UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10 - QSB

[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2001

[   ]      TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from________ to________

Commission File Number 000-26403

FPB Financial Corp.
(Exact name of small business issuer as specified in its charter)

300 WEST MORRIS AVENUE, HAMMOND, LOUISIANA 70401
(Address of principal executive offices)

Issuer's telephone number, including area code: 985-345-1880

        Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x]   No [ ]

Shares of common stock, par value $.01 per share, outstanding as of May 11, 2001: 331,355

Transitional Small Business Disclosure Format (check one):

Yes[  ]  No [ x ] 

FPB FINANCIAL CORP.

FORM 10-QSB

QUARTER ENDED MARCH 31, 2001

PART I - FINANCIAL INFORMATION

Interim Financial Information required by Rule 10 - 01 of Regulation S - X and Item 303 of Regulation S - B is included in this Form 10 - QSB as referenced below:

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FPB FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2001 AND DECEMBER 31, 2000

The accompanying notes are an integral part of these financial statements.

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FPB FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2001 AND DECEMBER 31, 2000

The accompanying notes are an integral part of these financial statements.

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FPB FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME

Three Months Ended March 31, 2001 and 2000

The accompanying notes are an integral part of these financial statements.

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FPB FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME

Three Months Ended March 31, 2001 and 2000

The accompanying notes are an integral part of these financial statements.

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FPB FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended March 31, 2001 and 2000

The accompanying notes are an integral part of these financial statements.

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FPB FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended March 31, 2001 and 2000

The accompanying notes are an integral part of these financial statements.

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FPB FINANCIAL CORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 2001 and 2000

The accompanying notes are an integral part of these financial statements.

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FPB FINANCIAL CORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 2001 and 2000

The accompanying notes are an integral part of these financial statements.

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FPB FINANCIAL CORP. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

March 31, 2001

Note 1 - Basis of Presentation -

        The accompanying consolidated financial statements at March 31, 2001 and for the three months ended March 31, 2001 and 2000 include the accounts of FPB Financial Corp. (the Company) and its wholly owned subsidiary, Florida Parishes Bank (the Bank). Currently, the business and management of FPB Financial Corp. is primarily the business and management of the Bank. All significant inter-company transactions and balances have been eliminated in the consolidation.

        On February 23, 1999, the Bank incorporated FPB Financial Corp. to facilitate the conversion of the Bank from mutual to stock form (the Conversion). In connection with the Conversion, the Company offered its common stock to the depositors and borrowers of the Bank as of specified dates, to an employee stock ownership plan and to members of the general public. Upon consummation of the Conversion on June 30, 1999, all of the Bank's outstanding common stock was issued to the Company, the Company became the holding company for the Bank and the Company issued 331,355 shares of common stock.

        The Conversion was accounted for under the pooling of interest method of accounting. In the Conversion, the Company issued 331,355 shares of common stock, 26,508 shares of which were acquired by its Employee Stock Ownership Plan, and the Bank issued 1,000 shares of $.01 par value common stock to the Company.

        The accompanying consolidated unaudited financial statements were prepared in accordance with instructions for Form 10-QSB and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. However, all adjustments (consisting only of normal recurring accruals) which, in the opinion of management, are necessary for a fair presentation of the consolidated financial statements have been included. The results of operations for the three months ended March 31, 2001 are not necessarily indicative of the results to be expected for the year ending December 31, 2001.

Note 2 - Employee Stock Ownership Plan-

        The Company sponsors a leveraged employee stock ownership plan (ESOP) that covers all employees who have at least one year of service with the Company. The ESOP shares initially were pledged as collateral for its debt. The debt is being repaid based on a thirteen-year amortization and the shares are being released for allocation to active employees annually over the thirteen-year period. The shares pledged as collateral are deducted from stockholders equity as unearned ESOP shares in the accompanying balance sheets.

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        As shares are released from collateral, the Company reports compensation expense equal to the current market price of the shares. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings; dividends on unallocated ESOP shares are recorded as additional compensation expense.

        The ESOP shares as of March 31, 2001 were as follows:

        During the first quarter of 2001, the ESOP purchased an additional 200 shares of FPB Financial Corp. stock on the open market.

