UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED JUNE 30, 1995
Commission file number 2-90033
ASSUMPTION BANCSHARES, INC.
(Exact name of registrant specified in its charter)
Louisiana
(State or other jurisdiction of incorporation or organization)
72-0121470
(I.R.S. Employer Identification No.)
P.O. Box 398
110 Franklin Street
Napoleonville, Louisiana
(Address of principal executive office)
70390
(Zip code)
(504) 369-7269
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
Number of shares outstanding as of June 30, 1995:
160,000 Common Shares
ASSUMPTION BANCSHARES, INC.
Condensed Consolidated Statements of Condition
June 30, 1995 and December 31, 1994
June 30, December 31,
Assets 1995 1994
________________ _______________
(Unaudited)
Cash and due from banks $ 4,680,892 $ 5,646,119
Federal funds sold 3,250,000 4,800,000
________________ _______________
Cash and cash equivalents 7,930,892 10,446,119
Interest-bearing deposits 99,000 99,000
Securities:
Held-to-maturity (market values
of $26,970,000 and $23,765,000
at June 30, 1995 and
December 31, 1994, respectively) 26,753,680 25,509,568
Available-for-sale (amortized cost of
$12,441,874 and $18,002,372 at June 30,
1995 and December 31, 1994,
respectively) 12,267,283 17,166,810
Loans 52,940,073 50,575,872
Less allowance for possible loan losses 1,091,725 1,103,823
________________ _______________
Net loans 51,848,348 49,472,049
Other real estate 132,330 187,243
Bank premises and equipment, net 2,243,322 2,052,931
Accrued interest receivable 792,303 819,816
Other assets 550,430 672,006
________________ _______________
$ 102,617,588 106,425,542
================ ===============
Liabilities and Stockholders' Equity
_____________________________________
Deposits:
Noninterest-bearing demand 11,263,821 11,419,962
NOW accounts 17,364,197 21,559,771
Money market accounts 10,309,654 11,186,172
Savings and IRA accounts 23,282,849 23,604,166
Certificates and other time deposits
$100,000 and over 3,329,465 3,648,964
Other certificates of deposit 27,718,995 26,833,732
________________ _______________
93,268,981 98,252,767
Accrued interest payable 278,910 193,474
Other liabilities and accrued expenses 186,175 63,584
________________ _______________
Total liabilities 93,734,066 98,509,825
________________ _______________
Stockholders' equity:
Common stock 800,000 800,000
Paid-in capital 450,000 450,000
Retained earnings 7,746,927 7,217,554
Net unrealized loss on securities (113,405) (551,837)
________________ _______________
Total stockholders' equity 8,883,522 7,915,717
________________ _______________
$ 102,617,588 106,425,542
================ ===============
See accompanying note to condensed consolidated financial statements.
ASSUMPTION BANCSHARES, INC.
Condensed Consolidated Statements of Income
(Unaudited)
Three months and six months ended June 30, 1995 and 1994
Three months ended Six months ended
___________________ __________________
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
_____ _____ _____ _____
Interest income:
Interest and fees on loans $ 1,175,775 1,031,879 2,282,115 2,013,513
Interest on investment securities:
Taxable 477,604 565,916 990,602 1,145,442
Exempt from federal income taxes 176,943 112,635 337,133 193,551
Interest on federal funds sold 44,245 47,473 117,944 110,446
Interest on deposits with banks 1,481 1,159 3,515 2,157
____________ ____________ ___________ ___________
Total interest income 1,876,048 1,759,062 3,731,309 3,465,109
Interest expense on deposits 777,341 624,588 1,518,426 1,275,735
____________ ____________ ___________ ___________
Net interest income 1,098,707 1,134,474 2,212,883 2,189,374
Provision for possible loan losses 9,000 10,000 18,000 40,000
____________ ____________ ___________ ___________
Net interest income after
provision for possible
loan losses 1,089,707 1,124,474 2,194,883 2,149,374
Other income 124,029 132,877 274,797 264,586
Other expenses (860,212) (941,265) (1,782,657)(1,743,500)
____________ ____________ ___________ ___________
Income before income taxes 353,524 316,086 687,023 670,460
Income tax expense 84,000 98,000 157,650 171,411
____________ ____________ ___________ ___________
Net income $ 269,524 218,086 529,373 499,049
============ ============ =========== ===========
Per share data:
Net income $ 1.68 1.37 3.31 3.12
====== ==== ==== =====
Number of shares used in computation 160,000 160,000 160,000 160,000
======= ======= ======= =======
See accompanying note to condensed consolidated financial statements.
