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 MARCH 31, 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: 000-25219
LINCOLN BANCORP
(Exact name of registrant specified in its charter)
Indiana 35-2055553
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1121 East Main Street
Plainfield, Indiana 46168-0510
(Address of principal executive offices, including Zip Code)
(317) 839-6539
(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 March 31, 2000 was 5,872,725.
<PAGE>
LINCOLN BANCORP AND SUBSIDIARY
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 Comprehensive Income 6
Consolidated Condensed Statement of Shareholders' Equity 7
Consolidated Condensed Statement of Cash Flows 8
Notes to Unaudited Consolidated Condensed Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 10
Item 3. Quantitative and Qualitative Disclosures about Market Risk 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
<PAGE>
FORM 10Q
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
LINCOLN BANCORP AND SUBSIDIARY
Consolidated Condensed Balance Sheet
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------------------- --------------------
<S> <C> <C>
Assets
Cash and due from banks $ 892,147 $ 2,576,080
Interest-bearing demand deposits in other banks 13,057,772 8,242,552
--------------------- --------------------
Cash and cash equivalents 13,949,919 10,818,632
Investment securities
Available for sale 142,587,441 145,875,328
Held to maturity 500,000 500,000
--------------------- --------------------
Total investment securities 143,087,441 146,375,328
Loans 242,053,043 234,760,885
Allowance for loan losses 1,813,577 1,760,706
--------------------- --------------------
Net loans 240,239,466 233,000,179
Premises and equipment 3,643,095 3,672,650
Investments in limited partnerships 1,961,030 2,063,661
Federal Home Loan Bank stock 5,446,900 5,446,700
Interest receivable 2,293,301 2,246,870
Other assets 7,260,701 7,204,023
--------------------- --------------------
Total assets $ 417,881,853 $ 410,828,043
===================== ====================
Liabilities
Deposits
Noninterest-bearing $ 3,824,423 $ 3,395,618
Interest-bearing 215,525,700 201,586,609
--------------------- --------------------
Total deposits 219,350,123 204,982,227
Securities sold under repurchase agreements 4,600,000 4,600,000
Federal Home Loan Bank advances 100,937,608 103,937,608
Note payable 1,225,501 1,714,001
Interest payable 1,171,751 1,096,519
Other liabilities 3,346,977 2,754,552
--------------------- --------------------
Total liabilities 330,631,960 319,084,907
--------------------- --------------------
Commitments and Contingencies
Shareholders' Equity
Preferred stock, without par value
Authorized and unissued - 2,000,000 shares
Common stock, without par value
Authorized - 20,000,000 shares
Issued and outstanding - 5,872,725 and 6,308,325 shares 57,497,916 61,853,916
Retained earnings 43,840,190 43,575,208
Accumulated other comprehensive loss (5,721,347) (5,065,649)
Unearned recognition and retention plan ("RRP") shares (3,252,191) (3,407,119)
Unearned employee stock ownership plan ("ESOP") shares (5,114,675) (5,213,220)
--------------------- --------------------
Total shareholders' equity 87,249,893 91,743,136
--------------------- --------------------
Total liabilities and shareholders' equity $ 417,881,853 $410,828,043
===================== ====================
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
LINCOLN BANCORP AND SUBSIDIARY
Consolidated Condensed Statement of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------ -------------------
2000 1999
------------------ -------------------
<S> <C> <C>
Interest Income
Loans, including fees $ 4,568,457 $ 3,985,924
Investment securities 2,532,712 2,273,162
Deposits with financial institutions 129,007 107,206
Dividend income 108,341 107,442
------------------ -------------------
Total interest and dividend income 7,338,517 6,473,734
------------------ -------------------
Interest Expense
Deposits 2,447,219 2,460,864
Short term borrowings 61,922 11,056
Federal Home Loan Bank advances 1,463,348 655,802
------------------ -------------------
Total interest expense 3,972,489 3,127,722
------------------ -------------------
Net Interest Income 3,366,028 3,346,012
Provision (adjustment) for loan losses (21,872) 31,050
------------------ -------------------
Net Interest Income After Provision (Adjustment) for loan losses 3,387,900 3,314,962
------------------ -------------------
Other Income
Net realized and unrealized gains on loans 2,835
Net realized losses on sales of available-for-sale securities (3,904)
Equity in losses of limited partnerships (102,630) (82,471)
Other income 211,862 232,923
------------------ -------------------
