SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1999 Commission File Number 0-24120
WESTERN OHIO FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 31-1403116
----------------------------- ------------------------
(State of jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
28 EAST MAIN STREET, SPRINGFIELD, OHIO 45501-0719
- -------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(937) 325-4683
--------------
(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 [ ]
As of May 6, 1999 there were 1,988,507 shares of the Registrant's common stock
issued and outstanding.
<PAGE>
INDEX
WESTERN OHIO FINANCIAL CORPORATION
----------------------------------
PART I. FINANCIAL INFORMATION PAGES
- ------- --------------------- -----
Item 1. Financial Statements:
Condensed Consolidated Statements of Financial
Condition ...................................... 3
Condensed Consolidated Statements of Income ...... 4
Condensed Consolidated Statements of
Comprehensive Income............................ 5
Condensed Consolidated Statements of Cash Flows... 6
Notes to Condensed Consolidated Financial
Statements...................................... 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.... 8-14
Item 3. Quantitative and Qualitative Disclosures
About Market Risk................................ 15
PART II. OTHER INFORMATION
- -------- -----------------
Item 4. Submission of Matters to a Vote of Security
Holders......................................... 16
Item 6. Exhibits and REports on Form 8-K.................. 16
Signatures.................................................... 17
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<PAGE>
WESTERN OHIO FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
(Dollars in thousands) 1999 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 10,105 $ 13,854
Securities available for sale, at fair value 9,575 15,402
Mortgage-backed securities available
for sale, at fair value 47,888 50,044
Federal Home Loan Bank stock, at cost 7,068 6,948
Loans receivable, net 235,373 234,812
Premises and equipment, net 3,173 3,241
Real estate owned 56 56
Other assets 4,463 3,371
- ----------------------------------------------------------------------------------
Total Assets $ 317,701 $ 327,728
==================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 198,401 192,966
Advances from the Federal Home
Loan Bank of Cincinnati 71,014 85,252
Other liabilities 2,163 1,916
- ----------------------------------------------------------------------------------
Total Liabilities 271,578 280,134
==================================================================================
Stockholders' equity
Common stock 26 26
Additional paid-in-capital 40,382 40,452
Accumulated Other Comprehensive Income (607) (120)
Unearned ESOP (1,260) (1,309)
Unearned MRP-Deferred (1,043) (1,092)
Treasury Stock; 527,936 and 476,317 shares
at cost respectively (11,790) (10,714)
Retained earnings(substantially restricted) 20,295 20,351
- ----------------------------------------------------------------------------------
Total Shareholders' equity 46,123 47,594
- ----------------------------------------------------------------------------------
Total Liabilities And Shareholders' Equity $ 317,701 $ 327,728
==================================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
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<PAGE>
WESTERN OHIO FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
For the Quarter Ended
March 31,
(Dollars in thousands except per share amounts) 1999 1998
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Interest Income:
Interest and fees on loans $ 4,620 $ 5,437
Interest on mortgage-backed securities 765 367
Interest and dividends on investment securities 217 366
Interest on overnight and interest bearing deposits 121 455
Other interest and dividends 120 115
- -------------------------------------------------------------------------------------------
Total Interest Income 5,843 6,740
- -------------------------------------------------------------------------------------------
Interest expense:
Interest expense on deposits 2,369 3,183
Interest on borrowings 1,038 972
- -------------------------------------------------------------------------------------------
Total Interest Expense 3,407 4,155
- -------------------------------------------------------------------------------------------
Net Interest Income 2,437 2,585
Provision for losses on loans 32 -
Net interest income after provision for losses 2,405 2,585
Gain on sale of loans and securities 79 173
Other income 278 220
- -------------------------------------------------------------------------------------------
Other expenses (2,052) (2,262)
- -------------------------------------------------------------------------------------------
Income before income taxes 710 716
- -------------------------------------------------------------------------------------------
Income tax expense 259 281
- -------------------------------------------------------------------------------------------
Net Income $ 451 $ 435
===========================================================================================
Earnings per share:
Basic $ 0.22 $ 0.19
Diluted $ 0.22 $ 0.19
===========================================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
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<PAGE>
WESTERN OHIO FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
<TABLE>
<CAPTION>
For the Quarter Ended
March 31,
1999 1998
(Dollars in thousands except per share amounts)
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Net income 451 435
Other comprehensive income, net of tax:
Unrealized gains / (losses) arising during period (387) (42)
Less: reclassification adjustment for accumulated
gains/losses included in net income (99)
- -----------------------------------------------------------------------------------------------
Other comprehensive income (387) (141)
