<PAGE> 1
UNITED STATES
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 September 30, 1999
o 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: 333-6581
ST. JOSEPH CAPITAL CORPORATION
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
DELAWARE 35-1977746
- --------------------------------- ---------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
3820 EDISON LAKES PARKWAY, MISHAWAKA, IN 46545
----------------------------------------------
(Address of principal executive offices)
(219) 273-9700
---------------------------
(Issuer's telephone number)
N/A
---------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act, 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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Issuer's classes
of common equity, as of the latest practicable date:
1,675,112 shares of common stock, $0.01 par value per share, were
outstanding as of November 9, 1999.
Transitional Small Business Disclosure Format (check one): Yes No X
-- --
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets,
September 30, 1999 (Unaudited) and December 31, 1998 (Audited) 3
Consolidated Statements of Income, (Unaudited)
Three months ended September 30, 1999 and 1998 4
Nine months ended September 30, 1999 and 1998
Condensed Consolidated Statement of Changes in
Stockholders' Equity, (Unaudited)
Three months ended September 30, 1999 and 1998
Nine months ended September 30, 1999 and 1998 5
Consolidated Statements of Cash Flow, (Unaudited)
Nine months ended September 30, 1999 and 1998 6
Notes to Consolidated Financial Statements, 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 18
ITEM 2. CHANGES IN SECURITIES 18
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 18
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 18
ITEM 5. OTHER INFORMATION 18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 18
SIGNATURES 19
</TABLE>
2
<PAGE> 3
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
PART I - FINANCIAL INFORMATION
ST. JOSEPH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
September 30, 1999 (Unaudited) and December 31, 1998 (Audited)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
ASSETS
Cash and due from banks $ 7,720,718 $ 6,113,583
Interest-bearing deposits in other financial institutions -
short-term 74,397 5,531
Federal funds sold 7,200,000 9,600,000
------------- -------------
Total cash and cash equivalents 14,995,115 15,719,114
Securities available for sale 27,334,155 31,066,346
Federal Home Loan Bank (FHLB) stock 388,800 222,200
Loans receivable, net of allowance for loan losses
of $1,100,000 in 1999 and $751,675 in 1998 78,039,707 48,011,296
Accrued interest receivable 686,688 739,024
Premises and equipment, net 1,424,165 742,495
Other assets 59,383 103,565
------------- -------------
Total assets $ 122,928,013 $ 96,604,040
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing demand $ 13,725,765 $ 11,442,145
Savings, NOW and money market 48,292,047 46,414,185
Certificates of deposit 27,784,369 18,534,135
------------- -------------
Total deposits 89,802,181 76,390,465
Securities sold under agreements to repurchase 9,771,013 6,388,971
FHLB advances 6,000,000 2,000,000
Accrued interest payable 163,137 100,707
Other liabilities 316,218 113,052
------------- -------------
Total liabilities 106,052,549 84,993,195
Stockholders' equity
Preferred stock, $.01 par value, 100,000 shares
authorized; -0- shares issued and outstanding -- --
Common stock, $.01 par value, 2,500,000 shares
authorized; 1,673,264 and 1,278,625 shares issued
and outstanding in 1999 and 1998 16,733 12,786
Additional paid-in capital 18,237,786 12,323,967
Accumulated deficit (956,827) (1,280,858)
Accumulated other comprehensive income (422,228) 554,950
------------- -------------
Total stockholders' equity 16,875,464 11,610,845
------------- -------------
Total liabilities and stockholders' equity $ 122,928,013 $ 96,604,040
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
ST. JOSEPH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three months ended September 30, 1999 and 1998 (Unaudited)
Nine months ended September 30, 1999 and 1998 (Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Sept 30, 1999 Sept 30, 1998 Sept 30, 1999 Sept 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Interest and dividend income
Loans receivable, including fees $ 1,436,875 $ 723,987 $ 3,708,471 $ 1,926,313
Securities available for sale - taxable 413,095 441,419 1,288,717 1,198,870
FHLB stock 1,516 - 16,031 2,506
Federal Funds sold 63,344 128,144 161,524 252,939
Other interest earning assets 1,676 - 7,007 6,865
----------- ----------- ----------- -----------
Total interest income 1,916,506 1,293,500 5,181,750 3,387,493
Interest expense
Deposits 869,001 653,393 2,299,726 1,704,434
Securities sold under agreements to
Repurchase 102,764 107,061 283,858 231,539
FHLB advances 43,675 - 117,582 -
Other borrowings - - 3,522 2,921
----------- ----------- ----------- -----------
Total interest expense 1,015,440 760,454 2,704,688 1,938,894
----------- ----------- ----------- -----------
NET INTEREST INCOME 901,066 533,096 2,477,062 1,448,599
Provision for loan losses 142,325 66,670 348,325 266,675
----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 758,741 466,426 2,128,737 1,181,924
Noninterest income
Gains on sales and calls of securities
available for sale, net - 29,941 - 41,275
Other income 28,988 7,946 72,039 16,944
----------- ----------- -----------
Total noninterest income 28,988 37,887 72,039 58,219
Noninterest expense
Salaries and employee benefits 380,940 269,689 1,075,932 751,037
Occupancy and equipment 97,870 111,806 324,354 331,768
Other expense 159,680 164,440 476,459 418,433
----------- ----------- ----------- -----------
Total noninterest expense 638,490 545,935 1,876,745 1,501,238
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES 149,239 (41,622) 324,031 (261,095)
Income tax expense - - - -
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 149,239 $ (41,622) $ 324,031 $ (261,095)
=========== =========== =========== ===========
Basic income (loss) per common share $ .12 $ (.03) $ .25 $ (.20)
=========== =========== =========== ===========
Diluted income (loss) per common share $ .11 $ (.03) $ .25 $ (.20)
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
ST. JOSEPH CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Three months ended September 30, 1999 and 1998 (Unaudited)
