U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998.
[ ] 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 000-22469
LAFAYETTE BANCORPORATION
(Exact name of registrant as specified in its charter)
INDIANA 35-1605492
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
133 North 4th Street, Lafayette, Indiana 47902
(Address of principal executive offices) (Zip Code)
(765) 423-7100
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1994 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: Yes (x) No ( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Class Outstanding at May 11, 1998
Common Stock, without par value 2,164,195 shares
<PAGE>2
LAFAYETTE BANCORPORATION
INDEX
PART I. FINANCIAL INFORMATION
Item 1.
Consolidated Balance Sheets -- March 31, 1998 and December 31, 1997
Consolidated Statements of Income -- Three Months Ended March 31, 1998 and
1997
Consolidated Statements of Cash Flows -- Three Months Ended March 31, 1998
and 1997
Notes to Consolidated Financial Statements -- March 31, 1998
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
27 Financial Data Schedule
b) Reports on Form 8-K
SIGNATURES
<PAGE>3
ITEM 1.
LAFAYETTE BANCORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
March 31, December 31,
1998 1997
ASSETS
Cash and due from banks $ 17,694 $ 16,901
Federal funds sold 5,600 14,000
-------------- -------------
Total cash and cash equivalents 23,294 30,901
Securities available-for-sale (at market) 69,390 66,577
Securities held-to-maturity (market value $5,473
and $5,378) 5,346 5,268
Loans held for sale 6,087 7,640
Loans 319,766 312,227
Less: Allowance for loan losses (3,639) (3,464)
-------------- -------------
Loans, net 316,127 308,763
Federal Home Loan Bank stock (at cost) 1,242 1,242
Premises, furniture and equipment, net 6,283 6,183
Accrued interest receivable and other assets 11,639 12,455
-------------- -------------
Total assets $ 439,408 $ 439,029
============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Noninterest-bearing deposits $ 38,218 $ 42,752
Interest-bearing demand and savings deposits 151,236 144,028
Interest-bearing time deposits 172,668 168,415
-------------- -------------
Total deposits 362,122 355,195
Short-term borrowings 12,987 20,372
Long-term debt 19,476 19,886
Accrued interest payable and other liabilities 5,267 5,107
-------------- -------------
Total liabilities 399,852 400,560
Shareholders' equity
Common stock, no par value: 5,000,000 shares authorized;
2,176,395 and 2,173,570 shares issued; and 2,164,195
and 2,161,370 shares outstanding 2,176 2,174
Additional paid-in capital 24,622 24,555
Retained earnings 12,971 11,927
Unrealized gain / (loss) on securities available-for-sale,
net of tax (($76) and ($59)) (116) (90)
Less: Treasury stock, at cost (12,200 shares) (97) (97)
-------------- -------------
Total shareholders' equity 39,556 38,469
-------------- -------------
Total liabilities and shareholders' equity $ 439,408 $ 439,029
============== =============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>4
LAFAYETTE BANCORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the three months ended March 31, 1998 and 1997
(Dollar amounts in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1998 1997
---- ----
Interest income
Loans $ 7,071 $ 6,025
Taxable securities 820 1,060
Tax exempt securities 191 238
Other 170 169
-------------- -------------
Total interest income 8,252 7,492
Interest expense
Deposits 3,569 3,424
Short-term borrowings 163 182
Long-term debt 297 140
-------------- -------------
Total interest expense 4,029 3,746
-------------- -------------
Net interest income 4,223 3,746
Provision for loan losses 180 60
-------------- -------------
Net interest income after provision for loan losses 4,043 3,686
Noninterest income
Income from fiduciary activities 226 204
Service charges on deposit accounts 325 288
Net realized gain on securities - 29
Net gain on loan sales 225 131
Other service charges and fees 214 169
Other operating income 231 114
-------------- -------------
Total noninterest income 1,221 935
-------------- -------------
Noninterest expense
Salaries and employee benefits 1,957 1,705
Occupancy expenses, net 215 219
Equipment expenses 254 228
Other operating expenses 824 780
-------------- -------------
Total noninterest expense 3,250 2,932
-------------- -------------
