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 March 31, 2003.

PEOPLES BANCSHARES OF POINTE COUPEE PARISH, INC.
CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2003
(UNAUDITED)

ASSETS


	Cash and due from banks	1,401,018.00
	Federal Funds Sold	525,000.00

	Cash and cash equivalent	1,926,018.00

	Interest bearing deposits in other banks	1,595,000.00

	Securities available for sale	1,805,063.00

	Federal Home Loan Bank Stock, at cost	438,900.00

	Loans, less allowance for loan loss of
	$735,965.00 at March 31, 2003	45,059,401.00

	Accrued interest receivable	480,223.00

	Bank premises and equipment, net of
	accumulated depreciation	529,183.00

	Foreclosed real estate	-

	Other assets	608,499.00


	TOTAL ASSETS	52,442,287.00

	LIABILITIES AND STOCKHOLDERS' EQUITY

	LIABILITIES
	Deposits
	Noninterest-bearing				6,950,909.00
	Interest-bearing				28,803,323.00
	Total deposits				35,754,232.00


	Federal funds borrowed				0.00
	Other borrowed funds				6,658,702.00
	Accrued interest payable				102,137.00
	Other liabilities				566,376.00
	Total liabilities				43,081,447.00

	COMMITMENTS AND CONTINGENCIES

	STOCKHOLDERS' EQUITY
	Common stock; $2.50 par value; 1,000,000 shares authorized;
	309,677 shares issued; and 308,977 shares outstanding				774,193.00
	Capital surplus				1,530,320.00
	Retained earnings				7,012,217.00
	Accumulated other comprehensive income				52,386.00
					9,369,116.00
	Less: 700 shares held in treasury-at cost				-8,276.00
	Total stockholders' equity				9,360,840.00

	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY				52,442,287.00

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

	Three Months Ended Mar 31
INTEREST INCOME	2003	2002
Interest and fees on loans	715,888.00	685,467.00
Interest on available-for-sale securities	20,972.00	31,148.00
Interest on federal funds sold	6,488.00	12,779.00
Interest on deposits in other banks	10,901.00	13,981.00
Total interest income	754,249.00	743,375.00

INTEREST EXPENSE
Interest on deposits	136,344.00	214,449.00
Interest on federal funds purchased	0.00	0.00
Interest on other borrowed funds	41,576.00	11,223.00
	177,920.00	225,672.00

NET INTEREST INCOME	576,329.00	517,703.00

Provision (credit) for loan losses	0.00	0.00

NET INTEREST INCOME AFTER PROVISION
(CREDIT) FOR LOAN LOSSES	576,329.00	517,703.00

NON-INTEREST INCOME
Service charges on deposit accounts	41,155.00	40,386.00
Other service charges and fees	114,123.00	96,066.00
Net gain on sales of loans	0	0
Net realized gains on sales of
available-for-sale securities	0	-
Other Income	36,706.00	26,593.00
Total other income	191,984.00	163,045.00

NON-INTEREST EXPENSE
Salaries and Employee benefits	238,403.00	215,893.00
Occupancy expenses	40,201.00	42,466.00
Data processing expenses	26,304.00	25,867.00
Other operating expenses	127,287.00	117,652.00
Total other expenses	432,195.00	401,878.00

INCOME BEFORE INCOME TAX EXPENSE	336,118.00	278,870.00

Income tax expense	112,000.00	93,000.00

NET INCOME	224,118.00	185,870.00

OTHER COMPREHENSIVE INCOME
unrealized holding gains (losses) arising during
the period net of taxes	10,286.00	-3,934.00


COMPREHENSIVE INCOME	234,404.00	181,936.00

Per common share data:
Net income	0.72	0.60

Cash Dividends	0.55	0

Average number of shares outstanding	308,977	308,977

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

CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MAR. 31, 2003 AND 2002

	2003	2002
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	224,118.00	185,870.00
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Gain on sale of assets	(824.00)	0
Net realized gain from sale and maturities
of available-for-sale securities	0.00	-
Net accretion of investment security discounts/
amortization of investment security premium	377.00	10,184.00
Provision (credit) for loan losses	0	0.00
Provision for foreclosed real estate	0.00	7,200.00
Depreciation	15,200.00	14,433.00
Net changes in operating assets and liabilities:
Accrued interest receivable	(18,995.00)	7,742.00
Other assets	(81,170.00)	(41,100.00)
Accrued interest payable	16,223.00	7,562.00
Other liabilities	216,271.00	186,055.00
Net cash provided by (used in) operating activities	371,200.00	377,946.00


CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales and maturities of
available-for-sale securities	333,458.00	992,492.00
Purchase of available-for-sale securities	(965,876.00)	-
Net (increase) decrease in interest-bearing deposits in
other banks	(100,000.00)	(1,095,000.00)
Purchase of other stocks	(3,000.00)	(3,200.00)
Loan originations and principal collections, net	(2,506,768.00)	(1,962,491.00)
Expenditures on foreclosed real estate	-	2,700.00
Proceeds from sale of foreclosed real estate and other assets	0.00	0.00
Purchases of bank premises & equipment	(17,788.00)	(3,174.00)
Proceeds form sales of bank premises and equipment	3,750.00	0
Net cash provided by (used in) investment activities	(3,256,224.00)	(2,068,673.00)

PEOPLES BANCSHARES OF POINTE COUPEE PARISH, INC
NEW ROADS, LOUISIANA

CONSOLIDATED STATEMENT OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 2003 AND 2002


CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in noninterest-bearing demand
deposit accounts, savings accounts, and NOW accounts	218,118.00	2,022,938.00
Net increase (decrease) in time deposits	(793,605.00)	(788,499.00)
Net increase (decrease)in fed funds borrowed	-	0.00
Net increase in other borrowed funds	-344,518.00	(500,000.00)
Proceeds from sale of treasury stock	0	0
Dividends paid	-	-
Net cash provided by (used in) financing activities	(920,005.00)	734,439.00

Net increase (decrease) in cash and cash equivalent	(3,805,029.00)	(956,288.00)

Cash and cash equivalent-beginning of period	5,731,047.00	6,544,591.00

Cash and cash equivalent-end of period	1,926,018.00	5,588,303.00


Supplemental disclosures of cash flow information

Cash paid for interest	161,697.00	218,110.00


Cash paid for income taxes	0.00	0.00

The accounting and reporting policies of Peoples Bancshares of Pointe Coupee Parish, Inc. (Bancshares) and its subsidiary conform to accounting principles generally accepted in the United States of America and to the prevailing practices within the banking industry. A summary of significant accounting policies is as follows:

The consolidated financial statements include the accounts of Bancshares and its wholly owned subsidiary, Peoples Bank and Trust Company (the Bank). All significant intercompany accounts and transactions have been eliminated in consolidation.

Substantially all of the assets, liabilities, and operations presented in the consolidated financial statements are attributable to Peoples Bank and Trust Company. The Bank provides a variety of banking services to individuals and businesses primarily in and around Pointe Coupee Parish, Louisiana. Its primary deposit products are demand deposits accounts and certificates of deposits, and its primary lending products are commercial, agriculture, real estate, and consumer loans.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The determination of the adequacy of the allowance for loan losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. In connection with the determination of the estimated losses on loans, management obtains independent appraisals for significant collateral.

The Bank's loans are generally secured by specific items of collateral including real property, consumer assets, and business assets. Although the Bank has a diversified loan portfolio, a substantial portion of its debtors' ability to honor their contracts is dependent on local economic conditions and the agricultural industry.

While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans.

Such agencies may require the Bank to recognize additional losses based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the estimated losses on loans may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated.

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.

Interest-bearing deposits in other banks mature within one year and are carried at cost, which approximates market.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding principal adjusted for any charge-off's, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method.

The accrual of interest on impaired loans is discontinued when, in management's opinion, the borrower may be unable to meet payments as they become due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received, 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. Loans are charged-off if management considers the collection of principal and interest to be doubtful.

The allowance for loan losses is maintained at a level which, in management's judgment, is adequate to absorb credit losses inherent in the loan portfolio. The amount of the allowance is based on management's evaluation of the collectibility of the loan portfolio, including the nature of the portfolio, credit concentrations, trends in historical loss experience, specific impaired loans, and economic conditions.