Nine months ended September 30, 1999 and 1998 (Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Sept 30, 1999 Sept 30, 1998 Sept 30, 1999 Sept 30, 1998
Total Total Total Total
Stockholders' Stockholders' Stockholders' Stockholders'
Equity Equity Equity Equity
------ ------ ------ ------
<S> <C> <C> <C> <C>
BALANCE AT JULY 1 AND JANUARY 1: $ 11,051,771 $ 11,134,415 $ 11,610,845 $ 11,204,425
Comprehensive income (loss):
Net income (loss) 149,239 (41,621) 324,031 (261,095)
Net change in net unrealized
appreciation (depreciation) on
securities available for sale, net
of reclassification adjustments
and tax effects (189,277) 315,589 (977,178) 336,652
------------ -------------- ------------ ------------
Total comprehensive income (loss) (40,038) 273,968 (653,147) 75,557
Proceeds from issuance of common
Stock by 401k plan 5,863,731 22,600 5,917,766 151,001
------------ -------------- ------------ ------------
BALANCE AT SEPTEMBER 30: $ 16,875,464 $ 11,430,983 $ 16,875,464 $ 11,430,983
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
CONSOLIDATED STATEMENTS OF CASH FLOW
Six months ended September 30, 1999 and 1998 (Unaudited)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 324,031 $ (261,095)
Adjustments to reconcile net income (loss)
to net cash from operating activities
Depreciation 182,438 162,128
Provision for loan losses 348,325 266,675
Net amortization on securities available for sale 69,875 45,464
Net change in
Accrued interest receivable 52,336 14,551
Other assets 44,182 (37,713)
Accrued interest payable 62,430 (24,881)
Other liabilities 203,166 30,595
-------------- ---------------
Net cash from operating activities 1,286,783 195,724
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of securities available for sale (1,514,862) (24,514,874)
Proceeds from maturities and calls of securities
available for sale 4,200,000 18,053,466
Purchase of FHLB stock (166,600) -
Net change in loans receivable (30,376,736) (14,554,706)
Purchase of premises and equipment, net (864,108) (53,157)
--------------- ----------------
Net cash from investing activities (28,722,306) (21,069,271)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits 13,411,716 22,919,467
Net change in securities sold under agreements
to repurchase and other borrowings 4,882,042 6,841,778
Proceeds from FHLB advances 2,500,000 -
Proceeds from issuance of common stock, net 5,917,766 151,001
-------------- ---------------
Net cash from financing activities 26,711,524 29,912,246
-------------- ---------------
Net change in cash and cash equivalents (723,999) 9,038,699
Cash and cash equivalents at beginning of period 15,719,114 4,535,464
-------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 14,995,115 $ 13,574,163
============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE> 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include
the accounts of the Company and its wholly owned subsidiary, St. Joseph Capital
Bank (the "Bank").
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions for Form 10-QSB.
Accordingly, they do not include all information and footnotes required by
generally accepted accounting principles for complete presentation of financial
statements. In the opinion of management, the condensed consolidated financial
statements contain all adjustments (consisting only of normal recurring
accruals) considered necessary for a fair presentation have been included. All
significant inter-company accounts and transactions have been eliminated in
consolidation. The income reported for the periods presented is not necessarily
indicative of the results to be expected for the full year.
NOTE 2 - RIGHTS OFFERING
On September 10, 1999, the Company completed a rights offering during
which 390,581 shares of the Company's common stock were sold at $15.50 per
share, resulting in gross proceeds of $6.1 million. Expenses associated with the
rights offering totaling $225,000 were netted against the gross proceeds and not
recorded as expenses in the Company's statement of income. Thus, the net
proceeds from the initial public offering were $5.9 million. The Company used
approximately $5.5 million of the proceeds from the rights offering to provide
additional capital to the Bank.
NOTE 3 - LOANS RECEIVABLE, NET
Loans receivable were as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
---- ----
<S> <C> <C>
One to four family residential mortgage loans $ 22,273,169 $ 13,311,145
Construction loans - residential 1,964,574 629,168
Construction loans - commercial 7,896,888 4,966,020
Commercial and multi-family real estate loans 26,704,309 14,988,484
Commercial business loans 17,590,208 13,247,735
Consumer loans 2,752,269 1,636,286
---------------- ----------------
79,181,417 48,778,838
Allowance for loan losses (1,100,000) (751,675)
Net deferred loan origination fees (41,710) (15,867)
---------------- ----------------
$ 78,039,707 $ 48,011,296
================ ================
</TABLE>
Activity in the allowance for loan losses was as follows:
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, December 31,
1999 1998
---- ----
<S> <C> <C>
Beginning balance $ 751,675 $ 360,000
Provision for loan losses 348,325 391,675
Recoveries - -
Charge-offs - -
---------------- ----------------
Ending balance $ 1,100,000 $ 751,675
================ ================
</TABLE>
7
<PAGE> 8
At September 30, 1999 and December 31, 1998 no portion of the allowance for
loan losses was allocated to impaired loan balances as there were no loans
considered impaired as of or for the period ending September 30, 1999 and for
the year ending December 31, 1998.
NOTE 4 - PREMISES AND EQUIPMENT, NET
Premises and equipment were as follows:
September 30, December 31,
1999 1998
---- ----
Land $ 200,000 $ -
Building and improvements 777,065 -
Leasehold improvements, furniture, fixtures
and equipment 991,202 1,104,159
Accumulated depreciation (544,102) (361,664)
------------- -----------
$ 1,424,165 $ 742,495
============= ===========
NOTE 5 - COMMITMENTS AND CONTINGENCIES
Some financial instruments are used to meet client financing needs and to
reduce exposure to interest rate changes. These financial instruments include
commitments to extend credit, unused open end revolving lines of credit and
standby letters of credit. These involve, to varying degrees, credit and
interest-rate risk in excess of the amount reported in the balance sheet.