- -----------------------------------------------------------------------------------------------
Comprehensive income 64 294
===============================================================================================
</TABLE>
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<PAGE>
WESTERN OHIO FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Quarter Ended
March 31,
(Dollars in thousands) 1999 1998
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities $ 1,398 $ 868
- -----------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Loans:
Originations (14,497 (8,002)
Purchases (21,101 -
Collections 32,541 21,289
Sales 1,344
Mortgage-backed securities:
Collections 1,859 1,293
Investment securities:
Maturities 5,500 1,000
Sales 151
Property and equipment:
Additions (16) (56)
Sale proceeds 6
- -----------------------------------------------------------------------------------------------------
Net cash provided by investing activities 5,636 15,675 -
- -----------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net increase (decrease) in deposits 5,435 9,286
Net decrease in advances from borrowers for taxes and insurance (314) (486)
Treasury stock repurchase (1,200) (836)
Dividends paid (529) (603)
Stock options, net 63 (27)
Advances from Federal Home Loan Bank:
Net borrowings 7,100
Repayments (21,338) (14,512)
- -----------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities (10,783) (7,178)
- -----------------------------------------------------------------------------------------------------
Net Increase (decrease) in cash and cash equivalents
(3,749) 9,365
Cash and cash equivalents:
Beginning 13,854 31,239
- -----------------------------------------------------------------------------------------------------
Ending 10,105 40,604
=====================================================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
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<PAGE>
WESTERN OHIO FINANCIAL CORPORATION
Notes to Condensed Consolidated Financial Statements
PRINCIPLES OF CONSOLIDATION:
The financial statements include Western Ohio Financial Corporation (the
"Company") and its wholly owned subsidiary Cornerstone Bank ("Cornerstone"). The
financial statements of Cornerstone include the accounts of its wholly owned
subsidiaries, West Central Mortgage Services, Inc. ("WCMS") and West Central
Financial Services, Inc. ("WCFS").
BASIS OF PRESENTATION:
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
reporting and with the instructions to Form 10-Q and Article 10 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 of normal
recurring accruals) considered necessary for a fair presentation have been
included. These unaudited condensed financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Corporation's annual report on Form 10-K for the year ended December 31, 1998.
The financial data and results of operations for periods presented may not
necessarily reflect the results to be anticipated for the entire year. .
EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE: Basic earnings per share are
computed by dividing income available to common shareholders by the
weighted-average number of common shares outstanding for the period. Diluted
earnings per share includes the dilutive effect of stock options granted and
unearned MRP shares using the treasury stock method. The basic weighted average
number of common shares outstanding during the three month period ended March
31, 1999 and March 31, 1998 were 2,015,122 and 2,254,347 respectively. The
diluted weighted average number of common shares giving effect to stock options
and MRP shares during the three month period ended March 31, 1999 and March 31,
1998 were 2,039,263 and 2,322,142, respectively.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS-When used in this filing and in future filings by the
Company with the Securities and Exchange Commission, in the Company's press
releases or other public or shareholder communications, or in oral statements
made with the approval of an authorized executive officer, the words or phrases
"would be", "will allow", "intends to", "will likely result", "are expected to",
"will continue", "is anticipated", "estimate", "project" or similar expressions
are intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are subject to
risks and uncertainties, including but not limited to changes in economic
conditions in the Company's market area, changes in policies by regulatory
agencies, fluctuations in interest rates, demand for loans in the Company's
market area and competition, all or some of which could cause actual results to
differ materially from historical earnings and those presently anticipated or
projected. The Company wishes to caution readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date made and
advises readers that various factors, including regional and national economic
conditions, substantial changes in levels of market interest rates, credit and
other risks of lending and investment activities and competitive and regulatory
factors, could affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from those
anticipated or projected.
The Company does not undertake, and specifically disclaims any obligation, to
update any forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statements.
IMPACT OF THE YEAR 2000-The Company's lending and deposit activities are almost
entirely dependent upon computer systems which process and record transactions,
although the Company can effectively operate with manual systems for brief
periods when its electronic systems malfunction or cannot be accessed. The
Company utilizes the services of a nationally recognized data processing service
bureau that specializes in data processing for financial institutions. In
addition to its basic operating activities, the Company's facilities and
infrastructure, such as security systems and communications equipment, are
dependent, to varying degrees, upon computer systems.
