UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-KSB
(Mark One)
(X) ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
Commission file number 000-21658
MINDEN BANCSHARES, INC.
(name of small business issuer in its charter)
LOUISIANA
(State or other jurisdiction of incorporation or organization)
72-0980704
(I.R.S. Employer Identification No.)
401 Main Street, Minden, Louisiana 71055
(Address of principal executive offices- Zip code)
(318) 377-4283
Issuer's telephone number
Securities registered under Section 12(b) of the Exchange Act:
None
(Title of each class)
None
Name of each exchange on which registered
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $2.50 par value
(Title of Class)
Page 1 of 48 Pages
Exhibit Index on Page 41
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 [ ]
Check if disclosure of delinquent filers in response to item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
Issuers' revenues for its most recent fiscal year: $22,493,000.
State the aggregate market value of the voting stock held by nonaffiliates
computed by reference to price at which the stock was sold, or the average bid
and asked prices of such stock as of a specified date within the past 60 days:
As of March 10, 1998 - $22,860,432.
State the number of shares outstanding of each of the issuer's classes, of
common equity, as of the latest practical date: As of March 10, 1998 - 280,511
shares Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement, which will be
filed within 120 days of the end of the registrant's fiscal year, are
incorporated by reference into Part III of this Report.
Transitional Small Business Disclosure Form (check one): Yes [ ] No [ X ]
FORM 10-KSB
INDEX
PART I Page
Item 1. Business 4
Item 2. Properties 16
Item 3. Legal Proceedings None
Item 4. Submission of Matters to a Vote of Security Holders None
PART II
Item 5. Market for Registrant's Common Equity and Related 17
Stockholder Matters
Item 6. Management's discussion and Analysis of Financial
Condition and Results of Operations 17
Item 7. Financial Statements 24
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures None
PART III
Item 9. Directors and Executive Officers of the Registrant 40
Item 10. Executive Compensation 40
Item 11. Security Ownership of Certain Beneficial Owners and
Management 40
Item 12. Certain Relationships and Related Transactions 40
PART IV
Item 13. Exhibits and Reports on Form 8-K 41
Signatures 42
MINDEN BANCSHARES, INC.
FORM 10-KSB
PART I
ITEM 1. BUSINESS
GENERAL
Minden Bancshares, Inc. ("Minden Bancshares"), a business organized under
the laws of Louisiana and a registered bank holding company under the Federal
Bank Holding Company Act of 1956 was organized in 1983 to acquire all of the
stock of Minden Bank & Trust Company ("Minden Bank") pursuant to a
reorganization that was consummated on January 21, 1985.
The principal asset of Minden Bancshares is all of the outstanding stock
of Minden Bank, all of which is owned by Minden Bancshares. As of December 31,
1997, Minden Bancshares had, on a consolidated basis, total assets of
$292,078,000, total deposits of $248,183,000 and total stockholders' equity of
$31,686,000. The principal executive offices of Minden Bancshares and its
wholly owned subsidiary are located at 401 Main Street, Minden, Louisiana
71055.
At December 31, 1997, Minden Bancshares' wholly owned subsidiary, Minden
Bank, had 97 full time and 11 part time employees.
Minden Bancshares and its subsidiary, Minden Bank, derive all of their
income from banking and bank-related services. The holding company structure
serves as a mechanism to enhance Minden Bank's ability to meet its customer's
requirements for financial services and provides flexibility for expansion of
Minden Bancshares' banking business.
SUBSIDIARY ENTITY
Minden Bank is a state-chartered bank organized under the laws of
Louisiana and is a member of the Federal Reserve System. Through its three
locations in Minden, its branch location in Sarepta, Louisiana and its four
branches in Shreveport, Louisiana , (See "ITEM 2 PROPERTIES" for descriptions)
Minden Bank conducts a general banking and trust business. It is a full service
bank offering (i) retail banking services, such as demand, savings and time
deposits, money market checking, lending, safe deposit boxes, money orders,
travelers checks and five ATM locations, (ii) commercial account services which
include, in addition to above, commercial lending, stand-by letters of credit,
wire transfers, and night depository services.
Minden Bank's deposit base is such that the loss of one depositor or a
group of depositors would not have a materially adverse effect on its business
and earnings. Also, the loan portfolio is also diversified so that one industry
or group of related industries does not comprise a material portion of the loan
portfolio. Minden Bank's business is not seasonal.
At December 31, 1997, Minden Bank had total assets and deposits of
$292,078,000 and $248,236,000 respectively.
ACQUISITIONS
On March 24, 1995, Minden Bank acquired three Hibernia National Bank
branches in Shreveport, Louisiana, described under "ITEM 2. PROPERTIES," with
assets totaling approximately $35,400,000 and liabilities totaling approximately
$37,500,000 with the excess $2,100,000 of liabilities over assets being
allocated to deposit based intangibles. The acquisition was accounted for under
the purchase method.
On May 21, 1997, Minden Bank acquired First Federal Savings Bank (FFSB) in
Shreveport, Louisiana, described under "ITEM 2. PROPERTIES," merged it into
Minden Bank and began operating the location as its Youree Drive Branch.
Minden Bank acquired assets of $35,289,000 and liabilities of $31,750,000.
Minden Bank paid $5,411,200 cash for all of the outstanding stock of FFSB and
accounted for the acquisition under the purchase method. The purchase price
was $1,872,000 in excess of FFSB book value and was recorded as goodwill.
COMPETITION
Minden Bancshares is the largest bank holding company and Minden Bank is
the largest bank headquartered and located in Webster Parish. Through its
banking subsidiary, Minden Bancshares services customers in Webster, Caddo and
surrounding parishes. The Shreveport acquisitions discussed above are Minden
Bank's only facilities located outside Webster Parish.
Banking in the market area served by Minden Bank is highly competitive.
Competition is provided by other financial holding companies and institutions
located in Webster parish and throughout the State of Louisiana. Recently,
Hibernia Corporation, headquartered in New Orleans, Louisiana, with statewide
operations in Louisiana and portions of Texas through its banking subsidiary,
Hibernia National Bank, and Peoples Holding Corporation, headquartered in
Minden, Louisiana, with operations in Webster, Bossier and Claiborne Parishes
through its subsidiary bank, Peoples Bank & Trust Company, announced the
acquisition of Peoples Holding Corporation by Hibernia Corporation. The
announcement advised that regulatory approvals should be received and the
acquisition completed in September, 1998. Peoples Holding Corporation had
consolidated assets of $228 million at December 31, 1997 and has been Minden
Bank's main source of competition in the Minden, Louisiana area for many years
Minden Bancshares and its banking subsidiary, Minden Bank, not only compete with
other bank holding companies and banks, but with savings and loan associations,
insurance companies, finance companies, credit unions, pension trusts, and other
institutions that provide investment services to the public. Minden Bank
anticipates intense competition from the established local, state, regional, and
national banks and bank holding companies.
SUPERVISION AND REGULATION
General
Minden Bancshares is a registered bank holding company subject to
regulation by the FRB under the BHCA. Minden Bancshares is required to file
financial information with the FRB periodically and is subject to periodic
examination by the FRB. The BHCA requires FRB approval for bank acquisitions by
bank holding companies and regulates the activities of bank holding companies.
Minden Bancshares is also subject to regulation by the OFI and must file
periodic information with that state agency. The OFI also conducts periodic
examination of Minden Bancshares.
Minden Bank is a member of the Federal Reserve System and as such, is
subject to the supervision of and is regularly examined by the FRB and the OFI.
The FRB and OFI approve all acquisitions or establishments of additional
branches along with the closing of any existing branches. Minden Bank is also
subject to supervision of and may be examined by the FDIC.
Recent Legislation
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 Minden Bank is a member, substantially revised statutory
provisions, including capital standards. FDICIA provided insurance rate
structure which provided 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.
See "FDIC Insurance Assessments" below.
Monetary Policies
The results of operation of Minden Bancshares and its banking subsidiary
are affected by the credit policies of monetary authorities particularly the
Board of Governors of the Federal Reserve System. The instruments of monetary
policy employed by the Federal Reserve Board include open market operations in
United States Government Securities, changes in the discount rate on member bank
borrowings and changes in reserve requirements against member bank deposits. In
view of changing conditions in the national economy and in the money markets, as
well as the effective action by monetary and fiscal authorities, including the
Federal Reserve System, no prediction can be made as to possible future changes
in interest rates, deposit levels, loan demand or the business and earnings of
Minden Bancshares and its banking subsidiary.
FDIC Insurance Assessments
Minden Bank is subject to FDIC insurance assessments. Effective May 1,
1995, the FDIC revised the BIF assessment rates from 0.23% to 0.4% for the
healthiest 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 the 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 Deposits Insurance Funds
Act of 1996 (Funds ) reduced the rates to 0.0% for the healthiest banks and
0.27% of 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 0.01296% for 1997 and an 0.0648% under SAIF for 1997. Minden Bank had
$3,990,000 of SAIF deposits in 1996 and had $4,469,000 of SAIF deposits in the
1997 first quarter with the assessment increasing to $35,834,110 effective June
30, 1997 with the FFSB acquisiiton. Minden Bank's Oakar deposits insured under
the SAIF are the result of the acquisition in 1994 of the Minden branch of the
failed Oak Tree Federal Savings Bank and the 1997 acquisition of FFSB.
Selected Statistical Information
SELECTED FINANCIAL DATA
The following selected financial data is not covered by the auditor's
report and should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operation" which are included
later.
Years Ended December 31,
------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
(Dollars in thousands, except per share data)
Operations:
Interest Income $20,028 17,255 15,015 11,100 10,599
Interest Expense 8,750 7,420 6,301 4,213 4,195
------- ------ ------ ------ ------
Net Interest Income 11,278 9,835 8,714 6,887 6,404
Provision for Loan Losses _ _ _ 270
------- ------ ------ ------ ------
Net Interest Income After
Provision for Loan Losses 11,278 9,835 8,714 6,887 6,134
Noninterest Income 2,465 2,208 1,804 1,128 1,353
Noninterest Expense 6,278 5,359 5,233 3,740 3,721
------- ------ ------ ------ ------
Income Before Taxes 7,465 6,684 5,285 4,275 3,766
Income Tax Expense 2,384 2,073 1,617 1,336 1,214
------- ------ ------ ------ ------
Net Income $ 5,081 4,611 3,668 2,939 2,552
======= ====== ====== ====== ======
Per Share:
Earnings Per Share $ 18.11 16.43 13.07 10.43 8.84
Book Value at End of Period<F1> 112.96 98.15 85.55 67.74 66.07
Cash Dividends 4.00 3.25 2.75 2.25 1.75
Total Shares Outstanding
(thousands) 281 281 281 281 283
Balances at End of Period:
Investment Securities $124,916 105,231 88,525 90,057 86,417
Loans,
net of unearned interest 136,889 115,346 99,381 66,225 57,728
Allowance for Possible
Loan Losses 3,603 3,306 3,397 3,395 3,354
Total Assets 292,078 250,032 227,011 172,565 163,173
Deposits 248,183 215,996 196,096 145,264 141,002
Stockholders' Equity 31,686 27,536 24,009 19,021 18,671
Average Balances:
Total Average Assets 277,084 241,234 210,199 169,353 163,207
Total Average Shareholders'
Equity 29,852 25,867 21,998 19,380 17,969
Ratios:
Return on Average Assets 1.83% 1.91% 1.75% 1.74% 1.56%
Return on Average Equity 17.02% 17.83% 16.67% 15.17% 14.20%
Average Stockholders' Equity
to Average Assets 10.77% 10.72% 10.47% 11.44% 11.01%
<F1> These amounts reflect unrealized gains and losses on available for sale
securities in the stockholders' equity section of the balance sheet, required
upon the adoption of FASB 115 in 1994. The book value per share at the end of
1997, 1996, 1995 and 1994 without including the unrealized gains and losses on
available for sale securities would have been $112.00, $97.88, $84.69 and
$74.37, respectively.