Note 3 -Earnings Per Share -

        The computation of basic earnings per share for the three months ended March 31, 2001 includes reported net income of $56,107 in the numerator and the weighted average number of shares outstanding of 293,075 in the denominator. Diluted earnings per share are calculated with reported net income in the numerator and the weighted average number of shares outstanding of 295,705 for the three months ended March 31, 2001, in the denominator. The computation of basic earnings per share for the three months ended March 31,2000 includes reported net income of $105,944 in the numerator and the weighted average number of shares outstanding of 306,412 in the denominator.

        FPB Financial Corp. is a Louisiana corporation organized in February 1999 by the Bank for the purpose of becoming a unitary holding company of the Bank. The Company purchased all of the capital stock of the Bank issued in the Conversion in exchange for 50% of the net Conversion proceeds and retained the remaining 50% of the net Conversion proceeds as its initial capitalization. The only significant assets of the Company at March 31, 2001 are the capital stock of the Bank, the Company's loan to the ESOP, and approximately $583,000 in investment securities available for sale. The business and management of the Company primarily consists of the business and management of the Bank. The Company neither owns nor leases any property, but instead uses the premises, equipment and furniture of the Bank. At the present time, the Company does not intend to employ any persons other than officers of the Bank and the Company will utilize the support staff of the Bank from time to time. Additional employees will be hired as appropriate to the extent the Company expands or changes its business in the future.

Note 4 - Recognition and Retention Plan

        On April 25, 2000, the Company's stockholders approved a Recognition and Retention Plan (the "Plan") as an incentive to retain personnel of experience and ability in key positions. The shareholders approved a total of 13,254 shares of stock to be acquired for the Plan, of which 7,954 shares have been allocated for distribution to key employees and directors. As shares are acquired for the Plan, the purchase price of these shares is recorded as unearned compensation, a contra equity account. As the shares are distributed, the contra equity account is reduced. The allocated shares are earned by participants as Plan share awards vest over a specified period of at least five years. If the service of an employee or non-employee director Plan participant is terminated prior to the end of the vesting period for any reason other than death or disability, the recipient shall forfeit the right to any shares subject to the awards which have not been earned. The compensation cost associated with the Plan is based on the market price of the stock as of the date on which the Plan shares are granted.

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Note 5 - Stock Option Plan

        On April 25, 2000, the Company's stockholders approved a stock option plan for the benefit of directors, officers, and other key employees. An amount equal to 10% of the total number of common shares issued in the initial public offering, or 33,135 shares, are reserved for issuance under the stock option plan. The option exercise price cannot be less than the fair value of the underlying common stock as of the date of the option grant and the maximum option term cannot exceed ten years.

        The stock option plan also permits the granting of stock appreciation rights (SARs). SARs entitle the holder to receive, in the form of cash or stock, the increase in fair value of the Company's common stock from the date of the grant to the date of exercise. No SARs have been issued under the plan.

        The following table summarizes the activity related to stock options:

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FPB FINANCIAL CORP AND SUBSIDIARY

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

        The following discussion compares the consolidated balance sheet of FPB Financial Corp. and Subsidiary at March 31, 2001 to December 31, 2000 and the results of operations for the three months ended March 31, 2001 with the same period in 2000. Currently, the business and management of FPB Financial Corp. is primarily the business and management of the Bank. This discussion should be read in conjunction with the interim consolidated financial statements and footnotes included herein.

        This quarterly report on Form 10 - QSB includes statements that may constitute forward-looking statements, usually containing the words "believe", "estimate", "expect", "intend" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause future results to vary from current expectations include, but are not limited to, the following: changes in economic conditions (both generally and more specifically in the markets in which the Company operates); changes in interest rates, accounting principles, policies or guidelines and in government legislation and regulation (which change from time to time and over which the Company has no control); and other risks detailed in this quarterly report on Form 10 - QSB and the Company's other Securities and Exchange Commission filings. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

        FPB Financial Corp. is the holding company for the Bank. Substantially all of the Company's assets are currently held in, and its operations are conducted through, its sole subsidiary the Bank. The Company's business consists primarily of attracting deposits from the general public and using such deposits to make loans for the purchase and construction of residential properties. The Company also originates commercial loans, commercial real estate loans and various types of consumer loans.