Commitments were as follows:
September 30, December 31,
1999 1998
---- ----
Commitments to extend credit $ 9,237,000 $ 4,040,000
Unused open end revolving lines of credit 27,868,000 21,821,000
Standby letters of credit 2,204,000 3,147,000
Commitments to extend credit are agreements to lend to a client as long as
there is no violation of any condition established in the commitment, and
generally have fixed expiration dates. Standby letters of credit are conditional
commitments to guarantee a client's performance to a third party. Exposure to
credit loss if the other party does not perform is represented by the
contractual amount of these items. Collateral or other security is normally not
obtained for these financial instruments prior to their use, and many of the
commitments are expected to expire without being used.
Under an employment agreement with an executive officer, certain events
leading to separation from the Company could result in cash payments totaling
approximately $375,000 at September 30, 1999.
During 1998, the Company had leased a building for its main office
location. During 1999, the Company exercised an option in the building lease
agreement to purchase the building for $800,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion provides additional information regarding our
operations for the three and nine month periods ended September 30, 1999 and
1998 and financial condition as of September 30, 1999 and December 31, 1998.
This discussion should be read in conjunction with our consolidated financial
statements and the accompanying notes thereto and other information in our 1998
10-KSB.
8
<PAGE> 9
OVERVIEW
St. Joseph was formed in February, 1996 for the purpose of organizing
the bank. The bank opened in February 1997 with $10.0 million in assets and grew
to approximately $123.0 million as of September 30, 1999. We expect continued
opportunities for growth, even though the rate of growth will probably be slower
than we have experienced to date.
On September 10, 1999, the Company completed a rights offering during
which 390,581 shares of the Company's common stock were sold at $15.50 per
share, resulting in gross proceeds of $6.1 million. The Company used
approximately $5.5 million of the proceeds from the rights offering to provide
additional capital to the Bank.
We reported earnings of $324,031 or $.25 basic and $.25 diluted income
per common share for the nine month period ended September 30, 1999 as compared
to a net loss of $(261,095) or $(.20) basic and diluted loss per common share
for the same period in 1998. During the three month period ended September 30,
1999, we reported earnings of $149,239 or $.12 basic and $.11 diluted income per
common share compared to a net loss of $ (41,622) or $(.03) basic and diluted
loss per common shares for the same period in 1998. For all periods involved,
the increase resulted primarily from increased interest income as a result of
the growth of the loan portfolio.
Our results of operations are dependent primarily on net interest
income, which is the difference between the interest earned on loans and
securities and the interest paid on deposits and borrowings. Our operating
results are also affected by sources of noninterest income, including service
charge fees on deposit accounts, loan fees and other income. Our operating
expenses include employee compensation and benefits, occupancy, equipment
expense and other noninterest expenses. Our operating results are also affected
by economic and competitive conditions, particularly changes in interest rates,
government policies and actions of regulatory authorities. The majority of our
loan portfolio is invested in commercial loans. Deposits from commercial clients
represent a significant funding source as well.
We have added equipment and employees to accommodate historical growth
and anticipated growth. As such, overhead expenses have had a significant impact
on earnings. Our primary challenge currently, from a profitability standpoint,
is to increase our net interest income. Additional growth will enable us to
continue to increase net interest income.
FORWARD-LOOKING STATEMENTS
When used in this Form 10-QSB, the words or phrases "will likely
result", "are expected to", "will continue", "is anticipated", "estimated",
"project", or similar expressions are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements are subject to certain risks and uncertainties
including changes in economic conditions in the Company's market area, changes
in policies by regulatory agencies, fluctuations in interest rates, demand for
loans in the Company's market area and competition, that could cause actual
results to differ materially from historical earnings and those presently
anticipated or projected. The Company wishes to caution readers not to place
undue reliance on any such forward-looking statements, which speak only as to
the date made. The Company wishes to advise readers that the factors listed
above could affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements.
The Company does not undertake, and specifically disclaims any
obligation to subsequently update or revise any forward-looking statements
contained in the report after the date of the report.
RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED WITH THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 1998
OVERVIEW. Consolidated net income for the nine month period ended
September 30, 1999 was $324,031 as compared to a net loss of $(261,095) for the
same period in 1998 for an increase of $585,126. Income per common share for the
nine months of 1999 increased to $.25 basic and diluted from a basic and diluted
loss of $(.20) for the nine months of 1998. Net income for the three month
period ended September 30, 1999 was $149,239 as compared to a net loss of
$(41,622) for the same period in 1998 for an increase of $ 190,861. Income per
common share for the three month period ended September 30, 1999 increased to $
.12 basic and $.11 diluted from a basic and diluted loss of $(.03) for the three
9
<PAGE> 10
months ended September 30, 1998. The increase in net income for the nine month
period was comprised of increases in both net interest income after provision
for loan losses of $946,813 and noninterest income of $13,820 reduced by
increases in noninterest expense of $375,507. The increase in net income for the
three month period was also comprised of an increase in net interest income
after provision for loan losses of $292,315 reduced by increases in noninterest
expense of $92,555 and a reduction in noninterest income of $8,899.
NET INTEREST INCOME. Net interest income for the nine months ended
September 30, 1999 and 1998, amounted to $2.5 million and $1.4 million,
respectively, and for the three months ended September 30, 1999 and 1998, net
interest income amounted to $0.9 million and $0.5 million, respectively. Net
interest income represented the difference between interest income earned on
earning assets and interest expense paid on interest bearing liabilities.
Interest income increased by $1.8 million, from $3.4 million for the
nine month period ended September 30, 1998 to $5.2 million for the nine month
period ended September 30, 1999 and for the three months ended September 30,
1999 and 1998, interest income increased by $0.6 million, from $1.3 million to
$1.9 million, respectively. The 52.9% and 46.1% rise in interest income for the
nine months ended and the three months ended September 30, 1999 and 1998 was
basically attributable to greater average outstanding balances in interest
earning assets, principally loans receivable. Interest income should continue to
grow as the loan portfolio and other interest earning assets increase.