<TABLE>
<CAPTION>
SELECTED STATISTICAL INFORMATION
CONSOLIDATED AVERAGE BALANCES, INTEREST INCOME/EXPENSE,
YIELDS/RATES, VOLUME AND RATE/VOLUME VARIANCE ANALYSIS
TAXABLE EQUIVALENT BASIS
------------------------
(in thousands)
YEARS ENDED DECEMBER 31,
------------------------
1997 1996
-------------------------- -------------------------
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
-------- ------ ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Earning Assets:
Loans, net of
unearned income <F2> $128,612 12,353 9.60% 108,349 10,572 9.76%
Investment Securities:
Taxable (available for sale) 92,517 5,643 6.10% 80,624 4,774 5.92%
Nontaxable (held to maturity) 14,964 1,062 7.10% 14,635 1,032 7.05%
-------- ------ ------- ------
Total investment securities 107,481 6,705 6.24% 95,259 5,806 6.09%
Federal funds sold 18,771 1,018 5.42% 20,387 1,069 5.24%
Interest-bearing balances with
other banks 5,279 247 4.68% 1,887 97 5.14%
-------- ------ ------- ------
Total earning assets 260,143 20,323 7.81% 225,882 17,544 7.77%
Allowance for loan losses (3,509) (3,386)
Unrealized gain (loss) on available
for sale securities 108 27
Cash and due from banks 10,660 9,992
Other assets 9,682 8,719
-------- -------
Total Assets $277,084 241,234
======== =======
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Demand $ 26,097 645 2.47% 24,316 604 2.48%
Savings 53,413 1,636 3.06% 49,802 1,522 3.06%
Certificates of deposit less
than $100,000 and other time
deposits 91,075 4,752 5.22% 75,385 3,923 5.20%
Certificates of deposit of
$100,000 or more 25,966 1,386 5.34% 20,442 1,077 5.27%
-------- ------ ------- ------
Total interest-bearing
deposits 196,551 8,419 4.28% 169,945 7,126 4.19%
Securities sold under agreements to
repurchase 7,589 324 4.27% 6,300 279 4.43%
Notes payable 72 7 8.75% 162 15 9.26%
-------- ------ ------- ------
Total interest-bearing
liabilities 204,212 8,750 4.28% 176,407 7,420 4.21%
Noninterest-bearing demand deposits 41,137 37,327
Other liabilities 1,883 1,633
Stockholders' equity 29,852 25,867
-------- -------
Total liabilities and
stockholders' equity $277,084 241,234
======== =======
Net interest income/net interest spread 11,573 3.53% 10,124 3.56%
===== =====
Net yield on earning assets 4.45% 4.48%
===== =====
Taxable equivalent adjustment:
Nontaxable (held to maturity)
investment securities 295 289
------ ------
Net interest income 11,278 9,835
====== ======
<F2> Loans on nonaccrual status have been included in the computation of average
balances.
</TABLE>
<TABLE>
<CAPTION>
SELECTED STATISTICAL INFORMATION
CONSOLIDATED AVERAGE BALANCES, INTEREST INCOME/EXPENSE,
YIELDS/RATES, VOLUME AND RATE/VOLUME VARIANCE ANALYSIS
TAXABLE EQUIVALENT BASIS
------------------------
(in thousands)
Variance Increase (Decrease)
Interest Attributable To
Volume Income/Expense -----------------------------------
Increase (Decrease) Increase (Decrease) 1997 1996
----------------------- ------------------- ---------------- ----------------
1997-1996 1996-1995 1997 1996 Volume Rate<F3> Volume Rate<F3>
--------- --------- ---- ---- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Earning Assets:
Loans, net of
unearned income $20,263 20,852 1,781 1,908 1,978 (197) 2,061 (153)
Investment Securities:
Taxable (available for sale) 11,893 2,842 870 181 704 166 165 16
Nontaxable (held to maturity) 329 2,231 29 147 23 6 159 (12)
-------- -------- ------ ------ ------ ------- ------ -------
Total investment securities 12,222 5,073 899 328 727 172 324 4
Federal funds sold
Interest-bearing balances with other banks (1,616) 2,202 (51) 26 (85) 34 126 (100)
Total earning assets 3,392 239 150 21 174 (24) 11 10
-------- -------- ------ ------ ------ ------- ------ -------
Allowance for loan losses 34,261 28,366 2,779 2,283 2,794 (15) 2,522 (239)
-------- -------- ------ ------ ------ ------- ------ -------
Unrealized gain (loss) on available
for sale securities
Cash and due from banks
Other assets
Total Assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits:
Demand $ 1,781 2,642 41 61 44 (3) 66 (5)
Savings 3,611 5,300 114 205 111 3 152 53
Certificates of deposit
less than $100,000
and other time deposits 15,690 8,653 829 674 816 13 419 255
Certificates of deposit
of $100,000 or more 5,524 4,794 309 177 291 18 275 (98)
-------- -------- ------ ------ ------ ------- ------ -------
Total interest-bearing deposits 26,606 21,389 1,293 1,117 1,262 31 912 205
Securities sold under agreements
to repurchase 1,289 (532) 45 11 57 (12) (21) 32
Notes payable (90) (90) (8) (9) (8) 0 (8) (1)
-------- -------- ------ ------ ------ ------- ------ -------
Total interest-bearing liabilities 27,805 20,767 1,330 1,119 1,311 19 883 236
-------- -------- ------ ------ ------ ------- ------ -------
Noninterest-bearing demand deposits
Other liabilities
Stockholders' equity
Total liabilities and
stockholders' equity
Net increase in net earning assets $ 6,456 7,599 1,449 1,164 1,483 (34) 1,639 (475)
========= ========= ====== ====== ====== ======= ======= =======
Net yield on earning assets
Taxable equivalent adjustment:
Nontaxable (held to maturity)
investment securities
Net interest income
<F3> The change in interest due to both rate and volume has been allocated
to the rate componet.
</TABLE>
INVESTMENT SECURITIES PORTFOLIO
-------------------------------
The carrying amounts of investment securities held by Minden Bank &
Trust Company ("Minden Bank"), the wholly owned banking subsidiary of Minden
Bancshares, Inc. ("Minden Bancshares") at the dates indicated are
summarized as follows (in thousands):
December 31,
1997 1996 1995
---------- --------- ---------
Held to Maturity:
State and Political Subdivisions $ 16,502 14,784 14,443
---------- --------- ---------
Available for Sale:
U.S. Treasury and Agency 108,005 90,334 73,721
Federal Reserve Bank Stock 1,400 1,205 1,037
---------- --------- ----------
109,405 91,539 74,758
Unrealized Gains (losses) 409 113 361
---------- --------- ----------
Total Available for Sale Securities 109,814 91,652 75,119
---------- --------- ----------
Total Investment Securities $ 126,316 106,436 89,562
========== ========= ==========
Minden Bank did not own an aggregate book value of securities in any
one issuer that exceeded 10% of total equity capital.
The following table shows maturities of investment securities (in thou-
sands) at amortized cost held by Minden Bank at December 31, 1997 together
with the weighted average yields:
<TABLE>
<CAPTION>
U.S. Weighted State and Weighted Weighted
Government Average Political Average Other Average
& Treasury Yield Subdivisions Yield<F4> Securities Yield
---------- -------- ------------ -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Due 1 year or less $ 41,710 5.92% 459 8.08% 1,400 6.00%
Due after 1 year
through 5 years 60,756 6.18% 5,879 7.15% _ _
Due after 5 years
through 10 years - - 7,929 7.48% _ _
Due after 10 years 5,539 6.33% 2,235 7.20% _ _
---------- -------- ----------- -------- ---------- --------
Total $108,005 6.09% 16,502 7.35% 1,400 6.00%
========== ======== =========== ======== ========== ========
<F4>Computed on taxable equivalent basis.
</TABLE>
LOAN PORTFOLIO
--------------
There are no foreign loans in Minden Bank's loan portfolio. The amount of
loans outstanding for the indicated years are shown in the following table ac-
cording to type of loan (in thousands):
December 31,
1997 1996
------ ------
Commercial, financial and agricultural loans $ 33,673 31,567
Construction loans secured by real estate 3,778 3,381
Other loans secured by real estate 75,237 60,025
Installment and single payment loans 22,186 18,143
Other loans 2,178 2,368
------- -------
Total Loans $137,052 115,484
Less: Unearned income 163 138
Reserve for possible loan losses 3,603 3,306
------- -------
Net Loans $133,286 112,040
======== =======
The following table presents maturities and interest rate sensitivity with
respect to selected loan categories as of December 31, 1997. Maturities, which
are presented in thousands, are based on remaining scheduled repayments of
principal.
Due Over One
One Year Year Through Over
Loan Category or Less Five Years Five Years Total
-------- ---------- ---------- -------
Commercial, financial and
agricultural $15,371 17,020 1,282 $33,673
Construction loans secured
by real estate 1,644 2,110 24 3,778
------ ------ ----- ------
Total $17,015 19,130 1,306 $37,451
======= ====== ===== =======
Loans due after one year:
Having Predetermined Interest Rates $16,302
Having Floating Interest Rates 4,134
-------
Total $20,436
=======
RISK ELEMENTS IN LOAN PORTFOLIO
The following table sets forth the nonperforming assets at December 31,
1997 and December 31, 1996 (in thousands).
Years Ended December 31,
1997 1996
------ ------
Nonaccrual (Impaired-Cash Basis) Loans $ 562 $ 355
Past-Due Loans 587 510
Restructured Loans 0 0
------ ------
Total Non-performing Loans 1,149 865
Other Real Estate Loans 278 217
------ ------
Total Non-performing Assets $1,427 $1,082
====== ======
In addition to the non-performing loans discussed above, management has
identified other loans for which payments are current that are subject to poten-
tial future classification as nonperforming. As of December 31, 1997 these loans
totaled $71 thousand as compared to $501 thousand a year ago.
Nonaccrual (impaired-cash basis) loans are those loans on which it appears
that the collection of all principal and interest under the loan terms is un-
likely under either the projection of cash flows or values of underlying col-
lateral. Once a determination has been made as to the projected amount which
may be collected, any probable under collection is first applied to accrued
interest by reversal against current year earnings with any further under col-
lection anticipated being reflected by a partial charge off of principal
against the reserve for possible loans losses, leaving the anticipated col-
lectible portion as the loan balance which does not accrue interest until
such time as it appears probable that the loan will be fully collectible as
to principal and interest, at which time, it will be reinstated with the
principal increase being recognized as recovery by crediting to reserve for
possible loan losses and the accrued interest being recognized as interest
income. Collections on impaired loans upon which full collection of principal
and accrued interest is unlikely, are first applied to the remaining principal,
with any excess then being applied to the partially charged off principal by
credit to the reserve for possible loan losses, with any additional collection
then being recognized as interest income. Nonaccrual (impaired-cash basis)
loans amounted to 0.41% of total loans at December 31, 1997 and 0.31% of total
loans at December 31, 1996. Interest income on nonaccrual loans which would
have been reported on an accrual basis amounted to approximately $68,000 for the
year ended December 31, 1997 and $36,000 for the year ended December 31, 1996.
Interest income included cash basis interest of $108,000 in 1997 and $60,000 in
1996. Cash basis interest provided increase of 2 basis points in the yield on
average loans for 1997 and 1996. Interest income for 1997 did not include any
interest on restructured loans and 1996 included $4,000.
