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 March 31, 1996
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 March 31, 1996.
TECHE BANCSHARES, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
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 three (3) months ended
March 31, 1996. 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. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED BALANCE SHEETS
March 31, 1996 and December 31, 1995
(Dollars in Thousands)
March 31,
1996 December 31,
(Unaudited) 1995
ASSETS
Cash and due from banks $1,614 $1,108
Securities Available for Sale at mkt value 13,379 11,943
Securities Held To Maturity (Market Value
of $3,983 and $5,274, respectively) 4,005 5,273
Other securities at cost 281 258
Federal funds sold 2,250 2,800
Loans, net of allowance for loan losses
of $160 and $161, respectively) 10,548 10,773
Bank premises, furniture, and equipment 726 744
Accrued interest receivable 300 269
Other real estate owned 100 113
Other assets 213 189
----------------------
Total assets $33,416 $33,470
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits -
Non-interest demand $4,890 $5,282
Interest bearing -
NOW and MMDA accounts 5,517 6,799
Savings 3,465 3,201
Time, $100 and over, 5,881 5,255
Other time 10,643 9,979
----------------------
Total deposits 30,396 30,516
Accrued interest payable 99 111
Notes payable - stockholders 151 151
Other liabilities and accrued expenses 199 159
----------------------
Total liabilities 30,845 30,937
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 1,172 1,111
----------------------
2,596 2,535
Less: 200 shares of treasury stock (19) (19)
Allowance for unrealized
loss on mkt securities 0 0
Market Value Allowance on
AFS Bonds (6) 17
----------------------
Total stockholders' equity 2,571 2,533
----------------------
Total liabilities and stockholders' equity $33,416 $33,470
======================
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1996 and 1995;
(Dollars in Thousands except Earnings per Share)
Three Months Ended
March 31, March 31,
1996 1995
Interest income:
Interest and fees on loans $274 $281
Interest on investment securities -
U.S. government securities 242 218
State and political subdivisions 3 1
Interest on interest-bearing deposits
in banks 0 14
Dividends on equity securities 0 0
Interest on federal funds sold 31 20
----------------------
Total interest income 550 534
Interest expense:
Interest on deposits $247 $206
Stockholder loans 2 4
----------------------
Total interest expense 249 210
----------------------
Net interest income 301 324
Other income:
Service charges on deposit accounts 58 56
Gain on sale of Other Real Estate 2 0
Other income and charges 17 15
----------------------
Total other income 77 71
Other expenses:
Salaries and employee benefits 144 129
Occupancy expense 51 51
Loss on sale of other real estate 2 4
Other operating expenses 91 107
----------------------
Total other expenses 288 291
----------------------
Income before income taxes 90 104
Income taxes 29 36
----------------------
Net income $61 $68
Earnings per share $2.18 $2.42
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 Three Months Ended March 31, 1996 and 1995
Allowance
Unrealized Unrealized
Loss on Gain (Loss)
Common Stock Marketable on
Treas. Stk Equity AFS
Surplus Securities Securities Total
Balances, January 1, 1996 $2,516 $0 $17 $2,533
Net income three months 61 $61
Change in Unrealized AFS (23) ($23)
------- ------ ------ -------
Balances, March 31, 1996 2,577 $0 ($6) $2,571
======= ====== ====== =======
Balances, January 1, 1995 2,211 ($4) ($242) $1,965
Net income three months 68 $68
Change in Unrealized AFS 129 $129
Realized loss mkt securities 4 $4
------- ------ ------ ------
Balances, March 31, 1995 $2,279 $0 ($113) $2,166
======= ====== ====== ======
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 Three Months Ended March 31, 1996 and 1995
March 31, March 31,
1996 1995
Cash flows from operating activities:
Net income $61 $68
Adjustments to reconcile net income
to net cash provided by
operating activities -
Depreciation of bank premises 25 20
(Gain) Loss on Other real estate 2 (4)
(Gain) Loss on sale of securities (2) 4
(Inc)dec accrued int receivable (30) 3
(Inc) dec deferred tax asset 0 18
(Inc) dec other assets (24) 0
Inc(dec) accrued interest payable (11) 23
Inc(dec) other liabilities 38 (186)
Net cash provided by operating ----------------------
