SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
[X] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 (fee required)
For the fiscal year ended December 31, 2002
or
[ ] Transition report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 (no fee required)
Commission File Number 2-89561
TECHE BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Louisiana 72-1008552
(State of incorporation) (I.R.S. Employer Identification No.)
606 S. Main Street, St. Martinville, Louisiana 70582
(Address of principal executive offices) (Zip code)
(337) 394-9726
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $10.00 par value
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
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (Section 229.405 of this chapter) is
not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
State the aggregate market value of the voting stock held by
nonaffiliates of the Registrant: (Total number of shares held by
nonaffiliated: See Part II, item 5.)
Indicate the number of shares outstanding of each of the
Registrant's classes of common stock, as of the latest practicable
date.
Common Stock, $10 par value, 27,925 shares outstanding as of
December 31, 2002
Documents Incorporated by Reference
Annual Report to Shareholders for the Year
Ended December 31, 2002 Parts I, II and IV
Definitive Proxy Statement for the 2002
Annual Meeting of Shareholders Part IV
FORM 10-K
TECHE BANCSHARES, INC.
PART I
Item 1. Business
General -
Teche Bancshares, Inc. (Company) was organized during 1984 for
the purpose of operating as a one bank holding company. As a
result, Teche Bank and Trust Company (Bank) was acquired by Teche
Bancshares, Inc. in a business combination accounted for as a
pooling of interests. Teche Bancshares, Inc.'s sole source of
income is derived from the earnings and dividends of its
subsidiary, Teche Bank & Trust Company.
Teche Bank and Trust Company is a Louisiana chartered state
bank engaged in the general banking business since September 27,
1969. The Bank's main office is located in the primary business
district of St. Martinville, Louisiana. The Bank has two branches.
One is located on the north side of town on the main thoroughfare.
The other branch is in Coteau, Louisiana. The population of both
areas is largely rural and the economy is based on agriculture, and
tourism.
The City of St. Martinville is located in the south central
part of Louisiana. The Bank's primary market area, the City of St.
Martinville, had a population of 6,989 in 2000. Its general market
area, St. Martin Parish, Louisiana, had a population of 48,583.
The community of Coteau is located twelve miles south of St.
Martinville in Iberia Parish. The primary market area of the
Coteau Branch is the six mile circular radius from the branch that
is within Iberia Parish. The population of the primary market area
is approximately 6,450 people. There are no banks or branches of
other financial institutions located within the primary market
area.
Competition -
There are two other banks and one savings and loan in the
Bank's primary market area. Competition for loans and deposits is
intense among the financial institutions in the area.
In the Bank's general market area there are five other banks
and two domestic savings and loan institutions aggressively
pursuing loans, deposits and other accounts. Below is a list of
banks and savings institutions having offices in St. Martin Parish
with their total deposits as of June 30, 2002 (latest available):
Bank Thousands of Dollars
Farmers-Merchants Bank and Trust $118,913
First Louisiana National Bank 79,969
St. Martin Bank and Trust 61,662
MidSouth National Bank 39,221
Teche Bank and Trust Co. 38,956
Teche Federal Savings Bank 23,567
Iberia Bank 10,233
Total parish bank deposits $372,521
========
Regulation -
As a bank holding company, Teche Bancshares, Inc. is subject to
the Bank Holding Company Act of 1956, as amended (the "Act"). The
Act subjects Teche Bancshares, Inc. to supervision and regulation
by the Federal Reserve Board, which includes periodic examinations
and the obligation of Teche Bancshares, Inc. to file semi-annual
and annual reports with the Federal Reserve Board. The Act
requires prior approval by the Federal Reserve Board for
acquisitions of more than 5 percent of the voting shares or
substantially all of the assets of any bank or bank holding
company. The Act prohibits Teche Bancshares, Inc. from engaging in
any business other than banking or bank-related activities
specifically allowed by the Federal Reserve Board. The Act also
prohibits Teche Bancshares, Inc. and its subsidiary from engaging
in certain tie-in arrangements in connection with the extension of
credit, the lease or sale of property or the provision of any
services. Under Title VI of the Financial Institutions, Reform,
Recovery and Enforcement Act of 1989, the Act has been amended to
authorize bank holding companies to acquire savings and thrift
institutions without tandem operations restrictions. Teche
Bancshares, Inc.'s one banking subsidiary ("The Bank") is subject
to a variety of regulations concerning the maintenance of reserves
against deposits, limitations on the rates that can be charged on
loans or paid on deposits, branching, restrictions on the nature
and amounts of loans and investments that can be made and limits on
daylight overdrafts. The Bank is regulated by the Federal Deposit
Insurance Corporation.
The Bank is limited in the amount of dividends they may
declare. Prior approval must be obtained from the appropriate
regulatory authorities before dividends can be paid by the Bank to
Teche Bancshares, Inc. if the amount of adjusted capital, surplus
and retained earnings are below defined regulatory limits. The
Bank is also restricted from extending credit or making loans to or
investments in Teche Bancshares, Inc. and certain other affiliates
as defined in the Federal Reserve Act. Furthermore, loans and
extensions of credit are subject to certain other collateral
requirements.
The Federal Reserve Board has established guidelines with
respect to the maintenance of appropriate levels of capital by
registered bank holding companies and banks.
"Primary capital" for this purpose includes common stock,
surplus, undivided profits, contingency and other capital reserves,
and the allowance for loan losses. "Total capital" consists of
primary capital plus secondary capital, which includes certain
limited-life preferred stock and long-term debt that meets certain
maturity and preference ranking criteria.
In January, 1989, the Federal Reserve Board issued risk-based
capital guidelines to assist in the assessment of the capital
adequacy of bank holding companies and banks. These guidelines
include a new definition of capital and a framework for calculating
risk-weighted assets by assigning assets and off-balance sheet
items to broad risk categories. The risk-based capital guidelines
also establish a schedule for achieving the minimum supervisory
standards and provide for transitional arrangements during a
phase-in-period (beginning year end 1990) to facilitate adoption
and implementation of the measure at the end of 1997.
The table below indicates the Bank's capital measures at
December 31, 2002. The bank meets the risk-based capital
guidelines at December 31, 2002 as follows:
Regulatory Bank's
Requirement Capital
Risk-based capital ratios:
Tier 1 4.0% 18.3%
===== ======
Tier 2 0.0% 1.2%
===== ======
Total risk-based capital ratio 8.0% 19.5%
===== ======
Additional Financial Information -
Average Balance Sheets:
(in thousands)
December 31,
2002 2001 2000
ASSETS ------ ----- ------
Cash and due from banks $ 1,751 $ 1,799 $ 1,840
Interest-bearing deposits
in banks 2,086 1,228 70
Investments securities:
U. S. Treasury securities 64 400 400
Federal agency securities 19,372 16,013 16,887
States and political
subdivisions 1,019 601 1,106
Other securities 500 449 411
------ ------ ------
Total investment securities 20,955 17,463 18,804
Federal funds sold 3,369 2,821 704
Loans, net of allowance
for losses 30,628 28,646 25,322
Bank premises, and equipment 819 839 714
Accrued interest receivable 269 304 334
Other real estate owned 164 187 207
Other assets 291 226 196
--------- --------- ---------
Total assets $60,332 $53,515 $48,191
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits -
Demand $ 7,449 $ 6,874 $ 6,744
NOW and MMDA accounts 10,736 7,629 7,288
Savings 4,507 3,762 3,832
Time (100,000 and over) 12,426 11,786 10,029
Other time 12,748 12,572 12,249
------ ------ ------
Total deposits 47,866 42,623 40,142
Federal funds purchased - 1 33
Other borrowed funds 6,791 5,558 3,481
Accrued interest payable 146 213 195
Other liabilities &
accrued expense 420 401 331
------ ------ ------
Total liabilities 55,223 48,796 44,182
------ ------ ------
Stockholders' equity:
Common stock ($10 par value,
100,000 shares authorized,
28,125 shares issued
and outstanding) 281 281 281
Surplus 1,139 1,139 1,139
Undivided profits 3,330 2,230 2,230
Paid in capital 380 380 380
Total stockholders' equity 5,130 4,740 4,030
Less: Treasury stock, at cost (21) (21) (21)
-------- -------- --------
Net stockholders' equity 5,109 4,719 4,009
-------- -------- --------
Total liabilities and
stockholders' equity $60,332 $53,515 $48,191
======== ======== ========
Additional Financial Information (continued) -
Analysis of Net Interest Earnings Based on Average Amounts
Outstanding:
(in thousands)
Year Ended December 31,
2002 2001 2000
Interest earning assets:
Interest-bearing deposits,
in banks $2,086 $1,228 $ 70
Interest earned on interest-
bearing deposits 33 39 4
Yield on interest-bearing
deposits 1.6% 3.2% 6.2%
====== ====== ======
U. S. Treasury and federal agency
securities $19,435 $16,413 $17,288
Interest earned on U. S. Treasury
and federal agency securities 776 933 1,129
Yield on U. S. Treasury and
federal agency securities 4.0% 5.7% 6.5%
====== ====== ======
Obligations of states and political
subdivisions $1,019 $601 $1,106
Interest earned on obligations of
states and political
subdivisions 46 28 51
Yield on obligations of states and
political subdivisions 4.5% 4.7% 4.6%
====== ====== ======
Other securities $500 $449 $411
Interest/dividends earned
on other securities 13 15 24
Yield on other securities 2.7% 3.4% 5.8%
====== ====== ======
Federal funds sold $ 3,369 $ 2,821 $704
Interest earned on
federal funds sold 51 109 43
Yield on federal funds sold 1.5% 3.9% 6.1%
====== ====== ======
Net loans $30,628 $28,645 $25,322
Interest and fees
earned on net loans 2,427 2,559 2,375
Yield on net loans 7.9% 8.9% 9.4%
====== ====== ======
Total interest earning assets $57,036 $50,158 $44,899
Interest earned on total
interest-earning assets 3,345 3,684 3,626
Yield on total interest-earning
assets 5.9% 7.3% 8.1%
====== ====== ======
Interest bearing liabilities:
NOW and MMDA accounts $10,737 $ 7,629 $7,288
Interest paid on NOW AND MMDA
accounts 98 148 157
Average rate on NOW AND MMDA
accounts .9% 1.9% 2.2%
====== ====== ======
Additional Financial Information (continued) -
Analysis of Net Interest Earnings Based on Average Amounts
Outstanding (continued):
(in thousands)
Year Ended December 31,
2002 2001 2000
Savings $ 4,507 $ 3,762 $3,832
Interest paid on savings 41 67 76
Average rate paid on savings 0.9% 1.8% 2.0%
====== ====== ======
Time deposits - $100,000
and over $12,427 $11,786 $10,029
Interest paid on time deposits,
$100,000 and over 451 644 544
Average rate paid on time deposits,
$100,000 and over 3.6% 5.5% 5.4%
====== ====== ======
Other time deposits $12,748 $12,572 $12,249
Interest paid on other time
deposits 466 660 633
Average rate paid on other time
deposits 3.7% 5.2% 5.2%
====== ====== ======
Federal funds purchase $ - $ 1 $ 33
Interest paid on federal funds
purchased - - 2
Average rate paid on federal funds
purchased 0.0% 4.7% 5.9%
====== ====== ======
Other borrowed funds $6,790 $5,558 $3,481
Interest paid on other borrowed
funds 398 333 204
Average rate paid on other
borrowed funds 5.9% 6.0% 5.9%
====== ====== ======
Total interest bearing
liabilities $47,208 $41,307 $36,912
Interest paid on total interest
bearing liabilities 1,455 1,853 1,616
Average rate on total interest
bearing liabilities 3.1% 4.5% 4.4%
====== ====== ======
Net yield on interest-earning
assets (net interest-
earnings divided by total
interest-earning assets 3.3% 3.6% 4.5%
====== ====== ======
Changes in Interest Income and Expenses -
The following table shows, for the periods indicated, the
change in interest income and interest expense for each major
component of interest-earning assets and interest-bearing
liabilities attributable to (i) changes in volume (change in volume
multiplied by old rate), (ii) changes in rates (change in rate
multiplied by old volume) and (iii) changes in rate/volume (change
in rate multiplied by the change in volume). The change in
interest income or expense attributable to the combination of rate
variance and volume variance is included in the table, but such
amount has also been allocated between, and included in the amounts
shown as, changes due to rate and changes due to volume. The
allocation of the change due to rate/volume variance was made in
proportion to the amounts due solely to rate variance and solely to
volume variance, which amounts are not included in the table.
