U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY
PERIOD ENDED JUNE 30, 1996
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
TO
Commission file number 000-21658
MINDEN BANCSHARES, INC.
(Exact name of small business issuer as specified in its charter)
Louisiana 72-0980704
(State or other jurisdiction of (IRS Employer Identification No.)
Incorporation or organization)
401 Main Street, Minden, Louisiana 71055
(Address of principal executive offices) (Zip Code)
(318) 377-4283
(Issuer's's telephone number)
Check whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act of 1934 during
the past 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
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
280,549 as of July 31, 1996
Transitional Small Business Disclosure Format (Check one):
Yes No X
Page 1 of 38 Pages
Exhibit Index - 25
FORM 10-QSB
INDEX
PART I Page
Item 1. Financial Statements - Minden Bancshares,
Inc. and Subsidiary
Consolidated Balance Sheets as of
June 30, 1996 4
Consolidated Statements of Income for
the Three Months & Six Months
Ended June 30, 1996 and 1995 5
Consolidated Statements of Cash Flows
for the Six Months ended June 30, 1996,
and 1995 6
Notes to Consolidated Financial 7-8
Statements
Item 2. Management's Discussion and Analysis 9-24
PART II
Item 4. Submission of Matters to a Vote
of Security Holders 25
Item 6. Exhibits and Reports on Form 8-K 25
PART I - Financial Information
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<S> <C> <C>
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
(UAUDITED)
June December
ASSETS 1996 1995
-------------------------------------------(in thousands, except per share data)
Cash and Cash Equivalents:
Cash and Due From Banks $12,063 $11,121
Federal Funds Sold 12,500 21,500
--------- ---------
Total 24,563 32,621
--------- ---------
Securities:
Held to Maturity 14,661 14,443
Available for Sale 83,466 74,082
--------- ---------
Total 98,127 88,525
--------- ---------
Federal Reserve Bank and Federal Home Loan Bank Stock 1,185 1,037
Loans, Less Allowance for Loan Losses of $3,353 and $3,397 106,521 95,984
Accrued Interest Receivable 2,677 2,328
Bank Premises and Equipment 3,176 3,198
Real Estate Owned Other Than Bank Premises 367 376
Other Assets 3,127 2,942
--------- ---------
Total Assets $239,743 $227,011
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------------------
Liabilities:
-----------
Deposits:
Demand $34,223 $35,698
Savings and Interest-Bearing Demand 75,351 70,510
Time 95,514 89,888
--------- ---------
Total Deposits 205,088 196,096
Securities Sold Under Repurchase Agreement 7,613 5,802
Accrued Interest Payable 860 787
Other Liabilities 554 137
Note Payable 180 180
--------- ---------
Total Liabilities 214,295 203,002
--------- ---------
Stockholders' Equity:
--------------------
Common Stock, par value $2.50 per share; 500,000
shares authorized; 309,816 shares issued;
280,627 and 280,658 shares outstanding 775 775
Additional Paid-In Capital 11,205 11,205
Undivided Profits 15,084 13,078
Net Unrealized Gain (Loss) on Available for Sale Securities (325) 239
Treasury Stock-At Cost (1,291) (1,288)
--------- ---------
Total Stockholders' Equity 25,448 24,009
--------- ---------
Total Liabilities and Stockholders' Equity $239,743 $227,011
========= =========
See accompanying notes.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS & SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
Three Months Six Months
Ended June 30 Ended June 30
================== ===================
1996 1995 1996 1995
-------- -------- -------- ---------
Interest Income: (in thousands, except per share data)
---------------
Interest and Fees on Loans $2,542 $2,242 $5,016 $3,939
Securities:
Held to Maturity (non-taxable) 186 155 370 302
Available for Sale 1,191 1,118 2,257 2,273
Federal Funds Sold 256 278 535 381
Federal Reserve Stock and Other 17 48 35 28
Interest-Bearing Balances with Banks 20 0 58 34
-------- -------- -------- ---------
Total Interest Income 4,212 3,841 8,271 6,957
-------- -------- -------- ---------
Interest Expense:
----------------
Savings and Interest-Bearing Demand Deposits 527 487 1,029 866
Time Deposits 1,226 1,040 2,423 1,830
Securities Sold Under Repurchase Agreement and Other 76 74 144 142
-------- -------- -------- ---------
Total Interest Expense 1,829 1,601 3,596 2,838
-------- -------- -------- ---------
Net Interest Income 2,383 2,240 4,675 4,119
Provision for Loan Losses 0 0 0 0
-------- -------- -------- ---------
Net Interest Income After
Provision for Loan Losses 2,383 2,240 4,675 4,119
-------- -------- -------- ---------
Other Income:
------------
Service Charges 375 327 747 604
Trust Department Fees 3 20 35 22
Other Operating Income 128 88 279 160
-------- -------- -------- ---------
Total Other Income 506 435 1,061 786
-------- -------- -------- ---------
Operating Expenses:
------------------
Salaries and Employee Benefits 698 607 1,392 1,080
Occupancy Expense 88 103 288 174
Furniture and Equipment Expense 55 68 113 114
Other Operating Expenses 362 411 687 717
FDIC Insurance 6 95 25 182
Stationery, Supplies and Printing 31 118 69 180
-------- -------- -------- ---------
Total Operating Expense 1,240 1,402 2,574 2,447
-------- -------- -------- ---------
Income Before Income Taxes 1,649 1,273 3,162 2,458
Income Taxes 509 389 974 753
-------- -------- -------- ---------
Net Income $1,140 $884 $2,188 $1,705
======== ======== ======== =========
Earnings Per Share $4.06 $3.15 $7.80 $6.08
======== ======== ======== =========
Dividends Declared Per Share $0.65 $0.50 $0.65 $0.50
======== ======== ======== =========
See accompanying notes.
</TABLE>
MINDEN BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
June 30, 1996
1. Basis of Presentation
The unaudited interim consolidated financial statements of
Minden Bancshares, Inc. and subsidiary are prepared in accordance
with generally accepted accounting principles for interim financial
information except as described below:
On March 24, 1995, Minden Bank & Trust Company ("Minden Bank"),
wholly owned subsidiary of Minden Bancshares, Inc. ("the Company"),
acquired three branches in Shreveport, Louisiana, from Hibernia
National Bank ("Hibernia"), formerly Pioneer Bank & Trust Company
("Pioneer"). The U. S. Justice Department required the disposal of
these three Pioneer branches before it would approve the merger of
Hibernia and Pioneer. The acquisition was recorded as follows:
ASSETS ($Thousands)
Cash on Hand $ 1,088
Available for investment 12,041
Net loans 21,166
Facilities and equipment 1,120
Other assets 2,147
Total Assets $37,562
=======
LIABILITIES
Non-interest bearing deposits $ 5,884
Interest bearing deposits 30,060
Total Deposits $35,944
Securities sold under
repurchase agreements 1,483
Other liabilities 135
Total Liabilities $37,562
=======
The acquisition was recorded and is being reported as a purchase
of assets and not as the purchase of a business due to the
unavailability of prior financial reporting and inadequate branch
accounting records maintained by Pioneer.
