-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HkzhOfzJ/4zPL0IOlWgDjVcYV4l/7V3J7qT+kwXLUQS3Ft6xXM4YEPqsyffSD0+T bbkzDlwiLsH5KBHfEKsWWA== 0000718446-98-000008.txt : 19980812 0000718446-98-000008.hdr.sgml : 19980812 ACCESSION NUMBER: 0000718446-98-000008 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARATHON BANCORP CENTRAL INDEX KEY: 0000718446 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 953770539 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-12510 FILM NUMBER: 98682104 BUSINESS ADDRESS: STREET 1: 11150 W OLYMPIC BL CITY: LOS ANGELES STATE: CA ZIP: 90064 BUSINESS PHONE: 3109969100 MAIL ADDRESS: STREET 1: 11150 W OLYMPIC BLVD CITY: LOS ANGELES STATE: CA ZIP: 90064 10QSB 1 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 JUNE 30, 1998 ------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 0-12510 -------------------------------- MARATHON BANCORP - ------------------------------------------------------ (Exact name of registrant as specified in its charter) California - -------------------------------- 95-3770539 - ---------- (State or other jurisdiction of incorporation)(I.R.S. Employer Identification No.) 11150 West Olympic Boulevard, Los Angeles, CA 90064 - ---------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (310) 996-9100 --------------- 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 ____ ----- As of August 3, 1998, there were 3,820,819 shares of no par Common Stock issued and outstanding.
Consolidated Statements of Financial Condition Marathon Bancorp and Subsidiary June 30, December 31, ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1998 1997 ------------ -------------- Cash and Due From Banks . . . . . . . . . . . . . . . . . . . . . . . $ 5,081,000 $ 7,327,000 Federal Funds Sold. . . . . . . . . . . . . . . . . . . . . . . . . . 10,100,000 8,700,000 Investment Securities Securities Available for Sale. . . . . . . . . . . . . . . . . . . 2,754,000 5,249,000 Securities Held to Maturity. . . . . . . . . . . . . . . . . . . . 9,091,000 9,147,000 (Aggregate market value of $9,057,000 at June 30, 1998 and ------------ -------------- $9,079,000 at December 31, 1997) TOTAL INVESTMENT SECURITIES. . . . . . . . . . . . . . . . . . 11,845,000 14,396,000 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,077,000 46,775,000 Less Allowance for Credit Losses . . . . . . . . . . . . . . . . . (722,000) (747,000) ------------ -------------- NET LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . 44,355,000 46,028,000 Premises and Equipment. . . . . . . . . . . . . . . . . . . . . . . . 400,000 416,000 Other Real Estate Owned . . . . . . . . . . . . . . . . . . . . . . . 982,000 1,248,000 Accrued Interest and Other Assets . . . . . . . . . . . . . . . . . . 2,038,000 954,000 ------------ -------------- TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . $74,801,000 $ 79,069,000 ============ ============== LIABILITIES AND SHAREHOLDERS' EQUITY Deposits Noninterest-Bearing. . . . . . . . . . . . . . . . . . . . . . . . $27,604,000 $ 31,932,000 Interest-Bearing . . . . . . . . . . . . . . . . . . . . . . . . . 38,194,000 38,513,000 ------------ -------------- TOTAL DEPOSITS. . . . . . . . . . . . . . . . . . . . . . . . 65,798,000 70,445,000 Accrued Interest and Other Liabilities. . . . . . . . . . . . . . . . 755,000 423,000 ------------ -------------- TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . 66,553,000 70,868,000 Shareholders' Equity Preferred Shares - No Par Value, 1,000,000 Shares Authorized, No Shares Issued and Outstanding. . . . . . . . . . . . . . . . 0 0 Common Shares - No Par Value, 9,000,000 Shares Authorized, Issued and Outstanding: 3,817,819 in 1998 and 1,589,596 in 1997 13,622,000 13,607,000 Net Unrealized Gain on Securities Available for Sale . . . . . . . 4,000 3,000 Accumulated Deficit. . . . . . . . . . . . . . . . . . . . . . . . (5,378,000) (5,409,000) ------------ -------------- TOTAL SHAREHOLDERS' EQUITY. . . . . . . . . . . . . . . . . . 8,248,000 8,201,000 ------------ -------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY. . . . . . . . . . $74,801,000 $ 79,069,000 ============ ==============
Consolidated Statements of Income Marathon Bancorp and Subsidiary Three Months Ended Six Months Ended June 30, June 30, 1998 1997 1998 1997 ------------------- ------------------ ---------- --------------- INTEREST INCOME Interest and Fees on Loans . . . . . . . . . . $ 936,000 $ 920,000 $1,852,000 $ 1,796,000 Interest on Investment Securities - Taxable. . 175,000 115,000 344,000 224,000 Other Interest Income. . . . . . . . . . . . . 113,000 103,000 229,000 168,000 ------------------- ------------------ ---------- --------------- TOTAL INTEREST INCOME. . . . . . . . . . . . 1,224,000 1,138,000 2,425,000 2,188,000 INTEREST EXPENSE Interest on NOW Accounts . . . . . . . . . . . 9,000 13,000 21,000 27,000 Interest on Money Market and Savings . . . . . 156,000 166,000 307,000 319,000 Interest on Time Deposits. . . . . . . . . . . 176,000 137,000 325,000 226,000 Other Interest Expense . . . . . . . . . . . . - 1,000 - ------------------- ------------------ ---------- TOTAL INTEREST EXPENSE . . . . . . . . . . . 341,000 316,000 654,000 572,000 ------------------- ------------------ ---------- --------------- NET INTEREST INCOME. . . . . . . . . . . . . . . . 883,000 822,000 1,771,000 1,616,000 Provision for Credit Losses. . . . . . . . . . . . - - - 150,000 ------------------- ------------------ ---------- --------------- NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES . . . . . . . . . . 883,000 822,000 1,771,000 1,466,000 ------------------- ------------------ ---------- --------------- NONINTEREST INCOME Service Charges and Fees on Deposits . . . . . 55,000 97,000 116,000 157,000 Other Noninterest Income . . . . . . . . . . . 50,000 4,000 90,000 12,000 ------------------- ------------------ ---------- --------------- 'TOTAL NONINTEREST INCOME. . . . . . . . . . 105,000 101,000 206,000 169,000 ------------------- ------------------ ---------- --------------- NONINTEREST EXPENSE Salaries and Employee Benefits . . . . . . . . 393,000 390,000 785,000 762,000 Occupancy Expenses . . . . . . . . . . . . . . 111,000 135,000 270,000 291,000 Furniture and Equipment. . . . . . . . . . . . 35,000 26,000 58,000 63,000 Professional Services. . . . . . . . . . . . . 31,000 24,000 43,000 78,000 Business Promotion . . . . . . . . . . . . . . 4,000 5,000 20,000 12,000 Stationery and Supplies. . . . . . . . . . . . 7,000 26,000 36,000 54,000 Data Processing Services . . . . . . . . . . . 103,000 141,000 218,000 256,000 Messenger and Courier Services . . . . . . . . 24,000 24,000 46,000 61,000 Insurance and Assessments. . . . . . . . . . . 92,000 89,000 173,000 185,000 Legal Costs. . . . . . . . . . . . . . . . . . 47,000 88,000 85,000 113,000 Customer Checks. . . . . . . . . . . . . . . . 9,000 7,000 20,000 20,000 Net Loss on Sale of OREO . . . . . . . . . . . 43,000 3,000 43,000 3,000 Net Operating Cost of Other Real Estate Owned. 4,000 15,000 16,000 17,000 Other Expenses . . . . . . . . . . . . . . . . 64,000 106,000 132,000 166,000 ------------------- ------------------ ---------- --------------- TOTAL NONINTEREST EXPENSE. . . . . . . . . . 967,000 1,079,000 1,945,000 2,081,000 ------------------- ------------------ ---------- --------------- INCOME (LOSS) BEFORE INCOME TAXES . . . . . . . . 21,000 ( 156,000) 32,000 ( 446,000) Income Taxes. . . . . . . . . . . . . . . . . . 1,000 - 1,000 2,000 ------------------- ------------------ ---------- --------------- NET INCOME (LOSS). . . . . . . . . . . . . . . . . $ 20,000 $ ( 156,000) $ 31,000 $ ( 448,000) =================== ================== ========== =============== Per Share Data: Net Income (Loss) - Basic . . . . . . . . . . $ 0.01 $ ( 0.10) $ 0.01 $( 0.31) Net Income (Loss) - Diluted . . . . . . . . . $ 0.01 $ ( 0.10) $ 0.01 $( 0.31)
