UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1994
Commission File Number 0-12154
THE PEOPLES HOLDING COMPANY
(Exact name of the registrant as specified in its charter)
MISSISSIPPI 64-0676974
(State of Incorporation) (I.R.S. Employer Identification Number)
209 Troy Street, P. O. Box 709, Tupelo, Mississippi 38801
(Address of principal executive offices)
Registrant's telephone number including area code 601-680-1001
Indicate by check 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, and (2) has
been subject to such filing requirements for the past 90 days.
YES__X__NO_____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as to the latest practicable date.
Common stock, $5 Par Value, 2,417,829 shares outstanding
as of April 29, 1994
<PAGE>
THE PEOPLES HOLDING COMPANY
INDEX
PART 1. FINANCIAL INFORMATION PAGE
Item 1. FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheets -
March 31, 1994 and December 31, 1993...............3
Consolidated Statements of Income - Three Months
Ended March 31, 1994 and 1993......................5
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1994 and 1993.........7
Notes to Consolidated Financial Statements..............9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...............11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..................................23
Item 6.(b) Reports on Form 8-K..............................23
Signatures..................................................24
<PAGE>
THE PEOPLES HOLDING COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
[CAPTION]
MARCH 31 DECEMBER 31
1994 1993
____________ ___________
(Unaudited) (Note 1)
[S] [C] [C]
Assets
Cash and due from banks $ 44,200,743 $ 35,956,431
Federal Fund Sold 13,000,000 8,000,000
----------- -----------
57,200,743 43,956,431
Interest bearing balances with banks 275,361 77,887
Securities (Market value-
$246,820,927 and $234,979,483 at
March 31, 1994 and December 31, 1993) 246,366,374 230,904,295
Loans 436,417,193 427,416,747
Unearned Income ( 9,657,851) ( 9,835,772)
Allowance for loan losses ( 6,561,133) ( 6,216,854)
----------- -----------
Net Loans 420,198,209 411,364,121
Bank premises and equipment 15,443,252 15,537,825
Other assets 17,432,343 16,669,428
___________ ___________
Total Assets $ 756,916,282 $ 718,509,987
=========== ===========
[S] [C] [C]
Liabilities
Deposits:
Non-interest bearing 131,965,607 99,140,347
Interest bearing 538,618,567 537,598,201
----------- -----------
Total Deposits 670,584,174 636,738,548
Treasury tax and loan account 3,125,607 4,000,000
Notes and debentures payable 5,173,578 59,797
Other liabilities 7,046,055 7,787,929
----------- -----------
Total Liabilities $ 685,929,414 $ 648,586,274
Shareholders' Equity
Common Stock, $5 par value-
4,200,000 shares authorized
2,417,829 shares issued and
outstanding at March 31, 1994
and December 31, 1993 12,089,145 12,089,145
Capital surplus 30,000,000 30,000,000
Retained earnings 29,204,724 27,834,568
Adjustment to unrealized losses on
available-for-sale securities, net
of tax (307,001) 0
----------- -----------
Total Shareholders' Equity 70,986,868 69,923,713
----------- -----------
Total Liabilities and
Shareholders' Equity $ 756,916,282 $ 718,509,987
=========== ===========
[FN]
See Notes to Consolidated Financial Statements
<PAGE>
THE PEOPLES HOLDING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME
[CAPTION]
THREE MONTHS ENDED MARCH 31
1994 1993
---- ----
(Unaudited)
[S] [C] [C]
Interest Income
Interest and fees on loans $ 8,470,392 $ 8,303,468
Interest on balances with banks 21,388 25,351
Interest on federal funds sold 170,142 207,360
Interest on investment securities:
Taxable 2,374,123 2,369,740
Tax-exempt 631,164 553,600
---------- ----------
Total interest income 11,667,209 11,459,519
Interest Expense
Interest on time deposits of
$100,000 or more 513,469 407,388
Interest on other deposits 3,630,176 3,542,035
Interest on borrowed funds 70,045 30,276
---------- ----------
Total interest expense 4,213,690 3,979,699
---------- ----------
Net interest income 7,453,519 7,479,820
Provision for possible loan losses 491,851 1,158,993
---------- ----------
Net interest income after
provision for possible
loan losses 6,961,668 6,320,827
Other income
Service charges 1,345,036 1,145,855
Fees and commission 378,557 352,319
Trust department income 114,420 107,145
Trading account income 0 135,719
Net investment security gains 2,790 600
Other operating income 599,652 351,691
---------- ----------
Total other income 2,440,455 2,093,329
Other Expenses
Salaries and employee benefits 3,858,262 3,614,074
Occupancy of bank premises 495,364 459,477
Furniture and equipment depreciation,
rental cost, servicing, etc.. 296,025 255,235
Other operating expense 2,440,110 2,106,240
---------- ----------
Total other expenses $ 7,089,761 $ 6,432,026
----------- -----------
Income before income taxes 2,312,362 1,982,130
Income taxes 386,114 633,763
---------- ----------
Income before cumulative effect of
changes in accounting principles 1,926,248 1,348,367
Cumulative effect of changes in
accounting principle, net of income
taxes 0 522,518
---------- ----------
Net income $ 1,926,248 $ 1,870,885
========== ==========
[CAPTION]
1994 1993
---- ----
[S] [C] [C]
Earnings per share:
Income before cumulative effect
of changes in accounting
principles $ .80 $ .55
Cumulative effect of changes in
accounting principles .00 .22
---- ----
Total earnings per share $ .80 $ .77
Cash dividend per share $ .23 $ .22
Earnings per share data for 1994 and 1993 are based on 2,417,829 shares
outstanding. Cash dividend per share is based on actual amounts declared.
