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 March 31, 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 May
5, 1999: 210,870
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ X ].
<PAGE>
IBL Bancorp, Inc.
Form 10-QSB
Quarter Ended March 31, 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:
Item 1 - Financial Statements
Consolidated Statements Of Financial Condition At March 31, 2000
(Unaudited) and December 31, 1999 ......................................... 3
Consolidated Statements Of Income and Comprehensive Income (Unaudited) For
the Three Months Ended March 31, 2000 and 1999 ............................ 4
Consolidated Statements Of Changes in Shareholders' Equity (Unaudited) For
The Three Months Ended March 31, 2000 and 1999 ............................ 6
Consolidated Statements Of Cash Flows (Unaudited) For the Three Months
Ended March 31, 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............................................... 16
Item 2 - Changes in Securities and Use of Proceeds...................... 16
Item 3 - Defaults Upon Senior Securities................................ 16
Item 4 - Submission of Matters to a Vote of Security Holders............ 16
Item 5 - Other Information............................................... 16
Item 6 - Exhibits and Reports on Form 8-K............................... 16
Signatures.................................................................. 17
2
<PAGE>
<TABLE>
<CAPTION>
IBL BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
March 31, 2000 and December 31, 1999
March 31,
2000 December 31,
(Unaudited) 1999
-----------
<S> <C> <C>
ASSETS
Cash and amounts due from depository institutions ....... $ 148,918 $ 770,481
Interest-bearing deposits in other institutions ......... 2,030,735 2,121,112
------------ ------------
Total cash ............................................ 2,179,653 2,891,593
------------ ------------
Time deposits ........................................... 1,401,000 1,101,000
------------ ------------
Mortgage-backed securities held-to-maturity (estimated
market value $2,469,173 and $2,308,395) ............... 2,548,887 2,371,700
Mortgage-backed securities available-for-sale (amortized
cost $4,395,986 and $3,739,649) ....................... 4,379,237 3,732,565
------------ ------------
Total investment securities ........................... 6,928,124 6,104,265
------------ ------------
Loans receivable ........................................ 19,238,494 18,549,659
Less allowance for loan losses .......................... 391,380 406,329
------------ ------------
Loans receivable, net ................................. 18,847,114 18,143,330
------------ ------------
Premises and equipment, net ............................. 147,348 154,248
Federal Home Loan Bank stock, at cost ................... 182,900 180,200
Accrued interest receivable ............................. 122,905 108,581
Other assets ............................................ 42,361 93,134
------------ ------------
Total assets .......................................... $ 29,851,405 $ 28,776,351
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits ................................................ $ 23,906,069 $ 22,884,393
Advances from Federal Home Loan Bank .................... 2,300,000 2,300,000
Advances by borrowers for taxes and insurance ........... 11,297 12,821
Federal income taxes payable ............................ 21,937 477
Other liabilities and deferrals ......................... 63,849 74,622
------------ ------------
Total liabilities ..................................... 26,303,152 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 .............................. 1,740,518 1,740,201
Unearned ESOP shares .................................... (143,386) (147,603)
Unearned RRP shares ..................................... (64,984) (44,193)
Retained earnings - substantially restricted ............ 2,025,050 1,958,199
Accumulated other comprehensive loss .................... (11,054) (4,675)
------------ ------------
Total stockholders' equity ............................ 3,548,253 3,504,038
------------ ------------
Total liabilities and stockholders' equity ............ $ 29,851,405 $ 28,776,351
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
IBL BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
Three months ended March 31, 2000 and 1999
2000 1999
(Unaudited) (Unaudited)
<S> <C> <C>
INTEREST INCOME
Loans............................................. $ 380,750 $ 357,073
Mortgage-backed securities........................ 105,459 54,451
FHLB stock and other securities................... 2,752 2,316
Deposits.......................................... 40,630 31,049
---------- ----------
Total interest income........................... 529,591 444,889
---------- ----------
INTEREST EXPENSE
Deposits
Interest-bearing demand deposit accounts......... 27,829 18,335
Passbook savings accounts........................ 25,744 23,753
Certificate of deposit accounts.................. 170,071 174,555
---------- ----------
Total interest on deposits...................... 223,644 216,643
Advances from Federal Home Loan Bank.............. 29,888 5,702
---------- ----------
Total interest expense.......................... 253,532 222,345
---------- ----------
Net interest income............................. 276,059 222,544
Provision for losses on loans..................... - 3,140
---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR
LOSSES ON LOANS.................................. 276,059 219,404
---------- ----------
NON-INTEREST INCOME
Service charges on deposit accounts............... 17,789 18,389
Other............................................. 4,546 3,306
---------- ----------
Total non-interest income....................... 22,335 21,695
---------- ----------
NON-INTEREST EXPENSES
Compensation and benefits......................... 99,385 94,145
Occupancy ........................................ 8,055 6,059
Furniture and equipment .......................... 7,851 7,599
Deposit insurance premium......................... 1,244 3,215
Data processing................................... 17,499 19,028
Legal and other professional...................... 22,655 13,239
Advertising....................................... 4,761 3,510
Office supplies and postage....................... 8,439 9,015
Other taxes - share tax assessment................ 8,550 -
Other general and administrative.................. 6,606 18,211
---------- ----------
Total non-interest expenses..................... 185,045 174,021
---------- ----------
</TABLE>
Continued. . .
