United States
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 [Fee Required]
For the fiscal year ended December 31, 1995
[ ] Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [no fee required] for the
transition period from to .
Commission File Number 0-12774
ASSUMPTION BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Louisiana
(State or other jurisdiction of incorporation or organization)
72-0999764
(I.R.S. Employer Identification No.)
P. O. Box 398
110 Franklin Street
Napoleonville, Louisiana 70390
(Address of principal office)
(504) 369-7269
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $5.00 Par Value
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. [x]
Aggregate estimated market value of voting stock held by non-affiliates as of
February 15, 1996 (for purposes of this computation shares held by directors
and officers are excluded): $5,719,000
Number of shares outstanding as of February 15, 1996: 160,000 Common Shares
Documents Incorporated by Reference
____________________________________
Document Part of Form 10-K
____________________________________ ______________________
Definitive Proxy Statement for the 1995
Annual Meeting of Shareholders Part III
<PAGE> 2
PART I
Item I - Business
________
Assumption Bancshares, Inc. (Bancshares) is a Louisiana business
corporation and a one-bank holding company registered under the Federal
Bank Holding Company Act of 1956 as amended. It was formed in 1984
primarily for the purpose of holding all of the outstanding stock of
Assumption Bank and Trust Company (the Bank), which is Bancshares' sole
subsidiary. The Bank, which was formed in 1933, conducts general
commercial banking business throughout the State of Louisiana with the
majority of its business concentrated in Assumption Parish, western
Ascension Parish and northern Lafourche Parish. Its principal office and
a motor branch are located in Napoleonville, Louisiana. The Bank operates
three other branch offices, one each in Pierre Part, Labadieville and
LaPlace, Louisiana and an automatic teller machine in Belle Rose,
Louisiana.
The Bank provides the usual services offered by banks of similar size and
in similar markets. The Bank does have trust powers, but does not have an
active trust department.
The Bank competes actively with national and state banks in Southern
Louisiana for all types of loans and deposits. In addition, the Bank
competes for funds with savings and loan associations, the U.S.
Government, credit unions, and other financial service companies. It
competes for loans with other financial service institutions, such as
savings and loan associations, insurance companies, small loan companies,
credit unions, mortgage companies, and certain government agencies. The
Bank's primary competitors in its service area are ArgentBank, Iberville
Bank, Service Mortgage Co., Guidry Finance Company and banks and savings
and loans located in Thibodaux, Donaldsonville and LaPlace, Louisiana.
The Bank does not receive a material portion of its deposits from any
single person. However, as of December 31, 1995, the Assumption Parish
School Board, Assumption Parish Waterworks District #1, the Assumption
Parish Sheriff's Office, the Assumption Parish Police Jury, the Assumption
Parish Clerk of Court, Assumption General Hospital and four commercial
enterprises accounted for an aggregate of 12% of the Bank's deposits.
The lending services of the Bank include a broad range of consumer, real
estate and commercial loans. As of December 31, 1995, real estate and
home loans represented approximately 82% of all loans; commercial,
financial and agricultural loans accounted for 6% and individual loans,
which include auto and mobile home loans accounted for 12%.
Bancshares and the Bank employ 52 persons full-time and 7 persons part-
time.
The Bank's location in the heart of Louisiana's sugar cane country
subjects it to seasonal variations in business. Because of the impact of
the sugar industry, deposits typically vary by four to five million
dollars during the course of each fiscal year.
<PAGE> 3
SUPERVISION AND REGULATION
__________________________
General
_______
Bancshares and the Bank are extensively regulated under both federal and
state laws. To the extent that the following information describes
particular statutory provisions, it is qualified in its entirety by
reference to the particular statutory and regulatory provisions. Any
change in applicable law or regulation may have a material effect on the
business and prospects of Bancshares.
Bancshares
__________
Bancshares is a bank holding company within the meaning of the Bank
Holding Company Act of 1956, as amended (the Act), and, as such, is
subject to the provisions of the Act and to regulation and supervision by
the Board of Governors of the Federal Reserve System (the Board).
Bancshares is required to file with the Board annual reports containing
such information as the Board may require pursuant to the Act and is also
subject to periodic examination by the Board.
Under the Act, a bank holding company may not acquire more than 5% of the
voting shares or substantially all the assets of any bank or another bank
holding company without the prior approval of the Board. The Act also
limits the business in which a bank holding company may engage, directly
or through subsidiaries, to banking, managing or controlling banks, and
furnishing or performing activities so closely related to banking or
managing or controlling banks as to be a proper incident thereto.
In addition, Bancshares is subject to the Securities Exchange Act of 1934
and files reports with the Securities and Exchange Commission under
provisions of that Act.
The Bank
________
Both federal and state laws extensively regulate various aspects of the
banking industry, including requirements regarding the maintenance of
reserves against deposits, limitations on the rates that can be charged on
loans, and restrictions on the nature and amounts of loans and investments
that can be made.
Banks domiciled in Louisiana having a minimum capitalization of $100,000
may open one or more branch offices anywhere within the state and acquire
one or more banks located within the state or any or all branches thereof.
A certificate of authority must be obtained from the Commissioner of
Financial Institutions in connection with the establishment of a branch
office.
Louisiana's reciprocal interstate banking law allows bank holding
companies domiciled in any state to acquire Louisiana banks and bank
holding companies, if the state in which the holding company is domiciled
allows Louisiana banks and bank holding companies the same opportunities.
As a state bank, the Bank is subject to the supervisory authority of the
Louisiana Commissioner of Financial Institutions, whose office conducts
periodic examinations of the Bank. As a federally-insured bank, the Bank
is also subject to supervision and regulation by the Federal Deposit
Insurance Corporation. The foregoing regulation is primarily intended to
protect the Bank's creditors and depositors rather than Bancshares'
security holders.
<PAGE> 4
STATISTICAL INFORMATION
_______________________
The following tables contain additional information concerning the
business operations of Bancshares and the Bank and should be read in
conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations and the consolidated financial
statements and the related notes thereto for the three years ended
December 31, 1995, included in Items 7 and 8, respectively.
SECURITIES PORTFOLIO
____________________
The Bank adopted the provisions of Statement of Financial Accounting
Standards No. 115, Accounting for Certain Investments in Debt and Equity
Securities (Statement 115) at December 31, 1993. Under Statement 115,
held-to-maturity securities are those securities which the Bank has the
ability and intent to hold until maturity. Trading securities are bought
and held principally for the purpose of selling them in the near future.
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 and discounts.
Carrying values of securities at December 31, 1995 and 1994, are as
follows (in thousands of dollars):
1995
_________________________________________
Held-to- Available-
maturity for-sale Total 1994
________ __________ ______ _____
U.S. Treasury securities $ - - - 501
Mortgage-backed securities 4,253 16,731 20,984 27,297
Other U.S. Government agencies - 1,482 1,482 1,701
State and municipal obligations 9,970 4,159 14,129 12,429
Collateralized mortgage obligations 455 315 770 748
_________ __________ _________ ________
$ 14,678 22,687 37,365 42,676
========= ========== ========= ========
Additional information with respect to the amortized cost, approximate
market value and gross unrealized gains and losses is included in note 2
to the consolidated financial statements.
<PAGE> 5
The carrying value and average yield of securities at December 31, 1995,
by contractual maturity are shown below (in thousands of dollars).
Expected maturities will differ from contractual maturities on securities
which may have call provisions.
Amortized Average
cost yield
__________ __________
Held-to-maturity
_________________
State and municipal obligations:
Due in one year or less $ 55 8.00
Due after one year through five years 506 6.69
Due after five years through ten years 5,234 5.31
Due after ten years 4,175 5.50
________
9,970
Mortgage-backed securities 4,253 8.17
Collateralized mortgage obligations 455 9.25
________
Total held-to-maturity $ 14,678
========
Fair Average
value yield
_______ _______
Available-for-sale
____________________
Other U.S. Government agencies:
Due in one year or less 225 9.05
Due after one year through five years 1,018 8.82
Due after five years through ten years 107 4.72
Due after ten years 132 6.54
_______
1,482
_______
State and municipal obligations:
Due after one year through five years 2,147 5.30
Due after five through ten years 2,012 4.94
_______
4,159
Mortgage-backed securities 16,731 5.98
Collateralized mortgage obligations 315 7.38
_______
Total available-for-sale $ 22,687
=======
<PAGE> 6
The weighted average yields shown above have been computed by comparing
the forward income stream on the securities, plus or minus the anticipated
accretion of discounts or amortization of premiums, to the amortized cost
of the securities, which is stated at cost, adjusted for previous
amortization or accretion. Average yields on issues of states and
political subdivisions have not been computed on a tax equivalent basis.
At December 31, 1995, the Bank held securities issued by Assumption Parish
totaling $980,000, which exceeded 10% of stockholders' equity.
<PAGE> 7
LOAN PORTFOLIO
______________
Types of Loans
_______________
The amount of loans outstanding by type and concentration is shown in the
following table (in thousands of dollars):
December 31
_______________
1995 1994
_______ _______
Commercial, financial and agricultural $ 3,498 3,808
Real estate, principally mortgage 46,695 41,177
Individuals 6,893 5,591
________ ________
$ 57,086 50,576
========= =======
Substantially all of the Bank's loans are derived from borrowers and
property located in the local market area which is largely dependent on
the agricultural and chemical industries. The Bank does not have
concentrations of credit in either of these industries. However, the
Bank's borrowers are all indirectly affected by the economic performance
of these industries.
The loan portfolio contains no foreign loans.
Maturities and Sensitivities of Loans to Changes in Interest Rates
__________________________________________________________________
The following table presents the maturity distribution and sensitivity to
interest rate changes of the loan portfolio at December 31, 1995 (in
thousands of dollars):
Due in Over 1 Over
1 year to 5 5
or less* years years Total
__________ _________ ________ ________
Maturity of Loans
_________________
Commercial, financial and
agricultural $ 668 2,696 134 3,498
Real estate 8,924 35,983 1,788 46,695
Individuals 1,318 5,314 261 6,893
_________ _________ ________ _________
$ 10,910 43,993 2,183 57,086
========= ========= ======== =========
Interest Rate Sensitivity
_________________________
Loans with predetermined rates 7,088 43,993 2,183 53,264
Loans with floating rates 3,822 - - 3,822
_________ _________ ________ _________
$ 10,910 43,993 2,183 57,086
========= ========= ======== =========
* Includes demand loans, loans having no stated schedule of repayments
and no stated maturity and overdrafts.