Income before income taxes 2,014 1,689
Income taxes 689 569
-------------- -------------
Net income 1,325 1,120
-------------- -------------
Other comprehensive income, net of tax:
Change in unrealized gains / (losses) on securities (26) (463)
--------------- --------------
Comprehensive income $ 1,299 $ 657
============== =============
Basic earnings per share $ .61 $ .52
=================================
Diluted earnings per share $ .60 $ .52
=================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>5
LAFAYETTE BANCORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1998 and 1997
(Dollar amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1998 1997
---- ----
Cash flows from operating activities
Net income $ 1,325 $ 1,120
Adjustments to reconcile net income to net cash
from operating activities
Depreciation 157 159
Premium amortization, net of discount accretion 59 98
Provision for loan losses 180 60
Net realized gain on securities - (29)
Net realized (gain) loss on sale of :
Other real estate (43) 1
Change in assets and liabilities:
Loans originated for sale (14,795) (8,015)
Loans sold 16,348 9,478
Accrued interest receivable and other assets 603 691
Accrued interest payable and other liabilities 160 491
----------- -----------
Net cash from operating activities 3,994 4,054
Cash flows from investing activities
Purchase of securities available-for-sale (17,650) (6,217)
Proceeds from sales of securities available-for-sale 2,982 5,991
Proceeds from maturities of securities available-for-sale 11,778 6,004
Purchase of securities held-to-maturity (92) (160)
Proceeds from maturities of securities held-to-maturity 11 118
Loans made to customers, net of payments collected (7,544) (5,424)
Property and equipment expenditures (257) (23)
Proceeds from sales of other real estate 251 99
----------- -----------
Net cash from investing activities (10,521) 388
Cash flows from financing activities
Net change in deposit accounts 6,927 (1,533)
Net change in short-term borrowings (7,385) (14,495)
Payments on long-term debt (410) (434)
Common stock issued 69 -
Dividends paid (281) (236)
------------ ------------
Net cash from financing activities (1,080) (16,698)
Net change in cash and cash equivalents (7,607) (12,256)
Cash and cash equivalents at beginning of year 30,901 29,380
----------- -----------
Cash and cash equivalents at end of period $ 23,294 $ 17,124
=========== ===========
Supplemental disclosures of cash flow information Cash paid during the period
for:
Interest $ 3,867 $ 3,748
Income taxes 50 114
Non-cash investing activity
Loans transferred to other real estate $ - $ -
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>6
LAFAYETTE BANCORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(Dollar amounts in thousands, except share and per share data)
(Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION
The significant accounting policies followed by Lafayette Bancorporation (the
"Corporation") for interim financial reporting are consistent with the
accounting policies followed for annual financial reporting. The consolidated
interim financial statements have been prepared in accordance with Generally
Accepted Accounting Principles and in accordance with instructions to Form 10-Q
and may not include all information and footnotes normally disclosed for full
annual financial statements. All adjustments which are, in the opinion of
management, necessary for a fair presentation of the results for the periods
reported have been included in the accompanying unaudited consolidated financial
statements and all such adjustments are of a normal recurring nature. Certain
prior period information has been reclassified to correspond with the 1998
presentation.
Under a new accounting standard, comprehensive income is now reported for all
periods. Comprehensive income includes both net income and other comprehensive
income. Other comprehensive income includes the change in unrealized gains and
losses on securities available-for-sale, net of tax.
NOTE 2 - PER SHARE DATA
The following illustrates the computation of basic and diluted earnings per
share, and includes the weighted average number of shares used in calculating
earnings and dividends per share amounts for the periods presented. The weighted
average number of shares have been retroactively restated for stock dividends.
