SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
OR
[ ] 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: 000-23543
UNION COMMUNITY BANCORP
(Exact name of registrant specified in its charter)
Indiana 35-2025237
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
221 East Main Street
Crawfordsville, Indiana 47933
(Address of principal executive offices,
including Zip Code)
(765) 362-2400
(Registrant's telephone number, including area code)
Indicate by check mark 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 for such shorter period that the Registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
The number of shares of the Registrant's common stock, without par value,
outstanding as of June 30, 2000 was 2,486,050.
<PAGE>
Union Community Bancorp
Form 10-Q
Index
Page No.
FORWARD LOOKING STATEMENT 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheet 4
Consolidated Condensed Statement of Income 5
Consolidated Condensed Statement of Shareholders' Equity 6
Consolidated Condensed Statement of Cash Flows 7
Notes to Unaudited Consolidated Condensed Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
<PAGE>
FORWARD LOOKING STATEMENT
This Quarterly Report on Form 10-Q ("Form 10-Q") contains statements which
constitute forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements appear in a number of
places in this Form 10-Q and include statements regarding the intent, belief,
outlook, estimate or expectations of the Company (as defined in the notes to the
consolidated condensed financial statements), its directors or its officers
primarily with respect to future events and the future financial performance of
the Company. Readers of this Form 10-Q are cautioned that any such forward
looking statements are not guarantees of future events or performance and
involve risks and uncertainties, and that actual results may differ materially
from those in the forward looking statements as a result of various factors. The
accompanying information contained in this Form 10-Q identifies important
factors that could cause such differences. These factors include changes in
interest rates; loss of deposits and loan demand to other financial
institutions; substantial changes in financial markets; changes in real estate
values and the real estate market; or regulatory changes.
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
UNION COMMUNITY BANCORP AND SUBSIDIARY
Consolidated Condensed Balance Sheet
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
--------------------- ------------------
Assets
<S> <C> <C>
Cash $ 135,930 $ 286,812
Interest-bearing demand deposits 2,006,400 2,830,213
--------------------- ------------------
Cash and cash equivalents 2,142,330 3,117,025
Investment securities
Available for sale 197,500 315,463
Held to maturity 7,714,537 7,521,923
--------------------- ------------------
Total investment securities 7,912,037 7,837,386
Loans, net of allowance for loan losses
of $452,258 and $422,258 108,109,192 106,173,782
Premises and equipment 364,975 367,427
Federal Home Loan Bank stock 1,043,700 1,043,700
Investment in limited partnership 956,609 1,011,609
Interest receivable 741,645 823,768
Other assets 155,806 278,942
--------------------- ------------------
Total assets $ 121,426,294 $ 120,653,639
===================== ==================
Liabilities
Deposits
Noninterest-bearing $ 2,446,088 $ 1,151,075
Interest-bearing 68,274,111 67,839,367
--------------------- ------------------
Total deposits 70,720,199 68,990,442
Federal Home Loan Bank advances 11,534,893 11,658,526
Note payable 654,542 837,442
Interest payable 168,319 122,565
Dividends payable 336,924 315,591
Other liabilities 469,507 449,158
--------------------- ------------------
Total liabilities 83,884,384 82,373,724
--------------------- ------------------
Commitments and Contingent Liabilities
Shareholders' Equity
Preferred stock, no-par value
Authorized and unissued - 2,000,000 shares
Common stock, no-par value
Authorized - 5,000,000 shares
Issued and outstanding - 2,486,050 and 2,600,700 shares 24,273,989 25,389,422
Retained earnings 16,147,424 15,912,206
Accumulated other comprehensive income (loss) (7,797) 15,385
Unearned employee stock ownership plan ("ESOP") shares (1,572,785) (1,624,444)
Unearned recognition and retention plan ("RRP") shares (1,298,921) (1,412,654)
--------------------- ------------------
Total shareholders' equity 37,541,910 38,279,915
--------------------- ------------------
Total liabilities and shareholders' equity $ 121,426,294 $ 120,653,639
===================== ==================
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
UNION COMMUNITY BANCORP AND SUBSIDIARY
Consolidated Condensed Statement of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
---------------- ----------------- ---------------- ----------------
2000 1999 2000 1999
---------------- ----------------- ---------------- ----------------
Interest and Dividend Income