[FN]
See Notes to Consolidated Financial Statements.
<PAGE>
THE PEOPLES HOLDING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
[CAPTION]
THREE MONTHS ENDED MARCH 31
1994 1993
---- ----
(Unaudited)
[S] [C] [C]
Operating Activities
Net Income $ 1,926,248 $ 1,870,885
Adjustments to reconcile net
income to net cash provided
by operating activities:
Provision for loan losses 491,851 1,158,993
Provision for depreciation and
amortization 384,428 322,483
Net amortization accretion of
securities' premiums/discounts 595,354 194,451
Increase (decrease) in interest
receivable ( 528,095) 326,913
Increase in interest payable 44,175 228,563
Gain on sale of trading securities 0 (135,719)
Proceeds from sales of trading
securities 0 5,075,625
Gain on sale/call of
securities (2,791) (600)
Increase (decrease)in other liab. (786,049) 1,130,505
Deferred income tax (228,703) (1,307,076)
Gain on sale of fixed assets (653) (2,575)
(Increase) decrease
in other assets 133,530 (1,132,232)
------------ ------------
Net Cash Provided by Operating
Activities 2,029,295 7,730,216
Investment Activities
Net increase in balances with
other banks (197,474) (22,370)
Proceeds from maturities/calls of
investment securities 24,310,185 25,552,866
Purchase of investment securities (40,829,980) (43,789,976)
Net increase in loans (9,396,139) 1,117,946
Proceeds from sale of fixed assets 1,314 10,207
Purchase of premises and equipment (201,802) (144,229)
----------- ----------
Net cash used in Investment
Activities ( 26,313,896) ( 17,275,556)
[CAPTION]
1994 1993
---- ----
[S] [C] [C]
Financing Activities
Net increase in demand and savings
deposits 35,799,726 16,884,782
Net increase (decrease) in time
deposits (1,954,100) (9,956,122)
Net increase (decrease) in short-
term borrowed funds (874,393) 335,303
Increase (decrease) in long-term debt 5,113,781 (22,437)
Cash dividends paid (556,101) (531,922)
------------ -----------
Net Cash Provided by Financing
Activities 37,528,913 6,709,604
------------ -----------
Increase (decrease) in Cash
and Cash Equivalents 13,244,312 (2,835,736)
Cash and Cash Equivalents at
beginning of period 43,956,431 57,062,966
----------- -----------
Cash and Cash Equivalents at
end of period $ 57,200,743 $ 54,227,230
=========== ===========
Cash paid for:
Interest expense $ 4,169,515 $ 3,751,136
Income taxes 315,000 300,000
Non-cash transactions:
Transfer of loans to other real
estate $ 70,200
Unrealized loss on securities
held as available for sale:
Decrease in securities $ 465,153
Increase in deferred taxes $ 158,152
Decrease in equity $ 307,001
[FN]
See Notes to Consolidated Financial Statements
<PAGE>
THE PEOPLES HOLDING COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Basis of Presentation
The consolidated balance sheet at December 31, 1993, has been derived from
the audited financial statements at that date. The accompanying unaudited
consolidated financial statements reflect all adjustments (consisting only
of normally recurring accruals) which are, in the opinion of management,
necessary to a fair statement of the results for the interim periods
presented. The statements should be read in conjunction with the summary
of accounting policies and notes to financial statements included in the
Registrant's annual report for the year ended December 31, 1993. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been omitted in accordance with the rules of the Securities
and Exchange Commission.
