UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission File Number 000-24907
IBL BANCORP, INC.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
LOUISIANA 72 - 1421499
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23910 RAILROAD AVE., PLAQUEMINE, LOUISIANA 70764
------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number, including area code: (225) 687-6337
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No_
Shares of common stock, par value $.01 per share, outstanding as of August 7,
2000: 210,870
Transitional Small Business Disclosure Format (check one): Yes [_] No [X]
<PAGE>
IBL Bancorp, Inc.
Form 10-QSB
Quarter Ended June 30, 2000
PART I - FINANCIAL INFORMATION
Interim Financial Information required by Rule 10-01 of Regulation S-X and Item
303 of Regulation S-B is included in this Form 10-QSB as referenced below:
Page
Item 1 - Financial Statements
Consolidated Statements Of Financial Condition At June 30, 2000
(Unaudited) and December 31, 1999............................................3
Consolidated Statements Of Income and Comprehensive Income
(Unaudited) For the Three and Six Months Ended June 30, 2000 and 1999.......4
Consolidated Statements Of Changes in Shareholders' Equity (Unaudited)
For The Three and Six Months Ended June 30, 2000 and 1999....................6
Consolidated Statements Of Cash Flows (Unaudited) For the
Three and Six Months Ended June 30, 2000 and 1999............................7
Notes to Consolidated Financial Statements...................................8
Item 2 - Management's Discussion and Analysis or Plan
of Operations..............................................11
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings................................................17
Item 2 - Changes in Securities and Use of Proceeds........................17
Item 3 - Defaults Upon Senior Securities..................................17
Item 4 - Submission of Matters to a Vote of Security Holders..............17
Item 5 - Other Information................................................17
Item 6 - Exhibits and Reports on Form 8-K.................................18
Signatures...................................................................19
2
<PAGE>
IBL BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, 2000 and December 31, 1999
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
(Unaudited)
----------- -----------
<S> <C> <C>
ASSETS
Cash and amounts due from depository institutions............................... $ 150,010 $ 770,481
Interest-bearing deposits in other institutions ................................ 1,162,893 2,121,112
------------- ------------
Total cash ............................................................... 1,312,903 2,891,593
------------- ------------
Time deposits .................................................................. 1,401,000 1,101,000
------------- ------------
Securities held-to-maturity
Mortgage-backed (estimated market value $2,392,794 and $2,308,395) ............ 2,459,130 2,371,700
Municipal (market value approximates cost) .................................... 70,283 -
Mortgage-backed securities available-for-sale (amortized
cost $4,926,585 and $3,739,649) ............................................... 4,912,741 3,732,565
------------- ------------
Total investment securities .............................................. 7,442,154 6,104,265
------------- ------------
Loans receivable ............................................................... 19,885,046 18,549,659
Less allowance for loan losses ................................................. 391,380 406,329
------------- ------------
Loans receivable, net .................................................... 19,493,666 18,143,330
------------- ------------
Premises and equipment, net .................................................... 143,767 154,248
Federal Home Loan Bank stock, at cost .......................................... 190,800 180,200
Accrued interest receivable .................................................... 141,945 108,581
Other assets ................................................................... 37,281 93,134
------------- ------------
Total assets........................................................ $ 30,163,516 $ 28,776,351
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits ....................................................................... $ 23,858,031 $ 22,884,393
Advances from Federal Home Loan Bank ........................................... 2,500,000 2,300,000
Advances by borrowers for taxes and insurance .................................. 16,428 12,821
Federal income taxes payable ................................................... 53,868 477
Other liabilities and deferrals ................................................ 107,551 74,622
------------- ------------
Total liabilities .................................................. 26,535,878 25,272,313
------------- ------------
Commitments and contingencies .................................................. - -
------------- ------------
Preferred stock - $.01 par, 2,000,000 shares authorized ........................ - -
Common stock - $.01 par, 5,000,000 shares authorized, 210,870 shares
issued ........................................................................ 2,109 2,109
Additional paid-in capital ..................................................... 1,740,571 1,740,201
Unearned ESOP shares ........................................................... (139,169) (147,603)
