1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE
SECURITIES EXCHANGE AT OF 1934
For the transition period from___________to______________
Commission File Number 0-21165
FIRST ALLEN PARISH BANCORP, INC.
Exact name of Registrant as specified in its Charter)
Delaware 72-1331593
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification Number)
222 South Tenth Street - Oakdale, Louisiana 71463
-------------------------------------------- ----------
(Address of principal executive offices) (zip code)
Registrant's telephone number,including area code:
(318)335-2031
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by section 13 of 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 ( )
Indicate the number of shares outstanding of each of the
issuer's common stock as of the latest practicable date.
Class Outstanding at June 30, 1997
---------------------- ----------------------------
Common Stock, .01 par value 264,506
2
FIRST ALLEN PARISH BANCORP, INC.
TABLE OF CONTENTS
Page
Part I - FINANCIAL INFORMATION
Item 1: Financial Statements
Consolidated statements of financial condition 3
Consolidated statements of income 4-5
Consolidated statements of stockholders' equity 6
Consolidated statements of cash flows 7-10
Notes to consolidated financial statements 11-12
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 13-18
Part II - OTHER INFORMATION 19
Signatures 20
3
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Financial Condition
June 30, 1997 and December 31, 1996
June 30, 1997
(Unaudited) December 31, 1996
------------- -----------------
S>
ASSETS
Cash and cash equivalents
Interest-bearing $ 1,859,818 $ 847,896
Non-interest bearing 383,213 626,409
Mortgage-backed and related securities -
held-to-maturity 12,521,387 13,238,771
Mortgage-backed and related securities -
available-for-sale, estimated market
value 4,381,862 3,946,564
Loans receivable, net 12,885,609 11,937,990
Accrued interest receivable 205,474 206,457
Other receivables 72,308 42,800
Foreclosed real estate 74,856 74,856
Federal Home Loan Bank stock, at cost 259,300 259,200
Premises and equipment, at cost, less
accumulated depreciation 276,039 282,353
Other assets 63,060 26,574
----------- -----------
Total assets $32,982,926 $31,489,870
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $28,246,309 $25,749,999
Advances from Federal Home Loan Bank 1,200,000
Advances by borrowers for taxes
and insurance 30,272 31,854
Federal income taxes:
Current 42,267 2,843
Deferred 127,685 122,265
Accrued liabilities 18,273 44,624
Dividends Payable 37,706
Deferred income 18,356 18,818
---------- ----------
Total liabilities 28,520,868 27,170,403
---------- ----------
STOCKHOLDERS' EQUITY
Serial preferred stock (.01 par value,
100,000 shares authorized, none
issued or outstanding) - -
Common stock (.01 par value, 900,000
shares authorized, 264,506 shares
issued and outstanding) 2,645 2,645
Additional paid-in capital 2,305,338 2,298,842
Retained earnings (substantially
restricted) 2,353,436 2,230,294
Unrealized gain on securities
available-for-sale (5,601) (6,004)
Unearned employee stock ownership
plan (193,760) (206,310)
--------- ---------
Total stockholders' equity 4,462,058 4,319,467
--------- ---------
Total liabilities and stockholders'
equity $32,982,926 $31,489,870
=========== ===========
See accompanying notes to consolidated financial statements.
