<PAGE> 1
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
-----------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
----------------------- --------------------
Commission file number 0-22008
-----------
MISSISSIPPI VALLEY BANCSHARES, INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MISSOURI 43-1336298
- ------------------------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 Corporate Park Drive, St. Louis, Missouri 63105
- ------------------------------------------------- --------------------------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (314) 268-2580
----------------------
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 the number of shares outstanding of each of the issuer's
classes of common stock, as of April 19, 1996:
Common Stock, $1.00 par value 4,510,906
- ----------------------------- ------------------------
Class Number of Shares
<PAGE> 2
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING
SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
MISSISSIPPI VALLEY BANCSHARES, INC.
-----------------------------------
<TABLE>
INDEX
-----
<CAPTION>
Page No.
----------
<S> <C>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets --
March 31, 1996 and December 31, 1995 3
Condensed Consolidated Statements of
Income -- Quarters Ended March 31, 1996
and March 31, 1995 4
Consolidated Statements of Changes in
Shareholders' Equity -- Three Months
Ended March 31, 1996 and March 31, 1995 5
Condensed Consolidated Statements of
Cash Flows -- Three Months Ended
March 31, 1996 and March 31, 1995 6
Notes to Condensed Consolidated
Financial Statements 7
ITEM 2. Management's Discussion and Analysis
of Results of Operations and
Financial Condition 8-14
PART II. OTHER INFORMATION
-----------------
ITEM 6. Exhibits and Reports on Form 8-K 15
SIGNATURE 16
- ---------
EXHIBIT INDEX 17
- -------------
</TABLE>
2
<PAGE> 3
<TABLE>
I. FINANCIAL INFORMATION
- ------------------------
ITEM 1. FINANCIAL STATEMENTS
- --------------- --------------------
MISSISSIPPI VALLEY BANCSHARES, INC.
-----------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
<CAPTION>
March 31, December 31,
1996 1995
(Derived from
(Unaudited) Audited Statements)
----------- -------------------
(dollars in thousands)
Assets
- ------
<S> <C> <C>
Cash and due from banks $ 22,830 $ 24,374
Federal funds sold 10,000 3,200
Held to maturity securities
(fair value of $73,932 and
$76,882, respectively) 71,965 73,919
Available for sale securities 195,771 253,733
Trading account securities 14 99
Loans, net of
unearned income 648,500 623,777
Allowance for possible loan losses 11,435 10,789
---------- ----------
Net loans 637,065 612,988
Premises and equipment 9,450 8,822
Other assets 17,258 17,913
---------- ----------
TOTAL ASSETS $ 964,353 $ 995,048
========== ==========
<CAPTION>
Liabilities
- -----------
<S> <C> <C>
Deposits:
Non-interest bearing $ 80,277 $ 85,748
Interest bearing 774,681 800,817
---------- ----------
Total deposits 854,958 886,565
Securities sold under agreements
to repurchase 19,771 21,989
Other short-term borrowings 9,794 4,750
Long-term borrowings 2,700 2,700
Other liabilities 7,479 8,937
---------- ----------
TOTAL LIABILITIES 894,702 924,941
---------- ----------
<CAPTION>
Shareholders' Equity
- --------------------
<S> <C> <C>
Preferred stock-par value $1
Authorized 100,000 shares,
issued 25,000 shares 2,500 2,500
Common stock-par value $1
Authorized 15,000,000 shares,
issued 4,510,906 in 1996
and 4,508,006 in 1995 4,511 4,508
Capital surplus 19,825 19,802
Retained earnings 42,124 39,415
Unrealized gain on available
for sale securities 691 3,882
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 69,651 70,107
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 964,353 $ 995,048
========== ==========
See accompanying notes.
</TABLE>
3
<PAGE> 4
<TABLE>
MISSISSIPPI VALLEY BANCSHARES, INC.