Interest rate sensitivity management is concerned with the management of
the timing and magnitude of repricing assets compared to liabilities. It
is the objective of interest rate sensitivity management to generate
stable growth in net interest income and to control the risks associated
with interest rate movement. Management regularly reviews interest rate
exposure by utilizing forecasting models to analyze the impact various
interest rate changes would have on net interest income.
Interest rate sensitivity is defined as the exposure to fluctuations in
market rates of interest earned and paid. Sensitivity to fluctuations in
market rates of interest occurs when the repricing characteristics of
interest-earning assets and interest-bearing liabilities do not match
within the same period. When the repricing characteristics do not match,
a "gap" is created. The Bank's interest rate sensitivity on December 31,
1995 is detailed in the following table. While the table is presented on
a contractual basis, a significant portion of the Bank's retail deposits
do not respond to changes in interest rates to the degree the unadjusted
gap would indicate.
<PAGE> 8
The Bank's experience has indicated that repricing of NOW, savings and
money market accounts does not result in changes of the same magnitude as
changes in general market rates. In addition, these categories have
historically been very stable sources of funds to the Bank, which would
indicate a much longer implicit maturity than their contractual
availability.
<PAGE> 9
DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY; INTEREST RATES
AND INTEREST DIFFERENTIAL
____________________________________________________________________________
(Dollars in Thousands)
<TABLE>
<CAPTION>
1995 1994 1993
__________________________ _________________________ __________________________
Daily Amount Daily Amount Daily Amount
average earned Average average earned Average average earned Average
balance or paid rate balance or paid rate balance or paid rate
________ ________ ________ ________ _______ _______ ________ _________ _______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Interest-earning
assets
Loans<F1> $ 54,072 4,819 8.91% $ 47,904 4,259 8.89% $ 44,674 4,169 9.33%
Taxable securities 26,439 1,801 6.81 36,142 2,178 6.03 46,428 2,842 6.12
Tax-exempt securities<F2> 13,644 709 5.20 9,862 490 4.97 3,508 166 4.73
Federal funds sold 2,797 164 5.86 4,032 146 3.62 5,611 164 2.92
Deposits with other banks 99 6 6.06 99 5 5.05 - - -
_________ ________ __________ ________ __________ _______ _______
Total interest-
earning assets 97,051 7,499 7.73 98,039 7,078 7.22 100,221 7,341 7.32
________ _________ _______ __________ ________ _____ __________ _______ _____
Noninterest-earning assets:
Cash and due from banks 4,524 3,932 4,041
Bank premises and equipment 2,210 1,839 1,180
Other assets 1,343 1,932 1,528
Allowance for loan losses (1,116) (1,104) (1,030)
_________ _________ _________
104,012 104,638 105,940
_________ _________ _________
Liabilities:
Interest-bearing liabilities:
Deposits:
NOW 18,166 485 2.67 19,225 439 2.28 19,044 463 2.43
Savings and IRA 23,096 827 3.58 24,087 793 3.29 24,347 922 3.79
Money market 10,892 260 2.39 11,850 295 2.49 12,815 339 2.65
Certificates of deposit
and other time deposits,
$100,000 and over 3,571 187 5.24 3,237 112 3.46 3,234 109 3.37
Other certificates
of deposit 27,712 1,339 4.83 26,856 890 3.31 28,626 999 3.49
Fed funds purchased 441 26 5.90 805 40 4.97 - - -
________ _______ ________ _____ _______ ____ _____
Total interest-bearing
liabilities 83,878 3,124 3.72 86,060 2,569 2.99 88,066 2,832 3.22
________ ________ _______ ________ ______ ______ ________ _______ _____
Noninterest-bearing
liabilities:
Demand deposits 10,912 10,111 9,503
Other liabilities 491 386 830
Stockholders' equity 8,731 8,081 7,541
_________ ________ ________
$104,012 $104,638 $105,940
Net interest income/average ========= ======== ========
earning assets $4,375 4.51% $4,509 4.60% $4,509 4.50%
====== ===== ====== ===== ====== =====
</TABLE>
(TABLE CONTINUED)
<TABLE>
<CAPTION>
1995 compared with 1994 1994 compared with 1993
_______________________ ________________________
Variance due to Variance due to
_______________________ ________________________
Rate/ Rate/
Volume Rate Volume Total Volume Rate Volume Total
_________ ______ _______ _______ _______ _______ ________ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Interest-earning
assets:
Loans<F1> $ 548 10 1 560 $ 301 (197) (14) 90
Taxable securities (585) 283 (76) (378) (630) (43) 9 (663)
Tax-exempt securities<F2> 188 22 9 219 301 8 15 324
Federal funds sold (44) 91 (28) 19 (46) 38 (11) (19)
Deposits with other banks - 1 - 1 - - 5 5
Total interest- _______ ______ ______ ______ ________ _____ _____ _____
earning assets 107 408 (94) 421 (74) (194) 5 (263)
_______ ______ ______ ______ ________ _____ _____ ______
Noninterest-earning assets:
Cash and due from banks
Bank premises and equipment
Other assets
Allowance for loan losses
Liabilities:
Interest-bearing liabilities:
Deposits:
NOW (24) 74 (4) 46 4 (28) - (24)
Savings and IRA (33) 69 (3) 34 (10) (120) 1 (129)
Money market (24) (12) 1 (35) (26) (20) 2 (44)
Certificates of deposit
and other time deposits,
$100,000 and over 12 58 6 75 - 3 - 3
Other certificates
of deposit 28 408 13 449 (62) (50) 3 (109)
Fed funds purchased (18) 7 (3) (14) - - 40 40
_____ _____ _____ _____ _____ _____ ___ _____
Total interest-bearing
liabilities (59) 604 10 555 (93) (216) 46 (263)
_____ _____ _____ _____ _____ _____ ___ ______
Noninterest-bearing
liabilities:
Demand deposits
Other liabilities
Stockholders' equity
Net interest income/average
earning assets $166 (196) (104) (134) $ 19 22 (41) -
====== ===== ===== ===== ====== === ==== =====
<FN>
<F1> Loans on which interest accruals have been stopped are included in the
daily average of loans outstanding.
<F2> Not taxable equivalent.
</FN>
</TABLE>
<PAGE> 10
The table indicates the Bank is liability sensitive (a negative gap) at
December 31, 1995 for periods 1-90 days and 91-365 days, and is asset
sensitive (a positive gap) for the period over one year or fixed. A
positive gap indicates more interest-earning assets are subject to
repricing than interest-bearing liabilities in a given period.
Conversely, a negative gap indicates more interest-bearing liabilities are
subject to repricing earlier than interest-earning assets. In an
environment of increasing interest rates, a positive gap implies that
earnings would be expected to increase as the volume of repricing assets
exceeds repricing liabilities. In contrast, a negative gap implies that
earnings would be expected to decrease in an environment of increasing
interest rates. It should be noted that this presents the Bank's overall
position for a single day, which may not be indicative of its position in
the future.
Interest Rate Sensitivity
_________________________
1 - 90 91 - 365 Over 1
days days year Total
_____ _____ _____ _____
Loans $ 7,272 3,638 46,176 57,086
Securities 7,027 2,891 27,447 37,365
Federal funds sold 5,950 - - 5,950
Interest-bearing deposits - - 99 99
_________ ________ ________ _________
Total earning assets 20,249 6,529 73,722 100,500
_________ ________ ________ _________
NOW and savings accounts 35,468 - - 35,468
Money market accounts 10,700 - - 10,700
Certificates of deposit and
IRA accounts 14,815 14,561 11,262 40,638
_________ ________ ________ _________
Total interest-bearing
liabilities 60,983 14,561 11,262 86,806
Gap $(40,734) (8,032) 62,460 13,694
========== ========= ========= =========
Cumulative gap $(40,734) (48,766) 13,694
========== ========= =========
Cumulative gap/total
earning assets (40.53)% (48.52)% 13.63%
========== ========= =========
Risk Elements
_____________
The following table sets forth the past due and nonaccrual loans (in
thousands of dollars):
December 31
___________
1995 1994
____ ____
Loans past due 90 days or more $ 135 227
=== ===
Nonaccrual loans $ 853 494
=== ===
The amount of additional interest income on nonaccrual loans which would
have been recognized during 1995 and 1994, had the related loans been
performing according to their original terms, approximates $67,000 and
$38,000, respectively. The income recognized during 1995 and 1994 on
these loans was not significant.
<PAGE> 11
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.
Potential Problem Loans
________________________
Management has identified approximately $104,000 of potential problem
loans, which are loans for which payments are contractually current but
the borrowers are currently experiencing financial difficulties at
December 31, 1995, which are not otherwise identified as past due or
nonaccrual.
SUMMARY OF LOAN LOSS EXPERIENCE
_______________________________
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):
Years ended
December 31
1995 1994
____ ____
Balance of the allowance for loan
losses at beginning of year $ 1,104 1,130
______ ______
Loans charged-off:
Commercial, financial and agricultural 3 15
Real estate 25 112
Individuals 59 56
______ ______
87 183
______ ______
Recoveries on loans previously charged-off:
Commercial, financial and agricultural 9 14
Real estate 17 57
Individuals 17 26
_____ ______
43 97
_____ ______
Net loans charged-off 44 86
Provision charged to income 136 60
_____ ______
Balance of the allowance for loan
losses at end of year $ 1,196 1,104
====== ======
Ratio of net charge-offs during the year to
average loans outstanding during the year 0.08% 0.18%
====== ======
<PAGE> 12
Allowance for Loan Losses and Nonperforming Loans
_________________________________________________
Management considers the allowance for loan losses adequate to cover
losses on the loans outstanding as of each reporting date. It must be
emphasized, however, that the determination of the allowance for loan
losses, using the Bank's procedures and methods, rests upon various
judgments and assumptions. The factors which influence management's
judgment in determining the level of the allowance for loan losses and the
amount which is charged to operating expenses are: (1) past loan loss
experience; (2) composition of the loan portfolio; (3) evaluation of
potential future losses; (4) current economic conditions; (5) specific
identification and anticipation of problem and nonperforming loans, and
(6) other relevant factors affecting loans. No assurance can be given
that the Bank will not, in any particular period, sustain loan losses
which are sizable in relation to the amount reserved or that subsequent
evaluations of the loan portfolio, in light of conditions and factors then
prevailing, will not require significant changes in the allowance for loan
losses. In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the Bank's allowance for
loan losses. Such agencies may require the Bank to recognize additions to
the allowance based on their judgment about information available to them
at the time of their examinations.
