<PAGE> 1
UNITED STATES
SECURITIES & EXCHANGE COMMISSION
Washington, DC. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1997
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 0-24084
SHO-ME FINANCIAL CORP.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 44-0363938
-------- ----------
(State or other jurisdiction (I.R.S. Employer ID Number)
of incorporation or organization)
109 N. HICKORY, MT. VERNON, MISSOURI 65712
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
(417) 466-2171
--------------------------------------------------
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 reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Class Outstanding at August 8, 1997
- ----------------------------- -----------------------------
Common Stock, Par Value $ .01 1,498,636 Shares
<PAGE> 2
SHO-ME FINANCIAL CORP.
AND SUBSIDIARY
INDEX
PART I. FINANCIAL INFORMATION (UNAUDITED) PAGE NO.
Item 1. Consolidated Condensed Financial Statements
- Consolidated Statements of Financial Condition 3
- Consolidated Condensed Statements of Income 4
- Consolidated Statements of Cash Flows 5
- Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-12
PART II OTHER INFORMATION 13
Signature Page 14
<PAGE> 3
PART I: FINANCIAL INFORMATION
Item I
SHO-ME FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
JUNE 30, 1997 (UNAUDITED) and DECEMBER 31, 1996
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Cash and due from banks $1,404,888 $1,687,719
Interest bearing deposits in other
financial institutions 2,485,731 9,838,295
------------ ------------
Cash and cash equivalents 3,890,619 11,526,014
Available-for-sale securities 23,986,664 18,880,277
Loans receivable, net 287,523,750 255,469,576
Foreclosed assets held for sale, net 44,179 0
Premises and equipment, net 5,499,861 5,452,142
Interest receivable
Loans 1,872,746 1,604,575
Investments 383,683 213,910
Investment in FHLB stock 4,975,000 4,325,000
Prepaid expenses and other assets 139,080 94,048
Deferred income taxes 487,543 430,913
------------ ------------
Total Assets $328,803,125 $297,996,455
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $199,775,439 $182,014,158
Federal Home Loan Bank advances 96,328,557 84,051,000
Advances from borrowers for taxes and insurance 1,535,578 619,096
Accounts payable and accrued expenses 1,175,342 815,732
Income taxes payable 290,285 464,342
------------ ------------
Total Liabilities 299,105,201 267,964,328
Common stock 20,499 20,499
Additional paid-in-capital 20,136,324 19,997,273
Unrealized appreciation on
available-for-sale securities, net 115,257 137,194
Retained earnings 20,955,749 18,886,732
Unearned ESOP shares (939,894) (995,179)
Unearned MRP shares (236,084) (313,498)
Treasury Stock, at cost (10,353,927) (7,700,894)
------------ ------------
Total Stockholders' Equity 29,697,924 30,032,127
------------ ------------
Total Liabilities and Stockholders' Equity $328,803,125 $297,996,455
============ ============
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE> 4
PART I: FINANCIAL INFORMATION
SHO-ME FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
<TABLE>
<CAPTION>
Three-months Six-months
ended ended
June 30, June 30,
1997 1996 1997 1996
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans $5,825,740 $4,828,839 $11,217,003 $9,323,859
Available-for-sale Securities 416,859 321,911 794,776 656,585
Other 36,043 17,441 94,775 52,983
---------- ---------- ----------- -----------
6,278,642 5,168,191 12,106,554 10,033,427
INTEREST EXPENSE
Deposits 2,308,633 1,911,168 4,513,570 3,678,327
Federal Home Loan Bank advances 1,340,858 1,059,663 2,514,953 2,123,055
---------- ---------- ----------- -----------
3,649,491 2,970,831 7,028,523 5,801,382
NET INTEREST INCOME 2,629,151 2,197,360 5,078,031 4,232,045
PROVISION FOR LOAN LOSSES 45,000 45,000 75,000 65,000
---------- ---------- ----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,584,151 2,152,360 5,003,031 4,167,045
---------- ---------- ----------- -----------
NONINTEREST INCOME
Service charges 142,160 129,512 274,114 230,194
Net realized gains (losses) on sales of
loans and available-for-sale securites 141,836 (20,443) 156,821 (18,309)
Income on foreclosed assets (1,959) (623) (1,761) (623)
Income on FHLB stock 80,582 67,235 155,232 132,433
Other income 113,590 93,238 236,746 187,110
---------- ---------- ----------- -----------
476,209 268,919 821,152 530,805