In the opinion of management, all adjustments (consisting only
of normal recurring adjustments) necessary for a fair presentation of
the financial position and the results of operations for the interim
periods presented have been included.
2. Statement of Cash Flows
For purposes of the Consolidated Statements of Cash Flows, the
Company has defined cash equivalents as those amounts included in the
balance sheets captions Cash and due from banks and Federal funds
sold. Cash flows from loans and deposits of the Company's bank
subsidiary are reported on a net basis.
3. Investment Securities
The specific identification method is used to determine realized
gains and losses on sales of investment securities which is included
in other operating income.
Debt securities available for sale are carried at fair market
value by means of valuation account in accordance with SFAS 115. At
June 30, 1996, the fair market value of securities available for sale
was $492,000 less than amortized cost and at December 31, 1995, the
fair market value was $362,000 more than amortized cost.
Debt securities held to maturity are carried at cost, adjusted
for the amortization of premiums and accretion of discount. The
amortized cost and estimated market value of securities held to
maturity at June 30, 1996 and December 31, 1995, are as follows:
Securities Held to Maturity
Gross Gross Estimated
Book Unrealized Unrealized Market
Value Gains Losses Value
June 30, 1996 14,661 137 177 14,621
December 31, 1995 14,443 90 55 14,478
4. Earnings per Common Share
The earnings per common share are computed by dividing the net
income for the interim periods by the weighted average number of
common shares outstanding. The weighted average number of shares
outstanding in the second quarter, 1996, and 1995, were 280,642 and
280,672 respectively, and for the first six months of 1996 and 1995,
were 280,647 and 280,672 respectively.
PART I - Financial Information Continued
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
<TABLE>
<S> <C> <C> <C> <C>
MINDEN BANCSHARES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
CONSOLIDATED INCOME SUMMARY
AND SELECTED FINANCIAL DATA
(in thousands, except per share and ratio data)
Three Months Ended Six Months Ended
June 30 June 30 June 30 June 30
1996 1995 1996 1995
Interest income $4,212 $3,841 $8,271 $6,957
Interest expense 1,829 1,601 3,596 2838
--------- ----------- --------- ---------
Net interest income 2,383 2,240 4,675 4,119
Provision for possible loan losses 0 0 0 0
--------- ----------- --------- ---------
Net interest income after provision 2,383 2,240 4,675 4,119
Noninterest income 506 435 1,061 786
Noninterest expense 1,240 1,402 2,574 2447
--------- ----------- --------- ---------
Income before taxes 1,649 1,273 3,162 2,458
Income tax expense 509 389 974 753
--------- ----------- --------- ---------
Net Income $1,140 $884 $2,188 $1,705
========= =========== ========= =========
Earnings per share <F1> $4.06 $3.15 $7.80 $6.08
Dividends declared per share $0.65 $0.50 $0.65 $0.50
Average shares outstanding 280.6 280.7 280.6 280.7
Book value per share $90.68 $79.61 $90.68 $79.61
Selected Quarter End Balances:
Loans $109,874 $91,372
Deposits 205,088 186,360
Debt 7,613 6,396
Equity 25,448 22,343
Total Assets 239,743 216,211
Selected Average Balances:
Loans 107,056 91,202 103,604 80,414
Deposits 206,713 185,448 201,489 167,264
Debt 7,031 7,342 6,554 7,010
Equity 25,343 21,619 24,854 20,693
Total Assets 240,867 215,573 234,512 196,224
Selected Ratios (%)
Return on average assets 1.90% 1.64% 1.87% 1.75%
Return on average equity 18.04% 16.40% 17.66% 16.62%
Net interest margin (taxable equivalent) 4.37% 4.57% 4.41% 4.60%
Tier 1 risk-based capital 21.37% 18.00%
Total risk-based capital 22.64% 19.29%
Leverage 9.95% 9.39%
<F1> Earnings per share is based on the weighted average number
of shares outstanding in the respective period
</TABLE>
OVERVIEW
The Company's second quarter 1996 net income totalled $1,140
thousand, ($4.06 per share) up 29 percent from $884 thousand ($3.15
per share) in the second quarter, 1995. For the first six months of
1996, net income was $2,188 thousand ($7.80 per share) up 28% from
$1,705 thousand ($6.08 per share) in the first half of 1995.
The return on average assets was 1.90 percent for the second
quarter, 1996, an increase of 16 percent from the second quarter,
1995 of 1.64 percent. For the first six months of 1996, the return
on average assets was 1.87% as compared to 1.75% for the same period
last year.
The return on average equity was 18.04 percent for the second
quarter, 1996, an increase of 10 percent over the second quarter,
1995 of 16.40 percent. For the first six months of 1996, the return
on average equity was 17.66% as compared to 16.62% in the prior year.
The 1996 second quarter earnings benefitted from a 6 percent
increase in net interest income, a 16 percent increase in other
income and a 12 percent decrease in noninterest expense when compared
to the 1995 second quarter. The first six months of 1996 earnings
benefitted from a 13 percent increase in net interest income over the
prior year period, a 35 percent increase in noninterest income while
being detrimented by 5 percent increase in noninterest expense.
Total assets at June 30, 1996 increased to 239,743 thousand, up
11 percent from a year ago and up 6 percent from December 31, 1995.
RESULTS OF OPERATIONS
<TABLE>
<S> <C> <C> <C> <C>
NET INTEREST INCOME
Second Quarter Six Months
--------------------------------------------
1996 1995 1996 1995
(in thousands) ========= ========= ========= =========
Total Interest Income $4,212 $3,841 $8,271 $6,957
Total Interest Expense 1,829 1,601 3,596 2,838
--------- --------- --------- ---------
Net Interest Income 2,383 2,240 4,675 4,119
Taxable-Equivalent Adjustment
to Interest Income 72 64 144 123
--------- --------- --------- ---------
Net Interest Income-
Taxable Equivalent Basis <F2> $2,455 $2,304 $4,819 $4,242
========= ========= ========= =========
AVERAGE BALANCES (in thousands):
Interest-Earning Assets <F3> $225,332 $202,211 $219,120 $185,945
========= ========= ========= =========
Interest-Bearing Liabilities $175,813 $160,896 $172,357 $146,606
Interest-Free Funds 49,519 41,315 46,763 39,339
--------- --------- --------- ---------
Total Investible Funds $225,332 $202,211 $219,120 $185,945
========= ========= ========= =========
AVERAGE INTEREST RATES (fully taxable): <F2>
Yield On:
Interest-Earning Assets <F3> 7.63% 7.75% 7.70% 7.67%
Interest-Bearing Liabilities 4.17% 3.99% 4.18% 3.90%
--------- --------- --------- ---------
Spread on Interest-Bearing Funds 3.46% 3.76% 3.52% 3.77%
Contribution of Interest-Free Funds 0.91% 0.81% 0.89% 0.83%
--------- --------- --------- ---------
Net Yield on Interest-Earning Assets 4.37% 4.57% 4.41% 4.60%
========= ========= ========= =========
<F2> Reflects an adjustment to the net interest income amount included in the Statement of
Income to permit comparisons of yields on tax-exempt and taxable assets.