Total other income 109,232 149,383
------------------ -------------------
Other Expenses
Salaries and employee benefits 1,167,103 803,358
Net occupancy expenses 99,257 73,313
Equipment expenses 137,537 143,783
Deposit insurance expense 11,968 47,671
Data processing fees 205,022 164,277
Professional fees 94,681 33,063
Director and committee fees 47,925 37,948
Mortgage servicing rights amortization 42,918 (17,084)
Other expenses 331,019 233,289
------------------ -------------------
Total other expenses 2,137,430 1,519,618
------------------ -------------------
Income Before Income Tax 1,359,702 1,944,727
Income tax expense 429,349 700,459
------------------ -------------------
Net Income $ 930,353 $ 1,244,268
================== ===================
Basic earnings per share $ .17 $ .19
================== ===================
Diluted earnings per share .17 .19
================== ===================
Dividends per share .08 .06
================== ===================
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
LINCOLN BANCORP AND SUBSIDIARY
Consolidated Condensed Statement of Comprehensive Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------------
2000 1999
------------------ ------------------
<S> <C> <C>
Net Income $ 930,353 $1,244,268
Other comprehensive income, net of tax
Unrealized losses on securities available for sale
Unrealized holding losses arising during the period, net of tax
benefit of $430,074 and $335,316 (655,698) (511,228)
Less: Reclassification adjustment for losses included in net
income, net of tax benefit of $1,546 (2,358)
------------------ ------------------
(655,698) (508,870)
------------------ ------------------
Comprehensive income $ 274,655 $ 735,398
================== ==================
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
LINCOLN BANCORP AND SUBSIDIARY
Consolidated Condensed Statement of Shareholders' Equity
For the Three Months Ended March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Accumulated
---------------------------- Other Unearned
Shares Retained Comprehensive Unearned ESOP
Outstanding Amount Earnings Loss Compensation Shares Total
-------------- ------------- -------------- -------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, January 1, 1999 6,308,325 $ 61,853,916 $ 43,575,208 $ (5,065,649) $ (3,407,119) $(5,213,220) $ 91,743,136
Net income for the period 930,353 930,353
Unrealized losses on
securities, net of
reclassification
adjustment (655,698) (655,698)
Purchase of common stock (435,600) (4,356,000) (290,091) (4,646,091)
ESOP shares earned 6,504 98,545 105,049
Amortization of unearned
compensation expense (8,851) 154,928 146,077
Cash dividends
($.08 per share) (372,933) (372,933)
-------------- ------------- -------------- -------------- --------------- ------------- -------------
Balances, March 31, 2000 5,872,725 $ 57,497,916 $ 43,840,190 $ (5,721,347) $ (3,252,191) $(5,114,675) $ 87,249,893
============== ============= ============== ============== =============== ============= =============
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
LINCOLN BANCORP AND SUBSIDIARY
Consolidated Condensed Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------- -------------------
2000 1999
-------------------- -------------------
<S> <C> <C>
Operating Activities
Net income $ 930,353 $ 1,244,268
Adjustments to reconcile net income to net
cash provided (used) by operating activities
Provision(adjustment) for loan losses (21,872) 31,050
Gain on sale of foreclosed real estate (6,902) (9,449)
Loss on disposal of premises and equipment 4,219
Investment securities accretion, net (87,086) (63,604)
Investment securities (gains) losses 3,904
Equity in losses of limited partnerships 102,630 82,471
Amortization of net loan origination fees (51,843) (97,066)
Depreciation and amortization 108,840 107,488
Deferred income tax benefit (9,337) 461,773
Amortization of unearned compensation expense 146,077
ESOP shares earned 105,049 108,399
Net change in:
Interest receivable (46,431) (423,730)
Interest payable 75,232 (55,029)
Other assets 416,649 (221,183)
Other liabilities (125,883) 23,572
Income taxes receivable/payable 242,987 529,017
-------------------- -------------------
Net cash provided by operating activities 1,778,463 1,726,100
-------------------- -------------------
Investing Activities
Purchases of securities available for sale (1,167,754) (64,794,311)
Proceeds from sales of securities available for sale 10,259,375
Proceeds from maturities of securities available for sale 3,456,954 6,312,166
Proceeds from maturities of securities held to maturity 500,000
Net change in loans (6,708,488) (10,978,307)
Purchases of loans (547,401) (3,993,635)
Purchase of FHLB of Indianapolis stock (200)