---------- ---------- ----------- -----------
NONINTEREST EXPENSE
Salaries and employee benefits 666,833 698,184 1,315,759 1,353,161
Net occupancy expense 195,628 170,859 386,091 435,851
Deposit insurance premium 29,383 83,719 36,553 166,195
FHLB service charges 57,373 61,182 110,566 115,250
Data processing 94,887 85,638 203,310 182,657
Legal and professional fees 102,356 94,200 149,274 110,625
Advertising 38,964 61,748 44,441 93,107
Other operating expense 131,213 169,632 277,022 343,686
---------- ---------- ----------- -----------
1,316,637 1,425,162 2,523,016 2,800,532
---------- ---------- ----------- -----------
INCOME BEFORE INCOME TAXES 1,743,723 996,117 3,301,167 1,897,318
PROVISION FOR INCOME TAXES 644,759 396,440 1,228,525 747,217
---------- ---------- ----------- -----------
NET INCOME $1,098,964 $599,677 $2,072,642 $1,150,101
========== ========== =========== ===========
Earnings Per Common Share: $ .74 $ .36 $ 1.37 $ .68
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE> 5
PART I: FINANCIAL INFORMATION
SHO-ME FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
<TABLE>
<CAPTION>
Six-months
ended
June 30,
1997 1996
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES (unaudited) (unaudited)
<S> <C> <C>
Net income $2,072,642 $1,150,101
Items not requiring (providing) cash:
Depreciation 170,242 150,000
Provision for loan losses 75,000 65,000
Net realized (gains) losses on available-for-sale securities (12,171) 27,645
Net realized gains on equity investments (142,709) 0
Origination of loans held for delivery against commitments (190,702) (395,330)
Proceeds from sale of loans held for delivery against commitments 192,643 329,695
Gain on sale of loans (1,941) (9,335)
Amortization of deferred income,
premiums and discounts on loans and investments (28,562) (45,486)
Deferred income taxes (43,000) 0
Accruals for MRP shares 77,414 167,468
Accruals for ESOP shares 204,570 140,722
Changes in:
Accrued interest receivable (437,943) (253,213)
Prepaid expenses and other assets (45,032) (47,373)
Accounts payable and accrued expenses 470,954 320,035
Income taxes payable (134,612) (40,312)
----------- -----------
Net cash provided by operating activities 2,226,793 1,559,617
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net originations of loans (32,034,441) (28,266,490)
Purchase of loans (150,400) 0
Purchase of premises and equipment (217,961) (484,653)
Proceeds from maturity of available-for-sale securities 1,000,000 2,000,000
Proceeds from sale of available-for-sale securities 2,449,744 2,595,545
Purchases of available-for-sale securities (8,868,312) (5,710,902)
Principal reductions of available-for-sale securities 443,677 688,215
Purchases of Federal Home Loan Bank stock (650,000) (19,000)
Proceeds from the sale of foreclosed assets 27,867 0
----------- -----------
Net cash used in investing activities (37,999,826) (29,197,285)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in certificates of deposit $9,319,352 $18,053,356
Net increase in checking and savings 8,318,696 4,245,507
Proceeds from FHLB advances 69,000,000 14,807,000
Repayments of FHLB advances (56,750,000) (10,000,000)
Stock issuance from exercised options 50,708 0
Net increase in advances from borrowers for taxes and insurance 916,482 772,331
Purchase of treasury stock (2,717,600) (1,436,314)
----------- -----------
Net cash provided by financing activities 28,137,638 26,441,880
----------- -----------
DECREASE IN CASH AND CASH EQUIVALENTS (7,635,395) (1,195,788)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 11,526,014 5,574,708
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $3,890,619 $4,378,920
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE> 6
SHO-ME FINANCIAL CORP.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1: Basis of Presentation
The accompanying unaudited interim consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-QSB and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three
and six month periods ended June 30, 1997 and 1996 are not necessarily
indicative of the results that may be expected for the full year. For further
information, refer to the Company's December 31, 1996 Form 10-KSB which was
filed with the Securities and Exchange Commission and the Company's annual
report which contains the audited financial statements for the fiscal years
ended December 31, 1996 and 1995.
