Ponchatoula Homestead Savings, F.A.
STATEMENTS OF FINANCIAL CONDITION
As of June 30, 1998 and December 31, 1997
ASSETS
(UNAUDITED) (AUDITED)
June 30, December 31,
1998 1997
-------- --------
(In Thousands)
Cash and Cash Equivalents ........................ $ 2,227 $ 609
Interest-bearing Deposits in Other Institutions .. 12,704 645
Securities:
Investment Securities Available
for Sale (Amortized Cost of
$2.3 million and $2.6 million) ........... 2,305 2,605
Mortgage-Backed Securities
Available for Sale (Amortized
Cost of $13.2 million and $14.3 million) . 13,215 14,261
Mortgage-Backed Securities
Held to Maturity (Fair Value of
$10.6 million and $10.4 million) ......... 10,594 10,301
Federal Home Loan Bank Stock, at Cost ....... 1,187 584
-------- --------
Total Securities ......................... 27,301 27,751
Loans Held for Sale .............................. 634 1,414
Loans Receivable ................................. 38,031 28,033
Leases Receivable ................................ 284 301
-------- --------
Total Loans and Leases Receivable ........ 38,315 28,334
Less: Allowance for Loan and Lease Losses .. (270) (265)
-------- --------
Net Loans and Leases Receivable .......... 38,045 28,069
Premises and Equipment, Net ...................... 558 545
Accrued Interest Receivable ...................... 457 420
Other Assets ..................................... 272 127
-------- --------
Total Assets ............................. $ 82,198 $ 59,580
======== ========
1
LIABILITIES AND STOCKHOLDERS' EQUITY
(UNAUDITED) (AUDITED)
June 30, December 31,
1998 1997
-------- --------
(In Thousands)
Deposits ......................................... $ 52,662 $ 42,111
Advances from Borrowers for Taxes and
Insurance ................................... 37 32
Advances from Federal Home
Loan Bank ................................... 23,428 11,500
Income Taxes Payable ............................. 89 162
Other Liabilities ................................ 57 40
-------- --------
Total Liabilities ........................ 76,273 53,845
Stockholders' Equity:
Common Stock - $.10 Par Value;
8,000,000 Shares Authorized, 606,479
Shares Issued and Outstanding in 1998
606,345 in 1997 .......................... 61 61
Paid-in Capital in Excess of Par ............ 2,200 2,017
Retained Earnings - Substantially Restricted 3,700 3,734
Unrealized Gain (Loss) on Securities
Available for Sale, Net .................. 4 (35)
-------- --------
5,965 5,777
Common Stock Acquired by Recognition Plans .. (40) (42)
-------- --------
Total Stockholders' Equity ............... 5,925 5,735
-------- --------
Total Liabilities and Stockholders'
Equity ............................... $ 82,198 $ 59,580
======== ========
2
Ponchatoula Homestead Savings, F.A.
STATEMENTS OF INCOME
for the three and six months ended June 30, 1998 and 1997
(UNAUDITED) (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30,
1998 1997 1998 1997
------- ------- ------- -------
(In Thousands) (In Thousands)
Interest Income:
Loans and Leases ............................ $ 727 $ 596 1,390 $ 1,188
Mortgage-Backed Securities .................. 365 413 738 793
Investment Securities ....................... 44 46 88 90
Other ....................................... 34 25 46 41
------- ------- ------- -------
Total Interest Income .................... 1,170 1,080 2,262 2,112
Interest Expense:
Deposits .................................... 467 494 930 1,001
Borrowings .................................. 253 131 414 265
------- ------- ------- -------
Total Interest Expense ................... 720 625 1,344 1,266
------- ------- ------- -------
Net Interest Income ...................... 450 455 918 846
Provision for (Recovery of) Loan and Lease
Losses ...................................... 15 0 16 (16)
------- ------- ------- -------
Net Interest Income After Provision for
(Recovery of) Loan and Lease Losses .. 435 455 902 862
------- ------- ------- -------
Noninterest Income:
Gain on Sale of Loans ....................... 20 36 82 80
Loan Fees and Service Charges ............... 97 45 158 94
Other Income ................................ 19 6 26 12
------- ------- ------- -------
Total Noninterest Income ................. 136 87 266 186
(UNAUDITED) (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30,
1998 1997 1998 1997
------- ------- ------- -------
(In Thousands) (In Thousands)
Noninterest Expense:
Compensation and Benefits ................... 243 250 453 443
Occupancy and Equipment Expense ............. 37 35 77 71
