<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1996.
[ ] Transition report pursuant to Section 13 or 15(d) of the Exchange Act
of 1934
For the transition period from __________ to ___________
Commission file number 0- 13307
The New Iberia Bancorp, Inc.
----------------------------
(Exact name of registrant as specified in its charter)
Louisiana 72-0969631
----------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
800 South Lewis, New Iberia, Louisiana 70560
--------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (318) 365-6761
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
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
2,000,000 shares common stock
<PAGE> 2
PART I FINANCIAL INFORMATION
Item 1 - Financial Statements
(a) Financial Highlights
(b) Balance Sheet
(c) Income Statement
(d) Changes in Stockholder's Equity
(e) Cash Flow
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
(a) Capital Resources
(b) Results of Operations
(c) Liquidity
PART II OTHER INFORMATION
Item 1 - Legal Proceedings
Item 6 - Exhibits and Reports on Form 8-K
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE NEW IBERIA BANCORP, INC.
----------------------------
DATE: MAY 9, 1996 BY: /s/ ERNEST FREYOU
------------------ -------------------------------------
Ernest Freyou
President and Chief Executive Officer
DATE: MAY 9, 1996 BY: /s/ LEONARD J. FREYOU
------------------ -------------------------------------
Leonard J. Freyou
Senior Vice-President and Cashier
<PAGE> 3
10-Q INDEX
PART I
FINANCIAL INFORMATION
<TABLE>
<S> <C> <C>
Item 1 Financial Statements
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Consolidated Comparative Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4
Consolidated Comparative Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-6
Consolidated Statement of Changes in
Stockholder's Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Statement of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9
Item 2 Management's Discussion & Analysis of Financial
Condition and Results of Operations
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Results of Operations:
Net Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Earning Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Investment Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-12
Interest-Bearing Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Reserve and Provision for Possible Loan
Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-14
Other Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Nonperforming Assets and Past Due Loans . . . . . . . . . . . . . . . . . . . . . . . . . 15-16
Liquidity and Interest Rate Sensitivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16-17
PART II
-------
OTHER INFORMATION
-----------------
Item 1 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Item 6 Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
<PAGE> 4
ITEM 1 (A) FINANCIAL HIGHLIGHTS
(ALL DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995 PERCENT
---- ---- CHANGE
------
<S> <C> <C> <C> <C>
FOR 3 MOS. Net Income $885 $606 46%
ENDED 3/31/96 Cash dividends declared $150* $150** 0%
Average Common Shares
Outstanding (in thousands) 2,000 1,991.8
*Dividends for the quarter ended March 31, 1996 were
declared on April 8, 1996; record date April 19, 1996;
payment date April 30, 1996
**Dividends for the quarter ended March 31, 1995 were
declared on March 6, 1995; record date March 23, 1995;
payment date April 1, 1995
- --------------------------------------------------------------------------------------------------
PER SHARE Net Income $.44 $.30 47%
FOR 3 MOS. Cash dividends declared $.075 $.075 0%
ENDED 3/31/96 Shareholder's Equity
(Book Value) $11.94 $10.52 13%
Market Value $25.63 N/A N/A
<CAPTION>
AS OF 03/31/96 12/31/95 PERCENT
----- -------- -------- CHANGE
-------
<S> <C> <C> <C>
Total Assets $266,335 $263,868 .93%
Total Earning Assets $251,588 $245,374 2.53%
Total Loans Gross $148,564 $142,705 4.11%
Total Deposits $239,653 $237,626 .85%
Total Shareholder's Equity $23,875 $23,639 1.00%
Total Trust Assets $2,574 $2,439 5.53%
</TABLE>
1
<PAGE> 5
REPRESENTATION OF MANAGEMENT:
All adjustments have been made that, in the opinion of Management, are
necessary to fairly present the financial results for the interim periods
presented.
Operating results for the three months ended March 31, 1996 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1996.
For all periods, the share amount, per share data and par value throughout the
Financial Statements have been adjusted to give effect to the 40-to-1 stock
split and change in par value reported in the Form 10-Q filed with the
Commission by the Corporation on May 12, 1995.
