SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1999
--------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission file number 0-25538
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TECHE HOLDING COMPANY
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Louisiana 72-128746
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
211 Willow Street, Franklin, Louisiana 70538
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (318) 828-3212
-----------------------------
N/A
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year if changed since last report.
Indicate by check X 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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date August 11, 1999.
Class Outstanding
- -------------------------- ----------------
$.01 par value common stock 2,802,580 shares
<PAGE>
TECHE HOLDING COMPANY
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1999
INDEX
Page
Number
------
PART I - CONSOLIDATED FINANCIAL INFORMATION OF TECHE
HOLDING COMPANY
Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Materially Important Events 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TECHE HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
At At
June 30, September 30,
1999 1998
----------- -------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents.................................................... $ 9,082 $ 10,680
Certificates of deposit...................................................... 658
Securities available-for-sale, at estimated
market value (amortized cost of $63,206 and $36,239)....................... 62,475 36,769
Loans receivable, net of allowance for loan losses
of $3,552 and $3,515)...................................................... 337,234 345,172
Accrued interest receivable.................................................. 2,080 2,065
Investment in Federal Home Loan Bank stock, at cost.......................... 4,124 3,884
Real estate owned, net....................................................... 478 331
Prepaid expenses and other assets............................................ 589 500
Premises and equipment, at cost less accumulated depreciation................ 10,275 8,764
-------- --------
TOTAL ASSETS........................................................... $ 426,337 $ 408,823
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits..................................................................... $ 298,551 $279,265
Advances from Federal Home Loan Bank......................................... 75,320 67,721
Borrowings for common stock repurchase -- 5,178
Advance payments by borrowers for taxes and insurance........................ 1,401 1,644
Accrued interest payable..................................................... 355 485
Accounts payable and other liabilities....................................... 849 1,223
Deferred Income Taxes........................................................ 294 780
-------- --------
Total liabilities...................................................... 376,770 356,296
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, 5,000,000 shares authorized;
none issued.............................................................. -- --
Common stock, $.01 par value, 10,000,000 shares
authorized; 4,232,000 shares issued...................................... 42 42
Additional paid in capital................................................. 42,122 42,037
Retained earnings.......................................................... 30,374 28,757
Unearned ESOP shares....................................................... (1,837) (2,086)
Unearned Compensation (MSP)................................................ (490) (790)
Treasury stock - 1,420,000 and 1,317,000 shares, at cost................... (20,172) (15,783)
Unrealized gain (loss) on securities available-for-sale, net of
deferred income taxes.................................................... (472) 350
-------- --------
Total stockholders' equity............................................. 49,567 52,527
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
CAPITAL............................................................ $ 426,337 $ 408,823
======== ========
</TABLE>
- ---------------------
* The consolidated balance sheet at September 30, 1998 has been taken from
the audited balance sheet at that date.
See notes to unaudited consolidated financial statements.
1
<PAGE>
TECHE HOLDING COMPANY
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
For Three Months For Nine Months
Ended June 30, Ended June 30,
--------------------------- -----------------------------
1999 1998 1999 1998
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans........................... $ 6,519 $ 6,917 $ 19,839 $ 20,604
Interest and dividends on investments................ 480 135 849 446
Interest on mortgage-backed securities............... 477 527 1,376 1,575
Other interest income................................ 88 51 418 140
------ ------ ------- -------
7,564 7,630 22,482 22,765
------ ------ ------- -------
INTEREST EXPENSE:
Deposits............................................. 3,156 3,185 9,421 9,699
Advances from Federal Home Loan Bank................. 900 935 2,668 2,866
Other borrowed money................................. -- -- 112 --
------ ------ ------- -------
4,056 4,120 12,201 12,565
------ ------ ------- -------
NET INTEREST INCOME.................................... 3,508 3,510 10,281 10,200
PROVISION FOR LOAN LOSSES.............................. 30 45 120 135
------ ------ ------- -------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES...................................... 3,478 3,465 10,161 10,065
------ ------ ------- -------
NON-INTEREST INCOME:
Service charges and other............................ 1,077 763 3,134 2,170
Gain on sale of real estate owned.................... 68 -- 84 13
Other income......................................... 47 96 86 323
------ ------ ------- -------
TOTAL NON-INTEREST INCOME.............................. 1,192 859 3,304 2,506
------ ------ ------- -------
GAIN ON SALE OF SECURITIES............................. 8 54 10 104
------ ------ ------- -------
NON-INTEREST EXPENSE:
Compensation and employee benefits................... 1,519 1,385 4,452 4,150
Occupancy expense.................................... 710 633 2,032 1,705
Marketing and professional........................... 278 197 725 557
Other operating expenses............................. 799 571 2,212 1,750
------ ------ ------- -------
Total non-interest expense....................... 3,306 2,786 9,421 8,162
------ ------ ------- -------
INCOME BEFORE INCOME TAXES............................. 1,372 1,592 4,054 4,513
------ ------ ------- -------
INCOME TAXES........................................... 480 578 1,419 1,590
------ ------ ------- -------
NET INCOME............................................. $ 892 $ 1,014 $ 2,635 $ 2,923
====== ====== ======= =======
BASIC EARNINGS PER COMMON SHARE........................ $ .34 $ .33 $ .96 $ .94
====== ====== ======= =======
DILUTED EARNINGS PER
COMMON SHARE......................................... $ .33 $ .31 $ .98 $ .89
====== ====== ======= =======
DIVIDENDS DECLARED PER COMMON SHARE.................... $ .125 $ .125 $ .375 $ .375
====== ====== ======= =======
</TABLE>
See notes to unaudited consolidated financial statements.