The Company is aware of the potential Year 2000 related problems that may affect
the computers that control or operate the Company's operating systems,
facilities and infrastructure. In 1997, the Company began a process of
identifying any Year 2000 related problems that may be experienced by its
computer-operated or computer-dependent systems. The Company has contacted the
companies that supply or service the Company's computer-operated or
computer-dependent systems to obtain confirmation that each system that is
material to the operations of the Company is either currently Year 2000
compliant or is expected to be Year 2000 compliant. With respect to systems that
cannot presently be confirmed as Year 2000 compliant, the Company will continue
to work with the appropriate supplier or servicer to ensure all such systems
will be rendered compliant in a timely manner, with minimal expense or
disruption of the Company's operations. All of the identified computer systems
affected by the Year 2000 issue are currently in the renovation, validation or
implementation phase of the process of becoming Year 2000 compliant. Other than
public utilities, the various companies whose services are deemed critical to
the mission of the Company have been tested or assurances received that such
companies will be Year 2000 compliant.
-8-
<PAGE>
As a contingency plan, the Company has determined that if such service providers
were to have their systems fail, the Company would implement manual systems
until such systems could be re-established. The Company does not anticipate that
such short-term manual systems would have a material adverse effect on the
Company's operations. The expense of any change in suppliers or servicers is not
expected to be material to the Company. The Company has examined its computer
hardware and software and determined it will cost approximately $128,000 to make
such systems Year 2000 compliant. Of that amount, the Company has already spent
approximately $54,000. At this time, however, any additional expense that may be
incurred by the Company in connection with Year 2000 issues cannot be
determined.
In addition to the possible expense related to its own systems, the Company
could incur losses if loan payments are delayed due to Year 2000 problems
affecting any of the Company's significant borrowers or impairing the payroll
systems of large employers in the Company's primary market area. Because the
Company's loan portfolio is highly diversified with regard to individual
borrowers and types of businesses and the Company's primary market area is not
significantly dependent on one employer or industry, the Company does not expect
any significant or prolonged Year 2000 related difficulties will affect net
earnings or cash flow.
-9-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Western Ohio Financial Corporation ("the Company") is the holding company of
Cornerstone Bank. Consolidated assets of the Company totaled $317.7 million at
March 31, 1999, a decrease of $10.0 million from the December 31, 1998, total of
$327.7 million. The primary decrease in assets is a result of a decrease of $5.8
million in securities as well as decreases in cash and cash equivalents of $3.7
million and mortgage-backed securities of $2.2 million. Funds were used
primarily to repay Federal Home Loan Bank borrowings.
Loans receivable increased $600,000 during the three months ended March 31,
1999, increasing from $234.8 million in December 31, 1998 to $235.4 million on
March 31, 1999. This slight increase is the net result of the Company purchasing
participation loans to offset the amortization and prepayment of its mortgage
loan portfolio.
Cash and cash equivalents decreased by $3.7 million to $10.1 million on March
31, 1999, from $13.9 million on December 31, 1998. Cash and cash equivalents
consist of cash, checking deposits and federal funds deposited at other
financial institutions.
Securities available for sale decreased $5.8 million or 37.8% from $15.4 million
at December 31, 1998, to $9.6 million on March 31, 1999. The decrease is
primarily the result of securities maturing or being called during March 1999.
The Company's mortgage-backed securities available for sale decreased by $2.2
million or 4.4% from $50.1 million on December 31, 1998, to $47.9 million on
March 31, 1999. This was due to principal repayments on existing mortgage-backed
securities available for sale. A portion of these securities is often referred
to as derivatives. The derivative securities are all adjustable rate in nature
and were not "high risk" securities under the criteria set forth by the Federal
Financial Institutions Examination Council ("FFIEC").
The investment in the stock of the Federal Home Loan Bank of Cincinnati
increased by $116,500 from $6.9 million at December 31, 1998, to $7.1 million at
March 31, 1999. The increase is due to the stock dividends paid by the Federal
Home Loan Bank. This investment is dictated by an institution's membership in
the Federal Home Loan Bank and is a factor of the institution's borrowings and
total assets. Currently, dividends on such stock are paid primarily in the form
of additional shares of stock.
Other assets increased $1.1 million over the three months ended March 31, 1999
primarily due to an increase in prepaid expenses.
Deposits at March 31, 1999 totaled $198.4 million, an increase of $5.4 million
from $193.0 million at December 31, 1998. This increase is generally due to
Cornerstone's aggressive attempt to increase deposits, especially in the
checking account base.