Note 2: Holding Company Formation and Stock Issuance
Sho-Me Financial Corp. (SMFC) was established May 9, 1990, for the
purpose of becoming a holding company for the shares of 1st Savings Bank, fsb.,
upon its conversion from a federal mutual savings bank to a federal stock
savings bank.
The Company's subscription and community stock offering was completed on June
28, 1994, with the issuance of 2,049,875 shares at a price of $10 per share,
providing net proceeds of approximately $18.1 million after conversion costs
and approximately $1.6 million in debt incurred by the employee stock ownership
plan (ESOP).
Note 3: Principles of Consolidation
The consolidated financial statements include the accounts of SMFC and
its wholly-owned subsidiary, 1st Savings Bank, fsb. which in turn owns all of
First Savings Financial Corporation. Significant intercompany accounts and
transactions have been eliminated in consolidation.
Note 4: Employee Stock Ownership Plan
In conjunction with the stock conversion, the Company established an
ESOP with 163,990 unallocated shares available for distribution. The
unallocated shares have been credited to Unearned ESOP Shares, a contra-equity
account. As shares are released from collateral the Company reports
compensation expense equal to the current market price of the shares, and the
shares become outstanding for Earnings Per Share calculations. The ESOP has
allocated 64,475 shares to the employees of the Bank.
<PAGE> 7
Note 5: Benefit Plans
On April 26, 1995, the Company's stockholders voted to approve both a
Management Recognition and Retention Plan (MRP) and a Stock Option and
Incentive Plan (SOIP). The MRP authorized 81,995 shares to be issued to
directors, officers and employees of the Bank of which 63,438 were awarded.
The SOIP authorized 204,987 stock options on shares to be issued to directors,
officers, and employees of the Bank, of which 155,596 were awarded and 150,246
remain outstanding. Both the MRP and SOIP vest over a five year period with
compensation expense being amortized over each participant's vesting period for
the MRP. As of August 1, 1997 unvested MRP shares totaled 37,105.
Note 6: Earnings Per Share
Earnings per share of common stock have been determined by dividing net
income for the period by the weighted average number of outstanding shares of
common stock, common stock equivalents and allocated ESOP shares. Unallocated
ESOP shares were not included in the determination of either primary or fully
diluted earnings per share. Stock options were considered to be common stock
equivalents and were therefore included in both primary and fully diluted
earnings per share calculations. Primary earnings per share for the three and
six months ended June 30, 1997 were computed on weighted average shares or
share equivalents of 1,484,594 and 1,508,797, respectively, as compared to
1,664,380 and 1,683,320 from the same periods of the prior year. Fully diluted
earnings per share for the three and six months ended June 30, 1997 were
computed on weighted average shares or share equivalents of 1,492,661 and
1,513,496, respectively, as compared to 1,664,380 and 1,683,620 for the same
periods of the prior year. The reduction in both primary and fully diluted
shares outstanding was attributed to the Company's share repurchase program.
<PAGE> 8
PART I
Item 2
Sho-Me Financial Corp.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
GENERAL
The accompanying Consolidated Financial Statements include the accounts
of Sho-Me Financial Corp. (the "Company") and all accounts of its wholly-owned
subsidiary, 1st Savings Bank, f.s.b. (the "Bank" or "1st Savings"). All
significant intercompany transactions and balances have been eliminated in
consolidation.