Unearned RRP shares ............................................................ (64,984) (44,193)
Retained earnings - substantially restricted ................................... 2,098,248 1,958,199
Accumulated other comprehensive loss ........................................... (9,137) (4,675)
------------- ------------
Total stockholders' equity ........................................ 3,627,638 3,504,038
------------- ------------
Total liabilities and stockholders' equity.......................... $ 30,163,516 $ 28,776,351
============== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
IBL BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
Three and six months ended June 30, 2000 and 1999
<TABLE>
<CAPTION>
-----Three months ended----- ------Six months ended------
06/30/00 06/30/99 06/30/00 06/30/99
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans ............................. $ 406,596 $ 374,670 $ 798,627 $ 731,743
Mortgage-backed securities ........ 122,854 56,890 228,313 111,341
FHLB stock and other securities ... 5,889 2,266 8,641 4,582
Deposits .......................... 32,187 42,501 72,817 73,550
---------- ---------- ---------- ----------
Total interest income ....... 567,526 476,327 1,108,398 921,216
---------- ---------- ---------- ----------
INTEREST EXPENSE
Deposits
Interest-bearing demand deposit
accounts ........................ 28,566 22,706 56,395 41,041
Passbook savings accounts ........ 26,109 24,184 51,853 47,937
Certificate of deposit accounts .. 176,660 179,401 346,731 353,956
---------- ---------- ---------- ----------
Total interest on deposits .. 231,335 226,291 454,979 442,934
Advances from Federal Home
Loan Bank ........................ 39,316 5,702 69,204 11,404
---------- ---------- ---------- ----------
Total interest expense ...... 270,651 231,993 524,183 454,338
---------- ---------- ---------- ----------
Net interest income ... 296,875 244,334 584,215 466,878
Provision for losses on loans ..... -- 2,720 -- 5,860
---------- ---------- ---------- ----------
NET INTEREST INCOME
AFTER PROVISION FOR
LOSSES ON LOANS .................. 296,875 241,614 584,215 461,018
---------- ---------- ---------- ----------
NON-INTEREST INCOME
Service charges on deposit accounts 19,792 20,779 37,581 39,168
Other ............................. 4,886 5,586 9,432 8,892
---------- ---------- ---------- ----------
Total non-interest income ... 24,678 26,365 47,013 48,060
---------- ---------- ---------- ----------
NON-INTEREST EXPENSES
Compensation and benefits ......... 97,975 92,654 197,360 186,799
Occupancy ......................... 7,909 6,740 15,964 12,799
Furniture and equipment ........... 5,490 6,115 13,341 13,714
Deposit insurance premium ......... 1,177 3,083 2,421 6,298
Data processing ................... 17,724 19,607 35,223 38,635
Legal and other professional ...... 15,873 31,292 38,528 44,531
Advertising ....................... 5,237 3,428 9,998 6,938
Office supplies and postage ....... 11,260 6,682 19,699 15,697
Other taxes - share tax assessment 8,550 -- 17,100 --
Other general and administrative .. 19,834 25,922 37,721 44,133
---------- ---------- ---------- ----------
Total non-interest expenses . 191,029 195,523 387,355 369,544
---------- ---------- ---------- ----------
</TABLE>
Continued ...
4
<PAGE>
<TABLE>
<CAPTION>
-----Three months ended----- ------Six months ended------
06/30/00 06/30/99 06/30/00 06/30/99
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
INCOME BEFORE PROVISION
FOR INCOME TAXES ................. $ 130,524 $ 72,456 $ 243,873 $ 139,534
PROVISION FOR INCOME
TAXES ............................ 48,919 23,616 87,154 50,382
--------- --------- --------- ---------
NET INCOME ........................ $ 81,605 $ 48,840 $ 156,719 $ 89,152
========= ========= ========= =========
Basic earnings per share .......... $ .43 $ .25 $ .82 $ .46
========= ========= ========= =========
Diluted earnings per share ........ $ .42 $ .25 $ .80 $ .46
========= ========= ========= =========
COMPREHENSIVE INCOME
Net income ........................ $ 81,605 $ 48,840 $ 156,719 $ 89,152
--------- --------- --------- ---------
Other comprehensive income (loss)
Unrealized holding gains (losses)
on securities during the period 2,905 (18,074) (6,760) (21,648)
Income tax benefit (expense)
related to unrealized holding
gains (losses) ................. (988) 6,145 2,298 7,360
--------- --------- --------- ---------
Other comprehensive income (loss),
net of tax effects .............. 1,917 (11,929) (4,462) (14,288)
--------- --------- --------- ---------
Comprehensive income .............. $ 83,522 $ 36,911 $ 152,257 $ 74,864
--------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
IBL BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Six months ended June 30, 2000 and 1999
<TABLE>
<CAPTION>
Additional Unearned Unearned
Common Paid - In ESOP RRP
Stock Capital Shares Shares
----------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1998 ............................ $ 2,109 $ 1,740,254 $ (165,971) $ --
----------- ----------- ------------ -------------
COMPREHENSIVE INCOME
(Unaudited)
Net income ............................................ -- -- -- --
Other comprehensive income, net of tax
Unrealized losses on securities ..................... -- -- -- --
----------- ----------- ------------ -------------
Comprehensive income .................................. -- -- -- --
----------- ----------- ------------ -------------
ESOP shares released for allocation ................... -- (580) 9,933 --
Dividends ............................................. -- -- -- --