Federal Insurance Premium ................... 4 0 11 1
Net Real Estate Owned Expense ............... 0 (2) 0 1
Other ....................................... 166 122 312 240
------- ------- ------- -------
Total Noninterest Expense ................ 450 405 853 756
------- ------- ------- -------
Income Before Provision for Income
Taxes ................................ 121 137 315 292
Income Taxes ..................................... 41 47 107 99
------- ------- ------- -------
Net Income ............................... $ 80 $ 90 208 $ 193
======= ======= ======= =======
Per Share:
Earnings Per Common Share ................... 0.13 0.15 0.34 0.32
======= ======= ======= =======
Earnings Per Common Share - Assuming Dilution 0.13 0.15 0.34 0.32
======= ======= ======= =======
Cash Dividends Declared ..................... 0.20 0.17 0.40 0.33
======= ======= ======= =======
3
Ponchatoula Homestead Savings, F.A.
STATEMENTS OF STOCKHOLDERS' EQUITY
for the six months ended June 30, 1998 and 1997
(UNAUDITED) (UNAUDITED)
June 30, June 30,
1998 1997
------- -------
(In Thousands)
Common Stock:
Balance - Beginning and End of Period ....... $ 61 $ 61
======= =======
Paid-in Capital in Excess of Par:
Balance - Beginning of Period ............... $ 2,017 $ 1,698
Exercise of Stock Options ................ 1 --
Dividends Declared and Waived
by Holding Company ................... 182 151
------- -------
Balance - End of Period ..................... $ 2,200 $ 1,849
======= =======
Retained Earnings:
Balance - Beginning of Period ............... $ 3,734 $ 3,844
Net Income ............................... 208 193
Cash Dividends Declared and Paid ......... (60) (50)
Dividends Declared and Waived
by Holding Company ................... (182) (151)
------- -------
Balance - End of Period ..................... $ 3,700 $ 3,836
======= =======
Unrealized Gain (Loss) on Securities
Available for Sale, Net:
Balance - Beginning of Period ............... $ (35) $ (101)
Net Change in Unrealized Gain (Loss) ..... 39 9
------- -------
Balance - End of Period ..................... $ 4 $ (92)
======= =======
Director & Management Recognition Plans
Balance - Beginning of Period ............... $ (42) (57)
Shares of Common Stock Earned ............ 2 6
Balance - End of Period ..................... $ (40) $ (51)
======= =======
4
Ponchatoula Homestead Savings, F.A.
STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1998 and 1997
(UNAUDITED)
June 30
-----------------------
1998 1997
-------- --------
Cash Flows From Operating Activities:
Net Income .......................................................... $ 208 $ 193
Adjustments to Reconcile Net Income
to Net Cash Provided by (Used in) Operating
Activities:
Depreciation ................................................. 16 13
Provision for (Recovery of)
for Loan and Lease Losses ................................ 16 (16)
Net Amortization of Premiums on Securities ................... 41 31
Stock Dividends on Federal Home
Loan Bank Stock .......................................... (22) (15)
Net (Increase) Decrease in Loans
Held for Sale ............................................ 780 1,553
Change in Assets and Liabilities
(Increase) Decrease in Accrued
Interest Receivable ................................... (37) 40
(Increase) Decrease in Other
Assets ................................................ (145) (22)
Increase (Decrease) in Income
Taxes Payable ......................................... (73) 0
Increase (Decrease) in Other
Liabilities ........................................... 17 66
-------- --------
Net Cash Provided by (Used in) Operating Activities 801 1,843
Cash Flows From Investing Activities:
Purchases of Property and Equipment ................................. (29) (15)
Maturities of Investment Securities ................................. 600 600
Purchases of Investment Securities .................................. (300) (700)
Maturities of Mortgage-Backed Securities ............................ 2,557 2,185
Proceeds from Call of Maturites of Mortgage-Backed Securities ....... -- 349
Purchases of Mortgage-Backed
Securities ....................................................... (1,786) (1,199)
Proceeds from Sale of Real Estate Owned ............................. -- 6
Purchase of Real Estate Owned ....................................... -- (1)
Net (Increase) Decrease in Loans and Leases
Receivable ....................................................... (10,011) (1,172)
