinds of services offered by the Bank during the last
three fiscal years.
The Bank has not engaged in any research activities relating
to the development of new services or the improvement of existing
services except in the normal course of the business activities.
The Bank presently has no plans for any new line of business
requiring the investment of a material amount to total assets.
Most of the Bank's business originates from within the
parishes of St. James, St. Charles, Jefferson, Lafourche, St.
John, Tangipahoa and Assumption Parish, Louisiana; however, some
business is obtained from the parishes immediately surrounding
these parishes. There has been no material effect upon the
Bank's capital expenditures, earnings, or competitive position as
a result of federal, state, or local environmental regulations.
<PAGE> 4
The Agency
On February 28, 1998, First American Agency, L.L.C. (the
"Agency"), a wholly-owned subsidiary of the Bank was formed. On
March 5, 1998, the Agency acquired Riverbend Insurance Agency,
Inc. of Destrehan, St Charles Parish, Louisiana. Through this
subsidiary, the Bank is engaged in the insurance agency business.
As a result of this acquisition, the Company's Board of
Directors voted to dissolve One American Agency, Inc., the
Company's former insurance agency subsidiary. One Amercian
Agency, Inc. previously provided limited insurance products as
dictated by Federal regulations. Effective December 31, 1998,
the assets of One American Agency, Inc., which were
insignificant, were merged into the Company.
The Agency operates out of the offices of the former
Riverbend Insurance Agency at 1972 Ormond Blvd., Suite C,
Destrehan, St. Charles Parish, Louisiana. Plans are in effect to
relocate this office to Luling, St. Charles Parish, Louisiana
sometimes in the second quarter of 2000. The Agency provides
general insurance agent services for the Company and its
subsidiary. The Agency also provides agent services in relation
to property and casualty, credit life, accident and health, and
general liability insurance that maybe related to the extension
of credit or other financial services of the Bank.
Competition
The Company's general market area contains approximately 215
thousand households. It's primary market place consists of St.
James Parish, St. John Parish, St. Charles Parish, the northern
portion of Lafourche Parish, the east bank of the Mississippi
river in Jefferson Parish, the south central portion of
Tangipahoa Parish, Assumption Parish and St. Tammany Parish, all
located in Louisiana. These parishes have experienced moderate
population growth over the last several years.
In the primary market area, there are several banks, credit
unions, and branches of savings and loan institutions
aggressively pursuing loans, deposits and other accounts.
Interest rates on loans made and deposits received were
mostly deregulated by law in 1983, but are substantially the same
among banks operating in the area served. Competition among
banks for loan customers is generally governed by such factors as
loan terms other than interest charges, restrictions on borrowers
and compensating balances, and the services offered by the bank.
Competition for deposits is governed primarily by the services
offered, including convenience of location.
In addition federal regulations have significantly broadened
the powers of savings and loan institutions with the result that
such institutions may now engage in certain activities formerly
permitted only to banks. The Company has experienced no major
effects from this legislation at this time.
Employees
The Company has approximately 173 full time employees, and
11 part-time employees. Management considers its relationship
with the employees to be good.
<PAGE> 5
Supervision and Regulation
The Company is a bank holding company within the meaning of
the Bank Holding Company Act of 1956 (the "Act"), as amended, is
subject to the provisions of the Act and to regulation by the
Board of Governors of the Federal Reserve System (the "Board").
The Act requires the Company to file with the Board annual
reports containing such information as the Board may require.
The Board is authorized by the Act to examine the Company and all
of its activities. The activities that may be engaged in by the
Company and its subsidiaries are limited by the Act to those
closely related to banking or managing or controlling banks as to
be a proper incident thereto. In determining whether a
particular activity is a proper incident to banking or managing
or controlling banks, the Board must consider whether its
performance by an affiliate of a holding company can reasonably
be expected to produce benefits to the public, such as
convenience, increased competition, or gains in efficiency that
outweigh possible adverse effects, such as undue concentration of
resources, unfair competition, conflicts of interest, or unsound
banking practices.
The Board has adopted regulations implementing the
provisions of the Act with respect to the activities of bank
holding companies. Such regulations reflect a determination by
the Board that the following activities are permissible for bank
holding companies: (1) making, for its own account or for the
account of others, loans such as would be made, for example, by a
mortgage, finance or factoring company; (2) operating as an
industrial bank; (3) servicing loans; (4) acting as a
fiduciary; (5) acting as an investment or financial advisor,
including acting in such capacity for a mortgage investment trust
or real estate investment trust; (6) leasing personal or real
property, where the lease is to serve as the functional
equivalent of an extension of credit to the lessee of the
property; (7) investing in community welfare corporations or
projects; (8) providing bookkeeping and data processing services
for a bank holding company and its subsidiaries, or storing and
processing certain other banking, financial, or related economic
data; (9) acting as an insurance agent, principally insurance
issued in connection with extensions of credit by the holding
company or any of its subsidiaries; (10) underwriting credit
life and credit accident and health insurance related to
extensions of credit; (11) providing courier services for
documents and papers related to banking transactions; (12)
providing management consulting advice to non-affiliated banks;
and (13) selling money orders, travelers cheques and U.S. Savings
Bonds. In each case, the Company must secure the approval of the
Board prior to engaging in any of these activities.
Whether or not a particular non-banking activity is
permitted under the Act, the Board is authorized to require a
holding company to terminate any activity or divest itself of any
non-banking subsidiary if in its judgment the activity or
subsidiaries would be unsound.
Under the Act and the Board's regulations, a bank holding
company and its subsidiaries are prohibited from engaging in
certain tie-in arrangements in connection with any extensions of
credit or provision of any property or services.
In addition to the limitation of Louisiana law with respect
to the ownership of banks, as described below, the ownership or
control of voting shares of a second bank by a bank holding
company, such as One American Corp., is restricted by the Act
unless the prior approval of the Board is obtained. The Act
prohibits the Board from approving an application from a bank
holding company to acquire shares of a bank located outside the
state in which the operations of the holding company's
subsidiaries are principally conducted, unless such an
acquisition is specifically authorized by statue of the state in
which the bank whose shares are to be acquired is located.
The Louisiana Bank Holding Company Act, as amended in 1984,
authorized multi-banking holding companies within the state.
Certain limitations and restrictions were set, which expired July
1, 1989. These restrictions limit acquisitions of additional
banks to those which have been in existence for at least five
years. The State Commissioner of Financial Institutions is
authorized to administer the Louisiana Act by issuance of orders
and regulations.
<PAGE> 6
In addition, Louisiana banking laws were changed in 1985 and
1986 to allow interparish banking, limited statewide branching
beginning January 1, 1987, and regional banking beginning July 1,
1987. These changes have allowed Louisiana and the regional
banks and other financial institutions to engage in a wider range
of activities than were previously allowed to such institutions.
The restrictions on state banking were repealed in 1988, with the
intention of allowing state charted banks to establish branch
offices state wide.
Also effective January 1, 1991, Louisiana's reciprocal
interstate banking laws allowed bank holding companies domiciled
in any state of the United States to acquire Louisiana banks and
bank holding companies, if the state in which the bank holding
company is domiciled allows Louisiana banks and bank holding
companies the same opportunities.
In 1997, the State of Louisiana enacted the Financial
Institution Insurance Sales Law. The Financial Institution Sales
Law made it possible for the Bank to sell all forms of insurance
through its subsidiary, First American Agency, L.L.C.
Additional information regarding supervision and regulation
can be found in the 1999 Form 10-K in the Section titled
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and incorporated herein by reference.
Regulatory Matters
The capital ratios for the Company and the Bank currently
exceed the regulatory capital requirements at December 31, 1999.
The capital ratios are included in the 1999 Form 10-K in the
Section titled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and incorporated herein by
reference.
Capital Adequacy
The Company's dividends are determined by its Board of
Directors. The current policy is to maintain dividends at a
level which ensures the Company and Bank are able to maintain
sufficient regulatory capital levels. The Company's primary
source of funds is the dividend received from the Bank. Under
current regulatory limitations the Bank could pay in dividends
without regulatory approval approximately $3.7 million. The
Company carries no debt, therefore future liquidity needs are
limited to the payment of any declared dividends. The Company
maintains sufficient liquidity to maintain its operations should
a regulatory agency limit the Bank from paying dividends.
The Bank is subject to regulation and regular examination by
the Federal Deposit Insurance Corporation, and the Office of
Financial Institutions of the State of Louisiana. Applicable
regulations relate to reserves, investments, loans, issuance of
securities, the level of capital, establishment of branches and
other aspects of its operations. Should the Bank fail to comply
with current regulations, the Federal Deposit Insurance
Corporation may initiate sanctions and other administrative
proceedings for failure to comply with current regulations and
may cease deposit insurance.
Statistical Information
The following data contains information concerning the
business and operations of One American Corp., its subsidiaries,
First American Bank and Trust, and One American Agency, Inc.
This information should be read in conjunction with Financial
Statements and Management's Discussion and Analysis of Financial
Condition and Results of Operations.
<PAGE> 7
Average Balance Sheets and Interest Yield Analysis
The following information called for by Item 1 is included
in the 1999 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Average Balance Sheets and Interest Rate Analysis
for the years ended December 31, 1999, 1998, and 1997
Interest Differential
The following information called for by Item 1 is included
in the 1999 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Interest Differentials
for the years ended December 31, 1999 and 1998
Securities Portfolio
The following information called for by Item 1 is included
in the 1999 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Securities
Also, the following information called for by Item 1 is
included in the 1999 Form 10-K Section titled "Notes to
Consolidated Financial Statements" and is incorporated herein by
reference.
See Note D titled Securities in the 1999 Form 10-K for a
detailed analysis of the security portfolio.
There were no securities held by the Company at December 31,
1999, that exceeded, in aggregate by issuer, 10% of Stockholders'
Equity.
Loan Portfolio
The following information called for by Item 1 is included
in the 1999 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Loans
for the years ended December 31, 1999, 1998, 1997,
1996, and 1995
Non-Performing Loans
The following information called for by Item 1 is included
in the 1999 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Non-Performing Loans
for the years ended December 31, 1999, 1998, 1997,
1996, and 1995
<PAGE> 8
Summary of Loan Loss Experience
The following information called for by Item 1 is included
in the 1999 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Summary of Loan Loss Experience
for the years ended December 31, 1999, 1998, 1997,
1996, and 1995
Deposits
The following information called for by Item 1 is included
in the 1999 Form 10-K Section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and is
incorporated herein by reference.
Average Balance Sheets and Interest Rate Analysis
for the years ended December 31, 1999, 1998, and 1997
Maturities of time deposits of $100,000 or more at December
31, 1999, are summarized below:
In thousands
3 Months or Less $4,491
Over 3 through 6 Months 3,875
Over 6 through 12 Months 6,129
Over 12 Months 3,780
$18,275
Return on Equity and Assets
The following information called for by Item 1 is included
in the 1999 Form 10-K in the Section titled Item 6. "Selected
Financial Data" and is incorporated herein by reference.
Average Total Assets
December 31, 1999, 1998, 1997, 1996, and 1995
Average Stockholders' Equity
December 31, 1999, 1998, 1997, 1996, and 1995
Selected Ratios
for the years ended December 31, 1999, 1998, 1997,
1996, and 1995
Per Share
for the years ended December 31, 1999, 1998, 1997,
1996, and 1995
Item 2. Description of Properties
One American Corp. is located in Vacherie, Louisiana in the
main office building of First American Bank and Trust. Through
its subsidiary First American Bank and Trust, the Company owns the
premises in which its main office, operation center, and seventeen
of its branch offices are located and holds a lease for the one
remaining branch office. The Bank also leases the premises from
which its Loan Production Office and First American Agency, L.L.C.
operate, as well as the new location for the Luling branch and the
Agency.
The Company considers all properties to be suitable and
adequate for their intended purposes and its leases to be fair and
reasonable.
<PAGE> 9
Item 3. 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 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders
during the fourth quarter of the year ended December 31, 1999.
Part II
Item 5. Market for Registrant's Common Stock and Related Security
Holder's Matters
Common Stock - One American Corp.'s (the Company) stock is
not listed on any security exchange. Due to the lack of an
active trading market, One American Corp. does not have the
available information to furnish the high and low sales price or
the range of bid and ask quotations for its stock. Based upon
limited inquiries by management, it is believed that the stock of
the Company traded at the following amounts:
1999 1998
First Quarter $27.00 $18.50
Second Quarter $27.00 $25.00
Third Quarter $27.00 $25.00
Fourth Quarter $28.00 $27.00
There can be no assurance that these limited inquiries
adequately reflect the actual high and low bids or prices for the
stock of the Company.