4
<PAGE>
<TABLE>
<CAPTION>
2000 1999
(Unaudited) (Unaudited)
<S> <C> <C>
INCOME BEFORE PROVISION FOR INCOME TAXES.......... $ 113,349 $ 67,078
PROVISION FOR INCOME TAXES........................ 38,235 26,766
---------- ----------
NET INCOME........................................ $ 75,114 $ 40,312
========== ==========
Basic earnings per share.......................... $ .39 $ .21
========== ==========
Diluted earnings per share........................ $ .35 $ .21
========== ==========
COMPREHENSIVE INCOME
Net income........................................ $ 75,114 $ 40,312
---------- ----------
Other comprehensive income (loss)
Unrealized holding losses on
securities during the period................... (9,665) (3,574)
Income tax benefit related to
unrealized holding losses...................... 3,286 1,215
---------- ----------
Other comprehensive loss, net of
tax effects..................................... (6,379) (2,359)
---------- ----------
Comprehensive income.............................. $ 68,735 $ 37,953
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
IBL BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Three months ended March 31, 2000 and 1999
Retained
Earnings -
Additional Unearned Unearned Substan-
Common Paid - In ESOP RRP tially
Stock Capital Shares Shares Restricted
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1998 ........... $ 2,109 $ 1,740,254 $ (165,971) $ -- $ 1,806,496
----------- ----------- ----------- ----------- -----------
COMPREHENSIVE INCOME (Unaudited)
Net income ........................... -- -- -- -- 40,312
Other comprehensive income, net of tax
Unrealized losses on securities .... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Comprehensive income ............... -- -- -- -- 40,312
----------- ----------- ----------- ----------- -----------
ESOP shares released for allocation .. -- -- 2,776 -- --
Dividends ............................ -- -- -- -- (7,908)
----------- ----------- ----------- ----------- -----------
BALANCE, MARCH 31, 1999 .............. $ 2,109 $ 1,740,254 $ (163,195) $ -- $ 1,838,900
=========== =========== =========== =========== ===========
BALANCE, DECEMBER 31, 1999 ........... $ 2,109 $ 1,740,201 $ (147,603) $ (44,193) $ 1,958,199
----------- ----------- ----------- ----------- -----------
COMPREHENSIVE INCOME (Unaudited)
Net income ........................... -- -- -- -- 75,114
Other comprehensive income, net of tax
Unrealized losses on securities .... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Comprehensive income ............... -- -- -- -- 75,114
----------- ----------- ----------- ----------- -----------
ESOP shares released for allocation .. -- 317 4,217 -- 699
Acquisition of RRP shares ............ -- -- -- (20,791) --
RRP shares issued .................... -- -- -- --
Dividends ............................ -- -- -- -- (8,962)
----------- ----------- ----------- ----------- -----------
BALANCE, MARCH 31, 2000 .............. $ 2,109 $ 1,740,518 $ (143,386) $ (64,984) $ 2,025,050
=========== =========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Accumulated
Other
Compre-
hensive Total
Income Equity
----------- -----------
<S> <C> <C>
BALANCE, DECEMBER 31, 1998 ........... $ (293) $ 3,382,595
----------- -----------
COMPREHENSIVE INCOME (Unaudited)
Net income ........................... -- 40,312
Other comprehensive income, net of tax
Unrealized losses on securities .... (2,359) (2,359)
----------- -----------
Comprehensive income ............... (2,359) 37,953
----------- -----------
ESOP shares released for allocation -- 2,776
Dividends ............................ -- (7,908)
----------- -----------
BALANCE, MARCH 31, 1999 ............ $ (2,652) $ 3,415,416
=========== ===========
BALANCE, DECEMBER 31, 1999 ........... $ (4,675) $ 3,504,038
----------- -----------
COMPREHENSIVE INCOME (Unaudited)
Net income ........................... -- 75,114
Other comprehensive income, net of tax
Unrealized losses on securities .... (6,379) (6,379)
----------- -----------
Comprehensive income ............... (6,379) 68,735
----------- -----------
ESOP shares released for allocation .. -- 5,233
Acquisition of RRP shares ............ -- (20,791)
RRP shares issued .................... -- --
Dividends ............................ -- (8,962)
----------- -----------
BALANCE, MARCH 31, 2000 .............. $ (11,054) $ 3,548,253
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
s IBL BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31, 2000 and 1999
2000 1999
(Unaudited) (Unaudited)
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income............................................... $ 75,114 $ 40,312
---------- ----------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation........................................... 6,900 5,750
Provision for loan losses.............................. - 3,140