----------- ----------- ------------ -------------
BALANCE, JUNE 30, 1999
(Unaudited) .......................................... $ 2,109 $ 1,739,674 $ (156,038) $ --
=========== =========== ============ =============
BALANCE, DECEMBER 31, 1999 ............................ $ 2,109 $ 1,740,201 $ (147,603) $ (44,193)$
----------- ----------- ------------ -------------
COMPREHENSIVE INCOME
(Unaudited)
Net income ............................................ -- -- -- --
Other comprehensive income, net of tax
Unrealized losses on securities ..................... -- -- -- --
----------- ----------- ------------ -------------
Comprehensive income .................................. -- -- -- --
----------- ----------- ------------ -------------
ESOP shares released for allocation ................... -- 370 8,434 --
Acquisition of RRP shares ............................. -- -- -- (20,791)
Dividends ............................................. -- -- -- --
----------- ----------- ------------ -------------
BALANCE, JUNE 30, 2000
(Unaudited) .......................................... $ 2,109 $ 1,740,571 $ (139,169) $ (64,984)
=========== =========== ============ =============
<CAPTION>
Retained Accumulated
Earnings- Other
Substan- Compre-
tially hensive Total
Restricted Income Equity
----------- ----------- -----------
<S> <C> <C> <C>
BALANCE, DECEMBER 31, 1998 ............................ $ 1,806,496 $ (293) $ 3,382,595
----------- ----------- -----------
COMPREHENSIVE INCOME
(Unaudited)
Net income ............................................ 89,152 -- 89,152
Other comprehensive income, net of tax
Unrealized losses on securities ..................... -- (14,288) (14,288)
----------- ----------- -----------
Comprehensive income .................................. 89,152 (14,288) 74,864
----------- ----------- -----------
ESOP shares released for allocation ................... -- -- 9,353
Dividends ................................. (15,816) -- (15,816)
----------- ----------- -----------
BALANCE, JUNE 30, 1999
(Unaudited) .......................................... $ 1,879,832 $ (14,581) $ 3,450,996
=========== =========== ===========
BALANCE, DECEMBER 31, 1999 ............................ 1,958,199 $ (4,675) $ 3,504,038
----------- ----------- -----------
COMPREHENSIVE INCOME
(Unaudited)
Net income ............................................ 156,719 -- 156,719
Other comprehensive income, net of tax
Unrealized losses on securities ..................... -- (4,462) (4,462)
----------- ----------- -----------
Comprehensive income .................................. 156,719 (4,462) 152,257
----------- ----------- -----------
ESOP shares released for allocation ................... 1,254 -- 10,058
Acquisition of RRP shares ............................. -- -- (20,791)
Dividends ............................................. (17,924) -- (17,924)
----------- ----------- -----------
BALANCE, JUNE 30, 2000
(Unaudited) .......................................... 2,098,248 $ (9,137) $ 3,627,638
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE>
IBL BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ..................................................................... $ 156,719 $ 89,152
----------- -----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation ................................................................. 11,123 10,415
Provision for loan losses .................................................... -- 5,860
ESOP contribution ............................................................ 10,058 9,353
Provision for deferred federal income tax benefit ............................ (3,140) (2,666)
Amortization of net premium on investment and mortgage-backed securities ..... 7,115 9,086
Net discount charged (realized) on installment loans ......................... 41,458 (7,658)
Net loan fees deferred ....................................................... 3,188 1,677
Stock dividends from Federal Home Loan Bank .................................. (10,600) (4,500)
Net increase in interest receivable .......................................... (33,364) (24,111)
Net decrease (increase) in other assets ...................................... 61,291 (9,303)
Net increase (decrease) in interest payable .................................. 15,372 (539)
Net increase (decrease) in income taxes payable .............................. 53,391 (57,420)
Net increase in other liabilities ............................................ 32,929 32,720
----------- -----------
Total adjustments ........................................................ 188,821 (37,086)
----------- -----------
Net cash provided by operating activities ...................................... 345,540 52,066
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans receivable ............................................... (1,394,982) (679,797)
Purchases of securities available-for-sale ..................................... (1,636,148) (629,796)
Principal payments received on mortgage-backed securities
available-for-sale ............................................................ 445,119 235,106
Purchases of securities held-to-maturity ....................................... (262,871) (450,495)
Principal payments received on mortgage-backed securities
held-to-maturity .............................................................. 172,419 166,374
Purchase of municipal obligation ............................................... (70,283) --
Proceeds from sale of foreclosed assets ........................................ -- 10,500
