<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, 1996
[ ] 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:
Title of Each Class Name of Exchange on Which Registered
------------------- ------------------------------------
Common Stock, No Par Value American Stock Exchange, Inc.
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 February 26, 1997:
Common Stock, no par value - $35,478,072*
* 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 February 26, 1997:
Common Stock, no par value - 2,999,988
<PAGE> 3
10-K INDEX
PART I
<TABLE>
<S> <C>
Item 1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-4
Statistical Information:
Average Balance Sheets and Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . 5-8
Loan Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Loan Maturity Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-11
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
Item 4 Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
PART II
Item 5 Market for the Registrant's Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-21
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34-55
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . 56
PART III
Item 10 Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56-62
Item 11 Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63-66
Item 12 Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . . . . . . . . . 67-69
Item 13 Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . 71-72
Signatures of Directors and Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
</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.
1
<PAGE> 5
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 $14,686,068 and demand deposits were
$12,666,941 as of December 31, 1996. In connection with the deposits of these
public funds, the Bank is required to pledge securities to secure such
deposits.
As of December 31, 1996, the Bank had a total of 9,117 accounts representing
non-interest bearing demand deposits of $46,108,749; 5,410 accounts
representing money market accounts, now accounts and 50+ accounts with a total
balance of $65,561,710; 7,861 savings and Christmas club accounts with a total
balance of $17,096,326; and 6,089 time deposit accounts with a total balance of
$113,025,401.
There has been no significant change in the kinds of services offered by the
Bank during the last three fiscal years except for the addition of a third
party investment security firm that sells annuities and mutual funds. 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 February 13, 1997, the Corporation entered into an Agreement and Plan of
Merger with Regions Financial Corporation ("Regions"), pursuant to which the
Corporation would be merged into Regions, subject to approval of the
Corporation's shareholders, regulatory approval and other conditions. Under
the terms of the Agreement, Regions would exchange 0.36 of a share of its
common stock for each share of the Corporation's common stock in the merger,
subject to possible adjustment.
2
<PAGE> 6
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 32% of the market in this trade
area for total deposits of $269 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 of the respective markets.
Employees
The Corporation currently has no employees. The Bank has approximately 143
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 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 judgment the activity
or subsidiaries would be unsound.
3
<PAGE> 7
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.
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 with the
implementation of the revised interagency Uniform Financial Institutions Rating
System referred to as the CAMELS rating system which covers areas of Capital
adequacy, Asset quality, Management administration, Earnings, Liquidity, and
Sensitivity to market risk.
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).
In August, 1996 a three-for-two stock split was effected in the form of a 50%
stock dividend. 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 this document have
been adjusted to give effect to the stock splits.
5
<PAGE> 9
Distribution of Assets, Liabilities, and Stockholder's Equity; Average Balances
and Interest Rates
<TABLE>
<CAPTION>
December 31, 1996 December 31, 1995 December 31, 1994
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate
=========================================================================================
(In Thousands of Dollars)
Assets
Interest Earning Assets:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Loans (1) (2) (3) 160,096 14,576 9.10% 127,116 11,927 9.38% 97,501 9,029 9.26%
U.S. Treasury Notes 20,730 1,224 5.90% 20,736 1,296 6.25% 25,362 1,473 5.81%
U.S. Government:
Agency Notes 4,132 314 7.60% 9,189 696 7.57% 5,039 337 6.69%
Mortgage Backed Securities 37,273 2,523 6.77% 37,156 2,655 7.15% 52,090 3,219 6.18%
Tax Exempt Investment Securities (1) 22,356 1,759 7.87% 23,125 1,818 7.86% 22,202 1,768 7.96%
Federal Funds Sold 11,771 614 5.22% 10,077 578 5.74% 5,624 232 4.13%
-----------------------------------------------------------------------------------------
Total Earning Assets (1) 256,358 21,010 8.20% 227,399 18,970 8.34% 207,818 16,058 7.73%
Cash on Hand & Due from Banks 10,625 9,636 9,090
Premises & Equipment-Net 5,242 5,509 4,877
Other Assets 3,235 3,971 3,315
------- ------- -------
Total Non Interest Bearing Assets 19,102 19,116 17,282
------- ------- -------
======= ======= =======
Total Assets 275,460 246,515 225,100
======= ======= =======
</TABLE>
(1) Tax Equivalent Basis Calculated at 34%
(2) Non accrual 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, 1996 December 31, 1995 December 31, 1994
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate
==========================================================================================
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Liabilities and Stockholder's Equity
Interest Bearing Liabilities:
Demand Deposits 67,187 1,980 2.95% 62,119 1,787 2.88% 59,775 1,452 2.43%
Savings Deposits 17,141 388 2.26% 17,872 429 2.40% 18,180 407 2.24%
Time Deposits 123,913 6,689 5.40% 108,888 5,668 5.21% 92,047 3,609 3.92%
Federal Funds Purchased/
Repurchase Agreements 2,065 91 4.41% 1,994 99 4.96% 2,259 79 3.50%
------------------------------------------------------------------------------------------
Total Interest Bearing Liabilities 210,306 9,148 4.35% 190,873 7,983 4.18% 172,261 5,547 3.22%
Non Interest Bearing Liabilities:
Demand Deposits 39,416 32,590 31,717
Other Liabilities 1,171 1,222 1,014
------- ------- -------
Total Non Interest Bearing Liabilities 40,587 33,812 32,731
Stockholder's Equity 24,567 21,830 20,108
------- ------- -------
Total Liabilities and Stockholder's
Equity 275,460 246,515 225,100
======= ======= =======
Net Interest Earnings (1) 11,862 10,987 10,511
Net Yield on Earning Assets 4.63% 4.83% 5.06%
</TABLE>
7
<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>
1996 COMPARED TO 1995 1995 Compared to 1994
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 2,989 (340) 2,649 2,776 122 2,898
U.S. Treasury Notes 0 (72) (72) (304) 127 (177)
U.S. Government:
Agency Notes (385) 3 (382) 309 50 359
Mortgage Backed Securities 8 (140) (132) (1,243) 679 (564)
Tax Exempt Investment Securities (61) 2 (59) 72 (22) 50
Federal Funds Sold 78 (42) 36 232 114 346
--------------------------------------------------------------------
Total Interest on Earning Assets 2,629 (589) 2,040 1,842 1,070 2,912
Interest paid on:
Demand Deposits 149 44 193 59 276 335
Savings Deposits (17) (24) (41) (7) 29 22
Time Deposits 808 213 1,021 738 1,321 2,059
Repurchase Agreements 4 (12) (8) (8) 28 20
--------------------------------------------------------------------
Total Interest Bearing Liabilities 944 221 1,165 782 1,654 2,436
</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.
8
<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,
1996 1995 1994 1993 1992
(In Thousands of Dollars)
% of Loans % of Loans % of Loans % of Loans % of Loans
in each in each in each in each in each
Amount category to Amount category to Amount category to Amount category to Amount category to
Total Loans Total Loans Total Loans Total Loans Total Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial, Financial, 41,751 23.03% 32,262 22.61% 27,280 24.06% 20,469 22.00% 31,143 37.96%
and Agricultural
Real Estate - Construction 2,065 1.14% 1,642 1.15% 279 0.25% 4,282 4.60% 1,836 2.24%
Real Estate - Mortgage 79,570 43.89% 62,399 43.73% 52,362 46.19% 46,226 49.68% 30,218 36.83%
Installment, Credit Cards, 57,906 31.94% 46,402 32.52% 33,449 29.50% 22,073 23.72% 18,843 22.97%
and Other
- ---------------------------------------------------------------------------------------------------------------------------------
181,292 100.00% 142,705 100.00% 113,370 100.00% 93,050 100.00% 82,040 100.00%
</TABLE>
9
<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 $2,799 $54,374(2) $734 $57,907
Variable Rate Installment,
Credit Cards & Others -0- -0- -0- -0-
Fixed Rate Commercial,
Financial & Agriculture 13,300 12,029 -0- 25,329
Variable Rate Commercial,
Financial & Agricultural 5,229 11,191 -0- 16,420
Fixed Rate Real Estate-
Construction 2,065 -0- -0- 2,065
Variable Rate Real Estate-
Construction -0- -0- -0- -0-
Fixed Rate Real Estate-
Mortgage 11,537 40,713 371 52,621
Variable Rate Real Estate-
Mortgage -0- 7,245 19,705 26,950
TOTALS $34,930 $125,552 $20,810 $181,292
</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 $2,194,394 for 1996 and
$2,406,470 for 1995.
10
<PAGE> 14
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 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 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.
11
<PAGE> 15
Nonaccrual and Past Due Loans
The following table summarizes the Corporation's nonaccrual and past due loans:
<TABLE>
<CAPTION>
December 31
1996 1995 1994 1993 1992
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Nonaccrual Loans 435 160 97 208 661
Restructured Loans 311 585 605 386 458
Accruing Loans contractually past 784 282 168 419 95
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, 1996, 1995, and 1994.
Had interest income been recognized on nonaccrual loans based on the
contractual terms throughout the year, the amount for each year ended December
31, 1996 through 1992 would have been approximately $16,000, $13,000, $6,000,
$19,000 and $63,000, 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
uncertainties 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
1996 1995 1994 1993 1992
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Balance of Allowance for Loan Losses at
beginning of period 3,397 3,114 2,826 2,297 1,875
Loans Charged Off:
Commercial, Financial, Agricultural 3 1 27 14 8
Real Estate 50 4 0 0 91
Installment and Credit Cards 456 278 146 88 121
-----------------------------------------------------
Total 509 283 173 102 220
Recoveries of Loans previously charged off
Commercial, Financial, Agricultural 89 170 330 230 300
Real Estate 1 3 7 258 34
Installment and Credit Cards 33 37 21 39 58
-----------------------------------------------------
Total 123 210 358 527 392
Net loans charged off 386 73 (185) (425) (172)
Additions to allowance charged to expense (1) 536 355 103 104 250
Balance of Allowance for Loan Losses at 3,547 3,396 3,114 2,826 2,297
end of period
Ratio of Net Charge 0ffs during period to 0.22% 0.07% -0.19% -0.50% -0.22%
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 judgment, 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,
1996 1995 1994 1993 1992
Amount % of Loans Amount % of Loans Amount % of Loans Amount % of Loans Amount % of Loans
to to to to to
Total Loans Total Loans Total Loans Total Loans Total Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at end of each period
applicable to:
Commercial, Financial, Agricultural 1,032 23.03% 1,396 22.61% 1,183 24.06% 770 22.00% 851 37.96%
Real Estate Construction 0 1.14% 34 1.15% 0 0.25% 0 4.60% 0 2.24%
Real Estate Mortgage 806 43.89% 874 43.73% 1,111 46.19% 1,866 49.68% 1,334 36.83%
Installment and Credit Cards 1,709 31.94% 1,092 32.52% 820 29.50% 190 23.72% 112 22.97%
- -----------------------------------------------------------------------------------------------------------------------------------
Total 3,547 100.00% 3,396 100.00% 3,114 100.00% 2,826 100.00% 2,297 100.00%
</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
1996 1996 1995 1995
(In Thousands of Dollars)
HTM AFS HTM AFS
<S> <C> <C> <C> <C>
U.S. Treasury Notes -0- $22,979 -0- $23,993
U.S. Government:
Agency Notes -0- $ 3,984 -0- $ 6,552
Mortgage Backed Securities $10,909 $22,547 $13,616 $25,874
State and Political Subdivision $22,020 -0- $22,831 -0-
Totals $32,929 $49,510 $36,447 $56,419
</TABLE>
The following table sets forth the maturities of investment securities at
December 31, 1996 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>
Held to Maturity:
U.S. Government:
Mortgage Backed Securities 0 .00% 82 9.48% 108 8.59% 10,719 8.75%
State and Political Subdivision 395 5.71% 5,597 5.27% 14,568 5.34% 1,460 5.66%
Totals 395 5.71% 5,679 5.33% 14,676 5.36% 12,179 8.38%
Available for Sale:
U.S. Treasury 21,956 5.43% 1,023 5.55% 0 .00% 0 0.00%
U.S. Government:
Agency Notes 0 .00% 0.00 .00% 3,984 7.35% 0 0.00
Mortgage Backed
Securities 865 6.66% 11,098 6.37% 8,843 7.12% 1,741 9.15%
Totals 22,821 5.48% 12,121 6.31% 12,827 7.19% 1,741 9.15%
</TABLE>
At December 31, 1996, 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 is 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,
1996 1995 1994
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 $39,416 none $ 32,590 none $ 31,717 none
Interest Bearing
Demand Deposits 67,187 2.95% 62,119 2.88% 59,775 2.43%
Savings Deposits 17,141 2.26% 17,872 2.40% 18,180 2.24%
Time Deposits 123,913 5.40% 108,888 5.21% 92,047 3.92%
TOTAL $208,241 $221,469 $ 201,719
</TABLE>
Time Certificates of Deposit of $100,000 or more, outstanding at December 31,
1996, 1995, and 1994 are summarized as follows:
<TABLE>
<CAPTION>
Time Certificates
of Deposit
(In Thousands of Dollars)
1996 1995 1994
<S> <C> <C> <C>
3 Months or Less $ 10,308 $ 12,189 $ 10,834
Over 3 through 6 Months 9,909 11,334 11,651
Over 6 through 12 Months 14,565 12,914 10,335
Over 12 Months 12,604 9,110 7,365
--------- ---------- ----------
TOTAL $ 47,386 $ 45,547 $ 40,185
</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,
1996 1995 1994
<S> <C> <C> <C>
Return on Average Assets 1.28% 1.17% 1.21%
Return on Average Equity 14.33% 13.19% 13.58%
Dividend Payout Ratio 34.65% 15.60% 21.88%
Dividend Declared Ratio(1) 34.94% 31.25% 21.88%
Equity to Assets Ratio(2) 8.60% 8.89% 8.96%
</TABLE>
(1) During 1995, the Corporation changed the timing of dividend declaration
from declaring during the quarter to declaring in arrears (i.e. the following
quarter). This ratio reflects the dividend payment ratio including the
dividend declared in arrears for the applicable period.
