U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OF 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT
For the transition period from___________ to ___________
Commission File No. 0-25546
Mississippi View Holding Company
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 41-1795363
- -------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or jurisdiction) Identification No.)
35 East Broadway, Little Falls, Minnesota 56345-3093
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(address of principal executive offices)
(320) 632-5461
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(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Sections
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
----- ------
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date.
Class: Common Stock, par value $.10 per share
Outstanding shares at February 7, 1997: 818,743
MISSISSIPPI VIEW HOLDING COMPANY
INDEX TO FORM 10-QSB
Page
----
PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements
Consolidated statements of Financial Condition at December 31,
1996 (unaudited) and September 30, 1996 (audited) 2
Consolidated Statements of Income for the three
months ended December 31, 1996 and 1995 (unaudited) 3
Consolidated Statements of Cash Flows for the three months
ended December 31, 1996 and 1995 (unaudited) 4
Notes to Condensed Consolidated Financial
Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Non-Performing and Problem Assets 10
Capital Compliance 11
Liquidity Resources 12
Key Operating Ratios 13
PART II. OTHER INFORMATION
------- -----------------
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Default Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES
EXHIBITS
Page 1
MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
December September
31, 30,
1996 1996
----------- ----------
ASSETS (Unaudited) (Audited)
------ ----------- ----------
Cash and cash equivalents:
Cash and due from banks .................................... $ 213,244 $ 317,777
Interest bearing deposits with banks ....................... 2,684,660 2,265,877
Securities available for sale, at fair value ................. 12,700,706 12,235,145
Securities held to maturity, at amortized cost ............... 8,330,501 9,294,092
FHLB Stock, at cost .......................................... 650,700 650,700
Loans held for sale .......................................... 57,966 178,663
Loans receivable, net of allowance for loan losses of
$876,794 in 1997 and $877,094 in 1996 ...................... 43,799,358 43,070,281
Accrued interest receivable .................................. 476,879 450,327
Premises and equipment, net of depreciation .................. 780,160 788,846
Foreclosed real estate (net of allowance for losses
of $15,700 for 1997 and $15,700 for 1996) .................. -- --
Deferred tax asset (net of valuation allowance) .............. -- 163,903
Other assets ................................................. 634,613 595,208
------------ ------------
Total Assets ........................................... $ 70,328,787 $ 70,010,819
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities:
Demand deposits ............................................ $ 4,257,629 $ 4,471,137
Savings deposits ........................................... 14,548,431 14,087,832
Time deposits .............................................. 37,536,245 37,972,225
------------ ------------
Total deposits 56,342,305 56,531,194
Advances from borrowers for taxes and insurance ........... 50,376 138,530
Deferred tax liability .................................... 431,125 --
Other liabilities.......................................... 469,803 900,850
------------ ------------
Total Liabilities....................................... 57,293,609 57,570,574
Commitments and contingencies
Stockholders' equity:
Serial Preferred Stock, no par value; 5,000,000
shares authorized, no shares issued ...................... -- --
Common Stock, $.10 par value, 10,000,000 shares
authorized; 1,007,992 shares issued; 757,190 and
776,713 outstanding ...................................... 100,799 100,799
Paid in Capital............................................ 7,517,901 7,510,397
Treasury Stock (153,278 and 130,278 shares), at cost....... (1,811,689) (1,536,689)
Retained Earnings, substantially restricted................ 7,289,911 7,116,646
Unearned ESOP shares (64,511 and 66,527 shares) at cost ... (552,378) (566,736)
Unearned Management Stock Bonus Plan shares (33,013 and
34,474 shares), at cost................................... (371,703) (387,412)
Net unrealized gain/(loss) on available for sale securities 862,337 203,240
------------ ------------
Total Stockholders' Equity........................ 13,035,178 12,440,245
------------ ------------
Total Liabilities and Stockholders' Equity ....... $ 70,328,787 $ 70,010,819
============= ============
See Notes to consolidated financial statements.