Note 2 Changes in Accounting Methods
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities", effective for fiscal years beginning after
December 15, 1993. Under the new rules, debt securities that the Company
has both the positive intent and ability to hold to maturity are carried
at amortized cost. Debt securities that the Company does not have the
positive intent and ability to hold to maturity and all marketable equity
securities are classified as available-for-sale or trading and carried at
fair value. Unrealized holding gains and losses on securities classified
as available-for-sale are carried as a separate component of shareholders'
equity. Unrealized holding gains and losses on securities classified as
trading are reported in earnings.
[CAPTION]
Securities are summarized as follows at March 31, 1994:
[S] [C]
Held to maturity (amortized cost) $ 43,033,280
Available for sale (estimated fair value) 203,333,094
-------------
Total securities $ 246,366,374
=============
The amortized cost of securities held to maturity at March 31, 1994 was
$43,487,833.
<PAGE>
Note 3 Acquisition
During April, 1994, the Company entered into an agreement with The
Resolution Trust Corporation to purchase selected assets and assume certain
liabilities of the New Albany, Southaven and Hernando branches of the
Security Federal Savings and Loan Association. The acquisition was
approved by regulatory authorities and consummated on April 15, 1994.
Total deposit acquired were approximately $32 million.
Note 4 Income Taxes
[CAPTION]
Federal income taxes payable (receivable were as follows:
[S] [C]
Current $ 391,804
Deferred (1,627,651)
-----------
$ (1,235,847)
===========
[CAPTION]
The components of income tax expense (credits) are presented below:
[S] [C]
Current $ 483,890
Deferred ( 97,776)
---------
$ 386,114
=========
[CAPTION]
The difference between income tax expense and the amount computed by
applying the statutory federal income tax rate to operating earnings
results from the following:
[S] [C]
Federal tax expense at statutory rate $ 786,204
Add (deduct) effect of:
Tax-exempt interest income ( 214,596)
Amortization of intangible assets 14,227
Dividends received deduction ( 6,022)
Other items-net ( 193,699)
----------
$ 386,114
==========
Deferred tax assets resulted largely from temporary differences arising
from loan loss provision. Effective January 1, 1993, the Company adopted
FASB No. 109, which resulted in a deferred tax rate of 34%.
Historically, the Company has produced taxable income which can fully
utilize the deferred tax asset.
<PAGE>
THE PEOPLES HOLDING COMPANY AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Financial Condition
Total assets of The Peoples Holding Company grew from $718,509,987 on
December 31, 1993, to $756,916,282 on March 31, 1994, or 5.35% for the
three month period. Loans, less unearned income, increased $9,178,367 or
2.20%. Cash and Due From Banks was up from $35,956,431 on December 31,
1993, to $44,200,743 on March 31, 1994, or an increase of $8,244,312.
Securities grew from $246,364,206 on December 31, 1993, to $246,754,426 on
March 31, 1994. Transaction deposit accounts, which require a 10% reserve
balance in cash or on deposit at the Federal Reserve Bank, were up from
$260,709,000 on December 31, 1993, to $282,977,000 on March 31, 1994.
Total deposits for the first three months of 1993 grew from $636,738,548
on December 31, 1993 to $670,584,174 on March 31, 1994, or an increase of
$33,845,626.
The equity capital to total assets ratio was 9.73% and 9.38% for December
31, 1993 and March 31, 1994, respectively.
Results of Operations-Quarter Ended March 31, 1994 compared to 1993
Total interest income was $11,667,209 for the quarter ended March 31, 1994,
compared to $11,459,519 for the same quarter in 1993, or an increase of
$207,690. Interest and fees on loans were $8,470,392 for 1994 compared to
$8,303,468 for 1993, or an increase of $166,924. Average loans were
$416,795,219 and $385,243,713 for 1994 and 1993, respectfully. This
amounted to a 8.19% increase. Average yield on loans was 8.24% for 1994
compared to 8.74% for 1993. Average investments were $235,828,420 for 1994
compared to $193,664,096 for 1993. This amounted to a 21.77% increase.
