SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 000-22951
LANDMARK FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
United States of America 16-1531343
(State or other jurisdiction (IRS Employer Identification
of incorporation or number)
26 Church Street, Canajoharie, New York 13317
(Address of principal executive offices)
Registrant's telephone number, including area code:
(518) 673-2012
----------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report
Indicate by check whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 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 /X/ No / /
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date: 152,000 shares of Common Stock, par value $.10 per share.
Transitional Small Business Disclosure Format (check one):
Yes / / No /X/
<PAGE>
LANDMARK FINANCIAL CORP. AND SUBSIDIARY
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statements of Financial Condition
at December 31, 1997 and March 31, 19971 1
Consolidated Statements of Operations for the
Three Months and Nine Months Ended
December 31, 1997 and 1996 2
Consolidated Statements of Changes in
Stockholders' Equity for the Nine Months
Ended December 31, 1997 3
Consolidated Statements of Cash Flows for the
Nine Months Ended December 31, 1997 and 1996 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition And Results of
Operation 7
PART II - OTHER INFORMATION 13
SIGNATURES 14
<PAGE>
Landmark Financial Corp. and Subsidiary
Consolidated Statements of Financial Condition
December 31, 1997 and March 31,1997
<TABLE>
December 31, March 31,
1997 1997
(Unaudited)
Assets
<S> <C> <C>
Cash $ 157,213 $ 589,458
Interest Bearing Deposits 1,889,667 120,000
Investment Securities, Net (Available For Sale) 807,659 397,793
Investment Securities, Net (Held To Maturity) 0 200,000
Trading Account Securities 0 69,324
Mortgage-Backed Securities, Net (Held To Maturity) 86,327 257,096
Loans Receivable, Net 13,688,506 9,392,212
Accrued Interest Receivable 66,445 38,630
Stock In Federal Home Loan Bank, At Cost 71,600 58,500
Office Properties And Equipment, At Cost
Less Accumulated Depreciation 167,443 155,379
Deferred Tax Asset, Net 23,400 40,309
Other Assets 74,918 7,100
Total Assets $17,033,178 $11,325,801
Liabilities And Stockholders' Equity
Deposits 14,616,752 10,237,301
Accrued Interest On Deposits 87 0
Advance Payments By Borrowers For Taxes
And Insurance 202,881 107,277
Income Taxes Payable 17,100 0
Accrued Expenses And Other Liabilities 32,722 26,317
Total Liabilities 14,869,542 10,370,895
Stockholders' Equity:
Common Stock, $0.10 Par Value Per Share:
152,000 Shares Authorized; 152,000 and 0
Issued At December 31, 1997 and
December 31,1996 Respectively 15,200 0
Additional Paid-In Capital 1,306,077 0
Retained Earnings (Substantially Restricted) 955,681 956,285
Unrealized Gain (Loss) On Securities Available
For Sale, Net of Taxes 8,278 (1,379)
Unearned ESOP Shares (121,600) 0
Total Stockholders' Equity 2,163,636 954,906
Total Liabilities and Stockholders' Equity $17,033,178 $11,325,801
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
Landmark Financial Corp. and Subsidiary
Consolidated Statements of Operation
December 31,1997 and December 31.1996
(Unaudited)
<TABLE>
For the Three Months Ended For the Nine Months Ended
December 31, December 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest income:
Loans receivable $304,111 $155,044 $843,800 $406,532
Mortgage-backed securities 1,845 3,528 6,567 7,748
Investments 31,604 19,490 68,628 68,907
Other
Total interest income 337,560 178,062 918,995 483,187
Interest expense: 195,950 89,871 537,336 227,623
Deposits
Total interest expense 195,950 89,871 537,336 227,623
Net interest income 141,610 88,191 381,659 255,564
Provision for losses on loans 0 0 12,000 0
Net interest income after provision
for losses on loans 141,610 88,191 369,659 255,564
Noninterest income:
Late charges and other loan fees 4,383 8,190 14,925 19,845
Gain on sale of investment securities
and mortgage-backed securities 0 0 12,411 50
Commissions and other fees 11,905 0 16,944 0
Other 12,303 2,321 13,337 3,906