Page 2
MISSISSIPPI VIEW HOLDING COMPANY
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months
Ended December 31,
--------------------
1996 1995
------- --------
Interest Income:
Loans receivable ..................... $ 942,489 $ 939,475
Securities available for sale ........ 162,547 74,096
Securities held to maturity .......... 187,901 293,227
---------- ----------
Total interest income .............. 1,292,937 1,306,798
Interest Expense:
Demand deposits ...................... 9,973 9,525
Savings deposits ..................... 94,223 77,033
Time deposits ........................ 530,099 535,522
---------- ----------
Total interest expense ............. 634,295 622,080
---------- ----------
Net interest income ................. 658,642 684,718
Provision for loan losses ........... -- --
---------- ----------
Net interest income after
provision for loan loss ....... 658,642 684,718
Noninterest Income:
Other fees and service charges ...... 22,175 2,246
Gain on sale of loans ............... 2,246 59,897
Net gain on sale of real estate owned -- 1,186
Contingency recovery ................ -- 81,023
Other ............................... 13,096 14,267
---------- ----------
Total noninterest income 37,517 158,619
Noninterest Expense:
Compensation and employee benefits .. 225,574 230,904
Occupancy ........................... 21,933 19,716
Deposit insurance premium ........... 38,185 37,456
Data processing ..................... 21,402 18,788
Advertising ......................... 8,086 7,970
Real estate owned expense, net ...... 346 2,810
Other ............................... 123,294 94,266
---------- ----------
Total noninterest expense ... 438,820 411,910
---------- ----------
Income before income taxes ............ 257,339 431,427
Income tax expense .................... 84,074 173,819
---------- ----------
Net income ............................ $ 173,265 $ 257,608
========== ==========
Dividends Declared Per Share .......... $ -- $ --
========== ==========
Primary Earnings Per Share ............ $ 0.22 $ 0.29
========== ==========
See Notes to consolidated financial statements.
Page 3
MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended
December 31,
---------------------------
1996 1995
----------- ------------
OPERATING ACTIVITIES
Interest received on loans and investments .................. $ 1,256,833 $ 1,264,318
Interest paid ............................................... (634,127) (622,300)
Other fees, commissions, and interest received .............. 61,506 57,174
Cash paid to suppliers, employees and others ................ (781,205) (353,926)
Contributions to charities .................................. (3,749) (1,579)
Income taxes paid ........................................... -- (228,360)
Loans originated for sale ................................... (170,400) (265,140)
Proceeds from sale of loans ................................. 231,391 325,656
Net cash provided by (used in) operating activities .... (39,751) 175,843
INVESTING ACTIVITIES
Loans originations and principal payment on loans, net ...... (677,459) (110,282)
Proceeds from maturities of:
Debt securities held to maturity .......................... 1,792,000 2,668,346
Securities available for sale ............................. 468,306 --
Mortgage-backed securities held to maturity ............... 159,990 214,794
Mortgage-backed securities available for sale ............. 164,554 1,837
Proceeds from sale of:
Real estate ............................................... -- 1,186
Purchase of:
Debt securities held to maturity .......................... (988,000) (693,000)
Securities available for sale ............................. -- (1,037,498)
Mortgage-backed securities held to maturity ............... -- (327,531)
Equipment and property improvements ....................... (12,266) (1,504)
Net cash provided by (used in) investing activities ....... 907,125 716,348
FINANCING ACTIVITIES
Net increase (decrease) in demand accounts, passbook accounts
and certificates of deposit accounts ..................... (189,058) (817,186)
Net increase (decrease) in mortgage escrow funds ............ (88,154) (109,536)
Acquisition of treasury stock ............................... (275,000) --
Net increase (decrease) in unearned MSBP shares ............. (912) (458,628)
Net cash provided by (used in) financing activities ....... (553,124) (1,385,350)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .................. 314,250 (493,159)
CASH AND CASH EQUIVALENTS - Beginning of year ..................... 2,583,654 2,837,070
CASH AND CASH EQUIVALENTS - End of period ......................... $ 2,897,904 $ 2,343,911
See Notes to consolidated financial statements.
