UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MarkOne)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the quarterly period ended December 31, 1997
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 0-23164
LANDMARK BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Kansas 48-1142260
(State or other jurisdiction I.R.S. Employer
of incorporation or organization) Identification Number
CENTRAL AND SPRUCE STREETS, DODGE CITY, KANSAS 67801
(Address and Zip Code of principal executive offices)
(316) 227-8111
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
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
The number of shares outstanding of each of the issuer's classes of common
stock, as of December 31, 1997:
$.10 par value common stock 1,688,641 shares
(Class) (Outstanding)
Transitional Small Business Disclosure Format:
Yes No [X]
<PAGE>
LANDMARK BANCSHARES, INC.
INDEX
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Financial Condition as of
December 31, 1997 (unaudited) and September 30, 1997 1
Statements of Income for the Three
Months Ended December 31, 1997 and 1996 (unaudited) 2
Statements of Cash Flows for the Three Months Ended
December 31, 1997 and 1996 (unaudited) 3 - 4
Notes to Financial Statements 5 - 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9 - 11
PART II - OTHER INFORMATION
Item 2. Changes in Securities 12
Item 5. Other Information 12
Item 6(b). Reports on Form 8-K 12
SIGNATURES 13
<PAGE>
1
LANDMARK BANCSHARES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY,
LANDMARK FEDERAL SAVINGS BANK
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
December 31, 1997 September 30, 1997
(Unaudited)
------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents:
Interest bearing $ 2,514,885 $ 2,062,879
Non-interest bearing 771,754 678,173
Time deposits in other financial institutions 111,751 110,580
Securities held to maturity 16,939,243 18,837,942
Securities available for sale 8,467,460 7,122,785
Mortgage-backed securities held to maturity 33,376,786 36,689,551
Loans receivable, net 166,317,500 157,672,603
Loans held for sale 472,284 490,234
Accrued income receivable 1,516,653 1,446,605
Real estate owned or in judgment and other
repossessed property, net 247,323 251,950
Office properties and equipment, at cost less
accumulated depreciation 1,361,904 1,188,250
Prepaid expenses and other assets 1,542,297 1,233,038
Income taxes receivable - current 0 65,564
------------------------------
TOTAL ASSETS $ 233,639,840 $ 227,850,154
------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits 145,969,289 144,734,739
Outstanding checks in excess of bank balance 0 0
Other Borrowed Money 51,500,000 46,200,000
Advances from borrowers for taxes and
insurance 768,750 1,673,057
Accrued expenses and other Liabilities 1,274,436 2,304,593
Deferred income taxes 871,926 692,435
Income taxes
Current 335,386 0
------------------------------
TOTAL LIABILITIES $ 200,719,787 $ 195,604,824
------------------------------
Stockholders' Equity
Common Stock 228,131 228,131
$.10 par value; 10,000,000 shares authorized;
2,281,312 shares issued
Additional Paid-in Capital 22,185,681 22,173,827
Treasury Stock; 592,671 shares of common stock at cost (9,249,935) (9,249,935)
Retained income (substantially restricted) 19,740,793 19,305,087
Employee Stock Ownership Plan (844,597) (844,597)
Management Stock Bonus Plan (241,306) (289,567)
Net unrealized gain/loss on available for sale securities 1,101,286 922,384
------------------------------
Total Stockholders' Equity 32,920,053 32,245,330
------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 233,639,840 $ 227,850,154
------------------------------
</TABLE>
<PAGE>
2
LANDMARK BANCSHARES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY,
LANDMARK FEDERAL SAVINGS BANK
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended December 31
1996 1997
(unaudited) (unaudited)
-------------------------------
<S> <C> <C>
INTEREST INCOME
Interest on loans 2,750,847 3,341,282
Interest and dividends on investment securities 543,587 432,926
Interest on mortgage-backed securities 735,335 584,168
-------------------------------
Total interest income 4,029,769 4,358,376
INTEREST EXPENSE
Deposits 1,815,263 1,864,805
Borrowed funds 517,137 707,644
-------------------------------
Total interest expense 2,332,400 2,572,449
Net interest income 1,697,369 1,785,927
PROVISION FOR LOSSES ON LOANS 45,000 70,000