-------- --------
Net Cash Provided by (Used in) Investing Activities (8,969) 53
5
(UNAUDITED)
June 30
-----------------------
1998 1997
-------- --------
Cash Flows From Financing Activities:
Net Increase (Decrease) in Money Market Accounts,
NOW Accounts and Savings Accounts ................................ 11,363 (173)
Net Increase (Decrease) in Certificates
of Deposit ....................................................... (812) (157)
Proceeds from (Repayment of) Federal Home
Loan Bank Advances ............................................... 11,928 (500)
Increase (Decrease) in Advances from
Borrowers for Taxes and Insurance ................................ 5 (12)
Dividends Paid on Common Stock ...................................... (60) (50)
Purchase of Federal Home Loan Bank Stock ............................ (581) --
MRP Shares Issued ................................................... 2 6
-------- --------
Net Cash Provided by (Used In)
Financing Activities ......................... 21,845 (886)
-------- --------
Net Increase (Decrease) in Cash and
Cash Equivalents .................................................... 13,677 1,010
Cash and Cash Equivalents -
Beginning of Period ................................................. 1,254 1,298
-------- --------
Cash and Cash Equivalents -
End of Period ....................................................... $ 14,931 $ 2,308
======== ========
Supplemental Disclosures of Cash flow
Information:
Cash Payments for:
Interest Paid to Depositors .................................. $ 930 $ 1,002
======== ========
Interest Paid on Borrowings .................................. $ 414 $ 265
======== ========
Income Taxes ................................................. $ 78 $ 265
======== ========
Supplemental Schedules of Noncash
Investing and Financing Activities:
Real Estate Acquired in Settle-
ment of Loans and Leases ..................................... $ -- $ 59
======== ========
Increase (Decrease) in Unrealized Gain (Loss)
on Securities Available for Sale ............................. $ 39 $ 14
======== ========
(Increase) Decrease in Deferred Tax
Effect on Unrealized Gain (Loss) on Securities
Available for Sale ........................................... $ (13) $ (5)
======== ========
6
Ponchatoula Homestead Savings, F.A.
Notes to Financial Statements
(Unaudited)
June 30, 1998 and 1997
Note 1 - Summary of Significant Accounting Policies -
The accounting principles followed by Ponchatoula Homestead Savings,
F.A. are those which are generally practiced within the savings and loan
industry. The methods of applying those principles conform with generally
accepted accounting principles and have been applied on a consistent basis.
The accompanying unaudited financial statements were prepared in
accordance with instructions for Form 10-QSB and, therefore do not include
information or footnotes necessary for a complete presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles. However, all adjustments (consisting only of
normal recurring accruals) which, in the opinion of management, are necessary
for a fair presentation of the financial statements have been included.
Comprehensive Income
The Financial Accounting Standards Board issued Statement No. 130
"Reporting Comprehensive Income", which becomes effective for fiscal years
beginning after December 15, 1997. This statement establishes standards for
reporting and display of comprehensive income and its components which are
revenues, expenses, gains, and losses that under GAAP are included in
comprehensive income but excluded from net income. Ponchatoula adopted this
statement in 1998. The only component of comprehensive income included in the
financial statements was an unrealized gain (loss) on securities available for
sale, which was immaterial for all periods presented.
Note 2 - Dividends and Earnings Per Share -
Ponchatoula declared quarterly dividends of $.20 for the first and
second quarters of 1998. The Mutual Holding Company waived receipt of dividends
declared on all shares owned; the amounts waived have been recorded by
Ponchatoula as additional paid-in capital. Total dividends paid to stockholders
other than the Mutual Holding Company in the first six months of 1998 was
$61,000 or $.40 per share. Under Federal regulations, Ponchatoula may not
declare or pay a cash dividend on its capital stock if the effect thereof would
cause Ponchatoula's regulatory capital to be reduced below the amount required
for liquidity.
