UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 5TH STREET, N.W.
WASHINGTON, D. C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 No. 0-27154
JOACHIM BANCORP, INC.
(Exact name of registrant as specified in its charter)
Missouri 43-1721475
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
De Soto Plaza, De Soto, Missouri 63020
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (314) 586-8821
Not applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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 the issuer's classes of common
stock, as of the latest practicable date.
Class Outstanding July 23, 1996
Common Stock, par value $.01 per share 760,437 Shares
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JOACHIM BANCORP, INC. AND SUBSIDIARY
FORM 10-QSB
FOR THE QUARTER ENDED JUNE 30, 1996
INDEX
PAGE NO.
PART I - Financial Information (Unaudited)
Consolidated Balance Sheets . . . . . . . . . . . . . 1
Consolidated Statements of Earnings . . . . . . . . . 2
Consolidated Statements of Cash Flows . . . . . . . . 3
Notes to Consolidated Financial Statements. . . . . . 4
Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . 5
PART II - Other Information . . . . . . . . . . . . . . 8
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JOACHIM BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, March 31,
1996 1996
-------- ---------
ASSETS
Cash and cash equivalents $ 4,304,852 5,384,802
Certificates of deposit 2,550,891 1,300,242
Securities held to maturity, at amortized cost
(market value of $4,979,733 and $5,266,825,
respectively) 5,047,770 5,298,854
Stock in Federal Home Loan Bank of Des Moines 288,500 288,500
Mortgage-backed and related securities held to
maturity, at amortized cost (market value of
$857,651 and $861,705, respectively) 870,742 873,599
Loans receivable, net 22,789,697 22,932,379
Premises and equipment, net 358,847 365,101
Accrued interest receivable:
Securities and certificates of deposit 122,459 120,420
Mortgage-backed securities 4,834 4,850
Loans receivable 124,402 126,240
Other assets, including prepaid income taxes
of $34,580 at March 31, 1996 29,154 84,364
-------- ---------
Total assets $ 36,492,148 36,779,351
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 25,242,566 25,644,434
Accrued interest on deposits 23,820 26,644
Advances from borrowers for taxes and insurance 192,775 128,166
Other liabilities 67,656 80,762
Income taxes payable 173,333 148,000
-------- ---------
Total liabilities 25,700,150 26,028,006
Commitments and contingencies
Preferred stock, $.01 par value; 1,000,000 shares
authorized; none issued and outstanding -- --
Common stock, $.01 par value; 5,000,000 shares
authorized;760,437 shares issued and outstanding 7,604 7,604
Additional paid-in capital 7,083,481 7,077,876
Common stock acquired by ESOP (515,707) (538,130)
Retained earnings - substantially restricted 4,216,620 4,203,995
-------- ---------
Total stockholders' equity 10,791,998 10,751,345
-------- ---------
Total liabilities and stockholders' equity $ 36,492,148 36,779,351
See accompanying notes to consolidated financial statements.
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JOACHIM BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended
June 30,
1996 1995
------ ------
Interest income:
Loans receivable $ 468,224 453,435
Mortgage-backed and related securities 14,126 2,466
Securities 74,269 37,465
Other interest-earning assets 84,454 56,511
------ ------
Total interest income 641,073 549,877
Interest expense on deposits 274,783 275,394
------ ------
Net interest income 366,290 274,483
Provision for loan losses 1,500 3,500
------ ------
Net interest income after provisionfor loan losses 364,790 270,983
Noninterest income:
Loan service charges 9,784 5,222
NOW service charges 6,689 5,487
Rental income (expense) from foreclosed real estate -- (2,768)
Gain on investment in data center 12,668 --
Other 1,276 1,501
------ ------
Total noninterest income 30,417 9,442
Noninterest expense:
Compensation and benefits 157,433 130,468
Occupancy expense4,4075,416
Equipment and data processing expense 20,341 19,183
Loss (gain) on foreclosed real estate, net -- (3,321)
SAIF deposit insurance premium 14,485 14,372
Professional services 14,764 9,760
Other 26,564 19,793
------ ------
Total noninterest expense 237,994 195,671
Earnings before income taxes 157,213 84,754
Income taxes 56,260 28,500
------ ------
Net earnings $ 100,953 56,254
Net earnings per common share $.14 --
Weighted-average shares outstanding 707,745 --
Dividends per share $.125 --
See accompanying notes to consolidated financial statements.