Total interest expense was $4,213,690 for 1994, compared to $3,979,699 for
1993 or an increase of $233,991. Average total interest bearing deposits
was $562,338,032 for 1994 compared to $515,311,701 for 1993. Interest
rates paid on interest bearing deposits were 2.95% for 1994 compared to
3.11% for 1993. Interest on borrowed funds was $70,045 for 1994 compared
to $30,276 for 1993.
The net interest spread was 4.05% for 1994 compared to 4.58% for 1993.
<PAGE>
Provision for possible loan losses was $491,851 for 1994 compared to
$1,158,993 for 1993. The allowance for loan losses was 1.54% and 1.88% to
total loans outstanding, net of unearned discount, on March 31, 1994 and
1993, respectively. Total non-performing loans was $3,987,660 on March 31,
1994, compared to $6,207,491 for March 31, 1993. Management felt that with
the decrease in non-performing loans the allowance for loan losses could
be decreased also. The allowance for loan losses was $7,294,158 on March
31, 1993, compared to $6,561,133 on March 31, 1994.
Allowance for Loan Losses:
[CAPTION]
March March
1994 1993
--------- ---------
[S] [C] [C]
Balance, January 1 $ 6,216,854 $ 6,462,925
Provision for Loan losses 491,851 1,158,993
--------- ---------
6,708,705 7,621,918
--------- ---------
Charge-offs ( 241,782) ( 407,553)
Recoveries 94,210 79,793
---------- ----------
( 147,572) ( 327,760)
---------- ----------
Balance March 31 $ 6,561,133 $ 7,294,158
========= =========
[CAPTION]
March March
1994 1993
----------- -----------
[S] [C] [C]
Loan Loss Analysis:
Net loans-Average $ 416,795,219 $385,243,713
Net loans-Quarter End 426,759,342 387,305,898
Net Charge-Offs 147,572 327,760
Allowance for Loan Losses 6,561,133 7,294,158
Ratios:
Net Charge-Offs to:
Net Loans-Average 0.04% 0.09%
Allowance for Loan Losses 2.25% 4.49%
Allowance for Loan Losses to:
Net Loans-Quarter End 1.54% 1.88%
Non-Performing Loans 164.54% 117.51%
Non-Performing Loans to:
Net Loans-Quarter End 0.93% 1.60%
Net Loans-Average 0.96% 1.61%
[CAPTION]
The following table shows the principal amounts of nonaccrual loans at June
30 for the years indicated.
March March
1994 1993
[S] [C] [C]
Non-Performing Loans
Non-Accruing 1,117,766 1,055,365
Accruing Loans Past Due 2,869,894 5,152,126
90 Days or More ----------- -----------
Total Non-Performing Loans $ 3,987,660 $ 6,207,491
=========== ===========
Other income, net of investment security gains and losses and trading
account income was $2,437,665 for 1994 compared to $1,957,010 for 1993, or
an increase of $480,655. This amounted to 24.56%. Service charges were
up $199,181, fees and commissions were up $26,238, trust department income
was up $7,275 while other operating income was up $247,961. Other
operating income included $165,388 in life insurance proceeds for 1994.
Other expenses were $7,089,761 for 1994 compared to $6,432,026 for 1993,
or an increase of $657,735. This amounted to a 10.23% increase. Salaries
and employee benefits were up $244,188, occupancy of bank premises was up
$35,887, furniture and equipment depreciation, rental cost, servicing, etc.
were up $40,790 and other operating expense was up $333,870.
Income tax expense was $386,114 for 1994 compared to $633,763 for 1993.
