<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20552
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT
For the transition period from ____________ to ____________
Commission File Number _________
Ohio State Financial Services, Inc.
(Exact name of registrant as specified in its charter)
Ohio 31-1529204
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
435 Main Street, Bridgeport, OH 43912
-------------------------------------
(Address of principal executive offices)
(614) 635-0764
----------------------------
(Registrant's telephone
number, including area code)
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 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 No X
--- ---
As of September 16, 1997, the latest practicable date, 100 shares of the
registrant's common shares, without par value, were issued and outstanding.
<PAGE> 2
BRIDGEPORT SAVINGS AND LOAN ASSOCIATION AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Page
Number
------
PART I - FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements
Consolidated Statement of Financial Condition (Unaudited) as of
June 30, 1997 and December 31, 1996 3
Consolidated Statement of Operations (Unaudited)
for the Six Months ended June 30, 1997 and 1996 4
Consolidated Statement of Operations (Unaudited)
for the Three Months ended June 30, 1997 and 1996 5
Consolidated Statement of Cash Flows (Unaudited)
for the Six Months ended June 30, 1997 and 1996 6
Notes to Unaudited Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Default Upon Senior Securities 12
Item 4. Submissions of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
</TABLE>
<PAGE> 3
BRIDGEPORT SAVINGS AND LOAN ASSOCIATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------------- -----------------
<S> <C> <C>
ASSETS Cash and cash equivalents:
Cash and amounts due from banks $ 539,201 $ 450,252
Interest-bearing deposits with other institutions 1,953,775 1,985,410
----------------- -----------------
Total cash and cash equivalents 2,492,976 2,435,662
Interest bearing time deposits 1,300,000 800,000
Investment securities:
Securities held to maturity (fair value of $4,801,393
and $4,873,596) 4,719,722 4,781,206
Securities available for sale 350,700 339,300
----------------- -----------------
Total investment securities 5,070,422 5,120,506
Loans receivable, (net of allowance for loan losses
of $140,978 and $143,000) 24,660,286 24,892,321
Office properties and equipment, net 473,842 471,672
Accrued interest receivable 165,730 134,340
Other assets 100,575 74,153
----------------- -----------------
TOTAL ASSETS $ 34,263,831 $ 33,928,654
================= =================
LIABILITIES AND RETAINED EARNINGS
Deposits $ 28,954,640 $ 28,791,121
Advances from borrowers for taxes and insurance 138,989 154,245
Accrued interest payable and other liabilities 217,997 212,945
----------------- -----------------
Total liabilities 29,311,626 29,158,311
----------------- -----------------
Retained earnings - substantially restricted 4,952,205 4,770,343
----------------- -----------------
Total retained earnings 4,952,205 4,770,343
----------------- -----------------
TOTAL LIABILITIES AND RETAINED EARNINGS $ 34,263,831 $ 33,928,654
================= =================
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
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<PAGE> 4
BRIDGEPORT SAVINGS AND LOAN ASSOCIATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
1997 1996
----------------- -----------------
<S> <C> <C>
INTEREST AND DIVIDEND INCOME
Loans $ 976,758 $ 1,008,995
Interest-bearing deposits and investment securities 197,269 198,009
Mortgage-backed securities 44,355 53,666
Dividends on Federal Home Loan Bank stock 11,559 10,627
----------------- -----------------
Total interest and dividend income 1,229,941 1,271,297
----------------- -----------------
INTEREST EXPENSE
Deposits 577,799 579,700
Advances from Federal Home Loan Bank 961 -
----------------- -----------------
Total interest expense 578,760 579,700
----------------- -----------------
NET INTEREST INCOME 651,181 691,597
PROVISION FOR LOAN LOSSES - -
----------------- -----------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 651,181 691,597
----------------- -----------------
NONINTEREST INCOME
Service charges 3,554 9,418
Gain on sale of other real estate 2,245 -
Other income 21,534 16,051
----------------- -----------------
Total noninterest income 27,333 25,469
----------------- -----------------
NONINTEREST EXPENSE
Salaries and benefits 180,108 171,242
Occupancy and equipment 46,036 60,618
Deposit insurance premiums 11,575 39,884
Legal and accounting fees 12,985 14,242
Advertising and public relations 18,702 14,242
Franchise, payroll and other taxes 45,573 46,810
Stationery, printing and office expenses 19,394 11,215
Service bureau expense 23,895 29,002
Other expenses 45,497 56,407
----------------- -----------------
Total noninterest expense 403,765 443,662
----------------- -----------------
INCOME BEFORE INCOME TAXES 274,749 273,404
INCOME TAXES 92,887 91,325
----------------- -----------------
NET INCOME $ 181,862 $ 182,079
================= =================
