<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the transition period from ________ to________
Commission file No. 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 70562-1240
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(318) 365-6761
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of Each Class Name of Exchange on Which Registered
- ------------------- ------------------------------------
<S> <C>
Common Stock,No Par Value American Stock Exchange, Inc.
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO 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. ( )
<PAGE> 2
State the aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 11, 1996:
Common Stock, no par value - $30,305,947*
* For the purpose of this computation, shares owned by executive officers,
directors, and 5% shareholders of the Registrant, even though all such persons
may not be affiliates as defined in SEC Rule 405, have been excluded.
State the aggregate number of shares outstanding of each of the registrant's
classes of common stock as of March 11, 1996:
Common Stock, no par value - 2,000,000
Documents Incorporated by Reference
Portions of the Registrant's definitive proxy statement, which was
filed with the Commission on March 18, 1996, are incorporated by reference into
Part III of this Report.
<PAGE> 3
10-K INDEX
<TABLE>
<S> <C>
PART I
Item 1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-4
Statistical Information:
Average Balance Sheets and Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8
Loan Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Loan Maturity Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Loan Concentration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Non accrual and Past due Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Summary of Loan Loss Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Allowance for Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Investment Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Deposits & Return on Equity Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Item 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17-18
Item 3 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19-20
Item 4 Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . 21
PART II
Item 5 Market for the Registrant's Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Item 6 Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . 23-33
Item 8 Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34-52
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . 53
PART III
Item 10 Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Item 11 Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Item 12 Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . . . . . . . 53
Item 13 Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . 54
Signatures of Directors and Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
</TABLE>
<PAGE> 4
PART I
ITEM 1 - BUSINESS
THE REGISTRANT
The New Iberia Bancorp, Inc. (the "Corporation") was incorporated in Louisiana
in January of 1983 under the name The New Iberia National Bancorp, Inc. At the
annual shareholders meeting on March 12, 1984, the shareholders of The New
Iberia National Bank, now The New Iberia Bank (the "Bank") approved a merger
agreement pursuant to which the Bank would be merged into a wholly-owned
subsidiary of the Corporation. On May 1, 1984, the merger took place, the Bank
became a wholly-owned subsidiary of the Corporation and the shareholders of the
Bank became shareholders of the Corporation, through a one-for-one stock
exchange. The reorganization was accounted for in a manner similar to a
pooling -of- interest. There were no material transactions prior to May 1,
1984, for the Corporation; therefore the operations of the Corporation are
those of the Bank for all previous periods. The Corporation is now engaged,
through its subsidiary, in the banking business. The Bank is the Corporation's
principal asset and primary source of revenue.
THE BANK
The Bank was organized in March 1887 under the National banking laws of the
United States. The Bank's securities consist of 50,000 shares of common stock,
all of which are held by its parent, the Corporation.
In order to bid on the failed Peoples Bank and Trust Co. of New Iberia,
Louisiana (Peoples), on November 17, 1987, the Bank changed its charter from a
national bank charter to a Louisiana State bank charter. Peoples was closed by
the Office of Financial Institutions of the State of Louisiana on November 17,
1987. The Bank acquired certain assets and liabilities of Peoples from the
Federal Deposit Insurance Corporation on November 17, 1987.
The Bank presently has a main office at 800 South Lewis Street, New Iberia,
Iberia Parish, Louisiana with seven branch offices and one ATM Location in
Iberia Parish; three branch offices in Lafayette Parish, Louisiana, and one
branch office in Vermilion Parish, Louisiana.
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 savings deposits, and the making of commercial,
lease financing, real estate, personal, home improvement, automobile and other
installment and term loans. It also offers, among other services, travelers'
checks, safe deposit boxes, note collection, and other customary bank services
to its customers, including trust services. In addition, the Bank offers
drive-up teller services, automatic teller machines, and night depository
facilities. The Bank is insured under the Federal Deposit Insurance Act; but
is not a member of the Federal Reserve System.
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The four main areas in which the Bank has directed its lending activities are
(1) real estate construction and mortgage loans; (2) loans to individuals for
household, family and other consumer expenditures; (3) commercial and
industrial loans and (4) farm loans.
There is no one depositor on whom the Bank depends or who accounts for a
substantial portion of the Bank's business. The Bank is a depository for some
local governments, the majority of which are located in Iberia Parish, as well
as other governmental agencies. The Bank has agreements with many of these
public bodies, which gives the Bank reasonable assurance that a large portion
of the funds on deposit will not fluctuate substantially over the term of the
agreements. The Bank maintains adequate liquid assets to provide for changes
which may occur in the balance of public funds from time to time. The time
deposit balances of all public funds were $14,942,922 and demand deposits were
$12,274,601 as of December 31, 1995. In connection with the deposits of these
public funds, the Bank is required to pledge securities to secure such
deposits.
As of December 31, 1995, the Bank had a total of 9,447 accounts representing
non-interest bearing demand deposits of $38,858,005; 3,987 accounts
representing money market accounts, now accounts and 50+ accounts with a total
balance of $63,609,993; 7,614 savings and Christmas club accounts with a total
balance of $17,031,970; and 5,535 time deposit accounts with a total balance of
$118,125,636.
There has been no significant change in the kinds of services offered by the
Bank during the last three fiscal years. The Bank holds no patents, registered
trademarks, licenses (other than licenses required to be obtained from
appropriate bank regulatory agencies), franchises or concessions.
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 its business activities. The Bank presently has no plans for any new
line of business requiring the investment of a material amount of total assets.
The Bank will continue to review and possibly repackage certain products that
are being offered in order to remain competitive within its marketplace.
Most of the Bank's business originates from within Iberia, Lafayette, and
Vermilion Parishes of Louisiana. 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.
On January 24, 1996, the Corporation announced that it had agreed to negotiate
a definitive agreement for the acquisition of the Corporation by Whitney
Holding Corporation, a bank holding company based in New Orleans, Louisiana,
for consideration consisting of $54 million in the aggregate, payable in
Whitney Holding Corporation common stock to the shareholders of the Corporation
at the approximate rate of $27 in value of Whitney Holding Corporation stock
for each share of Corporation stock outstanding. Assuming a definitive
agreement is successfully negotiated, it must be approved by the board of
directors of both the Corporation and Whitney Holding Corporation. Closing of
any such transaction would also be subject to
2
<PAGE> 6
customary conditions, including regulatory approval and approval by the
shareholders of the Corporation. The merger is intended to be accounted for as
a pooling-of-interests. It is not expected that, if a definitive agreement is
reached, the merger would take place before the third or fourth quarter of
1996. The merger, if it occurs, would result in the Corporation being merged
into Whitney Holding Corporation and the shareholders of the Corporation
becoming shareholders of Whitney Holding Corporation. In addition, the Bank
would be merged into Whitney National Bank. Therefore, if the merger takes
place, both the Corporation and the Bank would cease doing business as
independent entities.
COMPETITION
The Bank competes principally in the Iberia Parish area with other banks and
savings and loans for deposits, loans, safe deposit boxes, retirement accounts,
and other banking services. The total Iberia Parish trade area has a
population of approximately 70,000, with the city of New Iberia's population
being approximately 35,000. There are ten financial institutions in the Iberia
Parish trade area. The Bank has approximately 26% of the market in this trade
area for total deposits of $238 million. The Bank moved into the Lafayette
market in March of 1992. Lafayette Parish has a population of 190,000 and the
City of Lafayette has a population of approximately 95,000. In July 1994, the
Bank opened a branch in Vermilion Parish, in the Town of Abbeville. Vermilion
Parish has a population of 50,000 and the Town of Abbeville has a population of
approximately 12,000. The Bank competes in Lafayette and Vermilion Parishes
the same as it does in Iberia Parish, acquiring small consumer and commercial
business accounts. Presently, the deposit base in Lafayette and Vermilion
Parishes are less than one percent.
EMPLOYEES
The Bank has approximately 141 full time equivalent employees, and no employees
are employed in a casual capacity. Management considers its relationship with
the employees to be good.
SUPERVISION AND REGULATION
The Corporation 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 Corporation to file with the Board an annual report
containing such information as the Board may require. The Board is authorized
by the Act to examine the Corporation and all of its activities. The
activities that may be engaged in by the Corporation and its subsidiaries are
limited by the Act to those so 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
3
<PAGE> 7
produce benefits to the public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh possible adverse effects,
such as undue concentration of resources, decreased or unfair competition,
conflicts of interest, or unsound banking practices.
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 judgement 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 extension of credit or provision of any property or
services.
The Corporation and the Bank are also subject to regulation by the Louisiana
Commissioner of Financial Institutions. Under the Louisiana Bank Holding
Company Act of 1962, as amended (the "Louisiana Act"), one-bank holding
companies are authorized to operate in Louisiana provided the activities of the
non-banking subsidiaries are limited to the ownership of real estate and
improvements, computer services, equipment leasing and other directly related
banking activities. The Louisiana Act, as amended in 1984, authorizes
multi-bank holding companies within the state beginning January 1, 1985.
In addition, the Bank is subject to regulation and regular examination by the
Federal Deposit Insurance Corporation. Applicable regulations relate to
reserves, investments, loans, issuance of securities, establishment of branches
and other aspects of its operations. The Federal Deposit Insurance Corporation
Improvement Act of 1991 (FDICIA) added regulatory requirements applicable to
the Corporation in regard to safety and soundness of the organization. The
additional cost burden to remain in compliance, although not determined, is
expected to have some effect on earnings in the future.
With regard to additional regulatory requirements, in particular dealing with
capital adequacy and proposed interest rate risk considerations in capital
adequacy measures, it may generally be assumed that the proposed changes will
not have a significant effect on the Bank's overall capital position. The Bank
currently exceeds the minimum requirements for a well capitalized institution
and it is believed that the Bank will not fall below this level even after
interest rate risk guidelines are incorporated later in 1996.
The Corporation is not currently subject to any regulatory directives or
recommendations which would have a material effect on liquidity, capital
resources or operations.
4
<PAGE> 8
STATISTICAL INFORMATION
The following data contains information concerning the business and operations
of The New Iberia Bancorp, Inc. and its subsidiary The New Iberia Bank.
Financial information from previous years may be reclassified to conform to
current accounting procedures. In all cases, the presentation of the financial
data has been presented in accordance with generally accepted accounting
principles (GAAP).
5
<PAGE> 9
Distribution of Assets, Liabilities, and Stockholder's Equity; Average Balances
and Interest Rates
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
===========================================================================
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest Earning Assets:
Loans (1) (2) (3) 127,116 11,927 9.38% 97,501 9,029 9.26%
U.S. Treasury Notes 20,736 1,296 6.25% 25,362 1,473 5.81%
U.S. Government:
Agency Notes 9,189 696 7.57% 5,039 337 6.69%
Mortgage Backed Securities 37,156 2,655 7.15% 52,090 3,219 6.18%
Tax Exempt Investment Securities (1) 23,125 2,168 9.38% 22,202 2,010 9.05%
Federal Funds Sold 10,077 578 5.74% 5,624 232 4.13%
-------------------------------------------------------------------------
Total Earning Assets (1) 227,399 19,320 8.50% 207,818 16,300 7.84%
Cash on Hand & Due from Banks 9,636 9,090
Premises & Equipment-Net 5,509 4,877
Other Assets 3,971 3,315
------- -------
Total Non Interest Bearing Assets 19,116 17,282
------- -------
Total Assets 246,515 225,100
======= =======
<CAPTION>
December 31, 1993
Average Yield/
Balance Interest Rate
=================================
(In Thousands of Dollars)
<S> <C> <C> <C>
Assets
Interest Earning Assets:
Loans (1) (2) (3) 85,340 8,012 9.39%
U.S. Treasury Notes 30,295 1,857 6.13%
U.S. Government:
Agency Notes 2,500 135 5.40%
Mortgage Backed Securities 68,186 4,355 6.39%
Tax Exempt Investment Securities (1) 11,680 1,020 8.73%
Federal Funds Sold 9,229 264 2.86%
----------------------------------
Total Earning Assets (1) 207,230 15,643 7.55%
Cash on Hand & Due from Banks 8,666
Premises & Equipment-Net 4,905
Other Assets 3,300
-------
Total Non Interest Bearing Assets 16,871
-------
Total Assets 224,101
=======
</TABLE>
(1) Tax Equivalent Basis Calculated at 34%
(2) Non accruing loans are included in the daily average loan amounts
outstanding.
(3) Interest on loans includes loan fee income. Loan fee income for each
period presented does not have a material impact on yield.
6
<PAGE> 10
Distribution of Assets, Liabilities, and Stockholder's Equity; Average Balances
and Interest Rates
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
==========================================================================
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
Liabilities and Stockholder's Equity
Interest Bearing Liabilities:
Demand Deposits 62,119 1,787 2.88% 59,775 1,452 2.43%
Savings Deposits 17,872 429 2.40% 18,180 407 2.24%
Time Deposits 108,888 5,668 5.21% 92,047 3,609 3.92%
Federal Funds Purchased/
Repurchase Agreements 1,994 99 4.96% 2,259 79 3.50%
-------------------------------------------------------------------------
Total Interest Bearing Liabilities 190,873 7,983 4.18% 172,261 5,547 3.22%
Non Interest Bearing Liabilities:
Demand Deposits 32,590 31,717
Other Liabilities 1,222 1,014
------- -------
Total Non Interest Bearing Liabilities 33,812 32,731
Stockholder's Equity 21,830 20,108
------- -------
Total Liabilities and Stockholder's Equity 246,515 225,100
======= =======
Net Interest Earnings (1) 11,337 10,753
Net Yield on Earning Assets 4.99% 5.17%
<CAPTION>
December 31, 1993
Average Yield/
Balance Interest Rate
==================================
(In Thousands of Dollars)
<S> <C> <C> <C>
Liabilities and Stockholder's Equity
Interest Bearing Liabilities:
Demand Deposits 59,546 1,376 2.31%
Savings Deposits 18,018 429 2.38%
Time Deposits 94,121 3,714 3.95%
Federal Funds Purchased/
Repurchase Agreements 2,375 59 2.48%
----------------------------------
Total Interest Bearing Liabilities 174,060 5,578 3.20%
Non Interest Bearing Liabilities:
Demand Deposits 31,061
Other Liabilities 998
-------
Total Non Interest Bearing Liabilities 32,059
Stockholder's Equity 17,982
-------
Total Liabilities and Stockholder's Equity 224,101
=======
Net Interest Earnings (1) 10,065
Net Yield on Earning Assets 4.86%
</TABLE>
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<PAGE> 11
Interest Differential
The following table sets forth for the periods indicated a summary of the
changes in interest earned and interest paid resulting from changes in volume
and changes in rates:
<TABLE>
<CAPTION>
1995 Compared to 1994 1994 Compared to 1993
Increase(Decrease) due to: VOLUME RATE NET VOLUME VOLUME RATE NET VOLUME
RATE CHANGE RATE CHANGE
<S> <C> <C> <C> <C> <C> <C>
Interest earned on:
Loans 2,776 122 2,898 1,126 (109) 1,017
U.S. Treasury Notes (304) 127 (177) (290) (94) (384)
U.S. Government:
Agency Notes 309 50 359 164 38 202
Mortgage Backed Securities (1,243) 679 (564) (1,032) (104) (1,136)
Tax Exempt Investment Securities 85 73 158 951 39 990
Federal Funds Sold and Securities 232 114 346 412 (444) (32)
Purchased under agreement to resell
---------------------------------------------------------------------------------
Total Interest on Earning Assets 1,855 1,165 3,020 1,331 (674) 657
Interest paid on:
Demand Deposits 59 276 335 5 71 76
Savings Deposits (7) 29 22 4 (26) (22)
Time Deposits 738 1,321 2,059 (81) (24) (105)
Federal Funds Purchased/
Repurchase Agreements (8) 28 20 (3) 23 20
---------------------------------------------------------------------------------
Total Interest Bearing Liabilities 782 1,654 2,436 (75) 44 (31)
</TABLE>
Note: The change in interest due to both rate and volume has been allocated to
volume and rate changes in proportion to the relationship of the absolute
dollar amounts of the change in each.