2
<PAGE>
TECHE HOLDING COMPANY
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the Nine Months
Ended June 30,
-------------------------
1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ............................................................... $ 2,635 $ 2,923
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for loan losses.............................................. 120 135
Gain on sale of securities............................................. (10) (104)
Depreciation........................................................... 657 466
Accretion of deferred loan fees and other.............................. (28) (65)
Accretion of discounts on loans........................................ (213) (176)
Other items - net...................................................... (287) 765
------- -------
Net cash provided by operating activities.......................... 2,874 3,944
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment securities available-for-sale....................... (39,785) (12,471)
Proceeds from maturities of securities available-for-sale.................. 12,678 10,632
Net loan repayments (originations)......................................... 8,059 (1,948)
Investment in FHLB stock................................................... (240) 101
Purchase of premises and equipment......................................... (2,168) (1,315)
Sales of investment securities available-for-sale.......................... 269 437
Net decrease in certificates of deposit.................................... 658 --
------- -------
Net cash used in investing activities.................................. (20,529) (4,564)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits................................................... 19,286 2,694
Net increase in FHLB advances.............................................. 7,599 3,245
Net decrease in advance payments by borrowers for
taxes and insurance...................................................... (243) (276)
Dividends paid............................................................. (1,018) (1,198)
Purchase of common stock for treasury...................................... (9,220) --
Borrowings under loan agreement............................................ 6,767 --
Repayment of borrowings under loan agreement............................... (7,114) --
------- -------
Net cash provided by financing activities.............................. 16,057 4,465
------- -------
NET INCREASE (DECREASE) IN CASH.............................................. (1,598) 3,845
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............................... 10,680 5,860
------- -------
CASH AND CASH EQUIVALENTS, END OF YEAR....................................... $ 9,082 $ 9,705
======= =======
</TABLE>
See notes to unaudited consolidated financial statements.
3
<PAGE>
TECHE HOLDING COMPANY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - PRINCIPLES OF CONSOLIDATION
The consolidated financial statements as of and for the three and nine
month periods ended June 30, 1999 include the accounts of Teche Holding
Company (the "Corporation") and its subsidiary, Teche Federal Savings
Bank (the "Bank"). The Corporation's business is conducted principally
through the Bank. All significant intercompany accounts and
transactions have been eliminated in consolidation.
NOTE 2 - BASIS OF PRESENTATION
The accompanying consolidated financial statements were prepared in
accordance with instructions for Form 10-Q and, therefore, do not
include all information necessary for a complete presentation of
consolidated financial condition, results of operations, and cash flows
in conformity with generally accepted accounting principles. However,
all adjustments, consisting of normal recurring accruals, which, in the
opinion of management, are necessary for a fair presentation of the
consolidated financial statements have been included. The results of
operations for the periods ended June 30, 1999 and 1998 are not
necessarily indicative of the results which may be expected for the
entire fiscal year or any other period. Certain reclassifications have
been made to the 1998 financial statements in order to conform to the
classifications adopted for reporting in 1999.