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, March 31,
1998 1997
Basic earnings per share
Net income $ 1,325 $ 1,120
Weighted average shares outstanding 2,163,850 2,161,386
------------- --------------
Basic earnings per share $ .61 $ .52
==================================
Diluted earnings per share
Net income $ 1,325 $ 1,120
Weighted average shares outstanding 2,163,850 2,161,386
Stock Options 111,112 79,220
Assumed shares repurchased upon exercise (68,824) (71,261)
-------------- ---------------
Diluted average shares outstanding 2,206,138 2,169,345
-------------- --------------
Diluted earnings per share $ .60 $ .52
==================================
</TABLE>
<PAGE>7
LAFAYETTE BANCORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(Dollar amounts in thousands, except share and per share data)
(Unaudited)
- --------------------------------------------------------------------------------
NOTE 3 - SECURITIES
The amortized cost and estimated market values of securities are as follows at
March 31, 1998:
<TABLE>
<CAPTION>
<S> <C> <C>
Amortized Estimated
Cost Market Value
Securities Available-for-Sale
U.S. Government and its agencies $ 21,424 $ 21,416
Obligations of states and political subdivisions 12,433 12,510
Mortgage-backed and other asset-backed securities 35,725 35,464
----------- -----------
$ 69,582 $ 69,390
=========== ===========
Securities Held-to-Maturity
Obligations of states and political subdivisions $ 5,346 $ 5,473
=========== ===========
</TABLE>
The amortized cost and estimated market values of securities are as follows at
December 31, 1997:
<TABLE>
<CAPTION>
<S> <C> <C>
Amortized Estimated
Cost Market Value
Securities Available-for-Sale
U.S. Government and its agencies $ 21,946 $ 21,906
Obligations of states and political subdivisions 9,892 9,981
Corporate obligations 250 250
Mortgage-backed and other asset-backed securities 34,637 34,440
----------- -----------
$ 66,725 $ 66,577
=========== ===========
Securities Held-to-Maturity
Obligations of states and political subdivisions $ 5,268 $ 5,378
=========== ===========
</TABLE>
NOTE 4 - LOANS
Loans are comprised of the following:
March 31, December 31,
1998 1997
Commercial and agricultural loans $ 113,393 $ 112,586
Real estate construction loans 21,927 17,117
Residential real estate loans 131,741 127,574
Installment loans to individuals 52,705 54,950
Commercial paper - -
-------------- -------------
Total loans $ 319,766 $ 312,227
============== ==============
<PAGE>8
LAFAYETTE BANCORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(Dollar amounts in thousands, except share and per share data)
(Unaudited)
- --------------------------------------------------------------------------------
NOTE 5 - ALLOWANCE FOR LOAN LOSSES
The activity in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
---- ----
Balance, January 1 $ 3,464 $ 3,198
Provision charged to operations 180 60
Loans charged off (86) (155)
Recoveries on loans previously charged-off 81 57
------------- --------------
Balance, March 31 $ 3,639 $ 3,160
============= ==============
</TABLE>
NOTE 6 - SHORT-TERM BORROWINGS
Short-term borrowings are comprised of the following:
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, December 31,
1998 1997
Repurchase agreements $ 11,952 $ 17,340
Treasury tax and loan open-end note 1,035 3,032
---------------- ---------------
$ 12,987 $ 20,372
================ ===============
</TABLE>
<PAGE>9
ITEM 2.
LAFAYETTE BANCORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollar amounts in thousands, except per share data)
Lafayette Bancorporation (the "Corporation") is a one-bank holding company
located in Lafayette, Indiana, and conducts business from thirteen offices in
Tippecanoe and White Counties, Indiana. The Corporation provides a wide range of
commercial and personal banking activities, including accepting deposits; making
commercial and consumer loans; originating mortgage loans; providing personal
and corporate trust services; providing investment advisory and brokerage
services; and providing auto, homeowners, and other insurance products.
RESULTS OF OPERATIONS
Net Income
The Corporation earned $1,325, or $.61 per share for the first quarter of 1998
compared to $1,120, or $.52 per share for the first quarter of 1997. The $205,
or 18.3% increase in net income is attributable primarily to higher net interest
income. Realized gains on the sale of mortgage loans in addition to improved
earnings from the Corporation's investment brokerage department and ATM fee
income were contributing factors in enhancing earnings. A gain from the sale of
an other real estate owned property was recognized which also attributed to the
increase in noninterest income. The increase in 1998 profits were offset
partially by an increase in the loan loss provision and salaries and benefits
expense.
Return on average assets (ROA) was 1.21% and 1.10% for the periods ending March
31, 1998 and 1997, while return on average equity (ROE) was 13.56% and 12.79%
for the periods ending March 31, 1998 and 1997, respectively.