Management groups small homogenous loans - residential mortgage, consumer
installment and small business loans of $20 thousand or less - collectively for
evaluation due to the inability to obtain customer cash flow information to pro-
ject future collections. Due to the inability to project future cash flows, all
of the nonaccrual (impaired) loans discussed are valuated based upon net realiz-
able value of underlying collateral. Loans which become past due 90 days or
more, unless due to seasonal fluctuations, are reviewed for impairment.
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 at its
depreciated value and has subsequently been written down by $91 thousand.
SUMMARY OF LOAN LOSS EXPERIENCE
-------------------------------
The following table summarizes the balance in the allowance for loan
losses of Minden Bank at the end of each period, changes in the allowance
arising from charge-offs and recoveries by category and the provision charged to
expense for the fiscal years ended December 31, 1997 and December 31, 1996:
Years Ended December 31,
1997 1996
---- ----
(Amounts are in 000's)
Balance at beginning of period $3,306 3,397
Charge-Offs-All Domestic
Commercial, financial & agricultural 42 78
Real Estate - construction 87 _
Real Estate - mortgage 36 10
Installment loans to individuals 150 156
Lease financing - -
Foreign - -
------ -----
Total 315 244
------ -----
Recoveries-All Domestic
Commercial, financial & agricultural - -
Real Estate - construction - -
Real Estate - mortgage 294 85
Installment loans to individuals 65 68
Lease financing - -
Foreign - -
------ -----
Total 359 153
------ -----
Net charge-offs (recoveries) (44) 91
Additions charged to operations - -
Acquired in First Federal Savings Bank acquisition 253 -
Balance at end of period $3,603 3,306
====== =====
Ratio of net charge-offs during the period
to average loans outstanding during the period (0.03%) 0.08%
The reserve of Minden Bank is based upon management's analysis of the
portfolio and current and expected economic conditions. This analysis includes a
study of loss experience, internal loan reviews, a review of delinquencies, and
an estimate of the possibility of loss in view of the risk characteristics of
the portfolio. In addition, since 1989, management has attempted to maintain its
reserve in an amount equal to or greater than its nonperforming assets. This
objective has been achieved with the reserve account being 2.63% and 2.87% of
total loans at December 31, 1997 and 1996, respectively.
ALLOCATION OF RESERVE FOR POSSIBLE LOAN LOSSES
----------------------------------------------
Management has allocated the reserve for possible loan losses according to
amounts deemed reasonably necessary to provide for possible losses within the
categories of loans set forth in the table below. In determining the allocation,
management reviews loans monthly taking into consideration each borrower's abil-
ity to repay, repayment record, past credit history and underlying collateral
values before classifying a loan to our watch list as (1) watch list, (2) sub-
standard, or (3) non-accrual. Specific reserves are allocated to the loans
placed on the watch list based upon individual factors. All other loans are
assigned a 2.5% loss factor except to the extent loans are not secured by cash
or the government. Because the allocation is based on estimates and subjective
judgment, it is not necessarily indicative of the special amounts or loan
categories in which charge-offs may ultimately occur. The amount of the reserve
applicable to each category and the percentage of loans in each category to
loans are presented below.
For the Years Ended December 31
1997 1996
---------------- ---------------
(amounts are in 000's)
% of % of
Loans in Loans in
Amount Category Amount Category
------ -------- ------ --------
Commercial, financial
and agricultural $ 901 25% 893 27%
Construction loans
secured by real estate 72 2% 99 3%
Other loans secured by
real estate 1,982 55% 1,719 52%
Installment and single payment 576 16% 529 16%
Foreign _ _ _ _
Other 72 2% 66 2%
------ ---- ----- ----
Total $3,603 100% 3,306 100%
====== ==== ===== ====
OTHER INTEREST-BEARING ASSETS
-----------------------------
There were no other "nonperforming interest-bearing assets" held by Minden
Bank at December 31, 1997 or 1996.
DEPOSITS - AVERAGE BALANCES AND AVERAGE RATES PAID
--------------------------------------------------
The daily average amounts of deposits (in 000's) together with the rates
paid on such deposits is presented below for the periods indicated:
Years Ended December 31,
1997 1996
--------- ---------
Noninterest-bearing demand deposits $ 41,137 37,327
Rate Paid 0% 0%
Interest-bearing demand deposits $ 26,097 24,316
Rate Paid 2.47% 2.48%
Savings Deposits $ 53,413 49,802
Rate Paid 3.06% 3.06%
Time Deposits $117,041 95,827
Rate Paid 5.24% 5.22%
Total interest-bearing deposits $196,551 169,945
Total deposits $237,688 207,272
Average Rate Paid 3.54% 3.44%
MATURITIES SCHEDULE FOR TIME CERTIFICATES OF DEPOSITS OVER $100,000
-------------------------------------------------------------------
Maturity schedules for time certificates of deposit of more than $100,000
are presented below (in 000's) for the dates indicated:
Year Ended
December 31, Average
1997 Rate
----------- -------
3 months or less $17,026 5.37%
Over 3 months through 12 months 9,072 5.33%
Over 12 months 2,409 5.63%
------- ------
Total outstanding $28,507 5.38%
======= ======
RETURN ON EQUITY AND ASSETS
---------------------------
The following table presents the net income, average assets, average
equity, return on assets (net income divided by average assets), return on
equity (net income divided by average equity) and equity to assets ratio
(average equity divided by average assets) for the periods indicated:
Years Ended December 31,
1997 1996
----------- -----------
(amounts in 000's)
Net Income $ 5,081 $ 4,611
Average Assets 277,084 241,234
Average Equity 29,852 25,867
Return on Average Assets 1.83% 1.91%
Return on Average Equity 17.02% 17.83%
Dividend Payment Ratio 22.08% 19.77%
Average Equity to Average
Assets Ratio 10.77% 10.72%
ITEM 2. PROPERTIES
Minden Bank has eight banking locations including the main office, which
are all owned by Minden Bank.
The main office of Minden Bank is presently located in a two-story office
building at 401 Main Street, Minden, Louisiana. The premises consist of
approximately 22,000 total square feet of office space, all of which is occupied
by Minden Bank.
Minden Bank has two branches in the City of Minden. They are located and
described as follows:
1. 200 Homer Road. The former Webster Bank main office consists of
approximately 7,000 total square feet office space all of which is
occupied by Minden Bank.
2. 1316 Sibley Road. The former Webster Bank branch consists of
approximately 3,500 square feet of office space of which all is
occupied by Minden Bank.
Minden Bank also has a branch located on Louisiana Highway 7, Sarepta,
Louisiana 71071, which is approximately 25 miles northwest of the City of
Minden. The premises in Sarepta consist of approximately 1,500 square feet of
office space of which all is occupied by Minden Bank.
The four Shreveport branches are located and described as follows:
1. 6250 Hearne Avenue. This branch consists of approximately 3,400 total
square feet of office space all of which is occupied by Minden Bank.
2. 1633 North Market Street. This branch consists of approximately 4,500
total square feet of office space all of which is occupied by Minden
Bank. Our commercial lending department for the Shreveport area
market is currently housed at the North Market branch.
3. 3400 Line Avenue. This branch consists of approximately 1,600 total
square feet of office space all of which is occupied by Minden Bank.
4. 6601 Youree Drive. This branch consists of approximately 3,000 total
square feet of office space all of which is occupied by Minden Bank.
PART II
ITEM 5. MARKET FOR MINDEN BANCSHARES' COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Minden Bancshares' Common Stock is not traded on any exchange and there is
no established public trading market. The transfer of stock represents a
process between buyers and sellers and prices of stock are not always reported
to Minden Bancshares' management. During the first quarter 1996, there was one
transfer for 200 shares for which no price was reported. During the second
quarter of 1996, there were five transfers totaling 811 shares of which the
price of one transfer of 94 shares for which price was reported of $76.00.
There was one transfer in the third quarter of 1996 of 147 shares at a reported
price of $85.00. There was one transfer in the fourth quarter of 1996 of 316
shares for which no price was reported. Minden Bancshares purchased into
Treasury 31 shares from one shareholder for $76.00 in the second quarter, 1996
and 78 shares from one shareholder for $80.00 in the third quarter 1996. During
the first quarter of 1997, there were five transfers totaling 1,812 shares
with one transfer of 312 shares reported at price of $100.00. During the second
quarter of 1997, there were two transfers totaling 2,235 shares for which no
prices were reported. During the third quarter of 1997, there were three
transfers totaling 4,062 shares with one transfer of 120 shares reporting price
of $120.00. During the fourth quarter of 1997, there were three transfers
totaling 609 shares with one transfer of 369 shares reporting price of $102.98,
one transfer of 120 shares reporting price of $120.00 and one transfer of 120
shares reporting price of $125.00. Minden Bancshares purchased into Treasury
38 shares from one shareholder for $92.00 in the second quarter of 1997.
Minden Bancshares declared and paid semi-annual dividends during 1997 and
1996 as listed.
1997 1996
----- -----
First half $ .75 $ .65
Second half 3.25 2.60
----- -----
Totals $4.00 $3.25
===== =====
Minden Bancshares has paid semi-annual dividends each year since its
acquisition of Minden Bank in 1985 and Minden Bank paid dividends for at least
twenty consecutive years prior to 1985. It is the present intention of Minden
Bancshares' Board of Directors to continue the dividend payments; however,
future dividends must necessarily depend on earnings, financial condition,
appropriate legal restrictions and other factors relevant at the time the Board
of Directors considers its dividend policy.
At December 31, 1997, Minden Bancshares had approximately 461 shareholders
of record.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following analysis should be read in conjunction with Minden
Bancshares historical financial statements, notes and charts appearing elsewhere
herein.
FINANCIAL PERFORMANCE OVERVIEW
------------------------------
Two key measures of profitability used by the banking industry are return
on average assets (ROA) and return on average equity (ROE). For the year ended
December 31, 1997, Minden Bancshares ROA was 1.83% compared to 1.91% for the
year ended December 31, 1996 and 1.75% for the year ended December 31, 1995.
ROE, a measure of the effective use of shareholders' investment, was 17.02% in
1997, compared to 17.83% in 1996 and 16.67% in 1995. Minden Bancshares' results
for both ROE and ROA for the years 1997, 1996 and 1995 compare favorably to the
ROA and ROE of banks of similar size.
Another financial indicator used in the banking industry is net interest
margin which is a measure that demonstrates the effectiveness of a bank in man-
aging the yield derived from earning assets. Net interest margin is the net
yield which earnings from interest represent on total average earning assets.
Key factors affecting net interest margin are the level of interest rates, the
amount of noninterest-bearing funds supporting earning assets, net interest
spread (which is defined as the difference between the annualized yield on
average earning assets on a tax equivalent basis and the annualized rate on
funds) and the level of earning assets which may be affected by nonaccrual and
restructured loans.
The following table sets forth the net interest margin and net interest
spread on a tax equivalent basis for Minden Bancshares on a consolidated basis
for the years ended December 31, 1997, 1996 and 1995:
Years Ended December 31,
------------------------
1997 1996 1995
Net Interest Margin - Tax Equivalent 4.45% 4.48% 4.53%
Net Interest Spread - Tax Equivalent 3.53% 3.56% 3.68%
The decrease in Minden Bank's net interest margin for the period ended
December 31, 1997 is due to lower net interest margin of FFSB being consolidated
into Minden Bank and Minden Brancshares. The decrease in Minden Bank's net in-
terest margin for the period ended December 31, 1996 was due to decrease in
overall interest rates.
RESULTS OF OPERATIONS
---------------------
Minden Bancshares' net income increased in each of its last three years.
Net income for Minden Bancshares was $5,081,000 for the year ended December 31,
1997, an increase of $470,000 or 10.19% over net income of $4,661,000 in 1996
which increased by $943,000 or 25.71% over net income for 1995. The increase in
1997 net income of 10.19% over 1996 is attributable to the acquisition of FFSB
along with continued deposit growth. The increase in 1996 net income of 25.71%
over 1995 is due to an entire year's operation on the three Shreveport branches
accompanied by increased loan and deposit growth.