Pursuant to Section 13(e)(1) of the Securities Exchange Act
of 1934, One American Corp filed a Issuer Tender Offer Statement
with the Securities and Exchange Commission on July 20, 1998.
Also pursuant to Section 13(e)(1) of the Securities Exchange Act
of 1934, One American Corp filed a Final Amendment Issuer Tender
Offer Statement with the Securities and Exchange Commission on
August 27, 1998. For specifics on these two filings, please
refer to One American Corp's EDGAR filings with the Securities
and Exchange Commission.
Information - Request for additional information or copies
of Form 10-K filed with the Securities and Exchange Commission in
Washington, DC should be directed to:
Frank J. Bourgeois General Counsel
President Martin, Himel, Peytavin &
Nobile
One American Corp. P. O. Box 278
P. O. Box 550 Lutcher, LA 70071-0278
Vacherie, LA 70090-0550
Transfer Agent and Registrar Independent Accountants
First American Bank and Trust Hannis T. Bourgeois, L L P
P. O. Box 550 2322 Tremont Drive, Suite
200
Vacherie, LA 70090-0550 Baton Rouge, LA 70809
<PAGE> 10
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
One American Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, 1999, 1998, 1997, 1996, and 1995
($ in thousands, except per share data)
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Assets
Cash and Due from Banks $18,023 $22,755 $13,115 $13,946 $15,232
Securities 96,308 111,035 127,027 125,219 139,967
Loans 211,131 178,462 146,975 132,776 104,320
Other Assets 18,313 17,124 15,277 14,170 12,109
Total Assets $343,775 $329,376 $302,394 $286,111 $271,628
Liabilities and Stockholders' Equity
Deposits $301,891 $289,191 $263,657 $250,704 $239,724
Other Liabilities 2,918 2,385 2,482 1,872 1,692
Stockholders' Equity 38,966 37,800 36,255 33,535 30,212
Total Liabilities and Stockholders' Equity 343,775 329,376 302,394 286,111 271,628
Average Total Assets $339,975 $312,545 $292,308 $278,223 $261,692
Average Stockholders' Equity $38,863 $36,730 $35,022 $32,287 $28,186
Selected Ratios:
Loans to Assets 61.42% 54.18% 48.60% 46.41% 38.41%
Loans to Deposits 69.94% 61.71% 55.74% 52.96% 43.52%
Deposits to Assets 87.82% 87.80% 87.19% 87.62% 88.25%
Equity to Assets 11.33% 11.48% 11.99% 11.72% 11.12%
Return on Average Assets 1.34% 1.30% 1.38% 1.82% 2.01%
Return on Average Equity 11.76% 11.06% 11.52% 15.64% 18.62%
Dividend Payout 42.39% 46.97% 41.85% 28.10% 16.74%
Avg. Equity-to-Avg. Assets 11.43% 11.75% 11.98% 11.60% 10.77%
<CAPTION>
Condensed Consolidated Statements of Income
for the years ended December 31, 1999, 1998, 1997, 1996, and 1995
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Interest Income $23,613 $22,249 $20,757 $19,717 $18,205
Interest Expense 8,958 8,335 7,712 7,244 6,511
Net Interest Income 14,655 13,914 13,045 12,473 11,694
Provision for Loan Losses 900 1,200 1,025 90 0
Net Interest Income After
Provision for Loan Losses 13,755 12,714 12,020 12,383 11,694
Other Income 4,260 3,638 3,740 3,978 4,464
Other Expenses 11,287 10,406 9,673 9,030 8,501
Income Before Income Taxes 6,728 5,946 6,087 7,331 7,657
Applicable Income Tax Expense 2,159 1,885 2,050 2,281 2,410
Net Income $4,569 $4,061 $4,037 $5,050 $5,247
Per Share:
Net Income $1.71 $1.51 $1.49 $1.87 $1.94
Cash Dividends $0.73 $0.71 $0.63 $0.53 $0.33
Book Value - End of Year $14.62 $14.15 $13.41 $12.41 $11.18
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
SELECTED QUARTERLY DATA
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
One American Corp. and Subsidiaries
for the quarter periods in the years ended December 31, 1999 and
1998
1999 FOURTH THIRD SECOND FIRST
($ in thousands, except per share data) QUARTER QUARTER QUARTER QUARTER
<S> <C> <C> <C> <C>
Interest Income $6,072 $6,001 $5,919 $5,621
Interest Expense 2,345 2,274 2,214 2,125
Net Interest Income 3,727 3,727 3,705 3,496
Provision for Loan Losses 225 225 225 225
Net Interest Income after Provision
for Loan Losses 3,502 3,502 3,480 3,271
Other Income 948 980 1,494 838
Other Expenses 3,127 2,852 2,804 2,504
Income before Income Taxes 1,323 1,630 2,170 1,605
Applicable Income Taxes 407 515 714 523
Net Income $916 $1,115 $1,456 $1,082
Per Share:
Net Income $0.34 $0.42 $0.54 $0.41
Dividends $0.19 $0.18 $0.18 $0.18
<CAPTION>
1998 FOURTH THIRD SECOND FIRST
($ in thousands, except per share data) QUARTER QUARTER QUARTER QUARTER
<S> <C> <C> <C> <C>
Interest Income $5,713 $5,633 $5,556 $5,347
Interest Expense 2,145 2,136 2,046 2,008
Net Interest Income 3,568 3,497 3,510 3,339
Provision for Loan Losses 225 225 300 450
Net Interest Income after Provision
for Loan Losses 3,343 3,272 3,210 2,889
Other Income 806 904 930 998
Other Expenses 2,798 2,595 2,592 2,421
Income before Income Taxes 1,351 1,581 1,548 1,466
Applicable Income Taxes 380 513 490 502
Net Income $971 $1,068 $1,058 $964
Per Share:
Net Income $0.36 $0.40 $0.39 $0.36
Dividends $0.19 $0.18 $0.17 $0.17
</TABLE>
<PAGE> 12
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
One American Corp. and Subsidiaries
Management's Discussion and
Analysis of Financial Condition and Results of Operations
The Businesses of One American Corp.
One American Corp. (the Company) is comprised of one
subsidiary, First American Bank and Trust (the Bank). The
Company's operations relate principally to its investment in the
Bank.
First American Bank and Trust is engaged in primarily the
same business operations as any independent commercial bank, with
special emphasis in retail banking, including the acceptance of
checking and saving deposits, and the making of commercial, real
estate, personal, home improvement, automobile and other term
loans. The Bank also offers travelers' cheques, safe deposit
boxes, note collection, escrow and other customary bank services
to its customers with the exception of trust services. In
addition, the Bank offers drive-up teller services, automated
teller machines and night depository facilities. Through its
wholly-owned subsidiary, First American Agency, L.L.C. (the
Agency), the Bank provides general insurance agent services
related to property and casualty, credit life, accident and
health, and general liability insurance.
Overview of 1999
Net income for the year 1999 was $4.6 million compared to
$4.1 million for the year 1998. For the year ended 1999, earnings
per share were $1.71 compared to $1.51 in 1998. Return on
average assets was 1.34% and 1.30% for the years ended 1999 and
1998, respectively. For the years ended 1999 and 1998, return on
average stockholders' equity was 11.76% and 11.06%, respectively.
Net interest income for 1999 was $14.7 million, a 5.3%
increase over the $13.9 million for 1998. The net interest
margin on a fully tax equivalent basis (FTE) was 4.77% for the
current year and 4.94% for the same period of 1998.
During the year 1999, in comparison with the same period of
1998, average loans outstanding increased $34.0 million or 20.8%
due to continued efforts to grow the percentage of earning assets
represented by loans and taking advantage of an increased loan
demand. Average total deposits for the year 1999 increased $25.0
million or 9.1% when compared to the average total deposits for
the same period of 1998. Average total assets for the current
year increased $27.4 million or 8.8% when compared to the total
average assets of the year 1998. Average stockholders' equity
for 1999 was $38.9 million, an increase of 5.8% over the average
stockholders' equity for 1998.
The Bank opened a second full-service office in Thibodaux,
Lafourche Parish, Louisiana on March 15, 1999, increasing its
presence in the Nicholls State University and the Thibodaux
Regional Medical Center areas of the city. With the opening of
the new Thibodaux location, the Bank had in operation a total of
eighteen full-service offices and one loan production office. In
addition, a full-service office is under construction in the city
of Donaldsonville, Ascension Parish, Louisiana. This new office
is scheduled for opening in the second quarter of 2000. Also,
plans are in effect to relocate the Luling, Louisiana full-
service office as well as the offices of the Agency into a larger
facility in Luling. This relocation should be completed in the
second quarter of 2000.
Earnings Analysis
Net Interest Income - Net interest income is the difference
between interest and fees generated from interest earning assets
and the interest expense for interest bearing liabilities and is
the primary source of earnings for the Bank. For analytical
purposes, net interest income is presented on a tax equivalent
basis. A 34% tax rate is used for all periods presented.
Certain earning assets are exempt from income taxes, therefore, a
tax equivalent adjustment is included so that tax exempt earning
assets will be compatible with other earning assets. The primary
factors that affect net interest income are the changes in volume
and mix of earning assets and interest-bearing liabilities, along
with the change in market rates.
<PAGE> 13
Net interest income on a fully tax equivalent basis (FTE)
increased $707 thousand or 5.0%. Net interest income (FTE) for
1999 was $14.9 million compared to $14.2 million for the prior
year. Net interest income (FTE) for 1997 was $13.3 million.
Earning Assets, Interest Bearing Liabilities, and Net
Interest Spread - Average earning assets increased $25.1 million
or 8.7% to $313.0 million during 1999. Average earning assets
were $287.8 million in 1998 and $269.1 million in 1997. The
trend in earning assets over the years compared shows a shift in
the mix of earning assets toward the loan portfolio from the
securities portfolio as shown in the table Earning Asset
Structure on page 16. Management'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 currently enjoys a
strong economic climate that provides lending opportunities that
did not exist in the past. The level of growth in the loan
portfolio has increased in the years 1999 and 1998, with the
percent of averge loans to average earning assets increasing from
56.7% to 63.0%. However, there is no assurance that either
similar levels of growth or the current strong econimic climate
will continue into the future.
The trend over the years compared shows an increase in
interest bearing liabilities with the largest growth occuring in
certificates of deposit and money market deposit accounts. Also
beneficial was the increase in the levels of non interest bearing
deposits, even though its relationship as a percentage of total
deposits remained realtively stable. The Bank continually
strives to attract a broad core deposit base consisting of
individual and commercial customers.
For the year ended 1999, the average yield on earning assets
was 7.63%, while the average cost of interest bearing funds was
3.71%, producing a net interest spread (FTE) of 3.92%. The net
interest margin (FTE) was 4.77% for the year ended 1999. The net
interest margin decreased when compared to the net interest
margins of 4.94% and 4.96% for the years ended 1998 and 1997,
respectively, because the yield on earning assets decreased more
than the cost of interest bearing liabilities decreased.
The table of Average Balance Sheets and Interest Rate
Analysis for the periods ended December 31, 1999, 1998, and 1997
on page 25 and the corresponding table of Interest Differentials
on page 26 detail the effect a change in average balances
outstanding and the change in interest yield and costs have on
net interest income for the respective periods. Also, the tables
of Earning Asset Structure and Deposit Structure on page 16 show
a more condensed, descriptive analysis of the common size
percentage changes in average earning assets and average deposit
mix over the annual periods analyzed.
Provision for Loan Losses
Provision for loan losses was $900 thousand in 1999, a
decrease of $300 thousand from the provision for loan losses of
$1.2 million in 1998. The provision for loan losses in 1997 was
$1.0 million. See the sections entitled Allowance for Loan
Losses and Non-Performing Assets for more details on the
Provision for Loan Losses.
Other Income
Other income was $4.3 million for 1999 and $3.6 million for
1998. Service charges on deposit accounts were $2.2 million for
1999 and 2.1 million in 1998. Gain on purchased assets increased
$377 thousand to $986 thousand for 1999 when compared to the
prior year. These gains are recognition of collection of
principal on certain loans acquired in past Bank acquisitions.
The Bank continues to pursue the collection of these loans.
However, the amount of future gains, if any, are indeterminable.
Other operating income for 1999 was $1.1 million compared to
$956 thousand in 1998. Included in other operating income are
fees from bankcard services, safe deposit box rentals, and other
operating fees associated with the daily operations of the Bank.
The Bank recovered $2 thousand as gains from security
transactions during the year 1999. These securities included
Louisiana Agricultural Finance Authority Bonds and Louisiana
Housing Finance Authority Bonds that were partially written off
in accordance with regulatory directives in May of 1992.
