UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1997
Commission file Number 2-89561
Teche Bancshares, Inc.
Louisiana 72-1008552
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
606 South Main Street, St. Martinville, Louisiana 70582
(Address of principal executive offices 70582
Registrant's telephone number, including area code:
(318) 394-9726
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES (X) NO ( )
Indicated the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date.
Common Stock, $10 Par Value - 27,925 shares as of June 30, 1997.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
(UNAUDITED)
CONSOLIDATED BALANCE SHEETS
June 30, 1997 and December 31, 1996
(Dollars in Thousands)
June 30, December 31
1997 1996
ASSETS
Cash and due from banks $2,114 $1,476
Securities Available for Sale at mkt value 16,065 13,914
Securities Held To Maturity (Market Value
of $3,993 and $4,759, respectively) 3,986 4,760
Other securities at cost 328 286
Federal funds sold 625 1,225
Loans, net of allowance for loan losses
of $168 and $158, respectively) 13,596 12,710
Bank premises, furniture, and equipment 707 708
Accrued interest receivable 351 268
Other real estate owned 52 55
Other assets 214 150
----------------------
Total assets $38,038 $35,552
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits -
Non-interest demand 6,098 $5,675
Interest bearing -
NOW and MMDA accounts 6,700 6,029
Savings 3,432 3,256
Time, $100 and over, 7,297 7,062
Other time 10,537 10,353
----------------------
Total deposits 34,064 32,375
Accrued interest payable 135 135
Fed Funds Purchased 500 0
Other liabilities and accrued expenses 279 195
----------------------
Total liabilities 34,978 32,705
Stockholders' equity:
Common stock ($10 par value, 100,000
shares authorized, 28,125 shares
issued and outstanding) 281 281
Surplus 1,143 1,143
Retained earnings 1,583 1,398
----------------------
3,007 2,822
Less: 200 shares of treasury stock (19) (19)
Allowance for unrealized
loss on mkt securities 0 0
Market Value Allowance on
AFS Bonds 72 44
----------------------
Total stockholders' equity 3,060 2,847
----------------------
Total liabilities and stockholders' equity $38,038 $35,552
======================
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
(UNAUDITED)
CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended June 30, 1997 and 1996;
(Dollars in Thousands except Earnings per Share)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
Interest income:
Interest and fees on loans $313 $270 $631 $543
Interest on investment securities -
U.S. government's 331 275 608 518
State/political sub's 13 4 19 7
Dividends on equities 0 2 0 2
Interest on federal funds 14 20 34 51
--------------------------------------------
Total interest income 671 571 1,292 1,121
Interest expense:
Interest on deposits $291 $261 $567 $508
Stockholder loans 0 2 0 4
--------------------------------------------
Total interest expense 291 263 567 512
--------------------------------------------
Interest inc. before provision 380 308 725 609
Provision for Credit Losses 0 0 10 0
--------------------------------------------
Net interest income 380 308 715 609
--------------------------------------------
Other income:
Service charges deposits 65 64 130 121
Gain on sale of ORE 0 0 0 0
Gain on sale of Securities 1 0 1 3
Other income and charges 18 13 41 30
--------------------------------------------
Total other income 84 77 172 154
Other expenses:
Salaries/employee benefits 155 146 308 290
Occupancy expense 56 54 106 105
Loss on sale of ORE 0 0 0 3
Other operating expenses 104 81 205 171
--------------------------------------------
Total other expenses 315 281 619 569
--------------------------------------------
Income before income taxes 149 104 268 194
Income taxes 46 34 84 63
--------------------------------------------
Net income $103 $70 $184 $131
Earnings per share $3.70 $2.51 $6.59 $4.69
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
For the Six Months Ended June 30, 1997 and 1996
Allowance for
Unrealized Unrealized
Common Loss on Gain (Loss)
Stock, Marketable on
Treasury & Equity AFS
Surplus Securities Securities Total
Balances, January 1, 1997 $2,803 $0 $44 $2,847
Net income six months 184 - $184
Change in Unrealized AFS 29 $29
------ ------ ------ ------
Balances, June 30, 1997 2,987 $0 $73 $3,060
====== ====== ====== ======
Balances, January 1, 1996 $2,515 $0 $17 $2,532
Net income six months 131 - $131
Change in Unrealized AFS (115) ($115)
------ ------ ------ ------
Balances, June 30, 1996 2,646 $0 ($98) $2,548
====== ====== ====== ======
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended June 30, 1997 and 1996
June 30, June 30,
1997 1996
Cash flows from operating activities:
Net income $184 $131
Adjustments to reconcile net income
to net cash provided by
operating activities -
Depreciation of bank premises 42 42
Provision for Credit Losses 10
(Gain) Loss on Other real estate 0 3
(Gain) Loss on sale of securities (1) (3)
(Inc)dec accrued int recievable (83) (18)
(Inc) dec other assets (63) (15)
Inc(dec) accrued interest payable 1 23
Inc(dec) other liabilities 84 9
Net cash provided by operating ----------------------
activities 174 172
Cash flows from investing activities:
Dec(inc) in federal funds 600 2,600
Dec(inc) in investment securities (1,389) (1,866)
Net dec (inc) in loans (897) (167)
Capital expenditures premises & equip (41) (4)
Proceeds from sale of other real estate 3 15
----------------------
Net cash used in investing activities (1,724) 578
Cash flows from financing activities:
Net increase (decrease) in -
Demand deposits 423 (638)
NOW and MMDA 671 (1,845)
Savings deposits 176 127
Time deposits $100,000 and over 235 1,805
Other time deposits 183 369
Increase in federal funds purchased 500
----------------------
Net cash provided by financing activities 2,188 (182)
Net increase in cash and cash equivalents 638 568
Cash and cash equivalents, beginning 1,476 1,108
Cash and cash equivalents, end of period $2,114 $1,676
Cash paid during the period:
Interest $566 $489
Income Taxes $70 $24
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
The information furnished reflects all normal, recurring adjustments
which are, in the opinion of management, necessary for a fair statement of
Teche Bancshares, Inc. and its subsidiary for the six (6) months ended June
30, 1997. Results for the interim period presented are not necessarily
indicative of results which may be expected for any other interim period or
for the year as a whole.