2
<PAGE> 6
ITEM I (B)- CONSOLIDATED COMPARATIVE BALANCE SHEET
<TABLE>
<CAPTION>
--------------------------------------------------------------------
ASSETS CURRENT QUARTER PREVIOUS YEAR
AS OF 3/31/96 AS OF 12/31/95
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
CASH AND DUE FROM BANKS $9,440,871 $13,338,408
FEDERAL FUNDS SOLD $12,354,723 $9,803,320
------------ ------------
TOTAL CASH, DUE FROM BANKS, FEDERAL FUNDS SOLD $21,795,594 $23,141,728
INVESTMENT SECURITIES:
1. HELD TO MATURITY: Fair Value of $36,707,645 at 3/31/96 and
$37,774,879 at 12/31/95, respectively
(A) U.S. GOVERNMENT:
MORTGAGE BACKED SECURITIES $12,937,938 $13,616,067
(B) OBLIGATIONS OF STATES & POLITICAL
SUBDIVISIONS $22,634,490 $22,831,240
------------ ------------
TOTAL INVESTMENT SECURITIES HELD TO MATURITY $35,572,428 $36,447,307
2. AVAILABLE FOR SALE, at Fair value
(A) U.S. TREASURY SECURITIES $24,000,120 $23,992,840
(B) U.S. GOVERNMENT:
AGENCY NOTES $3,992,880 $6,551,900
MORTGAGE BACKED SECURITIES $25,461,573 $25,724,289
(C) DOMESTIC DEBT SECURITIES $1,852,594 $0
(D) CORPORATE STOCKS IN OTHER BANKS $150,084 $150,084
------------ ------------
TOTAL INVESTMENT SECURITIES AVAILABLE FOR SALE $55,457,251 $56,419,113
TOTAL INVESTMENT SECURITIES $91,029,679 $92,866,420
LOANS HELD FOR SALE $1,205,357 $592,750
LOANS: GROSS $147,456,858 $142,202,415
LESS:
(A) UNEARNED INCOME ON LOANS ($97,705) ($90,344)
(B) RESERVE FOR POSSIBLE LOAN LOSSES ($3,318,362) ($3,396,531)
------------ ------------
LOANS: NET $145,246,148 $139,308,290
BANK PREMISES, EQUIPMENT, FURNITURE & FIXTURES $5,313,647 $5,395,155
REAL ESTATE OWNED OTHER THAN BANK PREMISES $50,000 $50,000
INTANGIBLE ASSETS $196,727 $226,810
OTHER ASSETS $2,702,909 $2,880,022
TOTAL OTHER ASSETS $8,263,283 $8,551,987
------------ ------------
TOTAL ASSETS $266,334,704 $263,868,425
============ ============
</TABLE>
3
<PAGE> 7
ITEM I (B)- CONSOLIDATED COMPARATIVE BALANCE SHEET
(CONTINUED)
<TABLE>
<CAPTION>
--------------------------------------------------------------------
LIABILITIES AND CAPITAL CURRENT QUARTER PREVIOUS YEAR
AS OF 3/31/96 AS OF 12/31/95
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
DEPOSITS IN DOMESTIC OFFICES
(A) DEMAND $38,137,951 $38,858,005
(B) NOW, SUPER NOW & MONEY MARKET ACCOUNTS $65,605,045 $63,609,993
(C) SAVINGS & CHRISTMAS CLUB $17,687,516 $17,031,970
(D) TIME CD'S - $100,000 AND OVER $43,614,489 $45,546,660
(E) TIME CD'S - OTHER $58,337,779 $56,428,847
(F) IRA CD'S $16,270,368 $16,150,129
----------- -----------
TOTAL DEPOSITS $239,653,148 $237,625,604
FEDERAL FUNDS PURCHASED AND SECURITIES SOLD $1,479,154 $1,749,621
OTHER LIABILITIES $1,327,218 $854,644
TOTAL LIABILITIES $242,459,520 $240,229,869
COMMON STOCK:
(1) SHARES AUTHORIZED 10,000,000
(2) COMMON STOCK, NO PAR 2,000,000 outstanding $9,500,500 $9,500,500
(3) UNDIVIDED PROFITS $14,610,671 $14,175,287
(4) UNREALIZED GAIN(LOSS) ON AFS INVESTMENTS ($235,987) ($37,231)
----------- -----------
NET OF INCOME TAX EFFECT
TOTAL EQUITY CAPITAL $23,875,184 $23,638,556
------------ ------------
TOTAL LIABILITIES AND EQUITY CAPITAL $266,334,704 $263,868,425
============ ============
</TABLE>
4
<PAGE> 8
ITEM I - (C) CONSOLIDATED COMPARATIVE STATEMENT OF INCOME
<TABLE>
<CAPTION>
----------------------------------
QUARTER QUARTER
ENDING ENDING
3/31/96 3/31/95
----------------------------------
<S> <C> <C>
INTEREST INCOME:
INTEREST & FEES ON LOANS $3,250,576 $2,626,365
U.S. TREASURY NOTES $333,437 $381,228
U.S. GOVERNMENT:
AGENCY NOTES $94,640 $183,879
MORTGAGE BACKED SECURITIES $637,467 $648,943
OBLIGATIONS OF STATE & POLITICAL SUB. $291,329 $305,750
DOMESTIC DEBT SECURITIES $20,463 $61,107
OTHER INTEREST INCOME $181,661 $73,566
----------------------------------
TOTAL INTEREST INCOME $4,809,574 $4,280,839
INTEREST EXPENSE:
INTEREST ON DEPOSITS $2,139,410 $1,755,390
INTEREST ON SHORT TERM BORROWING $18,658 $25,995
----------------------------------
TOTAL INTEREST EXPENSE $2,158,067 $1,781,385
----------------------------------
NET INTEREST INCOME $2,651,507 $2,499,454
PROVISION FOR LOAN LOSSES $0 $62,100
----------------------------------
NET INTEREST INCOME AFTER PROVISION $2,651,507 $2,437,354
FOR LOAN LOSSES
COMMISSION & FEES FROM FIDUCIARY ACTIVITIES $1,284 $1,368
INSURANCE COMMISSIONS, FEES & PREMIUMS $25,443 $16,604
FEES ON OTHER CUSTOMER SERVICES $313,144 $317,205
ALL OTHER INCOME $185,949 $123,558
----------------------------------
TOTAL INCOME BEFORE OVERHEAD COST $3,177,327 $2,896,088
</TABLE>
5
<PAGE> 9