Page 4
MISSISSIPPI VIEW HOLDING COMPANY
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the Three Months Ended
December 31,
--------------------------
1996 1995
----------- -------------
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net Income ............................................................. $ 173,265 $ 257,608
Adjustments:
Depreciation ......................................................... 20,951 20,943
Federal Home Loan Bank stock dividends ............................... -- (12,800)
Non-cash dividends ................................................... (1,319) (1,286)
ESOP fair value adjustment ........................................... 4,451 4,613
Amortization of ESOP compensation .................................... 14,359 23,016
Amortization of MSBP compensation .................................... 16,622 16,622
Tax benefit of MSBP vesting activities ............................... 3,052 --
Net amortization and accretion of premiums and discounts on securities 993 762
Net (gains) on sale of real estate owned ............................. -- (1,186)
Net loan fees deferred and amortized ................................. 10,334 (4,077)
Net mortgage loan servicing fees deferred and amortized .............. 363 (12,700)
Contingency recovery ................................................. -- (81,023)
(Increase) decrease in:
Loans held for sale ............................................... 58,745 57,974
Accrued interest receivable ....................................... (26,552) (10,217)
Tax refund receivable ............................................. (71,640) --
Deferred tax assets ............................................... 163,903 14,056
Other assets ...................................................... 31,873 14,339
Increase (decrease) in:
Accrued interest payable ............................................. 168 (220)
Accrued income taxes ................................................. (8,272) (73,210)
Other liabilities .................................................... (431,047) (37,371)
---------- ----------
Net cash provided by operating activities ............................ $ (39,751) $ 175,843
========== ==========
SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING AND FINANCING ACTIVITIES
Refinancing of sales of real estate owned .............................. $ -- $ 13,800
Non cash dividends ..................................................... $ 1,319 $ 1,286
Federal Home Loan Bank stock dividend .................................. $ -- $ 12,800
Transfer of debt securities to available for sale from securities
held to maturity .................................................... $ -- $2,449,446
Transfer of loans to held for sale from loans for portfolio ............ $ -- $2,135,339
Contingency Recovery ................................................... $ -- $ 81,023
See Notes to consolidated financial statements.
Page 5
MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 (Unaudited)
Note 1: PRINCIPLES OF CONSOLIDATION The unaudited consolidated financial
statements as of and for the three month period ended December 31, 1996, include
the accounts of Mississippi View Holding Company (the "Company") and its wholly
owned subsidiary Community Federal Savings & Loan Association of Little Falls
(the "Association"). All significant intercompany accounts and transactions have
been eliminated in consolidation.
Note 2: BASIS OF PRESENTATION General: The accompanying unaudited interim
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
instructions per Form 10-QSB. Accordingly, they do not include all information
and disclosures required by generally accepted accounting principles for
complete financial statements. The accompanying consolidated financial
statements do not purport to contain all the necessary financial disclosures
required by generally accepted accounting principles that might otherwise be
necessary in the circumstances and should be read with the fiscal 1996
consolidated financial statements and notes of Mississippi View Holding Company
and Subsidiary included in their annual audit report for the year ended
September 30, 1996.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for fair presentations have been
included. The results of operations for the three month period ended December
31, 1996, are not necessarily indicative of the results that may be expected for
the entire fiscal year or any other period.
Reclassification: Certain items previously reported have been reclassified
to conform with the current period's reporting format.
Page 6
Management's Discussion and Analysis of Financial Condition
for September 30, 1996 and December 31, 1996
General. Total assets of Mississippi View Holding Company, (the "Company")
increased by $317,968 from September 30, 1996, to December 31, 1996. The asset
growth was the net result of increased loans receivable of $608,380 and
increased cash equivalents of $314,250 offset by reduced securities of $498,030
and reduced tax deferred assets of $163,903.
Cash and Cash Equivalents. Cash and cash equivalents consisting of
interest-bearing and noninterest bearing deposits, increased $314,250. Liquidity
increased due to maturing security investments exceeding cash disbursements for
loan originations and deposit withdrawals.
Securities available for sale. Securities available for sale increased
$465,561. Security maturities and principal payments reduced the portfolio by
$971,667. This decrease was offset by an increase in the mark to market value of
these securities of $1,437,228 of which $995,958 was due to an error in the
recorded number of shares of stock of the Federal Home Loan Mortgage Corporation
(FHLMC) owned by the Association. The additional shares issued in a previous
3-for-1 stock split were not recorded which resulted in the amount of stock
owned being understated by 8,792 shares. The market value adjustment had no
effect on net income or earnings per share but did have an effect on certain
balance sheet items and their corresponding ratios. Any future increase or
decrease in the market value of such securities will have a corresponding
positive or negative effect on stockholders' equity.
Securities held to maturity. Debt and mortgage-backed securities held to
maturity decreased $963,591, or 10.37%, from $9,294,092 on September 30, 1996,
to $8,330,501 on December 31, 1996. Net debt securities of $803,972 matured and
mortgage-backed securities decreased $159,619 due to principal amortization.
These funds were used to supplement increased lending activities and deposit
withdrawals.
Loans Held for Sale. Loans held for sale decreased $120,697 from $178,663
(3 loans) on September 30, 1996, to $57,966 (2 loans) on December 31, 1996. This
decrease was the result of seasonal activity. Management's strategy is to sell
in the secondary market lower-yielding fixed rate mortgage loans rather than
maintaining them for portfolio. These loans are pre sold in the secondary market
prior to origination. The balance is the amount sold, yet unfunded as of the
period end.