(2) The ratio for 1996 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.
16
<PAGE> 20
See Item 6 for other selected financial data.
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
(1) On March 13, 1996, The New Iberia Bank (the "Bank"), the sole subsidiary
of the Corporation, was sued by Mary Joyce Keel in the 16th Judicial District
Court, Iberia Parish, Louisiana (Docket No. 83846-F). The Bank's insurance
carrier has been notified of the existence of this suit. The suit alleges
violations of the plaintiff's rights under the Americans with Disabilities Act
of 1990. Damages sought are actual damages of not less than $50,000.00 plus
unspecified punitive damages. The Bank removed the litigation to federal
court and a trial date was set for June 16, 1997. The suit was then dismissed
by the court on November 12, 1996 without prejudice upon motion of the
plantiff.
(2) The Bank is named as the trustee of The Jules B. Schwing Childrens Trust
(the "Trust") in the last will and testament of Jules B. Schwing. Under the
will, the main asset of the Trust will be stock of the Corporation,
(approximately 31% of the total issued and outstanding common stock of the
Corporation), although the Succession has not been closed and the assets
thereof have not been dispersed to the heirs and legatees.
On or about April 21, 1996, in the 16th Judicial District Court, Iberia Parish,
Louisiana (Docket No. 13847) certain of the children of Jules B. Schwing,
namely, Jules A. Schwing, Marie Louise Schwing, Edmond L. Schwing, John E.
Schwing, III, and Charles E. Schwing (the "Petitioning Heirs"), filed in the
Succession a Petition to Annul Probated Testament (the "Petition"), which
sought to annul the last will and testament of Jules B. Schwing. The Bank, as
trustee of the Trust, was named as a defendant in the Petition.
On June 24, 1996, the Bank, in its capacity as trustee of the Trust, filed in
the Succession an Exception to Unauthorized Use of Ordinary Proceeding and
Motion to Convert Petition to Annul Probated Testament to Summary Proceeding.
Prior to the hearing on this matter, in support of the Bank's exceptions and
motion, Robert M. Fleming, the court appointed Executor of the Succession,
filed a Memorandum in Opposition to Use of Ordinary Proceeding to Annul
Testament. This exception was granted on August 8, 1996, and the matter will
now proceed to trial as a summary proceeding. A trial date is currently set
for March 31, 1997.
On or about October 16, 1996, the Petitioning Heirs filed a Motion to
Terminate, In Part, or Modify Trust, or Alternatively, to Appoint a Substitute
Trustee, which seeks to terminate or modify the Trust or to appoint a
substitute trustee in place of the Bank. Motions for Partial Summary Judgment
on these motions were heard on February 21, 1997.
19
<PAGE> 23
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 1996.
PART II
Item 5 - Market for Registrant's Common Equity and Related Stockholder Matters
The Corporation's stock is listed on the American Stock Exchange, Inc. Listed
below are the high and low sales prices during each quarter since August 31,
1995, the day which the stock became listed on the American Stock Exchange.
The New Iberia Bancorp, Inc.
Stock Prices
<TABLE>
<CAPTION>
1996 1995
High Low High Low
<S> <C> <C> <C> <C>
First Quarter $17.92 $15.25 * *
Second Quarter 17.17 16.75 * *
Third Quarter 16.92 13.00 $12.92 $ 9.33
Fourth Quarter 18.88 17.00 15.83 11.17
</TABLE>
(Note: All stock prices shown above prior to September 24, 1996 have been
adjusted for the 3 for 2 stock split effected as a 50% stock dividend which was
paid on that date to shareholders of record on September 10, 1996.)
The Corporation had 498 shareholders of record as of the year ending December
31, 1996.
Given the Corporation's and the Bank's financial condition and state and
federal laws concerning dividends, dividends declared through December 31, 1996
did not exceed legal limitations for the Corporation or the Bank. There are
no additional regulatory dividend restrictions imposed on the Corporation or
the Bank. During 1997, the amount of undivided profits of the Bank, which
could be paid to the Corporation without prior regulatory approval, is
approximately $4,600,000 plus an amount equal to the 1997 earnings of the Bank.
20
<PAGE> 24
Dividend Information(1)(3)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
First Quarter $.05 $.05
Second Quarter .05 .05
Third Quarter(2) .16 .05
Fourth Quarter .15 .15
</TABLE>
(1) All amounts in this schedule were adjusted to reflect a 3 for 2 stock split
effected as a 50% stock dividend declared by the Board of Directors on August
12, 1996 and paid on September 24, 1996 to shareholders of record on September
10, 1996.
(2) A special dividend of $0.07 per share was declared August 12, 1996, to
holders of record August 22, 1996.
(3) The dividend amounts reflected above are attributable to dividends declared
by the Board of Directors for the applicable periods.
21
<PAGE> 25
Item 6 - Selected Financial Data
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995 1994 1993 1992
(In Thousand of Dollars, except per share data)
<S> <C> <C> <C> <C> <C>
Interest Income $20,403 $18,364 $15,314 $15,300 $15,575
Interest Expense 9,148 7,983 5,546 5,578 7,070
Net Interest Income 11,255 10,381 9,769 9,722 8,505
before Provisions
Provision for Loan Loss 536 355 103 104 250
Net Interest Income 10,719 10,026 9,665 9,618 8,255
after Provisions
Non Interest Income 2,268 2,039 1,980 1,531 1,463
Non Interest Expense 8,164 8,269 7,864 6,933 5,919
Income before Income
Taxes 4,823 3,796 3,781 4,216 3,799
Income Tax Expense 1,302 916 1,050 1,195 1,152
Net Income $3,521 $2,880 $ 2,731 $ 3,021 $ 2,647
Balance Sheet Totals:
Total Equity $25,833 $ 23,639 $20,027 $ 19,077 $ 16,489
Total Assets 299,423 263,868 233,268 224,878 228,606
Net Loans 177,746 139,308 110,256 87,873 79,743
Selected average balances:
Average equity $ 24,567 $ 21,830 $ 20,108 $ 17,982 $ 15,393
Average assets 275,460 246,515 225,100 224,101 205,064
Per Share Data:
Net Income* $ 1.16 $ .96 $ .91 $ 1.01 $ .61
Annual Cash Dividend .41 (1) .30 .20 .15 .12
Selected ratios:
Return on Average Assets 1.28% 1.17% 1.21% 1.35% 1.29%
Return on Average Equity 14.33% 13.19% 13.58% 16.80% 17.20%
</TABLE>
*Converted to reflect 3 for 2 stock split effected as a 50% stock dividend
declared by the Board of Directors on August 12, 1996 and paid on September 24,
1996 to shareholders of record on September 10, 1996.
(1) Includes fourth quarter cash dividend of .15 per share declared by Board of
Directors on January 13, 1997 for stockholders of record on January 27, 1997,
with payment on February 6, 1997.
22
<PAGE> 26
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
OVERVIEW
In 1996, the Corporation experienced a successful year in which earnings,
dividends paid, total assets, total loans, and total deposits all increased
over the comparable levels in 1995. In 1996, the Corporation generated net
income of $3,520,723 or $1.16 per share, compared to $2,880,435 or $.96 per
share in 1995, and net income of $2,730,717 or $.91 per share for 1994. The
increase in net income in 1996 over 1995 is mainly the result of an increase in
net interest income ($873,446), offset by an increase in the provision for
loan loss of $181,200. The increase in income in 1995 over 1994 is primarily
the result of an increase in net interest income ($612,915) 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 litigation during
that year. (See "Legal Proceedings" for an update on current litigation.) 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 1996 of
14.33% versus 13.19% in 1995 and 13.58% in 1994.
During 1996, the Corporation increased the annual dividend per share to $.41.
This annual dividend per share amount for 1996, which includes a $.15 per share
declared in January 1997, which the board attributed to fourth quarter 1996
performance, represents an increase of approximately 37% over the $.30 per
share dividend declared and paid for 1995. The strength in earnings in 1996 by
the Corporation enabled the Corporation to increase its dividend stream to its
stockholders. The Corporation believes its capital is at sufficient levels to
sustain future budgeted growth and protect against unexpected downturns in the
local economy.
At December 31, 1996 total assets were $299.4 million, an increase of $35.6
million or 13.50% from the $263.8 million reported for December 31, 1995. In
comparison, total assets increased by $30.5 million or 13.07% in 1995 from the
233.3 million for December 31, 1994. The changes in assets in 1996 are the
result of continued loan growth in a growing local economy. The changes in
assets in 1995 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, 1996 were $181.3
million, compared to $142.7 million, a $38.6 million or 27.04% increase from
the same date in 1995. Loan growth for 1996 can be broken down as follows:
real estate- $17.5 million; commercial loans- $9 million; and consumer loans-
$12.1 million. The increase in loans for 1996 is due to the continued
consumer loan demand, a good commercial loan market (particularly commercial
real estate), and the constant level of interest rates throughout 1996. At
December 31, 1996, total deposits were $269.1 million, a $31.5 million, or
13.26% increase from the amount reported at December 31, 1995. Total deposits
of $237.6 million at December 31, 1995 were $27 million, or 12.82% more than
the amount reported at December 31, 1994 of $210.6 million. The increase in
total deposits in 1996 was a result of an increase in certificates of deposits
and demand deposits in anticipation of the loan growth in 1996, a similar
comparison to the growth
23
<PAGE> 27
in 1995 where the increase was in certificates of deposit.
On February 13, 1997, the Corporation entered into an Agreement and Plan of
Merger with Regions Financial Corporation, a bank holding company based in
Birmingham, Alabama, for consideration consisting of 0.36 of a share of
Regions' common stock for each share of the Corporation's stock outstanding at
the consummation of the merger (or, as to Corporation stock options not
exercised at the time of the merger, the conversion of such stock options into
Regions' stock options based upon the same exchange rate), subject to possible
adjustment. 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 anticipated that, if all conditions are met, the
merger will take place in the second or third quarter of 1997. The merger, if
approved, would result in the Corporation being merged into Regions Financial
Corporation and the shareholders of the Corporation becoming shareholders of
Regions Financial Corporation. Therefore, if the merger takes place, the
Corporation would cease doing business as an independent entity.
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 1996 was $11,255,056, an $873,446 or 8.41%
increase over the reported balance in 1995 of $10,381,610. In 1995, net
interest income increased by $612,915 or 6.27%, over the 1994 amount of
$9,768,695. The increase in net interest income in 1996 was mainly due to a
significant increase in interest and fees on loans of $2,648,770, offset by an
increase in interest expense of $1,165,337 and a reduction in investment
interest income of $609,987. 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 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.
EARNING ASSETS
Earning assets averaged $256.4 million for 1996, an increase of $29 million or
12.75%, compared to the 1995 average of $227.4 million. The 1995 average
represented an increase of $19.6 million or 9.43% over the 1994 average of
$207.8 million.
