U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY
PERIOD ENDED JUNE 30, 1999
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
TO
Commission file number 000-21658
MINDEN BANCSHARES, INC.
(Exact name of small business issuer as specified in its charter)
Louisiana 72-0980704
(State or other jurisdiction of (IRS Employer Identification No.)
Incorporation or organization)
401 Main Street, Minden, Louisiana 71055
(Address of principal executive offices) (Zip Code)
(318) 377-4283
(Issuer's telephone number)
Check whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
280,583 as of July 30, 1999
Transitional Small Business Disclosure Format (Check one):
Yes No X
Page 1 of 30 Pages
Exhibit Index - 27
FORM 10-QSB
INDEX
PART I Page
Item 1. Financial Statements - Minden Bancshares,
Inc. and Subsidiary
Consolidated Balance Sheets as of
June 30, 1999 and December 31, 1998 4
Consolidated Statements of Income for
the Three Months and Six Months
Ended June 30, 1999 and 1998 5
Consolidated Statements of Comprehensive
Income for the Three Months and Six
Months Ended June 30, 1999 and 1998 6
Consolidated Statements of Cash Flows
for the Six Months ended June 30, 1999,
and 1998 7
Notes to Consolidated Financial 8-10
Statements
Item 2. Management's Discussion and Analysis 11-26
PART II
Item 4. Submission of Matters to a Vote
of Security Holders 27
Item 5. Other Information 27
Item 6. Exhibits and Reports on Form 8-K 28
PART I - Financial Information
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<S> <C> <C>
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
June December
1999 1998
-------- --------
ASSETS
-------------------------------------------(in thousands, except per share data)
Cash and Cash Equivalents:
Cash and Due From Banks $13,100 $15,856
Federal Funds Sold 8,500 12,000
--------- ---------
Total 21,600 27,856
--------- ---------
Securities:
Held to Maturity 18,332 18,191
Available for Sale 121,010 132,437
--------- ---------
Total 139,342 150,628
--------- ---------
Federal Reserve Bank and Federal Home Loan Bank Stock 1,616 1,533
Loans, Less Allowance for Loan Losses of $3,305 and $3,392 150,085 136,928
Accrued Interest Receivable 2,787 2,595
Bank Premises and Equipment 4,608 4,167
Real Estate Owned Other Than Bank Premises 183 116
Intangible assets 3,147 3,281
Other Assets 1,450 1,271
--------- ---------
Total Assets $324,818 $328,375
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------------------
Liabilities:
-----------
Deposits:
Noninterest Bearing $42,150 $47,603
Interest Bearing 232,808 232,768
--------- ---------
Total Deposits 274,958 280,371
Securities Sold Under Repurchase Agreement 10,241 9,933
Accrued Interest Payable 1,114 1,227
Other Liabilities 822 730
--------- ---------
Total Liabilities 287,135 292,261
--------- ---------
Stockholders' Equity:
--------------------
Common Stock, par value $2.50 per share; 500,000
shares authorized; 309,816 shares issued;
280,583 and 280,583 shares outstanding 775 775
Additional Paid-In Capital 11,214 11,214
Undivided Profits 27,608 25,038
Accumulated Other Comprehensive Income (612) 389
Treasury Stock-At Cost (1,302) (1,302)
--------- ---------
Total Stockholders' Equity 37,683 36,114
--------- ---------
Total Liabilities and Stockholders' Equity $324,818 $328,375
========= =========
See accompanying notes.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS & SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
Three Months Six Months
Ended June 30 Ended June 30
================== ===================
1999 1998 1999 1998
-------- -------- -------- ---------
Interest Income: (in thousands, except per share data)
---------------
Interest and Fees on Loans $3,437 $3,345 $6,776 $6,594
Securities:
Held to Maturity (non-taxable) 215 220 436 431
Available for Sale 1,582 1,448 3,358 2,932
Federal Funds Sold 325 286 567 504
Federal Reserve Stock and Other 22 24 44 43
Interest-Bearing Balances with Banks 70 79 137 161
-------- -------- -------- ---------
Total Interest Income 5,651 5,402 11,318 10,665
-------- -------- -------- ---------
Interest Expense:
----------------
Savings and Interest-Bearing Demand Deposits 663 633 1,339 1,218
Time Deposits 1,772 1,628 3,544 3,250
Securities Sold Under Repurchase Agreement and Other 115 122 236 240
-------- -------- -------- ---------
Total Interest Expense 2,550 2,383 5,119 4,708
-------- -------- -------- ---------
Net Interest Income 3,101 3,019 6,199 5,957
Provision for Loan Losses 0 0 0 0
-------- -------- -------- ---------
Net Interest Income After
Provision for Loan Losses 3,101 3,019 6,199 5,957
-------- -------- -------- ---------
Other Income:
------------
Service Charges 446 416 885 798
Insurance Commissions 51 57 91 105
Other Operating Income 186 184 415 356
-------- -------- -------- ---------
Total Other Income 683 657 1,391 1,259
-------- -------- -------- ---------
Operating Expenses:
------------------
Salaries and Employee Benefits 863 822 1,755 1,641
Occupancy Expense 121 118 237 223
Furniture and Equipment Expense 68 72 137 146
Amortization of Intangibles 67 67 134 134
Other Amortization 15 11 21 21
Capital Stock Taxes 121 106 241 212
Stationery, Supplies & Printing 72 49 125 110
Other Operating Expenses 393 440 771 771
-------- -------- -------- ---------
Total Operating Expense 1,720 1,685 3,421 3,258
-------- -------- -------- ---------
Income Before Income Taxes 2,064 1,991 4,169 3,958
Income Taxes 652 625 1,318 1,244
-------- -------- -------- ---------
Net Income $1,412 $1,366 $2,851 $2,714
======== ======== ======== =========
Earnings Per Share $5.03 $4.87 $10.16 $9.67
======== ======== ======== =========
Dividends Declared Per Share $1.00 $0.85 $1.00 $0.85
======== ======== ======== =========
See accompanying notes.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
THREE MONTHS & SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
Three Months Six Months
Ended June 30 Ended June 30
================== ==================
1999 1998 1999 1998
-------- -------- -------- --------