activities 59 (54)
Cash flows from investing activities:
Dec interest-bearing deposits in banks 0 288
Dec(inc) in federal funds 550 (2,750)
Dec(inc) in investment securities (688) 1,466
Dec(inc) in other securities (23) 0
Net dec (inc) in loans 225 334
Capital expenditures premises & equip (7) (26)
Proceeds from sale of securities 500 2
Proceeds from sale of other real estate 10 57
----------------------
Net cash used in investing activities 567 (629)
Cash flows from financing activities:
Net increase (decrease) in -
Demand deposits (392) 55
NOW and MMDA (1,281) (3,081)
Savings deposits 263 (105)
Time deposits $100,000 and over 626 1,369
Other time deposits 664 618
----------------------
Net cash provided by financing activities (120) (1,144)
Net increase in cash and cash equivalents 506 (1,827)
Cash and cash equivalents, beginning 1,108 3,019
Cash and cash equivalents, end of period $1,614 $1,192
Cash paid during the period:
Interest $260 $186
Income Taxes $0 $14
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1996.
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 18.95% and Tier one
capital ratio was 7.71% at March 31, 1996. The bank only risk based capital
ratio was 19.95% and Tier one capital ratio was 8.14%. 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 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 March 31, 1996, were $1,218 a decrease of $2,414
from December 31, 1995. Loans on which the accrual of interest had been
discontinued at March 31, 1996 totalled $236,156 which is down $2,138 as
compared to the amount at December 31, 1995.
We are actively marketing our other real estate owned. At March 31, 1996
other real estate totalled $100,518 which is down $12,101 or 10.7% from
December 31, 1995.
Results of Operations
Net Income. Our net income for the three (3) months ended March 31, 1996
was $60,870 down $6,758 as compared to that of the same period last year. The
decrease in income was mostly attributed to a decrease in our net interest
income.
Revenue. Our net interest income for the three (3) months ended March 31,
1996 is down $23,680 as compared to the same period in 1995. The decrease was
the result of the combination of a $200,000 loan that was placed on non-
accrual and Certificates of deposit that have not rolled down since rates
have declined. We anticipate an improvement in our net interest income as
higher rate Certificates of Deposit reprice. Contributing to our decline in
net interest income was the growth in deposits that we have experienced
during the first quarter. Our growth in loans has not kept pace with the rise
in deposits and as the result we are investing our excess funds in lower
yielding investment securities. These factors when combined with the flat
yield curve that we experienced between the one year treasury and five year
treasury have served to squeeze our net interest margin.
Provision for Loan Losses. Our bad debt reserve totalled $160,123 at March
31, 1996 which represents 1.50% of our gross loans. Our reserve for loan
loss was adequate and did not require any additional provisions during the
first three (3) months of 1996.
Other Income. Our other income is up $6,694 when compared to the same period
last year. The increase was due to a gain on a bond that was called that we
had purchased at a discount and increases in volume of exchange items
processed by tellers.
Other Expenses. Other expenses are down $2,516 as compared to the same time
last year. Other operating expenses declined due to decreases in assessments
for FDIC insurance premiums. The decrease in other operating expenses was
partially offset by an increase in salaries and employee benefits. Salaries
and employee benefits increased because we added two new employees when we
opened the Coteau branch and due to raises that were earned during the later
part of 1995.
Provision for Income Tax. A provision is made for income tax to reflect one
fourth 3/12ths) of the annualized income tax that we anticipate we will
incur. The provision for income tax for the period ended March 31, 1996 was
$28,800 as compared to $36,512 for the same period last year. The decrease in
income tax was due to decreased income before income taxes for the current
quarter.
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.
May 9, 1996 Alcee J. Durand, Jr.
Date President/CEO
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