UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED MARCH 31, 1996
Commission file number 2-90033
ASSUMPTION BANCSHARES, INC.
(Exact name of registrant specified in its charter)
Louisiana
(State or other jurisdiction of incorporation or organization)
72-0121470
(I.R.S. Employer Identification No.)
P.O. Box 398
110 Franklin Street
Napoleonville, Louisiana
(Address of principal executive office)
70390
(Zip code)
(504) 369-7269
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES X NO
Number of shares outstanding as of March 31, 1996:
160,000 Common Shares
<PAGE>
ASSUMPTION BANCSHARES, INC.
Condensed Consolidated Statements of Condition
(Unaudited)
March 31, 1996 and December 31, 1995
March 31, December 31,
Assets 1996 1995
_______ _____ _____
Cash and due from banks $ 4,654,671 6,293,399
Federal funds sold 5,150,000 5,950,000
____________ ___________
Cash and cash equivalents 9,804,671 12,243,399
Interest-bearing time deposits 99,000 99,000
Securities:
Held-to-maturity (market value of $14,395,000
and $14,765,000 at March 31, 1996 and
December 31, 1995, respectively) 14,523,396 14,677,589
Available-for-sale (amortized cost of
$22,754,000 and $22,630,000 at
March 31, 1996 and December 31, 1995,
respectively) 22,546,913 22,686,923
Loans 58,735,623 57,086,118
Less allowance for loan losses 1,206,639 1,195,517
____________ ___________
Net loans 57,528,984 55,890,601
Other real estate 43,647 20,717
Bank premises and equipment, net 2,189,246 2,230,281
Accrued interest receivable 800,650 814,196
Other assets 409,249 444,794
____________ ___________
$ 107,945,756 109,107,500
============ ===========
Liabilities and Stockholders' Equity
_____________________________________
Deposits:
Noninterest-bearing demand 12,224,600 12,542,093
NOW accounts 18,014,578 20,518,595
Money market accounts 10,577,597 10,699,688
Savings and IRA accounts 23,193,297 22,393,243
Certificates and other time deposits,
$100,000 and over 3,795,969 4,416,000
Other certificates of deposit 30,087,811 28,778,502
____________ ___________
97,893,852 99,348,121
Accrued interest payable 383,770 340,500
Other liabilities and accrued expenses 335,549 252,980
____________ ___________
Total liabilities 98,613,171 99,941,601
____________ ___________
Stockholders' equity:
Common stock 800,000 800,000
Paid-in capital 450,000 450,000
Retained earnings 8,219,822 7,878,785
Net unrealized (loss) gain on securities (137,237) 37,114
____________ ___________
Total stockholders' equity 9,332,585 9,165,899
____________ ___________
$ 107,945,756 109,107,500
============ ===========
See accompanying notes to condensed consolidated financial statements.
<PAGE>
ASSUMPTION BANCSHARES, INC.
Condensed Consolidated Statements of Income
(Unaudited)
Three months ended March 31, 1996 and 1995
1996 1995
______ _____
Interest income:
Interest and fees on loans $ 1,314,358 1,106,340
Interest on securities:
Taxable 392,228 512,998
Exempt from federal income taxes 184,101 160,190
Interest on federal funds sold 89,185 73,699
Interest on deposits with banks 1,481 2,034
____________ ___________
Total interest income 1,981,353 1,855,261
Interest expense on deposits 809,569 741,085
____________ ___________
Net interest income 1,171,784 1,114,176
Provision for loan losses 9,000 9,000
____________ ___________
Net interest income after provision
for loan losses 1,162,784 1,105,176
Other income 146,031 150,768
Other expenses (884,378) (922,445)
____________ ___________
Income before income taxes 424,437 333,499
Income tax expense 83,400 73,650
____________ ___________
Net income $ 341,037 259,849
============ ===========
Per share data:
Net income $ 2.13 1.62
============ ===========
Number of shares used in computation 160,000 160,000
============ ===========
See accompanying notes to condensed consolidated financial statements.
<PAGE>
ASSUMPTION BANCSHARES, INC.