The following is an allocation of the allowance for loan losses by related
categories of loans and the percentage of loans in each category to total
loans (in thousands of dollars):
December 31
___________
1995 1994
__________________ __________________
Commercial, financial and
agricultural $ 73 6.1% 83 7.5%
Real estate 978 81.8 899 81.4
Individuals 145 12.1 122 11.1
_____ _____ _____ _____
$ 1,196 100.0% 1,104 100.0%
===== ===== ===== =====
DEPOSITS
_________
The daily average amounts and average rates paid on deposits are
summarized below (in thousands of dollars):
December 31
___________
1995 1994
________________ _________________
Noninterest-bearing demand $ 10,912 - % 10,111 - %
NOW accounts 18,166 2.7 19,225 2.3
Money market accounts 10,892 2.4 11,850 2.5
Savings and IRA accounts 23,096 3.6 24,087 3.3
Certificates of deposit and other time
deposits, $100,000 and over 3,571 5.2 3,237 3.5
Other certificates of deposit 27,712 4.8 26,856 3.3
______ ==== ______ ===
$ 94,349 95,366
====== ======
<PAGE> 13
Remaining maturities of deposits of $100,000 or more at December 31, 1995,
are summarized as follows (in thousands of dollars):
Over 3
Within through Over 12
3 months 12 months months Total
________ _________ _______ _______
Certificates of deposit,
and other time deposits,
$100,000 and over $ 2,764 1,652 - 4,416
====== ===== ====== =====
The Bank has no foreign deposits.
RETURN ON EQUITY AND ASSETS
____________________________
The following table shows the return on assets (net income divided by
average total assets), return on equity (net income divided by average
equity), dividend payout ratio (dividends declared per share divided by
net income per share) and equity to assets ratio (average equity divided
by average total assets) for each year indicated.
Year ended
December 31
____________
1995 1994
_______ _______
Return on assets 1.04% 1.11%
Return on equity 12.34 14.43
Dividend payout ratio 38.63 30.86
Equity to assets ratio 8.39 7.72
======= =======
Item 2 - Properties
__________
The principal properties of Bancshares and the Bank (collectively, the
Company), are its main offices located at 110 Franklin Street,
Napoleonville, Louisiana, a motor branch in Napoleonville, Louisiana, an
automatic teller machine (ATM) in Belle Rose, Louisiana, and branch
offices in Pierre Part and Labadieville, Louisiana. The Bank owns all of
these properties with no encumbrances. The Bank also owns certain
leasehold improvements associated with its LaPlace branch.
Item 3 - Legal Proceedings
__________________
The Company is a party to various ordinary routine legal proceedings
incidental to its business, none of which is believed by management, after
consulting with counsel, will have a material effect on the financial
position or results of operations of either Bancshares or the Bank.
Item 4 - Submission of Matters to a Vote of Security Holders
____________________________________________________
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
<PAGE> 14
Item 4a - Executive Officers of the Registrant
____________________________________
The executive officers of Bancshares and the Bank are Joseph H. Montero
and Harold F. Templet. Mr. Montero, 61, is the President and Chief
Executive Officer of Bancshares and the Bank and has served as an
executive officer of the Bank since 1971. Mr. Templet, 49, has been an
executive officer of the Bank since 1981; he currently serves as
Bancshares' Secretary and Treasurer and the Bank's Senior Vice President.
PART II
________
Item 5 - Market Price of, and Dividends on, the Registrant's Common Equity
and Related Stockholder Matters
_________________________________________________________________
The primary market area for Bancshares' common stock is the Assumption
Parish area. There is no established trading market for the common stock.
The limited number of transactions that have come to the attention of
management during the past two years have occurred at prices ranging from
$27 to $42 per share. No assurance can be given that this range of prices
per share represents the actual market value of Bancshares' common stock.
The approximate number of holders of record of each class of Bancshares'
equity securities as of December 31, 1995, was as follows:
Title of Class Number of Record Holders
_______________ _________________________
Common stock, $5 par value 737
Bancshares' declared annual dividends to its stockholders of $416,000
($2.60 per share) and $360,000 ($2.25 per share) during 1995 and 1994,
respectively. Future dividends are dependent upon the future earnings of
Bancshares and management's discretion.
Item 6 - Selected Financial Data
________________________
Selected financial data of Bancshares and the Bank for each of the years
in the five-year period ended December 31, 1995, is shown below. The
selected financial data should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations
and the consolidated financial statements and the related notes thereto
for the three years ended December 31, 1995, included in Items 7 and 8,
respectively (dollars in thousands, except per share data).
<PAGE> 15
SELECTED FINANCIAL DATA
________________________
1995 1994 1993 1992 1991
_____ ____ ____ ____ ____
Interest income:
Interest and fees
on loans $ 4,819 4,259 4,169 4,520 4,903
Interest on securities 2,510 2,668 3,008 3,554 2,595
Other 170 151 164 153 367
________ _______ _______ _______ _______
Total interest
income 7,499 7,078 7,341 8,227 7,865
Interest expense (3,125) (2,569) (2,832) (3,601) (4,816)
________ _______ _______ _______ _______
Net interest
income 4,374 4,509 4,509 4,626 3,049
Provision for possible
loan losses (136) (60) (321) (446) (919)
________ _______ _______ _______ _______
Net interest
income after
provision for
possible loan
losses 4,238 4,449 4,188 4,180 2,130
________ _______ _______ _______ _______
Other income 637 531 662 330 75
Other expenses (3,582) (3,539) (3,241) (3,101) (2,761)
________ _______ _______ _______ _______
Income (loss)
before income
taxes 1,293 1,441 1,609 1,409 (556)
Income tax expense 216 275 496 432 -
________ _______ _______ _______ _______
Income (loss)
before cumulative
effect of change
in accounting
principle 1,077 1,166 1,113 977 (556)
Cumulative effect of
change in accounting
for income taxes - - 54 - -
________ _______ _______ _______ _______
Net income
(loss) $ 1,077 1,166 1,167 977 (556)
======== ======= ======= ======= =========
Per share data:
Income (loss) before
cumulative effect of
change in accounting
principle $ 6.73 7.29 6.95 6.11 (3.48)
======= ======= ======= ======= ========
Cumulative effect of
change in accounting
for income taxes - - .34 - -
======= ======= ======= ======= =======
Net income (loss) $ 6.73 7.29 7.29 6.11 (3.48)
======= ======= ======= ======= ========
Dividends declared $ 2.60 2.25 2.50 1.75 -
======= ======= ======= ======= ========
Number of shares
used in computations 160,000 160,000 160,000 160,000 160,000
======= ======= ======= ======= ========
Total securities $ 37,365 42,676 48,669 45,142 42,539
======= ======= ======= ======= ========
Total loans $ 57,086 50,576 43,559 42,889 42,717
======= ======= ======= ======= ========
Total assets $ 109,108 106,426 105,843 107,728 96,993
======= ======= ======= ======= ========
<PAGE> 16
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
__________________________________________________________________
The following discussion focuses primarily on the Bank and should be read
in conjunction with the consolidated financial statements, the related
notes thereto, and other financial information presented herein.
Overview of 1995 Performance
_____________________________
The Bank recorded consolidated net income of $1,077,000 or $6.73 per share
in 1995 as compared to a net income of $1,166,000 or $7.29 per share in
1994, and a net income of $1,167,000 or $7.29 per share in 1993. Equity
capital was 8.40% and 7.44% of assets as of December 31, 1995 and 1994,
respectively.
The Bank's net income decreased slightly in 1995 due primarily to two
factors. First, net interest income fell from $4,509,000 in 1994 to
$4,374,000 in 1995. While the Bank achieved a higher rate on earning
assets due to an increase in the loan portfolio, higher rates on interest-
bearing liabilities resulted in an overall decrease in the net interest
margin from 4.60% in 1994 to 4.51% in 1995. This decrease in net interest
margin is consistent with economic conditions which drove rates on shorter
term liabilities up at a faster pace than longer term earning assets.
Secondly, although charge offs remained low during 1995, the growth in the
loan portfolio resulted in an increase in the provision for loan losses
from $60,000 in 1994 to $136,000 in 1995. Overall, the provision for loan
losses has decreased since 1991. The provision in 1991 was unusually high
due to the deterioration and ultimate bankruptcy of certain of the Bank's
borrowers. The Bank recognized all of the losses related to these
borrowers in 1991, and has experienced a much lower level of loan charge-
offs since 1991.
The factors described above which contributed to the decrease in net
income during 1995 are offset by an increase in other income. Other
income of $637,000 in 1995, compared to $531,000 in 1994, increased
primarily due to higher customer service charge income and lower security
losses.
Throughout 1994 and 1995, the Bank began investing in a larger volume of
state and municipal obligations. The tax exempt income earned on these
investments was the primary reason the Bank's effective income tax rate
decreased to approximately 17% during 1994 and 1995.
Liquidity and Capital Resources
________________________________
The Bank's deposits increased approximately $1,095,000 at December 31,
1995 as compared to December 31, 1994. Equity as a percentage of year-end
assets increased from 7.44% at December 31, 1994 to 8.40% at December 31,
1995. Net earnings of $1,077,000 for the year ended December 31, 1995,
and an increase in the fair value of securities classified as available-
for-sale of $589,000, offset by dividends of $416,000 resulted in a net
increase in stockholders' equity of $1,250,000. The increase in cash and
cash equivalents was due primarily to the increase in deposits, and the
normal cycle of cash flow by the agricultural customers in the Bank's
trade area.
<PAGE> 17
In prior years, fluctuating interest rates and competitive forces in the
financial services industry have intensified the need for management and
matching of maturities of various assets and liabilities. During the
recent past, interest rates earned on loans and newly-acquired securities
have generally stabilized. However, elimination of rate ceilings and
maturity restrictions on a major segment of the Bank's interest-bearing
deposit accounts, the introduction of money market accounts and the
general deregulation of the financial services industry have intensified
competition for funds, resulting in the need for management of all
maturities. This process involves maintaining liquidity and controlling
interest sensitivity. The goal of liquidity management is to ensure funds
are available for customer needs. Interest sensitivity management
attempts to match shifts in earning asset yields with interest paying
liability rates.