Interest expense increased by $0.8 million, from $1.9 million for the
nine month period ended September 30, 1998 to $2.7 million for the nine month
period ended September 30, 1999 and for the three months ended September 30,
1999 and 1998, interest expense increased by $0.2 million, from $0.8 million to
$1.0 million, respectively. The 42.1% and 25.0% rise in interest expense for the
nine months ended and the three months ended September 30, 1999 and 1998 was
primarily attributable to greater average outstanding balances in interest
bearing liabilities. Interest expense should also continue to increase as
deposits and Federal Home Loan Bank advances and other borrowings grow.
PROVISION FOR LOAN LOSSES. The provision for loan losses is established
based on factors such as the local and national economy and the risk associated
with the loans in the portfolio. The provision for loan losses was $348,325 for
the nine month period ended September 30, 1999 compared to $266,675 in the same
period in 1998. For the three months ended September 30, 1999, the provision for
loan losses was $142,325 compared to $66,670 in the same period of 1998. At
September 30, 1999, the allowance for loan losses was $1,100,000 or 1.39% of
total loans receivable compared to $626,675 or 1.70% at September 30, 1998. The
increase in the allowance for loan losses is a result of the growth of the loan
portfolio and management's risk assessment of the portfolio. The decrease in the
percentage of allowance for loan losses to total loans receivable between
periods is a result of management's risk assessment of the portfolio. The risk
assessment is based on numerous statistical factors including the specific asset
class of each loan (i.e. commercial, residential or consumer), the internal risk
rating of each loan, specific industry concentrations, an assessment for large
dollar and unsecured loans and specific reserves for watchlist credits.
We have not experienced any charge-offs from loans receivable since
inception. At September 30, 1999, no portion of the allowance for loan losses
was allocated to impaired loan balances, as there were no loans considered
impaired. Loan impairment is reported when full payment under the loan terms is
not expected. Impairment is evaluated in total for smaller-balance loans of a
similar nature such as residential mortgage, consumer and credit card loans, and
on an individual loan basis for other loans. If a loan is impaired, a portion of
the allowance is allocated so that the loan is reported, net, at the present
value of estimated future cash flows using the loan's existing rate, or at the
fair value of collateral if repayment is expected solely from the collateral.
Loans receivable are evaluated for impairment when payments are delayed,
typically 90 days or more, or when it is probable that all principal and
interest amounts will not be collected according to the original terms of the
loan.
Management allocated approximately 73% of the allowance for loan losses
to commercial loans, 12% to residential real estate mortgage loans and 6% to
installment loans at September 30, 1999, leaving 9% unallocated. There were no
non-performing loans at September 30, 1999. Management believes the allowance
for loan losses at September 30, 1999 was adequate to absorb existing losses in
the loan portfolio.
10
<PAGE> 11
NONINTEREST INCOME. Noninterest income increased by $13,820, from
$58,219 for the nine month period ended September 30, 1998 to $72,039 for the
nine month period ended September 30, 1999. For the three month period ended
September 30, 1999, noninterest income decreased by $8,899, from $37,887 for
1998 to $28,988 in 1999. Noninterest income during both periods of 1998
consisted of income from gains on sales and calls of securities available for
sale, depository account service fees and other miscellaneous fees. Noninterest
income during both periods in 1999 consisted of income from depository account
service fees and other miscellaneous fees. The increase in the nine month
periods was primarily due to depository account service fees.
NONINTEREST EXPENSE. The main components of noninterest expense were
primarily salaries and benefits, occupancy and equipment, professional fees and
data processing fees for both six month periods. Noninterest expense for the
nine months ended September 30, 1999 was $1,876,745 as compared to $1,501,238
for the same period in 1998, an increase of $375,507. Management continues to
attempt to control overhead expenses without impairing the quality of service
provided to clients.
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1999 1998 % Change
---- ---- --------
<S> <C> <C> <C>
Salaries and employee benefits $ 1,075,931 $ 751,037 43.26%
Occupancy and equipment expense 324,354 331,768 (2.23)
Advertising and promotion 34,550 36,970 (6.55)
Client courier 15,941 76,783 (79.24)
Data processing 104,048 78,009 33.38
Incorporation expense 4,588 4,617 (.63)
Liability insurance 20,280 20,480 (.98)
Printing, postage, stationery and supplies 46,404 31,565 47.01
Professional dues and memberships 15,453 11,896 29.90
Professional fees 69,959 64,212 8.95
Telephone 28,455 21,837 30.31
Other 136,762 72,064 89.78
------------- ------------
$ 1,876,745 $ 1,501,238 25.01
============= ============
</TABLE>
Salaries and benefits experienced the most significant dollar increase of
any noninterest expense component. For the nine months ended September 30, 1999,
total salaries and benefits were $1,075,931 compared to $751,037 for the nine
months ended September 30, 1998. For the three months ended September 30, 1999,
salaries and benefits was $380,940 compared to $269,689 for the same period in
1998. The change in both periods was primarily attributable to the increase in
the number of employees from 19 at September 30, 1998 to 29 at September 30,
1999, as well as merit and cost of living raises.
Other expense experienced the largest single percentage increase within the
noninterest expense category. For the nine months ended September 30, 1999 and
September 30, 1998, other expense increased to $136,762 or $64,698 over the 1998
nine month total of $72,064. The change was primarily attributable to the
increase in business development expenses associated with attracting new and
retaining existing clients as well as other normal miscellaneous expenses
associated with our growth.
The reduction in the expense associated with our courier service for the
nine month periods was a result of bringing the operations of the courier
service in-house versus paying a third party vendor for courier services. The
percentage increase in data processing for the nine month periods of 33.38% and
printing, postage, stationary and supplies of 47.01% continued to be associated
with the growth in the number of account holders. The percentage increases for
the nine month periods in other categories were mainly attributable to the
increased volume of transactions handled due to the growing number of clients.
