-----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, AdA6SNFX1ScX/sKGzDk8KCSciDu+MYmF35Mscq/fYWG49mVF2awBwuOuYTH8KjhO wHs7oz2MJDqIj0eJ/F3x+Q== 0000943374-96-000044.txt : 19960816 0000943374-96-000044.hdr.sgml : 19960816 ACCESSION NUMBER: 0000943374-96-000044 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARDIN BANCORP INC CENTRAL INDEX KEY: 0000947220 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 431719104 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-26560 FILM NUMBER: 96613258 BUSINESS ADDRESS: STREET 1: 2ND & ELM STS STREET 2: P O BOX 608 CITY: HARDIN STATE: MO ZIP: 64035 BUSINESS PHONE: 8163984312 MAIL ADDRESS: STREET 1: 2ND & ELM STS STREET 2: P O BOX 608 CITY: HARDIN STATE: MO ZIP: 64035 10QSB 1 6/30/96 10-QSB FOR HARDIN BANCORP INC. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 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) 2nd and Elm Street, Hardin, Missouri 64035 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code:(816) 398-4312 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 of 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 common stock as of the latest practicable date. Common stock, .01 par value 1,012,180 Class Outstanding at June 30, 1996 HARDIN BANCORP, INC. CONTENTS PART I - FINANCIAL INFORMATION Item 1: 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 6-7 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 8-11 PART II - OTHER INFORMATION 12 Signatures 13 PAGE Hardin Bancorp, Inc. and Subsidiaries Consolidated Balance Sheets June 30, 1996, and March 31, 1996
(Unaudited) June 30, March 31, Assets 1996 1996 ----------- --------- Cash $ 277,856 $ 253,557 Interest bearing deposits 2,412,632 5,430,396 Certificates of deposits - - Investment securities - available for sale 12,110,020 6,362,850 Mortgage backed securities: Held to maturity 15,231,170 16,298,987 Available for sale 7,554,609 7,906,862 Loans receivable, net 47,175,133 45,031,460 Accrued interest receivable: Investment securities 188,051 116,562 Mortgage backed securities 176,185 188,532 Loans receivable 311,157 296,775 Premises and equipment 533,482 510,218 Stock in Federal Home Loan Bank (FHLB) of Des Moines, at cost 742,000 742,000 Prepaid expenses and other assets 237,301 248,623 Total assets $ 86,949,596 $ 83,386,822 Liabilities and Stockholder's Equity Liabilities Deposits $ 66,090,856 $66,605,247 Advances from borrowers for taxes and insurance 343,464 223,752 Advances on FHLB line of credit 5,000,000 - Accrued interest payable 40,480 30,385 Income taxes payable: Current 171,393 56,575 Deferred (60,325) 48,000 Accrued expenses and other liabilities 431,248 387,922 ---------- ---------- Total liabilities 72,017,116 67,351,881 ---------- ---------- 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, and 1,012,180 and 1,058,000 outstanding at June 30, 1996 and March 31, 1996 respectively 10,580 10,580 Additional paid-in capital 10,055,448 10,055,448 Retained earnings 6,979,995 6,885,230 Unrealized gain or (loss) on available for sale securities, net (338,329) (154,597) Unearned employee stock ownership plan (761,720) (761,720) Deferred recognition and retention plan (476,979) - Treasury stock (45,820 shares, at cost) (536,515) - ---------- ---------- Total stockholders' equity 14,932,480 16,034,941 ---------- ---------- Total liabilities and stockholders' equity $ 86,949,596 $ 83,386,822 ---------- ---------- ---------- ---------- See accompanying notes to consolidated financial statements.
Hardin Bancorp, Inc. and Subsidiaries Consolidated Statements of Earnings for the three months ended June 30, 1996 and 1995 (Unaudited)
1996 1995 ----------- ----------- Interest income Loans receivable $ 947,561 $ 704,238 Mortgage backed securities 367,865 403,950 Investment securities 197,029 83,400 Other 60,065 75,485 ----------- ----------- Total interest income 1,572,520 1,267,073 ----------- ----------- Interest expense Deposits 829,107 851,958 FHLB advances 68,288 8,588 ----------- ----------- Total interest expense 897,395 860,546 ----------- ----------- Net interest income 675,125 406,527 Provision for loan loss 7,500 - ----------- ----------- Net interest income after provision for loan losses 667,625 406,527 Non-interest income Service charges 20,565 26,913 Loan servicing fees 9,613 - Gain/(loss) on sale of investments and mortgage backed securities - (2,886) Other income 62,327 25,781 ----------- ----------- Total non-interest income 92,505 49,808 ----------- ----------- Non-interest expense Compensation and benefits 231,026 164,952 Occupancy and equipment 25,886 22,287 Federal insurance premiums 37,771 38,660 Data processing 22,332 22,150 Other 133,021 80,408 ----------- ----------- Total non-interest expense 450,036 328,457 ----------- ----------- Earnings before income taxes 310,094 127,878 Income tax expense 114,818 43,415 ----------- ----------- Net earnings $ 195,276 $ 84,463 ----------- ----------- ----------- ----------- Net earnings per common share: Primary and fully diluted $ 0.20 $ N/A Weighted average number of shares outstanding: Primary and fully diluted 972,301 N/A N/A not applicable because no stock was outstanding. See accompanying notes to consolidated financial statements.
