U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO __________
Commission file number - 333-12501
HOME CITY FINANCIAL CORPORATION
(Exact name of small business issuer as specified in its charter)
OHIO 34-1839475
_______________________________ ____________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
63 West Main Street
Springfield, Ohio 45502
________________________________________ __________
(Address of principal executive offices) (Zip Code)
(513) 324-5736
_____________________________
(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 past 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_____
As of April 30, 1997, 876,024 shares of common stock of the Registrant were
outstanding. There were no preferred shares outstanding.
*The Registrant's Registration Statement on Form S-1 was declared effective on
November 12, 1996. Prior to December 30, 1996, the Registrant conducted no
business except the offering of its shares and preparation to acquire Home City
Federal Savings Bank of Springfield. The financial information contained in this
Form 10-QSB for periods prior to December 30, 1996 is, therefore, that of Home
City Federal Savings Bank of Springfield.
<PAGE>
HOME CITY FINANCIAL CORPORATION
SPRINGFIELD, OHIO
FORM 10-QSB
INDEX
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Page Number
PART I FINANCIAL INFORMATION
Item. 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets -- 3
March 31, 1997 and June 30, 1996
Condensed consolidated statements of income -- 4
Three months and nine months ended
March 31, 1997 and 1996
Condensed consolidated statements of cash flows -- 5
Nine months ended March 31, 1997 and 1996
Notes to condensed consolidated financial 6
statements -- March 31, 1997 and June 30, 1996
Item 2. Management's Discussion and Analysis of Financial 7
Condition and Results of Operations
PART II OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
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<TABLE>
HOME CITY FINANCIAL CORPORATION
Springfield, Ohio
CONSOLIDATED BALANCE SHEETS
Dollars in thousands
__________________________
(Unaudited) (Unaudited)
March 31, June 30,
1997 1996
<S> <C> <C>
Assets
Cash and cash equivalents
Cash and due from banks $ 1,136 $ 855
Interest-bearing time deposits 730 588
Federal funds sold 200 400
-------- -------
Total cash and cash equivalents 2,066 1,843
Time deposits with original maturities 90 days or more 361 1,061
Investment securities available-for-sale, at fair value 9,188 2,188
Mortgage-backed securities available-for-sale, at fair value 768 2,975
Loans, net 53,431 45,225
Accrued interest receivable 355 273
Properties and equipment 479 488
Investments required by law - stock in Federal Home Loan Bank 415 394
Cash surrender value of life insurance 1,083 1,044
Other assets 89 237
-------- -------
Total assets $ 68,235 $55,728
======== =======
Liabilities and Shareholders' Equity
Deposits
Demand accounts $ 971 $ 302
NOW accounts 485 395
Savings accounts 7,729 9,561
Time deposits, $100,000 or more 5,651 7,216
Other time deposits 34,959 29,700
-------- -------
Total deposits 49,795 47,174
Advances from Federal Home Loan Bank 4,005 2,903
Accrued interest payable 53 49
Advance payments by borrowers for taxes and insurance 47 20
Deferred income taxes 63 68
Other liabilities 211 116
-------- -------
Total liabilities 54,174 50,330
-------- -------
Shareholders' Equity
Common shares, 5,000,000 authorized w/o par value;
952,200 shares issued 0 0
Additional paid-in capital 9,085 0
Retained earnings, substantially restricted 5,558 5,271
Unrealized gain on securities available-for-sale, net of applicable
deferred income taxes 180 127
Common shares acquired by Employee Stock Ownership Plan (762) 0
-------- -------
Total shareholders' equity 14,061 5,398
-------- -------
Total liabilities and shareholders' equity $ 68,235 $55,728
======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
<TABLE>
HOME CITY FINANCIAL CORPORATION
Springfield, Ohio
CONSOLIDATED STATEMENTS OF INCOME
Dollars in thousands, except per share amounts
______________________________________________
(Unaudited) (Unaudited)
3 Months Ended 9 Months Ended
March 31, March 31,
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans $ 1,203 $1,048 $ 3,470 $3,021
Interest on investment securities 92 33 173 106
Interest on mortgage-backed securities 25 56 123 157
Interest on deposits in banks and federal funds sold 68 14 130 38
------- ------ ------- ------
Total interest income 1,388 1,151 3,896 3,322
------- ------ ------- ------
Interest expense
Interest on interest-bearing checking accounts 3 1 8 2
Interest on savings deposits 48 59 169 192
Interest on certificates of deposit 616 552 1,825 1,560
Interest on advances from Federal Home Loan Bank 66 41 167 132
------- ------ ------- ------
Total interest expense 733 653 2,169 1,886
------- ------ ------- ------
Net interest income 655 498 1,727 1,436
Provision for loan losses 20 0 57 0
------- ------ ------- ------
Net interest income after provision for loan loss 635 498 1,670 1,436
Noninterest income
Service charges on deposit accounts 2 1 5 2
Life insurance 15 15 45 30
Loss on sale of mortgage-backed securities (19) 0 (19) 0
Other income 5 1 7 3
------- ------ ------- ------
Total noninterest income 3 17 38 35
------- ------ ------- ------
Noninterest expense
Salaries and employee benefits 156 133 402 389
Supplies, telephone and postage 15 8 37 31
Occupancy and equipment 25 27 75 74
FDIC deposit insurance 8 24 319 70
Data processing 15 14 49 39
Legal, accounting and examination 53 26 104 88
Franchise tax 45 19 83 53
Other expense 54 45 136 157
------- ------ ------- ------
Total noninterest expense 371 296 1,205 901
------- ------ ------- ------
Income before income taxes 267 219 503 570
Federal income tax expense 89 70 141 184
------- ------ ------- ------
Net income $ 178 $ 149 $ 362 $ 386
======= ====== ======= ======
_____________________________________________________________________________________________________________________
Per share data:
Net income per share of common stock $ 0.20 N/A $ 0.41 N/A
_____________________________________________________________________________________________________________________
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
HOME CITY FINANCIAL CORPORATION
Springfield, Ohio
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in thousands
____________________
(Unaudited)
9 Months Ended
March 31,
1997 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income 362 386
Adjustments to reconcile net income to net cash
provided by operating activities:
Premium amortization, net of discount accretion 18 29
Provision for loan losses 57 0
Depreciation 30 28
Deferred income taxes (5) 49
Life insurance income, net of expense (39) (11)
Changes in operating assets and liabilities:
Increase in accrued income receivable (82) (92)
(Increase) decrease in other assets 148 (45)
Increase (decrease) in accrued interest payable 4 (1)
Increase in other liabilities 100 18
-------- -------
Net cash provided by operating activities 593 361
-------- -------
Cash flows from investing activities:
Net increase (decrease) in time deposits 700 (1)
Proceeds from maturities of held-to-maturity securities 0 500
Purchase of available-for-sale securities (6,969) (255)
Proceeds from sale of mortgage-backed securities 1,891 0
Payments on mortgage-backed securities 253 427
Purchase of loans (375) 0
Net change in loans (7,891) (6,810)
Purchases of premises and equipment (21) (51)
Purchase of Federal Home Loan Bank stock (21) (16)
Purchase of life insurance contracts 0 (1,020)
-------- -------
Net cash used in investing activities (12,433) (7,226)
-------- -------
Cash flows from financing activities:
Net increase in deposits 2,621 6,195
Proceeds from advances from Federal Home Loan Bank 1,825 900
Payments on advances from Federal Home Loan Bank (723) (1,061)
Proceeds from sale of Common Stock 8,313 0
Net increase in advance payments by borrowers for
taxes and insurance 27 7
-------- -------
Net cash provided by financing activities 12,063 6,041
-------- -------
Net increase (decrease) in cash and cash equivalents 223 (824)
Cash and cash equivalents at beginning of period 1,843 2,377
-------- -------
Cash and cash equivalents at end of period $ 2,066 $ 1,553
======== =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
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HOME CITY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997, and June 30, 1996
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In September 1996, the Board of Directors of Home City Federal Savings Bank of
Springfield (the "Company") adopted a Plan of Conversion (the "Plan") whereby
the Company would convert to the stock form of ownership, followed by the
issuance of all the Company's outstanding stock to a newly formed holding
company, Home City Financial Corporation (the "Corporation"). Pursuant to the
Plan, the Corporation offered common shares for sale to certain depositors of
the Company and members of the community. The conversion was completed on
December 30, 1996, and resulted in the issuance of 952,200 common shares of the
Corporation which, after consideration of offering expenses totaling
approximately $447,000 and $762,000 in shares purchased by the ESOP (the
"Employee Stock Ownership Plan"), resulted in net capital proceeds of $8.3
million. Condensed financial statements of the Corporation are presented herein.