The percentage decrease in noninterest expense categories other than
salaries and benefits for the three months ended September 30, 1999 and 1998 was
6.8%.
11
<PAGE> 12
INCOME TAXES. The potential future income tax benefit from the financial
statement net operating losses in the years 1998, 1997 and 1996 has not been
reflected in the consolidated financial statements. A valuation allowance has
been recorded to offset the excess of deferred tax assets over deferred tax
liabilities. As we continue to be profitable, the valuation allowance will
continue to be reduced and the tax benefit from these losses will be realized.
The federal and state income tax benefit from tax return net operating losses
can be carried forward for twenty years and fifteen years, respectively, from
the time of the loss before they expire.
It is anticipated that the tax return net operating loss carryforwards
available for federal and state income tax purposes will be completely used in
1999.
FINANCIAL CONDITION
SEPTEMBER 30, 1999 COMPARED WITH THE DECEMBER 31, 1998
Our total assets increased by $26.3 million or 27.2% to $123.0 million
at September 30, 1999 from $96.6 million at December 31, 1998. The growth during
the period was primarily resulting from an increase in the loan portfolio funded
by deposits received from clients and FHLB advances. In addition, the completion
of the rights offering allowed us to buy back participation loans, which added
to the growth in the loan portfolio. The largest increase in our balance sheet
as of September 30, 1999 was in the loan portfolio.
CASH AND CASH EQUIVALENTS. Cash and due from banks increased by $1.6
million or 26.2% to $7.7 million at September 30, 1999 from $6.1 million at
December 31, 1998. Cash and due from banks represented cash maintained at
correspondent banks in the form of demand deposits as well as cash maintained at
the Federal Reserve Bank of Chicago.
Federal funds sold are inter-bank funds with daily liquidity. At
September 30, 1999, we had $7.2 million invested in federal funds. This amount
decreased by $2.4 million or 25.0% from $9.6 million at December 31, 1998. The
decrease in federal funds sold was a result of funding the loan growth for the
period.
INVESTMENT PORTFOLIO. Securities available for sale totaled $27.3
million at September 30, 1999, which represented a decrease of $3.8 million or
12.2% from $31.1 million at December 31, 1998. The decrease was a result of
funding increased loan demand as well as normal maturities.
All securities have been classified as available for sale. Available
for sale securities represent those securities which we may decide to sell if
needed for liquidity, asset/liability management or other reasons. Such
securities are reported at fair value with unrealized gains and losses included
as a separate component of stockholders' equity, net of tax. The unrealized loss
on the securities portfolio, net of taxes was $(422,228) at September 30, 1999
compared to an unrealized gain on the securities portfolio of $554,950 at
December 31, 1998.
LOAN PORTFOLIO. Loans receivable net of allowance increased by $30.0
million or 62.5% to $78.0 million at September 30, 1999 from $48.0 million at
December 31, 1998. The increase was attributable to our officer calling program
as well as the buying back of participation loans with the proceeds of the
rights offering.
Management believes the allowance for loan losses at September 30, 1999
was adequate to absorb any losses on nonperforming loans, as the allowance
balance is maintained by management at a level considered adequate to cover
losses that are currently anticipated based on past loss experience, general
economic conditions, information about specific borrower situations including
their financial position and collateral values, and other factors and estimates
which are subject to change over time.
The allowance for loan losses balance and the provision for loan losses
are determined by management based upon periodic reviews of the loan portfolio.
In addition, management considers the level of charge-offs on loans as well as
the fluctuations of charge-offs and recoveries on loans, including the factors
which caused these changes. Estimating the risk of loss and the amount of loss
is necessarily subjective. Accordingly, the allowance is maintained by
management at a level considered adequate to cover losses that are currently
anticipated based on past loss experience, general economic conditions,
information about specific borrower situations including their financial
position and collateral values and other factors and estimates which are subject
to change over time.
12
<PAGE> 13
While management's periodic analysis of the adequacy of the allowance
for loan losses may allocate portions of the allowance for specific problem loan
situations, the entire allowance is available for any loan charge-offs that
occur.
OTHER ASSETS. Premises and equipment increased by $681,670 or 91.8% to
$1,424,165 at September 30, 1999 from $742,495 at December 31, 1998. The
increase was primarily the result of purchasing our headquarters building in
May, 1999 for $800,000.
DEPOSITS. Deposits increased by $13.4 million or 17.5% to $89.8 million
at September 30, 1999 from $76.4 million at December 31, 1998. The increase
resulted from a $9.3 million increase in certificates of deposit and a $4.1
million increase in noninterest-bearing, NOW, money market and other savings
accounts. We do not accept brokered certificates of deposit. The increase in
certificates of deposit during the first half of 1999 was primarily a result of
expanding relationships with existing clients and obtaining business from other
local relationship based clients.
Transaction accounts, which include noninterest-bearing, NOW, money
market, other savings and our client-based repurchase agreement relationships,
increased by $4.2 million during the nine months of 1999. Our average cost of
interest bearing liabilities decreased from 5.12% during the year 1998 to 4.31%
during the nine months of 1999.
The increase in deposits for these periods were a result of periodic
aggressive pricing programs for deposits, ongoing marketing efforts and the
hiring of new personnel. Management also believes the increase was a reaction by
clients to the acquisitions and mergers of local banks by transferring their
financial business to community banks that have the ability to offer more
personalized service.
SHORT-TERM BORROWINGS. Short-term borrowings increased $3.4 million
from $6.4 million as of December 31, 1998 to $9.8 million as of September 30,
1999. Short-term borrowings represented repurchase agreements offered to
commercial clients. Though short-term in nature, repurchase agreements have been
and continue to be a stable source of funds.
