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, 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 September
30, 1996.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED BALANCE SHEETS
September 30, 1996 and December 31, 1995
(Dollars in Thousands)
Sept. 30,
1996 December 31
(Unaudited) 1995
ASSETS
Cash and due from banks $1,813 $1,108
Interest-bearing deposits in banks 0 0
Securities Available for Sale at mkt value 14,673 11,943
Securities Held To Maturity (Market Value
of $3,587 and $5,274, respectively) 3,619 5,273
Other securities at cost 286 259
Federal funds sold 0 2,800
Loans, net of allowance for loan losses
of $159 and $161, respectively) 11,558 10,773
Bank premises, furniture, and equipment 681 744
Accrued interest receivable 283 269
Other real estate owned 95 112
Other assets 174 189
----------------------
Total assets $33,182 $33,470
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits -
Non-interest demand 5,079 $5,282
Interest bearing -
NOW and MMDA accounts 5,090 6,799
Savings 3,237 3,201
Time, $100 and over, 6,017 5,255
Other time 10,438 9,979
----------------------
Total deposits 29,861 30,516
Accrued interest payable 112 111
Notes payable - stockholders 250 151
Other liabilities and accrued expenses 253 160
----------------------
Total liabilities 30,476 30,938
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 1,334 1,110
----------------------
2,758 2,534
Less: 200 shares of treasury stock (19) (19)
Allowance for unrealized
loss on mkt securities 0 0
Market Value Allowance on
AFS Bonds (33) 17
----------------------
Total stockholders' equity 2,706 2,532
----------------------
Total liabilities and stockholders' equity $33,182 $33,470
======================
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, 1996 and 1995;
(Dollars in Thousands except Earnings per Share)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1996 1995 1996 1995
Interest income:
Interest and fees on loans $289 $297 $833 $857
Interest on investment securities -
U.S. government's 297 246 815 704
State/political sub's 5 1 12 2
Interest on interest-bearing deposits
in banks 0 6 0 26
Dividends on equities 3 3 5 4
Interest on federal funds 7 29 57 84
--------------------------------------------
Total interest income 601 582 1,722 1,677
Interest expense:
Interest on deposits $259 $242 $768 $683
Stockholder loans 1 4 5 11
--------------------------------------------
Total interest expense 260 246 773 694
--------------------------------------------
Net interest income 341 336 949 983
Other income:
Service charges deposits 66 59 187 170
Gain on sale of ORE 0 0 0 10
Gain on sale of Securities 0 1 3 0
Other income and charges 10 11 41 41
--------------------------------------------
Total other income 76 71 231 221
Other expenses:
Salaries/employee benefits 145 134 436 384
Occupancy expense 55 55 160 152
Loss on sale of ORE 0 0 2 0
Loss on sales securities 0 0 0 4
Other operating expenses 79 86 250 299
--------------------------------------------
Total other expenses 279 275 848 839
--------------------------------------------
Income before income taxes 138 132 332 365
Income taxes 45 43 108 125
--------------------------------------------
Net income $93 $89 $224 $240
Earnings per share $3.34 $3.18 $8.03 $8.61
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, 1996 and 1995
Allowance for
Unrealized Unrealized
Loss on Gain (Loss)
Common StocMarketable on
Treasury St Equity AFS
Surplus Securities Securities Total
Balances, January 1, 1996 $2,515 $0 $17 $2,532
Net income nine months 224 - $224
Change in Unrealized AFS (50) ($50)
------ ------ ------ ------
Balances, June 30, 1996 2,739 $0 ($33) $2,706
====== ====== ====== ======
Balances, January 1, 1995 $2,211 ($4) ($242) $1,965
Net income six months 240 $240
Sale of Treasury Stock 2 $2
Change in Unrealized AFS 254 $254
Realized loss mkt securities 4 $4
------ ------ ------ ------
Balances, June 30, 1995 2,453 $0 $12 $2,465
====== ====== ====== ======
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, 1996 and 1995
Sept. 30, Sept. 30,
1996 1995
Cash flows from operating activities:
Net income $224 $240
Adjustments to reconcile net income
to net cash provided by
operating activities -
Depreciation of bank premises 63 63
(Gain) Loss on Other real estate 3 (10)
(Gain) Loss on sale of securities (3) 4
(Inc)dec accrued int recievable (13) (68)
(Inc) dec other assets 20 (18)
(Inc) dec deferred tax asset 0 76
Inc(dec) accrued interest payable 1 30