/TABLE
4
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income
For the three months ended June 30, 1997 and 1996
(Unaudited)
1997 1996
---------- ----------
INTEREST INCOME
Loans receivable:
First mortgage loans $207,230 $212,951
Consumer and other loans 74,218 49,307
Mortgage-backed and related securities 265,793 236,652
Other interest earning assets 25,651 29,828
-------- --------
Total interest income 572,892 528,738
-------- --------
INTEREST EXPENSE
Deposits 302,849 288,902
Borrowed funds 4,197 -
-------- --------
Total interest expense 307,046 288,902
-------- --------
Net interest income 265,846 239,836
PROVISION (RECOVERY) LOAN LOSSES 2,644
-------- --------
Net interest income after recovery from
loan losses 268,490 239,836
-------- --------
NONINTEREST INCOME
Service charges on deposits 45,355 56,510
Insurance commissions earned 254 3,532
Loan origination and servicing fees 9,047 7,361
Net other real estate expenses (151) (225)
Gain on foreclosed real estate 98
Other operating revenues 8,520 4,774
-------- --------
Total noninterest income 63,123 71,952
-------- --------
NONINTEREST EXPENSES
Compensation and employee benefits 103,320 84,871
Occupancy and equipment expenses 18,762 14,115
SAIF deposit insurance premiums 4,209 15,197
Stationery and printing 14,142 13,079
Data processing 14,148 18,180
Other expenses 49,634 35,051
-------- --------
Total noninterest expenses 204,215 180,493
Income before income taxes 127,398 131,295
INCOME TAX EXPENSE 42,187 45,707
-------- --------
NET INCOME $85,211 $85,588
======== ========
Net earnings per common share:
Primary and fully diluted $0.35 -
Weighted average number of shares ======== ========
outstanding Primary and fully diluted 244,404 -
/TABLE
5
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income
For the six months ended June 30, 1997 and 1996
(Unaudited)
1997 1996
------------- -------------
INTEREST INCOME
Loans receivable:
First mortgage loans $436,315 $425,609
Consumer and other loans 121,596 96,713
Mortgage-backed and related securities 528,012 479,333
Other interest earning assets 48,001 50,808
--------- ---------
Total interest income 1,133,924 1,052,463
INTEREST EXPENSE
Deposits 579,983 585,906
Borrowed funds 19,733 -
---------- ---------
Total interest expense 599,716 585,906
--------- ---------
Net interest income 534,208 466,557
PROVISION (RECOVERY) LOAN LOSSES 1,424 9,461
Net interest income after recovery from
loan losses 525,632 476,018
NONINTEREST INCOME --------- ---------
Service charges on deposits 94,068 98,790
Insurance commissions earned 2,969 4,417
Loan origination and servicing fees 18,062 13,497
Net other real estate expenses (363) (281)
Gain on foreclosed real estate 201 86
Other operating revenues 12,694 9,258
--------- ---------
Total noninterest income 127,631 125,767
NONINTEREST EXPENSES
Compensation and employee benefits 202,101 182,006
Occupancy and equipment expenses 34,319 28,878
SAIF deposit insurance premiums 8,470 30,630
Stationery and printing 27,385 27,287
Data processing 29,511 32,990
Other expenses 114,772 90,508
--------- ---------
Total noninterest expenses 416,558 392,299
--------- ---------
Income before income taxes 246,705 209,486
INCOME TAX EXPENSE 83,887 73,166
--------- ---------
NET INCOME $162,818 $136,320
========= =========
Net earnings per common share:
Primary and fully diluted $0.67 -
Weighted average number of shares ========= =========
outstanding Primary and fully diluted 244,404 -
/TABLE
6
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the three months ended June 30, 1997 and 1996
(Unaudited)
1997 1996
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 85,211 $ 85,588
-------- -------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation of premises and equipment 8,962 9,205
Provision for loan losses (2,644) -
Gain on sale of foreclosed real estate (98) -
Premium amortization net of discount
accretion (11,288) 2,785
Deferred income taxes 1,401 2,909
Stock dividend on FHLB Stock (3,877) (3,732)
Changes in assets and liabilities -
(Increase) decrease in accrued
interest receivable (572) (4,890)
(Increase) decrease in other assets (29,161)(119,384)
Decrease in advance payable, Federal
Home Loan Bank - -
Increase in accrued liabilities (25,839) 21,366
Increase (decrease) in current
income taxes payable 8,644 (9,695)
Increase (decrease) in deferred
income (1,400) 1,140
-------- --------
Total adjustments ( 55,872)(100,296)
Net cash provided by (used)
operating activities (29,339) (14,708)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease (increase) in mortgage-backed
and related securities (80,035) (44,932)
Sale of investment securities 3,677 3,732
Purchase of investment securities - -
Net (decrease in loans made to customers (465,433) 15,478
Proceeds from sale of foreclosed real
estate - -
Purchase of property and equipment (4,821) (4,683)
-------- --------
Net cash provided (used) by
investing activities (546,612)(30,405)
------- -------
(continued)
See accompanying notes to consolidated financial statements.