FHLB ADVANCES AND OTHER BORROWINGS. As a result of our membership in
the Federal Home Loan Bank of Indianapolis, we have the ability to borrow for
short or long-term purposes under a variety of programs. FHLB advances increased
by $4.0 million to $6.0 million as of September 30, 1999 from $2.0 million at
December 31, 1998. As of September 30, 1999, the bank held $388,800 of FHLB
stock. The increases primarily resulted as we used FHLB advances for loan
matching and for hedging against the possibility of rising interest rates.
Other liabilities increased by $203,166 or 179.7% to $316,218 as of
September 30, 1999 from $113,052 as of December 31, 1998. Other liabilities were
comprised of unpaid amounts for various products and services and accrued but
unpaid interest on deposits.
CAPITAL RESOURCES
Additional paid-in capital increased by $5.9 million from $12.3 million
at December 31, 1998 to $18.2 million at September 30, 1999. The increase in
additional paid-in capital was a result of proceeds received from the rights
offering completed on September 10, 1999.
The retained deficit decreased by $324,031 or 25.3% to $(.9) million as
of September 30, 1999 from $(1.3) million as of December 31, 1998. The decrease
reflected net income for the nine month period ended September 30, 1999.
Unrealized gains (losses) on securities available for sale, were
$(422,228) as of September 30, 1999 as compared to $554,950 as of December 31,
1998. The decrease was attributable to the decrease during the period in fair
value of the securities available for sale due to rising interest rates.
Total stockholders' equity was $16.9 million as of September 30, 1999,
an increase of $5.3 million from $11.6 million as of December 31, 1998. The
increase resulted from the combination of the proceeds received from the rights
offering and the increase in the net income for the period offset by the
increase in the net unrealized loss on securities available for sale.
13
<PAGE> 14
The components of total risk-based capital are Tier 1 capital and Tier
2 capital. Tier 1 capital is total stockholders' equity less intangible assets.
Tier 2 capital is Tier 1 capital plus a portion of the allowance for loan
losses. The allowance for loan losses is includable in Tier 2 capital up to a
maximum of 1.25% of risk weighted assets. The net unrealized appreciation
(depreciation) on securities available for sale, net of tax, is not considered
in meeting regulatory capital requirements. The following table provides the
bank's minimum regulatory capital requirements and the bank's actual capital
ratios at September 30, 1999:
<TABLE>
<CAPTION>
Minimum Required To Be
Minimum Required For Well Capitalized Under
Capital Adequacy Prompt Corrective Action Bank's Capital
September 30, 1999 Purposes Regulations Ratio
- ------------------------------------ -------------------- ----------------------------- --------------
<S> <C> <C> <C>
Ratio of Total Capital to Risk
Weighted Assets 8.0% 10.0% 20.1%
Ratio of Tier 1 Capital to Risk
Weighted Assets 4.0% 6.0% 18.8%
Ratio of Tier 1 Capital to Average
Assets 4.0% 5.0% 14.0%
</TABLE>
The bank exceeded the applicable minimum regulatory capital
requirements at September 30, 1999 and was considered to be well capitalized.
Restrictions exist regarding the ability of the bank to transfer funds
to St. Joseph in the form of cash dividends, loans or advances. No cash or other
dividends were declared or paid during the nine month period ended September 30,
1999 or the year ended December 31, 1998.
As of September 30, 1999, management was not aware of any current
recommendations by the banking regulatory authorities which, if they were to be
implemented, would have, or are reasonably likely to have, a material adverse
effect on our liquidity, capital resources or operations.
ASSET/LIABILITY MANAGEMENT
LIQUIDITY
Liquidity relates primarily to our ability to fund loan demand, meet
deposit clients' withdrawal requirements and provide for operating expenses.
Assets used to satisfy these needs consist of cash and due from banks, federal
funds sold, interest bearing deposits in other financial institutions and
securities available for sale. These assets are commonly referred to as liquid
assets. Liquid assets were $42.3 million at September 30, 1999 compared to $46.8
million at December 31, 1998, respectively. Liquidity levels declined $4.5
million from December 31, 1998 due to the need to fund the loan growth with
liquid assets. Management recognizes that securities may need to be sold in the
future to help fund loan demand and accordingly, as of September 30, 1999, the
entire securities portfolio of $27.3 million was classified as available for
sale. Management believes its current liquidity level is sufficient to meet
anticipated future growth.
The statements of cash flows for the periods presented provide an
indication of our sources and uses of cash as well as an indication of our
ability to maintain an adequate level of liquidity. A discussion of the
statements of cash flows for the nine month period ended September 30, 1999 and
1998 follows.
During both periods presented, we experienced a net increase in cash
from operating activities. Net cash from operating activities was $1,286,783
during the nine months ended September 30, 1999 compared to $195,724 for the
same period in 1998. The increase in cash from operating activities of
$1,091,059 during 1999 as compared to 1998 was primarily a result of our ability
to generate an operating profit of $324,031 for the nine months ended September
30, 1999 compared to a net operating loss of $(261,095) for the same period in
1998.
For all periods presented, we experienced a net decrease in net cash
from investing activities. Net cash from investing activities was $(28.7)
million and $(21.1) million for the nine months ended September 30, 1999 and
1998, respectively. The changes in net cash from investing activities include
purchases, maturities and calls of securities available for sale, growth in
loans receivable and purchases of premises and equipment.
14
<PAGE> 15
Net cash flow from financing activities was $26.7 million and $29.9
million for the periods ended September 30, 1999 and 1998, respectively. In 1999
and 1998, the decrease was primarily attributable to lower growth in total
deposits, securities sold under agreements to repurchase, Federal Home Loan Bank
advances and the proceeds of the rights offering of $13.4 million, $4.9 million,
$2.5 million and 5.9 million compared to $22.9 million, $6.8 million, $0 and $0.