Consolidated Statements of Cash Flows Marathon Bancorp and Subsidiary Six Months Ended June 30, --------------------------- 1998 1997 --------------------------- ------------------- OPERATING ACTIVITIES Net Income (Loss). . . . . . . . . . . . . . . . . . . . . . . $ 31,000 $ ( 448,000) Adjustments to Reconcile Net Gain (Loss) to Net Cash Provided by Operating Activities: Depreciation and Amortization. . . . . . . . . . . . . . 73,000 66,000 Provision for Credit Losses. . . . . . . . . . . . . . . - 150,000 Provision for OREO Losses. . . . . . . . . . . . . . . . - - Loss (Gain) on Sale of Other Real Estate Owned . . . . . 46,000 ( 3,000) Net Amortization of Premiums and Discounts on Investment Securities. . . . . . . . . . . . . . . ( 3,000) 12,000 Net Change in Deferred Loan Origination Fees . . . . . . 11,000 41,000 Net Change in Accrued Interest, Other Assets and Other Liabilities. . . . . . . . . . . . . . . . ( 752,000) ( 209,000) --------------------------- ------------------- NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES. . . . . ( 594,000) ( 391,000) INVESTING ACTIVITIES Net Decrease (Increase) in Interest-Bearing Deposits with Financial Institutions. . . . . . . . . . . . . . . . . . . - 498,000 Purchases of Available for Sale Securities. . . . . . . . . . ( 2,476,000) ( 102,000) Purchases of Held to Maturity Securities . . . . . . . . . . . ( 5,986,000) - Proceeds from Maturities of Available for Sale Securities. . . 6,016,000 - Proceeds from Maturities of Held to Maturity Securities. . . . 5,000,000 128,000 Net Decrease in Loans. . . . . . . . . . . . . . . . . . . . . 680,000 978,000 Proceeds from Sale of Other Real Estate Owned. . . . . . . . . 1,202,000 1,645,000 Purchases of Furniture, Fixtures and Equipment . . . . . . . . ( 57,000) ( 46,000) --------------------------- ------------------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES . . . . 4,379,000 3,101,000 FINANCING ACTIVITIES Net Change in Demand Deposits, Money Market and Savings. . . . ( 8,010,000) 1,875,000 Net Change in Time Deposits. . . . . . . . . . . . . . . . . . 3,363,000 ( 188,000) Proceeds from Issuance of Common shares. . . . . . . . . . . . 16,000 1,319,000 --------------------------- ------------------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES . . . . ( 4,631,000) 3,006,000 --------------------------- ------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS. . . . . . . . . ( 846,000) 5,716,000 Cash and Cash Equivalents at Beginning of Year . . . . . . . . 16,027,000 7,289,000 --------------------------- ------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD. . . . . . . . . . . . $ 15,181,000 $ 13,005,000 =========================== =================== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Interest Paid. . . . . . . . . . . . . . . . . . . . . . . . . $ 595,000 $ 293,000 Income Taxes Paid (Refunded) . . . . . . . . . . . . . . . . . $ 2,400 $ 2,400 Loans Made to Facilitate the Sale of Other Real Estate Owned . $ 600,000 $ 1,695,000
Consolidated Statements of Equity Marathon Bancorp and Subsidiary Net Unrealized Appreciation (Depreciation) on Available Common shares Accumulated for Sale -------------- Shares Amount Deficit Securities Total -------------- ------------ ------------- ----------- ---------- BALANCE - JANUARY 1, 1998 . 3,811,819 $ 13,607,000 $( 5,409,000) $ 3,000 $8,201,000 Net Income. . . . . . . . . - - 31,000 - 31,000 Issuance of Common Shares . 6,000 15,000 - - 15,000 Net Changes in Unrealized Appreciation on Available for Sale Securities . . . - - - 1,000 1,000 -------------- ------------ ------------- ----------- ---------- BALANCE - JUNE 30, 1998 . . 3,817,819 $ 13,622,000 $( 5,378,000) $ 4,000 $8,248,000 ============== ============ ============= =========== ==========
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (1) BASIS OF PRESENTATION AND MANAGEMENT REPRESENTATIONS The unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-QSB and, therefore, do not include all footnotes normally required for complete financial disclosure. While the Company believes that the disclosures presented are sufficient to make the information not misleading, reference may be made to the consolidated financial statements and notes thereto included in the Company's 1997 Annual Report on Form 10-KSB. The accompanying consolidated statements of financial condition and the related consolidated statements of operations and cash flows reflect, in the opinion of management, all material adjustments necessary for fair presentation of the Company's financial position as of June 30, 1998 and December 31, 1997, results of operations and changes in cash flows for the six-month period ended June 30, 1998 and 1997. The results of operations for the six-month period ended June 30, 1998 are not necessarily indicative of what the results of operations will be for the full year ending December 31, 