10QSB 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 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 0-26560 HARDIN BANCORP, INC. -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its Charter) Delaware 43-1719104 -------------------------------------------------------------------------------- State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification Number) 201 Northeast Elm Street, Hardin, Missouri 64035 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (660) 398-4312 -------------- 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 [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Class Outstanding at June 30, 2000 -------------------------------------------------------------------------------- Common stock, .01 par value 731,453 HARDIN BANCORP, INC. AND SUBSIDIARIES CONTENTS PART I FINANCIAL INFORMATION Item 1. Unaudited Financial Statements ........................Page Consolidated Balance Sheets...........................1 Consolidated Statements of Earnings...................2 Consolidated Statements of Stockholders' Equity.......3 Consolidated Statements of Cash Flows...............4-5 Notes to Consolidated Financial Statements............6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..............................................7-9 PART II OTHER INFORMATION........................................10 Signatures...............................................11
Hardin Bancorp, Inc. and Subsidiaries Consolidated Balance Sheets June 30, 2000 March 31, 2000 ------------- -------------- (Unaudited) Assets ------ Cash $ 1,155,709 $ 1,418,308 Interest bearing deposits 3,132,786 3,331,934 Investment securities available-for-sale 36,759,327 37,793,223 Mortgage-backed securities available-for-sale 11,950,032 11,805,699 Loans receivable, net 80,782,741 78,059,195 Accrued interest receivable: Investment securities 450,718 487,312 Mortgage-backed securities 92,562 84,232 Loans receivable 568,821 548,094 Premises and equipment 1,755,268 1,777,911 Stock in Federal Home Loan Bank (FHLB) of Des Moines, at cost 2,065,000 2,015,000 Deferred income taxes 1,133,153 816,000 Prepaid expenses and other assets 355,554 347,403 ------------- ------------- Total assets $ 140,201,671 $ 138,484,311 ============= ============= Liabilities and Stockholders' Equity ------------------------------------ Liabilities: Deposits $ 85,263,057 $ 86,565,365 Advances from borrowers for property taxes and insurance 514,183 359,670 Advances from FHLB 41,300,000 38,300,000 Accrued interest payable 39,890 40,935 Current income taxes payable 254,422 73,601 Accrued expenses and other liabilities 702,898 718,463 ------------- ------------- Total liabilities 128,074,450 126,058,034 ------------- ------------- Stockholders' equity: Serial preferred stock, $.01 par value; 500,000 shares authorized, none issued or outstanding -- -- Common stock, $.01 par value; 3,500,000 shares authorized, 1,058,000 shares issued 10,580 10,580 Additional paid in capital 10,329,414 10,319,573 Retained earnings 9,002,966 8,813,865 Accumulated other comprehensive loss (2,026,231) (1,477,663) Unearned employee benefits (378,753) (429,323) Treasury stock of 326,547 shares at cost (4,810,755) (4,810,755) ------------- ------------- Total stockholders' equity 12,127,221 12,426,277 ------------- ------------- Total liabilities and stockholders' equity $ 140,201,671 $ 138,484,311 ============= =============
See accompanying notes to unaudited consolidated financial statements. 1
Hardin Bancorp, Inc. and Subsidiaries Consolidated Statements of Earnings For the Three Months Ended June 30, 2000 and 1999 (Unaudited) 2000 1999 ---------- ---------- Interest income: Loans receivable $1,637,506 $1,430,390 Mortgage-backed securities 188,020 169,021 Investment securities 656,570 674,607 Other 65,519 61,770 ---------- ---------- Total interest income 2,547,615 2,335,788 ---------- ---------- Interest expense: Deposits 961,899 944,336 FHLB advances 589,735 477,435 ---------- ---------- Total interest expense 1,551,634 1,421,771 ---------- ---------- Net interest income 995,981 914,017 Provision for loan losses 18,590 1,297 ---------- ---------- Net interest income after provision for loan losses 977,391 912,720 ---------- ---------- Non-interest income: Service charges 173,074 132,975 Loan servicing fees 7,381 7,072 Gain on sale of real estate owned 9,205 -- Gain on sale of investments and mortgage-backed securities -- 7,164 Other 44,185 39,432 ---------- ---------- Total non-interest income 233,845 186,643 ---------- ---------- Non-interest expense: Compensation and benefits 364,439 340,141 Occupancy and equipment 63,388 66,305 Federal insurance premiums 4,444 11,940 Data processing 60,290 49,954 Other 202,502 212,616 ---------- ---------- Total non-interest expense 695,063 680,956 ---------- ---------- Earnings before income taxes 516,173 418,407 Income tax expense 180,821 148,990 ---------- ---------- Net earnings $ 335,352 $ 269,417 ========== ========== Net earnings per share: Basic $ 0.48 $ 0.39 Diluted 0.47 0.38 ========== ==========
