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, 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:
(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, 2000.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
(UNAUDITED)
CONSOLIDATED BALANCE SHEETS
June 30, 2000 and December 31, 1999
(Dollars in Thousands)
June 30, December 31
2000 1999
ASSETS
Cash and due from banks $2,109 $2,159
Interest-bearing deposits with banks 76 89
Securities Available for Sale at mkt value 16,946 17,770
Securities Held To Maturity (Market Value
of $1,458 and $1,622, respectively) 1,465 1,622
Other securities at cost 422 387
Federal funds sold - 1,475
Loans, net of allowance for loan losses
of $250 and $233, respectively) 25,442 22,572
Bank premises, furniture, and equipment 702 733
Accrued interest receivable 368 380
Other real estate owned 208 217
Other assets 174 53
----------------------
Total assets $47,912 $47,457
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits -
Non-interest demand 6,253 $7,109
Interest bearing -
NOW and MMDA accounts 7,129 6,424
Savings 3,981 3,740
Time, $100 and over, 10,303 11,293
Other time 12,269 11,619
----------------------
Total deposits 39,935 40,185
Accrued interest payable 200 192
Federal Home Loan Borrowings 3,354 3,141
Fed Funds Purchased 150 -
Repurchase Agreements - -
Other liabilities and accrued expenses 247 173
----------------------
Total liabilities 43,886 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 2,741 2,433
----------------------
4,166 3,858
Less: 200 shares of treasury stock (19) (19)
Market Value Allowance on
AFS Bonds (121) (73)
----------------------
Total stockholders' equity 4,026 3,766
----------------------
Total liabilities and stockholders' equity $47,912 $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
Six Months Ended June 30, 2000 and 1999;
(Dollars in Thousands except Earnings per Share and Average Shares)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
Interest income:
Interest and fees on loans $569 $445 $1,099 $842
Interest on investment securities -
U.S. government's 294 310 594 655
State/political sub's 13 13 26 27
Dividends on equities - - 12 -
Interest on balances from banks 1 - 2 1
Interest on federal funds 9 7 24 34
--------------------------------------------
Total interest income 886 775 1,757 1,559
Interest expense:
Interest on deposits $339 $321 $672 $639
Interest on fed funds purchased - 5 1 5
Interest on borrowed funds 47 45 91 91
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Total interest expense 387 371 764 735
--------------------------------------------
Interest inc. before provision 499 404 993 824
Provision for Credit Losses 10 35 17 35
--------------------------------------------
Net interest income 489 369 976 789
--------------------------------------------
Other income:
Service charges deposits 86 74 165 141
Gain on sale of ORE - - - -
Gain on sale of Securities - 1 - 1
Other income and charges 20 26 49 43
--------------------------------------------
Total other income 106 101 214 185
Other expenses:
Salaries/employee benefits 197 186 391 375
Occupancy expense 51 56 100 111
Loss on sale of ORE - - - -
Other operating expenses 117 117 243 238
--------------------------------------------
Total other expenses 365 359 734 724
--------------------------------------------
Income before income taxes 230 111 456 250
Income taxes 77 35 149 76
--------------------------------------------
Net income $153 $76 $307 $174
Net income per share $5.49 $2.74 $11.01 $6.23
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 Six Months Ended June 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 six months 307 - $307
Change in Unrealized AFS (48) ($48)
------ ------ ------ ------
Balances, June 30, 2000 $4,147 $0 $(121) $4,026
====== ====== ====== ======
Balances, January 1, 1999 $3,470 $0 $108 $3,578
Net income six months 174 - $174
Change in Unrealized AFS (64) ($64)
------ ------ ------ ------
Balances, June 30, 1999 $3,644 $0 $44 $3,688
====== ====== ====== ======
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, 2000 and 1999
June 30, June 30,
2000 1999
Cash flows from operating activities:
Net income $307 $174
Adjustments to reconcile net income
to net cash provided by
operating activities -
Depreciation of bank premises 48 59
Provision for Credit Losses 17 35
(Gain) Loss on sale of securities - (1)
Write down of other real estate owned 9 7
(Inc)dec accrued int receivable 12 (20)
(Inc) dec other assets (120) (91)
Inc(dec) accrued interest payable 8 (24)
Inc(dec) other liabilities 74 101
Net cash provided by operating ----------------------
activities 355 240
Cash flows from investing activities:
Dec(inc) in interest bearing deposits in banks 13 40
Dec(inc) in federal funds 1,475 1,500
Dec(inc) in investment securities 899 363
Net dec (inc) in loans (2,887) (4,001)
Capital expenditures premises & equip (18) (12)
Dec(inc) in other real estate owned - (5)
----------------------
Net cash used in investing activities (518) (2,115)
Cash flows from financing activities:
Net increase (decrease) in -
Demand deposits (856) (266)
NOW and MMDA 705 (1,381)
Savings deposits 240 542
Time deposits $100,000 and over (990) 408
Other time deposits 650 (16)
Federal Home Loan Borrowings 214 (44)
Increase in federal funds purchased 150 1,325
Increase in repurchase agreements - 1,325
----------------------
Net cash provided by financing activities 113 1,893
Net increase in cash and cash equivalents (50) 18
Cash and cash equivalents, beginning 2,159 1,574
Cash and cash equivalents, end of period $2,109 $1,592
Cash paid during the period:
Interest $756 $759
Income Taxes $103 $80
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC.
NOTES TO FINANCIAL STATEMENTS
June 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 six (6) months ended June
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 JUNE 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 17.98% and Tier one
capital ratio was 8.62% at June 30, 2000. The bank only risk based capital
ratio was 17.94% and Tier one capital ratio was 8.6%. 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 June 30, 2000, were $6,958 a decrease of $3,599
from December 31, 1999. Loans on which the accrual of interest had been
discontinued at June 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 June 30, 2000 other real estate totalled $208,320 which is down
$9,000 from December 31, 1999.
Results of Operations
Net Income. Our net income for the six (6) months ended June 30, 2000 was
$307,450 up $133,447 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 six (6) months ended June 30, 2000
is up $186,841 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 $16,665 during the first half of the year.
Provision for Loan Losses. Our bad debt reserve totalled $249,861 at June 30,
2000 which represents .97% of our gross loans. During the first half of
2000, we added $16,665 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 June 30, 2000.
Other Income. Our other income is up $28,847 when compared to the same period
last year. The increase was mostly due to an increase in NSF fee income over
that of the prior year.
Other Expenses. Other expenses are up $9,715 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 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, 2000 was $149,019
as compared to $76,493 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.
August 14, 2000 Alcee J. Durand, Jr.
Date President/CEO