-----------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
----------------------
1996 1995
---------- ----------
(dollars in thousands, except per share data)
<S> <C> <C>
Interest income:
Interest and fees on loans $ 14,153 $ 12,999
Held to maturity securities:
Taxable 1,076 1,962
Tax-exempt 141 143
Available for sale securities 3,598 777
Other 97 73
---------- ----------
TOTAL INTEREST INCOME 19,065 15,954
---------- ----------
Interest expense:
Deposits 9,192 6,941
Short-term borrowings 406 816
Long-term borrowings 54 68
---------- ----------
TOTAL INTEREST EXPENSE 9,652 7,825
---------- ----------
NET INTEREST INCOME 9,413 8,129
Provision for possible loan losses 1,100 800
---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE LOAN LOSSES 8,313 7,329
---------- ----------
Other income:
Service charges 364 333
Security gains/(losses), net on:
Sales of held to maturity securities (3) (34)
Sales of available for sale securities 312 (204)
Trading profits and commissions 358 150
Other 302 316
---------- ----------
1,333 561
---------- ----------
Other expenses:
Employee compensation and
other benefits 2,228 1,924
Net occupancy 301 226
Equipment 290 221
Advertising 152 176
FDIC insurance expense 1 368
Other 1,476 1,079
---------- ----------
4,448 3,994
---------- ----------
INCOME BEFORE INCOME TAXES 5,198 3,896
Income taxes 1,935 1,453
---------- ----------
NET INCOME $ 3,263 $ 2,443
========== ==========
Earnings per common share:
Primary .71 .54
Fully diluted .68 .51
See accompanying notes.
</TABLE>
4
<PAGE> 5
<TABLE>
MISSISSIPPI VALLEY BANCSHARES, INC.
-----------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
----------------------------------------------------------
(Unaudited)
<CAPTION>
Unrealized Total
Preferred Stock Common Stock Gain, (Loss) Share-
----------------- ---------------- Capital Retained On Available for holders'
Shares Amount Shares Amount Surplus Earnings Sale Securities Equity
------ ------ ------ ------ ------- -------- ---------------- --------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1995 25,000 $2,500 4,381,106 $4,381 $19,315 $30,413 $(1,859) $54,750
Net income 2,443 2,443
Issuance of common
stock 1,400 1 12 13
Cash dividends on:
common stock (350) (350)
preferred stock (58) (58)
Unrealized gain, (loss) net
of tax, on available
for sale securities 814 814
------ ------ --------- ------ ------- ------- ------- -------
BALANCE AT MARCH 31, 1995 25,000 $2,500 4,382,506 $4,382 $19,327 $32,448 $(1,045) $57,612
====== ====== ========= ====== ======= ======= ======= =======
BALANCE AT JANUARY 1, 1996 25,000 $2,500 4,508,006 $4,508 $19,802 $39,415 $ 3,882 $70,107
Net income 3,263 3,263
Issuance of common
stock 2,900 3 23 26
Cash dividends on:
common stock (496) (496)
preferred stock (58) (58)
Unrealized gain, (loss) net
of tax, on available
for sale securities (3,191) (3,191)
------ ------ --------- ------ ------- ------- ------- -------
BALANCE AT MARCH 31, 1996 25,000 $2,500 4,510,906 $4,511 $19,825 $42,124 $ 691 $69,651
====== ====== ========= ====== ======= ======= ======= =======
See accompanying notes.
</TABLE>
5
<PAGE> 6
<TABLE>
MISSISSIPPI VALLEY BANCSHARES, INC.
-----------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
----------------------
1996 1995
---------- ----------
(dollars in thousands)
<S> <C> <C>
Operating activities
- --------------------
Net income $ 3,263 $ 2,443
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for possible loan losses 1,100 800
Provision for depreciation and amortization 232 184
Accretion of discounts and amortization of
premiums on securities 25 64
Realized securities (gains) and losses, net (309) 238
Net decrease in trading account securities 85 735
Decrease (increase) in interest receivable 735 (411)
Increase (decrease) in interest payable (130) 670
Other, net 449 693
---------- ----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 5,450 5,416
---------- ----------
Investing activities
- --------------------
Proceeds from sales and paydowns of
held to maturity securities 2,011 8,995
Purchases of held to maturity securities (8,795)
Purchases of available for sale securities (17,591)
Proceeds from sales and paydowns of
available for sale securities 53,141 12,599
Purchases of premises and equipment (859) (908)
Increase in loans outstanding, net (25,178) (14,122)
---------- ----------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 29,115 (19,822)
---------- ----------
Financing activities
- --------------------
Net increase (decrease) in deposits (31,607) 15,887
Net increase (decrease) in repurchase agreements
and other short-term borrowings 2,826 (1,330)
Proceeds from sale of common stock 26 13
Cash dividends (554) (408)
---------- ----------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (29,309) 14,162
---------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 5,256 (244)
Cash and cash equivalents at beginning of period 27,574 19,998
---------- ----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 32,830 $ 19,754
========== ==========
See accompanying notes.