Net Interest Income
Net interest income is the most significant component of the Corporation's
earnings. Net interest income is the difference between interest and fees
realized on earning assets, primarily loans and securities, and interest paid on
deposits and other borrowed funds. The net interest margin is this difference
expressed as a percentage of average earning assets. Net interest income is
determined by several factors, including the volume of earning assets and
liabilities, the mix of earning assets and liabilities, and interest rates. Net
interest income for the first quarter of 1998 was $477, or 12.7% higher than
that same three month period ending March 31, 1997. The continued growth in the
Corporation's loan portfolio contributed to the 1998 net interest income
increase.
Total interest income for the first quarter of 1998 and 1997 was $8,252 and
$7,492, respectively. A shift in asset mix along with the continued loan growth
primarily accounted for the $760, or 10.1% increase. From March 1997 to March
1998, average loan balances increased $49,004, or 18.1%, while average balances
of investment securities declined $21,129, or 22.5% for that same time period.
For the first quarter of 1998, total interest expense increased $283, or 7.6%
compared to the same 1997 time period. Although the average deposit growth of
approximately 4.6% from March 1997 to March 1998 resulted in increased interest
expense, the overall average cost of these funds remained relatively unchanged
between the two years. Additionally, Federal Home Loan Bank borrowings acquired
in the second quarter of 1997 to fund a portion of the Corporation's loan growth
also attributed to the higher overall interest expense.
<PAGE>10
The following table summarizes the Corporation's net interest income (on a
tax-equivalent basis) for each of the periods presented. A marginal federal
income tax rate of 34% for each period was used.
<TABLE>
<CAPTION>
Three Months Change from
Ended March 31, Prior Period
1998 1997 Amount Percent
---- ---- ------ -------
<S> <C> <C> <C> <C>
Interest income $8,371 $7,640 $731 9.6%
Interest expense 4,029 3,746 283 7.6%
----- ----- ----
Net interest income $4,342 $3,894 $448 11.5%
====== ====== ====
</TABLE>
Net interest income, on a tax equivalent basis, for the first three months of
1998 was $448, or 11.5% higher than for that same three month period ending
March 31, 1997. The net interest margin, on a tax equivalent basis for the three
months ending March 31, 1998 and 1997 was 4.30% and 4.15%, respectively.
The ongoing shift in earning assets, the higher yields realized as a result of
such asset shift, and the length of time those higher yielding assets have been
in place contributed to the increase in interest income, in addition to the
current year growth experienced in the Corporation's loan portfolio.
Provision for Loan Losses and Asset Quality
The provision for loan losses represents charges made to earnings to maintain an
adequate allowance for loan losses. The allowance is maintained at an amount
believed by management to be sufficient to absorb losses inherent in the credit
portfolio. Management conducts, on a quarterly basis, a detailed evaluation of
the adequacy of the allowance.
The consolidated provision for loan losses was $180 and $60 for the first three
months of 1998 and 1997, respectively. Although management believes the
allowance to be sufficient, management is attempting to increase the allowance
due to the significant loan growth experienced by the Corporation. The allowance
for loan losses at March 31, 1998 was $3,639, or 1.14% of total loans compared
to $3,469, or 1.11% of total loans at December 31, 1997. During the first
quarter of 1998 net charge-off's were $5, a decline of $93, or 94.9% compared to
the same 1997 time period as a result of a reduction in net installment loan
charge-off's along with increases in commercial loan recoveries.
<PAGE>11
Nonperforming loans include nonaccrual loans, restructured loans, and loans
delinquent 90 days or more. Loans are classified as nonaccrual when management
believes that collection of interest is doubtful, typically when payments are
past due 90 days, unless the loans are well secured and in the process of
collection.
The following table indicated the composition of nonperforming loans:
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, December 31,
1998 1997
Loans past due 90 days or more $ 967 $ 505
Non-accrual loans 134 127
Restructured loans 234 350
---------------- ---------------
Total nonperforming loans $ 1,335 $ 982
================ ===============
</TABLE>
Management believes overall asset quality has not declined despite an increase
in the nonperforming loan totals. During the first three months of 1998, a total
of $1,964 were removed from management's watch list. Loans past due 90 days or
more increased primarily due to the addition of one large commercial loan and
three mortgage loans. Although non-accrual loan totals increased slightly,
restructured loan totals declined $116 during the first quarter.