For 1996, loans averaged $160 million, a $32.9 million, or 25.89% increase from
the average balance reported in 1995. The average loan balance in 1995 was
$127.1 million, an increase of $29.6 million, or 30.36%, compared to the
average balance in 1994 of $97.5 million. As noted previously, the increase in
loans over the past two years is the result of an increase in all areas of loan
activity. Commercial loan activity significantly increased during 1996 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 9.26% in 1994, 9.38%
24
<PAGE> 28
in 1995, and 9.10% in 1996.
The Corporation established a mortgage loan origination department in 1993.
The Corporation recognized net gains (losses) on sales of mortgage loans of
approximately $(14,000) and $18,000 during 1996 and 1995, respectively.
Investment securities (excluding federal funds sold) averaged $84.5 million for
1996 representing a decrease of $5.7 million, or 6.32%, when compared to 1995.
Investment securities averaged $ 90.2 million for 1995 representing a decrease
of $14.5 million, or 13.85% over the 1994 average of $104.7 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 6.49% in 1994 to 7.17% in 1995 and decreased to 6.89% in
1996. The change in the yield of the investment portfolio from 1995 to 1996
was the result of a reduction in the portfolio, particularly a reduction in
mortgage backed securities, with the balance of the portfolio being reinvested
during the year in short term investment securities. 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 $11.8 million, compared to $10.1
million in 1995 and $5.6 million in 1994. The average yield on federal funds
sold in 1996, 1995, and 1994, was 5.22%, 5.74%, and 4.13%, respectively.
The average tax equivalent yield on earning assets was 8.20% in 1996 as
compared to a 1995 yield of 8.34% and a 1994 yield of 7.73%.
INTEREST-BEARING LIABILITIES
Interest-bearing liabilities in 1996 averaged $210.3 million, an increase of
$19.4 million, or 10.16%, from the 1995 average. Interest-bearing liabilities
in 1995 averaged $190.9 million, an increase of $18.6 million, or 10.80%,
over the 1994 level of $172.3 million. Interest bearing checking accounts
increased by $5.1 million, while savings accounts decreased by $0.7 million
during 1996. Certificates of deposits increased in 1996 by $15 million. As
loan demand grew throughout 1996, 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
for time periods that approximated the repricing and estimated maturities of
the loans the deposits funded. In 1995, interest bearing checking accounts
increased by $2.3 million and certificates of deposit increased by $16.8
million. Public funds decreased by approximately $0.1 million in 1996 and
increased $4.8 million in 1995.
Interest expense for 1996 totaled $9,147,865, an increase of $1,165,337, or
14.60% from the 1995 amount. Interest expense for 1995 was $7,982,528 compared
to $5,545,827 for 1994, an increase of $2,436,701 or 43.94%. The largest
increase in interest expense in 1996 occurred with certificates of deposit
where the average yield increased to 5.40% from 5.21%. In 1995, the increase
in interest cost was mainly the result of a higher average yield in
certificates of
25
<PAGE> 29
deposit. The rate was 5.21% in 1995 as compared to 3.92% in 1994. The average
rates paid for all interest-bearing liabilities were 4.35% in 1996 compared to
4.18% in 1995 and 3.22% in 1994.
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 $3,546,853 at December 31, 1996, compared
to $3,396,531, at December 31, 1995. The allowance as a percentage of loans
was 1.96% at December 31, 1996, as compared to 2.39% at year-end 1995. As
evidenced by the Summary 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 increase in charged off loans in 1996 is related to
the volume of increase in consumer retail loans over the last five years.
Consumer loans have increased by approximately 35% and 26% in 1995 and 1996,
respectively, while the percentage of charge-offs to consumer loans outstanding
increased from .6% in 1995 to .8% in 1996.
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 the continuing good
local economy over the last few years has had a positive effect on the
performance of the loan portfolio. Still, a review of the loan portfolio has
found that the effects of gaming establishments in the Corporation's market
area has had some influence on the local consumer, as evidenced by a higher
percentage of consumer past due loans. Management reviews on an ongoing basis
the changes occurring in the loan portfolio and adjusts internal procedures to
address those changes.
26
<PAGE> 30
The provision for loan losses was $536,200 for 1996, compared to $355,000 in
1995. The increased provision for loan losses is due to increased loan
activity. The 1995 provision was an increase over the 1994 provision of
$103,525.
In 1996 charge-offs were $509,004 compared to $282,877 and $173,454 in 1995 and
1994, respectively. Recoveries totaled $123,126, $210,194, $358,429, during
the years ended December 31, 1996, 1995, and 1994, 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. Gross charge-offs as a percentage of average loans
for 1996, 1995, and 1994, were .3%, .2%, and .2%, respectively.
OTHER INCOME
For 1996, other income was $2,268,452, an increase of $229,396, or 11.25%, over
the $2,039,056 other income for 1995. The increase in 1996 is mainly
attributable to overdraft fees and increased service charges. Other income for
1995 showed a $59,482 or 3.01% increase over the $1,979,574 figure during 1994.
OTHER EXPENSES
Total non-interest expenses for 1996 were $8,164,205 compared to the 1995
expense of $8,269,046, a decrease of $104,841 or 1.27%. Total Other Expenses for
1995 increased by $405,043 or 5.15% from the 1994 total of $7,864,003.
Salaries and employee benefits, a major component of other expenses, increased
by $92,620 in 1996 to $3,992,206. In 1995 salaries and employee benefits were
$3,899,586, and in 1994, $3,638,888. This increase in cost in 1995 was the
result of a substantial increase in growth and customer activity at the
Corporation's main office, the locations in Lafayette and Vermilion Parishes,
and the mortgage lending operation. The increase also was attributable to an
increase in personnel training for placement in management positions. Occupancy
and equipment expense totaled $1,038,143, a decrease of $82,035 for 1996 as
compared to 1995. The occupancy expense for 1995 was $1,120,178, an increase of
$7,710 as compared to $1,112,468 in 1994.
The cost of professional services remained higher than normal in 1996, primarily
due to litigation pending throughout the year between the Corporation and one of
its directors and the attempted negotiation of an acquisition agreement that was
never entered into. The total cost for professional services in 1996 was
$628,358, compared to $659,977 and $137,421 in 1995 and 1994, respectively.
For 1996, other non-interest expenses were $2,505,498, down $83,807 or 3.24%,
over the $2,589,305 reported in 1995. The decrease in 1996 was partly due to
the reduction in FDIC assessments to the Corporation ($243,097), offset by an
increase in advalorem tax ($51,026) and
27
<PAGE> 31
operational expenses ($44,939). Other non-interest expenses in 1995 decreased
$385,919, or 12.98% over the 1994 amount of $2,975,226.
INCOME TAX
The effective income tax rate for 1996 was 27%, compared to 24.1% in 1995 and
27.8% in 1994. The decrease in the effective tax rate in 1995 was 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.
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, 1996
non-performing assets totaled $826,369, an increase of $3,081 from December 31,
1995. Non-performing assets for 1995 were $823,288, a decrease of $67,575 from
1994 total of $890,863. 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, 1996, non-accrual loans totaled $435,821 compared to $159,877
at year-end 1995, and $97,282 at year end 1994. The increase in non-accrual
loans in 1996 is primarily due to an increase in consumer non-performance, with
one commercial loan of approximately $188,000 also increasing the total.
Interest income that would have been recognized under the contractual terms of
non-accrual loans for the years ended December 31, 1996, 1995, and 1994 was
approximately $16,000, $13,000, and $6,000, respectively. The amount of
interest income related to these loans included in net income for the years
ended December 31, 1996, 1995, and 1994, was zero.
Other real estate totaled $ -0-, $50,000, and $181,816, at December 31, 1996,
1995, and 1994, respectively. At December 31, 1996, repossessed movable assets
amounted to $79,764 as compared to $28,150 and $6,350 at December 31, 1995 and
1994, 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,"
28
<PAGE> 32
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, 1996, impaired loans total
$583,348.
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 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, 1996, loans totaling $1.5 million with discounts of approximately
$.7 million are being accreted to income over the remaining estimated life of
the loans. Income recorded in 1996 from this accretion was approximately
$90,000.
INVESTMENT PORTFOLIO
Reference is made to Footnote 3 of the Corporation's 1996 Financial Statements
for a comparison of December 31, 1996 and 1995 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 shorter term
investment securities 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 1996, the Corporation sold
$1.8 million of available for sale securities resulting in gross realized gains
of $24,988 and gross realized losses of $10,255. During 1995, the Corporation
sold approximately $6.2 million of 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 $30,868 and gross realized losses of
$62,178. During 1995, four securities were called
29
<PAGE> 33
resulting in gross realized gain of $5,510 and no gross realized losses. During
1994, the Corporation sold approximately $22.1 million of 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 a gross realized gain of $100.
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 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,
1996 and 1995, remaining to be amortized was approximately $119,000 and
$132,000, 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
to maintain 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 minus 10% is
viewed as acceptable within the industry. The Corporation's liquidity ratio at
year end 1996 was 33.65% with a dependency ratio of 1.77%; in 1995, the
liquidity ratio was 40.97% with a dependency ratio of .63%. The decrease in
the liquidity ratio in 1996 was due to continued loan growth where some
investment securities were used to fund loans. 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.
30
<PAGE> 34
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 38,977 43,214 49,955 82,996 98,296 181,292
Short-Term
Investments 17,378 17,378 17,378 17,378 -0- 17,378
Investments (1) 999 2,015 4,160 23,221 59,217 82,438
Total Earning Assets 57,354 62,607 71,493 123,595 157,513 281,108
Funding Sources
Public Fund
Demand Deposits 12,598 12,598 12,598 12,598 -0- 12,598
Now Accounts** -0- -0- -0- -0- 31,575 31,575
Money Market (IMFA) 34,236 34,236 34,236 34,236 -0- 34,236
CD over 100 5,497 8,111 9,593 34,017 13,369 47,386
Other Time Deposit 7,174 12,439 18,083 56,430 23,696 80,126
Savings** -0- -0- -0- -0- 17,115 17,115
Repurchase Agreements 3,576 3,576 3,576 3,576 -0- 3,576
Total Funding 63,081 70,960 78,086 140,857 85,755 226,612
Cumulative Maturity/
Rate Sensitivity (GAP) (5,727) (8,353) (6,593) (17,262) 71,758 54,496
GAP/Total Earning Assets (2.04%) (2.97%) (2.34%) (6,14%)
GAP/Total Assets (1.91%) (2.79%) (2.20%) (5.77%)
</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
$754,000 a month over a large portion of 1996.
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
may be expected to fall in the future (although there can be no assurance this
will take place), 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
31
<PAGE> 35
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.
CAPITAL RESOURCES
Capital ratios at end of year:
<TABLE>
<CAPTION>
Regulatory
1996 1995 1994 Minimum
---- ---- ---- -------
<S> <C> <C> <C> <C>
Leverage 8.90% 9.00% 8.96% 3.0%
Risk-based capital
Tier 1 14.60% 16.50% 17.52% 4.0%
Total 15.80% 18.00% 19.02% 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 1 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, 1996, the Bank met all of the criteria for a
"well-capitalized" institution (which is the highest level of capital
measurement), which are 5% leverage, 6% Tier 1, and 10% 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
32
<PAGE> 36
or fair value less the cost to sell. On January 1, 1996, the Corporation had
no long-lived assets that met the criteria, therefore the impact of adopting
this statement was not 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. The
Corporation does not have a material amount of mortgage servicing rights, thus
the adoption of this Statement on January 1, 1996 was not material.
In June 1996, the FASB issued SFAS No. 125 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." This
Statement provides accounting and reporting standards for distinguishing
transfers of financial assets that are sales from transfers that are secured
borrowings. This Statement is effective after December 31, 1996, and is to be
applied prospectively. Adoption of this Statement will not have a material
impact on the consolidated financial statements.
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, 1996 and 1995, 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, 1996. 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, 1996 and 1995 and the results of its operations and cash
flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN L.L.P.