Condensed Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
Three months ended March 31, 1996 and 1995
<TABLE>
<CAPTION>
Net
unrealized
gain Total
Common Paid-in Retained (loss) on stockholders'
stock captial earnings securities equity
____________ ____________ ____________ ______________ ______________
<S> <C> <C> <C> <C> <C>
Balances at
December 31,
1994 $ 800,000 450,000 7,217,554 (551,837) 7,915,717
Net income for three
months ended
March 31, 1995 - - 259,849 - 259,849
Change in net
unrealized gain
(loss) on
securities - - - 269,560 269,560
____________ ____________ ____________ ______________ ______________
Balances at
March 31, 1995 $ 800,000 450,000 7,477,403 (282,277) 8,445,126
============ ============ ============ ============== ==============
Balances at
December 31, 1995 800,000 450,000 7,878,785 37,114 9,165,899
Net income for three
months ended
March 31, 1996 - - 341,037 - 341,037
Change in net
unrealized gain
(loss) on
securities - - - (174,351) (174,351)
____________ ____________ ____________ ______________ ______________
Balances at
March 31, 1996 $ 800,000 450,000 8,219,822 (137,237) 9,332,585
============ ============ ============ ============== ==============
See accompanying notes to condensed consolidated financial statements.
</TABLE>
ASSUMPTION BANCSHARES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three months ended March 31, 1996 and 1995
1996 1995
_______ ________
Cash flows from operating activities:
Net income $ 341,037 259,849
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 55,350 49,950
Provision for loan losses 9,000 9,000
Net gain on sale of securities (7,760) (17,713)
Gain on sale of other assets acquired in
settlement of loans - (10,000)
Decrease in accrued interest receivable 13,546 20,457
Increase in accrued interest payable 43,270 85,497
Increase in other assets and other
liabilities 207,930 82,742
___________ __________
Net cash provided by operating
activities 662,373 479,782
___________ __________
Cash flows from investing activities:
Proceeds from sales of securities available-
for-sale 1,749,568 968,516
Maturities of and principal payments
on securities held-to-maturity 151,688 721,982
Purchases of securities available-for-sale (2,780,211) (489,531)
Maturities of and principal payments
on securities available-for-sale 916,751 325,554
Purchases of securities held-to-maturity - (1,273,694)
Loans originated, net of principal
collections (1,678,985) (1,665,721)
Proceeds from sales of other real estate 8,672 53,082
Capital expenditures (14,315) (159,124)
___________ __________
Net cash used in investing activities (1,646,832) (1,518,936)
___________ __________
Cash flows from financing activities:
Net decrease in demand deposits, NOW accounts,
money market accounts and savings accounts (2,143,547) (2,019,968)
Net increase in certificates of deposit and
other time deposits of $100,000 and over 689,278 529,267
___________ __________
Net cash used in financing activities (1,454,269) (1,490,701)
___________ __________
Net decrease in cash and cash equivalents (2,438,728) (2,529,855)
Cash and cash equivalents at beginning of period 12,243,399 10,446,119
___________ __________
Cash and cash equivalents at end of period $ 9,804,671 7,916,264
=========== ==========
Supplemental disclosures - interest paid $ 766,299 655,588
=========== ==========
See accompanying notes to condensed consolidated financial statements.
<PAGE>
ASSUMPTION BANCSHARES, INC.
Notes to Condensed Consolidated Financial Statements
Three months ended March 31, 1996 and 1995
The condensed consolidated financial statements reflect all
adjustments which are, in the opinion of management, necessary for a
fair presentation of financial position and results of operations for
the interim periods presented. All adjustments are of a normal
recurring nature.
Cash and Cash Equivalents
For purposes of the condensed consolidated statements of cash flows,
cash and cash equivalents represent cash and due from banks and
federal funds sold.
Securities
The Bank classifies its securities in one of three categories:
trading, available-for-sale, or held-to-maturity. Trading securities
are bought and held principally for the purpose of selling them in
the near future. Held-to-maturity securities are those securities in
which the Bank has the ability and intent to hold the security until
maturity. All other securities not included in trading or held-to-
maturity are classified as available-for-sale.
Trading and available-for-sale securities are recorded at fair value.
Held-to-maturity securities are recorded at amortized cost, adjusted
for the amortization or accretion of premiums or discounts.
Unrealized holding gains and losses on trading securities are
included in earnings. Unrealized holding gains and losses, net of
the related tax effect, on the available-for-sale securities are
excluded from earnings and are reported as a separate component of
stockholders' equity until realized. Transfers of securities between
categories are recorded at fair value at the date of transfer.
Unrealized holding gains and losses are recognized in earnings for
transfers into trading securities. Unrealized holding gains or
losses associated with transfers of securities from held-to-maturity
to available-for sale are recorded as a separate component of
stockholders' equity. The unrealized holding gains or losses
included in the separate component of equity for securities
transferred from available-for-sale to held-to-maturity are
maintained and amortized into earnings over the remaining life of the
security as an adjustment to yield in a manner consistent with the
amortization or accretion of premium or discount on the associated
security.
A decline in the market value of any available-for-sale or held-to-
maturity security below cost that is deemed other than temporary
results in a charge to earnings resulting in the establishment of a
new cost basis for the security.
