UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1995
Commission file Number 2-89561
Teche Bancshares, Inc.
Louisiana 72-1008552
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
606 South Main Street, St. Martinville, Louisiana 70582
(Address of principal executive offices 70582
Registrant's telephone number, including area code:
(318) 394-9726
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 ( )
Indicated the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical date.
Common Stock, $10 Par Value - 27,925 shares as of September
30, 1995.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Dollars in Thousands)
Sept 30,
1995 December 31
(Unaudited) 1994
ASSETS
Cash and due from banks $1,698 $3,019
Interest-bearing deposits in banks 297 882
Securities Available for Sale at mkt value 11,860 10,900
Securities Held To Maturity (Market Value
of $4,206 and $4,139, respectively) 4,193 4,215
Other securities at cost 257 254
Federal funds sold 175 0
Loans, net of allowance for loan losses
of $160 and $180, respectively) 10,832 10,968
Bank premises, furniture, and equipment 767 668
Accrued interest receivable 320 252
Other real estate owned 313 411
Deferred tax asset 0 76
Other assets 190 171
----------------------
Total assets $30,902 $31,816
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits -
Non-interest demand 4,508 $4,379
Interest bearing -
NOW and MMDA accounts 4,939 8,006
Savings 3,063 3,453
Time, $100 and over, 5,330 4,322
Other time 9,635 9,005
----------------------
Total deposits 27,475 29,165
Securities Sold under Repurchase Agreements 306 0
Accrued interest payable 107 78
Notes payable - stockholders 292 292
Other liabilities and accrued expenses 257 316
----------------------
Total liabilities 28,437 29,851
Stockholders' equity:
Common stock ($10 par value, 100,000
shares authorized, 28,125 shares
issued and outstanding) 281 281
Surplus 1,143 1,143
Retained earnings 1,049 808
----------------------
2,473 2,232
Less: 225 shares of treasury stock (19) (21)
Allowance for unrealized
loss on mkt securities 0 (4)
Market Value Allowance on
AFS Bonds 11 (242)
----------------------
Total stockholders' equity 2,465 1,965
----------------------
Total liabilities and stockholders' equity $30,902 $31,816
======================
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended September 30, 1995 and 1994;
(Dollars in Thousands except Earnings per Share)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1995 1994 1995 1994
Interest income:
Interest and fees on loans $297 $276 $857 $775
Interest on investment securities -
U.S. government's 246 213 704 557
State/political sub's 1 1 2 2
Interest on interest-bearing
deposits in banks 6 17 26 52
Dividends on equities 3 0 4 1
Interest on federal funds 29 2 84 29
--------------------------------------------
Total interest income 582 509 1,677 1,416
Interest expense:
Interest on deposits $243 $167 $683 $477
Stockholder loans 3 5 11 16
--------------------------------------------
Total interest expense 246 172 694 493
--------------------------------------------
Net interest income 336 337 983 923
Other income:
Service charges deposits 59 59 170 157
Gain on sale of ORE 0 0 10 11
Other income and charges 11 18 42 43
--------------------------------------------
Total other income 70 77 222 211
Other expenses:
Salaries/employee benefits 135 119 384 352
Occupancy expense 54 41 153 121
Loss on sale of ORE 0 0 0 34
Loss on sale of securities (1) 0 4 0
Other operating expenses 86 112 299 306
--------------------------------------------
Total other expenses 274 272 840 813
--------------------------------------------
Income before income taxes 132 142 365 321
Income taxes 43 34 125 87
--------------------------------------------
Net income $89 $108 $240 $234
Earnings per share $3.17 $3.86 $8.60 $8.41
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
For the Nine Months Ended September 30, 1995 and 1994
Allowance for
Unrealized Unrealized
Loss on Gain (Loss)
Common Stk Marketable on
Treas. Stk Equity AFS
Surplus Securities Securities Total
Balances, January 1, 1995 $2,211 ($4) ($242) $1,965
Net income nine months 240 $240
Sale of Treasury Stock 2 $2