New Orleans, Louisiana,
January 10, 1997
(except with respect to
Note 14, as to which the
date is February 14, 1997)
34
<PAGE> 38
THE NEW IBERIA BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
------------- -------------
ASSETS
<S> <C> <C>
CASH AND DUE FROM BANKS (Note 2) $ 12,939,531 $ 13,338,408
FEDERAL FUNDS SOLD 17,737,804 9,803,320
------------- -------------
CASH AND CASH EQUIVALENTS 30,677,335 23,141,728
INVESTMENT SECURITIES AVAILABLE FOR SALE, at fair value
(Note 3) 49,510,056 56,419,113
INVESTMENT SECURITIES HELD TO MATURITY (market value of approximately
$34,160,075 and $37,774,879 at December 31, 1996 and 1995,
respectively) (Note 3) 32,928,394 36,447,307
LOANS HELD FOR SALE (Note 4) 738,050 592,750
LOANS (Notes 4, 5 and 6) 180,554,433 142,112,071
Less: Allowance for loan losses (3,546,853) (3,396,531)
------------- -------------
Net loans 177,007,580 138,715,540
BANK PREMISES AND EQUIPMENT, net (Note 7) 5,157,438 5,395,155
ACCRUED INTEREST RECEIVABLE 2,006,083 1,938,282
OTHER ASSETS 1,397,724 1,218,550
------------- -------------
Total assets $ 299,422,660 $ 263,868,425
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS:
Noninterest bearing $ 46,108,749 $ 38,858,005
Interest bearing (Note 8) 223,036,445 198,767,599
------------- -------------
Total deposits 269,145,194 237,625,604
ACCRUED INTEREST PAYABLE 400,819 350,738
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 3,575,744 1,749,621
OTHER LIABILITIES 467,579 503,906
------------- -------------
Total liabilities 273,589,336 240,229,869
------------- -------------
COMMITMENTS AND CONTINGENCIES (Note 10)
COMMON STOCK, no par value; 10,000,000 shares authorized; 2,999,988 issued
and outstanding 14,250,558 9,500,500
UNDIVIDED PROFITS 11,725,761 14,175,287
LESS: Unrealized loss on securities available for sale (142,995) (37,231)
------------- -------------
Total stockholders' equity 25,833,324 23,638,556
------------- -------------
Total liabilities and stockholders' equity $ 299,422,660 $ 263,868,425
============= =============
</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, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
INTEREST INCOME:
Interest and other fees on loans $ 14,575,998 $ 11,927,228 $ 8,862,651
Interest on investment securities-
Taxable 4,060,961 4,646,503 5,028,964
Tax-exempt 1,152,702 1,212,495 1,189,492
Interest on Federal funds sold 613,260 577,912 232,250
Interest on deposits in other banks -- -- 1,165
------------ ------------ ------------
Total interest income 20,402,921 18,364,138 15,314,522
------------ ------------ ------------
INTEREST EXPENSE:
Interest on deposits 9,057,042 7,883,957 5,467,261
Interest on short-term borrowings 90,823 98,571 78,566
------------ ------------ ------------
Total interest expense 9,147,865 7,982,528 5,545,827
------------ ------------ ------------
NET INTEREST INCOME 11,255,056 10,381,610 9,768,695
PROVISION FOR LOAN LOSSES 536,200 355,000 103,525
------------ ------------ ------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
10,718,856 10,026,610 9,665,170
------------ ------------ ------------
OTHER INCOME:
Service fees 693,937 609,196 581,834
Fees on overdrafts 626,365 580,960 511,900
Other 933,417 874,700 925,834
Net securities gains (losses) 14,733 (25,800) (39,994)
------------ ------------ ------------
Total other income 2,268,452 2,039,056 1,979,574
------------ ------------ ------------
OTHER EXPENSE:
Salaries and employee benefits 3,992,206 3,899,586 3,638,888
Occupancy and equipment expense 1,038,143 1,120,178 1,112,468
Professional fees 628,358 659,977 137,421
Other expenses (Note 11) 2,505,498 2,589,305 2,975,226
------------ ------------ ------------
Total other expense 8,164,205 8,269,046 7,864,003
------------ ------------ ------------
INCOME BEFORE INCOME TAXES 4,823,103 3,796,620 3,780,741
PROVISION FOR INCOME TAXES (Note 9) 1,302,380 916,185 1,050,024
------------ ------------ ------------
NET INCOME $ 3,520,723 $ 2,880,435 $ 2,730,717
============ ============ ============
NET INCOME PER SHARE $ 1.16 $ .96 $ .91
============ ============ ============
</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, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Common Treasury Unrealized Undivided
Stock Stock Loss Profits
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
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 ($.20 per share) -- -- -- (597,528)
------------ ------------ ------------ ------------
BALANCE, December 31, 1994 9,497,410 (2,060) (1,185,173) 11,716,358
Net income -- -- -- 2,880,435
Change in unrealized loss on securities
available for sale -- -- 1,147,942 --
Reissue 8,240 shares of treasury stock 3,090 2,060 -- 27,875
Less: Cash dividends ($.15 per share) -- -- -- (449,381)
------------ ------------ ------------ ------------
BALANCE, December 31, 1995 9,500,500 -- (37,231) 14,175,287
Net income -- -- -- 3,520,723
Change in unrealized loss on securities
available for sale -- -- (105,764) --
Stock split effected in the form of a
50% stock dividend 4,750,058 -- -- (4,750,249)
Less: Cash dividends ($.41 per share) -- -- -- (1,220,000)
------------ ------------ ------------ ------------
BALANCE, December 31, 1996 $ 14,250,558 $ -- $ (142,995) $ 11,725,761
============ ============ ============ ============
</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, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,520,723 $ 2,880,435 $ 2,730,717
Adjustments to reconcile net income to net cash provided by
operating activities-
Depreciation and amortization 506,709 644,498 663,301
Net discount accretion and premium amortization 102,609 112,840 878,529
Provision for loan losses and other real estate write-downs 536,200 355,000 103,525
Net gain on sales and calls of investment
securities and mortgage loans 639 2,362 228,513
(Increase) decrease in accrued interest receivable (67,801) 253,741 (293,233)
Increase in accrued interest payable 50,081 107,199 50,038
Increase (decrease) in other liabilities 18,157 (865,029) 26,436
Decrease (increase) in other assets (350,166) 324,558 (347,464)
------------ ------------ ------------
Net cash provided by operating activities 4,317,151 3,815,604 4,040,362
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investment securities
available for sale 1,778,454 6,215,962 23,682,119
Proceeds from maturities and calls of investment
securities held to maturity 3,456,813 16,150,130 8,839,411
Proceeds from maturities and calls of investment
securities available for sale 29,910,167 13,211,706 19,884,157
Purchase of investment securities held to maturity -- (5,835,604) (30,420,262)
Purchase of investment securities available for sale (24,967,057) (21,750,409) (13,447,232)
Net cash increase in loans (38,987,634) (29,378,885) (20,375,663)
Purchase of bank premises and equipment (148,000) (227,657) (1,523,474)
Proceeds from sale of-
Other real estate 50,000 132,000 53,000
Bank premises and equipment -- 3,750 --
------------ ------------ ------------
Net cash used in investing activities (28,907,257) (21,479,007) (13,307,944)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in repurchase agreements 1,826,123 146,050 (444,476)
Net increase in demand, NOW, and savings deposits 22,148,757 9,098,799 1,177,267
Net increase in certificates of deposit 9,370,833 17,932,643 6,466,289
Dividends paid (1,220,000) (449,381) (432,528)
Other -- 33,025 975
------------ ------------ ------------
Net cash provided by financing activities 32,125,713 26,761,136 6,767,527
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents 7,535,607 9,097,733 (2,500,055)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 23,141,728 14,043,995 16,544,050
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 30,677,335 $ 23,141,728 $ 14,043,995
============ ============ ============
SUPPLEMENTAL DISCLOSURE:
Interest paid on deposits $ 9,097,785 $ 7,875,329 $ 5,595,865
============ ============ ============
Federal income tax paid $ 1,500,000 $ 1,085,000 $ 1,195,000
============ ============ ============
NON-CASH TRANSACTIONS:
Loans transferred to other real estate $ -- $ -- $ (54,000)
============ ============ ============
Loans made to facilitate sales of other real estate $ -- $ -- $ 52,000
============ ============ ============
</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, 1996, 1995 AND 1994
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 a separate ATM location in Iberia
Parish. The Bank also has three branches 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.
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.
39
<PAGE> 43
Securities which may be sold in response to changes in interest rates,
liquidity needs or asset/liability management strategies are classified as
securities available for sale. These securities are accounted for at fair
value, with net unrealized gains or losses shown as a separate component of
stockholders' equity, net of the related tax.
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 or expense 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.
On January 1, 1996, the Bank adopted SFAS No. 122, "Accounting for Mortgage
Servicing Rights" which amends SFAS No. 65. "Accounting for Certain Mortgage
Banking Activities." This statement requires that a mortgage banking
enterprise recognize as separate assets the rights to service mortgage loans
for others, however those rights are acquired. The impact on the Bank's
financial position and results of operations for the year ended December 31,
1996 was not material.
Loans
Loans are stated at the principal amounts outstanding net of unearned income.
Interest income on loans is accrued using the interest method, which results in
a constant yield in relation to the outstanding balance. Loan origination fees
and costs are not deferred due to the immaterial effect on the financial
statements.
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.
40
<PAGE> 44
On January 1, 1996, the Bank adopted SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long- Lived Assets to be Disposed Of."
The impact on the Bank's financial position and results of operations for the
year ended December 31, 1996 was not material.
Foreclosed Assets
Foreclosed assets, including real estate, are reported in other assets and are
recorded at estimated fair value, less estimated selling costs. At
foreclosure, the reduction of the carrying amount to fair value is charged to
the allowance for loan losses. Any subsequent writedowns and revenues and
expenses associated with foreclosed assets prior to sale are included in other
expense.
Intangible Assets
Goodwill, the excess of cost over net tangible assets acquired, is included in
other assets in the consolidated balance sheets and is approximately $106,000
and $227,000 as of December 31, 1996 and 1995, respectively. Goodwill is
amortized on a straight-line basis over a 10 year period.
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 based on the weighted average number of common
shares outstanding and common stock equivalents arising from the assumed
exercise of outstanding stock options, unless their effect would be
antidilutive. In August, 1996 a three-for-two stock split was effected in the
form of a 50% stock dividend. 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 splits.
Recent Pronouncements
In June 1996, the FASB issued SFAS No. 125 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." This
Statement provides accounting and reporting standards for distinguishing
transfers of financial assets that are sales from transfers that are secured
borrowings. This Statement is effective after December 31, 1996, and is to be
applied prospectively. Adoption of this Statement will not have a material
impact on the consolidated financial statements.
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 1996 and 1995 were approximately $4,345,000 and $3,365,000,
respectively.
41
<PAGE> 45
3. INVESTMENT SECURITIES:
The amortized cost and estimated market value of investment securities at
December 31, 1996 and 1995 were:
<TABLE>
<CAPTION>
December 31, 1996
----------------------------
Unrealized
---------------------------- Market
Book Value Gains Losses Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Held to Maturity
U. S. Government Agencies:
Mortgage-backed securities $ 10,908,602 $ 607,739 $ -- $ 11,516,341
State and Municipal Obligations 22,019,792 644,001 (20,059) 22,643,734
------------ ------------ ------------ ------------
$ 32,928,394 $ 1,251,740 $ (20,059) $ 34,160,075
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
December 31, 1996
----------------------------
Unrealized
---------------------------- Market
Book Value Gains Losses Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Available for Sale
U. S. Treasuries $ 22,984,649 $ 8,646 $ (13,815) $ 22,979,480
U. S. Government Agencies:
Mortgage-backed securities 22,586,995 88,167 (128,226) 22,546,936
Other 3,975,398 8,242 -- 3,983,640
------------ ------------ ------------ ------------
$ 49,547,042 $ 105,055 $ (142,041) $ 49,510,056
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
----------------------------
Unrealized
---------------------------- Market
Book Value Gains Losses Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Held to Maturity
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
============ ============ ============ ============
Available for Sale
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
============ ============ ============ ============
</TABLE>
During 1996, the Bank sold $1,778,454 of available for sale securities
resulting in gross realized gains of $24,988 and gross realized losses of
$10,255.
42
<PAGE> 46
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.
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. 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 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,
1996 and 1995, remaining to be amortized was approximately $119,000 and
$132,000, respectively.
The amortized cost and estimated market value of debt securities at December
31, 1996, 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 $ 395,000 $ 396,960 $21,961,535 $21,956,280
Due after 1 year
through 5 years 5,596,637 5,724,741 1,023,114 1,023,200
Due after 5 years
through 10 years 8,595,901 8,677,724 3,975,398 3,983,640
Due after 10 years 7,432,254 7,844,309 -- --
----------- ----------- ----------- -----------
Total 22,019,792 22,643,734 26,960,047 26,963,120
Mortgage-backed
securities 10,908,602 11,516,341 22,586,995 22,546,936
----------- ----------- ----------- -----------
Total $32,928,394 $34,160,075 $49,547,042 $49,510,056
=========== =========== =========== ===========
</TABLE>
The average remaining maturity of U. S. Treasury, U. S. Agency, and state and
municipal obligations at December 31, 1996 was 0.6, 8.6 and 6.4 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 3.6 years at December 31, 1996.
Investment securities with carrying values of $55,275,812 and $55,723,108 at
December 31, 1996 and 1995, respectively, were pledged to secure public funds
and for other purposes.
43
<PAGE> 47
4. LOANS:
The composition of loans as of December 31 is as follows:
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
Commercial and agricultural $ 41,750,879 $ 32,728,022
Real estate:
Construction 2,065,205 1,642,091
Residential mortgage 37,132,708 33,203,838
Commercial mortgage 41,699,112 28,600,959
Consumer and other 57,984,781 46,027,505
Less: Unearned income (78,252) (90,344)
------------- -------------
Total $ 180,554,433 $ 142,112,071
============= =============
</TABLE>
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 $191,607, $274,874 and $459,550 related to these collections for the
years ended December 31, 1996, 1995 and 1994, 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 aggregate market value of loans held for sale was $743,260 and $596,151 as
of December 31, 1996 and 1995, respectively. The Bank is servicing
approximately $20,938,231 and $15,694,000 of mortgage loans sold as of December
31, 1996 and 1995, respectively, and charges an annualized servicing fee of
1/4% of the loan balance outstanding. For 1996 and 1995, the Bank earned
approximately $49,000 and $33,000, respectively, in servicing fees. In 1996
and 1995, the Bank incurred (losses) gains of $(14,000) and $18,000,
respectively, related to loan sales. All loans sold during 1996 and 1995 were
without recourse. Included in noninterest bearing deposits are $133,696 and
$74,639 of escrow funds related to loans sold and serviced by the Bank at
December 31, 1996 and 1995, respectively.
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
$2,194,394 and $2,406,470 at December 31, 1996 and 1995, respectively. During
1996, $1,062,019 of new loans were made and repayments totaled $1,273,555.
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
-----------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Balance at beginning of year $ 3,396,531 $ 3,114,214 $ 2,825,714
Provision charged to expense 536,200 355,000 103,525
Loans charged off (509,004) (282,877) (173,454)
Recoveries on loans previously charged off 123,126 210,194 358,429
----------- ----------- -----------
Net (chargeoffs) recoveries (385,878) (72,683) 184,975
----------- ----------- -----------
Balance at end of year $ 3,546,853 $ 3,396,531 $ 3,114,214
=========== =========== ===========
</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 31, 1996 the Bank's recorded investment in impaired loans and
the related valuation allowance calculated under SFAS No. 114 is as follows:
<TABLE>
<CAPTION>
1996 1995
----------------------- -----------------------
Recorded Valuation Recorded Valuation
Investment Allowance Investment Allowance
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Impaired loans:
Valuation allowance required $ 325,307 $ 149,957 $ 123,059 $ 88,870
No valuation allowance required 258,041 -- 221,221 --
---------- ---------- ---------- ----------
Total $ 583,348 $ 149,957 $ 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 1996 was
$439,773.
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
-------------------
1996 1995
-------- --------
<S> <C> <C>
Nonperforming assets:
Nonaccrual loans $435,821 $159,877
Restructured loans 310,783 585,261
Other real estate, net -- 50,000
Other foreclosed assets 79,765 28,150
-------- --------
Total nonperforming assets $826,369 $823,288
======== ========
Loans past due 90 days or more and not on nonaccrual status $784,353 $281,972
======== ========
</TABLE>
45
<PAGE> 49
There was no interest income recognized on nonaccrual loans for the years ended
December 31, 1996, 1995 and 1994. Interest income that would have been
recognized for the years ended December 31, 1996, 1995 and 1994 on nonaccrual
loans had those loans been on accrual status at contractual terms throughout
the year was approximately $16,000, $13,000 and $6,000, respectively.
Of the $435,821 in nonaccrual loans, $309,784 were current as to payment of
contractual interest as of December 31, 1996.
The allowance for other real estate losses was not material for the years ended
December 31, 1996 and 1995.
7. BANK PREMISES AND EQUIPMENT:
A summary of bank premises and equipment is as follows:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Land $1,026,748 $1,020,748
Buildings and improvements 5,201,915 5,197,162
Furniture, fixtures and equipment 3,252,869 3,146,959
---------- ----------
Total 9,481,532 9,364,869
Less: Accumulated depreciation 4,324,094 3,969,714
---------- ----------
Net bank premises and equipment $5,157,438 $5,395,155
========== ==========
</TABLE>
Estimated useful lives range from three to forty years. Depreciation expense
for 1996, 1995 and 1994 was $385,717, $523,836 and $542,637, respectively.
8. INTEREST-BEARING DEPOSITS:
A summary of interest bearing deposits is as follows:
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Certificates of deposit of $100,000 or more $ 47,385,743 $ 45,546,660
Certificates of deposit less than $100,000 80,125,726 72,578,977
Demand and savings 95,524,976 80,641,962
------------ ------------
Total $223,036,445 $198,767,599
============ ============
</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
------------------------
1996 1995
---------- ----------
<S> <C> <C>
DEFERRED ASSETS:
Allowance for loan losses $ 511,000 $ 329,000
Unrealized loss on investment securities 74,000 19,000
Other 49,000 45,000
---------- ----------
Subtotal 634,000 393,000
---------- ----------
DEFERRED LIABILITIES:
Investment securities -- (42,000)
Bank premises and equipment (52,000) (40,000)
Other (1,000) (3,000)
---------- ----------
Subtotal (53,000) (85,000)
---------- ----------
NET DEFERRED ASSET $ 581,000 $ 308,000
========== ==========
</TABLE>
The components of income tax expense in the consolidated statements of
operations were as follows:
<TABLE>
<CAPTION>
Years Ended December 31
-----------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Current $ 1,520,921 $ 1,064,595 $ 1,202,384
Deferred (218,541) (148,410) (152,360)
----------- ----------- -----------
Total $ 1,302,380 $ 916,185 $ 1,050,024
=========== =========== ===========
</TABLE>
Total tax expense on income before taxes for 1996, 1995, and 1994 resulted in
effective tax rates that differed from the Federal statutory income tax rate.
A reconciliation follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Amount of tax expense at Federal statutory tax rate $ 1,639,855 $ 1,290,850 $ 1,285,452
Increases (decreases) in taxes resulting from:
Tax-exempt interest income (352,000) (364,000) (358,685)
Amortization of intangible 41,025 41,025 41,025
Other, net (26,500) (51,690) 82,232
----------- ----------- -----------
Total $ 1,302,380 $ 916,185 $ 1,050,024
=========== =========== ===========
</TABLE>
Other assets include $34,000 and $55,000 of prepaid income taxes at December
31, 1996 and 1995, respectively. The Bank is not subject to state income
taxes.
47
<PAGE> 51
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 $2,699,850 at December 31, 1996.
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 $2,714,682 at December 31, 1996. 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,
1996 were approximately $17,708,108. Unused credit card lines amounted to
approximately $3,964,532 at December 31, 1996. 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 $876,000.
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>
<CAPTION>
Year Ended December 31:
<S> <C>
1997 $ 75,360
1998 75,360
1999 38,040
2000 8,000
2001 6,000
2002 and thereafter 20,500
---------
Total $ 223,260
=========
</TABLE>
The Bank is named as defendant in various lawsuits. The amount, if any, of
ultimate liability with respect to such matters cannot be determined. However,
after consulting with legal counsel, management believes any such liability
will not have a material effect on the Bank's financial position or results of
operation.
48
<PAGE> 52
11. OTHER OPERATING EXPENSES:
The components of other operating expenses were:
<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Regulatory assessments $ 40,281 $ 283,378 $ 490,185
Amortization of intangible 120,992 120,662 120,662
Loss on sale of loans 14,094 -- 178,246
Supplies 196,039 188,593 183,756
Advertising 203,773 242,545 229,570
Other expenses 1,930,319 1,754,128 1,772,807
---------- ---------- ----------
Total $2,505,498 $2,589,306 $2,975,226
========== ========== ==========
</TABLE>
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,
$49,000 and $41,000 for the years ended December 31, 1996, 1995 and 1994,
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.
49
<PAGE> 53
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.
The estimated fair values of the Bank's financial instruments as of December
31, 1996 and 1995 were (in 000s):
<TABLE>
<CAPTION>
December 31, 1996 December 31, 1995
------------------- -------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- -------- -------- --------
<S> <C> <C> <C> <C>
ASSETS:
Cash and cash equivalents $ 30,677 $ 30,677 $ 23,142 $ 23,142
Securities held to maturity 32,928 34,160 36,447 37,775
Securities available for sale 49,510 49,510 56,419 56,419
Loans 181,292 180,551 142,705 143,468
LIABILITIES:
Deposits, demand 141,634 141,634 119,500 119,500
Deposits, time 127,511 127,871 118,126 118,684
Securities sold under agreements
to repurchase 3,576 3,576 1,750 1,750
</TABLE>
14. SUBSEQUENT EVENT:
On February 14, 1997, the Company announced that an agreement was reached for
the merger of the Company into Regions Financial Corporation. The closing of
the transaction, among other things, would be subject to regulatory approval
and approval of the shareholders of the Company.
15. DIVIDEND RESTRICTION:
The Company is subject to certain restrictions on the amount of dividends it
may declare without prior regulatory approval in accordance with the Federal
Reserve Act. At December 31, 1996, approximately $4,600,000 of retained
earnings were available for dividend declaration without prior regulatory
approval.
16. STOCK COMPENSATION:
In August 1996, the Company adopted The New Iberia Bancorp, Inc. Nonstatutory
Stock Option Plan (the Plan) which provides for the granting of non-qualified
stock options to the Bank's executives and certain key employees up to a
maximum of 150,000 shares of common stock. During August 1996, 150,000 stock
options were granted with an exercise price per share of $11.98 which was less
than the fair market value of the stock on grant date. The options vest over a
period of four years with compensation expense recognized over the vesting
period. Approximately $22,000 was recognized during 1996. The options are
exercisable over a ten-year period. The exercise period for an option may
accelerate based upon a change in control of the Bank or the optionee's
termination or death. As of December 31, 1996, 30,000 options were
exercisable. No options were exercised or cancelled in 1996.
The Company applies APB Opinion No. 25 and related Interpretations in
accounting for its stock-based compensation plans. On January 1, 1996, the
Company adopted FASB Statement No. 123 "Accounting for Stock-Based
Compensation" ("SFAS 123") which requires disclosure of the compensation cost
for stock-based incentives granted after January 1, 1995 based on the fair
value at grant date for the awards.
50
<PAGE> 54
Had compensation cost for the Company's 1996 grants for stock-based
compensation plans been determined consistent with SFAS 123, the Company's net
income, and net income per common share for 1996 would approximate the proforma
amounts below (in thousands except per share data):
<TABLE>
<CAPTION>
As Reported Proforma
----------- -----------
<S> <C> <C>
Net income $ 3,520 $ 3,503
Net income per common share $ 1.16 $ 1.15
</TABLE>
The fair value of each option granted during 1996 is $7.06 and is estimated on
the date of grant using the Black-Scholes option-pricing model with the
following assumptions: (i) dividend yield of 2%, (ii) expected volatility of
42.39%, (iii) risk-free interest rate of 6.41%, and (iv) expected life of 10
years.
17. REGULATORY CAPITAL:
The Company is subject to various regulatory capital requirements administered
by the federal banking agencies. Failure to meet minimum capital requirements
can initiate certain mandatory and possible additional discretionary actions by
regulators that, if undertaken, could have a direct material effect on the
Company's financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Company must meet
specific capital guidelines that involve quantitative measures of the company's
assets, liabilities, and certain off-balance sheet items as calculated under
regulatory accounting practices. The Company's capital amounts and
classification are also subject to qualitative judgments by the regulators
about components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the Company to maintain minimum amounts and ratios (set forth in the
table below) of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as defined) to
average assets (as defined). Management believes, as of December 31, 1996,
that the Company meets all capital adequacy requirements to which it is
subject.
As of December 31, 1996, the most recent notification from FDIC categorized the
Company as well capitalized under the regulatory framework for prompt
corrective action. To be categorized as the Company must maintain minimum
total risk-based, Tier I risk-based, Tier I leverage ratios as set forth in
the table. There are no conditions or events since that notification that
management believes have changed the institution's category.
The Company's actual capital amounts and ratios are also presented in the
table.
