SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10 - QSB
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarter ended March 31, 2001 Commission File Number 2-89559
Zachary Bancshares, Inc.
(Exact name of registrant as specified in its charter)
Louisiana 72-0981148
(State of or other jurisdiction (I.R.S. Employer incorporation
of organization) or Identification No.)
4743 Main Street
Post Office Box 497
Zachary, Louisiana 70791-0497
(Address of principal executive office) (Zipcode)
Registrant's telephone number, including area code 225 654 2701
None
(Former name, former address and former fiscal
year if changed since last report)
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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $10 par value, 193,667 shares outstanding as of March 31, 2001.
I N D E X
Financial Statements:
Consolidated Balance Sheets - March 31, 2001,
December 31, 2000 and March 31, 2000 2
Consolidated Statements of Income - for the three
months ended March 31, 2001 and 2000 3
Consolidated Statements of Changes in Stockholders'
Equity - for the three months ended March 31,
2001 and 2000 4
Consolidated Statements of Cash Flows -
for the three months ended March 31, 2001 and 2000 5-6
Notes to Consolidated Financial Statements 7-11
Management's Discussion and Analysis of Financial
Condition and Results of Operations 12-14
Part II - Other Information 15
Signatures 16
Management's Responsibility for Financial Reporting 17
Independent Accountant's Report 18
1
Zachary Bancshares, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
March 31, 2001, December 31, 2000 and March 31, 2000
($ in Thousands)
ASSETS
(UNAUDITED) (UNAUDITED)
March 31, December 31, March 31,
2001 2000 2000
Cash and Due from Banks $ 3,466 $ 2,785 $ 3,129
Interest Bearing Deposits in
Other Institutions 4,030 24 38
Reserve Funds Sold 8,025 6,950 3,375
Securities Available for Sale
(Amortized Cost $13,057,
$14,346 and $15,098) 13,240 14,333 14,596
Total Loans 60,434 62,550 62,891
Less: Allowance for Loan Losses (1,195) (1,170) (1,027)
Net Loans 59,239 61,380 61,864
Bank Premises and Equipment 3,825 3,888 4,081
Accrued Interest Receivable 527 548 578
Other Assets 208 214 367
Total Assets $92,560 $90,122 $88,028
LIABILITIES
Deposits:
Noninterest Bearing $19,672 $17,420 $19,622
Interest Bearing 61,585 61,847 56,746
81,257 79,267 76,368
Borrowed Funds - - 1,500
Accrued Interest Payable 269 258 193
Other Liabilities 252 194 303
Total Liabilities 81,778 79,719 78,364
STOCKHOLDERS' EQUITY
Common Stock - $10 Par Value; Authorized
2,000,000 Shares; Issued 216,000
Shares, Respectively 2,160 2,160 2,160
Surplus 1,480 1,480 1,480
Retained Earnings 7,468 7,219 6,802
Accumulated Other Comprehensive
Income (Loss) 121 (9) (331)
Treasury Stock (22,333 Shares at Cost) (447) (447) (447)
Total Stockholders' Equity 10,782 10,403 9,664
Total Liabilities and
Stockholders' Equity $92,560 $90,122 $88,028
The accompanying notes are an integral part of these financial statements.
2
Zachary Bancshares, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF INCOME
for the three months ended March 31, 2001 and 2000
($ in Thousands) except per share data
(UNAUDITED)
MARCH 31,
2001 2000
Interest Income:
Interest and Fees on Loans $1,395 $1,404
Interest on Securities 232 249
Other Interest Income 110 48
Total Interest Income 1,737 1,701
Interest Expense:
Interest Expense on Deposits 709 560
Interest Expense on Borrowings - 24
Total Interest Expense 709 584
Net Interest Income 1,028 1,117
Provision for Loan Losses 59 59
Net Interest Income After
Provision for Loan Losses 969 1,058
Other Income:
Service Charges on Deposit Accounts 160 143
Other Operating Income 53 46
Total Other Income 213 189
Income before Other Expenses 1,182 1,247
Other Expenses:
Salaries and Employee Benefits 442 452
Occupancy Expense 56 49
Equipment Expense 96 99
Net Other Real Estate Expense - (22)
Other Operating Expenses 213 232
Total Other Expenses 807 810
Income before Income Taxes 375 437
Applicable Income Taxes 126 148
Net Income $ 249 $ 289
Per Share:
Net Income $ 1.29 $ 1.49
The accompanying notes are an integral part of these financial statements.