Future references are made either to the Corporation or the Company as
applicable.
The Corporation is a savings and loan holding company whose activities are
primarily limited to holding the stock of the Company. The Company conducts a
general banking business in west central Ohio which consists of attracting
deposits from the general public and applying those funds to the origination of
loans for residential, consumer and non- residential purposes. The Company's
profitability is significantly dependent on net interest income which is the
difference between interest income generated from interest-earning assets (i.e.,
loans and investments) and the interest expense paid on interest-bearing
liabilities (i.e., customer deposits and borrowed funds). Net interest income is
affected by the relative amount of interest-earning assets and interest-bearing
liabilities and interest received or paid on these balances. The level of
interest rates paid or received by the Company can be significantly influenced
by a number of environmental factors, such as governmental monetary policy, that
are outside of management control.
Earnings per common share were computed by dividing net income by the weighted
average number of shares outstanding for both the three- and nine-month periods
ended March 31, 1997. The weighted average number of shares outstanding for both
the three- and nine-month periods ended March 31, 1997, were 876,024. Unreleased
ESOP shares are not considered to be outstanding shares for the purpose of
determining the weighted average number of shares used in the earnings per
common share calculation.
The consolidated financial information presented herein has been prepared in
accordance with generally accepted accounting principles ("GAAP") and general
accounting practices within the financial services industry. In preparing
consolidated financial statements in accordance with GAAP, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and revenues and expenses during the
reporting period. Actual results could differ from such estimates.
NOTE B - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with instructions to Form 10-QSB and Article 10 of
Regulation S-X and Rule 310 of Regulation SB. Accordingly, they do not include
all information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included.
Operating results are not necessarily indicative of the results that may be
expected for the year ended June 30, 1997.
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<PAGE>
HOME CITY FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following focuses on the consolidated financial condition of the
Corporation at March 31, 1997, compared to June 30, 1996, and the results of
operations for the three- and nine-month periods ended March 31, 1997, compared
to the same periods in 1996. The purpose of this discussion is to provide a
better understanding of the consolidated financial statements and footnotes
included in the Form 10-QSB. The Corporation is not aware of any market or
institutional trend, events or uncertainties that will have or are reasonably
likely to have a material effect on liquidity, capital resources or operations
except as discussed herein. Other than as discussed herein, the Corporation is
not aware of any current recommendations by regulatory authorities which would
have such effect if implemented.
Note Regarding Forward-Looking Statements
In addition to historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties. Economic circumstances, the Corporation's operations and the
Corporation's actual results could differ significantly from those discussed in
the forward-looking statements. Some of the factors that could cause or
contribute to such differences are discussed herein but also include changes in
the economy and interest rates in the nation and the Corporation's market area
generally. Some of the forward-looking statements included herein are the
statements regarding the allowance for loan losses.
Financial Condition
Liquidity
Liquidity relates to the Company's ability to meet cash demands of its
customers and their credit needs. Liquidity is provided by the Company's ability
to readily convert assets to cash and readily marketable, short-term assets,
such as federal funds sold and deposits in other banks.
Cash and cash equivalents, time deposits with original maturities of 90
days or more, investment securities available-for-sale, and mortgage-backed
securities available-for-sale were $12.38 million at March 31, 1997, an increase
of $4.32 million from the June 30, 1996 total. Such increase was attributable to
the net inflow of funds from the conversion and related stock offering. The
Company's liquidity ratio was 15.8% at March 31, 1997, which exceeded the
regulatory requirement of 5%.
Liability liquidity relates to the Company's ability to retain existing
deposits, obtain new deposits and borrow in the marketplace. Total deposits
increased $2.62 million for the nine months ended March 31, 1997, compared to
June 30, 1996. During the first nine months of fiscal 1997, a decrease of $1.83
million in savings accounts and $1.57 million in Jumbo or negotiable rate
certificates (i.e., time deposits of $100 thousand or more) were offset by
increases in transaction accounts (i.e., demand deposit and negotiable order of
withdrawal, or "NOW," accounts) of $0.76 million and other time certificate
increases of $5.26 million.
Access to funds from the Federal Home Loan Bank (the "FHLB") in the form
of short- and long-term advances is a supplemental source of cash to meet
liquidity needs.
Capital Resources
Shareholders' equity totaled $14.06 million at March 31, 1997, compared
to $5.40 million at June 30, 1996. This increase was primarily due to the
additional paid-in capital as a result of the aforementioned conversion and
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<PAGE>
related public offering. A net unrealized holding gain on securities
available-for-sale of $53,000 also contributed to the increase. As of March 31,
1997, the Corporation's ratio of shareholders' equity to assets was 20.61%,
compared to 9.69% at June 30, 1996.
Regulatory Capital Requirements
The Company is required by applicable law and regulation to meet certain
minimum capital requirements. These requirements call for tangible capital of
1.5% of adjusted total assets, core capital (which for the Company is equal to
tangible capital) of 3% of adjusted total assets, and risk-based capital (which
for the Company consists of core capital and general valuation allowances) equal
to 8% of risk-weighted assets. Assets and certain off-balance-sheet items are
weighted at percentage levels ranging from 0% to 100% depending on their
relative risk.
The following table summarizes the Company's regulatory capital
requirements and actual capital at March 31, 1997:
<TABLE>
Excess of actual capital
Actual Capital Current requirements over current requirements Applicable
Amount Percent Amount Percent Amount Percent asset total
------ ------- ------ ------- ------ ------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Tangible
Capital $10,147 15.59% $ 976 1.50% $9,171 14.09% $65,098
Core
Capital 10,147 15.59 1,953 3.00 8,194 12.59 65,098
Risk-based
Capital 10,568 29.31 2,885 8.00 7,683 21.31 36,060
</TABLE>
Changes in Financial Condition
General. The Corporation's consolidated total assets were $68.24 million
at March 31, 1997, reflecting an increase of $12.51 million, or 22.44%, over the
$55.73 million at June 30, 1996. This growth was primarily attributable to an
increase in loans outstanding, funded primarily by the proceeds from the capital
stock offering and secondarily by increases in total deposits of $2.62 million
and Federal Home Loan Bank advances of $1.10 million.
Cash and Cash Equivalents, Time Deposits, Investment Securities,
Mortgage-Backed Securities and FHLB Stock. Cash and cash equivalents, time
deposits with original maturities of 90 days or more, investment securities,
mortgage-backed securities and FHLB stock increased by $4.34 million between
June 30, 1996, and March 31, 1997. The primary changes were an increase in cash
and cash equivalents from $1.84 million at June 30, 1996, to $2.07 million at
March 31, 1997, and a decrease in time deposits with original maturities of 90
days or more from $1.06 million at June 30, 1996, to $361,000 at March 31, 1997.
The additional funds derived from the conversion and related stock offering were
utilized to purchase short-term liquid investment securities.
Loans Receivable. Net loans receivable equaled $53.43 million at March
31, 1997, compared to $45.23 million at June 30, 1996, an increase of 18.13%,
attributable to the continued demand for mortgage loans coupled with the growth
of the consumer loan product line, which was introduced in January of 1996.
Average total loans outstanding for the nine-month period ended March 31, 1997,
equaled $50.05 million, compared to $43.28 million for the same nine-month
period ended March 31, 1996, which represents an increase of $6.77 million, or
15.6%. Approximately 35.9% of this increase was experienced in the installment
loan portfolio (i.e., consumer loans). Management is continuing to emphasize
single-family residential lending.
Deposits. Total deposits increased by $2.62 million, or 5.56%, during
the first nine months of fiscal year 1997. Total time deposits increased by
$3.69 million, or 10.01%, while demand and savings deposits decreased a net
amount of $1.07 million, or 11.68%, during the nine-month period ended March 31,
1997.
