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 MARCH 31,
1997
( ) 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)
(318) 377-4283
(Issuer'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 April 30, 1997
Transitional Small Business Disclosure Format (Check one):
Yes ( ) No (X)
Page 1 of 25 Pages
Exhibit Index - Page 22
FORM 10-QSB
INDEX
PART I Page
Item 1. Financial Statements - Minden Bancshares,
Inc. and Subsidiary
Consolidated Balance Sheets as of
March 31, 1997 and December 31, 1996 4
Consolidated Statements of Income for
the Three Months Ended March 31, 1997
and 1996 5
Consolidated Statements of Cash Flows
for the Three Months ended March 31,
1997, and 1996 6
Notes to Consolidated Financial
Statements 7-8
Item 2. Management's Discussion and Analysis 9-21
PART II
Item 6. Exhibits and Reports on Form 8-K 22
PART I - Financial Information
------------------------------
ITEM 1. FINANCIAL STATEMENTS
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
March December
1997 1996
ASSETS
- ----------------------------------------- (in thousands, except per share data)
Cash and Cash Equivalents:
Cash and Due From Banks $12,412 $14,907
Federal Funds Sold 12,000 8,500
-------- ----------
Total 24,412 23,407
-------- ----------
Securities:
Held to Maturity 14,711 14,784
Available for Sale 87,849 90,447
--------- ----------
Total 102,560 105,231
--------- ----------
Federal Reserve Bank and Federal Home Loan Bank Stock 1,246 1,205
Loans, Less Allowance for Loan Losses of $3,306 and $3,306 117,227 112,040
Accrued Interest Receivable 2,392 2,178
Bank Premises and Equipment 3,077 3,093
Real Estate Owned Other Than Bank Premises 252 217
Other Assets 2,769 2,661
--------- ----------
Total Assets $253,935 $250,032
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------------------------
Liabilities:
- -----------
Deposits:
Interest Bearing $179,129 $177,799
Noninterest Bearing 37,575 38,197
--------- ----------
Total Deposits 216,704 215,996
Securities Sold Under Repurchase Agreement 6,909 5,418
Accrued Interest Payable 857 860
Other Liabilities 916 132
Note Payable 90 90
--------- ----------
Total Liabilities 225,476 222,496
--------- ----------
Stockholders' Equity:
- --------------------
Common Stock, par value $2.50 per share; 500,000
shares authorized; 309,816 shares issued;
280,549 and 280,549 shares outstanding 775 775
Additional Paid-In Capital 11,205 11,205
Undivided Profits 17,992 16,778
Net Unrealized Gain(Loss) on AFS Securities (216) 75
Treasury Stock-At Cost (1,297) (1,297)
--------- ----------
Total Stockholders' Equity 28,459 27,536
--------- ----------
Total Liabilities and Stockholders' Equity $253,935 $250,032
========= ==========
See accompanying notes.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(UNAUDITED)
1997 1996
-------- --------
Interest Income: (in thousands, except per share data)
- ---------------
Interest and Fees on Loans $2,767 $2,475
Securities:
Held to Maturity (non-taxable) 185 184
Available for Sale 1,257 1,066
Federal Funds Sold 224 279
Federal Reserve Stock and Other 17 17
Interest-Bearing Balances with Banks 26 38
-------- --------
Total Interest Income 4,476 4,059
-------- --------
Interest Expense:
- ----------------
Savings and Interest-Bearing Demand Deposits 557 502
Time Deposits 1,287 1,197
Securities Sold Under Repurchase Agreement and Other 68 69
-------- --------
Total Interest Expense 1,912 1,768
-------- --------
Net Interest Income 2,564 2,291
Provision for Loan Losses 0 0
-------- --------
Net Interest Income After Provision for Loan Losses 2,564 2,291
-------- --------
Other Income:
- ------------
Service Charges 392 373
Trust Department Fees 2 32
Other Operating Income 159 150
-------- --------
Total Other Income 553 555
-------- --------
Operating Expenses:
- ------------------
Salaries and Employee Benefits 708 694
Occupancy Expense 94 200
Furniture and Equipment Expense 64 58
Other Operating Expenses 368 307
Capital Stock Taxes 81 36
Stationery, Supplies and Printing 39 38
-------- --------
Total Operating Expense 1,354 1,333
-------- --------
Income Before Income Taxes 1,763 1,513