(in thousands, except per share data)
Net Income $1,412 $1,366 $2,851 $2,714
-------- -------- -------- --------
Other Comprehensive Income:
Unrealized Gains (Losses) on Securities:
Unrealized Gains (Losses) Arising during Period (1,267) (32) (1,517) 296
Less: Reclassification Adjustment for Gains
Arising during Period 0 0 0 0
-------- -------- -------- --------
Total Gains (Losses) Arising during Period (1,267) (32) (1,517) 296
Tax (Expense) Benefit 431 11 516 (100)
-------- -------- -------- --------
Other Comprehensive Income (836) (21) (1,001) 196
-------- -------- -------- --------
Comprehensive Income $576 $1,345 $1,850 $2,910
======== ======== ======== ========
See accompanying notes
</TABLE>
<TABLE>
<S> <C> <C>
MINDEN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
====================
1999 1998
--------- ---------
Cash Flows from Operating Activities: (in thousands, except per share data)
------------------------------------
Net Income $2,851 $2,714
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 291 285
(Gain) Loss on Sale of ORE (14) (17)
(Increase) Decrease in Accrued Interest Receivable (192) (158)
(Increase) Decrease in Other Assets 308 (257)
Increase (Decrease) in Accrued Interest Payable (113) 56
Increase (Decrease) in Other Liabilities 92 369
--------- ---------
Total Adjustments 372 278
--------- ---------
Net Cash Provided (Used) by Operating Activities 3,223 2,992
Cash Flows from Investing Activities:
------------------------------------
Proceeds from Sales and Maturities of Investment Securities:
Available for sale 49,058 53,578
Held to maturity 1,685 872
Purchase of Investment Securities:
Available for sale (39,230) (46,902)
Held to maturity (1,826) (2,162)
Proceeds from Sales of ORE 121 151
Purchase of Equipment (724) (86)
Net (Increase) Decrease in Loans (13,177) (6,824)
--------- ---------
Net Cash (Used) by Investing Activities (4,093) (1,373)
Cash Flows from Financing Activities:
------------------------------------
Dividends Paid (281) (238)
Net Increase (Decrease) in Noninterest Bearing Demand
Deposits (5,453) 4,229
Net Increase (Decrease) in Interest-Bearing Deposits 40 6,791
Net Increase (Decrease) in Securities Sold Under
Repurchase Agreements 308 (633)
Purchase of Treasury Stock 0 (2)
Sale of Treasury Stock 0 16
--------- ---------
Net Cash Provided by Financing Activities (5,386) 10,163
--------- ---------
Net Increase (Decrease) in Cash and Cash Equivalents (6,256) 11,782
Cash and Cash Equivalents at Beginning of Period 27,856 21,696
--------- ---------
Cash and Cash Equivalents at End of Period $21,600 $33,478
========= =========
Cash Payments: Interest $5,232 $4,661
========= =========
Income Taxes $1,375 $1,375
========= =========
See accompanying notes.
</TABLE>
MINDEN BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
June 30, 1999
1. Basis of Presentation
The unaudited interim consolidated financial statements of Minden
Bancshares, Inc. and subsidiary are prepared in accordance with generally
accepted accounting principles for interim financial information.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the financial
position and the results of operations for the interim periods presented have
been included.
2. Statement of Cash Flows
For purposes of the Consolidated Statements of Cash Flows, the Company has
defined cash equivalents as those amounts included in the balance sheets
captions Cash and due from banks and Federal funds sold. Cash flows from loans
and deposits of the Company's bank subsidiary are reported on a net basis.
3. Investment Securities
The specific identification method is used to determine realized gains and
losses on sales of investment securities which is included in other operating
income.
Debt securities available for sale are carried at fair market value by
means of valuation account in accordance with SFAS 115. At June 30, 1999, the
fair market value of securities available for sale was $928,000 less than
amortized cost and at December 31, 1998, the fair market value was $589,000
more than amortized cost.
Debt securities held to maturity are carried at cost, adjusted for the
amortization of premiums and accretion of discount. The amortized cost and
estimated market value of securities held to maturity at June 30, 1999 and
December 31, 1998, are as follows:
Securities Held to Maturity
---------------------------
Gross Gross Estimated
Book Unrealized Unrealized Market
Value Gains Losses Value
----- ---------- ---------- --------
June 30, 1999 18,332 202 225 18,309
December 31, 1998 18,191 647 67 18,771
4. Accumulated Other Comprehensive Income
Three Months Ended Three Months Ended
June 30, 1999 June 30, 1998
----------------------- -----------------------
Accumulated Accumulated
Unrealized Other Unrealized Other
Gains (Losses) Comprehensive Gains (Losses) Comprehensive
on Securities Income on Securities Income
-------- --------- -------- -------
Beginning Balance $224 $224 $486 $486
Current-period Change (837) (837) (21) (21)
-------- --------- -------- --------
Ending Balance ($613) ($613) $465 $465
======== ========= ======== ========
Six Months Ended Six Months Ended
June 30, 1999 June 30, 1998
----------------------- -----------------------
Accumulated Accumulated
Unrealized Other Unrealized Other
Gains (Losses) Comprehensive Gains (Losses) Comprehensive
on Securities Income on Securities Income
-------- --------- -------- -------
Beginning Balance $389 $389 $269 $269
Current-period Change (1,002) (1,002) 196 196
-------- --------- -------- --------
Ending Balance ($613) ($613) $465 $465
======== ========= ======== ========
5. Earnings per Common Share
The earnings per common share are computed by dividing the net income for
the interim periods by the weighted average number of common shares outstanding.
The weighted average number of shares outstanding in the second quarter, 1999,
and 1998, were 280,583 and 280,578 respectively, and for the first six months of
1999 and 1998, were 280,583 and 280,556 respectively.
