-----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, Va7Ip1cRAjNad10qCvvh6/Uh3tVOhrg0zsORm3nrEOptAJ/Aj6zcfq3Ijn/5P1ay koLSr5i1RHmE5qB+xn3DVA== 0000946275-98-000106.txt : 19980218 0000946275-98-000106.hdr.sgml : 19980218 ACCESSION NUMBER: 0000946275-98-000106 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980217 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANDMARK BANCSHARES INC CENTRAL INDEX KEY: 0000915800 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 481142260 STATE OF INCORPORATION: KS FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-23164 FILM NUMBER: 98540277 BUSINESS ADDRESS: STREET 1: CENTRAL & SPRUCE STS CITY: DODGE CITY STATE: KS ZIP: 67801 BUSINESS PHONE: 3162278111 MAIL ADDRESS: STREET 2: CENTRAL & SPRUCE STREETS CITY: DODGE CITY STATE: KS ZIP: 67801 10QSB 1 FORM 10QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (MarkOne) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended December 31, 1997 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 0-23164 LANDMARK BANCSHARES, INC. (Exact name of registrant as specified in its charter) Kansas 48-1142260 (State or other jurisdiction I.R.S. Employer of incorporation or organization) Identification Number CENTRAL AND SPRUCE STREETS, DODGE CITY, KANSAS 67801 (Address and Zip Code of principal executive offices) (316) 227-8111 (Registrant's telephone number, including area code) N/A (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 The number of shares outstanding of each of the issuer's classes of common stock, as of December 31, 1997: $.10 par value common stock 1,688,641 shares (Class) (Outstanding) Transitional Small Business Disclosure Format: Yes No [X] LANDMARK BANCSHARES, INC. INDEX Page Number PART I. FINANCIAL INFORMATION Item 1. Financial Statements Statements of Financial Condition as of December 31, 1997 (unaudited) and September 30, 1997 1 Statements of Income for the Three Months Ended December 31, 1997 and 1996 (unaudited) 2 Statements of Cash Flows for the Three Months Ended December 31, 1997 and 1996 (unaudited) 3 - 4 Notes to Financial Statements 5 - 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 11 PART II - OTHER INFORMATION Item 2. Changes in Securities 12 Item 5. Other Information 12 Item 6(b). Reports on Form 8-K 12 SIGNATURES 13 1 LANDMARK BANCSHARES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY, LANDMARK FEDERAL SAVINGS BANK Consolidated Statements of Financial Condition
December 31, 1997 September 30, 1997 (Unaudited) ------------------------------------ ASSETS Cash and cash equivalents: Interest bearing $ 2,514,885 $ 2,062,879 Non-interest bearing 771,754 678,173 Time deposits in other financial institutions 111,751 110,580 Securities held to maturity 16,939,243 18,837,942 Securities available for sale 8,467,460 7,122,785 Mortgage-backed securities held to maturity 33,376,786 36,689,551 Loans receivable, net 166,317,500 157,672,603 Loans held for sale 472,284 490,234 Accrued income receivable 1,516,653 1,446,605 Real estate owned or in judgment and other repossessed property, net 247,323 251,950 Office properties and equipment, at cost less accumulated depreciation 1,361,904 1,188,250 Prepaid expenses and other assets 1,542,297 1,233,038 Income taxes receivable - current 0 65,564 ------------------------------ TOTAL ASSETS $ 233,639,840 $ 227,850,154 ------------------------------ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits 145,969,289 144,734,739 Outstanding checks in excess of bank balance 0 0 Other Borrowed Money 51,500,000 46,200,000 Advances from borrowers for taxes and insurance 768,750 1,673,057 Accrued expenses and other Liabilities 1,274,436 2,304,593 Deferred income taxes 871,926 692,435 Income taxes Current 335,386 0 ------------------------------ TOTAL LIABILITIES $ 200,719,787 $ 195,604,824 ------------------------------ Stockholders' Equity Common Stock 228,131 228,131 $.10 par value; 10,000,000 shares authorized; 2,281,312 shares issued Additional Paid-in Capital 22,185,681 22,173,827 Treasury Stock; 592,671 shares of common stock at cost (9,249,935) (9,249,935) Retained income (substantially restricted) 19,740,793 19,305,087 Employee Stock Ownership Plan (844,597) (844,597) Management Stock Bonus Plan (241,306) (289,567) Net unrealized gain/loss on available for sale securities 1,101,286 922,384 ------------------------------ Total Stockholders' Equity 32,920,053 32,245,330 ------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 233,639,840 $ 227,850,154 ------------------------------
2 LANDMARK BANCSHARES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY, LANDMARK FEDERAL SAVINGS BANK Consolidated Statements of Income
