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, 1997
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, 1997.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, 1997 and December 31, 1996
(Dollars in Thousands)
March 31, December 31
1997 1996
ASSETS
Cash and due from banks $2,413 $1,476
Securities Available for Sale at mkt value 15,952 13,914
Securities Held To Maturity (Market Value
of $4,316 and $4,759, respectively) 4,343 4,760
Other securities at cost 328 286
Federal funds sold 1,450 1,225
Loans, net of allowance for loan losses
of $167 and $158, respectively) 13,081 12,710
Bank premises, furniture, and equipment 704 708
Accrued interest receivable 300 268
Other real estate owned 53 55
Other assets 152 150
----------------------
Total assets $38,776 $35,552
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits -
Non-interest demand $5,925 $5,675
Interest bearing -
NOW and MMDA accounts 8,083 6,029
Savings 3,374 3,256
Time, $100 and over, 7,163 7,062
Other time 11,052 10,353
----------------------
Total deposits 35,597 32,375
Accrued interest payable 116 135
Other liabilities and accrued expenses 186 195
----------------------
Total liabilities 35,899 32,705
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 1,479 1,398
----------------------
2,903 2,822
Less: 200 shares of treasury stock (19) (19)
Allowance for unrealized
loss on mkt securities 0 0
Market Value Allowance on
AFS Bonds (7) 44
----------------------
Total stockholders' equity 2,877 2,847
----------------------
Total liabilities and stockholders' equity $38,776 $35,552
======================
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended March 31, 1997 and 1996;
(Dollars in Thousands except Earnings per Share)
Three Months Ended
March 31, March 31,
1997 1996
Interest income:
Interest and fees on loans $318 $274
Interest on investment securities -
U.S. government securities 277 242
State and political subdivisions 6 3
Interest on interest-bearing deposits
in banks 0 0
Dividends on equity securities 0 0
Interest on federal funds sold 19 31
----------------------
Total interest income 620 550
Interest expense:
Interest on deposits $276 $247
Stockholder loans 0 2
----------------------
Total interest expense 276 249
----------------------
Net interest income 344 301
Provision for Credit Losses 10 0
----------------------
Net interest income after provision 334 301
----------------------
Other income:
Service charges on deposit accounts 65 58
Gain on sale of Securities 1 2
Other income and charges 23 17
----------------------
Total other income 89 77
Other expenses:
Salaries and employee benefits 153 144
Occupancy expense 50 51
Loss on sale of other real estate 0 2
Other operating expenses 102 91
----------------------
Total other expenses 305 288
----------------------
Income before income taxes 118 90
Income taxes 37 29
----------------------
Net income $81 $61
Earnings per share $2.89 $2.18
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, 1997 and 1996
Allowance
Unrealized Unrealized
Loss on Gain (Loss)
Common Stock Marketable on
Treas. Stk Equity AFS
Surplus Securities Securities
Balances, January 1, 1997 $2,803 $0 $44
Net income three months 81
Change in Unrealized AFS (51)
------- ------ ------
Balances, March 31, 1997 2,884 $0 ($7)
======= ====== ======
Balances, January 1, 1996 2,515 $0 $17
Net income three months 61
Change in Unrealized AFS (22)
------- ------ ------
Balances, March 31, 1996 $2,576 $0 ($5)
======= ====== ======
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, 1997 and 1996
March 31, March 31,
1997 1996
Cash flows from operating activities:
Net income $81 $61
Adjustments to reconcile net income
to net cash provided by
operating activities -
Depreciation of bank premises 20 25
(Gain) Loss on Other real estate 0 2
(Gain) Loss on sale of securities (1) (2)
Provision for credit losses 10 0
(Inc)dec accrued int recievable (31) (30)
(Inc) dec other assets (2) (24)
Inc(dec) accrued interest payable (19) (11)
Inc(dec) other liabilities (9) 38
Net cash provided by operating ----------------------
activities 49 59
Cash flows from investing activities:
Dec(inc) in federal funds (225) 550
Dec(inc) in investment securities (1,671) (688)
Dec(inc) in other securities (42) (23)
Net dec (inc) in loans (382) 225
Capital expenditures premises & equip (16) (7)
Proceeds from sale of securities 1 500
Proceeds from sale of other real estate 2 10
----------------------
Net cash used in investing activities (2,333) 567
Cash flows from financing activities:
Net increase (decrease) in -
Demand deposits 250 (392)
NOW and MMDA 2,053 (1,281)
Savings deposits 118 263
Time deposits $100,000 and over 102 626
Other time deposits 698 664
----------------------
Net cash provided by financing activities 3,221 (120)
Net increase in cash and cash equivalents 937 506
Cash and cash equivalents, beginning 1,476 1,108
Cash and cash equivalents, end of period $2,413 $1,614
Cash paid during the period:
Interest $295 $260
Income Taxes $0 $0
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
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, 1997. 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 MARCH 31, 1997.
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.
The primary source of funding for the parent company is dividends from the
Bank. During 1996, the holding company paid off all of its long-term debt.
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 18.38% and Tier one
capital ratio was 7.44% at March 31, 1997. The bank only risk based capital
ratio was 18.33% and Tier one capital ratio was 7.41%. 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, 1997, were $56,452 a decrease of $5,439
from December 31, 1996. Loans on which the accrual of interest had been
discontinued at March 31, 1997 totalled $267,711 which is up $28,868 as
compared to the amount at December 31, 1996.
We are actively marketing our other real estate owned. At March 31, 1997
other real estate totalled $53,418 which is down $1,801 from December 31,
1996.
Results of Operations
Net Income. Our net income for the three (3) months ended March 31, 1997
was $80,785 up $19,915 as compared to that of the same period last year. The
increase in income was mostly attributed to an increase in our net interest
income.
Revenue. Our net interest income for the three (3) months ended March 31,
1997 is up $33,484 as compared to the same period in 1996. The increase in
net interest income was the result of increases in interest from loans and
investments. During the fourth quarter of 1996, we experienced loan growth
that has improved our interest margin. The increase in investments was due
to the investment of funds from growth in deposits. We invested our excess
funds from deposits in investments to increase our yields over fed funds.
Provision for Loan Losses. Our bad debt reserve totalled $166,687 at March
31, 1997 which represents 1.26% of our gross loans. During the first quarter
of 1997, we added $9,999 to our reserve for loan loss account. Our reserve
for loan loss balance was considered adequate at March 31, 1997.
Other Income. Our other income is up $11,279 when compared to the same period
last year. The increase was mostly due to the recovery of $5,658 of the loss
from the sale of Louisiana Agricultural Finance Bonds (LAFA). In 1991, we
sold the LAFA bonds that we owned realizing a loss of approximately $200,000.
Since that time we have been listed in the class action suit that was filed
against Executive Life, the issuer of the bond. In a prior year, we
recovered approximately $40,000 of our loss.
Other Expenses. Other expenses are up $16,271 as compared to the same time
last year. Other expenses increased due to increases in Salaries and
employee benefits and other operating expenses. Other operating expenses
increased due to general increases in various expenses. Salaries and
benefits increased as the result of raises that were provided in the fourth
quarter of 1996.
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, 1997 was
$37,377 as compared to $28,800 for the same period last year. The increase in
income tax was due to increased income for the current year.
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 6, 1997 Alcee J. Durand, Jr.
Date President/CEO
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