The following is a comparison of per share earnings of Minden Bancshares
for the years ended December 31, 1997, 1996 and 1995 which reflects the change
in net income:
12 Months Ended December 31,
1997 1996 1995
----- ----- -----
Earnings Per Share: $18.11 $16.43 $13.07
NET INTEREST INCOME (TAX EQUIVALENT BASIS)
------------------------------------------
Net interest income, the difference between interest income and interest
expense, is the prime component of Minden Bancshares' earnings. During 1997, tax
equivalent net interest income was $11,573,000 on average earning assets of
$260,143,000 which represents a net interest margin of 4.45% compared to 4.48%
on tax equivalent net interest income of $10,124,000 on average earning assets
of $225,882,000 for 1996. Interest income for 1997 increased by $2,779,000 or
15.84% over 1996. Of the $2,779,000 increase in interest income, $757,000 of
the increase resulted from increase in loan volume as the result of the FFSB
acquisition and $1,024,000 of the increase resulted from other loan volume
increases for total of $1,781,000 increase in interest income on loans. In-
terest income on investment securities increased by $883,000 or 16.21% from the
FFSB acquisition and deposit growth. Interest expense for 1997 increased by
$1,330,000 or 17.92% over 1996. Of the $1,330,000 increase in interest expense,
$927,000 is attributable to the FFSB acquisition with difference occurring from
deposit growth.
In 1996, tax equivalent net interest income of Minden Bancshares was
$10,124,000, an increase of $1,164,000 or 12.99% over the previous year of 1995.
The increase of 12.99% in net interest income for 1996 when compared to the
prior year was attributable to an entire year's operation of the three Shreve-
port branches acquired March 24, 1995 along with increased loan demand and
deposit growth.
NET YIELD ON EARNINGS ASSETS/SPREAD
-----------------------------------
Minden Bancshares' net interest income is influenced by changes in
interest rates as well as volume.
Average earning assets of Minden Bancshares consisting of loans, taxable
and nontaxable investment securities, federal funds sold and interest-bearing
balances due from banks, for 1997 increased $34,261,000 or 15.17% over 1996.
The yield on interest-earning assets increased to 7.81% during 1997 from
7.77% during 1996 mainly from the acquisition of FFSB and continued loan and
deposit growth.
Average interest-bearing liabilities increased $27,805,000 or approximate-
ly 15.76% during 1997 when compared to the prior year. The average cost of these
funds increased from 4.21% in 1996 to 4.28% in 1997. Net interest margin de-
creased to 4.45% in 1997 from 4.48% in 1996. The net interest margin was reduced
primarily from the acquisition of FFSB, whose net interest margin was lower than
Minden Bank's at the time of acquisition.
During 1996, average earning assets increased $28,366,000 or 14.36% when
compared to average earning assets of approximately $197,516,000 for the prior
year. Average interest-bearing liabilities increased $20,767,000 or 13.34%
during 1996 when compared to average interest-bearing liabilities of
$155,640,000 for 1995. Net interest margin decreased to 4.48% for 1996 when
compared to net interest margin of 4.53% for 1995. The decrease in net interest
margin during 1996 was mainly from lower interest rates.
Management anticipates that the net interest margin for 1998 will compare
with 1997 or increase slightly.
EARNING ASSETS
--------------
Average assets at Minden Bancshares increased during each of the last three
fiscal years. During 1997, average assets increased $35,850,000 or 14.86% over
1996. In 1996, average assets increased $31,035,000 or 14.76% over 1995.
Average earning assets of Minden Bancshares, consisting of loans, taxable
and nontaxable investment securities, federal funds sold and interest-bearing
balances due from banks increased over the last three fiscal years. In 1997,
average earning assets of Minden Bancshares increased $34,261,000 or 15.17%
over 1996. During 1996, average earning assets increased by $28,366,000 or
14.36% over average earning assets in 1995.
Consolidated average earning assets of Minden Bancshares increased in 1997
by $34,261,000. Average loans increased $20,263,000 in 1997 to $128,612,000 as
compared to an increase of $28,366,000 in 1996 to $108,349,000. Of the
$20,263,000 increase in average loans for 1997 over 1996, $8,918,000 was
attributable to the FFSB acquisition with balance having been derived from
increased loan demand. The entire increase of $28,366,000 for 1996 over 1995
was from increased loan demand. The following table summarizes loan activities
for the periods indicated:
For The Years Ended December 31,
1997 1996 1995
------- ------ ------
(dollars in 000's)
Average Loans $128,612 108,349 87,497
Dollar Change 20,263 20,852 26,376
Percent Change 18.70% 23.83% 43.15%
Interest $ 12,353 10,572 8,664
Dollar Change 1,781 1,908 2,819
Percent Change 16.85% 22.02% 48.23%
Yield 9.60% 9.76% 9.90%
Change (0.16%) (0.14%) 0.34%
Minden Bank's investment portfolio is another primary source of earnings.
Securities purchased are primarily low risk and are purchased as long term
investments. Management maintains the portfolio to provide marketability and
risk diversification. Securities transactions are not entered into in anticipa-
tion of taking gains on short term price movements. In addition, restructuring
activities are infrequent and are carried out in conjunction with a prudent
overall business plan which does not result in a pattern of gains being realized
and losses being deferred on investment securities.
Average investment securities increased in 1997 and 1996. As Minden Bank's
average earning assets increased significantly in 1997 and 1996, the amounts in
investment securities increased by lesser amounts due to loan funding require-
ments. Available funds were used by management to purchase taxable and tax-
exempt securities in 1997 and 1996.
The following table summarizes investment activities for the periods
indicated:
For The Years Ended December 31,
1997 1996 1995
-------- -------- --------
(dollars in 000's)
Investment Securities
(Average Balances at Amortized Cost)
U.S. Treasury & Other $ 34,979 42,345 45,372
U.S. Government Agencies 57,538 38,279 32,410
State and Political Subdivisions 14,964 14,635 12,404
-------- ------- -------
Total $107,481 95,259 90,186
======== ====== ======
Dollar Increase (decrease) $ 12,222 5,073 (648)
Percent Increase (decrease) 12.83% 5.63% (0.71%)
Interest Income
U.S. Treasury & Other $ 2,198 2,654 2,675
U.S. Government Agencies 3,445 2,120 1,918
State and Political Subdivisions 767 743 639
-------- ------ ------
Total $ 6,410 5,517 5,232
======== ====== ======
Federal funds sold, another major component of average earning assets, de-
creased to $18,771,000 or 7.93% in 1997 from $20,387,000 for the prior year. The
yield on federal funds sold increased to 5.42% for 1997 from 5.24% for the prior
year.
INTEREST-BEARING DEPOSITS
-------------------------
Average noninterest-bearing deposits increased to $41,137,000 in 1997, an
increase of $3,810,000 or 10.21% over the prior year. In 1997, average interest-
bearing deposits increased to $196,551,000, a $26,606,000 or 15.66% increase
over the prior year. Of the $26,606,000 increase in average interest-bearing
deposits in 1997 over 1996, $17,638,000 was attributable to the FFSB acquisition
while only $160,000 of the noninterest-bearing liabilities was attributable.
The following table reflects average interest-bearing deposit activities
for the periods indicated:
For the Years Ended December 31,
1997 1996 1995
------- ------- -------
(dollars in 000's)
Average Interest-Bearing Demand $ 26,097 24,316 21,674
Dollar Change 1,781 2,642 4,260
Percent Change 7.32% 12.19% 24.46%
Interest Expense $ 645 604 543
Dollar Change 41 61 109
Percent Change 6.79% 11.23% 25.12%
Yield 2.48% 2.48% 2.50%
Change 0.00% (0.02%) 0.01%
Average Savings Deposits $ 53,413 49,806 44,502
Dollar Change 3,607 5,304 7,146
Percent Change 7.24% 11.92% 19.13%
Interest Expense $ 1,636 1,522 1,317
Dollar Change 114 205 354
Percent Change 7.49% 15.57% 36.76%
Yield 3.06% 3.06% 2.95%
Change 0.00% 0.11% 0.37%
Average Other Time Deposits $117,041 95,827 82,380
Dollar Change 21,214 13,447 14,828
Percent Change 22.14% 16.32% 21.95%
Interest Expense $ 6,138 5,000 4,149
Dollar Change 1,138 851 1,487
Percent Change 22.76% 20.51% 55.86%
Yield 5.24% 5.22% 5.04%
Change 0.02% 0.18% 1.10%
PROVISION FOR LOAN LOSSES
-------------------------
The provision for loan losses is the charge made against earnings to keep
the allowance for possible loan losses at a level management considers adequate
considering the nature of the loan portfolio and current economic conditions in
the marketplace. Management estimates the required allowance for possible loan
losses and the provision thereto by taking into consideration current economic
trends, changes in the character and size of the loan portfolio, nonperforming
loans, past loss experience, the ability of borrowers to repay based upon
financial statements and sources of cash flow, repayment performance and
history, underlying collateral values securing loans and other factors which
deserve recognition in estimating credit losses.
No provision was charged to income in 1997 or 1996. Net recoveries for 1997
increased by $388,000 to $297,000 when compared to net charge-offs of $91,000
for 1996. The net recoveries for 1997 of $297,000 include $253,000 of loan
reserve acquired in the FFSB acquisition. Management was of the belief that no
provision for 1997 was needed although loans had increased by $21,543,000 to
$136,889,000 from $115,346,000 at December 31, 1996. The reserve for loan losses
was $3,603,000 or 2.63% of total loans outstanding as of December 31, 1997 com-
pared to $3,306,000 or 2.87% of total loans outstanding as of December 31, 1996.
The net loan charge-offs in 1996 were $91,000 as compared to net loan re-
coveries in 1995 of $2,000. Net charge-offs as a percentage of average loans for
1996 was 0.08% as compared to net recoveries of 0.00% for 1995. The net loans
outstanding at December 31, 1996 increased by $15,965,000 to $115,346,000 when
compared to net loans outstanding at December 31, 1995 of $99,381,000. The
reserve for possible loan losses at December 31, 1996 decreased by $91,000 to
$3,306,000 when compared to December 31, 1995.
The following table summarizes provision and allowance activities for the
periods indicated:
For the Years Ended December 31,
1997 1996 1995
------- ------- -------
(dollars in 000's)
Loans, Net $136,889 115,346 99,381
Allowance for Possible Loan Losses 3,603 3,306 3,397
Percent of Loans 2.63% 2.87% 3.42%
Provision for Possible Loan Losses $ 0 0 0
Net Charge-Offs (recoveries) (297) 91 (2)
Percent of Average Loans (0.22%) 0.08% (0.00%)
NONINTEREST INCOME
------------------
Noninterest income consists primarily of service charges, trust department
fees and other fees and commissions. During 1997, noninterest income increased
by $257,000 to $2,465,000, or 11.64% over 1996, due to new services provided and
increased fees for services provided. Of the $257,000 increase in noninterest
income for 1997 over 1996, $152,000 was for loan origination and service release
fees on home mortgage loans originating at the Youree Drive Branch (formerly
First Federal savings Bank) and gain on sale of investment securities was re-
flected in the amount of $81,000. During 1996, noninterest income increased by
$404,000 to $2,208,000 or 22.39% from 1995. The increase in noninterest income
of $404,000 for 1996 was due primarily to increased fees for services provided.