Income Taxes 549 465
-------- --------
Net Income $1,214 $1,048
======== ========
Earnings Per Share $4.33 $3.74
======== ========
Dividends Declared Per Share $0.00 $0.00
======== ========
See accompanying notes.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(UNAUDITED)
1997 1996
--------- ---------
Cash Flows from Operating Activities: (in thousands, except per share data)
- ------------------------------------
Net Income $1,214 $1,048
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 96 94
(Gain) Loss on Sale of ORE 0 0
(Increase) Decrease in Accrued Interest Receivable (214) 40
Write-down on Real Estate Owned Other than Bank Premises 0 0
(Increase) Decrease in Other Assets (3) 10
Increase (Decrease) in Accrued Interest Payable (3) 50
Increase (Decrease) in Other Liabilities 784 817
--------- ---------
Total Adjustments 660 1,011
--------- ---------
Net Cash Provided (Used) by Operating Activities 1,874 2,059
--------- ---------
Cash Flows from Investing Activities:
- ------------------------------------
Proceeds from Sales and Maturities of Investment Securities 21,503 7,476
Purchase of Investment Securities (19,314) (13,744)
Proceeds from Sales of ORE 0 0
Purchase of Equipment (35) (32)
Net (Increase) Decrease in Loans (5,222) (5,985)
--------- ---------
Net Cash (Used) by Investing Activities (3,068) (12,285)
--------- ---------
Cash Flows from Financing Activities:
- ------------------------------------
Dividends Paid 0 0
Net Increase (Decrease) in Noninterest Bearing Deposits (622) 2,170
Net Increase (Decrease) in Interest-Bearing Deposits 1,330 6,975
Net Increase (Decrease) in Securities Sold Under
Repurchase Agreements 1,491 (431)
Purchase of Treasury Stock 0 0
--------- ---------
Net Cash Provided by Financing Activities 2,199 8,714
--------- ---------
Net Increase (Decrease) in Cash and Cash Equivalents 1,005 (1,512)
Cash and Cash Equivalents at Beginning of Period 23,407 32,621
--------- ---------
Cash and Cash Equivalents at End of Period $24,412 $31,109
========= =========
Cash Payments: Interest $1,915 $1,718
========= =========
Income Taxes $0 $0
========= =========
See accompanying notes.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
March 31, 1997
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.
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
March 31, 1997, the fair market value of securities available for
sale was $327,000 less than amortized cost and at December 31, 1996,
the fair market value was $114,000 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 March 31, 1997, and December 31, 1996, are as follows:
Securities Held to Maturity
---------------------------
Gross Gross Estimated
Book Unrealized Unrealized Market
Value Gains Losses Value
----- ---------- ---------- --------
March 31, 1997 $14,711 $178 $80 $14,809
December 31, 1996 14,784 203 72 14,915
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 first quarters, 1997, and 1996, were 280,549 and
280,658 respectively.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
QUARTERLY CONSOLIDATED INCOME SUMMARY
AND SELECTED FINANCIAL DATA
(in thousands, except per share and ratio data)
Three Months Ended
March 31 December 31 March 31
1997 1996 1996
--------- ----------- ---------
Interest income $4,476 $4,532 $4,059
Interest expense 1,912 1,925 1,768
--------- ----------- ---------
Net interest income 2,564 2,607 2,291
Provision for possible loan losses 0 0 0
--------- ----------- ---------
Net interest income after provision 2,564 2,607 2,291
Noninterest income 553 592 555
Noninterest expense 1,354 1,401 1,333
--------- ----------- ---------
Income before taxes 1,763 1,798 1,513
Income tax expense 549 563 465
--------- ----------- ---------
Net Income $1,214 $1,235 $1,048
========= =========== =========
Earnings per share <F1> $4.33 $4.40 $3.74
Dividends declared per share $0.00 $2.65 $0.00
Average shares outstanding 280.5 280.5 280.7
Book value per share $101.44 $98.15 $88.47
Selected Quarter End Balances:
Loans $120,532 $115,346 $105,375
Deposits 216,704 215,996 205,241
Debt 6,999 5,508 5,551
Equity 28,459 27,536 24,829
Total Assets 253,935 250,032 237,412