Balances of non-accrual loans and related income recognized have
been included for computational purposes. Yields of tax exempt
securities have not been computed on a tax equivalent basis.
Year Ended December 31,
(dollars in thousands)
1999 v. 2000
Increase (Decrease) Due to
Volume Rate Rate/Volume Total
Interest earnings assets:
Increase (decrease) -
Interest bearing deposits
in banks 1 1 - 2
U. S. Treasury & Federal
Agency Sec. (249) 173 (35) (111)
State and political
subdivisions (3) 1 - (2)
Federal Funds sold (18) 12 (4) (10)
Net loans 551 (20) (6) 525
Total interest earning
assets 282 167 (45) 404
Interest-bearing liabilities:
Increase (decrease) -
NOW and MMDA accounts 12 7 1 20
Savings (1) - - (1)
Time deposits, $100,000
and over (50) 55 (5) -
Other time deposits 55 55 6 116
Federal funds purchased (5) 1 - (4)
Securities repurchased (8) (8) 8 (8)
Other Borrowed Funds 16 6 1 23
Total interest-bearing
liabilities 19 116 11 146
Increase (decrease) in net
( interest income 263 51 (56) 258
===== ===== ===== =====
2000 v. 2001
Increase (Decrease) Due to
Volume Rate Rate/Volume Total
Interest earnings assets:
Increase (decrease) -
Interest bearing deposits
in banks 72 (2) (35) 35
U. S. Treasury & Federal
Agency Sec. (57) (138) 7 (188)
State and political
subdivisions (23) 1 (1) (23)
Federal Funds sold 129 (15) (47) 67
Net loans 312 (127) (17) 168
Total interest earning
assets 433 (281) (93) 59
Interest-bearing liabilities:
Increase (decrease) -
NOW and MMDA accounts 8 (22) (1) (15)
Savings (1) (8) - (9)
Time deposits, $100,000
and over 95 10 2 107
Other time deposits 17 - - 17
Federal funds purchased (2) 6 (6) (2)
Securities repurchased - - - -
Other Borrowed Funds 123 3 2 128
Total interest-bearing
liabilities 240 (11) (3) 226
Increase (decrease) in net
interest income 193 (270) (90) (167)
===== ===== ==== ======
2001 v. 2002
Increase (Decrease) Due to
Volume Rate Rate/Volume Total
Interest earnings assets:
Increase (decrease) -
Interest bearing deposits
in banks 27 (20) (14) (7)
U. S. Treasury & Federal
Agency Sec. 172 (279) 51 (158)
State and political
subdivisions 20 (1) (1) 18
Federal Funds sold 21 (68) (13) (60)
Net loans 176 (286) (20) (130)
Total interest earning
assets 416 (654) (99) (337)
Interest-bearing liabilities:
Increase (decrease) -
NOW and MMDA accounts 59 (76) (31) (48)
Savings 13 (34) (7) (28)
Time deposits, $100,000
and over 35 (224) (12) (201)
Other time deposits 9 (189) (3) (183)
Federal funds purchased - - - -
Securities repurchased - - - -
Other Borrowed Funds 74 (6) (1) 67
Total interest-bearing
liabilities 190 (529) (54) (393)
Increase (decrease) in net
interest income 226 (125) (45) 56
===== ===== ==== ======
Interest Sensitivity -
The Company's policy for interest-rate sensitivity management
is to control the exposure of net interest income to interest rate
movements. The relationship or gap between repricing dates of
interest-earning assets and interest-bearing liabilities must be
actively monitored and flexible enough to take advantage of
changes in market rates. The Company follows such a policy and
responds to market change by adjusting the structure of the assets
and liabilities repricing within comparable time intervals. This
enables the Company to respond to the volatility of interest rates,
and thereby capitalize on profit opportunities while minimizing
adverse changes in earnings.
The following table reflects the year-end position (in
thousands) of the Company's interest-earning assets and
interest-bearing liabilities which can either reprice or mature
within the designated time periods. The interest sensitivity gaps
can vary day-to-day and are not necessarily a reflection of the
future. In addition, certain assets and liabilities within the
same designated time period may nonetheless reprice at different
times and at different levels.
After 1
Within Year But After 5 Non-interest
1 year Within 5 Years Earnings Total
ASSETS
Cash and due
from banks $ - $ - $ - $ 2,354 $ 2,354
Int. Bearing deposits
in banks 2,401 - - - 2,401
Securities available
for sale 20,069 3,582 1,749 - 25,400
Securities held
to maturity 1,101 - - - 1,101
Other securities - - - 524 524
Federal funds sold 2,425 - - - 2,425
Loans 9,690 8,134 12,340 32 30,196
Other assets - - - 1,284 1,284
------- ------- ------ ------- -------
Total assets $ 35,686 $11,716 $14,089 $4,194 $65,685
======= ======= ====== ======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Demand deposits $ - $ - $ - $ 9,191 $ 9,191
Interest-bearing deposits:
NOW and MMDA's 8,103 5,060 - - 13,163
Savings 1,858 2,787 - - 4,645
Time, $100,000
and over 10,666 2,944 - - 13,610
Other time 8,324 3,777 - - 12,101
Other borrowed
funds 288 1,327 5,675 - 7,290
Other liabilities - - - 335 335
Stockholder's equity - - - 5,350 5,350
------- ------- ------ ------- -------
Total liabilities and
stockholder's
equity $29,239 $15,895 $5,675 $14,876 $65,685
======= ======= ====== ======= =======
Interest rate
sensitivity gap $ 6,447 $(4,179) $8,414 $(10,682)
======= ======= ====== ========
Investment Portfolio -
The following table indicates the composition of the Company's
investments (in thousands) at December 31, 2002, 2001 and 2000 and
shows the maturity distribution by carrying amount and yield (not
on a taxable equivalent basis) of the Company's investment
portfolio at December 31:
2002
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
Securities available for sale:
U.S. Government and
Agency Securities $ 8,513 $ 25 $ (5) $ 8,533
State and Municipal
Securities 1,376 28 - 1,404
Mortgage-backed
securities 15,205 264 (6) 15,463
------ --- ---- ------
Totals 25,094 317 (11) 25,400
Securities held to maturity:
State and Municipal
Securities 401 4 - 405
Mortgage-backed
Securities 700 - - 700
------- --- ---- ------
Totals 1,101 4 - 1,105
Other Securities 524 - - 524
( ------- --- ---- ------
Totals 524 - - 524
Total securities $26,719 $321 $(11) $27,029
======= ==== ===== =======
2001
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
Securities available for sale:
U.S. Government and
Agency Securities $ 496 $ 16 $ (-) $ 512
Mortgage-backed
securities 15,636 222 (17) 15,841
------ --- ---- ------
Totals 16,132 238 (17) 16,353
Securities held to maturity:
State and Municipal
Securities 407 10 - 417
Mortgage-backed
Securities 2,499 - - 2,499
------- --- ---- ------
Totals 2,906 10 - 2,916
Other Securities 484 - - 484
------- --- ---- ------
Totals 484 - - 484
Total securities $19,522 $248 $(17) $19,753
======= ==== ===== =======
2000
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
Securities available for sale:
U.S. Government and
Agency Securities $ 2,788 $ 9 $ (6) $ 2,791
Mortgage-backed
securities 12,643 53 (31) 12,665
------ --- ---- ------
Totals 15,431 62 (37) 15,456
Securities held to maturity:
U.S. Government
and Agency
Securities - - - -
State and Municipal
Securities 945 5 - 950
Mortgage-backed
Securities 2,216 - (4) 2,212
------- --- ---- ------
Totals 3,161 5 (4) 3,162
Other Securities 431 - - 431
------- --- ---- ------
Totals 431 - - 431
Total securities $19,023 $ 67 $(41) $19,049
======= ==== ===== ========
Investment Portfolio (Continued) -
2002
Due After Due After
Due in One Year Five Years
One Year But Before But Before Due After
or Less Five Years Ten Years Ten Years
Securities available for sale:
U.S. Government and
Agency Securities $8,264 $ 269 $ - $ -
State and Municipal
Securities - 170 1,234 -
Mortgage-backed
securities 11,805 3,143 515 -
------ ----- ----- -----
Totals 20,069 3,582 1,749 -
Securities to be held to maturity:
State and municipal
securities 401 - - -
Mortgage-backed
securities 700 - - -
------ ----- ----- -----
Totals 1,101 - - -
Other securities - - - 524
Total $21,170 $ 3,583 $1,749 $ 524
====== ======= ======= ======
Weighted Average Yield
Securities available for sale:
U.S. Government and
Agency Securities 3.5% 3.7% 0.0% 0.0%
====== ====== ====== =====
State and Municipal
Securities 0.0% 1.8% 4.1% 0.0%
====== ====== ====== =====
Mortgage-backed
securities 5.4% 6.8% 4.5% 0.0%
====== ====== ====== =====
Securities to be held to maturity:
State and municipal
securities 4.5% 0.0% 0.0% 0.0%
====== ====== ====== ======
Mortgage-backed
securities 1.3% 0.0% 0.0% 0.0%
====== ====== ====== ======
Other securities 0.0% 0.0% 0.0% 2.7%
====== ====== ====== ======
Yields on tax exempt obligations have not yet been computed on a
tax-equivalent basis.
Loan Portfolio Information -
Types of Loans: 2002 2001 2000 1999 1998
Real estate loans $18,028 $15,728 $14,479 $11,501 $ 7,032
Commercial and
industrial loans 9,679 10,501 10,258 8,594 7,128
Personal and
consumer loans 2,823 2,923 3,157 2,689 2,381
All other loans 8 18 19 37 33
------ ------ ----- ----- -----
Totals 30,538 29,170 27,913 22,821 16,574
Less: Unearned income (0) (1) (5) (16) (47)
Allowance for
loan losses (341) (300) (270) (233) (173)
------ ------ ----- ----- -----
Net loans $30,197 $29,170 $27,638 $22,572 $16,354
======= ======= ======= ======= =======
Maturities and Sensitivities of Loans to Changes in Interest Rates
(in thousands)
Repricing Repricing Repricing Repricing
in one After one After five After
Year or But Before but Before Ten
2002 less five Years Ten Years
Real estate $18,028 $ 1,350 $4,575 $4,627 $7,476
Commercial and
industrial 9,679 7,335 2,118 203 23
Personal and
consumer 2,823 1,371 1,442 10 -
All other 8 8 - - -
-------- -------- ------- ------ ------
Totals $30,538 $10,064 $8,135 $4,840 $7,499
======== ======== ======= ====== ======
All loans due after one year are at predetermined interest rates.
Non-accrual, Past Due, Restructured and Impaired Loans:
(in thousands)
December 31, December 31,
2002 2001
Non-accrual loans $ 32 $ -
===== =====
Restructured loans $ - $ -
===== =====
Impaired loans $ - $ -
===== =====
Accruing loans past due 90 days or more
at year end $ 57 $ 194
===== =====
The Bank's policy is to place loans on non-accrual whenever
it appears that interest will not be collected. Management's list
of potential problem loans indicated a principal balance of $10,304
as of December 31, 2002.
At December 31, 2002, management believes that potential
problem loans with credit problems have been adequately reserved
for in the allowance for loan loss accounts.
The Bank has taken an aggressive approach to consumer
lending yet management is still very conservative in making credit
decisions. Management feels that by increasing the Bank's consumer
loan base, it can spread risk in the loan portfolio and increase
loan demand and profit margin at the same time.
Summary of Loan Loss Experience:
December 31,
2002 2001
Balance, beginning of year $ 300 $ 270
Provision added to operations 48 41
--- ---
Charge-offs:
Personal loans 7 19
Business loans - -
--- ---
Total Charge off's 7 19
Recoveries:
Personal loans - 5
Business loans - 3
--- ---
Total Recoveries - 8
Net allowance activity 41 30
Balance, end of year $ 341 $ 300
===== =====
Ratio of allowance activity during the period
to average loans outstanding during the
period .14% .10%
===== =====
In determining the adjustments charged in operations,
management considered the overall risk of loan losses in its loan
portfolio, as well as considering the potential losses that might
be incurred on specific loans.