</TABLE>
6
<PAGE> 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
1. The condensed consolidated financial statements include the
accounts of Mississippi Valley Bancshares, Inc. (the "Company") and its
wholly-owned subsidiary, Southwest Bank of St. Louis (the "Bank").
Significant intercompany accounts and transactions have been eliminated in
consolidation. The results of operations for the interim periods shown in
this report are not necessarily indicative of results to be expected for the
entire year. In the opinion of management, the information contained herein
reflects all adjustments necessary to make the results of operations for the
interim periods a fair statement of such operations. All such adjustments
are of a normal recurring nature.
2. Interest-Rate Risk Management - The Company sometimes uses various
interest rate related contracts, such as futures and options, to manage its
overall interest rate risk exposure for asset-liability management purposes.
When such contracts are not matched against a specifically designated group
of assets or liabilities and are held for trading purposes, the gains or
losses from the change in the market values of such contracts are recognized
in current income and are reported in other income.
The Company's objective in managing interest-rate risk is to maintain
a balanced mix of interest-sensitive assets and interest-sensitive
liabilities over a designated time horizon. The extent of interest rate
sensitivity can vary within intervening time periods, depending on current
business conditions and management's interest rate outlook. The principal
objective of the Bank's asset-liability management activities is to provide
maximum levels of net interest income while maintaining acceptable levels of
interest rate and liquidity risk while facilitating the funding needs of the
Bank. To achieve that objective, the Bank uses various derivative financial
instruments.
During the first quarter of 1996 the Bank purchased $145 million of
interest rate swap contracts as part of its asset-liability management
strategy to manage interest rate risk. The contracts, which require the
Bank to pay a fixed rate of interest and receive a variable rate of interest
from the seller of the contract, are accounted for as modifications of the
interest rate characteristics of certain bank assets. The Bank had been in
a liability sensitive position prior to the affect of these swap contracts.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
- ------- -----------------------------------------------
OF OPERATIONS AND FINANCIAL CONDITION
-------------------------------------
The following discussion should be read in conjunction with the
attached condensed consolidated financial statements and notes thereto, and
with the Company's audited financial statements and notes thereto for the
year ended December 31, 1995.
SUMMARY OF EARNINGS
- -------------------
Consolidated net income for the first quarter of 1996 was $3,263,000,
up $820,000 or 33.6% from $2,443,000 earned in the first quarter of 1995.
On a per share basis, net income was $.68, up 33.3% from $.51 in the same
period of the prior year. The principal contributor to the improved
earnings was the increase in net interest income. Adding to the improved
performance were gains realized on sales of available for sale securities.
Offsetting a portion of the income gains was a slightly higher provision for
possible loan losses and increased noninterest expenses.
For the quarter, the Company's return on average assets was 1.36% in
1996, up from 1.27% in the same period last year. The Company's return on
equity increased to 18.27% from 17.51% in the first three months of 1995.
Total assets at March 31, 1996 were $964 million, total loans outstanding
were $649 million and deposits were $855 million at the Company's five
banking locations. At the end of March, 1996, total equity capital was
$69.7 million, or 7.22% of assets, down slightly from $70.1 million, or
7.05% at the end of 1995. During the first quarter of 1996 the sum of the
unrealized loss, net of tax, on available for sale securities and dividends
paid exceeded net earnings and therefore total equity capital declined
during the period.
NET INTEREST INCOME
- -------------------
The following discussion and tables set forth the composition of
average interest-earning assets and interest-bearing liabilities along with
accompanying interest income, expense, yields and rates, on a tax-equivalent
basis. The tax-equivalent adjustments were approximately $62,000 and
$69,000 for the three months ended March 31, 1996 and 1995. Net interest
income on a tax equivalent basis, divided by average interest-earning
assets, represents the Company's net interest margin.
