PEOPLES BANCSHARES OF POINTE COUPEE PARISH INC - 10-Q Quarterly Report

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Common stock, $2.50 Par Value 1,000,000 shares authorized 309,677 issued and 308,977 outstanding as of September 30,2002

LIABILITIES Deposits
Noninterest-bearing	6,643,100.00
Interest-bearing	28,338,870.00

Total deposits	34,981,970.00

Federal funds borrowed	0.00
Other borrowed funds	6,062,224.00
Accrued interest payable	105,474.00
Other liabilities	378,680.00

Total liabilities	41,528,348.00

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Common stock. $2.50 par value. 1.000,000 shares authorize, 309,677 shares issued; and 308,977 shares outstanding	774,193.00
Capital surplus	1,530,320.00
Retained earnings	6,876,176.00

Accumulated other comprehensive income	50,335.00

	9.231,024.00
Less: 700 shares held in treasury-at cost	(8,276.00)

Total stockholders' equity	9,222,748.00

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY	50,751,096.00

CONSOLIDATED STATEMENTS OF INCOME
PEOPLES BANCSHARES OF POINTE COUPEE PARISH, INC.
AND SUBSIDIARY, NEW ROADS, LA.
(UNAUDITED)

	Nine months Ended Sept 30
INTEREST INCOME	2002	2001
Interest and fees on loans	2,138,419.00	2,562,689.55
Interest on available-for-sale securities	77,170.00	175,931.85
Interest on federal funds sold	24,773.00	116,977.86
Interest on deposits in other banks	37,693.00	-

Total interest income	2,278,055.00	2,855,599.26

INTEREST EXPENSE
Interest on deposits	553,447.00	1,126,113.72
Interest on federal funds purchased	775.00	169.01
Interest on other borrowed funds	45,796.00	76,038.05

	600,018.00	1,202,320.78


NET INTEREST INCOME	1,678,037.00	1,653,278.48

Provisions (credit) for loan losses	-	4,432.75

NET INTEREST INCOME AFTER PROVISION
(CREDIT) FOR LOAN LOSSES)	1,678,037.00	1,648,845.73

NON-INTEREST INCOME
Service charges on deposit accounts	125,075.00	121,029.14
Other service charges and fees	333,453.00	282,949.36
Net gain on sales of loans	-	-
Net realized gains on sales of
available-for-sale securities	-	2,729.31
Other Income	73,877.00	78,731.30

Total other income	532,405.00	485,439.11

NON-INTEREST EXPENSE
Salaries and Employee benefits	649,771.00	654,860.51
Occupancy expenses	126,243.00	126,905.58
Data processing expenses	74,382.00	71,045.59
Other operating expenses	361,830.00	394,239.28

Total other expenses	1,212,226.00	1,247,050.96

INCOME BEFORE INCOME TAX EXPENSE	998,216.00	887,233.88

Income tax expense	340,000.00	291,000.00

NET INCOME	658,216.00	596,233.88

OTHER COMPREHENSIVE INCOME
unrealized holding gains (losses) arising during
the period net of taxes	26,149.36	19,622.94


COMPREHENSIVE INCOME	684,365.36	615,856.82

Per common share data:
Net income	2.13	1.92

Cash Dividends	0.55	0.55

Average number of shares outstanding	308,977.00	308,977.00


PEOPLES BANCSHARES OF POINTE COUPEE PARISH, INC. AND SUBSIDIARY
NEW ROADS, LOUISIANA

CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPT. 30, 2002 AND 2001

	2002	2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	658,217.00	596,234.00
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Gain on sale of assets	(25,038.00)	-
Net realized gain from sale and maturities
of available-for-sale securities	-	(2,729.00)
Net accretion of investment security discounts/
amortization of investment security premium	3,222.00	(9,752.00)
Provisions (credit) for loan losses	-	4,433.00
Provisions for foreclosed real estate	4,360.00	7,500.00
Depreciation	43,691.00	45,050.00
Net changes in operating assets and liabilities:

Accrued interest receivable	(39,586.00)	39,171.00
Other assets	(369,648.00)	(511,445.00)
Accrued interest payable	(39,020.00)	(107,515.00)
Other liabilities	180,917.00	(122,586.00)