PAGE Hardin Bancorp, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity Year ended March 31, 1996 and Three months ended June 30, 1996 (Unaudited)
Unrealized Unearned Additional Gain or (Loss) Employee Total Common Paid-in Retained on Stock Deferred Treasury Stockholders' Stock Capital Earnings Securities,net Ownership Plan RRP Stock Equity ------- ---------- ---------- --------- --------- --------- ---------- ----------- Balance at March 31, 1996 $10,580 10,055,448 6,885,230 (154,597) (761,720) - - 16,034,941 Net earnings - - 195,276 - - - - 195,276 Change in unrealized loss on available-for-sale securities, net of tax - - - (183,732) - - - (183,732) Repurchase of common stock - - - - - - (1,034,665) (1,034,665) Adoption of RRP - - - - - (498,150) 498,150 - Amortization of RRP - - - - - 21,171 - 21,171 Dividend declared ($.10 per share) - - (100,511) - - - - (100,511) ------- ---------- ---------- --------- --------- --------- ---------- ----------- Balance at June 30, 1996 $10,580 10,055,448 6,979,995 (338,329) (761,720) (476,979) (536,515) 14,932,480 ------- ---------- ---------- --------- --------- --------- ---------- ----------- ------- ---------- ---------- --------- --------- --------- ---------- ----------- See accompanying notes to consolidated financial statements.
PAGE Hardin Bancorp, Inc. and Subsidiaries Consolidated Statements of Cash Flows Three Months Ended June 30, 1996 and 1995 (Unaudited)
1996 1995 ----------- ------------ Operating Activities: Net Earnings $ 195,276 $ 84,463 Adjustments to reconcile net earnings to net cash provided by operating activities: Provision for losses on loans 7,500 - Depreciation 12,263 10,654 Premium accretion and amortization of discounts and deferred loan fees, net 23,863 22,828 Net gain (Loss) on sale of loans and investment securities available for sale - 2,886 Gain on sale of premises and equipment - (4,877) Amortization of deferred Recognition and Retention Plan (RRP) 21,171 - Changes in assets and liabilities: Interest receivable (73,524) 34,199 Other assets 11,322 (75,929) Accrued interest payable 10,095 (2,214) Accrued expense and other liabilities 48,615 (40,305) Income taxes payable 114,818 43,316 ----------- ------------ Net cash provided by operating activities 371,399 75,021 ----------- ------------ Investing Activities: Net increase in loans receivable (1,753,741) (320,775) Proceeds from maturities of certificate of deposits in other institutions - 100,000 Purchase of loans receivable (396,238) (1,761,669) Principal payments on mortgage backed securities: Available for sale 305,910 - Held to maturity 1,049,407 1,184,877 Purchase of investments securities Available for sale (7,499,531) (1,267,655) Proceeds from maturities of investment securities: Available for sale 1,500,000 - Held to maturity - - Proceeds from sales of investment securities available for sale - 2,993,438 Proceeds from sale of real estate owned - - Purchase of office premises and equipment (35,527) (2,776) Proceeds from sale of office premises and equipment - 13,500 ----------- ------------ Net cash used in investing activities (6,829,720) 938,940 ----------- ------------
Hardin Bancorp, Inc. and Subsidiaries Consolidated Statements of Cash Flows, Continued Three Months Ended June 30, 1996 and 1995 (Unaudited)
1996 1995 ---------- ---------- Financing Activities: Net (decrease) increase in savings deposits (514,391) 369,833 Proceeds from FHLB advances 5,000,000 - Repayments of FHLB advances - (1,500,000) Net increase in advances from borrowers for taxes and insurance 119,712 96,799 Payment of dividends (105,800) - Purchase of treasury stock (1,034,665) - ---------- ---------- Net cash provided by financing activities 3,464,856 (1,033,368) ---------- ---------- Increase in cash (2,993,465) (19,407) Cash at beginning of period 5,683,953 4,442,116 ---------- ---------- Cash at end of period $ 2,690,488 $ 4,422,709 ---------- ---------- ---------- ---------- Supplemental disclosure of cash flow information: Cash paid for: Interest $ 887,300 $ 862,760 Income taxes, net of refunds $ - $ 99 Noncash investing and financing: Allocation of treasury stock to RRP $ 498,150 $ - Dividends declared and payable $ 100,511 $ - See accompanying notes to consolidated financial statements.