Three months ended March 31, 1996 and 1995
- ------------------------------------------
Total tax-equivalent interest income for the three months ended March
31, 1996 was $19,127,000, up $3,104,000 as compared to the same period in
1995. The combination of a $60 million increase in average loans and $120
million of additional securities pushed total interest income above 1995
levels. Offsetting a portion of the income advancement from increased
earning assets were the lower yields earned on most assets. Total asset
yields declined to 8.19%,
8
<PAGE> 9
down 40 basis points from 8.59% in 1995 as interest rates began a general
decline in late 1995 and early 1996. Funding the Company's increased assets
was the $227 million increase in money market deposits raised mostly with
promotional rates in connection with the opening of its Concord Village office
in the last half of 1995.
Total interest expense for the first quarter of 1996 was $9,652,000,
up $1,827,000 from $7,825,000 in the first quarter of 1995. The increase in
interest expense resulted from the greater volume of money market deposits
and slightly higher rates paid on certificates of deposit. Overall rates
paid on total interest bearing liabilities declined 13 basis points to 4.76%
from 4.89% in 1995.
Total tax-equivalent net interest income increased $1,277,000 as
interest income growth exceeded that of interest expense. The Company's net
interest margin was 4.05% in the first quarter of 1996 compared with 4.38%
in the same period in 1995 as the decline in yields on earning assets
exceeded the reduction in rates paid on total interest bearing liabilities.
9
<PAGE> 10
<TABLE>
AVERAGE BALANCES, INTEREST AND RATES
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------------------------------------
1996 1995
--------------------------- ---------------------------
INTEREST INTEREST
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
------- -------- ------ ------- -------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Loans<F1><F2>
Taxable...................................... $626,984 $14,152 9.05% $566,367 $12,982 9.28%
Tax-exempt<F3>............................... 69 1 8.58 1,139 26 9.10
Held to maturity securities
Taxable...................................... 64,563 1,076 6.68 131,730 1,962 6.00
Tax-exempt<F3>............................... 7,438 203 10.90 7,586 203 10.70
Available for sale securities........................ 230,847 3,598 6.25 43,033 777 7.31
Trading account securities........................... 676 11 6.66 1,181 19 6.58
Federal Funds sold and other short-
term investments................................ 6,062 86 5.69 3,569 54 6.08
-------- ------- -------- -------
Total interest-earning assets 936,639 19,127 8.19 754,605 16,023 8.59
------- -------
Noninterest-earning assets:
Cash and due from banks.............................. 21,264 18,951
Bank premises and equipment.......................... 9,455 6,681
Other assets......................................... 10,997 9,036
Allowance for possible loan losses................... (10,988) (9,784)
-------- --------
Total assets......................... $967,367 $779,489
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
NOW accounts......................................... $ 19,797 $ 84 1.70% $ 18,818 $ 114 2.47%
Money market accounts................................ 367,822 3,881 4.23 140,850 1,448 4.17
Savings deposits..................................... 22,132 164 2.98 23,772 174 2.96
Time deposits of $100,000 or more.................... 31,248 414 5.31 41,609 547 5.33
Other time deposits.................................. 337,509 4,649 5.52 364,107 4,658 5.19
-------- ------- -------- -------
Total interest-bearing deposits.............. 778,508 9,192 4.75 589,156 6,941 4.78
Federal funds purchased, repurchase
agreements and other short-term
borrowings...................................... 32,637 406 4.98 55,987 816 5.92
Convertible debentures............................... 2,700 54 8.00 3,240 68 8.33
-------- ------- -------- -------
Total interest-bearing liabilities........... 813,845 9,652 4.76 648,383 7,825 4.89
------- -------
Noninterest-bearing liabilities:
Demand deposits...................................... 78,172 73,275
Other liabilities.................................... 3,499 1,256
Shareholders' equity....................................... 71,851 56,575
-------- --------
Total liabilities and
shareholders' equity...................... $967,367 $779,489
======== ========
Net interest income.......................... $ 9,475 $ 8,198
======= =======
Net interest margin.......................... 4.05% 4.38%
===== =====
<FN>
- ---------------------------------
<F1> For purposes of these computations, nonaccrual loans are included
in the average loan amounts outstanding.
Interest on nonaccrual loans is recorded when received.