ITEM I - (C) CONSOLIDATED COMPARATIVE STATEMENT OF INCOME
(CONTINUED)
<TABLE>
<CAPTION>
----------------------------------
QUARTER QUARTER
ENDING ENDING
3/31/96 3/31/95
----------------------------------
<S> <C> <C>
OTHER EXPENSES:
SALARIES $961,303 $900,249
NET OCCUPANCY EXPENSE OF PREMISES $133,683 $121,175
FURNITURE & EQUIPMENT $122,200 $171,786
OTHER EXPENSES $761,192 $836,938
----------------------------------
TOTAL OTHER EXPENSES $1,978,379 $2,030,149
----------------------------------
NET INCOME OR (LOSS) BEFORE INCOME TAX $1,198,948 $865,939
INCOME TAX EXPENSE $313,563 $259,445
----------------------------------
INCOME OR LOSS BEFORE EXTRAORDINARY ITEMS $885,385 $606,494
----------------------------------
EARNINGS PER SHARE DATA $0.44 $0.30
DIVIDENDS PER SHARES OUTSTANDING* $0.075 $0.075
</TABLE>
*Dividends for the quarter ended March 31, 1996 were declared on April 8, 1996;
record date April 19, 1996; payment date April 30, 1996.
6
<PAGE> 10
ITEM I - (D) CONSOLIDATED CHANGES IN STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
------------------- ------------------
THREE MONTHS PREVIOUS YEAR
ENDED 3/31/96 ENDED 3/31/95
------------------- ------------------
<S> <C> <C>
STATEMENT OF CHANGES IN CAPITAL ACCOUNTS
BALANCE AT BEGINNING OF YEAR $23,638,556 $20,026,535
NET INCOME $885,385 $606,494
NET CHANGE IN UNREALIZED GAIN/LOSS
ON AVAILABLE FOR SALE SECURITIES
(NET OF TAX EFFECT) ($198,756) $466,639
----------- -----------
TOTAL ADDITIONS $686,629 $1,073,134
DEDUCTIONS:
CASH DIVIDENDS DECLARED AND PAID* $450,000 $150,000
----------- -----------
TOTAL DEDUCTIONS $450,000 $150,000
BALANCE AT END OF PERIOD $23,875,184 $20,949,668
=========== ===========
</TABLE>
* Dividends for the quarter ended December 31, 1995 were declared on January 9,
1996; record date January 19,1996; payment date January 31, 1996
7
<PAGE> 11
THE NEW IBERIA BANCORP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
<TABLE>
<CAPTION>
----------- -----------
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $885,385 $606,494
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION & AMORTIZATION 128,642 179,437
DISCOUNT ACCRETION & PREMIUM AMORTIZATION (13,816) (42,451)
PROVISION FOR LOAN LOSSES 0 62,100
NET GAIN ON SALE OF REAL ESTATE OWNED 0 (5,000)
INCREASE IN OTHER LIABILITIES 472,573 165,024
DECREASE IN OTHER ASSETS 177,113 291,951
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,649,897 1,257,555
CASH FLOWS FROM INVESTING ACTIVITIES:
PROCEEDS FROM MATURITIES & CALL OF INVESTMENT SEC.(HTM) 853,525 829,075
PROCEEDS FROM MATURITIES & CALL OF INVESTMENT SEC.(AFS) 12,055,248 2,874,768
PURCHASE OF INVESTMENT SECURITIES(HTM) 0 (1,000,000)
PURCHASE OF INVESTMENT SECURITIES(AFS) (11,216,584) (977,656)
NET (INCREASE) DECREASE IN LOANS (5,978,246) (10,476,516)
PURCHASE OF BANK PREMISES & EQUIPMENT (17,051) (34,926)
PROCEEDS FROM SALE OF:
OTHER REAL ESTATE OWNED 0 80,000
----------- -----------
NET CASH PROVIDED BY (USED IN)
INVESTMENT ACTIVITIES ($4,303,108) ($8,705,255)
</TABLE>
8
<PAGE> 12
CONSOLIDATED STATEMENT OF CASH FLOWS
(CONTINUED)
<TABLE>
<CAPTION>
----------- -----------
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
DECREASE IN REPURCHASE AGREEMENTS (270,467) (162,773)
INCREASE IN DEMAND, NOW & SAVINGS DEPOSITS 1,930,544 2,283,945
INCREASE IN CERTIFICATES OF DEPOSITS 97,000 4,366,988
DIVIDENDS PAID (450,000) (448,146)
----------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,307,077 6,040,014
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS (1,346,134) (1,407,686)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 23,141,728 14,043,995
CASH AND CASH EQUIVALENTS AT END OF PERIOD 21,795,594 12,636,309
SUPPLEMENTAL DISCLOSURE:
INTEREST PAID ON BORROWINGS AND DEPOSITS 2,162,317 1,717,073
FEDERAL INCOME TAX PAID 0 0
</TABLE>
9
<PAGE> 13
PART I -- FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
In the first quarter of 1996, The New Iberia Bancorp, Inc. (the "Corporation")
recorded net income of $885,385 ($.44 per share). This compares to the same
period in 1995 when net income was $606,494 ($.30 per share). The change in
net income is explained by the following changes: (i) net interest income
increase of $152,053, (ii) a decrease in non interest expense by $51,770, and
(iii) no provision for loan losses for the first quarter of 1996 as compared to
$62,100 for the first quarter of 1995. Management evaluated the loan loss
reserve during the first quarter and believed the reserve to be adequate,
thereby requiring no provision for the quarter.