PAGE HARDIN BANCORP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (1) Hardin Bancorp, Inc. Hardin Bancorp, Inc. (the "Holding company") was incorporated under the laws of the State of Delaware for the purpose of becoming the savings and loan holding company of Hardin Federal Savings Bank, (the "Bank") in connection with the Bank's conversion from a federally chartered mutual savings bank to a federally chartered stock savings bank, pursuant to its Plan of Conversion. On August 21, 1995, the Holding Company commenced a Subscription and Community Offering of its shares in connection with the conversion of the Bank (the "Offering"). The Offering was consummated and the Holding Company acquired the Bank on September 28, 1995. It should be noted that the Holding Company had no assets prior to the conversion and acquisition on September 28, 1995. The accompanying consolidated financial statements as of and for the three months ended June 30, 1996 include the accounts of the Holding Company and the Bank. (2) Basis of Preparation The accompanying unaudited consolidated financial statements were 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 Holding Company's Annual Report for the year ended March 31, 1996, 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 statements of earnings for the three month period ended June 30, 1996 are not necessarily indicative of the results which may be expected for the entire year. (3) Earnings Per Share On September 28, 1995, 1,058,000 shares of the Holding Company's stock were issued, including 84,640 shares issued to the ESOP. Earnings per share amounts for the three month period ended June 30, 1996 are based upon an average of 972,301 shares. The shares issued to the Employee Stock Ownership Plan (ESOP) are not included in this computation until they are allocated to plan participants. (4) Stockholders' Equity and Stock Conversion The Bank converted from a federally chartered mutual savings bank to a federally chartered stock savings bank pursuant to its Plan of Conversion which was approved by the Bank's members on September 21, 1995. The conversion was effective on September 28, 1995 and resulted in the issuance of 1,058,000 shares of common stock (par value $0.01) at $10.00 per share for a gross sales price of $10,580,000. Costs related to conversion (primarily underwriters' commissions, printing, and professional fees) aggregated $532,600 and were deducted to arrive at the net proceeds of $10,047,400. The Holding Company established an employee stock ownership trust which purchased 84,640 shares of common stock of the Holding Company at the issuance price of $10.00 per share with funds borrowed from the holding company. (5) Employee Stock Ownership Plan (ESOP) All employees meeting age and service requirements are eligible to participate in an ESOP established on September 28, 1995. Contributions made by the Bank to the ESOP are allocated to participants by a formula based on compensation. Participant benefits become 100 percent vested after five years. The ESOP purchased 84,640 shares in the Bank's conversion. ESOP expense for the three month period ended June 30, 1996 was $29,742. (6) Recognition and Retention Plan (RRP) On April 16, 1996, the shareholders approved adoption of a RRP whereby 42,320 shares of common stock were authorized to be purchased by the plan. At June 30, 1996, 35,972 shares have been awarded to plan participants. The cost of these shares will be amortized as compensation expense over a five year vesting period. 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 and at June 30, 1996, had no significant assets other than the investment in the capital stock of the Bank, cash, investment securities, and Hardin Bancorp loan to the employee stock ownership plan (ESOP), representing a portion of the net proceeds from the conversion retained at the holding company level. 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 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 (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, mortgage backed securities, U.S. Government securities, and insured interest bearing deposits. The Bank also originated consumer loans, including loans for the purchase of automobiles and home improvement loans. 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 presently 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. On August 8, 1995, the FDIC revised the premium schedule for BIF-insured banks to provide a range of .04% to .31% of deposits (as compared to the former range of .23% to .31% of deposits for both BIF and SAIF insured institutions) in anticipation of the BIF achieving its statutory reserve ratio. The lower premiums for BIF members became effective in the third quarter of 1995 after FDIC verification that the BIF achieved the statutory reserve ratio on June 30, 1995. Assessments for BIF members were subsequently reduced to as low as $2,000. As a result, BIF members generally will pay lower premiums than the SAIF members. It is anticipated that the SAIF will not be adequately recapitalized until 2002, absent a substantial increase in premium rates or the imposition of special assessments or other significant developments, such as a merger of the