Selected Average Balances:
Loans $116,766 $113,788 $100,151
Deposits 216,399 215,741 196,271
Debt 6,182 5,695 6,257
Equity 28,121 27,226 24,669
Total Assets 252,074 250,681 228,468
Selected Ratios (%)
Return on average assets 1.95% 1.95% 1.84%
Return on average equity 17.51% 18.00% 17.04%
Net interest margin (taxable equivalent) 4.54% 4.53% 4.45%
Tier 1 risk-based capital 22.11% 22.25% 16.18%
Total risk-based capital 23.38% 23.52% 17.44%
Leverage 10.71% 10.26% 9.96%
<F1> Earnings per share is based on the weighted average number
of shares outstanding in the respective period
PART I - Financial Information Continued
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
MINDEN BANCSHARES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OVERVIEW
The Company's first quarter 1997 net income totaled $1,214
thousand, ($4.33 per share) up 16 percent from $1,048 thousand ($3.74
per share) in the first quarter, 1996 and down 2 percent from $1,235
thousand ($4.40 per share) in the fourth quarter, 1996.
The return on average assets was 1.95 percent for the first
quarter, 1997, up 6 percent from the first quarter, 1996 of 1.84
percent and equaled the fourth quarter, 1996 of 1.95 percent.
The return on average equity was 17.51 percent for the first
quarter, 1997, an increase of 3 percent over the first quarter, 1996
of 17.04 percent and a 3 percent decrease from the fourth quarter,
1996 of 18.00 percent.
The 1997 first quarter earnings benefited from a 12 percent
increase in net interest income and was detrimented by less than
1 percent decrease in other income and a 17 percent increase in
noninterest expense when compared to the 1996 first quarter. The
1997 first quarter earnings were detrimented by a 2 percent decrease
in net interest income and a 7 percent decrease in noninterest
income and benefited from a 2 percent decrease in noninterest
expense when compared to the 1996 fourth quarter.
Total assets at March 31, 1997 increased to $253,935 thousand,
up 7 percent from a year ago and up 2 percent from December 31,
1996.
RESULTS OF OPERATIONS
Net Interest Income
The Company's net interest income for the 1997 first quarter was
$2,564 thousand, an increase of 12% from $2,291 thousand in the 1996
first quarter, and a decrease of 2 percent from $2,607 thousand in
the fourth quarter, 1996. Increases in loan volume and investment
securities with decreases in federal funds sold and increased deposit
volume have contributed to the increase in net interest income for the
first quarter of 1997 over 1996.
Average Interest-Earning Assets
Average interest-earning assets were $235,440 thousand for the
1997 first quarter, $22,533 thousand higher than the 1996 first
quarter of $212,907 thousand. Average loans increased by $16,616
thousand and average investment securities increased by $11,145
thousand (at amortized cost) during the first quarter, 1997 over
the first quarter, 1996 while the average Federal funds sold decreased
by $4,370 thousand thereby placing the net asset and deposit growth
into higher earning assets.
Average Interest-Bearing Liabilities
Average interest-bearing liabilities for the 1997 first quarter
were $185,114 thousand, compared to $168,902 thousand for the same
period last year. Average time deposits for the 1997 first quarter
were $100,251 thousand, an increase of $8,460 thousand over the same
period last year and average savings and interest-bearing demand
deposits for the 1997 first quarter were $78,681 thousand, an
increase of $7,827 thousand over the same period last year. Average
securities sold under agreements to repurchase averaged $6,092
thousand during the first quarter, 1997, an increase of $15 thousand
from the first quarter, 1996.
Net Yield on Interest-Earning Assets
The net yield on interest-earning assets was 4.54% in the first
quarter of 1997, an increase of 9 basis points from 4.45% in the same
period last year. The major contributing factor has been the
restructuring of interest earning assets discussed above.
Management expects that the net yield on earning assets will
remain constant or decrease modestly during the balance of 1997.