Inc(dec) other liabilities 93 (59)
Net cash provided by operating ----------------------
activities 388 258
Cash flows from investing activities:
Dec interest-bearing deposits in banks 0 585
Dec(inc) in federal funds 2,800 (175)
Dec(inc) in investment securities (1,151) (688)
Net dec (inc) in loans (785) 136
Capital expenditures premises & equip (5) (161)
Proceeds from sale of other real estate 15 107
----------------------
Net cash used in investing activities 874 (196)
Cash flows from financing activities:
Net increase (decrease) in -
Demand deposits (204) 129
NOW and MMDA (1,709) (3,067)
Savings deposits 36 (390)
Time deposits $100,000 and over 762 1,007
Other time deposits 459 630
Increase in repurchase agreements 0 306
Increase in fed funds purchased 250 0
Sale of Treasury stock 0 2
Repayment of Notes to stockholders (151) 0
----------------------
Net cash provided by financing activities (557) (1,383)
Net increase in cash and cash equivalents 705 (1,321)
Cash and cash equivalents, beginning 1,108 3,019
Cash and cash equivalents, end of period $1,813 $1,698
Cash paid during the period:
Interest $771 $664
Income Taxes $24 $57
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 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 nine (9) months ended September 30, 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.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1996.
Liquidity
Liquidity is the ability to ensure 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 funded from dividends of the
Bank and from the Parent's cash held with the Bank. In the third
quarter of 1996, we paid off the debt of the parent company. Our
need for cash in the holding company going forward will be minimal.
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 19.69% and
Tier one capital ratio was 8.25% at September 30, 1996. The bank
only risk based capital ratio was 19.62% and Tier one capital ratio
was 8.22%. 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 September 30, 1996, were $89,297
an increase of $85,665 from December 31, 1995. Loans on which the
accrual of interest had been discontinued at September 30, 1996
totalled $232,623 which is down $5,671 as compared to the amount at
December 31, 1995.
We are actively marketing our other real estate owned. At September
30, 1996 other real estate totalled $94,918 which is down $17,701 or
15.7% from December 31, 1995.
Results of Operations
Net Income. Our net income for the nine (9) months ended September
30, 1996 was $224,125 down $16,118 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 nine (9) months ended
September 30, 1996 is down $33,478 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 the growth in deposits that
we experienced during the first quarter. Our growth in loans did not
keep pace with the rise in deposits and as the result we invested
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 during the
growth period served to squeeze our net interest margin. Our net
interest margin improved during the third quarter of 1996.
Provision for Loan Losses. Our bad debt reserve totalled $159,070 at
September 30, 1996 which represents 1.36% of our gross loans. Our
reserve for loan losses was adequate and did not require any
additional provisions during the first nine (9) months of 1996.
Other Income. Our other income is up $9,558 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
the volume of service charges and exchange items processed by
tellers.
Other Expenses. Other expenses are up $8,782 as compared to the same
time last year. Other operating expenses increased due to increases
in salaries and employee benefits and increased occupancy expenses.
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. Occupancy expenses
increased due to the addition of the Coteau Branch. The increase in
other operating expenses was partially offset by a decrease in
assessments for FDIC insurance premiums.
Provision for Income Tax. A provision is made for income tax to
reflect three fourths (9/12ths) of the annualized income tax that we
anticipate we will incur. The provision for income tax for the
period ended September 30 1996 was $108,206 as compared to $124,790
for the same period last year. The decrease in income tax was due to
decreased income before income taxes for the first nine months of
1996.
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.
Alcee J. Durand, Jr.
President/CEO
November 13, 1996
Date
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