1998. (2) INCOME OR LOSS PER SHARE Income or loss per share is computed using the weighted average number of common shares outstanding during the period. Loss per share calculations exclude common share equivalents (stock options) since their effect would be to increase the income per share and reduce the loss per share. Accordingly, the weighted average number of shares used to compute the net income or loss per share were 3,816,566 and 1,592,294 respectively for the three-month period ended June 30, 1998 and 3,814,206 and 1,434,660 respectively for the six-month period ended June 30, 1998. MANAGEMENT'S DISCUSSION AND ANALYSIS The following discussion is intended to provide additional information about Marathon Bancorp (the Company), its financial condition and results of operations, which is not otherwise apparent from the consolidated financial statements. Since Marathon National Bank (the Bank) represents a substantial portion of the Company's activities and investments, the following relates primarily to the financial condition and operations of the Bank. It should be read in conjunction with the Company's 1997 Annual Report on Form 10-KSB. FINANCIAL HIGHLIGHTS OVERVIEW Marathon Bancorp recorded a fourth consecutive quarterly profit of $20,000 compared to a loss of $156,000 for the second quarter of 1997. For the six-month period ended June 30, 1998 the Company recorded profits of $31,000 compared to a loss of $448,000 for the first six months of 1997. Assets were $74,801,000 and deposits were $65,798,000 both increased from the levels reported in the first quarter although less than the numbers reported for yearend 1997. RESULTS OF OPERATIONS Net Interest Income Net interest income (the difference between interest income and interest expense) for the first six months of 1998 increased by $155,000, or 10% over the same period last year. The increase came about through a number of factors. The Company has decreased its non-performing assets substantially in 1998 from the levels of 1997. At June 30, 1998 the Company had $6,000 in loans on nonaccrual and $982,000 of foreclosed real estate compared to $2,431,000 in loans on nonaccrual and $1,281,000 of foreclosed real estate at June 30, 1997. Investments and fed funds sold increased from $13,580,000 at June 30, 1997 to $21,945,000 at the end of this quarter. Interest income increased for the first six months of 1998 by $237,000 with the increase coming in all categories of earning assets. The average loan portfolio size remained fairly constant but the decrease in non-performing loans helped to increase the interest earned on the portfolio. Increases in investments and fed funds sold were the reason for the increase in the interest earned on both of these portfolios. Interest expense for the first six months of 1998 increased by $82,000, or 14% over the interest expense reported for the first half of 1997. This was due to an increase in certificates of deposit, during the later part of 1997. For the three months ended June 30, 1998 net interest income increased for the same reasons as for the six-month period. The increase in net interest income was $61,000, or 7% over the three months ended June 30, 1997. Interest income was up $86,000 and the interest expense increased $25,000 for the first quarter of 1998. The net interest margin for the first six months of 1998 was 5.41% compared to 5.47% for the first half of 1997 and the net interest margin for the three months ended June 30, 1998 was 5.30% compared to 5.19% for the same period in 1997. Noninterest Income Noninterest income rose for both the six months and three months ended June 30, 1998. For the six months noninterest income grew $37,000, or 22% and for the three months was up $4,000, or 4%. An increase in fees on commercial checking accounts in the second quarter of 1997 was a large contributing factor to the increase in service charges on deposits. An increase in loan noninterest fees and charges was the reason for the increase in other noninterest income in both periods in 1998. Noninterest Expense The Company was able to reduce the level of noninterest expense in both the six months and three months ended June 30, 1998. The main areas of cost reduction were occupancy, data processing, legal