SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10 - QSB
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarter ended September 30, 2000 Commission File Number 2-89559
Zachary Bancshares, Inc.
(Exact name of registrant as specified in its charter)
Louisiana 72-0981148
(State of or other jurisdiction (I.R.S. Employer incorporation
of organizaton) or Identification No.)
4743 Main Street
Post Office Box 497
Zachary, Louisiana 70791-0497
(Address of principal executive office) (Zipcode)
Registrant's telephone number, including area code 225 654 2701
None
(Former name, former address and former fiscal
year if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 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
classes of common stock, as of the latest practicable date.
Common Stock, $10 par value, 193,667 shares outstanding as of
September 30, 2000.
I N D E X
Financial Statements:
Consolidated Balance Sheets - September 30, 2000,
December 31, 1999 and September 30, 1999 2
Consolidated Statements of Income - for the three
and nine months ended September 30, 2000 and 1999 3
Consolidated Statements of Changes in Stockholders'
Equity - for the nine months ended September 30,
2000 and 1999 4
Consolidated Statements of Cash Flows -
for the nine months ended September 30, 2000 and 1999 5 - 6
Notes to Consolidated Financial Statements 7 - 11
Management's Discussion and Analysis of Financial
Condition and Results of Operations 12 - 14
Part II - Other Information 15
Signatures 16
Management's Responsibility for Financial Reporting 17
Independent Accountant's Report 18
1
Zachary Bancshares, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
September 30, 2000, December 31, 1999 and September 30, 1999
($ in Thousands)
ASSETS
(UNAUDITED) (UNAUDITED)
September 30, December 31, September 30,
2000 1999 1999
Cash and Due from Banks $ 2,946 $ 3,161 $ 3,875
Interest Bearing Deposits in
Other Institutions 10 29 58
Reserve Funds Sold 1,500 1,425 1,975
Securities Available for Sale
(Amortized Cost $15,568,
$15,876 and $16,842) 15,216 15,433 16,442
Loans 65,090 61,252 59,936
Less: Allowance for Loan Losses (1,141) (965) (950)
63,949 60,287 58,986
Bank Premises and Equipment 3,946 4,157 4,236
Accrued Interest Receivable 577 502 595
Other Assets 346 301 257
Total Assets $88,490 $85,295 $86,424
LIABILITIES
Deposits:
Noninterest Bearing $18,118 $17,848 $18,441
Interest Bearing 58,690 55,718 58,102
76,808 73,566 76,543
Borrowed Funds 1,000 2,000 -
Accrued Interest Payable 232 194 183
Other Liabilities 320 122 237
Total Liabilities $78,360 $75,882 $76,963
STOCKHOLDERS' EQUITY
Common Stock - $10 Par Value; Authorized
2,000,000 Shares; Issued 216,000
Shares, Respectively $ 2,160 $ 2,160 $ 2,160
Surplus 1,480 1,480 1,480
Retained Earnings 7,169 6,513 6,532
Unrealized (Loss) on Securities
Available for Sale, Net (232) (293) (264)
Treasury Stock (22,333 Shares at Cost) (447) (447) (447)
Total Stockholders' Equity 10,130 9,413 9,461
Total Liabilities and
Stockholders' Equity $88,490 $85,295 $86,424
The accompanying notes are an integral part of these financial statements.