7
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows (continued)
For the three months ended June 30, 1997 and 1996
(Unaudited)
1997 1996
----------- -----------
C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) in demand deposits, NOW
accounts, passbook savings accounts,
and certificates of deposits 916,808 244,392
Net (decrease) in advances by
borrowers for taxes and insurance (3,774) 4,313
----------- -----------
Net cash provided by
financing activities
913,034 248,705
----------- -----------
Net increase in cash and
cash equivalents 395,761 203,592
CASH AND CASH EQUIVALENTS,
beginning of period 1,847,270 2,226,450
---------- -----------
CASH AND CASH EQUIVALENTS,
end of period $2,243,031 $2,430,042
========== ==========
Supplemental Disclosures
Cash paid for:
Interest on deposits, advances, and other
borrowings $ 307,357 $ 288,629
Income taxes 40,649 55,640
- -
Change in unrealized gain (loss) on securities
available for sale (8,429) (2,126)
See accompanying notes to consolidated financial statements.
8
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the six months ended June 30, 1997 and 1996
(Unaudited)
1997 1996
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 162,818 $136,320
--------- --------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation of premises and equipment 17,925 18,147
Provision for loan losses (1,424) (9,461)
Gain on sale of foreclosed real estate (201) (86)
Premium amortization net of discount
accretion 2,616 7,138
Deferred income taxes 5,420 13,101
Stock dividend on FHLB Stock (7,477) (7,532)
Changes in assets and liabilities
(Increase) decrease in accrued
interest receivable 983 2,684
(Increase) decrease in other assets (65,994) (110,127)
Decrease in advance payable, Federal
Home Loan Bank (1,200,000) -
Increase in accrued liabilities (26,351) 11,001
Increase (decrease) in current
income taxes payable 39,424 5,619
Increase (decrease) in deferred
income (462) 229
--------- ---------
Total adjustments (1,235,541) (69,287)
Net cash provided by (used)
operating activities (1,072,723) 67,033
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease (increase) in mortgage-backed
and related securities 294,263 127,074
Sale of investment securities 7,377 7,932
Purchase of investment securities - -
Net (decrease in loans made to customers (943,308) (64,116)
Proceeds from sale of foreclosed real
estate - -
Purchase of property and equipment (11,611) (7,750)
Net cash provided (used) by --------- ---------
investing activities (653,279) (63,140)
--------- ---------
(continued)
See accompanying notes to consolidated financial statements.
9
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows (continued)
For the six months ended June 30, 1997 and 1996
(Unaudited)
1997 1996
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) in demand deposits, NOW
accounts, passbook savings accounts,
and certificates of deposits 2,496,310 944,909
Net (decrease) in advances by
borrowers for taxes and insurance (1,582) (7,635)
--------- ---------
Net cash provided by
financing activities
2,494,728 937,274
--------- ---------
Net increase in cash and
cash equivalents 768,726 1,067,447
CASH AND CASH EQUIVALENTS, 1,474,305 1,362,595
beginning of period --------- ---------
CASH AND CASH EQUIVALENTS, end of period $2,243,031 $2,430,042
========== ==========
Supplemental Disclosures
Cash paid for:
Interest on deposits, advances, and other
borrowings $ 599,716 $ 585,906
Income taxes 40,649 55,640
- -
Change in unrealized gain (loss) on securities
available for sale (611) (11,368)
See accompanying notes to consolidated financial statements.
10
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
(1) First Allen Parish Bancorp, Inc.
--------------------------------
First Allen Parish Bancorp, Inc. (the "Corporation")
was incorporated under the laws of the State of Delaware for the
purpose of becoming the savings and loan holding company of First
Federal Savings and Loan Association of Allen Parish (the
"Association"), in connection with the Association's conversion
from a federally chartered mutual savings association to a
federally chartered stock savings association, pursuant to its
Plan of Conversion. On August 9, 1996, the Corporation commenced
a Subscription and Community Offering of its shares in connection
with the conversion of the Association (the "Offering"). The
Offering was consummated and the Corporation acquired the
Association on September 27, 1996. It should be noted that the
Corporation had no assets prior to the conversion and acquisition
on September 27, 1996.