SAIF and BIF. As a result of the disparity, SAIF members could be placed at a significant competitive disadvantage to BIF members due to higher costs for deposit insurance. Proposed legislation under consideration by Congress provides for a one-time assessment to be imposed on all deposits assessed at the SAIF rates, as of March 31, 1995, in order to recapitalize the SAIF and eliminate the disparity. The BIF and the SAIF would be merged effective January 1, 1998. The special assessment rate is anticipated to be .85% to .90%. Based upon the Bank's level of SAIF deposits at March 31, 1995, and assuming a special assessment of .90%, the Bank's assessment would be approximately $610,000 on a pre-tax basis. If the legislation is enacted it is anticipated the assessment would be payable in 1996. Accordingly, this special assessment would significantly increase non-interest expense and adversely affect the Bank's results of operations. Conversely, depending upon the Bank's capital level and supervisory rating, and assuming, although there can be no assurance, that the insurance premium levels for BIF and SAIF members are again equalized, deposit insurance premiums could decrease significantly to as low as .04% for future periods. The Congress is also considering requiring all federal thrift institutions, such as the Bank, to either convert to a national bank or a state chartered depository institution by January 1, 1998. In addition, the Company would no longer be regulated as a thrift holding company, but rather as a bank holding company. The Office of Thrift Supervision (OTS) also would be abolished and its functions transferred among the federal banking regulators. Other proposed legislation before Congress might require the recapture in taxable income of the Bank's bad debt reserve, unless the Bank met certain conditions. The Bank's bad debt reserve was approximately $1,600,000 at June 30, 1996. Certain aspects of the legislation remain to be resolved and therefore no assurance can be given as to whether or in what form the legislation will be enacted or its effect on the Company and the Bank. Legislation recently passed by Congress contains a provision that would repeal the tax bad debt reserve currently available to Thrifts including the percentage of taxable income method for tax years beginning after December 31, 1995. If signed by the President, the Bank would have to change to the experience method of computing it's bad debt reserve. The legislation would require a Thrift to recapture the portion of it's bad debt reserve that exceeds the base year reserve, defined as the tax reserve as of the last taxable year beginning before 1988. FINANCIAL CONDITION Consolidated assets of Hardin Bancorp, Inc. were $86,949,596 as of June 30, 1996, an increase of $3,562,774 as compared to March 31, 1996. At June 30, 1996 total stockholder's equity was $14,932,480, a decrease of $1,102,461 when compared to stockholder's equity at March 31, 1996. The increase in assets resulted from the Bank obtaining a Federal Home Loan Bank advance in the amount of $5,000,000 to fund the purchase of a U.S. Government agency security. The decrease in stockholder's equity was a result of 42,320 shares of Hardin Bancorp, Inc. common stock acquired by the Hardin Bancorp, Inc. Recognition and Retention Plan for $498,150, and 45,820 shares of common stock acquired as Treasury Stock for $536,515. Additional net unrealized loss on available for sale securities in the amount of $183,732 and quarterly common stock cash dividends of $100,510, off-set by quarterly earnings in the amount of $195,276 also impacted the change in stockholder's equity. Cash, interest bearing deposits and investment securities increased to $14,800,508 at June 30, 1996, from $12,046,803 at March 31, 1996, an increase of $2,753,705. Mortgage backed securities decreased $1,420,070 to a total of $22,785,779 at June 30, 1996, from a total of $24,205,849 as of March 31, 1996. Loans receivable increased to $47,175,133 on June 30, 1996 from $45,031,460 on March 31, 1996, an increase of $2,143,673. The decrease in mortgage backed securities and the increase in loans receivable reflect the Bank's plan to increase the mortgage and consumer loan portfolios and decrease the level of mortgage related securities. Deposits totaled $66,090,856 on June 30, 1996, a decrease from $66,605,247 on March 31, 1996. The $514,391 decrease is due to competitive rates offered by other financial institutions and mutual funds. The Bank offers special terms and rates from time to time to enable it to retain its depositor base. Advances from the Federal Home Loan Bank of Des Moines increased $5,000,000 at June 30, 1996. The Bank obtained an advance in the amount of $5,000,000 to fund the purchase of a U.S. Government agency security. These advances are short-term borrowings which are utilized to invest in loans and investment securities when funds are needed for arbitrage opportunities and are not available from current operations. RESULTS OF OPERATIONS Net earnings for the Company's first quarter ended June 30, 1996, were $195,276 compared to $84,463 for the comparable quarter in 1995. The increase was due to an improved net interest margin, and an increase