51
<PAGE> 55
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
------------------ ------------------- --------------------
(Dollars in Thousands) Amount Ratio Amount Ratio Amount Ratio
---------------------- ------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1996:
Total Capital (to Risk Weighted Assets):
Consolidated $ 28,105 15.8% $ 14,195 8% $ 17,444 10%
The New Iberia Bank 27,806 15.6% 14,238 8% 17,798 10%
Tier 1 Capital (to Risk Weighted Assets):
Consolidated 25,871 14.6% 7,097 4% 10,646 6%
The New Iberia Bank 25,565 14.4% 7,119 4% 10,679 6%
Tier 1 Capital (to Average Assets):
Consolidated 25,871 8.9% 8,730 3% 14,549 5%
The New Iberia Bank 25,565 8.8% 8,719 3% 14,532 5%
As of December 31, 1995:
Total Capital (to Risk Weighted Assets):
Consolidated $ 25,638 18.0% 11,399 8% 14,249 10%
The New Iberia Bank 25,047 18.0% 11,399 8% 14,249 10%
Tier 1 Capital (to Risk Weighted Assets):
Consolidated 23,449 16.5% 5,700 4% 8,550 6%
The New Iberia Bank 23,259 16.3% 5,700 4% 8,550 6%
Tier 1 Capital (to Average Assets):
Consolidated 23,449 9.0% 7,776 3% 12,960 5%
The New Iberia Bank 23,259 9.0% 7,776 3% 12,960 5%
</TABLE>
52
<PAGE> 56
18. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE:
Securities sold under agreements to repurchase (repos) are secured by U. S.
government and agency securities. The Company has the ability to exercise
legal authority over the securities which serve as collateral for the repos.
During 1996, average outstanding repos were $2,065,719 with an average rate of
4.4%. The highest month-end outstanding balance during 1996 was $4,233,446.
19. PARENT COMPANY FINANCIAL STATEMENTS:
Balance Sheets
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Cash $ 327,224 $ 28,988
Income tax receivable -- 174,635
Investment in subsidiary bank 25,528,174 23,448,956
------------ ------------
Total assets $ 25,855,398 $ 23,652,579
============ ============
Accrued liabilities $ 22,074 $ 14,023
Capital 14,250,558 9,500,500
Undivided profits 11,725,761 14,175,287
Unrealized loss on securities available for sale (142,995) (37,231)
------------ ------------
Total liabilities and stockholders' equity $ 25,855,398 $ 23,652,579
============ ============
</TABLE>
Statements of Operations
<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Dividends from subsidiary bank $1,670,000 $ 850,000 $ 787,000
Less: Expenses 507,466 530,867 206,672
---------- ---------- ----------
Income before equity in undistributed income of subsidiary bank
1,162,534 319,133 580,328
Equity in undistributed income of subsidiary bank 2,184,982 2,303,419 2,150,389
Income tax benefit 173,207 257,883 --
---------- ---------- ----------
Net income $3,520,723 $2,880,435 $2,730,717
========== ========== ==========
</TABLE>
53
<PAGE> 57
Statements of Cash Flows
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities-
Net income $ 3,520,723 $ 2,880,435 $ 2,730,717
(Increase) decrease in income tax receivable 174,635 (174,635) --
Equity in undistributed income of subsidiary bank (2,184,982) (2,303,419) (2,150,389)
(Increase) decrease in dividends receivable -- 450,000 (165,000)
Increase in accrued liabilities 7,860 31,256 --
----------- ----------- -----------
Net cash provided by operating activities 1,518,236 883,637 415,328
----------- ----------- -----------
Cash flows from financing activities-
Dividends paid (1,220,000) (897,527) (433,134)
Proceeds from reissue of treasury stock -- 33,025 1,950
----------- ----------- -----------
Net cash used in financing activities (1,220,000) (864,502) (431,184)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents 298,236 19,135 (15,856)
Cash and cash equivalents at beginning of year 28,988 9,853 25,709
----------- ----------- -----------
Cash and cash equivalents at end of year $ 327,224 $ 28,988 $ 9,853
=========== =========== ===========
</TABLE>
54
<PAGE> 58
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.
1996 (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 $5,441 $5,244 $4,908 $4,810
Net Interest Income 2,985 2,880 2,738 2,652
Provision for Loan Losses 304 147 85 -0-
Income before income tax 1,103 1,270 1,236 1,199
Net Income 846 904 886 885
Per Share Data:
Net Income* $ .28 $ .30 $ .29 $ .29
Cash Dividends
Declared** .15 .16 .05 .05
</TABLE>
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* $ .32 $ .22 $ .22 $ .20
Cash Dividends
Declared** .15 .05 .05 .05
</TABLE>
*Converted to reflect a 3-for-2 stock split effected as a 50% dividend
declared by the Board of Directors on August 12, 1996 and paid on September 24,
1996, to shareholders of record on September 10, 1996.
** All cash dividends shown were declared for the applicable periods indicated
and paid in the next quarter.
55
<PAGE> 59
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
The following table lists information about the directors of the Corporation
(all of the directors of the Corporation are also directors of the Bank):
<TABLE>
<CAPTION>
Name, Age and First Became Shares of Stock
Principal Occupation A Director of Beneficially Owned* Percent
(Last 5 Years) Bank or Corp. (As of 2/28/97) of Class
<S> <C> <C> <C> <C>
Ernest Freyou 58 7-01-88 8,430 (1) .28%
President and CEO
The New Iberia Bancorp, Inc.
The New Iberia Bank
P. O. Box 11240
New Iberia, LA 70562-1240
Gerald H. Halphen, M.D. 65 4-12-82 6,000 .20%
Pediatrician
125 Hilltop Circle
New Iberia, LA 70560
Frank C. Minvielle 58 11-04-91 7,635 (2) .25%
Sales - Cameco, Inc.
President - Cajun Sugar
Co-operative
2714 1/2 West Main Street
Jeanerette, LA 70544
Farming & Sugar Industry Equipment
James W. Schwing, Sr. 63 7-26-71 43,680 (3) 1.46%
Chairman of the Board
The New Iberia Bancorp, Inc.
The New Iberia Bank
P. O. Box 13340
New Iberia, LA 70562-3340
Attorney
</TABLE>
56
<PAGE> 60
<TABLE>
<CAPTION>
Name, Age and First Became Shares of Stock
Principal Occupation A Director of Beneficially Owned* Percent
(Last 5 Years) Bank or Corp. (As of 2/28/97) of Class
<S> <C> <C> <C> <C>
Jules A. Schwing 56 4-27-92 190,220 (4) 6.34%
President
Schwing Insurance Agency, Inc.
P. O. Box 10069
New Iberia, LA 70562-0069
Insurance Agent
Jerry E. Shea, Jr.(5) 46 1-13-97 6,095 (6) .20%
Chairman
Bayou Welding Works, Inc.
P. O. Box 11010
New Iberia, LA 70562-1010
Edward P. Terrell, III 61 11-04-91 6,000 .20%
Executive Vice President
McIlhenny Company
425 E. Main Street
New Iberia, LA 70560
Eugene A. Patout, Sr. 71 4-17-95 9,000 .30%
Owner & President
Patout-Greenwood Insurance
Agency, Inc.
717 Charles St.
New Iberia, LA 70560
Insurance Agent
Charles C. LeMaire 68 4-17-95 6,000 .20%
Retired
402 Wildwood
New Iberia, LA 70560
Dr. Edmond A. Lamperez 64 4-17-95 9,000 (7) .30%
Urologist
The Urology Clinic
602 N. Lewis Street, Suite 400
New Iberia, LA 70560
</TABLE>
57
<PAGE> 61
<TABLE>
<CAPTION>
Name, Age and First Became Shares of Stock
Principal Occupation A Director of Beneficially Owned* Percent
(Last 5 Years) Bank or Corp. (As of 2/28/97) of Class
<S> <C> <C> <C> <C>
James L. Gray 69 4-17-95 9,600 (8) .32%
President
James L. Gray, Inc.
P. O. Box 13038
New Iberia, LA 70562-3038
Property Rentals
William D. Quinlan 57 4-01-91(9) 18,600 (10) .62%
President
Insurance Center, Inc.
P. O. Box 12710
New Iberia, LA 70562
Insurance
</TABLE>
The following table lists information about the executive officers of the Bank
in addition to those listed above:
<TABLE>
<CAPTION>
Name, Age and First Became Shares of Stock
Principal Occupation an Executive Beneficially Owned* Percent
(Last 5 Years) Officer of Bank(11) (As of 2/28/97) of Class
<S> <C> <C> <C> <C>
Robert F. Eppley(12) 50 12/21/87 300 (13) .01%
Executive Vice President
and Secretary
The New Iberia Bank
233 Duperier Avenue
New Iberia, LA 70560-2417
Leonard J. Freyou(12) 70 1/5/76 1,560 .05%
Sr. Vice President/Cashier
The New Iberia Bank
2312 Freyou Road
New Iberia, LA 70560-0743
Anne T. Dugas(14) 37 1/11/93 -0- (15) .00%
Vice President, Branch Operations
The New Iberia Bank
P. O. Box 12514
New Iberia, LA 70562-2514
</TABLE>
58
<PAGE> 62
<TABLE>
<CAPTION>
Name, Age and First Became Shares of Stock
Principal Occupation an Executive Beneficially Owned* Percent
(Last 5 Years) Officer of Bank(11) (As of 2/28/97) of Class
<S> <C> <C> <C> <C>
Lon Dupre 37 1/11/93 -0- (16) .00%
Vice President and CFO
The New Iberia Bank
1604 Southwood Drive
New Iberia, LA 70560
Benny Menard(17) 42 1/11/93 -0- (18) .00%
Vice President, Loan Administration
The New Iberia Bank
1706 Pembroke
New Iberia, LA 70560
Jerome Weber 42 1/11/93 -0- (19) .00%
Senior Vice President, Lending
The New Iberia Bank
2310 Turnberry Drive
New Iberia, LA 70560
</TABLE>
The following table lists information about the directors of the Bank who are
not directors of the Corporation:
<TABLE>
<CAPTION>
Name, Age and First Became Shares of Stock
Principal Occupation A Director of Beneficially Owned* Percent
(Last 5 Years) Bank (As of 2/28/97) of Class
<S> <C> <C> <C> <C>
Edwin S. 46 4/17/95 19,728 (20) .65%
("Happy") Broussard, III
(Farm Bureau Insurance
Agency Manager
4515 Sugar Oaks Road
New Iberia, LA 70560
</TABLE>
59
<PAGE> 63
<TABLE>
<CAPTION>
Name, Age and First Became Shares of Stock
Principal Occupation A Director of Beneficially Owned* Percent
(Last 5 Years) Bank (As of 2/28/97) of Class
<S> <C> <C> <C> <C>
Samuel S. Broussard, Jr. 42 7/10/95 9,300 (21) .31%
Co-owner and CEO of
Sam Broussard Trucking
Co., Sammy Broussard
International, Sammy Broussard
Lawn & Tractor Center,
S & S Leasing & Rental Co.,
The Cattlemen's Ranch Supply, Inc.
and LaBelle Cheniere Ranch
307 Estate Drive
New Iberia, LA 70560
J. Preston Duhe(22) 77 4/28/80 15,480 .52%
Retired Farmer
2915 Old Spanish Trail
New Iberia, LA 70560
Edwin S. Patout 49 4/17/95 9,000 .30%
Attorney
P.O. Box 9502
New Iberia, LA 70562-9502
J. P. Thibodeaux(22) 68 4/12/82 6,780 .226%
Chairman of the Board
of J. P. Thibodeaux, Inc.
101 Sawgrass Lane
Broussard, LA 70518
</TABLE>
*Unless otherwise noted, each individual has sole voting and investment power
of the shares reported.
(1) Includes one hundred fifty (150) shares owned jointly by Mr. Freyou
and his wife. Does not include the options held by Mr. Freyou for
57,000 shares, 20% of which are vested but not exercised. These
options (and the others described below) will become fully exercisable
upon a change in control as defined in the Stock Option Plan (which
would include a merger of the Corporation into Regions).
(2) Includes one thousand six hundred thirty-five (1,635) shares owned by
Mr. Minvielle in street name.
60
<PAGE> 64
(3) Prior to being elected Chairman of the Board on May 28, 1991, Mr.
James W. Schwing, Sr. was a director for 20 years and an attorney, a
profession in which he is currently engaged. The stock listed above
includes 12,360 shares in Mr. Schwing's retirement plan.
(4) Includes one-sixth (151,220) of the shares held by the Estates of
Jules B. Schwing and Marie Louise Landry Schwing, of which Robert M.
Fleming is Provisional Executor, which own 907,320 shares of stock.
See "Principal Shareholders and Securities Ownership of Management."