The accompanying consolidated financial statements as
of and for the three months ended and six months ended June 30,
1997, include the accounts of the Corporation and the
Association.
(2) Employee Stock Ownership Plan (ESOP)
------------------------------------
All employees meeting age and service requirements are
eligible to participate in an ESOP established on January 1,
1996. Contributions made by the Association to the ESOP are
allocated to participants by a formula based on compensation.
Participant benefits become 100 percent vested after five years.
The ESOP purchased 21,160 shares in the Association's
conversions.
(3) Basis of Preparation
--------------------
The accompanying unaudited consolidated financial
statements were prepared in accordance with instructions for Form
10-Q. To the extent that information and footnotes required by
generally accepted accounting principles for complete financial
statements are contained in the audited financial statements
included in the Association's audit report for the year ended
December 31, 1996, such information and footnotes have not been
duplicated herein. In the opinion of management, all
adjustments, consisting only of normal recurring accruals, which
are necessary for the fair presentation of the interim financial
statements have been included. The statements of earnings for
the three month and six month period ended June 30, 1997 are not
necessary indicative of the results which may be expected for the
entire year.
11
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
(4) Earnings Per Share
------------------
On September 27, 1996, 264,506 shares of the
Corporation's stock were issued, including 21,160 shares issued
to the ESOP. Earnings per share amounts for the three month
period and six month period ended June 30, 1997 are based upon an
average of 244,404 shares. The shares issued to the Employee
Stock Ownership Plan (ESOP) are not included in this computation
until they are allocated to plan participants.
(5) Stockholders' Equity and Stock Conversion
-----------------------------------------
The Association converted from a federally chartered
mutual savings association to a federally chartered stock savings
association pursuant to its Plan of Conversion which was approved
by the Association's members on September 18, 1996. The
conversion was effective on September 27, 1996 and resulted in
the issuance of 264,506 shares of common stock (par value $0.01)
at $10 per share for a gross sales price of $2,645,060. Costs
related to conversion (primarily underwriters' commissions,
printing, and professional fees) approximated $272,131 and were
deducted to arrive at the net proceeds of $2,372,929. The
Corporation established an employee stock ownership trust which
purchased 21,160 shares of common stock of the Corporation at the
issuance price of $10 per share with funds borrowed from the
holding company.
12
FIRST ALLEN PARISH BANCORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis
of Financial Condition and Results of Operations
General
- -------
First Allen Parish Bancorp, Inc. (the "Corporation") was
incorporated under the laws of the state of Delaware to become a
savings and loan holding company with First Federal Savings and
Loan Association of Allen Parish (the "Association") of Oakdale,
Louisiana, as its subsidiary. The Corporation was incorporated
at the direction of the Board of Directors of the Association,
and on September 27, 1996, acquired all of the capital stock of
the Association upon its conversion from mutual to stock form
(the "conversion"). Prior to the conversion, the Corporation did
not engage in any material operations and at September 30, 1996,
had no significant assets other than the investment in the
capital stock of the Association, the First Allen Parish Bancorp
loan to the employee stock ownership plan (ESOP), representing a
portion of the net proceeds from the conversion retained at the
holding company level and investments in mortgage backed
securities.
First Federal Savings and Loan Association of Allen Parish
was originally founded in 1962 as a federally chartered mutual
savings and loan association located in Oakdale, Louisiana. On
September 18, 1996, the Association members voted to convert the
Association to a federal stock institution. The Association
conducts its business through its main office in Oakdale,
Louisiana and a Loan Production Office(LPO) located in Oberlin,
Louisiana. Deposits are insured by the Savings Association
Insurance Fund (SAIF) to the maximum allowable.