NOTE 3 - EARNINGS PER SHARE
Following is a summary of the information used in the computation of
basic and diluted income per common share for the three and nine months
ended June 30, 1999 and 1998.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
------------------------- --------------------------
1999 1998 1999 1998
--------- ----------- ---------- ---------
(In thousands)
<S> <C> <C> <C> <C>
Weighted average number of common
shares outstanding - used in computation
of basic earnings per common share............. $ 2,590 $ 3,119 $ 2,688 $ 3,107
Effective of dilutive securities:
Stock options.................................. 54 134 34 146
MSP stock grants............................... 28 39 24 34
Weighted average number of common
shares outstanding plus effect of dilutive
securities - used in computation of diluted
------ ------ ------ ------
earnings per common share...................... $ 2,672 $ 3,292 $ 2,746 $ 3,287
====== ====== ====== ======
</TABLE>
4
<PAGE>
NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS
The Corporation adopted Statement of Financial Accounting Standards No.
130 "Reporting Comprehensive Income" ("SFAS 130") effective October 1,
1998. SFAS 130 establishes standards for reporting and display of
comprehensive income and its components. Comprehensive income includes
net income and other comprehensive income (losses) which, in the case
of the Corporation, only includes unrealized gains and losses on
securities available-for-sale net of related income tax effect. Because
of interest rate volatility, the Company's accumulated comprehensive
income and stockholders' equity could materially fluctuate for each
interim period and year-end period. Following is a summary of the
Corporations's comprehensive income for the nine months ended June 30,
1999 and 1998.
1999 1998
----------- -----------
Net income $ 2,635 $ 2,923
Other comprehensive income (loss), net of tax (822) 90
------ ------
Total Comprehensive Income $ 1,813 $ 3,013
====== ======
5
<PAGE>
TECHE HOLDING COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Corporation's total assets at June 30, 1999 and September 30, 1998 totaled
$426.3 million and $408.8 million, respectively, an increase $17.5 million or
4.3%.
Securities available-for-sale totaled $62.5 million at June 30, 1999, which
represents an increase of $25.7 million or 70.0% as compared to September 30,
1998, due to the purchase of securities during this period. The Corporation
purchased such securities to supplement the decrease in lending during the
period.
Loans receivable totaled $337.2 million at June 30, 1999 which represented a
$7.9 million or 2.3% decrease compared to September 30, 1998. This decrease was
primarily due to loan repayments in excess of originations during the period.
Total deposits, after interest credited, at June 30, 1999 were $298.6 million
which represents an increase of $19.3 million or 6.9% as compared to September
30, 1998.
Advances increased $7.6 million or 11.2% as compared to the amount at September
30, 1998.
On January 8, 1999, the Company repaid the entire borrowing from its available
cash accounts but maintained its line of credit of $8.0 million, which is
available through a third party lender through September 30, 1999 for further
common stock repurchases and other limited purposes.
Stockholders' equity decreased to $3.0 million at June 30, 1999, from $52.5
million at September 30, 1998, primarily as a result of stock repurchased during
the period and cash dividends paid, offset somewhat by earnings for the nine
month period. During the nine month period, the Corporation repurchased 282,000
shares at an average price of $15.18 per share.
COMPARISON OF EARNINGS FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 1999
AND 1998
Net Income. The Company had net income of $892,000 and $2.6 million for the
three and nine months ended June 30, 1999 as compared to net income of $1.0
million and $2.9 million for the three and nine month periods ended June 30,
1998, respectively. The decreases during both periods were due primarily to
expenses relating to four new branches opened in the last eleven months.
Total Interest Income. Total interest income decreased by $66,000 or 0.9% and
$283,000 or 1.2% for the three and nine months ended June 30, 1999,
respectively, as compared to the same periods ending March 31, 1998 due
primarily to a decrease in the average balances of loans. The average yield on
loans decreased to 7.78% for the nine months ended June 30, 1999 from 7.85% in
1998.
Total Interest Expense. Total interest expense decreased 1.6% and 2.9% for the
three and nine month periods primarily due to a decrease of rates paid on
deposits, offset somewhat by an increase in other interest expense due to the
use of a line of credit to repurchase the Corporation's common stock.
6
<PAGE>
Net Interest Income. Net interest income remained relatively stable, increasing
6.3% and 1.0% for the three and nine month periods ended June 30, 1999 as
compared to the same periods ended March 31, 1998.
Provision for Loan Losses. The provision for loan losses decreased $15,000 for
both the three month and nine month periods.