Earnings per common share are computed by dividing net income by the
number of shares of common stock outstanding, which is 606479 for the six month
period ended June 30, 1998. Earnings per common share assuming dilution, are
computed by dividing net income by the number of shares of common stock
outstanding plus the effect of diluted securities, which was 617940 for the six
month period ended June 30, 1998.
Note 3 - Stock Option and Management Recognition Plans -
1996 Stock Incentive Plan
This program was designed to attract and retain qualified personnel in key
positions, provide key employees with a proprietary interest in Ponchatoula as
an incentive to contribute to the success of Ponchatoula and reward key
employees for outstanding performance. An aggregate of 10,782 shares of
authorized but unissued Common Stock of Ponchatoula was reserved for issuance
under the Plan, which is equal to 7.5% of Common Stock issued to the public in
connection with the formation of the mutual holding company ("the offering").
The exercise price of each option equals the market price of Ponchatoula's stock
on the date of grant and an option's maximum term is 10 years. Options are
granted and vested at the discretion of the Compensation Committee. Ninety
percent of the options were granted on July 10, 1996. At December 31, 1997,
shares available for grant under this plan
7
amounted to 1,449 shares. There were 134 options exercised during the first six
months of 1998
1996 Directors' Stock Option Plan
In order to attract and retain qualified directors for Ponchatoula, the
Board of Directors and stockholders of Ponchatoula have adopted the 1996
Directors' Stock Option Plan. An aggregate of 3,594 shares of authorized but
unissued Common Stock of Ponchatoula was reserved for issuance under the
Directors' Stock Option Plan, which is equal to 2.5% of the Common Stock of
Ponchatoula issued in the offering. The exercise price of each option equals the
market price of Ponchatoula's stock on the date of grant and an option's maximum
term is 10 years. Ninety percent of the options were granted on the date the
Plan was approved by the stockholders of Ponchatoula, which was April 10, 1996.
The options become exercisable after six months from the grant date.
1996 Management Recognition Plan for Officers
The objective of this plan is to enable Ponchatoula to provide officers
and key employees with a proprietary interest in Ponchatoula as compensation for
their contributions to the Association and as an incentive to contribute to
Ponchatoula's future success. An aggregate of 4,312 shares of authorized Common
Stock of Ponchatoula was issued to the Management Recognition Plan for Officers,
which is equal to 3.0% of the Common Stock of Ponchatoula issued in the
offering. The awards are allocated at the discretion of the Committee. Shares
vest at the rate of 20% on each annual anniversary date.
1996 Management Recognition Plan for Directors
The objective of this plan is to enable Ponchatoula to provide non-employee
directors with a proprietary interest in Ponchatoula as compensation for their
contributions to Ponchatoula and as an incentive to contribute to Ponchatoula's
future success. An aggregate of 1,434 shares of authorized Common Stock of
Ponchatoula was issued to the Management Recognition Plan for Directors, which
is equal to 1.0% of the Common Stock of Ponchatoula issued in the offering.
Ninety percent of the awards were granted on the date the Plan was approved by
the stockholders of Ponchatoula, which was April 10, 1996. The remaining 144
shares were granted April 10, 1997. Shares vest at the rate of 20% on each
annual anniversary date.
Note 4 - The Conversion -
On February 5, 1998, Ponchatoula Homestead Savings, F. A. (The
"Association") incorporated Homestead Bancorp, Inc. (The "Company") to
facilitate the conversion of Homestead Mutual Holding Company (the "MHC") from
mutual to stock form (the "Conversion"). In connection with the Conversion, the
Company offered its common stock to the depositors and borrowers of the
Association as of specified dates, to an employee stock ownership plan and to
members of the general public. Upon consummation of the Conversion on July 17,
1998, the MHC merged into the Association, the Association then merged with an
interim subsidiary of the Company (with the Association as the surviving
entity), all of the Association's outstanding common stock (other than shares
held by the MHC, which were cancelled) was exchanged for common stock of the
Company, and the Company became the holding company for the Association and
issued shares of common stock to the general public.