<F3> Based upon amortized cost of all investment securities. Adjustments to fair market
value for available for sale investment securities amounted to averages of a negative
$53 thousand for the second quarter, 1996, and $208 thousand positive for
the first six months, 1996, as compared to a positive $1,087 thousand for
the second quarter, 1995, and a positive $2,673 thousand for the first six
months of 1995.
</TABLE>
Net Interest Income
The Company's net interest income for the 1996 second quarter
was $2,383 thousand, an increase of 6% from $2,240 thousand in the
1995 second quarter, and an increase of 4 percent from $2,291
thousand in the first quarter, 1996. Net interest income for the
first half of 1996 was $4,675, an increase of 13 percent over the
first half, 1995 of $4,119 thousand. Increases in loan and deposit
volume have contributed to the increase in net interest income for
both periods of 1996 over 1995.
Average Interest-Earning Assets
Average interest-earning assets were $225,332 thousand for the
1996 second quarter, $23,121 thousand higher than the 1995 second
quarter. For the first half of 1996, interest-earning assets
averaged $219,120 thousand, an increase of 18 percent over the prior
year of $185,945 thousand. Average loans increased by $15,854
thousand, during the second quarter, 1996, over the prior year, and
by $23,190 in the first half, 1996 over the first half, 1995.
Average investment securities increased by $7,530 during the second
quarter, 1996 over the prior year and by $2,071 during the first 6
months, 1996 over 1995. During the second quarter, 1996, average
Federal funds sold increased by $918 thousand over the prior year and
by $7,347 thousand in the first half, 1996 over the prior year
period.
Average Interest-Bearing Liabilities
Average interest-bearing liabilities for the 1996 second quarter
were $175,813 thousand, compared to $160,896 thousand for the same
period last year, and were $172,357 for the first half of 1996 as
compared to $146,406 for the prior year. Average time deposits for
the 1996 second quarter were $94,710, an average of $11,070 thousand
over the same period last year and average time deposits for the
first half, 1996 were $93,250 thousand as compared to $76,504
thousand in the prior year. Average savings and interest-bearing
demand deposits for the 1996 second quarter were $73,892 thousand, an
increase of $3,978 thousand over the same period last year, and were
$72,373 thousand in the first half, 1996 as compared to $62,822 in
the prior year.
Net Yield on Interest-Earning Assets
The net yield on interest-earning assets was 4.24% in the second
quarter of 1996, a decrease of 20 basis point from 4.44% in the same
period last year and was 4.28% in the first half, 1996 as compared to
the prior year of 4.47%. The major contributing factor has been the
increased rates on time deposits and lower rates on loans.
Management expects that the net yield on earning assets will
remain constant or increase slightly during the balance of 1996.
PROVISION FOR LOAN LOSSES
The Company has made no provision for loan losses in 1996 or
1995. Management does not anticipate any provision for loan losses
during 1996. A discussion of the Company's loan portfolio, net
charge-off and recoveries, and allowances for loan losses appears on
pages 15-18.
<TABLE>
<S> <C> <C> <C> <C>
OTHER INCOME
First
Second Quarter Six Months
------------------- -------------------
1996 1995 1996 1995
(in thousands) ========= ========= ========= =========
Service Charges $375 $327 $747 $604
Trust Fees 3 20 35 22
Other Operating Income 128 88 279 160
--------- --------- --------- ---------
Total Other Income $506 $435 $1,061 $786
========= ========= ========= =========
</TABLE>
Other income for the 1996 second quarter was $506 thousand, up
$71 thousand from the same period last year. For the first six
months of 1996, other income was $1,061 thousand, an increase of $275
thousand over the same period last year.
The increase in other income for both periods of 1996 over 1995
have resulted from increased volume and fee structures.
<TABLE>
<S> <C> <C> <C> <C>
OPERATING EXPENSES
First
Second Quarter Six Months
------------------- -------------------
1996 1995 1996 1995
(in thousands) ========= ========= ========= =========
Salaries and Employee Benefits $698 $607 $1,392 $1,080
Occupancy Expense 88 103 288 174
Furniture and Equipment Expense 55 68 113 114
Other Operating Expenses 362 411 687 717
FDIC Insurance 6 95 25 182
Stationary, Supplies and Printing 31 118 69 180
--------- --------- --------- ---------
Total Operating Expenses $1,240 $1,402 $2,574 $2,447
========= ========= ========= =========
</TABLE>
Operating expenses for the 1996 second quarter were $1,240
thousand, down from $1,402 thousand in the 1995 second quarter, a
decrease of $162 thousand. Operating expenses for the first six
months of 1996 were $2,574 thousand, an increase of $127 thousand
from $2,447 thousand in the comparable period last year. The
decrease in operating expenses in the second quarter and increase for
the first six months, 1996 as compared to the same periods in the
prior year were due to the acquisition of the three Shreveport,
Louisiana branches in March, 1995.
Salaries and employee benefits in the 1996 second quarter were
$698 thousand, compared to $607 thousand in the same period last
year. Salaries and employee benefits in the 1996 first six months
were $1,392 thousand as compared to $1,080 thousand in the same
period last year. The increases for both periods in 1996 over 1995
were due to staffing of the three Shreveport branches along with
increased support staff in March, 1995.
Combined occupancy expense and furniture and equipment expense
for the 1996 second quarter were $143 thousand as compared to $171
thousand for the same period last year. Occupancy expense and
furniture and equipment expense for the 1996 first six months were
$401 thousand as compared to $288 thousand for the same period last
year. The decrease in the second quarter, 1996 as compared to the
second quarter, 1995 was due to prior year expenses in connection
with the Shreveport acquisition. The increase in the first half,
1996 over 1995 was due to replacement of main office heating and air
conditioning system in the first quarter, 1996.
Other operating expenses were $362 thousand for the 1996 second
quarter as compared to $411 thousand for the same period last year.
Other operating expenses in the 1996 first six months were $687
thousand as compared to $717 thousand for the same period last year.
The decreases for both periods are attributable to the three
Shreveport branch acquisitions and related costs which occurred in
March, 1995.
The decreases in FDIC insurance for both periods is due to lower
rates established in second half of 1995.
INCOME TAXES
In the 1996 second quarter, the Company recorded income tax
expense of $509 thousand, compared to $389 thousand for the same
period last year. In the 1996 first six months income tax expense
was $974 thousand as compared to $753 thousand in the same period
last year.
The effective tax rate was 30.9% for the 1996 second quarter as
compared to 30.6% for the same period last year. The effective tax
rate was 30.8% for the first six months of 1996, as compared to 30.6%
for the same period last year. The higher effective tax rate in both
periods of 1996, as compared to the same period last year reflects
difference in the composition of the Company's pre-tax income in both
years.
