UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED SEPTEMBER 30, 1995
Commission file number 2-90033
ASSUMPTION BANCSHARES, INC.
(Exact name of registrant specified in its charter)
Louisiana
(State or other jurisdiction of incorporation or organization)
72-0121470
(I.R.S. Employer Identification No.)
P.O. Box 398
110 Franklin Street
Napoleonville, Louisiana
(Address of principal executive office)
70390
(Zip code)
(504) 369-7269
(Registrant's telephone number, including area code)
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
Number of shares outstanding as of September 30, 1995:
160,000 Common Shares
<PAGE>
ASSUMPTION BANCSHARES, INC.
Condensed Consolidated Statements of Condition
(Unaudited)
September 30, 1995 and December 31, 1994
September 30, December 31,
Assets 1995 1994
___________ _____________ _____________
Cash and due from banks $ 4,646,316 $ 5,646,119
Federal funds sold - 4,800,000
_____________ _____________
Cash and cash equivalents 4,646,316 10,446,119
Interest-bearing deposits 99,000 99,000
Securities:
Held-to-maturity (market values of $25,992,000
and $23,765,000 at September 30, 1995 and
December 31, 1994, respectively) 26,081,560 25,509,568
Available-for-sale (amortized cost of
$12,160,376 and $18,002,372 at September 30,
1995 and December 31, 1994, respectively) 12,125,212 17,166,810
Loans 57,177,186 50,575,872
Less allowance for possible loan losses 1,124,503 1,103,823
_____________ _____________
Net loans 56,052,683 49,472,049
Other real estate 33,350 187,243
Bank premises and equipment, net 2,253,287 2,052,931
Accrued interest receivable 827,691 819,816
Other assets 409,192 672,006
_____________ _____________
$ 102,528,291 106,425,542
============= =============
Liabilities and Stockholders' Equity
____________________________________
Deposits:
Noninterest-bearing demand 9,204,840 11,419,962
NOW accounts 16,220,125 21,559,771
Money market accounts 9,617,216 11,186,172
Savings and IRA accounts 23,090,478 23,604,166
Certificates and other time deposits
$100,000 and over 3,332,136 3,648,964
Other certificates of deposit 28,065,747 26,833,732
_____________ _____________
89,530,542 98,252,767
Federal funds purchased 3,200,000 -
Accrued interest payable 405,781 193,474
Other liabilities and accrued expenses 191,601 63,584
_____________ _____________
Total liabilities 93,327,924 98,509,825
Stockholders' equity:
Common stock 800,000 800,000
Paid-in capital 450,000 450,000
Retained earnings 7,973,575 7,217,554
Net unrealized loss on securities (23,208) (551,837)
_____________ _____________
Total stockholders' equity 9,200,367 7,915,717
_____________ _____________
$ 102,528,291 106,425,542
============= =============
See accompanying note to condensed consolidated financial statements.
<PAGE>
ASSUMPTION BANCSHARES, INC.
Condensed Consolidated Statements of Income
(Unaudited)
For the three-month and nine-month periods ended September 30, 1995 and 1994
<TABLE>
<CAPTION>
Three months ended Nine months ended
__________________ _________________
Sept. 30, Sept. 30, Sept. 30, Sept.30,
1995 1994 1995 1994
_____ ______ _______ _______
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 1,233,249 1,089,057 3,515,364 3,102,570
Interest on investment securities:
Taxable 407,395 528,444 1,397,997 1,673,886
Exempt from federal income taxes 185,887 143,070 523,020 336,621
Interest on federal funds sold 27,257 25,137 145,201 135,583
Interest on deposits with banks 1,497 1,175 5,012 3,332
_____________ ____________ ___________ __________
Total interest income 1,855,285 1,786,883 5,586,594 5,251,992
Interest expense on deposits 782,418 620,998 2,300,844 1,896,733
Interest on federal funds purchased 5,445 9,852 5,445 9,852
_____________ ____________ ___________ __________
Total interest expense 787,863 630,850 2,306,289 1,906,585
_____________ ____________ ___________ __________
Net interest income 1,067,422 1,156,033 3,280,305 3,345,407
Provision for possible loan losses 34,000 10,000 52,000 50,000
_____________ ____________ ___________ __________
Net interest income after
provision for possible
loan losses 1,033,422 1,146,033 3,228,305 3,295,407
Other income 148,825 139,962 423,622 404,548
Other expenses (886,399) (893,723) (2,669,056) (2,637,223)
_____________ ____________ ___________ __________
Income before income taxes 295,848 392,272 982,871 1,062,732
Income tax expense (69,200) (41,700) (226,850) (213,111)
_____________ ____________ ___________ __________
Net income $ 226,648 350,572 756,021 849,621
============= ============ =========== ===========
Per share data:
Net income $ 1.42 2.19 4.73 5.31
============= ============ =========== ===========
Number of shares used in computation 160,000 160,000 160,000 160,000
============= ============ =========== ===========
</TABLE>
See accompanying note to condensed consolidated financial statements.
