SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
[X] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 (fee required)
For the fiscal year ended December 31, 1996
or
[ ] Transition report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 (no fee required)
Commission File Number 2-89561
TECHE BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Louisiana 72-1008552
(State of incorporation) (I.R.S. Employer Identification No.)
606 S. Main Street, St. Martinville, Louisiana 70582
(Address of principal executive offices) (Zip code)
(318) 394-9726
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $10.00 par value
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 by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (Section 229.405 of this chapter) is
not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
State the aggregate market value of the voting stock held by
nonaffiliates of the Registrant: (Total number of shares held by
nonaffiliated: See Part II, item 5.)
Indicate the number of shares outstanding of each of the
Registrant's classes of common stock, as of the latest practicable
date.
Common Stock, $10 par value, 27,925 shares outstanding as of
December 31, 1996
Documents Incorporated by Reference
Annual Report to Shareholders for the Year
Ended December 31, 1996 Parts I, II and IV
Definitive Proxy Statement for the 1996
Annual Meeting of Shareholders Part IV
FORM 10-K
TECHE BANCSHARES, INC.
PART I
Item 1. Business
General -
Teche Bancshares, Inc. (Company) was organized during 1984 for
the purpose of operating as a one bank holding company. As a
result, Teche Bank and Trust Company (Bank) was acquired by Teche
Bancshares, Inc. in a business combination accounted for as a
pooling of interests. Teche Bancshares, Inc.'s sole source of
income is derived from the earnings and dividends of its
subsidiary, Teche Bank & Trust Company.
Teche Bank and Trust Company is a Louisiana chartered state
bank engaged in the general banking business since September 27,
1969. The Bank's main office is located in the primary business
district of St. Martinville, Louisiana. The Bank has two branches.
One is located on the north side of town on the main thoroughfare.
The other branch is in Coteau, Louisiana. The population of both
areas is largely rural and the economy is based on agriculture,
textiles and tourism.
The City of St. Martinville is located in the south central
part of Louisiana. The Bank's primary market area, the City of St.
Martinville, had a population of 7,965 in 1990. Its general market
area, St. Martin Parish, Louisiana, had a population of 40,214 and
has not experienced substantial population growth over the past
several years.
The community of Coteau is located twelve miles south of St.
Martinville in Iberia Parish. The primary market area of the
Coteau Branch is the six mile circular radius from the branch that
is within Iberia Parish. The population of the primary market area
is approximately 6,450 people. There are no banks or branches of
other financial institutions located within the primary market
area.
Competition -
There are two other banks and one savings and loan in the
Bank's primary market area. Competition for loans and deposits is
intense among the financial institutions in the area.
In the Bank's general market area there are four other banks
and one domestic savings and loan institution aggressively pursuing
loans, deposits and other accounts. Below is a list of banks
headquartered in St. Martin Parish with their total deposits as of
December 31, 1996:
Bank Thousands of Dollars
Teche Bank and Trust Co. $ 32,376
St. Martin Bank and Trust 77,699
Farmers-Merchants Bank and Trust 89,810
First National Bank of St. Martin 46,967
Total parish bank deposits $246,852
========
Regulation -
As a bank holding company, Teche Bancshares, Inc. is subject to
the Bank Holding Company Act of 1956, as amended (the "Act"). The
Act subjects Teche Bancshares, Inc. to supervision and regulation
by the Federal Reserve Board, which includes periodic examinations
and the obligation of Teche Bancshares, Inc. to file semi-annual
and annual reports with the Federal Reserve Board. The Act
requires prior approval by the Federal Reserve Board for
acquisitions of more than 5 percent of the voting shares or
substantially all of the assets of any bank or bank holding
company. The Act prohibits Teche Bancshares, Inc. from engaging in
any business other than banking or bank-related activities
specifically allowed by the Federal Reserve Board. The Act also
prohibits Teche Bancshares, Inc. and its subsidiary from engaging
in certain tie-in arrangements in connection with the extension of
credit, the lease or sale of property or the provision of any
services. Under Title VI of the Financial Institutions, Reform,
Recovery and Enforcement Act of 1989, the Act has been amended to
authorize bank holding companies to acquire savings and thrift
institutions without tandem operations restrictions. Teche
Bancshares, Inc.'s one banking subsidiary ("The Bank") is subject
to a variety of regulations concerning the maintenance of reserves
against deposits, limitations on the rates that can be charged on
loans or paid on deposits, branching, restrictions on the nature
and amounts of loans and investments that can be made and limits on
daylight overdrafts. The Bank is regulated by the Federal Deposit
Insurance Corporation.
The Bank is limited in the amount of dividends they may
declare. Prior approval must be obtained from the appropriate
regulatory authorities before dividends can be paid by the Bank to
Teche Bancshares, Inc. if the amount of adjusted capital, surplus
and retained earnings is below defined regulatory limits. The Bank
is also restricted from extending credit or making loans to or
investments in Teche Bancshares, Inc. and certain other affiliates
as defined in the Federal Reserve Act. Furthermore, loans and
extensions of credit are subject to certain other collateral
requirements.
The Federal Reserve Board has established guidelines with
respect to the maintenance of appropriate levels of capital by
registered bank holding companies and banks.
"Primary capital" for this purpose includes common stock,
surplus, undivided profits, contingency and other capital reserves,
and the allowance for loan losses. "Total capital" consists of
primary capital plus secondary capital, which includes certain
limited-life preferred stock and long-term debt that meets certain
maturity and preference ranking criteria.
In January, 1989, the Federal Reserve Board issued risk-based
capital guidelines to assist in the assessment of the capital
adequacy of bank holding companies and banks. These guidelines
include a new definition of capital and a framework for calculating
risk-weighted assets by assigning assets and off-balance sheet
items to broad risk categories. The risk-based capital guidelines
also establish a schedule for achieving the minimum supervisory
standards and provide for transitional arrangements during a
phase-in-period (beginning year end 1990) to facilitate adoption
and implementation of the measure at the end of 1996.
The table below indicates the Bank's capital measures at
December 31, 1996. The bank meets the risk-based capital
guidelines at December 31, 1996 as follows:
Regulatory Bank's
Requirement Capital
Risk-based capital ratios:
Tier 1 4.0% 17.54%
===== ======
Tier 2 - % .99%
===== ======
Total risk-based capital ratio 8.0% 18.53%
===== ======
Additional Financial Information -
Average Balance Sheets:
(in thousands)
December 31,
1996 1995 1994
ASSETS ------ ----- ------
Cash and due from banks $ 1,641 $ 1,416 $ 1,282
Interest-bearing deposits
in banks 0 390 882
Investments securities:
U. S. Treasury securities 1,058 1,581 1,890
Federal agency securities 16,301 13,067 11,507
States and political
subdivisions 420 52 54
Other securities 278 256 157
------ ------ ------
Total investment securities 18,057 14,956 13,608
Federal funds sold 1,315 1,672 890
Loans, net of allowance
for losses 11,269 10,802 10,344
Bank premises, and equipment 713 829 800
Accrued interest receivable 259 250 231
Other real estate owned 83 215 397
Other assets 351 380 365
--------- --------- ---------
Total assets $33,688 $30,910 $28,799
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits -
Demand $ 5,243 $ 4,528 $ 4,291
NOW and MMDA accounts 5,119 4,980 5,188
Savings 3,227 3,185 3,614
Time (100,000 and over) 6,400 5,472 4,038
Other time 10,430 9,695 8,763
------ ------ ------
Total deposits 30,419 27,860 25,894
Federal funds purchased 5 1 21
Securities repurchased 57 23 83
Accrued interest payable 134 119 82
Notes payable - stockholders 94 280 416
Other liabilities &
accrued expense 660 447 208
------ ------ ------
Total liabilities 31,369 28,730 26,704
------ ------ ------
Stockholders' equity:
Common stock ($10 par value,
100,000 shares authorized,
28,125 shares issued
and outstanding) 281 281 281
Surplus 1,139 1,139 1,139
Undivided profits 920 781 696
Total stockholders' equity 2,340 2,201 2,116
Less: Treasury stock, at cost (21) (21) (21)
-------- -------- --------
Net stockholders' equity 2,319 2,180 2,095
-------- -------- --------
Total liabilities and
stockholders' equity $33,688 $30,910 $28,799
======== ======== ========
Additional Financial Information (continued) -
Analysis of Net Interest Earnings Based on Average Amounts
Outstanding:
(in thousands)
Year Ended December 31,
1996 1995 1994
Interest earning assets:
Interest-bearing deposits,
in banks $ 0 $390 $ 882
Interest earned on interest-
bearing deposits 0 27 69
Yield on interest-bearing
deposits 0.0% 7.0% 7.8%
====== ====== ======
U. S. Treasury and federal agency
securities $17,359 $14,648 $13,397
Interest earned on U. S. Treasury
and federal agency securities 1,098 957 758
Yield on U. S. Treasury and
federal agency securities 6.3% 6.5% 5.6%
====== ====== ======
Obligations of states and political
subdivisions $420 $52 $54
Interest earned on obligations of
states and political
subdivisions 17 3 3
Yield on obligations of states and
political subdivisions 4.1% 5.3% 5.7%
====== ====== ======
Other securities $278 $256 $ -
Interest/dividends earned
on other securities 5 5 -
Yield on other securities 1.9% 2.0% -%
====== ====== ======
Federal funds sold $ 1,315 $ 1,672 $ 890
Interest earned on
federal funds sold 69 98 33
Yield on federal funds sold 5.3% 5.8% 3.7%
====== ====== ======
Net loans $11,269 $10,802 $10,344
Interest and fees
earned on net loans 1,161 1,138 1,055
Yield on net loans 10.3% 10.5% 10.2%
====== ====== ======
Total interest earning assets $30,641 $27,820 $25,567
Interest earned on total
interest-earning assets 2,351 2,229 1,918
Yield on total interest-earning
assets 7.7% 8.0% 7.5%
====== ====== ======
Interest bearing liabilities:
NOW and MMDA accounts $5,119 $ 4,980 $5,188
Interest paid on NOW AND MMDA
accounts 115 114 108
Average rate on NOW AND MMDA
accounts 2.2% 2.3% 2.1%
====== ====== ======
Additional Financial Information (continued) -
Analysis of Net Interest Earnings Based on Average Amounts
Outstanding (continued):
(in thousands)
Year Ended December 31,
1996 1995 1994
Savings $ 3,227 $ 3,185 $3,614
Interest paid on savings 64 63 72
Average rate paid on savings 2.0% 2.0% 2.0%
====== ====== ======
Time deposits - $100,000
and over $ 6,400 $ 5,472 $ 4,038
Interest paid on time deposits,
$100,000 and over 330 287 153
Average rate paid on time deposits,
$100,000 and over 5.2% 5.2% 3.8%
====== ====== ======
Other time deposits $10,430 $ 9,695 $ 8,763
Interest paid on other time
deposits 519 457 325
Average rate paid on other time
deposits 5.0% 4.7% 3.7%
====== ====== ======
Federal funds purchase $ 5 $ 1 $21
Interest paid on federal funds
purchased - - 1
Average rate paid on federal funds
purchased 5.5% 3.3% 5.4%
====== ====== ======
Securities repurchased $ 56 $ 23 $ 83
Interest paid on securities
repurchased 3 1 8
Average rate paid on securities
repurchased 5.8% 5.6% 9.2%
====== ====== ======
Notes payable - stockholders $ 94 $ 280 $ 416
Interest paid on notes payable -
stockholders 5 14 21
Average rate paid on notes
payable - stockholders 4.9% 5.1% 5.1%
====== ====== ======
Total interest bearing
liabilities $25,332 $23,636 22,123
Interest paid on total interest
bearing liabilities 1,036 936 687
Average rate on total interest
bearing liabilities 4.1% 4.0% 3.1%
====== ====== ======
Net yield on interest-earning
assets (net interest-
earnings divided by total
interest-earning assets 4.3% 4.0% 4.8%
====== ====== ======
Changes in Interest Income and Expenses -
The following table shows, for the periods indicated, the
change in interest income and interest expense for each major
component of interest-earning assets and interest-bearing
liabilities attributable to (i) changes in volume (change in volume
multiplied by old rate), (ii) changes in rates (change in rate
multiplied by old volume) and (iii) changes in rate/volume (change
in rate multiplied by the change in volume). The change in
interest income or expense attributable to the combination of rate
variance and volume variance is included in the table, but such
amount has also been allocated between, and included in the amounts
shown as, changes due to rate and changes due to volume. The
allocation of the change due to rate/volume variance was made in
proportion to the amounts due solely to rate variance and solely to
volume variance, which amounts are not included in the table.