Increased competition for funds and loans, combined with the weak local
economic conditions, have created risks for institutions without adequate
liquidity and favorable opportunities for those which have their resources
structured to take advantage of income opportunities as they appear. The
Bank has an aggregate of approximately $33 million of cash and due from
banks, federal funds sold, securities and loans maturing within one year.
Management believes the Bank currently has sufficient liquidity. Further
liquidity may be provided for the Bank, should the need arise, by
acquiring additional deposits and through borrowing from the federal funds
market or through the use of repurchase agreements.
The dividends declared and paid in 1995, 1994 and 1993 were $2.60, $2.25
and $2.50 per share, respectively. The continuation of the dividend is
dependent upon the future profitability of the Bank. While management
expects the Bank to be profitable in the future, future profitability
cannot be predicted with certainty.
The Federal Reserve Board has adopted a risk-based capital measure which
is applicable to bank holding companies and banks. The guidelines for
measuring compliance with the risk-based capital require a minimum total
capital standard of 8% at December 31, 1995, of which 4.00% must consist
of "core" capital (common stockholders' equity). At December 31, 1995,
the Bank was in compliance with the risk-based capital requirements having
both a core and a total capital ratio of 18.38%. Management is not aware
of any recommendations by regulatory authorities which are reasonably
likely to have a material effect on the Bank's liquidity, capital
resources or operations.
Securities
____________
Securities which totaled $37,365,000 at December 31, 1995, decreased
approximately $5,300,000 or 12% from 1994. During 1995, the Bank
experienced loan growth of approximately $6,500,000 which was funded
primarily through sales and maturities of investments. 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> 18
The Bank adopted the provisions of Statement of Financial Accounting
Standards No. 115, Accounting for Certain Investments in Debt and Equity
Securities (Statement 115) at December 31, 1993. Under Statement 115,
held-to-maturity securities are those securities which the Bank has the
ability and intent to hold until maturity. Trading securities are bought
and held principally for the purpose of selling them in the near future.
The Bank has not established a trading portfolio. 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 and discounts.
As a result of increases in the general level of market interest rate
during 1994, the carrying value of securities available for sale included
$552,000 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.
During November 1995, the Financial Accounting Standards Board (FASB)
issued a "A Guide to Implementation of Statement 115 on Accounting for
Certain Investments in Debt and Equity Securities" (Implementation Guide).
In accordance with the Implementation Guide, the Bank reclassified
securities with an amortized cost of $10,899,000 and a net unrealized gain
of $14,600 from held-to-maturity to available-for-sale as of December 31,
1995.
After this reclassification, securities with a fair value of $22,687,000
have been identified as available-for-sale. Improving bond prices caused
a significant change in the market values of these securities during 1995.
Fair value of securities classified as available-for-sale exceeded their
amortized cost by $56,000. Included in other liabilities at December 31,
1995, is $19,000 to reflect the tax effect of unrealized holding gains. A
net unrealized gain on securities of $37,000 is included in stockholders'
equity at December 31, 1995.
Allowance and Provision for Loan Losses
________________________________________
The provision for loan losses was $136,000 in 1995, compared to $60,000
and $321,000 in 1994 and 1993, respectively. While the Bank continues to
experience a low level of charge offs, growth in the loan portfolio
resulted in a higher provision for loan losses in 1995. The Bank's
allowance for loan losses as a percentage of gross loans was 2.09% and
2.18% at December 31, 1995 and 1994, respectively. The provision for loan
losses is based upon management's evaluation of the loan portfolio and the
prevailing local economy. Management continues to evaluate 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 level of nonperforming assets, which includes other real estate and
nonaccrual loans, increased to approximately $874,000 in 1995 compared to
$681,000 and $732,000 in 1994 and 1993, respectively. This increase in
nonperforming assets is not the result of a single borrower, rather, it is
due to several residential and commercial real estate loans being placed
on nonaccrual status during 1995. As a percentage of total loans plus
foreclosed assets, nonperforming assets were 1.5%, 1.3%, 1.7% at December
31, 1995, 1994 and 1993, respectively. Management does not believe there
has been an overall deterioration in asset quality as a result of these
changes.
<PAGE> 19
Net Interest Income
____________________
The primary factors which impact net interest income are the gross amount
and mix of interest-earning assets and interest-bearing liabilities, their
respective yields, and relative sensitivity to changes in market interest
rates.
Net interest income in 1995 was $4,374,000, down from $4,509,000 in both
1994 and 1993. Although interest rates increased substantially during
1995, the Bank's yield on loans decreased slightly due to the significant
portion of fixed rate loans. The Bank's yields on loans have
traditionally lagged the current interest rate environment. At the same
time, the Bank's deposit liabilities reprice faster, resulting in moderate
rate increases during 1995. The net result is a small decrease in the
Bank's net interest margin for 1995. Further, the Bank's larger
allocation of investments in tax free municipal obligations at lower
coupon rates resulted in a reduced net interest income. The table
entitled Distribution of Assets, Liabilities and Stockholders' Equity;
Interest Rates and Interest Differential appearing under the heading
Statistical Information in Item 1 above reveals how decreasing volumes of
interest-earning assets, increasing rates earned on those assets combined
with lower volumes of interest-bearing liabilities at rates higher than
the previous year resulted in a $134,000 lower net interest income when
compared with 1994.
Other Income
_____________
Other income in 1995 was $637,000, up from the 1994 amount of $531,000,
and down slightly from $662,000 in 1993. The fluctuations in other income
for 1995, 1994 and 1993 are primarily due to security gains in 1993
compared to losses realized in 1994 and 1995 and changes in service
charges earned on deposit accounts.
Other Expenses
______________
Other expenses in 1995 totaled $3,582,000, 1994 totaled $3,539,000, up
from $3,241,000 in 1993. Salaries and employee benefits increased $87,000
from 1994 to 1995 due to the addition of one full-time and two part-time
employees as well as an increase in pension costs. During 1995, the Bank
Insurance Fund (BIF) administered by the FDIC, became fully funded. As a
result, the Bank's FDIC insurance premiums decreased approximately
$100,000. Expenses to maintain other real estate decreased during 1995
due to the Bank's falling level of foreclosures. Professional services
expenses increased due to additional legal and accounting fees during
1995.
Other expenses increased from $3,241,000 in 1993 to $3,539,000 in 1994
primarily due to the opening of a new branch office in January 1994.
Salaries and employee benefits increased $186,000 during 1994 due to the
addition of five new employees.
Income Taxes
_____________
Note 8 to the consolidated financial statements includes a reconciliation
of income tax expense for the years ended December 31, 1995, 1994, and
1993 to the expected income tax expense, based on the statutory federal
income tax rate of 34%. Tax-exempt interest of $721,000, $501,000 and
$166,000 during 1995, 1994 and 1993, respectively, was a principal factor
in reducing the effective tax rate during those years.
<PAGE> 20
Fair Value of Financial Instruments
____________________________________
The Bank adopted the provisions of Statement of Financial Accounting
Standards No. 107, Disclosures About Fair Value of Financial Instruments
(Statement 107) at December 31, 1995. Under Statement 107, the Bank has
disclosed fair value information for its financial instruments. Refer to
note 11 to the consolidated financial statements for further detail.
The fair value of financial instruments is based upon quoted market prices
or management's best estimate of the values at which the instruments could
be exchanged in a transaction between willing parties. Estimates of fair
values are based on present value and other valuation techniques, which
are significantly affected by the assumptions used, including discount
rates and estimates of future cash flows. As such, the derived fair value
estimates may not be realizable in an immediate settlement of the
instruments.
It is not management's intention to immediately dispose of a significant
portion of its financial instruments; thus, any unrealized gains or losses
should not be interpreted as a forecast of future earnings and cash flows.
Effect of Inflation
____________________
Inflation is not a material factor affecting the Bank's business. General
operating expenses such as salaries and employee benefits are, however,
subject to normal inflationary pressures.
Effects of Financial Accounting Standards Issued but not Adopted
_________________________________________________________________
In March 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of
(Statement 121). Statement 121 provides guidance for the recognition of
impairment losses related to long-lived assets, such as bank premises, and
certain intangibles and related goodwill. The Statement, which if
effective for fiscal years beginning after December 15, 1995, requires
that assets be reviewed for impairment when events or changes in
circumstances indicate the carrying amount of an asset may not be
recoverable. The Company has determined that adoption of the provisions
of Statement 121 will have no material effect on its financial condition
and results of operations.
In May 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 122, Accounting for Mortgage Servicing
Rights, an Amendment to FASB Statement No. 65 (Statement 122). Statement
122 requires that entities recognize, as separate assets, the rights to
service mortgage loans for others, however those servicing rights are
acquired. The Statement, which is to be applied prospectively in fiscal
years beginning after December 15, 1995, also requires that the assessment
of capitalized mortgage servicing rights for impairment be based on the
fair value of those rights. The Company has determined that adoption of
Statement 122 will have no effect on its financial condition and results
of operations.
<PAGE> 21
Item 8 - Financial Statements and Supplementary Data
___________________________________________
Index to Financial Statements
_______________________________
Independent Auditors' Report
Consolidated Statements of Condition as of December 31, 1995 and 1994
Consolidated Statements of Operations for the years ended December 31,
1995, 1994 and 1993
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the years ended December 31,
1995, 1994 and 1993
Notes to Consolidated Financial Statements for the years ended December
31, 1995, 1994 and 1993
All schedules have been omitted because they are not applicable or the
required information is presented in the consolidated financial statements
or notes thereto.
<PAGE> 22
Independent Auditors' Report
______________________________
The Board of Directors
Assumption Bancshares, Inc.:
We have audited the accompanying consolidated statements of condition of
Assumption Bancshares, Inc. and subsidiary as of December 31, 1995 and
1994, and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the years in the three-year period ended
December 31, 1995. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated 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 audit 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Assumption Bancshares, Inc. and subsidiary at December 31, 1995 and 1994,
and the results of their operations and their cash flows for each of the
years in the three- year period ended December 31, 1995, in conformity
with generally accepted accounting principles.
As discussed in note 1, the Company changed its method of accounting for
securities to adopt the provisions of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards (SFAS) No. 115,
Accounting for Certain Investments in Debt and Equity Securities at
December 31, 1993. Also, as discussed in note 1, the Company changed its
method of accounting for income taxes to adopt the provisions of the
Financial Accounting Standards Board's SFAS No. 109, Accounting for Income
Taxes on January 1, 1993.
