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, 2000
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:
(337) 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, 2000.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
(UNAUDITED)
CONSOLIDATED BALANCE SHEETS
September 30, 2000 and December 31, 1999
(Dollars in Thousands)
September 30, December 31
2000 1999
ASSETS
Cash and due from banks $2,208 $2,159
Interest-bearing deposits with banks 44 89
Securities Available for Sale at mkt value 15,743 17,770
Securities Held To Maturity (Market Value
of $1,305 and $1,622, respectively) 1,308 1,622
Other securities at cost 426 387
Federal funds sold - 1,475
Loans, net of allowance for loan losses
of $260 and $233, respectively) 27,307 22,572
Bank premises, furniture, and equipment 682 733
Accrued interest receivable 345 380
Other real estate owned 203 217
Other assets 231 53
----------------------
Total assets $48,497 $47,457
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits -
Non-interest demand 6,484 $7,109
Interest bearing -
NOW and MMDA accounts 6,566 6,424
Savings 3,833 3,740
Time, $100 and over, 9,668 11,293
Other time 13,002 11,619
----------------------
Total deposits 39,553 40,185
Accrued interest payable 178 192
Federal Home Loan Borrowings 3,574 3,141
Fed Funds Purchased 550 -
Other liabilities and accrued expenses 382 173
----------------------
Total liabilities 44,237 43,691
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 2,910 2,433
----------------------
4,335 3,858
Less: 200 shares of treasury stock (19) (19)
Market Value Allowance on
AFS Bonds (56) (73)
----------------------
Total stockholders' equity 4,260 3,766
----------------------
Total liabilities and stockholders' equity $48,497 $47,457
======================
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, 2000 and 1999;
(Dollars in Thousands except Earnings per Share and Average Shares)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
Interest income:
Interest and fees on loans $628 $492 $1,727 $1,335
Interest on investment securities -
U.S. government's 276 300 870 954
State/political sub's 13 13 39 39
Dividends on equities - - 19 9
Interest on balances from banks 1 - 3 2
Interest on federal funds 5 2 29 36
--------------------------------------------
Total interest income 923 807 2,687 2,375
Interest expense:
Interest on deposits $360 $315 $1,033 $953
Interest on fed funds purchased 1 8 1 14
Interest on borrowed funds 52 46 143 136
--------------------------------------------
Total interest expense 413 369 1,177 1,103
--------------------------------------------
Interest inc. before provision 510 438 1,510 1,272
Provision for Credit Losses 10 15 27 50
--------------------------------------------
Net interest income 500 423 1,483 1,222
--------------------------------------------
Other income:
Service charges deposits 89 75 252 217
Gain on sale of ORE - - - -
Gain on sale of Securities - - - 1
Other income and charges 23 23 72 66
--------------------------------------------
Total other income 109 98 324 284
Other expenses:
Salaries/employee benefits 201 192 592 566
Occupancy expense 52 59 152 171
Loss on sale of ORE - - - -
Other operating expenses 116 110 359 349
--------------------------------------------
Total other expenses 369 361 1,103 1,086
--------------------------------------------
Income before income taxes 240 160 704 420
Income taxes 79 63 228 140
--------------------------------------------
Net income $161 $97 $476 $280
Net income per share $5.78 $3.46 $17.06 $10.01
Average shares outstanding 27,925 27,925 27,925 27,925
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, 2000 and 1999
Allowance for
Unrealized Unrealized
Common Loss on Gain (Loss)
Stock, Marketable on
Treasury & Equity AFS
Surplus Securities Securities Total
Balances, January 1, 2000 $3,840 $0 $(73) $3,767
Net income nine months 476 - $476
Change in Unrealized AFS 17 $17
------ ------ ------ ------
Balances, Sept. 30, 2000 $4,316 $0 $(56) $4,260
====== ====== ====== ======
Balances, January 1, 1999 $3,470 $0 $108 $3,578
Net income nine months 280 - $280
Change in Unrealized AFS (138) ($138)
------ ------ ------ ------
Balances, Sept. 30, 1999 $3,750 $0 $(30) $3,720
====== ====== ====== ======
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, 2000 and 1999
Sept. 30, Sept. 30,
2000 1999
Cash flows from operating activities:
Net income $476 $280
Adjustments to reconcile net income
to net cash provided by
operating activities -
Depreciation of bank premises 73 89
Provision for Credit Losses 27 50
(Gain) Loss on Other real estate - (1)
Write down of other real estate owned 14 12
(Inc)dec accrued int receivable 34 (9)
(Inc) dec other assets (178) (97)
Inc(dec) accrued interest payable (13) (24)
Inc(dec) other liabilities 209 155
Net cash provided by operating ----------------------