Purchases of office property and equipment ..................................... (642) --
Certificates of deposits acquired .............................................. (300,000) (606,000)
----------- -----------
Net cash used in investing activities .......................................... (3,047,388) (1,954,108)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposit accounts ............................................... 958,266 3,865,713
Net increase (decrease) in advances by borrowers for taxes and insurance ....... 3,607 (5,824)
Cash dividends ................................................................. (17,924) (15,816)
Acquisition of RRP shares ...................................................... (20,791) --
Advances from Federal Home Loan Bank ........................................... 200,000 --
----------- -----------
Net cash provided by financing activities ...................................... 1,123,158 3,844,073
----------- -----------
NET INCREASE (DECREASE) IN CASH ................................................ (1,578,690) 1,942,031
Cash - beginning of period ..................................................... 2,891,593 1,858,498
----------- -----------
Cash - end of period............................................................ $ 1,312,903 $ 3,800,529
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
IBL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
June 30, 2000
A: BASIS OF PRESENTATION
The accompanying consolidated financial statements for the period
ended June 30, 2000 include the accounts of IBL Bancorp, Inc. (the
"Company") and its wholly owned subsidiary, Iberville Building and
Loan Association (the "Association"). Currently, the business and
management of IBL Bancorp, Inc. is primarily the business and
management of the Association. All significant intercompany
transactions and balances have been eliminated in the consolidation.
The accompanying consolidated 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 consolidated financial
statements have been included. The results of operations for the six
months ended June 30, 2000 are not necessarily indicative of the
results to be expected for the year ending December 31, 2000.
B: EMPLOYEE STOCK OWNERSHIP PLAN
The Company sponsors a leveraged employee stock ownership plan
(ESOP) that covers all employees who have at least one year of
service with the Company. The ESOP shares initially were pledged as
collateral for the ESOP debt. The debt is being repaid based on a
ten-year amortization and the shares are being released for
allocation to active employees quarterly over the ten-year period.
The shares pledged as collateral are deducted from stockholders'
equity as unearned ESOP shares in the accompanying balance sheets.
As shares are released from collateral, the Company reports
compensation expense equal to the current market price of the
shares. Dividends on allocated ESOP shares are recorded as a
reduction of retained earnings; dividends on unallocated ESOP shares
are applied to the ESOP debt and recorded as a reduction of unearned
ESOP shares. ESOP compensation expense was $10,058 for the six
months ended June 30, 2000 based on the quarterly release of shares.
C: RECOGNITION AND RETENTION PLAN
On October 20, 1999, the Company's stockholders approved a
Recognition and Retention Plan (RRP) as an incentive to retain
personnel of experience and ability in key positions. The
shareholders approved a total of 8,434 shares of stock to be
acquired for the Plan, of which 7,169 shares have been allocated for
distribution to key employees and directors. As shares are acquired
for the plan, the purchase price of these shares is recorded as
unearned compensation, a contra equity account.
8
<PAGE>
C: RECOGNITION AND RETENTION PLAN (Continued)
As the shares are distributed, the contra equity account is reduced.
The allocated shares are earned by participants as plan share awards
vest over a specified period. If the service of an employee or
non-employee director plan participant is terminated prior to the
end of the vesting period for any reason other than death,
disability, retirement or a change in control, the recipient shall
forfeit the right to any shares subject to the awards which have not
been earned. The compensation cost associated with the plan is based
on the market price of the stock as of the date on which the plan
shares are earned.
A summary of the changes in restricted stock follows:
Unawarded Awarded
Shares Shares
------ ------
Balance, January 1, 1999 -- --
Purchased by Plan ...... 8,434 --
Granted ................ (7,169) 7,169
Earned and issued ...... -- (2,390)
------ ------
Balance, June 30, 2000 . 1,265 4,779
====== ======
D: STOCK OPTION PLAN
On October 20, 1999, the Company's stockholders approved a stock
option plan for the benefit of directors, officers, and other key
employees. An amount equal to 10% of the total number of common
shares issued in the initial public offering or 21,087 shares are
reserved for issuance under the stock option plan. The option
exercise price cannot be less than the fair value of the underlying
common stock as of the date of the option grant and the maximum
option term cannot exceed ten years.
The stock option plan also permits the granting of stock
appreciation rights (SARs). SARs entitle the holder to receive, in
the form of cash or stock, the increase in fair value of the
Company`s common stock from the date of the grant to the date of
exercise. No SARs have been issued under the plan.