Management does not allocate its allowance for loan loss by
asset category; however, in determining the balance of the
allowance for loan loss account, management considers the various
risks inherent with the Bank's loan portfolio, as well as specific
risk of certain loans. The allowance for loan losses is
established through a provision for loan losses charged to
expenses. Loans are charged against the allowance for loan losses
when management believes that the collectibility of the principal
is unlikely. The allowance is an amount that management believes
will be adequate to absorb possible losses on existing loans
that may become uncollectible, based on evaluations of the
collectibility of loans and prior loan loss experience. The
evaluations take into consideration such factors as changes in the
nature and volume of the loan portfolio, overall portfolio
quality, review of specific problem loans and current economic
conditions that may affect the borrower's ability to pay.
Management approximates that the amount of charge-offs during
the next full year of operation will be as follows:
(in thousands)
Real estate loans $ 32
Commercial & industrial 4
Personal & consumer 2
All other loans -
------
Total $ 38
======
Deposits -
See analysis of net interest earnings for average deposits
and average rate paid. Non-interest bearing demand deposits have
not been included in the net interest earnings, because they do not
pay interest. Therefore, the average interest rate paid would be
zero. The average balances for the past three years can be found
on the average balance sheets.
Maturities of Time Certificates over $100,000 or More:
December Three Over Three Over Six Over
31, Months Through Through Twelve
2002 or less Six Twelve Months
Time Certificates
- $100,000
or more $13,610 $3,554 $2,541 $4,571 $2,944
====== ====== ====== ====== ======
Return on Average Equity and Assets -
December 31, December 31, December 31,
2002 2001 2000
Return on average assets 0.7% 0.7% 1.1%
===== ===== =====
Return on average equity 8.8% 8.7% 14.5%
===== ===== =====
Dividend payout ratio 9.9% 10.9% 7.6%
===== ===== =====
Equity to asset ratio 8.5% 8.9% 8.4%
===== ===== =====
Capital adequacy ratio 8.6% 9.0% 9.1%
===== ===== =====
Item 2. Properties
The main banking house is made of concrete and brick and has
6,470 square feet of working area. The main banking house and
concrete parking lot are situated on three adjoining pieces of
property on the outskirts of St. Martinville, Louisiana.
The Bank also owns a piece of property on the outskirts of St.
Martinville, Louisiana, on which they have a branch made of
concrete and brick which has 1,660 square feet of working area.
The Coteau Branch is constructed of brick with 2,472 square feet of
working area. None of these properties carry a mortgage.
Item 3. Legal Proceedings
The Company is not involved in any legal actions.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders,
through the solicitation of proxies or otherwise during the fourth
quarter for calendar year ended December 31, 2002.
FORM 10-K
TECHE BANCSHARES, INC.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
Teche Bancshares, Inc.'s stock is not listed on any security
exchange, and is not registered with the National Association of
Security Dealers. Due to the lack of an active trading market, the
Company does not have available information to furnish the high and
low sales price on the range of bid and asked quotations for
its stock. However, based upon stock sales during the fourth
quarter of 2002, it is believed that the stock of the Company
trades for approximately $110.00 per share. There can be no
assurance that the limited inquiries adequately reflect the high
and low bids on prices for the Holding Company's stock.
At December 31, 2002, Teche Bancshares, Inc. had approximately
364 stockholders.
Teche Bancshares, Inc. paid a dividend of $1.60 per share in
2002, 2001 and 2000. Future dividends paid by the Holding Company
will depend upon the Bank's ability to pay dividends, which is
restricted by applicable federal and state statutes.
Teche Bank & Trust Company is a Louisiana state banking
corporation. Applicable Louisiana law prohibits a state bank from
paying a dividend if its surplus remaining after payment of the
dividend would be less than half the aggregate par value of its
outstanding stock. In addition, a state bank is required
to obtain the prior approval of the Louisiana Commissioner of
Financial Institutions before declaring or paying a dividend in a
given year if the total of all dividends declared and paid by the
state bank during the year would exceed the total of its
net profit for that year combined with the net profit from the
immediately preceding year.
Item 6. Selected Financial Data
(in thousands except per share)
2002 2001 2000 1999 1998
Investment
securities $27,025 $19,743 $19,048 $19,779 $24,271
Loans 30,197 28,869 27,638 22,572 16,354
Deposits 52,711 45,414 41,885 40,185 38,097
Stockholders
equity 5,350 4,889 4,395 3,766 3,878
Operating
revenues 3,809 4,103 4,068 3,605 3,247
Net interest
income 1,890 1,830 2,009 1,736 1,497
Provision for
loan losses (48) (41) (37) (60) -
Net income 450 409 584 411 387
Earnings
per share 16.12 14.64 20.91 14.72 13.87
Total assets 65,685 57,211 51,002 47,457 45,283
Cash dividend:
Per share 1.60 1.60 1.60 1.50 1.50
Total 45 45 42 42 42
Item 7. Managements's Discussion and Analysis of Financial
Condition and Results of Operations
2002 IN REVIEW
Our net income for the years ended December 31, 2002, 2001, and
2000 was $450,070, $408,830, and $583,954, respectively. Net
income increased $41,240 from $408,830 for the year ended December
31, 2002. Net income decreased $175,124 from $583,954 for the year
ended 2001. Earnings per common share were $16.12 for 2002,
$14.64 for 2001, and $20.91 for 2000. Return on average assets and
return on equity was .75% and 9.2% for 2002. Return on average
assets and return on equity was .70% and 8.7% in 2001. For 2000,
return on average assets and return on equity was 1.1% and 14.5%.
Highlights for 2002 were as follows:
1. For the year ended 2002, we increased our total assets by 14.8
percent. Net loans increased 4.6% or $1,327,765 as compared
to 2001. This positive trend marks the eleventh consecutive
year of asset growth for Teche Bank.
2. We purchased software and equipment to capture images of our
loan documents. This software will ultimately allow our loan
officers to share loan documents between offices to better
serve our customers. The investment in new image equipment
allowed us to reduce our dependence on sometimes unreliable
microfilm while providing us with better archival records. We
continue to invest in technology to improve our ability to
efficiently serve our customers.
3. During 2002, our board of directors voted to recommend to our
shareholders a transaction to take our company private and a
conversion to subchapter S status. The decision was made
after much research and deliberation. Information is being
prepared that will be sent to the stockholders of the Company
for a vote during 2003.
EARNINGS ANALYSIS
Net interest Income
The largest source of operating revenue for the Company is net
interest income. Net interest income represents the difference
between total interest income earned on earning assets and total
interest expense paid on interest-bearing liabilities. The amount
of interest income is dependent upon many factors including the
volume and mix of earning assets, the general level of interest
rates and the dynamics of changes in interest rates. The cost of
funds necessary to support earning assets varies with the volume
and mix of interest-bearing liabilities and the rates paid to
attract and retain such funds.
During the year ended 2002, we borrowed $1,000,000 in amortizing
advances from the Federal Home Loan Bank giving us a balance in
amortizing advances totalling $7,289,953. These fixed rate
advances were used to offset longer term fixed rate loans. These
funds give us the ability to extend the maturities of our
liabilities to better match them with our long-term assets. The
average rate obtained on all advances borrowed was 5.78%.
Net interest income was $1,841,698 in 2002, compared to $1,788,741
in 2001. This change represents an increase of $52,957 over the
previous year. Our net interest income increased as the result of
an increase in the volume of assets and liabilities managed by the
bank during the year.
Net interest income was $1,788,741 in 2001, compared to $1,972,491
in 2000. This change represents a decrease of $183,750 over the
previous year. Our net interest income decreased for the year as
the result of the Federal Reserve Bank's lowering rates 11 times
during the year. Most of our deposits were fixed rate certificates
of deposit which repriced slower than our assets.
Provision for Loan Losses
The provision for loan losses is the amount charged against current
earnings which management believes is necessary to maintain the
allowance at an adequate level at the time the charge is taken,
considering the watch list trends, net charge-off experience, size
of the loan portfolio and general economic conditions and trends.
During 2002, 2001 and 2000, we added $48,331, $41,496, and $36,663,
respectively, to our reserve for loan losses to assure that we had
adequate reserves for the loan growth that we experienced. The
allowance for loan loss at December 2002 was $341,398 or 1.11% of
gross loans.
Other Income
Other income was $463,685 for 2002 as compared to $418,938 in 2001.
The increase in other income was due primarily to a gain on the
sale of an investment, an increase in commission income on credit
life insurance and an increase in other operating revenue. During
the year 2002, we implemented fee increases in order to improve our
noninterest income.
Other income was $418,938 for 2001 as compared to $442,031 in 2000.
The decrease in other income was mostly due to a decrease in
commissions on credit life.
Other Expenses
Other expenses were $1,652,733 for 2002 compared to $1,609,137 in
2001. The increase in other expenses was due primarily to an
increase in salaries and employee benefits, and an increase in
other operating expenses. The increase in salaries and benefits
was due to salary increases approved at the end of 2001 and an
increase in the cost of group health insurance. The increase in
other operating expenses was due mostly to a loss incurred on the
sale of a vehicle that was repossessed, and to increases in the
bank's cost of insurance.
Other expenses were $1,609,137 for 2001 compared to $1,570,797 in
2000. The increase in other expense was mostly the result of
increases in occupancy expenses as a result of the expansion of our
Coteau office and the purchase of a new IBM AS400 computer to
process our operations.
Investments
During the first quarter of 1994 the Company adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (FAS 115). This
pronouncement provides guidance regarding the appropriate
classification of debt and equity securities in a company's balance
sheet and also provides for the recognition of unrealized holding
gains and losses as a result of changes in the fair value of
securities available for sale. The carrying value of securities
held to maturity continues to be amortized cost. Securities
available for sale are now carried at their estimated fair value in
accordance with FAS 115.
The carrying value of securities available for sale at the end of
2002 was adjusted up $306,126 to reflect an increase in market
value from amortized cost. Securities held to maturity had a
market value more than amortized cost of $4,199 at year end.
Management considers the increase in value of the securities
portfolio to be temporary in nature.
The carrying value of securities available for sale at the end of
2001 was adjusted up $221,241 to reflect an increase in market
value from amortized cost. Securities held to maturity had a
market value more than amortized cost of $9,858 at year end.
Management considers the increase in value of the securities
portfolio to be temporary in nature.
Loans
At December 31, 2002, loans, net of allowance for loan losses and
unearned discount, were $30,196,850. This was an increase of
$1,327,765 over $28,869,085 at the end of 2001. Average loans
during the year 2002 were $30,627,794 up approximately $1,982,373
from the average of 2001.
At December 31, 2001, loans, net of allowance for loan losses and
unearned discount, were $28,869,085. This was an increase of
$1,230,791 over $27,638,294 at the end of 2000. Average loans
during the year 2001 were $28,645,421 up approximately $3,323,843
from the average of 2000.
FINANCIAL CONDITION ANALYSIS
Deposits
At December 31, 2002 total deposits were $52,710,537 an increase of
$7,296,982 over that of the prior year end balance. Average
deposits for the year ended 2001 were $47,866,321 as compared to
$42,623,113 in 2001. Our deposits are up due to our receiving the
St. Martin Parish School Board account. The School Board contract
rotates for a two year period between all of the banks in St.
Martin Parish. Our two year term began in August 2002 and will end
July 31, 2004. The School Board's deposits have varied between
$5,000,000 and $10,000,000.
At December 31, 2001 total deposits were $45,413,555 an increase of
$3,528,252 over that of the prior year end balance. Average
deposits for the year ended 2001 were $42,623,113 as compared to
$40,141,866 in 2000. Average deposits were up due to growth in our
local economy and monies leaving the stock market.
Time deposits of $100,000 and greater were $13,610,270 at the end
of 2002, an increase of $2,066,418 over that of the prior year.
The increase was due to increases in the deposits of one of our
major stockholders and from bids won on Public Funds. We bid
aggressively to get Public Funds when we can earn a spread on these
incremental funds. We hold $2,000,000 in jumbo certificates from
the State of Louisiana. Rates on these funds are attractive
compared to alternatives for funding.