The Company filed a Form SB-2 with the Securities and Exchange
Commission ("SEC") on April 2, 1998, which as amended was declared effective by
the SEC on May 14, 1998. The Association filed a Form AC with the Office of
Thrift Supervision ("OTS") on April 2, 1998. The Form AC and related offering
and proxy materials, as amended, were conditionally approved by the OTS by
letters dated May 14, 1998. The Company also filed an Application H-(e) 1-S with
the OTS on April 17, 1998, which was conditionally approved by the OTS by letter
dated May 26, 1998. The members of the MHC and the stockholders of the
Association approved the Plan at special meetings held on July 1, 1998, and the
subscription and community offerings closed on June 23, 1998.
The Company sold 1,119,543 shares of common stock in the subscription
offering at a price of $10.00 per share, for aggregate gross proceeds of
$11,195,430. In addition, a total of 358,402 shares of common stock were
8
issued by the Company in exchange for all of the 152,635 shares of common stock
of the Association outstanding prior to consummation of the Conversion
(excluding the 456,240 shares held by the MHC, which were cancelled), based upon
an exchange ratio of 2.34810 shares of Company common stock for each share of
Association common stock.
Current regulations allow Ponchatoula to pay dividends on its stock
after the conversion if its regulatory capital would not thereby be reduced
below the amount then required for the Liquidation Account. Also, capital
distribution regulations limit Ponchatoula's ability to make capital
distributions which include dividends, stock redemptions or repurchases,
cash-out mergers, interest payments on certain convertible debt, and other
transactions charged to the capital account based on their capital level and
supervisory condition. Federal regulations also preclude any repurchase of the
stock of Ponchatoula or its holding company for six years after the conversion,
except for repurchases of qualifying shares of a director and repurchases
pursuant to an offer made on a pro-rate basis to all stockholders and with prior
approval of the Office of Thrift Supervision or pursuant to an open-market stock
repurchase program that complies with certain regulatory criteria. Ponchatoula
has retained the services of both a marketing firm and legal counsel for the
specific purpose of implementing the Plan. Costs relating to the conversion will
be deferred and, upon conversion, such costs and any additional costs will be
charged against the proceeds from the sale of stock.
9
Ponchatoula Homestead Savings, F.A.
Managements Discussion and Analysis
Of Financial Condition and Results of Operations
June 30, 1998
General
Ponchatoula's results of operation depend primarily on its net interest
income, which is the difference between interest income on interest-earning
assets and interest expense on interest bearing liabilities. Ponchatoula's
principle interest-earning assets are loans and leases, mortgage-backed
securities and investment securities. Ponchatoula's results of operations also
are affected by the provision for losses on loans and leases; the level of its
other income, including loan fees and service charges, federal insurance
premiums, net real estate owned expense and miscellaneous other expenses; as
well as its income tax expense.
Changes in Financial Condition
At June 30, 1998, Ponchatoula's total assets, deposits and equity
amounted to $82.2 million, $52.7 million, and $5.9 million respectively compared
to $59.6 million, $42.1 million, and $5.7 million respectively at December 31,
1997. The increase in total assets of 22.6 million or 37.9% was due primarily to
an increase of $10 million in the net loan and lease portfolio. The increase of
35.5% in net loan and lease portfolio was due to new loan originations exceeding
new loan sales and repayment. Interest-bearing deposits in other institutions
increased $12.1 million during the first six months to $12.7 million. The
increase in interest-bearing deposits in other institutions, was due primarily
to deposits made in the institution to purchase stock offered for sale in the
conversion.
Ponchatoula's short term borrowing from the Federal Home Loan Bank
decreased during the first six months of 1998 by 1 million or 8.7%. Ponchatoula
uses the proceeds from short term borrowing to finance the purchase of
mortgage-backed securities. Ponchatoula's long term borrowing from the Federal
Home Loan Bank increased during the first six months of 1998 by $13 million.
Ponchatoula uses the proceeds from long term borrowing to fund long term fixed
rate mortgages. Deposits with Ponchatoula have increased 10.6 million or 25.1%.