Three Months Ended December 31 1996 1997 (unaudited) (unaudited) ------------------------------- INTEREST INCOME Interest on loans 2,750,847 3,341,282 Interest and dividends on investment securities 543,587 432,926 Interest on mortgage-backed securities 735,335 584,168 ------------------------------- Total interest income 4,029,769 4,358,376 INTEREST EXPENSE Deposits 1,815,263 1,864,805 Borrowed funds 517,137 707,644 ------------------------------- Total interest expense 2,332,400 2,572,449 Net interest income 1,697,369 1,785,927 PROVISION FOR LOSSES ON LOANS 45,000 70,000 ------------------------------- Net interest income after provision for losses 1,652,369 1,715,927 NON-INTEREST INCOME Service charges and late fees 60,344 74,597 Net gain (loss) on available for sale investments 108,692 0 Net gain (loss) on sale of loans 59,439 56,449 Service fees on loans sold 40,357 30,013 Other income 34,402 32,215 ------------------------------- 303,234 193,274 NON-INTEREST EXPENSE Compensation and related expenses 497,434 582,158 Occupancy expense 40,957 47,282 Advertising 14,449 16,331 Federal insurance premium 99,666 38,823 Loss (gain) from real estate operations 306 3,547 Data processing 43,488 45,999 Other expense 175,399 179,986 ------------------------------- 871,699 914,126 Income before income taxes 1,083,904 995,075 INCOME TAXES EXPENSES 431,500 398,950 ------------------------------- Net income 652,404 596,125 ------------------------------- Basic earnings per share $ 0.38 $ 0.38 Diluted earnings per share $ 0.36 $ 0.35 Dividends per share $ 0.10 $ 0.10
3 LANDMARK BANCSHARES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY LANDMARK FEDERAL SAVINGS BANK Consolidated Statements of Cash Flows
Three Months Ended December 31 1996 1997 (unaudited) (unaudited) ------------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 652,404 $ 596,125 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 28,260 31,430 Decrease (increase) in accrued interest receivable (16,223) (76,040) Increase (decrease) in outstanding checks in excess of bank balance (143,808) 0 Increase (decrease) in accrued and deferred income taxes 461,695 580,441 Increase (decrease) in accounts payable and accrued expenses 82,033 (1,024,165) Amortization of premiums and discounts on investments and loans 528 (32,477) Provision for losses on loans 45,000 70,000 Gain/loss on available for sale securities (108,692) 0 Other non-cash items, net (33,735) (473,919) Sale of loans held for sale 7,431,144 2,493,198 Gain on sale of loans held for sale (59,440) (56,449) Origination of loans held for sale (6,954,041) Purchase of loans held for sale (635,950) (2,399,860) ------------------------------------------ NET CASH PROVIDED BY OPERATING ACTIVITIES $ 749,175 $ (310,655) ------------------------------------------ CASH FLOWS FROM INVESTING ACTIVITIES Loan originations and principal payment on loans held for investment 3,677,235 (1,767,492) Principal repayments on mortgage-backed securities 2,003,025 3,313,957 Loans purchased for investment (12,785,479) (7,018,907) Acquisition of investment securities held to maturity (1,000,000) (3,000,000) Acquisition of investment securities available for sale (670,705) (984,282) Proceeds from sale of investment securities available for sale 351,758 0 Proceeds from maturities or calls of investment securities 3,300,000 4,900,000 Net (increase) decrease in time deposits 285,000 0 Sale of real estate acquired in settlement of loans 0 99,963 Acquisition of fixed assets (33,363) (205,083) ------------------------------------------ NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES (4,872,529) (4,661,844) ------------------------------------------
4 LANDMARK BANCSHARES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY, LANDMARK FEDERAL SAVINGS BANK Consolidated Statements of Cash Flows (Continued)
Three Months Ended December 31 1996 1997 (unaudited) (unaudited) ------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Net increase (decrease) in deposits $ (1,240,573) $ 1,234,550 Net increase (decrease) in escrow accounts (1,013,066) (904,307) Proceeds from FHLB advance and other borrowings 31,000,000 34,800,000 Repayment of FHLB advance and other borrowings (21,200,000) (29,500,000) Acquisition of Treasury Stock (298,750) 0 Other Financing Activities 45,170 48,261 Dividend Payment (175,352) (160,418) ------------------------------------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 7,117,429 5,518,086 ------------------------------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,994,075 545,587 BEGINNING CASH AND CASH EQUIVALENTS 473,710 2,741,052 ------------------------------------- ENDING CASH AND CASH EQUIVALENTS 3,467,785 3,286,639 ------------------------------------- SUPPLEMENTAL DISCLOSURES Cash paid during the period for: Interest on deposits, advances, and other borrowings 2,359,117 2,597,287 Income taxes 431,500 0 Transfers from loans to real estate acquired through foreclosure 0 19,155