3
Zachary Bancshares, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
for the three months ended March 31, 2001 and 2000
($ in Thousands)
ACCUMULATED
OTHER
COMMON RETAINED COMPREHENSIVE TREASURY TOTAL
STOCK SURPLUS EARNINGS INCOME(LOSS) STOCK EQUITY
Balances,
January 1, 2000 $2,160 $1,480 $6,513 $ (293) $(447) $ 9,413
Comprehensive Income:
Net Income 289 289
Change in Unrealized
Gain (Loss) on Securities
Available for Sale (38) (38)
Less: Reclassification Adjustment
Total Comprehensive Income 251
Cash Dividends - -
Balances,(Unaudited)
March 31, 2000 $2,160 $1,480 $6,802 $ (331) $(447) $ 9,664
Balances,
January 1, 2001 $2,160 $1,480 $7,219 $ (9) $(447) $10,403
Comprehensive Income:
Net Income 249 249
Change in Unrealized
Gain (Loss) on Securities
Available for Sale 130 130
Less: Reclassification Adjustment - -
Total Comprehensive Income 379
Cash Dividends - -
Balances, (Unaudited)
March 31, 2001 $2,160 $1,480 $7,468 $ 121 $(447) $10,782
The accompanying notes are an integral part of these financial statements.
4
Zachary Bancshares, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2001 and 2000
($ in Thousands)
(UNAUDITED)
March 31,
2001 2000
Cash Flows From Operating Activities:
Net Income $ 249 $ 289
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Deferred Tax Benefit (2) -
Provision for Loan Losses 59 59
Provision for Depreciation and Amortization 79 83
Stock Dividends - Federal Home Loan Bank (5) (5)
Net Amortization (Accretion) of Securities 1 1
(Gain) on Sale of Other Real Estate - (24)
(Increase) Decrease in Accrued Interest Receivable 21 (77)
(Increase) in Other Assets (58) (44)
Increase (Decrease) in Accrued Interest Payable 11 (1)
Increase (Decrease) in Other Liabilities 58 181
Net Cash Provided by Operating Activities 413 462
Cash Flows From Investing Activities:
Net (Increase) in Reserve Funds Sold (1,075) (1,950)
Purchases of Securities Available for Sale (997) -
Maturities or Calls of Securities Available for Sale 2,000 500
Principal Payments on Mortgage-Backed Securities 290 283
Net (Increase) Decrease in Loans 2,082 (1,636)
Purchases of Premises and Equipment (16) (7)
Proceeds from Sales of Other Real Estate - 24
Net Cash Provided by (Used in)
Investing Activities 2,284 (2,786)
(CONTINUED)
5
Zachary Bancshares, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
For the three months ended March 31, 2001 and 2000
($ in Thousands)
(UNAUDITED)
March 31,
2001 2000
Cash Flows From Financing Activities:
Decrease in Borrowed Funds - (500)
Net Increase (Decrease) in Demand Deposits,
NOW Accounts and Savings Accounts 1,583 2,421
Net Increase (Decrease) in Certificates of Deposits 407 380
Net Cash Provided by Financing Activities 1,990 2,301
Increase (Decrease) in Cash and Cash Equivalents 4,687 (23)
Cash and Cash Equivalents -
Beginning of Period 2,809 3,190
Cash and Cash Equivalents -
End of Period $7,496 $3,167
Supplemental Disclosures of Cash Flow Information:
Noncash Investing Activities:
Change in Unrealized Gain or (Loss)
on Securities Available for Sale $ 196 $ (59)
Change in Deferred Tax Effect on
Unrealized Gain or (Loss) on Securities
Available for Sale $ 67 $ (20)
Cash Payments For:
Interest Paid on Deposits $ 698 $ 560
Income Tax $ 158 $ 184
The accompanying notes are an integral part of these financial statements.
6
Zachary Bancshares, Inc. and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 30, 2001 and 2000
Summary of Significant Accounting Policies
The accounting principles followed by Zachary Bancshares, Inc. and its
wholly-owned Subsidiary, Bank of Zachary, 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 cash flows are summarized below.
Presentation
The accompanying unaudited consolidated interim financial statements do
not include all of the information and footnotes required by generally
accepted accounting principles. Management is of the opinion that the
unaudited interim financial statements reflect all normal, recurring accrual
adjustments necessary to provide a fair statement of the results for the
interim periods presented. It is noted that the results for the first three
months ended March 31, 2001 are no indication of the expected results for the
annual period which ends December 31, 2001. Additional information
concerning the audited financial statements and notes can be obtained from
Zachary Bancshares, Inc.'s annual report and Form 10-KSB filed for the period
ended December 31, 2000.