On March 31, 1996 total assets of the Corporation were $266,334,704 , which is
an increase of $2,466,279 ( .93%) from the $263,868,425 reported for December
31, 1995 and an increase of $25,490,291 (10.58%) from the balance at March 31,
1995 of $240,844,413. Gross loans on March 31, 1996 were $148,564,511, a
$5,859,690 (4.11%) increase from the December 31, 1995 balance of $142,704,821
and an increase of $23,902,498 (19.17%) from the balance on March 31, 1995 of
$124,662,012. Loans held for sale, at their fair value, on March 31, 1996,
December 31, 1995, and March 31, 1995, were $1,205,357, $592,750, and $71,250,
respectively. The increase in loans is attributable to strong commercial and
consumer lending along with steady activity in the mortgage lending area.
Total deposits were $239,653,148 on March 31, 1996, a $2,027,544 ( .85%)
increase from the balance of $237,625,604 on December 31, 1995 and an increase
of $22,408,054 (10.31%) from the balance on March 31, 1995 of $217,245,094.
The increase in deposits from December 1995 is primarily attributable to an
increase in interest bearing checking accounts.
CAPITAL RESOURCES
Capital ratios for the quarters ending March 31, 1996, 1995, and 1994:
<TABLE>
<CAPTION>
Regulatory
1996 1995 1994 Minimum*
---- ---- ---- ----------
<S> <C> <C> <C> <C>
Leverage 8.90% 8.85% 9.52% 3.00%
Risk-based capital
Tier I 16.08% 16.76% 18.23% 4.00%
Total 17.33% 18.26% 19.73% 8.00%
</TABLE>
*Current levels for a well capitalized institution in accordance with the
Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). The
unrealized loss on Available for Sale securities reflected in the equity
section of the balance sheet was excluded as required by regulatory agencies in
the computation of these ratios.
10
<PAGE> 14
RESULTS OF OPERATIONS
NET INTEREST INCOME - Net interest income is the difference between interest
earned on assets and interest paid for the funds supporting those assets. As
of March 31, 1996, net interest income was $2,651,507, an increase of $152,053
(6.08%) over the same period in 1995. The increase in net interest income is
the result of an increase in loan activity over the last year. Interest rates
decreased during 1995, allowing the opportunity for loan activity to increase
throughout the year. Activity in commercial and consumer lending has
continued to increase while mortgage lending activity has been steady
throughout the same period. Interest costs increased throughout 1995 and are
currently at a level position. Interest cost are not expected to increase
substantially for the remainder of the year.
EARNING ASSETS - Earning assets on March 31, 1996 were $251,948,912 an increase
of $6,574,351(2.68%) from the December 31, 1995 balance of $245,374,561. The
change is the result of an increase in loans outstanding of $5,859,689 and
$2,551,403 in federal funds sold, offset by a net decrease of $1,836,741 in
investment securities.
The average yield on earning assets for first three months of 1996 was 7.78%.
In 1995, the average yield on earning assets was 7.85%. The yield on loans has
decreased to an average of 9.02% from an average of 9.04% in 1995. The yield
on investments has decreased to an average of 6.15% from an average of 6.43%
in 1995. The yield on investments is down due to the reduction in the average
life of the portfolio by purchasing short term U.S. Treasury Notes and reducing
the purchases of mortgage-backed securities. The average rate on Fed Funds
Sold has decreased to an average of 5.25% from an average of 5.76% in 1995.
(All yields are year to date through March of the respective year.)
INVESTMENT SECURITIES - The Corporation's goals with respect to investment
portfolio management is to ensure (i) quality of securities, (ii) the
maintenance of attractive rates of return on the funds invested and (iii)
adequate liquidity to the Corporation. The portfolio consists primarily of
U.S. Treasury Notes, Municipal Bonds, and Mortgage-Backed Securities. U.S.
Treasury Notes and Municipal Bonds maturities are laddered to provide a
constant liquidity source. Mortgage-Backed Securities provide liquidity,
monthly cash flow and higher yields. The mix of the investment portfolio
continues to change, primarily due to prepayments on mortgage-backed
securities. The Corporation has primarily reinvested maturities and pay downs
in 1995 into loans, where demand has been good.