<PAGE> 14
Other Expenses
Other expenses totaled $11.3 million in 1999, an 8.5%
increase over the 1998 total of $10.4 million. Salaries and
employee benefits increased $454 thousand or 8.6%, to $5.8
million for 1999 compared to 1998. The increase in salaries is
due to an increase in personnel from the opening of new and
projected full service offices in addition to normal annual
salary adjustments. Net occupancy expense was $1.4 million for
1999 and $1.3 million for 1998. Other operating expenses totaled
$4.1 million and $3.8 million, respectively, for 1999 and 1998,
an increase of $258 thousand or 6.7%. For a further analysis of
other operating expenses see Note K.
Net other real estate and repossession expense was $19
thousand for 1999 and showed a $9 thousand benefit in 1998. Net
other real estate and repossession expense is the operating
expense of other real estate and repossessed assets less the
income generated by other real estate and the net gains from the
sale of other real estate and repossessed assets. During 1999,
expenses of carrying other real estate and other repossessed
assets totalled $2 thousand and net losses from the sale of those
assets totaled $27 thousand. These costs were offset by the
income generated from the operations of other real estate of $10
thousand.
For 1998, net other real estate and repossession expense
produced a benefit of $9 thousand. Expenses from other real
estate totaled $24 thousand, which were offset by income from the
operations of other real estate of $10 thousand, and net gains on
the sale of other real estate and repossessed assets of $23
thousand. Management strives to convert these non-performing
assets to investable funds at values which are beneficial to the
earnings of the Bank.
Applicable Income Taxes
Applicable income taxes for 1999, 1998, and 1997 were $2.2
million, $1.9 million, and $2.1 million, respectively, producing
an effective tax rate of 32%, 32%, and 33%, respectively. The
Company's effective income tax expense as a percentage of pretax
income is different from statutory rates because of tax-exempt
income and the related nondeductible interest expense. A portion
of the Company's interest income is from investments in state and
municipal bonds and is generally exempt from federal income
taxes. Interest expense on funds used for tax-exempt investments
is generally nondeductible for federal income taxes.
<PAGE> 15
<TABLE>
<CAPTION>
Table 1-
Average Earning Asset Structure
In thousands 1999 1998 1997
% 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 $5,679 1.81% $5,128 1.78% $2,753 1.02%
Federal Funds Sold 10,107 3.23% 11,144 3.87% 11,872 4.41%
Securities
Taxable 90,429 28.99% 97,988 34.04% 102,144 37.95%
Non-Taxable 9,460 3.02% 10,263 3.57% 10,134 3.77%
Loans - Net 197,291 63.04% 163,321 56.74% 142,240 52.85%
Total Average Earning Assets $312,966 100.00% $287,844 100.00% $269,143 100.00%
<CAPTION>
Average Deposit Structure
In thousands 1999 1998 1997
% of % of % of
Average Earning Average Earning Average Earning
Balances Assets Balances Assets Balances Assets
<C> <C> <C> <C> <C> <C>
Noninterest Bearing Deposits $58,107 19.48% $54,161 19.92% $48,896 19.05%
NOW Accounts 23,938 8.03% 24,063 8.81% 25,572 10.02%
Savings Accounts 32,150 10.78% 31,277 11.45% 32,082 12.57%
Money Market Deposit Accounts 64,252 21.54% 55,992 20.49% 49,738 19.48%
Certificates of Deposits less than $100,000 107,658 36.10% 96,254 35.22% 87,017 34.08%
Total Average Core Deposits 286,105 95.93% 261,747 95.78% 243,305 95.30%
Certificates of Deposits greater than $100,000 12,145 4.07% 11,531 4.22% 11,999 4.70%
Total Average Deposits $298,250 100.00% $273,278 100.00% $255,304 100.00%
Average Interest Bearing Deposits
as a percentage of Average Earning Assets 76.7% 76.1% 76.7%
Average Core Deposits
as a percentage of Total Average Assets 84.2% 83.7% 83.2%
</TABLE>
Liquidity
Liquidity management is the process of ensuring that the
Bank's asset and liability structure can meet the withdrawal
demands of its depositors, fund loan commitments, and provide for
other funding requirements. Management's primary source of funds
is the Bank's core deposit base. At December 31, 1999, average
core deposits were approximately $286.1 million or 96% of total
average deposits and 84% of total average assets. For a
comparison with prior period year ends, see the table entitled
Average Deposit Structure. Other sources of liquidity are
maturities in the investment portfolio and loan maturities and
repayments. Management continually evaluates the maturities and
mix of its earning assets and interest bearing liabilities to
monitor its ability to meet current and future obligations and to
achieve maximum net interest income. Due to the stability of the
core deposit base as noted above and the maturities of the
investment portfolio, management does not anticipate any
difficulty in either meeting the needs of its depositors or
funding future loan commitments.
<PAGE> 16
Interest Rate Risk
Interest rate risk is the measurement of risk exposure or
changes in net interest income and subsequently net income given
changes in the external interest rate markets. This possible
risk exposure is produced by the different repricing intervals of
interest earning assets and interest bearing liabilities, 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 maturity and
repricing period inconsistencies.
Management also measures interest rate risk exposure by the
process of dynamic income simulation. This process measures
possible levels of exposure more accurately given the ability to
better identify contractual maturities and repricing periods.
Key assumptions used in the simulation model include the relative
timing of prepayments on mortgage related assets and the cash
flows and maturities of other financial instruments. These
assumptions are intrinsically uncertain and, as a result, the
model cannot specifically estimate net interest income or
precisely predict the impact of a change in interest rates on net
income or stockholders' equity. Actual results will differ from
the simulated results due to the timing, magnitude, and frequency
of interest rate changes and changes in market conditions and
management strategies, among other factors.
The Bank's objective is to limit the impact on net interest
income from a gradual change in interest rates of 200 basis
points over twelve months to 10% of projected net interest
income. Based on the results of dynamic income simulation, at
December 31, 1999 the Bank would expect a decrease in net
interest income of $32,000 in the event of a gradual 200 basis
point increase in interest rates and a decrease of $65,000 in the
event of a gradual 200 basis point decrease in interest rates.
Both of these changes are well within the Bank's interest rate
risk policy limits.
For gap analysis, prepayment assumptions are applied to
loans reflective of historical experience and employing a "flat-
rate" interest rate change scenario. Decay rate methodology is
applied to non fixed rate deposit accounts 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 deposit balances out as far as the FDIC
regulatory guidelines allow in FDICIA 305. Decay rate
assumptions implemented are based on a flat rate environment and
at management's discretion.
The Bank has established decay rate assumptions based on
historical data collection on MMDA, Savings Accounts, Now
Accounts, and Noninterest 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 the
relationship each account type has to total deposits. Decay
rates are updated at each modeling session if warranted by rate
changes in the market or changes in non rate sensitivity patterns
given the account type. The identification of the non rate
sensitive portion of such accounts provides a more complete
picture of the actual core deposit base which may not reprice in
the same manner as the rate sensitive portion.
Table 2, Interest Rate Sensitivity Table, on page 18
presents the Bank's interest rate sensitivity position at
December 31, 1999, using gap analysis, based on the expected
maturity intervals of interest rate sensitive assets and
liabilities. Table 2 indicates that the Company's interest
earning assets exceed its interest bearing liabilities at the one
year point in time suggesting the Bank is positively rate
sensitive. This table does not necessarily reflect the impact of
interest rate movements on the Bank's net income because the
effective maturities or repricing of certain assets and
liabilities is subject to competition and other limitations. As
a result, certain assets and liabilities indicated as maturing or
repricing within a stated period may in fact mature or reprice at
different times and at different volumes.
The Bank is 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.
<PAGE> 17
<TABLE>
<CAPTION>
Table 2-
Interest Rate Sensitivity Table
December 31, 1999
In thousands
Expected Maturity, Years Ended:
Non- Fair
12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 Thereafter Sensitive Total Value
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments -
Fixed-Rate Securities $37,527 $29,353 $8,473 $3,760 $1,813 $5,118 $0 $86,044 $86,044
Average Interest Rates 5.67% 5.56% 5.93% 6.31% 5.89% 5.22% 0.00% 5.66%
Variable-Rate Securities 2,758 473 343 161 136 693 0 4,564 4,564
Average Interest Rates 5.42% 6.53% 6.50% 6.51% 6.51% 6.50% 0.00% 5.85%
Total Investments 40,285 29,826 8,816 3,921 1,949 5,811 0 90,608 90,608
Average Interest Rates 5.65% 5.58% 5.95% 6.32% 5.93% 5.37% 0.00% 5.67%
Loans -
Fixed-Rate Loans, Net 96,890 36,778 22,159 12,458 7,681 8,735 1,561 186,262 185,181
Average Interest Rates 8.53% 8.42% 8.39% 8.24% 8.20% 7.72% 0.00% 8.35%
Variable-Rate Loans, Net 13,730 3,916 2,531 1,247 833 2,612 0 24,869 24,658
Average Interest Rates 8.12% 8.37% 8.57% 8.70% 8.74% 8.81% 0.00% 8.33%
Total Loans 110,620 40,694 24,690 13,705 8,514 11,347 1,561 211,131 209,839
Average Interest Rates 8.48% 8.41% 8.41% 8.28% 8.26% 7.97% 0.00% 8.34%
Interest Bearing Deposits in
Other Banks 1,529 0 0 0 0 0 0 1,529 1,529
Average Interest Rates 5.10% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 5.10%
Federal Funds Sold 5,700 0 0 0 0 0 0 5,700 5,700
Average Interest Rates 4.93% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 4.93%
Other Assets 34,807 34,807
Total Assets $158,134 $70,520 $33,506 $17,626 $10,463 $17,158 $36,368 $343,775
Liabilities
NOW and Super NOW Deposits 1,953 5,449 5,449 2,167 2,167 4,334 0 21,519 19,383
Average Interest Rates 2.11% 2.11% 2.11% 2.11% 2.11% 2.11% 0.00% 2.11%
Insured Money Market Accounts 33,537 18,065 18,065 0 0 0 0 69,667 70,170
Average Interest Rates 3.61% 3.61% 3.61% 0.00% 0.00% 0.00% 0.00% 3.61%
Savings Deposits 3,324 7,826 7,826 3,163 3,163 6,326 0 31,628 29,224
Average Interest Rates 2.54% 2.54% 2.54% 2.54% 2.54% 2.54% 0.00% 2.54%
Variable-Rate Certificates of Deposit 967 2,281 2,281 922 922 1,844 0 9,217 8,788
Average Interest Rates 4.46% 4.46% 4.46% 4.46% 4.46% 4.46% 0.00% 4.46%
Certificates of Deposits 89,986 20,222 1,311 2,096 37 0 0 113,652 112,683
Average Interest Rates 4.65% 4.85% 5.62% 5.66% 4.79% 0.00% 0.00% 4.71%
Non Interest Bearing Deposits 20,943 13,124 8,225 5,157 3,234 5,525 0 56,208 56,208
Other Interest Bearing Liabilities 187 199 211 224 237 363 0 1,421 1,386
Average Interest Rates 5.88% 5.88% 5.88% 5.88% 5.88% 5.88% 0.00% 5.88%
Other Liabilities 0 0 0 0 0 0 1,497 1,497
Stockholders' Equity 0 0 0 0 0 0 38,966 38,966
Total Liabilities and
Stockholders' Equity $150,897 $67,166 $43,368 $13,729 $9,760 $18,392 $40,463 $343,775
Interest Rate Sensitivity Gap $7,237 $3,354 ($9,862) $3,897 $703 (1,234) ($4,095) $0
Cumulative Interest Rate
Sensitivity Gap $7,237 $10,591 $729 $4,626 $5,329 $4,095 $0
GAP / Assets 2.11% 0.98% (2.87%) 1.13% 0.20% (0.36%) (1.19%)
Cumulative GAP / Assets 2.11% 3.08% 0.21% 1.35% 1.55% 1.19% 0.00%
</TABLE>
<PAGE> 18
Financial Instruments
In the normal course of business the Bank enters into
agreements which, for accounting purposes, are considered off-
balance sheet activities. These agreements are loan and line 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.
Total commitments were $22.1 million and $20.3 million at
December 31, 1999 and 1998, respectively. Available loan
commitments at December 31, 1999, were $16.2 million and $14.9
million at December 31, 1998. The Bank had letters of credit of
$404 thousand issued at December 31, 1999. Additionally, the
Bank has deposit customers who have credit lines available to
them through their deposit accounts. At December 31, 1999 the
available portion of these credit lines was $322 thousand. These
credit lines are immediately cancelable by the Bank. The credit
lines provide a source of income to the Bank through service fees
charged and interest earned on balances outstanding. The credit
lines are reviewed regularly and do not pose a material credit
risk to the Bank. To date, the Bank does not have instruments
outstanding that can be specifically described as a financial
guarantee which guarantees the performance of a customer to a
third party other than the financial standby letters of credit
described above. The Bank also issues credit cards. The
aggregate credit available was $5.2 million and $4.3 million at
December 31, 1999 and 1998. Applicants are reviewed through
normal lending policies and credit reviews.