MANAGEMENT OF INTEREST SENSITIVITY
A number of measures are used to monitor and manage interest rate risk,
including income simulation and interest sensitivity (GAP) analysis. An income
simulation model is management's primary tool used to assess the direction and
magnitude of variations in net interest income resulting from changes in
interest rates. Key assumptions in the model include repayment speeds on various
loan and investment assets; cash flow and maturities of financial instruments
held for purposes other than trading; changes in market conditions, loan
volumes, and pricing; deposit sensitivity; client preferences; and management's
capital plans. These assumptions are inherently uncertain, subject to
fluctuations and revision in a dynamic environment and as a result, the model
cannot precisely estimate net interest income or exactly predict the impact of
higher or lower interest rates on net interest income. Actual results will
differ from simulated results due to timing, magnitude, and frequency of
interest rate changes and changes in market conditions and management
strategies, among other factors.
Results of the simulation done as of September 30, 1999, suggest that
we could expect net interest income to increase by approximately $241,000, if
interest rates gradually decline by 100 basis points over the next twelve
months, and to decrease approximately $141,000, if interest rates gradually
increased 100 basis points over the next twelve months, from forecast levels of
net interest income absent any changes in rates. These variances in net interest
income were within our policy parameters established to manage interest rate
risk. In addition to changes in interest rate, the level of future net interest
income is also dependent on a number of other variables, including growth,
composition and absolute levels of deposits, loans, and other earning assets and
interest bearing liabilities, economic and competitive conditions, client
preference and other factors.
Austin Advisors, Inc., a firm specializing in consulting and providing
assistance to banks, performs a formal asset/liability management analysis on a
monthly basis. This information is presented and reviewed by the "ALCO"
Committee.
IMPACT OF INFLATION AND CHANGING PRICES
The majority of our assets and liabilities are monetary in nature and
therefore we differ greatly from most commercial and industrial companies that
have significant investments in fixed assets or inventories. However, inflation
does have an important impact on the growth of total assets in the banking
industry and the resulting need to increase equity capital at higher than normal
rates in order to maintain an appropriate equity to assets ratio. Inflation
significantly affects noninterest expense, which tends to rise during periods of
general inflation.
IMPACT OF YEAR 2000 COMPLIANCE
The Year 2000 has posed a unique set of challenges to those industries
reliant on information technology. As a result of methods employed by early
programmers, many software applications and operational programs may be unable
to distinguish the Year 2000 from the Year 1900. If not effectively addressed,
this problem could result in the production of inaccurate data, or, in the worst
cases, the inability of the systems to continue to function altogether.
Financial institutions are particularly vulnerable due to the industry's
dependency on electronic data processing systems. In 1997, we started the
process of identifying the hardware and software issues required to be addressed
to assure Year 2000 compliance. We began by assessing the issues related to the
Year 2000 and the potential for those to adversely affect our operations.
Since that time, we have established a Year 2000 committee to deal with
this issue. The committee meets with and utilizes various representatives from
key units throughout the Company to aid in analysis and testing. It is the
mission of this committee to identify areas subject to complications related to
the Year 2000 and to initiate remedial measures designed to eliminate any
adverse effects on our operations. The committee has identified all
mission-critical software and hardware that may be adversely affected by the
Year 2000 and has requested vendors to represent that the systems and products
provided are or will be Year 2000 compliant.
15
<PAGE> 16
We license all software used in conducting our business from third
party vendors. None of our software has been internally developed. We have
developed a comprehensive list of all software, all hardware and all service
providers used. Every vendor has been contacted regarding the Year 2000 issues,
and we continue to closely track the progress each vendor is making in resolving
the problems associated with this issue. The vendor of the primary software we
use was compliant with the Year 2000 with no remediation needed. Testing
standards were formulated and comprehensive testing was completed in September
1998. We continue to monitor all other major vendors of services for Year 2000
issues in order to avoid shortages of supplies and services in the coming
months. We have not had any material delays regarding our information systems
projects as a result of the Year 2000 project.
There are third party utilities with which we have an important
relationship, i.e. Ameritech (phone service), Mishawaka Power (electricity) and
NIPSCO (natural gas). We have not identified any practical, long-term
alternatives to relying on these companies for basic utility services, however,
we have installed a generator that will supply power to our building as a backup
for any disruption in electrical service. In the event that the utilities
significantly curtail or interrupt their services to us, there would be a
significant adverse effect on our ability to conduct business. Information
received from these utilities indicates that they have significantly completed
remediation and validation of their mission critical applications.
We have also tested such things as alarm systems and networks for Year
2000 functionality and are not aware of any significant problems with such
systems.
Our cumulative costs of the Year 2000 project through the third quarter
of 1999 were approximately $48,000. The estimated total cost of the Year 2000
project is $72,000. This includes costs to upgrade equipment specifically for
the purpose of Year 2000 compliance and certain administrative expenditures. At
the present time, no situation that will require material cost expenditures to
become fully compliant have been identified. However, the Year 2000 problem is
pervasive and complex and can potentially affect any computer process.
Accordingly, no assurance can be given that Year 2000 compliance can be achieved
without additional unanticipated expenditures and uncertainties that might
affect future financial results.
We are committed to a plan for achieving compliance, focusing not only
on our own data processing systems, but also on our loan and depository clients.
The Year 2000 committee has taken steps to educate and assist our clients with
identifying their Year 2000 compliance problems, if any. In addition, the
management committee has proposed policies and procedures to help identify
potential risks and to gain an understanding of how clients are managing the
risks associated with the Year 2000. We are assessing the impact, if any, of the
Year 2000 risk in our credit analysis. In connection with potential credit risk
related to the Year 2000 issue, we have contacted our large commercial loan and
depository clients regarding their level of preparedness for the Year 2000.
Through these questionnaires and resulting assessments, we believe that overall
credit and liquidity risk to our large corporate borrowers and depositors is not
excessive.
We have developed contingency plans for various Year 2000 problems and
continue to revise those plans based on testing and vendor notifications.
The federal banking regulators issued guidelines establishing minimum
safety and soundness standards for achieving Year 2000 compliance. The
guidelines, which took effect October 15, 1998 and apply to all FDIC- insured
depository institutions, established standards for developing and managing Year
2000 project plans, testing remediation efforts and planning for contingencies.
