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 March 31, 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 March 31, 2000.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, 2000 and December 31, 1999
(Dollars in Thousands)
March 31, December 31
2000 1999
ASSETS
Cash and due from banks $2,136 $2,159
Interest - bearing deposits with banks 115 89
Securities Available for Sale at mkt value 18,171 17,770
Securities Held To Maturity (Market Value
of $1,515 and $1,622, respectively) 1,518 1,622
Other securities at cost 390 387
Federal funds sold 900 1,475
Loans, net of allowance for loan losses
of $241 and $233, respectively) 23,757 22,572
Bank premises, furniture, and equipment 716 733
Accrued interest receivable 311 380
Other real estate owned 212 217
Other assets 71 53
----------------------
Total assets $48,297 $47,457
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits -
Non-interest demand $7,390 $7,109
Interest bearing -
NOW and MMDA accounts 7,219 6,424
Savings 4,004 3,740
Time, $100 and over, 9,828 11,293
Other time 12,494 11,619
----------------------
Total deposits 40,935 40,185
Accrued interest payable 175 192
FHLB Borrowings 3,124 3,141
Other liabilities and accrued expenses 198 173
----------------------
Total liabilities 44,432 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 2,579 2,433
----------------------
4,004 3,858
Less: 200 shares of treasury stock (19) (19)
Market Value Allowance on
AFS Bonds (120) (73)
----------------------
Total stockholders' equity 3,865 3,766
----------------------
Total liabilities and stockholders' equity $48,297 $47,457
======================
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
St. Martinville, Louisiana
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended March 31, 2000 and 1999;
(Dollars in Thousands except Earnings per Share)
Three Months Ended
March 31, March 31,
2000 1999
Interest income:
Interest and fees on loans $530 $399
Interest on investment securities -
U.S. government securities 301 344
State and political subdivisions 13 14
Interest on interest-bearing deposits
in banks 1 1
Dividends on equity securities 4 0
Interest on federal funds sold 14 26
----------------------
Total interest income 863 784
Interest expense:
Interest on deposits $333 $318
Interest on borrowed funds 44 46
----------------------
Total interest expense 377 364
----------------------
Net interest income 486 420
Provision for Credit Losses 7 0
----------------------
Net interest income after provision 479 420
----------------------
Other income:
Service charges on deposit accounts 80 67
Other income and charges 28 17
----------------------
Total other income 108 84
Other expenses:
Salaries and employee benefits 194 188
Occupancy expense 50 55
Other operating expenses 125 122
----------------------
Total other expenses 369 365
----------------------
Income before income taxes 218 139
Income taxes 72 42
----------------------
Net income $146 $97
======================
Net income per share of common stock $5.23 $3.49
======================
Average shares outstanding 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 Three Months Ended March 31, 2000 and 1999
Unrealized
Gain (Loss)
Common Stock on
Treas. Stk AFS
Surplus Securities Total
Balances, January 1, 2000 $3,839 $(73) $3,766
Net income three months 146 146
Change in Unrealized AFS (47) (47)
------- ------ ------
Balances, March 31, 2000 $3,985 $(120) $3,865
======= ====== ======
Balances, January 1, 1999 $3,470 $108 $3,578
Net income three months 97 97
Change in Unrealized AFS 10 10
------- ------ ------
Balances, March 31, 1999 $3,567 $118 $3,685
======= ====== ======
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 Three Months Ended March 31, 2000 and 1999
March 31, March 31,
2000 1999
Cash flows from operating activities:
Net income $146 $97
Adjustments to reconcile net income
to net cash provided by
operating activities -
Depreciation of bank premises 24 29
Provision for Loan loss 7 0
Write down of other real estate 5 1
(Inc)dec accrued int receivable 69 43
(Inc) dec other assets (18) (17)
Inc(dec) accrued interest payable (17) (40)
Inc(dec) other liabilities 25 74
Net cash provided by operating ----------------------
activities 241 187
Cash flows from investing activities:
Dec(inc) in interest bearing deposits
in banks (25) (5)
Dec(inc) in federal funds 575 (1,525)
Dec(inc) in investment securities (344) (810)
Dec(inc) in other securities (4) (21)
Net dec (inc) in loans (1,192) (636)
Capital expenditures premises & equip (7) (10)
Proceeds from sale of securities 0 0
----------------------
Net cash used in investing activities (997) (3,007)
Cash flows from financing activities:
Net increase (decrease) in -
Demand deposits 281 978
NOW and MMDA 795 435
Savings deposits 263 190
Time deposits $100,000 and over (1,465) 96
Other time deposits 875 1,212
FHLB Borrowings (16) (14)
----------------------
Net cash provided by financing activities 733 2,897
Net increase in cash and cash equivalents (23) 77
Cash and cash equivalents, beginning 2,159 1,574
Cash and cash equivalents, end of period $2,136 $1,651
Cash paid during the period:
Interest $394 $404
Income Taxes $0 $0
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 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 three (3) months ended
March 31, 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 MARCH 31, 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 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 18.06% and Tier one
capital ratio was 8.22% at March 31, 2000. The bank only risk based capital
ratio was 18.01% and Tier one capital ratio was 8.20%. 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 monitors our capital ratio and asset
growth to assure that the bank will 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 March 31, 2000, were $15,728 an increase of $5,171
from December 31, 1999. There were no loans on which the accrual of interest
had been discontinued at March 31, 2000.
We are actively marketing our other real estate owned. At March 31, 2000
other real estate totalled $211,920. The one piece of real estate, a
commercial building, that we own is currently under a two year lease. We are
writing down the value of the building owned each month for the amount of
income earned on the lease. At the end of each of three two year option
periods the lessee has a purchase option on the building.
Results of Operations
Net Income. Our net income for the three (3) months ended March 31, 2000 was
$146,047 up $48,531 as compared to that of the same period last year. The
increase in income was mostly attributed to an increase in interest and fees
on loans. The increase in loan income 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 three (3) months ended March 31,
2000 is up $57,470 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 $6,666 during the first quarter of 2000.
Provision for Loan Losses. Our bad debt reserve totalled $241,329 at March
31, 2000 which represents 1% of our gross loans. During the first quarter of
2000, we added $6,666 to our reserve for loan loss account. Our reserve for
loan loss balance was considered adequate at March 31, 2000.
Other Income. Our other income is up $24,122 when compared to the same period
last year. The increase was mostly due to a increases in NSF fee income and
commission income on sales of credit life and disability insurance.
Other Expenses. Other expenses are up $3,405 as compared to the same time
last year. Salaries and employee benefits increased $5,740 due to raises
given at the end of 1999. Occupancy expenses decreased $5,691 due to smaller
amounts of depreciation expense as older computer equipment becomes fully
depreciated. Other operating expenses decreased $3,356 from a decrease in
stationary, printing and supplies costs.
Provision for Income Tax. A provision is made for income tax to reflect one
fourth (3/12ths) of the annualized income tax that we anticipate we will
incur. The provision for income tax for the period ended March 31, 2000 was
$71,548 as compared to $41,892 for the same period last year. The increase in
income tax was due to increased income for the current year.
Year 2000. 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.
May 12, 2000 Alcee J. Durand, Jr.
Date President/CEO
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