Balances of non-accrual loans and related income recognized have
been included for computational purposes. Yields of tax exempt
securities have not been computed on a tax equivalent basis.
Year Ended December 31,
(dollars in thousands)
1993 v. 1994
Increase (Decrease) Due to
Volume Rate Rate/Volume Total
Interest earnings assets:
Increase (decrease) -
Interest bearing deposits
in banks (11) (4) 1 (14)
U. S. Treasury & Federal
Agency Sec. 59 27 2 88
State and political
subdivisions - - - -
Federal Funds sold (83) 30 (23) (76)
Net loans 51 (20) (1) 30
---- ---- ----- ---
Total interest earning
assets 16 33 (21) 28
---- ---- ----- ---
Interest-bearing liabilities:
Increase (decrease) -
NOW and MMDA accounts (41) - - (41)
Savings 1 - 1 2
Time deposits, $100,000
and over 54 14 10 78
Other time deposits (10) (24) 1 (33)
Federal funds purchased 1 - - 1
Securities repurchased - - 7 7
Notes payable - stockholder (2) (3) - (5)
---- ---- ----- ---
Total interest-bearing
liabilities 3 (13) 19 9
---- ---- ----- ---
Increase (decrease) in net
interest income 13 46 (40) 19
===== ==== ===== =====
1994 v. 1995
Increase (Decrease) Due to
Volume Rate Rate/Volume Total
Interest earnings assets:
Increase (decrease) -
Interest bearing deposits
in banks (38) (7) 4 (41)
U. S. Treasury & Federal
Agency Sec. 70 121 11 202
State and political
subdivisions - - - -
Federal Funds sold 29 19 16 64
Net loans 47 31 1 79
Total interest earning
assets 108 164 32 304
Interest-bearing liabilities:
Increase (decrease) -
NOW and MMDA accounts (4) 10 - 6
Savings (9) - - (9)
Time deposits, $100,000
and over 55 57 20 132
Other time deposits 34 88 9 131
Federal funds purchased (1) - - (1)
Securities repurchased (6) (3) 2 (7)
Notes payable - stockholder (7) - - (7)
Total interest-bearing
liabilities 62 152 31 245
Increase (decrease) in net
interest income 46 12 1 59
===== ===== ===== =====
1995 v. 1996
Increase (Decrease) Due to
Volume Rate Rate/Volume Total
Interest earnings assets:
Increase (decrease) -
Interest bearing deposits
in banks (27) (27) 27 (27)
U. S. Treasury & Federal
Agency Sec. 176 (29) (5) 142
State and political
subdivisions - - - -
Federal Funds sold (21) (8) 2 (27)
Net loans 49 (22) (1) 26
Total interest earning
assets 177 (86) 23 114
Interest-bearing liabilities:
Increase (decrease) -
NOW and MMDA accounts 3 (5) - (2)
Savings 1 - - 1
Time deposits, $100,000
and over 48 - - 48
Other time deposits 35 29 2 66
Federal funds purchased - - - -
Securities repurchased 2 - - 2
Notes payable - stockholder (9) - - (9)
Total interest-bearing
liabilities 80 24 2 106
Increase (decrease) in net
interest income 97 (110) 21 8
===== ===== ===== =====
Interest Sensitivity -
The Company's policy for interest-rate sensitivity management
is to control the exposure of net interest income to interest rate
movements. The relationship or gap between repricing dates of
interest-earning assets and interest-bearing liabilities must be
actively monitored and flexible enough to take advantage of
changes in market rates. The Company follows such a policy and
responds to market change by adjusting the structure of the assets
and liabilities repricing within comparable time intervals. This
enables the Company to respond to the volatility of interest rates,
and thereby capitalize on profit opportunities while minimizing
adverse changes in earnings.
The following table reflects the year-end position (in
thousands) of the Company's interest-earning assets and
interest-bearing liabilities which can either reprice or mature
within the designated time periods. The interest sensitivity gaps
can vary day-to-day and are not necessarily a reflection of the
future. In addition, certain assets and liabilities within the
same designated time period may nonetheless reprice at different
times and at different levels.
After 1
Within Year But After 5 Non-interest
1 year Within 5 Years Earnings Total
ASSETS
Cash and due
from banks $ - $ - $ - $ 1,476 $ 1,476
Securities available
for sale 5,483 8,226 - 205 13,914
Securities held
to maturity 1,899 2,803 58 - 4,760
Other securities - - - 286 286
Federal funds sold 1,225 - - - 1,225
Loans 6,167 3,919 2,385 238 12,709
Other assets - - - 1,182 1,182
------- ------- ------ ------- -------
Total assets $14,774 $14,948 $2,443 $ 3,387 $35,552
======= ======= ====== ======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Demand deposits $ - $ - $ - $ 5,675 $ 5,675
Interest-bearing deposits:
NOW and MMDA's 2,627 3,402 - - 6,029
Savings 1,309 1,946 - - 3,255
Time, $100,000
and over 6,081 980 - - 7,061
Other time 8,568 1,786 - - 10,354
Other liabilities - - - 331 331
Stockholder's equity - - - 2,847 2,847
------- ------- ------ ------- -------
Total liabilities and
stockholder's
equity $18,585 $ 8,114 $ - $ 8,853 $35,552
======= ======= ====== ======= =======
Interest rate
sensitivity gap $(3,811) $ 6,834 $2,443 $(5,466)
======= ======= ====== =======
Investment Portfolio -
The following table indicates the composition of the Company's
investments (in thousands) at December 31, 1996, 1995 and 1994 and
shows the maturity distribution by carrying amount and yield (not
on a taxable equivalent basis) of the Company's investment
portfolio at December 31:
1996
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
Securities available for sale:
U.S. Government and
Agency Securities $ 1,194 $ 2 $ (2) $ 1,194
Mortgage-backed
securities 12,654 95 (29) 12,720
------- --- ---- ------
Totals 13,848 97 (31) 13,914
Securities held to maturity:
U.S. Government
and Agency
Securities 687 1 (1) 687
State and Municipal
Securities 538 1 (1) 538
Mortgage-backed
Securities 3,535 19 (20) 3,534
------- --- ---- ------
Totals 4,760 21 (22) 4,759
Other Securities 286 - - 286
Less: Reserve for
unrealized loss
on corporate stock - - - -
------- --- ---- ------
Totals 286 - - 286
Total securities $18,894 $118 $(53) $18,959
========= ==== ===== ========
Investment Portfolio (Continued) -
(in thousands)
1995
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
Securities available for sale:
U.S. Government and
Agency Securities $ 2,922 $ 9 $ (2) $ 2,929
Mortgage-backed
securities 8,995 50 (32) 9,013
------- --- ---- ------
Totals 11,917 59 (34) 11,942
Securities held to maturity:
U.S. Government
and Agency
Securities 813 3 - 816
State and Municipal
Securities 208 - (8) 200
Mortgage-backed
Securities 4,252 34 (27) 4,259
------- --- ---- ------
Totals 5,273 37 (35) 5,275
Other Securities 258 - - 258
Less: Reserve for
unrealized loss
on corporate stock - - - -
------- --- ---- ------
Totals 258 - - 258
Total securities $17,448 $96 $(69) $17,475
========= ==== ===== ========
Investment Portfolio (Continued) -
(in thousands)
1994
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
Securities available for sale:
U.S. Government and
Agency Securities $ 4,952 $ 3 $ (130) $ 4,825
Mortgage-backed
securities 6,315 9 (250) 6,074
------- --- ---- -------
Totals 11,267 12 (380) 10,899
Securities held to maturity:
U.S. Government
and Agency
Securities 2,943 - (23) 2,920
State and Municipal
Securities 55 - - 55
Mortgage-backed
Securities 1,217 - (53) 1,164
------- --- ---- -------
Totals 4,215 - (76) 4,139
Other Securities 257 - - 257
Less: Reserve for
unrealized loss
on corporate stock (4) - - (4)
------- --- ---- -------
Totals 253 - - 253
Total securities $15,735 $12 $(456) $15,291
========= ==== ====== ========
Investment Portfolio (Continued) -
1996
Due After Due After
Due in One Year Five Years
One Year But Before But Before Due After
or Less Five Years Ten Years Ten Years
Securities available for sale:
U.S. Government and
Agency Securities $ 250 $ 944 $ - $ -
Mortgage-backed
securities 5,233 7,282 - 205
------ ----- ----- -----
Totals 5,483 8,226 - 205
Securities to be held to maturity:
U.S. Government and
Agency Securities 300 387 - -
State and municipal
securities - 480 58 -
Mortgage-backed
securities 1,599 1,936 - -
------ ----- ----- -----
Totals 1,899 2,803 58 -
Other securities - - - 286
Total $7,382 $11,029 $ 58 $491
======= ======= ======= ======
Weighted Average Yield
Securities available for sale:
U.S. Government and
Agency Securities 6.0% 6.0% - % -
====== ====== ====== =====
Mortgage-backed
securities 7.4% 7.5% - % 8.4%
====== ====== ====== =====
Securities to be held to maturity:
U.S. Government and
Agency Securities 6.3% 6.0% - -
====== ====== ====== ======
State and municipal
securities - 4.2% 5.8% -
====== ====== ====== ======
Mortgage-backed
securities 6.5% 6.1% - % - %
====== ====== ====== ======
Other securities - - - 2.7%
====== ====== ====== ======
Yields on tax exempt obligations have not yet been computed on a
tax-equivalent basis.
Loan Portfolio Information -
Types of Loans: 1996 1995 1994 1993 1992
Real estate loans $ 7,292 $ 5,858 $ 6,710 $ 5,420 $ 5,353
Commercial and
industrial loans 2,630 2,412 1,779 1,854 1,825
Personal and
consumer loans 3,006 2,702 2,679 2,649 2,362
All other loans 27 24 39 13 5
------ ------ ----- ----- -----
Totals 12,955 10,996 11,207 9,936 9,545
Less: Unearned income (88) (62) (59) (73) (92)
Allowance for
loan losses (158) (161) (180) (181) (193)
------ ------ ----- ----- -----
Net loans $12,709 $10,773 $10,968 $ 9,682 $ 9,260
======= ======= ======= ======= =======
Maturities and Sensitivities of Loans to Changes in Interest Rates
(in thousands)
Repricing Repricing Repricing Repricing
in one After one After five After
Year or But Before but Before Ten
1996 less five Years Ten Years
Real estate $7,292 $3,507 $1,727 $1,666 $392
Commercial and
industrial 2,630 1,550 764 162 154
Personal and
consumer 3,006 1,349 1,645 12 -
All other 27 27 - - -
-------- -------- ------- ------ ------
Totals $12,955 $6,433 $4,136 $1,840 $546
======== ======== ======= ====== ======
Non-accrual, Past Due and Restructured Loans:
(in thousands)
December 31, December 31,
1996 1995
Non-accrual loans $239 $238
===== =====
Restructured loans $ 58 $ 58
===== =====
Accruing loans past due 90 days or more
at year end $ 60 $ 26
===== =====
The Bank's policy is to place loans on non-accrual whenever
it appears that interest will not be collected. A loan is
considered impaired when it is probable that the Bank will be
unable to collect all amounts due according to the contractual
terms of the loan agreement. An insignificant delay (less than 60
days) or shortfall in the amount of payments does not indicate
impairment. One loan is considered to be impaired as defined in
Financial Accounting Standards Board Statement No. 114, as amended
by Financial Accounting Standards Board Statement No. 118. This
loan has a carrying value of $215,987 and there is no allowance as
it relates to this loan. Management's list of potential problem
loans indicated a principal balance of $448,630 as of December 31,
1996.