Net cash provided by (used in) operating activities	417,115.00	(61,639.00)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales and maturities of
available-for-sale securities	1,874,023.00	6,336,984.00
Purchase of available-for-sale securities	(377,629.00)	(5,264,224.00)
Net (increase) decrease in interest-bearing deposits in
other banks	(4,000.00)	(196,000.00)
Purchase of other stocks	(9,500.00)	(20,500.00)
Loan originations and principal collections, net	(5,914,815.00)	(3,683,094.00)
Expenditures on foreclosed real estate	4,360.00	7,500.00
Proceeds from sale of foreclosed real estate and other assets	135,000.00	-
Purchases of bank premises & equipment	(24,971.00)	(36,952.00)
Proceeds form sales of bank premises and equipment	-	-

Net cash provided by (used in) investment activities	(4,317,532.00)	(2,856,286.00)

CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in noninterest-bearing demand
deposit accounts, savings accounts, and NOW accounts	(745,069.00)	(419,767.00)
Net increase in time deposits	(1,701,314.00)	(390,267.00)
Net increase in fed funds borrowed	-	-
Net increase in other borrowed funds	3,730,224.00	(539,900.00)
Proceeds from sale of treasury stock	-	-
Dividends paid	(169,937.00)	(169,937.00)

Net cash provided by (used in) financing activities	1,113,904.00	(1,519,871.00)

Net increase (decrease) in cash and due from banks	(2,786,513.00)	(4,437,796.00)

Cash and cash equivalent-beginning of year	6,544,591.00	6,069,687.00

Cash and cash equivalent-end of year	3,758,078.00	1,631,891.00

Supplemental disclosures of cash flow information
Cash paid for interest	639,039.00	1,094,806.00

Cash paid for income taxes	314,561.00	322,000.00

The accounting principles followed by Peoples Bancshares of Pointe Coupee Parish,Inc. and its wholly owned subsidiary, Peoples Bank and Trust of Pointe Coupee Parish, Louisiana, are those which are generally practiced within the banking industry. The methods of applying those principles conform with generally accepted accounting principles and have been applied on a consistent basis. The principles which significantly affect the determination of financial position, results of operations, changes in stockholders' equity and changes in financial position are summarized below.

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements included accounts of Peoples Bancshares of Pointe Coupee Parish, Inc. (the Company), and its wholly owned subsidiary, Peoples Bank and Trust Company of Pointe Coupee Parish, Louisiana (the Bank). All material intercompany accounts and transactions have been eliminated. Certain reclassification to previously published financial statements have been made to comply with current reporting requirements.

On December 9, 1983, the Bank was merged into Pointe Coupee Parish Bank and the surviving bank, Peoples Bank and Trust of Pointe Coupee Parish, Louisiana, became a wholly owned subsidiary of Peoples Bancshares of Pointe Coupee Parish, Inc. through a one-for-one exchange for all of the outstanding common stock of Peoples Bank and Trust of Pointe Coupee, Louisiana. The reorganization was accounted for as a pooling-of-interest. There were no material transactions prior to December 9, 1983 for Peoples Bancshares of Pointe Coupee Parish, Inc., and therefore the operations of the Company are those of the Bank and all previous periods presented.

REPORTING OF INCOME FOR TAX PURPOSES: With the information of the holding company, Peoples Bancshares of Pointe Coupee Parish, Inc., the consolidated federal income tax return will be filed for all companies by utilizing the tax method allowed.

INVESTMENT SECURITIES: The Bank's investments in securities are classified as available-for-sale securities and consist of bonds, notes, and debentures that are available to meet the Bank's operating needs. These securities are reported at fair value as determined by quoted market prices.

Unrealized holding gains and losses, net of tax, on available-for-sale securities are reported as a net amount in other comprehensive income. Gains and losses on the sale of investment securities are determined using the specific identification method. Realized gains (losses) on the sales and maturities of investment securities are classified as non-interest income and reported as a reclassification adjustment in other comprehensive income.

LOANS: Loans are stated at the principal amounts outstanding, less earned income and reserve for loan losses. Interest on commercial loans is accrued daily based on the principal outstanding. The accrual of interest on a loan is discontinued when, in the opinion of management, there is doubt about the ability of the borrower to pay interest or principal. Subsequent interest on such loans is recognized as income only when collected.