Total noninterest income 28,591 10,511 57,617 23,801
Noninterest expense:
Compensation and employee benefits 85,641 50,889 204,091 111,586
Office buildings and equipment 3,057 6,525 10,842 16,712
Data processing 8,879 4,993 26,137 13,656
Advertising 4,586 758 7,518 2,983
Deposit insurance premiums 2,092 47,181 5,044 54,869
Other 49,305 54,032 156,362 115,398
Amortization of cost in excess of fair
value of net assets acquired 8,666 2,304 18,086 5,850
Total noninterest expense 162,226 166,682 428,080 321,054
Income (loss) before income taxes 7,975 (67,980) (804) (41,689)
Income tax expense (benefit) 0 (10,000) (200) (10,000)
Net income (loss) $7,975 ($57,980) ($604) ($31,689)
Earnings per share $0.06 --- ($0.00) ---
Average common and common equivalent
shares outstanding 139,840 --- 139,840 ---
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
PAGE
<PAGE>
Landmark Financial Corp.and Subsidiary
Consolidated Statement of Changes in Stockholders' Equity
Nine Months Ended December 31, 1997
(Unaudited)
<TABLE>
Unrealized
gain(loss)
on securities
Additional available for Unearned Total
Common paid-in Retained sale, net, of ESOP stockholders'
stock capital earnings applicable taxes shares equity
<S> <C> <C> <C> <C> <C> <C>
Balance, March 31, 1997 $0 $0 $956,285 ($1,379) $0 $954,906
Net income (604) ($604)
Issuance of common stock 15,200 1,306,077 (121,600) $1,199,677
Change in unrealized gain
(loss) on securities
available for safe, net 9,657 $9,657
Balance, December31, 1997 $15,200 $1,306,077 $955,681 $8,278 ($121,600) $2,163,636
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
PAGE
<PAGE>
Landmark Financial Corp. and Subsidiary
Consolidated Statements of Cash Flows
Nine Months Ended December 31, 1997 and 1996
(Unaudited)
<TABLE>
December 31, December 31,
1997 1996
<S> <C> <C>
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES
Net income (loss) ($604) ($31,689)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Depreciation 16,312 5,594
Amortization (accretion), net 1,774 256
Provision for loan losses 12,000 0
Deferred income taxes (16,300) (11,800)
Decrease (increase) in
Accnued interest receivable (27,815) (5,197)
Trading account securities 69,324 0
Other assets (34,609) (21,358)
Increase (decrease) in
Accnued expenses and other liabilities 6,405 7,473
Accrued interest payable 87 0
Income taxes payable 17,100 0
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES
Net increase in loans receivable (4,308,294) (2,189,360)
Purchase of investments required by law (13,100) 0
Proceeds from sale of investments required by law 0 5,700
Proceeds from held-to-maturity securities 335.533 0
Purchases of held-to-maturity securities 0 (200,000)
Purchases of available-for-sale securities (401,983) (98,708)
Proceeds from principal repayments of mortgage-backed securities 35,236 64,527
Purchase of premises and equipment (28,376) (86,200)
(4,380,984) (2,504,041)
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES
Net increase (decrease) in deposits 4,379,451 1,719,518
Increase (decrease) in advances from borrowing taxes and insurance 95,604 70,964
Proceeds from sale of capital stock, net 1,199,677 0
5,674,732 1,790,482
Net increase (decrease) in cash 1,337,422 (770,280)
CASH, beginning of year 709,458 1,350,573
CASH, end of year $2,046,880 $580,293
SUPPLEMENTAL DISCLOSURES:
Cash paid for:
Income taxes $900 $17,140
Interest $537,249 $148,404
Increase (decrease) on unrealized gain
on securities available-for-sale $9,657 $29,023
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
LANDMARK FINANCIAL CORP. AND SUBSIDIARY
Notes To Consolidated Financial Statements
(Unaudited)
December 31, 1997
(1) Landmark Financial Corp. and Subsidiary
Landmark Financial Corp. (the Company) was incorporated under the
laws of the state of Delaware for the purpose of becoming the
savings and loan holding company of Landmark Community Bank, a
Savings Bank (the Bank) in connection with the Bank's conversion
from a federally chartered mutual savings bank to a federally
chartered stock savings bank, pursuant to its Plan of Conversion.