KPMG PEAT MARWICK LLP
New Orleans, Louisiana
January 11, 1996
<PAGE> 23
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statements of Condition
December 31, 1995 and 1994
Assets 1995 1994
_______ ________ _________
Cash and due from banks $ 6,293,399 5,646,119
Federal funds sold 5,950,000 4,800,000
___________ __________
Cash and cash equivalents 12,243,399 10,446,119
Interest-bearing time deposits 99,000 99,000
Securities (note 2):
Held-to-maturity (market values of
$14,765,181 and $23,765,186
at December 31, 1995 and 1994,
respectively) 14,677,589 25,509,568
Available-for-sale (amortized cost
of $22,630,690 and $18,002,372
at December 31, 1995 and 1994,
respectively) 22,686,923 17,166,810
Loans (note 3) 57,086,118 50,575,872
Less allowance for loan losses 1,195,517 1,103,823
____________ ____________
55,890,601 49,472,049
Other real estate 20,717 187,243
Bank premises and equipment,
net (note 4) 2,230,281 2,052,931
Accrued interest receivable 814,196 819,816
Other assets (note 5) 444,794 672,006
____________ _____________
$ 109,107,500 106,425,542
============ =============
Liabilities and Stockholders' Equity
_____________________________________
Deposits (note 6):
Noninterest-bearing deposits 12,542,093 11,419,962
Interest-bearing deposits 86,806,028 86,832,805
____________ ____________
99,348,121 98,252,767
Accrued interest payable 340,500 193,474
Other liabilities and accrued expenses 252,980 63,584
____________ ____________
Total liabilities 99,941,601 98,509,825
____________ ____________
(Continued)
<PAGE> 24
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statements of Condition, continued
1995 1994
_____ _____
Stockholders' equity (note 9):
Common stock - $5 par value. Authorized
1,000,000 shares; issued and outstanding
160,000 shares in 1995 and 1994 $ 800,000 800,000
Paid-in capital 450,000 450,000
Retained earnings 7,878,785 7,217,554
Unrealized gain (loss) on securities,
net of income taxes 37,114 (551,837)
__________ ___________
Total stockholders' equity 9,165,899 7,915,717
__________ ___________
Commitments (notes 5 and 10)
$109,107,500 106,425,542
=========== ===========
See accompanying notes to consolidated financial statements.
<PAGE> 25
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statements of Operations
Years ended December 31, 1995, 1994 and 1993
1995 1994 1993
____________ ___________ ___________
Interest income:
Interest and fees on loans $ 4,818,574 4,258,766 4,169,253
Interest on securities:
Taxable 1,800,819 2,177,923 2,841,888
Exempt from federal income taxes 709,192 489,820 166,280
Interest on federal funds sold 163,735 146,561 158,476
Interest on deposits with banks 6,510 4,810 5,025
____________ ___________ ___________
Total interest income 7,498,830 7,077,880 7,340,922
Interest expense on deposits 3,124,468 2,568,689 2,831,879
____________ ___________ ___________
Net interest income 4,374,362 4,509,191 4,509,043
Provision for loan losses (note 3) 136,000 60,000 320,500
____________ ___________ ___________
Net interest income after
provision for loan losses 4,238,362 4,449,191 4,188,543
____________ ___________ ___________
Other income:
Service charges on customer accounts 422,508 382,879 430,345
Securities gains (losses) (9,318) (48,997) 82,688
Other 223,327 197,340 148,472
____________ ___________ ___________
636,517 531,222 661,505
Other expenses (note 7) 3,581,629 3,539,335 3,240,927
____________ ___________ ___________
Income before income
taxes and cumulative
effect of change in
accounting principle 1,293,250 1,441,078 1,609,121
Income tax expense (note 8) 216,019 274,859 496,531
____________ ___________ ___________
Income before cumulative
effect of change in
accounting principle 1,077,231 1,166,219 1,112,590
Cumulative effect of change in
accounting for income taxes - - 54,255
____________ ___________ ___________
Net income $ 1,077,231 1,166,219 1,166,845
============ =========== ===========
Per share data:
Income before cumulative
effect of change in
accounting principle 6.73 7.29 6.95
Cumulative effect of change
in accounting for income taxes - - .34
____________ ___________ ___________
Net income $ 6.73 7.29 7.29
============ =========== ============
Number of shares used in computations 160,000 160,000 160,000
============ =========== ============
See accompanying notes to consolidated financial statements.
<PAGE> 26
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statements of Stockhlders' Equity
Years ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION> Net
unrealized
gain or Total
Common Paid-in Retained (loss) on stockholders'
stock capital earnings securities equity
__________ __________ ____________ ______________ ______________
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1993 $ 800,000 450,000 5,644,490 - 6,894,490
Net Income - _ 1,166,845 _ 1,166,845
Dividends declared, $2.50
per common share _ _ (400,000) _ (400,000)
Implementation of change
in accounting for
investment securities,
net of tax expense of
$139,701 _ _ _ 271,185 271,185
__________ __________ ____________ ______________ ______________
Balances at December 31, 1993 800,000 450,000 6,411,335 271,185 7,932,520
Net Income - - 1,166,219 - 1,166,219
Dividends declared, $2.25
per common share - - (360,000) - (360,000)
Change in unrealized gain
(loss) on securities, net
of tax benefit of $423,981 - - - (823,022) (823,022)
__________ __________ ____________ ______________ ______________
Balances at December 31, 1994 800,000 450,000 7,217,554 (551,837) 7,915,717
Net Income - - 1,077,231 - 1,077,231
Dividends declared, $2.60 (416,000) - (416,000)
per common share - -
Change in unrealized gain (loss)
on securities, net of tax
expense of $303,400 - - - 558,951 588,951
__________ __________ ____________ ______________ ______________
Balances at December 31, 1995 800,000 450,000 7,878,785 37,114 9,165,899
========== ========== ============ ============== ==============
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 27
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows
Years ended December 31, 1995, 1994 and 1993
1995 1994 1993
____________ ____________ ___________
Cash flows from operating activities:
Net income $ 1,077,231 1,166,219 1,166,845
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 201,625 199,800 152,016
Provision for loan losses 136,000 60,000 320,500
Securities losses (gains) 9,318 48,997 (82,688)
Writedown of other real estate - 63,554 79,753
Decrease (increase) in accrued
interest receivable 5,620 (46,862) 59,805
Increase in accrued
interest payable 147,026 (18,941) (46,047)
Other 113,205 11,057 (217,737)
____________ ____________ ___________
Net cash provided by
operating activities 1,690,025 1,483,824 1,432,447
____________ ____________ ___________
Cash flows from investing activities:
Proceeds from sales of securities
available-for-sale 5,213,282 11,523,329 13,592,242
Maturities of and principal payments
on securities held-to-maturity 2,256,336 5,075,055 15,708,390
Purchases of securities available-for
sale (489,431) (458,675) -
Maturities of and principal payments
on securities available-for-sale 1,503,873 3,250,573 -
Purchases of securities held-to-
maturity (2,323,160)(14,780,358)(27,141,543)
Loans originated, net of principal
collected (6,577,548) (7,055,327) (910,306)
Proceeds from sales of other real
estate 228,733 - 226,203
Capital expenditures (384,184) (613,554) (700,442)
____________ ____________ ___________
Net cash provided by (used
in) investing activities (572,099) (3,058,957) 774,544
____________ ____________ ___________
(Continued)
<PAGE> 28
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows, continued
1995 1994 1993
____________ ____________ ___________
Cash flows from financing activities:
Net increase (decrease) in demand
deposits, NOW accounts, money
market accounts and savings and
IRA accounts $ (778,149) 1,712,634 (100,112)
Net increase (decrease) in
certificates of deposit 1,873,503 (981,814) (2,846,106)
Dividends paid (416,000) (360,000) (400,000)
____________ ____________ ___________
Net cash provided by (used
in) financing activities 679,354 370,820 (3,346,218)
____________ ____________ ___________
Net increase (decrease) in cash
and cash equivalents 1,797,280 (1,204,313) (1,139,227)
Cash and cash equivalents at
beginning of year 10,446,119 11,650,432 12,789,659
____________ ____________ ___________
Cash and cash equivalents at
end of year $12,243,399 10,446,119 11,650,432
============ ============ ===========
Supplemental disclosures:
Interest paid $ 2,977,442 2,587,630 2,877,926
============ ============ ===========
Income taxes paid $ 250,000 310,000 460,000
============ ============ ===========
See accompanying notes to consolidated financial statements.
<PAGE> 29
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1995, 1994 and 1993
(1) Summary of Significant Accounting Policies
(a) Organization
______________
Assumption Bancshares, Inc. (Bancshares) was incorporated under the laws
of the State of Louisiana in 1984. On July 31, 1984, Assumption Bank and
Trust Company (the Bank) was reorganized as a subsidiary of Bancshares.
Prior to July 31, 1984, Bancshares had no significant activity.
Bancshares is currently engaged, through the Bank subsidiary, in banking
activities. The Bank is the principal asset and primary source of revenue
for Bancshares.
The Bank is subject to competition from other financial institutions and
the regulations of certain government agencies. The government regulatory
authorities periodically examine the Bank's financial condition and
regulatory compliance.
(b) Basis of Presentation
______________________
The consolidated financial statements include the financial statements of
Bancshares and the Bank. All significant intercompany balances and
transactions have been eliminated in consolidation. All references to the
"Bank" appearing hereafter shall mean the consolidated balances of
Bancshares and the Bank.
(c) Securities
___________
The Bank adopted the provisions of Statement of Financial Accounting
Standards No. 115, Accounting for Certain Investments in Debt and Equity
Securities (Statement 115) at December 31, 1993. Under Statement 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.
The Bank has not established a trading portfolio. Held-to-maturity
securities are those securities in which the Bank has the ability and
intent to hold 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
available-for-sale securities 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
(Continued)
<PAGE> 30
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
unrealized holding gains or losses included in the separate component of
equity for securities transferred from available-for-sale to held-for-
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.
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 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.
(d) Allowance for Loan Losses
___________________________
Management considers the allowance for loan losses adequate to absorb
losses on the loans outstanding as of each reporting date. The
determination of the allowance for loan losses, using the Bank's
procedures and methods, is based upon various judgments and assumptions.