Noninterest Income and Expense
Noninterest income increased $286, or 30.6% for the first three months of 1998,
compared to the same 1997 time period. The largest component on noninterest
income, service charges on deposit accounts, increased 12.8% to $325 for the
quarter ended March 31, 1998 primarily as a result of an increased number of
accounts being assessed fees, in conjunction with an increase in the fee
structure which was effective November 1, 1997.
Net gain on loans originated and sold in the secondary mortgage market increased
71.8% to $225 for the first quarter of 1998 compared to $131 for the first
quarter of 1997. Additional loan originators and support staff were added to the
department which led to an increase of $6,870, or 72.5% in loan fundings for the
first quarter of 1998 compared to the first quarter of 1997.
Other service charges and fees were $214 for the first three months of 1998
compared to $169 for the first three months of 1997. The Corporation did not
begin surcharging non-bank customer ATM transactions until May 1997, therefore,
the $45, or 26.6% increase is attributed primarily to ATM surcharge income.
Other operating income increased $117, or 102.6% to $231 for the first three
months of 1998 compared to the $114 recorded for the first three months of 1997.
A $56 increase in revenues generated by the Investment Center, a full service
brokerage operation offered through Robert Thomas Securities, Inc., member
NASD/SIPC, in addition to a $43 gain recognized on the sale of an other real
estate owned property accounted for a significant portion of the overall
increase.
<PAGE>12
Noninterest expense increased $318, or 10.8% to $3,250 for the first quarter of
1998 compared to that same 1997 time period. Salaries and employee benefits, the
largest noninterest expense component, increased $252, or 14.8% during the first
quarter of 1998. On March 23, 1998, the Corporation opened a new branch location
which required an increase in the number of personnel. Additional staffing needs
were met in the secondary mortgage market department which has led to increased
loan originations. The improved fee generation of the secondary mortgage market
department and of the Investment Center also led to increased commissions paid
to these employees. The increased level of staffing also gave rise to higher
health insurance costs incurred during the first quarter of 1998.
Other operating expenses increased $44, or 5.6% to $824 for the first quarter of
1998 compared to the same 1997 time period. An increase in legal fees as a
result of the Corporations year-end regulatory reporting requirements, in
addition to increased office supply costs primarily as a result of the new
branch facility accounted for a majority of the overall increase.
Income Taxes
Income taxes were $689 for the first three months of 1998 compared to $569 for
the first three months of 1997, an increase of $120, or 21.1%. This increase can
be attributed to the combination of increased corporate earnings in addition to
lower tax-exempt income realized as a result of $4,200 in 1997 municipal
security sales.
FINANCIAL CONDITION
Total assets were $439,408 at March 31, 1998 compared to $439,029 at December
31, 1997, an increase of $379, or .1%. Investment securities and net loans
increased $2,891 and $7,364 for the first quarter of 1998, while cash and cash
equivalents and loans held for sale decreased $7,607 and $1,553, respectively.
Total deposits increased $6,927 to $362,122 at March 31, 1998 compared to
$355,195 at December 31, 1997. Short-term borrowings decreased $7,385 during the
first quarter of 1998 primarily as a result of $6,187 of repurchase agreements
maturities. Long-term debt at March 31, 1998 was $19,476 and consists of
mortgage advances and other borrowings obtained from the Federal Home Loan Bank
of Indianapolis. The $410 decline during the first quarter of 1998 in long-term
debt is attributed to principal repayments.
<PAGE>13
Capital
The Corporation and Bank are subject to various regulatory capital guidelines as
required by federal and state banking agencies. These guidelines define the
various components of core capital and assign risk weights to various categories
of assets.
Tier 1 capital consists of shareholders' equity less goodwill and core deposit
intangibles, as defined by bank regulators. The definition of Tier 2 capital
includes the amount of allowance for loan losses which does not exceed 1.25% of
gross risk weighted assets. Total capital is the sum of Tier 1 and Tier 2
capital.
The minimum requirements under the capital guidelines are a 4.00% leverage ratio
(Tier 1 capital divided by average assets less intangible assets and unrealized
gains/losses), a 4.00% Tier 1 risk-based capital ratio (Tier 1 capital divided
by risk-weighted assets), and a 8.00% total capital ratio (Tier 1 capital plus
Tier 2 capital divided by risk-weighted assets).