Management periodically estimates the likely level of losses to determine
whether the allowance for loan losses is adequate to absorb possible losses in
the existing portfolio. Based on these estimates, an amount is charged or
credited to the provision for loan losses and credited or charged to the
allowance for loan losses in order to adjust the allowance to a level determined
to be adequate to absorb anticipated future losses.
Management's judgment as to the level of losses on existing loans involves the
consideration of current and anticipated economic conditions and their potential
effects on specific borrowers, an evaluation of the existing relationships among
loans, known and inherent risks in the loan portfolio and the present level of
the allowance, results of examination of the loan portfolio by regulatory
agencies and management's internal review of the loan portfolio. In determining
the collectibility of certain loans, management also considers the fair value of
any underlying collateral.
Non-interest Income. Total non-interest income increased $333,000 and $798,000
for the three and nine month periods ended June 30, 1999, primarily due to an
increase in service fee income associated with increased demand account volume
and fee income generated from certain fixed-rate mortgage loans originated for
sale in the secondary market. The Bank originates long-term fixed rate loans for
sale and for its portfolio. As part of its efforts to manage interest rate risk,
the Bank sells certain loans originated with terms of fifteen years or more in
the secondary market. During the third quarter of fiscal 1999, the Company
recognized approximately $90,000 of deferred income which resulted from loan
repayments.
Non-interest Expense. Total non-interest expense increased for both periods due
primarily to four branch offices opened in the last eleven months.
Gain on Sale of Securities. The Company experienced gains of $8,000 and $10,000
on the sale of securities during the three and nine months ended June 30, 1999
compared to gains of $54,000 and $104,000 during the same periods ended March
31, 1998. The decreases during both periods in fiscal 1999 were due to reduction
in the sales by the Company of its equity securities holdings.
Income Tax Expense. Income taxes decreased during the periods primarily due to
a decrease in income before income taxes.
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Under current Office of Thrift Supervision ("OTS") regulations, the Bank
maintains certain levels of capital. On June 30, 1999, the Bank was in
compliance with its three regulatory capital requirements as follows:
Amount Percent
------ -------
(In thousands)
Tangible capital.............................. $39,843 9.37
Tangible capital requirement.................. 6,372 1.50
------ ----
Excess over requirement....................... $33,471 7.87
====== ====
Core capital.................................. $39,843 9.37
Core capital requirement...................... 12,744 3.00
------ ----
Excess over requirement....................... $27,099 6.37
====== ====
Risk based capital............................ $42,781 18.24
Risk based capital requirement................ 18,764 8.00
------ -----
Excess over requirement....................... $24,017 10.24
====== =====
Management believes that under current regulations, the Bank will continue to
meet its minimum capital requirements in the foreseeable future. Events beyond
the control of the Bank, such as increased interest rates or a downturn in the
economy in areas in which the Bank operates could adversely affect future
earnings and as a result, the ability of the Bank to meet its future minimum
capital requirements.
The Bank's liquidity is a measure of its ability to fund loans, pay withdrawals
of deposits, and other cash outflows in an efficient, cost effective manner. The
Bank's primary source of funds are deposits and scheduled amortization and
prepayment of loan and mortgage-backed principal. The Bank also utilizes
advances from the Federal Home Loan Bank of Dallas for its investment and
lending activities. As of June 30, 1999, such borrowed funds totaled $75.3
million. Loan payments, maturing investments and mortgage-backed security
prepayments are greatly influenced by general interest rates, economic
conditions and competition.
The Bank is required under federal regulations to maintain certain specified
levels of "liquid investments," which include certain United States government
obligations and other approved investments. Current regulations require the Bank
to maintain liquid assets of not less than 4% of its net withdrawable accounts
plus short term borrowings. This level may be changed from time to time by the
regulators to reflect current economic conditions. The Bank has maintained
liquidity in excess of regulatory requirements. Furthermore, from time to time,
the Bank utilizes FHLB advances to the extent necessary to maintain its
liquidity.
Year 2000 Readiness
The "Year 2000" issue is a general term used to describe the various problems
that may result from improper processing of dates and date sensitive
calculations by computers, software, and other machinery.
8
<PAGE>
The problems generally arise from the fact that most computers and software
historically have used only two digits to identify the year in a date, often
meaning that the computer will not distinguish dates in the "2000's" from dates
in the "1900's".