ESOP contribution...................................... 5,233 2,776
Provision for deferred federal income tax benefit...... (2,755) -
Amortization of net premium on investment and
mortgage-backed securities............................ 3,387 4,522
Net discount charged (realized) on installment loans... 47,162 (26,013)
Net loan fees deferred ................................ 356 1,018
Stock dividends from Federal Home Loan Bank............ (2,700) (2,300)
Net increase in interest receivable.................... (14,324) (9,194)
Net increase in other assets........................... (10,239) (12,742)
Net decrease in interest payable....................... (2,772) (10,964)
Net increase (decrease) in income taxes payable....... 88,513 (14,142)
Net increase (decrease) in other liabilities........... (10,773) 14,234
---------- ----------
Total adjustments.................................... 107,988 (43,915)
---------- ----------
Net cash provided by (used in) operating activities...... 183,102 (3,603)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans receivable......................... (751,302) (259,818)
Principal payments received on mortgage-backed
securities available-for-sale........................... 248,417 93,066
Purchases of securities held-to-maturity................. (262,871) (200,000)
Purchases of securities available-for-sale............... (906,642) -
Proceeds from sale of foreclosed assets.................. - 10,500
Principal payments received on mortgage-backed
securities held-to-maturity............................. 84,185 88,504
Certificates of deposits acquired........................ (300,000) (506,000)
---------- ----------
Net cash used in investing activities.................... (1,888,213) (773,748)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposit accounts......................... 1,024,448 2,149,438
Net increase (decrease) in advances by borrowers for
taxes and insurance..................................... (1,524) 1,686
Cash dividends..... ..................................... (8,962) (7,908)
Acquistion of RRP shares................................. (20,791) -
---------- ----------
Net cash provided by financing activities................ 993,171 2,143,216
---------- ----------
NET (DECREASE) INCREASE IN CASH..... .................... (711,940) 1,365,865
Cash - beginning of period............................... 2,891,593 1,858,498
---------- ----------
Cash - end of period..................................... $ 2,179,653 $ 3,224,363
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
IBL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
March 31, 2000
A: BASIS OF PRESENTATION
The accompanying consolidated financial statements for the period ended
March 31, 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 three months ended March
31, 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 $5,233 for the three months ended March 31,
2000 based on the quarterly release of shares.
8
<PAGE>
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. 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 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, March 31, 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
9
<PAGE>
D: STOCK OPTION PLAN (Continued)
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 March 31, 2000........ 3,162 17,925
======= ======
E: EARNINGS PER SHARE
The following table provides a reconciliation between basic and diluted
earnings per share:
<TABLE>
<CAPTION>
For the three months ended March 31, 2000
-----------------------------------------
Weighted
Average
Income Shares Per-Share
(Numerator) (Denominator) Amount
<S> <C> <C> <C>
Net income .......................... $75,114
Basic earnings per share
Income available to
common stockholders ................ 75,114 191,373 $ 0.39
========
Effect of dilutive
securities
RRP shares granted .................. -- 4,779
Stock options granted ............... -- 17,925
------- -------
Diluted earnings per
share
Income available to
common stockholders +
assumed conversions ................ $75,114 214,077 $ 0.35
======= ======= ========
</TABLE>
The computation of basic earnings per share for March 31, 1999
includes reported net income in the numerator and the weighted average
number of shares outstanding of 194,428 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 March 31, 2000 to December 31, 1999 and
the results of operations for the three months ended March 31, 2000 with the
same period 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 $1,075,000 or 3.7% from $28.8
million at December 31, 1999 to $29.9 million at March 31, 2000. This increase
was primarily due to increases of $824,000 in investment securities, $704,000 in
net loan receivables and $300,000 in time deposits. These increases were offset
by a decrease in cash and cash equivalents of $712,000.