NONINTEREST EXPENSE
-------------------
This category of expense includes salaries, employee benefits, occupancy
expense, furniture and equipment expense and other expenses. Total noninterest
expenses (total operating expenses) for 1997 amounted to $6,278,000, a $919,000
or 17.15% increase over total operating expenses for 1996. The increase in total
operating expenses in 1997 over 1996 was attributable in part to the acquisition
of FFSB and its operation as our "Youree Drive" branch. Of the $302,000 increase
in salaries and employee benefits for 1997 over 1996, $183,000 was attributable
to the Youree Drive Branch with the balance being attributable to staff and
salary increases. Of the $59,000 increase in occupancy expense, $32,000 was
applicable to the Youree Drive branch. Also included in occupancy expense for
1997, were $84,000 expended for repairs of the Line Avenue Branch. Of the
$116,000 increase in capital stock tax for 1997, $36,000 was attributable to the
FFSB acquisition. Of the $320,000 increase in other operating expenses for 1997,
$65,000 was applicable to furniture and equipment expense for the Youree Drive
Branch and $54,000 was applicable to the purchase of a long-term data processing
contract which FFSB had entered into prior to purchase and for the conversion of
data onto Minden Bank's computer system, and $146,000 was expended for adver-
tising during 1997 as compared to $63,000 for 1996.
Total operating expenses for 1996 were $5,359,000 an increase of $126,000
or 2.41% when compared to total operating expenses for 1995. The increase in
total operating expenses in 1996 as compared to 1995 was attributable to an
entire year's operation of the three Shreveport branches acquired in 1995.
LIQUIDITY
---------
A key to success as a community bank is to maintain adequate liquidity in
order to satisfy customer needs in a satisfactory response time. To achieve this
goal, Minden Bank monitors 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, Minden Bank 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 at Minden Bank averaged 54.11% during 1997
compared to 52.27% in 1996 and 48.66% in 1995. Average federal funds sold were
$18,771,000, $20,387,000 and $18,185,000, respectively during 1997, 1996 and
1995. Additionally, at December 31, 1997, Minden Bank had investment securities
with an amortized cost of $125,909,000, of which $51,186,000 or 40.65% mature
within one year, $62,554,000 or 49.68% mature within two to five years, and
$12,169,000 or 9.67% mature in over five years. Additional sources of liquidity
which are available, are borrowing from the Federal Reserve Bank as a member
bank and the purchase of federal funds on a daily basis from other banks. Minden
Bancshares does not anticipate any events which will require liquidity beyond
that which is available from the above referenced sources.
INTEREST RATE SENSITIVITY
-------------------------
The interest rate sensitivity of Minden Bancshares' assets and liabilities
provides an indication of the extent to which Minden Bancshares' net interest
income may be affected by interest rate movements. An indicator of the rate
sensitivity structure of a financial institution's balance sheet is the
difference between its interest rate sensitive assets and interest rate
sensitive liabilities which is referred to as the "Gap". The table below
presents Minden Bancshares' Gap position at December 31, 1997:
<TABLE>
<CAPTION>
After 3 After 6
Within Within Within After Year End
3 Months 6 Months 12 Months One Year Balance
---------- -------- --------- -------- ----------
(dollars in 000's)
<S> <C> <C> <C> <C> <C>
Earning Assets:
Loans $ 50,058 12,263 17,767 56,801 $ 136,889
Securities available for sale 24,221 15,906 12,382 58,115 109,814
Securities held to maturity 340 110 - 16,052 16,502
All other 10,536 _ _ _ 10,536
---------- -------- --------- -------- ----------
Total Earning Assets $ 85,155 27,469 30,149 130,968 $ 273,741
---------- -------- --------- -------- ----------
Funding Sources:
Time deposits $ 46,612 26,080 32,292 19,879 $124,863
Other interest-bearing deposits 81,275 _ _ _ 81,275
Securities sold under agreements
to repurchase 6,297 20 1,842 2,650 10,809
Noninterest-bearing sources _ _ _ 56,794 56,794
---------- --------- -------- -------- ----------
Total Funding Sources $ 134,184 26,100 34,134 79,323 $ 273,741
---------- --------- -------- -------- ----------
Gap Summary:
Periodic net earning assets $ (49,029) 1,369 (3,985) 51,645 $ _
---------- --------- -------- -------- ----------
Cumulative net earning assets $ (49,029) (47,660) (51,645) - $ -
========== ========== ======== ======== ==========
Periodic net earning assets/
Total earning assets (17.91%) 0.50% (1.46%) 18.87% _
Cumulative ratio of earning assets
to interest-bearing liabilities (17.91%) (17.41%) (18.87%) _ -
</TABLE>
This table is based upon a point in time and may not always be meaningful
because it is based upon the earliest possible maturity or repricing and not
what may be a normal change in our interest rates. Also, this table does not
consider subsequent changes in interest rate structures or spreads between
asset and liability categories. Interest rate changes do not always occur
equally to interest-earning assets and interest-bearing liabilities. Interest
rates on interest-bearing demand deposits, "Now", money market and savings
accounts which may be immediately adjusted may not change in proportion to
changes in interest rates. Management believes that Minden Bancshares' asset
and liability mix is adequately positioned to adjust to interest rate changes.
CAPITAL ADEQUACY
----------------
Risk based capital guidelines issued by the Federal Reserve Board became
effective March 15, 1989. The guidelines require minimum levels of capital based
upon a risk rating of the contingent obligations. A minimum of 8% of total cap-
ital to risk-adjusted assets will be required, of which one-half of the 8% must
consist primarily of tangible common shareholders equity ("Tier 1 Capital"). At
December 31, 1997, Minden Bancshares' Tier 1 capital ratio was 19.90% and its
total risk based capital ratio was 21.17% under the most restrictive, fully
phased in, risk based guidelines.
In addition, effective September 7, 1990, the Federal Reserve Board imple-
mented an additional 3% minimum Tier 1 leverage ratio (the "Leverage Ratio") to
be maintained in conjunction with the risk based capital standard. The Leverage
Ratio gauges the amount of Tier 1 capital (less certain intangibles including
goodwill) to total average assets (less certain intangibles including goodwill).
At December 31, 1997, Minden Bancshares' Leverage Ratio was 9.59%. The Federal
Reserve Board can require a bank to maintain a Leverage Ratio greater than 3%
if, in its opinion, the bank is anticipating significant growth or is operating
with less than well diversified risks.
INFLATION
---------
Inflation has a significant impact on the growth of total assets in the
banking industry. It requires increases in equity capital at higher than normal
rates in order to maintain an appropriate equity to asset ratio. Minden Banc-
shares presently has the intent and ability to maintain proper equity to asset
ratios primarily by periodically adjusting its pricing of services and banking
products to take into consideration current costs. The consolidated financial
statements and related financial data of Minden Bancshares have been prepared in
accordance with generally accepted accounting principles which requires the
measurement of financial position and operating results in terms of historical
dollars without considering changes in the relative purchasing power of money
over time due to inflation.
RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------
In February of 1997, the Financial Accounting Standards Board (FASB) issued
SFAS 128, Earnings per Share, effective for financial statements for both in-
terim and annual periods ending after December 15, 1997. SFAS 128 provides for
revised calculation of earnings per share to compare with current international
reporting and provides for computation of earnings per share from continuing
operations and earnings per share of net income along with disclosures of the
respective computations. Since the Company is of simple capital structure with
only one class of common stock outstanding, management does not anticipate any
material impact by SFAS 128 in the calculation of the respective earnings per
share computation and disclosures.
In February of 1997, the Financial Accounting Standards Board (FASB) issued
SFAS 129, Disclosure of Information about Capital Structure, effective for
financial statements for periods ending after December 15, 1997. SFAS 129
provides for the presentation in summary form within an entity's financial
statements, the pertinent rights and privileges of the various securities out-
standing and the disclosure within its financial statements of the number of
shares issued upon conversion, exercise or satisfaction of required conditions
during at least the most recent annual fiscal period and any subsequent interim
period presented. Since this SFAS pertains only to the disclosure of required
information, it should not have any financial impact on the Company's
operations.
In June of 1997, the Financial Accounting Standards Board (FASB) issued
SFAS 130,Reporting Comprehensive Income, effective for fiscal years beginning
after December 15, 1997. SFAS 130 discusses how to report and display compre-
dhensive income and its components. Comprehensive income is defined as "the
change in equity [net assets] of a business enterprise during a period from
transactions and other events and circumstances from non owner sources. It
includes all changes in equity during a period except those resulting from
investments by owners and distributions to owners." This statement divides
comprehensive income into net income and other comprehensive income. The only
item that management anticipates that will be included in other comprehensive
income will be the net unrealized gain or loss on investment securities class-
ified as "available for sale," therefore there should be no material impact by
this SFAS on operations or financial statements.
In June of 1997, the Financial Accounting Standards Board (FASB) issued
SFAS 131, Disclosures about Segments of an Enterprise and Related Information,
effective for fiscal years beginning after December 15, 1997. SFAS 131 requires
that public business enterprises report certain information about operating
segments in complete sets of financial statements of the enterprise and in
condensed financial statements of interim periods issued to shareholders. It
also requires that public business enterprises report certain information about
their products and services, the geographic areas in which they operate, and
their major customers. At the current time, the Company does not meet the
additional reporting requirements of this SFAS.
OTHER ACCOUNTING ISSUES
-----------------------
Year 2000
- ---------
The problem now known as the "Year 2000" is the inability of older computer
systems, software and other equipment which have only maintained a two digit
year in date information to chronologically align dates with the occurrence of
the year 2000.
The Board of Directors has adopted a "Year 2000 Policy" to insure that all
information systems and other areas which may be affected by the "Year 2000"
millennium change are properly and expeditiously addressed to insure the contin-
uation of normal business operations of the Bank into the next millennium. In
the "Year 2000 Policy," provision is made for a "Year 2000 Plan" whereby an EDP
Steering Committee headed by the Vice President and Data Center Manager will
identify the areas which may be affected by the "Year 2000," and will address
all issues and will make any necessary recommendations to the Board of Directors
for approval.
The EDP Steering Committee has researched the need to upgrade the Bank's
"Mainframe" computer and software and has made recommendations to the Board of
Directors, which has approved the acquisition. The scheduling for installation
of the new computer system and software is in process and installation should be
completed in the fourth quarter, 1998 or first quarter, 1999. All personal com-
puters in service by the Bank are being tested, and necessary upgrades are being
ordered and installed. There are some computer networks with which the Bank
communicates that have advised that their upgrades to meet the "Year 2000" re-
quirements will not be in place until the first quarter, 1999.
Under the Bank's "Year 2000 Policy," all computer systems and electronic
date sensitive devices are to be tested, with necessary upgrades made, and cer-
tified as to their "Year 2000" readiness by the end of the first quarter, 1999.
ITEM 7. FINANCIAL STATEMENTS
January 8, 1998
The Board of Directors and Stockholders
Minden Bancshares, Inc. and Subsidiary
Minden, Louisiana
INDEPENDENT AUDITOR'S REPORT
----------------------------
We have audited the accompanying consolidated balance sheets of Minden
Bancshares, Inc. and Subsidiary as of December 31, 1997 and 1996, and the
related consolidated statements of income, changes in stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 1997.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Minden
Bancshares, Inc. and Subsidiary as of December 31, 1997 and 1996, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles.
HEARD, McELROY & VESTAL, L.L.P.