The factors which influence management's judgment in determining the level
of the allowance for loan losses and the amount which is charged to
operating expenses are: (1) past loan loss experience; (2) composition of
the loan portfolio; (3) evaluation of potential future losses; (4) current
economic conditions; (5) specific identification and anticipation of
problem and nonperforming loans, and (6) other relevant factors affecting
loans. No assurance can be given that the Bank will not, in any
particular period, sustain loan losses which are sizable in relation to
the amount reserved or that subsequent evaluations of the loan portfolio,
in light of conditions and factors then prevailing, will not require
significant changes in the allowance for loan losses. In addition,
various regulatory agencies, as an integral part of their examination
process, periodically review the Bank's allowance for loan losses. Such
agencies may require the Bank to recognize additions to the allowance
based on their judgment about information available to them at the time of
their examinations.
During the first quarter of 1995, the Bank adopted Statement of Financial
Accounting Standard No. 114, Accounting by Creditors for Impairment of a
Loan (Statement No. 114) and Statement of Financial Accounting Standards
No. 118, Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures (Statement No. 118). The Bank applied the
provisions of Statement No. 114 and Statement No. 118 to all of its loans,
except for its consumer installment loans which are collectively evaluated
for impairment.
(Continued)
<PAGE> 31
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
Pursuant to Statement No. 114 and Statement 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 Statement No. 114 and Statement No. 118 on
the Bank's financial condition and results of operations was immaterial.
(e) Other Real Estate
___________________
Other real estate consists of properties that were acquired through
foreclosure or through acceptance of a deed in lieu of foreclosure. These
properties are recorded at the lower of cost or fair value, net of
estimated selling costs. When a reduction from the carrying value of the
loan to the fair value of the property is required at the time of
foreclosure, the difference is charged to the allowance for loan losses.
Revenues and expenses associated with operating these properties are
recorded during the period in which they are received or incurred.
The process of determining the appropriate valuation of other real estate
involves judgments and estimates that are particularly susceptible to
change.
(f) Bank Premises and Equipment
_____________________________
Bank premises and equipment are stated at cost, less accumulated
depreciation. Depreciation of bank premises and equipment is calculated
using a combination of straight-line and accelerated methods over the
estimated useful lives of the assets. Estimated useful lives range up to
39 years for buildings, 3-10 years for furniture and equipment and the
shorter of the lease term or the useful life for leasehold improvements.
(Continued)
<PAGE> 32
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(g) Interest Income on Loans
_________________________
Accrual of interest on loans is discontinued when management believes,
after considering economic and business conditions and collection efforts,
that the borrowers' financial condition is such that collection of
interest is doubtful. Loan origination fees, net of loan origination
costs, are recognized over the life of the loan as an adjustment to
interest income.
(h) Income Taxes
________________
Effective January 1, 1993, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 109, Accounting for Income Taxes
(Statement 109) and has reported the cumulative effect of that change in
the method of accounting for income taxes in the 1993 consolidated
statement of income. Under the asset and liability method of Statement
109, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. Under Statement 109, the effect
on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
(i) Pension Plan
________________
The Bank participates in a noncontributory defined-benefit pension plan
organized by the Louisiana Bankers' Association which covers substantially
all employees. Pension costs are actuarially determined and include the
amortization of prior service costs over the estimated remaining service
periods of the Bank's employees. Funding is based on a review of the
specific requirements and an evaluation of the assets and liabilities of
the defined-benefit pension plan. The Bank does not provide any
postretirement or postemployment benefits, except for those provided under
the pension plan.
(j) Advertising Cost
___________________
The costs of advertising are expensed as incurred.
(k) Reclassification
___________________
Certain reclassifications were made to the consolidated financial
statements of prior years to conform with the presentation for 1995.
(Continued)
<PAGE> 33
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(l) Use of Estimates
___________________
Management of the Bank has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results
could differ from those estimates.
(m) Earnings per Share
_____________________
Earnings per share have been computed on the basis of the weighted average
number of shares of common stock outstanding during the year.
(n) Statements of Cash Flows
___________________________
For purposes of the consolidated statements of cash flows, the Bank
considers due from banks and federal funds sold to be cash equivalents.
(2) Securities
____________
The amortized cost, gross unrealized holding gains, gross unrealized
holding losses and fair value of available-for-sale and held-to-maturity
securities by major security type at December 31, 1995 and 1994, were as
follows:
Gross Gross
Amortized unrealized unrealized Fair
1995 cost gains losses value
_____ _________ ___________ ___________ __________
Held-to-maturity:
Mortgage-backed
securities $ 4,252,551 81,325 (23,588) 4,310,288
State and municipal
obligations 9,970,032 152,595 (160,637) 9,961,990
Collateralized
mortgage
obligations 455,006 37,897 - 492,903
___________ _________ __________ ___________
Total held-to-
maturity 14,677,589 271,817 (184,225) 14,765,181
___________ _________ __________ ____________
(Continued)
<PAGE> 34
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
Gross Gross
Amortized unrealized unrealized Fair
1995 cost gains losses value
______ __________ __________ __________ ________
Available-for-sale:
Mortgage-backed securities $ 16,748,075 121,091 (137,987) 16,731,179
Other U.S. Government
agencies 1,420,185 70,755 (9,263) 1,481,677
State and municipal
obligations 4,174,676 32,747 (48,128) 4,159,295
Collateralized mortgage
obligations 287,754 27,018 - 314,772
___________ __________ __________ __________
Total available-for-sale 22,630,690 251,611 (195,378) 22,686,923
___________ __________ __________ __________
Total securities $ 37,308,279 523,428 (379,603) 37,452,104
=========== ========== ========== ==========
Gross Gross
Amortized unrealized unrealized Fair
1994 cost gains losses value
______ __________ __________ __________ ________
Held-to-maturity:
U.S. Treasury securities $ 501,404 - (169) 501,235
Mortgage-backed securities 11,497,485 - (814,066) 10,683,419
Other U.S. Governmentagencies 1,242,368 288 (45,262) 1,197,394
State and municipal
obligations 11,774,541 5,585 (867,935) 10,912,191
Collateralized mortgage
obligations 493,770 10 (22,833) 470,947
__________ _________ __________ ___________
Total held-to-maturity 25,509,568 5,883 (1,750,265) 23,765,186
(Continued)
<PAGE> 35
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
Gross Gross
Amortized unrealized unrealized Fair
1994 cost gains losses value
______ __________ __________ __________ ________
Available-for-sale:
Mortgage-backed securities $16,568,909 2,809 (771,111) 15,800,607
Other U.S. Government
agencies 458,961 - (286) 458,675
State and municipal
obligations 687,482 - (33,925) 653,557
Collateralized mortgage
obligations 287,020 - (33,049) 253,971
___________ _________ ___________ __________
Total available-for-sale 18,002,372 2,809 (838,371) 17,166,810
___________ _________ ___________ __________
Total securities $ 43,511,940 8,692 (2,588,636) 40,931,996
=========== ========= =========== ==========
The amortized cost and fair values of securities at December 31, 1995, by
remaining contractual maturity are shown below (in thousands of dollars).
Expected maturities will differ from contractual maturities on mortgage-
backed securities and other securities which may have prepayment
provisions.
Amortized Fair
cost value
__________ __________
Held-to-maturity:
Due in one year or less $ 55 56
Due after one year through five years 506 515
Due after five years through ten years 5,234 5,256
Due after ten years 4,175 4,135
Mortgage-backed securities and
collateral mortgage obligations 4,708 4,803
__________ _________
Total held-to-maturity 14,678 14,765
__________ _________
Available-for-sale:
Due in one year or less 200 225
Due after one year through five years 3,109 3,165
Due after five years through ten years 2,154 2,119
Due after ten years 131 132
Mortgage-backed securities and
collateral mortgage obligations 17,036 17,046
__________ _________
Total available-for-sale 22,630 22,687
__________ _________
Total securities $ 37,308 37,452
========== =========
(Continued)
<PAGE> 36
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
During November 1995, the Financial Accounting Standards Board (FASB)
issued "A Guide to Implementation of Statement 115 on Accounting for
Certain Investments in Debt and Equity Securities" (Implementation Guide).
In accordance with the Implementation Guide, the Bank reclassified
securities with an amortized cost of $10,899,000 and a net unrealized gain
of $14,600, from the held-to-maturity category to the available-for-sale
category as of December 31, 1995.
During 1995, 1994 and 1993, gross gains of $40,457, $55,929 and $119,048,
respectively, were realized on sales of securities. Gross losses of
$49,775, $104,926 and $36,360 were realized on sales during 1995, 1994 and
1993, respectively.
Securities having a carrying value of approximately $21,609,000 and
$17,537,000 at December 31, 1995 and 1994, respectively, were pledged to
secure public deposits as required by law.
At December 31, 1995, the Bank held securities issued by Assumption Parish
totaling $980,000, which exceeded 10% of stockholders' equity.
(3) Loans and Allowance for Loan Losses
____________________________________
A summary of the types of loans follows:
1995 1994
______ ______
Commercial, financial and agricultural $ 3,497,583 3,808,032
Real estate 46,695,271 41,176,673
Individuals 6,893,264 5,591,167
____________ ____________
$ 57,086,118 50,575,872
============ =============
A summary of the changes in the allowance for loan losses for 1995, 1994
and 1993 follows:
1995 1994 1993
_____ _____ _____
Balance at beginning of year $ 1,103,823 1,129,774 856,173
Provision charged to income 136,000 60,000 320,500
____________ ___________ ____________
1,239,823 1,189,774 1,176,673
____________ ___________ ____________
Loans charged-off (87,602) (140,623) (202,924)
Recoveries on loans charged-off 43,296 54,672 156,025
____________ ___________ ____________
Net loans charged-off (44,306) (85,951) (46,899)
____________ ___________ ____________
Balance at end of year $ 1,195,517 1,103,823 1,129,774
============ =========== ============
The Bank had loans of approximately $853,000 and $494,000 on nonaccrual at
December 31, 1995 and 1994, respectively. The income recognized during
1995, 1994 and 1993 on nonaccrual loans was not significant. The
(Continued)
<PAGE> 37
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
additional amount of income the Bank would have recognized during 1995,
1994 and 1993 had the nonaccrual loans performed according to their terms,
approximates $76,000, $38,000 and $58,000, respectively.
At December 31, 1995, impaired loans, all of which were on nonaccrual,
totaled $853,000, requiring a total impairment allowance of $235,000. The
average recorded investment in impaired loans was approximately $768,000
during the year ended December 31, 1995. The Bank recognized no interest
income on those impaired loans during 1995. For all impaired loans, the
impairment amount was measured using the fair value of the underlying
collateral.
For purposes of the consolidated statements of cash flows, noncash
investing and financing transactions include other real estate and assets
acquired in settlement of loans of approximately $23,000, $58,000 and
$193,000 during 1995, 1994 and 1993, respectively.
