-----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, Pp5lF90LsJfWzhISF4/eW4iY2b97qCIh4B/ir9kejKY7FnWm7nbpo0clGU/1FxUI oebf+hhcFsoKnRb8jZSORw== 0000950164-98-000037.txt : 19980217 0000950164-98-000037.hdr.sgml : 19980217 ACCESSION NUMBER: 0000950164-98-000037 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980212 SROS: NONE 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: SEC FILE NUMBER: 000-26560 FILM NUMBER: 98535064 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 FORM 10-QSB 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 December 31, 1997 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 Identification Number) incorporation or organization 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. Class Outstanding at December 31, 1997 --------------------------- -------------------------------- Common stock, .01 par value 823,560 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 Statement 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.......................................................... 7-10 PART II OTHER INFORMATION................................................... 11 Signatures.......................................................... 12 Hardin Bancorp, Inc. and Subsidiaries Consolidated Balance Sheets December 31, and March 31, 1997 (Unaudited) December 31 March 31 ----------- -------- Assets ------ Cash ......................................... $ 470,814 $ 258,745 Interest bearing deposits .................... 6,734,223 4,007,164 Investment securities available-for-sale ..... 24,530,901 22,340,420 Mortgage-backed securities: Held-to-maturity ......................... 11,793,100 13,456,912 Available-for-sale ....................... 8,140,525 5,757,213 Loans receivable, net ........................ 59,987,972 54,567,570 Accrued interest receivable: Investment securities .................... 186,767 309,223 Mortgage-backed securities ............... 141,601 144,271 Loans receivable ......................... 402,778 329,200 Real estate owned ............................ 0 103,410 Premises and equipment ....................... 1,435,145 850,210 Stock in Federal Home Loan Bank (FHLB) of Des Moines, at cost ..................... 1,325,000 950,000 Current income taxes receivable .............. 5,044 0 Deferred income taxes receivable ............. 36,305 43,000 Prepaid expenses and other assets ............ 243,535 236,410 ------------ ------------ Total assets ...................... $115,433,710 $103,353,748 ============ ============ Liabilities and Stockholders' Equity ------------------------------------ Liabilities: Deposits ................................. $ 76,642,209 $ 70,200,857 Advances from borrowers for taxes and insurance .................... 113,074 275,440 Advances from FHLB ....................... 24,500,000 19,000,000 Accrued interest payable ................. 98,861 55,251 Current income taxes payable ............. 266,191 137,164 Deferred income taxes payable ............ 59,676 0 Accrued expenses and other liabilities ... 663,548 475,310 ------------ ------------ Total liabilities ................. 102,343,559 90,144,022 Stockholders'equity: Serial preferred stock, $.01 par value; 500,000 shares authorized, none issued or outstanding ......................... 0 0 Common stock, $.0l par value; 3,500,000 shares authorized, 1,058,000 shares issued ................ 10,580 10,580 Additional paid-in capital ............... 10,084,729 10,084,729 Retained earnings ........................ 7,340,374 6,994,680 Unrealized loss on available-for-sale securities, net ........................ (121,637) (234,597) Unearned employee stock ownership plan ... (636,800) (636,800) Deferred recognition and retention plan .. (349,948) (413,464) Treasury stock (234,440 and 198,640, respectively, shares at cost) .......... (3,237,147) (2,595,402) ------------ ------------ Total stockholders' equity ........ 13,090,151 13,209,726 ------------ ------------ Total liabilities and stockholders' equity ............ $115,433,710 $103,353,748 ============ ============ 1 Hardin Bancorp, Inc. and Subsidiaries Consolidated Statements of Earnings (Unaudited)