<F2> Interest income on loans includes loan fees, which were not
material to any period presented.
<F3> Information is presented on a tax-equivalent basis assuming a tax
rate of 35%. The tax-equivalent adjustments were approximately
$62,000 and $69,000 for the three months ended March 31, 1996 and
1995, respectively.
</TABLE>
10
<PAGE> 11
The following table indicates, on a tax-equivalent basis, the changes
in interest income and interest expense which are attributable to changes
in average volume and changes in average rates, in comparison with the
same period in the preceding year. The change in interest due to the
combined rate-volume variance has been allocated to rate and volume
changes in proportion to the absolute dollar amounts of the changes in each.
<TABLE>
CHANGES IN INTEREST INCOME AND EXPENSE VOLUME AND RATE VARIANCES
<CAPTION>
Three Months Ended
March 31, 1996
Compared to
March 31, 1995
----------------------------------------------
Increase (decrease) attributable to change in:
Yield/ Net
Volume Rate Change
---------- ---------- ----------
(dollars in thousands)
<S> <C> <C> <C>
Interest earned on:
Loans <F1><F2>................................... $ 1,441 $ (296) $ 1,145
Held to maturity securities:
Taxable..................................... (1,090) 204 (886)
Tax-exempt<F1>.............................. (4) 4
Available for sale securities.................... 2,951 (130) 2,821
Trading account securities....................... (8) (8)
Federal funds sold and other short-
term investments............................... 35 (3) 32
---------- ---------- ----------
Total interest income.................... 3,325 (221) 3,104
---------- ---------- ----------
Interest paid on:
NOW accounts..................................... 6 (36) (30)
Money market accounts............................ 2,412 21 2,433
Savings.......................................... (11) 1 (10)
Time deposits of $100,000 or more................ (131) (2) (133)
Other time deposits.............................. (325) 316 (9)
Federal funds purchased, repurchase
agreements and other short-term
borrowings..................................... (316) (95) (411)
Long-term borrowings............................. (7) (7) (14)
---------- ---------- ----------
Total interest expense................... 1,628 198 1,826
---------- ---------- ----------
Net interest income...................... $ 1,697 $ (419) $ 1,278
========== ========== ==========
<FN>
- ---------------------------
<F1> Information is presented on a tax-equivalent basis assuming a tax rate
of 35%. The approximate tax equivalent adjustments were $62,000 and
$69,000 for the three months ended March 31, 1996 and 1995.
<F2> Average balances included nonaccrual loans.
</TABLE>
11
<PAGE> 12
PROVISION FOR POSSIBLE LOAN LOSSES
- ----------------------------------
The provision for possible loan losses for the first quarter
of 1996 was $1,100,000, up from $800,000 for the same period last
year. The annualized ratio of net charge-offs to average loans for
the first three months of 1996 was .29% compared with .22% for the
same period last year. Net loan charge-offs were $454,000 and
$311,000 for the first quarter of 1996 and 1995, respectively.
The allowance for possible loan losses was $11.4 million or 1.76%
of loans outstanding at March 31, 1996. This compared to $10.8
million at the end of 1995 and $10.0 million, or 1.74% of loans, at
March 31, 1995. In management's judgement, the allowance for
possible loan losses is considered adequate to absorb potential
losses in the loan portfolio.