2
Zachary Bancshares, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF INCOME
for the three and nine months ended September 30, 2000 and 1998
($ in Thousands)except per share data
(UNAUDITED) (UNAUDITED)
QUARTER ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
Interest Income:
Interest and Fees on Loans $1,454 $1,333 $4,271 $3,762
Interest on Securities 257 258 765 780
Other Interest Income 19 50 98 201
Total Interest Income $1,730 $1,641 $5,134 $4,743
Interest Expense:
Interest Expense on Deposits $ 638 $ 576 $1,785 $1,683
Interest Expense on Borrowings 17 - 59 -
Total Interest Expense $ 655 $ 576 $1,844 $1,683
Net Interest Income $1,075 $1,065 $3,290 $3,060
Provision for Loan Losses 76 45 205 135
Net Interest Income After
Provision for Loan Losses 999 1,020 3,085 2,925
Other Income:
Service Charges on Deposit Accounts 151 137 448 376
Gain on Sale of Assets - 387 - 387
Other Operating Income 54 37 151 119
Total Other Income 205 561 599 882
Income before Other Expenses $1,204 $1,581 $3,684 $3,807
Other Expenses:
Salaries and Employee Benefits 453 421 1,354 1,190
Occupancy Expense 85 80 246 176
Net Other Real Estate Expense (40) (25) (122) 58
Other Operating Expenses 299 288 892 836
Total Other Expenses 797 764 2,370 2,260
Income before Income Taxes 407 817 1,314 1,547
Applicable Income Taxes 137 278 445 525
Net Income $ 270 $ 539 $ 869 $ 1,022
Per Share:
Net Income $ 1.39 $ 2.78 $ 4.49 $ 5.28
Cash Dividends $ 1.10 $ 1.00 $ 1.10 $ 1.00
The accompanying notes are an integral part of these financial statements.
3
Zachary Bancshares, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
for the nine months ended September 30, 2000 and 1999
($ in Thousands)
ACCUMULATED
OTHER TOTAL
COMMON RETAINED COMPREHENSIVE TREASURY STOCKHOLDERS
STOCK SURPLUS EARNINGS INCOME STOCK EQUITY
Balances,
January 1, 1999 $2,160 $1,480 $5,704 $ 6 $(447) $ 8,903
Comprehensive Income:
Net Income 1,022 1,022
Change in Unrealized
Gain (Loss) on Securities
Available for Sale (270) (270)
Less: Reclassification
Adjustment - -
Total Comprehensive
Income 752
Cash Dividends (194) (194)
Balances, (Unaudited)
September 30, 1999 $2,160 $1,480 $6,532 $ (264) $(447) $ 9,461
Balances,
January 1, 2000 $2,160 $1,480 $6,513 $ (293) $(447) $ 9,413
Comprehensive Income:
Net Income 869 869
Change in Unrealized
Gain (Loss) on Securities
Available for Sale 61 61
Less: Reclassification
Adjustment - -
Total Comprehensive ____
Income 930
Cash Dividends (213) (213)
Balances, (Unaudited)
September 30, 2000 $2,160 $1,480 $7,169 $ (232) $(447) $10,130
The accompanying notes are an integral part of these financial statements.
4
Zachary Bancshares, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the nine months ended September 30, 2000 and 1999
($ in Thousands)
(UNAUDITED)
September,
2000 1999
Cash Flows From Operating Activities:
Net Income $ 869 $ 1,022
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Provision for Loan Losses 205 135
Provision for Depreciation and Amortization 249 187
Stock Dividends - Federal Home Loan Bank (22) (14)
Net Amortization (Accretion) of Securities (24) 27
Charge Off of Other Real Estate - 93
(Gain) on Sale of Other Real Estate (125) (37)
(Gain) on Sale of Bank Assets (1) (387)
(Increase) in Accrued Interest Receivable (75) (77)
(Increase) Decrease in Other Assets (75) 114
Increase (Decrease) in Accrued Interest Payable 38 (49)
Increase (Decrease) in Other Liabilities 198 32
Net Cash Provided by Operating Activities 1,237 1,046
Cash Flows From Investing Activities:
Net (Increase) Decrease in Reserve Funds Sold (75) 4,200
Purchases of Securities Available for Sale (969) (8,786)
Maturities or Calls of Securities Available for Sale 500 7,000
Principal Payments on Mortgage-Backed Securities 823 2,495
Net Increase in Loans (3,867) (7,607)
Purchases of Premises and Equipment (38) (1,542)
Proceeds from Sales of Other Real Estate 125 136
Proceeds from Sale of Bank Assets 1 574
Net Cash Provided by Investing Activities (3,500) (3,530)
(CONTINUED)
5
(UNAUDITED)
September 30,
2000 1999
Cash Flows From Financing Activities:
Decrease in Borrowed Funds (1000) -
Net Increase (Decrease) in Demand Deposits,
NOW Accounts and Savings Accounts (1,514) 2,921
Net Increase (Decrease) in Certificates of Deposits 4,756 (828)
Cash Dividends (213) (194)
Net Cash Provided by Financing Activities 2,029 1,899
Increase (Decrease) in Cash and Cash Equivalents (234) (585)
Cash and Cash Equivalents -
Beginning of Period 3,190 4,518
Cash and Cash Equivalents -
End of Period $ 2,956 $ 3,933
Supplemental Disclosures of Cash Flow
Information:
Noncash Investing Activities:
Change in Unrealized Gain or (Loss)
on Securities Available for Sale $ 91 $ (409)
Change in Deferred Tax Effect on
Unrealized Gain or (Loss) on Securities
Available for Sale $ 31 $ 139
Cash Payments For:
Interest Paid on Deposits $ 1,753 $ 1,731
Income Tax $ 485 $ 613
The accompanying notes are an integral part of these financial statements.