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<PAGE>
Advances from the FHLB increased $1.10 million, or 37.96%, during the
first three quarters of fiscal year 1997, due to sustained loan demand.
Liabilities other than deposits and advances from the FHLB increased by
$121,000. Such increase was primarily attributed to the recording of $95,000 in
accounts payable related to operating expenses and income taxes. Minor increases
were also reported in accrued interest payable and other miscellaneous liability
accounts.
Results of Operations
General. The Corporation recorded a consolidated net income of $178,000
for the three months ended March 31, 1997, compared to $149,000 for the same
quarter in 1996, and $362,000 for the nine months ended March 31, 1997, compared
to $386,000 for the nine months ended March 31, 1996.
Three Months Ended March 31, 1997, Compared to Three Months Ended March 31, 1996
Net Interest Income. The Corporation's net interest income for the three
months ended March 31, 1997, increased by 31.53%, from $498,000, to $655,000,
compared to the same period in 1996. The net interest margin, which consists of
net interest income as a percentage of average interest-earning assets,
increased slightly, from 3.82% for the three months ended March 31, 1996, to
4.00% for the same period in 1997, primarily as a result of the growth in
earning assets. During the same period, the net interest spread, which reflects
average yield on interest-earning assets less average costs of interest-bearing
liabilities, decreased 51 basis points, to 2.87%. Average loans outstanding
increased by $7.5 million as compared to 1996, which contributed approximately
$158,000 to the net interest income, while the change in average yield on loans
outstanding decreased the net interest income by approximately $3,000.
Provision for Loan Losses. The allowance for loan losses was established
and is maintained by periodic charges to the provision for loan loss, an
operating expense, in order to provide for the risk of loss inherent in the
Company's loan portfolio. Loan losses and recoveries are charged or credited,
respectively, to the allowance for loan losses as they occur.
The allowance and provision for loan losses is determined by management
upon consideration of such factors as the size and character of the loan
portfolio, loan loss experience, problem loans and economic conditions in the
Company's market area. Management attempts to minimize the risk associated with
each loan by evaluating each loan independently based upon criteria which
include, but are not limited to, (a) the purpose of the loan, (b) the credit
history of the borrower, (c) the borrower's financial standing and trends, (d)
the market value of the collateral involved, and (e) the down payment received.
Quarterly reviews of the loan portfolio are conducted to identify problem loans
and to determine appropriate courses of action on a loan-by-loan basis. While
management believes that it uses the best information available to determine the
allowance for loan losses, unforeseen market conditions could result in material
adjustments, and net earnings could be significantly adversely affected, if
circumstances differ substantially from the assumptions used in making the final
determination. Increases in the loan portfolio, increases in the types of loans
carrying greater risk of loss, increases in non-performing loans and changes in
the local and national economy all could cause the allowance for loan losses to
be insufficient.
The Company added $20,000 to the allowance for loan losses during the
quarter ended March 31, 1997, due to the increase in loans receivable and the
increase in consumer loans, which are generally considered to have a greater
risk of loss than one- to four-family mortgage loans. The Company also recovered
$48,000 from loans previously charged-off.
Noninterest Income and Expense. Noninterest income was $3,000 for the
three months ended March 31, 1997, compared to $17,000, for the same period in
1996. This decrease was a result of the $19,000 loss recognized from the sale of
mortgage-backed securities, the proceeds of which were utilized to fund higher
yielding loans. Noninterest expense increased by $75,000 for the three months
ended March 31, 1997, compared to the same period in 1996. The increase was
attributed to the increased costs of employee salaries and benefit plans,
professional fees (legal and accounting) due to the Corporation's public company
reporting requirements, corporate franchise tax and other miscellaneous
operating expenses.
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<PAGE>
Nine Months Ended March 31, 1997, Compared to Nine Months Ended March 31, 1996
Net Interest Income. The Corporation's net interest income for the nine
months ended March 31, 1997, increased by 20.26%, from $1,436,000 to $1,727,000,
compared to the same period in 1996. The net interest margin, which consists of
net interest income as a percentage of average interest-earning assets,
increased slightly from 3.84% for the nine-month period ended March 31, 1996, to
3.89% for the same period in 1997, primarily as a result of the Corporation's
ability to increase interest-earning assets more rapidly than interest-costing
liabilities. The shifting of deposits from lower yielding accounts to longer
termed deposits, which generally have a higher rate of interest, did slow the
growth of the net interest margin. During the same period, the net interest
spread, which reflects average yield on interest-earnings assets less average
costs of interest-bearing liabilities, decreased 20 basis points to 3.19%.
Average loans outstanding increased by $6.7 million as compared to 1996, which
contributed approximately $453,000 to the net interest income while the change
in average yield on loans outstanding decreased the net interest income by
approximately $4,000.
Noninterest Income and Expense. Noninterest income was $38,000 for the
nine months ended March 31, 1997, compared to $35,000 for the same nine-month
period in 1996. This increase is attributed to the increase in the cash
surrender value of the key-man life insurance policy, which was partially offset
by the recognition of the loss of $19,000 on the sale of mortgage-backed
securities. Noninterest expense increased by $304,000, or 33.74%, in 1997
compared to 1996 primarily as a result of a one-time deposit insurance special
assessment of $263,000, which was levied on September 30, 1996, on all
institutions with deposits insured by the Savings Association Insurance Fund of
the Federal Deposit Insurance Corporation. Significant increases were also
experienced in corporate franchise taxes, ($30,000) and professional fees
($16,000).
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HOME CITY FINANCIAL CORPORATION
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None
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
None
ITEM 5 - OTHER INFORMATION
None
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
a. 1. Exhibit 3 (i): Articles of Incorporation
2. Exhibit 3 (ii): Code of Regulations
3. Exhibit 27: Financial Data Schedule
b. No reports on Form 8-K were filed during the quarter
ended March 31, 1997.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1933,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HOME CITY FINANCIAL CORPORATION
Date: May 12, 1997 /s/ Douglas L. Ulery
____________________________
Douglas L. Ulery
President
Date: May 12, 1997 /s/ Gary E. Brown
____________________________
Gary E. Brown
Treasurer
EXHIBIT 3(i)
ARTICLES OF INCORPORATION
OF
HOME CITY FINANCIAL CORPORATION
FIRST: The name of the corporation shall be Home City Financial
Corporation.
SECOND: The place in Ohio where the principal office of the corporation is
to be located is the City of Springfield, County of Clark.
THIRD: The purpose for which the corporation is formed is to engage in any
lawful act or activity for which corporations may be formed under Section
1701.01 to 1701.98, inclusive, of the Ohio Revised Code.
FOURTH: The authorized shares of the corporation shall be eight hundred
fifty (850) common shares, each without par value. The directors of the
corporation may adopt an amendment to the Articles of Incorporation of the
corporation in respect of any unissued or treasury shares of any class and
thereby fix or change: the division of such shares into series and the
designation and authorized number of each series; the dividend rate; the dates
of payment of dividends and the dates from which they are cumulative; the
liquidation price; the redemption rights and price; the sinking fund
requirements; the conversion rights; and the restrictions on the issuance of
shares of any class or series.
FIFTH: (A) The board of directors of the corporation shall have the power
to cause the corporation from time to time and at any time to purchase, hold,
sell, transfer or otherwise deal with (i) shares of any class or series issued
by it, (ii) any security or other obligation of the corporation which may confer
upon the holder thereof the right to convert the same into shares of any class
or series authorized by the articles of the corporation, and (iii) any security
or other obligation which may confer upon the holder thereof the right to
purchase shares of any class or series authorized by the Articles of
Incorporation of the corporation.
(B) The corporation shall have the right to repurchase, if and when any
shareholder desires to sell, or on the happening of any event is required to
sell, shares of any class or series issued by the corporation.
(C) The authority granted in this Article Fifth shall not limit the plenary
authority of the directors to purchase, hold, sell, transfer or otherwise deal
with shares of any class or series, securities or other obligations issued by
the corporation or authorized by the Articles of Incorporation of the
corporation.