activities 642 455
Cash flows from investing activities:
Dec(inc) in interest bearing deposits in banks 46 35
Dec(inc) in federal funds 1,475 700
Dec(inc) in investment securities 2,359 3,094
Purchase of other securities (39) (26)
Net dec (inc) in loans (4,761) (5,507)
Capital expenditures premises & equip (23) (37)
Dec(inc) in other real estate owned - (5)
----------------------
Net cash used in investing activities (943) (1,746)
Cash flows from financing activities:
Net increase (decrease) in -
Demand deposits (625) 270
NOW and MMDA 142 (1,138)
Savings deposits 92 374
Time deposits $100,000 and over (1,624) 1,891
Other time deposits 1,383 156
Federal Home Loan Borrowings 432 (74)
Increase in federal funds purchased 550 -
----------------------
Net cash provided by financing activities 350 1,479
Net increase in cash and cash equivalents 49 188
Cash and cash equivalents, beginning 2,159 1,574
Cash and cash equivalents, end of period $2,208 $1,762
Cash paid during the period:
Interest $1,190 $1,128
Income Taxes $154 $119
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
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, 2000. 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, 2000.
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. 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 18.05% and Tier one
capital ratio was 8.88% at September 30, 2000. The bank only risk based
capital ratio was 18.00% and Tier one capital ratio was 8.86%. 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. Management is monitoring our capital
ratio and asset growth to assure that the bank will continue to have adequate
capital to support its assets.
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, 2000, were $154,447 an increase of
$143,890 from December 31, 1999. Loans on which the accrual of interest had
been discontinued at September 30, 2000 totalled $0.
We own one piece of other real estate. At the present time our other real
estate is vacant. We are writing down our other real estate $1,800 per
month. At September 30, 2000 other real estate totalled $202,920 which is
down $14,400 from December 31, 1999.
Results of Operations
Net Income. Our net income for the nine (9) months ended September 30, 2000
was $476,276 up $196,689 as compared to that of the same period last year.
The increase in net income was mostly attributed to an increase in interest
and fees on loans. The increase in loan volume was partially due to loans
made by the two additional loan officers that we added in 1999. One of the
loan officers added was an experienced loan officer that we hired away from
a large institution in our area. The other loan officer is an officer
trainee.
Revenue. Our net interest income for the nine (9) months ended September 30,
2000 is up $261,682 as compared to the same period in 1999. The increase in
net interest income was the result of increases in the volume of loans. The
increase in loans was due, as previously mentioned, to the addition of two
new loan officers. Net interest income increased even after making a
provision for loan losses of $26,664 during the first half of the year.
Provision for Loan Losses. Our bad debt reserve totalled $260,066 at
September 30, 2000 which represents .94% of our gross loans. During the
current year, we added $26,664 to our reserve for loan loss account. We
increased our provision for loan losses to set aside reserves for the
increase in loans that we have experienced. Our reserve for loan loss
balance was considered adequate at September 30, 2000.
Other Income. Our other income is up $40,150 when compared to the same period
last year. The increase over that of the prior year was mostly due to an
increase in NSF fee income and commission income on the sale of credit life
insurance.
Other Expenses. Other expenses are up $16,872 as compared to the same time
last year. Other expenses increased due to increases in salaries and
employee benefits. Salaries and benefits increased as the result of raises
that were given in the fourth quarter of 1999. Part of the increase in other
expenses was offset by a decrease in occupancy expense. Occupancy expense
decreased due to smaller amounts of depreciation expense as older computer
equipment becomes fully depreciated.
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, 2000
was $228,486 as compared to $140,215 for the same period last year. The
increase in income tax was due to increased income for the current year.
Year 2000 Preparation. Thanks to the diligence of our employees and
management, we did not experience any significant disruptions with our
computer systems as the result of the year 2000 date change or any of the
subsequent critical millennium change dates.
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 14, 2000 Alcee J. Durand, Jr.
Date President/CEO