Three months ended Nine months ended December 31 December 31 ----------------------- ----------------------- 1997 1996 1997 1996 ---- ---- ---- ---- Interest income: Loans receivable ........................ $1,216,168 $1,061,788 $3,544,154 $3,025,304 Mortgage-backed securities .............. 314,122 318,929 913,308 1,032,058 Investment securities ................... 453,297 232,845 1,311,529 635,875 Other ................................... 117,974 67,621 329,969 157,685 ---------- ---------- ---------- ---------- Total interest income .............. 2,101,561 1,681,183 6,098,960 4,850,922 ---------- ---------- ---------- ---------- Interest expense: Deposits ................................ 981,643 851,283 2,866,427 2,517,993 FHLB advances ........................... 362,986 104,652 973,306 250,501 ---------- ---------- ---------- ---------- Total interest expense ............. 1,344,629 955,935 3,839,733 2,768,494 ---------- ---------- ---------- ---------- Net interest income ................ 756,932 725,248 2,259,227 2,082,428 Provision for loan losses ................. 24,094 7,500 78,671 23,590 ---------- ---------- ---------- ---------- Net interest income after provision for loan losses ......... 732,838 717,748 2,180,556 2,058,838 ---------- ---------- ---------- ---------- Non-interest income: Service charges ......................... 39,190 20,901 93,579 60,122 Loan servicing fees ..................... 9,718 8,803 26,055 27,609 Gain on sale of mortgage loans .......... 23,877 0 40,319 0 Gain on sale of real estate owned ....... 1,553 0 5,658 0 Gain (loss) on sale of investments and mortgage-backed securities ........ 15,482 5,286 65,304 (2,410) Other income ............................ 36,949 20,562 88,919 119,364 ---------- ---------- ---------- ---------- Total non-interest income .......... 126,769 55,552 319,834 204,685 ---------- ---------- ---------- ---------- Non-interest expense: Compensation and benefits ............... 253,285 240,682 829,459 736,376 Occupancy and equipment ................. 37,781 34,146 99,957 85,570 Federal insurance premiums .............. 11,747 38,022 33,808 113,855 SAIF special assessment ................. 0 0 0 441,018 Data processing ......................... 27,304 22,794 76,638 67,567 Real estate owned ....................... 33 0 1,439 0 Other ................................... 183,764 96,155 465,910 375,904 ---------- ---------- ---------- ---------- Total non-interest expense ......... 513,914 431,799 1,507,211 1,820,290 ---------- ---------- ---------- ---------- Earnings before income taxes ....... 345,693 341,501 993,179 443,233 Income tax expense ...................... 126,267 126,436 365,336 164,093 ---------- ---------- ---------- ---------- Net earnings ....................... $ 219,426 $ 215,065 $ 627,843 $ 279,140 ========== ========== ========== ========== Net earnings per common share: Basic ................................... $ 0.29 $ 0.24 $ 0.80 $ 0.30 ========== ========== ========== ========== Diluted ................................. $ 0.28 $ 0.24 $ 0.78 $ 0.30 ========== ========== ========== ========== Weighted average common and common equivalent shares outstanding ........... 797,809 901,478 809,018 934,681 ========== ========== ========== ==========
2 Hardin Bancorp, Inc. and Subsidiaries Consolidated Statement of Stockholders' Equity For The Nine Months Ended December 31, 1997 (Unaudited)
Unearned Employee Additional Unrealized Stock Total Common Paid-in Retained Loss on Ownership Deferred Treasury Stockholders' Stock Capital Earnings Securities, net Plan RRP Stock Equity ------ ---------- -------- --------------- --------- -------- -------- ------------- Balance at March 31, 1997 .... $10,580 $10,084,729 $6,994,680 $(234,597) $(636,800) $(413,464) $(2,595,402) $13,209,726 Net earnings ................. 0 0 627,843 0 0 0 0 627,843 Change in unrealized loss on available-for-sale securities, net of tax ..... 0 0 0 112,960 0 0 0 112,960 Repurchase of common stock (35,800 shares) ............ 0 0 0 0 0 0 (641,745) (641,745) Amortization of RRP .......... 0 0 0 0 0 63,516 0 63,516 Dividends declared ($.12 per share) ........... 0 0 (282,149) 0 0 0 0 (282,149) ------- ----------- ---------- --------- --------- --------- ----------- ----------- Balance at December 31, 1997 . $10,580 $10,084,729 $7,340,374 $(121,637) $(636,800) $(349,948) $(3,237,147) $13,090,151 ======= =========== ========== ========= ========= ========= =========== ===========
3 Hardin Bancorp, Inc. and Subsidiaries Consolidated Statements of Cash Flows Nine Months Ended December 31, 1997 and 1996 (Unaudited)