<S> <C> <C> <C> <C>
Loans $ 2,108,416 $ 1,903,945 $ 4,214,690 $ 3,720,294
Investment securities 133,735 142,018 265,226 283,550
Dividends on Federal Home Loan Bank stock 20,760 16,882 41,520 31,568
Deposits with financial institutions 13,659 24,012 36,955 73,057
---------------- ----------------- ---------------- ----------------
Total interest and dividend income 2,276,570 2,086,857 4,558,431 4,108,469
---------------- ----------------- ---------------- ----------------
Interest Expense
Deposits 933,270 865,493 1,830,652 1,724,718
Federal Home Loan Bank advances 173,614 46,626 344,794 58,040
---------------- ----------------- ---------------- ----------------
Total interest expense 1,106,884 912,119 2,175,446 1,782,758
---------------- ----------------- ---------------- ----------------
Net Interest Income 1,169,686 1,174,738 2,382,985 2,325,711
Provision for loan losses 15,000 15,000 30,000 30,000
---------------- ----------------- ---------------- ----------------
Net Interest Income After Provision for Loan Losses 1,154,686 1,159,738 2,352,985 2,295,711
---------------- ----------------- ---------------- ----------------
Other Income (Losses)
Equity in losses of limited partnerships (25,000) (27,500) (55,000) (52,500)
Gain on securities available for sale 8,331
Other income 28,767 38,434 61,863 52,213
---------------- ----------------- ---------------- ----------------
Total other income (losses) 3,767 10,934 15,194 (287)
---------------- ----------------- ---------------- ----------------
Other Expenses
Salaries and employee benefits 266,848 248,376 532,954 515,245
Net occupancy and equipment expenses 15,614 21,496 26,506 36,546
Deposit insurance expense 3,820 10,774 7,660 21,995
Legal and professional fees 48,521 48,113 71,326 82,662
Data processing fees 19,538 24,852 39,040 85,875
Other expenses 82,132 90,500 151,602 160,679
---------------- ----------------- ---------------- ----------------
Total other expenses 436,473 444,111 829,088 903,002
---------------- ----------------- ---------------- ----------------
Income Before Income Tax 721,980 726,561 1,539,091 1,392,422
Income tax expense 227,584 256,150 509,473 486,886
---------------- ----------------- ---------------- ----------------
Net Income $ 494,396 $ 470,411 $ 1,029,618 $ 905,536
================ ================= ================ ================
Basic Earnings per Share $ .22 $ .19 $ .45 $ .36
================ ================= ================ ================
Diluted Earnings per Share $ .22 $ .19 $ .45 $ .36
================ ================= ================ ================
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
UNION COMMUNITY BANCORP AND SUBSIDIARY
Consolidated Condensed Statement of Shareholders' Equity
For the Six Months Ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Accumulated
----------------------- Other Unearned
Shares Comprehensive Retained Comprehensive ESOP Unearned
Outstanding Amount Income Earnings Income (Loss) Shares Compensation Total
------------- --------- ------------ ------------ ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances, January 1, 2000 2,600,700 $25,389,422 $ 15,912,206 $ 15,385 $(1,624,444)$(1,412,654) $38,279,915
Comprehensive income
Net income for the period $1,029,618 1,029,618 1,029,618
Other comprehensive
loss, net of tax
Unrealized losses on
securities (23,182) (23,182) (23,182)
------------
Comprehensive income $1,006,436
============
Cash dividends $.285 per
share) (673,806) (673,806)
Purchase of common stock (114,650) (1,119,437) (120,594) (1,240,031)
Amortization of unearned
compensation expense 113,733 113,733
ESOP shares earned 4,004 51,659 55,663
---------- ------------ ------------ ------------- ----------- ------------- -----------
Balances, June 30, 2000 2,486,050 $24,273,989 $ 16,147,424 $ (7,797) $(1,572,785) $(1,298,921) $37,541,910
========== ============ ============ ============= =========== ============= ===========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
UNION COMMUNITY BANCORP AND SUBSIDIARY
Consolidated Condensed Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
---------------- ---------------
2000 1999
---------------- ---------------
Operating Activities
<S> <C> <C>
Net income $ 1,029,618 $ 905,536
Adjustments to reconcile net income to net
cash provided by operating activities
Provision for loan losses 30,000 30,000
Depreciation and amortization 17,568 17,177
Investment securities accretion, net (14,090) (4,206)
Gain on sale of investment securities available for sale (8,331) (284)
Equity in losses of limited partnerships 55,000 52,500
Amortization of unearned compensation expense 113,733 113,733
ESOP shares earned 55,663 60,771
Net change in:
Interest receivable 82,123 67,255
Interest payable 45,754 (454)
Other assets 52,931 25,962
Other liabilities 13,653 (13,336)
---------------- ---------------
Net cash provided by operating activities 1,473,622 1,254,654