5 LANDMARK BANCSHARES, INC. PART I - FINANCIAL INFORMATION ITEM 1. - FINANCIAL STATEMENTS LANDMARK FEDERAL SAVINGS BANK NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION The accompanying unaudited financial statements were prepared in accordance with the instructions for form 10-QSB and , accordingly, do not include all information and disclosures necessary to present financial condition, results of operations and cash flows of Landmark Bancshares, Inc. (the "Company") and its wholly-owned subsidiary Landmark Federal Savings Bank (the "Bank") in conformity with generally accepted accounting principles. However, all normal recurring adjustments have been made which, in the opinion of management, are necessary for the fair presentation of the financial statements. The results of operation for the three months ending December 31, 1997, are not necessarily indicative of the results which may be expected for the fiscal year ending September 30, 1998. 2. On March 28, 1994, the Bank segregated and restricted $15,144,357 of retained earnings in a liquidation account for the benefit of eligible savings account holders who continue to maintain their accounts at the bank after the conversion of the bank from mutual to stock form. In the event of a complete liquidation of the Bank, and only in such event, each eligible account holder will be entitled to receive a distribution from the liquidation account in an amount proportionate to the current adjusted balances of all qualifying deposits then held. The liquidation account will be reduced annually at September 30th to the extent that eligible account holders have reduced their qualifying deposits. 3. INVESTMENTS AND MORTGAGE - BACKED SECURITIES A summary of the Bank's carrying value of investment and mortgage - backed securities as of December 31, 1997 and September 30, 1997, is as follows:
Investment Securities December 31, 1997 September 30, 1997 ------------------------------------------------------- Held to maturity: Government Agency Securities $ 15,499,243 $ 17,297,942 Municipal Obligations 1,440,000 1,540,000 ------------------------------------------------------- $16,939,243 $18,837,942 Available for sale: Common Stock 5,270,360 4,086,785 Stock in Federal Home Loan Bank 3,037,100 2,976,000 Other 160,000 60,000 -------------------------------------------------------- $ 8,467,460 $ 7,122,785
6
Mortgage - Backed Securities held to maturity: FNMA - Arms 12,494,007 13,157,644 FHLMC -Arms 4,244,766 4,768,042 FHLMC -Fixed Rate 266,754 245,443 CMO Government Agency 11,843,535 13,310,277 CMO Private Issue 3,723,153 4,245,057 FNMA - Fixed Rate 502,849 589,777 GNMA - Fixed Rate 341,722 373,311 Unamortized Premiums 0 0 Unearned Discounts 0 0 -------------------------------------- $33,376,786 $36,689,551
4. LOAN RECEIVABLE, NET A summary of the Bank's loans receivable at December 31, 1997 and September 30, 1997, is as follows:
December 31, 1997 September 30, 1997 ------------------------------------------------ Mortgage Loans Secured by One to Four Family Residences 129,061,405 122,015,418 Secured by Other Properties 3,404,611 3,452,789 Construction Loans 1,739,799 1,936,517 Other 3,340,095 2,666,395 ------------------------------------------------ 137,545,910 130,071,119 Plus (Less): Unamortized Premium on Loan Purchase 49,548 29,460 Unearned Discount and Loan Fees (330,473) (348,405) Undisbursed Loan Proceeds (1,767) (1,724) Allowance for Loan Losses (640,056) (615,049) ------------------------------------------------ Total Mortgage Loans 136,623,162 129,135,401 ------------------------------------------------ Consumer and Other Loans: Automobile 14,523,067 13,309,943 Commercial 4,176,884 4,049,950 Loans on Deposits 604,888 573,654 Home Equity and Second Mortgage 9,742,115 9,986,176 Mobile Home 42,576 46,900 Other 1,008,682 924,153 ------------------------------------------------ 30,098,212 28,890,776 Less: Allowance for Loan Losses (403,874) (353,574) ------------------------------------------------ Total Consumer and Other Loans 29,694,338 28,537,202 ------------------------------------------------ Net Loans Receivable $166,317,500 $157,672,603
7 A summary of the Bank's allowance for loan losses for the 3 months ended December 31, 1997 and 1996, are as follows:
Three Months Ended December 31 1996 1997 ------------------------------------- Balance Beginning $740,346 $968,623 Provisions Charged to Operations 45,000 70,000 Loans Charged Off Net of Recoveries (5,251) 5,308 ------------------------------------- Balance Ending $780,095 $1,043,931