Time deposits of $100,000 and greater were $11,543,852 at the end
of 2001, an increase of $641,812 over that of the prior year. The
increase was due to increases in the deposits of one of our major
stockholders. We also held $2,000,000 in jumbo certificates from
the State of Louisiana during 2001.
Asset/Liability Management
The objective of asset/liability management is to maximize net
interest income while balancing liquidity and capital needs and
minimizing interest rate risk. The Asset/Liability Committee
(ALCO) develops and reviews strategies which assist in the
achievement of the Bank's goals. Strategies may include purchases
and sales of securities to alter maturities and yields, and changes
in the mix of earning assets and funding sources.
Changes in interest rates create interest rate risk. Interest rate
risk is measured each month by using a static gap analysis. Based
on the results of this model the ALCO committee determines the
appropriate strategies and goals to follow.
Liquidity is needed to meet the cash requirements for deposit
withdrawals and the funding of loans. A stable base of funding
sources and an adequate level of assets readily convertible into
cash provide liquidity. In order to maintain adequate liquidity,
management attempts to ladder the maturities and cash flows of its
investment portfolio so that cash flows will be available each year
to reinvest or to meet the liquidity demands of the bank.
Credit Risk Management
Teche Bancshares, Inc. manages its credit risk by maintaining high
credit underwriting standards and providing an adequate allowance
for loan losses. We concentrate our lending to areas within our
geographic market in order to keep the cost of managing assets low
and in order to be informed of developments affecting our credits.
Our credit underwriting standards emphasize cash flow and repayment
ability and ensure that loans are properly structured and
collateralized. An adequate allowance for loan losses provides for
losses inherent in the loan portfolio.
Nonperforming Assets
Nonaccrual loans and other real estate owned are included in
nonperforming assets. As of December 31, 2002, nonperforming
assets were $183,330, an increase of $6,580 from 2001. As of
December 31, 2001, nonperforming assets were $176,750, a decrease
of $23,016 from 2000. Nonaccrual loans at December 31, 2002, 2001
and 2000 were $32,314, $0 and $0. Other real estate owned was
$151,016, $176,750, and $197,520, at December 31, 2002, 2001, and
2000, respectively. The improvement in other real estate owned was
accomplished through the systematic write-down of the real estate
we own.
Watch List
The Bank's watch list includes loans which, for management
purposes, have been identified as requiring a higher level of
monitoring. These loans require monitoring due to conditions
which, if not corrected, could increase credit risk. Watch list
loans totaled $49,929, $183,861, and $249,912, at December 31,
2002, 2001, and 2000, respectively.
Capital and Dividends
The Company's risk based capital ratios at December 31, 2002
significantly exceeded the minimum regulatory guidelines. The
Company's leverage ratio was 8.4% and risk based capital was 19.5%,
well above the regulatory minimums of 3%-5% and 8%. The Company's
capital to asset ratio including the effect on capital of mark to
market changes in value of investments was 8.7% at December 31,
2002. Teche Bancshares, Inc.'s sole source of funds from which to
pay dividends to stockholders is Teche Bank & Trust Company.
During 2002 Teche Bank & Trust Company declared and paid a dividend
to Teche Bancshares, Inc. of $44,680 which was paid to stockholders
in the form of a dividend.
Fourth Quarter Results
Net income for the fourth quarter of 2002, 2001, and 2000 was
$128,879, $78,128, and $107,678, respectively. The increase in
income for the quarter was due to the effect of adjustments to
actual monthly accruals that were booked for advalorem tax,
bonuses, property tax payable, and income taxes. We estimated that
these expenses were going to be higher than they actually were.
Income before income tax for the quarter ended December 31, 2002
was $177,214 as compared to $108,331 for the same quarter ended
2001.
Item 8. Financial Statements and Supplementary Data
The audited financial statements of Teche Bancshares, Inc. are
presented on pages 28 to 62.
TECHE BANCSHARES, INC.
AND SUBSIDIARY
Financial Report
Years Ended December 31, 2002 and 2001
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR'S REPORT 30
FINANCIAL STATEMENTS
Consolidated balance sheets 31
Consolidated statements of income 32
Consolidated statements of changes in stockholders' equity 33
Consolidated statements of cash flows 34
Notes to consolidated financial statements 35-56
SUPPLEMENTARY INFORMATION
Consolidated schedules of other operating expenses 58
Consolidating schedules -
Consolidating balance sheet 60
Consolidating statement of income 61
Consolidating statement of cash flows 62
INDEPENDENT AUDITOR'S REPORT
The Board of Directors
Teche Bancshares, Inc. and Subsidiary
St. Martinville, Louisiana
We have audited the accompanying consolidated balance sheets of
Teche Bancshares, Inc. and Subsidiary as of December 31, 2002 and
2001, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the three years in
the period ended December 31, 2002. These consolidated financial
statements are the responsibility of the Bank's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining on a test basis evidence supporting the
amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Teche Bancshares, Inc. and Subsidiary as of December
31, 2002 and 2001, and the results of its operations and its cash
flows for each of the three years in the period ended December 31,
2002, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on
the consolidated financial statements taken as a whole. The
supplementary information contained on pages 57-62 is presented for
purposes of additional analysis and, although not required for a
fair presentation of consolidated financial position, results of
operations, and cash flows, was subjected to the audit procedures
applied in the audits of the consolidated financial statements. In
our opinion, the supplementary information is fairly presented in
all material respects in relation to the consolidated financial
statements taken as a whole.
Kolder, Champagne, Slaven, & Company, LLC
Certified Public Accountants
Breaux Bridge, Louisiana
January 23, 2003
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Balance Sheets
December 31, 2002 and 2001
(in thousands)
2002 2001
ASSETS
Cash and due from banks $ 2,354 $ 2,257
Interest bearing deposits w/banks 2,401 2,036
Securities available for sale 25,400 16,353
Securities to be held to maturity 1,101 2,906
Other securities 524 484
Federal funds sold 2,425 2,775
Loans, net of allowance for loan losses
and unearned discount on loans 30,197 28,869
Bank premises, furniture,
fixtures and equipment 759 867
Accrued interest receivable 311 313
Other real estate owned 151 174
Other assets 62 177
--------- ---------
Total assets $65,685 $57,211
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits -
Non-interest demand $ 9,191 $ 6,918
Interest bearing -
NOW and MMDA accounts 13,163 10,463
Savings 4,645 3,963
Time, $100,000 and over 13,610 11,544
Other time 12,101 12,525
--------- --------
Total deposits 52,710 45,413
Accrued interest payable 153 211
Other borrowed funds 7,290 6,529
Other liabilities and accrued expenses 182 169
--------- --------
Total liabilities 60,335 52,322
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 3,742 3,337
Less: 200 shares
of treasury stock (19) (19)
Accumulated other
comprehensive income 202 146
--------- --------
Total stockholders' equity 5,350 4,889
Total liabilities and
stockholders' equity $65,685 $57,211
=========== ==========
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Income
Years Ended December 31, 2002, 2001 and 2000
(in thousands)
2002 2001 2000
INTEREST INCOME
Interest and fees on loans $2,427 $2,559 $2,375
Interest on investment securities:
Interest on securities
available for sale 774 925 982
Interest on securities
to be held to maturity 2 8 147
Obligations of state and
political subdivisions 45 28 51
Interest and dividends
on other securities 13 15 24
Interest on federal funds sold 51 109 43
Interest on deposits in banks 33 39 4
----- ----- -----
Total interest income 3,345 3,683 3,626
INTEREST EXPENSE
Interest on deposits 1,057 1,520 1,410
Federal funds purchased - - 2
Interest on borrowed funds 398 333 204
Other interest - - 1
----- ----- -----
Total interest expense 1,455 1,853 1,617
Net interest income before
recovery of possible
loan losses 1,890 1,830 2,009
PROVISION FOR POSSIBLE LOAN LOSSES (48) (41) (37)
----- ----- -----
Net interest income after
recovery of possible
loan losses 1,842 1,789 1,972
OTHER INCOME
Service charges on
deposit accounts 351 345 341
Commissions income 40 30 54
ATM income 21 18 19
Net gain on security transactions 9 - -
Other operating revenue 43 26 28
----- ----- -----
Total other income 464 419 442
OTHER EXPENSES
Salaries and employee benefits 874 851 871
Occupancy expenses 256 250 216
Furniture and equipment expenses 31 38 34
Data processing expenses 52 59 52
Net other real estate expense - 1 3
Other operating expenses 440 410 394
----- ----- -----
Total other expenses 1,653 1,609 1,570
Income before income taxes 653 599 844
INCOME TAX EXPENSE (BENEFIT) 203 190 260
----- ------ -----
Net Income $ 450 $ 409 $ 584
======= ======= =======
Net income per share
of common stock-basic $16.12 $14.64 $20.91
======= ======= =======
Net income per share
of common stock-diluted $16.12 $14.64 $20.91
======= ======= =======
Average shares outstanding 27,925 27,925 27,925
======= ======= =======
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity
Years Ended December 31, 2002, 2001 and 2000
(in thousands)
Accumulated
Common Stk Other
Treas. Stk Retained Comprehensive
Surplus Earnings Income Total
------- ----- ------ -------
BALANCES,
DECEMBER 31, 1999 $1,405 $2,435 (74) $3,766
------- ----- ------ -------
Net income - 584 - 584
Unrealized gain on securities,
net of income tax of $46 - - 90 90
Reclassification adjustment
for net realized gain on sale
of available-for-sale securities
included in net income (net of
taxes of $0) - - - -
------- ----- ------ -------
Total Comprehensive Income - 584 90 674
Cash Dividend,
$1.60 per share - (45) - (45)
------- ----- ------ -------
BALANCES,
DECEMBER 31, 2000 $1,405 $2,974 16 $4,395
Net income - 409 - 409
Unrealized gain on securities,
net of income tax of $67 - - 130 130
Reclassification adjustment
for net realized gain on sale
of available-for-sale securities
included in net income (net of
taxes of $0) - - - -
------- ----- ------ -------
Total Comprehensive Income - 409 130 539
Cash Dividend,
$1.60 per share - (45) - (45)
------- ----- ------ -------
BALANCES,
DECEMBER 31, 2001 $1,405 $3,338 146 $4,889
------- ----- ------ -------
Net income - 450 - 450
Unrealized gain on securities,
net of income tax of $23 - - 45 45
Reclassification adjustment
for net realized gain on sale
of available-for-sale securities
included in net income (net of
taxes of $5) - - 11 11
------- ----- ------ -------
Total Comprehensive Income - 450 56 506
Cash Dividend,
$1.60 per share - (45) - (45)
------- ----- ------ -------
BALANCES,
DECEMBER 31, 2002 $1,405 $3,743 202 $5,350
======= ===== ====== =======
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
Years Ended December 31, 2002, 2001 and 2000
(in thousands)
2002 2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 450 $ 409 $ 584
Adjustments to reconcile
net income to net cash provided by
operating activities:
Depreciation of bank
premises and equipment 120 111 98
(Increase) decrease in:
other assets 114 (115) (7)
accrued interest receivable 2 86 (20)
accrued interest payable (58) (27) 45
other liabilities 11 (62) 58
----- ----- ------
Net cash provided
by operating activities 639 402 758
----- ----- ------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in interest-bearing
deposits in banks (365) (1,952) 5
(Increase) decrease in
federal funds sold 350 (2,675) 1,375
Proceeds from maturities of
securities available for sale 16,189 10,934 6,054
Proceeds from maturities of
securities held to maturity 2,989 3,185 893
Purchases of securities
to be held to maturity (1,224) (11,702) (3,650)
Purchases of securities
available for sale (25,180) (2,983) (2,477)
Net (increase) decrease
in loans (1,327) (1,231) (5,066)
Capital expenditures for
bank premises and equipment (12) (218) (124)
(Increase) decrease in
other real estate owned 23 23 19
----- ----- -----
Net cash provided by
(used in)investing
activities (8,557) (6,619) (2,969)
------- ------- -----
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in -
Demand deposits 2,275 (127) (64)
NOW and MMDA 2,700 1,658 2,381
Savings deposits 681 428 (205)
Time deposits, >= $100,000 1,950 515 (391)
Other time deposits (307) 1,054 (21)
Proceeds from long-term debt 1,000 2,450 1,240
Repayment of long-term debt (239) (173) (128)
Dividends paid (45) (45) (45)
----- ----- -----
Net cash provided by
financing activities 8,015 5,760 2,767
------- ------ ------
Net increase (decrease) in
cash and cash equivalents 97 (457) 556
CASH AND CASH EQUIVALENTS,
beginning of year 2,257 2,714 2,158
CASH AND CASH EQUIVALENTS,
end of year $ 2,354 $ 2,257 $2,714
======= ======= =======
CASH PAID DURING THE YEAR
Interest $1,513 $ 1,880 $ 1,572
====== ======= =======
Income taxes $ 164 $ 363 $ 255
====== ======= =======
The accompanying notes are an integral part of this statement.