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
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<PAGE> 5
BRIDGEPORT SAVINGS AND LOAN ASSOCIATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended June 30,
1997 1996
----------------- -----------------
<S> <C> <C>
INTEREST AND DIVIDEND INCOME
Loans $ 487,395 $ 498,165
Interest-bearing deposits and investment securities 100,738 103,968
Mortgage-backed securities 21,832 26,112
Dividends on Federal Home Loan Bank stock 5,961 5,359
----------------- -----------------
Total interest and dividend income 615,926 633,604
----------------- -----------------
INTEREST EXPENSE
Deposits 291,079 291,097
Advances from Federal Home Loan Bank 456 -
----------------- -----------------
Total interest expense 291,535 291,097
----------------- -----------------
NET INTEREST INCOME 324,391 342,507
PROVISION FOR LOAN LOSSES - -
----------------- -----------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 324,391 342,507
----------------- -----------------
NONINTEREST INCOME
Service charges and other fees 1,450 7,024
Gain on sale of other real estate 2,245 -
Other income 14,482 5,308
----------------- -----------------
Total noninterest income 18,177 12,332
----------------- -----------------
NONINTEREST EXPENSE
Salaries and benefits 89,290 83,766
Occupancy and equipment 22,425 33,963
Deposit insurance premiums 6,954 19,934
Legal and accounting fees 7,698 6,788
Advertising and public relations 10,983 9,509
Franchise, payroll and other taxes 21,762 21,837
Stationery, printing and office expenses 9,269 4,393
Service bureau expense 11,431 13,168
Other expenses 23,212 32,900
----------------- -----------------
Total noninterest expense 203,024 226,258
----------------- -----------------
INCOME BEFORE INCOME TAXES 139,544 128,581
INCOME TAXES 47,184 42,432
----------------- -----------------
NET INCOME $ 92,360 $ 86,149
================= =================
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
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<PAGE> 6
BRIDGEPORT SAVINGS AND LOAN ASSOCIATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
1997 1996
----------------- -----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 181,862 $ 182,079
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 22,310 35,687
Investment accretion and amortization, net (1,537) (7,270)
Federal Home Loan Bank stock dividends (11,400) (10,500)
Deferred federal income taxes 7,497 -
Gain on sale of real estate owned (2,245) -
Decrease (increase) in accrued interest receivable
and other assets (57,812) 5,346
Increase (decrease) in accrued interest payable
and other liabilities (2,445) (44,782)
----------------- -----------------
Net cash provided by operating activities 136,230 160,560
----------------- -----------------
INVESTING ACTIVITIES
Net increase in interest-bearing deposits (500,000) (700,000)
Proceeds from maturity of held-to-maturity securities - 400,000
Principal collected on mortgage-backed securities 63,021 114,059
Net decrease in loans 214,415 760,491
Proceeds from the sale of other real estate 19,865 -
Purchases of office properties and equipment (24,480) (18,605)
----------------- -----------------
Net cash provided by (used for) investing activities (227,179) 555,945
----------------- -----------------
FINANCING ACTIVITIES
Net increase in deposits 163,519 67,241
Net change in advances for taxes and insurance (15,256) (64,300)
----------------- -----------------
Net cash provided by financing activities 148,263 2,941
----------------- -----------------
Increase in cash and cash equivalents 57,314 719,446
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 2,435,662 1,177,023
----------------- -----------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 2,492,976 $ 1,896,469
================= =================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest on deposits and borrowings $ 578,105 $ 594,058
Income taxes 1,769 31,888
Loans transferred to real estate acquired in settlement 17,620 -
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
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<PAGE> 7
BRIDGEPORT SAVINGS AND LOAN ASSOCIATION AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
On March 24, 1997, the Board of Directors of Bridgeport Savings and Loan
Association (the "Association") approved a plan of conversion (the "Plan")
whereby the Association would convert from a mutual savings and loan association
to a capital stock savings and loan association incorporated under Ohio law and
simultaneously issue all of its outstanding stock to a newly-formed holding
company, Ohio State Financial Services, Inc. (the "Registrant"). Pursuant to the
Plan, the Association will offer for sale up to 892,687 common shares to certain
depositors and members of the community. The costs of issuing the common shares
will be deferred and deducted from the sale proceeds of the offering. If the
conversion is unsuccessful, all deferred costs will be charged to operations of
the Association. At June 30, 1997, the Association had incurred conversion costs
totaling approximately $74,732.