There has been no significant change in the level of non performing loans from September 30, 1997 to December 31, 1997. 5. REAL ESTATE OWNED OR IN JUDGMENT Real Estate owned or in judgment, including in-substance foreclosures and other repossessed property:
December 31, 1997 September 30, 1997 ------------------------------------------- Real Estate Acquired by Foreclosure $157,957 $ 232,851 Real Estate Loans in Judgment and Subject to Redemption 70,094 19,099 Other Repossessed Assets 19,272 0 ------------------------------------------- $247,323 $ 251,950
6. FINANCIAL INSTRUMENTS The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financial needs of its customers and to reduce its own exposure to fluctuations in interest rates. The financial instruments include commitments to extend credit and commitments to sell loans. The instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the statement of financial condition. The contract or notional amounts of those instruments reflect the extent of involvement the Bank has in particular classes of financial instruments. The Bank's exposure to credit loss in the event of non-performance by the other party to the financial instrument for loan commitments is represented by the contractual or notional amount of those instruments. The Bank uses the same credit policies in making commitments as it does for on-balance-sheet instruments. At December 31, 1997, the Bank had outstanding commitments to fund real estate loans of $1,784,859. Of the commitments outstanding, $1,303,250 are for fixed rate loans at rates of 6.75% to 10.0%. Commitments for adjustable rate loans amount to $481,609 with initial rates of 6.75% to 8.0%. Outstanding loan commitments to sell as of December 31, 1997 were $719,561. In addition the Bank had outstanding commercial loan commitments of $3,732,250 with initial rates of 8.0% to 10.0%. 7. EARNINGS PER SHARE Basic earnings per share (EPS) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock (potential common stock) were exercised or converted to common stock. For the periods presented potential common 8 stock includes outstanding stock options and nonvested stock awarded under the Management Stock Bonus Plan. Earnings per share for the three months ending December 31, 1997 and 1996, was determined as follows: STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
Basic Earnings Per Share Three months ended December 31 1996 1997 ------------------------------------ Weighted average common shares outstanding, Net of Treasury shares 1,852,996 1,688,641 Average unallocated ESOP shares (99,432) (84,423) Weighted average treasury share purchased (2,870) 0 Nonvested MSBP shares (43,345) (25,094) ------------------------------------ Weighted Average Shares for Basic EPS 1,707,349 1,579,124 ------------------------------------ Net Earnings 652,404 596,125 ------------------------------------ Per share amount $0.38 $0.38
Diluted Earnings Per Share Three months ended December 31 1996 1997 ------------------------------------ Weighted average shares for Basic EPS 1,707,349 1,579,124 Dilutive stock options 92,080 138,558 Dilutive MSBP shares 9,917 8,681 ------------------------------------ Weighted Average Shares for Diluted EPS 1,809,346 1,726,363 ------------------------------------ Net Earnings 652,404 596,125 ------------------------------------ Per share amount $0.36 $0.35
8. DIVIDENDS At a October 1997 board meeting, the Directors of the Company declared a $0.10 per share dividend. The dividend was payable to all stockholders of record as of November 3, 1997. 9 LANDMARK BANCSHARES, INC. PART I - FINANCIAL INFORMATION ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General: Landmark Bancshares, Inc. ("Company") is the holding company for Landmark Federal Savings Bank ("Bank"). Apart from the operations of the Bank, the Company did not engage in any significant operations during the quarter ended December 31, 1997. The Bank is primarily engaged in the business of accepting deposit accounts from the general public, using such funds to originate mortgage loans for the purchase and refinancing of single-family homes located in Central and Southwestern Kansas and for the purchase of mortgage-backed and investment securities. In addition, the Bank also offers and purchases loans through correspondent lending relationships in Wichita, Kansas City, and other cities in Kansas, in Albuquerque and Santa Fe, New Mexico, and Madison, Wisconsin. To a lesser extent, the Bank will purchase adjustable rate mortgages loans, to manage its interest rate risk as deemed necessary. The Bank also makes automobile loans, second mortgage loans, home equity loans and savings deposit loans. Management Strategy: Management's strategy has been to maintain profitability and increase capital. The Bank's lending strategy has historically focused