At December 31, 1996, management believes that potential
problem loans with credit problems have been adequately reserved
for in the allowance for loan loss accounts.
The Bank has taken an aggressive approach to consumer
lending yet management is still very conservative in making credit
decisions. Management feels that by increasing the Bank's consumer
loan base, it can spread risk in the loan portfolio and increase
loan demand and profit margin at the same time.
Summary of Loan Loss Experience:
December 31,
1996 1995
Balance, beginning of year $ 161 $ 180
Charge-offs:
Installment loans 5 6
Commercial loans 4 15
--- ---
Total Charge off's 9 21
Recoveries:
Real estate loans - -
Installment loans 3 1
Commercial loans 3 1
--- ---
Total Recoveries 6 2
Net charge-offs 3 19
Balance, end of year $ 158 $ 161
===== =====
Ratio of net charge-offs during the period
to average loans outstanding during the
period .03% .17%
===== =====
In determining the adjustments charged in operations,
management considered the overall risk of loan losses in its loan
portfolio, as well as considering the potential losses that might
be incurred on specific loans.
Management does not allocate its allowance for loan loss by
asset category; however, in determining the balance of the
allowance for loan loss account, management considers the various
risks inherent with the Bank's loan portfolio, as well as specific
risk of certain loans. The allowance for loans losses is
established through a provision for loan losses charged to
expenses. Loans are charged against the allowance for loan losses
when management believes that the collectibility of the principal
is unlikely. The allowance is an amount that management believes
will be adequate to absorb possible losses on existing loans
that may become uncollectible, based on evaluations of the
collectibility of loans and prior loan loss experience. The
evaluations take into consideration such factors as changes in the
nature and volume of the loan portfolio, overall portfolio
quality, review of specific problems loans and current economic
conditions that may affect the borrower's ability to pay.
Management approximates that the amount of charge-offs during
the next full year of operation will be as follows:
(in thousands)
Real estate loans $ -
Commercial & industrial -
Personal & consumer 4
All other loans -
------
Total $ 4
======
Deposits -
See analysis of net interest earnings for average deposits
and average rate paid. Non-interest bearing demand deposits have
not been included in the net interest earnings, because they do not
pay interest. Therefore, the average interest rate paid would be
zero. The average balances for the past three years can be found
on the average balance sheets.
Maturities of Time Certificates over $100,000 or More:
December Three Over Three Over Six Over
31, Months Through Through Twelve
1996 or less Six Twelve Months
Time Certificates
- $100,000
or more $7,062 $2,792 $ 927 $2,363 $980
====== ====== ====== ====== ====
Return on Average Equity and Assets -
December 31, December 31, December 31,
1996 1995 1994
Return on average assets 1.0% 1.0% .9%
===== ===== =====
Return on average equity 12.1% 15.4% 11.7%
===== ===== =====
Dividend payout ratio 11.6% 10.4% 14.2%
===== ===== =====
Equity to asset ratio 8.0% 7.1% 7.3%
===== ===== =====
Capital adequacy ratio 8.4% 8.0% 6.7%
===== ===== =====
Item 2. Properties
The main banking house is made of concrete and brick and has
3,200 square feet of working area. The main banking house and
concrete parking lot are situated on three adjoining pieces of
property on the outskirts of St. Martinville, Louisiana.
The Bank also owns a piece of property on the outskirts of St.
Martinville, Louisiana, on which they have a branch made of
concrete and brick which has 1,660 square feet of working area.
The Coteau Branch is constructed of brick with 1,170
square feet of working area. None of these properties carry a
mortgage.
Item 3. Legal Proceedings
The Company is not involved in any legal actions.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders,
through the solicitation of proxies or otherwise during the fourth
quarter for calendar year ended December 31, 1996.
FORM 10-K
TECHE BANCSHARES, INC.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
Teche Bancshares, Inc.'s stock is not listed on any security
exchange, and is not registered with the National Association of
Security Dealers. Due to the lack of an active trading market, the
Company does not have available information to furnish the high and
low sales price on the range of bid and asked quotations for
its stock. However, based upon stock sales during the fourth
quarter of 1996, it is believed that the stock of the Company
trades for approximately $70.00 per share. There can be no
assurance that the limited inquiries adequately reflect the high
and low bids on prices for the Holding Company's stock.
At December 31, 1996, Teche Bancshares, Inc. had approximately
381 stock-holders.
Teche Bancshares, Inc. paid a dividend of $1.35 per share in
1996. In 1995, and 1994, the bank paid $1.25 per share. Future
dividends paid by the Holding Company will depend upon the Bank's
ability to pay dividends, which is restricted by applicable federal
and state statutes.
Teche Bank & Trust Company is a Louisiana state banking
corporation. Applicable Louisiana law prohibits a state bank from
paying a dividend if its surplus remaining after payment of the
dividend would be less than half the aggregate par value of its
outstanding stock. In addition, a state bank is required
to obtain the prior approval of the Louisiana Commissioner of
Financial Institutions before declaring or paying a dividend in a
given year if the total of all dividends declared and paid by the
state bank during the year would exceed the total of its
net profit for that year combined with the net profit from the
immediately preceding year.
Item 6. Selected Financial Data
(in thousands except per share)
1996 1995 1994 1993 1992
Investment
securities $18,961 $17,474 $15,368 $13,650 $13,753
Loans 12,709 10,773 10,968 9,682 9,261
Deposits 32,375 30,516 29,165 27,334 27,008
Stockholders
equity 2,847 2,533 1,965 1,997 1,611
Operating
revenues 2,665 2,551 2,179 2,125 2,189
Net interest
income 1,310 1,288 1,223 1,209 1,028
(Recovery of)
provision for
loan losses - - - - (100)
Net income 325 337 246 421 403
Earnings
per share 11.65 12.07 8.81 15.09 14.44
Total assets 33,552 33,470 31,816 29,875 29,313
Cash dividend:
Per share 1.35 1.25 1.25 1.25 1.00
Total 38 35 35 35 28
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of
Operations
1996 IN REVIEW
Our net income for the years ended December 31, 1996, 1995 and
1994 was $325,387, $337,024 and $245,877, respectively. Net income
for 1996 decreased $11,637 from $337,024 in 1995. Net income for
1995 increased by $91,147 from $245,877 in 1994. Earnings per
common share were $11.65 for 1996, $12.07 for 1995, and $8.81 for
1994. Return on average assets and return on equity was 1.0% and
12.1% for 1996. Return on average assets and return on equity was
1.0% and 15.4% for 1995. For 1994, return on average assets was
.9% and return on equity was 11.7%.
Highlights for 1996 were as follows:
1. For the year ended 1996, we increased our average total assets
by 9%. Total loans at the end of 1996 were up 18% as compared to
the end of the year in 1995.
2. In July, 1996, we celebrated the first anniversary of our
Coteau Office. The expansion into Iberia Parish has been well
received by the residents of Coteau and the surrounding
communities.
3. We purchased a new AS400 IBM computer to more efficiently
process the operations of the bank. Delivery was made at year end
and installation was completed in early January. We have improved
the response time of our system significantly as the result of the
installation. This increase in efficiency will allow us to provide
better service to our customers.
4. During 1996, we paid off the capital injection loan that our
directors had funded since 1984.
EARNINGS ANALYSIS
Net Interest income
Net interest income was $1,309,536 in 1996 compared to $1,287,894
in 1995, an increase of $21,642. We were able to increase our net
interest income for the year ended 1996 because of growth in the
bank's total loans. Over the past two years, we have begun to
experience growth in the bank's total loans and assets.
Net interest income for 1995 was $1,287,894, compared to $1,223,496
in the prior year, an improvement of $64,398. This improvement was
due to growth that occurred during 1995.
Provision for Loan Losses
The provision for loan losses is the amount charged against current
earnings which management believes is necessary to maintain the
allowance at an adequate level at the time the charge is taken,
considering the watch list trends, net charge-off experience, size
of the loan portfolio and general economic conditions and trends.
It has not been necessary to add to our provision for loan losses
since 1990. In 1992 we transferred $100,000 of the excess that we
had carried in our reserve to income. During 1996, 1995 and 1994
we maintained our reserve for loan loss account at a level that was
adequate without making any additions to the provision account.
The allowance for loan losses at December 1996 was $157,640 or
1.22% of gross loans.
Other Income
Other income was $314,406 for 1996 as compared to $322,247 in 1995.
The majority of the decrease in other income was due to a
nonrecurring recovery in 1995 of $39,753 on a loss from the sale of
Louisiana Agricultural Finance (LAFA) Bonds. Excluding the one
time income received in 1995, other income for the year ended 1996
was higher than that of the previous year.
Other income was $322,247 for 1995 as compared to $260,433 in 1994.
The majority of the increase in other income over 1994 was due to
the same nonrecurring recovery on the loss from the sale of LAFA
Bonds.
Other Expenses
Other expenses were $1,160,908 for 1996 compared to $1,122,806 in
1995. The increase in other expenses was the result of increases
in salaries and employee benefits, occupancy expense, and furniture
and fixtures expenses. The increase in salaries and employee
benefits was due to an increase in the compensation of our
employees and the addition of two new Coteau Branch employees for
a full year in 1996. The increase in occupancy expenses and
furniture and fixtures was due primarily to the expenses of
operating the Coteau Branch for an entire year.
Other expenses were $1,122,806 in 1995 compared to $1,098,462 in
1994. The increase in other expense was the result of increases in
salaries and employee benefits, occupancy expense, and net other
real estate losses. Salaries and benefits and occupancy expense
increased due to the addition of the Coteau Branch and the
additional expenses associated with operating that location. Net
other real estate losses were incurred to reduce our other real
estate owned. We sold several properties during 1995 that we had
held for over five years. The increase in expenses was partially
reduced by a decrease in FDIC insurance for the year.
FINANCIAL CONDITION ANALYSIS
Investments
During the first quarter of 1994 the Company adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (SFAS 115). This
pronouncement provides guidance regarding the appropriate
classification of debt and equity securities in a company's balance
sheet and also provides for the recognition of unrealized holding
gains and losses as a result of changes in the fair value of
securities available for sale. The carrying value of securities
held to maturity continues to be amortized cost. Securities
available for sale are now carried at their estimated fair value in
accordance with SFAS 115.
The carrying value of securities available for sale at the end of
1996 was adjusted upward by $66,421 to reflect an increase in
market value over their amortized cost at that date. Securities
held to maturity had a market value in excess of carrying
value of $1,282 at year end. Management considers the increase in
value of the securities portfolio to be temporary in nature.
The carrying value of securities available for sale at the end of
1995 was adjusted upward by $25,469 to reflect an increase in
market value over their amortized cost at that date. Securities
held to maturity had a market value in excess of carrying
value of $1,395 at year end. The increase in value of the
securities portfolio was temporary.
As a result of increases in the general level of market interest
rates during 1994, the carrying value of securities available for
sale at December 31, 1994 reflected a net unrealized loss of
$367,278. The amortized cost of securities held to maturity was
less than estimated fair value by $76,062 at that date. The
decline in value of the securities portfolio was temporary.
Loans
At December 31, 1996, loans, net of allowance for loan losses and
unearned discount, were $12,708,902. This was an increase of
$1,936,002 over $10,772,900 at the end of 1995. Average loans
during the year 1996 were $11,268,606, an increase of approximately
$466,408 from 1995.
Loans, net of allowance for loan losses and unearned discount, were
$10,772,900 at December 31, 1995. Net loans decreased by $194,854
from $10,967,754 at the end of 1994. During the past several
years, economic conditions in the market served by Teche Bank have
resulted in limited opportunities to make quality commercial loans
and accordingly competition has been fierce between financial
institutions for loans.