RECENT ACCOUNTING PRONOUNCEMENTS
In March of 1995, the Financial Accounting Standards Board
(FASB) issued SFAS No. 121, Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed Of, effective
for fiscal years beginning after December 15, 1995. SFAS 121
requires that impairment losses be recorded on long-lived assets used
in operations, including related goodwill. SFAS 121 also addresses
the accounting for long-lived assets which are to be disposed of.
Management does not expect the effect of SFAS 121 to be material.
In May of 1995, the Financial Accounting Standards Board (FASB)
issued SFAS No. 122, Accounting for Mortgage Servicing Rights,
effective for fiscal years beginning after December 15, 1995. SFAS
122 will not have an effect on the operating results of Minden
Bancshares because neither it nor its subsidiary bank provide this
type of service.
CREDIT PORTFOLIO
Loan Portfolio
The Company's loans outstanding, totaled $109,874 thousand at
June 30, 1996 as compared to $91,372 thousand at June 30, 1995 and
$99,381 thousand at December 31, 1995. The increases over both prior
periods have been due to increased loan demand.
The following table sets forth the loan classifications at June
30, 1996, December 31, 1995, and June 30, 1995:
<TABLE>
<S> <C> <C> <C>
-----------------------------
June 30, Dec 31, June 30,
1996 1995 1995
(in thousands) --------- --------- ---------
Commercial, Financial and Agricultural Loans $28,667 $29,676 $29,276
Construction Loans Secured by Real Estate 3,460 2,722 1,570
Other Loans Secured by Real Estate 58,184 50,651 46,606
Installment and Single Payment Loans 17,128 15,148 14,044
Other Loans 2,619 1,502 236
--------- --------- ---------
Total Loans 110,058 99,699 91,732
Less Unearned Discount 184 318 360
--------- --------- ---------
Total Loans Net of Unearned Discount $109,874 $99,381 $91,372
========= ========= =========
</TABLE>
Non-performing Assets
The following table sets forth the non-performing assets at June
30, 1996, December 31, 1995, and June 30, 1995:
<TABLE>
<S> <C> <C> <C>
-----------------------------
June 30, Dec. 31, June 30,
1996 1995 1995
(in thousands) --------- --------- ---------
Non-Accrual Loans $547 $403 $482
Past-Due Loans 421 174 279
Restructured Loans 6 69 68
--------- --------- ---------
Total Non-performing Loans 974 646 829
Other Real Estate Owned 367 376 605
--------- --------- ---------
Total Non-performing Assets $1,341 $1,022 $1,434
========= ========= =========
</TABLE>
In addition to the non-performing loans discussed above,
management has identified other loans for which payments are current
that are subject to potential future classification as nonperforming.
As of June 30, 1996, these loans totalled $221 thousand as compared
to $257 thousand a year ago and $204 thousand at December 31, 1995.
Loans are placed on non-accrual status when they become ninety
(90) days past due unless there is sufficient evidence that they will
be brought current in the very near future. When loans are placed on
non-accrual status, all accrued interest is reversed against
earnings. Past due loans are those loans past due 90 days or more on
which there is sufficient evidence that they will be brought current
in the very near future. Restructured loans are those on which the
original terms have been renegotiated to provide for an extension of
the original payment period and/or a reduction or deferral of
interest-principal due to deterioration in the financial position of
the borrower.
Non-accrual loans are returned to accrual status only when they
are brought fully current with respect to interest and principal and
management estimates the loans to be fully collectible as to interest
and principal. Interest income on non-accrual loans which would have
reported on an accrual basis would have amounted to $15 thousand for
the 1996 second quarter and $11 thousand for the 1995 second quarter.
Interest income on non-accrual loans which would have been reported
on an accrual basis would have amounted to $25 thousand for the first
six months of 1996 and $17 thousand for the first six months of 1995.
Interest income on restructured loans included in net income amounted
to $1 thousand for the 1996 second quarter and $4 thouand for the
1995 second quarter. Interest income on restructured loans included
in net income amounted to $3 thousand for the first six months of
1996 and $7 thousand for the first six months of 1995.
Other real estate owned normally represents properties acquired
as loan satisfactions which are recorded at the lower of the
investment in the loan with respect to which the assets were
acquired, or the fair value of each property, with the initial write-
downs charged to the reserve for loan losses. Subsequent write-downs
of such properties are reflected as such on the income statement and
gains and losses on disposal are accordingly reflected on the income
statement. Other real estate owned currently includes the former
branch facility of Oak Tree Federal Savings Bank acquired on August
26, 1994 as part of the Minden Branch acquisition, which has not been
operated as a banking facility. Other real estate currently includes
former branch located at 324 Homer Road which was closed January 4,
1995. The former branch was capitalized as its depreciated value.
Allowance for Loan Losses
The allowance for loan losses is available to absorb potential
credit losses from the entire loan portfolio. The appropriate level
of the allowance is based on analyses of the loan portfolio and
reflects an amount which, in management's judgement, is adequate to
provide for potential losses. The analyses include consideration of
such factors as the risk rating of individual credits, the size and
diversity of the portfolio, particularly in terms of industry,
economic and political conditions, prior loss experience and results
of periodic credit reviews of the portfolio. Based upon the results
of these analyses, the allowance for losses is increased, from time
to time, by charges to income to the extent management considers
appropriate.
The accompanying table reflects the activity in the allowance
for loan losses for the three months ended June 30, 1996, and 1995,
and six months ended June 30, 1996, and 1995.
<TABLE>
<S> <C> <C> <C> <C>
Second Quarter First Six Months
------------------- ------------------
1996 1995 1996 1995
(in thousands) ========= ========= ==================
Balance at Beginning of Period $3,406 $3,391 $3,396 $3,395
Charge-Offs
Commercial, Financial and Agricultural 73 0 78 0
Real Estate - Construction 0 0 0 0
Real Estate - Mortgage 0 30 0 67
Installment Loans to Individuals 12 20 33 25
--------- --------- ------------------
Total 85 50 111 92
--------- --------- ------------------
Recoveries
Commercial Financial and Agricultural 0 2 0 21
Real Estate - Construction 0 0 0 0
Real Estate - Mortgage 20 53 42 60
Installment Loans to Individuals 12 13 26 25
--------- --------- ------------------
Total 32 68 68 106
--------- --------- ------------------
Net Recoveries (Charge-Offs) (53) 18 (43) 14
Additions Charged to Operations 0 0 0 0
--------- --------- ------------------
Balance at End of Period $3,353 $3,409 $3,353 $3,409
========= ========= ==================
The following table reflects the allowance coverage ratios at
June 30, 1996, December 31, 1995 and June 30, 1995.