6
Zachary Bancshares, Inc. and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
September 30, 2000 and 1999
Summary of Significant Accounting Policies -
The accounting principles followed by Zachary Bancshares, Inc.
and its wholly-owned Subsidiary, Bank of Zachary, are those which
are generally practiced within the banking industry. The methods
of applying those principles conform with generally accepted
accounting principles and have been applied on a consistent
basis. The principles which significantly affect the
determination of financial position, results of operations,
changes in stockholders' equity and cash flows are summarized
below.
Presentation
The accompanying unaudited consolidated interim financial
statements do not include all of the information and footnotes
required by generally accepted accounting principles. Management
is of the opinion that the unaudited interim financial statements
reflect all normal, recurring accrual adjustments necessary to
provide a fair statement of the results for the interim periods
presented. It is noted that the results for the first nine
months ended September 30, 2000 are no indication of the
expected results for the annual period which ends December 31,
2000. Additional information concerning the audited financial
statements and notes can be obtained from Zachary B
ancshares, Inc.'s annual report and Form 10-KSB filed for the
period ended December 31, 1999.
Principles of Consolidation
The consolidated financial statements include the accounts of
Zachary Bancshares, Inc. (the Company), and its wholly-owned
subsidiary, Bank of Zachary (the Bank). All material
intercompany accounts and transactions have been
eliminated. Certain reclassifications to previously published
financial statements have been made to comply with current
reporting requirements.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that
7
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates.
The determination of the adequacy of the allowance for loan
losses is based on estimates that are particularly susceptible to
significant changes in the economic environment and market
conditions. In connection with the determination of the
estimated losses on loans, management obtains independent
appraisals for significant collateral.
The Bank's loans are generally secured by specific items of
collateral including real property, consumer assets, and business
assets. Although the Bank has a diversified loan portfolio, a
substantial portion of its debtors' ability to honor their
contracts is dependent on local economic conditions.
While management uses available information to recognize losses
on loans, further reductions in the carrying amounts of loans may
be necessary based on changes in local economic conditions. In
addition, regulatory agencies, as an integral part of their
examination process, periodically review the estimated losses on
loans. Such agencies may require the Bank to recognize
additional losses based on their judgments about information
available to them at the time of their examination. Because of
these factors, it is reasonably possible that the estimated
losses on loans may change materially in the near term. However,
the amount of the change that is reasonably possible cannot be
estimated.
Securities
Securities classified as held to maturity are those debt
securities the Bank has both the intent and ability to hold to
maturity regardless of changes in market conditions, liquidity
needs or changes in general economic conditions. Securities
classified as trading are those securities held for resale in
anticipation of short-term market movements. The Bank had no
securities classified as held to maturity or trading at September
30, 2000 or 1999.
Securities classified as available for sale are those debt
securities that the Bank intends to hold for an indefinite period
of time but not necessarily to maturity. Any decision to sell a
security classified as available for sale would be based on
various factors, including significant movements in interest
rates, changes in the maturity mix of the Bank's assets and
liabilities, liquidity needs, regulatory capital considerations,
and other similar factors. Securities available for sale are
carried at fair value. Unrealized gains or losses are reported
as increase or decreases in stockholders' equity, net of the
related deferred tax effect. Realized gains or losses,
determined on the basis of the cost of specific securities sold,
are included in earnings.