On August 12, 1997, the Company commenced a Subscription and
Community Offering of its shares in connection with the
conversion of the Bank (the Offering). The Offering was
consummated and the Company acquired the Bank on November 13,
1997. The Company had no assets prior to the conversion and
acquisition on November 13, 1997.
The accompanying consolidated financial statements as of and for
the three months and nine months ended December 31, 1997 include
the accounts of the Company and the Bank. The accompanying
consolidated statements of financial condition as of March 31,
1997 and the statements of operations and cash flows for the
three months and nine months ended December 31, 1996,
respectively are of the Bank.
(2) Basis of Preparation
The accompanying unaudited consolidated financial statements were
prepared in accordance with instructions for Form 10-QSB. To the
extent that information and footnotes required by generally
accepted accounting principles for complete financial statements
are contained in or consistent with the audited financial
statements incorporated by reference in the Company's Annual
Report on Form 10-KSB for the year ended March 31, 1997, such
information and footnotes have not been duplicated herein. In the
opinion of management, all adjustments consisting only of normal
recurring accruals which are necessary for the fair presentation
of the interim financial statements have been included. The
consolidated statement of operations for the three month period
ended December 31, 1997 and the nine month period ended December
31, 1997 are not necessarily indicative of the results which may
be expected for the entire year. The March 31, 1997 balance sheet
has been derived from the audited financial statements as of that
date.
<PAGE>
LANDMARK FINANCIAL CORP. AND SUBSIDIARY
Notes To Consolidated Financial Statements
(Unaudited)
December 31, 1997
(3) Pro Forma Earnings Per Share
On November 13, 1997, 152,000 shares of the Company's stock were
issued, including 12,160 shares issued to the Employees Stock
Ownership Plan (ESOP). Pro forma income per share amounts for the
three month and nine month periods ended December 31, 1997 are
based upon 139,840 shares, exclusive of shares issued to the
ESOP, as though those shares were outstanding for the entire
period. The computation does not reflect the pro forma effects of
the investment income that would have been earned had the net
proceeds from conversion been received at the beginning of the
three and nine month periods.
(4) Stockholders' Equity and Stock Conversion
The Bank converted from a federally chartered mutual savings bank
to a federally chartered stock savings bank pursuant to its Plan
of Conversion which was approved by the Bank's members on
September 23, 1997. The conversion was effective on November 23,
1997 and resulted in the issuance of 152,000 shares of common
stock (par value $0.10) at $10.00 per share for a gross sales
price of $1,520,000. Cost related to conversion (primarily
underwriters' commissions, printing and professional fees)
aggregated $320,323 and were deducted to arrive at the net
proceeds of $1,078,077, net of the ESOP loan. The company
established an employee stock ownership trust which purchased
12,160 shares of common stock of the Company at the issuance
price of $10.00 per share with funds borrowed from the Bank.
(5) Employee Stock Ownership Plan
All employees meeting age and service requirements are eligible
to participate in an ESOP established on November 23, 1997.
Contributions made by the Bank to the ESOP are allocated to
participants by a formula based on compensation. Participant
benefits become 100% vested after five years. There was no ESOP
expense for the period ended December 31, 1997.
<PAGE>
Landmark Financial Corp. and Subsidiary
December 31, 1997
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion compares the financial condition of
Landmark Financial Corp. and its wholly owned subsidiary,
Landmark Community Bank, a Savings Bank, (collectively the Bank)
at December 31, 1997 to the financial condition at March 31,
1997, its fiscal year-end, and the results of operations for the
three months and nine months ended December 31, 1997, with the
same periods in fiscal 1996. This discussion should be read in
conjunction with the interim financial statements and notes which
are included herein.
During August and September 1997, the Office of Thrift
Supervision (OTS) conducted its previously scheduled routine
safety and soundness on-sight examination of the Bank. During the
course of its examination OTS examiners raised a number of
concerns and noted certain deficiencies in the Bank's operations.
As a result of the examination the Bank has agreed with the OTS
not to originate any new consumer or commercial loans and to
limit one-to-four family loan origination's to no more than
$200,000 per month. Management has addressed the concerns of the
OTS and expects that full operational lending authority will be
restored in the quarter ending March 31, 1998.