June 30, Dec 31, June 30,
For the Quarter Ended: 1996 1995 1995
--------- --------- -----------
Allowance for Loan Losses to:
Loans at Period-End 3.05% 3.42% 3.73%
Average Loans 3.13% 3.51% 3.74%
Non-performing Loans 344.25% 525.85% 411.22%
Non-performing Assets 250.04% 332.39% 237.73%
Total Net Charge-Offs (annualized) to:
Loans at Period-End 0.10% 0.00% (0.04%)
Average Loans 0.10% 0.00% (0.04%)
Allowance for Loan Losses 3.17% (0.06%) (1.06%)
</TABLE>
Management deems its allowance for loan losses at June 30, 1996,
to be adequate. The Company considers that it has sufficient
reserves to absorb losses that may currently exist in the portfolio
including the loans acquired in the acquisition of the three
Shreveport branches. The Company will continue to reassess the
adequacy of its allowance for loan losses and make provisions
accordingly.
CAPITAL
Total stockholders' equity at June 30, 1996, was $25,448 thousand,
up from $24,009 thousand at December 31, 1995 and $22,343 thousand at
June 30, 1995. Stockholders' equity at June 30, 1996, reflects negative
impact of $325 thousand for net unrealized gains on securities available
for sale.
Risk-Based Capital Ratios
In January, 1989, the Federal Reserve Board ("FRB") issued risk-
based capital guidelines which require banking organizations to maintain
certain ratios of "Qualifying Capital" to "risk-weighted assets."
"Qualifying Capital" is classified into Tier 1 and Tier 2 Capital. Tier
1 Capital applicable to the Company consists only of common equity.
Tier 2 Capital applicable to the Company consists only of qualifying
allowance for loan losses. The amount of Tier 2 Capital may not exceed
Tier 1 Capital. In calculating "risk-weighted assets," certain risk
percentages, as specified by the FRB, are applied to particular
categories of both on- and off-balance sheet assets. Effective December
31, 1992, the guidelines require that banking organizations maintain a
minimum ratio of Tier 1 Capital to risk-weighted assets of 4% and a
minimum ratio of Tier 1 and Tier 2 Capital ("Total Capital") to risk-
weighted assets of 8% (the "final risk-based guidelines"). At June 30,
1996, the Company's Tier 1 Capital to risk-weighted assets ratio was
21.37% and the Total Capital to risk-weighted assets ratio was 22.64%.
Leverage Ratios
The Tier 1 leverage ratio is defined as Tier 1 Capital (as defined
under the risk-based capital guidelines) divided by average total assets
(net of allowance for loan losses). The minimum leverage ratio is 3%
for banking organizations that do not anticipate significant growth and
that have well-diversified risk, excellent asset qualify, high liquidity
and good earnings. Other banking organizations are expected to have
ratios of at least 4% to 5%, depending upon their particular condition
and growth plans. Higher capital ratios could be required if warranted
by the particular circumstances, or risk profile, of a given banking
organization. The FRB has not advised the Company of any specific
minimum Tier 1 leverage ratio applicable to it.
The table which follows sets forth the Company's Tier 1 and Tier
2 Capital, risk-weighted assets, including off balance sheet items, and
the Company's risk-based capital ratios under the final guidelines as
well as Tier 1 leverage ratios.
Capital and Ratios
June 30, Dec 31, June 30,
1996 1995 1995
(in thousands), except ratios --------- --------- ---------
Tier 1 Capital
Common Stockholders' Equity 23,755 21,661 20,242
Tier 2 Capital
Reserve for Possible Loan Losses 1,413 1,628 1,458
--------- --------- ---------
Total Qualifying Capital 25,168 23,289 21,700
========= ========= =========
Risk Weighted Assets 113,066 126,390 112,466
Tier 1 Capital Ratio 21.37% 17.14% 18.00%
Total Capital Ratio 22.64% 18.43% 19.29%
Tier 1 Leverage Ratio 9.95% 9.52% 9.39%
Common Stock Dividends
For the second quarters of 1996 and 1995, the Board of Directors
of the Company declared dividends of $.65 and $.50 per share
respectively. Future dividend policies will be determined by the Board
of Directors in light of earnings and financial condition of the Company
and its subsidiary and other factors, including applicable governmental
regulations and policies.
LIQUIDITY MANAGEMENT
The objective of liquidity management is to ensure the
availability of sufficient cash flows to meet all financial commitments
and to capitalize on investment opportunities. Liquidity management
addresses the Company's ability to meet deposit withdrawals on demand
or at contractual maturity, to service indebtedness and to make new
loans and investments as opportunities arise. The Company monitors and
reviews its asset and liability mix on a routine basis.
The primary sources of liquidity include cash and due from banks,
federal funds sold and investment securities. Additionally, the bank
subsidiary has the ability to borrow and purchase federal funds on a
short term basis from other financial institutions as a source of
liquidity should the need arise.
The loan to deposit ratio averaged 51.79% during the 1996 second
quarter and 49.18% during the 1995 second quarter. Cash on hand and due
from banks averaged $10,167 thousand in the 1996 second quarter and
$7,093 thousand in the 1995 second quarter. Federal Funds sold averaged
$19,708 thousand in the 1996 second quarter and $18,790 thousand in the
1995 second quarter.
At June 30, 1996, investment securities at amortized cost,
totalled $98,619 thousand, of which $35,802 thousand or 36.30% mature
or reprice within one year, $50,228 thousand mature or reprice within
two to five years, and $12,589 thousand mature in over five years. The
Company does not anticipate any events which would require liquidity
beyond that which is available from the above referenced sources.
SUPERVISION AND REGULATION
Dividends
Substantially all of the funds used by the Company to pay
dividends to its shareholders are derived from dividends paid to it by
its subsidiary bank, which are subject to certain legal restrictions.
Under Louisiana law, state chartered banks cannot pay dividends in
excess of current year earnings plus undistributed earnings of the prior
year without the prior approval of the Commissioner of Financial
Institutions. Under Federal law, dividends by state chartered banks in
excess of current year earnings plus undistributed earnings of the two
prior years would require FRB approval.
In addition to the dividend restrictions described above, the FRB
and the Federal Deposit Insurance Corporation ("FDIC") have authority
under the Financial Institutions Supervisory Act to prohibit or to limit
the payment of dividends by banking organizations they supervise,
including the Company and its bank subsidiary if, in the banking
regulators' opinions, payment of a dividend would constitute an unsafe
or unsound practice in light of the financial condition of the banking
organization.
Other
On December 19, 1991, the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA") was enacted. Among other things,
FDICIA provides increased funding for the Bank Insurance Fund ("BIF")
of the FDIC by granting authority for special assessments against
insured deposits through a general risk-based assessment system. FDICIA
also contains provisions limiting activities and business methods of
depository institutions. FDICIA provides for expanded regulation of
depository institutions and their affiliates, including parent holding
companies, by such institutions' appropriate Federal banking regulator.
Effective November 2, 1992, the FDIC implemented a transitional
risk-related premium system ("RRPS") beginning in 1993. Under the RRPS,
each insured institution is assigned to one of three capital groups and
to one of three supervisory subgroups for purposes of determining the
assessment rate. The capital group assignments are based on "Call
Reports" submitted six months in advance of the assessment period and
supervisory subgroup assignments will be determined from the most recent
"Report of Examination" by the respective agency submitted by quarter
ending three months prior to assessment period.