Changes in Financial Condition

        The Company's total assets increased $926,000, or 1.5%, from $61.4 million at December 31, 2000 to $62.4 million at March 31, 2001. This increase was primarily due to increases of $1.3 million in net loans receivable, and $3.2 million in cash and cash equivalents, and was partially offset by a decrease of $3.5 million in investment securities available for sale.

        Interest-bearing deposits in other institutions increased by $3.4 million, or 109.7%, from $3.1 million at December 31, 2000 to $6.5 million March 31, 2001. The increase was primarily due to investment securities maturing and being called early by their various issuers.

        The demand for mortgage, consumer and commercial loans in the Bank's market area increased during the past three months. The net loan portfolio increased $1.3 million, or 2.8%, from $46.6 million at December 31, 2000 to $47.9 million at March 31, 2001.

        The Company's total classified assets for regulatory purposes at March 31, 2001 (excluding loss assets specifically reserved for) amounted to $312,000, all of which are classified as substandard. This represents an increase of $156,000, or 100.0%, from $156,000 at December 31, 2000. The largest classified asset at March 31, 2001 consisted of an $84,000 residential loan. The remaining $228,000 of substandard assets at March 31, 2001 consisted of 8 residential mortgage loans.

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        Deposits increased by $901,000, or 2.0%, from $46.0 million at December 31, 2000 to $46.9 million at March 31, 2001. The $901,000 increase was made up of $253,000 in interest-bearing deposits and $648,000 in non-interest bearing deposits. Federal Home Loan Bank advances were $8.2 million at December 31, 2000 and $8.2 million at March 31, 2001. Advances were utilized to structure longer maturity liabilities for asset-liability management purposes.

        Total stockholders' equity increased by $28,000 for the three months ended March 31, 2001. Net income of $56,000, ESOP shares released for allocation of $5,000, and $9,000 unrealized gain on investment securities were partially offset by the purchase of $11,000 of treasury stock, $11,000 of recognition plan stock, and $20,000 in dividends paid. Stockholders equity at March 31, 2001 totaled $6.8 million compared to equity of $6.8 million at December 31, 2000.

Liquidity and Capital Resources

        In the past, the Bank was required under applicable federal regulations to maintain specified levels of "liquid" investments in qualifying types of U.S. Government, federal agency and other investments having maturities of up to five years. OTS regulations required that a savings institution maintain liquid assets of not less than 4% of its average daily balance of net withdrawable deposit accounts and borrowings payable in one year or less. At March 31, 2001, the Bank's liquidity was 26.9%, or $7.7 million in excess of the prior minimum OTS requirement. In March 2001, the OTS issued an interim rule that removed the requirement that savings institutions maintain an average daily balance of 4.0% of its liquidity base. The OTS proposes to maintain the liquidity requirement that all savings institutions and service corporations maintain sufficient liquidity to ensure their safe and sound operation.

        The Bank is required to maintain regulatory capital sufficient to meet core and risk-based capital ratios of 4.0% and 8.0%, respectively. At March 31, 2001, the Bank's core capital amounted to $5.3 million, or 8.64% of adjusted total assets of $61.7 million, and the Bank's risk-based capital amounted to $5.5 million, or 18.37% of adjusted risk-weighted assets of $29.8 million.

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        As of March 31, 2001, the Bank's unaudited regulatory capital requirements are as indicated in the following table:

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        Based on the above capital ratios, the Bank meets the criteria for a "well capitalized" institution at March 31, 2001. The Bank's management believes that under the current regulations, the Bank will continue to meet its minimum capital requirements in the foreseeable future. However, events beyond the control of the Bank, such as increased interest rates or a downturn in the economy of the Bank's area, could adversely affect future earnings and, consequently, the ability of the Bank to continue to exceed its future minimum capital requirements.

Results of Operations

        The profitability of the Company depends primarily on its net interest income, which is the difference between interest income on interest-earning assets, principally loans, mortgage-backed securities, and investment securities, and interest expense on interest-bearing deposits and advances from the Federal Home Loan Bank. Net interest income is dependent upon the level of interest rates and the extent to which such rates are changing. The Company's profitability also is dependent, to a lesser extent, on the level of its non-interest income, provision for loan losses, non-interest expenses and income taxes. In the three months ended March 31, 2001, net interest income after provision for loan losses exceeded total non-interest expense. Total non-interest expense consists of general, administrative and other expenses, such as compensation and employee benefits, occupancy and equipment expense, federal insurance premiums, professional fees, and miscellaneous other expenses.