PART I - Financial Information Continued
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
<TABLE>
<S> <C> <C> <C> <C>
MINDEN BANCSHARES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
CONSOLIDATED INCOME SUMMARY
AND SELECTED FINANCIAL DATA
(in thousands, except per share and ratio data)
Three Months Ended Six Months Ended
---------------------- ---------------------
June 30 June 30 June 30 June 30
1999 1998 1999 1998
--------- --------- --------- ----------
Interest income $5,651 $5,402 $11,318 $10,665
Interest expense 2,550 2,383 5,119 4,708
--------- --------- --------- ---------
Net interest income 3,101 3,019 6,199 5,957
Provision for possible loan losses 0 0 0 0
--------- ----------- --------- ----------
Net interest income after provision 3,101 3,019 6,199 5,957
Noninterest income 683 657 1,391 1,259
Noninterest expense 1,720 1,685 3,421 3,258
--------- ----------- --------- ----------
Income before taxes 2,064 1,991 4,169 3,958
Income tax expense 652 625 1,318 1,244
--------- ----------- --------- ----------
Net income $1,412 $1,366 $2,851 $2,714
========= =========== ========= ==========
Earnings per share <F1> $5.03 $4.87 $10.16 $9.67
Dividends declared per share $1.00 $0.85 $1.00 $0.85
Average shares outstanding 280.6 280.6 280.6 280.6
Book value per share $134.30 $122.48 $134.30 $122.48
Selected Quarter End Balances:
Loans $l53,390 $143,436
Deposits 274,958 259,203
Debt 10,241 10,176
Equity 37,683 34,372
Total Assets 324,818 305,576
Selected Average Balances:
Loans 150,438 142,300 146,598 140,165
Deposits 283,112 256,841 284,452 252,953
Debt 9,670 10,279 9,898 10,483
Equity 37,799 33,431 37,320 32,766
Total Assets 332,669 302,362 333,659 297,835
Selected Ratios (%)
Return on average assets 1.70% 1.81% 1.72% 1.84%
Return on average equity 14.98% 16.39% 15.41% 16.70%
Net interest margin (taxable equivalent) 4.08% 4.39% 4.09% 4.42%
Tier 1 risk-based capital 20.86% 19.84%
Total risk based capital 22.12% 21.11%
Tier 1 Leverage 10.67% 10.18%
<F1> Earnings per share is based on the weighted average number
of shares in the respective period
</TABLE>
OVERVIEW
The Company's second quarter 1999 net income totaled $1,412 thousand,
($5.03 per share) up 3 percent from $1,366 thousand ($4.87 per share) in the
second quarter, 1998. For the first six months of 1999, net income was $2,851
thousand ($10.16 per share) up 5 percent from $2,714 thousand ($9.67 per share)
in the first half of 1998.
The return on average assets was 1.70 percent for the second quarter,
1999, a decrease of 6 percent from the second quarter, 1998 of 1.81 percent.
The return on average assets was 1.72 percent for the first six months of 1999,
a 5 percent decrease from 1.84 percent for the same period last year.
The return on average equity was 14.98 percent for the second quarter,
1999, a decrease of 9 percent from the second quarter, 1998 of 16.39 percent.
The return on average equity was 15.41 percent for the first six months of 1999,
a decrease of 8 percent from 16.70 percent in the prior year.
The 1999 second quarter earnings benefitted from a 3 percent increase in
net interest income and a 4 percent increase in noninterest income while
being detrimented by a 2 percent increase in noninterest expense when
compared to the 1998 second quarter. The first six months of 1999 earnings
benefitted from a 4 percent increase in net interest income over the
prior year period and a 10 percent increase in noninterest income while being
detrimented by 5 percent increase in noninterest expense.
Total assets at June 30, 1999 increased to 324,818 thousand, up 6 percent
from a year ago while decreasing 1 percent from December 31, 1998.
RESULTS OF OPERATIONS
<TABLE>
<S> <C> <C> <C> <C>
NET INTEREST INCOME
Second Quarter Six Months
-------------------- --------------------
1999 1998 1999 1998
(in thousands) ========= ========= ========= =========
Total Interest Income $5,651 $5,402 $11,318 $10,665
Total Interest Expense 2,550 2,383 5,119 4,703
--------- --------- --------- ---------
Net Interest Income 3,101 3,019 6,199 5,957
Taxable-Equivalent Adjustment
to Interest Income 83 85 169 166
--------- --------- --------- ---------
Net Interest Income-
Taxable Equivalent Basis <F2> $3,184 $3,104 $6,368 $6,183
========= ========= ========= =========
AVERAGE BALANCES (in thousands):
Interest-Earning Assets <F3> $312,865 $283,584 $313,807 $279,317
========= ========= ========= =========
Interest-Bearing Liabilities $246,547 $222,449 $246,992 $220,329
Interest-Free Funds 66,318 61,135 66,815 58,988
--------- --------- --------- ---------
Total Investable Funds $312,865 $283,584 $313,807 $279,317
========= ========= ========= =========
AVERAGE INTEREST RATES (fully taxable): <F2>
Yield On:
Interest-Earning Assets <F3> 7.35% 7.76% 7.38% 7.82%
Interest-Bearing Liabilities 4.15% 4.30% 4.18% 4.31%
--------- --------- --------- ---------
Spread on Interest-Bearing Funds 3.20% 3.46% 3.20% 3.51%
Contribution of Interest-Free Funds 0.88% 0.93% 0.89% 0.91%
--------- --------- --------- ---------
Net Yield on Interest-Earning Assets 4.08% 4.39% 4.09% 4.42%
========= ========= ========= =========
<F2> Reflects an adjustment to the net interest income amount included in the
Statement of Income to permit comparisons of yields on tax-exempt and
taxable assets.
<F3> Based upon amortized cost of all investment securities. Adjustments to
fair market value for available for sale investment securities amounted to
averages of a positive $23 thousand for the second quarter, 1999, and
$309 thousand positive for the first six months, 1999, as compared to a
positive $588 thousand for the second quarter, 1998, and a positive $591
thousand for the first six months of 1998.
</TABLE>
Net Interest Income
The Company's net interest income for the 1999 second quarter was $3,101
thousand, an increase of 3 percent over $3,019 thousand in the 1998 second
quarter, and an increase of less than 1 percent over $3,097 thousand in the
first quarter, 1999. Net interest income for the first half of 1999 was $6,199
thousand, an increase of 4 percent over the first half, 1998 of $5,957 thousand.
Increases in loan and deposit volume have contributed to the increase in net
interest income for both periods of 1999 over 1998.
Average Interest-Earning Assets
Average interest-earning assets were $312,865 thousand for the 1999
second quarter, $29,281 thousand higher than the 1998 second quarter, an
increase of 10 percent. For the first half of 1999, interest-earning assets
averaged $313,807 thousand, an increase of 12 percent over the prior year of
$279,317 thousand. Average loans increased by $8,138 thousand, during the
second quarter, 1999, over the prior year, and by $6,433 thousand in the first
half, 1999 over the first half, 1998. Average investment securities increased
by $14,327 thousand during the second quarter, 1999 over the prior year and by
$22,114 thousand during the first six months, 1999 over 1998. During the
second quarter, 1999, average Federal funds sold increased by $3,473 thousand
over the prior year and increased by $5,726 thousand in the first half, 1999
over the prior year period. Average interest bearing balances due from banks
increased by $234 thousand in the second quarter, 1999 over the same period
last year and increased by $97 thousand in the first half, 1999 over the
prior year period.