The Bank has extended loans, in the ordinary course of business, to
officers and directors of Bancshares and the Bank, their immediate
families and companies in which the directors are principal owners. In
the opinion of management, such transactions are on substantially the same
terms as those prevailing at the time for comparable transactions with
others. The amount of loans to these persons and their interests and the
related activity for 1995 and 1994 is summarized as follows:
1995 1994
_____ _____
Balance at beginning of year $ 1,056,766 508,411
Additions 4,618,705 4,150,096
Payments and renewals (3,786,625) (3,601,741)
____________ ____________
Balance at year end $ 1,888,846 1,056,766
=========== ============
(4) Bank Premises and Equipment
Bank premises and equipment are summarized as follows:
Accumulated
Cost depreciation Net
_____________ ______________ ____________
December 31, 1995:
Land$ 256,532 - 256,532
Banking houses 1,678,007 (667,967) 1,010,040
Leasehold improvements 108,198 (68,280) 39,918
Furniture and fixtures 2,708,200 (1,784,409) 923,791
_____________ ______________ ____________
$ 4,750,937 (2,520,656) 2,230,281
============= ============== ============
December 31, 1994:
Land 240,457 - 240,457
Banking houses 1,093,811 (635,068) 458,743
Leasehold improvements 107,811 (34,140) 73,671
Furniture and fixtures 2,423,204 (1,649,824) 773,380
Construction in progress 506,680 - 506,680
_____________ ______________ ____________
$ 4,371,963 (2,319,032) 2,052,931
============= ============== ============
(Continued)
<PAGE> 38
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
During 1995, the Bank completed expansion of its main office and the
construction in progress balance was reclassified to the appropriate
categories.
(5) Pension Plan
The Bank participates in a noncontributory defined-benefit pension plan
organized by the Louisiana Bankers' Association, which covers
substantially all of its employees. The following table sets forth the
plan's funded status and amounts recognized in the Bank's consolidated
statements of condition at December 31, 1995 and 1994.
1995 1994
_____ _____
Pension benefit obligation:
Accumulated benefit obligations:
Vested $ 1,866,974 1,655,106
Nonvested 165,697 129,150
____________ ____________
2,032,671 1,784,256
Additional benefits based on
estimated future salary levels 440,659 374,517
____________ ____________
Projected benefit obligation 2,473,330 2,158,773
Plan assets at fair value 2,134,586 1,881,102
____________ ____________
Plan assets less than projected
benefit obligation (338,744) (277,671)
____________ ____________
Unrecognized net asset being amortized
over 14 years 387,737 359,129
____________ ____________
Prepaid pension cost included in
other assets $ 48,993 81,458
============ ============
Plan assets for the defined benefit pension plan consist primarily of
common stocks, corporate bonds, U.S. Government obligations and cash
equivalents.
Net pension expense for 1995, 1994 and 1993 included the following:
1995 1994 1993
_______ ________ _________
Service cost - benefits earned
during the period $ 53,927 61,063 52,129
Interest cost on projected
benefit obligation 163,421 151,513 147,155
Actual return on plan assets (303,418) 29,188 (181,416)
Amortization of transition assets 136,132 (202,234) 27,410
_________ __________ _________
Net pension expense $ 50,062 39,530 45,278
========= ========== =========
(Continued)
<PAGE> 39
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
Assumptions used in determining the pension expense for the years ended
December 31, 1995, 1994 and 1993 were:
1995 1994 1993
_____ _____ ______
Discount rate 8.05% 7.25% 7.25%
Rates of increase in compensation levels 3.50 4.00 4.00
Expected long-term rate of return on assets 9.00 9.00 9.00
====== ====== ======
(6) Deposits
_________
A summary of deposit accounts at December 31, 1995 and 1994 follows:
1995 1994
_____________ ______________
Noninterest-bearing $ 12,542,093 11,419,962
_____________ ______________
Interest-bearing:
NOW accounts 20,518,595 21,559,771
Money market accounts 10,699,688 11,186,172
Savings and IRA accounts 22,393,243 22,392,130
Certificates of deposit
$100,000 and over 3,577,697 3,648,964
Other certificates of deposit 28,778,502 26,833,732
Other time deposits $100,000
and over 838,303 1,212,036
_____________ ______________
86,806,028 86,832,805
_____________ ______________
$ 99,348,121 98,252,767
============= ==============
Interest expense related to certificates of deposit and other time
deposits, $100,000 and over totaled $185,470, $105,364 and $164,639
during 1995, 1994 and 1993, respectively.
(Continued)
<PAGE> 40
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(7) Other Expenses
Details of other expenses are as follows:
1995 1994 1993
_____ ____ ____
Salaries and employee benefits $ 1,797,053 1,709,801 1,523,330
Repairs and maintenance 296,209 241,800 220,660
Depreciation 201,625 199,800 152,016
Stationery and supplies 195,577 190,886 173,756
Occupancy 149,663 142,037 117,021
Data processing 19,930 17,753 19,437
Professional services 202,413 162,420 202,638
Directors' fees 91,550 91,600 99,500
FDIC insurance and state
assessments 130,024 239,968 243,354
Taxes, other than on income 69,064 75,017 70,437
Telephone 79,683 83,378 74,554
Postage 60,000 61,783 60,022
Other real estate 29,004 93,544 96,088
Conventions and seminars 30,261 43,796 21,273
Advertising and marketing 104,934 92,297 77,782
Other 124,639 93,455 89,059
____________ ____________ ___________
$ 3,581,629 3,539,335 3,240,927
============ ============ ===========
(8) Income Taxes
_____________
Income tax expense for the years ended December 31, 1995, 1994 and 1993
consists of:
1995 1994 1993
____ _____ _____
Income from continuing operations:
Current $ 253,850 292,560 542,220
Deferred (37,831) (17,701) (45,689)
___________ ___________ ___________
216,019 274,859 496,531
Deferred tax expense (benefit)
recorded in stockholders'
equity for unrealized gains
(losses) on securities
available-for-sale 303,400 (423,981) 139,701
___________ ___________ __________
$ 519,419 (149,122) 636,232
=========== =========== ==========
(Continued)
<PAGE> 41
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
Total income tax expense differed from the amounts computed by applying
the U.S. federal income tax rates to income before income taxes as a
result of the following:
1995 1994 1993
______ ______ _____
U.S. federal income tax rate 34% 34% 34%
====== ====== =====
Computed "expected" income tax $ 439,884 474,432 547,101
Increase (decrease) in income taxes
resulting from:
Tax-exempt interest (249,440) (173,066) (56,535)
Other, net 25,575 (26,507) 5,965
___________ __________ _________
Total income tax expense $ 216,019 274,859 496,531
=========== ========== =========
As discussed in note 1, the Bank adopted Statement 109 as of January 1,
1993. The cumulative effect of this change in accounting for income
taxes as of January 1, 1993 has been reported in the consolidated
statement of operations. The tax effects of temporary differences that
give rise to the net deferred tax asset at December 31, 1995 and 1994
are presented below:
1995 1994
____ ____
Deferred tax assets:
Allowance for possible loan losses $ 266,635 220,391
Unrealized losses on securities
available-for-sale - 284,280
Other real estate due to writedowns 21,608 21,608
Minimum tax credit carryforward 19,438 -
Interest on nonperforming loans - 12,612
Other 3,316 9,684
__________ _________
Total deferred tax assets 310,997 548,575
__________ _________
Deferred tax liabilities:
Unrealized gains on securities
available-for-sale 19,120 -
Bank premises and equipment, principally
due to differences in cost basis and
depreciation 60,367 58,094
Securities, principally due to differences
cost basis and discount accretion 76,953 65,419
Pension, principally due to accrual for
tax and not financial reporting purposes 18,201 23,137
_________ _________
Total deferred tax liabilities 174,641 146,650
_________ _________
Net deferred tax asset $ 136,356 401,925
========= =========
No valuation allowance was recorded against the deferred tax asset
because management believes that it is more likely than not that the net
deferred tax asset will be realized in full.
(Continued)
<PAGE> 42
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(9) Parent Company Condensed Financial Information
Summarized financial information for Assumption Bancshares, Inc. (parent
company only) follows:
Balance Sheets
_______________
Assets December 31,
________ _____________
1995 1994
_________ _________
Cash $ 1,854 2,379
Investment in 100% of the outstanding
common stock of bank subsidiary 9,164,045 7,913,338
____________ ___________
$9,165,899 7,915,717
============ ===========
Liabilities and Stockholders' Equity
_____________________________________
Stockholders' equity:
Common stock $ 800,000 800,000
Paid-in capital 450,000 450,000
Retained earnings 7,878,785 7,217,554
Unrealized gain (loss) on securities,
net of income taxes 37,114 (551,837)
____________ ____________
$ 9,165,899 7,915,717
============ ============
Statements of Operations
______________________________
Years ended December 31,
__________________________
1995 1994 1993
____ ____ ____
Equity in net income
of bank subsidiary $ 1,077,756 1,167,955 1,168,125
Assessments from state banking
commission (525) (1,736) (1,280)
_____________ ____________ ____________
Net income $ 1,077,231 1,166,219 1,166,845
============= ============ ============
(Continued)
<PAGE> 43
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
Statements of Cash Flows
________________________
Years ended December 31,
___________________________
1995 1994 1993
_____ _____ _____
Net income $ 1,077,231 1,166,219 1,166,845
Adjustments to reconcile net income
to net cash used by operating
activities:
Equity in net income of
bank subsidiary (1,077,756) (1,167,955) (1,168,125)
____________ ___________ ____________
Net cash used by operating activities (525) (1,736) (1,280)
____________ ___________ ____________
Cash used in financing activities -
dividends paid to shareholders (416,000) (360,000) (400,000)
____________ ___________ ____________
Cash provided by investing activities -
dividends received from subsidiary 416,000 364,000 400,000
____________ ___________ ____________
Net increase (decrease) in cash (525) 2,264 (1,280)
Cash at beginning of year 2,379 115 1,395
____________ ___________ ____________
Cash at end of year $ 1,854 2,379 115
============ =========== ============
Bancshares' primary source of working capital is dividends from the
Bank. Certain restrictions exist under Federal law regarding the
ability of the subsidiary bank to transfer funds to Bancshares in the
form of cash dividends. In addition, regulatory authorities also
consider the adequacy of the Bank's capital in relation to its assets
and other considerations. Therefore, such capital adequacy may limit
the availability of undistributed earnings by a varying amount.