General
Landmark Financial Corp. was organized as a Delaware corporation
in June 1997 to acquire all of the capital stock issued by
Landmark Community Bank, a Savings Bank upon its conversion from
the mutual to stock form of ownership. Landmark Community Bank, a
Savings Bank was founded in 1925 as a New York chartered savings
and loan association located in Canajoharie, New York. In 1997,
its members voted to convert to a federal charter. The business
of the holding company consists primarily of the business of the
Bank.
The Bank conducts its business through its main office in
Canajoharie, Montgomery County, New York. The Bank has been, and
intends to continue to be, a community -oriented financial
institution offering selected financial services to meet the
needs of the communities it serves. The Bank attracts deposits
from the general public and historically has used such deposits,
together with other funds, primarily to originate oneto-four
family residential mortgage loans, construction and land loans
for single-family residential properties, commercial loans and
consumer loans consisting primarily of loans secured by
automobiles. While the Bank's primary business has been that of a
traditional thrift institution, originating loans in its primary
market area for retention in its portfolio, the Bank also has
been an active participant in the origination of consumer loans
primarily for the purchase of automobiles
<PAGE>
Landmark Financial Corp. and Subsidiary
December 31, 1997
The most significant factors influencing the operations of the
Bank and other financial institutions include general economic
conditions, competition in the local market place and the related
monetary and fiscal policies of agencies that regulate financial
institutions. More specifically, the cost of funds primarily
consisting of insured deposits is influenced by interest rates on
competing investments and general market rates of interest, while
lending activities are influenced by the demand for real estate
financing and other types of loans, which in turn is affected by
the interest rates at which such loans may be offered and other
factors affecting loan demand and funds availability.
The deposits of the Bank are presently insured by the Savings
Association Insurance Fund ("SAIF"), which together with the Bank
Insurance Fund ("BIF") are the two insurance funds administered
by the Federal Deposit Insurance Corporation (FDIC). In the third
quarter of 1995, the FDIC lowered the premium schedule for BIF-
insured institutions in anticipation of the BIF achieving its
statutory reserve ratio. The reduced premium created a
significant disparity in deposit insurance expense causing a
competitive advantage for BIF members. Legislation enacted on
September 30, 1996 provided for a one-time special assessment of
.657% of the Bank's SAIF insured deposits at March 31,1995. The
purpose of the assessment was to bring the SAIF to its statutory
reserve ratio. Based upon the above formula, the Bank charged
$43,000 against earnings for the three months ended December 31,
1996. Although the special one-time assessment significantly
increased non-interest expense for the period, the anticipated
reduction in the premium schedule has reduced the Bank's federal
insurance premiums in the current fiscal year.
Financial Condition
Total assets increased $5.70 million, or 50.4%, to $17.03 million
at December 31,1997 from $11.33 million at March 31, 1997. Part
of this increase was due to the sale of Landmark Financial Corp.
common stock, which generated net proceeds of $1,078,077 on
November 13,1997 after deducting an $121,600 loan by Landmark
Financial Corp. to the Bank. The loan was used to purchase common
stock for the ESOP. The remaining increase in assets is due to an
increase in out of market deposits of $4.4 million held by the
bank in the form of certificates of deposits.
Loans receivable, net increased by $4.29 million, or 45.7%, to
$13.69 million at December 31,1997 from $9.40 million at March
31,1997 primarily due to increases in consumer loans of $2.41
million, an increase in commercial loans of $461,000, and an
increase in one-to-four family portfolio loans of $1.46 million.
Interest-bearing deposits in other institutions increased by
$1.77 million, or 1,474.7%, to $1.89 million at December 31, 1997
from $120,000 at March 31, 1997 due to net proceeds from the sale
of common stock being temporarily invested in Federal Home Loan
Bank overnight deposits.
<PAGE>
Landmark Financial Corp. and Subsidiary
December 31, 1997
Deposits increased $4.4 million, or 42.8%, to $14.6 million at
December 31, 1997 from $10.2 million at March 31, 1997. The
increase in deposits is primarily attributable to an increase in
out of market certificate of deposits of $4.4 million with
maturities of two to five years. These deposits were obtained by
participating in an on-line internet service through advertising
certificate of deposit rates nationwide.