The Company's results of operations are primarily dependent on the
difference (or "interest rate spread") between the average yield earned on its
interest-earning assets, which consist primarily of loans receivable,
investment securities, mortgage-backed securities (MBS), and other investments,
and the average rate paid on interest-bearing liabilities which consist
primarily of retail deposits and Federal Home Loan Bank ("FHLB") advances. The
interest rate spread is affected by economic, regulatory, and competitive
factors which influence interest rates, loan demand, prepayment rates, and
deposit flows. The Bank, like other financial institutions, is subject to
interest-rate risk to the degree that its interest-earning assets mature or
reprice at different times, or on a varying basis, from its interest-bearing
liabilities.
The Company's results of operations are also affected by provisions for
loan losses, non-interest income and non-interest expenses, such as employee
salary and benefits, occupancy expenses, and other expenses. The following
discussion reviews the Company's financial condition at June 30, 1997 and the
results of operations for the three and six months ended June 30, 1997 and
1996.
On June 23, 1997, the Company announced that it had entered into a
definitive agreement to be acquired by Union Planters Corporation, a multi-bank
holding company based out of Memphis, Tennessee. Pursuant to the agreement,
shareholders of Sho-Me Financial Corp. will receive .7694 shares of Union
Planters stock for each share of Sho-Me Financial stock held, subject to
adjustment under certain circumstances, in a tax-free exchange which is
scheduled to close during the fourth quarter of 1997, subject to shareholder
and regulatory approvals.
FINANCIAL CONDITION
The Company's total assets increased $30.8 million, or 10.3%, from
$298.0 million at December 31, 1996 to $328.8 million at June 30, 1997. The
increase was primarily attributable to a $32.1 million increase in loans
receivable which was primarily funded by increased deposits and FHLB advances
of $17.8 million and $12.3 million, respectively. Additionally, cash and cash
equivalents were used to fund an increase in the balance of available-for-sale
securities of $5.1 million.
<PAGE> 9
The balance of net loans receivable increased $32.1 million, or 12.6%,
from $255.5 million at December 31, 1996 to $287.5 million at June 30, 1997.
Loan growth (excluding loans-in-process) consisted primarily of a $21.1 million
increase in loans secured by one-to four-family residences and to a lesser
degree, an increase in consumer and home equity lines-of-credit ("ELOC") of
$5.2 million and nonresidential real estate of $4.6 million. During the first
half of 1997, the Company originated $69.1 million in mortgage loans and
installment loans as compared to $62.4 million during the same period of the
prior year. The increase was primarily due to $8.6 million in ELOC
originations, a product which was initially offered in February of 1997.
Deposits increased $17.8 million, or 9.8%, from $182.0 million at
December 31, 1996 to $199.8 million at June 30, 1997. The increase was
attributable to the successful marketing and cross-selling of the Company's
products and services as well as their price competitiveness. The increase was
comprised of a $9.3 million increase in certificates of deposit and an $8.5
million increase in transaction accounts, statement savings accounts, and
accrued interest.
FHLB advances increased $12.3 million, or 14.6%, from $84.1 million at
December 31, 1996 to $96.3 million at June 30, 1997. Outstanding advances have
terms of up to five years at either variable or fixed rates of interest and
have been used primarily to finance growth in loans receivable. At June 30,
1997 the average cost of FHLB advances was .28% higher than the average cost of
the Company's certificates of deposit.
At June 30, 1997, stockholders' equity was $29.7 million as compared to
$30.0 million, at December 31, 1996. The reduction in stockholders' equity was
primarily due to the $2.9 million cost of repurchased stock exceeding net
income of $2.1 million for the year-to-date and benefit plan accruals of
$360,000. These items, in conjunction with asset growth, caused the ratio of
equity to total assets to decline from 10.1% at December 31, 1996 to 9.0% at
June 30, 1997.