See accompanying notes to unaudited consolidated financial statements. 2
Hardin Bancorp, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity For the Three Months Ended June 30, 2000 (Unaudited) Accumulated Additional Other Unearned Common Paid-in Retained Comprehensive Employee Stock Capital Earnings Loss Benefits -------- ----------- --------- ---------- -------- Balance at March 31, 2000 $ 10,580 10,319,573 8,813,865 (1,477,663) (429,323) Comprehensive income: Net earnings - - 335,352 - - Change in net unrealized loss on securities available for sale, net of tax - - - (548,568) - -------- ----------- --------- ---------- -------- Total comprehensive income (loss) - - 335,352 (548,568) - -------- ----------- --------- ---------- -------- Allocation of ESOP shares - 9,841 - - 26,909 Amortization of recognition and retention plan - - - - 23,661 Dividends declared ($.20 per share) - - (146,251) - - -------- ----------- --------- ---------- -------- Balance at June 30, 2000 $ 10,580 $10,329,414 9,002,966 (2,026,231) (378,753) ======== ============ ========= ========== ======== Total Treasury Shareholders' Stock Equity ---------- ---------- Balance at March 31, 2000 (4,810,755) 12,426,277 Comprehensive income: Net earnings - 335,352 Change in net unrealized loss on securities available for sale, net of tax - (548,568) ---------- ---------- Total comprehensive income (loss) - (213,216) ---------- ---------- Allocation of ESOP shares - 36,750 Amortization of recognition and retention plan - 23,661 Dividends declared ($.20 per share) - (146,251) ---------- ---------- Balance at June 30, 2000 (4,810,755) 12,127,221 ========== ==========
See accompanying notes to unaudited consolidated financial statements. 3
Hardin Bancorp, Inc. and Subsidiaries Consolidated Statements of Cash Flows For the Three Months Ended June 30, 2000 and 1999 (Unaudited) 2000 1999 ----------- ----------- Operating Activities: Net earnings $ 335,352 269,417 Adjustments to reconcile net earnings to net cash provided by operating activities: Provision for losses on loans 18,590 1,297 Depreciation 32,020 35,586 Premium accretion and amortization of discounts and deferred loan fees, net 7,677 16,205 Net gain on sale of loans and investment and mortgage-backed securities -- (7,164) Allocation of ESOP shares 36,750 -- Amortization of deferred recognition and retention plan 23,661 22,349 Changes in asset and liabilities: Interest receivable 7,537 14,210 Other assets (15,057) 5,017 Accrued interest payable (1,045) (1,019) Accrued expense and other liabilities (15,523) 276,492 Income taxes payable 180,821 138,991 ----------- ----------- Net cash provided by operating activities 610,783 771,381 ----------- ----------- Investing Activities: Net increase in loans receivable (2,459,785) (3,243,821) Principal payments on available-for-sale mortgage-backed & related securities 761,701 3,020,060 Proceeds from sales of available-for-sale mortgage-backed securities -- 363,166 Purchase of mortgage-backed securities (741,388) -- Purchase of loans serviced by other institutions (286,500) -- Proceeds from sales of available-for-sale investment securities -- 1,005,400 Proceeds from sales of other repossessed assets 6,906 -- Purchase of stock in FHLB of Des Moines (50,000) -- Purchase of office properties and equipment (9,377) (37,810) ----------- ----------- Net cash (used in) provided by investing activities $(2,778,443) 1,106,995 ----------- -----------
4
Hardin Bancorp, Inc. and Subsidiaries Consolidated Statements of Cash Flows For the Three Months Ended June 30, 2000 and 1999 (Unaudited) 2000 1999 ----------- ----------- Financing Activities: Net (decrease) increase in savings deposits $(1,302,309) 1,853,997 Proceeds from FHLB advances 3,000,000 6,000,000 Repayments of FHLB advances -- (11,000,000) Net decrease in advances from borrowers for taxes and insurance 154,473 167,387 Payment of dividends (146,251) (132,256) ----------- ----------- Net cash provided by (used in) financing activities 1,705,913 (3,110,872) ----------- ----------- Decrease in cash (461,747) (1,232,496) Cash and equivalents at beginning of period 4,750,242 4,994,692 ----------- ----------- Cash and equivalents at end of period $ 4,288,495 3,762,196 =========== =========== Supplemental disclosure of cash flow information: Cash paid for: Interest $ 1,552,679 1,422,790 Income taxes, net of refunds $ -- 9,999 Non-cash investing and financing: Dividends declared and payable $ 146,291 146,951