SIXTH: Notwithstanding any provision of the Ohio Revised Code requiring for
any purpose the vote, consent, waiver or release of the holders of shares of the
corporation entitling them to exercise any proportion of the voting power of the
corporation or of any class or classes thereof, such action, unless expressly
<PAGE>
otherwise provided by statute, may be taken by the vote, consent, waiver or
release of the holders of shares entitling them to exercise not less than a
majority of the voting power of the corporation or of such class or classes;
provided, however, that if the board of directors of the corporation shall
recommend against the approval of any of the following matters, the affirmative
vote of the holders of shares entitling them to exercise not less than
seventy-five percent (75%) of the voting power of any class or classes of shares
of the corporation which entitle the holders thereof to vote in respect of any
such matter as a class shall be required to adopt:
(A) A proposed amendment to the Articles of Incorporation of the
corporation;
(B) A proposed amendment to the Code of Regulations of the corporation;
(C) A proposal to change the number of directors by action of the
shareholders;
(D) An agreement of merger or consolidation providing for the proposed
merger or consolidation of the corporation with or into one or more
other corporations;
(E) A proposed combination or majority share acquisition involving the
issuance of shares of the corporation and requiring shareholder
approval;
(F) A proposal to sell, exchange, transfer or otherwise dispose of all, or
substantially all, of the assets, with or without the goodwill, of the
corporation; or
(G) A proposed dissolution of the corporation.
SEVENTH: Until the expiration of five years from the date of the
acquisition by the corporation of the capital stock of Home City Federal Savings
Bank of Springfield (the "Bank") to be issued in connection with the conversion
of the Bank from mutual to stock form, no Person (hereinafter defined) shall
directly or indirectly Offer (hereinafter defined) to Acquire (hereinafter
defined) or Acquire the Beneficial Ownership (hereinafter defined) of more than
10% of any class of any equity security of the corporation; provided, however,
that such prohibition shall not apply to the purchase of shares by underwriters
in connection with a public offering or the power of trustees to vote shares of
the corporation held by an employee stock ownership plan for the benefit of
employees of the Bank or the corporation. In the event that any shares of the
corporation are Acquired in violation of this Article Seventh, all shares
Beneficially Owned by any Person in excess of 10% of any class of equity
security of the corporation shall not be counted as shares entitled to vote,
shall not be voted by any Person and shall not be counted as voting shares in
connection with any matter submitted to the shareholders for a vote. For
purposes of this Article Seventh, the following terms shall have the meanings
set forth below:
<PAGE>
(A) "Person" includes an individual, a group acting in concert, a
corporation, a partnership, an association, a joint stock company, a
trust, an unincorporated organization or similar company, a syndicate
or any other group formed for the purpose of acquiring or disposing of
the equity securities of the corporation, but does not include an
employee stock ownership plan for the benefit of employees of the Bank
or the corporation.
(B) "Offer" includes every offer to buy or otherwise acquire,
solicitations or an offer to sell, tender offer for, or request or
invitation for tenders of, a security or interest in a security for
value.
(C) "Acquire" includes every type of acquisition, whether effected by
purchase, exchange, operation of law or otherwise.
(D) "Acting in concert" means (i) participation in a joint activity or
conscious parallel action towards a common goal, whether or not
pursuant to an express agreement, or (ii) a combination or pooling of
voting or other interests in the securities of an issuer for a common
purpose pursuant to any contracts, understanding, relationship,
agreement or other arrangement, whether written or otherwise.
(E) "Beneficial Ownership" shall include, without limitation, (i) all
shares directly or indirectly owned by a Person, by an Affiliate
(hereinafter defined) of such Person or by an Associate (hereinafter
defined) of such Person or such Affiliate, (ii) all shares which such
Person, Affiliate or Associate has the right to acquire through the
exercise of any option, warrant or right (whether or not currently
exercisable), through the conversion of a security, pursuant to the
power to revoke a trust, discretionary account or similar arrangement,
or pursuant to the automatic termination of a trust, discretionary
account or similar arrangement, and (iii) all shares as to which such
Person, Affiliate or Associate directly or indirectly through any
contract, arrangement, understanding, relationship or otherwise
(including, without limitation, any written or unwritten agreement to
act in concert) has or shares voting power (which includes the power
to dispose or to direct the disposition of such shares) or both.
<PAGE>
(F) "Affiliate" shall mean a Person that directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under
common control with, another Person.
(G) "Associate" of a Person shall mean (i) any corporation or organization
(other than the corporation or a subsidiary of the corporation) of
which the Person is an officer or partner or is, directly or
indirectly, the beneficial owner of ten percent or more of any class
of equity securities, (ii) any trust or other estate in which the
Person has a substantial beneficial interest or as to which the Person
serves as trustee or in a similar fiduciary capacity, except a
tax-qualified employee stock benefit plan in which the Person has a
substantial beneficial interest or serves as a trustee or in a similar
fiduciary capacity or a tax-qualified employee stock benefit plan, and
(iii) any relative or spouse of the Person, or any relative of such
spouse, who has the same home as the Person or is a director or
officer of the corporation or any of its parents or subsidiaries.
EIGHTH: No shareholder of the corporation shall have, as a matter of right,
the pre-emptive right to purchase or subscribe for shares of any class, now or
hereafter authorized, or to purchase or subscribe for securities or other
obligations convertible into or exchangeable for such shares or which by
warrants or otherwise entitle the holders thereof to subscribe for or purchase
any such shares.
IN WITNESS WHEREOF, I have hereunto signed my name this 12th day of August,
1996.
Douglas L. Ulery, Incorporator
<PAGE>
CERTIFICATE OF AMENDMENT
by Shareholders to the Articles of Incorporation of
HOME CITY FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name Of Corporation)
Douglas L. Ulery, who is:
_____Chairman of the Board __X__President _____Vice President (Check one)
and
Jo Ann Holdeman, who is:
__X__Secretary _____Assistant Secretary (Check one)
of the above named Ohio corporation for profit do hereby certify that: (check
the appropriate box and complete the appropriate statements)
_____a meeting of the shareholders was duly called for the purpose of adopting
this amendment and held on __________________, 19___ at which meeting a
quorum of the shareholders was present in person or by proxy, and by the
affirmative vote of the holders of shares entitling them to exercise
___________% of the voting power of the corporation.
__X__in a writing signed by all of the shareholders who would be entitled to
notice of a meeting held for that purpose, the following resolution to
amend the articles was adopted:
See Exhibit A.
IN WITNESS WHEREOF, the above named officers, acting for and on the behalf
of the corporation, have hereto subscribed their names this 18th day of
November, 1996.
By Douglas L. Ulery
_____________________________________
President
By Jo Ann Holdeman
_____________________________________
Secretary
NOTE: Ohio law does not permit one officer to sign in two capacities, Two
separate signatures are required, even if this necessitates the election of a
second officer before the filing can be made.
<PAGE>
Exhibit A
RESOLVED, that the Articles of Incorporation of the Corporation be amended
by deleting Article FOURTH in its entirety and substituting therefor the
following new Article FOURTH:
FOURTH: The authorized shares of the corporation shall be six
million (6,000,000), five million (5,000,000) of which shall be
common shares, each without par value, and one million
(1,000,000) of which shall be preferred shares, each without par
value. The directors of the corporation may adopt an amendment to
the Articles of Incorporation in respect of any unissued or
treasury shares of any class and thereby fix or change: the
division of such shares into series and the designation and
authorized number of each series; the dividend rate; the dates of
payment of dividends and the dates from which they are
cumulative; the liquidation price; the redemption rights and
price; the sinking fund requirements; the conversion rights; and
the restrictions on the issuance of shares of any class or
series.
FURTHER RESOLVED, that the Articles of Incorporation of the Corporation be
amended by adding thereto the following Article NINTH:
NINTH: No shareholder of the corporation shall have the right to
vote cumulatively in the election of directors.
EXHIBIT 3(ii)
CODE OF REGULATIONS
OF
HOME CITY FINANCIAL CORPORATION
AS AMENDED EFFECTIVE NOVEMBER 18, 1996
INDEX
Section Caption Page No.