PROVISION FOR LOAN LOSSES
The Company made no provision for loan losses in the 1997 first
quarter or the 1996 first quarter. Management does not anticipate
any provision for loan losses during 1997. A discussion of the
Company's loan portfolio, net charge-off and recoveries, and
allowance for loan losses appears on pages 13-16.
OTHER INCOME
Three Months Ended
--------------------------------
March 31, December 31, March 31,
1997 1996 1996
(in thousands) ========= ============ =========
Service Charges $392 $420 $373
Trust Fees 2 1 32
Insurance Commissions 77 81 67
Other Operating Income 82 90 83
------ ------ ------
Total Other Income $553 $592 $555
====== ====== ======
Other income for the 1997 first quarter was $553 thousand, down
from $555 thousand for the same period last year, and down from $592
thousand for the fourth quarter, 1996. The increase in service
charges are the result of increased fees for banking services along
with volume increases. The trust fees in the first quarter, 1996
included the annual fee and additional fee for the distribution of
the Bank's largest trust account.
OPERATING EXPENSES
Three Months Ended
--------------------------------
March 31, December 31, March 31,
1997 1996 1996
(in thousands) ========= ============= ========
Salaries and Employee Benefits $708 $697 $694
Occupancy Expense 94 103 200
Furniture and Equipment Expense 64 56 58
Other Operating Expenses 368 364 307
Capital Stock Tax 81 97 36
Stationery, Supplies and Printing 39 84 38
------- ------- -------
Total Operating Expenses $1,354 $1,401 $1,333
======= ======= =======
Operating expenses for the 1997 first quarter were $1,354
thousand, up from $1,333 thousand in the 1996 first quarter, and down
from $1,401 thousand in the fourth quarter, 1996.
Salaries and employee benefits in the 1997 first quarter were
$708 thousand, compared to $694 thousand in the same period last year
and $697 thousand in the fourth quarter, 1996. The increase over the
first quarter last year was primarily the result of salary increases.
Occupancy expense for the 1997 first quarter was $94 thousand
as compared to $200 thousand for the same period last year and $103
thousand for the fourth quarter, 1996. The decrease in occupancy
expense in the first quarter, 1997 from 1996 is due to replacement
of air conditioning system at the main office in the first quarter,
1996.
Other operating expenses were $368 thousand for the 1997 first
quarter as compared to $307 thousand for the same period last year
and $364 thousand in the fourth quarter, 1996. Other operating
expenses in the fourth quarter, 1996 and the first quarter, 1997
include costs pertaining to the evaluation of and actions toward
the acquisition of First Federal Savings Bank in Shreveport, Louisiana
which should be completed in the 1997 second quarter.
Capital stock tax which is the assessment on shareholders equity
under the advalorem tax program in the state of Louisiana increased
significantly in 1996. Inadequate provision was made in the first
quarter, 1996 resulting in increased provision in the latter months
of 1996. The 1997 provision reflects anticipated increase for 1997.
The fourth quarter, 1996 stationery, supplies and printing amount
reflects major orders of forms for the upcoming year.
INCOME TAXES
In the 1997 first quarter, the Company recorded income tax
expense of $549 thousand, compared to $465 thousand for the same
period last year.
The effective tax rate was 31.1% for the 1997 first quarter
and 30.7% for the 1996 first quarter. The effective tax rates in
1997 and 1996 reflect change in composition of the Company's pre-
tax income, primarily tax-exempt income.
RECENT ACCOUNTING PRONOUNCEMENTS
In October of 1995, the Financial Accounting Standards Board (FASB)
issued SFAS No. 123, Accounting for Stock-Based Compensation, effective
for transactions entered into after December 15, 1995. SFAS 123
establishes a fair value method of accounting for stock-based
compensation plans. It encourages entities to adopt the fair value
method of accounting but permits the continued usage of APB No. 25,
Accounting for Stock Issued to Employees, for all arrangements under
which employees receive shares of stock or other equity instruments
of the employer or the employer incurs liabilities to employees in
amounts based on the price of its stock that are appropriate for APB
No. 25 reporting. Since the options granted under the "Stock Incentive
Plan" are appropriate for APB No. 25 reporting, management will
continue to utilize APB No. 25 accounting which will not affect
operations or earnings. There are pro forma disclosure requirements
under SFAS 123 regarding earnings per share computations should those
amounts become material.