The FDIC completed the recapitalization of the BIF in May, 1995,
and has lowered the rate structure for the stronger capitalized banks
and those with higher supervisory ratings. The proposed new rates for
the BIF are 0.00% for the highest ratings to 0.31% for the lowest
ratings. The existing SAIF premium rates which are 0.23% to 0.31% will
continue. The portion of Minden Bank's deposits acquired in the
acquisition of the failed Oak Tree Federal Savings Bank Branch in Minden
in August, 1994, are insured through the SAIF. Minden Bank has the most
favorable rates available in 1996, 0.00% for BIF and 0.23% for SAIF
deposits.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MINDEN BANCSHARES, INC. AND SUBSIDIARY
Consolidated Net Interest Income and Average Balances
Three Months Ended June 30, 1996 and 1995
(Thousands)
1996 1995
------------------------------- -------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
--------- -------- ------------ --------- -------- ------------
ASSETS
Interest Bearing Balances Due from Banks $1,236 $20 6.49% $2,706 $33 3.87%
Federal Funds Sold 19,708 256 5.21% 18,790 278 5.93%
Investment Securities <F4> 96,157 1,377 5.74% 88,627 1,273 5.76%
Federal Reserve Bank and
Federal Home Loan Bank Stocks 1,175 17 5.80% 886 15 6.80%
Loans 107,056 2,542 9.52% 91,202 2,242 9.86%
--------- -------- --------- --------
Total Interest-
Earning Assets 225,332 $4,212 7.50% 202,211 $3,841 7.62%
Allowance for Loan Losses (3,418) (3,423)
Cash and Due from Banks 10,167 7,093
Other Assets <F4> 8,786 9,692
--------- ---------
Total Assets $240,867 $215,573
========= =========
LIABILITIES
Savings and Interest-
Bearing Demand $73,892 $527 2.86% $69,914 $487 2.79%
Time Deposits 94,710 1,226 5.19% 83,640 1,040 4.99%
--------- -------- --------- --------
Total Interest-
Bearing Deposits 168,602 1,753 4.17% 153,554 1,527 3.99%
Securities Sold Under
Repurchase Agreements 7,031 72 4.11% 7,072 68 3.86%
Long-Term Debt 180 4 8.91% 270 6 8.91%
--------- -------- --------- --------
Total Interest-
Bearing Liabilities 175,813 $1,829 4.17% 160,896 $1,601 3.99%
Demand Deposits 38,111 31,894
Other Liabilities 1,600 1,164
--------- ---------
Total Liabilities 215,524 193,954
--------- ---------
STOCKHOLDERS' EQUITY
Common Stockholders' Equity 25,343 21,619
--------- ---------
Total Liabilities and
Stockholders' Equity <F4> $240,867 $215,573
========= =========
SPREAD ON INTEREST-BEARING FUNDS 3.33% 3.63%
NET INTEREST INCOME AND NET
YIELD ON INTEREST-EARNING ASSETS $2,383 4.24% $2,240 4.44%
======== ============ ======== ============
<F4> Based upon amortized cost of investment securities
MINDEN BANCSHARES, INC. AND SUBSIDIARY
Consolidated Net Interest Income and Average Balances
Six Months Ended June 30, 1996 and 1995
(Thousands)
1996 1995
------------------------------- -------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
--------- -------- ------------ --------- -------- ------------
ASSETS
Interest Bearing Balances Due from Banks $2,102 $58 5.53% $1,766 $33 3.77%
Federal Funds Sold 20,434 535 5.25% 13,087 381 5.87%
Investment Securities <F5> 91,867 2,627 5.73% 89,796 2,575 5.78%
Federal Reserve Bank and
Federal Home Loan Bank Stocks 1,113 35 6.31% 882 29 6.63%
Loans 103,604 5,016 9.71% 80,414 3,939 9.88%
--------- -------- --------- --------
Total Interest-
Earning Assets 219,120 $8,271 7.57% 185,945 $6,957 7.54%
Allowance for Loan Losses (3,417) (3,409)
Cash and Due from Banks 10,030 6,834
Other Assets <F5> 8,779 6,854
--------- ---------
Total Assets $234,512 $196,224
========= =========
LIABILITIES
Savings and Interest-
Bearing Demand $72,373 $1,029 2.85% $62,822 $866 2.78%
Time Deposits 93,250 2,423 5.21% 76,504 1,830 4.82%
--------- -------- --------- --------
Total Interest-
Bearing Deposits 165,623 3,452 4.18% 139,326 2,696 3.90%
Securities Sold Under
Repurchase Agreements 6,554 136 4.16% 7,010 131 3.77%
Long-Term Debt 180 8 8.91% 270 11 8.22%
--------- -------- --------- --------
Total Interest-
Bearing Liabilities 172,357 $3,596 4.18% 146,606 $2,838 3.90%
Demand Deposits 35,866 27,938
Other Liabilities 1,435 987
--------- ---------
Total Liabilities 209,658 175,531
--------- ---------
STOCKHOLDERS' EQUITY
Common Stockholders' Equity <F5> 24,854 20,693
--------- ---------
Total Liabilities and
Stockholders' Equity $234,512 $196,224
========= =========
SPREAD ON INTEREST-BEARING FUNDS 3.39% 3.64%
NET INTEREST INCOME AND NET
YIELD ON INTEREST-EARNING ASSETS $4,675 4.28% $4,119 4.47%
======== ============ ======== ============
<F5> Based upon amortized cost of investment securities
</TABLE>
PART II - Other Information
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The following four items were submitted to a vote at the Annual
Meeting of Shareholders held on April 9, 1996.
(a) Election of Directors
The following fourteen (14) directors were elected to serve until
the 1997 Annual Meeting.
R. Thad Andress Harry E. McInnis, Jr.
Don L. Brice John W. Montgomery
Dr. Edward D. Brown Don D. Moore
Jack E. Byrd, Jr. Joe E. Ratcliff
Dr. Gary G. Daniel Howard G. Spillers
Hal K. Jackson R. E. (Mike) Woodard, Jr.
James D. Madden S. Douglas Madden
There were 208,792 votes cast for the election of all directors
with no votes being cast against or abstaining on any director.
(b) The appointment of Heard, McElroy & Vestal as independent
auditors for the Company and its subsidiary for the year ending December
31, 1996, was ratified by the following vote:
FOR 208,546
AGAINST 6
ABSTAIN 240
(c) The supplementing and amending of the Articles of
Incorporation which limits acts for which directors and officers may be
personally liable.
FOR 202,248
AGAINST 0
ABSTAIN 6,544
(d) The adoption of Stock Incentive Plan
FOR 205,511
AGAINST 2,729
ABSTAIN 552
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(1) 3 (i) Articles of Incorporation as amended on April 23,
1996
(2) 3 (i) (a) Amendment dated April 23, 1996 to the
Articles of Incorporation.