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<PAGE> 12
Loan Portfolio
The following table shows the Corporation's loan distribution at the end of the
last five years.
<TABLE>
<CAPTION>
December 31,
1995 1994 1993
(In Thousands of Dollars)
% of Loans % of Loans % of Loans
in each in each in each
Amount category to Amount category to Amount category to
Total Loans Total Loans Total Loans
<S> <C> <C> <C> <C> <C> <C>
Commercial, Financial, 32,262 22.61% 27,280 24.06% 20,469 22.00%
and Agricultural
Real Estate - Construction 1,642 1.15% 279 0.25% 4,282 4.60%
Real Estate - Mortgage 62,399 43.73% 52,362 46.19% 46,226 49.68%
Installment, Credit Cards, 46,402 32.52% 33,449 29.50% 22,073 23.72%
and Other
-----------------------------------------------------------------
142,705 100.00% 113,370 100.00% 93,050 100.00%
<CAPTION>
December 31,
1992 1991
(In Thousands of Dollars)
% of Loans % of Loans
in each in each
Amount category to Amount category to
Total Loans Total Loans
<S> <C> <C> <C> <C>
Commercial, Financial, 31,143 37.96% 30,417 42.40%
and Agricultural
Real Estate - Construction 1,836 2.24% 1,356 1.89%
Real Estate - Mortgage 30,218 36.83% 21,483 29.95%
Installment, Credit Cards, 18,843 22.97% 18,484 25.77%
and Other
-----------------------------------------
82,040 100.00% 71,740 100.00%
</TABLE>
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<PAGE> 13
LOAN MATURITY SCHEDULE
<TABLE>
<CAPTION>
AFTER ONE
WITHIN BUT WITHIN AFTER
ONE YEAR FIVE YEARS FIVE YEARS TOTAL
(IN THOUSAND OF DOLLARS)
<S> <C> <C> <C> <C>
Fixed Rate Installment,
Credit Cards & Others $ 3,564 $39,922(2) $ 2,916 $46,402
Variable Rate Installment,
Credit Cards & Others -0- -0- -0- -0-
Fixed Rate Commercial,
Financial & Agriculture 8,757(1) 9,005 -0- 17,762
Variable Rate Commercial,
Financial & Agricultural 11,013 3,487 -0- 14,500
Fixed Rate Real Estate-
Construction 1,642 -0- -0- 1,642
Variable Rate Real Estate-
Construction -0- -0- -0- -0-
Fixed Rate Real Estate-
Mortgage 7,925 19,808 -0- 27,733
Variable Rate Real Estate-
Mortgage 4,360 13,427 16,879 34,666
TOTALS $37,261 $85,649 $19,795 $142,705
</TABLE>
(1) Overdrafts are reflected in this category.
(2) Credit Cards are included in this category.
The breakdown for all loans on this schedule is based on contractual maturity,
not when repricing occurs. Had the breakdown been based on repricing, the
overall schedule would have reflected more dollars in the less than one year
and the one to five year categories. There are no demand loans or loans with
no stated maturities in the portfolio.
Note: The Corporation has no foreign loans. Loans to directors, executive
officers and principal shareholders aggregated $2,406,470 for 1995 and
$1,879,716 for 1994.
It is the policy of The New Iberia Bank 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 Officers' Loan Committee, the loan is well
secured and is in the process of collection. A loan is "well secured" if it is
secured (1) by collateral in the form of liens or of pledges of real estate or
personal property, including securities that have a realizable value sufficient
to discharge the loan, or (2) by the guaranty of a financially responsible
party. A debt is "in the process of
10
<PAGE> 14
collection" if collection of the debt is proceeding in due course either
through legal action, including judgments, enforcement procedures, or, in
appropriate circumstances, through collection efforts not involved in legal
action which are reasonably expected to result in repayment of the debt or in
its restoration to a current status.
LOAN CONCENTRATION
The Bank grants commercial, real estate and consumer loans to customers located
primarily in the Iberia, Lafayette, and Vermilion Parishes. The Bank's
portfolio consists of business loans extending across many industry types, as
well as loans to individuals. The Bank's primary service area has some
dependency on energy and energy related industries.
The Bank evaluates the credit risk of each customer on an individual basis and,
where deemed appropriate, collateral is obtained. Collateral varies by
individual loan customer but may include accounts receivable, inventory, real
estate, equipment, deposits, personal and government guaranties, and general
security agreements. Access to collateral is dependent upon the type of
collateral obtained. On an on-going basis, the Bank monitors its collateral
and the collateral value related to the loan balance outstanding.
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<PAGE> 15
Nonaccrual and Past Due Loans
The following table summarizes the Corporation's nonaccrual and past due loans:
<TABLE>
<CAPTION>
December 31
1995 1994 1993 1992 1991
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Nonaccrual Loans 160 97 208 661 693
Restructured Loans 585 605 386 458 758
Accruing Loans contractually past 282 168 419 95 289
due 90 days or more as to principal
or interest payments
</TABLE>
For nonaccrual loans, no interest income was recognized for the years ended
December 31, 1995, 1994, and 1993.
Had interest income been recognized on nonaccrual loans based on the
contractual terms throughout the year, the amount for each year ended December
31, 1995 through 1991 would have been approximately $13,000, $6,000, $19,000,
$63,000 and $69,000, respectively.
Typically, the Corporation's restructured loans are based on the ability to
provide 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 year.
The Corporation's management is not aware of any loans classified for regulatory
purposes as loss, doubtful, substandard, or special mention and excluded from
the above table which: (1) represent or result from trends or uncertainies that
will materially impact future operating results, liquidity, or capital
resources, or (2) represent 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.
12
<PAGE> 16
Summary of Loan Loss Experience
This table summarizes the Corporation's loan loss experience for each of the
last five years ended December 31:
<TABLE>
<CAPTION>
December 31
1995 1994 1993 1992 1991
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Balance of Allowance for Loan Losses at
beginning of period 3,114 2,826 2,297 1,875 1,887
Loans Charged Off:
Commercial, Financial, Agricultural 1 27 14 8 183
Real Estate 4 0 0 91 41
Installment and Credit Cards 278 146 88 121 99
---------------------------------------------------------
Total 283 173 102 220 323
Recoveries of Loans previously charged off
Commercial, Financial, Agricultural 170 330 230 300 151
Real Estate 3 7 258 34 3
Installment and Credit Cards 37 21 39 58 47
---------------------------------------------------------
Total 210 358 527 392 201
Net loans charged off 73 (185) (425) (172) 122
Additions to allowance charged to expense (1) 355 103 104 250 110
Balance of Allowance for Loan Losses at 3,396 3,114 2,826 2,297 1,875
end of period
Ratio of Net Charge 0ffs during period to 0.07% -0.19% -0.50% -0.22% 0.18%
average loans outstanding
</TABLE>
(1) The amount charged to expense and the related balance in the allowance for
loan losses is based upon periodic evaluations of the loan portfolio by
management. These evaluations consider several factors including, but not
limited to, ongoing loan review program, general economic conditions, loan
portfolio composition, prior loan loss experience and management's
estimation of future potential losses. The allowance for loan losses reflects
an amount which in management's judgement, is adequate to absorb potential loan
losses.
Refer to Management's Discussion and Analysis of Financial Condition and
Results of Operation for a discussion on the impact of SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan" on the Corporation.
13
<PAGE> 17
The following table shows an allocation of the allowance for loan losses for
each of the last five years indicated: (in Thousands of Dollars)
<TABLE>
<CAPTION>
December 31,
1995 1994 1993
Amount % of Loans Amount % of Loans Amount % of Loans
to to to
Total Loans Total Loans Total Loans
<S> <C> <C> <C> <C> <C> <C>
Balance at end of each period
applicable to:
Commercial, Financial, Agricultural 1,396 41.11% 1,183 24.18% 770 22.71%
Real Estate Construction 34 1.00% 0 0.25% 0 4.60%
Real Estate Mortgage 874 25.74% 1,111 46.45% 1,866 49.04%
Installment and Credit Cards 1,092 32.15% 820 29.12% 190 23.65%
--------------------------------------------------------------
Total 3,396 100.00% 3,114 100.00% 2,826 100.00%
<CAPTION>
December 31,
1992 1991
Amount % of Loans Amount % of Loans
to to
Total Loans Total Loans
<S> <C> <C> <C> <C>
Balance at end of each period
applicable to:
Commercial, Financial, Agricultural 851 37.96% 795 42.40%
Real Estate Construction 0 2.24% 35 1.88%
Real Estate Mortgage 1,334 36.83% 561 29.95%
Installment and Credit Cards 112 22.97% 484 25.77%
---------------------------------------
Total 2,297 100.00% 1,875 100.00%
</TABLE>
14
<PAGE> 18
INVESTMENT PORTFOLIO
The following table sets forth the carrying amount of investment securities at
the dates indicated:
<TABLE>
<CAPTION>
DECEMBER 31
1995 1995 1994 1994
(IN THOUSANDS OF DOLLARS)
HTM AFS HTM AFS
<S> <C> <C> <C> <C>
U.S. Treasury Notes $ - 0 - $23,993 $ 9,899 $15,827
U.S. Government:
Agency Notes - 0 - 6,552 8,493 1,443
Mortgage Backed Securities 13,616 25,874 21,529 18,392
State and Political Subdivisions 22,831 -0- 23,702 -0-
Totals $36,447 $56,419 $63,623 $35,662
</TABLE>
The following table sets forth the maturities of investment securities at
December 31, 1995 and the weighted average yields of such securities.
<TABLE>
<CAPTION>
MATURING
After One After Five
Within But Within But Within After
One Year Five Years Ten Years Ten Years
Amount Yield Amount Yield Amount Yield Amount Yield
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Held to Maturity:
U.S. Government:
Mortgage Backed Securities 0 .00 0 .00 232 9.14% 13,384 8.71%
State and Political Subdivision 813 6.33% 3,840 5.37% 12,580 5.23% 5,598 5.25%
Totals 813 6.33% 3,840 5.37% 12,812 5.30% 18,982 7.69%
Available for Sale:
U.S. Treasury 21,991 5.90% 2,002 6.32% 0 .00 0 .00
U.S. Government:
Agency Notes 0 .00 1,500 7.03% 5,052 7.64% 0 .00
Mortgage Backed
Securities 345 6.32% 10,205 6.31% 11,698 6.41% 3,626 7.41%
Totals 22,336 5.91% 13,707 6.39% 16,750 6.78% 3,626 7.41%
</TABLE>
At December 31, 1995, no securities exceeded, in aggregate by issuer, 10%
of Shareholders Equity. This does not include issues secured by the
Federal Government. The yield on tax exempt securities are not on a tax
equivalent basis for this schedule. Mortgage backed securities are
distributed in this schedule based on contractual payment dates in this
table.
15
<PAGE> 19
DEPOSITS
The amount of average deposits and average rates paid on such deposits is
summarized for the periods indicated in the following table:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994 1993
AVG. AVG. AVG. AVG. AVG. AVG.
AMOUNT RATE AMOUNT RATE AMOUNT RATE
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Non-Interest Bearing
Demand Deposits $32,590 none $31,717 none $31,061 none
Interest Bearing
Demand Deposits 62,119 2.88% 59,775 2.43% 59,546 2.31%
Savings Deposits 17,872 2.40% 18,180 2.24% 18,018 2.38%
Time Deposits 108,888 5.21% 92,047 3.92% 94,121 3.95%
TOTAL $221,469 $201,719 $202,746
</TABLE>
Time Certificates of Deposit of $100,000 or more, outstanding at December 31,
1995, 1994, and 1993 are summarized as follows:
<TABLE>
<CAPTION>
TIME CERTIFICATES
OF DEPOSIT
(IN THOUSANDS OF DOLLARS)
1995 1994 1993
<S> <C> <C> <C>
3 Months or Less $12,189 $10,834 $15,271
Over 3 through 6 Months 11,334 11,651 7,507
Over 6 through 12 Months 12,914 10,335 10,148
Over 12 Months 9,110 7,365 4,214
------- ------- -------
TOTAL $45,547 $40,185 $37,140
</TABLE>
RETURN ON EQUITY AND ASSETS
The following table shows consolidated operating and capital ratios of the
Corporation for each of the last three years:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994 1993
<S> <C> <C> <C>
Return on Average Assets 1.17% 1.21% 1.35%
Return on Average Equity 13.19% 13.58% 16.80%
Dividend Payout Ratio 15.63% 21.88% 14.34%
Equity to Assets Ratio* 8.89% 8.96% 8.29%
</TABLE>
* The ratio for 1995 excludes the effects of FASB 115 on capital. The
regulating bodies for the Bank do not include the net unrealized gain/loss on
available for sale securities in the calculation of this ratio.
See Item 6 for other selected financial data.
16
<PAGE> 20
ITEM 2 - PROPERTIES
The main offices of the Corporation and the Bank are located at 800 South Lewis
Street, New Iberia, Louisiana. Additionally, the Bank operates eleven branch
offices. Following are details of the properties occupied (building) by the
Corporation and the Bank.
<TABLE>
<CAPTION>
LOCATION TITLE SIZE(1) USE
<S> <C> <C> <C>
Main Office Owned 54,346 Banking
800 South Lewis Street
New Iberia, Louisiana
Pennywise Store & Building Leased 100 ATM (2)
Hopkins & Admiral Doyle Drive
New Iberia, Louisiana
West Main Street Branch Owned 1,700 Banking
600 West Main Street
New Iberia, Louisiana
North Lewis Street Branch Owned 4,940 Banking
317 North Lewis Street
New Iberia, Louisiana
Lydia Branch Owned 2,000 Banking
7711 Weeks Island Road
Lydia, Louisiana
Loreauville Branch Owned 3,627 Banking
130 S. Main Street
Loreauville, Louisiana
Jeanerette Branch Owned 4,000 Banking
1701 West Main Street
Jeanerette, Louisiana
Jane Street Branch Owned 2,400 Banking
1407 Jane Street
New Iberia, Louisiana
Downtown Branch Leased 7,936 Banking
222 East Main Street
New Iberia, Louisiana
</TABLE>
17
<PAGE> 21
<TABLE>
<CAPTION>
LOCATION TITLE SIZE(1) USE
<S> <C> <C> <C>
Lafayette Branch Leased 1,680 Banking
2843 Johnston Street
Lafayette, Louisiana
Moss Street Branch Leased 385 Banking
3803F Moss Street
Lafayette, Louisiana
Abbeville Branch Leased 385 Banking
2210 Veterans Blvd.
Abbeville, Louisiana
Acadiana Mall Branch Owned 3,315 Banking
5711 Johnston Street
Lafayette, Louisiana
</TABLE>
(1) Size is measured in square feet of building and drive up canopies.
(2) ATM Banking only.
18
<PAGE> 22
ITEM 3 - LEGAL PROCEEDINGS
STATE COURT LITIGATION
On October 7, 1994, the Corporation filed a petition for Declaratory Relief in
the Civil District Court in Iberia Parish, Louisiana (the "state court
proceeding") against Jules A. Schwing ("Schwing"), individually and in his
capacity as the executor of the estates of his parents. (Schwing has since
been replaced as executor of his parents' successions.)
The Petition for Declaratory Relief was filed in response to a request by
Schwing that the Corporation call a special meeting of its shareholders to
consider and vote upon various issues (the "shareholder proposals"). Section
2.3 of the Corporation's Bylaws provided that such a meeting could be called
only upon the request of a shareholder owning, in the aggregate, two-thirds of
the Corporation's issued and outstanding shares, which number of shares was not
owned by Schwing. Because Schwing asserted that Section 2.3 of the
Corporation's Bylaws was invalid, the Corporation sought a declaratory judgment
that Section 2.3 of the Corporation's Bylaws was valid and enforceable.
On November 8, 1994, the Corporation filed its First Amended and Restated
Petition for Declaratory Relief (the "First Amended Petition") in the state
court proceeding. In the First Amended Petition, the Corporation sought a
declaratory judgment that the shareholder proposals were inappropriate for
shareholder consideration under Louisiana law. After a hearing on December 19,
1994, the court ruled that Section 2.3 of the Corporation's Bylaws was invalid.