8
Loans
Loans are stated at principal amounts outstanding less the
allowance for loan losses. Interest on commercial and individual
loans is accrued daily based on the principal outstanding.
Generally, the Bank discontinues the accrual of interest income
when a loan becomes 90 days past due as to principal or interest.
When a loan is placed on non-accrual status, previously
recognized but uncollected interest is reversed to income or
charged to the allowance for loan losses. Interest income is
subsequently recognized only to the extent cash payments are
received. The Bank classifies loans as impaired if, based on
current information and events, it is probable that the Bank
will be unable to collect the scheduled payments of principal and
interest when due according to the contractual terms of the loan
agreement. The measurement of impaired loans is based on the
present value of the expected future cash flows discounted at the
loan's effective interest rate or the loan's observable market
price or based on the fair value of the collateral if the loan is
collateral-dependent.
Allowance for Loan Losses
The allowance for loan losses is maintained at a level which in
management's judgment is adequate to absorb credit losses
inherent in the loan portfolio. The allowance for loan losses is
based upon management's review and evaluation of the loan
portfolio. Factors considered in the establishment of the
allowance for loan losses include management's evaluation of
specific loans; the level and composition of classified loans;
historical loss experience; results of examinations by regulatory
agencies; an internal asset review process; expectations of
future economic conditions and their impact on particular
borrowers; and other judgmental factors. Allowances for impaired
loans are generally determined based on collateral values or the
present value of estimated cash flows. Although management uses
available information to recognize losses on loans, because of
uncertainties associated with local economic conditions,
collateral values, and future cash flows on impaired loans, it is
reasonably possible that a material change could occur in the
allowance for loan losses in the near term. However, the amount
of the change that is reasonably possible cannot be estimated.
The allowance for loan losses is based on estimates of
potential future losses, and ultimate losses may vary from the
current estimates. These estimates are reviewed periodically and
as adjustments become necessary, the effect of the change in
estimate is charged to operating expenses in the period incurred.
All losses are charged to the allowance for loan losses when the
loss actually occurs or when management believes that the
collectibility of the principal is unlikely. Recoveries are
credited to the allowance at the time of recovery.
9
Bank Premises and Equipment
Bank premises and equipment are stated at cost less accumulated
depreciation. Depreciation is provided at rates based upon
estimated useful service lives using the straight-line method for
financial reporting purposes and accelerated methods for income
tax reporting.
The cost of assets retired or otherwise disposed of and the
related accumulated depreciation are eliminated from the accounts
in the year of disposal and the resulting gains or losses are
included in current operations.
Expenditures for maintenance and repairs are charged to
operations as incurred. Cost of major additions and improvements
are capitalized.
Other Real Estate
Other real estate is comprised of properties acquired through
foreclosure or negotiated settlement. The carrying value of
these properties is lower of cost or fair value, minus estimated
costs to sell. Loan losses arising from the acquisition of these
properties are charged against the allowance for loan losses.
Any subsequent market reductions required are charged to Net
Other Real Estate Expense. Revenues and expenses associated with
maintaining or disposing of foreclosed properties are recorded
during the period in which they are incurred.
Income Taxes
The provision for income taxes is based on income as reported
in the financial statements. Also certain items of income and
expenses are recognized in different time periods for financial
statement purposes than for income tax purposes. Thus provisions
for deferred taxes are recorded in recognition of such timing
differences.
Deferred taxes are provided utilizing a liability method
whereby deferred tax assets are recognized for deductible
temporary differences and operating loss and tax credit
carryforwards and deferred tax liabilities are recognized for
taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and
liabilities and their tax bases. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it
is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactments.
The corporation and its subsidiary file a consolidated federal
income tax return. In addition, state income tax returns are
filed individually by the Company in accordance with state
statutes.
10
Earnings per Common Share
Basic EPS is computed by dividing income applicable to common
shares by the weighted average shares outstanding; no dilution
for any potentially convertible shares is included in the
calculation. Diluted EPS, reflects the potential dilution that
could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted
in the issuance of common stock that then shared in the earnings
of the Company. At September 30, 2000, the Company had no
convertible shares or other contracts to issue common stock. The
weighted average number of shares of common stock used to
calculate basic EPS was 193,667 for the periods ended September
30, 2000 and 1999, respectively.
