F0RM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20552
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 1996
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
O-19445
SHELBY COUNTY BANCORP
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Indiana 35-1832715
------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
29 East Washington Street
Shelbyville, Indiana 46176
------------------------------- ----------------------
(Address of principal executive (Zip Code)
office)
Registrant's telephone number, including area code:
(317) 398-9721
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 .
----- -----
As of February 5, 1997, there were 175,950 shares of the Registrant's Common
Stock issued and outstanding.
<PAGE>
SHELBY COUNTY BANCORP AND SUBSIDIARY
INDEX
Page
Number
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Statements
of Financial Condition as of
December 31, 1996 (Unaudited)
and September 30, 1996. 3
Consolidated Statements
of Earnings for the three
months ended December 31, 1996
and 1995 (Unaudited) 4
Consolidated Statements of Cash Flows
for the three months ended
December 31, 1996 and 1995 (Unaudited) 5
Notes to Consolidated
Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-9
PART II. OTHER INFORMATION 10
SIGNATURE PAGE 11
<PAGE>
SHELBY COUNTY BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
December 31, September 30,
1996 1995
----------- -----------
ASSETS
Cash $ 955,111 1,043,977
Interest-Bearing Deposits 4,137,503 3,879,299
Investment Securities Available
for Sale 7,426,158 7,243,756
Investment Securities Held to
Maturity (market value: $1,287,787
and $2,874,268) 1,215,871 1,267,448
Loans Receivable, Net 69,578,902 66,522,476
Accrued Interest Receivable on
Investment Securities 90,171 104,504
Stock of FHLB of Indianapolis 725,000 620,100
Premises and Equipment 1,859,749 1,874,702
Prepaid Expenses and Other Assets 119,102 119,353
TOTAL ASSETS $86,107,567 82,675,615
----------- -----------
LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities:
Deposits $64,287,888 65,286,137
FHLB Advances 14,568,001 10,071,360
Accrued Interest on Deposits 112,787 133,492
Income Taxes Payable 212,958 225,237
Deferred Income Taxes 51,430 4,954
Accrued Expenses and Other
Liabilities 260,576 521,557
TOTAL LIABILITIES $79,493,640 76,242,737
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock, without par value:
Shares authorized of 5,000,000;
Shares issued and outstanding
of 175,950 $ 1,358,123 1,358,123
Retained earnings-substantially
restricted 4,855,858 4,744,525
Unrealized Appreciation on
Investment Securities Available
for Sale 399,946 330,230
----------- -----------
TOTAL SHAREHOLDERS' EQUITY $ 6,613,927 6,432,878
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $86,107,567 82,675,615
See accompanying notes to consolidated financial statements.
<PAGE>
SHELBY COUNTY BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended
December 31,
------------------------
1996 1995
---------- ----------
Interest Income:
Loans Receivable $1,439,242 1,127,156
Mortgage-Backed Securities 70,479 84,335
Interest-Bearing Deposits 21,687 65,811
Investment Securities 58,876 31,975
Dividends from FHLB 12,236 8,253
Total Interest Income 1,602,520 1,317,530
Interest Expense on FHLB Advances 145,602 -0-
Interest Expense on Deposits 758,008 774,649
Total Interest Expense 903,610 774,649
---------- ----------
Net Interest Income 698,910 542,881
Provision for Loan Losses 23,000 15,000
Net Interest Income After
Provision for Loan Losses 675,910 527,881
Non-Interest Income:
Service Charges and Fees 59,740 69,611
Other 25,114 56,726
Total Non-Interest Income 84,854 126,337
Non-Interest Expense:
Salaries and Employee Benefits 243,789 271,100
Premises and Equipment 65,217 59,498
Federal Deposit Insurance 26,270 41,242
Data Processing 60,504 56,850
Advertising 35,298 21,717
Bank Fees and Charges 22,764 13,347
Other 90,992 95,704
---------- ----------
Total Non-Interest Expense 544,834 559,458
Earnings Before Income Taxes 215,930 94,760
Income Taxes 87,002 35,454
NET EARNINGS $ 128,928 59,306
EARNINGS PER SHARE $ .73 $ .34
---------- ----------
See accompanying notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
December 31,
---------------------------
1996 1995
----------- -----------
Cash Flows From Operating Activities:
Net Earnings $ 128,928 $ 59,306
Adjustments To Reconcile Net Earnings
To Net Cash Provided By Operating
Activities:
Depreciation and Amortization 37,904 26,606
Net Deferred Loan Origination Fees 6,446 (708)
Provision For Loan Losses 23,000 15,000
Gain on Sale of Securities AFS (258) (20,031)
Increase (Decrease) in Accrued
Int. Rec 14,333 2,422
(Increase) Decrease in Other Assets 251 218,210
Increase in Other Liabilities (293,448) 263,547
----------- -----------
Net Cash Provided by Oper. Act (82,844) 564,352
Cash Flows From Investing Activities:
Loans Funded Net of Collections (3,085,872) (3,113,055)
Principal Collected on Investment Sec 242,115 238,187
Investment in FHLB Stock (104,900) --
Purchase of Premises and Equipment (31,981) (24,094)
Disposals of Premises and Equipment 16,154 --
Proceeds From Sale of Securities AFS 187,136 2,179,440
Investment in Real Estate Owned, Net -- (5,350)
Net Investment in Mtg.-Backed Sec. & Inv (451,267) (3,919,363)
Net Cash Provided by (Used) in Invest. Act (3,228,615) (4,644,235)
Cash Flows from Financing Activities:
FHLB Advances 4,500,000 --
Dividends Paid (17,595) (17,535)
Net Increase in
Deposits (998,249) 5,948,988
Repayment of FHLB Advances & Other Borrowings (3,359) --
Proceeds of Issuance of Common Stock -- 17,250
Net Cash Provided by Financing
Activities 3,480,797 5,948,703
----------- -----------
Net Decrease in Cash and Cash
Equivalents 169,338 1,868,820
----------- -----------
Cash and Cash Equivalents at Beginning of
Period $ 4,923,276 7,241,682
Cash and Cash Equivalents at End of Period $ 5,092,614 9,110,502
Supplemental Cash Flow Information:
Interest Paid $ 881,822 $ 744,401
----------- -----------
Income Taxes Paid $ 100,000 $ 35,434
----------- -----------
See accompanying notes to consolidated financial statements.