Principles of Consolidation
The consolidated financial statements include the accounts of Zachary
Bancshares, Inc. (the Company), and its wholly-owned subsidiary, Bank of
Zachary(the Bank). All material intercompany accounts and transactions have
been eliminated. Certain reclassifications to previously published
financial statements have been made to comply with current reporting
requirements.
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
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.
7
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.
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.
Securities
Securities classified as held to maturity are those debt securities the
Bank has both the intent and ability to hold to maturity regardless of
changes in market conditions, liquidity needs or changes in general economic
conditions. Securities classified as trading are those securities held for
resale in anticipation of short-term market movements. The Bank had no
securities classified as held to maturity or trading at March 31, 2001 or
2000.
Securities classified as available for sale are those debt securities that
the Bank intends to hold for an indefinite period of time but not necessarily
to maturity. Any decision to sell a security classified as available for
sale would be based on various factors, including significant movements in
interest rates, changes in the maturity mix of the Bank's assets and
liabilities, liquidity needs, regulatory capital considerations, and other
similar factors. Securities available for sale are carried at fair value.
Unrealized gains or losses are reported as increase or decreases in
stockholders' equity, net of the related deferred tax effect. Realized gains
or losses, determined on the basis of the amortized cost of specific
securities sold, are included in earnings.
Loans
Loans are stated at principal amounts outstanding less the allowance for
loan losses. Interest on commercial and individual loans is accrued daily
based on the principal outstanding.
Generally, the Bank discontinues the accrual of interest income when a
loan becomes 90 days past due as to principal or interest. When a loan is
placed on non-accrual status, previously recognized but uncollected interest
is reversed to income or charged to the allowance for loan losses.
Subsequent cash receipts on non-accrual loans are accounted for on the cost
recovery method, until principal and interest amounts contractually due are
brought current and future payments are reasonably assured. The Bank
8
classifies loans as impaired if, based on current information and events, it
is probable that the Bank will be unable to collect the scheduled payments of
principal and interest when due according to the contractual terms of the
loan agreement. Impairment is measured on a loan by loan basis by either the
present value of the expected future cash flows discounted at the loan's
effective interest rate or the loan's observable market price or based on the
fair value of the collateral if the loan is collateral-dependent.
Allowance for Loan Losses
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 allowance for loan losses is based upon management's
review and evaluation of the loan portfolio. Factors considered in the
establishment of the allowance for loan losses include management's
evaluation of specific loans; the level and composition of classified loans;
historical loss experience; results of examinations by regulatory agencies;
an internal asset review process; expectations of future economic conditions
and their impact on particular borrowers; and other judgmental factors.
Allowances for impaired loans are generally determined based on collateral
values or the present value of estimated cash flows. Although management
uses available information to recognize losses on loans, because of
uncertainties associated with local economic conditions, collateral values,
and future cash flows on impaired loans, it is reasonably possible that a
material change could occur in the allowance for loan losses in the near
term. However, the amount of the change that is reasonably possible cannot
be estimated.
The allowance for loan losses is based on estimates of potential future
losses, and ultimate losses may vary from the current estimates. These
estimates are reviewed periodically and as adjustments become necessary, the
effect of the change in estimate is charged to operating expenses in the
period incurred. All losses are charged to the allowance for loan losses
when the loss actually occurs or when management believes that the collection
of the principal is unlikely. Recoveries are credited to the allowance at
the time of recovery.
Bank Premises and Equipment
Bank premises and equipment are stated at cost less accumulated
depreciation. Depreciation is provided at rates based upon estimated useful
service lives using the straight-line method for financial reporting purposes
and accelerated methods for income tax reporting.
The cost of assets retired or otherwise disposed of and the related
accumulated depreciation are eliminated from the accounts in the year of
disposal and the resulting gains or losses are included in current operations
Expenditures for maintenance and repairs are charged to operations as
incurred. Cost of major additions and improvements are capitalized.
9
Other Real Estate
Other real estate is comprised of properties acquired through foreclosure
or negotiated settlement. The carrying value of these properties is lower of
cost or fair value, minus estimated costs to sell. Loan losses arising from
the acquisition of these properties are charged against the allowance for
loan losses. Any subsequent market reductions required are charged to Net
Other Real Estate Expense. Revenues and expenses associated with maintaining
or disposing of foreclosed properties are recorded during the period in which
they are incurred.
Income Taxes
The provision for income taxes is based on income as reported in the
financial statements. Also certain items of income and expenses are
recognized in different time periods for financial statement purposes than
for income tax purposes. Thus provisions for deferred taxes are recorded in
recognition of such timing differences.
Deferred taxes are provided utilizing a liability method whereby deferred
tax assets are recognized for deductible temporary differences and operating
loss and tax credit carryforwards and deferred tax liabilities are recognized
for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases.