-------------------------------
Net interest income after provision for losses 1,652,369 1,715,927
NON-INTEREST INCOME
Service charges and late fees 60,344 74,597
Net gain (loss) on available for sale investments 108,692 0
Net gain (loss) on sale of loans 59,439 56,449
Service fees on loans sold 40,357 30,013
Other income 34,402 32,215
-------------------------------
303,234 193,274
NON-INTEREST EXPENSE
Compensation and related expenses 497,434 582,158
Occupancy expense 40,957 47,282
Advertising 14,449 16,331
Federal insurance premium 99,666 38,823
Loss (gain) from real estate operations 306 3,547
Data processing 43,488 45,999
Other expense 175,399 179,986
-------------------------------
871,699 914,126
Income before income taxes 1,083,904 995,075
INCOME TAXES EXPENSES 431,500 398,950
-------------------------------
Net income 652,404 596,125
-------------------------------
Basic earnings per share $ 0.38 $ 0.38
Diluted earnings per share $ 0.36 $ 0.35
Dividends per share $ 0.10 $ 0.10
</TABLE>
<PAGE>
3
LANDMARK BANCSHARES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
LANDMARK FEDERAL SAVINGS BANK
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended December 31
1996 1997
(unaudited) (unaudited)
------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 652,404 $ 596,125
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 28,260 31,430
Decrease (increase) in accrued interest receivable (16,223) (76,040)
Increase (decrease) in outstanding checks in excess of bank balance (143,808) 0
Increase (decrease) in accrued and deferred income taxes 461,695 580,441
Increase (decrease) in accounts payable and accrued expenses 82,033 (1,024,165)
Amortization of premiums and discounts on investments and loans 528 (32,477)
Provision for losses on loans 45,000 70,000
Gain/loss on available for sale securities (108,692) 0
Other non-cash items, net (33,735) (473,919)
Sale of loans held for sale 7,431,144 2,493,198
Gain on sale of loans held for sale (59,440) (56,449)
Origination of loans held for sale (6,954,041) ^(18,939)
Purchase of loans held for sale (635,950) (2,399,860)
------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 749,175 $ (310,655)
------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Loan originations and principal payment on loans held for investment 3,677,235 (1,767,492)
Principal repayments on mortgage-backed securities 2,003,025 3,313,957
Loans purchased for investment (12,785,479) (7,018,907)
Acquisition of investment securities held to maturity (1,000,000) (3,000,000)
Acquisition of investment securities available for sale (670,705) (984,282)
Proceeds from sale of investment securities available for sale 351,758 0
Proceeds from maturities or calls of investment securities 3,300,000 4,900,000
Net (increase) decrease in time deposits 285,000 0
Sale of real estate acquired in settlement of loans 0 99,963
Acquisition of fixed assets (33,363) (205,083)
------------------------------------------
NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES (4,872,529) (4,661,844)
------------------------------------------
</TABLE>
<PAGE>
4
LANDMARK BANCSHARES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY,
LANDMARK FEDERAL SAVINGS BANK
Consolidated Statements of Cash Flows
(Continued)
<TABLE>
<CAPTION>
Three Months Ended December 31
1996 1997
(unaudited) (unaudited)
-------------------------------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits $ (1,240,573) $ 1,234,550
Net increase (decrease) in escrow accounts (1,013,066) (904,307)
Proceeds from FHLB advance and other borrowings 31,000,000 34,800,000
Repayment of FHLB advance and other borrowings (21,200,000) (29,500,000)
Acquisition of Treasury Stock (298,750) 0
Other Financing Activities 45,170 48,261
Dividend Payment (175,352) (160,418)
-------------------------------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 7,117,429 5,518,086
-------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 2,994,075 545,587
BEGINNING CASH AND CASH EQUIVALENTS 473,710 2,741,052
-------------------------------------
ENDING CASH AND CASH EQUIVALENTS 3,467,785 3,286,639
-------------------------------------
SUPPLEMENTAL DISCLOSURES Cash paid during the period for:
Interest on deposits, advances, and other borrowings 2,359,117 2,597,287
Income taxes 431,500 0
Transfers from loans to real estate acquired through foreclosure 0 19,155
</TABLE>
<PAGE>
5
LANDMARK BANCSHARES, INC.