11 Computation of earnings per share
(This computation is provided in Note 4 to the
Financial Statements on Page 8 and Page 9 under
Management's Discussion and Analysis)
(3) 27 Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
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 hereunto duly authorized.
MINDEN BANCSHARES, INC.
August 12, 1996 BY:s/ Jack E. Byrd, Jr.
-----------------------------
Jack E. Byrd, Jr.
President and CEO
August 12, 1996 BY:s/ Robert W. Hines, Jr.
-----------------------------
Robert W. Hines, Jr.
Vice-President and
Chief Financial Officer
ARTICLES OF INCORPORATION as amended on April 23, 1996
EXHIBIT 3 (i)
ARTICLES OF INCORPORATION
OF
MINDEN BANCSHARES, INC.
I, the undersigned natural person of the age of eighteen (18)
years or more, acting as an incorporator of a corporation
(hereinafter called the "Corporation") under the Louisiana Business
Corporation Law, do hereby adopt the following Articles of
Incorporation for the Corporation:
ARTICLE ONE: NAME
The name of the Corporation is Minden Bancshares, Inc.
ARTICLE TWO: DURATION
The Corporation's period of duration is perpetual.
ARTICLE THREE: PURPOSE
The purpose or purposes for which the Corporation is organized
are:
(a) To act as a bank holding company;
(b) To transact any and all lawful business for which
corporations may be incorporated under the Louisiana Business
Corporation Law;
(c) To buy, sell, lease, and deal in services, personal
property, and real property;
(d) To do each and every thing necessary, suitable, or proper
for the accomplishment of any of the purposes or for the
attainment of any one or more of the objects herein enumerated
or which at any time appear conducive to or expedient for the
protection or benefit of the Corporation.
The foregoing clauses shall be construed as powers as well as
objects and purposes, and the matter expressed in each clause
shall, unless herein otherwise expressly provided, be in nowise
limited by reference to or inference from the terms of any other
clause, but shall be regarded as independent object, purposes and
powers, and shall not be construed to limit or restrict in any
manner the meaning of the general terms or the general powers of
the Corporation.
ARTICLE FOUR: STOCK
The Corporation is authorized to issue one class of shares to
be designated "common." The total number of common shares which
the Corporation is authorized to issue is 500,000 shares, and the
par value of each such share is $2.50.
ARTICLE FIVE: PREEMPTIVE RIGHTS DENIED
No holder of any shares of common stock shall have any
preemptive or preferential right to receive, purchase or subscribe
to (a) any unissued or treasury shares of any class of stock
(whether now or hereafter authorized) of the Corporation, (b) any
obligations, evidences of indebtedness or other securities of the
Corporation convertible into or exchangeable for, or carrying or
accompanied by any rights to receive, purchase or subscribe to, any
such unissued or treasury shares, (c) any right of subscription to
or right to receive , or any warrant or option for the purchase
of, any of the foregoing securities, or (d) any other securities
that may be issued or sold by the Corporation.
ARTICLE SIX: CUMULATIVE VOTING
Cumulative voting for the election of directors is prohibited.
ARTICLE SEVEN: ADOPTION OF BYLAWS
The Board of Directors of the Corporation may adopt the
initial bylaws of the Corporation and may thereafter alter, amend,
or repeal the bylaws of the Corporation or may adopt new bylaws,
subject to the shareholders' concurrent right to alter, amend, or
repeal the bylaws or to adopt new bylaws. The shareholders may
provide that any or all bylaws altered, amended, repealed, or
adopted by the shareholders shall not be altered, amended, re-
enacted, or repealed by the Board of Directors of the Corporation.
ARTICLE EIGHT: INTERESTED PARTIES
A contract or transaction between the Corporation and any
other Person (as used herein the term "Person" means an individual,
firm, trust, partnership, joint venture, association, corporation,
political subdivision or instrumentality, or other entity) shall
not be affected or invalidated by the fact that (a) any director,
officer, or security holder of the Corporation is also a party to,
or has a direct or indirect interest in, such contract or
transaction; or (b) any director or, officer, or security holder
the Corporation is in any connected with such other Person or with
any of its officers or directors.
Every person who may become a director of the Corporation is
hereby relieved from any liability that might otherwise exist from
contracting with the Corporation for the benefit of himself or of
any Person in which he has any interest, whether or not the
interested director's presence at a meeting or his vote or votes
were necessary to obligate the Corporation in such transaction, if
such interest shall have been disclosed to, or known to, the
Corporation's directors or shareholders who shall have approved
such transaction and the contract or transaction was fair as to the
Corporation as of the time it was authorized, approved or ratified
by the Board of Directors.
ARTICLE NINE: INDEMNIFICATION
Section A. The Corporation may indemnify any person who was
or is a party or is threatened with being made a party to any
threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (all such
actions, suits, and proceedings and accompanying modifiers being
comprehended by the term "Proceeding") (excluding actions by, or in
the right of, the Corporation), by reason of the fact that he is or
was a director or officer of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee,
or agent of another Person. Such indemnification may be made only
against those expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement actually and reasonably
incurred by such person in connection with such Proceeding if (i)
he is successful on the merits or otherwise; or (ii) he acted in
the transaction which is the subject of the Proceeding in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interest of the Corporation, and, with respect
to any criminal Proceeding, he had no reasonable cause to believe
his conduct was unlawful. The termination of any Proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the
best interest of the Corporation, nor, with respect to any criminal
Proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
Section B. The Corporation may indemnify any person who was
or is a party or is threatened with being made a party to a
Proceeding by or in the right of the Corporation by reason of the
fact that he is or was a director or officer of the Corporation, or
is or was serving at the request of the Corporation as a director,
officer, employee, or agent of another Person. Such
indemnification may be made against expenses (including attorneys'
fees, and amounts paid in settlement not exceeding, in the judgment
of the Board of Directors, the estimated expense of litigating the
action to conclusion) actually and reasonably incurred by such
person in connection with the defense or settlement of such
Proceeding if (i) he is successful on the merits or otherwise; or
(ii) he acted in the transaction which is the subject of the
Proceeding in good faith and in a manner he reasonably believed to
be in or not opposed to the best interest of the Corporation.
However, no indemnification may be made in respect of any claim,
issue, or matter in relation to which such person shall have been
adjudged to be liable for negligence or misconduct in the
performance of his duty to the Corporation. Notwithstanding the
foregoing exception, indemnification may be made to the extent that
the court in which such Proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnification for such expenses as the
court of appropriate jurisdiction shall deem proper.
Section C. Any indemnification under Section A or Section B
of this Article (other than one ordered by a court) may be made by
the Corporation only upon a determination that indemnification of
such person is proper in the circumstances because he has met the
applicable standard of conduct set forth in such Section. Such
determination shall be made by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to
such Proceeding; or, if such a quorum is not obtainable (or, even
if obtainable, if a quorum of disinterested directors so directs),
by independent legal counsel in a written opinion, or by the
shareholders of the Corporation; or through such procedures as
shall be authorized in the bylaws of the Corporation.