costs, office supplies, and other expense. Occupancy costs were reduced with the subletting of excess office space at the corporate office. Reduction in other real estate owned decreased costs during the second quarter of 1998. The reduction in non-performing assets and other real estate owned (OREO) accounted for the large reduction in legal costs. The remainder of 1998 should continue to show reduced legal expense and OREO costs compared to 1997. Also the improvement in the Bank's condition will reduce the FDIC insurance assessment for the remainder of 1998 by approximately $65,000. Provision for Credit Losses: The Bank made no provision for credit losses during the first half of 1998 compared to a provision of $150,000 during the first six months of 1997. During the first half of 1998, the Bank recorded charge-offs of $105,000 ($79,000 in the second quarter) and collected $80,000 in loan loss recoveries ($62,000 in the second quarter) compared to charge-offs of $492,000 and recoveries of $39,000 in 1997. The Bank's internally classified loans at June 30, 1998 were $2,081,000, or 4.6% of loans compared to $2,983,000 or 6.4% of loans at December 31, 1997. The classified loans at June 30, 1998 were only 25.2% of equity capital. Additionally loans past due 30 days or more at June 30, 1998 were only $37,000, and nonaccrual loans $6,000. Based upon these factors and management's assessment of the overall quality of the loan portfolio, its internal migration analysis and economic conditions management determined the current level of the reserve for credit losses was adequate without the need for further provisions. ASSETS AND LIABILITIES Assets at the end of 1997 were somewhat inflated with increased deposits from a number of large customers of the Bank during the last two weeks of the year which then decreased during the first two weeks of 1998. The Bank's assets increased $4,532,000, or 6.5% since the end of the first quarter of 1998. The increase was generated in demand deposits of commercial customers. The increase in deposits was invested in short-term fed funds sold to increase earning assets and the liquidity position of the Bank. The other real estate owned decreased with the sale of three properties totaling $1,248,000 and the addition of two properties totaling $982,000. Since the end of the second quarter, the Bank has sold another OREO property in July 1998 totaling $430,000 and recording a $2,000 profit. The sale leaves only one property in the Bank's OREO portfolio. LIQUIDITY AND CAPITAL Asset/Liability Management The Company's Asset/Liability Committee is responsible for managing the risks associated with changing interest rates and their impact on earnings, as well as, the liquidity needs of the Company. Management monitors its liquidity position continuously in relation to trends in loans and deposits, and relates the data to short and long term expectations. In order to serve customers effectively, funds must be available to meet their credit needs as well as their withdrawals of deposited funds. Assets that are normally considered liquid are federal funds sold, available for sale investment securities, cash and due from banks, and securities purchased under agreements to resell. The ratio of liquid assets to deposits was 24% as of June 30, 1998 and the loan to deposit ratio was 69%. Interest rate risk management focuses on the maturity and repricing of interest earning assets in relationship to the interest bearing liabilities that fund them. Net interest income can be vulnerable to fluctuations arising from a change in the general level of interest rates to the extent that the average yield on earning assets responds differently to such a change than does the average cost of funds. The Company measures interest rate sensitivity by distributing the maturities and repricing periods of assets and supporting funding liabilities into interest sensitivity periods, summarizing interest rate risk in terms of the resulting interest sensitivity gaps. A positive gap indicates that more interest sensitive assets than interest sensitive liabilities will be repriced during a specified period, while a negative gap indicates the opposite condition. It is the Bank's policy to maintain an adequate