ASSUMPTION BANCSHARES, INC.
Condensed Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
Six months ended June 30, 1995 and 1994
Net
unrealized Total
Common Paid-in Retained gain (loss) stockholders'
stock capital earnings on securities equity
___________ ___________ ____________ _______________ _____________
Balances at
December 31, 1993 $ 800,000 450,000 6,411,335 271,185 7,932,520
Net income for six
months ended
June 30, 1994 - - 499,049 - 499,049
Change in net unrealized
loss on securities - - - (585,912) (585,912)
___________ ___________ ____________ _______________ _____________
Balances at
June 30, 1994 $ 800,000 450,000 6,910,384 (314,727) 7,845,657
=========== =========== ============ =============== =============
Balances at
December 31, 1994 800,000 450,000 7,217,554 (551,837) 7,915,717
Net income for six
months ended
June 30, 1995 - - 529,373 - 529,373
Change in net unrealized
gain on securities - - - 438,432 438,432
___________ ___________ ____________ _______________ _____________
Balances at
June 30, 1995 $ 800,000 450,000 7,746,927 (113,405) 8,883,522
=========== =========== ============ =============== =============
See accompanying note to condensed consolidated financial statements.
ASSUMPTION BANCSHARES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six months ended June 30, 1995 and 1994
1995 1994
____________ ____________
Cash flows from operating activities:
Net income $ 529,373 499,049
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 101,725 99,900
Provision for possible loan losses 18,000 40,000
Net (gain) loss on sale of securities
available-for-sale (2,964) 14,211
Write down of other real estate - 63,554
Decrease in accrued interest receivable 27,513 25,402
Increase (decrease) in accrued interest payable 85,436 (40,450)
Increase in other assets and other liabilities 21,072 46,821
____________ ____________
Net cash provided by operating activities 780,155 748,487
____________ ____________
Cash flows from investing activities:
Proceeds from sales of securities available-
for-sale 5,215,291 9,501,466
Maturities of and principal payments on
securities held-to-maturity 1,079,048 3,827,062
Purchases of securities available-for-sale (489,531) (159,989)
Maturities of and principal payments on
securities available-for-sale 828,258 2,211,644
Purchases of securities held-to-maturity (2,323,160)(11,388,793)
Loans originated, net of principal collected (2,394,299) (2,525,298)
Proceeds from sales of other assets acquired
in settlement of loans 64,913 -
Capital expenditures (292,116) (348,048)
____________ ____________
Net cash provided by investing activities 1,688,404 1,118,044
____________ ___________
Cash flows from financing activities:
Net decrease in demand deposits, NOW accounts,
money market accounts and savings accounts (5,549,550) (2,254,550)
Net increase (decrease) of certificates of deposit
and other time deposits 565,764 (582,024)
____________ ___________
Net cash used in financing activities (4,983,786) (2,836,574)
____________ ___________
Net decrease in cash and cash equivalents (2,515,227) (970,043)
Cash and cash equivalents at beginning of period 10,446,119 11,650,432
____________ ___________
Cash and cash equivalents at end of period $ 7,930,892 10,680,389
============ ===========
Supplemental disclosures:
Interest paid $ 1,432,990 1,316,385
============ ===========
Income taxes paid $ 95,000 210,000
============ ===========
See accompanying note to condensed consolidated financial statements.
ASSUMPTION BANCSHARES, INC.