Section D. Expenses incurred in defending a civil or criminal
Proceeding may be paid by the Corporation in advance of the final
disposition of such Proceeding as authorized by the Board of
Directors or other appropriate body or party in the manner provided
in Section C of this Article only when the Corporation has received
an undertaking by or on behalf of the person who is to receive such
payment to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the Corporation
as authorized in this Article.
Section E. In determining whether the standard of conduct set
forth in Section A or Section B has been met, it may be determined
that a person has met the standard as to some matters but not as to
others, and the amount of indemnification may be accordingly
prorated.
Section F. The indemnification provided by Sections A through
E shall not be exclusive of any other rights to which a person may
be entitled by law, bylaw, agreement, vote or shareholders, or
otherwise.
Section G. The indemnification provided by Sections A through
E shall inure to the heirs, executors, and administrators of any
person entitled to indemnification under this Article.
Section H. The Corporation may purchase and maintain
insurance on any person who is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation
as a director, officer, employee, or agent of another Person
against any liability incurred by him in any such position, or
arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under
Sections A through E.
ARTICLE TEN: REPURCHASE OF STOCK
The Corporation is authorized to purchase, directly or
indirectly, its own shares to the extent of the aggregate of the
unrestricted capital surplus and unrestricted reduction surplus
available therefor, without submitting such purchase to a vote of
the shareholders of the Corporation.
ARTICLE ELEVEN: VOTING PERCENTAGES
Except as otherwise provided in these Articles, the bylaws or
by provision of law, a majority of votes actually cast shall decide
any matter properly before any shareholders' or directors' meeting
organized for the transaction of business, except that directors
shall be elected by plurality vote.
ARTICLE TWELVE: REVERSION OF UNCLAIMED DIVIDENDS, REDEMPTION
PAYMENTS AND RECLASSIFICATION SHARES
Any and all cash, property or share dividends, shares issuable
to shareholders in connection with a reclassification of stock, and
the redemption price of redeemed shares, which are not claimed by
the shareholders entitled thereto within a reasonable time (not
less than one year in any event) after the dividend or redemption
price became payable or the shares became issuable, despite
reasonable efforts by the Corporation to pay the dividend or
redemption price or deliver the certificates for the shares to such
shareholders within such time, shall, at the expiration of such
time, revert in full ownership to the Corporation, and the
Corporation's obligation to pay such dividend or redemption price
or issue such shares, as the case may be, shall thereupon cease;
provided that the Board of Directors may, at any time, for any
reason satisfactory to it, but need not, authorize (a) payment of
the amount of any cash or property dividend or redemption price or
(b) issuance of any shares, ownership of which has reverted to the
Corporation pursuant to the provision of this Article, to the
entity who or which would be entitled thereto had such reversion
not occurred.
ARTICLE THIRTEEN: INCORPORATOR
The name and address of the incorporator is:
NAME ADDRESS
Stephen T. Braun 4700 InterFirst Two
Dallas, Texas 75270
ARTICLE FOURTEEN: LIABILITY OF DIRECTORS OR OFFICERS FOR
MONETARY DAMAGES FOR BREACH OF FIDUCIARY DUTY
Section 14.1. A director or officer of the Corporation shall
not be personally liable to the Corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director or
officer, except for liability (a) for any breach of the director's
or officer's duty of loyalty to the Corporation or its
shareholders; (b) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation or law; (c)
under Louisiana R. S. 12:92 (D), or (d) for any transaction from
which the director or officer derived an improper personal benefit.
Section 14.2. If the Louisiana Business Corporation Law is
hereafter amended to authorize the further elimination or
limitation of the liability of directors or officers, then the
liability of a director or officer of the Corporation shall be
limited to the fullest extent permitted by the amended state law.
Section 14.3. Any repeal or modification of this paragraph by
the stockholders of the Corporation shall be prospective only and
shall not adversely affect any limitation on the personal liability
of a director or officer of the Corporation existing at the time of
such repeal or modification.
AMENDMENTS TO ARTICLES OF INCORPORATION
dated April 23, 1996
EXHIBIT 3 (i) (a)
THE ARTICLES OF INCOPORATION
OF MINDEN BANCSHARES, INC.
AMENDED ON APRIL 23, 1996 AS FOLLOWS:
ARTICLE FOURTEEN: LIABILITY OF DIRECTORS OR OFFICERS FOR
MONETARY DAMAGES FOR BREACH OF FIDUCIARY DUTY
Section 14.1. A director or officer of the Corporation shall
not be personally liable to the Corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director or
officer, except for liability (a) for any breach of the director's
or officer's duty of loyalty to the Corporation or its
shareholders; (b) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation or law; (c)
under Louisiana R. S. 12:92 (D), or (d) for any transaction from
which the director or officer derived an improper personal benefit.
Section 14.2. If the Louisiana Business Corporation Law is
hereafter amended to authorize the further elimination or
limitation of the liability of directors or officers, then the
liability of a director or officer of the Corporation shall be
limited to the fullest extent permitted by the amended state law.
Section 14.3. Any repeal or modification of this paragraph by
the stockholders of the Corporation shall be prospective only and
shall not adversely affect any limitation on the personal liability
of a director or officer of the Corporation existing at the time of
such repeal or modification.
Financial Data Schedule
EXHIBIT 27
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JUNE
30, 1996 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 12,063
<INT-BEARING-DEPOSITS> 622
<FED-FUNDS-SOLD> 12,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 84,651
<INVESTMENTS-CARRYING> 14,661
<INVESTMENTS-MARKET> 14,621
<LOANS> 109,874
<ALLOWANCE> 3,353
<TOTAL-ASSETS> 239,743
<DEPOSITS> 205,088
<SHORT-TERM> 0
<LIABILITIES-OTHER> 7,613
<LONG-TERM> 180
0
0
<COMMON> 775
<OTHER-SE> 24,673
<TOTAL-LIABILITIES-AND-EQUITY> 239,743
<INTEREST-LOAN> 5,016
<INTEREST-INVEST> 2,662
<INTEREST-OTHER> 593
<INTEREST-TOTAL> 8,271
<INTEREST-DEPOSIT> 3,453
<INTEREST-EXPENSE> 3,596
<INTEREST-INCOME-NET> 4,675
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,574
<INCOME-PRETAX> 3,162
<INCOME-PRE-EXTRAORDINARY> 2,188
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,188
<EPS-PRIMARY> 7.80
<EPS-DILUTED> 7.80
<YIELD-ACTUAL> 4.28
<LOANS-NON> 547
<LOANS-PAST> 421
<LOANS-TROUBLED> 6
<LOANS-PROBLEM> 221
<ALLOWANCE-OPEN> 3,396
<CHARGE-OFFS> 111
<RECOVERIES> 68
<ALLOWANCE-CLOSE> 3,352
<ALLOWANCE-DOMESTIC> 3,352
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