RESERVE FOR LOAN LOSSES: The provision for loan losses charged to operating expenses represents an amount based on past loan loss experience. Additional amounts are added based on management's evaluation of the loan portfolio under current economic conditions. The reserve for loan losses reflects an amount which, in management's judgment, is adequate to absorb potential loan losses.

BANK PREMISES AND EQUIPMENT: Bank premises and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed on a straight-line basis over the estimated useful lives of the related assets. Such lives range from five to forty years for building and improvements, and from three to ten years for furniture, fixtures and equipment. Expenditures for additions, major renewals and betterments are capitalized, and maintenance and repairs are charged to expenses as incurred. The cost of assets retired or otherwise disposed of the related accumulated depreciation are eliminated from the accounts in the year disposal, and the resulting gain or loss is credited or charged to operations.

FEDERAL INCOME TAXES: Amounts provided for federal income taxes are based on earnings reported for financial statement purposes, adjusted for permanent differences between reported financial and taxable income. Deferred taxes are provided for timing differences related to certain income and expense items which are recognized for financial accounting purposes in one period and for tax purposes in another period.

PEOPLES BANCSHARES OF POINTE COUPEE PARISH, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2002 AND 2001.

The company has 1,000,000 shares of $2.50 par value common stock authorized with 309,677 shares issued and 308,977 outstanding.

The computation of earnings per share and other per share amounts of common stock is based on the actual number of common stock outstanding during each period.

The Bank maintains a 401(k) savings plan for which the majority of its employees are eligible. The employer contributes to the plan based on the discretion of the Board of Directors. The Bank matches 50% of employee contributions up to 6% of each employee's salary.

The Bank maintains a deferred compensation agreement with several directors. Upon retirement, the Bank will pay the directors their deferred compensation plus interest. The Bank is the owner and beneficiary of several insurance policies covering the lives of these directors.

The Bank also maintains a supplemental executive retirement plan agreement with its president. Upon retirement, or in the event of death, the president, or his designated

beneficiary, will receive the benefit over a 20 year period. The Bank is the owner and beneficiary of an insurance policy covering the life of the president. If employment is terminated "without cause" prior to retirement, the Bank will pay the president his accrued benefit, which is based on the number of months of completed service since January, 1996.

In the normal course of business, commitments under letters of credit outstanding were $187,075 at September 30, 2002 and $57,530 at September30, 2001.

YEAR TO DATE NET INCOME THROUGH NOVEMBER 6, 2002, WAS $783,225.27.18. CONTINUED STRONG EARNINGS ARE THE RESULTS OF A REDUCTION IN PROBLEM ASSESTS, THEREBY DECREASING THE NEED FOR LOAN LOSS EXPENSES AND THE CONTINUED INTEREST RATE SPREAD OR MARGIN IN WHICH WE ARE NOW OPERATING.

MANAGEMENT CONTINUES TO PLACE STRONG EMPHASIS ON CREDIT QUALITY AND LOAN LOSS PROVISIONS.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

November 7, 2002,                                                      /s/Stephen P. David
Date                                                                             Stephen P. David
                                                                                    President/C.E.O.

November 7, 2002,                                                     /s/Joyce A. York
Date                                                                             Joyce A. York
                                                                                    Senior Vice President/Cashier

Item 1.	Financial statements (Unaudited)

	Unaudited consolidated balance sheet as of September 30, 2002.

	Unaudited consolidated statements of income for the nine months ended September 30, 2002 and 2001.

	Unaudited consolidated statement of cash flows for the nine months ended September 30, 2002 and 2001.

	Notes to unaudited consolidated financial statements as of September 30, 2002 and 2001.

Item 2.	Management's Discussion and Analysis of Financial Condition and Result of Operation's

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings

Item 2.	Changes in Securities

Item 3.	Defaults upon Senior Securities

Item 4.	Submission of Matters to a Vote of Security Holders

Cash and due from banks	1,708,078.00
Federal Funds Sold	2,050,000.00

Cash and cash equivalent	3,758,078.00

Interest bearing deposits in other banks	894,000.00
Securities available for sale	1,345,313.00
Federal Home Loan Bank Stock, at cost	432,700.00
Loans, less allowance for loan loss of $709,039.00 at June 30, 20002	42,688,201.00
Accrued interest receivable	500,669.00
Bank promises and equipment, net of accumulated depreciation	541,878.00
Foreclosed real estate
Other assets	590,257.00

TOTAL ASSETS	50,751,09600