<PAGE>
ASSUMPTION BANCSHARES, INC.
Condensed Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
For the nine-month periods ended September 30, 1995 and 1994
Net
unrealized
gain (loss) Total
Common Paid-In Retained on stockholders'
stock capital earnings securities equity
__________ _________ __________ ___________ ____________
Balances at
December 31, 1993 $ 800,000 450,000 6,411,335 271,185 7,932,520
Net income for nine
months ended
September 30, 1994 - - 849,621 - 849,621
Change in net
unrealized gain
(loss) on
securities - - - (654,819) (654,819)
__________ _________ __________ ___________ ____________
Balances at
September 30,1994 $ 800,000 450,000 7,260,956 (383,634) 8,127,322
=========== ========= =========== ========== ============
Balances at
December 31, 1994 800,000 450,000 7,217,554 (551,837) 7,915,717
Net income for nine
months ended
September 30, 1995 - - 756,021 - 756,021
Change in net
unrealized gain
(loss) on securities - - - 528,629 528,629
__________ _________ __________ ___________ ___________
Balances at
September 30,1995 $ 800,000 450,000 7,973,575 (23,208) 9,200,367
=========== ========= ========== =========== ===========
See accompanying note to condensed consolidated financial statements.
<PAGE>
ASSUMPTION BANCSHARES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the nine-month periods ended September 30, 1995 and 1994
1995 1994
_______________ _____________
Cash flows from operating activities:
Net income $ 756,021 849,621
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 151,675 149,850
Provision for possible loan losses 52,000 50,000
Net loss on sale of securities
available-for-sale 6,629 14,208
Gain on sale of other real estate (16,032) -
Write down of other real estate - 63,554
Decrease in accrued interest receivable (7,875) (135,006)
Increase in accrued interest payable 212,307 41,777
Increase in other assets and other liabilities 118,507 (11,945)
_______________ _____________
Net cash provided by operating activities 1,273,232 1,022,059
_______________ _____________
Cash flows from investing activities:
Proceeds from sales of securities
available-for-sale 5,215,291 9,503,502
Maturities of and principal payments on
securities held-to-maturity 1,751,168 4,462,891
Purchases of securities available-for-sale (489,531) -
Maturities of and principal payments on
securities available-for-sale 1,110,162 2,861,053
Purchases of securities held-to-maturity (2,323,160) (14,344,009)
Loans originated, net of principal collected (6,642,634) (8,670,006)
Proceeds from sales of other real estate acquired
in settlement of loans 185,134 -
Capital expenditures (357,240) (479,975)
_______________ _____________
Net cash provided by investing activities (1,550,810) (6,666,544)
_______________ _____________
Cash flows from financing activities:
Net decrease in demand deposits, NOW accounts,
money market accounts and savings accounts (9,637,412) (7,035,980)
Net increase (decrease) of certificates of deposit
and other time deposits 915,187 (858,370)
Net increase in federal funds purchased 3,200,000 5,500,000
_______________ _____________
Net cash used in financing activities (5,522,225) (2,394,350)
_______________ _____________
Net decrease in cash and cash equivalents (5,799,803) (8,038,835)
Cash and cash equivalents at beginning of period 10,446,119 11,650,432
_______________ _____________
Cash and cash equivalents at end of period $ 4,646,316 3,611,597
=============== =============
Supplemental disclosures:
Interest paid on deposits $ 2,088,538 1,840,729
=============== =============
Income taxes paid $ 185,000 310,000
=============== =============
See accompanying note to condensed consolidated financial statements.
<PAGE>
ASSUMPTION BANCSHARES, INC.
Note to Condensed Consolidated Financial Statements
For the nine-month periods ended September 30, 1995 and 1994
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the nine-month period ended September 30, 1995, are
not necessarily indicative of the results that may be expected for
the year ending December 31, 1995. For further information, refer
to the audited consolidated financial statements and notes
included in Assumption Bancshares' annual report on Form 10-K for
the year ended December 31, 1994.