The following table summarizes, for the periods indicated,
activity in the allowance for possible loan losses:
<TABLE>
Summary of Loan Loss Experience and Related Information
-------------------------------------------------------
<CAPTION>
Three Months Ended
March 31,
----------------------
1996 1995
---------- ----------
(dollars in thousands)
<S> <C> <C>
Allowance for possible loan losses
(beginning of period) $ 10,789 $ 9,575
Loans charged off (535) (370)
Recoveries of loans previously
charged off 81 59
---------- ----------
Net loans charged off (454) (311)
---------- ----------
Provision for possible loan losses 1,100 800
---------- ----------
Allowance for possible loan losses
(end of period) $ 11,435 $ 10,064
========== ==========
Loans outstanding:
Average $627,053 $567,506
End of period 648,500 577,288
Ratio of allowance for possible
loan losses to loans outstanding:
Average 1.82% 1.77%
End of period 1.76 1.74
Ratio of net charge-offs to
average loans outstanding, annualized: .29 .22
</TABLE>
12
<PAGE> 13
<TABLE>
The following table summarizes nonperforming assets at the dates indicated:
<CAPTION>
March 31, December 31, March 31,
1996 1995 1995
----------- ------------ -----------
(dollars in thousands)
<S> <C> <C> <C>
Nonaccrual loans $ 2,727 $ 3,778 $ 1,081
Loans past due 90 days or more 179 41
Restructured loans 717 731 240
----------- ----------- -----------
Total nonperforming loans 3,444 4,688 1,362
Other real estate 775
----------- ----------- -----------
Total nonperforming assets $ 3,444 $ 4,688 $ 2,137
=========== =========== ===========
Loans, net of unearned discount $ 648,500 $ 623,777 $ 577,288
Allowance for possible loan
losses to loans 1.76% 1.73% 1.74%
Nonperforming loans to loans .53 .75 .24
Allowance for possible loan losses
to nonperforming loans 332.03 230.14 738.91
Nonperforming assets to loans
and foreclosed assets .53 .75 .37
</TABLE>
NONINTEREST INCOME
- ------------------
For the first quarter of 1996 total noninterest income was $1,333,000,
up from $561,000 in the same period of 1995. Net securities gains of
$309,000 in 1996, compared with securities losses of $238,000 realized in
the first quarter of 1995, was the principal factor increasing 1996's
noninterest income total. In anticipation of a changing market the Company
began limiting its liability sensitivity in the first quarter of 1996 by
selling approximately $53 million of longer term available for sale
securities. Proceeds from the sale of held to maturity securities were
approximately $2 million and all sales were within 90 days of each
security's maturity date.
Service charges on depository accounts along with fees for other
customer services were $666,000, up slightly from $649,000 in the first
quarter of last year. Trading profits and commissions were $358,000,
up substantially from $150,000 in the first quarter of 1995 as customer
activity improved from the previous year.
NONINTEREST EXPENSE
- -------------------
Total noninterest expense for the first quarter of 1996 was $4,448,000,
up $454,000 from $3,994,000 in the first three months of 1995. Greater
personnel and benefit costs plus the accompanying increased occupancy and
equipment costs associated with the new Concord Village branch, opened in
June, 1995, were responsible for the increased overhead expenses in 1996.
Merit increases and greater benefit costs also increased overhead costs.
Even though total noninterest expenses were up 11.4%, the Company's first
quarter efficiency ratio improved to 41.2% from 45.6% in the same period in
1995.
13
<PAGE> 14
CAPITAL MANAGEMENT AND RESOURCES
- --------------------------------
As of March 31, 1996, the Company's total shareholders' equity was
$69.7 million. New capital was provided by the Company's first quarter net
earnings and minimally by the exercise of stock options. Offsetting the
Company's capital accumulation were the payments of cash dividends on
preferred and common stock and the recording of an unrealized loss, net of
tax, on available for sale securities. During the first quarter of 1996 the
fair market values of the Company's available for sale securities declined
and thereby reversed a large portion of the security write-ups recorded
throughout most of 1995.
The analysis of capital is dependent upon a number of factors
including asset quality, earnings strength, liquidity, economic conditions
and combinations thereof. The two primary criteria currently in effect are
the risk-based capital guidelines and the minimum capital to total assets or
leverage ratio requirement.
These regulatory guidelines require that Tier 1 capital equal or
exceed 4.00% of risk-weighted assets, and that the risk-based total capital
ratio equal or exceed 8.00%. As of March 31, 1996 and December 31, 1995 the
Company's Tier 1 capital was 10.56% and 10.30% of risk-weighted assets, and
total risk-based capital was 11.90% and 11.64% of risk-weighted assets,
respectively.
The minimum acceptable ratio of Tier 1 capital to total assets, or
leverage ratio, has been established at 3.00%. As of March 31, 1996 and
December 31, 1995, the Company's leverage ratio was 7.16% and 6.70%,
respectively.
Management believes that a strong capital position provided by a mix
of equity and long-term debt is essential. It provides safety and security
for depositors, and enhances Company value for shareholders by providing
opportunities for growth with the selective use of leverage.
14
<PAGE> 15
PART II. OTHER INFORMATION
-----------------
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) For a list of Exhibits, see "Exhibits Index" appearing elsewhere
herein.