(10) Commitments
The Bank is a party to financial instruments with off-balance-sheet risk
which are executed in the normal course of business to meet the
financing needs of its customers. These financial instruments include
commitments to extend credit and standby letters of credit. These
instruments involve, to varying degrees, elements of credit and interest
rate (market) risk in addition to the amounts reflected in the
statements of condition.
The Bank's exposure to loss in the event of nonperformance by the other
parties to these financial instruments is limited to the contractual
amount of such instruments. The Bank employs the same credit policies
in making commitments and conditional obligations as it does for on-
balance-sheet instruments.
(Continued)
<PAGE> 44
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
Financial instruments whose contract amounts represent credit risk as of
December 31, 1995 and 1994 are as follows:
1995 1994
____ _____
Commitments to extend credit $ 4,185,759 5,365,326
Stand-by letters of credit 1,016,624 677,657
____________ ___________
$ 5,202,383 6,042,983
============ ===========
Commitments to extend credit are agreements to extend credit to a
customer under certain terms and conditions. Commitments generally have
fixed expiration dates of less than one year and other termination
clauses and may require payment of a fee. Since some of the commitments
are expected to expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash requirements. The Bank
evaluates each customer's creditworthiness on an individual basis. The
amount of collateral required, if deemed necessary by the Bank upon
extension of credit, is based on management's evaluation of the
creditworthiness of the counterparty, and the terms of the agreement.
Collateral held varies, but generally includes: accounts receivable,
inventory, property, plant, and equipment, and real estate.
Standby letters of credit are conditional commitments issued by the Bank
to guarantee the performance of a customer to a third party. The credit
risk involved in issuing letters of credit is essentially the same as
that involved in extending loan facilities to customers. Letters of
credit can be secured by cash or non-cash items. Those secured by non-
cash items are backed by a note signed by the customer.
(11) Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107, Disclosures About
Fair Value of Financial Instruments (Statement 107), requires the
disclosure of estimated fair values for financial instruments. Quoted
market prices, if available, are utilized as an estimate of the fair
value of financial instruments. Because no quoted market prices exist
for a significant part of the Bank's financial instruments, the fair
value of such instruments has been derived based on management's
assumptions with respect to future economic conditions, the amount and
timing of future cash flows and estimated discount rates. Different
assumptions could significantly affect these estimates. Additionally,
these estimates are only indicative of individual financial instruments'
values and should not be considered an indication of the fair value of
the Bank taken as a whole.
(Continued)
<PAGE> 45
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
The estimated fair value of financial instruments at December 31, 1995
is as follows (in thousands of dollars):
Carrying Fair
Amount Value
________ _______
Financial assets:
Cash and cash equivalents $ 12,243 12,243
Interest-bearing deposits 99 99
Securities:
Held-to-maturity 14,678 14,765
Available-for-sale 22,687 22,687
Net loans
Loans receivable, net 55,890 56,513
Financial liabilities - deposits 99,348 99,437
The following methods and assumptions were used to estimate the fair
value of each class of financial instrument:
Cash and cash equivalents: The carrying amounts reported in the balance
sheet for cash and short-term instruments approximate those assets' fair
values. The Bank's investment in interest-bearing deposits with
maturities of greater than three months are quoted at market value.
Securities: Fair values for investment securities are based on quoted
market prices or dealer quotes.
Loans: For loans with maturities of three months or less, fair value is
considered to approximate carrying value. The fair value of other loans
is estimated by discounting the future cash flows using the current
rates at which similar loans would be made to borrowers with similar
credit ratings for the same remaining maturities.
Deposits: The carrying value for all deposits without fixed maturities,
and for time deposits with maturities of three months or less, is
considered to approximate fair value. The fair value for time deposits
greater than $100,000 with maturities greater than three months as well
as time deposits less than $100,000 is based upon the appropriate
discount rate for similar pools. The fair value of demand deposits is
the amount payable on demand, and is not adjusted for any value derived
from retaining those deposits for an expected future period of time.
That component, commonly referred to as deposit base intangible, was not
estimated at December 31, 1995 and is not considered in the fair value
amounts nor is it recorded as an intangible asset in the balance sheet.
(Continued)
<PAGE> 46
ASSUMPTION BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
Commitments to extend credit, standby letters of credit and letters of
credit: Pricing of these financial instruments is based on the credit
quality and relationship, fees, interest rates, compensating balances
and other covenants or requirements. Many of these commitments are
expected to, and typically do, expire without being drawn upon.
Carrying amounts which are comprised of the unamortized fee income and,
where necessary, reserves for any expected credit losses from these
financial instruments, are immaterial. Because these instruments are
generally priced at the time they are funded, there is no gain or loss
embedded in these transactions.
<PAGE> 47
Item 9 - Disagreements on Accounting and Financial Disclosure
____________________________________________________
There have been no changes or disagreements with the Company's
independent certified public accountants on any matter of accounting
principles or practice, financial statement disclosure or auditing scope
or procedure within the twenty-four months prior to December 31, 1995.
PART III
_________
Item 10 - Directors and Executive Officers of the Registrant
___________________________________________________
The information called for by this item will be included in Bancshares'
definitive Proxy Statement for the Annual Meeting of Shareholders to be
held May 15, 1996 filed pursuant to Regulation 14(a) under the
Securities Exchange Act of 1934 and is incorporated herein by reference.
Item 11 - Executive Compensation
_______________________
The information called for by this item will be included in Bancshares'
definitive Proxy Statement for the Annual Meeting of Shareholders to be
held May 15, 1996 to be filed pursuant to Regulation 14(a) under the
Securities Exchange Act of 1934 and is incorporated herein by reference.
Item 12 - Security Ownership of Certain Beneficial Owners and Management
______________________________________________________________
The information called for by this item will be included in Bancshares'
definitive Proxy Statement for the Annual Meeting of Shareholders to be
held May 15, 1996 to be filed pursuant to Regulation 14(a) under the
Securities Exchange Act of 1934 and is incorporated herein by reference.
Item 13 - Certain Relationships and Related Transactions
_______________________________________________
The information called for by this item will be included in Bancshares'
definitive Proxy Statement for the Annual Meeting of Shareholders to be
held May 15, 1996 to be filed pursuant to Regulation 14(a) under the
Securities Exchange Act of 1934 and is incorporated herein by reference.
PART IV
________
Item 14 - Exhibits, Financial Statements, Schedules and Reports on Form 8-K
_________________________________________________________________
(a) 1. Financial Statements
____________________
Independent Auditors' Report
Consolidated Statements of Condition as of December 31, 1995 and 1994
Consolidated Statements of Operations for the years ended December 31,
1995, 1994, and 1993
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1995, 1994, and 1993
Consolidated Statements of Cash Flows for the years ended December 31,
1995, 1994, and 1993
Notes to Consolidated Financial Statements for the years ended December
31, 1995, 1994, and 1993
<PAGE> 48
2. Financial Statement Schedules
______________________________
All schedules have been omitted because they are not applicable or the
required information is presented in the consolidated financial
statements or notes thereto.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by Bancshares during the quarter ended
December 31, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Bancshares duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ASSUMPTION BANCSHARES, INC.
By: /s/ Joseph H. Montero
_____________________
Joseph H. Montero
President and Chief Executive Officer
(Principal Executive and Financial
Officer)
Dated: March 20, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Signature Title Date
____________ _______ ____
/s/Clarence J. Savoie, II
___________________________
Clarence J. Savoie, II Chairman of the Board March 20, 1996
/s/ Patrick E. Cancienne, Sr.
_____________________________
Patrick E. Cancienne, Sr. Director March 20, 1996
/s/ F. N. Carrier, Jr.
________________________
F. N. Carrier, Jr. Director March 20, 1996
/s/ Dr. Nelson A. Cox, Sr.
______________________________
Dr. Nelson A. Cox, Sr. Director March 20, 1996
/s/ Dr. Ridley J. Gros
______________________________
Dr. Ridley J. Gros Director March 20, 1996
/s/ Felix H. Savoie, Jr.
______________________________
Felix H. Savoie, Jr. Director March 20, 1996
/s/ John E. Thibaut
_______________________________
John E. Thibaut Director March 20, 1996
/s/ Risley C. Triche
_______________________________
Risley C. Triche Director March 20, 1996
/s/ Stanley S. Sternfels
_______________________________
Stanley S. Sternfels Director March 20, 1996
/s/ Joseph H. Montero
_______________________________
Joseph H. Montero Director March 20, 1996
/s/ Leonard C. Guedry, Jr.
_______________________________
Leonard C. Guedry, Jr. Director March 20, 1996
/s/ Robert J. Tregre
_______________________________
Robert J. Tregre Director March 20, 1996
/s/ Nicess P. Templet
_______________________________
Nicess P. Templet Director March 20, 1996
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFRENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 6,293
<INT-BEARING-DEPOSITS> 99
<FED-FUNDS-SOLD> 5,950
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 22,687
<INVESTMENTS-CARRYING> 14,678
<INVESTMENTS-MARKET> 14,765
<LOANS> 57,086
<ALLOWANCE> 1,196
<TOTAL-ASSETS> 109,107
<DEPOSITS> 99,348
<SHORT-TERM> 0
<LIABILITIES-OTHER> 593
<LONG-TERM> 0
<COMMON> 800
0
0
<OTHER-SE> 8,366
<TOTAL-LIABILITIES-AND-EQUITY> 109,107
<INTEREST-LOAN> 4,819
<INTEREST-INVEST> 2,510
<INTEREST-OTHER> 170
<INTEREST-TOTAL> 7499
<INTEREST-DEPOSIT> 3,124
<INTEREST-EXPENSE> 3,124
<INTEREST-INCOME-NET> 4,375
<LOAN-LOSSES> 136
<SECURITIES-GAINS> (9)
<EXPENSE-OTHER> 3,582
<INCOME-PRETAX> 1,293
<INCOME-PRE-EXTRAORDINARY> 1,293
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,077
<EPS-PRIMARY> 6.73
<EPS-DILUTED> 6.73
<YIELD-ACTUAL> 4.51
<LOANS-NON> 853
<LOANS-PAST> 135
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 853
<ALLOWANCE-OPEN> 1,104
<CHARGE-OFFS> 88
<RECOVERIES> 43
<ALLOWANCE-CLOSE> 1,196
<ALLOWANCE-DOMESTIC> 1,196
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