The Association has been, and intends to continue to be, a
community-oriented financial institution offering selected
financial services to meet the needs of the communities it
serves. The Association attracts deposits from the general
public and historically has used such deposits, together with
other funds, to originate loans secured by real estate, including
one- to four-family residential mortgage loans, commercial real
estate loans, land loans, construction loans and loans secured by
other properties. The Association also originates consumer and
other loans consisting primarily of loans secured by automobiles,
manufactured homes, loans secured by deposits (share loans) and
lines of credit.
The most significant outside factors influencing the
operations of the Association and other financial institutions
include general economic conditions, competition in the local
market place and the related monetary and fiscal policies of
agencies that regulate financial institutions. More
specifically, the cost of funds primarily consisting of
insured deposits is influenced by interest rates on competing
investments and general market rates of interest, while lending
activities are influenced by the demand for real estate financing
and other types of loans, which in turn is affected by the
interest rates at which such loans may be offered and other
factors affecting loan demand and funds availability.
13
Deposits of the Association are currently insured by the
SAIF of the FDIC. The FDIC also maintains another insurance
fund, the Bank Insurance Fund, which primarily insures commercial
bank deposits. Applicable law requires that both the SAIF and
BIF funds be recapitalized to a ratio of 1.25% of reserves to
deposits, and the FDIC announced that the BIF reached the
required reserve ratio during May 1995. The SAIF, however, was
not expected to achieve that reserve ratio before 2002. Due to
the disparity in reserve ratios, on November 14, 1995, the FDIC
reduced annual assessments for BIF-insured institutions to the
legal minimum of $2,000 while SAIF-insured institutions continued
to pay assessments based on a schedule of from $0.23 to $.031 per
$100 of deposits.
In September 1996, Congress enacted legislation to
recapitalize the SAIF by a one-time assessment on all
SAIF-insured deposits held as of March 31, 1995. The assessment
was 65.7 basis points per $100 in deposits, payable by November
30, 1996. For the Association, the assessment resulted in a
one-time charge to earnings during the three months ended
September 30, 1996 in the amount of $170,020 or ($112,213 when
adjusted for taxes), based on the Association's deposits on March
31, 1995 of $25,878,177. In addition, beginning January 1,
1997, pursuant to the legislation, interest payments on bonds
("FICO Bonds") issued in the late 1980s by the Financing
Corporation ("FICO") to recapitalize the now defunct Federal
Savings and Loan Insurance Corporation are being paid jointly by
BIF-insured institutions and SAIF insured institutions. The FICO
assessment is 1.29 basis points per $100 in BIF deposits and 6.44
basis points per $100 in SAIF deposits. Beginning January 1,
2000, the FICO interest payments will be paid pro rata by banks
and thrifts based on deposits (approximately 2.4 basis points per
$100 in deposits). The BIF and SAIF will be merged on January 1,
1999, provided the bank and savings association charters are
merged by that date. In that event, pro-rata FICO sharing will
begin on January 1, 1999.
While the legislation has reduced the disparity between
premiums paid on BIF deposits and SAIF deposits, and has relieved
the thrift industry of a portion of the contingent liability
represented by the FICO bonds, the premium disparity between
SAIF-insured institutions, such as the Association, and
BIF-insured institutions will continue until at least January 1,
1999. Under the legislation, the Association anticipates that
its ongoing annual SAIF premiums will be approximately $17,000.
The Congress is also considering requiring all federal
thrift institutions, such as the Association, to either convert
to a national bank or a state chartered depository institution by
January 1, 1998. In addition, the Corporation may no longer be
regulated as a thrift holding company, but rather as a bank
holding company. The Office of Thrift Supervision (OTS) also
would be abolished and its functions transferred among the
federal banking regulators.
14
Financial Condition
- -------------------
Consolidated assets of First Allen Parish Bancorp, Inc. were
$32,982,926 as of June 30, 1997, an increase of $1,493,056 as
compared to December 31, 1996. At June 30, 1997, total
stockholders' equity was $4,462,058, an increase of $142,591 when
compared to stockholders' equity at December 31, 1996. The
increase in stockholders' equity was a result of increases in
deposits and net income earned during the six months ending June
30, 1997.