On December 28, 1994, Schwing presented to the Corporation written consents
purporting to adopt the shareholder proposals. As Schwing had already
solicited written consents with respect to his proposals, he did not resubmit
his request for a special shareholders meeting.
On January 3, 1995, the Corporation filed a Second Amended and Restated
Petition for Declaratory and Injunctive Relief (the "Second Amended Petition")
in the state court proceeding challenging the validity and authority of the
shareholders committee that was purportedly empowered by the shareholder
proposals and sought injunctive relief in relation to those claims. On that
date, the court granted a temporary restraining order enjoining the
shareholders committee from conducting any activity until a preliminary
injunction hearing could be held.
The preliminary injunction hearing was held on Monday, January 9, 1995. At
that hearing, the Corporation's request for an order restraining the activities
of Schwing and the shareholders committee during the pendency of the
proceedings was orally granted in part and denied in part. A written
Preliminary Injunction Order memorializing (with some modifications) the
court's oral ruling was entered on March 29, 1995. On April 12, 1995, the
Corporation appealed portions of the March 29, 1995 preliminary injunction
order and sought from the Louisiana Third Circuit Court of Appeal a request for
stay pending the appeal.
Also on March 29, 1995, a hearing was held in the state court proceeding on
cross Motions for Summary Judgment filed by the Corporation and Schwing
relating to the validity and propriety of the shareholder proposals. On that
date, the court orally granted Schwing's Motion for Summary Judgment and denied
the Corporation's Motion for Partial Summary Judgment. A
19
<PAGE> 23
written judgment to that effect and making the March 29, 1995 Preliminary
Injunction Order permanent was signed on May 22, 1995 (the "Judgment").
On May 24, 1995, the Corporation filed a Petition for Devolutive Appeal from
the Judgment and moved to stay the Judgment. The stay request was denied on
August 23, 1995. On December 6, 1995, the Louisiana Third Circuit Court of
Appeal rendered a decision affirming the Judgment. On January 5, 1996, the
Corporation filed an Application for Writ of Certiorari with the Louisiana
Supreme Court seeking review of the Judgment which was denied February 28,
1996.
FEDERAL COURT LITIGATION
On January 6, 1995, Schwing filed a Complaint for injunctive relief in the
United States District court for the Western District of Louisiana. The
Complaint sought to enjoin, among other things, the enforcement of various
amendments to the Corporation's Bylaws that were adopted by the board of
directors at a meeting on January 3, 1995.
On January 9, 1995, the Court refused to grant a requested temporary
restraining order. 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 the dismissal of his Complaint to the United States 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 a 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 March 6, 1996, the Fifth Circuit Court of
Appeals had not rendered a ruling in this matter.
20
<PAGE> 24
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security-holders of the Corporation
during the fourth quarter of 1995.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Corporation's stock became listed on the American Stock Exchange, Inc. on
August 31, 1995. The opening bid on that date was $14 a share. At December
31, 1995, the closing price was $23.375 a share. During the fourth quarter of
1995 (the only full quarterly period since the common stock of the Corporation
became listed on the American Stock Exchange, Inc.), the lowest sales price of
the Corporation's common stock was $14.00 on August 31, 1995, and the highest
sales price was $23.75 on December 14, 1995.
The Corporation had 509 shareholders of record as of the year ending December
31, 1995.
Given the Corporation's and the Bank's financial condition and state and
federal laws concerning dividends, dividends declared through December 31, 1995
did not exceed legal limitations for the Corporation or the Bank. There are
also no additional regulatory dividend restrictions imposed on the Corporation
or the Bank. During 1996, the amount of undivided profits of the Bank, which
could be paid to the Corporation without prior regulatory approval is
approximately $4,700,000 plus an amount equal to the 1996 earnings of the Bank.
In March 1995, the Board of Directors of the Corporation approved a change in
the declaration and payment schedule of dividends from semiannually to
quarterly. In September 1995, the Board further decided that dividends with
respect to performance during a quarter would be declared after the end of each
quarter rather than before the end of the quarter. As a result of this change,
a dividend attributable to the fourth quarter of 1995 was declared on January
9, 1996 and paid on January 31, 1996. The dividend with respect to third
quarter performance was declared in the third quarter and paid early in the
fourth quarter. All other cash dividends were declared in the respective
periods indicated in the chart below and paid early in the next quarter.
Dividend Information(1)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
First Quarter $.075 $.000
Second Quarter .075 .075
Third Quarter .075 .000
Fourth Quarter .225 .225
</TABLE>
(1) All amounts in this schedule were adjusted to reflect a 40-to-1 stock split
approved by stockholders on April 17, 1995.
21
<PAGE> 25
ITEM 6 - SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994 1993 1992 1991
(IN THOUSAND OF DOLLARS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Interest Income $18,364 $15,314 $15,300 $15,575 $15,247
Interest Expense 7,983 5,546 5,578 7,070 8,343
Net Interest Income 10,381 9,769 9,722 8,505 6,904
before Provisions
Provision for Loan Loss 355 103 104 250 110
Net Interest Income 10,026 9,665 9,618 8,255 6,794
after Provisions
Non Interest Income 2,039 1,980 1,531 1,463 1,392
Non Interest Expense 8,269 7,864 6,933 5,919 5,720
Income before Income
Taxes 3,796 3,781 4,216 3,799 2,466
Income Tax Expense 916 1,050 1,195 1,152 629
Net Income $ 2,880 $ 2,731 $ 3,021 $ 2,647 $ 1,837
Balance Sheet Totals:
Total Equity $ 23,639 $ 20,027 $ 19,077 $ 16,489 $ 14,225
Total Assets 263,868 233,268 224,878 228,606 187,026
Net Loans 139,308 110,256 87,873 79,743 69,865
Selected average balances:
Average equity $ 21,830 $ 20,108 $ 17,982 $ 15,393 $ 13,554
Average assets 246,515 225,100 224,101 205,064 174,354
Per Share Data:
Net Income* $ 1.44 $ 1.37 $ 1.52 $ .92 $ .92
Annual Cash Dividend* .45(1) .30 .22 .18 .15
Selected ratios:
Return on Average Assets 1.17% 1.21% 1.35% 1.29% 1.05%
Return on Average Equity 13.19% 13.58% 16.80% 17.20% 13.55%
</TABLE>
*Converted to reflect 40-1 stock split approved by shareholders on April 17,
1995.
(1) Includes fourth quarter cash dividend of .225 per share declared by Board
of Directors on January 9, 1996 for stockholders of record on January 19, 1996,
with payment on January 31, 1996.
22
<PAGE> 26
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Corporation continued to expand its operations with the opening of its
third full service location in Lafayette, Louisiana, since 1994. The
Corporation continued to benefit from a strong local economy which resulted in
a significant increase in loan demand throughout the year. This resulted in an
increase in its loan to deposit ratio to 60.34% by the end of 1995 from 53.6%
at the end of 1994. In 1995, the Corporation generated net income of
$2,880,435 or $1.44 per share, compared to a $2,730,717 or $1.37 per share in
1994, and net income of $3,020,542 or $1.52 per share for 1993. The increase
in net income in 1995 over 1994 is mainly the result of an increase in net
interest income ($612,914) offset by higher salary and benefit cost
($260,698),additional loan loss provisions ($251,475), and a $522,556 increase
in professional fees incurred due to ongoing litigation. (See "Legal
Proceedings" for an update on current litigation.) The decrease in net income
for 1994 over 1993 is the result of the addition of two new branch locations,
and losses incurred in the sale of mortgage loans. A more detailed analysis of
these differences will be discussed later in various sections of Management's
comments on the performance of the Corporation for the year. The Corporation
attained a return on stockholder's equity in 1995 of 13.19% versus 13.58% in
1994 and 16.80% in 1993.
During 1995, the Corporation revised its current dividend policy to
increase the annual dividend per share to $.45. Including the dividend declared
and paid in January 1996, which the board attributed to fourth quarter 1995
performance, the total annual dividend attributable to performance in 1995 was
$.45 per share ($.075 each of the first three quarters and $.225, attributable
to the fourth quarter which was paid on January 31, 1996.) This is a 50%
increase over the $.30 per share dividend declared and paid in 1994 ($.075 in
June 1994 and $.225 in December 1994.) The increase in the dividend amount
comes after a period of time during which the Corporation needed to retain
earnings to support its asset growth of 41.1% over a four year period starting
at the beginning of 1992 and ending at the end of 1995. The Corporation
believes its capital is at sufficient levels to sustain future budgeted growth
and protect against unexpected downturns in the local economy. Future dividend
payments will be reviewed periodically with changes made to adjust to current
growth levels and economic conditions.
At December 31, 1995 total assets were $263.8 million, an increase of $30.5
million or 13.07% from the $233.3 million reported for December 31, 1994. In
comparison, total assets increased by $8.4 million in 1994 from the
corresponding date in 1993. The changes in assets noted above were due to a
good local economy, introduction of new or redeveloped products for loans and
deposits, and the addition of a new location in the Lafayette market in 1995.
Gross loans at December 31, 1995 were $142.7 million, compared to $113.4
million, a $29.3 million or 25.84% increase from the same date in 1994. Loan
growth for 1995 can be broken down as follows: real estate- $10 million;
commercial loans- $5.5 million; and consumer loans- $12.5 million. The
increase in loans for 1995 is due to the continued activity in the mortgage
lending department, significant consumer loan demand, an improved commercial
loan market, and the
23
<PAGE> 27
relatively low level of interest rates throughout 1995. At December 31, 1995,
total deposits were $237.6 million, a $27 million, or 12.82% increase from the
amount reported at December 31, 1994. Total deposits of $210.6 million at
December 31, 1994 were $7.7 million, or 3.8% more than the amount reported at
December 31, 1993. The increase in total deposits in 1995 was a result of a
planned increase in certificates of deposits in anticipation of the loan growth
in 1995.
On January 24, 1996, the Corporation announced that it had agreed to negotiate
a definitive agreement for the acquisition of the Corporation by Whitney
Holding Corporation, a bank holding company based in New Orleans, Louisiana,
for consideration consisting of $54 million in the aggregate, payable in
Whitney Holding Corporation common stock to the shareholders of the Corporation
at the approximate rate of $27 in value of Whitney Holding Corporation stock
for each share of Corporation stock outstanding. Assuming a definitive
agreement is successfully negotiated, it must be approved by the board of
directors of both the Corporation and Whitney Holding Corporation. The closing
of any such transaction will also be subject to customary conditions, including
regulatory approval and approval by the shareholders of the Corporation. The
merger is intended to be accounted for as a pooling-of- interests. It is not
expected that, if a definitive agreement is reached, the merger would take
place before the third or fourth quarter of 1996. The merger, if it occurs,
would result in the Corporation being merged into Whitney Holding Corporation
and the shareholders of the Corporation becoming shareholders of Whitney
Holding Corporation. In addition, the Bank would be merged into Whitney
National Bank. Therefore, if the merger takes place, both the Corporation and
the Bank would cease doing business as independent entities.
NET INTEREST INCOME
Net interest income is the difference between interest earned on assets and
interest paid on deposits and other funds supporting those assets. Net
interest income for the year 1995 was $10,381,610, an $612,915 or 6.27%
increase over the reported balance in 1994 of $9,768,695. In 1994, net
interest income increased by $46,487 over the 1993 amount of $9,722,208, which
is an increase of .48%. The increase in net interest income in 1995 was due to
the significant increase in loan activity during the year offset in part by an
increase in interest expense paid on deposits. The small change in net
interest income in 1994 as compared to 1993 was mainly due to the repricing of
both assets and deposits during 1994, which resulted in an insignificant net
change. The impact on interest earned over the reporting period comes from (1)
the mix of loan products generated, (2) a strong investment portfolio yield
that also provided liquidity to fund loans, and (3) the customers' investment
in various types of interest-bearing products, from checking accounts to
certificates of deposit.
24
<PAGE> 28
EARNING ASSETS
Earning assets averaged $227.4 million for 1995, an increase of $20 million or
9.64%, compared to the 1994 average of $207.8 million. The 1994 average
represented an increase of $ 0.6 million or 0.3% over the 1993 average of
$207.2 million.
For 1995, loans averaged $127.1 million, a $29.6 million, or 30.36% increase
from the average balance reported in 1994. The average loan balance in 1994
was $97.5 million, an increase of $12.2 million, or 14.30%, compared to the
average balance in 1993 of $85.3 million. As noted previously, the increase in
loans over the past two years is the result of an increase in installment loan
activity along with production from the mortgage lending operation created in
1993. Commercial loan activity significantly increased during 1995 as the
local economy remained strong, particularly with agricultural loans made on a
seasonal basis. The overall yield on loans remained relatively level with an
average rate of 9.39% in 1993, 9.26% in 1994, and 9.38% in 1995.
The Corporation established a mortgage loan origination department in 1993.
(See footnote 4 in the December 31, 1995 consolidated financial statements.)
The Corporation recognized net gains (losses) on sales of mortgage loans of
approximately $18,000 and ($178,000) during 1995 and 1994, respectively. The
loss in 1994 was attributable to a rapid change in interest rates. During
1995, the Corporation followed procedures implemented in 1994 after the losses
occurred to minimize the effect of rapid rate changes on the mortgage lending
operations.
Investment securities (excluding federal funds sold) averaged $90.2 million for
1995, representing a decrease of $14.5 million, or 13.85%, when compared to
1994. Investment securities averaged $104.7 million for 1994 representing a
decrease of $8 million, or 7.10% over the 1993 average of $112.7 million.
Investment securities have decreased over the past two years due to the use of
maturing investments to fund loans. The tax equivalent yield on the portfolio
has increased from 6.54% in 1993, to 6.73% in 1994, and to 7.56% in 1995. This
increase in the overall yield of the investment portfolio is the result of
retaining higher yielding investment securities (mortgage backed securities and
municipal securities) as the portfolio reduced in size because of the growth
in loans. A discussion of the change in the mix of the investment portfolio is
discussed in the section "Investment Portfolio".
Federal Funds Sold during the year averaged $10.1 million, compared to $5.6
million in 1994 and $9.2 million in 1993. The average yield on federal funds
sold in 1995, 1994, and 1993 was 5.74%, 4.13%, and 2.86%, respectively.
The average tax equivalent yield on earning assets was 8.50% in 1995 as
compared to a 1994 yield of 7.84% and a 1993 yield of 7.55%.
25
<PAGE> 29
INTEREST-BEARING LIABILITIES
Interest-bearing liabilities in 1995 averaged $190.9 million, an increase of
$18.6 million, or 10.80%, from the 1994 average. Interest-bearing liabilities
in 1994 averaged $172.3 million, a decrease of $1.8 million, or 1.04%, over
the 1993 level of $174.1 million. Interest bearing checking accounts increased
by $2.3 million, while savings accounts decreased by $0.3 million during 1995.
Certificates of deposits increased in 1995 by $16.8 million. As loan demand
grew throughout 1995, the need to obtain additional deposits was required to
assist in funding the loan activity. As a result, competitive rates were
offered to encourage customers to purchase certificates of deposits. The rates
offered to obtain these deposits were lower than the assets that they were
funding, as evidenced by the increase in net interest income. In 1994, interest
bearing checking accounts increased by $0.2 million and certificates of deposit
increased by $ 2 million. Public funds decreased by approximately $4.8 million
in 1995 and increased $5 million in 1994.
Interest expense for 1995 totaled $7,982,528, an increase of $2,436,701, or
43.94% from the 1994 amount. Interest expense for 1994 was $5,545,827 compared
to $5,578,015 for 1993, a decrease of $32,188 or .58%. The largest increase in
interest expense in 1995 occurred with certificates of deposit where the
average yield increased to 5.21% from 3.92% earned in 1994 reflecting a higher
interest rate environment. Interest cost changed little from 1994 to 1993 as
customers had longer term maturities on deposits to maximize their returns
during the low interest rate cycle that ended in 1994. The average rates paid
for all interest-bearing liabilities were 4.18% in 1995 compared to 3.22% in
1994 and 3.20% in 1993.