Deposits
At December 31, 1996 total deposits were $32,375,543, an increase
of $1,859,740 over 1995. Average deposits for the year ended 1996
were $30,418,843 as compared to $27,859,434 in 1995. The increase
in deposits at year end was due to having the public fund deposits
of the St. Martin Parish Sheriff's Department property tax
collections. These funds were distributed to the various public
bodies during the first quarter of 1997. Average deposits are up
due to the growth of the Coteau Branch, and growth attributed to
the offering of our ATM's, Voice line and Saturday Banking
services.
At December 31, 1995 total deposits were $30,515,803. Total
deposits increased during the year due to the addition of the
Coteau branch and to growth attributed to the offering of our ATM,
Voice line and Saturday Banking services.
Time deposits of $100,000 and greater were $7,061,592 at the end of
1996, an increase of $1,806,921 over that of the prior year. The
increase was due to increases in Public Funds from bids won during
the year. We bid aggressively to get Public Funds when we can earn
a spread on these incremental funds. We continue to hold
$1,000,000 in jumbo certificates from the State of Louisiana that
were added in 1994. Rates on these funds are still attractive
compared to alternatives for funding.
Time deposits of $100,000 and greater were $5,254,671 at the end of
1995, an increase of $932,300 over that of the prior year. The
increase was due to increases in Public Funds from bids won during
the year.
Asset/Liability Management
The objective of asset/liability management is to maximize net
interest income while balancing liquidity and capital needs and
minimizing interest rate risk. The Asset/Liability Committee
(ALCO) develops and reviews strategies which assist in the
achievement of the Bank's goals. Strategies may include purchases
and sales of securities to alter maturities and yields, and changes
in the mix of earning assets and funding sources.
Changes in interest rates create interest rate risk. Interest rate
risk is measured each month by using a static gap analysis. Based
on the results of this model the ALCO committee determines the
appropriate strategies and goals to follow.
Liquidity is needed to meet the cash requirements for deposit
withdrawals and the funding of loans. A stable base of funding
sources and an adequate level of assets readily convertible into
cash provide liquidity. In order to maintain adequate
liquidity, management attempts to ladder the maturities and cash
flows of its investment portfolio so that cash flows will be
available each year to reinvest or to meet the liquidity demands of
the bank.
Credit Risk Management
Teche Bancshares, Inc. manages its credit risk by maintaining high
credit underwriting standards and providing an adequate allowance
for loan losses. We concentrate our lending to areas within our
geographic market in order to keep the cost of managing assets low
and in order to be informed of developments affecting our credits.
Our credit underwriting standards emphasize cash flow and repayment
ability and ensure that loans are properly structured and
collateralized. An adequate allowance for loan losses provides for
losses inherent in the loan portfolio.
Nonperforming Assets
Nonaccrual loans and other real estate owned are included in
nonperforming assets. As of December 31, 1996, nonperforming
assets were $294,062, a decrease of $56,851 from 1995. As of
December 31, 1995, nonperforming assets were $350,913, a decrease
of $67,097 from 1994. Nonaccrual loans at December 31, 1996, 1995
and 1994 were $238,843, $238,294 and $6,858, respectively. Other
real estate owned was $55,219, $112,619 and $411,152 at December
31, 1996, 1995 and 1994, respectively. The improvement in
nonperforming assets was accomplished by selling other real estate
owned. The majority of the balance in nonaccrual loans is
represented by one loan that is in bankruptcy. We are waiting for
the sale to go through the bankruptcy court to pay off the loan.
Watch List
The Bank's watch list includes loans which, for management
purposes, have been identified as requiring a higher level of
monitoring. These loans require monitoring due to conditions
which, if not corrected, could increase credit risk. Watch list
loans totaled $507,869 and $410,005 at December 31, 1996 and 1995.
Capital and Dividends
The Company's risk based capital ratios at December 31, 1996
significantly exceeded the minimum regulatory guidelines. The
Company's leverage ratio was 7.90% and risk based capital was
18.53%, well above the regulatory minimums of 3%-5% and 8%. The
Company's capital to asset ratio including the effect on capital of
mark to market changes in value of investments was 8.01% at
December 31, 1996. Teche Bancshares, Inc.'s sole source of funds
from which to pay dividends to stockholders is Teche Bank & Trust
Company. During 1996 Teche Bank & Trust Company declared and paid
a dividend to Teche Bancshares, Inc. of $193,564. Of this sum,
$155,865 was used to repay principal and interest on notes payable
to stockholders and $37,699 was paid to stockholders in the form of
a dividend.
Fourth Quarter Results
Net income for the fourth quarter of 1996, 1995, and 1994 was
$101,262, $96,781, and $11,229, respectively. The increase in
income for the quarter was mostly due to the adjustment made when
we calculated our actual income tax expense for the year. At year
end, we do an actual calculation which takes into account our tax
timing differences. For 1996, the adjustment served to decrease
the percentage of tax expense on the earnings of the last quarter.
Income before income tax for the quarter ended December 31, 1996
was $130,703 as compared to $122,302 for the same quarter ended
1995.
Item 8. Financial Statements and Supplementary Data
The audited financial statements of Teche Bancshares, Inc. are
presented on pages 29 to 63.
TECHE BANCSHARES, INC.
AND SUBSIDIARY
Financial Report
Years Ended December 31, 1996 and 1995
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Consolidated balance sheets 2
Consolidated statements of income 3
Consolidated statements of changes in stockholders' equity 4
Consolidated statements of cash flows 5
Notes to consolidated financial statements 6-27
SUPPLEMENTARY INFORMATION
Consolidated schedules of other operating expenses 29
Consolidating schedules -
Consolidating balance sheet 31
Consolidating statement of income 32
Consolidating statement of cash flows 33
INDEPENDENT AUDITOR'S REPORT
The Board of Directors
Teche Bancshares, Inc. and Subsidiary
St. Martinville, Louisiana
We have audited the accompanying consolidated balance sheets of
Teche Bancshares, Inc. and Subsidiary as of December 31, 1996 and
1995, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1996. These financial statements are
the responsibility of the Bank's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining on a test basis evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the consolidated
financial position of Teche Bancshares, Inc. and Subsidiary as of
December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting
principles.
Our audits were made primarily to form an opinion on the basic
consolidated financial statements, as stated in the preceding
paragraph. The supplementary information contained on pages 28-33
is presented for purposes of additional analysis and, although not
required for a fair presentation of consolidated financial
position, results of operations, and cash flows, was subjected to
the audit procedures applied in the audits of the basic
consolidated financial statements. In our opinion, the
supplementary information is fairly presented in all material
respects in relation to the basic consolidated financial statements
taken as a whole.
Darnall, Sikes, Kolder, Frederick & Rainey
A Corporation of Certified Public Accountants
Breaux Bridge, Louisiana
January 23, 1997
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Balance Sheets
December 31, 1996 and 1995
(in thousands)
1996 1995
ASSETS
Cash and due from banks $ 1,476 $ 1,108
Securities available for sale 13,915 11,943
Securities to be held to maturity 4,760 5,273
Other securities 286 259
Federal funds sold 1,225 2,800
Loans, net of allowance for loan losses
and unearned discount on loans 12,709 10,773
Bank premises, furniture,
fixtures and equipment 708 744
Accrued interest receivable 268 269
Other real estate owned 55 113
Other assets 150 188
--------- ---------
Total assets $35,552 $33,470
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits -
Non-interest demand $ 5,675 $ 5,282
Interest bearing -
NOW and MMDA accounts 6,029 6,799
Savings 3,256 3,201
Time, $100,000 and over 7,062 5,255
Other time 10,354 9,979
--------- --------
Total deposits 32,376 30,516
Accrued interest payable 134 111
Notes payable - stockholders - 151
Other liabilities and accrued expenses 195 159
--------- --------
Total liabilities 32,705 30,937
STOCKHOLDERS' EQUITY
Common stock ($10 par value, 100,000 shares
authorized, 28,125 shares issued
and outstanding) 281 281
Surplus 1,144 1,144
Retained earnings 1,397 1,110
Less: 200 shares (225 in 1994)
of treasury stock (19) (19)
Net unrealized gain (loss)
on securities available for sale,
net of tax of $23 in 1996
and $18 in 1995 44 17
--------- --------
Total stockholders' equity 2,847 2,533
Total liabilities and
stockholders' equity $35,552 $33,470
=========== ===========
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Income
Years Ended December 31, 1996, 1995 and 1994
1996 1995 1994
INTEREST INCOME
Interest and fees on loans $1,162 $1,138 $1,055
Interest on investment securities:
Interest on securities
available for sale 791 677 547
Interest on securities
to be held to maturity 307 280 211
Obligations of state and
political subdivisions 17 3 3
Interest and dividends
on other securities 5 5 -
Interest on federal funds sold 69 98 33
Interest on deposits in banks - 27 69
----- ----- -----
Total interest income 2,351 2,228 1,918
INTEREST EXPENSE
Interest on deposits 1,028 920 657
Federal funds purchased 1 - 1
Interest on securities repurchased 3 1 8
Other interest 5 5 8
Stockholder loans 4 14 21
----- ----- -----
Total interest expense 1,041 940 695
Net interest income before
recovery of possible
loan losses 1,310 1,288 1,223
PROVISION FOR POSSIBLE LOAN LOSSES - - -
----- ----- -----
Net interest income after
recovery of possible
loan losses 1,310 1,288 1,223
OTHER INCOME
Service charges on
deposit accounts 256 228 213
Commissions income 21 25 23
ATM income 9 8 1
Net gain on security transactions 4 - -
Recovery of investment loss - 40 -
Other operating revenue 24 21 23
----- ----- -----
Total other income 314 322 260
Income before other expenses 1,624 1,610 1,483
OTHER EXPENSES
Salaries and employee benefits 600 541 491
Occupancy expenses 187 175 158
Furniture and equipment expenses 35 24 21
Data processing expenses 34 41 35
Net loss on security transactions - 3 -
Net other real estate loss 1 36 25
Other operating expenses 304 303 367
----- ----- -----
Total other expenses 1,161 1,123 1,097
Income before income taxes 463 487 386
INCOME TAXES BENEFIT (EXPENSE) (138) (150) (140)
----- ------ -----
Net Income $ 325 $ 337 $ 246
======= ======= =======
Earnings per share $11.65 $12.07 $ 8.81
======= ======= =======
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity
Years Ended December 31, 1996, 1995 and 1994
(in thousands)
Allowance Unrealized
Loss on Gain (Loss)
Common Stk Marketable on
Treas. Stk Equity AFS
Surplus Securities Securities Total
BALANCES,
DECEMBER 31, 1993 $2,000 $(4) - $1,996
Net income 246 - - 246
Cash Dividend,
$1.25 per share (35) - - (35)
Cumulative effect of application
of statement of Financial Accounting
Standards No. 115 "Accounting for
Certain Investments in Debt and
Equity Securities" - - 154 154
Unrealized loss on
securities available
for sale - - (396) (396)
------- ----- ------ -------
BALANCES,
DECEMBER 31, 1994 $2,211 $(4) (242) $1,965
Net income 337 - - 337
Cash Dividend,
$1.25 per share (35) - - (35)
Sale of 25 shares
Treasury Stock 2 - - 2
Net change in unrealized gain
on AFS securities - - 259 259
Sale of Marketable
Securities - 4 - 4
------- ----- ------ -------
BALANCES,
DECEMBER 31, 1995 $2,515 $ - 17 $2,532
Net income 325 - - 325
Cash Dividend,
$1.35 per share (37) - - (37)
Net change in unrealized gain
on AFS securities - - 27 27
------- ----- ------ -------
BALANCES,
DECEMBER 31, 1996 $2,803 $ - $ 44 $2,847
====== ===== ====== =======
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
Years Ended December 31, 1996, 1995 and 1994
1996 1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 325 $ 337 $ 246
Adjustments to reconcile
net income to net cash provided by
operating activities:
Depreciation of bank
premises and equipment 85 87 74
Devaluation of other
real estate owned - - -
(Gain) loss on other
real estate owned 3 38 22
(Increase) decrease in:
other assets 39 (18) 9
deferred tax asset - 76 (62)
accrued interest receivable 1 (17) (40)
accrued interest payable 24 33 17
other liabilities 21 (157) 60
----- ----- -----
Net cash provided
by operating activities 498 379 326
----- ----- -----
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in interest-bearing
deposits in banks - 882 -
(Increase) decrease in
federal funds sold 1,575 (2,800) 625
Proceeds from sales of
securities available for sale 800 4,045 4,830
Proceeds from maturities of
securities available for sale 1,925 1,941 -
Proceeds from maturities of
securities held to maturity 5,830 1,272 -
Purchases of securities
to be held to maturity (3,023) (2,330) (2,290)
Purchases of securities
available for sale (6,976) (6,770) (4,500)
Net (increase) decrease
in loans (1,936) 194 (1,286)
Capital expenditures for
bank premises and equipment (48) (161) (96)
(Increase) decrease in
other real estate owned 52 260 261
----- ----- -----
Net cash provided by
(used in)investing
activities (1,801) (3,467) (2,456)
------- ------- -----
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in -
Demand deposits 393 903 114
NOW and MMDA (770) (1,207) (419)
Savings deposits 55 (251) (224)
Time deposits, >= $100,000 1,806 932 2,064
Other time deposits 375 974 294
Federal funds purchased - - 200
Dividends paid (37) (35) (35)
Decrease in treasury stock - 2 -
Decrease in notes
payable - stockholders (151) (141) (133)
----- ----- -----
Net cash provided by
financing activities 1,671 1,177 1,861
------- ------- -----
Net increase (decrease) in
cash and cash equivalents 368 (1,911) (269)
CASH AND CASH EQUIVALENTS,
beginning of year 1,108 3,019 3,288
CASH AND CASH EQUIVALENTS,
end of year $ 1,476 $ 1,108 $ 3,019
======= ======= =======
CASH PAID DURING THE YEAR
Interest $1,017 $ 908 $ 678
====== ======= =======
Income taxes $ 117 $ 153 $ 14
====== ======= =======
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
A. Principles of Consolidation
The accompanying consolidated financial statements
dated December 31, 1996, 1995 and 1994, include the
accounts of Teche Bancshares, Inc. (Company) and Teche
Bank and Trust Company (Bank), its wholly-owned
subsidiary. Intercompany transactions and balances have
been eliminated in consolidation.