The Bank is not a party to financial instruments defined as
interest rate exchange agreements, financial futures, or
financial options. Therefore, the Bank is not exposed to the
additional interest rate risk inherent in those instruments.
Loans
<TABLE>
<CAPTION>
An analysis of the loan portfolio at December 31, 1999,
1998, 1997, 1996, and 1995, is as follows:
($ in thousands) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Commercial, Financial and Agricultural $16,223 $17,526 $15,811 $10,444 $10,786
Real Estate
Construction 16,647 1,334 3,987 3,184 1,662
Mortgage 165,973 144,815 113,117 105,800 81,082
Individuals 15,974 15,120 13,892 13,559 11,457
Foreign 0 0 0 1,361 1,846
All Other Loans 469 3,199 2,395 1,576 793
Total Loans 215,286 181,994 149,202 135,924 107,626
Unearned Income 0 (2) (37) (65) (33)
Allowance for Loan Losses (4,155) (3,530) (2,190) (3,083) (3,273)
Total Loans, Net $211,131 $178,462 $146,975 $132,776 $104,320
</TABLE>
Allowance for Loan Losses
The Allowance for Loan Losses was $4.2 million at December
31, 1999, or 1.93%, of loans outstanding. At December 31, 1998
the Allowance for Loan Losses was $3.5 million, or 1.94%, of
loans outstanding. Net charge-offs (recoveries) were $275
thousand for the current year, versus ($140) thousand for 1998.
Gross charge-offs as a percentage of average loans were .27% and
.16% for 1999 and 1998, respectively. Recoveries as a percentage
of gross charge-offs for 1999 were 48.14% versus 154.05% for
1998.
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.
The Bank maintains the balance in the Allowance for Loan
Losses in order to accept any adverse loan relationships that
have the potential to occur in the future. Impaired loans are
individually evaluated and specific portions of the allowance are
allocated to each loan, based on collateral values and the
present value of estimated cash flows. The remainder of the
<PAGE> 19
allowance is unallocated and is tested for adequacy by comparing
its level to the sum of: a percentage of the balances of loans
graded substandard plus the sum of the non-impaired, non-
substandard remainder of the loan portfolio multiplied by a model-
generated "potential default" factor. The model analyzes various
classes of loans by industry to determine the inherent default
risk in each class. These risks are then quantified into
potential default factors, which are applied to each class of
loans in the Bank's portfolio. As the process applies these
potential default factors to the non-classified portion of the
loan portfolio, additional reserves necessary because of loan
growth are accounted for.
Also in determining the level of Allowance for Loan Losses,
management considers the uncertainty in estimating loan losses,
including the possibility of improper risk ratings and specific
reserve allocations, as well as the uncertainty in predicting the
future performance of the economy in the Bank's market area. As
the Bank's ratio of loans-to-deposits continues to increase, so
does the potential for problem loans to occur at a rate uncommon
to the Bank's historical loan loss basis given smaller loan-to-
deposit ratios of the past.
Table 3, Activity in Allowance for Loan Losses, below presents an
analysis of activity in the allowance for loan losses for the
past five years.
<TABLE>
<CAPTION>
Table 3-
($ in thousands) Year Ended December 31,
Activity in Allowance for Loan Losses 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Beginning Balance $3,530 $2,190 $3,083 $3,273 $3,077
Loans Charged Off:
Real Estate 254 77 312 78 295
Commercial, Financial, and Agricultural 213 121 1,631 392 103
Individual and Others 64 61 156 40 40
Total Charged Off 531 259 2,099 510 438
Loan Recoveries:
Real Estate 210 356 22 24 98
Commercial, Financial, and Agricultural 21 23 130 185 523
Individual and Others 25 20 29 21 13
Total Recoveries 256 399 181 230 634
Net Loans Charged Off (Recovered) 275 (140) 1,918 280 (196)
Provision charged to
Expense 900 1,200 1,025 90 0
Ending Balance $4,155 $3,530 $2,190 $3,083 $3,273
<CAPTION>
Year Ended December 31,
($ in thousands) 1999 1998 1997 1996 1995
Ending Balance
<S> <C> <C> <C> <C> <C>
Loans-Net $215,286 $181,992 $149,165 $135,859 $107,593
Daily Average Loans $197,291 $163,321 $142,204 $119,802 $101,318
Ratio of Net Charge-Offs
to Total Loans 0.13% -0.08% 1.29% 0.21% -0.18%
Ratio of Net Charge-Offs
to Average Loans 0.14% -0.09% 1.35% 0.23% -0.19%
</TABLE>
<PAGE> 20
The allowance for loan losses has been allocated according
to the type of loan described in the table below, at December 31,
1999, 1998, 1997, 1996, and 1995:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Real Estate $974 $1,094 $636 $1,231 $2,052
Commercial, Financial, and Agricultural 393 287 95 667 415
Individual and Others 54 58 117 79 23
Unallocated 2,734 2,091 1,342 1,106 783
Total Allowance $4,155 $3,530 $2,190 $3,083 $3,273
</TABLE>
Non-Performing Assets
Non-performing assets include non-accrual loans, impaired
loans, repossessions and other real estate. Generally, loans are
considered non-accrual 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. Non-accrual
loans at December 31, 1999 were $1.4 million compared with non-
accraul loans of $730 thousand at December 31, 1998. At December
31, 1999 non-accrual loans were .65% of gross loans outstanding
and 34.41% of the allowance for loan losses. The same ratios for
December 31, 1998 were .40% and 20.68%, respectively. Loans past
due 90 days and still accruing at December 31, 1999 and 1998 were
$415 thousand and $242 thousand, respectively. Impaired loans
having recorded investments of $4.7 million at December 31, 1999
compared to $3.7 million at December 31, 1998 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 $1.4 million at December 31, 1999 and December 31, 1998.
Interest received on impaired loans amounted to $474 thousand at
December 31, 1999 compared to $430 thousand at December 31, 1998.
Other real estate is properties held for sale acquired
through foreclosure or negotiated settlement of debt. Other real
estate was $19 thousand at December 31, 1999 and $73 thousand at
December 31, 1998.
In the process of reviewing the loan portfolio, management
acknowledges certain potential problem loans that are not
classified as impaired, non-accrual, greater than 90 days
delinquent, or restructured. Management does not feel that any
of these potential problem loans are reasonably likely to have or
will have a material effect on the Company's liquidity, capital
resources, or results of operations.
The following table presents information on the amount of
non-performing loans at December 31, 1999, 1998, 1997, 1996, and
1995:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Non-accrual $1,430 $730 $285 $174 $527
Past due 90 days or more 415 242 364 395 441
Restructured and Impaired 4,723 3,685 2,965 3,826 3,073
$6,568 $4,657 $3,614 $4,395 $4,041
</TABLE>
<PAGE> 21
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, based on recent regulatory
examinations or otherwise, of any known trends, events or
uncertainties which are reasonably likely to have or will have a
material effect on the Company's liquidity, capital resources, or
results of operations.
Capital Adequacy
The strength of a company is measured by the company's
capital, earnings history, asset quality, and management.
Capital can be increased by the retention of earnings and
issuance of equity stock. Management feels the current trend of
earnings and dividend distribution is sufficient to maintain its
capital adequacy requirements.
The Company 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. As shown in Table 4,
Capital Adequacy Ratios, the Company's ratios for the reporting
periods exceed regulatory minimums.
The Company's dividends are determined by its Board of
Directors. The current policy is to maintain dividends at a
level which ensures the Company and Bank are able to maintain
sufficient regulatory capital levels. The Company's primary
source of funds is dividends received from the Bank. Under
current dividend limitations the Bank could pay dividends of
approximately $3.7 million without regulatory approval. The
Company carries no debt; therefore, future liquidity needs are
limited to the payment of any declared dividends. The Company
maintains sufficient liquidity to maintain its operations should
a regulatory agency limit the Bank from paying dividends.
<PAGE> 22
Table 4-
<TABLE>
<CAPTION>
Capital Adequacy Ratios
In Thousands December 31, December 31,
1999 1998
<S> <C> <C>
Tier 1 Capital:
Stockholders' Equity $38,957 $36,397
Tier 2 Capital:
Allowance for Loan Losses 2,505 2,147
Total Capital $41,462 $38,544
Risk-Weighted Ratios:
Tier 1 Capital 19.6% 21.4%
Total Capital 20.9% 22.6%
Leverage Ratio 11.3% 11.3%
Stockholders' Equity 11.3% 11.1%
<CAPTION>
Regulatory Risk-Based Capitalization Requirements
Significantly Critically
Well Adequately Under Under Under
Capitalized Capitalized Capitalized Capitalized Capitalized
<S> <C> <C> <C> <C> <C>
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>
Capital Expenditures
The Bank continued to expand its branch office network with
the opening of a second full-service office in Thibodaux,
Lafourche Parish, Louisiana on March 15, 1999. Also, a full-
service office is under constructuion in Donaldsonville,
Ascension Parish, Louisiana, with an opening planned in the
second quarter of 2000. When the new Donaldsonville office is
open, the Bank will have in operation a total of nineteen full-
service banking locations and one loan production office.
The Year 2000
The Bank formed a Year 2000 committee to identify and
provide for potential costs and uncertainties related to the Year
2000 date change. "Mission-critical" systems as well as business-
resumption contingency plans were implemented and tested. The
Year 2000 threshold was crossed with no problems encountered to
date that effected significantly the Company's liquidity, capital
resources, or results of operation. The Bank will remain
vigilant for the remainder of the year 2000 for any undiscovered
date-change problems. Costs expensed in 1999 related to the Year
2000 issue were not material.
The discussion entitled "Year 2000" includes certain
"forward-looking statements" within the meaning of the Private
Securities Litigation Relief Act of 1995 (PSLRA). This statement
is included for the purpose of availing the Company of the
protections of the safe harbor provisions of the PSLRA.
Management's ability to predict the total effects of Year 2000
issues is inherently uncertain and subject to factors that may
cause actual results to materially differ from those anticipated.
Factors that could affect actual results include: the
possibility that contingency plans and remediation efforts will
not operate as intended, the Bank's failure to completely
identify all software and hardware applications that require
remediation, unexpected costs, and the general uncertainty
associated with the impact of Year 2000 issues on the banking
industry, the Bank's customers, vendors, and others with whom it
<PAGE> 23
conducts business. Readers are cautioned not to place undue
reliance on these forward-looking statements.