The guidelines are based upon guidance previously issued by the agencies under
the auspices of the Federal Financial Institutions Examination Council but are
not intended to replace or supplant the Federal Financial Institutions
Examination Council guidance which will continue to apply to all federally
insured depository institutions.
16
<PAGE> 17
The guidelines were issued under section 39 of the Federal Deposit
Insurance Act, which requires the federal banking regulators to establish
standards for the safe and sound operation of federally insured depository
institutions. Under section 39 of the Federal Deposit Insurance Act, if an
institution fails to meet any of the standards established in the guidelines,
the institution's primary regulators may require the institution to submit a
plan for achieving compliance. If an institution fails to submit an acceptable
compliance plan, or fails in any material respect to implement a compliance plan
that has been accepted by its primary regulator, the regulator is required to
issue an order directing the institution to cure the deficiency. Such an order
is enforceable in court in the same manner as a cease and desist order. Until
the deficiency cited in the regulator's order is cured, the regulator may
restrict the institution's rate of growth, require the institution to increase
its capital, restrict the rates the institution pays on deposits or require the
institution to take any action the regulator deems appropriate under the
circumstance. In addition to the enforcement procedures established in section
39 of the Federal Deposit Insurance Act, noncompliance with the standards
established by the guidelines may also be grounds for other enforcement action
by federal banking regulators, including cease and desist orders and civil money
penalty assessments. Our management believes Year 2000 planning has been
consistent with regulatory guidelines.
RECENT REGULATORY DEVELOPMENTS
PENDING LEGISLATION. On November 4, 1999, the United States Congress
approved legislation that would allow bank holding companies to engage in a
wider range of nonbanking activities, including greater authority to engage in
securities and insurance activities. Under the Gramm-Leach-Bliley Act (the
"Act"), a bank holding company that elects to become a financial holding company
may engage in any activity that the Board of Governors of the Federal Reserve
System (the "Federal Reserve"), in consultation with the Secretary of the
Treasury, determines by regulation or order is (i) financial in nature, (ii)
incidental to any such financial activity, or (iii) complementary to any such
financial activity and does not pose a substantial risk to the safety or
soundness of depository institutions or the financial system generally. The Act
specifies certain activities that are deemed to be financial in nature,
including lending, exchanging, transferring, investing for others, or
safeguarding money or securities; underwriting and selling insurance; providing
financial, investment, or economic advisory services; underwriting, dealing in
or making a market in, securities; and any activity currently permitted for bank
holding companies by the Federal Reserve under section 4(c)(8) of the Bank
Holding Company Act. A bank holding company may elect to be treated as a
financial holding company only if all depository institution subsidiaries of the
holding company are well-capitalized, well-managed and have at least a
satisfactory rating under the Community Reinvestment Act.
National banks are also authorized by the Act to engage, through
"financial subsidiaries," in any activity that is permissible for a financial
holding company (as described above) and any activity that the Secretary of the
Treasury, in consultation with the Federal Reserve, determines is financial in
nature or incidental to any such financial activity, except (i) insurance
underwriting, (ii) real estate development or real estate investment activities
(unless otherwise permitted by law), (iii) insurance company portfolio
investments and (iv) merchant banking. The authority of a national bank to
invest in a financial subsidiary is subject to a number of conditions,
including, among other things, requirements that the bank must be well-managed
and well-capitalized (after deducting from capital the bank's outstanding
investments in financial subsidiaries). The Act provides that state banks may
invest in financial subsidiaries (assuming they have the requisite investment
authority under applicable state law) subject to the same conditions that apply
to national bank investments in financial subsidiaries.
The Act must be signed by the President before it will take effect. At
this time, the Company is unable to predict the impact the Act may have on the
Company and its subsidiaries.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As a depository of funds, the Bank may occasionally be named as a
defendant in lawsuits (such as garnishment proceedings) involving claims to the
ownership of funds in particular accounts. Such litigation is incidental to the
Bank's business.
The Company's management is not aware of any pending litigation.
17
<PAGE> 18
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT NO.
----------
27 Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ST. JOSEPH CAPITAL CORPORATION
(Registrant)
Date: November 12, 1999 /s/ John W. Rosenthal
----------------------------------------
John W. Rosenthal
President
Date: November 12, 1999 /s/ Edward R. Pooley
----------------------------------------
Edward R. Pooley
Principal Financial Officer
18
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 7,720,718
<INT-BEARING-DEPOSITS> 74,397
<FED-FUNDS-SOLD> 7,200,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 27,334,155
<INVESTMENTS-CARRYING> 388,800
<INVESTMENTS-MARKET> 388,800
<LOANS> 79,139,707
<ALLOWANCE> 1,100,000
<TOTAL-ASSETS> 122,928,013
<DEPOSITS> 89,802,181
<SHORT-TERM> 9,771,013
<LIABILITIES-OTHER> 479,355
<LONG-TERM> 6,000,000
0
0
<COMMON> 16,733
<OTHER-SE> 16,858,731
<TOTAL-LIABILITIES-AND-EQUITY> 122,928,013
<INTEREST-LOAN> 3,708,471
<INTEREST-INVEST> 1,304,748
<INTEREST-OTHER> 168,531
<INTEREST-TOTAL> 5,181,750
<INTEREST-DEPOSIT> 2,299,726
<INTEREST-EXPENSE> 2,704,688
<INTEREST-INCOME-NET> 2,477,062
<LOAN-LOSSES> 348,325
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,876,745
<INCOME-PRETAX> 324,031
<INCOME-PRE-EXTRAORDINARY> 324,031
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 324,031
<EPS-BASIC> .25
<EPS-DILUTED> .25
<YIELD-ACTUAL> 3.51
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 751,675
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,100,000
<ALLOWANCE-DOMESTIC> 1,004,728
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 95,272
</TABLE>