<PAGE>
SHELBY COUNTY BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 Basis of Presentation
The consolidated financial statements include the accounts of Shelby County
Bancorp (the "Corporation") and its subsidiary Shelby County Savings Bank, FSB
(the "Bank"). A summary of significant accounting policies is set forth in Note
1 of Notes to Consolidated Financial Statements included in the September 30,
1996 Annual Report to Shareholders.
The consolidated interim 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 consolidated interim financial statements at December 31, 1996 and for the
three months ended December 31, 1996 and 1995 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 are computed by dividing net earnings for the periods ended
December 31, 1996 and 1995 by the 175,950 shares of weighted average common
stock outstanding, respectively, during the period. The effects of outstanding
stock options are dilutive by less than 3%.
Note 3 Stock Option Plan
The Corporation has adopted a stock option plan whereby 17,250 shares of
authorized but unissued common stock were reserved for future issuance upon the
exercise of stock options granted to key employees and directors at an option
price of $10 per share. Options for 12,075 shares at an option price of $10 per
share have been granted under the plan. A total of 3,450 shares of stock have
been issued under the plan as of December 31, 1996. Options for 1,725 shares at
an option price of $18 per share have also been granted under the plan. Options
for 3,450 shares at an option price of $20 per share have also been granted
under the plan.
Note 4 Dividends
On December 23, 1996, the Board of Directors declared a quarterly cash dividend
of $.10 per share. The dividend was paid January 15, 1997 to shareholders of
record as of December 31, 1996.
<PAGE>
SHELBY COUNTY BANCORP AND
SUBSIDIARY
Management's Discussion and Analysis of Financial Condition and
Results of Operations
(a) Financial Condition:
Total assets at December 31, 1996, were $86,108,000, an increase of
$3,432,000 from total assets of $82,676,000 at September 30, 1996. The most
significant increase in assets was in net loans receivable.Total net loans
receivable increased from $66,522,000 at September 30, 1996 to $69,579,000 at
December 31, 1996. Mortgage loans increased from $53,878,000 at September 30,
1996 to $57,372,000 at December 31, 1996. Consumer loans decreased from
$12,687,000 at September 30, 1996 to $12,202,000 at December 31, 1996. The
increase in mortgage loans is attributed to a very strong local economy and loan
demand. The two branches that were opened in 1995 have contributed over
$4,514,000 in mortgage and consumer lending. Interest bearing deposits increased
from $3,879,000 at September 30, 1996 to $4,138,000 at December 31, 1996. FHLB
stock increased from $620,000 at September 30, 1996 to $725,000 at December 31,
1996.
Total deposits at September 30, 1996 of $65,286,000 decreased to
$64,288,000 at December 31, 1996. This decrease in deposits is primarily due to
the withdrawal of city and county public funds deposits.
Non-performing assets decreased from $247,000 at September 30, 1996 to
$245,000 at December 31, 1996. It is management's opinion that the bank's
allowance for possible loan losses is adequate to absorb any anticipated future
losses from loans at December 31, 1996. Accrued expenses and other liabilities
decreased due to the paying of the SAIFassessment in November 1996.
(b) Results of Operations:
During the three month period ended December 31, 1996, net earnings
increased to $129,000 ($.73 per share) compared to net earnings of $59,000 ($.34
per share) during the three month period ended December 31, 1995. The increase
in earnings is primarily the result of an increase in interest income on loans
receivable in excess of the increase in interest expense.