1997 1996 ----------- ------------ Operating Activities: Net Earnings ....................................................... $ 627,843 $ 279,140 Adjustments to reconcile net earnings to net cash provided by operating activities: Provision for losses on loans .................................... 78,671 23,590 Depreciation ..................................................... 49,358 38,949 Premium accretion and amortization of discounts and deferred loan fees, net ....................... 68,150 65,946 Net (gain)/loss on sale of loans and investment and mortgage-backed securities ................................. (105,623) 2,410 Gain on real estate owned ........................................ (5,658) 0 Amortization of deferred Recognition and Retention Plan (RRP) .... 63,516 63,515 Provision for deferred income taxes .............................. 0 1,538 Changes in assets and liabilities: Interest receivable ............................................ (203,954) (64,274) Other assets ................................................... (7,125) 41,214 Accrued interest payable ....................................... 43,610 33,548 Accrued expense and other liabilities .......................... 198,272 200,114 Income taxes payable ........................................... 123,983 (50,547) ----------- ------------ Net cash provided by operating activities .......................... 931,043 635,143 ----------- ------------ Investing Activities: Net increase in loans receivable ................................. (4,400,198) (4,793,153) Purchase of loans receivable ..................................... (1,072,050) (2,506,169) Purchase of mortgage-backed securities available-for-sale ........ (7,819,121) 0 Principal payments on mortgage-backed and related securities: Available-for-sale ............................................. 5,652,390 939,436 Held-to-maturity ............................................... 1,629,717 2,287,193 Proceeds from sales of mortgage-backed securities ................ 4,895,433 863,408 Purchase of investment securities available-for-sale ............. (22,559,088) (14,003,686) Proceeds from maturities of investment securities Available-for-sale ............................................. 12,650,000 3,000,000 Proceeds from sales of investment securities ..................... 3,077,897 2,004,844 Purchase of stock in FHLB of Des Moines .......................... (375,000) 0 Purchase of real estate owned .................................... 0 0 Proceeds from sales of real estate owned ......................... 117,340 0 Addition to office properties and equipment ...................... (634,293) (301,679) ----------- ------------ Net cash used in investing activities .............................. $(8,836,973) $(12,509,806) ----------- ------------
4 Hardin Bancorp, Inc. and Subsidiaries Consolidated Statements of Cash Flows, (continued) Nine Months Ended December 31, 1997 and 1996 (Unaudited) 1997 1996 ------------ ----------- Financing Activities: Net increase in savings deposits .............. $ 6,441,352 $ 1,261,165 Proceeds from FHLB advances ................... 20,500,000 14,000,000 Repayments of FHLB advances ................... (15,000,000) 0 Net decrease in advances from borrowers for taxes and insurance ......................... (162,366) (77,287) Payment of dividends .......................... (292,183) (309,886) Purchase of treasury stock .................... (641,745) (1,744,196) ------------ ----------- Net cash provided by financing activities ....... 10,845,058 13,129,796 ------------ ----------- Increase in cash ................................ 579,351 5,629,552 Cash at beginning of period ..................... 4,265,909 5,683,953 ------------ ----------- Cash at end of period ........................... $ 4,845,260 $11,313,505 ============ =========== Supplemental disclosure of cash flow information: Cash paid for: Interest .................................... $ 3,796,123 $ 2,734,946 Income taxes, net of refunds ................ $ 241,353 $ 214,640 Noncash investing and financing: Allocation of treasury stock to RRP ........... $ 0 $ 498,150 Dividends declared and payable ................ $ 98,827 $ 95,485 Loans transferred to real estate owned ........ $ 8,272 $ 0 See accompanying notes to consolidated financial statements. 