Net Interest Income. Total net interest income increased $28,654
or 12% to $268,490 for the three months ended June 30, 1997 from
$239,836 for the three months ended June 30, 1996. This increase
was primarily the result of an increase in income earned on loans
receivable and mortgage-backed securities offset by an increase
in the average cost of deposits.
Interest-bearing and non-interest bearing deposits and
investment securities increased to $2,502,331 at June 30, 1997
from $1,733,505 at December 31, 1996, an increase of $768,826.
Mortgage backed securities decreased $282,086 to a total of
$16,903,249 at June 30, 1997, from a total of $17,185,335 as of
December 31, 1996.
Loans receivable increased to $12,885,609 on June 30, 1997
from $11,937,990 on December 31, 1996, an increase of $947,619.
Deposits totaled $28,246,309 on June 30, 1997 and
$25,749,999 on December 31, 1996, an increase of $2,496,310.
Comparison of Operating Results for the Three Months Ended June
- ---------------------------------------------------------------
30, 1997 and 1996
- -----------------
General. Net income decreased $344 or .44%, to a total of
$85,211 for the three months ended June 30, 1997 from $85,588 for
the three months ended June 30, 1996. This decrease was
primarily due to increases in net interest income offset by an
increases in non-interest income along with decreases in income
tax expense for the three months ended June 30, 1997.
Net Interest Income. Total net interest income increased
$28,654 or 12% to $268,490 for the three months ended June 30,
1997 from $239,836 for the three months ended June 30, 1996.
This increase was primarily the result of an increase in income
earned on loans receivable and mortgage-backed securities offset
by an increase in the average cost of deposits.
Provision for Losses on Loans. The Association maintains an
allowance for loan losses based upon management's periodic
evaluation of known and inherent risk in the loan portfolio, the
Association's past loss experience, adverse situations that may
affect the borrower's ability to repay loans, estimated value of
the underlying collateral and current and expected market
conditions. During the three months ended June 30, 1997 the
Association experienced recoveries on loans for which reserves
had previously been established. The provision and recovery of
$2,644 and -0- for the three months ended June 30, 1997 and 1996,
respectively were primarily due to losses and recoveries on
consumer loans.
15
Non-Interest Income. Non-interest income decreased $8,829,
or 12% to $63,123 for the three months ended June 30, 1997 from
$71,952 for the three months ended June 30, 1996. This decrease
was due to a $11,155 decrease in service charges on deposits, a
$3,278 decrease in insurance commissions earned, a $1,686
increase in loan origination and servicing fees and a $3,746
increase in other operating revenues.
Non-Interest Expense. Non-interest expense increased
$23,722 or 13% to $204,215 for the three months ended June 30,
1997 from $180,493 for the three months ended June 30, 1996.
This increase was primarily due to an increase of $18,449 in
compensation and employee benefits, a $4,647 increase in
occupancy and equipment expenses, an $1,063 increase in
stationery and printing, a $10,988 decrease in SAIF deposit
insurance premium, a $4,032 decrease in data processing and a
$14,583 increase in other expenses.
Income Tax Expense. Income tax expense decreased $3,520 or
8% to a total of $42,187 for the three months ended June 30, 1997
from an income tax expense of $45,707 for the three months ended
June 30, 1996.
16
Comparison of Operating Results for the six months ended June 30,
- -----------------------------------------------------------------
1997 and 1996.
- --------------
General. Net income increased $26,498 or 19% to $162,818
for the six months ended June 30, 1997 for $136,320 for the six
months ended June 30, 1996. This increase primarily due to and
increase in net interest income offset by increased in
non-interest expense and income taxes.
Net interest Income. Net interest income increased $59,614,
or 12% to $535,632 for the six months ended June 30, 1997 for
$476,018 for the six months ended June 30, 1996.
Provision for Losses on Loans. The Association established
a provision for loan loss of $1,220 for the six months ended June
30, 1997 and $-0- for the six months ended June 30, 1996. During
these period the Association experienced recoveries on loan for
which reserves had previously been established in the amounts of
$2,644 and $9,461 for the six months ended June 30, 1997 and
1996, respectively.