ALLOWANCE AND PROVISION FOR LOAN LOSSES
An adequate level of the allowance for 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 effects on the market served by
the Corporation. The provision for 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 allowance
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 non-performing loans and the relationship
of the reserve to the total loan portfolio. Management reviews the loan
portfolio regularly to identify potential losses and to determine that the
level of the allowance adequately reflects the potential loss exposure. Loans
identified as problem credits are reviewed more frequently to determine the
need for changes in the allowance. Since actual losses may vary from current
assessments, any necessary adjustments to the allowance are recorded in the
period in which they become known. Management of the Corporation monitors
adherence to lending policies and procedures as well as asset quality.
The allowance for loan losses totaled $3,396,531 at December 31, 1995, compared
to $3,114,214, at December 31, 1994. The allowance as a percentage of loans
was 2.38% at December 31, 1995, as compared to 2.75% at year-end 1994. As
evidenced by the Summary
26
<PAGE> 30
of Loan Loss Experience schedule, the Corporation has had much success over the
last five years in controlling charge offs with sound lending practices and
careful monitoring of the loan portfolio while at the same time, collecting
previously charged off loans and maintaining an adequate loan loss allowance.
The diversification of the loan portfolio is an important factor in the
assessment of loan quality and loss potential. Although the Corporation has a
significant amount of loans made to energy services and agricultural customers
due to the dominance of those industries in the local economy, the Corporation
seeks to lend to a variety of industries to minimize its exposure to possible
losses occurring from concentrations in any single sector. Broadening the base
of loan activity into the Lafayette market, along with a steadily improving
local economy over the last few years has had a positive effect on the
performance of the loan portfolio. During 1993, the United States 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 directly have an adverse effect on the Corporation's
customers in 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 concern
about the effect that gaming will have on the Corporation's consumer loan
portfolio. Appropriate consideration has been given to these factors in the
Bank's loan loss reserve.
The provision for loan losses was $355,000 for 1995, compared to $103,525 in
1994. The increased provision for loan losses is due to increased loan
activity. The 1994 provision was a small decrease from the 1993 provision of
$104,400.
In 1995 charge-offs were $282,877 compared to $173,454 and $102,520 in 1994 and
1993, respectively. Recoveries totaled $210,194, $358,429, $526,449, during
the years ended December 31, 1995, 1994, and 1993, respectively. The
consistent low levels of charged-off loans as a percentage of total average
loans each year are mainly attributable to the level of credit quality with
respect to loans being made and the continued diversification of the portfolio
over the last few years.
OTHER INCOME
For 1995, other income was $2,039,056, an increase of $59,482, or 3.01%, over
the $1,979,574 other income for 1994. The increase in 1995 is mainly
attributable to overdraft fees and increased service charges. Other income for
1994 showed a $448,738 or 29.32% increase over the $1,530,836 figure during
1993. This increase is the result of a large recovery in loans acquired in the
acquisition of a failed bank in 1987, which had been charged off prior to the
acquisition. The total of this one recovery was approximately $250,000. The
remaining increase is the result of additional income from service fees on
business accounts and overdraft charges received over the year.
27
<PAGE> 31
OTHER EXPENSES
Total non-interest expenses for 1995 were $8,269,046 compared to the 1994
expense of $7,864,003, an increase of $405,049 or 5.15%. Total Other Expenses
for 1994 increased by $931,087 or 13.43% from the 1993 total of $6,932,916.
Salaries and employee benefits, a major component of other expenses, increased
by $260,698 in 1995 to $3,899,586. The Corporation opened a new full service
location in Lafayette, its third location opened there since 1992, which added
more staff in addition to other customer service personnel to handle the
increased activity in both loans and deposits. In 1994, salaries and employee
benefits were $3,638,888, and in 1993, $3,191,417. This increase in cost is
the result of a substantial increase in growth and customer activity at the
Corporation's main office, the addition of new locations in Lafayette and
Vermilion Parishes in 1994, and the creation of the mortgage lending operation
in 1993. The increase also was attributable to an increase in personnel
training for placement in management positions. Occupancy and equipment expense
totaled $1,120,178, an increase of $7,710 for 1995 as compared to 1994. The
expense for 1994 was $1,112,468, an increase of $72,949 as compared to
$1,185,417 in 1993. The additional cost of the new location in Lafayette was
offset by a reduction in depreciation cost, as the Corporation's computer
hardware became fully depreciated in 1995.
The cost of professional services increased significantly in 1995, mainly due
to the litigation pending throughout the year between the Corporation and one
of its directors. (See "Legal Proceedings".) The total cost for professional
services in 1995 was $659,977, compared to $137,421 and $123,458 in 1994 and
1993, respectively.
For 1995, other non-interest expenses were $2,589,306, down $385,920, or
12.98%, over the $2,975,226 reported in 1994. The decrease in 1995 was partly
due to the reduction in FDIC assessments to the Corporation ($207,000). Non-
interest expenses in 1994 increased $542,602, or 22.30% over the 1993 amount of
$2,432,624. The increase in 1994 was due primarily to the loss incurred on the
sale of mortgage loans and increased advertising costs.
INCOME TAX
The effective income tax rate for 1995 was 24.1%, compared to 27.8% in 1994 and
28.3% in 1993. The decrease in the effective tax rate is due to an increase in
tax free municipal bond income over the last two years. Reference is made to
footnote 9 to the accompanying financial statements for a reconciliation of tax
expense at the statutory and effective tax rates.
28
<PAGE> 32
NON-PERFORMING 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 non- performing assets and specifically reserves
for them based on the current market value of the collateral if necessary.
Management utilizes historical loss trends to establish general reserves on
performing loans.
Non-performing 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. At December 31, 1995 non-
performing assets totaled $823,288, a decrease of $67,575 from December 31,
1994. Non-performing assets for 1994 were $890,863, a increase of $94,577 from
1993 total of $796,286. The decrease in non-performing assets is due to the
continuing efforts of the Corporation's management to minimize those assets in
a steadily improving local economy where interest rates have been relatively
low over the last few years.
A loan is placed on non-accrual status when, in management's opinion, the
collectability of principal or interest is doubtful. Interest previously
accrued on the loan is reversed and the accrual of interest is discontinued.
At December 31, 1995, non-accrual loans totaled $159,877 compared to $97,282 at
year-end 1994, and $208,963 at year end 1993. Interest income that would have
been recognized under the contractual terms of non-accrual loans for the years
ended December 31, 1995, 1994 and 1993 was approximately $13,000, $6,000 and
$19,000, respectively. The amount of interest income related to these loans
included in net income for the years ended December 31, 1995, 1994, and 1993
was zero.
Other real estate totaled $50,000, $181,816, and $181,912 at December 31, 1995,
1994, and 1993, respectively. At December 31, 1995, repossessed movable assets
amounted to $28,150 as compared to $6,350 and zero at December 31, 1994 and
1993, respectively. The reduction in other real estate is due to the sale of
foreclosed properties.
The Corporation adopted SFAS No. 114, "Accounting by Creditors for Impairment
of a Loan," and SFAS No. 118 "Accounting by Creditors for Impairment of a
Loan-Income Recognition and Disclosures," as of January 1, 1995. SFAS No. 114
requires that certain impaired loans be measured based on the present value of
expected future cash flows discounted at the loan's original effective interest
rate. As a practical expedient, impairment maybe measured based on the loan's
observable market price or the fair value of the collateral if the loan is
collateral dependent. When the measure of the impaired loan is less than the
recorded investment in the loan, the impairment is recorded through a valuation
allowance. The Corporation had previously measured the allowance for credit
losses using methods similar to those prescribed in SFAS No. 114. As a result
of adopting these statements, no additional allowance for loan losses was
required as of January 1, 1995. As of December 31, 1995, impaired loans
totalled $344,280.
In connection with the acquisition of a failed bank in 1987, the Corporation
acquired certain loans for less than their contractual balance. The accounting
for these loans is based on the "cost recovery method" as described in the
AICPA Practice Bulletin 6, dated August, 1989, which
29
<PAGE> 33
deals with the amortization of discounts on certain acquired loans and
incorporates SFAS No. 91 requirements. Under this method, any amounts received
are to be applied first against the recorded amount of the loan; when that
amount has been reduced to zero, any additional amounts received are recognized
as income. In accordance with Practice Bulletin 6, the cost recovery method is
used until it is determined that the amount and timing of collections are
reasonably estimable and collection is probable. The Corporation has
determined that at December 31, 1995, loans totalling $1.6 million with
discounts of approximately $0.7 million are being accreted to income over the
remaining estimated life of the loans. Income recorded in 1995 from this
accretion was approximately $60,000.
INVESTMENT PORTFOLIO
Reference is made to Footnote 3 of the Corporation's 1995 Financial Statements
for a comparison of December 31, 1995 and 1994 book values, unrealized gains
and losses, and market values of investment securities by category.
The Corporation's investment portfolio is managed to ensure quality of
securities, the maintenance of attractive rates of return on the funds invested
and adequate liquidity to the Corporation. The portfolio consists primarily of
United States Treasury Notes, Municipal Bonds, and Mortgage-Backed Securities.
United States 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 which are required when there is
low loan demand in the bank's operating area. Due to the recent increase in
loan demand, the Corporation has increased its purchases of United States
Treasury Notes to provide for future liquidity.
Management evaluates the Corporation's investment portfolio on an ongoing basis
in light of the Corporation's investment objectives in particular and the
Corporation's strategic plan in general. During 1995, the Corporation sold
$6.2 million of available for sale securities resulting in gross realized gains
of $30,868 and gross realized losses of $62,178. Four securities were called
resulting in a realized gain of $5,510. During 1994, the Corporation sold
approximately $22.1 million in available for sale securities to restructure the
portfolio for changes in interest rates and to fund loan growth. These sales
resulted in gross realized gains of $321,721 and gross realized losses of
$361,815. During 1994, one security was called resulting in gross realized
gain of $100 and no gross realized losses. During 1993, $1,249,000 of the
Corporation's securities were called resulting in gross realized gains of
$2,076 and no gross realized losses. No securities were sold in 1993.
In December, 1995, concurrent with the initial adoption of the SFAS No. 115
implementation guidance, the Corporation transferred approximately $16 million
of investment securities from the held to maturity portfolio to the available
for sale portfolio. The transfer was recorded at fair value on the date of
transfer. The unrealized gain, net of tax, on the transferred securities is
included as a separate component of stockholder's equity. During 1994, the
Corporation transferred approximately $4,800,000 of investment securities from
the available for sale portfolio to the held to maturity portfolio. The
transfer was recorded at fair value on the date of transfer. The unrealized
loss on the transferred securities is included in stockholder's equity in the
caption unrealized loss on securities available for sale. The unrealized loss
is being
30
<PAGE> 34
amortized over the remaining life of the securities as an adjustment of the
related yield. The related unrealized loss, net of tax, at December 31, 1995
and 1994, remaining to be amortized was approximately $132,000 and $147,000,
respectively.
LIQUIDITY AND INTEREST RATE SENSITIVITY
The Corporation's balance sheet is structured to provide adequate liquidity to
meet customers' funding requirements on a timely basis. The Corporation has an
Asset/Liability computer program to aid it in maintaining a proper balance
between interest earning assets and interest bearing liabilities. This program
is run on a regular basis, allowing management to diversify investments as
needed to keep a proper balance of maturities. Management is also capable of
managing interest rate sensitivity of assets and liabilities. This is critical
to protect net income against wide fluctuations in interest rates and in turn
maintaining consistent growth of net interest income.
The liquidity ratio of the Corporation is defined as those short term funds,
generally within one year of maturity, that can be used to satisfy the daily
needs of the Corporation to settle with its correspondent bank on cash letters
or to fund loans, etc., divided by total funds available. A ratio over 30% is
generally viewed as acceptable within the industry. The dependency ratio is
defined as short term funds minus volatile funds (certificates of deposits over
$100,000 and other short term borrowing) divided by earning assets minus
volatile funds. This ratio measures the percentage of volatile funds used to
fund long term earning assets. A dependency ratio of plus or minis 10% is
viewed as acceptable within the industry. The Corporation's liquidity ratio at
year end 1995 was 40.97% with a dependency ratio of .63%; in 1994, the
liquidity ratio was 45.60% with a dependency ratio of 9.50%. The significant
decrease in the dependency ratio was the result of shortening the maturity of
the investment portfolio and obtaining more core deposits. This increase in
core deposits was achieved by attracting certificates of deposit less than
$100,000. The dependency ratio was higher in 1994 due to an increase in large
certificates of deposits and a decrease in short term federal funds. The
Corporation's Management monitors this ratio monthly and will adjust the
position accordingly to stay within acceptable levels.
Liquidity is enhanced by the Corporation's ability to manage the interest rate
sensitivity of assets and liabilities. The Corporation actively monitors and
controls the relationship between interest sensitive assets and liabilities by
means of an interest rate simulation model.
31
<PAGE> 35
CUMULATIVE MATURITY/RATE SENSITIVITY
<TABLE>
<CAPTION>
(In Thousands of Dollars)
Repricing Days
1Yr&
1-30 1-60 1-90 1-365 Over Total
<S> <C> <C> <C> <C> <C> <C>
Earning Assets
Loans 15,478 16,499 24,221 53,400 89,305 142,705
Short-Term
Investments 9,803 9,803 9,803 9,803 -0- 9,803
0nvestments (1) 4,062 10,588 11,213 29,115 63,75 192,866
Total Earning Assets 29,343 36,890 45,237 92,318 153,056 245,374
Funding Sources
Public Fund
Demand Deposits 12,275 12,275 12,275 12,275 -0- 12,275
Now Accounts** -0- -0- -0- -0- 30,272 30,272
Money Market (IMFA) 21,062 21,062 21,062 21,062 -0- 21,062
CD over 100 4,398 7,719 12,895 38,844 6,703 45,547
Other Time Deposit 7,233 11,477 15,611 52,432 20,147 72,579
Savings** -0- -0- -0- -0- 18,205 18,205
Repurchase Agreements 1,750 1,750 1,750 1,750 -0- 1,750
Total Funding 46,718 54,283 63,593 126,363 75,327 201,690
Cumulative Maturity/
Rate Sensitivity (GAP) (17,375) (17,393) (18,356) (34,045) 77,729 43,684
GAP/Total Earning Assets (7.08%) (7.09%) (7.48%) (13.87%)
GAP/Total Assets (6.58%) (6.59%) (6.96%) (12.90%)
</TABLE>
**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.
(1) The amount of pay downs received on a monthly basis on mortgage backed
securities is not reflected in this schedule. Pay downs averaged nearly $0.4
million a month over a large portion of 1995.
The GAP percentages noted 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 fall in the future, the Corporation is in a position to benefit from a
downward move in interest rates. Continued monitoring of interest rate changes
will dictate if changes should be made. If changes need to be made, the
investment portfolio has already been restructured to make whatever changes are
necessary in the short run to minimize interest rate risk. All proposed
changes are contingent on a thorough review using the Corporation's
asset/liability model.
32
<PAGE> 36
CAPITAL RESOURCES
CAPITAL RATIOS AT END OF YEAR:
<TABLE>
<CAPTION>
REGULATORY
1995 1994 1993 MINIMUM
---- ---- ---- ----------
<S> <C> <C> <C> <C>
Primary capital 10.05% 10.16% 9.43% 5.5%
Leverage 8.89% 8.96% 8.29% 3.0%
Risk-based capital
Tier I 16.73% 17.52% 19.15% 4.0%
Total 17.48% 19.02% 20.65% 8.0%
</TABLE>
The Corporation and the Bank are subject to regulatory risk-based capital
guidelines. In the risk-based capital computation, all assets are weighted
based upon assigned risk factors, and off-balance sheet items are included,
such as loan commitments and standby letters of credit. Capital is separated
into two categories, Tier I and Tier 2, which combine for Total Capital. Tier
1 consists primarily of common stockholders' equity. Tier 2 consists primarily
of Tier 1 plus the allowance for loan losses subject to certain limitations.