---------------- ---------------
Investing Activities
Investment securities
Purchase of securities available for sale (778,529)
Purchase of securities held to maturity (300,000) (815,000)
Proceeds from sales of investment
securities available for sale 87,997 ---
Proceeds from maturities of securities held to
maturity and paydowns of mortgage-
backed securities 121,476 856,411
Net changes in loans (1,880,090) (8,523,313)
Purchase of FHLB of Indianapolis stock (104,200)
Purchases of property and equipment (15,116) (31,948)`
Proceeds on sale of foreclosed assets 100,356
Other investing activities (2,726)
---------------- ---------------
Net cash used by investing activities (1,985,733) (9,298,949)
---------------- ---------------
Financing Activities
Net change in
Interest-bearing demand and savings deposits 1,076,981 4,587,743
Certificates of deposit 652,776 (1,382,464)
Proceeds from borrowings 9,000,000 4,000,000
Repayment of borrowings (9,306,533) (296,900)
Cash dividends (652,473) (544,258)
Repurchase of common stock (1,240,031) (1,792,610)
Net change in advances by borrowers for taxes and insurance 6,696 (5,458)
---------------- ---------------
Net cash provided (used) by financing activities (462,584) 4,566,053
---------------- ---------------
Net Change in Cash and Cash Equivalents (974,695) (3,478,242)
Cash and Cash Equivalents, Beginning of Period 3,117,025 6,191,080
---------------- ---------------
Cash and Cash Equivalents, End of Period $ 2,142,330 $ 2,712,838
================ ===============
Additional Cash Flows Information
Interest paid $ 2,129,692 $ 1,783,212
Income tax paid 517,025 551,860
Transfers from loans to foreclosed assets 85,320 97,346
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
UNION COMMUNITY BANCORP AND SUBSIDIARY
Notes to Unaudited Consolidated Condensed Financial Statements
Note 1: Basis of Presentation
The consolidated financial statements include the accounts of Union Community
Bancorp (the "Company") and its wholly owned subsidiary, Union Federal Savings
and Loan Association, a federally chartered savings and loan association ("Union
Federal"). A summary of significant accounting policies is set forth in Note 1
of Notes to Financial Statements included in the December 31, 1999 Annual Report
to Shareholders. All significant intercompany accounts and transactions have
been eliminated in consolidation.
The interim consolidated condensed financial statements have been prepared in
accordance with instructions to Form 10-Q, and therefore do not include all
information and footnotes necessary for a fair presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles.
The interim consolidated condensed financial statements at June 30, 2000, and
for the three and six months ended June 30, 2000 and 1999, have not been audited
by independent accountants, but reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows for
such periods.
Note 2: Earnings Per Share
Earnings per share have been computed based upon the weighted average common
shares outstanding. Unearned ESOP shares have been excluded from the computation
of average common shares outstanding.
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
June 30, 2000 June 30, 1999
------------- -------------
Weighted Weighted
Average Per Share Average Per Share
Income Shares Amount Income Shares Amount
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Basic earnings per share
Income available to common
shareholders $494,396 2,260,870 $ .22 $470,411 2,488,607 $ .19
=========== =============
Effect of dilutive RRP awards
and stock options
-------------- --------------- ------------ -------------
Diluted earnings per share
Income available to common
shareholders and assumed
conversions $494,396 2,260,870 $ .22 $470,441 2,488,607 $ .19
============== =============== =========== ============ ============= =============
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
June 30, 2000 June 30, 1999
------------- -------------
Weighted Weighted
Average Per Share Average Per Share
Income Shares Amount Income Shares Amount
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Basic earnings per share
Income available to common
shareholders $1,029,618 2,292,573 $ .45 $905,536 2,541,514 $ .36
=========== =============
Effect of dilutive RRP awards
and stock options
-------------- --------------- ------------ -------------
Diluted earnings per share
Income available to common
shareholders and assumed
conversions $1,029,618 2,292,573 $ .45 $905,536 2,541,514 $ .36
============== =============== =========== ============ ============= =============
</TABLE>
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
The Company, an Indiana corporation, was organized in September, 1997. On
December 29, 1997, it acquired the common stock of Union Federal upon the
conversion of Union Federal from a federal mutual savings and loan association
to a federal stock savings and loan association.