Statement of Cash Flows
For the purposes of reporting cash flows, cash and cash
equivalents includes cash and due from banks and interest bearing
deposits in other banks.
Comprehensive Income
Components of comprehensive income are revenues, expenses,
gains and losses that under GAAP are included in comprehensive
income but excluded from net income. The components of
comprehensive income are disclosed in the Statements of Changes
in Stockholders' Equity for all periods presented.
11
Zachary Bancshares, Inc. and Subsidiary
MANAGEMENT'S DISCUSSION
September 30, 2000
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS ($ in Thousands)
The following is management's discussion and analysis of the
significant changes in income and expenses in relation to the
changes in financial position for the nine months ended September
30, 2000 and 1999. This information should be read in conjunction
with the financial statements and notes relating thereto. The
Company is unaware of any trends, uncertainties or events which
would or could have a material impact on future operating
results, liquidity, or capital.
FINANCIAL CONDITION ANALYSIS
Loans
Total loans were $65,090 at September 30, 2000 compared to $59,936
at September 30, 1999. This represents an increase of $5,154 or
9%. Loan growth was funded from reallocation of investment
securities as they matured and from deposit growth.
Investment Securities
Investment securities decreased 8% to $15,216 at September 30,
2000 compared to $16,442 at September 30, 1999. This decrease
was due to the reallocation of these funds to the loan portfolio
as the securities matured.
Bank Premises and Equipment
Total bank premises and equipment were $3,946 at September 30,
2000 compared to $4,236 at September 30, 1999. The Company
completed a contract totaling $2,921 for the construction of a
new main office facility located in Zachary, La. during the
second quarter of 1999 and began depreciating the facility in the
third quarter of 1999.
12
Deposits
Total deposits increased $265 to $76,808 at September 30, 2000
compared to $76,543 at September 30, 1999 as the bank bid less
aggressively on public funds and was able to attract new
checking, savings and certificate accounts from individuals and
commercial customers.
RESULTS OF OPERATION
For the Nine Month Period Ended September 30, 2000 over 1999
Net Income
Net Income was $869 for the nine month period ended September 30,
2000 compared to $1,022 in the same period in 1999. 1999's
results included the $387 gain on sale of the Company's former
main office facilities and the tax effect of that transaction.
Without that transaction net income would have been $767. Net
interest income increased $230 or 8% for the 2000 nine month
period offset by a $110 increase in other overhead expenses.
Interest Income
Interest Income for the nine month period ended September 30, 2000
increased 8% to $5,134 compared to $4,743 for the same period in
1999. The interest income increase resulted from the Company's
continued asset mix reallocation from lower yielding securities
into higher yielding loans. The Bank's loan portfolio increased
9% to $65,090 while its investment portfolio decreased 8% to
$15,216 in the time period under consideration.
Interest Expense
Interest Expense for the nine months ended September 30, 2000 was
$1,844 or an increase of 10% over the same period in 1999 at
$1,683. Interest bearing deposits increased 1% to $58,690 from
$58,102 at September 30, 1999. Weight average interest costs
increased to 3.20% from 2.98% at September 30, 1999 as interest
rate hikes in the general U.S. economy led to slightly higher
rates in certificates of deposit locally and the Company used a
Federal Home Loan Bank advance of $1,000 for additional
liquidity.
Provision for Loan Losses
The Company included $205 for provision for loan losses during the
nine month period ended September 30, 2000 compared to $135 at
September 30, 1999 due to continued increases in the loan
13
portfolio and the start of credit tightening in the general
economy. Loans are reviewed monthly to facilitate identification
and monitoring of potentially deteriorating credit. Management
considers the current allowance adequate to absorb potential
losses but continues to monitor the situation.
Total Other Income
Total other income for the nine month period ended September 30,
2000 decreased $283 compared to September 30, 1999. The 1999
results included the non-recurring $387 gain on sale of the
Company's former main office facility while service charges on
deposit accounts increased $72 and other operating income
increased $32.