Total Capital must be 8%, half of which must be Tier 1 capital. The Company is
well above the minimum requirements.
In conjunction with the risk-based capital guidelines, the regulators have
issued capital leverage guidelines. The leverage ratio consists of Tier 1
capital as a percent of average total assets. The minimum leverage ratio for
all banks and bank holding companies is 3%, with a higher minimum ratio
dependent upon the condition of the individual bank or bank holding company.
The FDIC Improvement Act of 1991 (FDICIA) included certain requirements for
different levels of regulatory oversight and intervention based on an
institution's capital levels. The guidelines included five levels of capital
measurement. As of December 31, 1995, the Bank met all of the criteria for a
"well-capitalized" institution (which is the highest level of capital
measurement), which are 5.0% leverage, 6.0% Tier 1, and 10.0% total capital
ratios.
FINANCIAL ACCOUNTING STANDARDS BOARD PRONOUNCEMENTS:
FASB Statement No. 121, "Accounting for the Impairment of Long Lived Assets and
for Long-Lived Assets to be Disposed of" is effective for fiscal years
beginning after December 15, 1995, and requires that long-lived assets and
certain identifiable intangibles to be held and used by a entity be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. In addition, certain
long-lived assets and certain identifiable intangibles to be disposed of will
be reported at the lower of carrying amount or fair value less the cost to
sell. At December 31, 1995 the Corporation had no long-lived assets that met
the criteria, therefore the impact of adopting this statement is not expected
to be material.
FASB Statement No. 122, "Accounting for Mortgage Service Rights", requires that
a mortgage banking enterprise recognize as separate assets rights to service
mortgage loans for others, however those servicing rights are acquired. At
December 31, 1995, the Corporation does not have any capitalized mortgage
servicing rights, thus the adoption of this Statement will not be material.
33
<PAGE> 37
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of
The New Iberia Bancorp, Inc.:
We have audited the accompanying consolidated balance sheets of The New Iberia
Bancorp, Inc. (a Louisiana corporation) as of December 31, 1995 and 1994, and
the related consolidated statements of operations, changes in stockholders'
equity and cash flows for each of the three years in the period ended December
31, 1995. 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 audits 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 The New Iberia Bancorp, Inc.
as of December 31, 1995 and 1994 and the results of its operations and cash
flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
New Orleans, Louisiana,
January 18, 1996 (except with respect to
Note 14, as to which the date is
January 24, 1996)
34
<PAGE> 38
THE NEW IBERIA BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
<S> <C> <C>
ASSETS
------
CASH AND DUE FROM BANKS (Note 2) $ 13,338,408 $ 10,234,600
FEDERAL FUNDS SOLD 9,803,320 3,809,395
-------------- --------------
CASH AND CASH EQUIVALENTS 23,141,728 14,043,995
INVESTMENT SECURITIES AVAILABLE FOR SALE, at market
(Note 3) 56,419,113 35,661,543
INVESTMENT SECURITIES HELD TO MATURITY (market value of approximately
$37,774,879 and $61,882,932 at December 31, 1995 and 1994,
respectively) (Note 3) 36,447,307 63,623,436
LOANS HELD FOR SALE (Note 4) 592,750 439,974
LOANS (Notes 4, 5 and 6) 142,112,071 112,930,484
Less: Allowance for loan losses (3,396,531) (3,114,214)
-------------- --------------
Net loans 138,715,540 109,816,270
BANK PREMISES AND EQUIPMENT, net (Note 7) 5,395,155 5,695,084
ACCRUED INTEREST RECEIVABLE 1,938,282 2,192,023
OTHER ASSETS 1,218,550 1,795,770
-------------- --------------
Total assets $ 263,868,425 $ 233,268,095
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
DEPOSITS:
Noninterest bearing $ 38,858,005 $ 31,257,121
Interest bearing (Note 8) 198,767,599 179,337,041
-------------- --------------
Total deposits 237,625,604 210,594,162
ACCRUED INTEREST PAYABLE 350,738 243,539
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 1,749,621 1,603,571
OTHER LIABILITIES 503,906 800,288
-------------- --------------
Total liabilities 240,229,869 213,241,560
-------------- --------------
COMMITMENTS AND CONTINGENCIES (Note 10)
COMMON STOCK, no par value; 10,000,000 shares authorized; 2,000,000 issued;
2,000,000 and 1,991,760 outstanding after deduction of treasury
stock at December 31, 1994 9,500,500 9,497,410
UNDIVIDED PROFITS 14,175,287 11,716,358
LESS: Unrealized loss on securities available for sale (37,231) (1,185,173)
LESS: Treasury stock, at cost (8,240 shares) - (2,060)
-------------- --------------
Total stockholders' equity 23,638,556 20,026,535
-------------- --------------
Total liabilities and stockholders' equity $ 263,868,425 $ 233,268,095
============== ==============
</TABLE>
The accompanying notes are an integral part of these balance sheets.
35
<PAGE> 39
THE NEW IBERIA BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ -------------
<S> <C> <C> <C>
INTEREST INCOME:
Interest and other fees on loans $ 11,927,228 $ 8,862,651 $ 8,012,321
Interest on investment securities-
Taxable 4,646,503 5,028,964 6,346,551
Tax-exempt 1,212,495 1,189,492 673,756
Interest on Federal funds sold 577,912 232,250 264,345
Interest on deposits in other banks - 1,165 3,250
------------ ------------ -------------
Total interest income 18,364,138 15,314,522 15,300,223
------------ ------------ -------------
INTEREST EXPENSE:
Interest on deposits 7,883,957 5,467,261 5,519,216
Interest on short-term borrowings 98,571 78,566 58,799
------------ ------------ -------------
Total interest expense 7,982,528 5,545,827 5,578,015
------------ ------------ -------------
NET INTEREST INCOME 10,381,610 9,768,695 9,722,208
PROVISION FOR LOAN LOSSES 355,000 103,525 104,400
------------ ------------ -------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 10,026,610 9,665,170 9,617,808
------------ ------------ -------------
OTHER INCOME:
Service fees 609,196 581,834 561,069
Fees on overdrafts 580,960 511,900 467,289
Other 874,700 925,834 500,402
Net securities gains (losses) (25,800) (39,994) 2,076
------------ ------------ -------------
Total other income 2,039,056 1,979,574 1,530,836
------------ ------------ -------------
OTHER EXPENSE:
Salaries and employee benefits 3,899,586 3,638,888 3,191,417
Occupancy and equipment expense 1,120,178 1,112,468 1,185,417
Professional fees 659,977 137,421 123,458
Other expenses (Note 11) 2,589,305 2,975,226 2,432,624
------------ ------------ -------------
Total other expense 8,269,046 7,864,003 6,932,916
------------ ------------ -------------
INCOME BEFORE INCOME TAXES 3,796,620 3,780,741 4,215,728
PROVISION FOR INCOME TAXES (Note 9) 916,185 1,050,024 1,195,186
------------ ------------ -------------
NET INCOME $ 2,880,435 $ 2,730,717 $ 3,020,542
============ ============ =============
NET INCOME PER SHARE $ 1.44 $ 1.37 $ 1.52
============ ============ =============
</TABLE>
The accompanying notes are an integral part of these statements.
36
<PAGE> 40
THE NEW IBERIA BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Common Treasury Unrealized Undivided
Stock Stock Loss Profits
----------- -------- ----------- ------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1992 $ 9,497,215 $ (2,190) $ - $ 6,994,097
Net income - - - 3,020,542
Less: Cash dividends ($.22 per share) - - - (433,095)
----------- -------- ----------- ------------
BALANCE, December 31, 1993 9,497,215 (2,190) - 9,581,544
Net income - - - 2,730,717
Unrealized loss on securities
available for sale - - (1,185,173) -
Reissue 520 shares of treasury stock 195 130 - 1,625
Less: Cash dividends ($.30 per share) - - - (597,528)
----------- -------- ----------- ------------
BALANCE, December 31, 1994 9,497,410 (2,060) $(1,185,173) 11,716,358
Net income - - - 2,880,435
Change in unrealized loss on securities
available for sale - - 1,147,942 -
Reissue 8,240 shares of treasury stock 3,090 2,060 - 27,875
Less: Cash dividends ($.23 per share) - - - (449,381)
----------- -------- ----------- ------------
BALANCE, December 31, 1995 $ 9,500,500 $ - $ (37,231) $ 14,175,287
=========== ======== =========== ============
</TABLE>
The accompanying notes are an integral part of these statements.
37
<PAGE> 41
THE NEW IBERIA BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
-------------- -------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,880,435 $ 2,730,717 $ 3,020,542
Adjustments to reconcile net income to net cash provided by
operating activities-
Depreciation and amortization 644,498 663,301 581,256
Net discount accretion and premium amortization 112,840 878,529 1,424,685
Provision for loan losses and other real estate
write-downs 355,000 103,525 106,400
Net gain (loss) on sales and calls of investment
securities and mortgage loans 2,362 228,513 (32,723)
(Increase) decrease in accrued interest receivable 253,741 (293,233) (18,991)
Increase (decrease) in accrued interest payable 107,199 50,038 (14,519)
Increase (decrease) in other liabilities (865,029) 26,436 (134,035)
Decrease (increase) in other assets 324,558 (347,464) (173,420)
Net loss on disposition of property - - 176,296
-------------- -------------- --------------
Net cash provided by operating activities 3,815,604 4,040,362 4,935,491
-------------- -------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investment securities - - 1,248,742
Proceeds from sales of investment securities
available for sale 6,215,962 23,682,119 -
Proceeds from maturities and calls of investment
securities held to maturity 16,150,130 8,839,411 38,231,910
Proceeds from maturities and calls of investment
securities available for sale 13,211,706 19,884,157 -
Purchase of investment securities held to maturity (5,835,604) (30,420,262) (46,239,141)
Purchase of investment securities available for sale (21,750,409) (13,447,232) -
Net cash increase in loans (29,378,885) (20,375,663) (10,299,966)
Purchase of bank premises and equipment (227,657) (1,523,474) (533,539)
Proceeds from sale of-
Other real estate 132,000 53,000 114,600
Bank premises and equipment 3,750 - 131,961
-------------- -------------- --------------
Net cash used in investing activities (21,479,007) (13,307,944) (17,345,433)
-------------- -------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in repurchase agreements 146,050 (444,476) (11,479,936)
Net increase in demand, NOW, and savings deposits 9,098,799 1,177,267 7,836,091
Net increase (decrease) in certificates of deposit 17,932,643 6,466,289 (2,558,084)
Dividends paid (449,381) (432,528) (398,248)
Other 33,025 975 -
-------------- -------------- --------------
Net cash provided by (used in) financing activities 26,761,136 6,767,527 (6,600,177)
-------------- -------------- --------------
Net increase (decrease) in cash and cash equivalents 9,097,733 (2,500,055) (19,010,119)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
YEAR 14,043,995 16,544,050 35,554,169
-------------- -------------- --------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 23,141,728 $ 14,043,995 16,544,050
============== ============== ==============
SUPPLEMENTAL DISCLOSURE:
Interest paid on deposits $ 7,875,329 $ 5,595,865 $ 5,592,534
============== ============== ==============
Federal income tax paid $ 1,085,000 $ 1,195,000 $ 1,320,000
============== ============== ==============
NON-CASH TRANSACTIONS:
Loans transferred to other real estate $ - $ (54,000) $ 67,213
============== ============== ==============
Loans made to facilitate sales of other real estate $ - $ 52,000 $ 16,200
============== ============== ==============
</TABLE>
The accompanying notes are an integral part of these statements.
38
<PAGE> 42
THE NEW IBERIA BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Nature of Operations
The New Iberia Bancorp, Inc. (the "Company") is a Louisiana bank holding
company organized in 1983. The Company's principal asset and sole revenue
source is The New Iberia Bank (the "Bank"). The Bank was founded in 1887 as a
national bank but changed to a state chartered bank in 1987. The accounting
and reporting policies of the Company and subsidiary conform with generally
accepted accounting principles.
The Bank carries on traditional commercial banking operations. Lending
activities have been primarily directed toward real estate construction and
mortgage loans, loans to individuals for household, automobile and other
consumer expenditures, commercial and industrial loans, and agriculture loans.
The Bank conducts its business through a main branch office in New Iberia,
Louisiana and seven branch offices and an ATM location in Iberia Parish. The
Bank also has three branches and an ATM in Lafayette Parish and one branch in
Vermilion Parish.
Use of Estimates in the Preparation of Financial Statements
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
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Principles of Consolidation
The consolidated financial statements of the Company include the accounts of
the Company and its wholly-owned subsidiary, The New Iberia Bank. All material
intercompany transactions and accounts have been eliminated.
Basis of Presentation
Certain prior years' amounts have been reclassified to conform with current
year financial statement presentation.
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash on
hand, amounts due from banks, and federal funds sold.
Investment Securities
The Bank classifies its investment securities into two categories: held to
maturity and available for sale.
Securities classified as held to maturity are those securities in which the
Bank has the intent and ability to hold until maturity and are stated at cost,
adjusted for amortization of premiums and accretion of discounts.
Securities to be held for indefinite periods of time and not on a long-term
basis or until maturity are classified as securities available for sale and are
accounted for at market with unrealized gains or losses shown as a separate
component of stockholders' equity, net of tax.
39
<PAGE> 43
Market value for securities is determined from quoted prices or quoted prices
of similar securities of comparable risk and maturity where no quoted market
price exists. Interest earned on investment securities is included in interest
income. Amortization of premiums and accretion of discounts are computed using
the interest method. The adjusted cost of the specific security sold is used
to compute the gain or loss on the sale of an investment security. Such gains
and losses are shown separately as a component of other income in the
statements of operations.
Loans Held for Sale
Loans held for sale are stated at the lower of aggregate cost or market value.
Since none of these loans have committed sales prices as of the balance sheet
date, market values are determined based on the Bank's market area. Net
unrealized losses (if any) are recognized in a valuation allowance by charges
to income. Fees related to mortgage servicing rights retained on sold
mortgages are included in income when contractually earned since these fees are
within the range of normal industry rates.
Loans
Interest income on loans is accrued using the interest method, which results in
a constant yield in relation to the outstanding balance. When a loan, in the
judgment of management, becomes doubtful as to the collection of accrued
interest receivable, it is placed on nonaccrual status. Interest accrued on
such loans during the current year, but uncollected, is reversed against
operations and any interest receivable accrued in prior years is reversed
against the allowance for possible loan losses. Subsequent cash payments
received are applied to the principal balance or recorded as interest income,
depending upon management's assessment of the ultimate collectibility of the
loan. If, in management's judgment, the ultimate collectibility of the
principal amount outstanding is not in doubt, payments of interest on
nonaccrual loans are included in income when received.
Allowance for Loan Losses
The allowance for loan losses represents an amount available for possible
future losses on loans. The allowance is based primarily upon management's
continuing evaluation of the current risk in the loan portfolio along with past
loan loss experience and the current economic environment. Ultimate losses may
vary from current estimates and, as adjustments become necessary, they are
included in earnings in the period in which they become known. Charge-offs
against the allowance are based upon management's judgment of its ability to
collect such loans.
Bank Premises and Equipment
Bank premises and equipment are stated at cost less accumulated depreciation
and amortization. Depreciation is computed using the straight-line method,
over the estimated useful lives of each type of asset. Leasehold improvements
are amortized using the straight-line method over the periods of the leases or
the estimated useful lives, whichever is shorter. Additions to premises and
equipment and major replacements or improvements are capitalized. Gains and
losses on dispositions, maintenance, repairs and minor replacements are
reflected in current operations.