11
<PAGE> 15
The breakdown of the investment portfolio as of March 31, 1996 is listed below:
<TABLE>
<CAPTION>
(In Thousands of Dollars)
Held to Maturity Available for Sale
---------------- -------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
--------- ------- --------- -------
<S> <C> <C> <C> <C>
U.S. Treasury Notes -0- -0- 23,951 24,000
U.S. Government
Agency Notes -0- -0- 3,973 3,993
Mortgage-Backed 12,938 13,589 26,160 25,958
Obligation State
& Political 22,634 23,114 -0- -0-
Domestic Debt -0- -0- 1,386 1,356
Corporate Stock -0- -0- 150 150
Total 35,572 36,703 55,620 55,457
</TABLE>
Gross unrealized gains and losses on "Held to Maturity" securities were as
follows:
<TABLE>
<CAPTION>
(In Thousands of Dollars)
BOOK UNREALIZED UNREALIZED MARKET
VALUE GAINS LOSSES VALUE
------------------------ -----------------------
<S> <C> <C> <C> <C>
U. S. Government:
Mortgage-Backed Sec. 12,938 651 -0- 13,589
Obligation State
& Political 22,634 575 95 23,114
Total 35,572 1,226 95 36,703
</TABLE>
Under current regulatory capital rules, the unrealized loss as of March 31,
1996, in the "Available for Sale" securities totaling $235,987, net of tax, is
excluded from capital when calculating leverage, primary capital and risk-based
capital ratios.
The Corporation had no sales of securities during the first quarter of 1996.
INTEREST-BEARING LIABILITIES - Interest-bearing liabilities on March 31, 1996
were $202,994,351, reflecting an increase of $2,477,131(1.24%) from the
December 31, 1995 balance of $200,517,220 and an increase of $14,492,306(
7.69%) from the March 31, 1995 balance, which totaled $188,502,045. As noted
previously, the increase in this category from December 1995 is due to an
increase in interest bearing checking accounts and the increase from last year
is due to an increase in certificates of deposit.
12
<PAGE> 16
INTEREST EXPENSE - Interest Expense as of March 31, 1996 totaled $2,158,067,
which represents an increase of $376,682 (21.15%) from the 1995 amount of
$1,781,385. The reason for the increase is the interest cost for certificates
of deposits. The average rates paid year to date for all interest-bearing
liabilities were 4.28% through March 1996 as compared to 3.91% for the same
period in 1995. All yields are year to date through March of the respective
year.
RESERVE AND PROVISION FOR POSSIBLE LOAN LOSSES
An adequate level of the Allowance for Possible Loan Losses is determined by
reviewing the quality of the loan portfolio, actual loan loss experience and
the current and anticipated economic conditions and their effect on the market
served by the Corporation. The Provision for Possible Loan Losses is the
amount charged to earnings in order to maintain an adequate level of reserves.
Other significant factors considered in determining the levels of the provision
and the reserve are the growth or decline in the loan portfolio, the
composition of the portfolio, industry concentrations, differing risks
associated with each category of loans, the current and prospective financial
condition of borrowers, the level of past due and nonperforming loans and the
relationship of the reserve to the total loan portfolio. Management regularly
reviews the loan portfolio in an effort to identify potential losses and to
determine that the level of reserves adequately reflects the potential loss
exposure. Loans identified as problem credits are reviewed more frequently to
determine potential changes in the reserve.
Since actual losses may vary from current assessments, any necessary
adjustments to the reserve are recorded in the period in which they become
known. The loan review department of the Corporation monitors adherence to
lending policies and procedures as well as asset quality.
There was no provision for loan losses for the first quarter of 1996 as
compared to $62,100 for the same period the previous year. The balance in the
reserve over the last year reflects levels of charge-offs and management's
estimates of collateral values when evaluating exposure in the loan portfolio.
The reserve as a percentage of loans and leases was 2.23% at quarter end (March
31, 1996) compared to 2.38% at year end (December 1995). Management projects
loan growth to continue throughout the remainder of the year. This growth is a
factor in Management's periodic determination of the reserve. Management plans
to make adjustments to the reserve based on recoveries received and charge-offs
made to ensure that an adequate loan loss reserve is maintained.
13
<PAGE> 17
The diversification of the loan portfolio is an important factor in the
assessment of loan quality and loss potential. Although the Corporation has
extended a significant amount of loans to energy services and agricultural
customers due to the prevalence of those industries in the local economy, the
Corporation attempts to lend to a variety of industries to minimize its
exposure to possible losses occurring from concentration of loans in any single
sector. Broadening the Corporation's base of loan activity into the Lafayette,
Louisiana market, along with the steadily improving local economy over the last
few years, has had a positive effect on the performance of the loan portfolio.