ARTICLE ONE
MEETINGS OF SHAREHOLDERS
1.01 Annual Meetings.........................................1
1.02 Calling of Meetings.....................................1
1.03 Place of Meetings.......................................1
1.04 Notice of Meetings......................................1
1.05 Waiver of Notice........................................2
1.06 Quorum..................................................2
1.07 Votes Required..........................................2
1.08 Order of Business.......................................2
1.09 Shareholders Entitled to Vote...........................2
1.10 Cumulative Voting.......................................3
1.11 Proxies.................................................3
1.12 Inspectors of Election..................................3
ARTICLE TWO
DIRECTORS
2.01 Authority and Qualifications............................3
2.02 Number of Directors and Term of Office..................4
2.03 Nomination and Election.................................4
2.04 Election................................................5
2.05 Removal.................................................5
2.06 Vacancies...............................................5
2.07 Meetings................................................6
2.08 Notice of Meetings......................................6
2.09 Waiver of Notice....................................... 6
2.10 Quorum................................................. 6
2.11 Executive Committee.................................... 7
<PAGE>
2.12 Compensation........................................... 7
2.13 By-Laws................................................ 7
ARTICLE THREE
OFFICERS
3.01 Officers............................................... 7
3.02 Tenure of Office....................................... 8
3.03 Duties of the Chairman of the Board.................... 8
3.04 Duties of the President................................ 8
3.05 Duties of the Vice Presidents.......................... 8
3.06 Duties of the Secretary................................ 8
3.07 Duties of the Treasurer................................ 8
ARTICLE FOUR
SHARES
4.01 Certificates........................................... 9
4.02 Transfers.............................................. 9
4.03 Transfer Agents and Registrars.........................10
4.04 Lost, Wrongfully Taken or Destroyed
Certificates.........................................10
4.05 Uncertificated Shares..................................10
ARTICLE FIVE
INDEMNIFICATION AND INSURANCE
5.01 Mandatory Indemnification..............................10
5.02 Court-Approved Indemnification.........................11
5.03 Indemnification for Expenses...........................11
5.04 Determination Required.................................12
5.05 Advances for Expenses..................................12
5.06 Article Five Not Exclusive.............................13
5.07 Insurance..............................................13
5.08 Certain Definitions....................................13
5.09 Venue..................................................14
ARTICLE SIX
MISCELLANEOUS
6.01 Amendments.............................................14
6.02 Action by Shareholders or Directors
Without a Meeting....................................14
<PAGE>
CODE OF REGULATIONS
OF
HOME CITY FINANCIAL CORPORATION
ARTICLE ONE
MEETINGS OF SHAREHOLDERS
Section 1.01. Annual Meetings. The annual meeting of the shareholders for
the election of directors, for the consideration of reports to be laid before
such meeting and for the transaction of such other business as may properly come
before such meeting shall be held on the third Wednesday of October in each year
at 2:00 p.m., or on such other date and at such other time as may be fixed from
time to time by the directors.
Section 1.02. Calling of Meetings. Meetings of the shareholders may be
called only by the chairman of the board, the president, or, in case of the
president's absence, death, or disability, the vice president authorized to
exercise the authority of the president; the secretary; the directors by action
at a meeting, or a majority of the directors acting without a meeting; or the
holders of at least twenty-five percent of all shares outstanding and entitled
to vote thereat.
Section 1.03. Place of Meetings. All meetings of shareholders shall be held
at the principal office of the corporation, unless otherwise provided by action
of the directors. Meetings of shareholders may be held at any place within or
without the State of Ohio.
Section 1.04. Notice of Meetings. (A) Written notice stating the time,
place and purposes of a meeting of the shareholders shall be given either by
personal delivery or by mail not less than seven nor more than sixty days before
the date of the meeting (1) to each shareholder of record entitled to notice of
the meeting, (2) by or at the direction of the president or the secretary. If
mailed, such notice shall be addressed to the shareholder at his address as it
appears on the records of the corporation. Notice of adjournment of a meeting
need not be given if the time and place to which it is adjourned are fixed and
announced at such meeting. In the event of a transfer of shares after the record
date for determining the shareholders who are entitled to receive notice of a
meeting of shareholders, it shall not be necessary to give notice to the
transferee. Nothing herein contained shall prevent the setting of a record date
in the manner provided by law, the Articles or the Regulations for the
determination of shareholders who are entitled to receive notice of or to vote
at any meeting of shareholders or for any purpose required or permitted by law.
<PAGE>
(B) Following receipt by the president or the secretary of a request in
writing, specifying the purpose or purposes for which the persons properly
making such request have called a meeting of the shareholders, delivered either
in person or by registered mail to such officer by any persons entitled to call
a meeting of shareholders, such officer shall cause to be given to the
shareholders entitled thereto notice of a meeting to be held on a date not less
than seven nor more than sixty days after the receipt of such request, as such
officer may fix. If such notice is not given within fifteen days after the
receipt of such request by the president or the secretary, then, and only then,
the persons properly calling the meeting may fix the time of meeting and give
notice thereof in accordance with the provisions of the Regulations.
Section 1.05. Waiver of Notice. Notice of the time, place and purpose or
purposes of any meeting of shareholders may be waived in writing, either before
or after the holding of such meeting, by any shareholders, which writing shall
be filed with or entered upon the records of such meeting. The attendance of any
shareholder, in person or by proxy, at any such meeting without protesting the
lack of proper notice, prior to or at the commencement of the meeting, shall be
deemed to be a waiver by such shareholder of notice of such meeting.
Section 1.06. Quorum. At any meeting of shareholders, the holders of a
majority of the voting shares of the corporation then outstanding and entitled
to vote thereat, present in person or by proxy, shall constitute a quorum for
such meeting. The holders of a majority of the voting shares represented at a
meeting, whether or not a quorum is present, or the chairman of the board, the
president, or the officer of the corporation acting as chairman of the meeting,
may adjourn such meeting from time to time, and if a quorum is present at such
adjourned meeting any business may be transacted as if the meeting had been held
as originally called.
Section 1.07. Votes Required. At all elections of directors the candidates
receiving the greatest number of votes shall be elected. Any other matter
submitted to the shareholders for their vote shall be decided by the vote of
such proportion of the shares, or of any class of shares, or of each class, as
is required by law, the Articles or the Regulations.
Section 1.08. Order of Business. The order of business at any meeting of
shareholders shall be determined by the officer of the corporation acting as
chairman of such meeting unless otherwise determined by a vote of the holders of
a majority of the voting shares of the corporation then outstanding, present in
person or by proxy, and entitled to vote at such meeting.
Section 1.09. Shareholders Entitled to Vote. Each shareholder of record on
the books of the corporation on the record date for determining the shareholders
who are entitled to vote at a meeting of shareholders shall be entitled at such
meeting to one vote for each share of the corporation standing in his name on
the books of the corporation on such record date. The directors may fix a record
date for the determination of the shareholders who are entitled to receive
notice of and to vote at a meeting of shareholders, which record date shall not
be a date earlier than the date on which the record date is fixed and which
record date may be a maximum of sixty days preceding the date of the meeting of
shareholders.
<PAGE>
Section 1.10. Cumulative Voting. No shareholder shall have the right to
vote cumulatively in the election of directors.
Section 1.11. Proxies. At meetings of the shareholders, any shareholder of
record entitled to vote thereat may be represented and may vote by a proxy or
proxies appointed by an instrument in writing signed by such shareholder, but
such instrument shall be filed with the secretary of the meeting before the
person holding such proxy shall be allowed to vote thereunder. No proxy shall be
valid after the expiration of eleven months after the date of its execution,
unless the shareholder executing it shall have specified therein the length of
time it is to continue in force.
Section 1.12. Inspectors of Election. In advance of any meeting of
shareholders, the directors may appoint inspectors of election to act at such
meeting or any adjournment thereof; if inspectors are not so appointed, the
officer of the corporation acting as chairman of any such meeting may make such
appointment. In case any person appointed as inspector fails to appear or act,
the vacancy may be filled only by appointment made by the directors in advance
of such meeting or, if not so filled, at the meeting by the officer of the
corporation acting as chairman of such meeting. No other person or persons may
appoint or require the appointment of inspectors of election.
ARTICLE TWO
DIRECTORS
Section 2.01. Authority and Qualifications. Except where the law, the
Articles or the Regulations otherwise provide, all authority of the corporation
shall be vested in and exercised by its directors. Directors need not be
shareholders of the corporation.
Section 2.02. Number of Directors and Term of Office.