Certified Public Accountants
Shreveport, Louisiana
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, 1997 and 1996
ASSETS 1997 1996
------ ---- ----
(in thousands, except per share data)
Cash and cash equivalents:
Cash and due from banks - Note 2 $ 17,196 14,907
Federal funds sold 4,500 8,500
--------- ---------
21,696 23,407
Investment securities - Note 3
Securities available for sale 108,414 90,447
Securities held to maturity 16,502 14,784
--------- ---------
124,916 105,231
Federal Reserve Bank and FHLB stock 1,400 1,205
Loans, less allowance for loan losses
of $3,603 and $3,306 - Notes 4 and 8 133,286 112,040
Accrued interest receivable 2,642 2,178
Bank premises and equipment - Note 5 3,662 3,093
Real estate owned
other than bank premises - Note 14 278 217
Other Assets - Notes 6 and 12 4,198 2,661
--------- ---------
TOTAL ASSETS $292,078 250,032
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES:
Deposits:
Noninterest bearing $ 42,045 38,197
Interest bearing - Note 11 206,138 177,799
--------- ---------
Total Deposits 248,183 215,996
Securities sold under
repurchase agreement 10,809 5,418
Accrued interest payable 986 860
Other liabilities 414 132
Note payable - Note 10 0 90
--------- ---------
Total Liabilities 260,392 222,496
STOCKHOLDERS' EQUITY:
Common stock, par value $2.50 per share;
500,000 shares authorized;
309,816 shares issued;
280,511 and 280,549 shares
outstanding, respectively 775 775
Additional paid-in capital 11,205 11,205
Undivided profits - Note 7 20,737 16,778
Treasury stock-at cost-shares
29,305-1997 and 29,267-1996 (1,300) (1,297)
Net unrealized appreciation on
AFS securities net of taxes
of $139-1997 and $39-1996 269 75
--------- ---------
Total Stockholders' Equity 31,686 27,536
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $292,078 250,032
========= =========
The accompanying notes are an integral part of the financial statements.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
December 31, 1997, 1996 and 1995
1997 1996 1995
---- ---- ----
(in thousands, except per share data)
INTEREST INCOME:
Interest and fees on loans $ 12,353 10,572 8,664
Investment securities:
Taxable 5,563 4,704 4,539
Tax-exempt 767 743 639
Federal funds sold 1,018 1,069 1,043
Federal Reserve stock and other 327 167 130
-------- -------- --------
Total interest income 20,028 17,255 15,015
INTEREST EXPENSE:
Deposits 8,419 7,126 6,009
Securities sold under
repurchase agreement and other 331 294 292
-------- -------- --------
Total interest expense 8,750 7,420 6,301
-------- -------- --------
Net interest income 11,278 9,835 8,714
Provision for loan losses - Note 4 - - -
-------- -------- --------
Net interest income after
provision for loan losses 11,278 9,835 8,714
-------- -------- --------
OTHER INCOME:
Service charges 1,798 1,574 1,367
Insurance commissions 292 300 189
Gain (loss) on investment securities 81 - -
Other operating income 294 334 248
-------- -------- --------
Total other income 2,465 2,208 1,804
OPERATING EXPENSES:
Salaries and employee benefits 3,087 2,785 2,489
Occupancy expense 550 491 363
Amortization 216 143 110
Writedown on real estate owned
other than bank premises - - 91
FDIC insurance 42 (6) 241
Stationery, supplies and printing 501 518 596
Data processing fees 138 120 210
Capital stock tax 367 251 129
Other operating expenses 1,377 1,057 1,004
-------- -------- --------
Total operating expenses 6,278 5,359 5,233
-------- -------- --------
INCOME BEFORE INCOME TAXES 7,465 6,684 5,285
INCOME TAXES - NOTE 6 2,384 2,073 1,617
-------- -------- --------
NET INCOME $ 5,081 4,611 3,668
======== ======== ========
EARNINGS PER SHARE $ 18.11 16.43 13.07
======== ======== ========
The accompanying notes are an integral part of the financial statements.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
December 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
Net
Unrealized
Appreciation
Total Additional (Depreciation)
Stockholders' Common Paid-In Undivided Treasury AFS
Equity Stock Capital Profits Stock Securities
------------- ------- ---------- --------- -------- --------------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $ 19,021 775 11,205 10,182 (1,279) (1,862)
- ----------------------------
Net income 3,668 -- -- 3,668 -- --
Cash dividends paid (772) -- -- (772) -- --
Purchase of 156 shares
common stock (9) -- -- -- (9) --
Change in unrealized appreciation
on AFS securities, net of taxes
of $1,082 2,101 -- -- -- -- 2,101
------------- ------- ---------- --------- -------- --------------
Balance at December 31, 1995 $ 24,009 775 11,205 13,078 (1,288) 239
- ----------------------------
Net income 4,611 -- -- 4,611 -- --
Cash dividends paid (911) -- -- (911) -- --
Purchase of 109 shares common
stock (9) -- -- -- (9) --
Change in unrealized appreciation
on AFS securities, net of taxes
of $84 (164) -- -- -- -- (164)
------------- ------- ---------- --------- -------- --------------
Balance at December 31, 1996 $ 27,536 775 11,205 16,778 (1,297) 75
- ----------------------------
Net income 5,081 -- -- 5,081 -- --
Cash dividends paid (1,122) -- -- (1,122) -- --
Purchase of 38 shares common
stock (3) -- -- -- (3) --
Change in unrealized appreciation
on AFS securities, net of taxes
of $100 194 -- -- -- -- 194
------------- ------- ---------- --------- -------- --------------
Balance at December 31, 1997 $ 31,686 775 11,205 20,737 (1,300) 269
- ---------------------------- ============= ======= ========== ========= ======== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
December 31, 1997, 1996 and 1995
1997 1996 1995
--------- -------- --------
(in thousands, except per share data)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,081 4,611 3,668
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 482 405 324
Writedown on real estate owned
other than bank premises - - 91
(Gain) loss on investment securities (81) - -
(Gain) on sale of real estate owned other than
bank premises - (42) (13)
(Increase) decrease in accrued interest receivable (464) 150 (84)
Decrease in other assets 87 69 262
Increase in accrued interest payable 126 73 293
Increase (decrease) in other liabilities 282 (5) 59
--------- -------- --------
Total adjustments 432 650 932
--------- -------- --------
Net cash provided by operating activities 5,513 5,261 4,600
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from AFS securities-maturities 90,068 22,515 15,376
Proceeds from HTM securities 518 183 410
Purchase of investment securities and
Federal Reserve Bank stock - Note 3 (110,466) (39,324) (11,238)
Proceeds from sales of real estate owned
other than bank premises 150 285 192
Purchase of equipment (801) (88) (1,107)
Purchase of goodwill (1,873) - -
Cost of deposit base intangibles - Note 12 - - (2,146)
Net (increase) in loans - Note 12 (21,183) (16,552) (33,449)
--------- -------- --------
Net cash (used) by investing activities (43,587) (32,981) (31,962)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (1,122) (911) (772)
Net increase in noninterest-bearing deposits
- Note 12 3,848 2,499 12,531
Net increase in interest-bearing deposits
- Note 12 28,339 17,401 38,301
Net increase (decrease) in securities sold
under repurchase agreement 5,391 (384) (1,636)
Payments on note payable (90) (90) (90)
Purchase of 38, 109, and 156 shares treasury stock (3) (9) (9)
--------- -------- --------
Net cash provided by financing activities 36,363 18,506 48,325
--------- -------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,711) (9,214) 20,963
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 23,407 32,621 11,658
--------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 21,696 23,407 32,621
========= ======== ========
CASH PAYMENTS:
Interest $ 8,624 7,347 6,008
========= ======== ========
Income taxes $ 2,270 1,933 1,531
========= ======== ========
The accompanying notes are an intgral part of the financial statements.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997, 1996 and 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
a. CONSOLIDATION
The accompanying financial statements include the accounts of Minden
Bancshares, Inc. (the Company) and its wholly-owned subsidiary, Minden
Bank and Trust Company (the Bank). The Company was organized as a bank
holding company under Federal Reserve Bank laws on June 27, 1983. The
holding company did not transact any business until 1985. The Bank has
locations in Minden, Sarepta, and Shreveport, Louisiana.
b. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reported period. Actual results could differ from
those estimates.
Material estimates that are particularly susceptible to
significant change relate to the determination of the allowance for
losses on loans and the valuation of real estate acquired in connection
with foreclosures or in satisfaction of loans. In connection with the
determination of the allowances for losses on loans and foreclosed real
estate, management obtains independent appraisals for significant
properties.
Most of the Bank's business activity is with customers
located within the Minden/Shreveport, Louisiana area. The loan categories
are detailed in Note 4. The economy of the area is diversified but
depends on timber, agriculture, and oil and gas. Although these areas of
the economy and the economy in general in the area are doing well, it
could decline in the future.
While management uses available information to recognize losses on loans,
future additions to the allowances may be necessary based on changes in
local economic conditions. In addition, regulatory agencies, as an
integral part of their examination process, periodically review the
Bank's allowances for losses on loans and foreclosed real estate. Such
agencies may require the Bank to recognize additons to the allowances
based on thier judgements about information available to them at the
time of thier examination. Because of these factors, it is reasonably
possible that the allowances for losses on loans may change materially
in the near future.
c. INVESTMENT SECURITIES
The Bank's investments in securities are classified in two categories and
accounted for as follows.
Securities to be held to maturity
---------------------------------
Bonds, notes and debentures (municipal bonds) for which the Bank has the
positive intent and ability to hold to maturity are reported at cost,
adjusted for amortization of premiums and accretion of discounts which
are recognized in interest income using the effective interest method
over the period to maturity.
Securities available for sale
-----------------------------
Securities available for sale consist of bonds, notes and debentures not
classified as trading securities nor as securities to be held to
maturity.
Declines in the fair value of individual held-to-maturity and
available-for-sale securities below their cost that are other than
temporary have resulted in write-downs of the individual securities to
their fair value. The related write-downs have been included in earnings
as realized losses. There were no write-downs in 1997, 1996 or 1995.
Unrealized holding gains and losses, net of tax, on securities available
for sale are reported as a net amount in a separate component of stock-
holders' equity until realized.
Gains and losses on the sale of securities available for sale are
determined using the specific-identification method.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997, 1996 and 1995
(continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
------------------------------------------------------
d. LOANS AND ALLOWANCE FOR LOAN LOSSES
Loans are stated at the amount of unpaid principal, reduced by unearned
discount and an allowance for loan losses. Unearned discount on certain
installment loans is recognized as income under the rule of seventy-
eights, which approximates interest on the outstanding balance. Interest
on other loans is calculated by using the simple interest method on
daily balances of the principal amount outstanding. The accrual of
interest on loans is usually discontinued when interest is past due by
ninety days. Upon such occurrence, all unpaid accrued interest on such
loans is reversed.
The allowance for loan losses is established through a provision for
loan losses charged to expense. Loans are charged against the allowance
for loan losses when management believes that the collectibility of the
principal is unlikely. The allowance is an amount that management
believes will be adequate to absorb possible losses on existing loans
that may become uncollectible, based on evaluations of the collectibility
of loans and prior loan loss experience. The evaluations take into
consideration such factors as changes in the nature and volume of the
loan portfolio, overall portfolio quality, review of specific problem
loans, and current economic conditions that may affect the borrowers'
ability to pay.
e. BANK PREMISES AND EQUIPMENT
Bank premises and equipment are carried at cost less accumulated
depreciation. Depreciation is provided over the estimated useful lives
of the respective assets on the straight-line and accelerated methods of
depreciation. Expenditures for major renewals and betterments of premises
and equipment are capitalized and those for maintenance and repairs are
charged to expense as incurred.
f. INCOME TAXES
Provisions for income taxes are based on taxes payable or refundable for
the current year (after exclusion of nontaxable income such as interest
on state and municipal securities) and deferred taxes on temporary
differences between the amount of taxable income and pretax financial
income and between the tax bases of assets and liabilities and their
reported amounts in the financial statements. Deferred tax assets and
liabilities are included in the financial statements at currently enacted
tax rates applicable to the period in which the deferred tax assets and
liabilities are expected to be realized or settled as prescribed in FASB
Statement No. 109, Accounting for Income Taxes. As changes in tax laws or
rates are enacted, deferred tax assets and liabilities are adjusted
through the provision for income taxes.
g. FEDERAL FUNDS
Federal funds sold are stated at the cash amount loaned to the member
bank. Interest is recognized on a daily basis as the funds are regularly
rolled over.
h. PENSION PLAN
In 1997, the Bank adopted a 401(k) Plan whereby employees with 12 months
or more service on the semiannual entry dates and are at least 21 years
old become eligible to make elective contributions and will share in the
employer dicretionary contribution for the year. Prior to 1997, the Bank
contributed to each eligible employee's individial retirement account
under it's simplified employees pension program. The percentage of
contribution to the 401 (k) Plan for 1997 and the employer SEP for 1996
and 1995 were set by the Board of Directors at 6%. Contributions for
1997, 1996, and 1995 (in thousands) to the respective plans amounted to
approximately $130, $115 and $107
i. EARNINGS PER SHARE
Earnings per share are computed using the weighted number of shares
outstanding during each year. The number of weighted average outstanding
shares was 280,527 in 1997, 280,623 in 1996, and 280,691 in 1995. The
dilutive effect of FASB No. 128 is considered immaterial (less than 3
cents per share) and thus not presented.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997, 1996 and 1995
(continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
------------------------------------------------------
j. CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Bank considers all cash
on hand, demand deposits with other banks, and federal funds sold to be
cash equivalents.