Purchases of property and equipment (79,285) (400,240)
Proceeds from sale of foreclosed real estate 63,304 54,907
-------------------- -------------------
Net cash used by investing activities (4,982,870) (63,040,045)
-------------------- -------------------
Financing Activities
Net change in
Noninterest-bearing, interest-bearing demand,
money market and savings deposits 2,375,775 3,511,779
Certificates of deposit 11,992,121 (9,038,159)
Short-term borrowings 4,600,000
Proceeds from FHLB advances 45,000,000 55,000,000
Repayment of FHLB advances (48,000,000) (7,000,000)
Payment on note payable to limited partnership (488,500) (488,500)
Dividends paid (459,807)
Purchase of common stock (4,646,091)
Additional conversion costs (13,706)
Net change in advances by borrowers for taxes and insurance 562,196 561,007
-------------------- -------------------
Net cash provided by financing activities 6,335,694 47,132,421
-------------------- -------------------
Net Change in Cash and Cash Equivalents 3,131,287 (14,181,524)
Cash and Cash Equivalents, Beginning of Period 10,818,632 22,907,357
-------------------- -------------------
Cash and Cash Equivalents, End of Period $ 13,949,919 $ 8,725,833
==================== ===================
Additional Cash Flows and Supplementary Information
Interest paid $ 3,897,257 $ 3,182,751
Income tax paid 197,500 ---
Loan balances transferred to foreclosed real estate 90,317 ---
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
LINCOLN BANCORP AND SUBSIDIARY
Notes to Unaudited Consolidated Condensed Financial Statements
Note 1: Basis of Presentation
The consolidated financial statements include the accounts of Lincoln Bancorp
(the "Company"), its wholly owned subsidiary, Lincoln Federal Savings Bank, a
federally chartered savings bank ("Lincoln Federal"), and Lincoln Federal's
wholly owned subsidiary, L-F Service Corporation ("L-F Service"). 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 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 financial statements at March 31, 2000, and for the
three months ended March 31, 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 Employee Stock Ownership Plan shares have been
excluded from the computation of average common shares outstanding.
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 2000 March 31, 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 $ 903,353 5,329,771 $ .17 $ 1,244,268 6,453,437 $ .19
=========== ===========
Effect of dilutive RRP
awards and stock options
------------- --------------- ---------------- --------------
Diluted earnings per share
Income available to common
shareholders and assumed
conversions $ 903,353 5,329,771 $ .17 $ 1,244,268 6,453,437 $ .19
============= =============== =========== ================ ============== ===========
</TABLE>
Note 3: Business Combinations
On March 21, 2000, the Company signed a definitive agreement to acquire Citizens
Bancorp, Frankfort, Indiana. The acquistion will be accounted for under the
purchase method of accounting. Under the terms of the agreements, the Company
will exchange .9375 shares of the Company's common stock and $9.375 in cash for
each share of Citizens' common stock. The transaction is subject to approval by
shareholders of Citizens Bancorp and appropriate regulatory agencies. As of
March 31, 2000, Citizens Bancorp had total assets and shareholders' equity of
$63,484,000 and $15,078,000, respectively.
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations.
General
Lincoln Bancorp, an Indiana corporation (the "Company"), was organized in
September, 1998. On December 30, 1998, it acquired the common stock of Lincoln
Federal Savings Bank ("Lincoln Federal") upon the conversion of Lincoln Federal
from a federal mutual savings bank to a federal stock savings bank.
Lincoln Federal was originally organized in 1884 as Ladoga Federal Savings and
Loan Association, located in Ladoga, Indiana. In 1979 Ladoga Federal merged with
Plainfield First Federal Savings and Loan Association, a federal savings and
loan association located in Plainfield, Indiana which was originally organized
in 1896. Following the merger, the Bank changed its name to Lincoln Federal
Savings and Loan Association and, in 1984, adopted its current name, Lincoln
Federal Savings Bank. Lincoln Federal currently conducts its business from six
full-service offices located in Hendricks, Montgomery, Clinton and Morgan
Counties, Indiana, with its main office located in Plainfield. Lincoln Federal
opened an office in Avon, Indiana in January, 1999 and its newest office in
Mooresville, Indiana in April, 1999. The Bank'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. Lincoln Federal's deposit accounts are
insured up to applicable limits by the SAIF of the FDIC.