Change in Unrealized AFS 254 $254
Realized loss mkt securities 4 $4
----- ----- ----- -----
Balances, Sept. 30, 1995 $2,453 $0 $12 $2,465
======= ======= ======= =======
Balances, January 1, 1994 $2,001 ($4) $0 $1,997
Net income nine months 234 $234
Change in Unrealized AFS (149) ($149)
------ ------ ------ ------
Balances, Sept. 30, 1994 $2,235 ($4) ($149) $2,082
====== ====== ====== ======
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine Months Ended September 30, 1995 and 1994
Sept. 30, Sept. 30,
1995 1994
Cash flows from operating activities:
Net income $240 $234
Adjustments to reconcile net income
to net cash provided by
operating activities -
Depreciation of bank premises 63 53
(Gain) Loss on Other real estate (10) 22
(Gain) Loss on sale of securities 4 0
(Inc)dec accrued int recievable (68) (89)
(Inc) dec other assets (18) 1
(Inc) dec deferred tax asset 76 0
Inc(dec) accrued interest payable 30 23
Inc(dec) other liabilities (59) 88
Net cash provided by operating ----------------------
activities 258 332
Cash flows from investing activities:
Dec interest-bearing deposits in banks 585 0
Dec(inc) in federal funds (175) 625
Dec(inc) in investment securities (688) (717)
Net dec (inc) in loans 136 (1,256)
Capital expenditures premises & equip (161) (93)
Proceeds from sale of other real estate 107 262
----------------------
Net cash used in investing activities (196) (1,179)
Cash flows from financing activities:
Net increase (decrease) in -
Demand deposits 129 (178)
NOW and MMDA (3,067) (2,579)
Savings deposits (390) (243)
Time deposits $100,000 and over 1,007 1,460
Other time deposits 630 165
Increase in Repurchase Agreements 306 0
Increase in Fed Funds Purchased 0 350
Sale of Treasury Stock 2 0
----------------------
Net cash provided by financing activities (1,383) (1,025)
Net increase in cash and cash equivalents (1,321) (1,872)
Cash and cash equivalents, beginning 3,019 3,288
Cash and cash equivalents, end of period $1,698 $1,416
Cash paid during the period:
Interest $665 $470
Income Taxes $57 $10
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
The information furnished reflects all normal, recurring
adjustments which are, in the opinion of management, necessary for
a fair statement of Teche Bancshares, Inc. and its subsidiary for
the nine (9) months ended September 30, 1995. Results for the
interim period presented are not necessarily indicative of results
which may be expected for any other interim period or for the year
as a whole.
TECHE BANCSHARES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1995
Liquidity
Liquidity is the ability to insure that adequate funds are available
to satisfy contractual liabilities, fund operations, meet withdrawal
requirements of depositors and provide for customer's credit needs
in a timely manner. Our primary source of liquidity is our core
deposits. We supplement our core deposits with a line of credit with
one of our correspondent banks, public fund time deposits,
repurchase agreements with correspondent banks and a line of credit
with the Federal Home Loan Bank. Our sources of liquidity are
adequate to fund the loan demand that we are experiencing.
At the parent company level, cash is needed to service long-term
debts. Cash to fund long-term debt is currently being funded from
dividends from the Bank and from the Parent's cash held with the
Bank. Management believes the parent's current sources of funds are
sufficient to meet its liquidity needs for the foreseeable future.
Capital Resources and Asset Quality
Our consolidated risk based capital to asset ratio was 18.26% and
Tier one capital ratio was 7.95% at September 30, 1995. The bank
only risk based capital ratio was 20.37% and Tier one capital was
8.92%. Banks are required to maintain a risk weighted capital to
asset ratio of 8% and Tier one capital ratio of 5%. Our risk based
capital ratio and Tier one capital ratio both exceed the required
amount.
Asset quality continues to be satisfactory due to our increased
emphasis on credit quality in our loan portfolio. Management is of
the opinion that we have all of our problem credits identified and
that an adequate allowance has been made for any potential future
losses.