on the origination of traditional, conforming one to four-family mortgage loans with the primary emphasis on single-family residences. The Bank's secondary focus has been on consumer loans, second mortgage loans, home equity loans and savings deposit loans. This focus, and the application of strict underwriting standards, are designed to reduce the risk of loss on the Bank's loan portfolio. However, this lack of diversification in its portfolio structure does increase the Bank's portfolio concentration risk by making the value of the portfolio more susceptible to declines in real estate values in its market area. This has been mitigated in recent years, through the investment in mortgage-backed securities and the sales of loans in the secondary market. Certain risks are inherent in the sales of loans in the secondary market. There is a risk that the Bank will not be able to sell all the loans that it has originated, or conversely, will be unable to fulfill its commitment to deliver loans pursuant to a firm commitment to sell loans. In addition, in periods of rising interest rates, loans originated by the bank may decline in value. Exposure to market and interest rate risk is significant during the period between the time the interest rate on a customer's mortgage loan application is established and the time the mortgage loan closes, and also during the period between the time the interest rate is established and the time the Bank commits to sell the loan. If interest rates change in an unanticipated fashion, the actual percentage of loans that close may differ from projected percentages. The resultant mismatching of commitments to closed loans and commitments to deliver sold loans may have an adverse effect on the profitability of loan originations. A sudden increase in interest rates can cause a higher percentage of loans to close than projected. To the degree that this was not anticipated, the Bank will not have made commitments to sell these loans and may incur significant mark to market losses, adversely affecting results of operations. The Bank historically sold 30 year fixed rate mortgages in the secondary market, however the Bank is keeping all currently originated 15 year and 20 year mortgages with fixed rates at or above 7.0% and 7.25% for investment and selling all other fixed rate loans. Through the first three months of fiscal year 1998 rates continued with moderate decline. As a result of rates at the end of December 1997, the Bank reflected only a unrealized gain of less than $1,000 in loans held for sale. Sustained levels of gain on sale of loans is dependent on continued stable or downward interest rate movement and would likely be adversely affected by a continued rise in interest rates. 10 Changes in financial condition between December 31, 1997 and September 30, 1997: Total assets increased by $5,789,686, or approximately 2.54% between September 30, 1997 and December 31, 1997. This increase is largely attributed to a $8,644,897 increase in loan receivables. The Bank utilizes FHLB line of credit and short term advances which increased $5.3 million from September 30, 1997 to December 31, 1997 to fund the acquisition of adjustable rate mortgages. In managing the Bank's overall interest rate risk, loan purchases have been made which increase the level of risk to the extent that borrowing will reprice more frequently than the adjustments on the mortgages. Results of operations: comparison between the three months ended December 31, 1997 and 1996: Net income for the three-month period ended December 31, 1997 of $596,125 represents a decrease of $56,279 from the net income reported for the three-month period ended December 31, 1996. The decrease was primarily due to a $108,692 gain on sale of investments during the three month period ended December 31, 1996 Net interest income after provision for losses on loans for the three-month period ended December 31, 1997 increased $63,558 or approximately 3.8% to $1,715,927 as compared with $1,652,369 for the same period ended December 31, 1996. This increase is associated with the increased interest received on the mortgage loan portfolio. Provision for loan loss has been increased primarily due to increased consumer lending. This net interest income increase is a result of an increase in the volume of net invested loans. Non interest income for the three-month period ended December 31, 1997 decreased $109,960 or 36.26% to $193,274 as compared with $303,234 for the same period ended December 31, 1996. This decrease was due to the $108,652 net gain from sale of investments during the quarter ended December 1996. Other expenses for the three-month period ended December 31, 1997 increased $42,427 or 4.8% to $914,126 as compared with $871,699 