TECHE BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
A. Principles of Consolidation
The accompanying consolidated financial statements
dated December 31, 2002, 2001 and 2000, include the
accounts of Teche Bancshares, Inc. (Company) and Teche
Bank and Trust Company (Bank), its wholly-owned
subsidiary. Intercompany transactions and balances have
been eliminated in consolidation.
B. Nature of Operations
Teche Bank and Trust Company is a Louisiana
chartered state bank engaged in the general banking
business since September 27, 1969. The Bank's main
office is located in the primary business district of St.
Martinville, Louisiana. The Bank also has two branches.
One is located on the north side of town on the main
thoroughfare. The other branch is located in Coteau,
Louisiana, which is in Iberia Parish. This branch was
opened in 1995. The population of both areas is largely
rural and the economy is based on agriculture, textiles
and tourism.
The City of St. Martinville and the Coteau Community
are both located in the south central part of Louisiana.
The Bank's primary market area is the City of St.
Martinville and its general market area is St. Martin
Parish, Louisiana.
C. Use of Estimates
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the
date of the consolidated financial statements and the
reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
Material estimates that are particularly susceptible
to significant change relate to the determination of the
allowance for losses on loans and the valuation of real
estate acquired in connection with foreclosures or in
satisfaction of loans. In connection with the
determination of the allowances for losses on loans and
foreclosed real estate, management obtains independent
appraisals for significant properties.
While management uses available information to
recognize losses on loans and foreclosed real estate,
future additions to the allowances may be necessary based
on changes in local economic conditions. Because of these
factors, it is reasonably possible that the allowances for
losses on loans and foreclosed real estate may change
materially in the future.
D. Basis of Accounting
The accompanying financial statements have been
prepared in accordance with generally accepted accounting
principles and in conformity with practices within the
banking industry.
E. Cash and Cash Equivalents
For the purposes of presentation in the Consolidated
Statements of Cash Flows, cash and cash equivalents are
defined as those amounts included in the balance sheet
caption "cash and due from banks". Cash, cash
equivalents and due from banks at December 31 included
the following:
(in thousands)
2002 2001 2000
Cash and due
from banks $2,354 $2,257 $2,714
========== ========== ==========
The Bank maintains cash balances at several banks.
Accounts at each institution are insured by the Federal
Deposit Insurance Corporation up to $100,000. The Bank
had deposits at institutions and agency federal funds
exceeding the insured amount by approximately $2,824,147.
F. Investment Securities
The Bank's investments in securities are classified
in three categories and accounted for as follows:
Trading Securities -
Government Bonds held principally for resale in the
near term and mortgage-backed securities held for sale in
conjunction with the Bank's mortgage banking activities
are classified as trading securities and recorded at
their fair values. Unrealized gains and losses on
trading securities are included in other income.
At December 31, 2002 and 2001, the Bank did not own
any trading securities.
Securities to be Held to Maturity -
Bonds, notes and debentures for which the Bank has
the positive intent and ability to hold to maturity are
reported at cost, adjusted for amortization of premiums
and accretion of discounts which are recognized in
interest income using the interest method over the period
to maturity.
Securities Available for Sale -
Securities available for sale consist of bonds,
notes, debentures and certain equity securities not
classified as trading securities nor as securities to be
held to maturity. These securities are recorded at fair
value.
Unrealized holding gains and losses, net of tax, on
available for sale securities are reported as a net
amount in other comprehensive income.
Declines in the fair value of individual
held-to-maturity securities below their costs that are
other than temporary result in write-downs of the
individual securities to their fair value. The related
write-downs will be included in earnings as realized
losses.
Premiums and discounts are recognized in interest
income using the interest method over the period to
maturity.
Gains and losses on the sale of securities available
for sale are determined using the specific-identification
method.
G. Loans, Allowance for Loan Losses and Interest Income
Loans are stated at the amount of unpaid principal
reduced by unearned discount and an allowance for loan
losses. Unearned discount on installment loans is
recognized as income over the terms of the loans by the
sum-of-months digits method which approximates the
interest method. Interest on other loans is calculated
and accrued by using the simple interest method on daily
balances of the principal amount outstanding.
The allowance for loan losses is established through
a provision for loan losses charged to expenses. Loans
are charged against the allowance for loan losses when
management believes that the collectibility of the
principal is unlikely. The allowance is an amount that
management believes will be adequate to absorb possible
losses on existing loans that may become uncollectible,
based on evaluations of the collectibility of loans and
prior loan loss experience. The evaluations take into
consideration such factors as changes in the nature and
volume of the loan portfolio, overall portfolio quality,
review of specific problem loans and current economic
conditions that may affect the borrowers' ability to pay.
Loans are considered past due when contractual
payments are not made as scheduled. Accrual of interest
is discontinued on a loan when management believes, after
considering economic and business conditions and
collection efforts, that the borrowers' financial
condition is such that collection of interest is
doubtful. All interest accrued but not collected for
loans that are placed on accrual or charged off is
reversed against interest income. The interest on these
loans is accounted for on the cash-basis or cost-recovery
method, until qualifying for return to accrual. Loans
are returned to accrual status when all the principal and
interest amounts contractually due are brought current
and future payments are reasonably assured.
H. Loan Origination Fees and Costs
The Bank charges minimal loan fees and direct
origination costs. These charges are recognized as
income at the time the loan is made.
I. Bank Premises, Furniture, Fixtures and Equipment
Land is carried at cost. Bank premises, furniture,
fixtures and equipment are carried at historical cost
less accumulated depreciation. For book purposes,
depreciation is computed using the straight-line method
over the estimated useful lives of the assets which range
from three to thirty-three years. For income tax
purposes, depreciation of assets acquired prior to
January 1, 1981, is calculated on the straight-line
method and depreciation of assets acquired after December
31, 1980, is calculated using the Accelerated Cost
Recovery (ACRS) or Modified Accelerated Cost Recovery
(MACRS) System of the Internal Revenue Service.
Maintenance and repairs which do not extend the life of
banking premises and equipment are charged to operating
expenses.
J. Other Real Estate Owned
Real estate properties acquired through or in lieu
of loan foreclosure are initially recorded at the lower
of the Bank's carrying amount or fair value less
estimated selling cost at the date of foreclosure. Any
write-downs based on the asset's fair value at the date
of acquisition are charged to the allowance for loan
losses. After foreclosure, these assets are carried at
the lower of their new cost basis or fair value less cost
to sell. Costs of significant property improvements are
capitalized, whereas costs related to holding property
are expensed as well as any interest costs. Valuations
are periodically performed by management, and any
subsequent write-downs are recorded as a charge to
operations, if necessary, to reduce the carrying value of
a property to the lower of its cost or fair value less
cost to sell.
K. Income Taxes
Provisions for income taxes are based on amounts
reported in the statements of income (after exclusion of
non-taxable income such as interest on state and
municipal securities) and include deferred taxes on
temporary differences in the recognition of income and
expense for tax and financial statement purposes.
Deferred taxes are computed as prescribed in Financial
Accounting Standards Board (FASB) Statement No. 109,
Accounting for Income Taxes.
L. Post-Retirement Health Care and Life Insurance Benefits
The Bank does not pay the costs of providing
continuing health care and life insurance benefits for
its retired employees.
M. Compensated Absences
Employees of the bank are entitled to paid vacation
depending upon length of service. Vacation must be taken
in the year accrued and cannot be carried over. Sick
leave accumulates on a monthly basis according to the
years of service and is available for employees when
needed. However, it does not vest nor is it payable at
termination of employment. The bank's policy is to
recognize the costs of compensated absences when actually
paid to employees.
N. Financial Instruments
In the ordinary course of business the Bank has
entered into off balance sheet financial instruments
consisting of commitments to extend credit, commercial
letters of credit and standby letters of credit. Such
financial instruments are recorded in the financial
statements when they become payable.
The following methods and assumptions were used by
the Bank in estimating fair values of financial
instruments as disclosed herein:
Cash and cash short-term instruments -- The carrying
amount of cash and short-term instruments
approximate their fair value.
Securities to be held to maturity and securities
available for sale -- Fair values for investment
securities are based on quoted market prices.
Loans receivable -- Fair values for variable and
fixed rate loans are estimated using discounted cash
flow analyses, using interest rates currently being
offered for loans with similar terms to borrowers of
similar credit quality.
Deposit liabilities -- The fair values disclosed for
demand deposits are, by definition, equal to the
amount payable on demand at the reporting date (that
is, their carrying amounts). The carrying amounts
of variable-rate, fixed-term money market accounts
and certificates of deposit approximate their fair
values at the reporting date. Fair values for
fixed-rate certificates of deposit are estimated
using a discounted cash flow calculation that
applies interest rates currently being offered on
certificates to a schedule of aggregated expected
monthly maturities on time deposits.
Accrued interest -- The carrying amounts of accrued
interest approximate their fair values.
Other borrowed funds - The fair value of the Bank's
other borrowed funds was estimated using discounted
cash flow analyses based on the Bank's current
incremental borrowing rates for similar types of
borrowing arrangements.
Other liabilities - The carrying amounts of other
liabilities approximate their fair values.
Off-balance-sheet instruments -- Fair values for
off-balance-sheet lending commitments are based on
fees currently charged to enter into similar
agreements, taking into account the remaining terms
of the agreements and the counterparties' credit
standing.
O. Advertising
Most of the Bank's advertising is expensed as
incurred. However, advertising that benefits more
than one year is expensed over the period
benefited. At December 31, 2002 and 2001, the
balance of prepaid advertising was $0 and $3,988,
respectively. This balance is included in other
assets on the balance sheet.
(2) Investment Securities
The amortized cost and fair value of securities, with
gross unrealized gains and losses, follows:
(in thousands)
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
(in thousands)
Securities available for sale:
December 31, 2002 -
U.S. Government and
agency securities $ 8,513 $25 $ (5) $ 8,533
State and Municipal
securities 1,376 28 - 1,404
Mortgage-backed
securities 15,205 264 (6) 15,463
------- --- ------ -------
$25,094 $317 $ (11) $25,400
======= === ====== =======
Securities available for sale:
December 31, 2001 -
U.S. Government and
agency securities $ 495 $16 $ - $ 511
Mortgage-backed
securities 15,637 222 (17) 15,842
------- --- ------ -------
$16,132 $238 $ (17) $16,353
======= === ====== =======
(in thousands)
Securities to be held to maturity:
December 31, 2002 -
State and municipal
securities 401 4 - 405
Mortgage-backed
securities 700 - - 700
------- --- ------ -------
$ 1,101 $ 4 $ - $1,105
======= === ====== =======
Securities to be held to maturity:
December 31, 2001 -
State and municipal
securities 407 $10 - 417
Mortgage-backed
securities 2,499 - - 2,499
------- --- ------ -------
$ 2,906 $10 $ - $2,916
======= === ====== =======
Investment securities carried at approximately
$13,321,716 at December 31, 2002 and $8,706,747 at December
31, 2001 were pledged to secure public deposits and for other
purposes required or permitted by law.
For the years ended December 31, 2002, 2001, and 2000,
proceeds from sales of securities available for sale amounted
to $506,255, $0, and $0, respectively. Gross realized gains
amounted to $8,918, $0, and $0, respectively. Gross realized
losses amounted to $0 in all three years.
The maturities of debt securities at December 31, 2002
were as follows: (in thousands)
Securities to be Securities
Held to Maturity Available for Sale
---------------- ----------------
Amortized Fair Amortized Fair
Cost Value Cost Value
--------- ----- -------- -----
Due in one year or less $1,101 $1,105 $19,885 $20,069
Due from one to five
years - - 3,491 3,582
Due from five to ten
years - - 1,718 1,749
Due after ten years - - - -
------ ------ ------- -------
$1,101 $1,105 $25,094 $25,400
====== ====== ======= =======
For purposes of the maturity table, mortgage-backed
securities, which are not due at a single maturity date, have
been allocated over maturity groupings based on the weighted-
average contractual maturities of underlying collateral. The
mortgage-backed securities may mature earlier than their
weighted-average contractual maturities because of principal
prepayments.