The mortgage-backed securities portfolio increased by $824,000 or 13.5%
from $6,104,000 at December 31, 1999 to $6,928,000 at March 31, 2000, due to
purchases of $1,169,000 in the first three 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 demand for mortgage loans in the Association's market area
increased during the past three months. The net loan portfolio increased
$704,000 or 3.9% from $18,143,000 at December 31, 1999 to $18,847,000 at March
31, 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 March 31, 2000. This increase was primarily
due to the purchase of short-term certificates of deposit.
Cash and amounts due from depository institutions decreased by
$622,000 or 80.7% from $770,000 at December 31, 1999 to $149,000 at March 31,
2000. Interest-bearing deposits in other institutions decreased by $90,000 or
4.3% from $2,121,000 at December 31, 1999 to $2,031,000 at March 31, 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 $1,022,000 or 4.5% from $22,884,000 at December
31, 1999 to $23,906,000 at March 31, 2000. This increase consisted primarily of
an increase of $753,000 in governmental funds on deposit at the Association.
Total stockholders' equity increased by $44,000 during the past three
months. Net income of $75,000, a $4,000 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 a quarterly dividend totaling $9,000 and an
increase of $6,000 in unrealized losses on available-for-sale investment
securities during this period. Stockholders' equity at March 31, 2000 totaled
$3,548,000 or 11.9% 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
March 31, 2000 (excluding loss assets specifically reserved for) amounted to
$392,000, all of which was classified as substandard. The largest classified
asset at March 31, 2000 consisted of a $70,000 adjustable-rate residential loan.
The remaining $322,000 of substandard assets at March 31, 2000 consisted of 10
residential mortgage loans totaling $306,000 and 4 consumer loans totaling
$16,000.
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 three
months ended March 31, 2000 and 1999, net interest income after provision for
loan losses exceeded total non-interest expense. Total non-interest expense
consists of general, administrative and other expenses, such as compensation and
benefits, furniture and equipment expense, federal insurance premiums, and
miscellaneous other expenses.
12
<PAGE>
Net income increased by $35,000 or 86.3% in the quarter ended
March 31, 2000 compared to the respective 1999 period. This increase in the
March 31, 2000 quarter was due to an increase in net interest income of $54,000
and a decrease in provision for losses on loans of $3,000. These factors were
primarily offset by an increase in non-interest expense of $11,000 and an
increase in provision for income tax of $11,000.
The $54,000 increase in net interest income in the first quarter of
2000 over the same period in 1999, was primarily due to increases in
interest-earning assets funded by increased deposits and previous 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 2.86% in the
quarter ended March 31, 1999 to 3.40% in the first quarter of 2000. The average
rate on interest-bearing liabilities decreased from 4.17% in the first quarter
of 1999 to 3.96% in the first quarter of 2000, while the average yield on
interest-earning assets increased from 7.03% to 7.36% over the same period. 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 build up for the Year 2000 into higher
yielding interest-earning assets.
Total interest income increased by $85,000 or 19.0% in the quarter
ended March 31, 2000 over the comparable 1999 period due to higher balances and
higher yields. The average balance of total interest-earning assets increased
from $24.6 million in the first quarter of 1999 to $28.6 million in the first
quarter of 2000.
Total interest expense increased by $31,000 or 14.0% for the quarter
ended March 31, 2000 compared to the respective 1999 period. This increase in
the 2000 quarter was primarily due to an increase in interest paid on Federal
Home Loan Bank advances of $24,000 and an increase in total interest paid on
deposit accounts of $7,000.
The provision for loan losses decreased by $3,000 for the quarter
March 31, 2000 from the comparable 1999 period. At March 31, 2000, the
Association's total non-accruing loans amounted to $80,000. The allowance for
loan losses amounted to $391,000 at March 31, 2000, representing 2.1% of the
total loans held in portfolio and 487.6% 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 increased by $600 or 3.0% in the quarter ended
March 31, 2000 from the comparable 1999 period. This increase in the quarter was
primarily due to a $1,200 increase in commissions on credit life insurance
offset mainly by a $600 decrease in service charges on deposit accounts.
Non-interest expenses increased by $11,000 or 6.3% in the quarter
ended March 31, 2000 over the comparable 1999 period. This increase in the
quarter was primarily due to increases of $9,000 in legal and other
professional, $9,000 in other taxes (share tax assessment), $5,000 in
compensation and benefits, $2,000 in occupancy, and $1,000 in advertising
expenses. These increases in non-interest expenses were partially offset by
decreases of $12,000 in other general and administrative, $2,000 in deposit
insurance premium, and $1,000 in data processing.
The increase of $9,000 in legal and other professional expense for the
three months ended March 31, 2000 was primarily caused by management's decision
to pay all of the cost associated
13
<PAGE>
with accounting work performed in 2000 for our 1999 audit in the first quarter
instead of expensing it over the remainder of the year.