B. Nature of Operations
Teche Bank and Trust Company is a Louisiana
chartered state bank engaged in the general banking
business since September 27, 1969. The Bank's main
office is located in the primary business district of St.
Martinville, Louisiana. The Bank also has two branches.
One is located on the north side of town on the main
thoroughfare. The other branch is located in Coteau,
Louisiana, which is in Iberia Parish. This branch was
opened in 1995. The population of both areas is largely
rural and the economy is based on agriculture, textiles
and tourism.
The City of St. Martinville and the Town of Coteau are
both located in the south central part of Louisiana. The
Bank's primary market area is the City of St. Martinville
and its general market area is St. Martin Parish,
Louisiana.
C. Basis of Accounting
The accompanying financial statements have been
prepared in accordance with generally accepted accounting
principles and in conformity with practices within the
banking industry.
D. Cash and Cash Equivalents
For the purposes of the Statements of Cash Flows, the
Company considers all highly liquid debt instruments
purchased with a maturity of three months or less to be
cash equivalents. Cash, cash equivalents and due from
banks at December 31 included the following:
1996 1995 1994
Cash and due
from banks $1,476 $1,108 $3,019
========== ========== ==========
E. Investment Securities
The Bank's investments in securities are classified
in three categories and accounted for as follows:
Trading Securities -
Government Bonds held principally for resale in the
near term and mortgage-backed securities held for sale in
conjunction with the Bank's mortgage banking activities
are classified as trading securities and recorded at
their fair values. Unrealized gains and losses on
trading securities are included in other income.
Securities Available for Sale -
Securities available for sale consist of bonds,
notes, debentures and certain equity securities not
classified as trading securities nor as securities to be
held to maturity.
Securities to be Held to Maturity -
Bonds, notes and debentures for which the Bank has
the positive intent and ability to hold to maturity are
reported at cost, adjusted for amortization of premiums
and accretion of discounts which are recognized in
interest income using the interest method over the period
to maturity.
At December 31, 1995 and 1994, the Bank did not own
any trading securities.
Declines in the fair value of individual
held-to-maturity securities below their costs that are
other than temporary result in write-downs of the
individual securities to their fair value. The related
write-downs will be included in earnings as realized
losses.
Unrealized holding gains and losses, net of tax, on
securities available for sale are reported as a net
amount in a separate component of shareholders' equity
until realized.
Gains and losses on the sale of securities available
for sale are determined using the specific-identification
method.
F. Loans, Allowance for Loan Losses and Interest Income
Loans are stated at the amount of unpaid principal
reduced by unearned discount and an allowance for loan
losses. Unearned discount on installment loans is
recognized as income over the terms of the loans by the
sum-of-months digits method which approximates the
interest method. Interest on other loans is calculated
and accrued by using the simple interest method on daily
balances of the principal amount outstanding.
The allowance for loan losses is established through
a provision for loan losses charged to expenses. Loans
are charged against the allowance for loan losses when
management believes that the collectibility of the
principal is unlikely. The allowance is an amount that
management believes will be adequate to absorb possible
losses on existing loans that may become uncollectible,
based on evaluations of the collectibility of loans and
prior loan loss experience. The evaluations take into
consideration such factors as changes in the nature and
volume of the loan portfolio, overall portfolio quality,
review of specific problem loans and current economic
conditions that may affect the borrowers' ability to pay.
Accrual of interest is discontinued on a loan when
management believes, after considering economic and
business conditions and collection efforts, that the
borrowers' financial condition is such that collection of
interest is doubtful.
G. Loan Origination Fees and Costs
The Bank charges minimal loan fees and direct
origination costs. These charges are recognized as
income at the time the loan is made.
H. Bank Premises, Furniture, Fixtures and Equipment
Bank premises, furniture, fixtures and equipment are
carried at historical cost less accumulated depreciation.
For book purposes, depreciation is computed using the
straight-line method over the estimated useful lives of
the assets which range from three to thirty-three years.
For income tax purposes, depreciation of assets acquired
prior to January 1, 1981, is calculated on the
straight-line method and depreciation of assets acquired
after December 31, 1980, is calculated using the
Accelerated Cost Recovery (ACRS) or Modified Accelerated
Cost Recovery (MACRS) System of the Internal Revenue
Service. Maintenance and repairs which do not extend
the life of banking premises and equipment are charged to
operating expenses.
I. Other Real Estate Owned
Assets acquired through the default of loans are
recorded at the lower of the outstanding loan amounts
plus accrued interest or fair market value of the assets
acquired. Reductions from outstanding loan amounts to
fair market value are charged against the reserve for
possible loan losses. Subsequent valuation reductions,
if any, are charged to operating expenses.
J. Income Taxes
Provisions for income taxes are based on amounts
reported in the statements of income (after exclusion of
non-taxable income such as interest on state and
municipal securities) and include deferred taxes on
temporary differences in the recognition of income and
expense for tax and financial statement purposes.
Deferred taxes are computed as prescribed in Financial
Accounting Standards Board (FASB) Statement No. 109,
Accounting for Income Taxes.
K. Post-Retirement Health Care and Life Insurance Benefits
The Bank does not pay the costs of providing
continuing health care and life insurance benefits for
its retired employees. Those benefits for retirees are
made available and are provided through an insurance
company whose monthly premiums are paid by the retired
employee.
L. Compensated Absences
Employees of the bank are entitled to paid vacation
depending upon length of service. Vacation must be taken
in the year accrued and cannot be carried over. Sick
leave accumulates on a monthly basis according to the
years of service and is available for employees when
needed. However, it does not vest nor is it payable at
termination of employment. The bank's policy is to
recognize the costs of compensated absences when actually
paid to employees.
M. Financial Instruments
In the ordinary course of business the Company has
entered into off balance sheet financial instruments
consisting of commitments to extend credit, commercial
letters of credit and standby letters of credit. Such
financial instruments are recorded in the financial
statements when they become payable.
The following methods and assumptions were used by
the Bank in estimating fair values of financial
instruments as disclosed herein:
Cash and cash equivalents -- The carrying amount of
cash and short-term instruments approximate their
fair value.
Securities to be held to maturity and securities
available for sale -- Fair values for investment
securities are based on quoted market prices.
Loans receivable -- Fair values for variable and
fixed rate loans are estimated using discounted cash
flow analyses, using interest rates currently being
offered for loans with similar terms to borrowers of
similar credit quality.
Deposit liabilities -- The fair values disclosed for
demand deposits are, by definition, equal to the
amount payable on demand at the reporting date (that
is, their carrying amounts). The carrying amounts
of variable-rate, fixed-term money market accounts
and certificates of deposit approximate their fair
values at the reporting date. Fair values for
fixed-rate certificates of deposit are estimated
using a discounted cash flow calculation that
applies interest rates currently being offered on
certificates to a schedule of aggregated expected
monthly maturities on time deposits.
Accrued interest -- The carrying amounts of accrued
interest approximate their fair values.
Off-balance-sheet instruments -- Fair values for
off-balance-sheet lending commitments are based on
fees currently charged to enter into similar
agreements, taking into account the remaining terms
of the agreements and the counterparties' credit
standing.
(2) Investment Securities
The carrying amounts of investment securities as
shown in the consolidated balance sheets of the Bank and
their approximate fair values at December 31 were as
follows:
(in thousands)
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
(in thousands)
Securities available for sale:
December 31, 1996 -
U.S. Government and
agency securities $ 1,194 $ 2 $ (2) $ 1,194
Mortgage-backed
securities 12,654 95 (29) 12,720
------- --- ------ -------
$13,848 $97 $(31) $13,914
======= === ====== =======
Securities available for sale:
December 31, 1995 -
U.S. Government and
agency securities $ 2,923 $ 9 $ (2) $ 2,930
Mortgage-backed
securities 8,995 50 (32) 9,013
------- --- ------ -------
$11,918 $59 $(34) $11,943
======= === ====== =======
(in thousands)
Securities to be held to maturity:
December 31, 1996 -
U.S. Government and
agency securities $ 687 $ 1 $ (1) $ 687
State and municipal
securities 539 1 (1) 539
Mortgage-backed
securities 3,534 19 (20) 3,533
------- --- ------ -------
$ 4,760 $21 $ (22) $ 4,759
======= === ====== =======
Securities to be held to maturity:
December 31, 1995 -
U.S. Government and
agency securities $ 813 $ 3 $ - $ 816
State and municipal
securities 208 - (8) 200
Mortgage-backed
securities 4,252 34 (27) 4,259
------- --- ------ -------
$ 5,273 $37 $ (35) $ 5,275
======= === ====== =======
Investment securities carried at approximately $5,888,788
at December 31, 1996 and $6,074,384 at December 31, 1995 were
pledged to secure public deposits and for other purposes
required or permitted by law.
Gross realized gains and losses on sales of investment
securities for the years ended December 31, were as follows:
(in thousands)
1996 1995
Gross realized gains:
Mortgage backed securities $ 2 $ 7
Other securities 2 2
--- ----
Total realized gains $ 4 $ 9
=== ====
Gross realized losses:
U.S. government & agency securities $ - $ 8
Other securities - 4
--- ----
Total realized losses $ - $ 12
=== ====
The maturities of debt securities at December 31, 1996
were as follows: (in thousands)
Securities to be Securities
Held to Maturity Available for Sale
---------------- ----------------
Amortized Fair Amortized Fair
Cost Value Cost Value
--------- ----- -------- -----
Due in one year or less $1,899 $1,898 $ 5,457 $ 5,483
Due from one to five
years 2,803 2,801 8,193 8,226
Due from five to ten
years 58 60 - -
Due after ten years - - 198 205
------ ------ ------- -------
$4,760 $4,759 $13,848 $13,914
====== ====== ======= =======
(3) Other Securities
Other securities at December 31 consist of the following
stock in industry-related financial institutions:
1996 1995
Shares Amount Shares Amount
Federal Home Loan
Bank Dallas 1,363 $136,300 1,085 $108,500
Louisiana Independent
Bancshares, Inc. 600 150,000 600 150,000
-------- ------
$286,300 $258,500
======== ========
These securities are valued at cost.