(A) Until changed in accordance with the provisions of the Regulations, the
number of directors of the corporation shall be five. Directors shall be elected
for such terms that the terms of an equal number of directors, as nearly as
possible, will expire each year. A term may not exceed three years. Directors
shall serve until their successors are duly elected and qualified or until their
earlier resignation, removal from office, or death.
(B) The number of directors may be fixed or changed at a meeting of the
shareholders called for the purpose of electing directors at which a quorum is
present, only by the affirmative vote of the holders of not less than a majority
of the voting shares which are represented at the meeting, in person or by
proxy, and entitled to vote on such proposal.
(C) The directors may fix or change the number of directors and may fill
any director's office that is created by an increase in the number of directors;
provided, however, that the directors may not increase the number of directors
to greater than fifteen nor reduce the number of directors to fewer than five.
<PAGE>
(D) No reduction in the number of directors shall of itself have the effect
of shortening the term of any incumbent director.
Section 2.03. Nomination and Election.
(A) Any nominee for election as a director of the corporation may be
proposed only by the directors or by any shareholder entitled to vote for the
election of directors. No person, other than a nominee proposed by the
directors, may be nominated for election as a director of the corporation unless
such person shall have been proposed in a written notice, delivered or mailed by
first class United States mail, postage prepaid, to the Secretary of the
corporation at the principal offices of the corporation. In the case of a
nominee proposed for election as a director at an annual meeting of
shareholders, such written notice of a proposed nominee shall be received by the
Secretary of the corporation on or before the sixtieth (60th) day before the
first anniversary of the most recent annual meeting of shareholders of the
corporation held for the election of directors; provided, however, that if the
annual meeting for the election of director in any year is not held on or before
the thirty-first (31st) day next following such anniversary, then the written
notice required by this subparagraph (A) shall be received by the Secretary
within a reasonable time prior to the date of such annual meeting. In the case
of a nominee proposed for election as a director at a special meeting of
shareholders at which directors are to be elected, such written notice of a
proposed nominee shall be received by the Secretary of the corporation no later
than the close of business on the seventh day following the day on which notice
of the special meeting was mailed to shareholders. Each such written notice of a
proposed nominee shall set forth (1) the name, age, business or residence
address of each nominee proposed in such notice, (2) the principal occupation or
employment of each such nominee, and (3) the number of common shares of the
corporation owned beneficially and/or of record by each such nominee and the
length of time any such shares have been so owned.
(B) If a shareholder shall attempt to nominate one or more persons for
election as a director at any meeting at which directors are to be elected
without having identified each such person in a written notice given as
contemplated by, and/or without having provided therein the information
specified in, subparagraph (A) of this Section, each such attempted nomination
shall be invalid and shall be disregarded unless the person acting as Chairman
of the meeting determines that the facts warrant the acceptance of such
nomination.
(C) The election of directors shall be by ballot whenever requested by the
person acting as Chairman of the meeting or by the holders of a majority of the
voting shares outstanding, entitled to vote at such meeting and present in
person or by proxy, but unless such request is made, the election shall be by
voice vote.
Section 2.04. Election. At each annual meeting of shareholders for the
election of directors, the successors to the directors whose term shall expire
in that year shall be elected, but if the annual meeting is not held or if one
or more of such directors are not elected thereat, they may be elected at a
special meeting called for that purpose. The election of directors shall be by
<PAGE>
ballot whenever requested by the presiding officer of the meeting or by the
holders of a majority of the voting shares outstanding, entitled to vote at such
meeting and present in person or by proxy, but unless such request is made, the
election shall be viva voce.
Section 2.05. Removal. A director or directors may be removed from office,
with or without assigning any cause, only by the vote of the holders of shares
entitling them to exercise not less than a majority of the voting power of the
corporation to elect directors in place of those to be removed, provided that
unless all the directors, or all the directors of a particular class (if the
directors of the corporation are divided into classes), are removed, no
individual director shall be removed in case the votes of a sufficient number of
shares are cast against his removal that, if cumulatively voted at an election
of all directors, or all the directors of a particular class, as the case may
be, would be sufficient to elect at least one director. In case of any such
removal, a new director may be elected at the same meeting for the unexpired
term of each director removed. Failure to elect a director to fill the unexpired
term of any director removed shall be deemed to create a vacancy in the board.
Section 2.06. Vacancies. The remaining directors, though less than a
majority of the whole authorized number of directors, may, by the vote of a
majority of their number, fill any vacancy in the board for the unexpired term.
A vacancy in the board exists within the meaning of this Section 2.06 in case
the shareholders increase the authorized number of directors but fail at the
meeting at which such increase is authorized, or an adjournment thereof, to
elect the additional directors provided for, or in case the shareholders fail at
any time to elect the whole authorized number of directors.
Section 2.07. Meetings. A meeting of the directors shall be held
immediately following the adjournment of each annual meeting of shareholders at
which directors are elected, and notice of such meeting need not be given. The
directors shall hold such other meetings as may from time to time be called, and
such other meetings of directors may be called only by the chairman of the
board, the president, or any two directors. All meetings of directors shall be
held at the principal office of the corporation or at such other place as the
directors may from time to time determine by resolution. Meetings of the
directors may be held through any communications equipment if all persons
participating can hear each other, and participation in a meeting pursuant to
this provision shall constitute presence at such meeting.
Section 2.08. Notice of Meetings. Notice of the time and place of each
meeting of directors for which such notice is required by law, the Articles, the
Regulations or the By-Laws shall be given to each of the directors by at least
one of the following methods:
(A) In a writing mailed not less than three days before such meeting
and addressed to the residence or usual place of business of a
director, as such address appears on the records of the
corporation; or
(B) By telegraph, cable, radio, wireless, or a writing sent or
delivered to the residence or usual place of business of a
director as the same appears on the records of the corporation,
not later than the day before the date on which such meeting is
to be held; or
<PAGE>
(C) Personally or by telephone not later than the day before the date
on which such meeting is to be held.
Notice given to a director by any one of the methods specified in the
Regulations shall be sufficient, and the method of giving notice to all
directors need not be uniform. Notice of any meeting of directors may be given
only by the chairman of the board, the president or the secretary of the
corporation. Any such notice need not specify the purpose or purposes of the
meeting. Notice of adjournment of a meeting of directors need not be given if
the time and place to which it is adjourned are fixed and announced at such
meeting.
Section 2.09. Waiver of Notice. Notice of any meeting of directors may be
waived in writing, either before or after the holding of such meeting, by any
director, which writing shall be filed with or entered upon the records of the
meeting. The attendance of any director at any meeting of directors without
protesting, prior to or at the commencement of the meeting, the lack of proper
notice, shall be deemed to be a waiver by him of notice of such meeting.
Section 2.10. Quorum. A majority of the whole authorized number of
directors shall be necessary to constitute a quorum for a meeting of directors,
except that a majority of the directors in office shall constitute a quorum for
filling a vacancy in the board. The act of a majority of the directors present
at a meeting at which a quorum is present is the act of the board, except as
otherwise provided by law, the Articles or the Regulations.
Section 2.11. Executive Committee. The directors may create an executive
committee or any other committee of directors, to consist of not less than three
directors, and may authorize the delegation to such executive committee or other
committees of any of the authority of the directors, however conferred, other
than that of filling vacancies among the directors or in the executive committee
or in any other committee of the directors.
Such executive committee or any other committee of directors shall serve at
the pleasure of the directors, shall act only in the intervals between meetings
of the directors, and shall be subject to the control and direction of the
directors. Such executive committee or other committee of directors may act by a
majority of its members at a meeting or by a writing or writings signed by all
of its members.
Any act or authorization of any act by the executive committee or any other
committee within the authority delegated to it shall be as effective for all
purposes as the act or authorization of the directors. No notice of a meeting of
the executive committee or of any other committee of directors shall be
required. A meeting of the executive committee or of any other committee of
directors may be called only by the president or by a member of such executive
or other committee of directors. Meetings of the executive committee or of any
other committee of directors may be held through any communications equipment if
all persons participating can hear each other and participation in such a
meeting shall constitute presence thereat.
<PAGE>
Section 2.12. Compensation. Directors shall be entitled to receive as
compensation for services rendered and expenses incurred as directors such
amounts as the directors may determine.