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
LANDMARK FEDERAL SAVINGS BANK
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements were prepared in
accordance with the instructions for form 10-QSB and , accordingly, do not
include all information and disclosures necessary to present financial
condition, results of operations and cash flows of Landmark Bancshares, Inc.
(the "Company") and its wholly-owned subsidiary Landmark Federal Savings Bank
(the "Bank") in conformity with generally accepted accounting principles.
However, all normal recurring adjustments have been made which, in the opinion
of management, are necessary for the fair presentation of the financial
statements.
The results of operation for the three months ending December 31, 1997, are not
necessarily indicative of the results which may be expected for the fiscal year
ending September 30, 1998.
2. On March 28, 1994, the Bank segregated and restricted $15,144,357 of retained
earnings in a liquidation account for the benefit of eligible savings account
holders who continue to maintain their accounts at the bank after the conversion
of the bank from mutual to stock form. In the event of a complete liquidation of
the Bank, and only in such event, each eligible account holder will be entitled
to receive a distribution from the liquidation account in an amount
proportionate to the current adjusted balances of all qualifying deposits then
held. The liquidation account will be reduced annually at September 30th to the
extent that eligible account holders have reduced their qualifying deposits.
3. INVESTMENTS AND MORTGAGE - BACKED SECURITIES
A summary of the Bank's carrying value of investment and mortgage -
backed securities as of December 31, 1997 and September 30, 1997, is as follows:
<TABLE>
<CAPTION>
Investment Securities December 31, 1997 September 30, 1997
-------------------------------------------------------
<S> <C> <C>
Held to maturity:
Government Agency Securities $ 15,499,243 $ 17,297,942
Municipal Obligations 1,440,000 1,540,000
-------------------------------------------------------
$16,939,243 $18,837,942
Available for sale:
Common Stock 5,270,360 4,086,785
Stock in Federal Home Loan Bank 3,037,100 2,976,000
Other 160,000 60,000
--------------------------------------------------------
$ 8,467,460 $ 7,122,785
</TABLE>
<PAGE>
6
<TABLE>
<CAPTION>
<S> <C> <C>
Mortgage - Backed Securities held to maturity:
FNMA - Arms 12,494,007 13,157,644
FHLMC -Arms 4,244,766 4,768,042
FHLMC -Fixed Rate 266,754 245,443
CMO Government Agency 11,843,535 13,310,277
CMO Private Issue 3,723,153 4,245,057
FNMA - Fixed Rate 502,849 589,777
GNMA - Fixed Rate 341,722 373,311
Unamortized Premiums 0 0
Unearned Discounts 0 0
--------------------------------------
$33,376,786 $36,689,551
</TABLE>
4. LOAN RECEIVABLE, NET
A summary of the Bank's loans receivable at December 31, 1997 and
September 30, 1997, is as follows:
<TABLE>
<CAPTION>
December 31, 1997 September 30, 1997
------------------------------------------------
<S> <C> <C>
Mortgage Loans Secured by
One to Four Family Residences 129,061,405 122,015,418
Secured by Other Properties 3,404,611 3,452,789
Construction Loans 1,739,799 1,936,517
Other 3,340,095 2,666,395
------------------------------------------------
137,545,910 130,071,119
Plus (Less):
Unamortized Premium on Loan Purchase 49,548 29,460
Unearned Discount and Loan Fees (330,473) (348,405)
Undisbursed Loan Proceeds (1,767) (1,724)
Allowance for Loan Losses (640,056) (615,049)
------------------------------------------------
Total Mortgage Loans 136,623,162 129,135,401
------------------------------------------------