Lincoln Federal offers a number of financial services, including: (I) one-to
four-family residential real estate loans; (ii) commercial real estate loans;
(iii) real estate construction loans; (iv) land loans; (v) multi-family
residential loans; (vi) consumer loans, including home equity loans and
automobile loans; (vii) commercial loans; (viii) money market demand accounts
("MMDAs"); (ix) savings accounts; (x) checking accounts; (xi) NOW accounts; and
(xii) certificates of deposit.
Lincoln Federal currently owns one subsidiary, L-F Service corporation ("L-F
Service"), whose assets consist of an investment in Family Financial Life
Insurance Company ("Family Financial") and in Bloomington Housing Associates,
L.P. ("BHA"). Family Financial is an Indiana stock insurance company that
primarily engages in retail sales of mortgage and credit insurance products in
connection with loans originated by its shareholder financial institutions. BHA
is an Indiana limited partnership that was organized to construct, own and
operate a 130-unit apartment complex in Bloomington, Indiana (the "BHA
project"). Development of the BHA Project has been completed and the project is
performing as planned.
Lincoln 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 Lincoln 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 $7.1 million, or 1.7% at March 31, 2000, compared to
December 31, 1999. The increase was primarily due to loan growth of $7.2
million. Net loans increased by 3.1% to $240.2 million due to an increase in
customer demand, especially in commercial loans, which were up $3.5 million.
Loan growth was funded by an increase in deposits.
Deposits increased $14.4 million to $219.4 million during the first quarter of
2000. The majority of this growth was in public fund certificates of deposit,
which increased by $13.8 million.
Total borrowed funds decreased by $3.5 million, or 3.3%, from December 31, 1999
to March 31, 2000. The decrease in total borrowed funds resulted from a decrease
in FHLB advances of $3.0 million and a decrease in the note payable to a limited
partnership of $489,000.
Shareholders' equity decreased $4.5 million from $91.7 million at December 31,
1999 to $87.2 million at March 31, 2000. The decrease was primarily due to stock
repurchases of $4.6 million, cash dividends of $373,000, and unrealized losses
on securities available for sale of $656,000. These decreases were offset by net
income for three months ended March 31, 2000 of $930,000, Employee Stock
Ownership Plan ("ESOP") shares earned of $105,000 and unearned compensation
amortization of $146,000.
Comparison of Operating Results for the Three Months Ended March 31, 2000 and
1999
Net income decreased $314,000, or 25.2%, from $1.2 million for the three months
ended March 31, 1999 to $930,000 for the three months ended March 31, 2000. The
decrease was primarily due to an increase in other expenses, which were $2.1
million for the three months ended March 31, 2000 compared to $1.5 million for
the comparable three months of 1999. Additional costs associated with a new
branch, key management additions, and costs of the management recognition and
retention plan that were not in existence during the first quarter of 1999
contributed to the increase in other expenses.
Interest income increased $865,000, or 13.4%, from $6.5 million for the three
months ended March 31, 1999 to $7.3 million for the same period in 2000.
Interest expense increased $845,000, or 27.0%, from $3.1 million for the three
months ended March 31, 1999 to $4.0 million for the same period in 2000. As a
result, net interest income for the three months ended March 31, 2000 increased
$20,000 or 0.6%, compared to the same period in 1999. The net interest margin
was 3.30% for the three-month period ended March 31, 2000 compared to 3.75% for
the same period in 1999. The average yield on earning assets declined 5 basis
points in 2000 and the average cost of interest-bearing liabilities increased 18
basis points from the first quarter of 1999 to the first quarter of 2000. This
reduced the spread from 2.38% to 2.15%, or 23 basis points.
The Company's provision for loan losses for the three months ended March 31,
2000 was a net credit of $22,000 compared to expense of $31,000 for the same
period in 1999, as a result of a large recovery during the first quarter of
2000.