The following discussion of the implications of the Year 2000 problem for the
Bank, contains numerous forward looking statements based on inherently uncertain
information. The cost of the project and the date on which the Bank plans to
complete the internal Year 2000 modifications are based on management's
assumptions of future events including the continued availability of internal
and external resources, third party modifications and other factors. However,
there can be no guarantee that these statements will be achieved and actual
results could differ, Moreover, although management believes it will be able to
make the necessary modifications in advance, there can be no guarantee that
failure to modify the systems would not have a material adverse effect on the
Bank.
The Bank places a high degree of reliance on computer systems of third parties,
such as customers, suppliers, and other financial and governmental institutions.
Although the Bank is assessing the readiness of these third parties and
preparing contingency plans, there can be no guarantee that the failure of these
third parties to modify their systems in advance of December 31, 1999 would not
have a material adverse effect on the Bank.
The Bank has a Year 2000 committee that is addressing potential Year 2000 issues
with its internal and external software and computer systems. The committee has
assessed the Bank's automated systems and has contacted third party vendors to
provide appropriate assurances regarding their ability to address any Year 2000
issues.
Most of the critical data processing of the Bank is provided by a third party
national service bureau. This service bureau began renovations to their software
applications in the early 1990's to address Year 2000 issues. The Bank and its
service bureau completed internal core system testing in December 1998. The Bank
is currently testing its internal systems compatibility with that of the service
bureau in live data tests.
Total cost associated with required modifications to existing systems is not
expected to be material to the Corporation's financial position. No additional
outside personnel is expected to be needed to resolve any Year 2000 issues at
this time. The current estimated costs to replace some hardware and software
systems is approximately $250,000, some of which will be capitalized and
depreciated over approximately three years. The Bank does not separately track
the internal costs incurred for the Year 2000 project because such costs are
principally the related payroll costs.
The Bank has contacted all material customers, vendors, and non-information
technology suppliers (i.e. utility systems, telephone systems and security
systems) regarding their Year 2000 state of readiness. Testing has been
completed on significant vendor applications, except the utilities as noted
below. The Bank has developed contingency plans and procedures if unforeseen
Year 2000 problems occur. Current testing of the contingency plan is expected to
be complete by September 30, 1999, with related employee training occurring in
the third and fourth quarter.
We are unable to test the Year 2000 readiness of our significant suppliers of
utilities. We are relying on the utility companies' internal testing and
representations to provide the required services that drive our data systems.
However, the Bank will be installing a generator at a central location which
should provide electric power in the event any local electric utilities
experience problems.
9
<PAGE>
As a practical matter, mortgage, consumer and commercial loan customers were not
contacted regarding their Year 2000 readiness. It was deemed to be beyond the
scope of our testing parameters to contact these borrowers. Further, most of
these are individuals with adequate collateral for their loans.
The most likely worst case Year 2000 scenario is that data processing would be
temporarily interrupted (as much as 2 to 3 days) which would increase the time
necessary to service customers and may prevent some customers from being
serviced until the problem is corrected. The Bank believes that completed and
planned modifications to its internal systems will allow it to be ready for the
Year 2000. However, factors outside of the Bank's control and unexpected service
bureau and other third party problems could impact the Bank's ability to process
data which could have a significant adverse impact on the financial condition
and results of operations of the Bank.
Despite the best efforts of management to address this issue, the vast number of
external entities that have direct and indirect business relationships with the
Bank, such as customers, vendors, payment systems providers and other financial
institutions, makes it impossible to assure that a failure to achieve compliance
by one or more of these entities would not have a material adverse impact on the
operations of the Bank.
Impact of Inflation
The consolidated financial statements of the Company and notes thereto,
presented elsewhere herein, have been prepared in accordance with GAAP, which
require the measurement of financial position and operating results in terms of
historical dollars without considering the change in the relative purchasing
power of money over time due to inflation. The impact of inflation is reflected
in the increased cost of the Company's operations. Unlike most industrial
companies, nearly all the assets and liabilities of the Company are financial.
As a result, interest rates have a greater impact on the Company's performance
than do the effects of general levels of inflation. Interest rates do not
necessarily move in the same direction or to the same extent as the prices of
goods and services.