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JOACHIM BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
June 30,
1996 1995
------ ------
Cash flows from operating activities:
Net earnings $ 100,953 56,254
Adjustments to reconcile net earnings to net cash
provided by (used for) operating activities:
Depreciation 8,376 7,591
ESOP expense 28,028 --
Amortization of premiums, net on securities and
mortgage-backed securities 1,476 2,101
Provision for loan losses 1,500 3,500
Loss (gain) on foreclosed real estate, net -- (3,321)
Decrease (increase) in:
Accrued interest receivable (185) 8,178
Other assets 55,210 34,064
Increase (decrease) in:
Accrued interest on deposits (2,824) 5,624
Other liabilities (13,106) (22,029)
Income taxes payable 25,333 (5,000)
Other, net (649) --
------ ------
Net cash provided by (used for) operating activities 204,112 86,962
Cash flows from investing activities:
Loans receivable:
Originated (1,423,016) (1,077,736)
Purchased -- --
Principal collections 1,564,198 1,106,200
Principal collections on mortgage-backed securities
held to maturity 2,465 2,545
Securities held to maturity:
Purchased -- --
Proceeds from maturity 250,000 --
Certificates of deposit:
Purchased (1,750,000) (500,000)
Proceeds from maturity 500,000 500,000
Proceeds from sale of foreclosed real estate, net -- (5,089)
Purchases of premises and equipment (2,122) (4,902)
------ ------
Net cash provided by (used for) investing activities (858,475) 21,018
Cash flows from financing activities:
Net increase (decrease) in:
Deposits (401,868) 605,019
Advances from borrowers for taxes and insurance 64,609 60,431
Cash dividends (88,328) --
------ ------
Net cash provided by (used for) financing activities (425,587) 665,450
Net increase (decrease) in cash and cash equivalents (1,079,950) 773,430
Cash and cash equivalents at beginning of period 5,384,802 2,978,861
------ ------
Cash and cash equivalents at end of period $4,304,852 3,752,291
Supplemental disclosures of cash flow information:
Cash paid (received) during the year for:
Interest on deposits $ 277,607 269,770
Federal income taxes -- --
State income taxes -- --
Real estate acquired in settlement of loans -- --
See accompanying notes to consolidated financial statements.
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JOACHIM BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) The information contained in the accompanying consolidated financial
statements is unaudited. In the opinion of management, the financial
statements contain all adjustments (none of which were other than normal
recurring entries) necessary for a fair statement of the results of operations
for the interim periods. The results of operations for the interim periods
are not necessarily indicative of the results which may be expected for the
entire fiscal year. The accompanying consolidated financial statements should
be read in conjunction with the consolidated financial statements for the year
ended March 31, 1996 contained in the Annual Report to stockholders and as an
exhibit filed with Form 10- KSB.
(2) Proposals recently have been introduced in the U.S. Congress which, if
adopted, would overhaul the savings association industry. The most
significant of these proposals would recapitalized the SAIF through a one-time
special assessment of approximately 85 basis points on the amount of deposits
held by the institution. Should the Association be required to pay such
special assessment, the Association's capital will be reduced by approximately
$142,000, based on deposits of $25.3 million at June 30, 1996 and a tax rate
of 34%. In the event the assessment is not deductible for tax purposes,
capital would be reduced by approximately $215,000. Management cannot predict
whether the special assessment proposal will be enacted, or, if enacted, the
amount of any one-time fee or the date to be used for determining deposits on
which the assessment will be based.
(3) On July 17, 1996, the stockholders of Joachim Bancorp, Inc. ratified the
1996 Stock Option Plan. Of the 76,044 shares reserved for issuance under the
Stock Option Plan, 60,839 shares were awarded in July, 1996, and the remainder
are available for future awards. The stock options were awarded at $12.3125
per share which was equal to the average selling price of the Company's common
stock on the NASDAQ exchange on the day prior to the date of grant.
