UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 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 September 30, 1997.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
(UNAUDITED)
CONSOLIDATED BALANCE SHEETS
September 30, 1997 and December 31, 1996
(Dollars in Thousands)
Sept. 30, December 31
1997 1996
ASSETS
Cash and due from banks $1,715 $1,476
Securities Available for Sale at mkt value 14,829 13,914
Securities Held To Maturity (Market Value
of $3,903 and $4,759, respectively) 3,882 4,760
Other securities at cost 328 286
Federal funds sold 300 1,225
Loans, net of allowance for loan losses
of $170 and $158, respectively) 13,910 12,710
Bank premises, furniture, and equipment 695 708
Accrued interest receivable 351 268
Other real estate owned 250 55
Other assets 240 150
----------------------
Total assets $36,500 $35,552
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits -
Non-interest demand 5,732 $5,675
Interest bearing -
NOW and MMDA accounts 5,231 6,029
Savings 3,512 3,256
Time, $100 and over, 7,656 7,062
Other time 10,204 10,353
----------------------
Total deposits 32,335 32,375
Accrued interest payable 120 135
Fed Funds Purchased 500 0
Other liabilities and accrued expenses 349 195
----------------------
Total liabilities 33,304 32,705
Stockholders' equity:
Common stock ($10 par value, 100,000
shares authorized, 28,125 shares
issued and outstanding) 281 281
Surplus 1,144 1,143
Retained earnings 1,676 1,398
----------------------
3,101 2,822
Less: 200 shares of treasury stock (19) (19)
Market Value Allowance on
AFS Bonds 114 44
----------------------
Total stockholders' equity 3,196 2,847
----------------------
Total liabilities and stockholders' equity $36,500 $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
Nine Months Ended September 30, 1997 and 1996;
(Dollars in Thousands except Earnings per Share)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1997 1996 1997 1996
Interest income:
Interest and fees on loans $342 $289 $973 $832
Interest on investment securities -
U.S. government's 296 297 904 815
State/political sub's 13 5 32 12
Dividends on equities 0 4 0 5
Interest on federal funds 3 7 37 58
--------------------------------------------
Total interest income 654 602 1,946 1,722
Interest expense:
Interest on deposits $283 $259 $850 $768
Stockholder loans 0 1 0 5
--------------------------------------------
Total interest expense 283 260 850 773
--------------------------------------------
Interest inc. before provision 371 341 1,096 949
Provision for Credit Losses 0 0 10 0
--------------------------------------------
Net interest income 371 341 1,086 949
--------------------------------------------
Other income:
Service charges deposits 62 65 192 187
Gain on sale of ORE 6 0 6 0
Gain on sale of Securities 1 1 2 3
Other income and charges 12 10 53 41
--------------------------------------------
Total other income 81 76 253 231
Other expenses:
Salaries/employee benefits 159 146 467 435
Occupancy expense 55 54 161 160
Loss on sale of ORE 6 0 6 3
Other operating expenses 95 79 300 250
--------------------------------------------
Total other expenses 315 279 934 848
--------------------------------------------
Income before income taxes 137 138 405 332
Income taxes 42 45 126 108
--------------------------------------------
Net income $95 $93 $279 $224
Earnings per share $3.39 $3.34 $9.98 $8.03
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
For the Nine Months Ended September 30, 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 nine months 279 - $279
Change in Unrealized AFS 70 $70
------ ------ ------ ------
Balances, September 30, 1997 3,082 $0 $114 $3,196
====== ====== ====== ======
Balances, January 1, 1996 $2,515 $0 $17 $2,532
Net income nine months 224 - $224
Change in Unrealized AFS (50) ($50)
------ ------ ------ ------
Balances, September 30, 1996 2,739 $0 ($33) $2,706
====== ====== ====== ======
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine Months Ended September 30, 1997 and 1996
Sept. 30, Sept. 30,
1997 1996
Cash flows from operating activities:
Net income $279 $224
Adjustments to reconcile net income
to net cash provided by
operating activities -
Depreciation of bank premises 63 64
Provision for Credit Losses 10 0
(Gain) Loss on Other real estate 0 3
(Gain) Loss on sale of securities (2) (3)
(Inc)dec accrued int recievable (83) (13)
(Inc) dec other assets (89) 20