<PAGE>
Statistical Summary
March 31, 1994
[CAPTION]
1994
AVERAGE
INCOME BALANCE
OR SHEET YIELDS/
EXPENSE AMOUNTS RATES
------- ------- -------
[S] [C] [C] [C]
Earnings Assets
Loans and leases, net
of unearned income 8,470,392 416,795,219 8.24%
Interest bearing bank
balances and federal
funds sold 191,530 25,079,065 3.05%
Taxable investment/trading
securities 2,374,123 193,314,300 4.91%
Nontaxable investment
securities 631,164 42,514,120 9.00%TE
---------- ----------- ------
Total investment and
trading securities 3,005,287 235,828,420 5.65%TE
Total earning assets 11,667,209 677,702,704 7.08%TE
Cash and due from banks 43,672,537
Other assets, less allowance
for loan losses 22,423,852
-----------
Total assets 743,799,083
===========
[S] [C] [C] [C]
Interest bearing liabilities:
Interest bearing demand
deposit accounts 961,605 177,531,010 2.17%
Savings accounts 532,018 96,362,729 2.29%
Time Deposits 2,650,022 288,444,293 3.67%
---------- ----------- -------
Total interest
bearing deposits 4,143,645 562,338,032 2.95%
1994
AVERAGE
INCOME BALANCE
OR SHEET YIELDS/
EXPENSE AMOUNTS RATES
------- ------- -------
Other costing liabilities 70,045 6,193,148 4.52%
---------- ----------- -------
Total interest
bearing liabilities 4,213,690 568,531,180 2.96%
[S] [C]
Non-interest bearing sources:
Non-interest bearing
deposits 98,242,851
Other liabilities 6,993,236
Shareholders' equity 70,031,816
-----------
Total liabilities and shareholders'
equity 743,799,083
===========
[S] [C] [C]
Net interest income/Net
interest margin 7,453,519 4.65%TE
<PAGE>
Statistical Summary
March 31, 1994
[CAPTION]
1993
AVERAGE
INCOME BALANCE
OR SHEET YIELDS/
EXPENSE AMOUNTS RATES
------- ------- -------
[S] [C] [C] [C]
Earnings Assets
Loans and leases, net
of unearned income 8,303,468 385,243,713 8.74%
Interest bearing bank
balances and federal
funds sold 232,711 32,323,951 2.92%
Taxable investment/trading
securities 2,369,740 159,408,025 5.95%
Nontaxable investment
securities 553,600 34,256,071 9.79%TE
---------- -----------
Total investment and
trading securities 2,923,340 193,664,096 6.63%TE
Total earning assets 11,459,519 611,231,760 7.69%TE
Cash and due from banks 41,876,419
Other assets, less allowance
for loan losses 21,989,737
-----------
Total assets 675,097,916
===========
Interest bearing liabilities:
Interest bearing demand
deposit accounts 1,006,939 174,730,413 2.34%
Savings accounts 451,310 77,813,492 2.35%
Time Deposits 2,491,174 262,767,796 3.84%
---------- ----------- -------
Total interest
bearing deposits 3,949,423 515,311,701 3.11%
<PAGE>
Statistical Summary
March 31, 1994
[CAPTION]
1993
AVERAGE
INCOME BALANCE
OR SHEET YIELDS/
EXPENSE AMOUNTS RATES
------- ------- -------
[S] [C] [C] [C]
Other costing liabilities 30,276 3,334,207 3.68%
---------- ----------- -------
Total interest
bearing liabilities 3,979,699 518,645,908 3.11%
[S] [C] [C] [C]
Non-interest bearing sources:
Non-interest bearing
deposits 84,211,304
Other liabilities 6,775,392
Shareholders' equity 65,465,312
-----------
Total liabilities and shareholders'
equity 675,097,916
===========
Net interest income/Net
interest margin 7,479,820 5.15%TE
<PAGE>
Liquidity and Interest Rate Sensitivity Management
The primary functions of asset/liability management are to assure adequate
liquidity and maintain an appropriate balance between interest sensitive
earning assets and interest bearing liabilities. Liquidity management
involves the ability to meet the cash flow requirements of customers who
may be either depositors wanting to withdraw or borrowers needing assurance
that sufficient funds will be available to meet their credit needs.
Interest rate sensitivity management seeks to avoid fluctuating net
interest margins and to provide for a consistent growth of net interest
income through periods of changing interest rates.
Available for sale securities, particularly those of shorter maturities,
are the principal source of asset liquidity. Securities maturing in one
year or less amounted to $54,912,000 at March 31, 1994, representing 22.25%
of the investment securities portfolio. Other types of assets such as
federal funds sold and interest bearing deposits in other banks are sources
of liquidity. Loans maturing within one year represented 65.94% of the
total loans, net of unearned income, for March 31, 1994. On March 31,
1994, there were $349,412,000 in interest earning assets which will mature
within one year while $473,103,000 in interest bearing liabilities will
mature or will be repriced within one year, which results in a negative
interest sensitivity gap.