Loans Receivable, Net. Loans receivable increased $729,077, or 1.69%, from
$43,070,281 on September 30, 1996, to $43,799,358 on December 31, 1996. This
increase was due to new loan originations exceeding principal amortizations and
loan payoffs.
Deferred Tax Asset. Deferred tax asset, net of valuation allowance,
decreased $163,903 during this three month period as a result of a tax deferred
liability being incurred due to the increase in the mark to market value of
available for sale securities.
Other Assets. Other assets increased $39,405, or 6.62%, from $595,208 as of
September 30, 1996, to $634,613 as of December 31, 1996. This increase was a
result of an accrued income tax refund of $71,640 offset by a reduced prepaid
federal deposit insurance premium of $38,185.
Page 7
Advances from Borrowers for Taxes and Insurance. Advances from borrowers
for taxes and insurance decreased $88,154 from $138,530 on September 30, 1996,
to $50,376 on December 31, 1996, due to the cyclical nature of these payments.
Other Liabilities. Other liabilities decreased by $431,047, or 47.85%, from
$900,850 on September 30, 1996, to $469,803 on December 31, 1996. Decreased
liabilities resulted from reduced loan escrow balances for taxes and insurance
of $21,842, payment of the Savings Association Insurance Fund (SAIF) assessment
this quarter of $362,557, and payment of accrued compensation and bonus expenses
after the fiscal year ended of $70,550. These liability decreases were offset by
a five year pledge/commitment of $26,250, of which $20,250 is outstanding at
December 31, 1996, to Unity Family Healthcare/St. Gabriel's Hospital, a local
healthcare/hospital facility, for renovation and expansion.
Stockholders' Equity. Stockholders' equity increased by $594,933, or 4.78%,
from $12,440,245 on September 30, 1996, to $13,035,178 on December 31, 1996.
This increase is the net effect of the following changes in equity: a paid in
capital increase of $7,504 resulting from the fair market value adjustment to
earned and committed to be released Employee Stock Ownership Plan ("ESOP")
shares, net of taxes, and the permanent tax/book benefit resulting from the
vesting of Management Stock Bonus Plan (MSBP) shares; an increase of $14,358 as
a result of accounting for earned ESOP shares; an increase of $15,709 as a
result of accounting for earned MSBP shares; an increase of $659,097 resulting
from market valuation adjustments on available for sale securities (see also
"Securities Available for Sale"); an increase of $173,265 from net operational
income for the three month period just ended; and a decrease of $275,000
resulting from open market purchases of common stock of the Company.
Comparison of Operating Results for the Three Months Ended
December 31, 1996 and 1995
Net Income. Net income decreased $84,343, or 32.74%, for the three months
ended December 31, 1996, when compared to the three months ended December 31,
1995. The reduced earnings was primarily due to decreased noninterest income
primarily due to a gain on sale of loans and a contingency recovery recorded
during the three months ended December 31, 1995, both of which were not present
during the quarter ended December 31, 1996.
Total Interest Income. Interest income decreased $13,861, or 1.061%, from
$1,306,798 for the three month period ended December 31, 1995, to $1,292,937 for
the three month period ended December 31, 1996. Interest income from loans
receivable increased $3,014 due to the increase in the average loan balances
along with lower rates paid on such balances over the period. Available for sale
security investment income increased $88,451 due to the increased average rate
of return of these investments. Held to maturity investment security income
decreased $105,326 due to a decrease in the average balance of such securities
as maturities were not reinvested in such investments.
Total Interest Expense. Interest expense increased $12,215, or 1.96%, for
the comparative three month periods ending December 31, 1995 and 1996. This
increase was due to transfers from a lower rate passbook to a higher rate tiered
passbook.
Page 8
Net Interest Income. Net interest income decreased $26,076, or 3.81%, from
$684,718 for the three months ended December 31, 1995, to $658,642 for the three
month period ended December 31, 1996. This was primarily due to the decreased
interest income from interest earning assets coupled with increased interest
expense from higher deposit rates. Furthermore, the Company's interest rate
spread decreased from 3.12% to 3.03% as the cost of interest-bearing deposits
increased at a faster rate than yields earned on interest-earning assets.