Average Interest-Bearing Liabilities
Average interest-bearing liabilities for the 1999 second quarter were
$246,547 thousand, compared to $222,449 thousand for the same period last year,
an 11 percent increase, and were $246,992 thousand for the first half of 1999
as compared to $220,329 thousand for the prior year, a 12 percent increase.
Average time deposits for the 1999 second quarter were $143,947, an increase
of $18,817 thousand over the same period last year, an increase of 15 percent,
and average time deposits for the first half, 1999 were $143,087 thousand as
compared to $125,098 thousand in the prior year, an increase of 14 percent.
Average savings and interest-bearing demand deposits for the 1999 second
quarter were $92,930 thousand, an increase of $5,890 thousand or 7 percent
over the same period last year, and were $94,007 thousand in the first half,
1999 as compared to $84,748 in the prior year, an increase of 9 percent.
Net Yield on Interest-Earning Assets
The taxable equivalent net yield on interest-earning assets was 4.08
percent in the second quarter of 1999, a decrease of 31 basis points from 4.39
percent in the same period last year and was 4.09 percent in the first half,
1999 as compared to the prior year of 4.42 percent. The major contributing
factors for the decreases have been the increased competitive banking market
for loans and deposits causing decreased rates on loans with deposit rates
having declined at a much slower rate.
Management expects that the net yield on earning assets will remain
constant or increase slightly during the balance of 1999.
PROVISION FOR LOAN LOSSES
The Company has made no provision for loan losses in 1999 or 1998.
Management does not anticipate any provision for loan losses during 1999.
A discussion of the Company's loan portfolio, net charge-off and recoveries,
and allowances for loan losses appears on pages 15-18.
<TABLE>
<S> <C> <C> <C> <C>
OTHER INCOME
First
Second Quarter Six Months
------------------- -------------------
1999 1998 1999 1998
(in thousands) ========= ========= ========= =========
Service Charges $446 $416 $885 $798
Insurance Commissions 51 57 91 105
Other Operating Income 186 184 415 356
--------- --------- --------- ---------
Total Other Income $683 $657 $1,391 $1,259
========= ========= ========= =========
</TABLE>
Other income for the 1999 second quarter was $683 thousand, up $26 thousand
from the same period last year. For the first six months of 1999, other income
was $1,391 thousand, an increase of $132 thousand over the same period last
year.
The increases in other income for both periods of 1999 over 1998 have
resulted primarily from volume increases.
<TABLE>
<S> <C> <C> <C> <C>
OPERATING EXPENSES
First
Second Quarter Six Months
------------------- -------------------
1999 1998 1999 1998
(in thousands) ========= ========= ========= =========
Salaries and Employee Benefits $863 $822 $1,755 $1,641
Occupancy Expense 121 118 237 223
Furniture and Equipment Expense 68 72 137 146
Amortization of Intangibles 67 67 134 134
Other Amortization 15 11 21 21
Capital Stock Taxes 121 106 241 212
Stationery, Supplies & Printing 72 49 125 110
Other Operating Expenses 393 440 771 771
--------- --------- --------- ---------
Total Operating Expenses $1,720 $1,685 $3,421 $3,258
========= ========= ========= =========
</TABLE>
Operating expenses for the 1999 second quarter were $1,720 thousand, up
from $1,685 thousand in the 1998 second quarter, an increase of $35 thousand.
Operating expenses for the first six months of 1999 were $3,421 thousand, an
increase of $163 thousand from $3,258 thousand in the comparable period last
year. The increases in operating expenses in the second quarter and for the
first six months, 1999 as compared to the same periods in the prior year were
due primarily to volume increases and inflation.
Salaries and employee benefits in the 1999 second quarter were $863
thousand, compared to $822 thousand in the same period last year. Salaries
and employee benefits in the 1999 first six months were $1,755 thousand as
compared to $1,641 thousand in the same period last year. The increases for
both periods in 1999 over 1998 were attributable to salary and staffing
increases.
Combined occupancy expense and furniture and equipment expense for the
1999 second quarter were $189 thousand as compared to $190 thousand for the
same period last year. Occupancy expense and furniture and equipment expense
for the 1999 first six months were $374 thousand as compared to $369 thousand
for the same period last year. The small increases in both 1999 periods has
been due primarily to volume changes and inflation.
Of the other operating expense categories shown, the increases in other
amortization for the first three months of 1999 over 1998 was attributable to
amortization of the new computer software. The increases in capital stock
taxes are due to increase in stockholders' equity and increased earnings in
1999 over 1998.
INCOME TAXES
In the 1999 second quarter, the Company recorded income tax expense of
$652 thousand, compared to $625 thousand for the same period last year. In
the 1999 first six months, income tax expense was $1,318 thousand as compared
to $1,244 thousand in the same period last year.
The effective tax rate was 31.6% for the 1999 second quarter as compared
to 31.4% for the same period last year. The effective tax rate was 31.6% for
the first six months of 1999, as compared to 31.4% for the same period last
year. The slightly higher effective tax rate in both periods of 1999, as
compared to the same period last year reflects difference in the composition of
the Company's pre-tax income in both years.
RECENT ACCOUNTING PRONOUNCEMENTS
In June of 1998, the Financial Accounting Standards Board (FASB) issued
FAS 133, Accounting for Derivative Instruments and Hedging, effective for
all fiscal quarters of fiscal years beginning after June 15, 1999. FAS 133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and
for hedging activities. Management does not anticipate any impact by this
FAS upon its financial statements because it does not currently hold any
derivative contracts or engage in any hedging activities and does not
anticipate engaging in any such activities.
In October of 1998, the Financial Accounting Standards Board (FASB)
issued FAS 134, Accounting for Mortgage-Backed Securities Retained after
the Securitization of Mortgage Loans Held for Sale by a Mortgage Banking
Enterprise, effective the first fiscal quarter beginning after December 15,
1998. On the date this Statement is applied, an enterprise may reclassify
mortgage-backed securities and other beneficial interests retained after the
securitization of mortgage loans held for sale from the trading category,
except for those with sales commitments in place. Those securities and
other interests shall be classified based on the entity's ability and intent,
on the date this Statement is initially applied, to hold those investments.
The Company has not been impacted by this Statement because it does not
engage in mortgage banking activities.
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 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 would
identify the areas which may be affected by the "Year 2000," and would address
these issues by making necessary recommendations to the Board of Directors
for approval.