The following table summarizes the activity related to stock
options:
Exercise Available Options
Price for Grant Outstanding
-------- --------- -------------
At inception............... -- 21,087 --
Granted.................... $ 10.50 (17,925) 17,925
Cancelled.................. -- -- --
Exercised.................. -- -- --
------- ------
At June 30, 2000........... -- 3,162 17,925
======= ======
9
<PAGE>
E: EARNINGS PER SHARE
The following tables provide a reconciliation between basic and
diluted earnings per share:
<TABLE>
<CAPTION>
For the three months ended June 30, 2000
----------------------------------------
Weighted
Average
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Net income........................................... $ 81,605
----------
Basic earnings per share
Income available to common stockholders.............. 81,605 190,493 $ 0.43
---------- =========
Effect of dilutive securities
RRP shares granted................................... 4,779
-------
Diluted earnings per share
Income available to common stockholders +
assumed conversions................................. 81,605 195,272 $ 0.42
========== ======= ==========
<CAPTION>
For the three months ended June 30, 2000
----------------------------------------
Weighted
Average
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Net income........................................... $ 156,719
Basic earnings per share
Income available to common stockholders.............. 156,719 190,933 $ 0.82
Effect of dilutive securities =========
RRP shares granted................................... 4,779
-------
Diluted earnings per share
Income available to common stockholders +
assumed conversions................................. $ 156,719 195,712 $ 0.80
=========== ======= ==========
</TABLE>
The computation of basic earnings per share includes reported net
income in the numerator and the weighted average number of shares
outstanding of 194,840 for the three months ended June 30, 1999 and
194,653 for the six months then ended in the denominator.
10
<PAGE>
IBL BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The following discussion compares the consolidated financial
condition of IBL Bancorp, Inc. and Subsidiary at June 30, 2000 to December 31,
1999 and the results of operations for the three and six months ended June 30,
2000 with the same periods in 1999. Currently, the business and management of
IBL Bancorp, Inc. is primarily the business and management of the Association.
This discussion should be read in conjunction with the interim consolidated
financial statements and footnotes included herein.
This quarterly report on Form 10-QSB includes statements that may
constitute forward-looking statements, usually containing the words "believe",
"estimate", "expect", "intend" or similar expressions. These statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially from those
reflected in the forward-looking statements. Factors that could cause future
results to vary from current expectations include, but are not limited to, the
following: changes in economic conditions (both generally and more specifically
in the markets in which the Company operates); changes in interest rates,
deposit flows, loan demand, real estate values and competition; changes in
accounting principles, policies or guidelines and in government legislation and
regulation (which change from time to time and over which the Company has no
control); and other risks detailed in this quarterly report on Form 10-QSB and
the Company's other Securities and Exchange Commission filings. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
reflect management's analysis only as of the date hereof. The Company undertakes
no obligation to publicly revise these forward-looking statements to reflect
events or circumstances that arise after the date hereof.
IBL Bancorp, Inc. is the holding company for the Association.
Substantially all of the Company's assets are currently held in, and its
operations are conducted through, its sole subsidiary the Association. The
Company's business consists primarily of attracting deposits from the general
public and using such deposits to make loans for the purchase and construction
of residential properties. The Company also originates commercial real estate
loans and various types of consumer loans.
Changes in Financial Condition
The Company's total assets increased $1,387,000 or 4.8% from $28.8
million at December 31, 1999 to $30.2 million at June 30, 2000. This increase
was primarily due to increases of $1,350,000 in net loans receivable, $1,338,000
in investment securities, and $300,000 in time deposits. These increases were
offset by a decrease in cash and cash equivalents of $1,579,000.
The mortgage-backed securities portfolio increased by $1,268,000 or
20.8% from $6,104,000 at December 31, 1999 to $7,372,000 at June 30, 2000, due
to purchases of $1,899,000 in the first six months of 2000 funded by increases
in deposits and the reallocation of the excess liquidity that was built up in
accordance with the Company's Year 2000 Plan.
11
<PAGE>
The Company also purchased a municipal bond in the amount of $70,000
in the first six months of 2000. At December 31, 1999, the Company had no
municipal bonds.
The demand for mortgage loans in the Association's market area
increased during the past six months. The net loan portfolio increased
$1,350,000 or 7.4% from $18,143,000 at December 31, 1999 to $19,494,000 at June
30, 2000. This increase consisted mainly of single-family residential mortgage
loans and was also funded by increases in deposits and the reallocation of Year
2000 cash.