In June of 1996, the Financial Accounting Standards Board (FASB)
issued SFAS 125, Accounting for Transfers and Servicing of Financial
Assets and Extinguishment of Liabilities, effective for transactions
occurring after December 31, 1996. SFAS 125 provides for fair value
accounting for assets transferred with the retention of some right(s)
of ownership and for liabilities disposed of for which all liabilities
are not extinguished until a later date. Any application of SFAS 125
will be immaterial in the Bank's current operations and will not require
accounting acknowledgment or disclosure.
CREDIT PORTFOLIO
Loan Portfolio
The Company's loans outstanding, totaled $120,532 thousand at
March 31, 1997 as compared to $115,346 thousand at December 31, 1996
and $105,375 thousand at March 31, 1996. The increases over both
prior periods have been due to increased loan demand.
The following table sets forth the loan classifications at March
31, 1997, December 31, 1996 and March 31, 1996:
--------------------------------
March 31, Dec 31, March 31,
(in thousands) 1997 1996 1996
--------- --------- ---------
Commercial, Financial & Agricultural Loans $31,568 $31,567 $27,664
Construction Loans Secured by Real Estate 3,525 3,381 2,962
Other Loans Secured by Real Estate 64,587 60,025 56,682
Installment and Single Payment Loans 18,569 18,143 15,981
Other Loans 2,398 2,368 2,334
--------- --------- ---------
Total Loans 120,647 115,484 105,623
Less Unearned Discount 114 138 248
--------- --------- ---------
Total Loans net of Unearned Discount $120,533 $115,346 $105,375
========= ========= =========
Non-performing Assets
The following table sets forth the non-performing assets at
March 31, 1997, December 31, 1996 and March 31, 1996:
----------------------------
March 31, Dec. 31, March 31,
1997 1996 1996
(in thousands) --------- -------- ---------
Non-Accrual Loans $332 $355 $341
Past-Due Loans 317 510 305
Restructured Loans 0 0 60
----- ------- -------
Total Non-performing Loans 649 865 706
Other Real Estate Owned 252 217 376
----- ------- -------
Total Non-performing Assets $901 $1,082 $1,082
===== ======= =======
In addition to the nonperforming loans discussed above,
management has identified other loans for which payments are current
that are subject to potential future classification as nonperforming.
As of March 31, 1997, these loans totaled $425 thousand as compared
to $219 thousand a year ago and $501 thousand at December 31, 1996.
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 $9 thousand for
the 1997 first quarter and $10 thousand for the 1996 first quarter.
There was no interest income on restructured loans included in net
income for the 1997 first quarter as compared to $2 thousand for the
1996 first quarter.
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 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 judgment, 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 March 31, 1997, and 1996.
First Quarter
-------------------------
1997 1996
(in thousands) ------------ ------------
Balance at Beginning of Period $3,306 $3,396
Charge-Offs
Commercial, Financial, Agricultural 0 5
Real Estate - Construction 0 0
Real Estate - Mortgage 32 0
Installment Loans to Individuals 35 21
------- -------
Total 67 26
Recoveries
Commercial, Financial, Agricultural 0 0
Real Estate - Construction 0 0
Real Estate - Mortgage 56 22
Installment Loans to Individuals 11 14
------- -------
Total 67 36
------- -------
Net Recoveries(Charge-Offs) 0 10
Additions Charged to Operations 0 0
------- -------
Balance at End of Period $3,306 $3,406
======= =======
The following table reflects the allowance coverage ratios at
March 31, 1997, December 31, 1996 and March 31, 1996.
March 31, Dec 31, March 31,
For the Quarter Ended: 1997 1996 1996
-------- -------- --------
Allowance for Loan Losses to:
Loans at Period-End 2.74% 2.87% 3.23%
Average Loans 2.83% 2.91% 3.40%
Non-performing Loans 509.40% 382.20% 482.44%
Non-performing Assets 366.93% 305.55% 314.79%
Total Net Charge-Offs (annualized) to:
Loans at Period-End 0.00% 0.04% (0.01%)
Average Loans 0.00% 0.04% (0.01%)
Allowance for Loan Losses 0.00% 1.40% (0.29%)
Management deems its allowance for loan losses at March 31,
1997, to be adequate. The Company considers that it has sufficient
reserves to absorb losses that may currently exist in the portfolio.