Cash and Cash Equivalents
For purposes of the condensed consolidated statements of cash
flows, cash and cash equivalents represent cash and due from banks
and federal funds sold.
Securities
The Bank accounts for its investments in accordance with the
provisions of Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities"
(SFAS No. 115). Under SFAS No. 115, the Bank classifies its
securities in one of three categories: trading, available-for-
sale, or held-to-maturity. Trading securities are bought and held
principally for the purpose of selling them in the near future.
Held-to-maturity securities are those securities in which the Bank
has the ability and intent to hold the security until maturity.
All other securities not included in trading or held-to-maturity
are classified as available-for-sale.
Trading and available-for-sale securities are recorded at fair
value. Held-to-maturity securities are recorded at amortized
cost, adjusted for the amortization or accretion of premiums or
discounts. Unrealized holding gains and losses on trading
securities are included in earnings. Unrealized holding gains and
losses, net of the related tax effect, on the available-for-sale
securities are excluded from earnings and are reported as a
separate component of stockholders' equity until realized.
Transfers of securities between categories are recorded at fair
value at the date of transfer. Unrealized holding gains and
losses are recognized in earnings for transfers into trading
securities. Unrealized holding gains or losses associated with
transfers of securities from held-to-maturity to available-for-
sale are recorded as a separate component of stockholders' equity.
The unrealized holding gains or losses included in the separate
component of equity for securities transferred from available-for-
sale to held-to-maturity are maintained and amortized into
earnings over the remaining life of the security as an adjustment
to yield in a manner consistent with the amortization or accretion
of premium or discount on the associated security.
<PAGE>
ASSUMPTION BANCSHARES, INC.
Note to Condensed Consolidated Financial Statements
A decline in the market value of any available-for-sale or held-
to-maturity security below cost that is deemed other than
temporary results in a charge to earnings resulting in the
establishment of a new cost basis for the security.
Premiums and discounts are amortized or accreted over the life of
the related held-to-maturity security as an adjustment to yield
using the effective interest method. Interest income is
recognized when earned. Realized gains and losses for securities
classified as available-for-sale and held-to-maturity are included
in earnings and are derived using the specific identification
method for determining the cost of securities sold.
Earnings per share
Earnings per share have been computed on the basis of the weighted
average number of shares outstanding.
Reclassification
Certain reclassifications were made to the condensed consolidated
statements of cash flows of prior periods to conform with the 1995
presentation.
Change in Accounting Principles - Accounting by Creditors for
Impairment of a Loan
During the first quarter of 1995, the Bank adopted Statement of
Financial Accounting Standard No. 114, Accounting by Creditors for
Impairment of a Loan (SFAS No. 114) and Statement of Financial
Accounting Standards No. 118, Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures (SFAS
No. 118). The Bank adopted the provisions of SFAS No. 114 and
SFAS No. 118 to all of its loans, except for its consumer
installment loans which are collectively evaluated for impairment.
Pursuant to SFAS No. 114 and SFAS No. 118, a loan is considered to
be impaired when, based on current information and events, it is
probable that the Bank will be unable to collect principal and
interest amounts due according to the contractual terms of the
loan agreement. When a loan is impaired, the measurement of its
impairment can be determined in one of three ways, as follows: (1)
the present value of the expected cash flows of the loan
discounted at the loan's original effective interest rate, (2) the
observable market price of the impaired loan, or (3) the fair
value of the collateral of a collateral-dependent loan. The
amount by which the recorded investment in the loan exceeds the
measure of the impaired loan is recognized by recording a
valuation allowance with a corresponding charge to the provision
for possible loan losses. The effect of adopting SFAS No. 114 and
SFAS No. 118 on the Bank's financial condition and results of
operations was immaterial.
At September 30, 1995, impaired loans, all of which were on
nonaccrual, totaled $839,500, of which $287,158 required a total
impairment allowance of $233,950. The average recorded investment
in impaired loans was approximately $715,000 and $769,000 during
the nine months and three months ended September 30, 1995,
respectively. The Bank recognized no interest income on those
impaired loans in the first nine months of 1995. For all impaired
loans, the impairment amount was measured using the fair value of
the underlying collateral.
<PAGE>
ASSUMPTION BANCSHARES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Net interest income for the nine months ended September 30, 1995
was comparable to amounts for the nine-month period ended
September 30, 1994. The Bank's net interest margins were 4.06%
and 4.20%, for the periods ended September 30, 1995 and 1994,
respectively.