(4) Loans
Major classifications of loans are as follows:
(in thousands)
1996 1995
Real estate loans $ 7,292 $ 5,857
Commercial and industrial loans 2,630 2,413
Personal and consumer loans 3,006 2,702
All other loans (including overdrafts) 27 24
------- -------
12,955 10,996
Less: Unearned discount (88) (62)
Allowance for loan losses (158) (161)
------- -------
Loans, net $12,709 $10,773
======= =======
Concentrations of credit risk arising from financial
instruments exist in relation to certain groups of customers.
A group concentration arises when a number of counterparties
have similar economic characteristics that would cause their
ability to meet contractual obligations to be similarly
affected by changes in economic or other conditions. The Bank
does not have a significant exposure to any individual
customer or counterparty. A geographic concentration arises
because the Bank operates primarily in the south central part
of Louisiana.
The amount of credit risk (which approximates carrying
value) represents the maximum accounting loss that would be
recognized at the reporting date if counterparties failed
completely to perform as contracted and any collateral or
security proved to be of no value. The bank has experienced
little difficulty in accessing collateral (described in Note
17) when required.
Loans on which the accrual of interest has been
discontinued or reduced amounted to $238,843 and $238,294 at
December 31, 1996 and 1995, respectively. If interest on those
loans had been accrued, such income would have approximated
$24,801, $4,964 and $517 for 1996, 1995 and 1994 respectively.
The Bank did not recognize any interest income on nonaccrual
loans during 1996.
Impairment of a loan having a recorded investment of
$215,987 at December 31, 1996 and December 31, 1995 has been
recognized in conformity with Financial Accounting Standards
Board (FASB) Statement No. 114, as amended by FASB Statement
No. 118. There is no allowance for loan losses as it relates
to this loan. Interest income has not been recognized in 1996
as this loan is on nonaccrual.
Changes in the allowance for loan losses are as follows:
(in thousands)
1996 1995 1994
Balance, beginning of period $161 $180 $181
Provision added to operations - - -
Loans charged off (9) (21) (14)
Recoveries 6 2 13
---- ---- ----
Balance, end of period $158 $161 $180
==== ==== ====
Management is of the opinion that the allowance for loan
losses account at December 31, 1996 is sufficient to cover any
possible loan losses.
(5) Bank Premises, Furniture, Fixtures and Equipment
The following is a summary of fixed assets and
accumulated depreciation as of December 31, 1996 and 1995:
(in thousands)
1996 1995
Land $ 266 $ 266
Bank buildings and improvements 750 748
Furniture, fixtures and equipment 596 549
----- -----
1,612 1,563
===== =====
Accumulated depreciation
and amortization (904) (819)
----- -----
$ 708 $ 744
===== =====
Depreciation expense for the periods ended December 31,
1996, 1995 and 1994, amounted to $84,826, $85,479 and $74,012,
respectively.
(6) Other Real Estate Owned
Other real estate owned consists of real estate acquired
through the foreclosure of loans. It is valued at the lower
of its fair value or recorded investment in the related loan
at the date of foreclosure. Other real estate owned at
December 31, 1996 and 1995 is composed of the following:
(in thousands)
1996 1995
Other real estate owned,
acquisition value $ 68 $ 151
Less: Allowance for other
real estate losses (13) (38)
----- -----
Net value $ 55 $ 113
===== =====
Changes in the allowance for losses on other real estate
are as follows:
(in thousands)
1996 1995 1994
Balances, beginning of period $ 38 $ 207 $ 215
Provision charged to operations - - -
Sales of properties (25) (169) (8)
----- ----- -----
Balances, end of period $ 13 $ 38 $ 207
===== ===== =====
(7) Deposits
The aggregate amount of short-term jumbo CDs, each with
a minimum denomination of $100,000, was approximately
$2,791,626 and $1,888,186 in 1996 and 1995 respectively.
At December 31, 1996, the scheduled maturities of jumbo
CDs are as follows: (in thousands)
Year Ended December 31, Maturities
1997 $6,081
1998 641
1999 240
2000 100
------
$7,062
======
(8) Notes payable - Stockholders
(in thousands)
1996 1995
Note bearing interest at 5%,
unsecured, due on demand $ - $151
==== ====
Additional information regarding the amount of interest
expense associated with this note payable is contained in Note
15.
(9) Contingent Liabilities and Commitments
A. The consolidated financial statements do not reflect
various commitments and contingent liabilities which
arise in the normal course of business and which involve
elements of credit risk, interest rate risk and liquidity
risk. These commitments and contingent liabilities are
described in Note 17 - Financial Instruments.
B. The Bank is not involved in any legal actions arising
from normal business activities.
(10) Concentration of Credit
All of the Bank's loans, commitments, and standby letters
of credit have been granted to customers in the Bank's market
area as described in Note 1, Item B. The concentration of
credit by type of loan is set forth in Note 4. Investments in
state and municipal securities also involve governmental
entities within the Bank's market area. The Bank, as a matter
of policy, does not extend credit to any single borrower or
group of related borrowers in excess of $697,000.
(11) Operating Lease
Teche Bancshares leases an automobile under an operating
lease agreement. Lease expense for 1996, 1995, and 1994 was
$5,400. The following is a schedule of minimum rental
payments for the next five years:
Year Ended December 31, Total
1997 $5,400
1998 5,400
1999 5,400
2000 5,400
2001 5,400
(12) Income Taxes
The Bank utilizes FASB Statement 109 to account for
income taxes.
The components of income tax expense for the years ended
December 31, 1996, 1995 and 1994 are as follows:
(in thousands)
1996 1995 1994
Income taxes currently payable:
Federal $(128) $(102) $(77)
Deferred tax asset (liability) due
to timing differences (10) (48) (63)
----- ---- -----
Total income tax benefit
(expense) $(138) $(150) $(140)
===== ===== =====
The effective tax rate of 29.7 percent in 1996, 30.8
percent in 1995, and 36.3 percent in 1994 differ from the
statutory rate of 34 percent principally because of the
utilization of net operating loss carryforwards and temporary
differences giving rise to deferred taxes.
A reconciliation of income tax expense at the statutory
rate to the effective rate follows:
Percent of Earnings
Before Taxes
1996 1995 1994
Computed at the expected statutory
rate 34.0% 34.0% 34.0%
Temporary differences giving rise
to deferred tax amounts 2.1 9.8 16.4
Net operating loss carryforwards - - (3.0)
Investment tax credit - - (10.0)
Temporary difference recognized
this year (10.1) (12.2) -
Other 3.7 (.8) (1.1)
----- ----- -----
Income tax expense-effective rate 29.7% 30.8% 36.3%
===== ===== =====
Temporary differences giving rise to the deferred tax
amounts consist primarily of the excess of allowance for loan
losses for tax purposes over the amount for financial
reporting purposes, write-downs in carrying value of certain
assets for financial reporting purposes, and the excess of
accumulated depreciation for tax purposes over accumulated
depreciation for financial reporting purposes.
Amounts for deferred tax assets and liabilities are as
follows:
(in thousands)
1996 1995
Deferred tax asset $ 4 $ -
Deferred tax liability (133) (106)
----- -----
Net deferred tax asset (liability) $(129) $(106)
===== =====
(13) Earnings Per Share
Earnings per share amounts are computed based on the
weighted average number of shares actually outstanding. The
number of shares used in the computations was 27,925 in 1996
and 1995 and 27,900 in 1994.
(14) Pension Plan
The Bank has a non-contributory, money-purchase pension
plan that covers any employee that has completed one (1) year
of service and has attained age 21. Pension costs include
certain service costs, which are accrued and funded currently.
Pension expenses charged to operations in 1996, 1995 and 1994
were $42,614, $32,875 and $38,362, respectively.
(14) Related Party Transactions
A. At December 31, 1996 and 1995, certain officers,
directors and related companies were indebted to the Bank in
the aggregate amount of $1,277,726 and $637,078, respectively.
These loans were made at prevailing interest rates.
B. The Bank has notes payable to stockholders in the
aggregate amount of $150,836 at December 31, 1995, as
previously disclosed in Note 8. The notes were paid out
during the year ended December 31, 1996. The note accrues
interest at a rate of 5% of principal and accrued interest.
Interest expense of $4,636, $14,245 and $21,016 was incurred
during 1996, 1995 and 1994, respectively, with all interest
having been paid at December 31, 1996.
(16) Regulatory Restrictions
Banking regulations limit the amount of dividends that
may be paid without prior approval of the Bank's regulatory
agency. Prior approval shall be required if the total of all
dividends declared and paid by the Bank during any one year
would exceed the total of its net profits of that year
combined with the net profits from the immediate preceding
year.
The Bank is subject to various regulatory capital
requirements administered by the federal banking agencies.
Failure to meet minimum capital requirements can initiate
certain mandatory and possibly additional discretionary
actions by regulators that, if undertaken, could have a direct
material effect on the Bank's financial statements. Under
capital adequacy guidelines and the regulatory framework for
prompt corrective action, the Bank must meet specific capital
guidelines that involve quantitative measures of the Bank's
assets, liabilities, and certain off-balance-sheet items as
calculated under regulatory accounting practices. The Bank's
capital amounts and classification are also subject to
qualitative judgements by the regulators about components,
risk weightings, and other factors.
Quantitative measures established by regulation to ensure
capital adequacy require the Bank to maintain minimum amounts
and ratios (set forth in the table below) of total and Tier I
capital (as defined in the regulations) to risk-weighted
assets (as defined), and of Tier I capital (as defined) to
average assets (as defined). Management believes, as of
December 31, 1996, that the Bank meets all capital adequacy
requirements to which it is subject.
As of December 31, 1996, the bank was categorized as well
capitalized under the regulatory framework for prompt
corrective action. To be categorized as well capitalized the
Bank must maintain a minimum total risk based, Tier I risk-
based, and Tier I leverage ratios as set forth in the table.
There are no conditions or events since that time that
management believes have changed the institution's category.
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provision
Amount Ratio Amount Ratio Amount Ratio
As of December 31, 1996:
Total Capital
(to risk weighted
assets)
$2,961 18.53% $1,278 >=8% $1,598 >=10%
Tier I Capital
(to risk weighted
assets)
$2,803 17.54% $ 639 >=4% $ 959 >= 6%
Tier I Capital
(to average
assets
$2,803 8.32% $1,348 >=4% $1,684 >= 5%
As of December 31, 1995:
Total Capital
(to risk weighted
assets)
$2,677 18.16% $1,179 >=8% $1,474 >=10%
Tier I Capital
(to risk weighted
assets)
$2,516 17.07% $ 589 >=4% $ 884 >= 6%
Tier I Capital
(to average
assets
$2,516 8.13% $1,236 >=4% $1,545 >= 5%
(17) Financial Instruments
The Bank is a party to financial instruments with
off-balance-sheet risk in the normal course of business to
meet the financing needs of its customers and to reduce its
own exposure to fluctuations in interest rates. These
financial instruments include commitments to extend credit,
credit card arrangements, and standby letters of credit.
Those instruments involve, to varying degrees, elements of
credit and interest-rate risk in excess of the amount
recognized in the statement of financial position. The
contract or notional amounts of those instruments reflect the
extent of the Bank's involvement in particular classes of
financial instruments.