Provision for Loan Losses. The Association currently maintains an allowance
for loan losses based upon management's periodic evaluation of known and
inherent risks in the loan portfolio, the Association's past loss experience,
adverse situations that may affect the borrowers' ability to repay loans,
estimated value of the underlying collateral, and current and expected market
conditions. Provisions for loan losses remained unchanged at $0.00 for the
periods ended December 31, 1995 and 1996. Management's assessment of the loan
portfolio and market conditions determined that no provisions needed to be
recorded at this time. While management maintains its allowance for losses at a
level which it considers to be adequate to provide for potential losses, there
can be no assurances that further additions will not be made to the loss
allowances and that such losses will not exceed the estimated amounts.
Due to the size of the institution and the minimal amount of nonperforming
loans the percentage of nonperforming loans to allowance for loan losses will
seem high. Movement of even one loan into or out of nonperforming status per
reporting period may result in a large percentage change due to the size of the
portfolio.
Noninterest Income. Noninterest income decreased by $121,102, or 76.35%,
during the three month period ended December 31, 1996, as compared to the same
period ended December 31, 1995. This decrease was primarily due to the net gain
on the sale of real estate owned of $1,186, a gain on sale of loans of $57,651
and a contingency recovery of $81,023 recorded during the three months ended
December 31, 1995, all of which were not present during the quarter in December
1996. In addition, other noninterest income reduced $1,711. The decreases were
offset by an increase in other fees and service charges of $19,929.
Noninterest Expense. Noninterest expense increased $26,910, or 6.53%, from
$411,910 to $438,820 during the comparative three month periods ending December
31, 1995 and 1996, respectively. The increased noninterest expense was primarily
the result of the Association's five year pledge/commitment of $26,250 to Unity
Family Healthcare/St. Gabriel's Hospital, the entire amount was expensed during
the period.
Income Tax. Income tax expense decreased $84,343, or 32.74%, from $257,608
for the three month period ended December 31, 1995, to $173,265 for the three
month period ended December 31, 1996, primarily due to decreased earnings.
Page 9
Non-performing and Problem Assets
Non-performing Assets. The following table sets forth information regarding
non-accrual loans, real estate owned, and other repossessed assets, and loans 90
days or more delinquent but on which the Association was accruing interest at
the date indicated. As of the date indicated, the Association had no loans
categorized as trouble debt restructuring within the meaning of SFAS 15.
At December 31,
1996 1995
------ ------
(In Thousands)
Loans accounted for on a non-accrual basis:
Mortgage loans:
Permanent loans secured by 1-4 dwelling units ....... $120 $ 2
All other mortgages .................................. -- --
Non-mortgage loans:
Commercial business loans ........................... 3 --
Consumer loans ...................................... 62 --
------ -------
Total .................................................. 185 2
Accruing loans which are contractually past due 90
days or more:
Mortgage loans:
Construction loans .................................. -- --
Permanent loans secured by 1-4 dwelling units ....... 30 37
All other mortgage loans ............................ -- --
Non-mortgage loans:
Consumer loans ...................................... 45 11
------ -------
Total .................................................. 75 48
------ -------
Total non-accrual and accrual loans .................... 260 50
------ -------
REO (net) .............................................. -- 13
Other non-performing assets ............................ -- --
------ -------
Total non-performing assets ............................ $ 260 $ 63
====== =======
Total non-accrual and accrual loans to net loans ....... 0.59% 0.11%
Total non-accrual and accrual loans to total assets..... 0.37% 0.07%
Total non-performing assets to total assets ............ 0.37% 0.09%
Allowance for loan losses to non-performing loans ...... 336.52% 1778.98%
Interest income that would have been recorded on loans accounted for on a
nonaccrual basis under the original terms of such loans was $6,175 for the three
month period ended December 31, 1996. No interest income on non-accrual loans
was included in income for the three month period ended December 31, 1996.
Page 10
Capital Compliance
The following table sets forth the Association's capital position at
December 31, 1996, as compared to the minimum regulatory capital requirements
imposed on the Association by the Office of Thrift Supervision ("OTS") at that
date.