Consumer and Other Loans:
Automobile 14,523,067 13,309,943
Commercial 4,176,884 4,049,950
Loans on Deposits 604,888 573,654
Home Equity and Second Mortgage 9,742,115 9,986,176
Mobile Home 42,576 46,900
Other 1,008,682 924,153
------------------------------------------------
30,098,212 28,890,776
Less:
Allowance for Loan Losses (403,874) (353,574)
------------------------------------------------
Total Consumer and Other Loans 29,694,338 28,537,202
------------------------------------------------
Net Loans Receivable $166,317,500 $157,672,603
</TABLE>
<PAGE>
7
A summary of the Bank's allowance for loan losses for the 3 months ended
December 31, 1997 and 1996, are as follows:
<TABLE>
<CAPTION>
Three Months Ended
December 31
1996 1997
-------------------------------------
<S> <C> <C>
Balance Beginning $740,346 $968,623
Provisions Charged to Operations 45,000 70,000
Loans Charged Off Net of Recoveries (5,251) 5,308
-------------------------------------
Balance Ending $780,095 $1,043,931
</TABLE>
There has been no significant change in the level of non performing loans from
September 30, 1997 to December 31, 1997.
5. REAL ESTATE OWNED OR IN JUDGMENT
Real Estate owned or in judgment, including in-substance foreclosures
and other repossessed property:
<TABLE>
<CAPTION>
December 31, 1997 September 30, 1997
-------------------------------------------
<S> <C> <C>
Real Estate Acquired by Foreclosure $157,957 $ 232,851
Real Estate Loans in Judgment and
Subject to Redemption 70,094 19,099
Other Repossessed Assets 19,272 0
-------------------------------------------
$247,323 $ 251,950
</TABLE>
6. FINANCIAL INSTRUMENTS
The Bank is a party to financial instruments with off-balance-sheet
risk in the normal course of business to meet the financial needs of its
customers and to reduce its own exposure to fluctuations in interest rates. The
financial instruments include commitments to extend credit and commitments to
sell loans. The instruments involve, to varying degrees, elements of credit and
interest rate risk in excess of the amount recognized in the statement of
financial condition. The contract or notional amounts of those instruments
reflect the extent of involvement the Bank has in particular classes of
financial instruments.
The Bank's exposure to credit loss in the event of non-performance by the other
party to the financial instrument for loan commitments is represented by the
contractual or notional amount of those instruments. The Bank uses the same
credit policies in making commitments as it does for on-balance-sheet
instruments.
At December 31, 1997, the Bank had outstanding commitments to fund real estate
loans of $1,784,859. Of the commitments outstanding, $1,303,250 are for fixed
rate loans at rates of 6.75% to 10.0%. Commitments for adjustable rate loans
amount to $481,609 with initial rates of 6.75% to 8.0%. Outstanding loan
commitments to sell as of December 31, 1997 were $719,561. In addition the Bank
had outstanding commercial loan commitments of $3,732,250 with initial rates of
8.0% to 10.0%.
7. EARNINGS PER SHARE
Basic earnings per share (EPS) is computed by dividing income available
to common stockholders by the weighted-average number of common shares
outstanding for the period. Diluted earnings per share reflects the potential
dilution that could occur if securities or other contracts to issue common stock
(potential common stock) were exercised or converted to common stock. For the
periods presented potential common
<PAGE>
8
stock includes outstanding stock options and nonvested stock awarded under the
Management Stock Bonus Plan.