Other Real Estate
Real estate acquired as a result of loan foreclosures is originally recorded at
the lower of the loan balance or estimated fair value less estimated disposal
cost. Estimated fair value is the anticipated sales price of the property,
based upon independent appraisals or other relevant factors. Estimated holding
periods may vary for each property, but are generally subject to a regulatory
maximum of ten years. Net other real estate expense includes other real estate
operating expenses, provisions to the allowance for possible other real
40
<PAGE> 44
estate losses and expenditures (except capital expenditures), revenues from the
operation of other real estate properties, and gains and losses on other real
estate sales. The allowance for possible losses on future other real estate
sales is maintained at a level based upon management's continuing evaluation of
property market values and the current economic environment. Other real
estate, net is included in other assets in the consolidated balance sheets.
Intangible Assets
Unamortized costs in excess of the fair value of the net tangible assets
acquired are included in other assets in the consolidated balance sheets and
are approximately $227,000 and $347,000 as of December 31, 1995 and 1994,
respectively.
Income Taxes
The Company and its subsidiary file a consolidated federal income tax return.
Provisions for income taxes are based on taxes payable or refundable for the
current year (after exclusion of non-taxable income such as interest on state
and municipal securities) and deferred taxes on temporary differences between
the amount of taxable income and pretax financial income and between the tax
bases of assets and liabilities and their reported amounts in the financial
statements. Deferred tax assets and liabilities are included in the financial
statements at currently enacted income tax rates as prescribed in FASB
Statement No. 109, "Accounting for Income Taxes." As changes in tax laws or
rates are enacted, deferred tax assets and liabilities are adjusted through the
provision for income taxes.
Net Income Per Share
Net income per share is computed by dividing net income by the average common
shares outstanding during the year. A forty-for-one stock split was effected
in April, 1995 and the par value of common stock was changed from $10 per share
to no par value. For all periods, the share and per share data throughout the
financial statements have been adjusted to give effect to the stock split.
2. CASH AND DUE FROM BANKS:
The Bank is required to maintain a reserve balance with the Federal Reserve
Bank based on a percentage of deposits. The average amount of the reserves for
the years 1995 and 1994 were approximately $3,365,000 and $3,242,000,
respectively.
3. INVESTMENT SECURITIES:
The amortized cost and estimated market value of investment securities at
December 31, 1995 and 1994 were:
<TABLE>
<CAPTION>
December 31, 1995
-----------------
Unrealized
----------
Book Value Gains Losses Market Value
-------------- ------------ ------------ --------------
Held to Maturity
----------------
<S> <C> <C> <C> <C>
U. S. Government Agencies:
Mortgage-backed securities $ 13,616,067 $ 619,781 $ - $ 14,235,848
State and Municipal Obligations 22,831,240 741,485 (33,694) 23,539,031
-------------- ------------ ------------ --------------
$ 36,447,307 $ 1,361,266 $ (33,694) $ 37,774,879
============== ============ ============ ==============
</TABLE>
41
<PAGE> 45
<TABLE>
<CAPTION>
December 31, 1995
-----------------
Unrealized
----------
Book Value Gains Losses Market Value
-------------- ----------- ----------- --------------
Available for Sale
------------------
<S> <C> <C> <C> <C>
U. S. Treasuries $ 23,766,312 $ 244,095 $ (17,567) $ 23,992,840
U. S. Government Agencies:
Mortgage-backed securities 26,035,958 122,408 (283,993) 25,874,373
Other 6,472,955 83,545 (4,600) 6,551,900
-------------- ----------- ----------- --------------
$ 56,275,225 $ 450,048 $ (306,160) $ 56,419,113
============== =========== =========== ==============
December 31, 1994
-----------------
Unrealized
----------
Book Value Gains Losses Market Value
-------------- ----------- ----------- --------------
Held to Maturity
----------------
U. S. Treasuries $ 9,899,023 $ - $ (65,568) $ 9,833,455
U. S. Government Agencies:
Mortgage-backed securities 21,529,092 157,634 (508,598) 21,178,128
Other 8,493,240 24,489 (290,140) 8,226,589
State and Municipal Obligations 23,702,081 77,399 (1,134,720) 22,644,760
-------------- ----------- ----------- --------------
$ 63,623,436 $ 258,522 $ 1,999,026 $ 61,882,932
============== =========== =========== ==============
Available for Sale
------------------
U. S. Treasuries $ 16,028,190 $ 11,912 $ (212,999) $ 15,827,103
U. S. Government Agencies:
Mortgage-backed securities 19,705,970 8,665 (1,323,079) 18,391,556
Other 1,500,084 - (57,200) 1,442,884
-------------- ----------- ----------- --------------
$ 37,234,244 $ 20,577 $(1,593,278) $ 35,661,543
============== =========== =========== ==============
</TABLE>
During 1995, the Bank sold $6,215,962 of available for sale securities
resulting in gross realized gains of $30,868 and gross realized losses of
$62,178. Four securities were called resulting in a realized gain of $5,510.
During 1994, the Bank sold $22,162,019 of available for sale securities
resulting in gross realized gains of $321,721 and gross realized losses of
$361,815. One security was called resulting in a realized gain of $100.
During 1993, $1,249,000 of the Bank's securities were called resulting in gross
realized gains of $2,076. No securities were sold in 1993.
In December, 1995, concurrent with the initial adoption of the Financial
Accounting Standards Board's SFAS No. 115 implementation guidance, the Bank
transferred approximately $16,007,000 of investment securities from the held to
maturity portfolio to the available for sale portfolio. The transfer was
recorded at fair value on the date of transfer. The unrealized gain on the
transferred securities is included in a separate component of stockholders'
equity. During 1994, the Bank transferred approximately $4,800,000 of
investment securities from the available for sale portfolio to the held to
maturity portfolio. The transfer was
42
<PAGE> 46
recorded at fair value on the date of transfer. The unrealized loss on the
transferred securities is included in stockholders' equity in the caption
unrealized loss on securities available for sale. The unrealized loss is
being amortized over the remaining life of the securities as an adjustment of
the related yield. The related unrealized loss, net of tax, at December 31,
1995 and 1994, remaining to be amortized was approximately $132,000 and
$147,000, respectively.
The amortized cost and estimated market value of debt securities at December
31, 1995, by contractual maturity, are shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Held to Maturity Available for Sale
------------------------------- -------------------------------
Book Market Book Market
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Due in 1 year or less $ 813,943 $ 821,249 $ 21,783,435 $ 21,990,300
Due after 1 year
through 5 years 3,839,602 3,946,421 3,482,877 3,502,040
Due after 5 years
through 10 years 12,579,578 13,005,272 4,972,955 5,052,400
Due after 10 years 5,598,117 5,766,089 - -
------------- ------------- ------------- -------------
Total 22,831,240 23,539,031 30,239,267 30,544,740
Mortgage-backed
securities 13,616,067 14,235,848 26,035,958 25,874,373
------------- ------------- ------------- -------------
Total $ 36,447,307 $ 37,774,879 $ 56,275,225 $ 56,419,113
============= ============= ============= =============
</TABLE>
The average remaining maturity of U. S. Treasury, U. S. Agency, and state and
municipal obligations at December 31, 1995 was .6, 6.9 and 7.4 years,
respectively. The Bank's mortgage-backed securities consist of ownership
interests in pools of residential mortgages guaranteed by a U. S. government
agency with contract maturities ranging from 5 to 30 years; however, the
underlying mortgages are subject to significant prepayments, primarily when the
contractual interest rates exceed the current market rate on similar mortgages.
Based on current prepayment assumptions, the estimated average remaining life
of mortgage-backed securities was approximately 4.3 years at December 31, 1995.
Investment securities with carrying values of $55,723,108 and $47,226,834 at
December 31, 1995 and 1994, respectively, were pledged to secure public funds
and for other purposes.
4. LOANS:
The composition of loans as of December 31 is as follows:
<TABLE>
<CAPTION>
1995 1994
-------------- -------------
<S> <C> <C>
Commercial and agricultural $ 32,728,022 $ 27,280,028
Real estate:
Construction 1,642,091 1,731,094
Residential mortgage 33,203,838 24,148,902
Commercial mortgage 28,600,959 26,790,679
Consumer and other 46,027,505 33,989,520
Less: Unearned income (90,344) (9,739)
-------------- -------------
Total $ 142,112,071 $ 112,930,484
============== =============
</TABLE>
The Bank grants commercial, real estate and consumer loans to customers located
primarily in Iberia Parish and the surrounding area. The Bank's portfolio
consists of business loans extending across many industry types, as well as
loans to individuals.
43
<PAGE> 47
The Bank evaluates the credit risk of each customer on an individual basis and,
where deemed appropriate, collateral is obtained. Collateral varies by
individual loan customer but may include accounts receivable, inventory, real
estate, equipment, deposits, personal and government guaranties, and general
security agreements. Access to collateral is dependent upon the type of
collateral obtained. On an ongoing basis, the Bank monitors its collateral and
the collateral value related to the loan balance outstanding.
For loans purchased by the Bank for less than their contractual balances, the
Bank records other income for contractual collections after the book balances
are reduced to zero under the cost recovery method of accounting. Other income
includes $274,874, $459,550 and $178,833 related to these collections for the
years ended December 31, 1995, 1994 and 1993, respectively. When it becomes
determinable that the full contractual balance will be collected, the Bank
changes from the cost recovery method to the effective interest method whereby
the related discount is accreted over the remaining life of the loan.
The Bank began originating mortgage loans for resale during 1993. The
aggregate market value of loans held for sale was $596,151 and $439,974 as of
December 31, 1995 and 1994, respectively. The Bank is servicing approximately
$15,694,000 and $11,413,000 of mortgage loans sold as of December 31, 1995 and
1994, respectively, and charges an annualized servicing fee of 1/4% of the loan
balance outstanding. For 1995 and 1994, the Bank earned $33,000 and $23,000,
respectively, in servicing fees. In 1995 and 1994, the Bank incurred gains
(losses) of $18,000 and $(178,246), respectively, related to loan sales. All
loans sold during 1995 and 1994 were without recourse. Included in noninterest
bearing deposits are $74,639 and $89,600 of escrow funds related to loans sold
and serviced by the Bank at December 31, 1995 and 1994, respectively.
Statement of Financial Accounting Standards No. 122, "Accounting for Mortgage
Service Rights", requires that a mortgage banking enterprise recognize as
separate assets rights to service mortgage loans for others, however those
servicing rights are acquired. This statement also requires that servicing
rights be assessed for impairment based on their fair value. The provisions of
the statement are required to be applied prospectively in fiscal years
beginning after December 15, 1995. Adoption of this statement will not have a
material impact on the consolidated financial statements.
In the ordinary course of business, the Bank makes loans to directors and
executive officers of the Bank and to their associates. In the opinion of
management, related party loans are made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with unrelated parties and do not involve more than
normal risk of collectibility. The amounts of such related party loans were
$2,406,470 and $1,879,716 at December 31, 1995 and 1994, respectively. During
1995, $1,094,511 of new loans were made and repayments totaled $567,757.
5. ANALYSIS OF ALLOWANCES FOR LOAN LOSSES:
A summary analysis of the transactions in the allowances for loan losses and
other real estate losses follows:
<TABLE>
<CAPTION>
Allowance for Loan Losses
---------------------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Balance at beginning of year $ 3,114,214 $ 2,825,714 $ 2,297,385
Provision charged to expense 355,000 103,525 104,400
Loans charged off (282,877) (173,454) (102,520)
Recoveries on loans previously charged off 210,194 358,429 526,449
------------ ------------ ------------
Net (chargeoffs) recoveries (72,683) 184,975 423,929
------------ ------------ ------------
Balance at end of year $ 3,396,531 $ 3,114,214 $ 2,825,714
============ ============ ============
</TABLE>
44
<PAGE> 48
The Bank adopted SFAS 114, "Accounting by Creditors for Impairment of a Loan,"
and SFAS No. 118, "Accounting by Creditors for Impairment of a Loan -- Income
Recognition and Disclosures," as of January 1, 1995. SFAS No. 114 requires
that certain impaired loans be measured based on the present value of expected
future cash flows discounted at the loan's original effective interest rate.
As a practical expedient, impairment maybe measured based on the loan's
observable market price or the fair value of the collateral if the loan is
collateral dependent. When the measure of the impaired loan is less than the
recorded investment in the loan, the impairment is recorded through a valuation
allowance.
The Bank had previously measured the allowance for credit losses using methods
similar to those prescribed in SFAS No. 114. As a result of adopting these
statements, no additional allowance for loan losses was required as of January
1, 1995.
As of December 1, 1995 the Bank's recorded investment in impaired loans and the
related valuation allowance calculated under SFAS No. 114 is as follows:
<TABLE>
<CAPTION>
Recorded Valuation
Investment Allowance
---------- ---------
<S> <C> <C>
Impaired loans:
Valuation allowance required $123,059 $88,870
No valuation allowance required 221,221 -
-------- -------
$344,280 $88,870
======== =======
</TABLE>
This valuation allowance is included in the allowance for loan losses on the
balance sheet.
The average recorded investment in impaired loans for the year ended 1995 was
$306,028.
Interest payments received on impaired loans are recorded as interest income
unless collection of the remaining recorded investment is doubtful at which
time payments received are recorded as reduction of principal. All impaired
loans are on nonaccrual status and therefore no interest income was recognized
on impaired loans.
6. NONPERFORMING ASSETS:
Nonperforming assets include loans on nonaccrual status, real estate acquired
through foreclosure and repossessed personal property. Loans past due 90 days
or more are considered to be performing assets until placed on nonaccrual
status. Nonperforming assets included in the balance sheets were as follows:
<TABLE>
<CAPTION>
December 31
-----------------------
1995 1994
---------- ----------
<S> <C> <C>
Nonperforming assets:
Nonaccrual loans $ 159,877 $ 97,282
Restructured loans 585,261 605,415
Other real estate, net 50,000 181,816
Other foreclosed assets 28,150 6,350
---------- ----------
Total nonperforming assets $ 823,288 $ 890,863
========== ==========
Loans past due 90 days or more and not on nonaccrual status $ 281,972 $ 168,377
========== ==========
</TABLE>
45
<PAGE> 49
There was no interest income recognized on nonaccrual loans for the years ended
December 31, 1995, 1994 and 1993. Interest income that would have been
recognized for the years ended December 31, 1995, 1994 and 1993 on nonaccrual
loans had those loans been on accrual status at contractual terms throughout
the year was approximately $13,000, $6,000 and $19,000, respectively.
Of the $159,877 in nonaccrual loans, $60,700 were current as to payment of
contractual interest as of December 31, 1995.
The allowance for other real estate losses was not material for the years ended
December 31, 1995, 1994 and 1993.
7. BANK PREMISES AND EQUIPMENT:
A summary of bank premises and equipment is as follows:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Land $ 1,020,748 $ 1,020,748
Buildings and improvements 5,197,162 5,212,162
Furniture, fixtures and equipment 3,146,959 2,931,264
----------- -----------
Total 9,364,869 9,164,174
Less: Accumulated depreciation 3,969,714 3,469,090
----------- -----------
Net bank premises and equipment $ 5,395,155 $ 5,695,084
=========== ===========
</TABLE>
Estimated useful lives range from three to forty years. Depreciation expense
for 1995, 1994 and 1993 was $523,836, $542,637 and $460,594, respectively.
Statement of Financial Accounting Standard No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long- Lived Assets to be Disposed of,"
which is effective for fiscal years beginning after December 15, 1995, requires
that long-lived assets and certain identifiable intangibles to be held and used
by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. In addition, certain long-lived assets and certain identifiable
intangibles to be disposed of will be reported at the lower of carrying amount
or fair value less the cost to sell. The adoption of this statement will not
have a material impact on the consolidated financial statements.