Deferred tax assets are reduced by a valuation allowance when, in the opinion
of management, it is more likely than not that some portion or all of the
deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on
the date of enactments.
The Company and its subsidiary file a consolidated federal income tax
return. In addition, The Company in accordance with state statutes files a
Louisiana state income tax return.
Earnings per Common Share
Basic EPS is computed by dividing income applicable to common shares by
the weighted average shares outstanding; no dilution for any potentially
convertible shares is included in the calculation. Diluted EPS, reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the Company. At
March 31,2001, the Company had no convertible shares or other contracts to
issue common stock. The weighted average number of shares of common stock
used to calculate basic EPS was 193,667 for the periods ended March 31, 2001
and 2000,respectively.
10
Statement of Cash Flows
For the purposes of reporting cash flows, cash and cash equivalents
includes cash and due from banks and interest bearing deposits in other banks
Comprehensive Income
Components of comprehensive income are revenues, expenses, gains and
losses that under GAAP are included in comprehensive income but excluded from
net income. The components of comprehensive income are disclosed in the
Statements of Changes in Stockholders' Equity for all periods presented.
Recent Accounting Pronouncements
In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities." This
statement replaces SFAS 125, by revising and clarifying the standards for
accounting for transfers of financial assest and collateral, and by requiring
additional disclosures. The provisions of SFAS No. 140 are effective for
transfers and servicing of financial assets occurring after March 31, 2001.
The adoption of SFAS No. 140 is not expected to have a material impact on the
Company's financial position or results of operations
11
Zachary Bancshares, Inc. and Subsidiary
MANAGEMENT'S DISCUSSION
March 31, 2001
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS ($ in Thousands)
The following is management's discussion and analysis of the significant
changes in income and expenses in relation to the changes in financial
position for the three months ended March 31, 2001 and 2000. This information
should be read in conjunction with the financial statements and notes
relating thereto. The Company is unaware of any trends, uncertainties or
events which would or could have a material impact on future operating
results, liquidity, or capital.
FINANCIAL CONDITION ANALYSIS
Loans
Total loans were $60,434 at March 31, 2001 compared to $62,891 at March
31, 2000. This represents a decrease of $2,457 or 4%. Interim loan
repayments accounted for the decrease in total loans along with a slowdown in
the general economy.
Investment Securities
Investment securities decreased 9% to $13,240 at March 31, 2001 compared
to $14,596 at March 31, 2000. Several securities were called prior to
maturity and the funds were reinvested in overnite reserve funds sold instead
of longer term investments.
Reserve Funds Sold/Interest Bearing Deposits at other banks
Reserve funds sold increased to $8,025 at March 31, 2001 from $3,375 at
March 31, 2000. Interest bearing deposits at other banks grew to $4,030 at
March 31, 2001 from $38 at March 31, 2000. Both of these accounts grew as
the funds generated from deposit growth and loan repayments were not
reinvested in long term investment securities in order to build up short term
liquidity in the event of deposit withdrawals by large depositors whose
certificates were repricing in late March and early April.
Deposits
Total deposits increased $4,889 to $81,257 at March 31, 2001 compared to
$76,368 at March 31, 2000 as the bank was able to attract new checking,
savings and certificate accounts from individuals and commercial customers.
The general decline in the market value of equity stock portfolios in the
first quarter 2001 led some customers to deposit funds in FDIC insured
accounts instead of keeping those funds in the stock market.
12
RESULTS OF OPERATION
For the three Month Period Ended March 31, 2001 over 2000
Net Income
Net Income was $249 for the three month period ended March 31, 2001
compared to $289 in the same period in 2000. This change was primarily due
to an increase in interest expense to $709 at March 31, 2001 from $584 at
March 31, 2000. This expense increase was offset by smaller increases in
interest income and other income.
Interest Income
Interest Income for the three month period ended March 31, 2001 increased
8% to $1,737 compared to $1,701 for the same period in 2000. The interest
income increase resulted primarily from the Company's increase in balances of
reserve funds sold and interest bearing deposits at other banks.
Interest Expense
Total interest expense for the three months ended March 31, 2001 was
$709, compared to $584 for the three month period ended March 31, 2000. This
was an increase of $125 or 21% between the two periods. Interest bearing
deposits increased 9% to $61,585 at March 31, 2001 from $56,746 at March 31,
2000. Weighted average interest costs increased to 3.61% at March 31, 2001
from 3.02% at March 31, 2000 as interest rate hikes in the general U.S.
economy led to higher rates in certificates of deposit locally.
Provision for Loan Losses
The Company included $59 for provision for loan losses during the three
month period ended March 31, 2001 the same as at March 31, 2000. Loans are
reviewed monthly to facilitate identification and monitoring of potentially
deteriorating credit. Management considers the current allowance adequate to
absorb potential losses but continues to monitor the situation.
Total Other Income
Total other income for the three month period ended March 31, 2001
increased $24 compared to March 31, 2000. The 2001 results included an
increase in service charges on deposit accounts of $17 and other operating
income increased $7.
Total Other Expense
Total other expenses decreased $3 to $807 at March 31, 2001 from $810
at March 31, 2000. Employee salaries and benefits decreased $10 for the three
month period under consideration as the Bank renegotiated the employee
hospitalization insurance policy resulting in savings in that area.
Occupancy expense increased $7 for the 2001 three month time period as
compared to 2000.
13
Income Tax
The Company is fully taxable at the maximum rate (34%) in both 2001 and
2000 and expects to remain taxable at the current rate throughout 2001.
Earnings Per Share
The Company's 2001 earnings per share at March 31, 2001 were $1.29 a 13%
decrease compared to $1.49 per share the previous year, primarily due to
higher interest expense on deposits incurred thus far in the present year.
Dividends
The Company does not normally pay a cash dividend during the first quarter
of the year but plans to continue its practice of paying dividends to
shareholders at the end of the 2nd and 4th quarters.
14
PART II
Item l. LEGAL PROCEEDINGS
During the normal course of business, the Company is involved in various
legal proceedings. In the opinion of management and counsel, any liability
resulting from such proceedings would not have a material adverse effect on
the Company's financial statements.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. None
15
SIGNATURES
Pursuant to the requirement of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
ZACHARY BANCSHARES, INC.
Date: May 11, 2001 ____________________
Harry S. Morris, Jr.
President
_________________
J. Larry Bellard
Treasurer
16
Management's Responsibility for Financial Reporting
The management of Zachary Bancshares, Inc. is responsible for the
preparation of the financial statements, related financial data and other
information in this quarterly report. The financial statements are prepared
in accordance with generally accepted accounting principles and include some
amounts that are necessarily based on management's informed estimates and
judgments, with consideration given to materiality. All financial
information contained in this quarterly report is consistent with that in the
financial statements.
Management fulfills its responsibility for the integrity, objectivity,
consistency and fair presentation of the financial statements and financial
information through an accounting system and related internal accounting
controls that are designed to provide reasonable assurance that assets are
safeguarded and that transactions are authorized and recorded in accordance
with established policies and procedures. The concept of reasonable
assurance is based on the recognition that the cost of a system of internal
accounting controls should not exceed the related benefits. As an integral
part of the system of internal accounting controls, Zachary Bancshares, Inc.
has a professional staff who monitors compliance with and assesses the
effectiveness of the system of internal accounting controls and coordinates
audit coverage with the independent public accountants.
The Audit Committee of the Board of Directors, composed solely of outside
directors, meets periodically with management, and the independent public
accountants to review matters relating to financial reporting, internal
accounting control and the nature, extent and results of the audit effort.
The independent public accountants have direct access to the Audit Committee
with or without management present.
The financial statements, as of December 31, 2000, were examined by Hannis T.
Bourgeois, LLP, independent public accountants, who rendered an independent
professional opinion on the financial statements prepared by management. The
financial statements, as of March 31, 2001, have been reviewed by Hannis T.
Bourgeois, LLP.
_________________
J. Larry Bellard
Treasurer
17
INDEPENDENT ACCOUNTANT'S REPORT
May 9, 2001
To the Shareholders and Board of Directors
Zachary Bancshares, Inc. and Subsidiary
Zachary, Louisiana
We have reviewed the accompanying Consolidated Balance Sheets of Zachary
Bancshares, Inc. and Subsidiary as of March 31, 2001 and 2000, and the
related Consolidated Statements of Income, Changes in Stockholders'Equity and
Cash Flows for the three month periods then ended.
We previously audited and expressed our unqualified opinion in our
report dated January 10, 2001 on the Consolidated Balance Sheet of Zachary
Bancshares, Inc. and Subsidiary as of December 31, 2000.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of obtaining an understanding of
the system for the preparation of interim financial information, applying
analytical review procedures to financial data, and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an examination in accordance with generally
accepted auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.
Based on our reviews, we are not aware of any material modifications
that should be made to the accompanying consolidated financial statements for
them to be in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/HANNIS T. BOURGEOIS, LLP
HANNIS T. BOURGEOIS, LLP
Baton Rouge, Louisiana
18