Results of Operations - Comparison of the three and six month periods ended
June 30, 1997 and 1996.
GENERAL. The Company's net income for the three and six month periods
ended June 30, 1997 was $1.1 million and $2.1 million, respectively, as
compared to net income of $600,000 and $1.2 million earned during the same
periods of 1996. The $499,000 and $922,000, respective increases in net income
were primarily the result of increased net interest income, noninterest income
and a reduction in noninterest expense.
NET INTEREST INCOME. Net interest income before provision for loan
losses increased by $432,000, or 19.7%, to $2.6 million for the quarter ended
June 30, 1997 as compared to the $2.2 million earned during the same quarter of
the prior year. The increase was primarily attributable to a 14 basis point
increase in the average interest rate spread and a $45.8 million, or 17.8%
increase in the average balance of interest-earning assets which was partially
offset by a $47.9 million, or 20.0% increase in the average balance of
interest-bearing liabilities.
Net interest income before provision for loan losses increased by
$846,000, or 20.0%, to $5.1 million for the six month period ended June 30,
1997 as compared to the $4.2 million earned
<PAGE> 10
during the same period of the prior year. The increase was primarily
attributable to a 15.7 basis point increase in the average interest rate spread
and a $44.2 million, or 17.6% increase in the average balance of
interest-earning assets which was partially offset by a $45.9 million, or 20.3%
increase in the average balance of interest-bearing liabilities.
INTEREST INCOME. Interest income for the three and six month periods
ended June 30, 1997 increased $1.1 million, or 21.5%, and $2.1 million, or
20.7%, respectively, as compared to the same period of the prior year. The
increases were primarily the result of a $44.2 million, or 17.6% increase in
average interest-earning assets and a 20.7 basis point rise in the average
yield earned on these assets, from 8.01% to 8.22%. The increase in
interest-earning assets was primarily a result of growth in loans receivable,
while higher yields were a result of upward loan repricing, increased consumer
lending and an overall increase in the ratio of loans, which have typically
earned higher yields than other interest-earning assets, to total assets.
INTEREST EXPENSE. Interest expense for the three and six month periods
ended June 30, 1997 increased $679,000, or 22.8%, and $1.2 million, or 21.2%,
respectively, as compared to the same periods of the prior year. The increases
were partly the result of a $45.9 million increase in average interest-bearing
liabilities and a 5.0 basis point rise in the average cost of these
liabilities, from 5.05% to 5.10%. The increase in average interest-bearing
liabilities consisted of growth in deposits and FHLB advances, while higher
interest costs were the result of aggressive pricing and an increase in the
ratio of certificates of deposit and FHLB advances, which represented higher
costing liabilities than transaction and savings accounts, to interest-bearing
liabilities.
PROVISION FOR LOSSES ON LOANS The provision for loan losses for the
three and six month periods ended June 30, 1997 was $45,000 and $75,000,
respectively, as compared to provisions of $45,000 and $65,000, respectively,
established during the same periods of the prior year. The Company regularly
reviews its allowance for loan losses and makes adjustments to its balance
based on management's analysis of the loan portfolio, the amount of
non-performing and classified assets and general economic conditions. Although
the Company maintains its allowance for loan losses at a level which it
considers to be sufficient to provide for potential losses, there can be no
assurance that future losses will not exceed internal estimates. In addition,
the amount of the allowance for loan losses is subject to review by regulatory
agencies which can order the establishment of additional loss provisions (See
"Nonperforming Assets").
NONINTEREST INCOME. Noninterest income for the three months ended June
30, 1997 increased $207,000, or 77.1%, to $476,000 as compared to the $269,000
earned during the same period of the prior year. The increase was primarily
due to a $162,000 increase in gains realized on the sale of loans and
securities which included a $143,000 one-time gain from the sale of equity
securities. In addition, noninterest income from service charges, FHLB stock
dividends and lease income increased by $13,000, $13,000, and $9,000,
respectively.