The EDP Steering Committee researched the need to upgrade the Bank's
"Mainframe" computer and software and made recommendations to the Board of
Directors, which approved the acquisition. The installation of the new
computer system was completed in the fourth quarter, 1998. The software
was warranted as "Year 2000 Compliant." Formal testing procedures in
accordance with the vendor's instructions have been concluded. All personal
computers in service by the Bank have been tested, and necessary upgrades
have been ordered, installed and tested. The Bank has expended approximately
$500 thousand in complying with its "Year 2000 Policy" and anticipates that
additional expenditures will not exceed $30 thousand.
In accordance with the Bank's "Year 2000 Policy," all computer systems
and electronic date sensitive devices were tested by the end of the first
quarter, 1999. The Bank did not receive test results until early in the
second quarter, 1999. The Bank accomplished its goals relating to it's
electronic date sensitive devices with the receipt of its test results.
Due to concern by banking regulators regarding the risk to the Bank from
effects to larger loan and deposit customers, service providers, vendors and
other sources, if their computer systems fail due to not being year 2000 com-
pliant, the Bank created a year 2000 task force to assess these risks. The
Bank has contacted its larger commercial accounts, both loan and deposit
customers, regarding the capacity of their computer systems to meet year
2000 compliance and is currently evaluating service providers, vendors
and is attempting to identify other sources which may provide an operating
or financial risk to the Bank.
CREDIT PORTFOLIO
Loan Portfolio
The Company's loans outstanding, totaled $153,390 thousand at June 30, 1999
as compared to $140,320 thousand at December 31, 1998 and $143,436 thousand
at June 30, 1998. The increase in loans has been due to increased loan demand.
The following table sets forth the loan classifications at June 30, 1999,
December 31, 1998 and June 30, 1998:
--------------------------------
June 30, Dec. 31, June 30,
(in thousands) 1999 1998 1998
--------- --------- ---------
Commercial, Financial & Agricultural Loans $39,334 $36,995 $39,563
Construction Loans Secured by Real Estate 5,744 4,868 4,511
Other Loans Secured by Real Estate 82,494 72,390 73,690
Held for Sale 1,208 1,275 1,437
Installment and Single Payment Loans 24,483 24,214 23,681
Other Loans 348 876 830
--------- --------- ---------
Total Loans 153,611 140,618 143,712
Less Unearned Discount 221 298 276
--------- --------- ---------
Total Loans net of Unearned Discount $153,390 $140,320 $143,436
========= ========= =========
Non-performing Assets
The following table sets forth the non-performing assets at June 30, 1999,
December 31, 1998 and June 30, 1998:
----------------------------
June 30, Dec. 31, June 30,
1999 1998 1998
(in thousands) --------- -------- ---------
Non-Accrual (Impaired-Cash Basis) Loans $470 $ 85 $269
Past-Due Loans 1,079 914 1,459
Restructured Loans 0 0 0
------- ------- -------
Total Non-performing Loans 1,549 999 1,728
Other Real Estate Owned 183 116 328
------- ------- -------
Total Non-performing Assets $1,732 $1,115 $2,056
======= ======= =======
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 June 30, 1999 these loans
totaled $320 thousand as compared to $33 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, the anticipated 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 0.31% of total loans at June 30, 1999 and 0.19% of total
loans at June 30, 1998. Interest income on nonaccrual loans which would
have been reported on an accrual basis amounted to approximately $12,000 for
the quarter ended June 30, 1999 as compared to $8,000 for the quarter ended
June 30, 1998 and $18,000 for the six months ended June 30, 1999 and 1998.
Interest income included cash basis interest of $3,000 in the second quarter,
1999 as compared to $4,000 in the second quarter, 1998 and $86,000 in the
first six months, 1999 as compared to $13,000 in the first six months, 1998.
Cash basis interest provided increases of 1 basis point in the yield on
average loans in the second quarter, 1999 as compared to 1 basis point in
the second quarter, 1998 and increases of 23 basis points in the first six
months, 1999 as compared to 2 basis points in the first six months, 1998.
Interest income for both periods, 1999 and 1998 did not include any
interest on restructured loans.
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 evaluated based upon net
realizable 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 6601 Youree
Drive, Shreveport, Louisiana which was closed June 28, 1999. The former branch
was capitalized at its depreciated value of $154 thousand.
Allowance for Loan Losses
The allowance for loan losses is available to absorb potential credit
losses from the entire loan portfolio. The appropriate level of the allowance
is based on analyses of the loan portfolio and reflects an amount which, in
management's judgment, is adequate to provide for potential losses. The
analyses include consideration of such factors as the risk rating of
individual credits, the size and diversity of the portfolio, particularly in
terms of industry, economic and political conditions, prior loss experience
and results of periodic credit reviews of the portfolio. Based upon the
results of these analyses, the allowance for losses is increased, from time to
time, by charges to income to the extent management considers appropriate.
The accompanying table reflects the activity in the allowance for loan
losses for the three month and six month periods ended June 30, 1999, and 1998.
<TABLE>
<S> <C> <C> <C> <C>
Second Quarter First Six Months
------------------- ------------------
1999 1998 1999 1998
(in thousands) ========= ========= ========= ========
Balance at Beginning of Period $3,381 $3,576 $3,392 $3,603
Charge-Offs
Commercial, Financial and Agricultural 27 20 32 20
Real Estate - Construction 0 23 0 23
Real Estate - Mortgage 64 7 64 17
Installment Loans to Individuals 69 90 150 137
--------- --------- ------------------
Total 160 140 246 197
--------- --------- ------------------
Recoveries
Commercial Financial and Agricultural 64 0 97 0
Real Estate - Construction 9 0 9 0
Real Estate - Mortgage 3 61 25 71
Installment Loans to Individuals 8 14 28 34
--------- --------- ------------------
Total 84 75 159 105
--------- --------- ------------------
Net Recoveries (Charge-Offs) (76) (65) (87) (92)
Additions Charged to Operations 0 0 0 0
--------- --------- ------------------
Balance at End of Period $3,305 $3,511 $3,305 $3,511
========= ========= ==================
The following table reflects the allowance coverage ratios at June 30,
1999, December 31, 1998 and June 30, 1998.