The Bank's exposure to credit loss in the event of
nonperformance by the other party to the financial instruments
for commitments to extend credit is presented by the
contractual notional amount of those instruments. The Bank
uses the same credit policies in making commitments and
conditional obligations as it does for on-balance-sheet
instruments. Credit risk represents the accounting loss that
would be recognized at the reporting date if counterparties
failed completely to perform as contracted. The credit risk
amounts are equal to the contractual amounts, assuming that
the amounts are fully advanced and that, in accordance with
the requirements of FASB Statement No. 105, "Disclosure of
Information about Financial Instruments with Off-Balance-Sheet
Risk and Financial Instruments with Concentrations of Credit
Risk," collateral or other security is of no value. The
bank's policy is to require customers to provide collateral
prior to the disbursement of approved loans. Collateral is
either in the form of a security interest or a mortgage on the
underlying property.
At December 31, 1996, the Bank was exposed to credit risk
on commitments to extend credit having contract amounts of
$1,920,521, summarized as follows: (in thousands)
Commitments to extend credit $ 1,764
Credit Card arrangements -
Standby letters of credit 156
--------
$ 1,920
========
Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition
established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require
payment of a fee. Since many of the commitments are expected
to expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash requirements.
The Bank evaluates each customer's credit worthiness on a
case-by-case basis. The amount of collateral obtained, if it
is deemed necessary by the Bank upon extension of credit, is
based on management's credit evaluation of the counterparty.
Collateral held varies but may include accounts receivable;
inventory, property, plant and equipment; and income-producing
commercial properties.
Commitments to extend credit, credit card arrangements,
and standby letters of credit all include exposure to some
credit loss in the event of nonperformance by the customer.
The Bank's credit policies and procedures for credit
commitments and financial guarantees are the same as those for
extensions of credit that are recorded on the consolidated
statements of condition. The Bank does not anticipate any
material losses as a result of the contingent liabilities and
commitments.
The estimated fair values of the Bank's financial
instruments were as follows:
(in thousands)
Carrying Fair
Value Value
December 31, 1996:
Financial assets:
Cash and due from banks $ 1,476 $ 1,476
Securities available for sale 13,914 13,914
Securities to be held to maturity 4,760 4,759
Federal funds sold 1,225 1,225
Loans 12,709 12,620
Accrued interest receivable 268 268
Carrying Fair
Value Value
Financial liabilities:
Deposit liabilities 32,376 32,399
Accrued interest payable 135 135
Notes payable-stockholders - -
Other liabilities 195 195
Off balance sheet instruments:
Commitments to extend credit - 1,764
Credit card arrangements - -
Stand by letter of credit - 156
December 31, 1995:
Financial assets:
Cash and due from banks $ 1,108 $ 1,108
Securities available for sale 11,943 11,943
Securities to be held to maturity 5,273 5,274
Federal funds sold 2,800 2,800
Loans 10,773 10,708
Accrued interest receivable 269 269
Financial liabilities:
Deposit liabilities 30,516 30,523
Accrued interest payable 111 111
Notes payable-stockholders 151 151
Other liabilities 160 160
Off balance sheet instruments:
Commitments to extend credit - 988
Credit card arrangements - -
Stand by letter of credit - 145
(18) Parent Company Only Financial Statements
BALANCE SHEETS
December 31, 1996 and 1995
(in thousands)
1996 1995
ASSETS
Current assets:
Cash $ 1 $ 2
Investment in Teche Bank & Trust Co. 2,837 2,675
Other assets 9 7
----- -----
Total assets $2,847 $2,684
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued interest payable $ - $ -
Notes payable stockholders - 151
--- ---
Total current liabilities - 151
--- ---
Stockholders' equity:
Common stock, $10 par value, 100,000 shares
authorized, 28,125 shares issued and
outstanding 281 281
Surplus 1,144 1,144
Retained earnings 1,397 1,110
Treasury stock (19) (19)
Unrealized gain (loss) on securities
available for sale, net of tax of
$22,573 and $18,660, respectively 44 17
----- -----
Total stockholders' equity 2,847 2,533
----- -----
Total liabilities and
stockholders' equity $2,847 $2,684
====== ======
STATEMENTS OF INCOME
Years Ended December 31, 1996, 1995 and 1994
(in thousands)
1996 1995 1994
Income:
Income from subsidiary $136 $154 $ 77
Interest and dividends on corporate
securities 193 193 191
Other income 2 7 -
--- --- ---
Total income 331 354 268
--- --- ---
Operating expenses:
Legal and professional fees - 2 1
FDIC and state assessments 1 1 -
Miscellaneous expense - - -
Interest on stockholder loans 5 14 21
--- --- ---
Total operating expenses 6 17 22
--- --- ---
Net income $325 $337 $246
==== ==== ====
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years Ended December 31, 1996, 1995 and 1994
(in thousands)
Allowance Unrealized
Loss on Gain (Loss)
Common Stk Marketable on
Treas. Stk Equity AFS
Surplus Securities Securities Total
BALANCES,
DECEMBER 31, 1993 $2,000 $(4) - $1,996
Net income 246 - - 246
Cash Dividend,
$1.25 per share (35) - - (35)
Cumulative effect of application
of statement of Financial Accounting
Standards No. 115 "Accounting for
Certain Investments in Debt and
Equity Securities" - - 154 154
Unrealized loss on
securities available
for sale - - (396) (396)
------- ----- ------ -------
BALANCES,
DECEMBER 31, 1994 $2,211 $(4) (242) $1,965
Net income 337 - - 337
Cash Dividend,
$1.25 per share (35) - - (35)
Sale of 25 shares
Treasury Stock 2 - - 2
Net change in unrealized gain
on AFS securities - - 259 259
Sale of Marketable
Securities - 4 - 4
------- ----- ------ -------
BALANCES,
DECEMBER 31, 1995 $2,515 $ - 17 $2,532
Net income 325 - - 325
Cash Dividend,
$1.35 per share (37) - - (37)
Net change in unrealized gain
on AFS securities - - 27 27
------- ----- ------ -------
BALANCES,
DECEMBER 31, 1996 $2,803 $ - 44 $2,847
====== ===== ====== =======
STATEMENTS OF CASH FLOWS
Years Ended December 31, 1996, 1995 and 1994
(in thousands)
1996 1995 1994
Cash flows from operating activities:
Net income $ 325 $ 337 $ 246
Adjustments to reconcile net income to
net cash provided by operating
activities:
Equity in undistributed earnings of
subsidiary bank (136) (154) (77)
Changes in:
Due to subsidiary - - -
Other assets (2) (7) -
Accrued interest payable - - -
---- ---- -----
Net cash provided by operating
activities 187 176 169
---- ---- -----
Cash flows from financing activities:
Dividends paid (37) (35) (35)
Decrease in treasury stock - 2 -
Decrease in notes payable (151) (141) (135)
---- ---- ----
Net cash used in financing
activities (188) (174) (170)
---- ----- ----
Net increase (decrease)
in cash (1) 2 (1)
Cash, beginning of period 2 - 1
---- ---- ----
Cash, end of period $ 1 $ 2 $ -
==== ==== ====
SUPPLEMENTARY INFORMATION
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Schedules of Other Operating Expenses
Years Ended December 31, 1996, 1995 and 1994
(in thousands)
1996 1995 1994
Advertising $ 23 $ 22 $ 21
Armored car service 4 2 2
Audits and examinations 18 18 17
ATM expense 22 20 6
Cash short 4 3 4
Club account fees 15 12 8
Collections 2 2 3
Committee fees 2 3 2
Consulting fees - 12 38
Conventions and seminar 10 7 11
Correspondent bank service charges 28 27 20
Courier service 3 3 3
Directors' fees 43 45 46
Donations 3 3 2
Dues and subscriptions 5 6 7
FDIC and state assessments 12 8 66
Insurance 32 35 39
Lease expense 5 5 5
Legal and professional fees 1 2 8
Miscellaneous 10 9 7
Office expense 32 31 26
Postage and freight 23 21 20
Other taxes and licenses 1 1 -
Travel and entertainment 6 6 6
---- ---- ----
$304 $303 $367
==== ==== ====
CONSOLIDATING SCHEDULES
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidating Balance Sheet
December 31, 1996
(in thousands)
Teche Teche
Bancshares, Elimination Teche Bank and
Inc. and Entries Bancshares, Trust
Subsidiary Dr (Cr) Inc. Company
ASSETS
Cash and due from banks $ 1,476 $(1) $1 $1,476
Securities available
for sale 13,915 - - 13,915
Securities to be held
to maturity 4,760 - - 4,760
Other securities 286 - - 286
Federal funds sold 1,225 - - 1,225
Loans 12,954 - - 12,954
Less: Allowance for
loan losses (157) - - (157)
Unearned discount
on loans (88) - - (88)
Bank premises, furniture,
fixtures and equipment 708 - - 708
Accrued interest receivable 268 - - 268
Other real estate owned 55 - - 55
Investment in subsidiary - (2,837) 2,837 -
Other assets 150 (9) 9 150
----- ---- --- -----
Total assets $35,552 $(2,847) $2,847 $35,552
======= ======== ====== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS
Non-interest demand $ 5,675 $ 1 $ - $ 5,676
Interest-bearing -
NOW and MMDA accounts 6,029 - - 6,029
Savings 3,256 - - 3,256
Time,$100,000 and over 7,062 - - 7,062
Other time 10,354 - - 10,354
------ --- --- ------
Total deposits 32,376 1 - 32,377
Accrued interest payable 135 - - 135
Other liabilities and
accrued expenses 194 9 - 203
------ --- --- ------
Total liabilities 32,705 10 - 32,715
------ --- --- ------
STOCKHOLDERS' EQUITY
Common stock 281 281 281 281
Surplus 1,144 1,519 1,144 1,519
Retained earnings 1,398 994 1,398 994
Less: 200 shares of
treasury stock (19) - (19) -
Net unrealized gain
on securities
available for
sale, 43 43 43 43
----- ---- ----- -----
Total stockholders'
equity 2,847 2,837 2,847 2,837
----- ----- ----- -----
Total liabilities and
stockholders'
equity $35,552 $2,847 $2,847 $35,552
======= ====== ====== =======
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidating Statement of Income
For the Year Ended December 31, 1996
Teche Teche
Bancshares, Elimination Teche Bank and
Inc. and Entries Bancshares, Trust
Subsidiary Dr (Cr) Inc. Company
INTEREST INCOME
Interest and fees
on loans $1,162 $ - $ - $1,162
Interest on investment securities -
Interest on securities
available for sale 791 - - 791
Interest on securities
held to maturity 307 - - 307
State and municipal
obligations 17 - - 17
Interest and dividends on
other securities 5 193 193 5
Interest on federal
funds sold 69 - - 69
----- --- --- -----
Total interest income 2,351 193 193 2,351
----- --- --- -----
INTEREST EXPENSE
Interest on deposits 1,028 - - 1,028
Interest on federal
funds purchased 1 - - 1
Interest on securities
repurchased 3 - - 3
Other interest 5 - - 5
Interest on
stockholder loans 4 - 4 -
--- --- --- ----
Total interest expense 1,041 - 4 1,037
--- --- --- -----
Net interest income 1,310 193 189 1,314
----- --- --- -----
OTHER INCOME
Service charges, collection
and exchange charges 256 - - 256
Commissions income 21 - - 21
ATM income 9 - - 9
Recovery of investment loss 4 - - 4
Other operating revenue 24 2 2 24
---- --- --- ----
Total other income 314 2 2 314
---- --- --- ----
Income before other
expenses 1,624 195 191 1,628
OTHER EXPENSES
Salaries and employee
benefit 600 - - 600
Occupancy expenses 187 - - 187
Furniture and equipment 35 - - 35
Data processing expenses 34 - - 34
Net other real estate loss 1 - - 1
Other operating expenses 304 - 1 303
---- ---- ---- -----
Total other expenses 1,161 - 1 1,160
----- ---- ---- -----
Income before income tax
expense and equity
in earnings
of subsidiary 463 195 190 468
INCOME TAX EXPENSE (138) (1) - (139)
------ ---- ---- -----
Income before equity
in earnings
of subsidiary 325 194 190 329
EQUITY IN EARNINGS
OF SUBSIDIARY - 135 135 -
----- ----- ----- -----
Net income $ 325 $ 329 $ 325 $ 329
===== ===== ===== =====
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidating Statement of Cash Flows
For the Year Ended December 31, 1996
Teche Teche
Bancshares, Elimination Teche Bank and
Inc. and Entries Bancshares, Trust
Subsidiary Dr (Cr) Inc. Company
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 325 $(329) $ 325 $ 329
Adjustments to reconcile net income to net
cash provided by operating activities -
Equity in earnings
of subsidiary - 135 (135) -
Depreciation of
bank premises
and equipment 85 - - 85
Net loss on other
real estate owned 3 - - 3
Decrease in
other assets 39 2 (2) 39
Decrease in accrued
interest receivable 1 - - 1
Increase (decrease)
in accrued
interest payable 24 - - 24
Increase in other
liabilities 21 (2) - 23
----- --- --- -----
Net cash provided
by operating
activities 498 (194) 188 504
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in federal
funds sold 1,575 - - 1,575
Proceeds from sales of
securities available
for sale 800 - - 800
Proceeds from maturities of securities
available for sale 1,925 - - 1,925
Proceeds from maturities of securities
held to maturity 5,830 - - 5,830
Purchases of securities to
be held to maturity (3,023) - - (3,023)
Purchases of securities
available for sale (6,976) - - (6,976)
Net increase in loans (1,936) - - (1,936)
Capital expenditures for bank
premises and equipment (48) - - (48)
Decrease in other
real estate owned 52 - - 52
------ ---- ---- ------
Net cash used in
investing
activities (1,801) - - (1,801)
------ ---- ---- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in -
Demand deposits 393 1 - 392
NOW and MMDA (770) - - (770)
Savings deposits 55 - - 55
Time deposits $100,000
and over 1,806 - - 1,806
Other time 375 - - 375
Dividends paid (37) 194 (37) (194)
Decrease in notes
payable - stockholders (151) - (151) -
------ ---- ---- -----
Net cash provided
by (used in)
financing
activities 1,671 195 (188) 1,664
------ ---- ---- -----
Net increase (decrease)
in cash
and cash
equivalents 368 (2) 2 368
CASH AND CASH EQUIVALENTS,
beginning of year 1,108 - - 1,108
------- ----- ----- -------
CASH AND CASH EQUIVALENTS,
end of year $ 1,476 $ (2) $ 2 $ 1,476
======= ===== ==== =======
FORM 10-K
TECHE BANCSHARES, INC.