The increase of $5,000 in compensation and benefits for the three
months ended March 31, 2000 was primarily due to increases of $3,000 in
compensation of officers and employees, $2,000 in ESOP contribution and $1,000
in contributions to employee retirement plan expenses. These increases were
partially offset by a decrease of $1,000 in other employee benefits.
The $11,000 increase in provision for income taxes for the quarter
ending March 31, 2000 over the same period in 1999 was due primarily to the
increase in pre-tax earnings.
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
March 31, 2000, the Association's liquidity was 13.3% or $2.2 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 March 31, 2000, the Association's tangible and core capital
both amounted to $2.9 million or 10.0% of adjusted total assets of $29.3
million, and the Association's risk-based capital amounted to $3.1 million or
21.2% of adjusted risk-weighted assets of $14.8 million.
14
<PAGE>
As of March 31, 2000, the Association's unaudited regulatory capital
requirements are as indicated in the following table:
<TABLE>
<CAPTION>
(Dollars In Thousands)
TANGIBLE CORE RISK-BASED
CAPITAL CAPITAL CAPITAL
------- ------- -------
<S> <C> <C> <C>
GAAP Capital ......................................... $2,923 $2,923 $2,923
Unrealized loss on securities available
net of taxes ......................................... -- 11 11
Additional Capital Items: General Valuation Allowances -- -- 186
------ ------ ------
Regulatory Capital Computed .......................... 2,923 2,934 3,120
Minimum Capital Requirement .......................... 439 1,170 1,180
Regulatory Capital Excess ............................ $2,484 $1,764 $1,940
====== ====== ======
Regulatory Capital as a
Percentage ...................................... 10.03% 10.03% 21.15%
Minimum Capital Required
as a Percentage ................................. 1.50% 4.00% 8.00%
------ ------ ------
Regulatory Capital as a
Percentage in Excess
of Requirements .................................. 8.53% 6.03% 13.15%
====== ====== ======
</TABLE>
Based on the above capital ratios, the Association meets the criteria
for a "well capitalized" institution at March 31, 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 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.
15
<PAGE>
IBL Bancorp, Inc.
Form 10-QSB
Quarter Ended March 31, 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 sections
(a) through (c) of this item.
On September 30, 1998, the Company sold 210,870 shares of
its common stock at $10.00 per share in connection with the
conversion of the Association from the mutual to stock form,
resulting in gross proceeds of $2,108,700. Net proceeds
amounted to $1,746,920, of which 50% was used by the Company
to purchase all of the Association's common stock issued in
the conversion. Of the proceeds retained by the Company,
$168,690 was used to make a loan to the Company's Employee
Stock Ownership Plan ("ESOP") in order to fund the purchase
of 16,869 shares by the ESOP in the conversion. The remaining
net proceeds retained by the Company are being used as the
Company's working capital and have been invested in
investment securities and other interest-earning assets.
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:
There are no matters required to be reported under this
section.
Item 5 - Other Information:
There are no matters required to be reported under this item.
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 March 31, 2000.
16
<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: May 8, 2000 By:/s/G. Lloyd Bouchereau, Jr.
------------------------------
G. Lloyd Bouchereau, Jr.,
President and
Chief Executive Officer
Date: May 8, 2000 By:/s/Gary K.Pruitt
-------------------
Gary K. Pruitt
Secretary
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 149
<INT-BEARING-DEPOSITS> 3,462
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 4,379
<INVESTMENTS-CARRYING> 2,732
<INVESTMENTS-MARKET> 2,652
<LOANS> 19,238
<ALLOWANCE> 391
<TOTAL-ASSETS> 29,851
<DEPOSITS> 23,906
<SHORT-TERM> 2,300
<LIABILITIES-OTHER> 97
<LONG-TERM> 0
0
0
<COMMON> 2
<OTHER-SE> 3,546
<TOTAL-LIABILITIES-AND-EQUITY> 29,851
<INTEREST-LOAN> 381
<INTEREST-INVEST> 108
<INTEREST-OTHER> 41
<INTEREST-TOTAL> 530
<INTEREST-DEPOSIT> 224
<INTEREST-EXPENSE> 254
<INTEREST-INCOME-NET> 276
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 185
<INCOME-PRETAX> 113
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 75
<EPS-BASIC> .39
<EPS-DILUTED> .35
<YIELD-ACTUAL> 3.81
<LOANS-NON> 80
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 61
<ALLOWANCE-OPEN> 406
<CHARGE-OFFS> 15
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 391
<ALLOWANCE-DOMESTIC> 116
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 275
</TABLE>