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Past-due status is determined based on contractual terms.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Bank does not separately identify consumer and residential loans for impairment disclosures. Because of uncertainties associated with the regional economic conditions, collateral values, and future cash flows on impaired loans, it is reasonably possible that management's estimate of loan losses inherent in the loan portfolio and the related allowance may change materially in the near term. The allowance is increased by a provision for loan losses, which is charged to expense and reduced by charge-off's, net of recoveries.

Real estate properties acquired through, or in lieu of, loan foreclosure are to be sold and are initially recorded at fair value at the date of foreclosure, establishing a new cost basis. After foreclosure, valuations are periodically performed by management, and the real estate is subsequently carried at the lower of carrying amount or fair value, less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in loss on foreclosed real estate.

Land is carried at cost. Bank premises and equipment are stated at cost less accumulated depreciation, which is computed using straight-line and accelerated methods over the estimated useful lives of the assets, which range from 3 to 30 years.

Provisions for income taxes are based on taxes payable or refundable for thecurrent year (after exclusion of non-taxable income such as interest on state and municipal securities) and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled as prescribed in Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

Net income per share of common stock has been computed on the basis of the weighted average number of shares of common stock outstanding.

Comprehensive income is the change in stockholders' equity during the period from transactions and other events and circumstances from non-owner sources. Comprehensive income includes the change in unrealized gains (losses), net of taxes, on available-for-sale securities during the period.

For purposes of presentation in the consolidated statements of cash flows, cash and cash equivalents include cash and balances due from banks and federal funds sold.

In the ordinary course of business, the Bank has entered into commitments to extend credit, including commercial letters of credit and standby letters of credit. Such financial instruments are recorded when they are funded.

Statement of Financial Accounting Standards (SFAS) No. 107, Disclosures about Fair Value of Financial Instruments, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments from it disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of Bancshares.

The following methods and assumptions were used by Bancshares in estimating its fair value disclosures for financial instruments:

Cash and cash equivalents - the carrying amounts of cash and cash equivalents approximate their fair values.

Interest-bearing deposits in other banks - fair values for interest-bearing deposits in other banks are estimated using a discounted cash flow analysis that applies interest rates currently being offered on certificates to a schedule of aggregated contractual maturities on such time deposits.

Investment securities - fair values for investment securities are based on quoted market prices, where applicable. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

Loans - - for variable-rate loans that reprice frequently and have no significant change in credit risk, fair values are based on carrying values. Fair values for certain mortgage loans (i.e., one-to-four family residential), credit card loans, and other consumer loans are based on quoted market prices of similar loans sold in conjunction with securitization transactions, adjusted for differences in loan characteristics. Fair values for commercial real estate and commercial 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. Fair values for impaired loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable.

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.

The following methods and assumptions were used by Bancshares in estimating its fair value disclosures for financial instruments:

Short-term borrowings - the carrying amounts of other short-term borrowings maturing within 90 days approximate their fair values. Fair values of other short-term borrowings are estimated using discounted cash flow analyses based on the incremental borrowing rates for similar types of borrowing arrangements.

Accrued interest - the carrying amounts of accrued interest 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.

Certain amounts in the 2001 and 2000 consolidated financial statements have been reclassified to conform with the current year presentation.

PEOPLES BANCSHARES OF POINTE COUPEE PARISH, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2003 AND 2002

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 $35,075.00 at March 31, 2003 and $209,530.00 at March 31, 2002.

YEAR TO DATE NET INCOME THROUGH MARCH 31, 2003 WAS $224,117.58. 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.

PART II.	OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDING

	No legal proceedings have been instituted against the Company at this time

ITEM 2.	CHANGES IN SECURITIES

	No changes in securities as of this date.

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES

	No defaults upon securities as of this date.

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

	No matters have been put to a vote of the security holders.

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.

PART I.	FINANCIAL INFORMATION

Item 1.	Financial statements (Unaudited)

	Unaudited consolidated balance sheet as of March 31, 2003.

	Unaudited consolidated statement of operations for the three months ended March 31, 2003 and 2002.

	Unaudited consolidated statement of cash flows for the three months
	Ended March 31, 2003 and 2002.

	Notes to unaudited consolidated financial statements.

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

May 9, 2003		/s/ Stephen P. David
Date		Stephen P. David
		President/C.E.O.


May 9, 2003		/s/ Joyce A. York
Date		Joyce A. York
		Senior Vice President/Cashier