in interest earning assets as a result of investing the net proceeds of the Company's stock offering which was completed on September 28, 1995. Net interest income after provision for loan losses for the first quarter ended June 30, 1996, was $667,625 compared to $406,527 for the similar period in 1995, an increase of $261,098. This increase was a result of interest income rising from $1,267,073 in 1995 to $1,572,520 in 1996 while interest expense increased from $860,546 in 1995 to $897,395 in 1996. The net interest margin for the first quarter ended June 30, 1996, was 3.11% compared to 2.20% for the first quarter of 1995. The increase in net interest income reflects the redeployment of funds from mortgage backed securities to mortgage and consumer loans, and an increase in interest earning assets due to the investment of the net proceeds from the Company's stock conversion which was completed on September 28, 1995. Non-interest income increased from $49,808 for the three months ended June 30, 1995, to $92,505 for the three months ended June 30, 1996. The increase was due to improved life insurance sales in the Bank's service corporation, and loan servicing fees during the current quarter, and a gain on the sale of the Bank's data processing center of $24,906. The Company's non-interest expense for the three months ended June 30, 1996, was $450,036 compared to $328,457 for the comparable period in 1995, an increase of $121,579. The increase was due to expenses in the amount of $50,913 related to the Hardin Bancorp, Inc. Employee Stock Ownership Plan (ESOP) and the Hardin Bancorp, Inc. Recognition and Retention Plan (RRP), and additional expenses related to becoming a public company. PROVISION FOR LOAN LOSSES The provision for loan losses is based on the periodic analysis of the loan portfolio by management. In establishing the provision, management considers numerous factors including general economic conditions, loan portfolio condition, prior loss experience, and independent analysis. The provision for loan losses for the three months ended June 30, 1996 was $7,500. Based upon the analysis of the addition to established allowances and the composition of the loan portfolio, management concluded that the allowance is adequate. While current economic conditions in the Bank's market are stable, future conditions will dictate the level of future allowances for losses on loans. NONPERFORMING ASSETS At June 30, 1996, nonperforming assets were approximately $134,000 compared to $94,000 on March 31, 1996. At June 30, 1996, the Bank's allowance for loan losses was 104% of nonperforming loans compared to 140% at March 31, 1996. Loans are considered nonperforming when the collection of principal and/or interest is not probable, or in the event payments are more than 90 days delinquent. CAPITAL RESOURCES The Bank is subject to three capital to asset requirements in accordance with Office of Thrift Supervision (OTS) regulations. The following table is a summary of the Bank's regulatory capital requirements versus actual capital as of June 30, 1996:
CAPITAL REQUIREMENTS: Actual Required Excess Amount/Percent Amount/Percent Amount/Percent (Dollars in Thousands) Tangible $11,109/13.24% $1,258/1.50% $9,851/11.74% Core Leverage Capital $11,109/13.24% $2,516/3.00% $8,593/10.24% Risk-Based Capital $11,248/32.99% $2,728/8.00% $8,520/24.99%
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 Federal Home Loan Bank of Des Moines 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 five 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 ratios at March 31, 1996, and June 30, 1996, were 7.74% and 6.79% respectively. In light of the competition for deposits, the Bank may utilize the funding sources of the Federal Home Loan Bank of Des Moines (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 date of purchase are considered cash equivalents. Cash and cash equivalents for the periods ended June 30, 1996 and 1995 were $2,690,488 and $4,422,709 respectively. The decrease was primarily due to the net cash used in investing activities for loan originations, loan purchases, and the purchase of investment securities off-set by borrowings from FHLB. Net cash provided by operating activities increased from $75,021 at June 30, 1995 to $371,399 at June 30, 1996. The increase was due to improved net earnings and normal adjustments to accrued income and expense items. PART II - OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes in Securities None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K Exhibits: 27 - Financial Data Schedule Reports on Form 8-K: None. 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 9, 1996 (S) Robert W. King Robert W. King, President and Chief Executive Officer (Duly Authorized Officer) Date: August 9, 1996 (S) Karen K. Blankenship Karen K. Blankenship, Senior Vice President and Secretary (Principal Financial Officer) EX-27 2 ART. 9 FDS FOR HARDIN BANCORP INC. 6/30/96 10QSB
9 1000 3-MOS MAR-31-1996 JUN-30-1996 278 2413 0 0 19665 15492 15231 48124 138 86950 66091 5000 926 0 11 0 0 14922 86950 1315 197 60 1572 829 897 675 7 0 450 310 310 0 0 195 .20 .20 7.61 134 29 0 501 131 0 0 138 105 0 33
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