PART II (CONTINUED)
Item (9) Disagreements on Accounting and Financial Disclosure
There were no reporting disagreements on any matter of
accounting principle or financial statement disclosure.
FORM 10-K
TECHE BANCSHARES, INC
PART III
Item (10) Directors and Executive Officers of the Registrant
- -------------------------------------------------------------
Directors
- ----------
Number of
Shares Owned Ownership as
Beneficially a Percent
Including Direct of Total
Name and Title and Term as and Indirect Outstanding
Address Age Occupation Director Ownership Shares
- -------- --- ---------- -------- ------------ -----------
Tilden A. Bonin, Jr.
St. Martinville, LA
61 Painting Sept., 1969 1,576 5.6%
Contractor to Present
James B. Bulliard, Sr.
St. Martinville, LA
61 Owner & GM Sept., 1969 3,312 11.9%
Manager Food to Present
Processor
Harris J. Champagne, Sr.
St. Martinville, LA
79 Retired Sept., 1969 1,213 4.3%
to Present
Gaston L. Dautreuil, Jr.
St. Martinville, LA
66 Owner Sept., 1969 2,690 9.5%
Electrical to Present
Contractor
Larry C. Degeyter
St. Martinville, LA
55 Owner, June, 1981 637 2.2%
Building to Present
Contractor
Alcee J. Durand, Jr.
St. Martinville, LA
38 President March, 1991 767 2.6%
Banking to Present
Item 10. Directors and Executive Officers of the Registrant
(continued)
Directors (continued)
- ----------
Number of
Shares Owned Ownership as
Beneficially a Percent
Including Direct of Total
Name and Title and Term as and Indirect Outstanding
Address Age Occupation Director Ownership Shares
- -------- --- ---------- -------- ------------ -----------
Charles A. Fuselier
St. Martinville, LA
54 Sheriff June, 1981 376 1.3%
to Present
Hubert Hulin, Sr.
St. Martinville, LA
78 Retired June, 1981 1,800 6.5%
to Present
Lawrence P. Melancon
St. Martinville, LA
81 Retired Sept., 1969 708 2.5%
to Present
Murphy Oubre
St. Martinville, LA
70 Rice Sept., 1969 824 3.0%
Farmer to Present
Stanley D. Stockstill
St. Martinville, LA
81 Retired March, 1982 511 1.8%
to Present
Darnell E. Fontenot
New Iberia, LA
57 Owner, Aug., 1995 100 .4%
Mobile to Present
Home Co.
Item 10. Directors and Executive Officers of the Registrant
(continued)
Directors (continued)
- ----------
Number of
Shares Owned Ownership as
Beneficially a Percent
Including Direct of Total
Name and Title and Term as and Indirect Outstanding
Address Age Occupation Director Ownership Shares
- -------- --- ---------- -------- ------------ -----------
Harris J. Champagne, Jr.
New Iberia, LA
34 Insurance October, 1996 188 .7%
Sales to Present
Melvin Douet
St. Martinville, LA
51 Owner, June, 1996 269 1.0%
Douet to Present
Motors, Inc.
(continued)
FORM 10-K
TECHE BANCSHARES, INC.
PART III (CONTINUED)
Executive Officers and Significant Employees
- --------------------------------------------
Other
Office
Held
Name Age Title with Bank Occupation
- -------------- ---- ------- --------- ----------
Alcee J. Durand, Jr. 38 President/ - Banker more
CEO than 5 years
Brian Friend 37 Cashier - CPA, Banker
Vice-President less than
5 years
Charles M. Durand 34 Vice- - Banker more
President than 5 years
Ave Laperouse 39 Assistant - Banker less
Vice President than 5 years
Jackie C. Leblanc 43 Assistant - Banker more
Vice President than 5 years
Jean L. Potier 53 Assistant - Banker more
Vice-President than 5 years
Rodney A. Viator 58 Assistant - Banker more
Vice-President than 5 years
Family Relationships
No family relationships exist between any members of the Board
of Directors other than the following:
Board Members Relationship
--------------------------------------- -----------------
Charles A. Fuselier and Stanley D. Stockstill Nephew and Uncle
Item (11) Executive Compensation - Cash Compensation
Number in Cash
Group Group Title Compensation
- --------- ------------- ------------
1 President/CEO $69,469
2 Vice-President 75,077
3 Assistant Vice-Presidents 88,912
Compensation Pursuant to Plans
The Bank has a non-contributory money purchase pension plan
that covers any employee that has completed one year of service and
has attained age 21. The Bank contributes 10 percent of an
employee's annual salary to the plan. During 1996, the Bank
contributed $42,614 to the Plan on behalf of all officers and
employees.
Item (12) Security Ownership of Certain Beneficial Owners and Mgmt
Security Ownership of Certain Beneficial Owners:
Title of Type of Country of Amount Percent
Name and Address Class Ownership Citizenship Owned of Class
- ---------------- ----- --------- ----------- ------ -------
Tilden A. Bonin, Jr.
St. Martinville, LA
Common Stock U.S.A. 1,576 5.6%
James B. Bulliard, Jr.
St. Martinville, LA
Common Stock U.S.A. 3,312 11.9%
Gaston L. Dautreuil, Jr.
St. Martinville, LA
Common Stock U.S.A. 2,690 9.5%
Hubert Hulin, Sr.
St. Martinville, LA
Common Stock U.S.A. 1,800 6.5%
Security Ownership of Management:
Title of Type of Shares Percent
Group Class Ownership Owned of Class
- ---------------------- ----- --------- ----- --------
Directors and Officers Common Stock 15,007 53.3%
Item (13) Certain Relationship and Related Transactions
From time to time in the ordinary course of its business, the
Bank has extended credit to its Officers and Directors and to
businesses in which its Officers and Directors own an interest.
The Bank intends to continue this policy because of the business
deposits and income that these activities generate for the Bank.
Such loans are made only with the approval of the Board of
Directors; are judged by the same credit guidelines and standards
as are applied to loans of a comparable nature made to others; are
made on substantially the same terms, including interest rates,
collateral and repayment terms as those prevailing at the
time for comparable transactions with others; and do not involve
more than the normal risk of collectibility or present other
unfavorable features.
Largest
Aggregate Amt.
Outstanding Amount Average
Relation Year Ending Outstanding Interest
Name to Company 12/31/96 as of 12/31/96 Rate
- ------------ ---------- --------- -------------- ------
Tilden A. Bonin, Jr.
Director $ 28,713 $ 26,099 7.86%
Gaston L. Dautreuil, Jr.
Director 290,630 195,100 8.05%
Larry C. Degeyter
Director 526,680 262,373 8.35%
Alcee J. Durand, Jr.
Director 50,065 43,092 8.09%
Charles Fuselier
Director 451,451 445,528 9.87%
Lawrence Melancon
Director 38,001 28,687 7.30%
Melvin P. Douet
Director 267,292 237,284 10.69%
Harris Champagne, Jr.
Director 32,111 24,498 9.72%
Total outstanding at December 31, 1996 $1,262,661
=========
FORM 10-K
TECHE BANCSHARES, INC.
PART IV
Item (14) Exhibits, Financial Statement Schedules and Reports on
Form 8-K
1. Financial Statements
The financial statements, including notes, are listed
in the index to the financial statements filed as part
of this annual report.
2. Exhibits
3. Reports on Form 8-K
No reports on Form 8-K were filed by Bancshares during
quarter ended December 31, 1996.
Page
Number Exhibit Number
------ -------------------------------------- -------
(3) Articles of Incorporation of Registrant as
currently in effect incorporated herein by
reference to Exhibit 3 Registrant Registration
Statement on Form S-14, filed February 21, 1984
(11) Computation of Earnings Per Share 49
(12) Computation of Ratios
(21) Subsidiary of Registrant 71
(24) Consent of Experts and Council -
(22) Subsidiaries of the Registrant
- ----- ------------------------------
Teche Bank and Trust Company Louisiana
FORM 10-K
TECHE BANCSHARES, INC.
PART IV (CONTINUED)
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
TECHE BANCSHARES, INC.
Date: March 26, 1997 By:/s/ Alcee J. Durand, Jr.
----------------------- ---------------------
Alcee J. Durand, Jr.
President/Secretary
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
By:/s/Tilden A. Bonin,Jr. By:/s/Darnell Fontenot
__________________________ __________________________
Tilden A. Bonin, Jr Date Darnell Fontenot Date
Director Director
By:/s/James B. Bulliard, Sr. By:/s/Charles A. Fuselier
__________________________ __________________________
James B. Bulliard, Sr.Date Charles A. Fuselier Date
Director Director
By:/s/Harris J. Champagne, Jr.By:/s/Hubert Hulin, Sr.
__________________________ __________________________
Harris J. Champagne, Jr.Date Hubert Hulin, Sr. Date
Director Director
By:/s/Gaston L. Dautreuil,Jr. By:/s/Lawrence P. Melancon
__________________________ __________________________
Gaston L. Dautreuil, Jr.Date Lawrence P. Melancon Date
Director Director
By:/s/Larry C. Degeyter By:/s/Murphy Oubre
__________________________ __________________________
Larry C. Degeyter Date Murphy Oubre Date
Director Director
By:/s/Melvin Douet By:/s/Stanley D. Stockstill
__________________________ __________________________
Melvin Douet Date Stanley D. Stockstill Date
Director Director
By:/s/Alcee J. Durand, Jr.
__________________________
Alcee J. Durand, Jr. Date
Director
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