See accompanying notes to unaudited consolidated financial statements. 4 HARDIN BANCORP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (1) Basis of Presentation The accompanying unaudited consolidated financial statements of Hardin Bancorp, Inc. and subsidiaries have been prepared in accordance with instructions for Form 10-QSB. To the extent that information and footnotes required by generally accepted accounting principles for complete financial statements are contained in the audited financial statements included in the Company's Annual Report for the year ended March 31, 2000, such information and footnotes have not been duplicated herein. In the opinion of management, all adjustments, consisting only of normal recurring accruals, which are necessary for the fair presentation of the interim financial statements have been included. The statement of earnings for the three-month period ended June 30, 2000 is not necessarily indicative of the results, which may be expected for the entire year. The March 31, 2000 consolidated balance sheet has been derived from the audited consolidated financial statements as of that date. (2) Earnings Per Share Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the effect of potential dilutive common shares (stock options) outstanding during the period. The shares used in the calculation of basic and diluted earnings per share are shown below: For the three months ended June 30, 2000 1999 ---- ---- Basic weighted average shares 702,648 690,886 Common stock equivalents/stock options 11,248 26,912 -------------------------------- Diluted weighted average shares 713,896 717,798 ================================ 6 HARDIN BANCORP, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL ------- Hardin Bancorp, Inc. (the "Company") was incorporated under the laws of the state of Delaware to become a savings bank holding company with Hardin Federal Savings Bank (the "Bank") of Hardin, Missouri, as its subsidiary. The holding company was incorporated at the direction of the Board of Directors of the Bank, and on September 28, 1995, acquired all of the capital stock of the Bank upon its conversion from mutual to stock form (the "conversion"). Prior to the conversion, the holding company did not engage in any material operations. Hardin Federal Savings Bank was originally founded in 1888 as a Missouri chartered savings and loan association located in Hardin, Missouri. On March 21, 1995, the Bank's members voted to convert the Bank to a Federal mutual charter. The Bank conducts its business through its main office in Hardin, Ray County, and two full service branch offices located in Richmond, Ray County, and Excelsior Springs, Clay County, Missouri. Deposits are insured by the Federal Deposit Insurance Corporation (the "FDIC") to the maximum allowable. The Bank is principally engaged in the business of attracting retail savings deposits from the general public and investing those funds in first mortgage loans on owner occupied, single-family residential loans, commercial real estate loans, mortgage-backed securities, U.S. Government and agency securities, and insured interest bearing deposits. The Bank also originates consumer loans for the purchase of automobiles, home improvement, and home equity lines of credit. The most significant outside factors influencing the operations of the Bank and other financial institutions include general economic conditions, competition in the local market place and the related monetary and fiscal policies of agencies that regulate financial institutions. More specifically, the cost of funds primarily consisting of insured deposits is influenced by interest rates on competing investments and general market rates of interest, while lending activities are influenced by the demand for real estate financing and other types of loans, which in turn is affected by the interest rates at which such loans may be offered and other factors affecting loan demand and funds availability. The deposits of the Bank are insured by the Savings Association Insurance Fund (the "SAIF"), which together with the Bank Insurance Fund (the "BIF"), are the two insurance funds administered by the FDIC. FINANCIAL CONDITION ------------------- Consolidated assets of Hardin Bancorp, Inc. were $140,201,671 as of June 30, 2000, as compared to $138,484,311, on March 31, 2000, an increase of $1,717,360. The increase was primarily due to an increase in loans receivable, net, partially offset by a decrease in investment securities. Loans receivable, net, increased to $80,782,741 on June 30, 2000 from $78,059,195 on March 31, 2000, an increase of $2,723,546. Mortgage-backed securities increased $144,333 to $11,950,032 on June 30, 2000 from $11,805,699 on March 31, 2000. Cash, interest bearing deposits and investment securities decreased $1,495,643 