5 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 Holding Company's Annual Report for the year ended March 31, 1997, 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 and nine month periods ended December 31, 1997 are not necessarily indicative of the results which may be expected for the entire year. The March 31, 1997 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. All per share data has been restated to reflect the adoption of SFAS No. 128. For the nine months ended December 31, 1997, the only difference between basic and diluted earnings per share lies in the computation of the weighted average shares outstanding. The diluted weighted average shares includes 27,629 shares as a result of the assumption that stock options granted by the Company had been exercised. 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 (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 (SAIF), which together with the Bank Insurance Fund (BIF), are the two insurance funds administered by the FDIC. FINANCIAL CONDITION - ------------------- Consolidated assets of Hardin Bancorp, Inc. were $115,433,710 as of December 31, 1997, an increase of $12,079,962 as compared to March 31, 1997. On December 31, 1997, total stockholders' equity was $13,090,151, a decrease of $119,575 when compared to stockholders' equity on March 31, 1997. The increase in assets was due to growth in investment securities and the loan portfolio which was funded by a $5,500,000 increase in Federal Home Loan Bank advances and an increase in deposits in the amount of $6,441,352. The decrease in stockholders' equity was a result of the declaration of cash dividends on the Company's common stock in June, September, and December, the repurchase of 35,800 shares of outstanding common stock, off-set by a decrease in unrealized loss on available-for-sale securities, net, amortization of deferred recognition and retention plan, and net earnings during the period. Cash, interest bearing deposits, and investment securities increased to $31,735,938 at December 31, 1997, from $26,606,329 on March 31, 1997, an increase of $5,129,609. The increase was partially funded by FHLB advances in order to leverage the Bank's strong capital position. Mortgage-backed securities increased $719,500 to $19,933,625 on December 31, 1997, from $19,214,125 on March 31, 1997. Loans receivable, net, increased to $59,987,972 on December 31, 1997, from $54,567,570 on March 31, 1997, an increase of $5,420,402. Deposits totaled $76,642,209 on December 31, 1997, an increase from $70,200,857 on March 31, 1997. The increase of $6,441,352 is due to a special certificate of deposit program and the introduction of a new checking account marketing program. 7 Federal Home Loan Bank advances were $24,500,000 on December 31, 1997, compared to $19,000,000 on March 31, 1997, an increase of $5,500,000. The funds were acquired to meet the Company's growth objective, and to fund the purchase of U.S. government agency securities. RESULTS OF OPERATIONS - --------------------- Net earnings were $219,426 for the three months ended December 31, 1997, compared to $215,065 for the three months ended December 31, 1996. The increase in earnings was primarily due to an increase in net interest income and total non-interest income partially off-set by an increase in total non-interest expense. Net interest income after provision for loan losses for the quarter ended December 31, 1997, was $732,838 compared to $717,748 for the three months ended December 31, 1996, an increase of $15,090. The increase is due to an increase in interest earning assets funded by an increase in deposits and Federal Home Loan Bank advances. Non-interest income for the three months ended December 1997 totaled $126,769 compared to $55,552 for the third quarter of 1996. The increase was due to higher service charge income and gains on the sale of loans and investments. The Company's non-interest expense for the three months ended December 31, 1997 was $513,914 compared to $431,799 in the comparable quarter in 1996, an increase of $82,115. The increase was due to increases in compensation and benefits. The increase in other non-interest expense is due to start-up costs for the Bank's debit card program and high performance checking program. These increases were partially off-set by reduced federal insurance premiums. Income tax expense for the three months ended December 31, 1997, was $126,267 compared to $126,436 for the three months ended December 31, 1996. The effective tax rates were 36.5% and 37.0% for the three months ended December 31, 1997 and 1996, respectively. Net earnings for the nine months ended December 31, 1997, were $627,843 compared to $279,140 for the nine months ended December 31, 1996, an increase of $348,703. The increase is related to a decrease in non-interest expense and an increase in non-interest