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements of Bridgeport Savings and Loan Association
(the "Association"), include its wholly-owned subsidiary, Trailway Financial,
Inc. All intercompany items have been eliminated.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-QSB and, therefore, do not
necessarily include all information that would be included in audited financial
statements. The information furnished reflects all adjustments which are, in the
opinion of management, necessary for a fair statement of the results of
operations. All such adjustments are of a normal recurring nature. The results
of operations for the interim periods are not necessarily indicative of the
results to be expected for the full year.
NOTE 2 - EFFECTS OF RECENT ACCOUNTING STANDARDS
In June, 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income," which establishes standards for reporting and displaying
comprehensive income and its components (revenues, expenses, gains, and losses)
in a full set of general-purpose financial statements. SFAS No. 130 requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements and requires
that an enterprise (a) classify items of other comprehensive income separately
from retained earnings and additional paid-in capital in the equity section of
the statement of financial position. Under existing accounting standards, other
comprehensive income shall be classified separately into foreign currency items,
minimum pension liability adjustments, and unrealized gains and losses on
certain investments in debt and equity securities. The provisions of SFAS No.
130 are effective for fiscal years beginning after December 15, 1997. Management
does not believe the adoption of SFAS No. 130 will have a material impact on the
disclosure requirements of the Registrant.
In February, 1997, the FASB issued SFAS No. 128, "Earnings Per Share," which
establishes standards for computing and presenting earnings per share ("EPS") by
entities with publicly held common stock or potential common stock. SFAS No. 128
simplifies the standards for computing earnings per share previously found in
Accounting Principles Board ("APB") Opinion No. 15, "Earnings Per Share." Basic
EPS excludes dilution and is computed by dividing income available to common
stockholders by the weighted-average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the entity. Diluted EPS is computed into common stock or
resulted in the issuance of common stock that then shared in the earnings of the
entity. Diluted EPS is computed similarly to fully diluted EPS pursuant to APB
Opinion No. 15. SFAS No. 128 supersedes APB Opinion No. 15 and is effective for
financial statements issued for periods ending after December 15, 1997,
including interim
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<PAGE> 8
periods. The Registrant will adopt Statement No. 128 on December 31, 1997, and
based on current estimates, does not believe the effect of the adoption will
have a significant impact on the Registrant's financial position or results of
operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RECENT DEVELOPMENTS
Analysis of Financial Condition
- -------------------------------
Total assets increased $335,000, or 1.0%, to $34.3 million at June 30, 1997,
from $33.9 million at December 31, 1996. The increase was due primarily to
growth in investment securities and interest-bearing deposits of $418,000, or
10.5%, which was offset by a $232,000 decrease in net loans, primarily
attributable to prepayments of loan participations.
Total deposits increased $164,000 during the same period, primarily due to an
increase of $307,000, or 2.1%, in the Association's certificates of deposit
accounts, which was partially offset by a decrease in regular savings and demand
deposit accounts.
Comparison of Operating Results for the Three Months ended June 30, 1997 and
- ----------------------------------------------------------------------------
1996
- ----
Net income increased $6,000, or 7.0%, to $92,000 for the three months ended June
30, 1997, as compared to $86,000 for the same period in 1996. The increase in
net income was primarily due to a $23,000 reduction in noninterest expenses,
which was partially offset by an $18,000 decrease in net interest income.