On July 17, 1996, the stockholders ratified the 1996 Management Recognition
and Development Plan (MRDP). All 30,417 shares under the MRDP were awarded in
July, 1996 to directors, executive officers and employees.
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JOACHIM BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
On December 27, 1995, Joachim Federal Savings and Loan Association
(Association) converted from mutual to stock form and became a wholly-owned
subsidiary of a newly formed Missouri holding company, Joachim Bancorp, Inc.
(Company).
The Company has no significant assets other than common stock of the
Association, the loan to the ESOP and net proceeds retained by the Company
following the conversion. The Company's principal business is the business of
the Association. Therefore, the discussion in the Management's Discussion and
Analysis of Financial Condition and Results of Operations relates to the
Association and its operations.
Certain statements in this report which relate to the Company's plans,
objectives or future performance may be deemed to be forward-looking
statements within the meaning of Private Securities Litigation Act of 1995.
Such statements are based on management's current expectations. Actual
strategies and results in future periods may differ materially from those
currently expected because of various risks and uncertainties. Additional
discussion of factors affecting the Company's business and prospects is
contained in periodic filings with the Securities and Exchange Commission.
LIQUIDITY AND CAPITAL RESOURCES
The Association's principal sources of funds are cash receipts from deposits,
loan repayments by borrowers and net earnings. The Association has an
agreement with the Federal Home Loan Bank of Des Moines to provide cash
advances, should the need for additional funds be required.
For regulatory purposes, liquidity is measured as a ratio of cash and certain
investments to withdrawable deposits. The minimum level of liquidity required
by regulation is presently 5%. The Association's liquidity ratio was
approximately 33% at June 30, 1996.
The savings and loan industry historically has accepted interest rate risk as
a part of its operating philosophy. Long-term, fixed-rate loans were funded
with deposits which adjust to market interest rates more frequently. Since
the early 1980's, the Association has originated primarily adjustable-rate
mortgage loans in order to reduce interest-rate risk exposure.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
(FIRREA) requires that the Association maintain core capital equal to 3% of
adjusted total assets and maintain tangible capital equal to 1.5% of adjusted
total assets. The Association must maintain an 8% risk-based capital.
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The following table presents the Association's capital position relative to
its regulatory capital requirements under FIRREA at June 30, 1996:
Unaudited Regulatory Capital
Tangible Core Risk-Based
-------- -------- ----------
Stockholders' equity per consolidated
financial statements $ 10,791,998 10,791,998 10,791,998
Stockholders' equity of Joachim Bancorp,
Inc.not available for regulatory capital
purposes (3,407,191) (3,407,191) (3,407,191)
-------- -------- ----------
GAAP capital 7,384,807 7,384,807 7,384,807
General valuation allowances -- -- 73,500
-------- -------- ----------
Regulatory capital 7,384,807 7,384,807 7,458,307
Regulatory capital requirement (504,072) (1,008,144) (1,311,680)
-------- -------- ----------
Regulatory capital - excess $ 6,880,735 6,376,663 6,146,627
Regulatory capital ratio 21.98% 21.98% 45.49%
Regulatory capital requirement (1.50) (3.00) (8.00)
-------- -------- ----------
Regulatory capital ratio - excess 20.48% 18.98% 37.49%
Commitments to originate adjustable-rate and fixed-rate mortgage loans at June
30, 1996 were approximately $23,000 and $86,000, respectively.
FINANCIAL CONDITION
Cash and cash equivalents and principal collections on loans were used to
purchase certificates of deposit and fund loan originations. The Company
expects that cash and cash equivalents will be used in the near future to
purchase short and intermediate-term securities in order to enhance interest
income. Other assets decreased due to the timing of Federal income tax
payments, the receipt of patronage dividends from the Association's data
processor, and timing of payment of certain prepaid items. Advances by
borrowers for taxes and insurance increased due to seasonal factors. Real
estate taxes are paid on behalf of borrowers in December of each year. Other
liabilities decreased due to the timing of payment of certain accrual items.