Union Federal was organized as a state-chartered savings and loan association in
1913. Since then, Union Federal has conducted its business from its full-service
office located in Crawfordsville, Indiana. Union Federal's principal business
consists of attracting deposits from the general public and originating
fixed-rate and adjustable-rate loans secured primarily by first mortgage liens
on one- to four-family residential real estate. Union Federal's deposit accounts
are insured up to applicable limits by the Savings Association Insurance Fund
("SAIF") of the Federal Deposit Insurance Corporation ("FDIC"). Union Federal
offers a number of financial services, including: (i) residential real estate
loans; (ii) multi-family loans; (iii) commercial real estate loans; (iv)
construction loans; (v) home improvement loans and consumer loans, including
single-pay loans, loans secured by deposits, installment loans and commercial
loans; (vi) money market demand accounts ("MMDAs"); (vii) passbook savings
accounts; and (viii) certificates of deposit.
Union Federal currently owns one subsidiary, UFS Service Corp. ("UFS"), whose
sole asset is its investment in Pedcor Investments 1993-XVI, L.P. ("Pedcor"),
which is an Indiana limited partnership that was established to organize, build,
own, operate and lease a 48-unit apartment complex in Crawfordsville, Indiana
known as Shady Knoll II Apartments (the "Project"). Union Federal owns the
limited partner interest in Pedcor. The general partner is Pedcor Investments
LLC. The Project, operated as a multi-family, low- and moderate-income housing
project, is completed and is performing as planned. Because UFS engages
exclusively in activities that are permissible for a national bank, Office of
Thrift Supervision ("OTS") regulations permit Union Federal to include its
investment in UFS in its calculation of regulatory capital.
Union Federal's results of operations depend primarily upon the level of net
interest income, which is the difference between the interest income earned on
interest-earning assets, such as loans and investments, and costs incurred with
respect to interest-bearing liabilities, primarily deposits and borrowings.
Results of operations also depend upon the level of Union Federal's non-interest
income, including fee income and service charges, and the level of its
non-interest expenses, including general and administrative expenses.
Financial Condition
Total assets increased approximately $773,000, or .6%, to $121.4 million at June
30, 2000, from $120.7 million at December 31, 1999. The increase was primarily
due to loan growth of $1.9 million offset by a decrease in cash and cash
equivalents of $975,000. Net loans increased by 1.8% to $108.1 million due to an
increase in customer demand and an increased focus by the Company in the areas
of commercial and consumer lending. Investment securities available for sale and
held to maturity also increased by $75,000, or 1.0% during the six months ended
June 30, 2000.
Deposits increased by $1.7 million to $70.7 million during the six months ended
June 30, 2000. The increase in deposits was primarily used to fund loan growth.
Borrowed funds at both June 30, 2000 and December 31, 1999 were approximately
$12 million.
Shareholder's equity decreased approximately $738,000 to $37.5 million at June
30, 2000. The decrease was primarily due to stock repurchases of $1.2 million,
cash dividends of $674,000 and unrealized losses on securities available for
sale of $23,000. These decreases were offset by net income for six months ended
June 30, 2000 of $1.0 million, Employee Stock Ownership Plan shares earned of
$56,000 and unearned compensation amortization of $114,000.
Comparison of Operating Results for the Three Months Ended June 30, 2000 and
1999
Net income increased approximately $24,000 from $470,000 for the three months
ended June 30, 1999 to $494,000 for the three months ended June 30, 2000. The
return on average assets was 1.63% and 1.67% for the three months ended June 30,
2000 and 1999, respectively.
Interest income increased $190,000, or 9.1%, from $2,087,000 for the three
months ended June 30, 1999 to $2,277,000 for the comparable period in 2000.
Interest expense increased approximately $195,000, or 21.4%, from $912,000 for
the three months ended June 30, 1999 to $1,107,000 for the same period in 2000.
As a result, net interest income for the three months ended June 30, 2000
amounted to $1,170,000, a $5,000 decrease from the second quarter of 1999.