We continuously monitor the quality of our loans. Loans past due 90
days or greater still accruing at September 30, 1995 were $38,749 a
decrease of $17,854 from December 31, 1994. Loans on which the
accrual of interest had been discontinued at September 30, 1995
totalled $6,294 which is down $582 as compared to the amount at
December 31, 1994.
We are actively marketing our other real estate owned. At September
30, 1995 other real estate owned totalled $313,703 which is down
$97,449 or 23.7% from December 31, 1994.
Results of Operations
Net Income. Our net income for the nine months ended September 30,
1995 was $240,243 up $5,595 as compared to that of the same period
last year. Our net interest income increased during the period,
however, the increase in income was offset by increases in salaries
and benefit expense, occupancy expense and income tax expense. In
prior years, we had net operating loss carryforwards that were used
to reduce our income tax expense. In 1994 we used all of the
remaining tax credits and net operating loss carryforwards that we
had.
Revenue. Our net interest income for the nine months ended September
30, 1995 is up $60,179 as compared to the same period in 1994.
Starting in the first quarter of 1994, interest rates rose very
rapidly. This increase in rates caused our bank to increase the rate
paid on deposits faster than we were able to reprice our assets.
During the first quarter of 1995, our asset repricing started to
catch up with the deposit repricing. Since that time our net
interest income has improved. Additionally, we have improved our
net interest income through actively managing our interest expense.
Provision for Loan Losses. Our bad debt reserve totalled $160,194 at
September 30, 1995 which represents 1.47% of our gross loans. Our
reserve for loan loss was adequate and did not require any
additional provisions during the first nine months of 1995.
Other Income. Our other income is up $9,155 when compared to the
same period last year. The increase was due to an increase in NSF
income and service charges on new demand deposit accounts opened.
The NSF income increase was the result of a change in the volume of
items overdrawn.
Other Expenses. Other expenses are up $26,532 as compared to the
same time last year. The primary causes for this increase in
expenses were increases in employee salaries and occupancy expenses.
The increases in salaries were the result of raises that were placed
in effect during the last quarter of 1994. The increase in
occupancy costs were due to increased costs from the addition of the
ATM, depreciation expense associated with recent equipment purchases
and the expenses associated with opening and operating our new
Coteau Branch.
During the first quarter of 1995 we added a 24-hour voice response
system in order to provide better customer service. The 394-TECH
line provides customers 24-hour access to balance information,
checks cleared, time and temperature, deposits cleared and banking
hours.
During the third quarter we purchased a building and equipment
located in Coteau, Louisiana. The building and equipment was
formerly the branch of a New Iberia bank that was sold and the
purchaser had decided to close the location. We purchased the assets
and opened it as a branch of our bank. We are very excited with the
progress that has been made in opening this branch. Our branch
commenced operations on July 17, 1995. We actively monitor our costs
and are always searching for ways to cost effectively deliver
services to our customers.
Provision for Income Tax. A provision is made for income tax to
reflect three fourths (9/12th) of the annualized income tax that we
anticipate we will incur. In prior years we had net operating loss
carryforwards and investment tax credits that reduced our income tax
expense. During 1994 we used all of the remaining credits and
operating loss carryforwards that were available.
PART II - OTHER INFORMATION
Item #1 Legal proceedings
Inapplicable
Item #2 Changes in Securities
Inapplicable
Item #3 Defaults Upon Senior Securities
Inapplicable
Item #4 Submission of Matters to be a Vote of Securities Holders
Inapplicable
Item #5 Other information
Inapplicable
Item #6 Exhibits and Reports on Form 8-K
Inapplicable
TECHE BANCSHARES, INC.
Pursuant to the requirement of the Securities Exchange Act of
1934, the Bank has duly caused this quarterly report to be signed on
its behalf by the undersigned thereunto duly authorized.
TECHE BANCSHARES, INC.
Registrant
/s/ Alcee J. Durand, Jr.
November 9, 1995 Alcee J. Durand, Jr.
Date President/CEO
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