(3) Other Securities
Other securities at December 31 consist of the following
stock in industry-related financial institutions:
2002 2001
Shares Amount Shares Amount
Federal Home Loan
Bank Dallas 3,741 $374,100 3,344 $334,400
Louisiana Independent
Bancshares, Inc. 600 150,000 600 150,000
-------- ------
$524,100 $484,400
======== ========
These securities are valued at cost. The stock in
Federal Home Loan Bank of Dallas is considered to be a
restricted security and is required to be maintained.
(4) Loans
Major classifications of loans are as follows:
(in thousands)
2002 2001
Real estate loans $18,028 $15,728
Commercial and industrial loans 9,679 10,501
Personal and consumer loans 2,823 2,923
All other loans (including overdrafts) 8 17
------- -------
30,538 29,169
Less: Unearned discount - -
Allowance for loan losses (341) (300)
------- -------
Loans, net $30,197 $28,869
======= =======
Concentrations of credit risk arising from financial
instruments exist in relation to certain groups of customers.
A group concentration arises when a number of counterparties
have similar economic characteristics that would cause their
ability to meet contractual obligations to be similarly
affected by changes in economic or other conditions. The Bank
does not have a significant exposure to any individual
customer or counterparty. A geographic concentration arises
because the Bank operates primarily in the south central part
of Louisiana. The Bank also has a concentration in real
estate loans.
The amount of credit risk (which approximates carrying
value) represents the maximum accounting loss that would be
recognized at the reporting date if counterparties failed
completely to perform as contracted and any collateral or
security proved to be of no value. The bank has experienced
little difficulty in accessing collateral (described in Note
16) when required.
Loans on which the accrual of interest has been
discontinued or reduced amounted to $32,314 and $0 at December
31, 2002 and 2001, respectively. If interest on those loans
had been accrued, such income would have approximated $1,869,
$0, and $0 for 2002, 2001, and 2000, respectively. The Bank
recognized $1,618 of interest income on nonaccrual loans
during 2002. The amount of accruing loans past due 90 days or
more at December 31, 2002 and December 31, 2001 was $56,558
and $194,137, respectively.
Changes in the allowance for loan losses are as follows:
(in thousands)
2002 2001 2000
Balance, beginning of period $300 $270 $233
Provision added to operations 48 41 37
Loans charged off (7) (19) (4)
Recoveries - 8 4
---- ---- ----
Balance, end of period $341 $300 $270
==== ==== ====
Management is of the opinion that the allowance for loan
losses account at December 31, 2002 is sufficient to cover any
possible loan losses.
(5) Bank Premises, Furniture, Fixtures and Equipment
The following is a summary of fixed assets and
accumulated depreciation as of December 31, 2002 and 2001:
(in thousands)
2002 2001
Land $ 301 $ 301
Bank buildings and improvements 953 953
Furniture, fixtures and equipment 701 731
----- -----
1,955 1,985
===== =====
Accumulated depreciation
and amortization (1,196) (1,118)
----- -----
$ 759 $ 867
===== =====
Depreciation expense for the periods ended December 31,
2002, 2001 and 2000, amounted to $119,531, $110,998, and
$97,999, respectively.
(6) Other Real Estate Owned
Other real estate owned consists of real estate acquired
through the foreclosure of loans. It is valued at the lower
of its fair value or recorded investment in the related loan
at the date of foreclosure. Other real estate owned at
December 31, 2002 and 2001 is composed of the following:
(in thousands)
2001 2000
Other real estate owned,
acquisition value $ 235 $ 235
Add: Renovation costs - -
Less: Allowance for other
real estate losses (84) (60)
----- -----
Net value $ 151 $ 175
===== =====
Changes in the allowance for losses on other real estate
are as follows:
(in thousands)
2002 2001 2000
Balances, beginning of period $ 60 $ 37 $ 17
Provision charged to operations 23 23 20
Sales of properties - - -
----- ----- -----
Balances, end of period $ 84 $ 60 $ 37
===== ===== =====
(7) Deposits
The aggregate amount of short-term jumbo time deposits,
each with a minimum denomination of $100,000, was
approximately $13,493,964 and $11,543,852 in 2002 and 2001,
respectively.
At December 31, 2002, the scheduled maturities of
time deposits are as follows: (in thousands)
Year Ended December 31, Maturities
2002 $ 289
2003 18,700
2004 4,822
2005 1,454
2006 5
2007 441
------
$25,711
======
Members of the board of directors had $11,544,594 and
$9,807,119 of deposits at December 31, 2002 and 2001,
respectively.
(8) Other Borrowed Funds
Teche Bank has borrowed monies from the Federal Home Loan
Bank of Dallas (FHLB) in the form of (17) advances. All
advances are secured by approximately $7,300,000 of mortgage
loans and mortgage-backed securities. The Bank's borrowing
capacity is determined by the dollar amount of its loan
portfolio and the number of FHLB shares that the Bank owns.
At December 31, 2002, the Bank had approximately $214,000
available on its line of credit with FHLB to be drawn upon as
needed. The Bank, based on its current loan portfolio, has
the option to purchase approximately 4,340 additional FHLB
shares. If the Bank was to purchase these additional shares,
the Bank's available line of credit would be increased by $8.7
million. Teche Bank purchased a $3,000,000 letter of credit
to secure funds of one of its government customers. The
letter of credit is considered an off-balance sheet item.
Without this letter of credit, their available line of credit
would be increased by an additional $3,000,000.
The Bank's fixed-rate, long-term debt of $7,289,953
matures beginning in 2008 through 2017. At December 31, 2002
and 2001, the interest rates on fixed-rate, long-term debt
ranged from 4.77 percent to 7.93 percent and from 4.95 percent
to 7.93 percent, respectively. The debt is payable in equal
monthly installments ranging from $429 to $7,789. Some notes
have balloon payments due at maturity, ranging from $145,310
to $699,056.
Following are maturities of long-term debt:
(in thousands)
2002 2001
2002 - 227
2003 288 241
2004 305 255
2005 322 270
2006 340 286
2007 360 -
Thereafter 5,675 5,250
------ ------
7,290 6,529
====== ======
(9) Contingent Liabilities and Commitments
A. The consolidated financial statements do not reflect
various commitments and contingent liabilities which
arise in the normal course of business and which involve
elements of credit risk, interest rate risk and liquidity
risk. These commitments and contingent liabilities are
described in Note 16 - Financial Instruments.
B. The Bank is not involved as a defendant in any legal
actions arising from normal business activities.
(10) Concentration of Credit
All of the Bank's loans, commitments, and standby letters
of credit have been granted to customers in the Bank's market
area as described in Note 1, Item B. The concentration of
credit by type of loan is set forth in Note 4. Investments in
state and municipal securities also involve governmental
entities within the Bank's market area. The Bank, as a matter
of policy, does not extend credit to any single borrower or
group of related borrowers in excess of $900,000.
(11) Income Taxes
The Bank utilizes FASB Statement 109 to account for
income taxes.
The components of income tax expense for the years ended
December 31, 2002, 2001 and 2000 are as follows:
(in thousands)
2002 2001 2000
Income taxes currently payable:
Federal $ 240 $ 219 $ 282
Deferred tax asset (liability) due
to timing differences (37) (29) (22)
----- ---- -----
Total income tax expense $ 203 $ 190 $ 260
===== ===== =====
The effective tax rate of 31.1 percent in 2002, 31.7
percent in 2001, and 30.8 percent in 2000, differs from the
statutory rate of 34 percent principally because of temporary
differences between tax purposes and financial reporting
purposes.
A reconciliation of income tax expense at the statutory
rate to the effective rate follows:
Percent of Earnings
Before Taxes
2002 2001 2000
Computed at the expected statutory
rate 34.0% 34.0% 34.0%
Tax-exempt interest - not taxable (2.4) (1.6) (2.0)
Stock dividends - not taxable (0.5) (0.7) (0.8)
Other - - (0.4)
----- ----- -----
Income tax expense-effective rate 31.1% 31.7% 30.8%
===== ===== =====
Temporary differences giving rise to the deferred tax
amounts consist primarily of the excess of allowance for loan
losses for tax purposes over the amount for financial
reporting purposes and the excess of accumulated depreciation
for tax purposes over accumulated depreciation for financial
reporting purposes.
Amounts for deferred tax assets and liabilities are as
follows:
(in thousands)
2002 2001
Deferred tax asset
Reserve for loan losses $ 13 $ -
Allowance for other real
estate 28 20
----- -----
41 20
----- -----
Deferred tax liability
Depreciation (32) (45)
Reserve for loan losses - (3)
Net unrealized gain on securities
available for sale (104) (75)
----- -----
Net deferred tax asset (liability) $(136) $(123)
----- -----
$ (95) $(103)
===== =====
(12) Net income per share of common stock
Earnings per share amounts are computed based on the
weighted average number of shares actually outstanding. The
number of shares used in the computations was 27,925 in 2002,
2001 and 2000.
(13) 401(k) Plan
The Bank has a 401(k) Plan whereby substantially all
employees participate in the Plan. Employees may contribute
up to 15 percent of their compensation subject to certain
limitations based on federal tax laws. The Bank has the
option to make matching contributions. Matching contributions
vest to the employee equally over a 5 year period. For the
year ended December 31, 2002, 2001 and, 2000 expense
attributable to the Plan amounted to $73,651, $66,577, and
$69,592, respectively.
(14) Related Party Transactions
A. At December 31, 2002 and 2001, certain officers,
directors and related companies were indebted to the Bank in
the aggregate amount of $1,944,105 and $1,378,736,
respectively. These loans were made at prevailing interest
rates.
B. The Bank leases an automobile from one of the directors
in the amount of approximately $6,000 per year.
C. The Bank paid director fees to members of the board of
directors in the amount of $76,800, $78,000, and $63,000, for
2002, 2001 and 2000, respectively.
(15) Regulatory Restrictions
Banking regulations limit the amount of dividends that
may be paid without prior approval of the Bank's regulatory
agency. Prior approval shall be required if the total of all
dividends declared and paid by the Bank during any one year
would exceed the total of its net profits of that year
combined with the net profits from the immediate preceding
year.
The Bank is subject to various regulatory capital
requirements administered by the federal banking agencies.
Failure to meet minimum capital requirements can initiate
certain mandatory and possibly additional discretionary
actions by regulators that, if undertaken, could have a direct
material effect on the Bank's financial statements. Under
capital adequacy guidelines and the regulatory framework for
prompt corrective action, the Bank must meet specific capital
guidelines that involve quantitative measures of the Bank's
assets, liabilities, and certain off-balance-sheet items as
calculated under regulatory accounting practices. The Bank's
capital amounts and classification are also subject to
qualitative judgements by the regulators about components,
risk weightings, and other factors.
Quantitative measures established by regulation to ensure
capital adequacy require the Bank to maintain minimum amounts
and ratios (set forth in the table below) of total and Tier I
capital (as defined in the regulations) to risk-weighted
assets (as defined), and of Tier I capital (as defined) to
average assets (as defined). Management believes, as of
December 31, 2002, that the Bank meets all capital adequacy
requirements to which it is subject.
As of December 31, 2002, the bank was categorized as well
capitalized under the regulatory framework for prompt
corrective action. To be categorized as well capitalized the
Bank must maintain a minimum total risk based, Tier I risk-
based, and Tier I leverage ratios as set forth in the table.
There are no conditions or events since that time that
management believes have changed the institution's category.
The Bank's actual capital amounts and ratios are also
presented in the table.