ASSET QUALITY
Loans are generally placed on a nonaccrual status when contractually
delinquent more than ninety days. Nonaccrual loans amounted to $107,000, or
.47% of net loans receivable, at June 30, 1996.
RESULTS OF OPERATIONS
NET EARNINGS
Net earnings increased from $56,000 for the three months ended June 30, 1995
to $101,000 for the three months ended June 30, 1996. The increase was due to
higher net interest income, higher noninterest income, offset by higher
noninterest expense and higher income taxes.
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NET INTEREST INCOME
Net interest income increased from $274,000 for the three months ended June
30, 1995 to $366,000 for the three months ended June 30, 1996. The increase
in net interest income was due to a higher ratio of average interest-earning
assets to average interest-bearing liabilities which more than offset the
effect of a declining interest rate spread. The ratio of interest-earning
assets to interest-bearing liabilities increased due primarily to proceeds
from sale of common stock. Interest on loans receivable increased due to a
slightly higher average balance. During February and March, 1996, the
Association purchased $1.4 million of loan participating interests from an
institution in Fulton, Missouri.
Interest on mortgage-backed and related securities, interest on securities and
interest on other interest- earning assets increased as a result of investment
of proceeds from sale of common stock. Management expects to reinvest a
portion of cash equivalents into loans, securities and mortgage- backed
securities meeting the risk guidelines of the Association. Interest on
deposits remained virtually unchanged as a slightly higher rate offset a
slightly lower average balance.
PROVISION FOR LOAN LOSSES
Provision for loan losses is based upon management's consideration of economic
conditions which may affect the ability of borrowers to repay the loans.
Management also reviews individual loans for which full collectibility may not
be reasonably assured and considers, among other matters, the risks inherent
in the Association's portfolio and the estimated fair value of the underlying
collateral. This evaluation is ongoing and results in variations in the
Association's provision for loan losses. As a result of this evaluation, the
Association's provision for loan losses amounted to $1,500 for the three month
period ended June 30, 1996, as compared to $3,500 for the three month period
ended June 30, 1995.
NONINTEREST INCOME
Noninterest income increased from $9,000 for the three months ended June 30,
1995 to $30,000 for the three months ended June 30, 1996. During the three
months ended June 30, 1996 the Association recognized income of $13,000 as a
result of the sale of assets of the Association's data processing service
bureau to its successor. In addition, the Association recognized prepayment
penalty income of $4,500 on a participation loan.
NONINTEREST EXPENSE
Noninterest expense increased from $196,000 for the three months ended June
30, 1995 to $238,000 for the three months ended June 30, 1996. Compensation
and benefits expense increased for the three months ended June 30, 1996 due to
the implementation of the Association's ESOP plan. ESOP plan expense was
$28,000 for the three months ended June 30, 1996 compared to none in the 1995
period. Under generally accepted accounting principles, expense of the ESOP
is affected by changes in the market price of the Company's stock.
Professional services and other noninterest expense increased due to costs
incurred operating as a public company. These costs included legal expenses
incurred with filing of the Company's annual report and attendance of annual
meeting, printing costs of the annual report, and stock registrar expenses.
INCOME TAXES
Income taxes fluctuated due to the level of earnings before income taxes.
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JOACHIM BANCORP, INC. AND SUBSIDIARY
PART II - Other Information
Item 1 - Legal Proceeding
There are no material legal proceedings to which the Holding Company or the
Association is a party or of which any of their property is subject. From
time to time, the Association is a party to various legal proceedings incident
to its business.
Item 2 - Changes in Securities
None.
Item 3 - Defaults upon Senior Securities
Not applicable.
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.
(a) Exhibits: none
(b) Reports on Form 8-K: No reports on Form 8-K have been filed during the
quarter for which this report is filed.
SIGNATURES
Pursuant to the requirements 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.
JOACHIM BANCORP, INC.
---------------------
(Registrant)
DATE: July 30, 1996 BY: /s/Bernard R. Westhoff
----------------------
Bernard R. Westhoff
President and Duly
Authorized Officer
BY: /s/Lee Ellen Hogan
-------------------
Lee Ellen Hogan, Treasurer
and Chief Financial Officer
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