Non-Interest Income. Non-interest income increased $1,864
or 1.5% to $127,631 for the six months ended June 30, 1997 for
$125,767 for the six months ended June 30, 1996. This increase
was due to a $4,722 decrease in service charges on deposits, a
$1,448 decrease in insurance commissions earned, a $4,565
increase in loan origination and servicing fees, and a $3,436
increase in other operating revenues.
Non-Interest Expense. Non-interest expense increased
$24,259 or 6% to $416,558 for the six months ended June 30, 1997
from $392,299 for the six months ended June 30, 1996. This
increase was due to $20,095 increase in compensation and employee
benefits, a $5,441 increase in occupancy and equipment expenses,
a $22,160 decrease in the SAIF deposit insurance premium, a
$3,479 decrease in data processing and a $24,264 increase in
other expenses.
Income Tax Expenses. Income tax expense increased $10,721
or 14% to $83,887 for the six months ended June 30, 1997 from
$73,166 for the six months ended June 30, 1996.
Non-Performing Assets
- ---------------------
At June 30, 1997, non-performing assets were approximately
$259,262 compared to $119,000 on December 31, 1996. At June 30,
1997, the Association's allowance for loan losses was 113% of non
performing loans compared to 249% at December 31, 1996.
Loans are considered non-performing when the collection of
principal and/or interest is not probable, or in the event
payments are more than 90 days delinquent.
17
Capital Resources
- -----------------
The Association is subject to three capital to asset
requirements in accordance with Office of Thrift Supervision
(OTS) regulations. The following table is a summary of the
Association's regulatory capital requirements versus actual
capital as of June 30, 1997:
Actual Required Excess
Amount/Percent Amount/Percent Amount/Percent
- ------------------------------- ---------------- ----------------
Tangible $3,344,000/10.45% $ 480,000/1.50% $2,864,000/8.95%
Core Leverage
Capital $3,344,000/10.45% $ 961,000/3.00% $2,383,000/7.45%
Risk-Based
Capital $3,490,000/10.90% $1,048,000/3.27% $2,442,000/7.63%
Liquidity
- ---------
The Association's principal sources of funds are deposits,
principal and interest payments on loans, deposits in other
insured institutions, and investment securities. While scheduled
loan repayments and maturing investments are relatively
predictable, deposit flows and early loan payments are more
influenced by interest rates, general economic conditions and
competition. Additional sources of funds may be obtained from the
Federal Home Loan Bank of Dallas by utilizing numerous available
products to meet funding needs.
The Association is required to maintain minimum levels of
liquid assets as defined by regulations. The required percentage
is currently five percent of net withdrawable savings deposits
and borrowings payable on demand or in one year or less. The
Association has maintained its liquidity ratio at levels
exceeding the minimum requirement. The eligible liquidity ratios
at December 31, 1996, and June 30, 1997, were 7.78% and 10.24%,
respectively.
For purposes of the cash flows, all short-term investments
with a maturity of three months or less at date of purchase are
considered cash equivalents. Cash and cash equivalents for the
periods ended June 30, 1997 and 1996 were $2,243,631 and
$2,430,042, respectively. The decrease was primarily due to the
net cash used in investing activities for loan originations and
purchase of mortgage-backed securities along with cash provided
by financing activities from issuance of 264,506 shares of .01
par value common stock at $10 per share.
18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other information
None
Item 6. Exhibits and Reports on Form 8-K
Exhibits:
27 - Financial Data Schedule
Reports on Form 8-K:
None.
19
SIGNATURES
Pursuant to the requirement 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.
First Allen Parish Bancorp, Inc.
Registrant
Date: August 7, 1997 /s/Charles L. Galligan
-------------------
Charles L. Galligan, President
and Chief Executive Officer
(Duly Authorized Officer)
Date: August 7, 1997 /s/Betty J. Parker
-------------------
Betty J. Parker, Treasurer and
Chief Financial Officer