income and net interest income after provision for loan losses. Net interest income after provision for loan losses for the nine month period ended December 31, 1997, was $2,180,556 compared to $2,058,838 for the nine month period ended December 31, 1996, an increase of $121,718. The increase was due to an increase in interest earning assets. Non-interest income for the nine months ended December 31, 1997, was $319,834 compared to $204,685 for the nine month period a year earlier, an increase of $115,149. The increase was due to higher service fee income and gains recognized on the sale of loans, real estate owned, and investments and mortgage-backed securities. These increases were partially off-set by decreases in loan servicing fees and other non-interest income. The Company's non-interest expense for the nine months ended December 31, 1997 was $1,507,211, compared to $1,820,290 for the nine month period ended December 31, 1996, a decrease of $313,079. The decrease was due to reduced federal insurance premiums and no SAIF special assessment in 1997, partially off-set by increases in compensation and benefits, occupancy and equipment, data processing expense, real estate owned expense, and other non-interest expense. Income tax expense for the nine months ended December 31, 1997, was $365,336 compared to $164,093 for the similar period in 1996, an increase of $201,243. The increase was due to an increase in earnings before income taxes, as the effective tax rates remained similar for the nine months ended December 31, 1997 (36.8%) and 1996 (37.0%). 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 December 31, 1997, was $24,094 and for the nine months ended December 31, 1997, was $78,671. 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. 8 NONPERFORMING ASSETS - -------------------- On December 31, 1997, nonperforming assets were $218,351 compared to $166,981 on September 30, 1997. At December 31, 1997, the Bank's allowance for loan losses was $232,710, or 107% of nonperforming assets. 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. The allowance for loan losses was .39% of total loans as of December 31, 1997. 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 December 31, 1997. Actual Required Excess Amount/Percent Amount/Percent Amount/Percent -------------- -------------- -------------- (Dollars in Thousands) Tangible Capital .......... $11,834/10.32% $1,721/1.50% $10,113/ 8.82% Core Leverage Capital ..... $11,834/10.32% $3,441/3.00% $ 8,393/ 7.32% Risk-Based Capital ........ $12,064/20.84% $4,631/8.00% $ 7,433/12.84% 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 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 December 31, 1997 was 7.77%. 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 the date of purchase are considered cash equivalents. Cash and cash equivalents for the periods ended December 31, 1997 and 1996 were $7,205,037 and $6,939,086, respectively. The increase was primarily due to an increase in net cash provided by operating activities and a decrease in net cash used in investing activities. Net cash provided by financing activities decreased from $13,129,796 for the nine months ended December 31, 1996, to $10,845,058 for the nine months ended December 31, 1997. The decrease was due primarily to a reduction in net proceeds from FHLB advances in the amount of $8,500,000 off-set by an increase in savings deposits of $5,180,187. 9 RECENT ACCOUNTING DEVELOPMENTS - ------------------------------ The Company will adopt SFAS Nos. 125 and 127 relating to transfers and servicing of financial assets and extinguishments of liabilities during 1997 and 1998, according to the required implementation dates. SFAS No. 125, adopted April 1, 1997, did not have a material effect on the financial position or results of operations. The adoption of SFAS No. 127 is not expected to have a material effect on the financial position or results of operations. SFAS No. 130, "Reporting Comprehensive Income", requires the reporting of comprehensive income and its components in the fiscal 1999 financial statements. Comprehensive income is defined as the change in equity from transactions and other events and circumstances from non-owner sources, and excludes investments by and distributions to owners. Comprehensive income includes net income and other items of comprehensive income meeting the above criteria. The Company's most significant component of other comprehensive income is the unrealized