The Company will continue to reassess the adequacy of its
allowance for loan losses and make provisions accordingly.
CAPITAL
Total stockholders' equity at March 31, 1997, was $28,459
thousand, up from $27,536 thousand at December 31, 1996 and $24,829
thousand at March 31, 1996. Stockholders' equity at March 31, 1997,
reflects negative impact of $216 thousand for net unrealized gains on
securities available for sale as compared to positive impacts of $75
thousand at December 31, 1996 and $10 thousand at March 31, 1996.
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 March 31, 1997, the Company's Tier 1
Capital to risk-weighted assets ratio was 22.11% and the Total
Capital to risk-weighted assets ratio was 23.38%.
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 quality, 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 for 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
March 31, Dec 31, March 31,
1997 1996 1996
(in thousands), except ratios -------- ------- --------
Tier 1 Capital
Common Stockholders' Equity $26,793 $25,534 $22,756
Tier 2 Capital
Reserve for Possible Loan Losses 1,537 1,457 1,778
-------- -------- --------
Total Qualifying Capital $28,330 $26,991 $24,534
======== ======== ========
Risk Weighted Assets $121,188 $114,750 $140,649
Tier 1 Capital Ratio 22.11% 22.25% 16.18%
Total Capital Ratio 23.38% 23.52% 17.44%
Tier 1 Leverage Ratio 10.71% 10.26% 9.96%
Common Stock Dividends
For the first quarters of 1997 and 1996, the Board of Directors
of the Company declared no dividends. 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 53.96% during the 1997 first
quarter and 51.03% during the 1996 first quarter. Cash on hand and
due from banks averaged $13,887 thousand in the 1997 first quarter
and $12,862 thousand in the 1996 first quarter. Federal Funds sold
averaged $16,789 thousand in the 1997 first quarter and $21,159
thousand in the 1996 first quarter.
At March 31, 1997, investment securities, at amortized cost,
totaled $104,133 thousand, of which $53,329 thousand or 51.21% mature
or reprice within one year, $43,486 thousand mature or reprice within
two to five years, and $7,318 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
In December, 1991, the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA") was enacted. This act provided
for recapitalization of the Bank Insurance Fund ("BIF") and the
Savings Association Insurance Fund ("SAIF") of which the Bank is a
member and substantially revised statutory provisions, including
capital standards. FDICIA provided insurance rate structure which
provides lower rates for stronger capitalized banks and banks with
higher supervisory ratings. The BIF became fully funded in 1995 and
the SAIF became fully funded in 1996 thereby reducing BIF and SAIF
FDIC premiums.
Minden Bank is subject to FDIC insurance assessments. Effective
May 1, 1995, the FDIC revised the BIF assessment rates from 0.23%
to 0.04% for the highest rated banks while retaining 0.31% for the
weakest banks when the BIF became fully funded. The BIF rate
schedule was reduced to 0.0% for healthiest banks to 0.27% for the
weakest banks effective January 1, 1996. SAIF assessment rates were
0.23% for the healthiest banks to 0.31% for the weakest banks until
October 1, 1996, whereby provisions of the Deposit Insurance Funds
Act of 1996 ("Funds") reduced the rates to 0.0% for the healthiest
banks to 0.27% for the weakest Oakar SAIF banks. Also, effective
October 1, 1996, under the Funds Act, a one time assessment was
made on all SAIF insured institutions and all BIF insured banks
with Oakar deposits to fully fund the SAIF. The Funds Act also
provided for separate assessments under BIF and SAIF effective