(5) Jerry Shea, Jr. replaced his father, Jerry Shea, Sr., who retired on
January 7, 1997.
(6) Includes 6,095 shares in street name.
(7) This does not include 60 shares owned by Dr. Lamperez's daughter or 60
shares owned by his son of which Dr. Lamperez disclaims beneficial
ownership.
(8) Includes 3,600 shares held of record by Protestant Cemetery
Association of New Iberia, of which Mr. Gray serves as President.
(9) Mr. Quinlan served as a director of the Corporation and the Bank from
11/4/91 to 4/17/95. From 4/17/95 to 8/12/96 he served as a Bank
Director only. Since 8/12/96 he has served as a director of both the
Corporation and the Bank.
(10) Includes 9,000 shares held in street name.
(11) The Executive Officers hold their offices for such terms as are
determined from time to time by the Board, except that Mr. Ernest
Freyou, Mr. Dupre, Mr. Eppley, Mr. Weber, Mrs. Dugas, and Mr. Menard
each have an employment contract with the Corporation and the Bank.
Each of these contracts were extended in January 1997. Mr. Freyou's
contract extends through August 16, 2000; Mr. Weber's extends through
August 16, 1999; the rest extend through August 16, 1998. They each
renew automatically at the end of the term unless terminated by
written notice in accordance with the provisions of the contract.
(12) Mr. Eppley and Mr. L. J. Freyou are also executive officers of the
Corporation.
(13) Mr. Eppley has a stock option agreement with the Corporation for
12,000 shares; 20% of the options are currently vested and not
exercised. These shares are not included in table above.
(14) Mrs. Dugas has served in her current position since November 15, 1993.
Prior to that she was Human Resources and Marketing Manager.
(15) Mrs. Dugas has a stock option agreement with the Corporation for
12,000 shares; 20% of the options are currently vested and not
exercised. These shares are not included in table above.
61
<PAGE> 65
(16) Mr. Dupre has a stock option agreement with the Corporation for 13,500
shares; 20% of the options are currently vested and not exercised.
These shares are not included in table above.
(17) Mr. Menard has served in his current position since October 26, 1992.
Prior to that he was a Loan Officer.
(18) Mr. Menard has a stock option agreement with the Corporation for
12,000 shares; 20% of the options are currently vested and not
exercised. These shares are not included in table above.
(19) Mr. Weber has a stock option agreement with the Corporation for 25,500
shares; 20% of the options are currently vested and not exercised.
These shares are not included in table above.
(20) Includes the following held in street name: 1,389 shares held as
custodian for Dustin Broussard, 1,372 shares held as custodian for
Shawn M. Broussard, 4,816 shares owned by Edwin S. Broussard SEP
Retirement Fund and 17 shares held as custodian for grandson.
(21) Includes 3,000 shares held in street name.
(22) J. Preston Duhe and J.P. Thibodeaux also served as a director of the
Corporation until April 17, 1995.
All of the Directors have been engaged in the occupations listed above for at
least the past five years.
Family relationships between directors and executive officers are: L. J. Freyou
and Ernest Freyou are first cousins. James W. Schwing, Sr. is the uncle of
Jules A. Schwing and Edwin S. Broussard, III. James W. Schwing, Sr. and Eugene
A. Patout, Sr. are cousins. Jules A. Schwing is a cousin of Edmond Lamperez and
of Edwin S. Broussard, III. Eugene A. Patout, Sr. is the uncle of Edwin S.
Patout.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires officers,
directors and beneficial owners of more than 10% of the outstanding shares of
the Corporation to file with the SEC certain reports describing their stock
ownership and changes in their stock ownership. They must also furnish the
Corporation with copies of these forms. Based solely on its review of the
copies of such forms received by it and written representations from certain
reporting persons that they have complied with the relevant filing
requirements, the Corporation believes that all filing requirements applicable
to its executive officers, directors and greater than 10% shareholders were
complied with as of December 31, 1996, except that director Jerry E. Shea, Jr.
filed a Form 3 and a Form 4 late in 1997, and that director Edwin S. Broussard,
III filed a Form 4 late.
62
<PAGE> 66
Item 11, Executive Compensation
The Corporation does not compensate its directors or executive officers except
that it did pay fees as listed below on a per meeting basis for nine Corporation
board meetings. The following table sets forth the compensation for services in
all capacities paid by the Bank to the Chief Executive Officer of the Bank for
each of the last three fiscal years.
Summary Compensation Table
<TABLE>
<CAPTION>
Name and Annual Compensation All Securities
Principal Other Annual Other Underlying
Position Year Salary Bonus Compensation Compensation Options/SARs
(1)
<S> <C> <C> <C> <C> <C> <C>
Ernest Freyou 1996 $140,000 $30,000 $11,400 $14,250 (2) 57,000
President & CEO 1995 $95,000 $30,000 $16,150 $13,125 (3) -0-
1994 $95,000 $20,000 $11,400 $12,875 (4) -0-
</TABLE>
(1) Represents director's fees earned by Mr. Freyou for each year.
(2) This figure represents (i) premiums in the amount of $10,000
paid on a life insurance policy for Mr. Freyou required by
the deferred compensation plan (described below) and (ii)
$4,250, which represents a matching contribution to The New
Iberia Bank Profit Sharing Plan with 401 (k) Provision (the
"Plan") made by the Bank on behalf of Mr. Freyou. The Plan
provides that the Bank may make a matching contribution to the
Plan on behalf of all participants in an amount to be
determined each year, which amount shall not exceed 2 1/2% of
the participant's annual compensation (salary plus bonus). In
each of 1996, 1995, and 1994, the Bank made matching
contributions for each participant at 2 1/2% of the
participant's annual compensation. Aggregate premiums paid in
1996 and attributable to life insurance maintained for the
three Executive Officers other than Mr. Freyou covered by the
deferred compensation plan was $10,146.03.
(3) This figure represents (i) premiums in the amount of $10,000
paid on a life insurance policy for Mr. Freyou under the
deferred compensation plan and (ii) $3,125 in matching
contributions to the 401(k) Plan made by the Bank on Mr.
Freyou's behalf.
(4) This figure represents (i) premiums in the amount of $10,000
paid on a life insurance policy for Mr. Freyou under the
deferred compensation plan and (ii) $2,875 in matching
contributions to the 401(k) Plan made by the Bank on Mr.
Freyou's behalf.
On August 16, 1994, the Corporation entered into a three-year employment
contract with its Chief Executive officer and President, Ernest Freyou. The
contract provides that it may be terminated at the end of its initial term by
90 days' written notice and that if it is not terminated, it will renew for
successive one-year periods unless terminated by notice at least 60 days but
not earlier than 90 days
63
<PAGE> 67
prior to its expiration. On January 28, 1997, the term was extended for an
additional three years from August 16, 1997. The contract may be terminated by
the Corporation prior to the completion of its term for (i) illness or
disability of Mr. Freyou over certain specified periods, (ii) commission by
Mr. Freyou of certain violations of law or (iii) material breach of the
contract. The contract further provides for a payment to Mr. Freyou equal to
three times his then current salary under certain circumstances in the event of
the termination of the contract as a result of a disposition of all the
properties and business of the Corporation by merger, consolidation, sale of
assets or otherwise. The Board believes that this amount would not be material
to a potential acquiror. The contract is deemed terminated as described above
if the Corporation does not assign the contract to the acquiring or surviving
entity in the merger, consolidation or sale or if the surviving entity does not
assume in writing all of the obligations of the Corporation under the contract
or if Mr. Freyou does not approve the assignment of the contract. The Board of
Directors believes that this employment contract is in the best interest of the
Corporation and the Bank because it makes it more likely that Mr. Freyou will
continue to be committed to the Corporation and the Bank over the next several
years. The Board believes that Mr. Freyou has been instrumental to the Bank's
success, and the Board believes that his continuing commitment and loyalty to
the Bank over the next few years is important.
64
<PAGE> 68
Option/SARs grants in Last Fiscal Year
<TABLE>
<CAPTION>
Number of % of Total
Securities Options/SARs
Underlying Granted to Market Price Grant Date
Option/SARs Employees in Exercise or on Date Expiration Present
Optionee Granted(#) Fiscal Year Base Price of Grant Date Value $
<S> <C> <C> <C> <C> <C> <C>
Ernest Freyou 57,000 38% $11.98 13.58 8/19/2006 $402,420 (1)
</TABLE>
(1) The option pricing model used for the computation of the present value
of the granted options is the Black-Scholes model. In using this
model, the following assumptions were used: (1) dividend yield of 2%,
(2) expected volatility of 42.39%, (3) risk-free interest rate of
6.41%, and (4) expected life of 10 years.
Compensation of Directors
During 1996, the Board of Directors of the Corporation and the Bank and
Director Committees held meetings and received attendance fees as follows:
<TABLE>
<CAPTION>
Number of Meetings Fees Per Meeting
Board or Committee Held in 1996 Per Member
<S> <C> <C>
Board of Directors 23 $ 300
(Corporation 9, Bank 14)
Asset & Liability 2 $ 150
Loan Committee 49 $ 150
Management Committee 5 $ 150
Trust Audit Committee 1 $ 150
Trust Investment Committee 2 $ 150
Ad Hoc/Negotiating 14 $ 150
Director's Audit Committee 1 $ 150
CRA Committee 1 $ 150
</TABLE>
Each Director receives a $ 300.00 per month stipend over and above the fees
received per meeting attended.
65
<PAGE> 69
MANAGEMENT COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Management Committee of the Board of Directors of the Bank establishes and
administers compensation policies and recommends to the board compensation and
annual incentive bonuses for all of the Bank's employees, including executive
officers (except the President and CEO, Ernest Freyou). The President's
compensation and bonus each year are determined directly by the Board of
Directors, without a Management Committee recommendation and without
participation by Mr. Freyou. Bank directors James W. Schwing, Sr., Ernest
Freyou, Frank C. Minvielle, Jerry E. Shea, Sr., J. P. Thibodeaux, Edward P.
Terrell, III, William D. Quinlan, Edwin Patout and James L. Gray served on the
Management Committee during fiscal year 1996. James W. Schwing, Sr. served as
the Chairman of the board of the Corporation and the Bank during that time and
Ernest Freyou served as President and CEO of the Corporation and the Bank
during that time. Also during 1996, Mr. Schwing received fees totalling
$70,000.00 for acting as legal counsel to the Bank.
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<PAGE> 70
Item 12 - Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information concerning the beneficial ownership
of voting stock of the Corporation by persons who are known to the Corporation
to own beneficially more than 5% of the Corporation's voting common stock:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent
of Beneficial Owner Beneficial Ownership Of Class
- ------------------- -------------------- --------
<S> <C> <C>
Honorable Robert M. Fleming 907,320 (1) 30.24%
Provisional Executor of the Estate of Jules B.
Schwing and the Estate of Marie Louise Landry
Schwing
P. O. Box 1150
Franklin, LA 70538-1150
Jules A. ("Tony") Schwing (2) 39,000 direct 6.34%
106 Bayou Drive 151,220 beneficial (representing
New Iberia, LA 70560 Mr. Schwing's interest in
the stock held in the
successions listed above)
Edmond L. Schwing (2) 40,800 direct 6.40%
5306 Shoreline Drive 151,220 beneficial (representing
New Iberia, LA 70560 Mr. Schwing's interest in
the stock held in the
successions listed above)
John E. Schwing, III (2) 39,600 direct 6.36%
223 Woodland Circle 151,220 beneficial (representing
New Iberia, LA 70560 Mr. Schwing's interest in
the stock held in the
successions listed above)
Marie Louise Schwing (2) 40,800 direct 11.44%
625 E Main Street 302,440 beneficial (representing
New Iberia, LA 70560 Ms. Schwing's interest and
that of her brother Charles
E. Schwing, for whom she
serves as curatrix, in the
stock held in the successions
listed above)
</TABLE>
67
<PAGE> 71
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent
of Beneficial Owner Beneficial Ownership Of Class
- ------------------- -------------------- --------
<S> <C> <C>
Susan Marie Schwing (3) 53,580 direct 6.83%
306 Brentwood Blvd. 151,220 beneficial (representing
Lafayette, LA 70503-3916 Ms. Schwing's interest in
the stock held in the
successions listed above)
The New Iberia Bancorp, Inc.(4) 760,834 benefical ownership of 25.36%
Concerned Shareholders Group Group members
Parish of Iberia, State of Louisiana
</TABLE>
(1) The Estates of Jules B. Schwing and Marie Louise Landry Schwing,
Provisional Executor Honorable Robert M. Fleming, beneficially own
907,320 shares or 30.24% of the outstanding common stock of the
corporation. Jules B. Schwing died on April 14, 1991, and Jules A.