The provisions for loan losses made for the three months ended June 30, 2000 and
1999 were $15,000. The 2000 provision and the allowance for loan losses were
considered adequate, based on size, condition and components of the loan
portfolio. While management estimates loan losses using the best available
information, no assurance can be given that future addition to the allowance
will not be necessary based on changes in economic and real estate market
conditions, further information obtained regarding problem loans, identification
of additional problem loans and other factors, both within and outside of
management's control.
Other income (losses) was $4,000 for the three months ended June 30, 2000
compared to $11,000 for the same period in 1999. Other income (losses) includes
the equity in losses of the Company's investment in a limited partnership,
Pedcor. In addition to recording the equity in the losses of Pedcor, a benefit
of low income housing income tax credits in the amount of $45,000 was recorded
for the three months ended June 30, 2000 and 1999. The decrease in other income
was due to nominal decreases in a variety of income categories.
Other expenses decreased approximately $8,000 from $444,000 for the three months
ended June 30, 1999 to $436,000 for the comparable period in 2000. The decrease
in other expenses was primarily due to nominal increases and decreases in a
variety of expense categories.
Income tax expense decreased $29,000, or 11.2%, for the three months ended June
30, 2000 compared to the same period in 1999. The decrease in tax expense was
the result of a recent revision to the Indiana Code that permits financial
institutions incorporated in Indiana to apportion income in the same manner as
financial institutions incorporated in other states. This revision to the
statute was made retroactive to January 1, 1999 and recognized as a single
adjustment in the second quarter of 2000.
Comparison of Operating Results for the Six Months Ended June 30, 2000 and 1999
Net income increased $124,000, or 13.7%, from $906,000 for the six months ended
June 30, 1999 to $1,030,000 for the six months ended June 30, 2000. The increase
was primarily attributable to an increase in the volume of interest earning
assets and a decrease in non-interest expense. The return on average assets was
1.70% and 1.63 % for the six months ended June 30, 2000 and 1999, respectively.
Interest income increased $450,000, or 11.0%, from $4,108,000 for the six months
ended June 30, 1999 as compared to $4,558,000 for the six months ended June 30,
2000. Interest expense increased $392,000, or 22.0%, from $1,783,000 for the six
months ended June 30, 1999 to $2,175,000 for the same period in 2000. As a
result, net interest income for the six months ended June 30, 2000 amounted to
$2,383,000, a 2.5% increase from six months ended June 30, 1999.
The provisions for loan losses made for the six months ended June 30, 2000 and
1999 were $30,000. The 2000 provision and the allowance for loan losses were
considered adequate, based on size, condition and components of the loan
portfolio. While management estimates loan losses using the best available
information, no assurance can be given that future addition to the allowance
will not be necessary based on changes in economic and real estate market
conditions, further information obtained regarding problem loans, identification
of additional problem loans and other factors, both within and outside of
management's control.
Other losses were $15,000 for the six months ended June 30, 2000 compared to
income and losses netting to zero for the same period in 1999. Other income
(losses) includes the equity in losses of the Company's investment in a limited
partnership, Pedcor. In addition to recording the equity in the losses of
Pedcor, a benefit of low income housing income tax credits in the amount of
$45,000 was recorded for the six months ended June 30, 2000 and 1999. The
increase in other income was due to nominal increases in a variety of income
categories.
Other expenses decreased $74,000 from $903,000 for the six months ended June 30,
1999 to $829,000 for the comparable period in 2000. The increase was primarily
due to approximately $45,000 of non-recurring expenses related to the Company's
data processing conversion during the first quarter of 2000.
Income tax expense decreased approximately $23,000, or 4.6%, for the six months
ended June 30, 2000 compared to the same period in 1999. The decrease in tax
expense was a result of the above mentioned revision to the Indiana Code.
Asset Quality
Union Federal currently classifies loans as special mention, substandard,
doubtful and loss to assist management in addressing collection risks and
pursuant to regulatory requirements which are not necessarily consistent with
generally accepted accounting principles. Special mention loans represent
credits that have potential weaknesses that deserve management's close
attention. If left uncorrected, these potential weaknesses may result in
deterioration of the repayment prospects or Union Federal's credit position at
some future date. Substandard loans represent credits characterized by the
distinct possibility that some loss will be sustained if deficiencies are not
corrected. Doubtful loans possess the characteristics of substandard loans, but
collection or liquidation in full is doubtful based upon existing facts,
conditions and values. A loan classified as a loss is considered uncollectible.