-10-
<PAGE>
Advances at March 31, 1999 totaled $71.0 million, a decrease of $14.2 million or
16.7% from $85.2 million at December 31, 1998. Advances were repaid from excess
cash and cash equivalents and the decrease in securities and mortgage-backed
securities. The advances have fixed and variable rates.
Other liabilities increased $247,000 from $1.9 million on December 31, 1998, to
$2.2 million on March 31, 1999. This increase is due to an increase in deferred
taxes offset by a decrease in advance payments held in escrow due to taxes being
paid in the first quarter of 1999.
Total stockholders' equity decreased $1.5 million from $47.6 million at December
31, 1998, to $46.1 million at March 31, 1999. This decrease is primarily due to
the Company purchasing approximately $1.2 million of its own stock during the
first quarter of 1999.
As of March 31, 1999, the Company had commitments to make $1.9 million of
residential loans and no commitments to make nonresidential mortgage loans. It
is expected that these loans will be funded within 30 days. The Company also had
$2.4 million in commitments to fund loans on residential properties under
construction. These commitments are anticipated to be filled within three to six
months. Unused commercial lines of credit were $1.1 million and unused home
equity lines of credit were $9.1 million. Commitments to originate nonmortgage
loans total $0.5 million.
-11-
<PAGE>
CAPITAL RESOURCES AND LIQUIDITY OF CORNERSTONE BANK
Cornerstone Bank is subject to various regulatory capital requirements
administered by the federal regulatory agencies. Failure to meet minimum capital
requirements can initiate certain mandatory actions that, if undertaken, could
have a direct material effect on Cornerstone's financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, Cornerstone must meet specific guidelines that involve quantitative
measures of Cornerstone's assets, liabilities, and certain off-balance sheet
items as calculated under regulatory accounting practices. At March 31, 1999,
management believes Cornerstone is in compliance with all regulatory capital
requirements. Cornerstone is considered well capitalized under the Federal
Deposit Insurance Act at March 31, 1999. The following is a summary of the
Bank's approximate regulatory capital position and minimum required levels to be
adequately capitalized under prompt corrective action regulations in dollars
(millions) and as a percentage of regulatory assets, at March 31, 1999.
Actual Required Excess
Tangible Capital $41.6 13.1% $4.8 1.5% $36.8 11.6%
Core Capital $41.6 13.1% $12.7 4.0% $28.9 9.1%
Risk-Based Capital $43.1 23.3% $14.8 8.0% $28.3 15.3%
Federal regulations require the Bank to maintain an average daily balance of
liquid assets including mortgage-backed securities, equal to at least 4% of the
sum of its average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less for the preceding calendar quarter.
Liquidity is measured by cash and certain investments that are not committed,
pledged, or required to liquidate specific liabilities. The following is a
summary of the Bank's regulatory liquidity and short-term liquidity ratios.
March 31, December 31, September 30, June 30,
1999 1998 1998 1998
-------- ------------ ------------- --------
Liquid Assets 34.4% 36.3% 38.8% 27.4%
The above tables pertain only to Cornerstone. The resources of the Company are
not considered in meeting the above requirements.
-12-
<PAGE>
RESULTS OF OPERATIONS
GENERAL
For the three months ended March 31, 1999, net income was $451,000 an increase
of $16,000 compared to $435,000 for the three months ended March 31, 1998. This
was due primarily to a decrease in non-interest expense exceeding the decrease
in net interest income.
INTEREST INCOME
For the three months ended March 31, 1999, interest income of $5.8 million,
decreased by $897,000 compared to the three months ended March 31, 1998 of $6.7
million. Interest and fees on loans decreased by $817,000 for the three months
ended March 31, 1999, compared to the three months ended March 31, 1998. This is
due to a lower volume of loans over comparable periods resulting from selling
loans in the secondary market rather than maintaining the loans in the
portfolio. Interest and dividends on investment securities decreased $149,000
during the three months ended March 31, 1999, over the three months ended March
31, 1998 due to principal payments on securities available for sale. Interest on
mortgage-backed securities increased $398,000 mostly as a result of purchasing
additional mortgage-backed securities available for sale. Interest on overnight
fed funds decreased $334,000 or 73.4% due to a lower volume of fed funds after
funding the Cincinnati area deposit sale.
INTEREST EXPENSE
Interest expense decreased by $748,000, from $4.2 million for the three months
ended March 31, 1998, as compared to $3.4 million for the three months ended
March 31, 1999. The decrease was primarily due to the sale of deposits in the
Cincinnati area completed in the fourth quarter of 1998. The interest on
borrowings increased slightly by $66,000 from $972,000 for the three months
ended March 31, 1998, to approximately $1.0 million for the three months ended
March 31, 1999. These borrowings are both fixed and adjustable rate in nature.