from $42,543,465 on March 31, 2000, to $41,047,822 on June 30, 2000. The decrease was due to investment funds being utilized to originate mortgage and consumer loans. Deposits totaled $85,263,057 on June 30, 2000, a decrease of $1,302,308 from $86,565,365 on March 31, 2000. The decrease in deposits was primarily due to seasonal deposit outflow and intense competition from local as well as national depository institutions. FHLB advances increased $3,000,000 to $41,300,000 on June 30, 2000, compared to $38,300,000 on March 31, 2000. The increase partially offset the outflow of deposits and was utilized to fund loan growth. Stockholders' equity was $12,127,221 on June 30, 2000, compared to $12,426,277 on March 31, 2000. The decrease in stockholders' equity was primarily the result of an increase in the unrealized loss on investment securities, partially offset by net earnings during the three months ended June 30, 2000. 7 RESULTS OF OPERATIONS --------------------- Net earnings for the Company's quarter ended June 30, 2000 were $335,352 compared to $269,417 for the comparable quarter in 1999. The increase in earnings was primarily due to an increase in net interest income after provision for loan losses and an increase in total non-interest income, offset by a slight increase in non-interest expense. Basic earnings per share for the quarter ended June 30, 2000 were $0.48 while diluted earnings per share were $0.47. Basic earnings per share for the quarter ended June 30, 2000 were calculated based on 702,648 average shares outstanding and diluted earnings per share were calculated based on 713,896 average shares outstanding. Basic earnings per share for the comparable quarter ended June 30, 1999 were $0.39 while diluted earnings per share were $0.38. Basic earnings per share for the quarter ended June 30, 1999 were calculated based on 690,886 average shares outstanding and diluted earnings per share were calculated based on 717,798 average shares outstanding. Net interest income after provision for loan losses was $977,391 for the quarter ended June 30, 2000 compared to $912,720 for the quarter ended June 30, 1999, an increase of $64,671. This increase was a result of total interest income increasing $211,827 from $2,335,788 in 1999 to $2,547,615 in 2000 partially offset by an increase in total interest expense of $129,863 from $1,421,771 in 1999 to $1,551,634 in 2000. The increase in total interest income was due to an increase in the average yield on interest earning assets while the increase in total interest expense was primarily a result of an increase in the average cost of FHLB advances. Total non-interest income increased from $186,643 for the quarter ended June 30, 1999 to $233,845 for the quarter ended June 30, 2000. The increase was due to an increase in service charge income and gains on sale of real estate owned. The Company's total non-interest expense for the three months ended June 30, 2000 was $695,063 compared to $680,956 for the comparable quarter in 1999. The increase was primarily due to increases in compensation and benefits expense and data processing expense, offset by reductions in occupancy and equipment expense, FDIC insurance premiums and other non-interest expense. PROVISION FOR LOAN LOSSES ------------------------- For the three months ended June 30, 2000 the Company recorded $18,590 in provision for loan losses in accordance with its classification of assets policy. The Company's loan portfolio consists primarily of one to four family loans, and has experienced minimal charge-offs in the past two years. At June 30, 2000, the Bank's allowance for loan losses was $316,751, or 252% of non-performing assets compared to $304,422, or 128% at March 31, 2000. The allowance for loan losses was .39% of total loans at June 30, 2000 and at March 31, 2000. At June 30, 2000, non-performing assets were $125,806 compared to $237,000 at March 31, 2000. Loans are considered non-performing when the collection of principal and/or interest is not probable, or in the event payments are more than 90 days delinquent. Management will continue to monitor its allowance for loan losses and make additions to the allowance through the provision for loan losses as economic conditions dictate. Although the Company maintains its allowance for loan losses at a level considered to be adequate, there can be no assurance that future losses will not exceed estimated amounts or that additional provisions for loan losses will not be required in the future. 8 CAPITAL RESOURCES ----------------- The Bank is subject to three capital to asset requirements in accordance with Office of Thrift Supervision (the "OTS") regulations. The following table is a summary of the Bank's regulatory capital requirements versus actual capital at June 30, 2000.