Time deposits increased by $300,000 or 27.3% from $1,101,000 at
December 31, 1999 to $1,401,000 at June 30, 2000. This increase was primarily
due to the purchase of short-term certificates of deposit.
Cash and amounts due from depository institutions decreased by
$620,000 or 80.5% from $770,000 at December 31, 1999 to $150,000 at June 30,
2000. Interest-bearing deposits in other institutions decreased by $958,000 or
45.2% from $2,121,000 at December 31, 1999 to $1,163,000 at June 30, 2000. Both
of these decreases were primarily due to the reallocation of the excess
liquidity that was built up in accordance with the Company's Year 2000 Plan.
Deposits increased by $974,000 or 4.3% from $22,884,000 at December
31, 1999 to $23,858,000 at June 30, 2000. This increase included a $204,000
increase in governmental funds on deposit at the Association.
Total stockholders' equity increased by $123,500 during the past
six months. Net income of $157,000, a $8,500 decrease in unearned ESOP shares
and a $500 increase in additional paid-in capital increased stockholders' equity
during the period. These factors were offset by an increase in unearned RRP
shares of $20,500, the payment of two quarterly dividends totaling $18,000 and
an increase of $4,000 in unrealized losses on available-for-sale investment
securities during this period. Stockholders' equity at June 30, 2000 totaled
$3,628,000 or 12.0% of total assets compared to stockholders' equity of
$3,504,000 or 12.2% of total assets at December 31, 1999.
The Association's total classified assets for regulatory purposes at
June 30, 2000 (excluding loss assets specifically reserved for) amounted to
$510,000, all of which was classified as substandard. The largest classified
asset at June 30, 2000 consisted of a $70,000 adjustable-rate residential loan.
The remaining $440,000 of substandard assets at June 30, 2000 consisted of 15
residential mortgage loans totaling $404,000 and 5 consumer loans totaling
$36,000.
Results of Operations
The profitability of the Company depends primarily on its net
interest income, which is the difference between interest and dividend income on
interest-earning assets, principally loans, mortgage-backed securities, and
investment securities, and interest expense on interest-bearing deposits and
borrowings. Net interest income is dependent upon the level of interest rates
and the extent to which such rates are changing. The Company's profitability
also is dependent, to a lesser extent, on the level of its non-interest income,
provision for loan losses, non-interest expense and income taxes. In the six
months ended June 30, 2000 and 1999, net interest income after provision for
loan losses exceeded total non-interest expense. Total non-interest expense
12
<PAGE>
consists of general, administrative and other expenses, such as compensation and
benefits, furniture and equipment expense, federal insurance premiums, and
miscellaneous other expenses.
Net income increased by $33,000 or 67.1% in the quarter ended June
30, 2000 and increased by $68,000 in the first six months of 2000 compared to
the respective 1999 periods. The increase in the June 30, 2000 quarter was due
to an increase in net interest income of $53,000, a $4,000 decrease in
non-interest expenses and a decrease in provision for losses on loans of $3,000.
These factors were primarily offset by a $25,000 increase in provision for
income taxes and a $2,000 decrease in non-interest income. The increase in net
income for the six-month period ending June 30, 2000 was primarily due to an
increase of $123,000 in net interest income after provision for loan losses
offset by a $36,000 increase in provision for income taxes, a $18,000 increase
in non-interest expenses and a $1,000 decrease in non-interest income.
The $53,000 increase in net interest income in the second quarter
of 2000 over the same period in 1999 was primarily due to increases in
interest-earning assets funded by increased deposits and advances from Federal
Home Loan Bank. This increase in net interest income can also be attributed to
an increase in the average interest rate spread from 3.05% in the quarter ended
June 30, 1999 to 3.34% in the second quarter of 2000. The average yield on
interest-earning assets increased from 7.05% in the quarter ended June 30, 1999
to 7.46% in the second quarter of 2000, while the average rate on
interest-bearing liabilities increased from 4.00% in the second quarter of 1999
to 4.12% in the second quarter of 2000. The increased yield on assets was
primarily due to higher yields on the Association's adjustable-rate mortgage
loans and adjustable-rate mortgage-backed securities. This increase in asset
yield can also be attributed to the reallocation of the excess cash liquidity
built up for the Year 2000 into higher yielding interest-earning assets.