Note to Condensed Consolidated Financial Statements
Six months ended June 30, 1995 and 1994
The condensed consolidated financial statements reflect all adjustments
which are, in the opinion of management, necessary for a fair
presentation of financial position and results of operations for the
interim periods presented. All adjustments are of a normal recurring
nature.
Cash and Cash Equivalents
_________________________
For purposes of the condensed consolidated statements of cash flows,
cash and cash equivalents represent cash and due from banks and federal
funds sold.
Securities
___________
The Bank accounts for its investments in accordance with the provisions
of Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities" (SFAS No. 115).
Under Statement 115, the Bank classifies its securities in one of three
categories: trading, available-for-sale, or held-to-maturity. Trading
securities are bought and held principally for the purpose of selling
them in the near future. Held-to-maturity securities are those
securities in which the Bank has the ability and intent to hold the
security until maturity. All other securities not included in trading
or held-to-maturity are classified as available-for-sale.
Trading and available-for-sale securities are recorded at fair value.
Held-to-maturity securities are recorded at amortized cost, adjusted
for the amortization or accretion of premiums or discounts. Unrealized
holding gains and losses on trading securities are included in
earnings. Unrealized holding gains and losses, net of the related tax
effect, on the available-for-sale securities are excluded from earnings
and are reported as a separate component of stockholders' equity until
realized. Transfers of securities between categories are recorded at
fair value at the date of transfer. Unrealized holding gains and
losses are recognized in earnings for transfers into trading
securities. Unrealized holding gains or losses associated with
transfers of securities from held-to-maturity to available-for sale are
recorded as a separate component of stockholders' equity. The
unrealized holding gains or losses included in the separate component
of equity for securities transferred from available-for-sale to held-
to-maturity are maintained and amortized into earnings over the
remaining life of the security as an adjustment to yield in a manner
consistent with the amortization or accretion of premium or discount on
the associated security.
A decline in the market value of any available-for-sale or held-to-
maturity security below cost that is deemed other than temporary
results in a charge to earnings resulting in the establishment of a new
cost basis for the security.
Premiums and discounts are amortized or accreted over the life of the
related held-to-maturity security as an adjustment to yield using the
effective interest method. Interest income is recognized when earned.
Realized gains and losses for securities classified as available-for-
sale and held-to-maturity are included in earnings and are derived
using the specific identification method for determining the cost of
securities sold.
Earnings per share
__________________
Earnings per share have been computed on the basis of the weighted
average number of shares outstanding.
Reclassification
________________
Certain reclassifications were made to the condensed consolidated
statements of cash flows of prior periods to conform with the 1995
presentation.
Change in Accounting Principles - Accounting by Creditors for
Impairment of a Loan
During the first quarter of 1995, the Bank adopted Statement of
Financial Accounting Standard No. 114, Accounting by Creditors for
Impairment of a Loan (SFAS No. 114) and Statement of Financial
Accounting Standards No. 118, Accounting by Creditors for Impairment of
a Loan - Income Recognition and Disclosures (SFAS No. 118). Pursuant
to SFAS No. 114 and SFAS No. 118, a loan is considered to be impaired
when it is probable that a creditor will be unable to collect principal
and interest amounts due according to the contractual terms of the loan
agreement. When a loan is impaired, the measurement of its impairment
can be determined in one of three ways, as follows: (1) the present
value of the expected cash flows of the loan discounted at the loan's
original effective interest rate, (2) the observable market price of
the impaired loan, or (3) the fair value of the collateral of a
collateral-dependent loan. The amount by which the recorded investment
in the loan exceeds the measure of the impaired loan is recognized by
recording a valuation allowance with a corresponding charge to the
provision for possible credit losses. The effect of adopting SFAS 114
and SFAS 118 on the Bank's financial condition and results of
operations was immaterial.