Noninterest income for the six months ended June 30, 1997 increased $290,000,
or 54.7%, to $821,000 as compared to the $531,000 earned during the same period
of the prior year. The increase was primarily attributable to a $175,000
increase in gains realized on the sale of loans and securities which included a
$143,000 one-time gain from the sale of equity securities. In
<PAGE> 11
addition, noninterest income from service charges, FHLB stock dividends and
lease income increased by $44,000, $23,000 and $16,000, respectively.
NONINTEREST EXPENSE. Noninterest expense for the three months ended
June 30, 1997 declined $109,000, or 7.6%, to $1.3 million as compared to $1.4
million expended during the same period of the prior year. Contributing to the
decline was a $54,000 reduction in SAIF premiums. In addition, salary,
advertising and general operating expenses declined by $93,000 which more than
offset increased occupancy, legal and processing expenses of 38,000. The
reductions in operating expenses were the result of improved operating
efficiencies and a reduction in expenses related to funding benefit plans.
Noninterest expense for the six months ended June 30, 1997 declined
$278,000, or 9.9%, to $2.5 million as compared to $2.8 million expended during
the same period of the prior year. Contributing to the decline was a $130,000
reduction in SAIF premiums, as well as a $202,000 decline in salary, occupancy,
advertising and general operating expenses which more than offset a $55,000
increase in legal and processing expenses. The reductions in operating
expenses were the result of improved operating efficiencies and a reduction in
expenses related to funding benefit plans.
PROVISION FOR INCOME TAXES. The provision for income taxes for the
three and six month periods ended June 30, 1997 increased $248,000 and
$481,000, respectively, as compared to the same periods of the prior year.
Increased taxation was primarily due to increased taxable income.
NONPERFORMING ASSETS
The allowance for loan losses is calculated based upon an evaluation of
pertinent factors underlying the various types and quality of the Company's
loans. Management considers such factors as the repayment status of a loan,
the estimated net fair value of the underlying collateral, the borrower's
intent and ability to repay the loan, local economic conditions, and the
Company's historical loss ratios. The Company's allowance for loan losses
increased $72,000 to $1.9 million at June 30, 1997 from $1.8 million on
December 31, 1996. At June 30, 1997, the Company had $1.2 million, or .36% of
total assets classified as substandard, doubtful, or loss as compared to
classified assets of $263,000, or .09% of assets at December 31, 1996. The
increase was due to an increase in the amount of loans exhibiting a
well-defined weakness. Each of these factors was considered by Management when
it evaluated the adequacy of the allowance for loan losses.
The ratio of nonperforming assets to total assets is another useful
tool in evaluating exposure to credit risk. Non-performing assets of the
Company include non-accruing loans, accruing loans delinquent/past maturity 90
days or more, and assets which have been acquired as a result of foreclosure or
deed-in-lieu of foreclosure. The table on the following page illustrates
changes in the Company's level of non-performing assets:
<PAGE> 12
<TABLE>
<CAPTION>
06/30/97 12/31/96 12/31/95
-------- -------- --------
(Dollars In Thousands)
<S> <C> <C> <C>
Loans Delinquent/Past Maturity 90 Days or More $ 374 $ 258 $ 35
Foreclosed Assets 44 0 51
-------- -------- --------
Total Non-performing Assets $ 418 $ 254 $ 35
Total Non-Performing Assets as a ======== ======== ========
Percentage of Total Assets .12% .09% .01%
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of funds are deposits, the receipt of
principal and interest payments on loans and MBS, investments and FHLB
advances. While the scheduled repayments on loans and securities as well as
the maturity of short-term investments are somewhat predictable sources of
funding, deposit flows and loan prepayment rates are influenced by many factors
which make their cash flows difficult to anticipate. Office of Thrift
Supervision regulations require the Bank to maintain cash and eligible
investments in an amount equal to at least 5% of customer accounts and
short-term borrowings to assure its ability to meet demands for withdrawals and
repayment of short-term borrowings. During the month ended June 30, 1997, the
Bank's liquidity ratio averaged 8.81%.