Union Federal had no loans classified as special mention as of June 30, 2000 and
December 31,1999. In addition, Union Federal had $1.1 million and $650,000 of
loans classified as substandard at June 30, 2000 and December 31, 1999,
respectively. At June 30, 2000, a letter of credit in the amount of $506,000 was
classified as substandard. The substandard letter of credit is to a borrower
with substandard loans of $966,000 which are included in the above substandard
loans total. At June 30, 2000 and December 31, 1999, no loans were classified as
doubtful or loss. At June 30, 2000, and December 31, 1999, respectively, $88,000
and $166,000 of the substandard loans were non-accrual loans. The allowance for
loan losses was $452,000 or .42% of loans at June 30, 2000 as compared to
$422,000 or .40% of loans at December 31, 1999.
Liquidity and Capital Resources
The standard measure of liquidity for savings associations is the ratio of cash
and eligible investments to a certain percentage of net withdrawable savings
accounts and borrowings due within one year. The minimum required ratio is
currently set by the Office of Thrift Supervision regulation at 4%. As of June
30, 2000, Union Federal had liquid assets of $9.9 million and a liquidity ratio
of 10.3%.
Other
The Securities and Exchange Commission ("Commission") maintains a web site that
contains reports, proxy information statements, and other information regarding
registrants that file electronically with the Commission, including the Company.
The address is (http://www.sec.gov).
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Presented below, as of June 30, 2000 and 1999, is an analysis performed by the
OTS of Union Federal's interest rate risk as measured by changes in Union
Federal's net portfolio value ("NPV") for instantaneous and sustained parallel
shifts in the yield curve, in 100 basis point increments, up and down 300 basis
points.
June 30, 2000
-------------------------------------------------------------------
Net Portfolio Value NPV as % of PV of Assets
Changes
In Rates $ Amount $ Change % Change NPV Ratio Change
-------- -------- --------- -------- --------- ------
+300 bp 24,872 -8,852 -26% 22.57% -545 bp
+200 bp 27,789 -5,935 -18% 24.47% -354 bp
+100 bp 30,765 -2,959 -9% 26.30% -172 bp
0 bp 33,724 28.01%
-100 bp 36,386 2,663 8% 29.46% +145 bp
-200 bp 38,297 4,573 14% 30.43% +242 bp
-300 bp 40,081 6,358 19% 31.30% +329 bp
June 30, 1999
-------------------------------------------------------------------
Net Portfolio Value NPV as % of PV of Assets
Changes
In Rates $ Amount $ Change % Change NPV Ratio Change
-------- -------- --------- -------- --------- ------
+300 bp $ 24,379 $ -8,455 -26% 23.30% -547 bp
+200 bp 27,261 -5,573 -17 25.27 -350 bp
+100 bp 30,147 -2,687 -8 27.13 -163 bp
0 bp 32,834 28.76
-100 bp 35,074 2,240 7 30.04 126 bp
-200 bp 36,965 4,131 13 31.06 230 bp
-300 bp 38,920 6,086 19 32.08 331 bp
The analysis at June 30, 2000 indicates that there have been no material changes
in market interest rates or in the Company's interest rate sensitive instruments
which would cause a material change in the market risk exposures which affect
the quantitative and qualitative risk disclosures as presented in Item 7A of the
Company's Annual Report on Form 10-K for the period ended December 31, 1999.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to Vote of Security Holders
On April 19, 2000, Union Community Bancorp held its Annual Meeting
of Shareholders. Two directors were elected to terms expiring in
2003 by the following votes:
Samuel H. Hildebrand For: 1,888,056 Withheld: 127,908
Harry A. Siamas For: 1,920,498 Withheld: 90,466
The terms of office of the following directors of Union Community
Bancorp continued after the Annual Shareholder Meeting:
Name Term Expires In
---- ---------------
Philip L. Boots 2001
John M. Horner 2001
Marvin L. Burkett 2002
Phillip E. Grush 2002
Joseph E. Timmons 2002
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits 27. Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter
ended June 30, 2000.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNION COMMUNITY BANCORP
Date: August 11, 2000 By: /s/ Joseph E. Timmons
--------------- -------------------------
Joseph E. Timmons
President and
Chief Executive Officer
Date: August 11, 2000 By: /s/ Denise E. Swearingen
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Denise E. Swearingen
Treasurer