<PAGE> 24
Table 5 -
<TABLE>
<CAPTION>
AVERAGE BALANCE SHEETS AND INTEREST RATE ANALYSIS
In thousands
1999 1998 1997
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE
Assets
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Bearing Deposit Accounts $5,679 $310 5.46% $5,128 $221 4.30% $2,753 $155 5.63%
Federal Funds Sold and Securities
Purchased under Resale Agreements 10,107 498 4.93% 11,144 590 5.30% 11,872 641 5.40%
Securities:
Taxable 90,429 4,969 5.49% 97,988 5,710 5.83% 102,144 5,948 5.82%
Non-Taxable* 9,460 780 8.25% 10,263 880 8.58% 10,134 873 8.61%
Loans - Net 197,291 17,321 8.78% 163,321 15,147 9.27% 142,240 13,437 9.45%
Total Earning Assets 312,966 23,878 7.63% 287,844 22,548 7.83% 269,143 21,054 7.82%
Allowance for Loan Losses (3,655) (2,928) (2,505)
Nonearning Assets 30,664 27,629 25,670
Total Assets $339,975 $312,545 $292,308
Liabilities and Stockholders' Equity
NOW Accounts $23,938 $485 2.03% $24,063 $502 2.09% $25,572 $541 2.12%
Savings Accounts 32,150 812 2.53% 31,277 792 2.53% 32,082 811 2.53%
Money Market Deposit Accounts 64,252 2,181 3.39% 55,992 1,734 3.10% 49,738 1,401 2.82%
Certificates of Deposits less than $100,000 107,658 4,827 4.48% 96,254 4,677 4.86% 87,017 4,368 5.02%
Certificates of Deposits greater than $100,000 12,145 573 4.72% 11,531 561 4.87% 11,999 542 4.52%
Total Interest Bearing Deposits 240,143 8,878 3.70% 219,117 8,266 3.77% 206,408 7,663 3.71%
Other Borrowings 1,353 80 5.91% 1,094 69 6.31% 811 49 6.04%
Total Interest Bearing Liabilities 241,496 8,958 3.71% 220,211 8,335 3.79% 207,219 7,712 3.72%
Noninterest Bearing Deposits 58,107 54,161 48,896
Other Liabilities 1,509 1,443 1,171
Stockholders' Equity 38,863 36,730 35,022
Total Liabilities and Stockholders' Equity $339,975 $312,545 $292,308
Net Interest Income - Tax Equivalent Basis* $14,920 $14,213 $13,342
Tax Equivalent Adjustment (265) (299) (297)
Net Interest Income $14,655 $13,914 $13,045
Net Interest Income - Spread* 3.92% 4.04% 4.10%
Net Interest Income as a % of Total Earning Assets* 4.77% 4.94% 4.96%
*Tax Equivalent Basis - 34% Rate for the periods dated
</TABLE>
<PAGE> 25
Table 6 -
<TABLE>
<CAPTION>
INTEREST DIFFERENTIALS 1999/1998 1998/1997
In thousands Change due to Total Change due to Total
Volume Rate Change Volume Rate Change
Interest Earning Assets:
<S> <C> <C> <C> <C> <C> <C>
Interest Bearing Deposit Accounts $24 $65 $89 $134 ($68) $66
Federal Funds Sold (55) (37) (92) (39) (12) (51)
Securities:
Taxable (440) (301) (741) (242) 4 (238)
Non-Taxable* (69) (31) (100) 11 (4) 7
Loans 3,151 (977) 2,174 1,991 (281) 1,710
Total Interest Income 2,611 (1,281) 1,330 1,855 (361) 1,494
Interest Bearing Liabilities:
NOW Accounts (3) (14) (17) (32) (7) (39)
Savings Accounts 22 (2) 20 (20) 1 (19)
Money Market Deposit Accounts 256 191 447 176 157 333
Certificates of Deposits less than $100,000 554 (404) 150 464 (155) 309
Certificates of Deposits greater than $100,000 30 (18) 12 (21) 40 19
Other Borrowings 16 (5) 11 17 3 20
Total Interest Expense 875 (252) 623 584 39 623
Increase (Decrease) in
Interest Differential $1,736 ($1,029) $707 $1,271 ($400) $871
*Tax Equivalent Basis - 34% Rate for the periods dated
</TABLE>
<PAGE> 26
Item 8. Financial Statements and Supplementary Data
One American Corp. and Subsidiaries
Management's Responsibility for Financial Reporting
The management of One American Corp. and Subsidiaries is
responsible for the preparation of the financial statements,
related financial data, and other information in this annual
report. The financial statements are prepared in accordance with
generally accepted accounting principles and include some amounts
that are necessarily based on management's informed estimates and
judgments, with consideration given to materiality. All
financial information in this annual report is consistent with
that in the financial statements.
Management fulfills its responsibility for the integrity,
objectivity, consistency, and fair presentation of the financial
statements, and the financial information through an accounting
system and related internal accounting controls that are designed
to provide reasonable assurance that assets are safeguarded and
that transactions are authorized and recorded in accordance with
established policies and procedures. The concept of reasonable
assurance is based on the recognition that the cost of a system
of internal accounting controls should not exceed the related
benefits. As an integral part of the system of internal
accounting controls, One American Corp. and Subsidiaries has a
professional staff who monitor compliance with and assess the
effectiveness of the system of internal accounting controls while
coordinating audit coverage with the independent public
accountants.
The Audit Committee of the Board of Directors, composed
solely of outside directors, meets periodically with management,
and the independent public accountants to review matters relating
to financial reporting, internal accounting controls and the
nature, extent and results of the audit effort. The independent
public accountants have direct access to the Audit Committee with
or without management present.
The financial statements as of December 31, 1999 and 1998,
were audited by Hannis T. Bourgeois, LLP, independent public
accountants, who rendered an independent professional opinion on
the financial statements prepared by management.
<PAGE> 27
Report of Independent Auditor
January 14, 2000
To the Shareholders
and Board of Directors of
One American Corp. and Subsidiaries
Vacherie, Louisiana
We have audited the accompanying Consolidated Balance Sheets
of One American Corp. and Subsidiaries as of December 31, 1999
and 1998, and the related Consolidated Statements of Income,
Changes in Stockholders' Equity, and Cash Flows for each of the
three years in the period ended December 31, 1999. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of One American Corp. and Subsidiaries as of December 31, 1999
and 1998, and the results of their operations, changes in their
stockholders' equity and their cash flows for each of the three
years in the period ended December 31, 1999, in conformity with
generally accepted accounting principles.
Respectfully submitted,
/s/ Hannis T. Bourgeois, LLP
Hannis T. Bourgeois, L L P
Baton Rouge, Louisiana
<PAGE> 28
<TABLE>
<CAPTION>
Consolidated Balance Sheets
One American Corp. and Subsidiaries
December 31, 1999 and 1998
In thousands 1999 1998
Assets
<S> <C> <C>
Cash and Due From Banks $16,494 $12,126
Interest Bearing Deposits in Other Banks 1,529 10,629
Federal Funds Sold and Securities
Purchased Under Resale Agreements 5,700 11,525
Securities Available for Sale (Amortized Cost of $91,695
and $98,588, respectively) 90,608 99,510
Loans 215,286 181,992
Less: Allowance for Loan Losses (4,155) (3,530)
Loans, Net 211,131 178,462
Bank Premises and Equipment 12,598 11,997
Other Real Estate 19 73
Accrued Interest Receivable 2,007 2,133
Other Assets 3,689 2,921
Total Assets $343,775 $329,376
Liabilities
Deposits:
Noninterest Bearing $56,208 $58,406
Interest Bearing 245,683 230,785
Total Deposits 301,891 289,191
Accrued Interest Payable 968 825
Other Liabilities 1,950 1,560
Total Liabilities 304,809 291,576
Stockholders' Equity
Common Stock-$2.50 par value;
Authorized-10,000,000 shares;
Issued-3,000,000 shares 7,500 7,500
Surplus 5,000 5,000
Retained Earnings 28,745 26,111
Accumulated Other Comprehensive Income (718) 609
Treasury Stock - 334,140 and 328,922 shares at cost (1,561) (1,420)
Total Stockholders' Equity 38,966 37,800
Total Liabilities and Stockholders' Equity $343,775 $329,376
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 29
<TABLE>
<CAPTION>
Consolidated Statements of Income
One American Corp. and Subsidiaries
for the years ended December 31, 1999, 1998, and 1997
In thousands, except per share data 1999 1998 1997
Interest Income
<S> <C> <C> <C>
Interest and Fees on Loans $17,321 $15,147 $13,437
Interest on Securities:
Taxable Interest 4,969 5,710 5,948
Nontaxable Interest 515 581 576
Total Interest on Securities 5,484 6,291 6,524
Other Interest Income 808 811 796
Total Interest Income 23,613 22,249 20,757
Interest Expense on Deposits 8,958 8,335 7,712
Net Interest Income 14,655 13,914 13,045
Provision for Loan Losses 900 1,200 1,025
Net Interest Income After
Provision for Loan Losses 13,755 12,714 12,020
Other Income
Service Charges on Deposit Accounts 2,156 2,068 2,092
Gain on Securities 2 5 190
Gain on Purchased Assets 986 609 607
Other Operating Income 1,116 956 851
Total Other Income 4,260 3,638 3,740
Income Before Other Expenses 18,015 16,352 15,760
Other Expenses
Salaries and Employee Benefits 5,759 5,305 4,749
Net Occupancy Expense 1,408 1,267 1,236
Net ORE and Repossession Expense 19 (9) (180)
Other Operating Expenses 4,101 3,843 3,868
Total Other Expenses 11,287 10,406 9,673
Income Before Income Taxes 6,728 5,946 6,087
Applicable Income Taxes 2,159 1,885 2,050
Net Income $4,569 $4,061 $4,037
Net Income Per Share $1.71 $1.51 $1.49
Cash Dividends Per Share $0.73 $0.71 $0.63
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 30
<TABLE>
<CAPTION>
One American Corp. and Subsidiaries
for the years ended December 31, 1999, 1998, and 1997
Accumulated
Other Total
Common Retained Comprehensive Treasury Stockholders'
In thousands Stock Surplus Earnings Income Stock Equity
<S> <C> <C> <C> <C> <C> <C>
Balances, January 1, 1997 $7,500 $5,000 $21,596 $64 ($625) $33,535
Comprehensive Income:
Net Income 4,037 4,037
Other Comprehensive Income,
Net of Tax:
Net Change in Unrealized Gain (Loss)
on Securities Available-for-Sale 565 565
Less: Reclassification Adjustments (190) (190)
Total Comprehensive Income 4,412
Treasury Stock Purchased (2) (2)
Cash Dividends (1,690) (1,690)
Balances, December 31, 1997 7,500 5,000 23,943 439 (627) 36,255
Comprehensive Income:
Net Income 4,061 4,061
Other Comprehensive Income,
Net of Tax:
Net Change in Unrealized Gain (Loss)
on Securities Available-for-Sale 175 175
Less: Reclassification Adjustments (5) (5)
Total Comprehensive Income 4,231
Treasury Stock Purchased (793) (793)
Cash Dividends (1,893) (1,893)
Balances, December 31, 1998 7,500 5,000 26,111 609 (1,420) 37,800
Comprehensive Income:
Net Income 4,569 4,569
Other Comprehensive Income,
Net of Tax:
Net Change in Unrealized Gain (Loss)
on Securities Available-for-Sale (1,325) (1,325)
Less: Reclassification Adjustments (2) (2)
Total Comprehensive Income 3,242
Treasury Stock Purchased (141) (141)
Cash Dividends
(1,935) (1,935)
Balances, December 31, 1999 $7,500 $5,000 $28,745 ($718) ($1,561) $38,966
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 31
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
One American Corp. and Subsidiaries
for the years ended December 31, 1999, 1998, and 1997
In thousands 1999 1998 1997
Cash Flows From Operating Activities
<S> <C> <C> <C>
Net Income $4,569 $4,061 $4,037
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Gain on Purchased Assets (986) (609) (607)
Provision for Depreciation 943 828 762
Provision for Loan Losses 900 1,200 1,025
Net Amortization (Accretion) on Securities (191) (261) (149)
Provision (Credit) for Deferred Income Taxes (302) (435) 412
(Gain) Loss on Sale of Other Real Estate and Repossessions (3) (6) (304)
(Gain) Loss on Sale of Equipment 0 0 (1)
(Gain) Loss on Securities 2 (5) (190)
Changes in Assets and Liabilities:
(Increase) Decrease in Accrued Interest Receivable 126 43 (145)
(Increase) Decrease in Other Assets 217 (386) (363)
Increase (Decrease) in Accrued Interest Payable 143 48 84
Increase (Decrease) in Other Liabilities (17) (11) 54
Net Cash Provided by Operating Activities 5,401 4,467 4,615
Cash Flows From Investing Activities
Maturities or Calls of Securities Available for Sale 59,770 67,370 61,775
Purchases of Securities Available for Sale (54,689) 51,485) (64,041)
Proceeds from Sale of Securities Available for Sale 2,000 5 189
Net (Increase) Decrease in Federal Funds Sold 5,825 625 1,175
Net (Increase) Decrease in Loans (32,999) (32,166) (15,174)
Proceeds from Sale of Other Real Estate and Repossessions 473 99 850
Purchases of Premises and Equipment (1,544) (1,988) (1,953)
Net Cash Used in Investing Activities (21,164) (17,540) (17,179)
Cash Flows From Financing Activities
Net Increase (Decrease) in Demand Deposits, NOW
and Savings Accounts 1,633 18,019 476
Net Increase (Decrease) in Certificates of Deposits 11,067 7,515 12,477
Proceeds from Other Borrowings 570 0 407
Repayments of Amounts Borrowed (175) (142) 0
Dividends Paid (1,922) (1,886) (1,625)
Treasury Stock Purchased (142) (793) (2)
Net Cash Provided By Financing Activities 11,031 22,713 11,733
Increase (Decrease) in Cash and Cash Equivalents (4,732) 9,640 (831)
Cash and Cash Equivalents - Beginning of Year 22,755 13,115 13,946
Cash and Cash Equivalents - End of Year $18,023 22,755 $13,115
<FN>
Continued on next page
</TABLE>
<PAGE> 32
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
One American Corp. and Subsidiaries
for the years ended December 31, 1999, 1998, and 1997
In thousands 1999 1998 1997
<S> <C> <C> <C>
Supplemental Disclosure of Cash Flow Information:
Income Tax Payments $2,525 $2,317 $1,536
Interest Paid on Deposits $8,815 $8,287 $7,628
Noncash Investing Activities:
Other Real Estate Acquired in Settlement of Loans $416 $88 $556
Change in Unrealized Gain (Loss) on
Securities Available for Sale ($2,010) $258 $568
Change in Deferred Tax Effect on
Unrealized Gain (Loss) on Securities Available for Sale ($683) $88 $193
Noncash Financing Activities:
Dividends Declared and Not Paid $494 $481 $473
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 33
One American Corp. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1999, 1998, and 1997
NOTE A
Summary of Significant Accounting Policies
The accounting principles followed by One American Corp.