Net interest income after provision for loan losses was $676,000 for
the three months ended December 31, 1996, compared to $528,000 for the three
months ended December 31, 1995. The interest rate margin for the three months
ended December 31, 1996 was 3.36%, compared to 3.04% for the same period one
year ago.
Interest income increased from $1,318,000 for the three months ended
December 31, 1995 to $1,603,000 for the three months endedDecember 31, 1996.
Interest expense for the three month period ended months ended December 31,
1995. This increase is primarily attributed to the increase in FHLB borrowings.
<PAGE>
SHELBY COUNTY BANCORP AND
SUBSIDIARY
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Total non-interest income was $85,000 for the three months ended
December 31, 1996, compared to $126,000 for the same period in 1995. The
decrease was primarily due to the closure of The Shelby Group, a wholly-owned
subsidiary of the Bank, in November 1996.
Non-interest expense totaled $545,000 for the quarter ended December
31, 1996 compared to $559,000 for the same period in the prior year. The primary
decrease in non-interest expense related to cost cutting measures in salaries
and employee benefits.
(c) Capital Resources and Liquidity
The Corporation is subject to regulation as a savings and loan holding
company, and is subject to certain restrictions in its dealings with the Bank.
The Bank is subject to the regulatory requirements applicable to a federal
savings bank.
Current capital regulations require savings institutions to have
minimum tangible capital equal to 1.5% to total assets and a core capital ratio
equal to 3% of total assets. Additionally, savings institutions are required to
meet a risk-based capital ratio equal to 8.0% for risk-weighted assets. At
December 31, 1996, the Bank satisfied its capital requirements.
The following is a summary of the Bank's regulatory capital and capital
requirements at December 31, 1996 based on capital regulations currently in
effect for savings institutions.
Tangible Core Risk-based
Capital Capital Capital
---------- ---------- ----------
Regulatory Capital $5,391,000 $5,391,000 $5,726,000
Minimum Capital Requirement 1,267,000 2,534,000 4,524,000
---------- ---------- ----------
Excess Capital $4,124,000 $2,857,000 $1,202,000
Regulatory Capital Ratio 6.33% 6.33% 10.13%
Required Capital Ratio 1.50% 3.00% 8.00%
<PAGE>
SHELBY COUNTY BANCORP AND SUBSIDIARY
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity measures the Bank's ability to meet its savings withdrawals
and lending commitments. Management believes that the Bank's liquidity is
adequate to meet current requirements, such as the funding of $1,758,000 in loan
commitments as of December 31, 1996. The Bank maintains liquidity of at least 5%
of net withdrawable assets. At December 31, 1996, its regulatory liquidity ratio
was 9.16%.
<PAGE>
II. OTHER INFORMATION
Item 1. Legal Proceedings
The Bank is not engaged in any legal proceedings of a material nature
at the present time. From time to time, the Bank is a party to legal proceedings
wherein it enforces its security interest in mortgage loans made by it.
Item 6. Exhibits and Reports on Form 8-K
a) Not applicable
b) Reports on 8-K--There were no reports on Form 8-K
filed during the three months ended December 31,
1996.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
SHELBY COUNTY BANCORP
Date: February 5, 1997 By /s/ Rodney L. Meyerholtz
-------------------------------------
Rodney L. Meyerholtz
President
Date: February 5, 1997 By /s/ Robert E. Thomas
------------------------------------
Robert E. Thomas
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 DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000876621
<NAME> Shelby County Bancorp
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Sep-30-1997
<PERIOD-START> Oct-1-1996
<PERIOD-END> Dec-31-1996
<EXCHANGE-RATE> 1.000
<CASH> 955,111
<INT-BEARING-DEPOSITS> 4,137,503
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 7,426,158
<INVESTMENTS-CARRYING> 1,215,871
<INVESTMENTS-MARKET> 1,220,976
<LOANS> 69,578,902
<ALLOWANCE> 348,900
<TOTAL-ASSETS> 86,107,567
<DEPOSITS> 64,287,888
<SHORT-TERM> 0
<LIABILITIES-OTHER> 637,751
<LONG-TERM> 14,568,001
<COMMON> 1,358,123
0
0
<OTHER-SE> 5,255,804
<TOTAL-LIABILITIES-AND-EQUITY> 64,287,888
<INTEREST-LOAN> 1,439,242
<INTEREST-INVEST> 151,042
<INTEREST-OTHER> 12,236
<INTEREST-TOTAL> 1,602,520
<INTEREST-DEPOSIT> 758,008
<INTEREST-EXPENSE> 903,610
<INTEREST-INCOME-NET> 698,910
<LOAN-LOSSES> 23,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 544,834
<INCOME-PRETAX> 215,930
<INCOME-PRE-EXTRAORDINARY> 128,928
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 128,928
<EPS-PRIMARY> .73
<EPS-DILUTED> .73
<YIELD-ACTUAL> 7.99
<LOANS-NON> 245,000
<LOANS-PAST> 0
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</TABLE>