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provision
Amount Ratio Amount Ratio Amount Ratio
As of December 31, 2002:
Total Capital
(to risk weighted
assets)
$5,489 19.5% $2,255 >=8% $2,818 >=10%
Tier I Capital
(to risk weighted
assets)
$5,148 18.3% $1,127 >=4% $ 1,691 >= 6%
Tier I Capital
(to average
assets
$5,148 8.5% $2,413 >=4% $3,017 >= 5%
As of December 31, 2001:
Total Capital
(to risk weighted
assets)
$5,043 18.7% $2,152 >=8% $2,690 >=10%
Tier I Capital
(to risk weighted
assets)
$4,743 17.6% $1,076 >=4% $ 1,614 >= 6%
Tier I Capital
(to average
assets
$4,743 8.9% $2,141 >=4% $2,676 >= 5%
(17) Financial Instruments
The Bank is a party to financial instruments with
off-balance-sheet risk in the normal course of business to
meet the financing needs of its customers and to reduce its
own exposure to fluctuations in interest rates. These
financial instruments include commitments to extend credit,
credit card arrangements, and standby letters of credit.
Those instruments involve, to varying degrees, elements of
credit and interest-rate risk in excess of the amount
recognized in the statement of financial position. The
contract or notional amounts of those instruments reflect the
extent of the Bank's involvement in particular classes of
financial instruments.
The Bank's exposure to credit loss in the event of
nonperformance by the other party to the financial instruments
for commitments to extend credit is presented by the
contractual notional amount of those instruments. The Bank
uses the same credit policies in making commitments and
conditional obligations as it does for on-balance-sheet
instruments. Credit risk represents the accounting loss that
would be recognized at the reporting date if counterparties
failed completely to perform as contracted. The credit risk
amounts are equal to the contractual amounts, assuming that
the amounts are fully advanced and that, in accordance with
the requirements of FASB Statement No. 105, "Disclosure of
Information about Financial Instruments with Off-Balance-Sheet
Risk and Financial Instruments with Concentrations of Credit
Risk," collateral or other security is of no value. The
bank's policy is to require customers to provide collateral
prior to the disbursement of approved loans. Collateral is
either in the form of a security interest or a mortgage on the
underlying property.
At December 31, 2002 and 2001, the Bank was exposed to
credit risk on commitments to extend credit having contract
amounts of $2,178,189 and $3,696,948, summarized as follows:
(in thousands)
2002 2001
Commitments to extend credit $ 2,099 $ 3,679
Credit Card arrangements - -
Standby letters of credit 79 18
-------- -------
$ 2,178 $ 3,697
======== =======
Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition
established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require
payment of a fee. Since many of the commitments are expected
to expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash requirements.
The Bank evaluates each customer's credit worthiness on a
case-by-case basis. The amount of collateral obtained, if it
is deemed necessary by the Bank upon extension of credit, is
based on management's credit evaluation of the counterparty.
Collateral held varies but may include accounts receivable;
inventory, property, plant and equipment; and income-producing
commercial properties.
Commitments to extend credit, credit card arrangements,
and standby letters of credit all include exposure to some
credit loss in the event of nonperformance by the customer.
The Bank's credit policies and procedures for credit
commitments and financial guarantees are the same as those for
extensions of credit that are recorded on the consolidated
balance sheets. The Bank does not anticipate any
material losses as a result of the contingent liabilities and
commitments.
The estimated fair values of the Bank's financial
instruments were as follows:
(in thousands)
Carrying Fair
Value Value
December 31, 2002:
Financial assets:
Cash and due from banks, interest
bearing deposits with banks, and
Federal funds sold $ 7,180 $ 7,180
Securities available for sale 25,400 25,400
Securities to be held to maturity 1,101 1,105
Loans 30,197 30,578
Accrued interest receivable 311 311
Financial liabilities:
Deposit liabilities 52,711 52,518
Accrued interest payable 153 153
Other borrowed funds 7,290 7,305
Other liabilities 181 181
Off balance sheet instruments:
Commitments to extend credit - 2,099
Credit card arrangements - -
Stand by letter of credit - 79
December 31, 2001:
Financial assets:
Cash and due from banks, interest
bearing deposits with banks, and
Federal funds sold $ 7,068 $ 7,068
Securities available for sale 16,353 16,353
Securities to be held to maturity 2,906 2,916
Loans 28,869 29,282
Accrued interest receivable 313 313
Financial liabilities:
Deposit liabilities 45,414 44,995
Accrued interest payable 211 211
Other borrowed funds 6,529 6,537
Other liabilities 170 170
Off balance sheet instruments:
Commitments to extend credit - 3,679
Credit card arrangements - -
Stand by letter of credit - 18
(18) Parent Company Only Financial Statements
BALANCE SHEETS
December 31, 2002 and 2001
(in thousands)
2002 2001
ASSETS
Current assets:
Cash $ 1 $ -
Investment in Teche Bank & Trust Co. 5,338 4,878
Other assets 11 11
----- -----
Total assets $5,350 $4,889
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: $ - $ -
--- ---
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 3,742 3,337
Treasury stock (19) (19)
Accumulated other comprehensive income 202 146
----- -----
Total stockholders' equity 5,350 4,889
----- -----
Total liabilities and
stockholders' equity $5,350 $4,889
====== ======
STATEMENTS OF INCOME
Years Ended December 31, 2002, 2001 and 2000
(in thousands)
2002 2001 2000
Income:
Income from subsidiary $404 $364 $540
Interest and dividends on corporate
securities 46 46 45
Other income 1 - -
--- --- ---
Total income 451 410 585
--- --- ---
Operating expenses:
Legal and professional fees - - -
FDIC and state assessments 1 1 1
Miscellaneous expense - - -
Interest on stockholder loans - - -
--- --- ---
Total operating expenses 1 1 1
--- --- ---
Net income $450 $409 $584
==== ==== ====
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years Ended December 31, 2002, 2001 and 2000
(in thousands)
Accumulated
Common Stk Other
Treas. Stk Retained Comprehensive
Surplus Earnings Income Total
------- ----- ------ -------
BALANCES,
DECEMBER 31, 1999 $1,405 $2,435 (74) $3,766
------- ----- ------ -------
Net income - 584 - 584
Unrealized gain on securities,
net of income tax of $46 - - 90 90
Reclassification adjustment
for net realized gain on sale
of available-for-sale securities
included in net income (net of
taxes of $0) - - - -
------- ----- ------ -------
Total Comprehensive Income - 584 90 674
Cash Dividend,
$1.60 per share - (45) - (45)
------- ----- ------ -------
BALANCES,
DECEMBER 31, 2000 $1,405 $2,974 16 $4,395
Net income - 409 - 409
Unrealized gain on securities,
net of income tax of $67 - - 130 130
Reclassification adjustment
for net realized gain on sale
of available-for-sale securities
included in net income (net of
taxes of $0) - - - -
------- ----- ------ -------
Total Comprehensive Income - 409 130 539
Cash Dividend,
$1.60 per share - (45) - (45)
------- ----- ------ -------
BALANCES,
DECEMBER 31, 2001 $1,405 $3,338 146 $4,889
------- ----- ------ -------
Net income - 450 - 450
Unrealized gain on securities,
net of income tax of $23 - - 45 45
Reclassification adjustment
for net realized gain on sale
of available-for-sale securities
included in net income (net of
taxes of $5) - - 11 11
------- ----- ------ -------
Total Comprehensive Income - 450 56 506
Cash Dividend,
$1.60 per share - (45) - (45)
------- ----- ------ -------
BALANCES,
DECEMBER 31, 2002 $1,405 $3,743 202 $5,350
======= ===== ====== =======
STATEMENTS OF CASH FLOWS
Years Ended December 31, 2002, 2001 and 2000
(in thousands)
2002 2001 2000
Cash flows from operating activities:
Net income $ 450 $ 409 $ 584
Adjustments to reconcile net income to
net cash provided by operating
activities:
Equity in undistributed earnings of
subsidiary bank (404) (364) (539)
Changes in:
Due to subsidiary - - -
Other assets - - -
---- ---- -----
Net cash provided by operating
activities 46 45 45
---- ---- ----
Cash flows from financing activities:
Dividends paid (45) (45) (45)
Decrease in notes payable - - -
---- ---- ----
Net cash used in financing
activities (45) (45) (45)
---- ----- ----
Net increase (decrease)
in cash 1 - -
Cash, beginning of period - - -
---- ---- ----
Cash, end of period $ 1 $ - $ -
==== ==== ====
SUPPLEMENTARY INFORMATION
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Schedules of Other Operating Expenses
Years Ended December 31, 2002, 2001 and 2000
(in thousands)
2002 2001 2000
Advertising $ 30 $ 26 $ 23
Armored car service 4 4 4
Audits and examinations 23 20 19
ATM expense 20 23 24
Business development 3 3 -
Cash short 4 2 5
Club account fees 20 21 24
Collections 3 3 3
Committee fees 1 3 3
Conventions and seminar 7 5 5
Correspondent bank service charges 60 52 48
Courier service - - -
Directors' fees 77 78 63
Donations 3 4 3
Dues and subscriptions 7 6 7
FDIC and state assessments 25 23 22
Insurance 28 23 23
Lease expense 6 6 6
Legal and professional fees 10 (1) 3
Miscellaneous 5 7 7
Office expense 46 44 44
Postage and freight 26 26 24
Other taxes and licenses 2 1 2
Travel and entertainment 7 8 12
ORE Devaluation 23 23 20
---- ---- ----
$440 $410 $394
==== ==== ====
CONSOLIDATING SCHEDULES
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidating Balance Sheet
December 31, 2002
(in thousands)
Teche Teche
Bancshares, Elimination Teche Bank and
Inc. and Entries Bancshares, Trust
Subsidiary Dr (Cr) Inc. Company
ASSETS
Cash and due from banks $ 2,354 $(1) $ 1 $2,354
Interest bearing deposits 2,401 - - 2,401
Securities available
for sale 25,400 - - 25,400
Securities to be held
to maturity 1,101 - - 1,101
Other securities 524 - - 524
Federal funds sold 2,425 - - 2,425
Loans 30,538 - - 30,538
Less: Allowance for
loan losses (341) - - (341)
Unearned discount
on loans - - - -
Bank premises, furniture,
fixtures and equipment 759 - - 759
Accrued interest receivable 311 - - 311
Other real estate owned 151 - - 151
Investment in subsidiary - (5,338) 5,338 -
Other assets 62 (11) 11 62
----- ---- --- -----
Total assets $65,685 $(5,350) $5,350 $65,685
======= ======== ====== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS
Non-interest demand $ 9,192 $ 1 $ - $ 9,193
Interest-bearing -
NOW and MMDA accounts 13,163 - - 13,163
Savings 4,645 - - 4,645
Time,$100,000 and over13,610 - - 13,610
Other time 12,101 - - 12,101
------ --- --- ------
Total deposits 52,711 - - 52,712
Accrued interest payable 153 - - 153
Other borrowed funds 7,290 - - 7,290
Other liabilities and
accrued expenses 181 11 - 192
------ --- --- ------
Total liabilities 60,335 12 - 60,347
------ --- --- ------
STOCKHOLDERS' EQUITY
Common stock 281 281 281 281
Surplus 1,144 1,519 1,144 1,519
Retained earnings 3,742 3,336 3,742 3,336
Less: 200 shares of
treasury stock (19) - (19) -
Net unrealized gain
on securities
available for
sale, 202 202 202 202
----- ---- ----- -----
Total stockholders'
equity 5,350 5,338 5,350 5,338
----- ----- ----- -----
Total liabilities and
stockholders'
equity $65,685 $5,350 $5,350 $65,685
======= ====== ====== =======
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidating Statement of Income
For the Year Ended December 31, 2002
(in thousands)
Teche Teche
Bancshares, Elimination Teche Bank and
Inc. and Entries Bancshares, Trust
Subsidiary Dr (Cr) Inc. Company
INTEREST INCOME
Interest and fees
on loans $2,427 $ - $ - $2,427
Interest on investment securities -
Interest on securities
available for sale 774 - - 774
Interest on securities
held to maturity 2 - - 2
State and municipal
obligations 45 - - 45
Interest and dividends on
other securities 13 46 46 13
Interest on federal
funds sold 51 - - 51
Interest on deposits
in banks 33 - - 33
----- --- --- -----
Total interest income 3,345 46 46 3,345
----- --- --- -----
INTEREST EXPENSE
Interest on deposits 1,057 - - 1,057
Interest on federal
funds purchased - - - -
Interest on borrowed funds 398 - - 398
Other interest - - - -
--- --- --- ----
Total interest expense 1,455 - - 1,455
--- --- --- -----
Net interest income 1,890 46 46 1,890
Provision for loan losses 48 - - 48
----- --- --- -----
Net interest income after
provision for loan
losses 1,842 46 46 1,842
OTHER INCOME
Service charges, collection
and exchange charges 350 - - 350
Commissions income 40 - - 40
ATM income 21 - - 21
Net gain on security
transactions 9 - - 9
Other operating revenue 43 2 2 43
---- --- --- ----
Total other income 463 - - 463
---- --- --- ----
OTHER EXPENSES
Salaries and employee
benefit 874 - - 874
Occupancy expenses 255 - - 255
Furniture and equipment 31 - - 31
Data processing expenses 52 - - 52
Net other real estate exp. - - - -
Other operating expenses 440 - 1 439
---- ---- ---- -----
Total other expenses 1,652 - 1 1,651
----- ---- ---- -----
Income before income tax
expense and equity
in earnings
of subsidiary 653 46 46 654
INCOME TAX EXPENSE 203 - - 204
------ ---- ---- -----
Income before equity
in earnings
of subsidiary 450 46 46 450
EQUITY IN EARNINGS
OF SUBSIDIARY - 404 404 -
----- ----- ----- -----
Net income $ 450 $ 450 $ 450 $ 450
===== ===== ===== =====
TECHE BANCSHARES, INC. AND SUBSIDIARY
Consolidating Statement of Cash Flows
For the Year Ended December 31, 2002
(in thousands)
Teche Teche
Bancshares, Elimination Teche Bank and
Inc. and Entries Bancshares, Trust
Subsidiary Dr (Cr) Inc. Company
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 450 $(450) $ 450 $ 450
Adjustments to reconcile net income to net
cash provided by operating activities -
Equity in earnings
of subsidiary - 404 (404) -
Depreciation of
bank premises
and equipment 120 - - 120
Increase in
other assets 114 - - 114
Increase in accrued
interest receivable 2 - - 2
Increase (decrease)
in accrued
interest payable (58) - - (58)
Decrease in other
liabilities 10 (1) - 11
----- --- --- -----
Net cash provided
by operating
activities 638 (47) 46 639
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in interest-bearing
deposits in banks (365) - - (365)
Decrease in federal
funds sold 350 - - 350
Proceeds from maturities of securities
available for sale 16,189 - - 16,189
Proceeds from maturities of securities
held to maturity 2,989 - - 2,989
Purchases of securities to
be held to maturity (1,223) - - (1,223)
Purchases of securities
available for sale (25,180) - - (25,180)
Net increase in loans (1,327) - - (1,327)
Capital expenditures for bank
premises and equipment (12) - - (12)
Decrease in other
real estate owned 23 - - 23
------ ---- ---- ------
Net cash used in
investing
activities (8,556) - - (8,556)
------ ---- ---- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in -
Demand deposits 2,275 - - 2,275
NOW and MMDA 2,700 - - 2,700
Savings deposits 681 - - 681
Time deposits $100,000
and over 1,950 - - 1,950
Other time (308) - - (308)
Proceeds from long-term
debt 1,000 - - 1,000
Repayment of long-term
debt (238) - - (238)
Dividends paid (45) 46 (45) (46)
------ ---- ---- -----
Net cash provided
by (used in)
financing
activities 8,015 46 (45) 8,014
------ ---- ---- -----
Net increase (decrease)
in cash
and cash
equivalents 97 (1) 1 97
CASH AND CASH EQUIVALENTS,
beginning of year 2,257 (114) 114 2,257
------- ----- ----- -------
CASH AND CASH EQUIVALENTS,
end of year $ 2,354 $ (1) $ 1 $ 2,354
======= ===== ==== =======
FORM 10-K
TECHE BANCSHARES, INC.