<PAGE>
Rate Sensitive Balance Sheet
March 31, 1994
[CAPTION]
(In Thousands)
ONE YEAR OVER
LESS THAN TO FIVE FIVE
ONE YEAR YEARS YEARS TOTAL
--------- --------- ----- -----
[S] [C] [C] [C] [C]
ASSETS
Securities 54,912 112,972 77,480 246,364
Loans 281,422 125,934 19,403 426,759
Federal Funds Sold 13,000 13,000
Interest Bearing Balances
with Banks 78 78
Other Assets 70,715 70,715
------- ------- ------- -------
Total Assets 349,412 239,906 167,598 756,916
======= ======= ======= =======
LIABILITIES
Non-Interest Bearing
Transaction Accounts 131,965 131,965
Interest Bearing
Transaction Accounts 151,012 151,012
Money Market and Savings 102,348 102,348
Certificates of Deposit
<100,000 143,221 37,625 130 180,976
Certificates of Deposit
>100,000 54,289 9,074 330 63,693
Individual Retirement
Account 18,295 21,771 524 40,590
Other Borrowed Funds 3,938 3,751 610 8,299
Other Liabilities 7,046 7,046
Equity 71,243 71,243
------- ------- ------- -------
Total Liabilities and
Equity 473,103 72,221 211,848 757,172
======= ======= ======= =======
GAP (123,691) 167,685 (44,250) 0
GAP/Assets (35.40%) 69.90% (26.48%) 0.00%
Cumulative GAP (123,691) 43,994 0 0
Cumulative GAP/Assets -35.40% 18.34% 0.00 0.00%
<PAGE>
Historically, the overall liquidity of the Company has been enhanced by a
significant aggregate of core deposits. The Company's deposit base has
changed from a significant dependence on negotiable certificates of deposit
to increased dependence on short-term interest bearing accounts which tends
to increase the Company's negative GAP position. As a result of this shift
in types of deposits, the Company is attempting to shorten the maturity of
investments and convert loans, where possible, to a floating rate.
Interest rate sensitivity varies with different types of interest earning
assets and interest bearing liabilities. Overnight federal funds on which
rates change daily and loans which are tied to the prime lending rate
differ considerably from long-term investment securities and fixed rate
loans. Similarly, time deposits over $100,000 and money market
certificates are much more interest rate sensitive than savings accounts.
The shorter-term interest rate sensitivities are the key to mesurement of
the interest rate sensitivity gap, or excess interest sensitive earning
assets over interest bearing liabilities.
<PAGE>
Capital Resources
Retained earnings through operations have been the primary source of
capital over the past three months. The ratio of shareholders equity to
total assets was 9.38% as of March 31, 1994, compared to 9.73% as of
December 31, 1993, and 9.22% as of March 31, 1993.
Total shareholders' equity of the Company was $70,986,868 and $69,923,713
for March 31, 1994 and December 31, 1993, respectively. This represented
an increase of $1,063,155 or 1.52%. Guidelines define a well capitalized
bank as one whose capital to risk-based assets is at least 10%, or 6% Tier
1 capital ratio, and a 5% leverage ratio.
The table below shows the capital ratios of the Company at the dates
indicated.
[CAPTION]
(In Thousands)
March 31 December 31
1994 1993
------- --------
[S] [C] [C]
Total Tier 1 Capital $ 68,192 $ 63,425
Total Tier 2 Capital 5,379 5,355
------ ------
Total Qualifying Capital 73,571 68,780
====== ======
Risk-weighted assets on balance sheet,
net of intangibles 429,480 426,964
Excess allowance for loan losses (1,182) ( 1,108)
Risk-weighted off balance sheet exposure 860 1,422
------- -------
Total Risk-Weighted Assets Inclusive
of Off Balance Sheet Exposure and
Net of Allowance 429,158 427,278
======= =======
Tier 1 Capital Ratio 15.88% 14.84%
Total Capital Ratio 17.14% 16.10%
Leverage Ratio 9.20% 9.48%
Management recognizes the importance of maintaining a strong capital base.
As the above ratios indicate, the Company exceeds the requirements for a
well capitalized bank.
Book value per share was $29.47 and $27.25 at March 31, 1994 and 1993,
respectively. Cash dividends were raised to $.23 per quarter, up from $.22
per share during the same quarter in 1993.
The Company's capital policy is to evaluate future needs based on growth,
earnings trends and anticipated acquisitions.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
There were no material proceedings pending at March 31
1994, against the registrant or its subsidiary.
Item 6(b) Reports on Form 8-K
No Form 8-K was filed during the quarter ended March 31,
1994.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
THE PEOPLES HOLDING COMPANY
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Registrant
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DATE: May 13, 1994 John W. Smith
President & Chief Executive
Officer
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DATE: May 13, 1994 E. W. Conwill
Vice President