Inc(dec) accrued interest payable (14) 2
Inc(dec) other liabilities 153 92
Net cash provided by operating ----------------------
activities 317 389
Cash flows from investing activities:
Dec(inc) in federal funds 925 2,800
Dec(inc) in investment securities (76) (1,151)
Net dec (inc) in loans (1,141) (785)
Capital expenditures premises & equip (51) (5)
Proceeds from sale of other real estate (195) 15
----------------------
Net cash used in investing activities (538) 874
Cash flows from financing activities:
Net increase (decrease) in -
Demand deposits 56 (204)
NOW and MMDA (797) (1,709)
Savings deposits 256 36
Time deposits $100,000 and over 594 762
Other time deposits (150) 459
Increase in federal funds purchased 500 250
Repayment of notes payable - stockholders 0 (151)
----------------------
Net cash provided by financing activities 459 (557)
Net increase in cash and cash equivalents 238 706
Cash and cash equivalents, beginning 1,476 1,108
Cash and cash equivalents, end of period $1,714 $1,814
Cash paid during the period:
Interest $864 $771
Income Taxes $105 $24
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC.
NOTES TO FINANCIAL STATEMENTS
September 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 nine (9) months ended
September 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 SEPTEMBER 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 18.33% and Tier one
capital ratio was 8.49% at September 30, 1997. The bank only risk based
capital ratio was 18.77% and Tier one capital ratio was 8.46%. Banks are
required to maintain a risk weighted capital to asset ratio of 8% and Tier
one capital ratio of 5%. Our risk based capital ratio and Tier one capital
ratio both exceed the required amount.
Asset quality continues to be satisfactory due to our emphasis on credit
quality in our loan portfolio. Management is of the opinion that we have all
of our problem credits identified and that an adequate allowance has been
made for any potential future losses.
We continuously monitor the quality of our loans. Loans past due 90 days or
greater still accruing at September 30, 1997, were $59,007 a decrease of
$2,884 from December 31, 1996. Loans on which the accrual of interest had
been discontinued at September 30, 1997 totalled $67,677 which is down
$171,166 as compared to the amount at December 31, 1996.
We are actively marketing our other real estate owned. At September 30, 1997
other real estate totalled $250,510 which is up $195,291 from December 31,
1996.
Results of Operations
Net Income. Our net income for the nine (9) months ended September 30,
1997 was $278,617 up $54,492 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 nine (9) months ended September 30,
1997 is up $135,984 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. We have experienced loan growth that has improved our interest
margin during this past year.
Provision for Loan Losses. Our bad debt reserve totalled $169,777 at
September 30, 1997 which represents 1.2% 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 September 30,
1997.
Other Income. Our other income is up $22,008 when compared to the same period
last year. The increase was mostly due to increases in service charge income
from an increase in the number of demand deposit accounts, 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 $86,090 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 three
fourths (9/12ths) of the annualized income tax that we anticipate we will
incur. The provision for income tax for the period ended September 30, 1997
was $125,616 as compared to $108,206 for the same period last year. The
increase in income tax was due to increased income for the current year.
PART II - OTHER INFORMATION
Item #1 Legal proceedings
Inapplicable
Item #2 Changes in Securities
Inapplicable
Item #3 Defaults Upon Senior Securities
Inapplicable
Item #4 Submission of Matters to be a Vote of Securities Holders
Inapplicable
Item #5 Other information
Inapplicable
Item #6 Exhibits and Reports on Form 8-K
Inapplicable
TECHE BANCSHARES, INC.
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Bank has duly caused this quarterly report to be signed on its behalf by the
undersigned thereunto duly authorized.
TECHE BANCSHARES, INC.
Registrant
/s/ Alcee J. Durand, Jr.
November 13, 1997 Alcee J. Durand, Jr.
Date President/CEO
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