PART II (CONTINUED)
Item (9) Disagreements on Accounting and Financial Disclosure
There were no reporting disagreements on any matter of
accounting principle or financial statement disclosure.
FORM 10-K
TECHE BANCSHARES, INC
PART III
Item (10) Directors and Executive Officers of the Registrant
- -------------------------------------------------------------
Directors
- ----------
Number of
Shares Owned Ownership as
Beneficially a Percent
Including Direct of Total
Name and Title and Term as and Indirect Outstanding
Address Age Occupation Director Ownership Shares
- -------- --- ---------- -------- ------------ -----------
Tilden A. Bonin, Jr.
St. Martinville, LA
67 Retired Sept., 1969 450 1.6%
to Present
James B. Bulliard, Sr.
St. Martinville, LA
67 Owner & GM Sept., 1969 3,212 11.5%
Manager Food to Present
Processor
Harris J. Champagne, Jr.
New Iberia, LA
40 Insurance October, 1996 207 .7%
Sales to Present
Gaston L. Dautreuil, Jr.
St. Martinville, LA
72 Retired Sept., 1969 2,776 9.9%
to Present
Larry C. Degeyter
St. Martinville, LA
61 Owner, June, 1981 821 2.9%
Building to Present
Contractor
Melvin Douet
St. Martinville, LA
57 Owner, June, 1996 750 2.7%
Douet to Present
Motors, Inc.
Alcee J. Durand, Jr.
St. Martinville, LA
44 President March, 1991 1,223 4.4%
Banking to Present
Item 10. Directors and Executive Officers of the Registrant
(continued)
Directors (continued)
- ----------
Number of
Shares Owned Ownership as
Beneficially a Percent
Including Direct of Total
Name and Title and Term as and Indirect Outstanding
Address Age Occupation Director Ownership Shares
- -------- --- ---------- -------- ------------ -----------
Darnell E. Fontenot
New Iberia, LA
64 Owner, Aug., 1996 431 1.5%
Mobile to Present
Home Co.
Charles A. Fuselier
St. Martinville, LA
61 Sheriff June, 1981 414 1.5%
to Present
Hubert Hulin, Sr.
St. Martinville, LA
84 Retired June, 1981 1,800 6.4%
to Present
Murphy Oubre
St. Martinville, LA
76 Rice Sept., 1969 874 3.1%
Farmer to Present
FORM 10-K
TECHE BANCSHARES, INC.
PART III (CONTINUED)
Executive Officers and Significant Employees
- --------------------------------------------
Other
Office
Held
Name Age Title with Bank Occupation
- -------------- ---- ------- --------- ----------
Alcee J. Durand, Jr. 44 President/ Director Banker more
CEO than 5 years
Brian Friend 43 Cashier - CPA, Banker
Vice-President more than
5 years
Charles M. Durand 40 Vice- - Banker more
President than 5 years
Glenn Bienvenu 53 Vice- - Banker more
President than 5 years
Ave Laperouse 45 Assistant - Banker less
Vice President than 5 years
Jackie C. Leblanc 49 Assistant - Banker more
Vice President than 5 years
Jean L. Potier 59 Assistant - Banker more
Vice-President than 5 years
Al Viator 48 Assistant - Banker more
Vice-President than 5 years
Ruth Sweeney 54 Assistant - Banker more
Vice-President than 5 years
Family Relationships
No family relationships exist between any members of the Board
of Directors.
Item (11) Executive Compensation - Cash Compensation
Number in Cash Compensation
Group Group Title 2000 2001 2002
- --------- ------------- ---- ---- ----
1 President/CEO $101,821 $104,009 $107,426
3 Vice-Presidents 150,224 147,957 151,018
5 Assistant Vice-Presidents 165,207 157,891 152,109
Compensation Pursuant to Plans
The Bank has a 401(k) plan whereby substantially all employees
participate in the Plan. Employees may contribute up to 15 percent
of their compensation subject to certain limitations based on
federal tax laws. The Bank has the option to make matching
contributions. Matching contributions vest to the employee over a
5 year period. For the year ended December 31, 2002, expense
attributable to the Plan amounted to $73,651.
Item (12) Security Ownership of Certain Beneficial Owners and Mgmt
Security Ownership of Certain Beneficial Owners:
Title of Type of Country of Amount Percent
Name and Address Class Ownership Citizenship Owned of Class
- ---------------- ----- --------- ----------- ------ -------
James B. Bulliard, Jr.
St. Martinville, LA
Common Stock U.S.A. 3,212 11.5%
Gaston L. Dautreuil, Jr.
St. Martinville, LA
Common Stock U.S.A. 2,776 9.9%
Hubert Hulin, Sr.
St. Martinville, LA
Common Stock U.S.A. 1,800 6.4%
Security Ownership of Management:
Title of Type of Shares Percent
Group Class Ownership Owned of Class
- ---------------------- ----- --------- ----- --------
Directors and Officers Common Stock 13,143 47.1%
Item (13) Certain Relationship and Related Transactions
From time to time in the ordinary course of its business, the
Bank has extended credit to its Officers and Directors and to
businesses in which its Officers and Directors own an interest.
The Bank intends to continue this policy because of the business
deposits and income that these activities generate for the Bank.
Such loans are made only with the approval of the Board of
Directors; are judged by the same credit guidelines and standards
as are applied to loans of a comparable nature made to others; are
made on substantially the same terms, including interest rates,
collateral and repayment terms as those prevailing at the
time for comparable transactions with others; and do not involve
more than the normal risk of collectibility or present other
unfavorable features.
Largest
Aggregate Amt.
Outstanding Amount Average
Relation Year Ending Outstanding Interest
Name to Company 12/31/02 as of 12/31/02 Rate
- ------------ ---------- --------- -------------- ------
Tilden A. Bonin, Jr.
Director $ 76,253 $ 15,723 7.89%
Harris Champagne, Jr.
Director 47,757 46,607 7.29%
Gaston L. Dautreuil, Jr.
Director 29,642 21,779 6.99%
Larry C. Degeyter
Director 524,213 280,324 6.77%
Melvin P. Douet
Director 723,440 702,452 6.24%
Alcee J. Durand, Jr.
Director 72,710 66,165 6.94%
Darnell E. Fontenot
Director 380,125 356,030 5.25%
Charles Fuselier
Director 477,031 455,025 6.00%
Total outstanding at December 31, 2002 $1,944,105
=========
FORM 10-K
TECHE BANCSHARES, INC.
PART IV
Item (14) Exhibits, Financial Statement Schedules and Reports on
Form 8-K
1. Financial Statements
The financial statements, including notes, are listed
in the index to the financial statements filed as part
of this annual report.
2. Exhibits
3. Reports on Form 8-K
No reports on Form 8-K were filed by Bancshares during
quarter ended December 31, 2002.
Page
Number Exhibit Number
------ -------------------------------------- -------
(3) Articles of Incorporation of Registrant as
currently in effect incorporated herein by
reference to Exhibit 3 Registrant Registration
Statement on Form S-14, filed February 21, 1984
(11) Computation of Earnings Per Share 48
(12) Computation of Ratios 19
(13) Annual Report to Security Holders 28-62
(21) Subsidiary of Registrant 69
(23) Consent of Experts and Council -
(21) Subsidiaries of the Registrant
- ----- ------------------------------
Teche Bank and Trust Company Louisiana
FORM 10-K
TECHE BANCSHARES, INC.
PART IV (CONTINUED)
Pursuant to the requirements of Section 13 or 15(d) 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 BANCSHARES, INC.
Date: March 26, 2003 By:/s/ Alcee J. Durand, Jr.
----------------------- ---------------------
Alcee J. Durand, Jr.
President/Secretary
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
By:/s/Tilden A. Bonin,Jr. By:/s/Alcee J. Durand, Jr.
__________________________ __________________________
Tilden A. Bonin, Jr Date Alcee J. Durand Date
Director Director, President and
Chief Executive Officer
By:/s/James B. Bulliard, Sr. By:/s/Darnell Fontenot
__________________________ __________________________
James B. Bulliard, Sr.Date Darnell Fontenot Date
Director Director
By:/s/Harris J. Champagne, Jr. By:/s/Charles A. Fuselier
__________________________ __________________________
Harris J. Champagne, Jr.Date Charles A. Fuselier Date
Director Director
By:/s/Gaston L. Dautreuil,Jr. By:/s/Hubert Hulin, Sr.
__________________________ __________________________
Gaston L. Dautreuil, Jr.Date Hubert Hulin, Sr. Date
Director Director
By:/s/Larry C. Degeyter By:/s/Murphy Oubre
__________________________ __________________________
Larry C. Degeyter Date Murphy Oubre Date
Director Director
By:/s/Melvin Douet
__________________________
Melvin Douet Date
Director