-----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, Oh+0Veq/F9xQgjnyQ98DMEE3MIFNlHpoTlVmxrVmpU5AZo0iMETrXlQTVIR4nBIs zCfv/6IBdryvGDcGSUZ/Bw== 0001046386-98-000070.txt : 19980515 0001046386-98-000070.hdr.sgml : 19980515 ACCESSION NUMBER: 0001046386-98-000070 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOGANSPORT FINANCIAL CORP CENTRAL INDEX KEY: 0000939928 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 351945736 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25910 FILM NUMBER: 98620171 BUSINESS ADDRESS: STREET 1: 723 E BROADWAY STREET 2: PO BOX 569 CITY: LOGANSPORT STATE: IN ZIP: 46947 BUSINESS PHONE: 2197223855 MAIL ADDRESS: STREET 1: 723 EAST BROADWAY STREET 2: P O BOX 569 CITY: LOGANSPORT STATE: IN ZIP: 46947 10-Q 1 LOGANSPORT FINANCIAL QUARTERLY STATEMENTS SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 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: 0-25910 LOGANSPORT FINANCIAL CORP. (Exact name of registrant specified in its charter) Indiana 35-1945736 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 723 East Broadway P.O. Box 569 Logansport, Indiana 46947 (Address of principal executive offices including Zip Code) (219) 722-3855 (Registrant's telephone number, including area code) 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 report), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] The number of shares of the Registrant's common stock, without par value, as of May 1, 1998 was 1,261,600. Logansport Financial Corp. Form 10-Q Index Page No. PART 1. FINANCIAL INFORMATION Item 1. Financial Statements 3 Consolidated Statements of Financial Condition as of March 31, 1998 (Unaudited) and December 31, 1997 Consolidated Statements of Earnings for the three months ended March 31, 1998 and 1997 (Unaudited ) Consolidated Statements of Shareholders' Equity for the three months ended March 31, 1998 and 1997 (Unaudited) Consolidated Statements of Cash Flows for the three months ended March 31, 1998 and 1997 (Unaudited) Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3. Quantitative and Qualitative Disclosures About Market Risk 14 PART II. OTHER INFORMATION Item 1. Legal Proceedings 17 Item 6. Exhibits and Reports of Form 8-K 17 SIGNATURES -2- LOGANSPORT FINANCIAL CORP.
Consolidated Statements of Financial Condition (Unaudited) (In thousands, except share data) March 31, December 31, 1998 1997 ASSETS Cash and due from banks $ 411 $ 589 Interest-bearing deposits in other financial institutions 4,114 1,680 ------- ------- Cash and cash equivalents 4,525 2,269 Certificates of deposit in other financial institutions 100 100 Investment securities available for sale-at market 4,628 5,750 Mortgage-backed securities available for sale-at market 9,959 9,932 Loans receivable-net 65,394 63,635 Real estate acquired through foreclosure-net 148 106 Office premises and equipment-at depreciated cost 472 465 Federal Home Loan Bank stock- at cost 494 494 Investment in real estate partnership 1,547 1,540 Accrued interest receivable on loans 276 299 Accrued interest receivable on mortgage-backed securities 80 83 Accrued interest receivable on investments 49 121 Prepaid expenses and other assets 36 33 Cash surrender value of life insurance 1,096 1,085 Deferred income tax asset 195 203 -------- -------- Total assets $88,999 $86,115 ====== ====== LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $63,330 $60,595 Advances from the Federal Home Loan Bank 6,500 6,500 Notes payable 1,450 1,525 Accrued interest and other liabilities 873 861 Accrued income taxes 62 92 ------- ------- Total liabilities 72,215 69,573 Shareholders' equity Common stock 7,568 7,566 Retained earnings-restricted 9,494 9,316 Less shares acquired by stock benefit plan (369) (400) Unrealized gains on securities designated as available for sale, net of related tax effects 91 60 ------ ------ Total shareholders' equity 16,784 16,542 ------ ------ Total liabilities and shareholders' equity $88,999 $86,115 ====== ======
-3- LOGANSPORT FINANCIAL CORP.