Earnings per share for the three months ending December 31, 1997 and
1996, was determined as follows:
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Basic Earnings Per Share
Three months ended
December 31
1996 1997
------------------------------------
<S> <C> <C>
Weighted average common shares outstanding,
Net of Treasury shares 1,852,996 1,688,641
Average unallocated ESOP shares (99,432) (84,423)
Weighted average treasury share purchased (2,870) 0
Nonvested MSBP shares (43,345) (25,094)
------------------------------------
Weighted Average Shares for Basic EPS 1,707,349 1,579,124
------------------------------------
Net Earnings 652,404 596,125
------------------------------------
Per share amount $0.38 $0.38
</TABLE>
<TABLE>
<CAPTION>
Diluted Earnings Per Share
Three months ended
December 31
1996 1997
------------------------------------
<S> <C> <C>
Weighted average shares for Basic EPS 1,707,349 1,579,124
Dilutive stock options 92,080 138,558
Dilutive MSBP shares 9,917 8,681
------------------------------------
Weighted Average Shares for Diluted EPS 1,809,346 1,726,363
------------------------------------
Net Earnings 652,404 596,125
------------------------------------
Per share amount $0.36 $0.35
</TABLE>
8. DIVIDENDS
At a October 1997 board meeting, the Directors of the Company declared
a $0.10 per share dividend. The dividend was payable to all stockholders of
record as of November 3, 1997.
<PAGE>
9
LANDMARK BANCSHARES, INC.
PART I - FINANCIAL INFORMATION
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General:
Landmark Bancshares, Inc. ("Company") is the holding company for
Landmark Federal Savings Bank ("Bank"). Apart from the operations of the Bank,
the Company did not engage in any significant operations during the quarter
ended December 31, 1997. The Bank is primarily engaged in the business of
accepting deposit accounts from the general public, using such funds to
originate mortgage loans for the purchase and refinancing of single-family homes
located in Central and Southwestern Kansas and for the purchase of
mortgage-backed and investment securities. In addition, the Bank also offers and
purchases loans through correspondent lending relationships in Wichita, Kansas
City, and other cities in Kansas, in Albuquerque and Santa Fe, New Mexico, and
Madison, Wisconsin. To a lesser extent, the Bank will purchase adjustable rate
mortgages loans, to manage its interest rate risk as deemed necessary. The Bank
also makes automobile loans, second mortgage loans, home equity loans and
savings deposit loans.
Management Strategy:
Management's strategy has been to maintain profitability and increase
capital. The Bank's lending strategy has historically focused on the origination
of traditional, conforming one to four-family mortgage loans with the primary
emphasis on single-family residences. The Bank's secondary focus has been on
consumer loans, second mortgage loans, home equity loans and savings deposit
loans. This focus, and the application of strict underwriting standards, are
designed to reduce the risk of loss on the Bank's loan portfolio. However, this
lack of diversification in its portfolio structure does increase the Bank's
portfolio concentration risk by making the value of the portfolio more
susceptible to declines in real estate values in its market area. This has been
mitigated in recent years, through the investment in mortgage-backed securities
and the sales of loans in the secondary market.
Certain risks are inherent in the sales of loans in the secondary
market. There is a risk that the Bank will not be able to sell all the loans
that it has originated, or conversely, will be unable to fulfill its commitment
to deliver loans pursuant to a firm commitment to sell loans. In addition, in
periods of rising interest rates, loans originated by the bank may decline in
value. Exposure to market and interest rate risk is significant during the
period between the time the interest rate on a customer's mortgage loan
application is established and the time the mortgage loan closes, and also
during the period between the time the interest rate is established and the time
the Bank commits to sell the loan. If interest rates change in an unanticipated
fashion, the actual percentage of loans that close may differ from projected
percentages. The resultant mismatching of commitments to closed loans and
commitments to deliver sold loans may have an adverse effect on the
profitability of loan originations.
A sudden increase in interest rates can cause a higher percentage of
loans to close than projected. To the degree that this was not anticipated, the
Bank will not have made commitments to sell these loans and may incur
significant mark to market losses, adversely affecting results of operations.