(the Company), its wholly-owned subsidiary, First American Bank
and Trust (the Bank), and its wholly-owned subsidiary, First
American Agency, L.L.C. (the Agency), are those which are
generally practiced within the banking industry. The methods of
applying those principles conform with generally accepted
accounting principles and have been applied on a consistent
basis. The principles which significantly affect the
determination of financial position, results of operations,
changes in stockholders' equity, and cash flows are summarized
below.
Principles of Consolidation - The consolidated financial
statements include the accounts of One American Corp. (the
Company), its wholly-owned subsidiary, First American Bank and
Trust (the Bank), and its wholly-owned subsidiary, First American
Agency, L.L.C. (the Agency), and One American Agency, Inc. First
American Agency, L.L.C. was formed in March, 1998 and One
Amercian Agency, Inc. was liquidated in December, 1998. All
significant intercompany balances and transactions have been
eliminated. Certain reclassifications to previously published
financial statements have been made to comply with current
reporting requirements.
Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during
the period. Actual results could differ from those estimates.
The determination of the adequacy of the allowance for loan
losses is based on estimates that are particularly susceptible to
significant changes in the economic environment and market
conditions. In connection with the determination of estimated
losses on loans, management obtains independent appraisals for
significant collateral. The Bank's loans are generally secured
by specific items of collateral including real property, consumer
assets, and business assets. Although the Bank has a diversified
loan portfolio, a substantial portion of its debtors' ability to
honor their contracts is dependent on local conditions in the
area. While management uses available information to recognize
losses on loans, further reductions in the carrying amounts of
loans may be necessary based on changes in local economic
conditions. In addition, regulatory agencies, as an integral
part of their examination process, periodically review the
estimated losses on loans. Such agencies may require the Bank to
recognize additional losses based on their judgements about
information available to them at the time of their examination.
Because of these factors, it is reasonably possible that the
estimated losses on loans may change materially in the near term.
However, the amount of the change that is reasonably possible
cannot be estimated.
Securities - Management determines the appropriate
classification of debt securities (Held to Maturity, Available
for Sale, or Trading) at the time of purchase and re-evaluates
this classification periodically. Securities that management has
both the intent and ability to hold to maturity regardless of
changes in market conditions, liquidity needs, or changes in
general economic conditions are classified as securities held to
maturity. These securities are carried at cost adjusted for
amortization of premium and accretion of discount, computed by
various methods approximating the interest method over their
contractual lives.
Securities that may be sold prior to maturity are classified
as securities available for sale. 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. Securities purchased for trading
purposes are classified as trading securities and are carried at
market value with market adjustments included in non-interest
income. The Bank had no securities classified as held to
maturity or trading at December 31, 1999 or 1998.
<PAGE> 34
Loans - Loans are stated at principal amounts outstanding,
less unearned income and allowance for loan losses. Interest on
commercial and individual 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. Gain on purchased assets is recognized on acquired loans
from previous bank acquisitions on a cost recovery method as
principal payments are made.
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. The Bank classifies loans as impaired if,
based on current information and events, it is probable that the
Bank will be unable to collect the scheduled payments of
principal and interest when due according to the contractual
terms of the loan agreement. The measurement of impaired loans
is based on the present value of the expected future cash flows
discounted at the loan's effective interest rate or the loan's
observable market price or based on the fair value of the
collateral if the loan is collateral-dependent.
Allowance for Loan Losses - The allowance for loan losses is
maintained at a level which, in management's judgement, is
adequate to absorb credit losses inherent 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 examination by regulatory agencies; an internal asset
review process; expectations of future economic conditions and
their impact on particular borrowers; and other judgmental
factors. Allowances for impaired loans are generally determined
based on collateral values or the present value of estimated cash
flows. Although management uses available information to
recognize losses on loans, because of uncertainties associated
with local economic conditions, collateral values, and future
cash flows on impaired loans, it is reasonably possible that a
material change could occur in the allowance for loan losses in
the near term. However, the amount of the change that is
reasonably possible cannot be estimated.
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
collectability 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
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
<PAGE> 35
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 - Basic EPS is computed by
dividing income applicable to common shares by the weighted
average shares outstanding; no dilution for any potentially
convertible shares is included in the calculation. Diluted EPS
reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock
that then shared in the earnings of the company. At December 31,
1999, the company had no convertible shares or other contracts to
issue common stock. The weighted average number of shares of
common stock used to calculate basic EPS was 2,668,449 for the
year ended December 31, 1999, 2,686,389 for the year ended
December 31, 1998, and 2,703,230 for the year ended December 31,
1997.
On April 22, 1998, the organization reduced the par value of
its common shares from $5.00 to $2.50 per share to effect a 2 -
for - 1 stock split issued May 8, 1998. The earnings per common
share for the year ended December 31, 1997 has been retroactively
restated for this stock split.
Statements of Cash Flows - For purposes of reporting cash
flows, cash and cash equivalents include cash and due from banks
and interest bearing deposits in other banks.
Comprehensive Income - The Financial Accounting Standards
Board issued Statement No. 130 "Reporting Comprehensive Income",
which became effective for fiscal years beginning after December
31, 1997. This statement establishes standards for reporting and
display of comprehensive income and its components which are
revenues, expenses, gains, and losses that under GAAP are
included in comprehensive income but excluded from net income.
The Company adopted this statement in 1998. The components of
comprehensive income are disclosed in the Statements of Changes
in Stockholders Equity for all periods presented.
Recent Accounting Pronouncements - In June 1997, the FASB
issued SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," which establishes standards for the
reporting of financial information from operating segments in
annual and interim financial statements. SFAS No. 131 requires
that financial information be reported on the same basis that it
is reported internally for evaluating segment performance and
allocating resources to segments. The adoption of this statement
had no material effect on the financial statements as of December
31, 1999 or 1998.
In February, 1998 the FASB issued Statement No. 132,
"Employers' Disclosures about Pensions and Other Postretirement
Benefits." FASB Statement No. 132 revises employers' disclosures
about pension and other postretirement benefit plans. It does
not change the measurement or recognition of those plans. It
standardizes the disclosure requirements for pensions and other
postretirement benefits. The adoption of this statement in 1998
had no material impact on the Company's financial position or
results of operations.
In June, 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities". The provisions
of this statement are effective for the Company's year ended
December 31, 1998. The impact of adopting this statement did not
have a material effect on the Company's financial statements.
<PAGE> 36
NOTE B
Acquisitions
On March 5, 1998, First American Agency, L.L.C., a
subsidiary of First American Bank and Trust, acquired Riverbend
Insurance Agency, Inc. of Destrehan, St Charles Parish,
Louisiana. Equity earnings from First American Agency, L.L.C. in
the amount of $198 thousand and $54 thousand, respectively, are
included in Other Income of the Company for the years ended
December 31, 1999 and 1998. The net equity in First American
Agency, L.L.C of $938 thousand and $639 thousand, respectively,
is reflected in Other Assets in the Balance Sheet as of December
31, 1999 and 1998. As a result of this acquisition, the
Company's Board of Directors voted to dissolve One American
Agency, Inc. and its assets, which were insignificant, were
merged into its Parent Company effective December 31, 1998.
NOTE C
Cash and Due from Banks
The Bank is required to maintain average cash reserve
balances. The amounts of those reserves at December 31, 1999 and
1998, were approximately $4.4 million and $4.2 million,
respectively.
NOTE D
Securities
Amortized costs and fair values of securities available for
sale as of December 31, 1999 and 1998 are summarized as follows:
<TABLE>
<CAPTION>
1999
Gross Gross
Amortized Unrealized Unrealized Fair
($ in thousands) Cost Gains Losses Value
<S> <C> <C> <C> <C>
U. S. Treasury Securities $31,997 $1 ($188) $31,810
Securities of Other U. S. Government Agencies 23,977 1 (249) 23,729
Mortgage-Backed Securities 24,575 42 (718) 23,899
Obligations of State and Political Subdivisions 9,962 101 (77) 9,986
Equity Securities 1,184 0 0 1,184
Totals $91,695 $145 ($1,232) $90,608
<CAPTION>
1998
Gross Gross
Amortized Unrealized Unrealized Fair
($ in thousands) Cost Gains Losses Value
<S> <C> <C> <C> <C>
U. S. Treasury Securities $36,017 $288 ($2) $36,303
Securities of Other U. S. Government Agencies 35,888 109 (44) 35,953
Mortgage-Backed Securities 15,607 200 (11) 15,796
Obligations of State and Political Subdivisions 10,118 382 0 10,500
Equity Securities 958 0 0 958
Totals $98,588 $979 ($57) $99,510
</TABLE>
<PAGE> 37
The following table shows the amortized cost, fair value,
maturity distribution, and weighted average yield of the
securities available for sale as of December 31, 1999.
Maturities may differ from contractual maturities in mortgage-
backed securities because the mortgages underlying the securities
may be called or repaid without any penalties.
<TABLE>
<CAPTION>
($ in thousands) Amortized Fair Average
Cost Value Yield
U. S. Treasury Securities
<S> <C> <C> <C>
Within 1 Year $16,014 $15,989 5.40%
After 1 but Within 5 Years 15,983 15,821 5.36%
After 5 but Within 10 Years 0 0 0.00%
After 10 Years 0 0 0.00%
31,997 31,810 5.38%
Securities of Other U. S. Government Agencies
Within 1 Year 14,003 13,913 5.56%
After 1 but Within 5 Years 9,974 9,816 5.73%
After 5 but Within 10 Years 0 0 0.00%
After 10 Years 0 0 0.00%
23,977 23,729 5.63%
Mortgage-Backed Securities
Within 1 Year 6 7 9.49%
After 1 but Within 5 Years 13,735 13,326 5.46%
After 5 but Within 10 Years 8,926 8,669 6.30%
After 10 Years 1,908 1,897 6.12%
24,575 23,899 5.82%
Obligations of State and Political Subdivisions
Within 1 Year 2,334 2,349 8.78%
After 1 but Within 5 Years 3,860 3,901 7.58%
After 5 but Within 10 Years 3,548 3,516 6.94%
After 10 Years 220 220 8.22%
9,962 9,986 7.65%
Equity Securities 1,184 1,184 5.18%
Totals $91,695 $90,608 5.81%
<FN>
* Tax Equivalent Basis - 34%
</TABLE>
Securities available for sale with a carrying amount of
$29.7 million and $42.1 million at December 31, 1999 and 1998,
respectively, were pledged as collateral on public deposits and
for other purposes as required or permitted by law.
The Bank has invested in Federal Home Loan Bank of Dallas
and First National Bankers Bankshares stock which are included in
Equity Securities and are reflected at the lower of cost or fair
value in these financial statements. The cost of these
securities was $1.2 million and $958 thousand, which approximates
fair value, at December 31, 1999 and 1998, respectively. At
December 31, 1999, $1.1 million of Federal Home Loan Bank of
Dallas stock was pledged to secure advances from the Federal Home
Loan Bank.
<PAGE> 38
Gross realized gains and losses from the sale of securities
for the years ended December 31, 1999, 1998, and 1997 are as
follows:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998 1997
<S> <C> <C> <C>
Realized gains $2 $5 $190
Realized losses 0 0 0
$2 $5 $190
</TABLE>
NOTE E
Loans
An analysis of the loan portfolio at December 31, 1999 and
1998, is as follows:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998
<S> <C> <C>
Commercial, Financial, and Agricultural $16,223 $17,526
Real Estate - Construction 16,647 1,334
Real Estate - Mortgage 165,973 144,815
Individuals 15,974 15,120
All Other Loans 469 3,199
Total Loans 215,286 181,994
Unearned Income 0 (2)
Total Loans, net of Unearned Income $215,286 $181,992
</TABLE>
Impaired loans having recorded investments of $6.1 million
at December 31, 1999 have been recognized in conformity with FASB
Statement No. 114 as amended by FASB Statement No. 118. The
average recorded investment in impaired loans during the year
ended December 31, 1999 was approximately $5.3 million. Impaired
loans at December 31, 1998 were $4.4 million. The allowance for
loan losses related to these loans was
$1.4 million at December 31, 1999 and December 31, 1998.