Net interest income decreased $18,000, or 5.3%, from $342,000 for the three
months ended June 30, 1996, to $324,000 for the three months ended June 30,
1997. The decrease was primarily due to a $442,000, or 1.7%, decrease in the
average balance of loans outstanding during the three months ended June 30,
1997, compared to the same period in 1996. The Association's net interest margin
declined 16 basis points to 3.93% for the three months ended June 30, 1997,
compared to 4.09% for the 1996 period.
Total interest and dividend income decreased $17,000 for the three months ended
June 30, 1997, compared to the same period in 1996. Interest income on loans
decreased $10,000, or 2.2%, to $488,000 for the three months ended June 30,
1997, compared to $498,000 for the 1996 period, primarily as a result of
prepayments of approximately $300,000 of loan participations during the 1997
period. A reduction in the yield on investments of 33 basis points from 6.56% in
the 1996 period, to 6.23% in the 1997 period, contributed to a decrease in
interest income on investments of $7,000, or 5.1% to $129,000 for the three
months ended June 30, 1997, compared to $136,000 for the 1996 period. The
decline in the yield on investments was caused by a higher concentration of
lower-yielding interest-bearing deposits for the 1997 period.
Total interest expense remained constant between the two periods, with only a
$1,000 increase from the 1996 period to the 1997 period. The Association's cost
of funds increased from 3.92% for the three months ended June 30, 1996, to 4.02%
for the 1997 period, but average outstanding deposits declined $646,000, or
2.2%. The increase in the Association's cost of funds was directly attributable
to a higher concentration of time deposits during the 1997 period.
There were no provisions for losses on loans for the three months ended June 30,
1997 and 1996. Management judges the adequacy of the allowance for loan losses
and any additions to it based on a level which is deemed adequate to absorb
credit losses inherent in the loan portfolio. The amount of the allowance is
based on management's evaluation of the collectibility of the loan portfolio,
including the nature of the portfolio, credit concentrations, trends in
historical loss experience, known and inherent risks in the portfolio, adverse
situations that may affect the borrower's ability to repay, the estimated value
of any underlying collateral, and current economic conditions. Based on
management's evaluation, the amount of the allowance was deemed adequate with no
additional provision necessary.
-8-
<PAGE> 9
The foregoing statement is a "forward-looking" statement within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Factors that could affect the
adequacy of the loan loss allowance include, but are not limited to, the
following: (1) changes in the national and local economy which may negatively
impact the ability of borrowers to repay their loans and which may cause the
value of real estate and other properties that secure outstanding loans to
decline; (2) unforeseen adverse changes in circumstances with respect to certain
large loans; (3) decreases in the value of collateral securing consumer loans to
amounts equal to less than the outstanding balances of the consumer loans; and
(4) determinations by various regulatory agencies that the Association must
recognize additions to its loan loss allowance based on such regulators'
judgment of information available to them at the time of their examinations.
Noninterest income totaled $18,000 for the three months ended June 30, 1997, an
increase of $6,000, or 50%, from $12,000 for the 1996 period, as the result of a
gain on the sale of other real estate and equipment.
Noninterest expenses decreased $23,000, or 10.0%, from $226,000 for the three
months ended June 30, 1996, to $203,000 for the 1997 period. The decrease in
noninterest expenses was primarily attributable to a $13,000, or 65%, decrease
in the Association's federal deposit insurance premium for the 1997 period, due
to a reduction in the Association's premium rate from $.23 per $100 of deposits
to $.065 per $100 of deposits. Other reductions resulted from cost controls
instituted by management.
The provision for income taxes totaled $47,000 for the three months ended June
30, 1997, an increase of $5,000, or 11.9%, from the $42,000 provision in the
comparable 1996 period, due to an increase in net income before taxes.
Comparison of Operating Results for the Six Months Ended June 30, 1997 and 1996
- -------------------------------------------------------------------------------
Net income remained constant at $182,000 for the six months ended June 30, 1997
and 1996. A decrease in net interest income of $40,000 was offset by a reduction
in noninterest expense of $40,000 for the six months ended June 30, 1997,
compared to the six months ended June 30, 1996.