The $117,000 increase in net interest income in the first six months
of 2000 compared to the first six months of 1999 was also primarily due to
increases in interest-earning assets funded by increased deposits and advances
from Federal Home Loan Bank. The increase in net interest income during this
period can also be attributed to an increase in the average interest rate spread
from 3.10% in the six month period ending June 30, 1999 to 3.37% in the six
month period ending June 30, 2000. The average yield on interest-earning assets
increased from 7.11% in the first six months of 1999 to 7.41% in the first six
months of 2000, while the average rate on interest-bearing liabilities increased
from 4.01% to 4.04% over the same period. This increase in asset yield can also
be attributed to the reallocation of the excess liquidity built up for the Year
2000 into higher interest-earning assets.
Total interest income increased by $91,000 or 19.2% in the quarter
ended June 30, 2000 and increased $187,000 or 20.32% over the comparable 1999
periods due to higher balances and higher yields. The average balance of total
interest-earning assets increased from $25.0 million in the first six months of
1999 to $29.1 million in the first six months of 2000.
Total interest expense increased by $39,000 or 16.7% for the
quarter ended June 30, 2000 and $70,000 or 15.4% for the first six months of
2000 compared to the respective 1999 periods. The increase in the quarter period
was primarily due to an increase in interest paid on Federal Home Loan Bank
advances of $34,000 and an increase in total interest paid on deposit
13
<PAGE>
accounts of $5,000. The increase in the six-month period was primarily due to an
increase in interest paid on Federal Home Loan Bank advances of $58,000 and an
increase in total interest paid on deposit accounts of $12,000.
The provision for loan losses decreased by $3,000 for the quarter
ended June 30, 2000 and decreased $6,000 in the first six months of 2000 from
the comparable 1999 periods. At June 30, 2000, the Association's total
non-accruing loans amounted to $197,000. The allowance for loan losses amounted
to $391,000 at June 30, 2000, representing 2.0% of the total loans held in
portfolio and 198.5% of total non-accruing loans at such date. The analysis of
the provision for loan losses led to the conclusion that the allowance for loan
losses was sufficient in light of the current asset quality of the loan
portfolio.
Non-interest income decreased by $1,500 or 6.4% in the quarter
ended June 30, 2000 and decreased $1,000 or 2.2% in the first six months of 2000
from the comparable 1999 periods. The decrease in the quarter was primarily due
to a $1,000 decrease in service charges on deposit accounts and a $500 decrease
in commissions on credit life insurance. The decrease in the six- month period
was primarily due to a decrease in service charges on deposit accounts of $1,500
offset by an increase in commissions on credit life insurance of $500.
Non-interest expenses decreased by $4,000 or 2.3% in the quarter
ended June 30, 2000 and increased $18,000 or 4.8% in the first six months of
2000 from the comparable 1999 periods. The decrease in the quarter was primarily
due to decreases of $15,000 in legal and other professional, $6,000 in other
general and administrative, $2,000 in deposit insurance premium, $2,000 in data
processing and $1,000 in furniture and equipment. These decreases in
non-interest expenses were partially offset by increases of $9,000 in other
taxes, $5,000 in compensation and benefits, $5,000 in office supplies and
postage, $2,000 in advertising and $1,000 in occupancy. The increase in the
six-month period was primarily due to increases of $17,000 in other taxes,
$11,000 in compensation and benefits, $4,000 in office supplies and postage,
$3,000 in occupancy and $3,000 in advertising. These increases in non-interest
expense were offset primarily by decreases of $6,000 in other general and
administrative, $6,000 in legal and other professional, $4,000 in deposit
insurance premium, $3,500 in data processing and $500 in furniture and
equipment.
The decrease of $6,000 in other general and administrative for the
six months ended June 30, 2000 was primarily caused by the reclassification of
$4,000 in FHLB demand deposit charges into data processing expense, a $3,000
decrease in supervisory examination and a $2,000 decrease in loan expense. These
decreases were partially offset by increases of $1,000 in taxes-franchise,
$1,000 in dues and subscriptions and $1,000 in expense account for directors.
The decrease of $6,000 in legal and other professional for the six
months ended June 30, 2000 was primarily due to a $4,000 decrease in legal and a
$2,000 decrease in accounting expenses associated with the preparation of the
company's reporting requirements as a public entity.
The $17,000 increase in other taxes for the six months ended June
30, 2000 over the same period in 1999 was caused by the company beginning to
accrue for a parish and city tax which is assessed on publicly held companies.
14
<PAGE>
The $11,000 increase in compensation and benefits for the six months
ended June 30, 2000 was due primarily to increases of $6,000 in compensation for
officers and employees, $4,000 in ESOP contributions, $4,000 in compensation for
directors, $500 in payroll taxes and $500 in contributions for employee
retirement. These increases were partially offset by a $4,000 decrease in other
employee benefits.