8. INTEREST-BEARING DEPOSITS:
A summary of interest bearing deposits is as follows:
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
<S> <C> <C>
Certificates of deposit of $100,000 or more $ 45,546,660 $ 40,185,025
Certificates of deposit less than $100,000 72,578,977 60,007,969
Demand and savings 80,641,962 79,144,047
-------------- --------------
Total $ 198,767,599 $ 179,337,041
============== ==============
</TABLE>
46
<PAGE> 50
9. INCOME TAXES:
As of December 31, the temporary differences which create deferred tax assets
and liabilities consisted of the following:
<TABLE>
<CAPTION>
Tax Effect of
Temporary Difference
------------------------
1995 1994
---------- ---------
<S> <C> <C>
DEFERRED ASSETS:
Allowance for loan losses $ 329,000 $ 208,000
Other real estate - 21,000
Unrealized loss on investment securities 19,000 611,000
Other 45,000 59,000
---------- ---------
Subtotal 393,000 899,000
---------- ---------
DEFERRED LIABILITIES:
Investment securities (42,000) (66,000)
Bank premises and equipment (40,000) (67,000)
Other (3,000) (15,000)
---------- ---------
Subtotal (85,000) (148,000)
---------- ---------
NET DEFERRED ASSET $ 308,000 $ 751,000
========== =========
</TABLE>
The components of income tax expense in the consolidated statements of
operations were as follows:
<TABLE>
<CAPTION>
Years Ended December 31
------------------------------------------
1995 1994 1993
----------- ----------- ------------
<S> <C> <C> <C>
Current $ 1,064,595 $ 1,202,384 $ 1,320,186
Deferred (148,410) (152,360) (125,000)
----------- ----------- ------------
Total $ 916,185 $ 1,050,024 $ 1,195,186
=========== =========== ============
</TABLE>
Total tax expense on income before taxes for 1995, 1994, and 1993 resulted in
effective tax rates that differed from the Federal statutory income tax rate.
A reconciliation follows:
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Amount of tax expense at Federal statutory tax rate $ 1,290,850 $ 1,285,452 $ 1,433,348
Increases (decreases) in taxes resulting from:
Tax-exempt interest income (364,000) (358,685) (211,263)
Amortization of intangible 41,025 41,025 41,025
Other, net (51,690) 82,232 (67,924)
----------- ----------- -----------
Total $ 916,185 $ 1,050,024 $ 1,195,186
=========== =========== ===========
</TABLE>
Other assets include $55,000 and $35,000 of prepaid income taxes at December
31, 1995 and 1994, respectively. The Bank is not subject to state income
taxes.
10. COMMITMENTS AND CONTINGENCIES:
Standby letters of credit represent commitments by the Bank to meet the
obligations of certain customers if called upon. Outstanding standby letters
of credit amounted to $3,004,000 at December 31, 1995.
47
<PAGE> 51
Additionally, in the normal course of business, there were various other
commitments and contingent liabilities which are not reflected in the financial
statements. Loan commitments are single-purpose commitments to lend which will
be funded and reduced according to specified repayment schedules. Most of
these commitments have maturities of less than one year. Loan commitments
outstanding were approximately $16,543,000 at December 31, 1995. Lines of
credit are commitments to lend up to a specified amount for a period not to
exceed one year. Amounts outstanding under lines of credit fluctuate because
they are generally used to finance short-term, seasonal working capital needs
of the borrower. Total unfunded lines of credit outstanding as of December 31,
1995 were approximately $14,989,000. Unused credit card lines amounted to
approximately $6,385,000 at December 31, 1995. The Bank uses the same credit
policies in making commitments and issuing standby letters of credit as it does
for on-balance-sheet instruments. The Bank evaluates each customer's credit
worthiness on a case-by-case basis. The amount of collateral obtained if
deemed necessary by the Bank upon extension of credit is based on management's
credit evaluation of the counterparty. Collateral held varies but may include
certificates of deposit, accounts receivable, inventory, property, plant and
equipment, and income-producing properties. There are no commitments which
present an unusual risk to the Bank, and no material losses are anticipated as
a result of these transactions.
The Company has employment agreements with certain key officers which require
cash payments on the occurrence of certain events, including death, disability
and termination resulting from acquisition of the Company. The Company's
maximum exposure under such arrangements is approximately $900,000.
The Bank is obligated under noncancellable operating leases for 5 branch sites.
The lease terms extend through the year 2005 and future minimum payments under
these leases are as follows:
<TABLE>
<S> <C>
Year Ended December 31:
1996 $ 67,800
1997 55,200
1998 33,600
1999 22,800
2000 8,000
2001 and thereafter 26,250
---------
Total $ 213,650
=========
</TABLE>
The Bank is named as defendant in various lawsuits. In management's opinion,
the resolution of these matters will not have a material effect on the Bank's
financial position or results of operation.
11. OTHER OPERATING EXPENSES:
The components of other operating expenses were:
<TABLE>
<CAPTION>
1995 1994 1993
----------- ------------ ------------
<S> <C> <C> <C>
Regulatory assessments $ 283,378 $ 490,185 $ 488,222
Amortization of intangible 120,662 120,662 120,662
Loss on sale of loans - 178,246 -
Supplies 188,593 183,756 150,705
Advertising 242,545 229,570 137,276
Other expenses 1,754,128 1,772,807 1,535,759
----------- ------------ ------------
Total $ 2,589,306 $ 2,975,226 $ 2,432,624
=========== ============ ============
</TABLE>
48
<PAGE> 52
12. EMPLOYEE BENEFITS:
The Company has a Tax-Deferred Savings Plan covering substantially all
full-time employees. Employees may voluntarily contribute up to 15% of their
gross annual salary to the plan per year. The Company, subject to board of
director approval, matches the employees' contributions to a maximum of 2-1/2%
of the employees' gross annual salaries. Employees become eligible to
participate in the plan after one year of service and must complete at least
1,000 hours of service in any given year to be eligible to participate in that
year. Employer contributions under the plan were approximately $49,000,
$41,000 and $33,000 for the years ended December 31, 1995, 1994 and 1993,
respectively.
13. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Bank to estimate the
fair value of each class of financial instruments:
Cash and Cash Equivalents - The carrying amount of these short-term instruments
approximates their fair value.
Investment Securities - The fair values of securities held to maturity and
available for sale are based on quoted prices or quoted prices of similar
securities of comparable risk and maturity where no quoted market price exists.
Loans - For variable-rate loans that reprice frequently and have no significant
change in credit risk, fair values are based on carrying values. Fair values
for certain mortgage loans (e.g., one-to-four family residential), credit card
loans and other consumer loans are based on quoted market prices of similar
loans sold in conjunction with securitization transactions, adjusted for
differences in loan characteristics. Fair values for commercial real estate
and commercial loans are estimated using discounted cash flow analyses, using
interest rates currently being offered for loans with similar terms to
borrowers of similar credit quality.
Deposits - The fair values disclosed for demand deposits are, by definition,
equal to the amount payable on demand at the reporting date (that is, their
carrying amounts). The carrying amounts of variable-rate, fixed-term money
market accounts and certificates of deposits approximate their fair values at
the reporting date. Fair values for fixed-rate certificates of deposit are
estimated using a discounted cash flow calculation that applies interest rates
currently being offered on certificates to a schedule of aggregated expected
monthly maturities on time deposits.
Securities Sold Under Agreements to Repurchase - The carrying amount of these
short-term instruments approximates their fair value.
Off-balance sheet financial instruments - The fair values of off-balance sheet
financial instruments are not material.
49
<PAGE> 53
The estimated fair values of the Bank's financial instruments as of December
31, 1995 and 1994 were (in 000s):
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
--------------------- ---------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
ASSETS:
-------
Cash and cash equivalents $ 23,142 $ 23,142 $ 14,044 $ 14,044
Securities held to maturity 36,447 37,775 63,623 61,883
Securities available for sale 56,275 56,419 35,662 35,662
Loans 142,705 143,468 112,341 111,700
LIABILITIES:
------------
Deposits, demand 119,500 119,500 110,401 110,401
Deposits, time 118,126 118,684 100,193 99,700
Securities sold under agreements
to repurchase 1,750 1,750 1,604 1,604
</TABLE>
14. SUBSEQUENT EVENTS:
On January 24, 1996, the Company announced that it entered into negotiations to
reach a definitive agreement for the acquisition of the Company by Whitney
Holding Corporation. The agreement must be approved by the boards of both
institutions and closing of the transaction, among other things, would be
subject to regulatory approval and approval of the shareholders of the Company.
15. PARENT COMPANY FINANCIAL STATEMENTS:
Balance Sheets
<TABLE>
<CAPTION>
1995 1994
------------- ------------
<S> <C> <C>
Cash $ 28,988 $ 9,853
Dividends receivable - 450,000
Income tax receivable 174,635 -
Investment in subsidiary bank 23,448,956 19,997,594
Organization costs - 17,234
------------- ------------
Total assets $ 23,652,579 $ 20,474,681
============= ============
Dividends payable $ - $ 448,146
Accounts payable 14,023 -
Capital 9,500,500 9,495,350
Undivided profits 14,175,287 11,716,358
Unrealized loss on securities available for sale (37,231) (1,185,173)
------------- ------------
Total liabilities and stockholders' equity $ 23,652,579 $ 20,474,681
============= ============
</TABLE>
50
<PAGE> 54
Statements of Operations
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- ------------
<S> <C> <C> <C>
Dividends from subsidiary bank $ 850,000 $ 787,000 $ 435,000
Less: Expenses 530,867 206,672 6,366
----------- ----------- ------------
Income before equity in undistributed income of
subsidiary bank 319,133 580,328 428,634
Equity in undistributed income of subsidiary bank 2,303,419 2,150,389 2,591,908
Income tax benefit 257,883 - -
----------- ----------- ------------
Net income $ 2,880,435 $ 2,730,717 $ 3,020,542
=========== =========== ============
</TABLE>
Statements of Cash Flows
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ -----------
<S> <C> <C> <C>
Cash flows from operating activities-
Net income $ 2,880,435 $ 2,730,717 $ 3,020,542
Increase in income tax receivable (174,635) - -
Equity in undistributed income of subsidiary bank (2,303,419) (2,150,389) (2,591,908)
(Increase) decrease in dividends receivable 450,000 (165,000) (35,000)
Other 31,256 - -
------------ ------------ -----------
Net cash provided by operating activities 883,637 415,328 393,634
------------ ------------ -----------
Cash flows from financing activities-
Dividends paid (897,527) (433,134) (398,248)
Proceeds from reissue of treasury stock 33,025 1,950 -
------------ ------------ -----------
Net cash used in financing activities (864,502) (431,184) (398,248)
------------ ------------ -----------
Net increase (decrease) in cash and cash equivalents 19,135 (15,856) (4,614)
Cash and cash equivalents at beginning of year 9,853 25,709 30,323
------------ ------------ -----------
Cash and cash equivalents at end of year $ 28,988 $ 9,853 $ 25,709
============ ============ ===========
</TABLE>
51
<PAGE> 55
Summary of Quarterly Financial Information
The following quarterly financial information is unaudited. In the opinion of
management all normal recurring adjustments necessary to present fairly the
results of operations for such periods are reflected.
1995 (UNAUDITED)
(in thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
Fourth Third Second First
Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C>
Interest Income $4,860 $4,644 $4,579 $4,281
Net Interest Income 2,690 2,607 2,585 2,499
Provision for Loan Losses 80 150 63 62
Income before income tax 1,109 958 863 866
Net Income 972 647 655 606
Per Share Data:
Net Income* $ .49 $ .32 $ .33 $ .30
Cash Dividends
Declared*(1) .225 .075 .075 .075
</TABLE>
1994 (UNAUDITED)
(in thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
Fourth Third Second First
Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C>
Interest Income $4,094 $3,857 $3,684 $3,679
Net Interest Income 2,565 2,473 2,379 2,352
Provision for Loan Losses 62 41 0 0
Income before income tax 562 1,015 1,230 974
Net Income 422 747 873 689
Per Share Data:
Net Income* $ .21 $ .37 $ .44 $ .35
Cash Dividends
Declared*(1) .225 0 .075 0
</TABLE>
*Converted to reflect 40-to-1 stock split approved by Shareholders on April 17,
1995. (1) All cash dividends shown were declared in the respective periods
indicated and paid early in the next quarter except for the dividend declared
for the fourth quarter of 1995 which was declared on January 9, 1996 and paid
on January 31, 1996.
52
<PAGE> 56
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
In response to this item, the Corporation incorporates by reference the
sections entitled "Election of Directors", "Executive Officers" and "Compliance
with Section 16(a) of the Securities Exchange Act" of its Proxy Statement dated
March 18, 1996.
ITEM 11 - EXECUTIVE COMPENSATION
In response to this item, the Corporation incorporates by reference the
sections entitled "Remuneration of Directors and Officers" and "Management
Committee Interlocks and Insider Participation" of its Proxy Statement dated
March 18, 1996.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
In response to this item, the Corporation incorporates by reference the
sections entitled "Principal Shareholders and Securities Ownership of
Management","Election of Directors" and "Executive Officers" of its Proxy
Statement dated March 18, 1996.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In response to this item, the Corporation incorporates by reference the section
entitled "Interest of Management and Others in Certain Transactions" of its
Proxy Statement dated March 18, 1996.
53
<PAGE> 57
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements
1. The following consolidated financial statements of The New Iberia
Bancorp Inc. and its subsidiary are included in Part II, Item 8:
Independent Auditors Report
Consolidated Balance Sheets for December 31, 1995 and 1994
Consolidated Statements of Income for the years ended December 31,
1995, 1994 and 1993
Consolidated Statements of Changes in Stockholders' Equity for the
years ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flow for the years ended December
31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
Selected Quarterly Financial Information for 1995 and 1994
2. Other financial statements and schedules have been omitted because
they are either not applicable or because the required information
has been included in the financial statements or related notes.
(b) Report on Form 8-K
1. No report on Form 8-K was filed by the Corporation during the last
quarter of 1995. The most recent report on Form 8-K filed by the
Corporation concerned the negotiation of a definitive agreement for
the acquisition of the Corporation by Whitney Holding Corporation
and was filed with the Commission on January 26, 1996.
(c) Exhibits
10.1 Employment Agreement between The New Iberia Bank and Ernest Freyou
10.2 Nonqualified Deferred Compensation Agreement between The New Iberia
Bank and Ernest Freyou
27.1 Financial Data Schedule
54
<PAGE> 58
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.
The New Iberia Bancorp, Inc.
----------------------------
Registrant
/s/ JAMES W. SCHWING, SR.
----------------------------
James W. Schwing, Sr.
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed on March 11, 1996 by the following persons on behalf of the
Registrant and in the capacities indicated.
/s/ ROBERT F. EPPLEY
- -------------------------------------
Robert F. Eppley
Secretary of the Board and Executive Vice-President
/s/ ERNEST FREYOU /s/ FRANK C. MINVIELLE
- ------------------------------------- ------------------------------
Ernest Freyou, Director Frank C. Minvielle, Director
President/Chief Executive Officer
/s/ JAMES L. GRAY /s/ EUGENE A. PATOUT, SR.
- --------------------------------------- -----------------------------
James L. Gray, Director Eugene A. Patout, Sr. Director
/s/ GERALD HALPHEN /s/ JAMES W. SCHWING, SR.
- ----------------------------------- -----------------------------
Gerald Halphen, M.D., Director James W. Schwing, Sr. Director
/s/ EDMOND A. LAMPEREZ /s/ JULES A. SCHWING
- -------------------------------- --------------------------------
Edmond A. Lamperez, M.D., Jules A. Schwing, Director
Director
/s/ CHARLES C. LEMAIRE /s/ JERRY E. SHEA, SR.
- ---------------------------------- ---------------------------------
Charles C. LeMaire, Director Jerry E. Shea, Sr., Director
/s/ EDWARD P. TERRELL, III
- ----------------------------------
Edward P. Terrell, III, Director
/s/ LON DUPRE /s/ LEONARD J. FREYOU
- ---------------------------------- ---------------------------------
Lon Dupre, Vice-President and Leonard J. Freyou, Cashier
Chief Financial Officer Senior Vice-President
55
<PAGE> 59
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <C>
10.1 Employment Agreement between The New Iberia Bank and Ernest Freyou
10.2 Nonqualified Deferred Compensation Agreement between The New Iberia Bank and Ernest Freyou
27.1 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Agreement, entered into this 16th day of August , 1994, between The
New Iberia Bank, Bancorp, (collectively referred to as the "Company") and Mr.