Consolidated Statements of Earnings (Unaudited) (In thousands, except share data) Three months ended March 31, 1998 1997 Interest income Loans $1,316 $1,162 Mortgage-backed securities 152 124 Investment securities 75 100 Interest-bearing deposits and other 45 53 ------ ------ Total interest income 1,588 1,439 Interest expense Deposits 732 684 Borrowings 94 44 ------ ------ Total interest expense 826 728 ------ ------ Net interest income 762 711 Provision for losses on loans 9 3 ------ ------ Net interest income after provision for losses on loans 753 708 Other income Service charges on deposit accounts 19 18 Loss on sale of investment and mortgage-backed securities - (32) Gain on sale of real estate acquired through foreclosure - 1 Other operating 33 32 ------ ------ Total other income 52 19 General, administrative and other expense Employee compensation and benefits 175 164 Occupancy and equipment 19 22 Federal deposit insurance premiums 10 9 Data processing 26 23 Other operating 87 79 ------ ------ Total general, administrative and other expense 317 297 ------ ------ Earnings before income taxes 488 430 Income tax expense 184 158 ------ ------ NET EARNINGS $ 304 $ 272 ====== ====== Other comprehensive income, net of tax Unrealized gains (losses) on securities 31 (19) ------ ------ COMPREHENSIVE INCOME $ 335 $ 253 ====== ====== EARNINGS PER SHARE Basic (based on net earnings) $.24 $.22 === === Diluted (based on net earnings) $.23 $.21 === ===
-4- LOGANSPORT FINANCIAL CORP.
Consolidated Statements of Shareholders' Equity (Unaudited) (In thousands, except share data) Three months ended March 31, 1998 1997 Balance at January 1 $16,542 $15,427 Issuance of shares under stock option plan 2 - Amortization of stock benefit plan 31 31 Cash dividends of $.10 per share (126) (126) Unrealized gains (losses) on securities designated as available for sale, net of related tax effects 31 (19) Net earnings 304 272 ------ ------ Balance at March 31 $16,784 $15,585 ====== ======
-5- LOGANSPORT FINANCIAL CORP.
Consolidated Statements of Cash Flows (Unaudited) (In thousands) Three months ended March 31, 1998 1997 Cash flows from operating activities: Net earnings for the period $ 304 $ 272 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization 9 10 Amortization of premiums on investments and mortgage-backed securities 42 15 Amortization expense of stock benefit plan 31 31 Loss of sale of investment and mortgage-backed securities - 32 Provision for losses on loans 9 3 Gain on sale of real estate acquired through foreclosure - (1) Increase (decrease) in cash, due to changes in: Accrued interest receivable on loans 23 34 Accrued interest receivable on mortgage-backed securities 3 (14) Accrued interest receivable on investments 72 46 Prepaid expenses and other assets (3) 22 Accrued interest and other liabilities 12 (49) Federal income taxes Current (30) 127 Deferred 8 (12) -------- ------- Net cash provided by operating activities 480 516 Cash flows provided by (used in) investing activities: Proceeds from sale of investment securities - 1,068 Purchase of investment securities (100) (301) Maturities/calls of investment securities 1,255 150 Proceeds from sale of mortgage-backed securities 297 - Purchase of mortgage-backed securities (1,084) (2,235) Principal repayments on mortgage-backed securities 725 238 Loan disbursements (6,029) (3,239) Investment in real estate partnership (7) - Principal repayments on loans 4,210 3,131 Purchases and additions to office premises and equipment (16) (4) Proceeds from sale of real estate acquired through foreclosure - 14 Increase in cash surrender value of life insurance policy (11) (9) ------- -------- Net cash used in investing activities (760) (1,187)
-6- LOGANSPORT FINANCIAL CORP.
Consolidated Statements of Cash Flows (Unaudited) (In thousands) Three months ended March 31, 1998 1997 Cash provided by (used in) financing activities: Net increase in deposit accounts $2,735 $1,993 Proceeds from Federal Home Loan Bank advances - 3,500 Proceeds from note payable - 100 Repayment of Federal Home Loan Bank advances - (2,000) Repayment of note payable (75) (1,500) Proceeds from the exercise of stock options 2 - Dividends on common stock (126) (126) ------ ------ Net cash provided by financing activities 2,536 1,967 ----- ----- Net increase in cash and cash equivalents 2,256 1,296 Cash and cash equivalents, beginning of period 2,269 3,759 ----- ----- Cash and cash equivalents, end of period $4,525 $5,055 ===== ====== Supplemental disclosure of cash flow information: Cash paid during the year for: Interest on deposits and borrowings $ 810 $ 712 ====== ====== Income taxes $ 214 $ 31 ====== ======= Dividends payable at end of period $ 126 $ 126 ====== ====== Foreclosed mortgage loans transferred to real estate acquired through foreclosure $ 54 $ 13 ======= =======
-7- NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS NOTE A: Basis of Presentation The unaudited interim consolidated condensed financial statements include the accounts of Logansport Financial Corp. (the "Company") and its subsidiary, Logansport Savings Bank, FSB, (the "Bank"). The unaudited interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and disclosures required by generally accepted accounting principles for complete financial statements. Accordingly, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 1997. In the opinion of management, the financial statements reflect all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company's financial position as of March 31, 1998, results of operations for the three month periods ended March 31, 1998 and 1997 and cash flows for the three month periods ended March 31, 1998 and 1997. NOTE B: Earnings Per Share and Dividends Per Share Basic earnings per share is computed based upon the weighted-average shares outstanding during the period. Weighted-average common shares outstanding totaled 1,261,072 and 1,256,375 for the three month periods ended March 31, 1998 and 1997, respectively. Diluted earnings per share is computed taking into consideration common shares outstanding and dilutive potential common shares to be issued under the Company's stock option plan. Weighted-average common shares deemed outstanding for purposes of computing diluted earnings per share totaled 1,308,043 and 1,279,435 for the three month periods ended March 31, 1998 and 1997, respectively. A cash dividend of $.10 per common share was declared on March 10, 1998, payable on April 10, 1998, to stockholders of record as of March 25, 1998. NOTE C: Recent Accounting Pronouncements In June 1996, The Financial Accounting Standards Board (the "FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 125, "Accounting for Transfer and Servicing of Financial Assets and Extinguishments of Liabilities", that provides accounting guidance on transfers of financial assets, servicing of financial assets, and extinguishment of liabilities. SFAS No. 125 introduces an -8- approach to accounting for transfers of financial assets that provides a means of dealing with more complex transactions in which the seller disposes of only a partial interest in the assets, retains rights or obligations, makes use of special purpose entities in the transaction, or otherwise has continuing involvement with the transferred assets. The new accounting method, the financial components approach, provides that the carrying amount of the financial assets transferred be allocated to components of the transaction based on their relative fair value. SFAS No. 125 provides criteria for determining whether control of assets has been relinquished and whether a sale has occurred. If the transfer does not qualify as a sale, it is accounted for as a secured borrowing. Transactions subject to the provisions of SFAS No. 125 include, among others, transfers involving repurchase agreements, securitization of financial assets, loan participations, factoring arrangements, and transfers of receivables with recourse. An entity that undertakes an obligation to service financial assets recognizes either a servicing asset or liability for the servicing contract (unless related to a securitization of assets, and all the securitized assets are retained and classified as held to maturity). A servicing asset or liability that is purchased or assumed is initially recognized at its fair value. Servicing assets and liabilities are amortized in proportion to and over the period of estimated net servicing income or net servicing loss and are subject to subsequent assessments for impairment based on fair value. SFAS No. 125 provides that a liability is removed from the balance sheet only if the debtor either pays the creditor and is relieved of its obligations for the liability or is legally released from being the primary obligor. SFAS No. 125 is effective for transfers and servicing of financial assets and extinguishment of liabilities occurring after December 31, 1997, and is to be applied prospectively. Earlier or retroactive application is not permitted. Management adopted SFAS No. 125 effective January 1, 1998, as required, without material effect on the Company's consolidated financial position or results of operations. In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards for reporting and display of comprehensive income and its components (revenues, expenses, gains and losses) in a full set of general-purpose financial statements. SFAS No. 130 requires that all items that are required to be recognized under accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. It does not require a special format for that financial statement but requires that an enterprise display an amount representing total comprehensive income for the period in that financial statement. SFAS No. 130 requires that an enterprise (a) classify items of other comprehensive income by their nature in a financial statement and (b) display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of a statement of financial position. SFAS No. 130 is effective for fiscal years beginning after December 15, 1997. Reclassification of financial statements for earlier periods provided for comparative purposes is required. Management adopted SFAS No. 130 -9- effective January 1, 1998, as required, without material impact on the Company's financial statements. In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." SFAS No. 131 significantly changes the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about reportable segments in interim financial reports issued to shareholders. It also establishes standards for related disclosures about products and services, geographic areas and major customers. SFAS No. 131 uses a "management approach" to disclose financial and descriptive information about the way management organizes the segments within the enterprise for making the operating decisions and assessing performance. For many enterprises, the management approach will likely result in more segments being reported. In addition, SFAS No. 131 requires significantly more information to be disclosed for each reportable segment than is presently being reported in annual financial statements and also requires that selected information be reported in interim financial statements. SFAS No. 131 is effective for fiscal years beginning after December 15, 1997. SFAS No. 131 is not expected to have a material impact on the Company's financial statements. Note D: Other Matters As with all providers of financial services, the Company's operations are heavily dependent on information technology systems. The Bank is addressing the potential problems associated with the possibility that the computers that control or operate the Bank's information technology systems and infrastructure may not be programmed to read four-digit date codes and, upon arrival of the year 2000, may recognize the two-digit code "00" as the year 1900, causing systems to fail to function or to generate erroneous data. The Bank is working with the companies that supply or service its information technology systems to identify and remedy any year 2000 related problems. As of March 31, 1998, management has developed an estimate of expenses that are reasonably likely to be incurred by the Bank in connection with this issue, however does not expect to incur significant expenses to implement the necessary corrective measures. No assurance can be given, however, that significant expense will not be incurred in future periods. In the event that the Bank is ultimately required to purchase replacement computer systems, programs, and/or equipment, or incur substantial expense to make the Bank's systems, programs, and/or equipment year 2000 compliant, the Bank's net earnings and financial condition could be adversely affected. In addition to possible expense related to its own systems, the Bank could incur losses if loan payments are delayed due to year 2000 problems affecting any major borrowers in the Bank's primary market area. Because the Bank's loan portfolio is highly diversified with regard to individual borrowers and types of businesses, and the Bank's primary market areas are not significantly dependent -10- upon any one employer or industry, the Bank does not expect any significant or prolonged difficulties that will affect net earnings or cash flow. -11- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation. Forward Looking Statements In addition to historical information contained herein, the following discussion contains forward-looking statements that involve risks and uncertainties. Economic circumstances, the Company's operations and the Company's actual results could differ significantly from those discussed in the forward-looking statements. Some of the factors that could cause or contribute to such differences are discussed herein but also include changes in the economy and interest rates in the nation and the Company's market area generally. Some of the forward-looking statements included herein are the statements regarding management's determination of the amount and adequacy of the allowance for losses on loans, the effect of the year 2000 on information technology systems and the effect of certain recent accounting pronouncements. Financial Condition Total assets were $89.0 million at March 31, 1998 compared to $86.1 million at December 31, 1997, an increase of $2.9 million or 3.3%. This increase was funded primarily from a growth in deposits. Cash and cash equivalents increased approximately $2.2 million, from $2.3 million at December 31, 1997 to $4.5 million at March 31, 1998. Efforts to reinvest the growth of deposits in new loans and investments are on-going; however, the interest rate environment contributed to the time required to obtain quality investments and resulted in the increase in cash equivalents. Securities decreased slightly from $15.7 million at December 31, 1997 to $14.6 million at March 31, 1998. Loans increased $1.8 million, or 2.8%, from $63.6 million at December 31, 1997 to $65.4 million at March 31, 1998. Mortgage loan origination exceeded $6.0 million for the quarter, with payoffs equaling $4.2 million. Loan demand in the first quarter of 1998 was very strong compared to the first quarter of 1997 in which there was no growth in the loan portfolio. Deposits were $63.3 million at March 31, 1998 compared to $60.6 million at December 31, 1997, an increase of $2.7 million in the first quarter of 1998. Borrowings consisted of $6.5 million of FHLB advances and a $1.5 million note payable related to an equity investment in low income housing. Shareholders' equity was $16.8 million at March 31, 1998 and $16.5 million at December 31, 1997. The payment of dividends, an increase in the unrealized gain on securities available for sale, the amortization of the stock benefit plan and quarterly net earnings combined to result in an increase of $242,000 for the quarter. -12- Results of Operations Comparison of the Three Months Ended March 31, 1998 and March 31, 1997 - ----------------------------------------------------------------------- Net earnings for the Company for the three months ended March 31, 1998 was $304,000 compared with $272,000 for three months ended March 31, 1997. This was a increase of $32,000 or 11.8%. Net interest income increased $51,000 while other expenses increased $20,000 and taxes increased $26,000. The major contributor to the increase in net interest income was the growth in the loan portfolio the past calendar year. Loans were $65.4 million at March 31, 1998 compared to $57.1 million at March 31, 1997. The provision for loan losses was $9,000 for the three months ended March 31, 1998 and $3,000 for the three months ended March 31, 1997. Two properties were taken into real estate owned in the quarter ended March 31, 1998 with a combined book value of $54,000. One property was written down from $37,000 to a net realizable value of $23,000. Three properties remained in real estate owned at the end of the quarter ending March 31, 1998, and all were sold during April 1998 resulting in a small gain for the Company. One property was taken into real estate owned in the period ended March 31, 1997 and was sold at a gain before the quarter ended. Non-performing loans decreased to $363,000, or 0.56% of loans at March 31, 1998 from $431,000, or 0.67% of loans at December 31, 1997. Loan loss reserves amounted to $240,000 or .37% of total loans at March 31, 1998 compared to $245,000, or 0.38% at December 31, 1997. Other income increased by $33,000 primarily because of a $32,000 loss on the sale of securities available for sale in the quarter ended March 31, 1997. Service charges on deposit accounts and other operating income showed virtually no change compared to the prior year. Total other expenses increased $20,000 or 6.7% in the period ending March 31, 1998 compared to March 31, 1997. Employee compensation and benefits increased $11,000 or 6.7%. This increase was a result of the salary increases and additional personnel compared to a year ago. Data processing fees increased $3,000 and other operating expenses increased $8,000, mainly in the area of advertising, charitable contributions, and service fees. Service fees have increased due to changes in handling our daily deposit but are offset by an increase in interest income due to better cash availability. The Company's effective tax rate for the three months ended March 31, 1998 was 37.7% and was 36.7% for the three months ending March 31, 1997. -13- Capital Resources Pursuant to OTS capital regulations, savings associations must currently meet a 1.5% tangible capital requirement, a 4% leverage ratio (or core capital) requirement, and total risk-based capital to risk-weighted assets ratio of 8%. At March 31, 1998, the Bank's tangible capital ratio was 18.4%, its leverage ratio was 18.4%, and its risk-based capital to risk-weighted assets ratio was 34.2%. Therefore, the Bank's capital significantly exceeded all of the capital requirements currently in effect. The following table provides the minimum regulatory capital requirements and the Bank's capital ratios as of March 31, 1998. Capital Standard Required Bank's Excess - ---------------- -------- ------ ------ Tangible (1.5%) $1,325,000 $16,257,000 $14,932,000 Core (4.0%) 3,535,000 16,257,000 12,722,000 Risk-based (8.0%) 3,857,000 16,497,000 12,640,000 Liquidity The standard measure of liquidity for savings associations is the ratio of cash and eligible investments to a certain percentage of net withdrawable savings account and borrowings due within one year. The minimum required ratio is currently set by the Office of Thrift Supervision at 4%. At March 31, 1998 the Bank's regulatory liquidity ratio was 34.4%. -14- Item 3. Quantitative and Qualitative Disclosures About Market Risk The Bank, like other savings associations, is subject to interest rate risk to the degree that its interest-bearing liabilities, primarily deposits with short and medium-term maturities, mature or reprice at different rates than its interest-earning assets. Management of the Bank believes it is critical to manage the relationship between interest rates and the effect on the Bank's net portfolio value ("NPV"). Generally, NPV is the discounted present value of the difference between incoming cash flows on interest-earning and other assets and outgoing cash flows on interest-bearing liabilities. Management of the Bank's assets and liabilities is done within the context of the marketplace, regulatory limitations and within limits established by the Board of Directors on the amount of change in NPV which is acceptable given certain interest rate changes. The Office of Thrift Supervision ("OTS") issued a regulation, effective January 1, 1994, which uses a net market value methodology to measure the interest rate risk exposure of thrift institutions. Under OTS regulations, an institution's "normal" level of interest rate risk in the event of an assumed change in interest rates, is a decrease in the institution's NPV in an amount not exceeding 2% of the present value of its assets. Thrift institutions with over $300 million in assets or less than a 12% risk-based capital ratio are required to file OTS Schedule CMR. Data from schedule CMR is used by the OTS to calculate changes in NPV (and the related "normal" level of interest rate risk based upon certain interest rate changes (discussed below). Institutions which do not meet either of the filing requirements are not required to file OTS Schedule CMR, but may do so voluntarily. The Bank does not currently meet either of these requirements, but it does voluntarily file Schedule CMR. Presented below, as of December 31, 1997, the latest available date, is an analysis performed by the OTS of the Bank's interest rate risk as measured by changes in NPV for instantaneous and sustained parallel shifts in the yield curve, in 100 basis point increments, up and down 400 basis points and in accordance with OTS regulations. As illustrated in the table, The Bank's NPV is more sensitive to rising rates than declining rates. This occurs principally because, as rates rise, the market value of the Bank's investments, adjustable-rate mortgage loans (many of which have maximum per year adjustments of 1%), fixed-rate loans and mortgage-backed securities declines due to the rate increase. The value of the Bank's deposits and borrowings change in approximately the same proportion in rising and falling rate scenarios. -15-
Change Net Portfolio Value NPV as % of PV of Assets In Rates $ Amount $ Change % Change NPV Ratio Change - -------- -------- -------- -------- --------- ------ (Dollars in thousands) +400bp 11,904 -6,160 -34 % 14.85 % -579bp +300bp 13,766 -4,298 -24 % 16.73 -391bp +200bp 15,512 -2,553 -14 % 18.40 % -225bp +100bp 16,991 -1,074 - 6 % 19.73 % - 91bp 0bp 18,064 20.64 % - - 100bp 18,830 766 +4 % 21.25 % + 60bp - - 200bp 19,514 1,450 +8 % 21.76 % +112bp - - 300bp 20,468 2,403 +13 % 22.49 % +184bp - - 400bp 21,701 3,637 +20 % 23.43 % +278bp
Interest Rate Risk Measures: 200 Basis Point (bp) Rate Shock Pre-shock NPV Ratio: NPV as % of PV of Assets 20.64 % Exposure Measure: Post-Shock NPV Ratio 18.40 % Sensitivity Measure: Change in NPV Ratio (225 bp) As with any method of measuring interest rate risk, certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate loans, have features which restrict changes in interest rates on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, expected rates of prepayments on loans and early withdrawals from certificates could likely deviate significantly from those assumed in calculating the table. -16- Part II. OTHER INFORMATION Item 1. Legal Proceedings Neither the Bank nor the Company were, during the three-month period ended March 31, 1998, or are as of the date hereof involved in any legal proceeding of a material nature. From time to time, the Bank is a party to legal proceedings wherein it enforces its security interests in connection with its mortgage and other loans. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. The following exhibits are attached to this report on Form 10-Q: 3.1 The Articles of Incorporation of the Registrant are incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 (Registration No. 33-89788). 3.2 The Code of By-Laws of the Registrant is incorporated by reference to Exhibit 3.2 to the Form 10-Q for the period ended June 30, 1997, filed with the Commission on August 13, 1997. 27.1 Financial Data Schedule for the three month period ended March 31, 1998. 27.2 Restated Financial Data Schedule for the three month period ended March 31, 1997. (b) Reports on Form 8-K. The Registrant filed no reports on Form 8-K during the fiscal quarter ended March 31, 1998. -17- Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on behalf of the undersigned thereto duly authorized. Logansport Financial Corp. Date: May 12, 1998 By: /s/ Thomas G. Williams --------------------------- ---------------------- Thomas G. Williams President and Chief Executive Officer Date: May 12, 1998 By: /s/ Dottye Robeson --------------------------- ------------------ Dottye Robeson Secretary and Treasurer -18- EX-27.1 2 FDS FOR MARCH 31, 1998
9 1,000 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 4,525 100 0 0 14,587 14,587 14,587 65,634 (240) 88,999 63,330 6,500 935 1,450 0 0 7,568 9,216 88,999 1,316 227 45 1,588 732 826 762 (9) 0 317 488 0 0 0 304 .24 .23 3.64 363 363 0 0 245 147 0 240 0 0 240
EX-27.2 3 RESTATED FDS FOR MARCH 31, 1997
9 1,000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 1,359 3,795 0 0 14,604 0 0 57,132 239 79,298 59,389 0 824 3,500 0 0 7,518 8,067 79,298 1,197 224 53 1,475 684 729 746 3 (32) 316 430 272 0 0 272 .22 .21 3.97 0 356 0 0 236 0 0 239 0 0 239
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