holding gains and losses on available for sale securities. SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information" requires reporting about operating segments, products and services, geographic areas, and major customers. Its objective is to provide information about the different types of business activities and economic environments in which businesses operate. The adoption of SFAS No. 131 is not expected to require any additional disclosure during fiscal 1999. YEAR 2000 COMPLIANCE - -------------------- The Company utilizes and is dependent upon data processing systems and software to conduct its business. The data processing systems and software include those developed and maintained by the Company's data processor and purchased software which is run on in-house computer networks. In 1997 the Company initiated a review and assessment of all hardware and software to confirm that it will function properly in the year 2000. The Company's data processor and those vendors which have been contacted have indicated that their hardware and/or software will be Year 2000 compliant by the end of 1998. This will allow time for the testing for compliance. While there may be some expenses incurred during the next two years, it is not expected to have a material effect on the Company's consolidated financial condition or results of operations. PENDING LEGISLATION - ------------------- Legislation enacted in 1996 provides that the Bank Insurance Fund ("BIF") and the Savings Association Insurance Fund ("SAIF") will merge on January 1, 1999 if there are no more savings associations as of that date. Several bills have been introduced in the current Congress that would eliminate the federal thrift charter and the OTS. The bills would require that all federal savings associations convert to national banks or state depository institutions and would treat all state savings associations as state banks for purposes of federal banking laws. Subject to a narrow grandfathering provision, all savings and loan holding companies would become subject to the same regulation and activities restrictions as bank holding companies under the pending legislative proposals. The legislative proposals would also abolish the OTS and transfer its functions to the federal bank regulators with respect to the institutions and to the Board of Governors of the Federal Reserve System with respect to the regulation of holding companies. The Bank is unable to predict whether the legislation will be enacted or, given such uncertainty, determine the extent to which the legislation, if enacted would affect its business. The Bank is also unable to predict whether the SAIF and BIF will eventually be merged. 10 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 September 18, 1997, the Company's Board of Directors authorized the purchase of 42,968 shares of the Company's common stock to be acquired over the next twelve months and notified the Office of Thrift Supervision (OTS) in compliance with OTS Regulations. As of December 31, 1997, the Company held 234,440 shares of its common stock as treasury stock at an aggregate purchase price of $3,237,147. During the period the company acquired 35,800 shares of common stock at an aggregate purchase price of $641,745. On August 7, 1997, Hardin Federal Savings Bank began construction on a new branch office at 200 North Spartan Drive, Richmond, Missouri. The 3,200 square feet office building will feature 3 drive-up lanes, an ATM lane, and a fully-finished walk-out basement at an estimated total cost of $760,000. Completion is expected in March, 1998. Item 6. Exhibits and Reports on Form 8-K -------------------------------- Exhibits: 27 - Financial Data Schedule Reports on Form 8-K: None. 11 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: February 12, 1998 Robert W. King ----------------- ----------------------------------- Robert W. King, President and Chief Executive Officer (Duly Authorized Officer) Date: February 12, 1998 Karen K. Blankenship ----------------- ----------------------------------- Karen K. Blankenship, Senior Vice President and Secretary (Principal Accounting Officer) 12 EX-27 2 FINANCIAL DATA SCHEDULE
9 1,000 9-MOS MAR-31-1998 DEC-31-1997 471 6,734 0 0 32,671 11,793 11,669 60,221 233 115,434 76,642 24,500 1,201 0 0 0 11 13,080 115,434 3,544 2,225 330 6,099 2,866 3,840 2,259 79 65 1,507 993 993 0 0 628 .80 .78 7.69 218 0 0 336 158 4 0 233 126 0 107
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