Liquidity and Capital Resources
The Association is required under applicable federal regulations to
maintain specified levels of "liquid" investments in qualifying types of U.S.
Government, federal agency and other investments having maturities of up to five
years. Current OTS regulations require that a savings institution maintain
liquid assets of not less than 4% of its average daily balance of net
withdrawable deposit accounts and borrowings payable in one year or less. At
June 30, 2000, the Association's liquidity was 9.5% or $1.3 million in excess of
the minimum OTS requirement.
The Association is required to maintain regulatory capital
sufficient to meet tangible, core and risk-based capital ratios of 1.5%, 4.0%,
and 8.0%, respectively. At June 30, 2000, the Association's tangible and core
capital both amounted to $3.0 million or 10.2% of adjusted total assets of $29.6
million, and the Association's risk-based capital amounted to $3.2 million or
21.2% of adjusted risk-weighted assets of $15.1 million.
As of June 30, 2000, the Association's unaudited regulatory capital
requirements are as indicated in the following table:
(Dollars In Thousands)
TANGIBLE CORE RISK-BASED
CAPITAL CAPITAL CAPITAL
------- ------- -------
GAAP Capital $3,000 $3,000 $3,000
Unrealized loss on securities available
net of taxes -- 9 9
Additional Capital Items:
General Valuation Allowances -- -- 190
------ ------ ------
Regulatory Capital Computed 3,000 3,009 3,199
Minimum Capital Requirement 444 1,183 1,209
------ ------ ------
Regulatory Capital Excess $2,556 $1,826 $1,990
====== ====== ======
Regulatory Capital as a
Percentage 10.18% 10.18% 21.16%
Minimum Capital Required
as a Percentage 1.50% 4.00% 8.00%
------ ------ ------
Regulatory Capital as a
Percentage in Excess
of Requirements 8.68% 6.18% 13.16%
====== ====== ======
Based on the above capital ratios, the Association meets the
criteria for a "well capitalized" institution at June 30, 2000. The
Association's management believes that under the current regulations, the
Association will continue to meet its minimum capital requirements in the
foreseeable future. However, events beyond the control of
15
<PAGE>
the Association, such as increased interest rates or a downturn in the economy
of the Association's area, could adversely affect future earnings and
consequently, the ability of the Association to continue to exceed its future
minimum capital requirements.
The Year 2000
The Association did not experience any interruption in service or
computer difficulties relating to the start of Year 2000. Additional expenses
are not expected to be incurred with issues related to the Year 2000; however,
management will continue to monitor our data processing.
16
<PAGE>
IBL Bancorp, Inc.
Form 10-QSB
Quarter Ended June 30, 2000
PART II - OTHER INORMATION
Item 1 - Legal Proceedings:
There are no matters required to be reported under
this item.
Item 2 - Changes in Securities and Use of Proceeds:
There are no matters required to be reported under this
item.
Item 3 - Defaults Upon Senior Securities:
There are no matters required to be reported under this
item.
Item 4 -Submission of Matters to a Vote of Security Holders:
On April 26, 2000, in conjunction with the Company's
annual meeting of stockholders, there were two matters
submitted for a vote of security holders. (1) The
election of directors Gary K. Pruitt and Edward J.
Steinmetz for a term of three years expiring in 2003.
Other directors whose term of office continued after
the meting are: G. Lloyd Bouchereau, Jr., John L.
Delahaye, Bobby E. Stanley and Danny M. Strickland. (2)
To ratify the appointment of L.A. Champange & Co.,
L.L.P. as the Company's independent auditors for the
year ending December 31, 2000. On matter (1) described
above votes were cast as follows for Gary K. Pruitt:
for = 151,525; withheld = 6,625; not voted = 52,720. On
matter (1) described above votes were cast as follows
for Edward J. Steinmetz: for = 151,550; withheld =
6,600; not voted = 52,720. On matter (2) described
above votes were cast as follows: for =151,550; against
5,600; abstain = 1000; not voted 52,720.
Item 5 - Other Information:
There are no matters required to be reported under
this item.
17
<PAGE>
Item 6 - Exhibits and Reports on Form 8-K:
(a) The following exhibit is filed herewith:
EXHIBIT NO. DESCRIPTION
----------- -----------
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the
Registrant during the quarter ended June 30, 2000.
18
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
IBL BANCORP, INC.
Registrant
Date: August 7, 2000 By: /s/ G. Lloyd Bouchereau, Jr.
----------------------------------------
G. Lloyd Bouchereau, Jr., President and
Chief Executive Officer
Date: August 7, 2000 By: /s/ Gary K.Pruitt
------------------------
Gary K. Pruitt
Secretary
19