The Company uses its liquidity resources principally to satisfy its
ongoing cash requirements which include funding loan commitments, funding
maturing certificates of deposit as well as deposit withdrawals, maintaining
liquidity, purchasing investments, and meeting operating expenses. At June 30,
1997 the Company had outstanding commitments to fund $3.2 million in mortgage
loans, $10.0 million in loans-in-process and $5.3 million in undisbursed equity
lines and letters-of-credit. These commitments are expected to be funded
through a combination of FHLB advances, deposit growth and the receipt of cash
from daily operations. Management believes that the Company's liquidity
resources will be sufficient to fund anticipated liquidity needs.
REGULATORY CAPITAL
At June 30, 1997, the Bank exceeded all regulatory capital requirements
with tangible capital of $25.9 million (8.0% of tangible assets); core capital
of $25.9 million (8.0% of adjusted tangible assets); and risk-based capital of
$27.7 million (14.8% of risk-weighted assets). Under current regulatory
guidelines, the Bank is considered to be "well-capitalized".
<PAGE> 13
Part II - Other Information
Item 1 - Legal Proceedings
The Company and the Bank are not involved in any pending legal
proceedings other than legal proceedings incident to the business of
the Company and the Bank, which involve amounts in the aggregate which
management believes are not material to the financial condition and
results of operations of the Company and the Bank.
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
Not applicable
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) The following is a description of the Form 8-K's filed during the
quarter ended June 30, 1997.
None.
<PAGE> 14
SIGNATURES
Pursuant to 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 thereunto duly authorized.
SHO-ME FINANCIAL CORP.
Registrant
Date: August 8, 1997 /s/ Raymond G. Merryman
------------------------- -----------------------------------
Raymond G. Merryman
President and Chief Executive Officer
Date: August 8, 1997 /s/ Greg A. Steffens
------------------------- -----------------------------------
Greg A. Steffens
Chief Financial Officer
<PAGE> 15
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE QUARTERLY
REPORT ON FORM 10-Q FOR THE FISCAL QUARTER ENDED SEPTEMBER 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,404,888
<INT-BEARING-DEPOSITS> 2,485,731
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 23,986,664
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 287,523,750
<ALLOWANCE> 1,896,128
<TOTAL-ASSETS> 328,803,125
<DEPOSITS> 199,775,439
<SHORT-TERM> 37,250,000
<LIABILITIES-OTHER> 3,001,205
<LONG-TERM> 59,078,557
0
0
<COMMON> 20,156,823
<OTHER-SE> 9,541,101
<TOTAL-LIABILITIES-AND-EQUITY> 328,803,125
<INTEREST-LOAN> 5,825,740
<INTEREST-INVEST> 416,859
<INTEREST-OTHER> 36,043
<INTEREST-TOTAL> 6,278,642
<INTEREST-DEPOSIT> 2,308,633
<INTEREST-EXPENSE> 3,649,491
<INTEREST-INCOME-NET> 2,629,151
<LOAN-LOSSES> 45,000
<SECURITIES-GAINS> 141,836
<EXPENSE-OTHER> 1,316,637
<INCOME-PRETAX> 1,743,723
<INCOME-PRE-EXTRAORDINARY> 1,743,723
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,098,964
<EPS-PRIMARY> .74
<EPS-DILUTED> .74
<YIELD-ACTUAL> 8.22
<LOANS-NON> 346,620
<LOANS-PAST> 27,523
<LOANS-TROUBLED> 44,179
<LOANS-PROBLEM> 2,581,896
<ALLOWANCE-OPEN> 1,860,380
<CHARGE-OFFS> 10,422
<RECOVERIES> 1,170
<ALLOWANCE-CLOSE> 1,896,128
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 77,327
</TABLE>