Total Other Expense
Total other expenses increased 5% or $110 to $2,370 at September
30, 2000 from $2,260 at September 30, 1999. Employee salaries and
benefits increased $164 for the nine month period under
consideration. Salary increases, new hires, and increased
hospitalization insurance and retirement expenses all contributed
to this increase. Occupancy expense increased $70 for the 2000
nine month time period as compared to 1999 as the Company has
occupied its new facility for the whole period in 2000 compared
to only three months in the 1999 nine month period.
Income Tax
The Company is fully taxable at the maximum rate (34%) in both
2000 and 1999 and expects to remain taxable at the current rate
throughout 2000.
Earnings Per Share
The Company's 2000 earnings per share at September 30, 2000 was
$4.49 a 15% decrease or $.79 per share compared to the previous
year due to the 1999 period including the $387 gain on sale.
Without the gain on sale in 1999 earnings per share would have
been $3.96.
Dividends
The Company's cash dividend increased $.10 at June 30, 2000 to
$1.10 per share or 10% over the previous year.
14
PART II
Item l. LEGAL PROCEEDINGS
During the normal course of business, the Company is
involved in various legal proceedings. In the opinion of
management and counsel, any liability resulting from such
proceedings would not have a material adverse effect on the
Company's financial statements.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. None
15
SIGNATURES
Pursuant to the requirement of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
ZACHARY BANCSHARES, INC.
Date: ____________________
Harry S. Morris, Jr.
President
__________________
Larry Bellard
Treasurer
16
Management's Responsibility for Financial Reporting
The management of Zachary Bancshares, Inc. is responsible for
the preparation of the financial statements, related financial
data and other information in this quarterly report. The
financial statements are prepared in accordance with generally
accepted accounting principles and include some amounts that are
necessarily based on management's informed estimates and
judgments, with consideration given to materiality. All financial
information contained in this quarterly report is consistent with
that in the financial statements.
Management fulfills its responsibility for the integrity,
objectivity, consistency and fair presentation of the financial
statements and financial information through an accounting system
and related internal accounting controls that are designed to
provide reasonable assurance that assets are safeguarded and that
transactions are authorized and recorded in accordance with
established policies and procedures. The concept of reasonable
assurance is based on the recognition that the cost of a system of
internal accounting controls should not exceed the related
benefits. As an integral part of the system of internal ac
counting controls, Zachary Bancshares, Inc. has a professional
staff who monitors compliance with and assesses the effectiveness
of the system of internal accounting controls and coordinates
audit coverage with the independent public accountants.
The Audit Committee of the Board of Directors, composed
solely of outside directors, meets periodically with management,
and the independent public accountants to review matters relating
to financial reporting, internal accounting control and the
nature, extent and results of the audit effort. The independent
public accountants have direct access to the Audit Committee with
or without management present.
The financial statements, as of December 31, 1999, were
examined by Hannis T. Bourgeois, LLP, independent public
accountants, who rendered an independent professional opinion on
the financial statements prepared by management. The financial
statements, as of September 30, 2000, have been reviewed by Hannis
T. Bourgeois, LLP.
__________________
Larry Bellard, Treasurer
17
INDEPENDENT ACCOUNTANT'S REPORT
November 6, 2000
To the Shareholders and Board of Directors
Zachary Bancshares, Inc. and Subsidiary
Zachary, Louisiana
We have reviewed the accompanying Consolidated Balance Sheets of
Zachary Bancshares, Inc. and Subsidiary as of September 30, 2000 and
the related Consolidated Statements of Income for three and nine
month periods then ended, and the related Consolidated Statements of
Changes in Stockholders' Equity and Cash Flows for the nine month
periods then ended.
We previously audited and expressed our unqualified opinion in
our report dated January 7, 2000 on the Consolidated Balance Sheet of
Zachary Bancshares, Inc. and Subsidiary as of December 31, 1999.
We conducted our reviews in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information consists
principally of obtaining an understanding of the system for the
preparation of interim financial information, applying analytical
review procedures to financial data, and making inquiries of persons
responsible for financial and accounting matters. It is
substantially less in scope than an examination in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as
a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to the accompanying consolidated
financial statements for them to be in conformity with generally
accepted accounting principles.
Respectfully submitted,
HANNIS T. BOURGEOIS, LLP
Baton Rouge, Louisiana
18