The increase in deposits was due primarily to deposits made in the institution
to purchase stock offered for sale in the conversion. The equity of Ponchatoula
increased $190,000 or 3.3% in the first six months of 1998, due to net income of
$208,000 combined with a increase in unrealized gain on available for sale
securities of $39,000 offset by dividends paid out of $60,000.
Capital
As of June 30, 1998, Ponchatoula's unaudited regulatory capital
exceeded all minimum capital requirements as indicated in the following table:
Unaudited Regulatory Capital
----------------------------
Tier 1
Core Risk-Based
Capital % Capital %
------- ------ --------- --------
GAAP Capital ............... $ 5,925 $ 5,925
Adjustments:
Unrealized Gain on
Securities Available
for Sale ............... (4) (4)
General Valuation
Reserves .............. -- 250
Regulatory Capital ......... 5,921 7.20% 6,171 19.72%
Minimum Capital Requirements 3,288 4.0 2,503 8.0
Excess Regulatory Capital .. $ 2,633 3.20% $ 3,668 11.72%
10
Liquidity
Ponchatoula is required under applicable federal regulations to
maintain specific levels of "liquid" investments in qualifying types of United
States Government, federal agency and other investments having maturities of
five years or less. Current regulations require that a Savings institution
maintain liquid assets of not less than 5% of its average daily balance of net
withdrawable shares.
Results of Operations
Net income for the first six months of 1998 was $208,000 compared to
$193,000 for the same period of 1997. The increase in net income of $15,000 or
7.8%, was primarily due to an increase in net interest income after provision
for recovery of loan and lease losses of $40,000 or 4.6%, combined with an
increase in non-interest income of $80,000 or 43%, offset by an increase in
non-interest expense of $97,000 or 12.8%, and an increase of $8,000 or 8.1% in
income tax expense. The increase in non-interest income is due to an increase in
loan fees, due to an increase in the volume of loans closed. The increase in
total non-interest expense was attributable to an increase of $10,000
compensation expense combined with an increase of $60,000 in other non-interest
expense. The increase in other non-interest expense is attributable to the
increased loan volume. Net income for the three months ended June 30, 1998 was
$80,000 compared to $90,000 for the same period of 1997. The decrease in net
income of $10,000 or 11.1%, was primarily due to a decrease in net interest
income after provision for recovery of loan and lease losses of $20,000 or 4.4%,
combined with an increase in non-interest expense of $45,000 or 11.1%, offset by
an increase in non-interest income of $49,000 or 56.3%. The increase in
non-interest income is due to an increase in loan fees, due to an increase in
the volume of loans closed. The increase in total non-interest expense was
attributable to an increase of $44,000 in other non-interest expense, offset by
a decrease of $7,000 in compensation expense. The increase in other non-interest
expense is attributable to the increased loan volume.
Net Interest Income
The primary source of earnings for Ponchatoula is net interest income;
the difference between income generated from interest-earning assets less
interest expense on interest-bearing liabilities. The primary factors that
affect interest income are changes in the volume and type of interest-earning
assets and interest-bearing liabilities, along with changes in market rates. Net
interest income for the first six months of 1998 was $918,000 an increase of
$72,000 or 8.5% over the same period of 1997. This increase in net interest
income was primarily attributable to an increase in interest income of $150,000
or 7.1%, offset by an increase in interest expense of $78,000 or 6.2% over the
same period of 1997. The increase in interest income was due to an increase in
interest received from Ponchatoula's loan and lease portfolio, offset by a
decrease in interest earned on mortgage-backed securities. The increase in
interest expense was due to a decrease in interest paid on deposit accounts,
offset by an increase in interest paid on Federal Home Loan Bank Advances. Net
interest income for the three months ended June 30, 1998 was $450,000 a decrease
of $5,000 or 1.1% over the same period of 1997. This decrease in net interest
income was primarily attributable to an increase in interest expense of $95,000
or 15.2%, offset by an increase in interest income of $90,000 or 8.3% over the
same period of 1997. The increase in interest income was due to an increase in
interest received from Ponchatoula's loan and lease portfolio, offset by a
decrease in interest earned on mortgage-backed securities. The increase in
interest expense was due to a decrease in interest paid on deposit accounts,
offset by an increase in interest paid on Federal Home Loan Bank Advances.