June 30, Dec 31, June 30,
For the Quarter Ended: 1999 1998 1998
--------- --------- -----------
Allowance for Loan Losses to:
Loans at Period-End 2.15% 2.41% 2.45%
Average Loans 2.20% 2.39% 2.47%
Non-performing Loans 213.36% 339.54% 203.18%
Non-performing Assets 190.82% 304.22% 170.77%
Total Net Charge-Offs (annualized) to:
Loans at Period-End 0.19% 0.40% 0.18%
Average Loans 0.20% 0.40% 0.18%
Allowance for Loan Losses 9.22% 16.96% 7.43%
</TABLE>
Management deems its allowance for loan losses at June 30, 1999, to be
adequate. The Company considers that it has sufficient reserves to absorb
losses that may currently exist in the portfolio. The Company will continue to
reassess the adequacy of its allowance for loan losses and make provisions
accordingly.
CAPITAL
Total stockholders' equity at June 30, 1999, was $37,683 thousand, up
from $36,114 thousand at December 31, 1998 and $34,372 thousand at June 30,
1998. Stockholders' equity at June 30, 1999, reflects impact of $465
thousand of negative accumulated other comprehensive income.
Risk-Based Capital Ratios
In January, 1989, the Federal Reserve Board ("FRB") issued risk-based
capital guidelines which require banking organizations to maintain certain
ratios of "Qualifying Capital" to "risk-weighted assets." "Qualifying Capital"
is classified into Tier 1 and Tier 2 Capital. Tier 1 Capital applicable to
the Company consists only of common equity. Tier 2 Capital applicable to the
Company consists only of qualifying allowance for loan losses. The amount of
Tier 2 Capital may not exceed Tier 1 Capital. In calculating "risk-weighted
assets," certain risk percentages, as specified by the FRB, are applied to
particular categories of both on- and off-balance sheet assets. Effective
December 31, 1992, the guidelines require that banking organizations maintain
a minimum ratio of Tier 1 Capital to risk-weighted assets of 4% and a minimum
ratio of Tier 1 and Tier 2 Capital ("Total Capital") to risk-weighted assets
of 8% (the "final risk-based guidelines"). At June 30, 1999, the Company's
Tier 1 Capital to risk-weighted assets ratio was 20.86% and the Total Capital
to risk-weighted assets ratio was 22.12%.
Leverage Ratios
The Tier 1 leverage ratio is defined as Tier 1 Capital (as defined under
the risk-based capital guidelines) divided by average total assets (net of
allowance for loan losses). The minimum leverage ratio is 3% for banking
organizations that do not anticipate significant growth and that have well-
diversified risk, excellent asset quality, high liquidity and good earnings.
Other banking organizations are expected to have ratios of at least 4% to 5%,
depending upon their particular condition and growth plans. Higher capital
ratios could be required if warranted by the particular circumstances, or risk
profile, of a given banking organization. The FRB has not advised the Company
of any specific minimum Tier 1 leverage ratio applicable to it.
The table which follows sets forth the Company's Tier 1 and Tier 2
Capital, risk-weighted assets, including off balance sheet items, and the
Company's risk-based capital ratios under the final guidelines as well as
Tier 1 leverage ratios.
Capital and Ratios
June 30, Dec 31, June 30,
1999 1998 1998
(in thousands), except ratios --------- --------- ---------
Tier 1 Capital
Common Stockholders' Equity $35,148 $32,445 $30,493
Tier 2 Capital
Reserve for Possible Loan Losses 2,121 1,982 1,937
--------- --------- ---------
Total Qualifying Capital $37,269 $34,427 $32,430
========= ========= =========
Risk Weighted Assets $168,458 $157,182 $151,011
========= ========= =========
Tier 1 Capital Ratio 20.86% 20.64% 20.19%
Total Capital Ratio 22.12% 21.90% 21.48%
Tier 1 Leverage Ratio 10.67% 10.12% 10.20%
Common Stock Dividends
For the second quarters of 1999 and 1998, the Board of Directors of the
Company declared dividends of $1.00 and $.85 per share respectively. Future
dividend policies will be determined by the Board of Directors in light of
earnings and financial condition of the Company and its subsidiary and other
factors, including applicable governmental regulations and policies.
LIQUIDITY MANAGEMENT
The objective of liquidity management is to ensure the availability of
sufficient cash flows to meet all financial commitments and to capitalize on
investment opportunities. Liquidity management addresses the Company's
ability to meet deposit withdrawals on demand or at contractual maturity, to
service indebtedness and to make new loans and investments as opportunities
arise. The Company monitors and reviews its asset and liability mix on a
routine basis.
The primary sources of liquidity include cash and due from banks, Federal
funds sold and investment securities. Additionally, the bank subsidiary has
the ability to borrow and purchase federal funds on a short term basis from
other financial institutions as a source of liquidity should the need arise.
The loan to deposit ratio averaged 53.14% during the 1999 second quarter
and 55.40% during the 1998 second quarter. Cash on hand and due from banks
averaged $17,856 thousand in the 1999 second quarter and $17,499 thousand in
the 1998 second quarter. Federal Funds sold averaged $27,934 thousand in the
1999 second quarter and $21,461 thousand in the 1998 second quarter.
At June 30, 1999, investment securities at amortized cost, totalled
$141,886 thousand, of which $53,854 thousand or 38% mature or reprice
within one year, $63,439 thousand or 45% mature or reprice within two to
five years, and $24,593 thousand or 17% mature in over five years. The
Company does not anticipate any events which would require liquidity beyond
that which is available from the above referenced sources.
SUPERVISION AND REGULATION
Dividends
Substantially all of the funds used by the Company to pay dividends to
its shareholders are derived from dividends paid to it by its subsidiary bank,
which are subject to certain legal restrictions. Under Louisiana law, state
chartered banks cannot pay dividends in excess of current year earnings plus
undistributed earnings of the prior year without the prior approval of the
Commissioner of Financial Institutions. Under Federal law, dividends by state
chartered banks in excess of current year earnings plus undistributed earnings
of the two prior years would require FRB approval.
In addition to the dividend restrictions described above, the FRB and the
Federal Deposit Insurance Corporation ("FDIC") have authority under the
Financial Institutions Supervisory Act to prohibit or to limit the payment of
dividends by banking organizations they supervise, including the Company and
its bank subsidiary if, in the banking regulators' opinions, payment of a
dividend would constitute an unsafe or unsound practice in light of the
financial condition of the banking organization.
Other
In December, 1991, the Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA") was enacted. This act provided for recapitalization of
the Bank Insurance Fund ("BIF") and the Savings Association Insurance Fund
("SAIF") of which the Bank is a member of both and substantially revised statu-
tory provisions, including capital standards. FDICIA provided insurance rate
structure which provides lower rates for stronger capitalized banks and banks
with higher supervisory ratings. The BIF became fully funded in 1995 and the
SAIF became fully funded in 1996 thereby reducing BIF and SAIF FDIC premiums.