10
<PAGE>
Additional Key Operating Ratios
<TABLE>
<CAPTION>
At or For the Three Months At or For Nine Months
Ended Ended
June 30, June 30,
---------------------- -----------------------
1999(1) 1998(1) 1999(1) 1998(1)
------- ------- ------- -------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Return on average assets...................... 0.85% 1.00% 0.84% 0.96%
Return on average equity...................... 2.05% 7.15% 6.88% 6.99%
Average interest rate spread.................. 2.92% 2.77% 2.82% 2.65%
Nonperforming assets to total assets.......... 0.28% 0.27% 0.28% 0.27%
Nonperforming loans to total loans............ 0.21% 0.31% 0.21% 0.31%
Net interest margin........................... 3.47% 3.55% 3.40% 3.44%
</TABLE>
- ----------------
(1) Annualized where appropriate.
Selected Financial Data
June 30, 1999 September 30, 1998
------------- ------------------
Ratio of Equity to Assets.............. 11.6% 12.8%
Book Value per Common Share............ 17.62 $16.97
Non-performing Assets/Total............ 0.28% 0.26%
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes from the information regarding market risk
disclosed under the heading "Asset and Liability Management" in the
Corporation's Annual Report for the year ended September 30, 1998.
Further, the Bank paid a dividend to the Company in the amount of $17.0 million
in January 1999, which reduced its capital and its net portfolio value ("NPV")
by approximately 33%.
11
<PAGE>
TECHE HOLDING COMPANY AND SUBSIDIARIES
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Neither the Company nor the Bank was engaged in any legal
proceeding of a material nature at June 30, 1999. From time to
time, the Company is a party to routine legal proceedings in
the ordinary course of business, such as claims to enforce
liens, condemnation proceedings on properties in which the
Company holds security interests, claims involving the making
and servicing of real property loans, and other issues
incident to the business of the Company. There were no
lawsuits pending or known to be contemplated against the
Company at June 30, 1999 that would have a material effect on
the operations or income of the Company or the Bank, taken as
a whole.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Articles of Incorporation of Teche Holding Company*
3.2 Bylaws of Teche Holding Company*
4.0 Stock Certificate of Teche Holding Company*
10.1 Form of Teche Federal Savings Bank Management Stock Plan**
10.2 Form of Teche Holding Company 1995 Stock Option Plan**
11.0 Statement regarding computation of earnings per share (see
Note 3 to the Notes to Unaudited Consolidated Financial
Statements included herein)
27.0 Financial Data Schedule***
(b) Reports on Form 8-K
None.
12
<PAGE>
- -------------------
* Incorporated herein by reference into this document from the Exhibits
to Form S-1, Registration Statement, initially filed with the
Commission on December 16, 1994, Registration No. 33-87486.
** Incorporated herein by reference into this document from the Exhibits
to the Registrant's Form 10-K for the fiscal year ended September 30,
1995, filed with the Commission.
*** Only in electronic filing.
13
<PAGE>
TECHE HOLDING COMPANY AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TECHE HOLDING COMPANY
Date: August 16, 1999 By: /s/Patrick O. Little
-------------------------------------
Patrick O. Little
President and Chief Executive Officer
(Principal Executive Officer)
Date: August 16, 1999 By: /s/J. L. Chauvin
-------------------------------------
J. L. Chauvin
Vice President and Treasurer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> JUN-30-1999
<CASH> 9,082
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 62,475
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 340,786
<ALLOWANCE> 3,552
<TOTAL-ASSETS> 426,337
<DEPOSITS> 298,551
<SHORT-TERM> 52,293
<LIABILITIES-OTHER> 2,897
<LONG-TERM> 23,027
0
0
<COMMON> 42
<OTHER-SE> 49,525
<TOTAL-LIABILITIES-AND-EQUITY> 426,337
<INTEREST-LOAN> 19,839
<INTEREST-INVEST> 2,225
<INTEREST-OTHER> 418
<INTEREST-TOTAL> 22,482
<INTEREST-DEPOSIT> 9,421
<INTEREST-EXPENSE> 12,201
<INTEREST-INCOME-NET> 10,281
<LOAN-LOSSES> 120
<SECURITIES-GAINS> 10
<EXPENSE-OTHER> 9,421
<INCOME-PRETAX> 4,054
<INCOME-PRE-EXTRAORDINARY> 4,054
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,635
<EPS-BASIC> .96
<EPS-DILUTED> .98
<YIELD-ACTUAL> 2.82
<LOANS-NON> 721
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,355
<CHARGE-OFFS> 7
<RECOVERIES> 4
<ALLOWANCE-CLOSE> 3,352
<ALLOWANCE-DOMESTIC> 3,352
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