During 1993, the U.S. Congress passed the North American Free Trade Agreement
(NAFTA). The Corporation believes that the increase in competition from
Mexican producers as a result of the passage of NAFTA could have a direct
adverse effect on the agricultural sugar and textile industries. As such, the
Corporation's operating market may be indirectly affected. Another factor
that may affect the quality of the loan portfolio is the opening of gaming
establishments in the Corporation's market. Although it is not known exactly
what amount of spendable money is now diverted to gaming, management is
concerned about the effect that gaming will have on the Corporation's consumer
loan portfolio. Appropriate consideration has been given to these factors in
the Corporation's loan loss reserve.
Charge-offs year to date for 1996 were $98,267 compared to $ 51,835 in 1995.
Recoveries year to date for 1996 were $20,099 compared to $127,762 in 1995.
The relatively small levels of charge-offs are attributable to management's
continued efforts to identify and work out problem loans.
Year to date Loan Recoveries compared to prior year charge-offs was 7.11% and
73.66% for March 1996 and March 1995, respectively.
OTHER INCOME
For the first quarter of 1996, Other Income was $525,820, an increase of
$67,085 ( 14.62%) over the $458,735 earned for the same period in 1995. The
increase is primarily due to an increase in loan credit life and accident and
health insurance premiums, merchant bankcard charges, and other fees adjusted
for deposit activities (ATM, purchases of cashier checks or money orders,
etc.).
OTHER EXPENSES
Total Other Expenses for the first quarter of 1996 was $1,978,379 compared to
$2,030,149 for the same period in 1995. This reflects an decrease of $51,770
(2.55%). Salary cost and benefits have increased ($61,054) while occupancy and
furniture and equipment cost have decreased ($37,078) along with other
expenses ($75,746). The largest reduction in other expenses is for FDIC
assessments($115,103).
INCOME TAXES
The effective tax rate as of March 31, 1996 is approximately 26%, which
compares to approximately 30% as of March 31,1995.
14
<PAGE> 18
NONPERFORMING ASSETS AND PAST DUE LOANS
Crucial to earnings performance is the monitoring of asset quality, chiefly in
the evaluation of credit risk, and the minimization of the Corporation's
exposure to losses. Management views these two critical functions as essential
to sound banking practice. Therefore, management regularly obtains appraisals
for the collateral supporting nonperforming assets and specifically establishes
reserves for them based on the current market value of the collateral if
necessary.
Nonperforming assets are those loans carried on a non-accrual basis, those
classified as troubled debt restructuring, real estate acquired through
foreclosure and repossessed movable property. The following schedule reflects
the balance of each category:
<TABLE>
<CAPTION>
(In Thousands of Dollars)
March 31,1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Non-accrual Loans 132 160
Troubled Debt Restructuring 565 585
Other Real Estate Owned 50 50
Repossessed Movable Prop. 43 28
Total 790 823
</TABLE>
RISK ELEMENT INFORMATION
<TABLE>
<CAPTION>
(In Thousands of Dollars)
March 31, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Past due loans 90 days 727 282
and still accruing
</TABLE>
<TABLE>
<CAPTION>
(In Thousands of Dollars)
March 31,1996 March 31, 1995
------------------ -------------------
<S> <C> <C>
Amount of income on non-accrual 3 2
loans that would have been
in income if still accruing
Interest income on restructured 18 18
loans included in net income
</TABLE>
Typically, the Corporation's restructured loans are based on the ability to
provide principal and interest repayment instead of providing a rate less than
the market. As a result, any rate adjustment would have resulted in an
immaterial change in earnings during the quarter.
Management is not aware of any loans classified for regulatory purposes as
loss, doubtful, substandard, or special mention and excluded from the
non-accrual, past due 90 days and still accruing, or restructured loans which:
(1) represent or result from trends or uncertainties that will materially
impact future operating results, liquidity, or capital resources, or (2)
represent
15
<PAGE> 19
material credits about which Management is aware of any information which
causes doubts as to the ability of such borrowers to comply with the loan
repayment terms.
On March 31, 1996, impaired loans totaled $435,785. Of the total impaired
loans, $396,463 required a total reserve of $212,609. There was no reserve for
impairment on the remaining $39,322 of impaired loans. During the three month
period ended March 31, 1996, impaired loans averaged $ 451,562. Interest
income recognized on impaired loans totalled approximately $8,500 for the
quarter.
NON-ACCRUAL OF INTEREST ON LOANS
It is the policy of the Corporation to discontinue the accrual of interest on
loans when principal or interest is in default for ninety days or more, unless,
in the best judgment of the Officer Loan Committee, the loan is well secured
and is in the process of collection. Interest previously accrued is reversed
and the accrual of interest is discontinued.
LIQUIDITY AND INTEREST RATE SENSITIVITY
Built into the Corporation's financial structure is the goal of maintenance of
adequate liquidity; i.e., the ability to meet customers' requirements on a
timely basis. The Corporation has in place an Asset/Liability computer
software program to aid it in maintaining a reasonable balance between interest
earning assets and interest bearing liabilities. The information is updated
and analyzed by management on a monthly basis in order to allow management to
diversify investments as needed to keep a proper balance of maturities.
Management also regularly evaluates and manages interest rate sensitivity of
assets and liabilities. This is critical to protect net income against wide
fluctuations in interest rates and to maintain consistent growth of net
interest income.