Other expenses at September 30, 1995 totaled $2,674,496 which is
slightly higher than the $2,637,223 for the first nine months of
1994. The increase in expenses is due primarily to the additional
expenditures on advertising and consulting fees during the first
six months of 1995. Other income at September 30, 1995 totaled
$423,462 which is comparable to $404,548 for the first nine months
of 1994.
The provision for income taxes is based on management's estimate
of the expected effective tax rate for the entire year.
Liquidity and Capital Resources
Fluctuating interest rates and competitive forces in the financial
services industry have intensified the need for management of and
matching maturities of various assets and liabilities. This
process involves maintaining liquidity and controlling interest
rate sensitivity. The goal of liquidity management is to ensure
funds are available for customer needs. Interest rate sensitivity
management attempts to match shifts in earning asset yields with
interest paying liability rates.
Net earnings for the first nine months of 1995 of $756,021
increased the Bank's stockholders' equity, while the unrealized
losses on securities classified as available-for-sale decreased
$528,629, from an unrealized loss of $551,837 to an unrealized
loss of $23,208. Stockholders' equity increased $1,284,650 since
December 31, 1994 as a result of these changes.
Management is not aware of any recommendations by regulatory
authorities or other matters which are reasonably likely to have a
material effect on the Bank's capital resources, liquidity or
operations.
The Bank's deposits decreased approximately $8.7 million since
December 31, 1994. This decrease is consistent with the seasonal
cycle of cash flow in the agricultural industry in the Bank's
trade area. During the quarter ended September 30, 1995, the Bank
began purchasing Federal funds to help meet these liquidity needs.
Management anticipates increases in deposits during the fourth
quarter as crop proceeds are received by the Bank's agriculture
customers.
Securities, comprised of U. S. Treasuries, obligations of states
and municipalities and government guaranteed mortgage-backed
securities, represented 37% and 40% of total assets at September
30, 1995 and December 31, 1994, respectively. The securities
portfolio is managed with the primary objective of generating
interest income while maintaining an appropriate level of asset
liquidity and controlling the Bank's net interest rate risk
position.
<PAGE>
ASSUMPTION BANCSHARES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The market value of the entire securities portfolio is 99.7% of
book value at September 30, 1995, compared to 95.9% at December
31, 1994. Management does not anticipate any significant effect
on future earnings, liquidity or capital resources as a result of
the amounts of unrealized gains or unrealized losses in the
securities portfolio.
Securities Available for Sale
As of September 30, 1995, management has classified securities
with an aggregate amortized cost of $12,160,376 and a market value
of $12,125,212 as available-for-sale.
Improving bond prices caused a significant change in the market
values of these securities during the third quarter. A net
unrealized loss, net of tax, decreased stockholders' equity
$23,000 at September 30, 1995. The net unrealized loss before
taxes included gross unrealized gains of $106,000 and gross
unrealized losses of $105,000. Stockholders' equity reflected
reductions for net unrealized losses, net of tax, of $113,000 at
the end of last quarter and $384,000 at September 30, 1994.
As a result of increases in the general level of market interest
rate during 1994, the carrying value of securities available for
sale included $551,837 in net unrealized losses, net of taxes, as
of December 31, 1994. Management considered the gross unrealized
losses in the securities portfolio to be temporary in nature.
Asset Quality
Nonperforming assets, which include nonaccrual loans, restructured
loans and foreclosed assets, totaled $873,000 at September 30,
1995, compared to $496,000 at September 30, 1994, $681,000 at
year-end 1994, and $763,000 at June 30, 1995.
As a percentage of total loans plus foreclosed assets,
nonperforming assets were 1.5% at September 30, 1995, compared to
1.0% a year ago, 1.3% at year-end 1994, and 1.4% at June 30, 1995.
The following table sets forth the past due and nonaccrual loans
(in thousands of dollars):
September 30
_________________
1995 1994
________ ________
Loans past due 90 days or more $ 153 175
======== ========
Nonaccrual loans, all of which are impaired:
Real estate 808 343
Individual 31 -
________ _______
Total $ 839 343
======== =======
Loans are placed on nonaccrual status when management's assessment
of the borrowers' financial condition indicates that collection of
interest is doubtful. In making this determination, management
considers current economic and business conditions, the nature of
the collateral, collection efforts and regulatory guidelines.
<PAGE>
ASSUMPTION BANCSHARES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Nonaccrual loans, which totaled $839,500 at September 30, 1995,
increased $496,000 (145%) from a year ago and $346,000 (70%) from
year-end 1994. Nonaccrual loans totaled $631,054 at June 30,
1995. The Bank placed loans related to a fishing supplies
retailer on nonaccrual during the first quarter of 1995, leading
to a substantial portion of the increase from a year ago. The
current quarter increase in nonaccrual loans is due primarily to
several residential and commercial real estate loans that have
become over 90 days delinquent during the third quarter of 1995.