Section 2.13. By-Laws. The directors may adopt, and amend from time to
time, By-Laws for their own government, which By-Laws shall not be inconsistent
with the law, the Articles or the Regulations.
ARTICLE THREE
OFFICERS
Section 3.01. Officers. The officers of the corporation to be elected by
the directors shall be a president, a secretary, a treasurer, and, if desired,
one or more vice presidents and such other officers and assistant officers as
the directors may from time to time elect. The directors may elect a chairman of
the board, who must be a director. Officers need not be shareholders of the
corporation and may be paid such compensation as the board of directors may
determine. Any two or more offices may be held by the same person, but no
officer shall execute, acknowledge or verify any instrument in more than one
capacity if such instrument is required by law, the Articles, the Regulations or
the By-Laws to be executed, acknowledged or verified by two or more officers.
Section 3.02. Tenure of Office. The officers of the corporation shall hold
office at the pleasure of the directors. Any officer of the corporation may be
removed, either with or without cause, at any time, by the affirmative vote of a
majority of all the directors then in office; such removal, however, shall be
without prejudice to the contract rights, if any, of the person so removed.
Section 3.03. Duties of the Chairman of the Board. The chairman of the
board, if any, shall preside at all meetings of the directors. He shall have
such other powers and duties as the directors shall from time to time assign to
him.
Section 3.04. Duties of the President. The president shall be the chief
executive officer of the corporation, shall exercise supervision over the
business of the corporation and shall have, among such additional powers and
duties as the directors may from time to time assign to him, the power and
authority to sign all certificates evidencing shares of the corporation and all
deeds, mortgages, bonds, contracts, notes and other instruments requiring the
signature of the president of the corporation. It shall be the duty of the
president to preside at all meetings of shareholders.
Section 3.05. Duties of the Vice Presidents. In the absence of the
president or in the event of his inability or refusal to act, the vice
president, if any (or in the event there be more than one vice president, the
vice presidents in the order designated, or in the absence of any designation,
then in the order of their election), shall perform the duties of the president,
and when so acting, shall have all the powers of and be subject to all
restrictions upon the president. The vice presidents shall perform such other
duties and have such other powers as the directors may from time to time
prescribe.
<PAGE>
Section 3.06. Duties of the Secretary. It shall be the duty of the
secretary, or of an assistant secretary, if any, in case of the absence or
inability to act of the secretary, to keep minutes of all the proceedings of the
shareholders and the directors and to make a proper record of the same; to
perform such other duties as may be required by law, the Articles or the
Regulations; to perform such other and further duties as may from time to time
be assigned to him by the directors or the president; and to deliver all books,
paper and property of the corporation in his possession to his successor, or to
the president.
Section 3.07. Duties of the Treasurer. The treasurer, or an assistant
treasurer, if any, in case of the absence or inability to act of the treasurer,
shall receive and safely keep in charge all money, bills, notes, choses in
action, securities and similar property belonging to the corporation, and shall
do with or disburse the same as directed by the president or the directors;
shall keep an accurate account of the finances and business of the corporation,
including accounts of its assets, liabilities, receipts, disbursements, gains,
losses, stated capital and shares, together with such other accounts as may be
required and hold the same open for inspection and examination by the directors;
shall give bond in such sum with such security as the directors may require for
the faithful performance of his duties; shall, upon the expiration of his term
of office, deliver all money and other property of the corporation in his
possession or custody to his successor or the president; and shall perform such
other duties as from time to time may be assigned to him by the directors.
ARTICLE FOUR
SHARES
Section 4.01. Certificates. Certificates evidencing ownership of shares of
the corporation shall be issued to those entitled to them. Each certificate
evidencing shares of the corporation shall bear a distinguishing number; the
signatures of the chairman of the board, the president, or a vice president, and
of the secretary or an assistant secretary (except that when any such
certificate is countersigned by an incorporated transfer agent or registrar,
such signatures may be facsimile, engraved, stamped or printed); and such
recitals as may be required by law. Certificates evidencing shares of the
corporation shall be of such tenor and design as the directors may from time to
time adopt and may bear such recitals as are permitted by law.
Section 4.02. Transfers. Where a certificate evidencing a share or shares
of the corporation is presented to the corporation or its proper agents with a
request to register transfer, the transfer shall be registered as requested if:
(1) An appropriate person signs on each certificate so presented or signs
on a separate document an assignment or transfer of shares evidenced by each
such certificate, or signs a power to assign or transfer such shares, or when
the signature of an appropriate person is written without more on the back of
each such certificate; and
<PAGE>
(2) Reasonable assurance is given that the indorsement of each appropriate
person is genuine and effective; the corporation or its agents may refuse to
register a transfer of shares unless the signature of each appropriate person is
guaranteed by a commercial bank or trust company having an office or a
correspondent in the City of New York or by a firm having membership in the New
York Stock Exchange; and
(3) All applicable laws relating to the collection of transfer or other
taxes have been complied with; and
(4) The corporation or its agents are not otherwise required or permitted
to refuse to register such transfer.
Section 4.03. Transfer Agents and Registrars. The directors may appoint one
or more agents to transfer or to register shares of the corporation, or both.
Section 4.04. Lost, Wrongfully Taken or Destroyed Certificates. Except as
otherwise provided by law, where the owner of a certificate evidencing shares of
the corporation claims that such certificate has been lost, destroyed or
wrongfully taken, the directors must cause the corporation to issue a new
certificate in place of the original certificate if the owner:
(1) So requests before the corporation has notice that such original
certificate has been acquired by a bona fide purchaser; and
(2) Files with the corporation, unless waived by the directors, an
indemnity bond, with surety or sureties satisfactory to the corporation, in such
sums as the directors may, in their discretion, deem reasonably sufficient as
indemnity against any loss or liability that the corporation may incur by reason
of the issuance of each such new certificate; and
(3) Satisfies any other reasonable requirements which may be imposed by the
directors, in their discretion.
Section 4.05. Uncertificated Shares. Anything contained in this Article
Fourth to the contrary notwithstanding, the directors may provide by resolution
that some or all of any or all classes and series of shares of the corporation
shall be uncertificated shares, provided that such resolution shall not apply to
(A) shares of the corporation represented by a certificate until such
certificate is surrendered to the corporation in accordance with applicable
provisions of Ohio law or (B) any certificated security of the corporation
issued in exchange for an uncertificated security in accordance with applicable
provisions of Ohio law. The rights and obligations of the holders of
uncertificated shares and the rights and obligations of the holders of
certificates representing shares of the same class and series shall be
identical, except as otherwise expressly provided by law.
<PAGE>
ARTICLE FIVE
INDEMNIFICATION AND INSURANCE
Section 5.01. Mandatory Indemnification. The corporation shall indemnify
any officer or director of the corporation who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including, without limitation, any action threatened or instituted by or in the
right of the corporation), by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee or agent of
another corporation (domestic or foreign, nonprofit or for profit), partnership,
joint venture, trust or other enterprise, against expenses (including, without
limitation, attorneys' fees, filing fees, court reporters' fees and transcript
costs), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and with respect to any criminal action
or proceeding, he had no reasonable cause to believe his conduct was unlawful. A
person claiming indemnification under this Section 5.01 shall be presumed, in
respect of any act or omission giving rise to such claim for indemnification, to
have acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and with respect to any
criminal matter, to have had no reasonable cause to believe his conduct was
unlawful, and the termination of any action, suit or proceeding by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, rebut such presumption.
Section 5.02. Court-Approved Indemnification. Anything contained in the
Regulations or elsewhere to the contrary notwithstanding:
(A) the corporation shall not indemnify any officer or director of the
corporation who was a party to any completed action or suit instituted by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee or agent of another corporation (domestic
or foreign, nonprofit or for profit), partnership, joint venture, trust or other
enterprise, in respect of any claim, issue or matter asserted in such action or
suit as to which he shall have been adjudged to be liable for acting with
reckless disregard for the best interests of the corporation or misconduct
(other than negligence) in the performance of his duty to the corporation unless
and only to the extent that the Court of Common Pleas of Clark County, Ohio, or
the court in which such action or suit was brought shall determine upon
application that, despite such adjudication of liability, and in view of all the
circumstances of the case, he is fairly and reasonably entitled to such
indemnity as such Court of Common Pleas or such other court shall deem proper;
and
(B) the corporation shall promptly make any such unpaid indemnification as
is determined by a court to be proper as contemplated by this Section 5.02.