Net interest income decreased $40,000, or 5.8%, from $691,000 for the six months
ended June 30, 1996, to $651,000 for the same period in 1997. The decrease was
primarily due to a decline of $32,000 in interest income on loans and a $9,000
decrease in interest income on investments.
Interest income decreased $41,000, or 3.2%, for the six months ended June 30,
1997, compared to the 1996 period, primarily due to a decline in the average
balance of loans outstanding of $555,000, or 2.2%, during the six months ended
June 30, 1997, compared to the same period in 1996. The Association's net
interest margin declined 20 basis points to 3.94% for the 1997 period from 4.14%
in the 1996 period. The Association's net interest margin declined due to a
higher concentration of lower-yielding interest-bearing deposits for the 1997
period coupled with an increase in the cost of funds caused by a shifting of the
deposit portfolio to higher-paying time deposits.
Total interest expense remained constant between the six months ended June 30,
1997 and 1996, with only a $1,000 decrease from the 1996 period to the 1997
period. The decrease in interest expense resulted from a decrease of $577,000 in
the average balance of deposits outstanding which was offset by a seven basis
point increase in the Association's cost of funds from 3.92% to 3.99%. The
increase in the Association's cost of funds was directly attributable to a
higher concentration of time deposits during the 1997 period.
There were no provisions for losses on loans during the six month periods ended
June 30, 1997 and 1996. Management judges the adequacy of the allowance for loan
losses and any additions to it based on a level which
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<PAGE> 10
is adequate to absorb credit losses inherent in the loan portfolio. The amount
of the allowance is based on management's evaluation of the collectibility of
the loan portfolio, including the nature of the portfolio, credit
concentrations, trends in historical loss experience, known and inherent risks
in the portfolio, adverse situations that may affect the borrower's ability to
repay, the estimated value of any underlying collateral, and current economic
conditions. Based on management's evaluation, the amount of the allowance was
deemed adequate with no additional provision necessary.
There can be no assurance that the loan loss allowance of the Association will
be adequate to cover losses on nonperforming assets in the future. The foregoing
statement is a "forward-looking" statement within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Factors that could affect the adequacy of the
loan loss allowance include, but are not limited to, the following: (1) changes
in the national and local economy which may negatively impact the ability of
borrowers to repay their loans and which may cause the value of real estate and
other properties that secure outstanding loans to decline; (2) unforeseen
adverse changes in circumstances with respect to certain large loans; (3)
decreases in the value of collateral securing consumer loans to amounts equal to
less than the outstanding balances of the consumer loans; and (4) determinations
by various regulatory agencies that the Association must recognize additions to
its loan loss allowance based on such regulators' judgment of information
available to them at the time of their examinations.
Noninterest income for the six months ended June 30, 1997, increased $2,000 to
$27,000 from the 1996 period, primarily due to a gain on the sale of assets
which was partially offset by a non-recurring income item in the 1996 period.
The non-recurring item for the 1996 period involved an adjustment on the
principal balance of mortgage-backed securities carried over from prior years.
Noninterest expenses decreased $40,000, or 9%, from $443,000 for the six months
ended June 30, 1996, to $403,000 for the 1997 period. The decline was primarily
attributable to a $28,000, or 71%, reduction in the Association's federal
deposit insurance premium in the 1997 period, due to a reduction in the
Association's premium rate from $.23 per $100 of deposits to $.065 per $100 of
deposits. Other reductions in the 1997 period resulted from cost controls
instituted by management.
The provision for income taxes for the six months ended June 30, 1997, decreased
$2,000, or 2.2%, to $91,000, as a result of a decrease in net income before
income taxes.