At December 31, 1996
-----------------------------
Percentage of
Amount Adjusted Assets
-------------- ---------------
GAAP Capital ............................... $ 11,503,760 16.36%
============== =====
Tangible Capital: (1)
Regulatory Requirement .................. $ 1,041,611 1.50%
Actual Capital .......................... 10,638,190 15.32%
-------------- -----
Excess ............................... $ 9,596,579 13.82%
============== =====
Core Capital: (1)
Regulatory Requirement .................. $ 2,083,223 3.00%
Actual Capital .......................... 10,638,190 15.32%
-------------- -----
Excess ............................... $ 8,554,967 12.32%
============== =====
Risk-Based Capital: (2)
Regulatory Requirement .................. $ 2,723,336 8.00%
Actual Capital .......................... 11,066,733 32.51%
Excess ............................... $ 8,343,397 24.51%
============== =====
(1) Regulatory capital reflects modifications from GAAP capital due to
valuation adjustments for available for sale securities and
unallowable mortgage servicing rights.
(2) Based on risk weighted assets of $34,041,699.
Page 11
Liquidity Resources
The Association is required to maintain minimum levels of liquid assets as
defined by the OTS regulations. The OTS minimum required liquidity ratio is 5%
and the minimum short term liquidity is 1%. At December 31, 1996, the
Association's total liquidity was 24.95%. Short term liquidity at December 31,
1996, was 16.15%. Both levels were well in excess of regulation requirements.
The Association adjusts its liquidity levels in order to meet funding needs for
deposit outflows, payment of real estate taxes from escrow accounts on mortgage
loans, loan funding commitments, and repayment of borrowings, when applicable.
The Association adjusts it liquidity level as appropriate to meet its
asset/liability objectives.
The primary sources of funds are deposits, amortization and prepayments of
loans and mortgage-backed securities, maturity of investments, and funds
provided from operations. As an alternative to supplement liquidity needs, the
Association has the ability to borrow from the Federal Home Loan Bank of Des
Moines. Scheduled loan amortization and maturing investment securities are a
relatively predictable source of funds, however, deposit flow and loan
prepayments are greatly influenced by, among other things, market interest
rates, economic conditions and competition. The Association's liquidity,
represented by cash, cash equivalents, securities (held to maturity and
available for sale), is a product of its operating, investing, and financing
activities.
Impact of Inflation and Changing Prices
The unaudited consolidated financial statements of the Company and notes
thereto, presented elsewhere herein, have been prepared in accordance with GAAP,
which requires the measurement of financial position and operating results in
terms of historical dollars without considering the change in the relative
purchasing power of money over time due to inflation. The impact of inflation is
reflected in the increased cost of the Company's operations. Unlike most
industrial companies, nearly all the assets and liabilities of the Company are
financial. As a result, interest rates have a greater impact on the Company's
performance than do the general levels of inflation. Interest rates do not
necessarily move in the same direction or to the same extent as the prices of
goods and services.
Page 12
Key Operating Ratios
The table below sets forth certain performance ratios of the Company for the
periods indicated.
At or for the Three Months
Ended December 31,
---------------------------
1996 (1) 1995 (1)
---------- ----------
Performance Ratios:
Return on average assets (net income divided by average
total assets) ........................................... 1.01% 1.49%
Return on average equity (net income divided by average
equity) ................................................. 5.65% 7.46%
Average interest earning assets to average interest bearing
liabilities ............................................. 123.03% 125.38%
Net interest rate spread ................................... 3.03% 3.12%
Net yield on average interest-earning assets ............... 3.90% 4.06%
Net interest income after provision for loan losses to total
other expenses .......................................... 150.09% 166.23%
Capital Ratios:
Book value per share (2) ................................... 15.25 13.60
Average equity to average assets ratio (average equity
divided by average total assets) ........................ 17.80% 20.04%
Stockholders' equity to assets at period end ............... 18.53% 20.07%
(1) The ratios for the three month period are annualized.
(2) Based upon shares outstanding at December 31, 1996 and 1995, of
854,714 and 1,007,992 respectively.
Page 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities
Not Applicable
Item 3. Default Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
On January 22, 1997, the Company declared a cash dividend of $0.08 per
share payable to stockholders of record on February 3, 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - Exhibit 11 - Statement re Computation of Per Share
Earnings.
- Exhibit 27 - Financial Data Schedule (only included in
electronic filing)
(b) Reports on Form 8-K - None
Page 14
MISSISSIPPI VIEW HOLDING COMPANY
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 thereunto duly authorized.
Mississippi View Holding Company
Date: 02-10-97 By: /s/ Thomas J. Leiferman
-------------- --------------------------
Thomas J. Leiferman
President and Chief Executive Officer
(Principal Executive Officer)
Date: 02-10-97 By: /s/ Larry D. Hartwig
-------------- ---------------------------
Larry D. Hartwig
Treasurer/Controller
(Principal Accounting and Financial
Officer)