balance of rate sensitive assets to rate sensitive liabilities. Due to the fact that the Bank has a large portfolio of noninterest bearing demand deposits the Company has historically been asset sensitive with a positive gap. Currently the Company is still asset sensitive and has the risk that a drop in interest rates will tend to decrease the net interest income while a increase in interest rates will increase income. The Bank has implemented interest rate floors on approximately 85% of the commercial loans and 55% of the real estate loans. This will help to mitigate the interest lost with a decline in interest rates. Capital The Bank is required to meet certain minimum risk-based capital guidelines and leverage ratios promulgated by the bank regulatory authorities. The risk based capital standards establish capital requirements that are more sensitive to risk differences between various assets, consider off balance sheet activities in assessing capital adequacy, and minimize the disincentives to holding liquid, low risk assets. The leverage ratio consists of tangible Tier 1 capital divided by average total assets. The Company's capital position is strong. The adequately capitalized risk-based capital ratio required by the federal regulators is 8.0 percent and the well capitalized ratio is 10.0 percent. At June 30, 1998 the Company and the Bank had a risk based capital ratio of 16.2 percent, and a Tier 1 capital leverage ratio of 11.4 percent. The Company has been released from the Memorandum of Understanding with the Federal Reserve Bank and now is under no special regulatory restrictions. YEAR 2000 The Company is well aware of the issues relating to the century date change and the impact on computer systems and business operations. The Company started its analysis of the problem in June 1997 when it sent letters to its vendors that supplied computer services to the Company on the status of their Year 2000 plans. All the mission critical vendors were well on their way with plans to make their products Year 2000 compliant. The Company then went on to develop its own Year 2000 plan. The Company's Year 2000 Plan (the Plan) was submitted to the Board of Directors for review in January 1998 and approved in February 1998. The Plan includes the steps necessary for the Company to become year 2000 compliant as well as the steps to be taken to check that the major borrowers and fund providers of the Company are also working to become compliant. The Company's main computer processing is supplied by the Fiserv CBS Service Bureau who has already modified and installed software that is year 2000 compliant and the Bank, and the user group to which it belongs, will begin testing the software during the third quarter. The Bank will also be testing other secondary software programs that have already been modified during the third and fourth quarters. At this time the Bank does not foresee any of its vendors not delivering year 2000 compliant software within a timeframe that will allow for sufficient testing to insure year 2000 compliance. The Company has a contingency plan to cover year 2000 issues. The costs to the Company will be both capital costs for the purchase of new equipment and the expense for the maintenance and testing of computer software. Some of these costs have already been expensed and others will be ongoing over the next eighteen months, but they should not have a major impact on future earnings. PART II. OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes in Securities None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K None. SIGNATURES Pursuant to the requirements 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. MARATHON BANCORP Date: August 10, 1998 Craig D. Collette ------------------- Craig D. Collette President and Chief Executive Officer Howard J. Stanke ------------------ Howard J. Stanke Executive Vice President and Chief Financial Officer EX-27 2
9 1,000 US DOLLARS 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 1 5,081 38,194 10,100 0 2,754 11,845 11,811 45,077 722 74,801 65,798 0 755 0 0 0 13,622 (5,374) 74,801 1,852 344 229 2,425 653 1 1,771 0 0 1,945 32 32 0 0 31 .01 .01 7.23 6 37 0 0 747 105 80 722 722 0 722
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