        Net income decreased by $50,000, or 47.2%, in the quarter ended March 31, 2001 compared to the respective 2000 period. The decrease noted for the quarter ended March 31, 2001 was due to an increase of $85,000 in non-interest expense and a decrease in net interest income of $8,000. The decrease was partially offset by an increase in non-interest income of $17,000, and a decrease in income tax expense of $27,000 for the period.

        Net interest income decreased by $8,000, or 2.0%, in the quarter ended March 31, 2001 over the comparable 2000 period. This is primarily due to a lower average net interest margin of 2.54% for the three months ended March 31, 2001, compared to 3.01% for the three months ended March 31, 2000. The effects of the reduced net interest margins were partially offset by an increase in average net interest earning assets to $7.8 million for the three months ended March 31, 2001 compared to $7.1 million in the 2000 respective periods. With recent decreases in market interest rates, we anticipate our net interest margin may improve slightly in the second quarter of 2001, which could increase our net interest income.

        Total interest income increased by $174,000, or 18.1%, in the quarter ended March 31, 2001 over the comparable 2000 period. This is due primarily to an increase in average net loans receivable of $47.0 million for the three months ended March 31, 2001, compared to $41.6 million for the period ended March 31, 2000, and an increase in average interest-earning deposits to $6.1 million for the three months ended March 31, 2001, compared to $2.0 million for the period ended March 31, 2000. These increases were partially offset by a decrease in average investment securities to $7.9 million for the three months ended March 31, 2001, compared to $8.8 million for the 2000 period.

        Total interest expense increased by $183,000, or 32.2%, for the quarter ended March 31, 2001 over the comparable 2000 period. This is due to an increase in average interest-bearing deposits to $44.9 million for the three months ended March 31, 2001, compared to $39.1 million for the 2000 period. FHLB advances averaged $8.2 million for the three months ended March 31, 2001, compared to $6.3 million for the 2000 period. The Company's average cost of funds increased to 5.66% for the three months ended March 31, 2001, compared to 4.75% for the comparable 2000 period. Our cost of funds has recently been increasing faster than the average yield on our assets.

        The Company decreased its allowance for loan losses by $8,000 in the three months ended March 31, 2001. This is due to charging off two consumer loans that totaled $8,000. The Company had no provisions for losses in the 2001 or 2000 period. At March 31, 2001, the Company's non-accruing loans amounted to $95,000, an increase of $20,000, or 26.7%, compared to March 31, 2000.

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        The allowance for loan losses amounted to $162,000 at March 31, 2001, representing 0.3% of the total loans held in portfolio and 170.5% of total non-accruing loans at such date. The increase in non-accruing loans is made up of residential and consumer loans. Management believes our allowance for loan losses is adequate as of March 31, 2001.

        Non-interest income increased by $17,000, or 85.0%, for the three months ended March 31, 2001 over the comparable 2000 period. The increase was attributed to increased fees for deposit accounts with insufficient funds and deposit account service charges.

        Non-interest expenses increased in the quarter ended March 31, 2001 by $85,000, or 33.7%, over the comparable 2000 period. The increase in the quarter was due to increases of $36,000 in compensation and employee benefits, $2,000 in advertising, $12,000 data processing and $43,000 in other expenses. These increases were partially offset by a decrease of $5,000 in occupancy and equipment expense, $2,000 in stationery, printing and supplies and $1,000 in professional fees. Other expenses increased in the three month period due primary to the Company expensing $21,000 in the three months ended March 31, 2001, compared to $11,000 in the three months ended March 31, 2000 for the State of Louisiana shares tax.

        Income tax expense decreased by $27,000 for the quarter ended March 31, 2001 over the comparable 2000 period due to a reduction in pre-tax income for the quarter.

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FPB Financial Corp.

Form 10-QSB
Quarter Ended March 31, 2001

PART II - OTHER INFORMATION

Item 6 - Exhibits and Reports on Form 8-K:

1. No exhibits are filed herewith.

2. Reports on Form 8-K:

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        In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized