-----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, JhzIIzDK2Eb1BN9Zc0t07k1wzzmjl4Gx9qWTYWbryOLrK4IIQdtHyuV31DcV2ZwC IN8AS2I/tVj5mgAFQj0x/w== /in/edgar/work/0001046386-00-000143/0001046386-00-000143.txt : 20001115 0001046386-00-000143.hdr.sgml : 20001115 ACCESSION NUMBER: 0001046386-00-000143 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOGANSPORT FINANCIAL CORP CENTRAL INDEX KEY: 0000939928 STANDARD INDUSTRIAL CLASSIFICATION: [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: 763934 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 0001.txt QUARTERLY FINANCIAL 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 SEPTEMBER 30, 2000 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 November 1, 2000 was 1,083,510. -1- 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 September 30, 2000 and December 31, 1999 Consolidated Statements of Earnings for the three and nine months ended September 30, 2000 and 1999 Consolidated Statements of Shareholders' Equity for the nine months ended September 30, 2000 and 1999 Consolidated Statements of Cash Flows for the nine months ended September 30, 2000 and 1999 Notes to Consolidated Condensed Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk 14 PART II. OTHER INFORMATION Item 1. Legal Proceedings 16 Item 6. Exhibits and Reports of Form 8-K 16 SIGNATURES -2- LOGANSPORT FINANCIAL CORP.
Consolidated Statements of Financial Condition (In thousands, except share data) September 30, December 31, ASSETS 2000 1999 Cash and due from banks $ 746 $ 1,336 Interest-bearing deposits in other financial institutions 4,141 3,810 ------- ------- Cash and cash equivalents 4,887 5,146 Investment securities available for sale-at market 9,911 8,539 Mortgage-backed securities available for sale-at market 5,263 5,898 Loans receivable-net 100,848 90,900 Office premises and equipment-at depreciated cost 1,860 1,902 Federal Home Loan Bank stock - at cost 1,773 1,273 Investment in real estate partnership 1,350 1,485 Accrued interest receivable on loans 543 416 Accrued interest receivable on mortgage-backed securities 43 47 Accrued interest receivable on investments 166 115 Prepaid expenses and other assets 60 45 Cash surrender value of life insurance 1,216 1,184 Prepaid income tax 184 46 Deferred income tax asset 390 472 ------- ------- Total assets $128,494 $117,468 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $ 77,054 $ 76,011 Advances from the Federal Home Loan Bank 33,000 23,000 Notes payable 1,237 1,307 Accrued interest and other liabilities 704 1,004 ------- ------- Total liabilities 111,995 101,322 Shareholders' equity Common stock 5,515 5,979 Retained earnings-restricted 11,337 10,734 Less shares acquired by stock benefit plan (137) (239) Accumulated comprehensive loss, unrealized losses on securities designated as available for sale, net of related tax effects (216) (328) ------- ------- Total shareholders' equity 16,499 16,146 ------- ------- Total liabilities and shareholders' equity $128,494 $117,468 ======= =======
-3- LOGANSPORT FINANCIAL CORP.
Consolidated Statements of Earnings (Unaudited) (In thousands, except share data) Three months ended Nine months ended September 30, September 30, 2000 1999 2000 1999 Interest income Loans $2,075 $1,658 $5,894 $4,707 Mortgage-backed securities 95 96 289 316 Investment securities 165 122 515 285 Interest-bearing deposits and other 118 69 307 188 ----- ----- ----- ----- Total interest income 2,453 1,945 7,005 5,496 Interest expense Deposits 984 860 2,903 2,432 Borrowings 446 200 1,138 453 ----- ----- ----- ----- Total interest expense 1,430 1,060 4,041 2,885 ----- ----- ----- ----- Net interest income 1,023 885 2,964 2,611 Provision for losses on loans 71 41 212 122 ----- ----- ----- ----- Net interest income after provision for losses on loans 952 844 2,752 2,489 Other income (loss) Service charges on deposit accounts 43 40 117 102 Loss on sale of investments and mortgage-backed securities (16) - (16) - Loss on equity investment (85) (36) (171) (86) Other operating 50 40 161 106 ----- ----- ----- ----- Total other income (loss) (8) 44 91 122 General, administrative and other expense Employee compensation and benefits 289 222 881 666 Occupancy and equipment 53 41 143 117 Federal deposit insurance premiums 4 10 12 30 Data processing 44 38 121 110 Other operating 100 86 315 320 ----- ----- ----- ----- Total general, administrative and other expense 490 397 1,472 1,243 ----- ----- ----- ----- Earnings before income taxes 454 491 1,371 1,368 Income tax expense 124 173 411 497 ----- ----- ----- ----- NET EARNINGS $ 330 $ 318 $ 960 $ 871 ===== ===== ===== ===== Other comprehensive income, net of tax unrealized gains (losses) on securities, net of tax $ 185 $ (132) $ 123 $ (362) Reclassification adjustment for realized gains included in earnings, net of tax of $5 (11) - (11) - ----- ----- ----- ----- COMPREHENSIVE INCOME $ 504 $ 186 $1,072 $ 509 ===== ===== ===== ===== EARNINGS PER SHARE Basic (based on net earnings) $.30 $.27 $.88 $.73 === === === === Diluted (based on net earnings) $.30 $.27 $.88 $.72 === === === ===
-4- LOGANSPORT FINANCIAL CORP.
Consolidated Statements of Shareholders' Equity (Unaudited) (In thousands, except share data) Nine months ended September 30, 2000 1999 Balance at January 1 $16,146 $16,488 Issuance of shares under stock option plan - 5 Amortization of stock benefit plan 102 96 Purchase of shares (464) - Cash dividends of $.33 per share (357) (395) Unrealized gains (losses) on securities designated as available for sale, net of related tax effects 112 (362) Net earnings 960 871 ------ ------ Balance at September 30 $16,499 $16,703 ====== ====== Accumulated other comprehensive income $ (216) $ (207) ====== ======
-5- LOGANSPORT FINANCIAL CORP.
Consolidated Statements of Cash Flows (Unaudited) (In thousands) Nine months ended September 30, 2000 1999 Cash flows from operating activities: Net earnings for the period $ 960 $ 871 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization 80 59 Amortization of premiums on investments and mortgage-backed securities 21 85 Amortization expense of stock benefit plan 102 96 Loss on sale of investments and mortgage-backed securities 16 - Provision for losses on loans 212 122 Loss of equity investment 171 86 Increase (decrease) in cash, due to changes in: Accrued interest receivable on loans (127) (80) Accrued interest receivable on mortgage-backed securities 4 14 Accrued interest receivable on investments (51) (68) Prepaid expenses and other assets (15) (6) Accrued interest and other liabilities (300) (235) Federal income taxes Current (138) (81) Deferred 25 20 ------ ------ Net cash provided by operating activities 960 883 Cash flows provided by (used in) investing activities: Proceeds from sale of investment securities designated as available for sale 1,914 - Purchase of investment securities (3,970) (4,020) Maturities/calls of investment securities 800 375 Purchase of Federal Home Loan Bank stock (500) (456) Principal repayments on mortgage-backed securities 651 1,681 Loan disbursements (39,009) (31,653) Investment in real estate partnership (36) (32) Principal repayments on loans 28,849 17,562 Purchases and additions to office premises and equipment (38) (445) Increase in cash surrender value of life insurance policy (32) (32) ------ ------ Net cash used in investing activities (11,371) (17,020) ------ ------
-6- LOGANSPORT FINANCIAL CORP.
Consolidated Statements of Cash Flows (Unaudited) (In thousands) Nine months ended September 30, 2000 1999 Cash flows provided by (used in) financing activities: Net increase in deposit accounts $ 1,043 $ 6,808 Proceeds from Federal Home Loan Bank advances 24,000 24,000 Repayment of Federal Home Loan Bank advances (14,000) (13,000) Repayment of note payable (70) (68) Proceeds from the exercise of stock options - 5 Purchase of shares (464) - Dividends on common stock (357) (395) ------ ------ Net cash provided by financing activities 10,152 17,350 ------ ------ Net increase (decrease) in cash and cash equivalents (259) 1,213 Cash and cash equivalents, beginning of period 5,146 4,328 ------ ------ Cash and cash equivalents, end of period $ 4,887 $ 5,541 ====== ====== Supplemental disclosure of cash flow information: Cash paid during the year for: Interest on deposits and borrowings $ 4,021 $ 2,872 ====== ====== Income taxes $ 526 $ 559 ====== ====== Dividends payable at end of period $ 119 $ 132 ====== ======
-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 condensed 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, 1999. 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 September 30, 2000, results of operations for the three and nine month periods ended September 30, 2000 and 1999 and cash flows for the nine month periods ended September 30, 2000 and 1999. 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 1,093,247 and 1,199,005 for the nine month periods ended September 30, 2000 and 1999, respectively and 1,083,510 and 1,199,210 for the three month periods ended September 30, 2000 and 1999, 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 1,093,247 and 1,213,148 for the nine months ended September 30, 2000 and 1999, respectively, and 1,087,538 and 1,202,566 for the three months ended September 30, 2000 and 1999, respectively. Incremental shares related to the assumed exercise of stock options included in the computation of diluted earnings per share totaled 14,143 for the nine month period ended September 30, 1999, and 4,028 and 3,356 for the three month periods ended September 30, 2000 and 1999, respectively. A cash dividend of $.11 per common share was declared on August 30, 2000 , payable on October 10, 2000, to stockholders of record as of September 20, 2000. NOTE C: Recent Accounting Pronouncements In September 1998, the Financial Accounting Standards Board (the "FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging Activities" which requires entities to recognize all derivatives in their financial statements as either assets or liabilities measured at fair value. SFAS No. 133 also specifies new methods of accounting for hedging transactions, prescribes the items and transactions that may be hedged, and specifies detailed criteria to be met to qualify for hedge accounting. -8- NOTE C: Recent Accounting Pronouncements (continued) The definition of a derivative financial instrument is complex, but in general, it is an instrument with one or more underlyings, such as an interest rate or foreign exchange rate, that is applied to a notional amount, such as an amount of currency, to determine the settlement amount(s). It generally requires no significant initial investment and can be settled net or by delivery of an asset that is readily convertible to cash. SFAS No. 133 applies to derivatives embedded in other contracts, unless the underlying of the embedded derivative is clearly and closely related to the host contract. SFAS No. 133, as amended by SFAS No. 137, is effective for fiscal years beginning after June 15, 2000. On adoption, entities are permitted to transfer held-to-maturity debt securities to the available-for-sale or trading category without calling into question their intent to hold other debt securities to maturity in the future. SFAS No. 133 is not expected to have a material impact on the Company's financial position or results of operations. In September 2000 the FASB issued SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," which revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures, but carries over most of the provisions of SFAS No. 125 without reconsideration. SFAS No. 140 is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001. The Statement is effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. SFAS No. 140 is not expected to have a material effect on the Company's financial position or results of operations. The foregoing discussion of the effects of recent accounting pronouncements contains forward-looking statements that involve risks and uncertainties. Changes in economic circumstances or interest rates could cause the effects of the accounting pronouncements to differ from management's foregoing assessment. -9- 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 loan losses and the effect of recent accounting pronouncements. Discussion of Financial Condition Changes from December 31, 1999 to September 30, 2000 The Corporation reported total assets of $128.5 million at September 30, 2000, compared to $117.5 million at December 31, 1999, an increase of $11.0 million, or 9.4%. This increase was funded from an additional $10.0 million in FHLB advances and growth in deposits of $1.0 million. Cash and cash equivalents decreased by approximately $259,000 from $5.1 million at December 31, 1999, to $4.9 million at September 30, 2000. The growth in assets was reinvested primarily in loans which increased by $9.9 million and investment and mortgage-backed securities which increased by $737,000. Net loans increased by $9.9 million, or 10.9%, from $90.9 million at December 31, 1999 to $100.8 million at September 30, 2000. Loan originations amounted to $39.0 million for the nine months ended September 30, 2000, while principal repayments amounted to $28.8 million. During the nine months ended September 30, 2000, loan origination volume exceeded that of the comparable period in 1999 by $7.4 million, or 23.2%. Loan originations during 2000 were comprised primarily of loans secured by one to four family residential, nonresidential, commercial real estate and other commercial property. The one to four family residential loans totaled $57.9 million at December 31, 1999 and $61.5 million at September 30, 2000. The commercial and nonresidential loan portfolios totaled $21.6 million at September 30, 2000, compared to $17.5 million at December 31, 1999. Deposits totaled $77.1 million at September 30, 2000, an increase of $1.0 million, or 1.4%, in the first nine months of 2000. Borrowings consisted of $33.0 million of FHLB advances and a $1.2 million note payable related to an equity investment in low income housing. Shareholders' equity was $16.5 million at September 30, 2000 and $16.1 million at December 31, 1999. The payment of dividends and repurchase of stock contributed to a decrease in equity, while a decrease in the unrealized loss on securities available for sale, earnings and the amortization of the stock benefit plan increased equity. -10- Results of Operations Comparison of the Nine Months Ended September 30, 2000 and September 30, 1999 Net earnings for the Company for the nine months ended September 30, 2000 totaled $960,000, compared with $871,000 for the nine months ended September 30, 1999, an increase of $89,000, or 10.2%. Net interest income increased $353,000, while general, administrative and other expense increased $229,000 and taxes decreased $86,000 due to the availability of low income housing tax credits. The major contributor to the increase in net interest income was the growth in the loan portfolio the past calendar year. Loans totaled $100.8 million at September 30, 2000 compared to $87.0 million at September 30, 1999. However, the impact of such growth was partially offset by a corresponding increase in deposits and advances and a decrease in the net interest margin. The interest rate spread amounted to 2.89% at September 30, 2000, compared to 2.98% at September 30, 1999, and the net interest margin totaled 3.34% and 3.53% for the nine month periods ended September 30, 2000 and 1999, respectively. The provision for losses on loans totaled $212,000 for the nine months ended September 30, 2000 and $122,000 for the nine months ended September 30, 1999. No properties were in real estate owned for the quarter ended September 30, 2000 or September 30, 1999. Non-performing loans decreased to $176,000, or .17% of loans at September 30, 2000 from $666,000 or .72% of loans at December 31, 1999. Loan loss reserves amounted to $639,000, or .62% of total loans at September 30, 2000 compared to $440,000 or.47% at December 31, 1999. The current period provision was attributable primarily to the growth in the commercial and nonresidential loan portfolios, which represented approximately 21.3% of the total loan portfolio at September 30, 2000, compared to 18.9% at December 31, 1999. Other income amounted to $91,000 for the nine months ended September 30, 2000, a decrease of $31,000 from the 1999 nine month period. Service charges on deposit accounts increased by $15,000, or 14.7%, and other operating income increased by $55,000, or 51.9%, mainly due to additional fees related to loan processing and increased sales of insurance related to mortgage loans. Such increases were partially offset by an $85,000 increase in the pre-tax loss from an equity investment in a low income housing tax credit investment and a loss on the sale of investment securities of $16,000. General, administrative and other expense increased by $229,000, or 18.4%, in the nine month period ended September 30, 2000 compared to September 30, 1999. Employee compensation and benefits increased $215,000, or 32.3%, as a result of salary increases and additional personnel compared to the same period in 1999, coupled with a one time charge of $38,000 due to the retirement of personnel. Data processing fees increased $11,000, or 10.0%, due to loan and deposit growth. Occupancy and equipment expense increased $26,000, or 22.2%, due primarily to a full nine months of depreciation related to the purchase of new equipment and the new banking facility, while the corresponding period in 1999 reflected only six months in the new facility. Other operating expenses decreased $5,000, or 1.6%, compared to the period ended September 30, 1999, due primarily to the effects of a non-recurring charge of $35,000 related to deposit operations recorded in the 1999 period. This charge was partially recovered in the fourth quarter of 1999. Excluding the effects of this non-recurring charge, other operating expenses increased by $30,000, due primarily to pro-rata increases related to the Company's overall growth year to year. -11- The Company's effective tax rate for the nine month periods ended September 30, 2000 and 1999 was 30.0% and 36.3%, respectively. The reduction for the 2000 period was due to the availability of additional tax credits from the low income housing equity investment. Results of Operations Comparison of the Three Months Ended September 30, 2000 and September 30, 1999 Net earnings for the Company for the three months ended September 30, 2000 totaled $330,000, compared with $318,000 for the three months ended September 30, 1999, an increase of $12,000, or 3.8%. Net interest income increased $138,000, while general, administrative and other expense increased $93,000 and taxes decreased $49,000 due to the availability of low income housing tax credits. The major contributor to the increase in net interest income was the growth in the loan portfolio the past calendar year. The interest rate spread amounted to 2.89% and 2.98% at September 30, 2000 and 1999, respectively. The provision for losses on loans totaled $71,000 for the three months ended September 30, 2000 and $41,000 for the three months ended September 30, 1999. No properties were in real estate owned for the quarter ended September 30, 2000 or September 30, 1999. The increase in the provision was primarily attributable to the growth in the loan portfolio. Service charges on deposit accounts increased by $3,000 and other operating income increased by $10,000. However, a pre-tax loss on the equity investment of $85,000 and a loss on the sale of investment of securities of $16,000 combined for an overall loss in the other income category. Total general, administrative and other expense increased by $93,000, or 23.4%, in the period ended September 30, 2000 compared to the same period ended September 30, 1999. Employee compensation and benefits increased $67,000, or 30.2%, as a result of salary increases and additional personnel compared to the 1999 quarter. Data processing fees increased $6,000, or 15.8%, due to loan and deposit growth. Other operating expenses increased $14,000, or 16.3%, compared to the quarter ended September 30, 1999, due primarily to the Corporation's overall growth year to year. The Company's effective tax rate for the three months ended September 30, 2000 was 27.3% and was 35.2% for the three months ended September 30, 1999. The decrease in the effective tax rate was primarily attributable to tax credits available from the Corporation's investment in a low income housing investment. -12- 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 September 30, 2000, the Bank's tangible capital ratio was 12.64%, its leverage ratio was 12.64%, and its risk-based capital to risk-weighted assets ratio was 20.91%. 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 September 30, 2000.
Capital Standard Required Bank's Excess - ---------------- -------- ------ ------ (In thousands) Tangible (1.5%) $1,927 $16,237 $14,310 Core (4.0%) 5,139 16,237 11,098 Risk-based (8.0%) 6,456 16,876 10,420
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 accounts and borrowings due within one year. The minimum required ratio is currently set by the Office of Thrift Supervision at 4%. At September 30, 2000 the Bank's regulatory liquidity ratio was 20.98%. -13- 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 June 30, 2000, 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 300 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.
Change Net Portfolio Value NPV as % of PV of Assets In Rates $ Amount $ Change % Change NPV Ratio Change (Dollars in thousands) +300bp 9,839 -7,020 -42% 8.07% -488bp +200bp 12,345 -4,514 -27% 9.89% -306bp +100bp 14,743 -2,116 -13% 11.55% -140bp 0bp 16,859 12.95% - -100bp 18,375 1,516 +9% 13.90% +95bp - -200bp 19,228 2,369 +14% 14.40% +145bp - -300bp 20,138 3,279 +19% 14.93% +198bp
-14- Interest Rate Risk Measures: 200 Basis Point (bp) Rate Shock Pre-shock NPV Ratio: NPV as % of PV of Assets 12.95% Exposure Measure: Post-Shock NPV Ratio 9.89% Sensitivity Measure: Change in NPV Ratio 306bp 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. -15- Part II. OTHER INFORMATION Item 1. Legal Proceedings Neither the Bank nor the Company were, during the nine-month period ended September 30, 2000, 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 September 30, 1997, filed with the Commission on August 13, 1997. 27 Financial Data Schedule for the nine month period ended September 30, 2000. (b) Reports on Form 8-K. The Registrant filed no reports on Form 8-K during the fiscal quarter ended September 30, 2000. -16- 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: November 13, 2000 By:/s/ David G. Wihebrink -------------------- --------------------------------- David G. Wihebrink, President and Chief Executive Officer Date: November 13, 2000 By:/s/ Dottye Robeson -------------------- --------------------------------- Dottye Robeson, Secretary and Treasurer -17- EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
9 1,000 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 746 4,141 0 0 15,174 0 0 100,848 639 128,494 77,054 0 1,941 33,000 0 0 5,515 10,984 128,494 5,894 804 307 7,005 2,903 4,041 2,964 212 (16) 1,472 1,371 960 0 0 960 .88 .88 3.34 176 0 0 0 440 13 0 639 0 0 639
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