Ernest Freyou (the "Executive"),
W I T N E S E T H:
WHEREAS, the Company wishes to secure the Executive's services for the period
provided in this Agreement;
WHEREAS, the Executive wishes to provide his services on a full-time basis to
the Company for the period specified herein, according to the terms and
conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the promises and of the respective
representations, warranties and agreements stated herein, the Parties hereto
hereby agree to the following:
1. EMPLOYMENT
The Company agrees to employ the Executive and the Executive agrees to
be employed by the Company upon the conditions and terms provided herein.
2. POSITION AND RESPONSIBILITIES
During the period of his/her employment, the Executive will serve as
(title) of the Company, and will perform such other managerial duties which the
Company may decide to assign him from time to time commensurate with his title
and position. The Executive will perform these duties for the Company, as well
as for all affiliated entities or branches, according to the Company's
instructions.
3. TERM
The term of this Agreement shall be for a period of three (3) years
commencing with the date of this Agreement. Either party may terminate this
Agreement effective at the end of the two year term by written notice to the
other no later than 90 days before the expiration of the Agreement. If the
Agreement is not so terminated or otherwise modified, it shall renew itself for
a term of one year. Thereafter, the Agreement will renew itself for successive
one year terms unless terminated by notice by either party to the other at
least 60 days but no earlier than 90 days prior to the expiration of this
Agreement.
<PAGE> 2
4. SALARY
a. During the term of his employment, the Company will pay Executive,
in consideration of his services hereunder, an annual salary of at least
$95,000.00, in equal monthly installments. This salary is subject to annual
review and adjustment by the Board of Directors each December and will be
reflected in the form of a written amendment to this Agreement.
b. In addition to the above-mentioned salary, the Executive will be
entitled to hospitalization insurance coverage which will also include legal
members of his family provided he pay for said coverage. The annual premium
for his coverage will be paid by the Company for the Executive.
c. The Company will provide Executive with use of an automobile.
d. Executive will be reimbursed for any expenses incurred on behalf of
the Company in the discharge of his duties hereunder.
5. VACATION
Executive will be entitled each year to fifteen (15) days of paid
vacation, at a time convenient to the Company.
6. TERMINATION
a. This Agreement shall be terminated prior to the completion of
its term upon any one of the following occurrences:
i) Executive's inability because of illness or other physical
or mental disability, to perform his/her duties, as hereinabove set forth, for
a period of six consecutive months; or inability because of illness or other
physical or mental disability, to perform his/her duties, as hereinabove set
forth, for a period of six months during any twelve consecutive month period
from the date hereof, whether such disability is consecutive or not. The
Company shall attempt to reasonably accommodate any disability of the Executive
in accordance with the requirements of the Americans with Disabilities Act.
ii) The Executive commits, or is convicted of a felony or a
crime involving moral turpitude, the violation of any statute, rule or
regulation under the federal securities or banking laws, or the securities or
banking laws of the State of Louisiana that, in the good faith opinion of the
Board of Directors of the Company would seriously impair the Executive's
ability to perform his/her duties hereunder or would substantially impair the
business reputation of the Company.
iii) Executive's material breach of this Agreement;
2
<PAGE> 3
iv) The Company's material breach of this Agreement;
b. In the event this Agreement is terminated pursuant to paragraph 11,
the Executive shall be entitled a lump sum payment equal to three times the
Executive's then current salary. The Company is to procure standard disability
insurance coverage for 90% of base salary of Executive in the event Executive
becomes disabled, and is to continue present life insurance coverage for the
Executive.
c. In the event this Agreement is terminated pursuant to paragraph (a)
(ii) or (a) (iii) above, then there will be no further obligation on the part
of the Company other than to pay the Executive his salary up to the date of
termination.
d. In the event this Agreement is terminated pursuant to paragraph 6
(a) (iv) above, the Executive shall be entitled to the salary and benefits
under this Agreement for the balance of the uncompleted term of the Agreement.
7. OBLIGATIONS AND GUARANTEES OF THE EXECUTIVE
The Executive represents and warrants to the Company that he is not
bound by any contract or restriction or obligation which would be incompatible
with the execution of this Agreement or with the Company's rights hereunder;
8. CONFIDENTIAL INFORMATION
The Executive acknowledges that, during his employment hereunder, he
will be making use of, acquiring, and adding to confidential information of
special and unique value relating to such matters as, for example, cost
information and profit margin information. Executive acknowledges that such
information constitutes the exclusive property of the Company. For the
purposes of this Agreement, the term "confidential information" shall mean any
information of any nature and in any form which, at the time or times concerned
is not generally known to those persons engaged in business similar to that
conducted or contemplated by the Company. The Executive shall return all
tangible evidence of such confidential information to the Company prior to or
upon the termination of his employment. In addition, Executive agrees that he
will not (except for the benefit of or with the written consent of the Company,
its successors or assigns) during or after his term of employment hereunder,
disclose any of said confidential information to any person, firm or
corporation for any purpose whatsoever.
9. INDEMNIFICATION
The Company hereby agrees to indemnify the Executive for any
liabilities incurred by him/her in the performance of his/her duties hereunder
to the full extent permitted by law.
10. HEADINGS
3
<PAGE> 4
Section headings and other headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
11. CONSOLIDATION, MERGER OR SALE OF ASSETS
In the event of a future disposition of substantially all the
properties and business of the Company, by merger, consolidation, sale of
assets, or otherwise, then the Company may, with the Executive's approval,
elect to assign this Agreement and all of its rights and obligations hereunder
to the acquiring or surviving person or entity, provided that such person or
entity shall assume in writing all of the obligations of the Company hereunder.
If this Agreement is not so assigned or if the Executive chooses not to approve
the assignment of this Agreement to the acquiring entity, then the acquisition
shall act as a termination of the Agreement and the Company will pay the
Executive the lump sum referred to in paragraph 6 (b) above.
12. GOLDEN PARACHUTE LIMITATION
The severance benefit payable under this plan will be reduced to the
extent necessary to prevent payments under the Agreement from being "excess
parachute payments" under Section 280G of the Internal Revenue Code of 1986, as
amended.
13. INTEGRATED AGREEMENT
This Agreement, and such other documents and instruments as are
delivered in accordance with the terms hereof, constitute the entire
understanding and agreement among the parties hereto with respect to the
subject matter of this Agreement, and supersedes any other agreements,
understandings, restrictions, representations or warranties among the parties
other than those set forth herein or herein provided for.
14. SEVERABILITY
Each provision of this Agreement is intended to be severable. In the
event that any one or more of the provisions contained in this Agreement shall
by any reason be held to be invalid, illegal, or unenforceable, such holding
shall not affect the validity or enforceability of any other provision of this
Agreement, and this Agreement shall be construed as if such invalid, illegal,
or unenforceable provisions had never been contained herein; provided, however,
that no provision shall be severed if it is clearly apparent under the
circumstances that the parties would not have entered into this Agreement
without such provision.
15. AMENDMENTS
This Agreement may be amended or modified in all respects at any time,
but only by an instrument in writing executed by the parties hereto.
4
<PAGE> 5
16. WAIVER
The failure by any party to enforce any of its rights hereunder shall
not be deemed to be a waiver of such rights, unless such waiver is an express
written waiver which has been signed by the waiving party, and in the case of
the Company, expressly approved by its Board of Directors. Waiver of any one
breach shall not be deemed to be a waiver of any other breach of the same or
any other provision hereof.
17. CHOICE OF LAW
The validity of this Agreement, the construction of its terms and the
determination of the rights and duties of the parties hereto shall be governed
by and construed in accordance with the laws of the State of Louisiana.
18. COUNTERPART EXECUTIVE
This Agreement may be executed in separate counterparts, with the same
effect as if the parties hereto had signed the same document. Counterparts so
executed and delivered shall be deemed to be an original, shall be construed
together and shall constitute one Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
WITNESSES:
/s/ BONNIE BLANCHARD /s/ ERNEST FREYOU
- --------------------------------- -----------------------------------
ERNEST FREYOU (EXECUTIVE)
/s/ LEONARD J. FREYOU By: /s/ JAMES SCHWING, SR.
- --------------------------------- -------------------------------
JAMES W. SCHWING, SR.,
CHAIRMAN OF THE BOARD
(COMPANY)
<PAGE> 6
EMPLOYMENT AGREEMENT ADDENDUM #1
The purpose of this writing is to reflect the new salary for 1996 in the
Employment Agreement as previously entered into between The New Iberia Bank and
The New Iberia Bancorp, Inc. (collectively referred to as the "Company") and
Ernest Freyou (the "Executive") on January 1, 1996, which is attached hereto
as Attachment B.
WHEREAS, the present agreement requires that any annual upward adjustment in
the Executive's pay shall be reflected in the form of a written amendment to
this agreement;
The Company and the Executive hereby agree to amend Section 4 a) of said
agreement as follows:
4. SALARY
a) During the term of his/her employment, the Company will pay
Executive, in consideration of his/her services hereunder, an
annual salary of at least $140,000 in equal monthly
installments. This salary is subject to annual review and
upward adjustment by the Board of Directors each December and
will be reflected in the form of a written amendment to this
Agreement.
IN WITNESS WHEREOF, the parties, hereto have executed this Employment Agreement
Addendum #1 on this 15th day of February, 1996.
/s/ ERNEST FREYOU
---------------------------------------
Ernest Freyou
The New Iberia Bank
The New Iberia Bancorp, Inc.
By: /s/ JAMES W. SCHWING, SR.
-----------------------------------
<PAGE> 1
EXHIBIT 10.2
NEW IBERIA BANK
NONQUALIFIED DEFERRED COMPENSATION PLAN
AGREEMENT made December 1, 1991, between The New Iberia
Bank, a domestic corporation (the "Corporation"), and Ernest Freyou (the
"Employee").
WHEREAS, Employee has performed valuable services to the
Corporation for a period of more than five (5) years, and the Corporation
wishes to reward and encourage the continuance of such services, it is
therefore agreed:
1. Payments Upon Termination of Employment
a. Amount. If the Employee continues employment with
the Corporation until he attains at least age 63,
then the Corporation shall pay to the Employee at
termination of employment an amount payable monthly
for ten (10) years in accordance with the following
Schedule:
<TABLE>
<CAPTION>
Employment Continued Monthly
-------------------- -------
at Least Until Age: Amount:
------------------- -------
<S> <C>
63 $1,144
65 $1,261
</TABLE>
b. Form of Payment. If an amount becomes due under this
paragraph by reason of the Employee's termination of
employment, then such amount shall be paid to the
Employee in accordance with subparagraph (a) above,
beginning within sixty (60) days of the termination
of the Employee's employment.
c. Death of Employee. If the Employee becomes entitled
to monthly payments under this paragraph, but the
Employee dies before he receives all such monthly
payments, then the remainder of such monthly payments
due under this paragraph shall continue to be made to
the Employee's Designated Beneficiary upon written
verification of the Employee's death.
2. Payment Upon Death
a. Amount. Upon the Employee's death prior to his
termination of employment, the Corporation shall pay
to the Designated Beneficiary the amount of
$100,000.00.
1
<PAGE> 2
b. Form of Payment. If an amount becomes due under this
paragraph, then such amount shall be paid to the
Designated Beneficiary in a lump sum within one
hundred and twenty (120) days of the date the
Corporation receives written verification of the
Employee's death.
3. Designated Beneficiary. The Designated Beneficiary referred
to in this Agreement may be designated or changed by the
Employee (without the consent of any prior beneficiary) on a
form provided by the Corporation and delivered to the
Corporation before his death. If no such beneficiary shall
have been designated, or if no Designated Beneficiary shall
survive the Employee, any amount payable under this Agreement
shall be payable to the Employee's estate.
4. Limitation on Obligation to Pay Death Benefit. The
Corporation shall not be obligated to pay the death benefit
described in paragraph 2 above, if the employee's death is on
account of suicide within the two year period beginning with
the date this Agreement is signed.
5. General Creditor Only of Corporation. The rights of the
Employee or any Designated Beneficiary of the Employee shall
be solely those of an unsecured creditor of the Corporation.
If the Corporation shall acquire an insurance policy or any
other asset in connection with the liabilities assumed by it
hereunder, then, except as otherwise expressly provided, such
policy or other asset shall not be deemed to be held under any
trust for the benefit of the Employee or his Designated
Beneficiary or to be collateral security for the performance
of the obligations of the Corporation but shall be and remain,
a general, unpledged, unrestricted asset of the Corporation.
6. No Trust. Nothing contained in the Agreement and no action
taken pursuant to the provisions of this Agreement shall
create or be construed to create a trust of any kind, or a
fiduciary relationship between the Corporation and the
Employee, his Designated Beneficiary or any other person.
7. No Assignment. The right of the Employee or any other person
to the payment of deferred compensation or other benefits
under this Agreement shall not be assigned, transferred,
pledged, or encumbered except by Will or by the laws of
descent and distribution.
2
<PAGE> 3
8. Corporation's Powers and Liabilities. The Corporation shall
have full power and authority to interpret and administer this
Agreement. The Corporation's interpretations and construction
of any provision or action taken under this Agreement shall be
binding and conclusive on all persons for all purposes. No
member of the Corporation shall be liable to any person for
any action taken or omitted in connection with the
interpretation and administration of this Agreement unless
attributable to the member's willful misconduct or lack of
good faith.
9. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Corporation, its successors and
assigns and the Employee and his heirs, executors,
administrators, and legal representatives.
10. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of
Louisiana.
11. Notice. Any notice to be delivered under this Agreement shall
be given in writing and delivered, personally or by certified
mail, postage prepaid, addressed to the Corporation or
Employee at their last know address.
12. Headings. Headings in this Agreement are for convenience only
and shall not be used to interpret or construe its provisions.
13. Source of Benefits. The amounts payable to the Employee shall
be paid exclusively from the general assets of the
Corporation.
14. Forfeitures of Benefits. Notwithstanding anything to the
contrary contained in this Agreement, the Employee shall
forfeit all benefits under this Agreement if it is determined
by the Corporation that he has acted in a manner which is
prejudicial to the Corporation's interest.
15. Waiver. A waiver of one or more provisions of this Agreement
shall not effect any other provisions of this Agreement, such
that the remaining provisions will remain in full force and
effect.
16. Termination of Employment. This agreement shall not obligate
the Corporation to continue the employment of the Employee or
limit the right of the corporation to terminate the Employee's
employment. Termination of the Employee's employment with the
Corporation for any
3
<PAGE> 4
reason, whether by action of the Corporation or Employee,
shall immediately terminate the Employee's participation in
the Agreement and all further obligations of either party to
the other except as otherwise provided in the Agreement. In
no event shall the Agreement, by its terms or implications,
constitute an employment contract of any nature whatsoever
between the Corporation and the Employee.
Thus, done and signed, this 2nd day of January, 1992.
WITNESS: THE NEW IBERIA BANK
/s/ PAMILA H. SPRAGGINS BY: /s/ LEONARD J. FREYOU
- ----------------------------- -----------------------------
Leonard J. Freyou
/s/ ROBERT EPPLEY /s/ ERNEST FREYOU
- ----------------------------- -----------------------------
Ernest Freyou
In accordance with Item 2a of this Agreement, I hereby name
Deanna Freyou, my wife, whose date of birth is Mar 3, 1938 and resides at
2225 Freyou Road, New Iberia, LA as revocable beneficiary in the event of my
death.
If the beneficiary named above dies, I name the following
revocable contingent beneficiaries to become the beneficiary.
<TABLE>
<CAPTION>
NAME ADDRESS RELATIONSHIP DATE OF BIRTH
<S> <C>
Children by law
</TABLE>
Dated at New Iberia on Jan. 2, 1992.
/s/ PAMILA H. SPRAGGINS /s/ ERNEST FREYOU
- ------------------------- -----------------------------
Witness Signature of Employee
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 13,338,408
<INT-BEARING-DEPOSITS> 198,767,599
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0
0
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