Management does not believe that there has been an overall
deterioration as a result of these changes.
Management has identified no potential problem loans, which are
loans for which payments are contractually current but the
borrowers are currently experiencing financial difficulties at
September 30, 1995, which are not otherwise identified as past due
or nonaccrual.
The provision for loan losses through September 30, 1995 was
$52,000 compared to $50,000 for the first nine months of 1994.
The Bank's allowance for loan losses as a percentage of average
loans has remained consistent at 2.13% and 2.18% at September 30,
1995 and December 31, 1994, respectively. Management evaluates
the adequacy of the allowance for loan losses on an ongoing basis
and believes, based on its analysis, that the allowance is
adequate to absorb losses relating to these and other credits in
the portfolio.
The allowance for possible loan losses as a percent of
nonperforming loans was 134%, 173%, 223% and 322% at September 30,
1995, June 30, 1995, December 31, 1994 and September 30, 1994,
respectively. Management has determined that the allowance for
possible loan losses at September 30, 1995, is adequate to cover
losses inherent in its loan portfolio.
The amount of additional interest income on nonaccrual loans,
which would have been recognized for the nine months ended
September 30, 1995 and 1994, had the related loans been performing
according to their original terms, approximates $55,600 and
$21,300, respectively. No income was recognized during 1995 and
1994 on these loans.
The following table summarizes the activity in the allowance for
loan losses arising from loans charged-off, recoveries of loans
previously charged-off, and additions to the allowance charged to
income (in thousands of dollars):
Nine months
ended
September 30,
1995 1994
________ __________
Balance of the allowance for loan
losses at beginning of period $ 1,104 1,130
_________ _________
Loans charged-off:
Commercial, financial and agricultural 3 86
Real estate 10 39
Individuals 49 38
_________ _________
62 163
__________ _________
Recoveries on loans previously charged-off:
Commercial, financial and agricultural 8 4
Real estate 9 19
Individuals 14 23
__________ _________
31 46
__________ _________
Net loans charged-off 31 117
Provision charged to income 52 50
__________ _________
Balance of the allowance for loan
losses at September 30 $ 1,125 1,063
========== =========
Ratio of net charge-offs during
the period to average loans
outstanding during the period 0.06% 0.24%
========== =========
<PAGE>
PART II
Items 1 through 5 are not applicable.
Item 6. Exhibits and Reports on Form 8-K. No Form 8-K was
required to be filed during the quarter ended September 30, 1995.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Joseph H. Montero
_______________________
Joseph H. Montero,
President,Chief Executive
Officer and Chief Accounting
Officer
Date: November 14, 1995
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM FINANCIAL STATEMENTS
FOR THE PERIOD ENDING SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 4,646
<INT-BEARING-DEPOSITS> 99
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 12,125
<INVESTMENTS-CARRYING> 26,082
<INVESTMENTS-MARKET> 25,992
<LOANS> 57,177
<ALLOWANCE> 1,125
<TOTAL-ASSETS> 102,528
<DEPOSITS> 89,530
<SHORT-TERM> 3,200
<LIABILITIES-OTHER> 598
<LONG-TERM> 0
<COMMON> 800
0
0
<OTHER-SE> 8,400
<TOTAL-LIABILITIES-AND-EQUITY> 102,528
<INTEREST-LOAN> 3,515
<INTEREST-INVEST> 1,922
<INTEREST-OTHER> 150
<INTEREST-TOTAL> 5,587
<INTEREST-DEPOSIT> 2,301
<INTEREST-EXPENSE> 2,306
<INTEREST-INCOME-NET> 3,280
<LOAN-LOSSES> 52
<SECURITIES-GAINS> (6)
<EXPENSE-OTHER> 2,699
<INCOME-PRETAX> 983
<INCOME-PRE-EXTRAORDINARY> 983
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 756
<EPS-PRIMARY> 4.73
<EPS-DILUTED> 4.73
<YIELD-ACTUAL> 7.87
<LOANS-NON> 839
<LOANS-PAST> 224
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 839
<ALLOWANCE-OPEN> 1,104
<CHARGE-OFFS> (62)
<RECOVERIES> 31
<ALLOWANCE-CLOSE> 1,125
<ALLOWANCE-DOMESTIC> 1,125
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