Minden Bank is subject to FDIC insurance assessments. Effective May 1,
1995, the FDIC revised the BIF assessment rates from 0.23% to 0.04% for the
highest rated banks while retaining 0.31% for the weakest banks when the BIF
became fully funded. The BIF rate schedule was reduced to 0.0% for healthiest
banks to 0.27% for the weakest banks effective January 1, 1996. SAIF assess-
ment rates were 0.23% for the healthiest banks to 0.31% for the weakest banks
until October 1, 1996, whereby provisions of the Deposit Insurance Funds Act of
1996 ("Funds") reduced the rates to 0.0% for the healthiest banks to 0.27% for
the weakest Oakar SAIF banks. Also, effective October 1, 1996, under the Funds
Act, a one time assessment was made on all SAIF insured institutions and all
BIF insured banks with Oakar deposits to fully fund the SAIF. The Funds Ace
also provided for separate assessments under BIF and SAIF effective January 1,
1997 for FICO bond servicing. The FICO assessments under BIF were at the annuaL
rate of 0..116% and 0.580% under SAIF for the second quarter, 1999. Minden Bank
has $41,092,307 of deposits in 1999 insured under SAIF as the result of the
acquisition in 1994 of the Minden branch of the failed Oak Tree Federal Savings
Bank, and the 1997 acquisition of First Federal Savings Bank.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MINDEN BANCSHARES, INC. AND SUBSIDIARY
Consolidated Net Interest Income and Average Balances
Three Months Ended June 30, 1999 and 1998
(Thousands)
1999 1998
------------------------------- -------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
--------- -------- ------------ --------- -------- ------------
ASSETS
Interest Bearing Balances Due from Banks $6,280 $70 4.47% $6,046 $79 5.24%
Federal Funds Sold 27,934 325 4.67% 21,461 286 5.35%
Investment Securities <F4> 126,610 1,880 5.96% 112,283 1,753 6.26%
Federal Reserve Bank and
Federal Home Loan Bank Stocks 1,603 22 5.50% 1,494 24 6.58%
Loans 150,438 3,437 9.16% 142,300 3,345 9.43%
--------- -------- --------- --------
Total Interest-
Earning Assets <F4> 312,865 $5,734 7.35% 283,584 $5,487 7.76%
Allowance for Loan Losses (3,396) (3,586)
Cash and Due from Banks 11,576 11,453
Other Assets <F4> 11,610 10,911
--------- ---------
Total Assets $332,655 $302,362
========= =========
LIABILITIES
Savings and Interest-
Bearing Demand $92,930 663 2.86% $87,040 $633 2.92%
Time Deposits 143,947 1,772 4.94% 125,130 1,628 5.22%
--------- -------- --------- --------
Total Interest-
Bearing Deposits 236,877 2,435 4.12% 212,170 2,261 4.27%
Securities Sold Under
Repurchase Agreements 9,670 115 4.77% 10,279 122 4.76%
--------- -------- --------- --------
Total Interest-
Bearing Liabilities 246,547 $2,550 4.15% 222,449 $2,383 4.30%
Demand Deposits 46,235 44,671
Other Liabilities 2,040 1,811
--------- ---------
Total Liabilities 294,822 268,931
--------- ---------
STOCKHOLDERS' EQUITY
Common Stockholders' Equity 37,833 33,431
--------- ---------
Total Liabilities and
Stockholders' Equity <F4> $332,655 $302,362
========= =========
SPREAD ON INTEREST-BEARING FUNDS <F4> 3.20% 3.46%
NET INTEREST INCOME AND NET
YIELD ON INTEREST-EARNING ASSETS <F4> $3,184 4.08% $3,104 4.39%
======== ============ ======== ============
<F4> Based upon amortized cost of investment securities and includes
adjustment to interest income for the tax equivalent adjustment
on tax-exempt securities.
MINDEN BANCSHARES, INC. AND SUBSIDIARY
Consolidated Net Interest Income and Average Balances
Six Months Ended June 30, 1999 and 1998
(Thousands)
1999 1998
------------------------------- -------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
--------- -------- ------------ --------- -------- ------------
ASSETS
Interest Bearing Balances Due from Banks $5,746 $137 4.81% $5,649 $161 5.75%
Federal Funds Sold 24,649 567 4.64% 18,923 504 5.37%
Investment Securities <F5> 135,244 3,964 5.91% 113,130 3,529 6.29%
Federal Reserve Bank and
Federal Home Loan Bank Stocks 1,570 44 5.65% 1,450 43 6.00%
Loans 146,598 6,776 9.32% 140,165 6,594 9.49%
--------- -------- --------- --------
Total Interest-
Earning Assets 313,807 $11,488 7.38% 279,317 $10,831 7.82%
Allowance for Loan Losses (3,404) (3,587)
Cash and Due from Banks 11,558 11,322
Other Assets <F5> 11,494 10,783
--------- ---------
Total Assets $333,455 $297,835
========= =========
LIABILITIES
Savings and Interest-
Bearing Demand $94,007 $1,340 2.87% $84,748 $1,218 2.90%
Time Deposits 143,087 3,544 4.99% 125,098 3,250 5.24%
--------- -------- --------- --------
Total Interest-
Bearing Deposits 237,094 4,884 4.15% 209,846 4,468 4.29%
Securities Sold Under
Repurchase Agreements 9,898 236 4.81% 10,483 240 4.62%
--------- -------- --------- --------
Total Interest-
Bearing Liabilities 246,992 $5,120 4.18% 220,329 $4,708 4.31%
Demand Deposits 47,358 43,107
Other Liabilities 1,940 1,633
--------- ---------
Total Liabilities 296,290 265,069
--------- ---------
STOCKHOLDERS' EQUITY
Common Stockholders' Equity <F5> 37,165 32,766
--------- ---------
Total Liabilities and
Stockholders' Equity $333,455 $297,835
========= =========
SPREAD ON INTEREST-BEARING FUNDS 3.20% 3.51%
NET INTEREST INCOME AND NET
YIELD ON INTEREST-EARNING ASSETS $6,368 4.09% $6,123 4.42%
======== ============ ======== ============
<F5> Based upon amortized cost of investment securities and includes
adjustment to interest income for the tax equivalent adjustment
on tax-exempt securities.
</TABLE>
PART II - Other Information
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The following four items were submitted to a vote at the Annual
Meeting of Shareholders held on April 13, 1999.
(a) Election of Directors
The following fourteen (12) directors were elected to serve until
the 2000 Annual Meeting.