Interest received on impaired loans amounted to $474 thousand and
$430 thousand at December 31, 1999 and 1998, respectively. All
non-accrual loans were considered impaired at December 31, 1999
and 1998.
The Bank is permitted, under the laws of the State of
Louisiana, to make extensions of credit to its executive officers
and directors and their affiliates in the ordinary course of
business. An analysis of the aggregate loans, for December 31,
1999 and 1998, are as follows:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998
<S> <C> <C>
Balance - Beginning of Year $5,671 $5,068
New Loans 804 3,492
Repayments (2,690) (2,889)
Balance - End of Year 3,785 5,671
Maximum Balance During the Year $5,900 $5,671
</TABLE>
<PAGE> 39
NOTE F
Allowance for Loan Losses
Following is a summary of the activity in the allowance for
loan losses:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998 1997
<S> <C> <C> <C>
Balance - Beginning of Year $3,530 $2,190 $3,083
Current Provision from Income 900 1,200 1,025
Recoveries on Loans Charged-Off 256 398 181
Loans Charged-Off (531) (258) (2,099)
Balance - End of Year $4,155 $3,530 $2,190
Ratio of Allowance for Loan Losses to
Impaired Loans at End of Year 67.54% 79.95% 67.39%
Ratio of Allowance for Loan Losses to Loans
Outstanding at End of Year 1.93% 1.94% 1.47%
Ratio of Net Loans Charged-Off to
Loans Outstanding at End of Year 0.13% -0.08% 1.29%
</TABLE>
NOTE G
Bank Premises and Equipment
Bank premises and equipment costs and the related
accumulated depreciation at December 31, 1999 and 1998, are as
follows:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998
<S> <C> <C>
Land $3,483 $3,303
Bank Premises 10,662 9,173
Furniture and Equipment 6,820 6,959
20,965 19,435
Accumulated Depreciation (8,367) (7,438)
$12,598 $11,997
</TABLE>
Depreciation charged to operating expenses for the three
years ended December 31, 1999, 1998, and 1997, respectively, was
$943 thousand, $828 thousand, and $762 thousand.
<PAGE> 40
NOTE H
Deposits
Following is a detail of deposits as of December 31, 1999
and 1998:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998
<S> <C> <C>
Non-interest Bearing Accounts $56,208 $58,406
NOW and Super NOW Accounts 21,519 26,716
Insured Money Market Accounts 69,667 60,647
Savings Accounts 31,628 31,847
Certificates of Deposit over $100,000 18,275 15,157
Other Certificates of Deposit 104,594 96,418
Total Deposits $301,891 $289,191
</TABLE>
Following is a detail of certificate of deposit maturities
as of December 31, 1999:
<TABLE>
<CAPTION>
Certificates of Deposit Maturities
($ in thousands)
<S> <C>
December 31, 2000 $93,174
December 31, 2001 26,088
December 31, 2002 1,448
December 31, 2003 2,106
December 31, 2004 & After 53
Total Certificates of Deposit $122,869
</TABLE>
Interest expense on Certificates of Deposit over $100
thousand at December 31, 1999, 1998, and 1997, amounted to $573
thousand, $561 thousand and $542 thousand, respectively.
Public Fund deposits at December 31, 1999 and 1998, were
$13.1 million and $16.8 million, respectively.
NOTE I
Stockholders' Equity and Regulatory Matters
Stockholders' Equity of the Company includes the
undistributed earnings of the Bank. Dividends are paid by the
Company from its assets which are provided primarily by dividends
from the Bank. Dividends are payable only out of retained
earnings and current earnings of the Company. Certain
restrictions exist regarding the ability of the Bank to transfer
funds to the Company in the form of cash dividends. Louisiana
statutes require approval to pay dividends in excess of a state
bank's earnings in the current year plus retained net profits for
the preceding year. As of January 1, 2000, the Bank had retained
earnings of $16.9 million of which $3.7 million was available for
distribution without prior regulatory approval.
The Company and the Bank are subject to various regulatory
capital requirements administered by federal and state banking
agencies. Failure to meet minimum regulatory capital
requirements can initiate certain mandatory, and possible
additional discretionary actions by regulators, that if
undertaken, could have a direct material affect on the Company's
financial statements. Under the capital adequacy guidelines and
the regulatory framework for prompt corrective action, the
Company and the Bank must meet specific capital guidelines
involving quantitative measures of assets, liabilities, and
certain, off-balance-sheet items as calculated under regulatory
accounting practices. The Company and the Bank's capital amounts
and classification under the prompt corrective action guidelines
are also subject to qualitative judgments by the regulators about
components, risk weightings and other factors.
Quantitative measures established by regulation to ensure
capital adequacy require the Company to maintain minimum amounts
and ratios. As detailed below, as of December 31, 1999 and 1998,
the Company met all of the capital adequacy requirements to which
it is subject.
<PAGE> 41
As of December 31, 1999 and 1998, the Company was
categorized as well capitalized under the regulatory framework
for prompt corrective action. There are no conditions or events
since the most recent notification that management believes have
changed the prompt corrective action category.
Following is a summary of capital levels at December 31,
1999 and 1998:
<TABLE>
<CAPTION>
To Be Well
Capitalized
Under
Required for Prompt
Capital Corrective
Actual Adequacy Actions
As of December 31, 1999 Ratios Purposes Provision
<S> <C> <C> <C>
Total Capital (to Risk Weighted Assets) 20.90% 8.00% 10.00%
Tier 1 Capital (to Risk Weighted Assets) 19.60% 4.00% 6.00%
Tier 1 Leveraged Capital (to Average Assets) 11.26% 4.00% 5.00%
As of December 31, 1998
Total Capital (to Risk Weighted Assets) 22.64% 8.00% 10.00%
Tier 1 Capital (to Risk Weighted Assets) 21.38% 4.00% 6.00%
Tier 1 Leveraged Capital (to Average Assets) 11.26% 4.00% 5.00%
</TABLE>
Under current regulations, the Bank is limited in the amount
it may loan to its Parent. Loans to the Parent may not exceed
10% of the Bank's capital and surplus. There were no loans
outstanding at December 31, 1999 and 1998.
NOTE J
Employee Benefit Plans
The Bank maintains a Salary Deferral Plan qualified under
Internal Revenue Service Code Section 401(k) for all employees
who are 21 years of age and have completed one year of service.
Covered employees may elect to contribute 1% to 15% of gross pay
to the plan. The majority of the plan's assets are invested in
mutual funds. As part of the plan, the Bank has, at its
discretion, the ability to match the contributions or make
supplemental contributions. No amounts were contributed by the
Bank for either 1999 or 1998.
The Bank maintains a noncontributory defined benefit pension
plan covering all employees who qualify as to age and length of
service. Current policy is to fund annual pension costs as they
accrue. The majority of the plan's assets are invested in money
market funds or mutual funds. The following table sets forth the
plan's funded status at December 31, 1999 and 1998.
<PAGE> 42
<TABLE>
<CAPTION>
($ in thousands) 1999 1998
Change in Benefit Obligation:
<S> <C> <C>
Benefit Obligation at Beginning of Year $7,335 $6,146
Service Cost 448 380
Interest Cost 499 441
Plan Participants' Contributions 0 0
Actuarial (Gain)/Loss (944) 558
Benefits Paid (226) (190)
Benefit Obligation at End of Year $7,112 $7,335
Change in Plan Assets:
Fair Value of Plan Assets at Beginning of Year $7,135 $6,204
Actual return on Plan Assets 752 1,026
Employer Contributions 0 110
Plan Participant's Contributions 0 0
Benefits and Expenses Paid (226) (205)
Fair Value of Plan Assets at End of Year $7,661 $7,135
Funded Status $549 ($200)
Unrecognized Net Actuarial Loss (Gain) (635) 431
Unrecognized transaction obligation (asset) (310) (354)
Unrecognized Prior Service Cost 132 156
Prepaid (Accrued) Benefit Cost ($264) $33
</TABLE>
Assumptions used in the determination of pension plan
information consisted of the following:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Discount Rate 7.75% 6.75%
Rate of Increase in Compensation Levels 5.50% 5.50%
Expected Long-Term Rate of Return
on Plan Assets 9.00% 9.00%
</TABLE>
Net pension expense for 1999, 1998, and 1997 included the
following components:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998 1997
<S> <C> <C> <C>
Service Cost $448 $379 $268
Interest Cost 499 441 376
Expected Return on Assets (630) (547) (474)
Amortization of Prior Service Cost 25 25 25
Transition (Asset)/Obligation Recognition (44) (44) (44)
Net Periodic Benefit Cost $298 $254 $151
</TABLE>
The Bank's employee benefit program also includes self-
funded health and dental insurance plans for all full-time
employees. The costs of these plans are completely funded by the
Bank. The employees can also elect to purchase dependent
coverage under the plans. The Bank pays a premium to a reinsurer
for coverage on losses and claims that exceed $20,000 per
individual per plan year. Amounts paid by the Bank in
association with these plans totaled $607 thousand, $582
thousand, and $548 thousand for the years ended December 31, 1999
, 1998, and 1997 respectively. The Bank had set aside reserves
in the amount of $665 thousand for payment of unreported claims
with dates of service through December 31, 1999.
<PAGE> 43
NOTE K
Other Operating Expenses
The analysis of other operating expenses for the years ended
December 31, 1999, 1998, and 1997, are as follows:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998 1997
<S> <C> <C> <C>
Advertising and Public Relations $320 $390 $301
Armored Courier Service 170 165 131
Director Fees 229 218 263
Equipment Expense 1,158 1,058 929
Insurance 118 130 118
Legal and Professional 319 266 506
Postage and Shipping 210 180 180
Regulatory Assessments 90 83 67
Service Charges-Other Institutions 411 276 274
Stationery, Printing, and Supplies 363 372 356
Telephone 309 304 295
Other 404 401 448
$4,101 $3,843 $3,868
</TABLE>
NOTE L
Income Taxes
The total provision for income taxes charged to income
amounted to $2.1 million for 1999, $1.9 million for 1998, and
$2.0 million for 1997. The provisions represent effective tax
rates of 32% for 1999, 32% for 1998, and 33% for 1997. Following
is a reconciliation between income tax expense based on the
federal statutory tax rates and income taxes reported in the
statements of income.
<TABLE>
<CAPTION>
($ in thousands) 1999 1998 1997
Income Taxes Based on Statutory Rates -
<S> <C> <C> <C>
34% for periods shown $2,288 $2,022 $2,069
Tax Exempt Income (174) (198) (196)
Other - Net 45 61 177
$2,159 $1,885 $2,050
</TABLE>
The components of consolidated income tax expense (benefits)
are:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998 1997
<S> <C> <C> <C>
Provision for Current Taxes $2,461 $2,320 $1,638
Provision (Credit) for Deferred Taxes (302) (435) 412
$2,159 $1,885 $2,050
</TABLE>
<PAGE> 44
A deferred income tax asset of $1.3 million and $370
thousand is included in other assets at December 31, 1999 and
1998, respectively. The deferred tax provision (credit) consists
of the following timing differences:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998 1997
<S> <C> <C> <C>
Stock Dividends Received $38 $0 $0
Depreciation Expense for Tax Reporting
in Excess of Amount for Financial Reporting (5) 10 (3)
Provision for Loan Losses for Financial
Reporting in Excess of Amount for
Tax Reporting (281) (391) 427
Accretion Income for Financial Reporting
in Excess of Tax Reporting 1 (6) 14
Increase (Decrease) in Insurance Reserve 31 (33) (10)
Increase (Decrease) in Prepaid Pension (86) (15) (16)
($302) ($435) $412
</TABLE>
The net deferred tax asset consists of the following
components at December 31, 1999 and 1998:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998
<S> <C> <C>
Stock Dividends ($38) $0
Depreciation (351) (356)
Provision for Loan Losses 1,238 957
Accretion Income (30) (29)
Insurance Reserve 180 211
Prepaid Pension (11) (97)
Unrealized (Gain) Loss on Securities
Available for Sale 370 (316)
Total Deferred Tax Asset $1,358 $370
</TABLE>
NOTE M
Borrowings
The Bank maintains an open line of credit with the Federal
Home Loan Bank of Dallas. The total line of credit available
with Federal Home Loan Bank of Dallas amounts to approximately
$22.6 million at December 31, 1999. This amount is computed
based on the Bank's investment in Federal Home Loan Bank stock
less current advances, not to exceed 65% of the Bank's
outstanding 1-4 family mortgage loans. The agreement provides
for interest based upon the federal funds rate on outstanding
balances for short term purposes and a certain spread above the
treasury yield curve for longer term advances. Drawings on the
line included in other liabilities, were $1.4 million and $1.0
million at December 31, 1999 and 1998 respectively. The line is
collateralized by a blanket lien on 1-4 family mortgage loans.