TECHE BANCSHARES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED JUNE 30, 1997.
Liquidity
Liquidity is the ability to insure that adequate funds are available to
satisfy contractual liabilities, fund operations, meet withdrawal
requirements of depositors and provide for customer's credit needs in a
timely manner. Our primary source of liquidity is our core deposits. We
supplement our core deposits with a line of credit with one of our
correspondent banks, public fund time deposits, repurchase agreements with
correspondent banks and a line of credit with the Federal Home Loan Bank. Our
sources of liquidity are adequate to fund the loan demand that we are
experiencing.
The primary source of funding for the parent company is dividends from the
Bank. During 1996, the holding company paid off all of its long-term debt.
Management believes the parent's current sources of funds are sufficient to
meet its liquidity needs for the foreseeable future.
Capital Resources and Asset Quality
Our consolidated risk based capital to asset ratio was 18.25% and Tier one
capital ratio was 7.88% at June 30, 1997. The bank only risk based capital
ratio was 18.20% and Tier one capital ratio was 7.85%. Banks are required to
maintain a risk weighted capital to asset ratio of 8% and Tier one capital
ratio of 5%. Our risk based capital ratio and Tier one capital ratio both
exceed the required amount.
Asset quality continues to be satisfactory due to our emphasis on credit
quality in our loan portfolio. Management is of the opinion that we have all
of our problem credits identified and that an adequate allowance has been
made for any potential future losses.
We continuously monitor the quality of our loans. Loans past due 90 days or
greater still accruing at June 30, 1997, were $103,228 an increase of $41,337
from December 31, 1996. Loans on which the accrual of interest had been
discontinued at June 30, 1997 totalled $272,957 which is up $34,114 as
compared to the amount at December 31, 1996.
We are actively marketing our other real estate owned. At June 30, 1997
other real estate totalled $52,168 which is down $3,051 from December 31,
1996.
Results of Operations
Net Income. Our net income for the six (6) months ended June 30, 1997 was
$183,973 up $53,010 as compared to that of the same period last year. The
increase in income was mostly attributed to an increase in our net interest
income.
Revenue. Our net interest income for the six (6) months ended June 30, 1997
is up $106,042 as compared to the same period in 1996. The increase in net
interest income was the result of increases in interest from loans and
investments. During the fourth quarter of 1996, we experienced loan growth
that has improved our interest margin. The increase in investments was due
to the investment of funds from growth in deposits. We invested our excess
funds from deposits in investments to increase our yields over fed funds.
Provision for Loan Losses. Our bad debt reserve totalled $168,479 at June 30,
1997 which represents 1.22% of our gross loans. During the first quarter of
1997, we added $9,999 to our reserve for loan loss account. Our reserve for
loan loss balance was considered adequate at June 30, 1997.
Other Income. Our other income is up $17,825 when compared to the same period
last year. The increase was mostly due to increases in the number of NSF
charges, increases in commission income and a recovery on a loss from the
sale of Louisiana Agricultural Finance Bonds (LAFA). Part of the increase
was due to the recovery of $5,658 of the loss from the sale of LAFA Bonds.
In 1991, we sold the LAFA bonds that we owned realizing a loss of
approximately $200,000. Since that time we have been listed in the class
action suit that was filed against Executive Life, the issuer of the bond.
In a prior year, we recovered approximately $40,000 of our loss.
Other Expenses. Other expenses are up $50,025 as compared to the same time
last year. Other expenses increased due to increases in Salaries and
employee benefits and other operating expenses. Other operating expenses
increased due to general increases in various expenses. Salaries and
benefits increased as the result of raises that were provided in the fourth
quarter of 1996.
Provision for Income Tax. A provision is made for income tax to reflect one
half (6/12ths) of the annualized income tax that we anticipate we will incur.
The provision for income tax for the period ended June 30, 1997 was $83,662
as compared to $62,830 for the same period last year. The increase in income
tax was due to increased income for the current year.
PART II - OTHER INFORMATION
Item #1 Legal proceedings
Inapplicable
Item #2 Changes in Securities
Inapplicable
Item #3 Defaults Upon Senior Securities
Inapplicable
Item #4 Submission of Matters to a Vote of Securities Holders
Inapplicable
Item #5 Other information
Inapplicable
Item #6 Exhibits and Reports on Form 8-K
Inapplicable
TECHE BANCSHARES, INC.
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Bank has duly caused this quarterly report to be signed on its behalf by the
undersigned thereunto duly authorized.
TECHE BANCSHARES, INC.
Registrant
/s/ Alcee J. Durand, Jr.
August 14, 1997 Alcee J. Durand, Jr.
Date President/CEO
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