2. CASH AND DUE FROM BANKS
-----------------------
The Bank, as a member of the Federal Reserve System, is required to maintain
certain average reserve balances at the Federal Reserve Bank and/or in cash
on hand. The required balance (in thousands) at December 31, 1997 and 1996
was $2,133 and $1,859.
3. INVESTMENT SECURITIES
---------------------
The carrying amounts of investment securities as shown in the consolidated
balance sheets of the Bank and their approximate fair values at December 31
(in thousands) were as follows:
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- --------
Securities available for sale -
December 31, 1997 -
U.S. Treasury 35,949 219 6 36,162
U.S. Government agency securities 72,056 334 138 72,252
--------- ---------- ---------- --------
108,005 553 144 108,414
========= ========== ========== ========
Securities to be held to maturity -
December 31, 1997 -
State and municipal securities 16,502 441 2 16,941
========= ========== ========== ========
Securities available for sale -
December 31, 1996 -
U.S. Treasury 39,539 347 45 39,841
U.S. Government agency securities 50,795 100 289 50,606
--------- ---------- ---------- --------
90,334 447 334 90,447
========= ========== ========== ========
Securities to be held to maturity -
December 31, 1996 -
State and municipal securities 14,784 203 72 14,915
========= ========== ========== ========
Assets, principally securities, carried at approximately (in thousands) $51,794
at December 31, 1997 and $41,234 at December 31, 1996 were pledged to secure
public deposits and for other purposes required or permitted by law.
Gross purchases (in thousands), of securities for 1997, 1996 and 1995 are
detailed below.
1997 1996 1995
-------- -------- --------
PURCHASES:
Purchases of available for sale securities 108,035 38,632 7,593
Purchase of Federal Reserve Bank stock 195 168 167
Purchases of held to maturity securities 2,236 524 3,478
-------- -------- --------
Total 110,466 39,324 11,238
======== ======== ========
Gains (in thousands) of $81 were realized on sales of securities available for
sale in 1997. No losses were recognized. No gain or losses were recognized on
the maturities and call of bonds held to maturity in 1997, 1996 and 1995.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997, 1996 and 1995
(continued)
3. INVESTMENT SECURITIES (continued)
---------------------------------
The scheduled maturities (in thousands) of securities to be held to
maturity and securities available for sale at December 31, 1997 were as
follows:
SECURITIES TO BE SECURITIES AVAILABLE
HELD TO MATURITY FOR SALE
------------------ --------------------
AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE
--------- ------- -------- ---------
Due in one year or less 459 461 41,710 41,756
Due from one year to five years 5,879 6,022 60,756 61,048
Due from five to ten years 7,929 8,209 - -
Due after ten years 2,235 2,249 5,539 5,610
--------- ------- --------- --------
16,502 16,941 108,005 108,414
========= ======= ========= ========
4. LOANS
-----
Loans (in thousands) at December 31, 1997 and 1996 consisted of the following:
1997 1996
--------- --------
Commercial, financial and agricultural $ 33,673 31,567
Real estate - construction 3,778 3,381
Real estate - mortgage 75,237 60,025
Installment - individuals 22,186 18,143
Other 2,178 2,368
--------- --------
137,052 115,484
Unearned discount (163) (138)
--------- --------
136,889 115,346
Allowance for loan losses (3,603) (3,306)
--------- --------
$133,286 112,040
========= ========
Changes in the allowance for loan losses (in thousands) are summarized as
follows:
1997 1996 1995
-------- -------- --------
Beginning balance $ 3,306 3,397 3,395
Provision charged to operations - - -
Loans charged off (315) (244) (180)
Recoveries 612 153 182
-------- -------- --------
Ending balance $ 3,603 3,306 3,397
======== ======== ========
Commitments to fund loans at December 31, 1997, 1996 and 1995 (in thousands)
amounted to approximately $24,523-1997, $17,432-1996, $19,045-1995. Loans on
which the accrual of interest has been discontinued amounted (in thousands) to
approximately $547, $346 and $403 at December 31, 1997, 1996 and 1995. Had
these loans been current in accordance with their original terms, related
interest income (in thousands) would have approximated $68, $36 and $48 for
1997, 1996 and 1995. Loans on which the accrual of interest has been reduced,
or whose terms have been otherwise modified, amounted (in thousands) to
approximately $-0-, $-0- and $69 at December 31, 1997, 1996 and 1995,
respectively.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997, 1996 and 1995
(continued)
4. LOANS (continued)
-----------------
Loan origination fees and certain direct origination costs are capitalized.
The Bank grants commercial and consumer loans to customers in Minden and
Shreveport, Louisiana and the surrounding area. Although the Banks have a
diversified loan portfolio, a substantial portion of loan repayment is
dependent upon the general business climate in Minden and Shreveport.
5. BANK PREMISES AND EQUIPMENT
---------------------------
Bank premises and equipment (in thousands) at December 31, 1997 and 1996 are
summarized as follows:
Estimated
Useful Lives 1997 1996
------ ------
Land $ 1,463 988
Buildings and improvements 8-50 Years 3,107 2,881
Furniture, fixtures and equipment 5-15 Years 725 679
Vehicles 3- 5 Years 28 28
------- ------
5,323 4,576
Less - accumulated depreciation 1,661 1,483
------- ------
Bank premises and equipment $ 3,662 3,093
======= ======
Depreciation (in thousands) charged to operations in 1997, 1996 and 1995
amounted to $232, $193 and $188, respectively.
6. INCOME TAXES
Federal income tax expense (in thousands) for December 31, 1997, 1996 and
1995 is as follows:
1997 1996 1995
----- ---- ----
Currently payable $ 2,393 1,932 1,541
Deferred (prepaid) (9) 141 76
------- ----- -----
Income tax expense 2,384 2,073 1,617
======= ===== =====
Federal statutory tax rate 34.0% 34.0% 34.0%
Tax-exempt income (3.6) (3.8) (4.2)
Other - net 1.5 .8 .8
------- ----- -----
Effective tax rate 31.9% 31.0% 30.6%
======= ===== =====
Included in other assets are deferred federal income taxes (in thousands) of
$473 and $564 at December 31, 1997 and 1996. Cumulative undistributed earnings
(in thousands) of the subsidiary Bank that have been recorded by the Company,
and for which no income taxes have been accrued, amounted to approximately
$31,636 at December 31, 1997. These earnings have been reinvested in the
subsidiary Bank.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997, 1996 and 1995
(continued)
6. INCOME TAXES (continued)
------------------------
The deferred tax asset at December 31, 1997 and 1996 consists of the
following:
1997 1996
---- ----
Defered tax assets: (in thousands
Reserve for loan losses $ 891 823
ORE write downs 38 38
----- ----
929 861
Deferred tax liability:
Discount on investments (317) (258)
----- ----
612 603
Net unrealized appreciation on securities AFS (139) (39)
----- ----
Net deferred tax assets (based upon 34% tax rate) 473 564
===== ====
Management has determined that no valuation allowance is necessary.
7. UNDIVIDED PROFITS
-----------------
At December 31, 1997 and 1996, the Bank's undivided profits were legally
available for dividends. The Bank is subject to various regulatory capital
requirements administered by federal banking agencies. Failure to meet
minimum capital requirements can initiate certain mandatory, and possibly
additional discretionary actions by regulators that, if undertaken, could
have a direct material effect on the Bank's financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt cor-
rective action, the Bank must meet specific capital guidelines that involve
quantitative measures of the Bank's assets, liabilities, and certain off-
balance-sheet items as calculated under regulatory accounting practices.
The Bank's capital amounts and classification are also subject to qualita-
tive judgments by the regulators about components, risk weightings, and
other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the
table below) of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as defined) to
average assets (as defined). Management believes, as of December 31, 1997,
that the Bank meets all capital adequacy requirements to which it is
subject.
As of December 31, 1997, the most recent notification from the Office of the
Comptroller of the Currency categorized the Bank as well capitalized under
the regulatory framework for prompt corrective action. To be categorized as
well capitalized the Bank must maintain minimum total risk-based, Tier I
risk-based, and Tier I leverage ratios as set forth in the table. There are
no conditions or events since that notification that management believes has
changed the institution's category.
The Bank's actual capital amounts (in thousands) and ratios are also
presented in the table.
<TABLE>
<CAPTION>
To Be Well Capitalized
Under Prompt
For Capital Corrective
Actual Adequancy Purposes: Action Provisions:
--------------- ------------------- -----------------------
Amount Ratio Amount Ratio Amount Ratio
------- ----- ------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C>
As of December 31,1997:
Total Captial > > > >
(to Risk Weighted Assets) $29,641 21.2% =$11,202 = 8.0% = $14,003 =10.0%
Tier 1 Captial > > > >
(to Risk Weighted Assets) $27,868 19.9% = $5,601 = 4.0% = $ 8,402 = 6.0%
Tier 1 Captial > > > >
(to Average Assets) $27,868 9.6% = $8,714 = 3.0% = $14,523 = 5.0%
</TABLE>
MINDEN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997, 1996 and 1995
(continued)
8. RELATED PARTY TRANSACTIONS
--------------------------
At December 31, 1997 and 1996, certain officers, directors, or companies in
which they have 10% or more beneficial ownership, were indebted to the Bank
in the aggregate amount (in thousands) of $8,453 and $10,557, respectively.
Deposits with the Bank from the above related parties amounted (in thou-
sands) to $16,482 at December 31, 1997. Below is a summary of the loan
activity for 1997 and 1996 (in thousands):
1997 1996
------- ------
Beginning balance $10,557 6,827
Additional borrowings 3,686 9,669
Repayments of borrowings 5,790 5,939
------- ------
Ending balance $ 8,453 10,557
======= ======
The Bank is included in a consolidated federal tax return and records its
liability to the parent, when applicable, for the tax benefits arising from
the parent operating loss.
9. COMMITMENTS AND CONTINGENCIES
-----------------------------
There are outstanding commitments and contingent liabilities on which
management does not anticipate losses. They include, among other things,
commitments to extend credit and letters of credit undertaken in the normal
course of business. Outstanding letters of credit (in thousands) amounted to
$933 at December 31, 1997, and $1,244 at December 31, 1996. These
commitments represent off-balance sheet risk to the Bank, with the
contractual notional amount representing the Bank's exposure to credit loss
in the event of nonperformance by the other party to the instruments.