At June 30, 1995, the recorded investment in loans that is considered
to be impaired under SFAS 114 was $631,000, all of which were on
nonaccrual, for which the related allowance for possible credit losses
was $163,000. The average recorded investment in impaired loans during
the first six months of 1995 was approximately $689,000 and the Bank
recognized no interest income on those impaired loans in the first six
months of 1995.
ASSUMPTION BANCSHARES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
______________________
Net interest income for the six months ended June 30, 1995 was
comparable to amounts for the six-month period ended June 30, 1994.
The Bank's net interest margins were 4.09% and 4.08%, at June 30,
1995 and 1994, respectively.
The provision for loan losses as of June 30, 1995 was $18,000
compared to $40,000 for the first six months of 1994. This lower
provision is due to a falling level of charge-offs experienced by
the Bank. Additionally, the Bank's allowance for loan losses as a
percentage of gross loans has remained consistent at 2.06% and 2.18%
at June 30, 1995 and December 31, 1994, respectively. Management
evaluates the adequacy of the allowance for loan losses on an
ongoing basis and believes, based on its analysis, that the
allowance is adequate to absorb losses relating to these and other
credits in the portfolio.
Changes in the total allowance for loan losses for the six months
ended June 30, 1995 and 1994 were as follows:
1995 1994
_______ _______
Balance at beginning of period $ 1,103,823 1,129,774
Charge-offs (52,612) (135,017)
Recoveries 22,514 12,707
_____________ ______________
Net charge-offs (30,098) (122,310)
Provision for loan losses 18,000 40,000
_____________ ______________
Balance at end of period $ 1,091,725 1,047,464
============= ==============
Other expenses at June 30, 1995 totaled $1,782,657 which is slightly
higher than the $1,743,500 for the first six months of 1994. The
increase in expenses is due primarily to the additional expenditures
on advertising and consulting fees during the first six months of
1995. Other income at June 30, 1995 totaled $274,797 which is
comparable to $264,586 for the first six months of 1994.
The provision for income taxes is based on management's estimate of
the expected effective tax rate for the entire year.
Liquidity and Capital Resources
________________________________
Fluctuating interest rates and competitive forces in the financial
services industry have intensified the need for management of and
matching maturities of various assets and liabilities. This process
involves maintaining liquidity and controlling interest rate
sensitivity. The goal of liquidity management is to ensure funds
are available for customer needs. Interest rate sensitivity
management attempts to match shifts in earning asset yields with
interest paying liability rates.
ASSUMPTION BANCSHARES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Securities, comprised of U. S. Treasuries, obligations of states and
municipalities and government guaranteed mortgage-backed securities,
represented 38% and 40% of total assets at June 30, 1995 and
December 31, 1994, respectively. The securities portfolio is
managed with the primary objective of generating interest income
while maintaining an appropriate level of asset liquidity and
controlling the Bank's net interest rate risk position.
As of June 30, 1995, management has classified securities with an
aggregate amortized cost of $12,441,874 and a market value of
$12,267,283 as available-for-sale.
The market value of the securities portfolio is 101% of book value
at June 30, 1995, compared to 99% at December 31, 1994. Management
does not anticipate any significant effect on future earnings,
liquidity or capital resources as a result of the amounts of
unrealized gains or unrealized losses in the securities portfolio.
Net earnings for the first six months of 1995 of $529,373 increased
the Bank's stockholders' equity, while the unrealized losses on
securities classified as available-for-sale decreased $438,432, from
an unrealized loss of $551,837 to an unrealized loss of $113,405.
Stockholders' equity increased $967,805 since December 31, 1994 as a
result of these changes. Management is not aware of any
recommendations by regulatory authorities or other matters which are
reasonably likely to have a material effect on the Bank's capital
resources, liquidity or operations.
PART II
Items 1 through 5 are not applicable.
Item 6. Exhibits and Reports on Form 8-K. No Form 8-K was required
to be filed during the quarter ended June 30, 1995.
SIGNATURE
__________
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
/s/ Joseph H. Montero
____________________________
Joseph H. Montero, President,
Chief Executive Officer and
Chief Accounting Officer
Date: August 11, 1995