Other income decreased $40,000, or 26.9%, for the three months ended March 31,
2000 compared to the same period in 1999 primarily due to a decrease in service
fee income on loans sold of $21,000 and increased limited partnership losses of
$20,000 due to the operating results of the limited partnerships.
Other expenses increased $618,000, or 40.7%, for the first quarter of 2000
compared to the same period in 1999. Additional costs associated with a new
branch, key management additions, and costs of the management recognition and
retention plan that were not in existence during the first quarter of 1999
contributed to the increase in other expenses.
Income tax expense decreased $271,000 for the three months ended March 31, 2000
compared to the same period in 1999. The decrease was directly related to the
decrease in taxable income for the period.
Asset Quality
Lincoln 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 Lincoln 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.
Lincoln Federal had $3.5 million of loans classified as special mention as of
March 31, 2000 and no loans classified as special mention as of December 31,
1999. The increase in loans classified as special mention was attributable to
four commercial loan relationships. In addition, Lincoln Federal had $744,000
and $1.1 million of loans classified as substandard at March 31, 2000 and
December 31, 1999, respectively. The decrease in loans classified as substandard
was primarily attributable to a principal reduction in the lone substandard
commercial relationship and a decrease in mortgage loans past due greater than
ninety days and on non-accrual status. Lincoln Federal reviews all loans on an
individual basis when the loan reaches ninety days past due to determine whether
non-accrual status is necessary. At March 31, 2000 and December 31, 1999, no
loans were classified as doubtful or loss. At March 31, 2000, and December 31,
1999, respectively, non-accrual loans were $744,000 and $1.1 million. The
allowance for loan losses was $1.8 million or approximately .7% of net loans at
March 31, 2000 and 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 March
31, 2000, Lincoln Federal had liquid assets of $91.7 million and a liquidity
ratio of 36.7%.
Other
The Securities and Exchange 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 March 31, 2000 and 1999, is an analysis performed by the
OTS of Lincoln Federal's interest rate risk as measured by changes in Lincoln
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.
March 31, 2000
Net Portfolio Value NPV as % of PV of Assets
Changes
In Rates $ Amount $ Change %Change NPV Ratio Change
-------- -------- --------- ------- --------- ------
+300 bp 44,661 -32,040 -42% 11.81% -658 bp
+200 bp 59,786 -21,915 -29% 24.03% -436 bp
+100 bp 65,925 -10,776 -14% 16.32% -207 bp
0 bp 76,701 18.39%
- -100 bp 86,023 9,322 12% 20.05% +166 bp
- -200 bp 91,424 14,723 19% 20.92% +253 bp
- -300 bp 93,338 16,637 22% 21.13% +274 bp
March 31, 1999
Net Portfolio Value NPV as % of PV of Assets
Changes
In Rates $ Amount $ Change %Change NPV Ratio Change
- -------- -------- --------- ------- --------- ------
+300 bp 53,590 -33,117 -38% 14.45% -657 bp
+200 bp 64,978 -21,730 -25% 16.88% -414 bp
+100 bp 76,289 -10,419 -12% 19.12% -191 bp
0 bp 86,707 21.02%
- -100 bp 95,401 8,694 10% 22.48% +146 bp
- -200 bp 102,729 16,022 18% 23.62% +260 bp
- -300 bp 111,367 24,660 28% 24.91% +389 bp
The analysis at March 31, 2000 indicates that there have been no material
changes in market interest rates or in Lincoln Federal'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.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits 27. Financial Data Schedule
(b) On March 23, 2000, the Company filed a current report on
Form 8-K disclosing the merger between Lincoln Bancorp and
Citizens Bancorp the Agreement and Plan of
Reorganization attached to which is as an exhibit thereto.
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.
LINCOLN BANCORP
Date: May 12, 2000 By: /s/ T. Tim Unger
----------- --------------------
T. Tim Unger
President and Chief Executive Officer
Date: May 12, 2000 By: /s/ John M. Baer
--------------- --------------------
John M. Baer
Treasurer
<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 March 31, 2000 and is qualified in its entirety by reference to
such statements.
</LEGEND>
<CIK> 0001070259
<NAME> Lincoln Bancorp
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-1-2000
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0
0
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</TABLE>