The Corporation's liquidity ratio on March 31, 1996 was 38.63% with a
dependency ratio of 3.05%; the liquidity ratio on December 31, 1995 was 40.97%
with a dependency ratio of .63%. Management believes that liquidity is
enhanced by its ability to manage the interest rate sensitivity of assets and
liabilities. The dependency ratio has increased from December 1995 due to a
decrease in short term federal funds. Management actively monitors and
controls the relationship between interest sensitive assets and liabilities by
means of an interest rate simulation model. The off balance sheet commitments,
if funded, would have a limited impact on the liquidity of the Corporation,
primarily due to the maturity structure of the investment portfolio.
16
<PAGE> 20
CUMULATIVE MATURITY/RATE SENSITIVITY
<TABLE>
<CAPTION>
(All Dollar Amounts in Thousands)
- ----------------------------------------------------------------------------------------------------------------------------------
EARNING ASSETS
--------------------------------------------------------------------------------
1-30 1-60 1-90 1-365 YEAR & OVER TOTAL
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LOANS* 35,817 63,269 84,934 148,203
SHORT TERM INVESTMENTS 12,354 12,354 12,354 12,354 0.00 12,354
INVESTMENTS*** 4,560 18,059 72,984 91,043
--------------------------------------------------------------------------------
TOTAL EARNING ASSETS 12,354 12,354 52,731 93,682 157,918 251,600
FUNDING SOURCES
PUBLIC FUNDS DDA 12,406 12,406 12,406 12,406 0 12,406
NOW ACCOUNTS** 0.00 0.00 0.00 0.00 29,837 29,837
MONEY MARKET (IMFA) 24,316 24,316 24,316 24,316 0 24,316
CERT. OF DEPOSIT >100M 15,092 34,031 9,583 43,614
OTHER TIME DEPOSITS 19,160 60,556 14,053 74,609
SAVINGS** 0 0 0 0 17,688 17,688
REPURCHASE AGREEMENTS 1,479 1,479 1,479 1,479 0 1,479
--------------------------------------------------------------------------------
TOTAL FUNDING 38,201 38,201 72,453 132,788 71,161 203,949
--------------------------------------------------------------------------------
CUMULATIVE MATURITY/ (25,847) (25,847) (19,722) (39,106) 86,757 47,651
--------------------------------------------------------------------------------
RATE SENSITIVITY (GAP)
AS A % OF EARNING ASSETS -10.27% -10.27% -7.84% -15.54%
AS A % OF TOTAL ASSETS -9.70% -9.70% -7.40% -14.68%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* LOAN FIGURES REPRESENT RATE SENSITIVITY ONLY, WHILE THE BALANCE SHEET
REPRESENTS TOTAL GROSS LOANS INCLUDING NON-ACCRUALS AND OVERDRAFTS
** HISTORICALLY, RATES ON THESE TYPES OF ACCOUNTS HAVE CHANGED LITTLE AS
COMPARED TO OTHER TYPES OF DEPOSITS, THEREFORE, THESE ACCOUNTS ARE NOT
CONSIDERED RATE SENSITIVE.
*** $150,084 - FIRST NATIONAL BANKERS BANK AND FNMA STOCK IS NOT RATE
SENSITIVE AND IS NOT INCLUDED IN THE ONE YEAR AND OVER.
THE AMOUNT OF PAYDOWNS RECEIVED ON A MONTHLY BASIS ON MORTGAGE BACKED
SECURITIES IS NOT REFLECTED IN THIS SCHEDULE. PAY DOWNS AVERAGED ABOUT
$685,000 A MONTH OVER THE FIRST THREE MONTHS OF 1996, AND WOULD NOT HAVE
CREATED A SIGNIFICANT DIFFERENCE IN THE PERCENTAGES ABOVE.
THE GAP PERCENTAGES NOTED ABOVE ARE A REFLECTION OF A NEGATIVE POSITION.
THIS MEASUREMENT SIMPLY SHOWS AT WHAT REPRICING INTERVAL ASSETS AND
LIABILITIES WILL REPRICE. IT DOES NOT TAKE INTO ACCOUNT AT WHAT LEVEL OF
RATE CHANGE THE ASSET OR LIABILITY WILL REPRICE. IN GENERAL TERMS, IF
RATES FALL, NET INTEREST INCOME SHOULD INCREASE AND IF RATES RISE, NET
INTEREST INCOME SHOULD DECREASE. IN LOOKING AT THE ONE YEAR HORIZON, AND
GIVEN THAT IN GENERAL, INTEREST RATES SHOULD REMAIN FLAT OR SLIGHTLY
HIGHER IN THE FUTURE, THE CORPORATION SHOULD ADJUST ITS CURRENT POSITION
BY SHORTENING THE REPRICING OF ASSETS OR EXTENDED DEPOSIT MATURITIES. THE
CORPORATION SHOULD CLOSELY MONITOR FUTURE CHANGES IN INTEREST RATES AND
ACCORDINGLY ADJUST ITS INTEREST RATE POSITION AS NEEDED. THE USE OF THE
ASSET/LIABILITY MODEL ON A MONTHLY BASIS PROVIDES A GOOD REVIEW AND GIVES
REALISTIC EXPECTATIONS OF THE AFFECT THAT CHANGES IN INTEREST RATES WILL
HAVE ON THE INTEREST RATE RISK OF THE CORPORATION.