The Bank historically sold 30 year fixed rate mortgages in the
secondary market, however the Bank is keeping all currently originated 15 year
and 20 year mortgages with fixed rates at or above 7.0% and 7.25% for investment
and selling all other fixed rate loans.
Through the first three months of fiscal year 1998 rates continued with
moderate decline. As a result of rates at the end of December 1997, the Bank
reflected only a unrealized gain of less than $1,000 in loans held for sale.
Sustained levels of gain on sale of loans is dependent on continued stable or
downward interest rate movement and would likely be adversely affected by a
continued rise in interest rates.
<PAGE>
10
Changes in financial condition between December 31, 1997 and September 30, 1997:
Total assets increased by $5,789,686, or approximately 2.54% between
September 30, 1997 and December 31, 1997. This increase is largely attributed to
a $8,644,897 increase in loan receivables.
The Bank utilizes FHLB line of credit and short term advances which
increased $5.3 million from September 30, 1997 to December 31, 1997 to fund the
acquisition of adjustable rate mortgages. In managing the Bank's overall
interest rate risk, loan purchases have been made which increase the level of
risk to the extent that borrowing will reprice more frequently than the
adjustments on the mortgages.
Results of operations: comparison between the three months ended December 31,
1997 and 1996:
Net income for the three-month period ended December 31, 1997 of
$596,125 represents a decrease of $56,279 from the net income reported for the
three-month period ended December 31, 1996. The decrease was primarily due to a
$108,692 gain on sale of investments during the three month period ended
December 31, 1996
Net interest income after provision for losses on loans for the
three-month period ended December 31, 1997 increased $63,558 or approximately
3.8% to $1,715,927 as compared with $1,652,369 for the same period ended
December 31, 1996. This increase is associated with the increased interest
received on the mortgage loan portfolio. Provision for loan loss has been
increased primarily due to increased consumer lending. This net interest income
increase is a result of an increase in the volume of net invested loans.
Non interest income for the three-month period ended December 31, 1997
decreased $109,960 or 36.26% to $193,274 as compared with $303,234 for the same
period ended December 31, 1996. This decrease was due to the $108,652 net gain
from sale of investments during the quarter ended December 1996.
Other expenses for the three-month period ended December 31, 1997
increased $42,427 or 4.8% to $914,126 as compared with $871,699 for the same
period ended December 31, 1996. This increase is primarily due to increased
compensation compared to the quarter ending December 31, 1996, partially offset
by the decrease in federal insurance premiums.
Earnings Per Share:
Effective with the quarter ended December 31, 1997, the Company adopted the
provisions of Statement of Financial Accounting Standards No. 128, Earnings per
Share. The Statement is to be applied to financial statements issued for periods
ending after December 15, 1997, including interim periods; earlier application
is not permitted. The Statement requires restatement of all prior-period
earnings per share (EPS) data presented.
FAS No. 128 simplifies the standards for computing EPS and makes them comparable
to international EPS standards. It replaces the presentation of primary EPS with
a presentation of basic EPS. It also requires presentation of basic and diluted
EPS on the face of the income statement for all entities with complex capital
structures. Basic EPS excludes dilution and is computed by dividing income
available to common stockholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS reflects the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the company. Diluted EPS is computed
similarly to the previously presented fully diluted earnings per share.
Liquidity and Capital Resources:
The Bank is required to maintain minimum levels of liquid assets, as defined by
the Office of Thrift Supervision ("OTS") regulations. This requirement, which
may be varied from time to time depending upon economic conditions and deposit
flows, is based upon a percentage of deposits and short-term borrowing. The
required minimum ratio is currently 4 percent. The Bank's liquidity ratio
averaged 5.25% during
<PAGE>
11
December 1997. The Bank manages its liquidity ratio to meet its funding needs,
including: deposit outflows, disbursement of payments collected from borrowers
for taxes and insurance, and loan principal disbursements. The Bank also manages
its liquidity ratio to meet its asset/liability management objectives.