("Tony") Schwing was appointed and confirmed as Executor for the
succession of Jules B. Schwing on April 23, 1991. Marie Louise Landry
Schwing died on June 17, 1985, and Jules A. ("Tony") Schwing was
appointed and confirmed as Executor for the Succession of Marie Louise
Landry Schwing on September 28, 1993. Robert M. Fleming was appointed
Provisional Executor of the Estates of Jules B. Schwing and Marie
Louise Landry Schwing on or about April 13, 1995, and Letters of
Provisional Administration were issued to him on or about April 21,
1995. Each of the heirs with interests in the stock (being Jules A.
("Tony") Schwing, Edmond Schwing, John Schwing, Marie Schwing,
individually and as curatrix for Charles Schwing, and Susan Schwing)
claim under a Joint Motion and Judgment dated April 13, 1995, entered
in the succession proceedings, the right to direct the Executor as to
the voting of one-sixth, or approximately 151,220 shares each (and, as
to Marie Schwing, two-sixths) of the stock in the successions. It is
unknown at this time whether a change in control will occur when the
shares owned by the estates are distributed. The Estates and Jules A.
("Tony") Schwing and his siblings as a group own 1,121,000 shares
(37.37%) of the Corporation's outstanding common stock. The siblings
of the deceased Jules B. Schwing (the children of J. E. Schwing other
than the deceased Jules B. Schwing) collectively own 246,982 shares
(8.23%) of the Corporation's outstanding common stock. The
aforementioned shareholders own, in the aggregate, 1,367,982 shares of
stock making them, as a group, 45.59% beneficial owners. The
individual members of the Schwing family disclaim any beneficial
ownership in the shares owned by the other members of the Schwing
family.
(2) Information taken from Schedule 13D/A (Amendment No., 3) dated May 12,
1995, and filed by the following persons with the SEC: Jules A.
Schwing, Estate of Jules B. Schwing, Estate of Marie Louise Landry
Schwing, Robert M. Fleming, as Provisional Executor of the Estate of
Jules B. Schwing and of the Estate of Marie Louise Landry Schwing,
Edmond L. Schwing, John E. Schwing, III, Marie Louise Schwing, Edmond
A. Lamperez, M.D., James L. Gray, Charles C. LeMaire and Eugene A.
Patout. Although these persons denied the existence of a group and
disclaimed beneficial ownership of the stock held by the others
(except as to the interests of Jules A., Edmond L., John E., and Marie
Louise Schwing in the shares held by the Estates), the
68
<PAGE> 72
Schedule 13D/A reports that collectively those persons beneficially
owned in the aggregate 1,101,120 shares representing approximately
36.7% of the outstanding common stock of the Corporation. The Schedule
13D/A filing by this group suggests that the group may take actions
that might result in a change in control of the Corporation. Edmond L.
Schwing has 4000 shares included in direct total being held in Street
Name.
(3) Information taken from Schedule 13D filed by Susan Schwing with the
SEC on May 18, 1995.
(4) On July 11, 1996, The New Iberia Bancorp, Inc. Concerned Shareholders
Group (the "Group"), consisting of shareholders of the Corporation
owning approximately 25.4% of the issued and outstanding common stock
of the Corporation, filed a Schedule 13D with the Securities and
Exchange Commission in which the members of the Group stated their
intention to cooperate as a group to oppose a proposed merger of the
Corporation with and into Whitney Holding Corporation. The members
included are: Anna Louise S. Allain (36,480 shares), Richard S.
Allain, Sr. (600 shares), Roy J. Breaux, Jr. (45,000 shares), Mrs. Roy
Breaux, Sr. (1,140 shares), Royce E. Breaux (45,000 shares), Roy
Breaux, Jr. & R.C. Breaux Trust (4,800 shares), Benedict Jacques
Broussard (13,680 shares), Daniel Broussard (13,530 shares), Edwin S.
Broussard, III (17,895 shares), Estate of George Patout Broussard
(38,580 shares), Flora Therese Schwing Broussard (17,700 shares),
George P. Broussard, Jr. (9,570 shares), Kenneth J. S. Broussard
(13,680 shares), Thomas S. Broussard, Sr. (13,320 shares), Alice C.
Porter (27,240 shares), Henry D. Porter (1,620 shares), Lena Savoy
Maumus Usufruct (36,000 shares), Pat Dougherty-Henriette S.
Dougherty, Usufruct (3,000 shares), Henriette S. Dougherty (33,120
shares), Margaret Ann Robbins Labiche (2,345 shares), John Thomas
Robbins (3,366 shares), Alton P. Lasalle (1,980 shares), Alfred W.
Lasalle (9,000 shares), Harriet Minvielle Lasalle (3,000 shares), Ruel
Robbins and Mary Robbins (900 shares), Mary S. Robbins (29,082
shares), Ruel Howard Robbins, Jr. (2,346 shares), James W. Schwing,
Sr. (43,680 shares), Paul Schwing (33,420 shares), Pierre F. Schwing
(34,740 shares), Susan M. Schwing (204,800 shares), Gregory Robert
Olivier Dekeyzer (1,200 shares), Frankie Olivier Patout (6,600
shares), Jules G. Patout (9,000 shares), Frederic F. Ric Patout (300
shares),and Alfred Granger, Jr. (3,120 shares). A merger agreement
was never executed by the Corporation and Whitney Holding Corporation,
and a press release announcing the termination of negotiations with
respect to such a transaction was issued by the Corporation on July
16, 1996.
The 12 members of the Board of Directors of the Corporation and the 6 executive
officers of the Bank who are not Directors, as a group, own 322,120 shares of
stock (including the shares in the Schwing successions with respect to which
Jules A. ("Tony") Schwing claims beneficial ownership), making the group of
such officers and directors a 10.74% beneficial owner.
On February 13, 1997, the Corporation entered into an Agreement and Plan of
Merger with Regions Financial Corporation, a bank holding company based in
Birmingham, Alabama, for consideration consisting of 0.36 of a share of
Regions' common stock for each share of the Corporation's stock outstanding at
the consummation of the merger (or, as to Corporation stock options not
exercised time of the merger, the conversion of such stock options into
Regions' stock options based upon the same exchange rate), subject to possible
adjustment. If the shareholders of the Corporation and the necessary regulatory
authorities approve the merger, all other conditions to the merger are
satisfied and the merger
69
<PAGE> 73
takes place, the Corporation would cease doing business as an independent
entity, the Bank would be wholly-owned by Regions and the shareholders of the
corporation would become shareholders of Regions.
Item 13 - Certain Relationships and Related Transactions
Interest of Management and Others in Certain Transactions
Since the beginning of the fiscal year 1996, to the present, The New Iberia
Bank has made loans in the ordinary course of business to Directors and
officers of the Bank and their family members and their associates, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and did
not involve more than normal risk of collectibility or present other
unfavorable features.
Since the beginning of 1996, seven Bank directors and executive officers each
had loan balances in excess of $60,000. The largest aggregate amount of these
loans during 1996 was $2,992,722. As of December 31, 1996, the aggregate
amount of indebtedness of these loans was $1,874,118, representing 7.25% of the
total equity capital accounts of the Bank.
During the year 1996, James W. Schwing, Sr., Chairman of the Board, received
fees totaling $70,000 for acting as legal counsel to the Bank.
70
<PAGE> 74
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, 1996 and 1995
Consolidated Statements of Income for the years ended December
31, 1996, 1995 and 1994
Consolidated Statements of Changes in Stockholders' Equity for
the years ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flow for the years ended
December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
Selected Quarterly Financial Information for 1996 and 1995
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. The most recent report on Form 8-K filed by the Corporation
concerned the execution by the Corporation of an Agreement and
Plan of Merger providing for the acquisition of the
Corporation by Regions Financial Corporation subject to
shareholder and regulatory approvals and other conditions.
That Form 8-K was filed with the Commission on February 18,
1997.
71
<PAGE> 75
(c) Exhibits
3.1 Copy of Amended and Restated Articles of Incorporation,
incorporated by reference to Exhibit 3. (i) of the Company's
Registration Statement on Form 8-A/A1 filed with the
Commission on July 19, 1995.
3.2 Copy of Amended and Restated Bylaws, incorporated by reference
to Exhibit 4 of the Company's Form S-8 Registration Statement
filed with the Commission on October 21, 1996.
10.1 The New Iberia Bancorp, Inc. Nonstatutory Stock Option Plan,
incorporated by reference to Exhibit 10.1 of the Company's 3rd
Quarter 1996 10-Q.
10.2 Form of Stock Option Agreement pursuant to The New Iberia
Bancorp, Inc. Nonstatutory Stock Option Plan, incorporated by
reference to Exhibit 10.2 of the Company's 3rd Quarter 1996
10-Q.
10.3 Copy of Employment Agreement between The New Iberia Bank, The
New Iberia Bancorp, Inc. and Ernest Freyou, incorporated by
reference to Exhibit 10.1 of the Company's 1995 10-K.
10.4 Copy of Nonqualified Deferred Compensation Agreement between
The New Iberia Bank and Ernest Freyou, incorporated by
reference to Exhibit 10.2 of the company's 1995 10-K.
21 Subsidiaries
The New Iberia Bancorp, Inc. owns 100% of the capital
stock of The New Iberia Bank.
23 Consent of Arthur Andersen LLP
27.1 Financial Data Schedule
72
<PAGE> 76
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 Security Exchange Act of 1934, this report
has been signed on March 10, 1997 by the following persons on behalf of the
Registrant and in the capacities indicated.
<TABLE>
<S> <C>
/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, M.D. /s/James W. Schwing, Sr.
- ----------------------------------- --------------------------------
Gerald Halphen, M.D., Director James W. Schwing, Sr. Director
/s/Edmond A. Lamperez, M.D. /s/Jules A. Schwing
- ----------------------------------- --------------------------------
Edmond A. Lamperez, M.D., Director Jules A. Schwing, Director
/s/Charles C. LeMaire /s/Jerry E. Shea, Jr.
- ----------------------------------- --------------------------------
Charles C. LeMaire, Director Jerry E. Shea, Jr., Director
/s/Edward P. Terrell, III /s/William D. Quinlan
- ----------------------------------- --------------------------------
Edward P. Terrell, III, Director William D. Quinlan, Director
/s/Lon Dupre /s/Leonard J. Freyou
- ----------------------------------- --------------------------------
Lon Dupre, Vice-President and Leonard J. Freyou, Cashier
Chief Financial Officer Senior Vice-President
</TABLE>
73
<PAGE> 1
Exhibit 23
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 10-K, into the
Corporation's previously filed Registration Statement File No.
333-14553.
/s/ Arthur Anderson LLP
New Orleans, Louisiana
March 17, 1997
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000731940
<NAME> THE NEW IBERIA BANCORP
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 12,939,531
<INT-BEARING-DEPOSITS> 223,036,445
<FED-FUNDS-SOLD> 17,737,804
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 49,510,056
<INVESTMENTS-CARRYING> 32,928,394
<INVESTMENTS-MARKET> 34,160,075
<LOANS> 181,292,483
<ALLOWANCE> 3,546,853
<TOTAL-ASSETS> 299,422,660
<DEPOSITS> 269,145,194
<SHORT-TERM> 3,575,744
<LIABILITIES-OTHER> 868,398
<LONG-TERM> 0
0
0
<COMMON> 14,250,558
<OTHER-SE> 11,582,766
<TOTAL-LIABILITIES-AND-EQUITY> 299,422,660
<INTEREST-LOAN> 14,575,998
<INTEREST-INVEST> 5,213,663
<INTEREST-OTHER> 613,260
<INTEREST-TOTAL> 20,402,921
<INTEREST-DEPOSIT> 9,057,042
<INTEREST-EXPENSE> 9,147,865
<INTEREST-INCOME-NET> 11,255,056
<LOAN-LOSSES> 536,200
<SECURITIES-GAINS> 14,733
<EXPENSE-OTHER> 8,164,205
<INCOME-PRETAX> 4,823,103
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,520,723
<EPS-PRIMARY> 1.16
<EPS-DILUTED> 1.15
<YIELD-ACTUAL> 4.63
<LOANS-NON> 435,821
<LOANS-PAST> 784,353
<LOANS-TROUBLED> 310,783
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,396,531
<CHARGE-OFFS> 509,004
<RECOVERIES> 123,126
<ALLOWANCE-CLOSE> 3,546,853
<ALLOWANCE-DOMESTIC> 3,546,853
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