<PAGE>
Section 5.03. Indemnification for Expenses. Anything contained in the
Regulations or elsewhere to the contrary notwithstanding, to the extent that an
officer or director of the corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Section
5.01, or in defense of any claim, issue or matter therein, he shall be promptly
indemnified by the corporation against expenses (including, without limitation,
attorneys' fees, filing fees, court reporters' fees and transcript costs)
actually and reasonably incurred by him in connection therewith.
Section 5.04 Determination Required. Any indemnification required under
Section 5.01 and not precluded under Section 5.02 shall be made by the
corporation only upon a determination that such indemnification of the officer
or director is proper in the circumstances because he has met the applicable
standard of conduct set forth in Section 5.01. Such determination may be made
only (A) by a majority vote of a quorum consisting of directors of the
corporation who were not and are not parties to, or threatened with, any such
action, suit or proceeding, or (B) if such a quorum is not obtainable or if a
majority of a quorum of disinterested directors so directs, in a written opinion
by independent legal counsel other than an attorney, or a firm having associated
with it an attorney, who has been retained by or who has performed services for
the corporation, or any person to be indemnified, within the past five years, or
(C) by the shareholders, or (D) by the Court of Common Pleas of Clark County,
Ohio, or (if the corporation is a party thereto) the court in which such action,
suit or proceeding was brought, if any; any such determination may be made by a
court under division (D) of this Section 5.04 at any time including, without
limitation, any time before, during or after the time when any such
determination may be requested of, be under consideration by or have been denied
or disregarded by the disinterested directors under division (A) or by
independent legal counsel under division (B) or by the shareholders under
division (C) of this Section 5.04; and no failure for any reason to make any
such determination, and no decision for any reason to deny any such
determination, by the disinterested directors under division (A) or by
independent legal counsel under division (B) or by shareholders under division
(C) of this Section 5.04 shall be evidence in rebuttal of the presumption
recited in Section 5.01. Any determination made by the disinterested directors
under division (A) or by independent legal counsel under division (B) of this
Section 5.04 to make indemnification in respect of any claim, issue or matter
asserted in an action or suit threatened or brought by or in the right of the
corporation shall be promptly communicated to the person who threatened or
brought such action or suit, and within ten (10) days after receipt of such
notification such person shall have the right to petition the Court of Common
Pleas of Clark County, Ohio, or the court in which such action or suit was
brought, if any, to review the reasonableness of such determination.
Section 5.05. Advances for Expenses. Expenses (including, without
limitation, attorneys' fees, filing fees, court reporters' fees and transcript
costs) incurred in defending any action, suit or proceeding referred to in
Section 5.01 shall be paid by the corporation in advance of the final
disposition of such action, suit or proceeding to or on behalf of the officer or
director promptly as such expenses are incurred by him, but only if such officer
or director shall first agree, in writing, to repay all amounts so paid in
respect of any claim, issue or other matter asserted in such action, suit or
proceeding in defense of which he shall not have been successful on the merits
or otherwise:
<PAGE>
(A) if it shall ultimately be determined as provided in Section 5.04 that
he is not entitled to be indemnified by the corporation as provided under
Section 5.01; or
(B) if, in respect of any claim, issue or other matter asserted by or in
the right of the corporation in such action or suit, he shall have been adjudged
to be liable for acting with reckless disregard for the best interests of the
corporation or misconduct (other than negligence) in the performance of his duty
to the corporation, unless and only to the extent that the Court of Common Pleas
of Clark County, Ohio, or the court in which such action or suit was brought
shall determine upon application that, despite such adjudication of liability,
and in view of all the circumstances, he is fairly and reasonably entitled to
all or part of such indemnification.
Section 5.06. Article Five Not Exclusive. The indemnification provided by
this Article Five shall not be deemed exclusive of any other rights to which any
person seeking indemnification may be entitled under the Articles or the
Regulations or any agreement, vote of shareholders or disinterested directors,
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be an officer or director of the corporation and shall inure
to the benefit of the heirs, executors, and administrators of such a person.
Section 5.07. Insurance. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, trustee, officer, employee, or agent of another corporation
(domestic or foreign, nonprofit or for profit), partnership, joint venture,
trust or other enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the obligation or the power to
indemnify him against such liability under the provisions of this Article Five.
Section 5.08. Certain Definitions. For purposes of this Article Five, and
as examples and not by way of limitation:
(A) A person claiming indemnification under this Article 5 shall be deemed
to have been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in Section 5.01, or in defense of any claim,
issue or other matter therein, if such action, suit or proceeding shall be
terminated as to such person, with or without prejudice, without the entry of a
judgment or order against him, without a conviction of him, without the
imposition of a fine upon him and without his payment or agreement to pay any
amount in settlement thereof (whether or not any such termination is based upon
a judicial or other determination of the lack of merit of the claims made
against him or otherwise results in a vindication of him); and
(B) References to an "other enterprise" shall include employee benefit
plans; references to a "fine" shall include any excise taxes assessed on a
person with respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
<PAGE>
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in the best
interests of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the corporation" within the meaning of that term as used in this Article Five.
Section 5.09. Venue. Any action, suit or proceeding to determine a claim
for indemnification under this Article Five may be maintained by the person
claiming such indemnification, or by the corporation, in the Court of Common
Pleas of Clark County, Ohio. The corporation and (by claiming such
indemnification) each such person consent to the exercise of jurisdiction over
its or his person by the Court of Common Pleas of Clark County, Ohio, in any
such action, suit or proceeding.
MISCELLANEOUS
Section 6.01. Amendments. The Regulations may be amended, or new
regulations may be adopted, at a meeting of shareholders held for such purpose,
only by the affirmative vote of the holders of shares entitling them to exercise
not less than a majority of the voting power of the corporation on such
proposal, or without a meeting by the written consent of the holders of shares
entitling them to exercise not less than a majority of the voting power of the
corporation on such proposal.
Section 6.02. Action by Shareholders or Directors Without a Meeting.
Anything contained in the Regulations to the contrary notwithstanding, except as
provided in Section 6.01, any action which may be authorized or taken at a
meeting of the shareholders or of the directors or of a committee of the
directors, as the case may be, may be authorized or taken without a meeting with
the affirmative vote or approval of, and in a writing or writings signed by, all
the shareholders who would be entitled to notice of a meeting of the
shareholders held for such purpose, or all the directors, or all the members of
such committee of the directors, respectively, which writings shall be filed
with or entered upon the records of the corporation.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
The schedule contains summary financial information extracted from the
Consolidated Balance Sheets as of March 31, 1997 and 1996, and June 30, 1996,
and the related Consolidated Income Statements for the three months and nine
months ending March 31, 1997 and 1996, and the periods ended March 31, 1997 and
1996, and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 1,136
<INT-BEARING-DEPOSITS> 1,091
<FED-FUNDS-SOLD> 200
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 9,956
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 53,899
<ALLOWANCE> 468
<TOTAL-ASSETS> 68,235
<DEPOSITS> 49,795
<SHORT-TERM> 0
<LIABILITIES-OTHER> 374
<LONG-TERM> 4,005
0
0
<COMMON> 0
<OTHER-SE> 14,061
<TOTAL-LIABILITIES-AND-EQUITY> 68,235
<INTEREST-LOAN> 1,203
<INTEREST-INVEST> 117
<INTEREST-OTHER> 68
<INTEREST-TOTAL> 1,388
<INTEREST-DEPOSIT> 667
<INTEREST-EXPENSE> 66
<INTEREST-INCOME-NET> 655
<LOAN-LOSSES> 20
<SECURITIES-GAINS> (19)
<EXPENSE-OTHER> 371
<INCOME-PRETAX> 267
<INCOME-PRE-EXTRAORDINARY> 178
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 178
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20
<YIELD-ACTUAL> 4.00
<LOANS-NON> 424
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 390
<ALLOWANCE-OPEN> 400
<CHARGE-OFFS> 0
<RECOVERIES> 48
<ALLOWANCE-CLOSE> 468
<ALLOWANCE-DOMESTIC> 468
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 315
</TABLE>