In addition to funds provided from operations, the Bank's primary sources of
funds are: savings deposits, principal repayments on loans and mortgage-backed
securities, and matured or called investment securities. In addition, the Bank
may borrow funds from time to time from the Federal Home Loan Bank of Topeka.
Scheduled loan repayments and maturing investment securities are a relatively
predictable source of funds. However, savings deposit flows and prepayments on
loans and mortgage-backed securities are significantly influenced by changes in
market interest rates, economic conditions and competition. The Bank strives to
manage the pricing of its deposits to maintain a balanced stream of cash flows
commensurate with its loan commitments.
When applicable, cash in excess of immediate funding needs is invested into
longer-term investments and mortgage-backed securities which typically earn a
higher yield than overnight deposits, some of which may also qualify as liquid
investments under current OTS regulations.
As required by the financial institutions reform, recovery and enforcement act
of 1989 ("FIRREA"), OTS prescribed three separate standards of capital adequacy.
The regulations require financial institutions to have minimum regulatory
capital equal to 1.50 percent of tangible assets; minimum core capital equal to
3.00 percent of adjusted tangible assets; and risk-based capital equal to 8.00
percent of risk-based assets.
The Bank's capital requirements and actual capital under the OTS regulations are
as follows at December 31, 1997:
Amount (Thousands) Percent of Assets
GAAP Capital $24,511 10.77%
Tangible Capital:
Actual 24,511 10.77%
Required 3,412 1.50%
Excess 21,099 9.27%
Core Capital:
Actual 24,511 10.77%
Required 6,825 3.00%
Excess 17,686 7.77%
Risk-Based Capital:
Actual 25,555 22.68%
Required 9,015 8.00%
Excess $16,540 14.68%
<PAGE>
12
LANDMARK BANCSHARES, INC.
PART II - OTHER INFORMATION
Item 2. - Changes in Securities
NONE
Item 5. - Other Information
Item 6(b). - Reports on Form 8-K
None
<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.
Date February 20, 1998 LANDMARK BANCSHARES, INC.
By /S/Larry Schugart
-----------------------------------------
LARRY SCHUGART
President and Chief Executive Officer
(Duly Authorized Representative)
By /S/James F. Strovas
-----------------------------------------
JAMES F. STROVAS
Senior Vice President and
Chief Financial Officer
(Duly Authorized Representative)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION DERIVED FROM THE
QUARTERLY REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 3,287
<INT-BEARING-DEPOSITS> 112
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 8,467
<INVESTMENTS-CARRYING> 50,316
<INVESTMENTS-MARKET> 50,687
<LOANS> 166,790
<ALLOWANCE> 1,044
<TOTAL-ASSETS> 233,640
<DEPOSITS> 145,969
<SHORT-TERM> 51,500
<LIABILITIES-OTHER> 3,250
<LONG-TERM> 0
0
0
<COMMON> 228
<OTHER-SE> 32,692
<TOTAL-LIABILITIES-AND-EQUITY> 233,640
<INTEREST-LOAN> 3,341
<INTEREST-INVEST> 1,017
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 4,358
<INTEREST-DEPOSIT> 1,865
<INTEREST-EXPENSE> 707
<INTEREST-INCOME-NET> 1,786
<LOAN-LOSSES> 70
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 914
<INCOME-PRETAX> 995
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 596
<EPS-PRIMARY> .37<F1>
<EPS-DILUTED> .37
<YIELD-ACTUAL> 2.90
<LOANS-NON> 79
<LOANS-PAST> 700
<LOANS-TROUBLED> 247
<LOANS-PROBLEM> 1,882
<ALLOWANCE-OPEN> 967
<CHARGE-OFFS> 0
<RECOVERIES> 5
<ALLOWANCE-CLOSE> 1,044
<ALLOWANCE-DOMESTIC> 1,044
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
<FN>
<F1> BASIC EARNINGS PER SHARE
</FN>
</TABLE>