R. Thad Andress James D. Madden
Don L. Brice Harry E. McInnis, Jr.
Dr. Edward D. Brown John W. Montgomery
Jack E. Byrd, Jr. Joe E. Ratcliff
Dr. Gary G. Daniel R. E. Woodard, III
Hal K. Jackson Douglas Madden
There were 216,339 votes cast for the election of all directors with no
more than 363 votes being cast against or abstaining on any director.
(b) The appointment of Heard, McElroy & Vestal as independent
auditors for the Company and its subsidiary for the year ending
December 31, 1998, was ratified by the following vote:
FOR 216,232
AGAINST 101
ABSTAIN 6
ITEM 5. OTHER INFORMATION
On July 16, 1999, the Company entered into a definitive agreement with
Regions Financial Corporation (Regions) which provides for the merger of the
Company into Regions. Regions and the Company issued a joint press release
on July 16, 1999 which describes the terms of the proposed merger. The
press release is included in its entirety at Exhibit 99 of this filing.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11 Computation of earnings per share
(This computation is provided in Note 4 to the
Financial Statements on Page 8 and Page 9 under
Management's Discussion and Analysis)
(1) 99 Other Exhibits(Part II)
Press Release issued jointly by Regions Financial
Corporation and Minden Bancshares, Inc. on July 18,
1999 concerning proposed merger
(2) 27 Financial Data Schedule(Part I)
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
MINDEN BANCSHARES, INC.
August 12, 1999 BY:s/ Jack E. Byrd, Jr.
-----------------------------
Jack E. Byrd, Jr.
President and CEO
August 12, 1999 BY:s/ Robert W. Hines, Jr.
-----------------------------
Robert W. Hines, Jr.
Vice-President and
Chief Financial Officer
(1) Press Release
EXHIBIT 99
July 16, 1999
REGIONS AND MINDEN BANCSHARES TO MERGE
Regions Financial Corporation and Minden Bancshares, Inc. of Minden, Louisiana,
jointly announced that a definitive agreement has been reached that provides
for the merger of Minden Bancshares into Regions.
Under the terms of the agreement, Regions would exchange 8.0 shares of its
common stock for each share of Minden Bancshares' common stock. Based on
Regions' closing stock price of $36.78 on July 15, 1999, the transaction would
be valued at approximately $86.5 million, including outstanding stock options.
The merger, which is anticipated to be accounted for as a purchase, is expected
to be consummated during the fourth quarter of 1999, pending approval of Minden
Bancshares' stockholders and regulatory authorities, completion of due
diligence and other customary conditions of closing. The transaction is
expected to be a tax-free reorganization for federal income tax purposes.
Regions expects to repurchase the 2.3 million shares of its common stock that
would be issued in connection with this transaction. Such repurchases will be
made in the open market from time to time, depending on market conditions.
Minden Bancshares' wholly owned banking subsidiary, Minden Bank & Trust Company,
operates seven offices in Minden, Shreveport and Sarepta in northwestern
Louisiana. At March 31, 1999, Minden Bancshares reported total assets of $332
million, deposits of $283 million and stockholders' equity of $37.4 million.
In 1998 Minden Bancshares reported a return on assets of 1.85%, with a return
on stockholders' equity of 16.85%, based on an 11.00% equity to assets ratio.
Carl E. Jones, Jr., president and chief executive officer of Regions, stated,
"We are very pleased to expand our northwestern Louisiana franchise through
affiliation with Minden Bancshares. Minden Bank & Trust Company is a high-
performing bank and has experienced excellent growth. We look forward to
serving the customers of this fine bank and to working with its directors,
officers, employees and stockholders."
Harry E. McInnis, Jr., chairman of the board of Minden Bancshares, said, "We
are very excited about our proposed affiliation with Regions Financial
Corporation, which is one of the strongest and most respected banking companies
in the country. Regions is a super-community banking organization that has an
outstanding record of' achievement. I am confident that our customers, staff
and stockholders will benefit from the affiliation with Regions."
Jack E. Byrd, Jr., president and chief executive officer of Minden Bancshares,
said, "We are extremely pleased to affiliate with Regions Financial. I know
our customers, employees and stockholders will benefit from affiliation with
a strong, major southern financial institution like Regions. Our customers can
look forward to an expanded product line, increased convenience and additional
services."
Regions Financial Corporation is a bank holding company providing banking
services from 731 offices in Alabama, Arkansas, Florida, Georgia, Louisiana,
South Carolina, Tennessee and Texas. Regions also provides banking-related
services in the fields of mortgage banking, insurance, securities brokerage
and mutual funds. Regions' common stock is traded in the Nasdaq National
Market System under the symbol RGBK.
For additional information, visit Regions' Web site at http://www.regionsbank.
com or contact: Ronald C. Jackson, Senior Vice President and Director of
Investor Relations, Regions Financial Corporation, Telephone 205/326-7374.
(2) Financial Data Schedule
EXHIBIT 27
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JUNE
30, 1999 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 13,100
<INT-BEARING-DEPOSITS> 2,672
<FED-FUNDS-SOLD> 8,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 121,010
<INVESTMENTS-CARRYING> 18,332
<INVESTMENTS-MARKET> 18,309
<LOANS> 153,390
<ALLOWANCE> 3,305
<TOTAL-ASSETS> 324,818
<DEPOSITS> 274,958
<SHORT-TERM> 0
<LIABILITIES-OTHER> 12,177
<LONG-TERM> 0
0
0
<COMMON> 775
<OTHER-SE> 36,908
<TOTAL-LIABILITIES-AND-EQUITY> 324,818
<INTEREST-LOAN> 6,776
<INTEREST-INVEST> 3,838
<INTEREST-OTHER> 704
<INTEREST-TOTAL> 11,318
<INTEREST-DEPOSIT> 4,883
<INTEREST-EXPENSE> 5,119
<INTEREST-INCOME-NET> 6,199
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,421
<INCOME-PRETAX> 4,169
<INCOME-PRE-EXTRAORDINARY> 2,851
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,851
<EPS-BASIC> 10.16
<EPS-DILUTED> 10.16
<YIELD-ACTUAL> 4.09
<LOANS-NON> 470
<LOANS-PAST> 1,079
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 320
<ALLOWANCE-OPEN> 3,392
<CHARGE-OFFS> 246
<RECOVERIES> 159
<ALLOWANCE-CLOSE> 3,305
<ALLOWANCE-DOMESTIC> 3,305
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