Interest rate spread is the yield of interest-earning assets minus the costs of
interest-bearing liabilities. The interest rate spread for the six months ended
June 30. 1998 was 2.64% as compared to 2.57% for the same period in 1997.
The table of Average Balance Sheets and Interest Rate Analysis for the
six months ended June 30, 1998 and 1997 on page 13, and the corresponding table
of Interest Differentials on page 14, detail the effect of a change in average
balances and the change in interest yield and interest cost have on net interest
income for the respective periods.
11
Nonperforming Assets
Nonperforming assets include non-accrual loans and leases and real
estate owned. Loans are considered non-accrual when the principal or interest
becomes 90 days past due or when there is uncertainty about the repayment of the
principal and interest in accordance with the terms of the loans. Non-accrual
loans at June 30, 1998 were $226,000 compared to $164,000 at June 30, 1997. The
percentage of non-accrual loans and leases to total loan and leases at June 30,
1998 and June 30, 1997 is 0.60%.
Real estate owned is properties held for sale acquired through
foreclosure or negotiated settlements of debt. At June 30, 1998 the Association
had no real estate owned, compared to $146,000 at June 30, 1997. Nonperforming
assets at June 30, 1998 and June 30, 1997 were 0.27% of total assets.
12
Ponchatoula Homestead Savings, F.A.
AVERAGE BALANCE SHEETS AND INTEREST RATE ANALYSIS for the six
months ended June 30, 1998 and 1997
Six Months Ended Six Months Ended
June 30, 1998 June 30, 1997
---------------------------------- ---------------------------------
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST RATE BALANCE INTEREST RATE
---------------------------------- ---------------------------------
(In Thousands) (In Thousands) (In Thousands) (In Thousands)
Interest - Earning Assets:
Loans and Leases Receivable $32,200 1,390 8.63% $27,981 1,188 8.50%
Mortgage - Backed Securities 23,786 738 6.21% 25,822 793 6.14%
Investment Securities 3,306 88 5.32% 2,984 90 6.03%
Other Interest - Earning Assets 1,433 46 6.42% 1,363 41 6.02%
---------------------------------- ---------------------------------
Total Interest - Earning Assets $60,725 2,262 7.45% $58,150 2,112 7.26%
Noninterest - Earning Assets 1,519 1,685
------- -------
Total Assets $62,244 $59,835
======= =======
Interest - Bearing Liabilities:
Deposits $42,085 930 4.42% $44,228 1,001 4.53%
Federal Home Loan Bank Advances 13,921 414 5.94% 9,727 265 5.45%
---------------------------------- ---------------------------------
Total Interest-bearing Liabilities $56,006 1,344 4.80% $53,955 1,266 4.69%
Noninterest - Bearing Liabilities 373 252
------- -------
Total Liabilities $56,379 $54,207
======= =======
Retained Earnings $ 5,865 $ 5,628
======= =======
Total Liabilities and Retained Earnings $62,244 $59,835
======= =======
Net Interest Income; Interest Rate Spread $ 918 2.65% $ 846 2.57%
================== ==================
Net Interest Margin as a % of
Total Earning Assets 3.02% 2.91%
==== ====
13
Ponchatoula Homestead Savings, F.A.
INTEREST DIFFERENTIALS
for the six months ended June 30, 1998 and 1997
June 30, 1998 VS June 30, 1997
------------------------------
CHANGE DUE TO
------------- TOTAL
VOLUME RATE CHANGE
----- ----- -----
(In Thousands)
Interest - Earning Assets:
Loans and Lease Receivable .......... $ 183 $ 19 $ 202
Mortgage-Backed Securities .......... (63) 8 (55)
Investment Securities ............... 9 (11) (2)
Other Interest-Earning assets ....... 2 3 5
----- ----- -----
Total Interest Income ........... $ 131 $ 19 $ 150
Interest - Bearing Liabilities:
Deposits ............................ $ (48) $ (23) $ (71)
Federal Home Loan Bank Advances ..... 123 26 149
----- ----- -----
Total Interest Expense .......... $ 75 $ 3 $ 78
Increase (Decrease) in Interest Differential $ 56 $ 16 $ 72
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