(b) Reports on Form 8-K: NONE
15
<PAGE> 16
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.
MISSISSIPPI VALLEY BANCSHARES, INC.
-----------------------------------
(Registrant)
Date: May 6, 1996 / s / Paul M. Strieker
----------- ------------------------------------
Paul M. Strieker, Executive Vice
President, Controller and Chief
Financial Officer and Assistant
Secretary (on behalf of the
Registrant and as Principal
Financial and Accounting Officer)
16
<PAGE> 17
MISSISSIPPI VALLEY BANCSHARES, INC.
EXHIBIT INDEX
FORM 10-Q
For the quarterly period ended March 31, 1996
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
11 Computation of Earnings
per Common Share
</TABLE>
17
<PAGE> 1
EXHIBIT NO. 11
--------------
COMPUTATION OF EARNINGS PER
------------------------------
COMMON SHARE
-------------
Primary earnings per share is computed by dividing net income, less
dividends on preferred stock, by the weighted average common shares and
dilutive common share equivalents outstanding.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1996 1995
---------- ----------
(dollars in thousands, except per share data)
<S> <C> <C>
Primary:
Average common shares outstanding 4,510,032 4,382,416
Common stock equivalents of warrants and
options outstanding-based on the
treasury stock method using market price 31,925 13,227
----------- -----------
4,541,957 4,395,643
=========== ===========
Net income $ 3,263 $ 2,443
Less: Dividends on preferred stock (58) (58)
----------- -----------
$ 3,205 $ 2,385
=========== ===========
Primary earnings per common share $ .71 $ .54
=========== ===========
</TABLE>
Fully diluted earnings per share gives effect to the increase in the
weighted average shares outstanding which would have resulted from
conversion of the outstanding convertible debentures and to the related
reduction in interest expense on an after-tax basis.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1996 1995
---------- ----------
(dollars in thousands, except per share data)
<S> <C> <C>
Fully diluted:
Average common shares outstanding 4,510,032 4,382,416
Common stock equivalents of warrants and
options outstanding-based on the
treasury stock method using market price 31,925 13,227
Convertible debenture common stock equivalents 237,600 356,400
----------- -----------
4,779,557 4,752,043
=========== ===========
Net income $ 3,263 $ 2,443
Less: Dividends on preferred stock (58) (58)
Plus: Convertible debenture interest,
net of federal income tax effect 35 45
----------- -----------
$ 3,240 $ 2,430
=========== ===========
Fully diluted earnings per common share $ .68 $ .51
=========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 22,830
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 10,000
<TRADING-ASSETS> 14
<INVESTMENTS-HELD-FOR-SALE> 195,771
<INVESTMENTS-CARRYING> 71,965
<INVESTMENTS-MARKET> 73,932
<LOANS> 648,500
<ALLOWANCE> 11,435
<TOTAL-ASSETS> 964,353
<DEPOSITS> 854,958
<SHORT-TERM> 29,565
<LIABILITIES-OTHER> 7,479
<LONG-TERM> 2,700
0
2,500
<COMMON> 4,511
<OTHER-SE> 62,640
<TOTAL-LIABILITIES-AND-EQUITY> 964,353
<INTEREST-LOAN> 14,153
<INTEREST-INVEST> 4,815
<INTEREST-OTHER> 97
<INTEREST-TOTAL> 19,065
<INTEREST-DEPOSIT> 9,192
<INTEREST-EXPENSE> 9,652
<INTEREST-INCOME-NET> 9,413
<LOAN-LOSSES> 1,100
<SECURITIES-GAINS> 309
<EXPENSE-OTHER> 4,448
<INCOME-PRETAX> 5,198
<INCOME-PRE-EXTRAORDINARY> 3,263
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,263
<EPS-PRIMARY> .71
<EPS-DILUTED> .68
<YIELD-ACTUAL> 4.05
<LOANS-NON> 2,727
<LOANS-PAST> 0
<LOANS-TROUBLED> 717
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 10,789
<CHARGE-OFFS> 535
<RECOVERIES> 81
<ALLOWANCE-CLOSE> 11,435
<ALLOWANCE-DOMESTIC> 7,043
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 4,392
</TABLE>