The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA)
requires federal regulatory agencies to define capital tiers. These are:
well-capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized. Under these regulations, a
"well-capitalized" institution must achieve a Tier 1 risk-based capital ratio of
at least 6.00%, and a total capital ratio of at least 10.00%, and a leverage
ratio of at least 5.00% and not be under a capital directive order. Failure to
meet capital requirements can initiate regulatory action that could have a
direct material effect on the Corporation's financial statements. If adequately
capitalized; regulatory approval is required to accept brokered deposits. If
undercapitalized, capital distributions, asset growth, and expansion is limited,
in addition to the institution being required to submit a capital restoration
plan.
Management believes the Corporation and the Bank met all the capital
requirements as of March 31, 1998 and December 31, 1997, and was well
capitalized under the guidelines established by the banking regulators. To be
well-capitalized, the Corporation and Bank must maintain the prompt corrective
action capital guidelines described above.
At March 31, 1998 and December 31, 1997, management was not aware of any current
recommendations by banking regulatory authorities which, if they were to be
implemented, would have, or are reasonably likely to have, a material effect on
the Corporation's consolidated liquidity, capital resources or operations
<PAGE>14
The Corporation's actual consolidated capital amounts and ratios are presented
in the following table. The Bank's actual capital amounts and ratios are not
materially different from the consolidated amounts below.
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, December 31,
1998 1997
Tier 1 capital
Shareholders' equity $ 39,556 $ 38,469
Less: Intangibles (859) (908)
Add/less: Unrealized loss/(gain) on securities 116 90
---------------- ---------------
TOTAL TIER 1 CAPITAL $ 38,813 $ 37,651
================ ===============
Total capital
Tier 1 capital $ 38,813 $ 37,651
Allowable allowance for loan losses 3,639 3,464
---------------- ---------------
TOTAL CAPITAL $ 42,452 $ 41,115
================ ===============
RISK WEIGHTED ASSETS $ 315,198 $ 310,170
================ ===============
AVERAGE ASSETS $ 435,775 $ 430,555
================ ===============
</TABLE>
<TABLE>
<CAPTION>
Actual ratios as of
March 31, December 31, Capital Adequacy Well-Capitalized
1998 1997 Requirement Requirement
---- ---- ----------- -----------
<S> <C> <C> <C> <C>
Tier I Capital
(to average assets) 8.9% 8.8% 4.0% 5.0%
Tier I Capital
(to risk
weighted assets) 12.3% 12.1% 4.0% 6.0%
Total Capital
(to risk
weighted assets) 13.5% 13.3% 8.0% 10.0%
</TABLE>
Liquidity
The consolidated statement of cash flows illustrates the elements which gave
rise to the change in the Corporation's cash and cash equivalents for the three
months ended March 31, 1998 and 1997. Including net income of $1,325, the net
cash from operating activities for the first three months of 1998 generated
$3,994 of available cash. Net cash from investing activities utilized $10,521 of
available cash primarily as a result of $2,971 in net investment security
purchases, in addition to $7,544 of loans funded by the Corporation. An increase
in deposits, offset by the short-term borrowings maturities and long-term debt
principal repayments resulted in utilization of the majority of the $1,080 net
cash from financing activities. Total cash outflows for the three month period
in 1998 exceeded cash inflows by $7,607 resulting in a cash and cash equivalent
balance of $23,294 at March 31, 1998.
<PAGE>15
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule for March 31, 1998
(b) Reports on Form 8-K
No Form 8-K was filed with the SEC during the quarter
ended March 31, 1998.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly cause this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 12, 1998 By /s/ Robert J. Weeder
---------------------------------------
Robert J. Weeder
President
Date: May 12, 1998 By /s/ Marvin S. Veatch
---------------------------------------
Marvin S. Veatch
Controller
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS
ENDED MONTH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL INFORMATION.
</LEGEND>
<CIK> 0001035373
<NAME> LAFAYETTE BANCORPORATION
<MULTIPLIER> 1,000
<S> <C>
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0
0
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</TABLE>