Actual Required Excess Amount/Percent Amount/Percent Amount/Percent -------------- -------------- -------------- (Dollars in Thousands) Tangible Capital $13,585/ 9.58% $2,127/ 1.50% $11,458/ 8.08% Core Leverage Capital $13,585/ 9.58% $5,671/ 4.00% $7,914/ 5.58% Risk-based Capital $13,898/21.09% $5,271/ 8.00% $8,627/13.09%
LIQUIDITY --------- The Bank's principal sources of funds are deposits, principal and interest payments on loans, deposits in other insured institutions, and investment securities. While scheduled loan repayments and maturing investments are relatively predictable, deposit flows and early loan payments are more influenced by interest rates, general economic conditions and competition. Additional sources of funds may be obtained from the FHLB by utilizing numerous available products to meet funding needs. The Bank is required to maintain minimum levels of liquid assets as defined by regulations. The required percentage is currently four percent of net withdrawable savings deposits and borrowings payable on demand or in one year or less. The Bank has maintained its liquidity ratio at levels exceeding the minimum requirement. The eligible liquidity ratio at June 30, 2000 was 33.08%. In light of the competition for deposits, the Bank may utilize the funding sources of the FHLB to meet loan demand in accordance with the Bank's growth plans. The wholesale funding sources may allow the Bank to obtain a lower cost of funding and create a more efficient liability match to the respective assets being funded. For purposes of the cash flows, all short-term investments with a maturity of three months or less at the date of purchase are considered cash equivalents. Cash and cash equivalents for the periods ended June 30, 2000 and 1999 were $4,288,495 and $3,762,196, respectively. The increase was primarily due to an increase in net cash provided by financing activities. YEAR 2000 COMPLIANCE -------------------- Hardin Bancorp, Inc. had a successful transition to year 2000 processing. The Company will continue to monitor all processing to ensure that no Y2K issues arise in the future. The Company has taken the necessary steps to validate and test its contingency/business resumption plan in order to minimize the impact on operations should there be system failures in the future. FORWARD LOOKING STATEMENT ------------------------- This Quarterly Report on Form 10-QSB may contain certain forward-looking statements consisting of estimates with respect to the financial condition, results of operations and business of the Company that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, loan demand, real estate values and competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services. 9 PART II - OTHER INFORMATION Item 1. Legal Proceedings ----------------- None. Item 2. Changes in Securities --------------------- None. Item 3. Defaults Upon Senior Securities ------------------------------- None. Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- None. Item 5. Other Information ----------------- On June 22, 2000 the Board of Directors declared a $.20 per share cash dividend to all stockholders of record on July 7, 2000, payable on July 21, 2000. Item 6. Exhibits and Reports on Form 8-K -------------------------------- Exhibits: 27 - Financial Data Schedule Reports on Form 8-K: None. 10 SIGNATURES Pursuant to the requirement 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. HARDIN BANCORP, INC. Registrant Date: August 14, 2000 /s/ Robert W. King --------------- ------------------ Robert W. King, President and Chief Executive Officer (Duly Authorized Officer) Date: August 14, 2000 /s/ Karen K. Blankenship --------------- ------------------------ Karen K. Blankenship, Senior Vice President and Secretary (Principal Accounting Officer) 11