Maturities are due on these advances are as follows:
<TABLE>
<CAPTION>
(in thousands)
December 31,
<S> <C>
2000 $188
2001 199
2002 211
2003 224
2004 and thereafter 599
$1,421
</TABLE>
<PAGE> 45
The Bank also maintains open lines of credit with two
correspondents to assist in maintaining short-term liquidity.
The agreements provide for interest based upon the federal funds
rate on outstanding balances. These lines totaling $5.0 million
and $4.5 million were unfunded at December 31, 1999 and December
31, 1998. Additionally, during 1999 the Bank established a
borrowing facility with the Federal Reserve Discount Window. Any
drawings on the line would be collateralized by the Bank's
securities portfolio. The line was unfunded at December 31,
1999.
NOTE N
Commitments
The Bank has entered into lesing agreements for a building
which will house one of its full service branches and First
American Agency, L.L.C. The leases, which are treated as
operating leases, begin February 1, 2000 and expire January 31,
2015 with two five year renewal options. Future minimum rental
payments required under these operating leases follow:
<TABLE>
<CAPTION>
(in thousands)
December 31,
<S> <C>
2000 $81
2001 93
2002 99
2003 99
2004 and thereafter 1,330
$1,702
</TABLE>
NOTE O
Off-Balance Sheet Instruments
The Company is a party to financial instruments with off-
balance sheet risk in the normal course of business to meet the
financing needs of its customers. These financial instruments
include commitments to extend credit, financial guarantees, and
letters of credit. Those instruments involve, to varying
degrees, elements of credit risk in excess of the amount
recognized in the Balance Sheets.
The Company's exposure to credit loss in the event of
nonperformance by the other party to the financial instrument for
commitments to extend credit and letters of credit is represented
by the contractual amount of those instruments. The Bank uses
the same credit policies in making commitments and conditional
obligations as they do for on-balance sheet instruments.
In the normal course of business the Company has made
commitments to extend credit of $22.1 million at December 31,
1999. This amount includes unfunded commitments aggregating
$21.7 million and letters of credit of $404 thousand.
NOTE P
Concentrations of Credit
The Bank's business activities are with customers in the
Bank's market area, which consists primarily of the southeast
region of the State of Louisiana. Investments in state and
municipal securities also involve governmental entities within
the Bank's market area. The concentrations of credit by type of
loan are shown in Note E. Most of the Bank's credits are to
individuals and small businesses secured by real estate. The
Bank, as a matter of policy, does not extend credit to any single
borrower or group of related borrowers in excess of the Bank's
legal lending limits. Included in Cash and Due From Banks,
Federal Funds Sold, and Interest Bearing Deposits in Other Banks
are amounts deposited in various institutions in excess of
federally insured limits.
<PAGE> 46
NOTE Q
Fair Value of Financial Instruments
The following methods and assumptions were used to estimate
the fair value of each class of financial instruments for which
it is practicable to estimate that value:
Cash and Short-Term Investments - For those short-term
instruments, the carrying amount is a reasonable estimate of fair
value.
Securities - Fair value of securities held to maturity and
available for sale is based on quoted market prices or dealer
quotes. If a quoted market price is not available, fair value is
estimated using quoted market prices for similar securities.
Loans - The fair value for loans is estimated using
discounted cash flow analyses, with interest rates currently
being offered for similar loans to borrowers with similar credit
rates. Loans with similar classifications are aggregated for
purposes of the calculations. The allowance for loan losses
which was used to measure the credit risk, is subtracted from
loans.
Deposits - The fair value of demand deposits, savings
accounts, and certain money market deposits is the amount payable
on demand at the reporting date. The fair value of fixed-
maturity certificates of deposit is estimated using discounted
cash flow analyses, with interest rates currently offered for
deposits of similar remaining maturities.
Commitments to Extend Credit and Standby Letters of Credit -
The fair value of commitments is estimated using the fees
currently charged to enter into similar agreements, taking into
account the remaining terms of the agreements and the present
creditworthiness of the parties. For fixed-rate loan
commitments, fair value also considers the difference between
current levels of interest rates and the committed rates. The
fair value of letters of credit were considered insignificant.
The estimated approximate fair values of the Bank's
financial instruments as of December 31, 1999 and 1998 are as
follows:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998
Carrying Carrying
Financial Assets: Amount Fair Value Amount Fair Value
<S> <C> <C> <C> <C>
Cash and
Short-Term Investments $23,723 $23,723 $34,280 $34,280
Securities 90,608 90,608 99,510 99,510
Loans - Net 211,131 209,839 178,462 181,865
$325,462 $324,170 $312,252 $315,655
Financial Liabilities:
Deposits $301,891 $296,456 $289,191 $286,807
Other Borrowings 1,421 1,386 1,026 1,070
$303,312 $297,842 $290,217 $287,877
</TABLE>
<PAGE> 47
Note R
Litigation and Contingencies
During the normal course of business, the Company is
involved in various legal proceedings. In the opinion of
management and counsel, any liability from such proceedings would
not have a material adverse effect on the Company's financial
statements.
Note S
Parent Company Financial Statements
The financial statements for One American Corp. (Parent
Company Only) are presented below:
<TABLE>
<CAPTION>
BALANCE SHEETS
December 31, 1999 and 1998
($ in thousands) 1999 1998
Assets
<S> <C> <C>
Cash $2,563 $2,136
Income Tax Receivable 140 99
Investment in Subsidiary 36,926 36,168
Total Assets 39,629 38,403
Liabilities
Accrued Dividend Payable 494 481
Payables to Subsidiary 169 122
663 603
Stockholders' Equity
Common Stock 7,500 7,500
Surplus 5,000 5,000
Retained Earnings 28,027 26,720
Treasury Stock - 334,140 and 328,922 shares at cost (1,561) (1,420)
Total Stockholders' Equity 38,966 37,800
Total Liabilities and Stockholders' Equity $39,629 $38,403
</TABLE>
<PAGE> 48
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
for the years ended December 31, 1999, 1998, and 1997
($ in thousands) 1999 1998 1997
Income
<S> <C> <C> <C>
Interest Income $57 $46 $44
Dividends from Subsidiaries 2,475 2,487 2,025
Total Income 2,532 2,533 2,069
Expenses
Operating Expenses 42 86 52
Total Expenses 42 86 52
Income before Income Taxes and Equity in
Undistributed Net Income of Subsidiaries 2,490 2,447 2,017
Income Tax Expense (Benefit) 5 (13) (3)
Income before Equity in Undistributed
Net Income of Subsidiaries 2,485 2,460 2,020
Equity in Undistributed Net Income of Subsidiaries 2,084 1,601 2,017
Net Income $4,569 $4,061 $4,037
</TABLE>
<PAGE> 49
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
for the years ended December 31, 1999, 1998, and 1997
($ in thousands) 1999 1998 1997
Cash Flows From Operating Activities:
<S> <C> <C> <C>
Net Income $4,569 $4,061 $4,037
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Equity in Undistributed Net Income of Subsidiaries (2,084) (1,601) (2,017)
Changes in Assets and Liabilities:
Increase (Decrease) in Payables to Subsidiaries 47 80 (93)
(Increase) Decrease in Receivables from Subsidiaries 0 20 (2)
(Increase) Decrease in Income Tax Receivables (41) (87) 110
Net Cash Provided by Operating Activities 2,491 2,473 2,035
Cash Flows From Investing Activities:
Proceeds From Liquidation of One
American Agency 0 235 0
Net Cash Provided by Investing Activities 0 235 0
Cash Flows From Financing Activities:
Treasury Stock Purchased (142) (793) (2)
Dividends Paid (1,922) (1,886) (1,625)
Net Cash Used in Financing Activities (2,064) (2,679) (1,627)
Net Increase in Cash 427 29 408
Cash - Beginning of Year 2,136 2,107 1,699
Cash - End of Year $2,563 $2,136 $2,107
Noncash Financing Activities:
Dividends Declared and Not Paid $494 $481 $472
Change in Unrealized Gain (Loss) on Securities Available
For Sale, Net ($1,327) $170 $375
</TABLE>
<PAGE> 50
Item 9. Disagreements on Accounting and Financial Disclosures
Not Applicable.
Part III
Items 10, 11, 12, and 13.
The information required by items 10, 11, 12 and 13 is
included in the Company's Proxy Statement, for the 2000 Annual
Meeting of Stockholders and is incorporated herein by reference.
Part IV
Item 14. Exhibits, Financial Statements Schedules and Reports on
Form 8-K
(a) Financial Statements
1. The financial statements of One American
Corp. in the Company's 1999 Form 10-K are
incorporated by reference in Item 8.
2. Other financial statement schedules are
either omitted because they are inapplicable or
included in the financial statements or related
notes.
(b) Reports on Form 8-K
There were no Forms 8-K filed in the quarter ended
December 31, 1999.
(c) Exhibits
3. Articles of Incorporation and by-laws of
One American Corp. are incorporated by reference to
the Company's Registration Statement on Form S-14
filed October 29, 1982, with the Securities and
Exchange Commission.
22. Subsidiaries of the Registrant
First American Bank and Trust, incorporated
under the laws of the State of Louisiana.
23. Definitive Proxy Statement for the 2000
Annual Meeting of Stockholders' of One American
Corp.
<PAGE> 51
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ONE AMERICAN CORP.
/s/ Frank J. Bourgeois
Frank J. Bourgeois
President
Dated March 9, 2000
Pursuant to the requirements of the Securities Act of 1934,
this report has been signed by the following persons in the
capacities indicated on March 9, 2000:
/s/ Frank J. Bourgeois, President (principal executive, financial,
and accounting officer) and Director
Frank J. Bourgeois
/s/ Craig G. Brazan, Director
Craig G. Brazan
/s/ Michael J. Cazenave, Director
Michael J. Cazenave
/s/ Steven G. Cazenave, Director
Steven G. Cazenave
/s/ A. Earle Cefalu, Director
A. Earle Cefalu
/s/ Dean T. Falgoust, Director
Dean T. Falgoust
/s/ Preston L. Falgoust, Director
Preston L. Falgoust
/s/ Marcel T. Graugnard, Jr., Director
Marcel T. Graugnard, Jr.
/s/ Honora F. Gravois, Director
Honora F. Gravois
/s/ Ozane J. Gravois, III, Director
Ozane J. Gravois, III
/s/ Gloria A. Kliebert, Secretary / Treasurer and Director
Gloria A. Kliebert
/s/ Anthony J. Nobile, Director
Anthony J. Nobile
/s/ Carl J. Poche, M.D., Director
Carl J. Poche, M.D.
<PAGE> 52
/s/ Debra Dufresne Vial, Director
Debra Dufresne Vial
/s/ Craig A. Vitrano, M.D., Director
Craig A. Vitrano, M.D.
/s/ Albert J. Waguespack, Director
Albert J. Waguespack
<PAGE> 53
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<PERIOD-TYPE> 12-MOS
<CASH> 16,494
<INT-BEARING-DEPOSITS> 1,529
<FED-FUNDS-SOLD> 5,700
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 90,608
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 215,286
<ALLOWANCE> 4,155
<TOTAL-ASSETS> 343,775
<DEPOSITS> 301,891
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,918
<LONG-TERM> 0
<COMMON> 7,500
0
0
<OTHER-SE> 31,466
<TOTAL-LIABILITIES-AND-EQUITY> 343,775
<INTEREST-LOAN> 17,321
<INTEREST-INVEST> 5,484
<INTEREST-OTHER> 808
<INTEREST-TOTAL> 23,613
<INTEREST-DEPOSIT> 8,958
<INTEREST-EXPENSE> 8,958
<INTEREST-INCOME-NET> 14,655
<LOAN-LOSSES> 900
<SECURITIES-GAINS> 2
<EXPENSE-OTHER> 11,287
<INCOME-PRETAX> 6,728
<INCOME-PRE-EXTRAORDINARY> 6,728
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,569
<EPS-BASIC> 1.71
<EPS-DILUTED> 1.71
<YIELD-ACTUAL> 7.63
<LOANS-NON> 1,430
<LOANS-PAST> 415
<LOANS-TROUBLED> 108
<LOANS-PROBLEM> 5,030
<ALLOWANCE-OPEN> 3,530
<CHARGE-OFFS> 531
<RECOVERIES> 256
<ALLOWANCE-CLOSE> 4,155
<ALLOWANCE-DOMESTIC> 1,421
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,734
</TABLE>