17
<PAGE> 21
PART II OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS:
STATE COURT LITIGATION
On March 13, 1996 The New Iberia Bank was sued by Mary Joyce Keel in the 16th
Judicial District Court, Iberia Parish, Louisiana (Docket No. 83846-F). The
Bank's insurance carrier has been notified of the existence of this suit. The
suit alleges violations of the plantiff's rights under the American with
Disabilities Act of 1990. Damages sought are actual damages of not less than
$50,000.00 plus unspecified punitive damages. The Bank has until May 3, 1996 to
respond to the suit.
FEDERAL COURT LITIGATION
On January 6, 1995, Jules A. Schwing ("Schwing"), individually and in his
capacity as executor of his parents' estates, filed a Complaint for injunctive
relief in the United States District Court for the Western District of
Louisiana. (Schwing has since been replaced as executor.) The Complaint sought
to enjoin, among other things, the enforcement of various amendments to the
Corporation's Bylaws which were adopted by the board of directors at a meeting
on January 3, 1995.
On January 9, 1995, the Court refused to grant a temporary restraining order in
connection with Schwing's Complaint for injunctive relief. A status conference
on this matter was held on January 18, 1995, at which time Schwing's counsel
reurged his request for a temporary restraining order or a preliminary
injunction. Both at the status conference and at a hearing held February 13,
1995, the Court refused to grant a temporary restraining order or schedule a
preliminary injunction hearing, and dismissed Schwing's Complaint for
injunctive relief.
Schwing appealed that dismissal to the U.S. Fifth Circuit Court of Appeals. On
March 29, 1995, Schwing filed a Motion for Injunction During Pendency of Appeal
in the United States District Court for the Western District of Louisiana,
which was denied by the Court on April 6, 1995. On August 11, 1995, Schwing
filed a motion in the Fifth Circuit Court of Appeals seeking an injunction
pending appeal to prohibit the Corporation from, among other things, pursuing
efforts to acquire another bank. The Corporation filed on August 18, 1995 a
motion to dismiss the appeal and for sanctions for frivolous appeal and,
shortly thereafter, the Corporation filed another motion requesting sanctions
for failure of Schwing to comply with the Federal Rules of Appellate Procedure
in his request for an injunction pending appeal.
On September 8, 1995, the Court denied Schwing's motion for injunction pending
appeal and ordered that the Corporation's motion to dismiss the appeal and for
sanctions for frivolous appeal be carried forward for resolution by the oral
argument panel. On October 24, 1995, an Order was entered denying the
Corporation's motion for sanctions for failure to comply with the Federal
Rules. Oral argument on unresolved issues and on the merits of the appeal was
held on December 5, 1995. As of May 3, 1996, the Fifth Circuit Court of
Appeals had not rendered a ruling in this matter.
18
<PAGE> 22
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
The Corporation filed a Form 8-K with the Commission on January 26, 1996. The
Form 8-K reported an agreement to negotiate a definitive agreement for the
acquisition of the Corporation.
EXHIBITS
27 Financial Data Schedule
19
<PAGE> 23
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 9,440,871
<INT-BEARING-DEPOSITS> 201,515,197
<FED-FUNDS-SOLD> 12,354,723
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 55,457,251
<INVESTMENTS-CARRYING> 35,572,428
<INVESTMENTS-MARKET> 36,707,645
<LOANS> 148,564,510
<ALLOWANCE> 3,318,362
<TOTAL-ASSETS> 266,334,704
<DEPOSITS> 239,653,148
<SHORT-TERM> 1,479,154
<LIABILITIES-OTHER> 1,327,218
<LONG-TERM> 0
<COMMON> 9,500,500
0
0
<OTHER-SE> 14,374,684
<TOTAL-LIABILITIES-AND-EQUITY> 266,334,704
<INTEREST-LOAN> 3,250,576
<INTEREST-INVEST> 1,377,337
<INTEREST-OTHER> 181,661
<INTEREST-TOTAL> 4,809,574
<INTEREST-DEPOSIT> 2,139,410
<INTEREST-EXPENSE> 2,158,067
<INTEREST-INCOME-NET> 2,651,507
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,978,379
<INCOME-PRETAX> 1,198,948
<INCOME-PRE-EXTRAORDINARY> 1,198,948
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 885,385
<EPS-PRIMARY> .44
<EPS-DILUTED> .44
<YIELD-ACTUAL> 4.29
<LOANS-NON> 132,426
<LOANS-PAST> 727,307
<LOANS-TROUBLED> 565,442
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,396,531
<CHARGE-OFFS> 98,267
<RECOVERIES> 20,098
<ALLOWANCE-CLOSE> 3,318,362
<ALLOWANCE-DOMESTIC> 3,318,362
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