Premiums and discounts are amortized or accreted over the life of the
related held-to-maturity security as an adjustment to yield using the
effective interest method. Interest income is recognized when
earned. Realized gains and losses for securities classified as
available-for-sale and held-to-maturity are included in earnings and
are derived using the specific identification method for determining
the cost of securities sold.
(Continued)
<PAGE>
ASSUMPTION BANCSHARES, INC.
Notes to Condensed Consolidated Financial Statements
Accounting by Creditors for Impairment of a Loan
During the first quarter of 1995, the Bank adopted Statement of
Financial Accounting Standards No. 114, Accounting by Creditors for
Impairment of a Loan (SFAS No. 114) and Statement of Financial
Accounting Standards No. 118, Accounting by Creditors for Impairment
of a Loan - Income Recognition and Disclosures (SFAS No. 118).
Pursuant to SFAS No. 114 and SFAS No. 118, a loan is considered to be
impaired when it is probable that a creditor 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 credit
losses. The effect of adopting SFAS No. 114 and SFAS No. 118 on the
Bank's financial condition and results of operations was immaterial.
At March 31, 1996, the recorded investment in loans that is
considered to be impaired under SFAS No. 114 was $731,000, all of
which were on nonaccrual, for which the related allowance for
possible credit losses was $223,000. The average recorded investment
in impaired loans during the first quarter of 1996 was approximately
$789,000 and the Bank recognized no interest income on those impaired
loans in the first quarter of 1996. For all impaired loans, the
impairment amount was measured using the fair value of the underlying
collateral.
Earnings Per Share
Earnings per share have been computed on the basis of the weighted
average number of shares outstanding.
Reclassification
Certain reclassifications were made to the condensed consolidated
statements of cash flows of prior periods to conform with the 1996
presentation.
<PAGE>
ASSUMPTION BANCSHARES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Net interest income for the three months ended March 31, 1996 was
slightly higher than amounts for the three-month period ended March
31, 1995. The Bank achieved a higher rate on earning assets due to
an increase in the loan portfolio since March 31, 1995. This
increase in income earned was partially offset by higher rates on
interest bearing liabilities. The Bank's net interest margins were
4.17% and 3.94% at March 31, 1996 and 1995, respectively.
The first quarter 1996 provision for loan losses was $9,000,
consistent with the first quarter of 1995. This relatively low
provision is due to the continued low level of charge-offs
experienced by the Bank. Net recoveries for the three months ended
March 31, 1996 were $2,000. Additionally, the Bank's allowance for
loan losses as a percentage of gross loans has remained consistent at
2.05% and 2.09% at March 31, 1996 and December 31, 1995,
respectively. Management evaluates the adequacy of the allowance for
loan losses on an ongoing basis and believes, based on its analysis,
that the allowance is adequate to absorb losses in the portfolio.
Changes in the total allowance for loan losses for the three months
ended March 31, 1996 and 1995 were as follows:
Three months
ended
1996 1995
______ _______
Balance at beginning of period $ 1,195,517 1,103,823
Charge-offs (21,514) (15,710)
Recoveries 23,636 14,609
_____________ ____________
Net recoveries (charge-offs) 2,122 (1,101)
Provision for loan losses 9,000 9,000
_____________ _____________
Balance at end of period $ 1,206,639 1,111,722
============= =============
Other expenses at March 31, 1996 totaled $884,000, down from $922,000
for the first quarter 1995. During 1995, the Bank Insurance Fund
(BIF) administered by the FDIC became fully funded. As a result, the
Bank's FDIC insurance premiums decreased from $55,000 per quarter to
$500 per quarter. This decrease in other expenses was partially
offset by increases in salaries and legal expenses.
The provision for income taxes is based on management's estimate of
the expected effective tax rate for the entire year.
Liquidity and Capital Resources
Fluctuating interest rates and competitive forces in the financial
services industry have intensified the need for management of and
matching maturities of various assets and liabilities. This process
involves maintaining liquidity and controlling interest rate
sensitivity. The goal of liquidity
(Continued)
<PAGE>
ASSUMPTION BANCSHARES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
management is to ensure funds are available for customer needs.
Interest rate sensitivity management attempts to match shifts in
earning asset yields with interest paying liability rates.
Net earnings for the first quarter 1996 of $341,000 increased the
Bank's stockholders' equity while the unrealized losses on securities
classified as available-for-sale increased by $174,000, resulting in
a net increase in equity for the first three months of 1996 of
$167,000. Management is not aware of any recommendations by
regulatory authorities or other matters which are reasonably likely
to have a material effect on the Bank's capital resources, liquidity
or operations.
Securities, comprised primarily of obligations of states and
municipalities and government guaranteed mortgage-backed securities,
represented 34% of total assets at March 31, 1996 and December 31,
1995. 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.