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. They
generally have fixed expiration dates and require payment of a fee. Since
many commitments are expected to expire without being drawn upon, the total
commitments do not represent future cash requirements. The Bank evaluates
each customer's credit worthiness on a case-by-case basis, and obtains
an amount of collateral it deems sufficient.
10. NOTE PAYABLE
------------
The Company incurred debt to finance the purchase of its own common stock
(treasury stock). A summary of the debt (in thousands) is detailed below:
1997 1996
Bank One, interest at Chase Manhattan Bank prime,
principal due $90 thousand per year; interest due
semi-annually _ 90
==== ====
The debt was secured by 16,500 shares of stock in Minden Bank and Trust
Company. The note matured in 1997.
11. TIME DEPOSITS
-------------
Time deposits (in thousands) of $100,000 or more amounted to $28,507 at
December 31, 1997 and $21,946 at December 31, 1996. Maturities (in
thousands) over five years: $103,410 - 1998, $14,608 - 1999, $4,610 - 2000,
$1,178 - 2001, and $1,013 - 2002, and $44-thereafter.
12. ACQUISITION
-----------
The Bank completed its purchase of three branches of Hibernia National Bank
in Shreveport, Louisiana as of March 24, 1995. Total assets acquired were
approximately $35.4 million, consisting of (in millions) cash $13.7, loans
$20.6 and fixed assets $1.1. Liabilities acquired were approximately $37.5
million consisting of deposits (in millions) of $35.9 and other liabilities
of $1.6. The Bank paid approximately $2.1 million in excess of assets
MINDEN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997, 1996 and 1995
(continued)
12. ACQUISITION (continued)
-----------------------
acquired and this amount was allocated to deposit-based intangibles and is
being amortized over 15 years. Amortization (in thousands) included in the
income statement for 1997, 1996 and 1995 and is $143, $143 and $110
respectively. The deposit base intangible net of amortization is included
in other assets.
The Bank acquired First Federal Savings Bank (FFSB) in Shreveport,
Louisiana. An agreement was signed on January 23, 1997 to acquire FFSB and
the purchase was completed in May 1997. FFSB has assets of $36.481 million
and liabilities of $33.051 million.
The Bank paid $5,411,200 cash for FFSB and accounted for the transaction as
a purchase. The purchase price was $1,872,531 over book value. The goodwill
is included in other assets and is being amortized over 15 years. Amort-
ization (in thousands) included in the income statement for 1997 is $73.
13. FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
Statement of Financial Accounting Standards No. 107, Disclosures About Fair
Value of Financial Instruments (Statement 107), requires that the company
disclose estimated fair values for its financial instruments. Fair-value
estimates, methods, and assumptions are set forth below for its financial
instruments.
a. Investment Securities
The fair value of investment securities, except certain agency and state
and municipal securities, is estimated based on bid prices published in
financial newspapers or bid quotations received from securities dealers.
The fair value of certain agency and state and municipal securities is
not readily available through market sources other than dealer
quotations, so fair value estimates are based on quoted market prices of
similar instruments, adjusted for differences between the quoted
instruments and the instruments being valued. The carrying value and
estimated fair value of investment securities at December 31, 1997 and
1996, are disclosed in Note 3.
b. Loans
Fair values are estimated for portfolios of loans that have similar
financial characteristics. Loans are segregated by type and maturity.
Each loan category is further segmented into fixed and adjustable rate
interest terms.
The fair value of performing loans is calculated by discounting scheduled
cash flows through the estimated maturity using estimated market discount
rates that reflect the credit and interest rate risk inherent in the
loan. The estimate of maturity is based on the company's historical
experience with repayments for each loan classification, modified, as
required, by an estimate of the effect of current economic and lending
conditions. For purposes of estimating fair value, loans with a remaining
maturity of three months or less and adjustable rate loans are assumed to
be carried at approximate fair value due to repricing at current market
rates.
Fair value for significant nonperforming loans is based on recent
external appraisals. If appraisals are not available, estimated cash
flows are discounted using a rate commensurate with the risk associated
with the estimated cash flows. Assumptions regarding credit risk, cash
flows and discount rates are judgmentally determined using available
market information and specific borrower information. The following
table presents information on loans (in thousands):
1997 1996
------------------ -------------------
Book Estimated Book Estimated
Value Fair Value Fair
(Gross) Value (Gross) Value
------------------ -------------------
Loans 136,889 137,352 115,346 116,415
======== ======== ======== ========
MINDEN BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997, 1996 and 1995
(continued)
13. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
-----------------------------------------------
c. Deposit Liabilities
Under Statement 107, the fair value of deposits with no stated maturity,
such as noninterest-bearing demand deposits, savings, and interest-
bearing transaction accounts is equal to the amount payable on demand
as of December 31, 1997 and 1996. The fair value of certificates of
deposit is based on the discounted value of contractual cash flows.
The discount rate is estimated using the rates currently offered for
deposits of similar remaining maturities. The following table presents
information on deposits (in thousands):
1997 1996
----------------- -----------------
Estimated Estimated
Book Fair Book Fair
Value Value Value Value
------- ------- ------- -------
Noninterest-bearing demand 42,045 42,045 38,197 38,197
Savings and interest-bearing demand 81,275 81,275 78,431 78,431
Certificates of deposit 124,863 126,277 99,368 99,573
------- ------- ------- -------
248,183 249,597 215,996 216,201
======= ======= ======= =======
d. Other Categories of Financial Instruments
The carrying amounts of cash and due from banks, federal funds sold,
accrued interest receivable and payable, securities sold under agreements
to repurchase, note payable, and loan commitments approximate fair value
because of the short maturities or periodic repricing of these instru-
ments.
e. Limitations
Fair value estimates are made at a specific point in time, based on rele-
vant market information and information about the financial instrument.
These estimates do not reflect any premium or discount that could result
from offering for sale at one time the Company's entire holdings of par-
ticular financial instruments. Because no market exists for a significant
portion of the Company's financial instruments, fair-value estimates are
based on judgments regarding future expected loss experience, current
economic conditions, risk characteristics of various financial instru-
ments, and other factors. These estimates are subjective in nature and
involve uncertainties and matters of significant judgment and therefore
cannot be determined with precision. Changes in assumptions could sig-
nificantly affect the estimates.
Fair value estimates are based on existing on-and off-balance sheet
financial instruments without attempting to estimate the value of
anticipated future business and the value of assets and liabilities that
are not considered financial instruments.
14. OTHER REAL ESTATE
-----------------
Other real estate owned represents property acquired through foreclosure
or deeded in lieu of foreclosure on loans on which the borrowers have
defaulted as to payment of principal and interest. Amounts are carried at
the lower of cost of acquisition or the asset's fair value less estimated
costs to sell. Reductions in the balance at the date of acquisition are
charged to the allowance for loan losses. Any subsequent write-downs to
reflect current fair value are charged to noninterest expense. There were
no allowances for possible write-downs at December 31, 1997 or 1996. The
Bank implemented FASB Statement No. 114, Accounting by Creditors for
Impairment of a Loan, in 1995. No significant change occurred due to this
pronouncement as impaired loans are deemed immaterial and no specific
reserve is allocated to them.
15. ADVERTISING
-----------
Advertising expense is expensed as incurred. Advertising expense charged
to operations (in thousands) in 1997, 1996 and 1995 amounted to $146, $63
and $54, respectively.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information as to the Directors and Executive Officers of the
Registrant is shown under the caption "Information Concerning Directors and
Nominees" on pages 3 through 6 of the Proxy Statement relating to the Annual
meeting of shareholders to be held on April 14, 1998, and is incorporated by
reference to this Report.
ITEM 10. EXECUTIVE COMPENSATION
The information set forth under the caption "Directors Fees" on page 7 of
the Proxy Statements relating to the Annual Meeting of Shareholders to be held
on April 14, 1998, and the information set forth under the caption "Executive
Compensation" on pages 8 and 9 of such Proxy Statement is incorporated by
reference to this Report.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information set forth under the caption "Voting Securities and
Principal Holders Thereof" on pages 2 and 3 of the Proxy Statement relating to
the Annual Meeting of Shareholders to be held on April 14, 1998, is incorporated
by reference to this Report.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth under the caption "Transactions and Relations
with Directors and Associates and Affiliates of Directors" on page 10 of the
Proxy Statement relating to the Annual meeting of Shareholders to be held on
April 14, 1998, is incorporated by reference to this Report.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibits listed below, as required by Item 601 of Regulation S-B,
have been filed or are being filed as a part of this Report.
Exhibit
Number Exhibit
3 (i) Articles of Incorporation as amended, of the Registrant, filed
on August 14, 1996, at Exhibit 3(I) to Form 10-QSB for the
quarterly period ended June 30, 1996, is incorporated by
reference
3 (ii) By-Laws of the Registrant filed on May 14, 1996, at Exhibit
3(ii) to Form 10-QSB for the quarterly period ended March 31,
1996, is incorporated by reference
4 (i) The instrument(s) defining the rights of holders of equity
securities of the Registrant are the By-Laws listed at 3(ii)
above.
21 List of Subsidiaries
27 Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
MINDEN BANCSHARES, INC.
(Registrant)
March 27, 1998 Jack E. Byrd, Jr.
Director,
President and Chief
Executive Officer
Pursuant to requirements of the Securities Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated:
Harry E. McInnis, Jr. S. Douglas Madden
Director and Director
Chairman of the Board March 27, 1998
March 27, 1998
Don D. Moore R. Thad Andress
Director and Vice Chairman Director
of the Board March 27, 1998
March 27, 1998
John W. Montgomery Don L. Brice
Director Director
Secretary March 27, 1998
March 27, 1998
Joe E. Ratcliff Dr. Edward D. Brown
Director Director
March 27, 1998 March 27, 1998
Howard G. Spillers R. E. Woodard, III
Director Director
March 27, 1998 March 27, 1998
Hal K. Jackson Robert W. Hines, Jr.
Director Vice President and
March 27, 1998 Chief Financial Officer
March 27, 1998
LIST OF SUBSIDIARIES
EXHIBIT 21
Subsidiaries of Minden Bancshares, Inc.
State of
Name Incorporation
Minden Bank & Trust Company Louisiana
Minden Bank & Trust Company, the only subsidiary of Minden Bancshares,
Inc. is a wholly-owned subsidiary.
FINANCIAL DATA SCHEDULE
EXHIBIT 27
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
DECEMBER 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> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<CASH> 17,196
<INT-BEARING-DEPOSITS> 6,036
<FED-FUNDS-SOLD> 4,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 108,414
<INVESTMENTS-CARRYING> 16,502
<INVESTMENTS-MARKET> 16,941
<LOANS> 136,889
<ALLOWANCE> 3,603
<TOTAL-ASSETS> 292,078
<DEPOSITS> 248,183
<SHORT-TERM> 0
<LIABILITIES-OTHER> 10,809
<LONG-TERM> 0
0
0
<COMMON> 775
<OTHER-SE> 30,911
<TOTAL-LIABILITIES-AND-EQUITY> 292,078
<INTEREST-LOAN> 12,353
<INTEREST-INVEST> 6,408
<INTEREST-OTHER> 1,267
<INTEREST-TOTAL> 20,028
<INTEREST-DEPOSIT> 8,419
<INTEREST-EXPENSE> 8,750
<INTEREST-INCOME-NET> 11,278
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 6,278
<INCOME-PRETAX> 7,465
<INCOME-PRE-EXTRAORDINARY> 5,081
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,081
<EPS-PRIMARY> 18.11
<EPS-DILUTED> 18.11
<YIELD-ACTUAL> 4.45
<LOANS-NON> 562
<LOANS-PAST> 587
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 71
<ALLOWANCE-OPEN> 3,306
<CHARGE-OFFS> 315
<RECOVERIES> 359
<ALLOWANCE-CLOSE> 3,603
<ALLOWANCE-DOMESTIC> 3,603
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