Total equity increased $1,208,730, or 126.6%, to $2,163,636 at
December 31, 1997 from $954,906 at March 31, 1997, due to a sale
of 152,000 common shares at an initial offering price of $10 per
share less the establishment of the Company's $121,600 ESOP and
conversion-related costs of $320,323.
Comparison of Operating Results for the Three Months and Nine
Months Ended December 31! 1997 and the Three Months and Nine
Months Ended December 31. 1996
Performance Summary. The Company's net income increased $65,955
to $7,975 for the three months ended December 31, 1997, compared
to a net loss of $57,980 for the three months ended December 31,
1996. The increase in earnings for the three months ended
December 31, 1997 as compared to the same period in 1996 is
primarily due to the one-time special assessment of $43,000 paid
to the SAIF fund in the three months ended December 31, 1996. The
net loss decreased $31,085, or 98.1%, to $604 for the nine months
ended December 31, 1997, as compared to $31,689 for the same
period in fiscal year 1996. The increase in earnings for the nine
months ended December 31, 1997 as compared to the same period in
1996 is primarily due to the one-time special assessment of
$43,000 paid to the SAIF fund in the nine months ended December
31, 1996.
Net interest income. The Company's net interest income increased
$53,419, or 60.6%, to $141,610 for the three months ended
December 31, 1997, from $114,198 for the three months ended
December 31, 1996. The increase in net interest income reflects
an increase of $159,498 in interest income and a corresponding
increase of $106,079 in interest expense for the three months
ended December 31, 1997 as compared to the same period in 1996.
For the nine months ended December 31, 1997, net interest income
increased $126,095, or 49.3%, from $255,564 for the same period
in fiscal 1996. The increase in net interest income reflects an
increase of $435,808 in interest income and a corresponding
increase of $309,713 in interest expense for the nine months
ended December 31, 1997 as compared to the same period in 1996.
The increase in interest income reflects increased balances of
loans receivable, primarily consumer auto loans and one-to-four
family mortgages that were originated in the fourth quarter of
fiscal year ended March 31, 1997 and the first quarter of fiscal
year ended March 31, 1998. Interest expense increased primarily
due to the increase of out of market deposits of $4.4 million.
Provisionfor Loan Losses. During the three months ended December
31, 1997, the Bank charged 0 (zero) against earnings as a
provision for loan losses compared to a provision of 0 (zero)
charged against earnings for the three months ended December 31,
1996. For the nine months ended December 31, 1997, the Bank
charged $12,000 against earnings as a provision for loan losses
compared to 0 (zero) charged against earnings for
<PAGE>
Landmark Financial Corp. and Subsidiary
December 31, 1997
the nine months ended December 31, 1996. The allowance for loan
losses at December 31, 1997 is .89% of loans receivable, net as
compared to 1.17% of loans receivable, net at
March 31, 1997. Total nonperforming loans at December 31, 1997
are $106,000, or .77% of loans receivable, net, as compared to
total nonperforming loans at March 31, 1997 of 47,000 or .50% of
loans receivable net.
Management regularly reviews the loan portfolio, including
problem loans, and changes in the relative makeup of the loan
portfolio to determine whether any loans require classification
or the establishment of additional reserves. Management will
continue to monitor its allowance for loan losses and make future
additions to the allowance as economic conditions dictate.
Although the Bank maintains its allowance for loan losses at a
level which it considers to be adequate to provide for potential
losses, there can be no assurance that future losses will not
exceed estimated amounts or that additional provisions for loan
losses will not be required in future periods.
Noninterest Income. For the three months ended December 31, 1997,
Noninterest income increased $18,080 or 172.0%, to $28,591 from
$10,511 for the same period in 1996. For the nine months ended
December 31, 1997, noninterest income increased $33,816 or 142.1%
from $23,801 for the same period in 1996. The increase is
primarily due to gain realized in the sale of trading account
securities in the amount of $ 12,411 and commissions received by
the Bank for brokering mortgage applications underwritten at
other financial institutions of $9,325 and miscellaneous fee
income of approximately $7,600. Other income also includes a one-
time recapture of income previously charged off as interest
expense in a prior quarter during the fiscal nine months ended
December 31, 1997. The amount ofthis income recapture is $8,985.