January 1, 1997 for FICO bond servicing. The FICO assessments
under BIF are at the annual rate of 0.1296% for 1997 and 0.648%
under SAIF for 1997. Minden Bank has $4,469,000 of deposits in
1997 insured under SAIF as the result of the acquisition in 1994
of the Minden branch of the failed Oak Tree Federal Savings Bank.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
Consolidated Net Interest Income and Average Balances
Three Months Ended March 31, 1997 and 1996
(Thousands)
1997 1996
------------------------ ------------------------
Average Rate Average Rate
Balance Interest <F2> Balance Interest <F2>
--------- -------- ----- --------- -------- -----
ASSETS
Interest Bearing Balances
Due from Banks $2,111 $26 4.99% $2,969 $38 5.13%
Federal Funds Sold 16,789 224 5.41% 21,159 279 5.29%
Investment Securities <F3> 98,565 1,515 6.23% 87,578 1,322 6.05%
Federal Reserve Bank/ Federal
Home Loan Bank Stocks 1,209 17 5.70% 1,051 17 6.49%
Loans 116,766 2,767 9.61% 100,150 2,475 9.91%
--------- -------- --------- --------
Total Interest-
Earning Assets 235,440 $4,549 7.84% 212,907 $4,131 7.78%
Allowance for Loan Losses (3,325) (3,416)
Cash and Due from Banks 11,776 9,893
Other Assets <F3> 8,154 8,774
--------- ---------
Total Assets $252,045 $228,158
========= =========
LIABILITIES
Deposits $178,932 $1,844 4.18% $162,645 $1,699 4.19%
Securities Sold Under
Repurchase Agreements 6,092 66 4.39% 6,077 65 4.29%
Long-Term Debt 90 2 9.01% 180 4 8.91%
--------- -------- --------- --------
Total Interest-
Bearing Liabilities 185,114 $1,912 4.19% 168,902 $1,768 4.20%
Demand Deposits 37,466 33,626
Other Liabilities 1,344 1,271
--------- ---------
Total Liabilities 223,924 203,799
--------- ---------
STOCKHOLDERS' EQUITY
Common Stockholders' 28,121 24,359
Equity <F3> --------- ---------
Total Liabilities and
Stockholders' Equity $252,045 $228,158
========= =========
SPREAD ON INTEREST-BEARING FUNDS 3.65% 3.58%
NET INTEREST INCOME AND NET
YIELD ON INTEREST-EARNING ASSETS $2,637 4.54% $2,363 4.45%
======== ===== ======== =====
<F2> All rates are annualized
<F3> Based upon amortized cost of investment securities
PART II
-------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(1) 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)
(2) 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.
May 9, 1997 BY:s/ Jack E. Byrd, Jr.
------------------------
Jack E. Byrd, Jr.
President and CEO
May 9, 1997 BY:s/ Robert W. Hines, Jr.
------------------------
Robert W. Hines, Jr.
Vice-President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MARCH
31, 1997 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-31-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 12,412
<INT-BEARING-DEPOSITS> 1,647
<FED-FUNDS-SOLD> 12,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 87,849
<INVESTMENTS-CARRYING> 14,711
<INVESTMENTS-MARKET> 14,809
<LOANS> 120,533
<ALLOWANCE> 3,306
<TOTAL-ASSETS> 253,935
<DEPOSITS> 216,704
<SHORT-TERM> 0
<LIABILITIES-OTHER> 8,772
<LONG-TERM> 0
0
0
<COMMON> 775
<OTHER-SE> 27,684
<TOTAL-LIABILITIES-AND-EQUITY> 253,935
<INTEREST-LOAN> 2,767
<INTEREST-INVEST> 1,459
<INTEREST-OTHER> 250
<INTEREST-TOTAL> 4,476
<INTEREST-DEPOSIT> 1,844
<INTEREST-EXPENSE> 1,912
<INTEREST-INCOME-NET> 2,564
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,354
<INCOME-PRETAX> 1,763
<INCOME-PRE-EXTRAORDINARY> 1,214
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,214
<EPS-PRIMARY> 4.33
<EPS-DILUTED> 4.33
<YIELD-ACTUAL> 4.54
<LOANS-NON> 332
<LOANS-PAST> 317
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 425
<ALLOWANCE-OPEN> 3,306
<CHARGE-OFFS> 67
<RECOVERIES> 67
<ALLOWANCE-CLOSE> 3,306
<ALLOWANCE-DOMESTIC> 3,306
<ALLOWANCE-FOREIGN> 0
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</TABLE>