for the same period ended December 31, 1996. This increase is primarily due to increased compensation compared to the quarter ending December 31, 1996, partially offset by the decrease in federal insurance premiums. Earnings Per Share: Effective with the quarter ended December 31, 1997, the Company adopted the provisions of Statement of Financial Accounting Standards No. 128, Earnings per Share. The Statement is to be applied to financial statements issued for periods ending after December 15, 1997, including interim periods; earlier application is not permitted. The Statement requires restatement of all prior-period earnings per share (EPS) data presented. FAS No. 128 simplifies the standards for computing EPS and makes them comparable to international EPS standards. It replaces the presentation of primary EPS with a presentation of basic EPS. It also requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. 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. Diluted EPS is computed similarly to the previously presented fully diluted earnings per share. Liquidity and Capital Resources: The Bank is required to maintain minimum levels of liquid assets, as defined by the Office of Thrift Supervision ("OTS") regulations. This requirement, which may be varied from time to time depending upon economic conditions and deposit flows, is based upon a percentage of deposits and short-term borrowing. The required minimum ratio is currently 4 percent. The Bank's liquidity ratio averaged 5.25% during 11 December 1997. The Bank manages its liquidity ratio to meet its funding needs, including: deposit outflows, disbursement of payments collected from borrowers for taxes and insurance, and loan principal disbursements. The Bank also manages its liquidity ratio to meet its asset/liability management objectives. In addition to funds provided from operations, the Bank's primary sources of funds are: savings deposits, principal repayments on loans and mortgage-backed securities, and matured or called investment securities. In addition, the Bank may borrow funds from time to time from the Federal Home Loan Bank of Topeka. Scheduled loan repayments and maturing investment securities are a relatively predictable source of funds. However, savings deposit flows and prepayments on loans and mortgage-backed securities are significantly influenced by changes in market interest rates, economic conditions and competition. The Bank strives to manage the pricing of its deposits to maintain a balanced stream of cash flows commensurate with its loan commitments. When applicable, cash in excess of immediate funding needs is invested into longer-term investments and mortgage-backed securities which typically earn a higher yield than overnight deposits, some of which may also qualify as liquid investments under current OTS regulations. As required by the financial institutions reform, recovery and enforcement act of 1989 ("FIRREA"), OTS prescribed three separate standards of capital adequacy. The regulations require financial institutions to have minimum regulatory capital equal to 1.50 percent of tangible assets; minimum core capital equal to 3.00 percent of adjusted tangible assets; and risk-based capital equal to 8.00 percent of risk-based assets. The Bank's capital requirements and actual capital under the OTS regulations are as follows at December 31, 1997: Amount (Thousands) Percent of Assets GAAP Capital $24,511 10.77% Tangible Capital: Actual 24,511 10.77% Required 3,412 1.50% Excess 21,099 9.27% Core Capital: Actual 24,511 10.77% Required 6,825 3.00% Excess 17,686 7.77% Risk-Based Capital: Actual 25,555 22.68% Required 9,015 8.00% Excess $16,540 14.68% 12 LANDMARK BANCSHARES, INC. PART II - OTHER INFORMATION Item 2. - Changes in Securities NONE Item 5. - Other Information Item 6(b). - Reports on Form 8-K None SIGNATURES 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. Date February 13, 1998 LANDMARK BANCSHARES, INC. By /S/Larry Schugart ----------------------------------------- LARRY SCHUGART President and Chief Executive Officer (Duly Authorized Representative) By /S/James F. Strovas ----------------------------------------- JAMES F. STROVAS Senior Vice President and Chief Financial Officer (Duly Authorized Representative) EX-27 2 FDS 10QSB
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION DERIVED FROM THE QUARTERLY REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION. 1,000 3-MOS SEP-30-1998 DEC-31-1997 3,287 112 0 0 8,467 50,316 50,687 166,790 1,044 233,640 145,969 51,500 3,250 0 0 0 228 32,692 233,640 3,341 1,017 0 4,358 1,865 707 1,786 70 0 914 995 0 0 0 596 .37 .37 2.90 79 700 247 1,882 967 0 5 1,044 1,044 0 0 BASIC EARNINGS PER SHARE
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