The market value of the securities portfolio at March 31, 1996 was
99.6% of book value, compared to 100.2% at December 31, 1995.
Management does not anticipate any significant effect on future
earnings, liquidity or capital resources as a result of the amounts
of unrealized gains or unrealized losses in the securities portfolio.
Securities Available-for-Sale
As of March 31, 1996, management has classified securities with an
aggregate amortized cost of $22,754,000 and a market value of
$22,547,000 as available-for-sale.
Falling bond prices caused a decrease in the market values of these
securities during the first quarter. Management considers the
unrealized losses in the securities portfolio to be temporary in
nature. A net unrealized loss, net of tax, decreased stockholders'
equity $137,000 at March 31, 1996. The net unrealized loss before
taxes included gross unrealized gains of $136,000 and gross
unrealized losses of $344,000. Stockholders' equity reflected net
unrealized gains, net of tax, of $37,000 at the end of last quarter
and net unrealized losses, net of tax, of $282,000 at March 31, 1995.
Asset Quality
Nonperforming assets, which include nonaccrual loans, restructured
loans and foreclosed assets, totaled $775,000 at March 31, 1996,
compared to $912,000 at March 31, 1995, $874,000 at year-end 1995,
and $873,000 at September 30, 1995.
As a percentage of total loans plus foreclosed assets, nonperforming
assets were 1.3% at March 31, 1996, compared to 1.7% a year ago, 1.5%
at year-end 1995, and 1.5% at September 30, 1995.
(Continued)
<PAGE>
ASSUMPTION BANCSHARES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following table sets forth the past due and nonaccrual loans (in
thousands of dollars):
March 31,
1996 1995
_____ _____
Loans past due 90 days or more $ 142 267
Nonaccrual loans, all of which
are impaired:
Real estate 731 767
Individual - 1
_____ ______
Total $ 731 768
===== ======
Nonaccrual loans at March 31, 1996 have decreased slightly compared
to March 31, 1995, and are down approximately $120,000 compared to
year-end 1995.
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.
Management has identified approximately $118,000 of potential problem
loans, which are loans for which payments are contractually current
but the borrowers are currently experiencing financial difficulties
at March 31, 1996, which are not otherwise identified as past due or
nonaccrual.
The allowance for possible loan losses as a percent of nonperforming
loans was 165%, 140%, 134%, and 145% at March 31, 1996, December 31,
1995, September 30, 1995, and March 31, 1995, respectively.
Management has determined that the allowance for possible loan losses
at March 31, 1996, is adequate to cover losses inherent in its loan
portfolio.
The amount of additional interest income on nonaccrual loans, which
would have been recognized for the three months ended March 31, 1996
and 1995, had the related loans been performing according to their
original terms, approximates $17,400 and $17,700, respectively. No
income was recognized during 1996 and 1995 on these loans.
PART II
_______
Items 1 through 5 are not applicable.
Item 6. Exhibits and Reports on Form 8-K. No Form 8-K was required
to be filed during the quarter ended March 31, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
/s/ Joseph H. Montero
____________________________
Joseph H. Montero,
President and
Chief Executive Officer
Date: May 14, 1996
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE PERIOD ENDING MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 4,655
<INT-BEARING-DEPOSITS> 99
<FED-FUNDS-SOLD> 5,150
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 22,547
<INVESTMENTS-CARRYING> 14,523
<INVESTMENTS-MARKET> 14,395
<LOANS> 58,736
<ALLOWANCE> 1,207
<TOTAL-ASSETS> 107,946
<DEPOSITS> 97,894
<SHORT-TERM> 0
<LIABILITIES-OTHER> 719
<LONG-TERM> 0
<COMMON> 800
0
0
<OTHER-SE> 8,533
<TOTAL-LIABILITIES-AND-EQUITY> 107,946
<INTEREST-LOAN> 1,314
<INTEREST-INVEST> 576
<INTEREST-OTHER> 91
<INTEREST-TOTAL> 1,981
<INTEREST-DEPOSIT> 810
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 1,171
<LOAN-LOSSES> 9
<SECURITIES-GAINS> 7
<EXPENSE-OTHER> 884
<INCOME-PRETAX> 424
<INCOME-PRE-EXTRAORDINARY> 424
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 341
<EPS-PRIMARY> 2.13
<EPS-DILUTED> 2.13
<YIELD-ACTUAL> 4.60
<LOANS-NON> 731
<LOANS-PAST> 142
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 118
<ALLOWANCE-OPEN> 1,196
<CHARGE-OFFS> 22
<RECOVERIES> 24
<ALLOWANCE-CLOSE> 1,207
<ALLOWANCE-DOMESTIC> 1,207
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