Liquidity and Cash Flows
- ------------------------
To ensure that the Association can satisfy customer credit needs for current and
future commitments and deposit withdrawal requirements, the Association manages
the liquidity position by ensuring that there are adequate short-term funding
sources available for those needs. Liquid assets consist of cash and due from
banks and investment securities maturing in one year or less. The following
table shows these liquidity sources at June 30, 1997, and December 31, 1996:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------ ------------
(dollars in thousands)
<S> <C> <C>
Cash and due from banks $ 539 $ 450
Interest-bearing deposits with other institutions 3,254 2,785
Investment securities maturing in one year or less 3,000 500
------------ ------------
Total liquid assets $ 6,793 $ 3,735
============ ============
As a percent of total assets 19.83% 11.01%
====== ======
</TABLE>
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<PAGE> 11
The Association's primary sources of funds are deposits, amortization and
prepayment of loans, maturities of investment securities, and funds provided
from operations. While scheduled loan repayments are a relatively predictable
source of funds, deposit flows and loan prepayments are greatly influenced by
general interest rates, economic conditions, and competition. In addition, the
Association invests excess funds in overnight deposits which provide liquidity
to meet lending requirements.
The Association has other sources of liquidity if a need for additional funds
arises. Additional sources of funds include Federal Home Loan Bank ("FHLB") of
Cincinnati advances. At June 30, 1997, the Association's total borrowing
capacity from the FHLB totaled approximately $6.7 million of which there were no
advances outstanding.
As of June 30, 1997, the Association has $147,000 in outstanding mortgage and
construction loan commitments. Management believes that it has adequate sources
to meet the actual funding requirements.
Management monitors the Association's tangible, core, and risk-based capital
ratios in order to assess compliance with OTS relations. At June 30, 1997, the
Association exceeded the minimum capital ratio requirements imposed by the OTS.
At June 30, 1997, the Association's capital ratios were as follows:
<TABLE>
<CAPTION>
Requirement Actual
----------- ------
<S> <C> <C>
Tangible capital 1.50% 14.84%
Core capital 3.00% 14.84%
Risk-based capital 8.00% 30.50%
</TABLE>
Risk Element
- ------------
The table below presents information concerning nonperforming assets which
include nonaccrual loans, renegotiated loans, loans 90 days or more past due,
other real estate loans, and repossessed assets. A loan is classified as
nonaccrual when, in the opinion of management, there are serious doubts about
collectibility of interest and principal. At the time the accrual of interest is
discontinued, future income is recognized only when cash is received.
Renegotiated loans are those loans which terms have been renegotiated to provide
a reduction or deferral of principal or interest as a result of the
deterioration of the borrower.
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------- -------------
(dollars in thousands)
<S> <C> <C>
Loans on nonaccrual basis $ 144 $ 69
Loans past due 90 days or more 0 0
Renegotiated loans 0 0
------------- -------------
Total nonperforming loans 144 69
Other real estate 0 0
Repossessed assets 0 0
------------- -------------
Total nonperforming assets $ 144 $ 69
============= =============
Nonperforming loans as a percent of total loans 0.65% 0.28%
===== =====
Nonperforming assets as a percent of total loans 0.47% 0.50%
===== =====
</TABLE>
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<PAGE> 12
Nonperforming loans are primarily made up of one- to four-family residential
mortgages. The collateral requirements on loans reduce the risk of potential
losses to an acceptable level in management's opinion.
Management believes the level of the allowance for loan losses at June 30, 1997,
is sufficient; however, there can be no assurance that the current allowance for
loan losses will be adequate to absorb all future loan losses. The relationship
between the allowance for loan losses and outstanding loans is a function of the
credit quality and known risk attributed to the loan portfolio. The on-going
loan review program and the credit approval process is used to determine the
adequacy of the allowance for loan losses.
PART II - OTHER INFORMATION
Item 1 - Legal proceedings
NONE
Item 2 - Changes in securities
NONE
Item 3 - Defaults upon senior securities
NONE
Item 4 - Submission of matters to a vote of security holders
NONE
Item 5 - Other information
NONE
Item 6 - Exhibits and reports on Form 8-K
NONE
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<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused the report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Ohio State Financial Services, Inc.
Date: September 17, 1997 By: /s/ Jon W. Letzkus
------------------
Jon W. Letzkus
President and Chief Executive Officer
(Principal Executive Officer)
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jon W. Letzkus
- ----------------------------
Jon W. Letzkus President and CEO September 17, 1997
/s/ Michael P. Eddy
- ---------------------------- Treasurer and
Michael P. Eddy Chief Financial Officer September 17, 1997
</TABLE>
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<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
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0
0
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</TABLE>