Noninterest Expense. Noninterest expense decreased $4,456 or
2.7%, to $162,226 for the three months ended December 31, 1997
from $166,682 for the same period in 1996. The decrease was
primarily due to the payment of the SAIF one-time assessment in
1996 of $43,000. During this same period compensation and related
benefits expense increased $34,752. Noninterest expense increased
$107,026 or 33.3%, to $428,080 from $321,054 for the same period
in 1996. Of this increase $92,505 was related to increased
expenses associated with compensation and related benefits for
the period in conjunction with the Bank's rapid growth.
Nonperforming Assets
On December 31, 1997, nonperforming assets were $105,647 compared
to $46,744 on March 31, 1997. The balance of the Bank's allowance
for loan losses was $122,000, or 115.48% of nonperforming loans
as of December 31, 1997. Loans are considered nonperforming when
the collection of principal and/or interest is not probable, or
in the event payments are more than ninety days delinquent.
<PAGE>
Landmark Financial Corp. and Subsidiary
December 31, 1997
Capital Resources
The Bank is subject to three capital to asset requirements in
accordance with OTS regulations. The following table is a summary
of the Bank's regulatory capital requirements versus actual
capital as of December 31, 1997 and March 31, 19.97,
respectively:
December 31, 1997
<TABLE>
Actual Required Excess
amount/percent amount/percent amount/percent
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Tangible $2,158 12.67% $255 1.50% $1,903 11.17%
Core leverage capital 2,158 12.67 681 4.00 1,477 8.68
Risk-based capital 2,280 21.99 829 8.00 1,451 13.99
March 31, 1997
Actual Required Excess
amount/percent amount/percent amount/percent
(dollars in thousands)
Tangible $956 8.40% $170 1.50% $786 6.90%
Core leverage capital 956 8.40 453 4.00 503 4.40
Risk-based capital 956 16.00 478 8.00 478 10.00
</TABLE>
Liquidity
The Bank's principal sources of funds are deposits, principal and
interest payments on loans, deposits in other insured
institutions and investment securities. While scheduled loan
repayments and maturing investments are relatively predictable,
deposit flows and early loan prepayments are more influenced by
interest rates, general economic conditions and competition.
Additional sources of funds may obtained from the FHLB of New
York by utilizing numerous available products to meet funding
needs.
The Bank is required to maintain minimum levels of liquid assets
as defined by regulations. The required percentage is currently
5.0% of net withdrawable savings deposits and borrowings payable
on demand or in one year or less. The Bank has maintained its
liquidity ratio at levels exceeding the minimum requirement. The
eligible
<PAGE>
Landmark Financial Corp. and Subsidiary
December 31, 1997
liquidity ratio at December 31. 1997 and March 31. 1997 were
19.59% and 12.45%, respectively.
In light of the competition for deposits, the Bank may utilize
the funding source of the FHLB to meet demand in accordance with
the Bank's growth plans. The wholesale funding sources may allow
the Bank to obtain a lower cost of funding and create a more
efficient liability match to the respective assets being funded.
For the purpose of the cash flow statement, all short-term
investments with a maturity of three months or less at date of
purchase are considered cash equivalents. Cash and cash
equivalents for the periods ended December 31, 1997 and March 31,
1997 were $2,046,880 and $709,458, respectively. The increase was
primarily due to the fact that the majority of the proceeds from
the sale of common stock was invested at the FHLB.
Net cash provided by operating activities increased to $43,674 at
December 31, 1997 from ($56,721) at December 31, 1996.
<PAGE>
Landmark Financial Corp. and Subsidiary
December 31, 1997
Part II - Other Information
Item 1. Legal Proceedings
From time to time, the Company is involved as a plaintiff or
defendant in various legal actions incident to its business. None
of these actions individually or in the aggregate is believed to
be material to the financial condition of the Company.
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. Subsequent Event
None
Item 6. Other Information
None
Item 7. Exhibits and Reports
None
<PAGE>
Landmark Financial Corp. and Subsidiary
December 31, 1997
SIGNATURES
Under the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned "hereunto duly authorized.
LANDMARK FINANCIAL CORP.
Date: 1/28/98 /s/ Gordon E. Coleman
----------------------------------
Gordon E. Coleman
President and Chief Executive
Officer
Date: 1/28/98 /s/ John F. Von Ahn
----------------------------------
John F. Von Ahn
Vice President and Chief Financial
Officer
(Principal Financial Officer)