NET INTEREST INCOME
Net interest income decreased a modest $148,000 to $2.4 million for the three
months ended March 31, 1999, as compared to $2.6 million for the three months
ended March 31, 1998. This decrease is due to the reduction in interest expense
from deposits being sold offset by the decrease in interest income from the
reduction of investment securities and overnight fed funds.
PROVISION FOR LOSSES ON LOANS
The provision for loan losses is a result of management's periodic analysis of
the adequacy of the allowance for loan losses and any specific losses applied to
that allowance. There was a $32,000 additional provision for loan losses during
the three months ended March 31, 1999 compared to no provision for the three
months ended March 31, 1998.
GAIN ON SALE OF LOANS AND SECURITIES
Gain on sale of loans and securities was $79,000 for the three months ended
March 31, 1999 compared to $173,000 for the same period in 1998. The decrease is
primarily due to selling a FHLMC security last year resulting in a gain of
$148,000.
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<PAGE>
OTHER INCOME
Other income increased $58,000 for the three months ended March 31, 1999, to
$278,000 from $220,000 for the three months ended March 31, 1998. This increase
is due to service fees generated by Cornerstone's checking account programs.
OTHER EXPENSE
Total other expense decreased by $210,000, from $2.3 million for the three month
period ended March 31, 1998, compared to $2.1 million for the three month period
ended March 31, 1999. This is primarily due to a reduction in overall operating
expenses resulting from exiting the Cincinnati area market.
INCOME TAX EXPENSE
Income tax expense decreased $22,000 from $281,000 for the three months ended
March 31, 1998 to $259,000 for the period ended March 31, 1999, as a result of
eliminating the nondeductible goodwill associated with the Cincinnati area
branch deposits.
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<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's primary market risk exposure is interest rate risk and, to a
lessor extent, liquidity risk. Interest rate risk is the risk that the Company's
financial condition will be adversely affected due to movements in interest
rates. The income of financial institutions is primarily derived from the excess
of interest earned on interest-earning assets over the interest paid on
interest-bearing liabilities. Accordingly, the Company places great importance
on monitoring and controlling interest-rate risk. The measurement and analysis
of the exposure of the Company's primary operating subsidiary, Cornerstone Bank,
to changes in the interest rate environment are referred to as asset/liability
management. One method used to analyze the Company's sensitivity to changes in
interest rates is the "net portfolio value" ("NPV") methodology used by the OTS
as part of its capital regulations.
NPV is generally considered to be the present value of the difference between
expected incoming cash flows on interest-earning and other assets and expected
outgoing cash flows on interest-bearing and other liabilities. The application
attempts to quantify interest rate risk as the change in the NPV which would
result from a theoretical 200 basis point (1 basis point equals .01%) change in
market interest rates. Both a 200 basis point increase in market interest rates
and a 200 basis point decrease in market interest rates are considered. Based on
internal analysis, management believes Cornerstone's interest rate risk
sensitivity did not materially change between December 31, 1998 and March 31,
1999.
The institution's NPV is more sensitive to rising rates than declining rates.
From an overall perspective, such difference in sensitivity occurs principally
because, as rates rise, borrowers do not prepay fixed-rate loans as quickly as
they do when interest rates are declining. Thus, in a rising interest rate
environment, because the Company has primarily fixed-rate loans in its loan
portfolio, the amount of interest the Company would receive on its loans would
increase relatively slowly as loans are slowly prepaid and new loans at higher
rates are made. Moreover, the interest the Company would pay on its deposits
would increase rapidly because the Company's deposits generally have shorter
periods to repricing.
As with any method of measuring interest rate risk, certain shortcomings are
inherent in the NPV approach. For example, although certain assets and
liabilities may have similar maturities or periods of repricing, they may react
in different degrees to change in market interest rates. Also, the interest
rates on certain types of assets and liabilities may fluctuate in advance of
changes in market interest rates, while interest rates on other types may lag
behind changes in market rates. Further, in the event of a change in interest
rates, expected rates of prepayment on loans and mortgage-backed securities and
early withdrawal levels from certificates of deposit would likely deviate
significantly from those assumed in making risk calculations.
In the event that interest rates rise from the recent historically low levels,
Cornerstone's net interest income could be expected to be negatively affected.
Moreover, rising interest rates could negatively affect Cornerstone's earnings
and thereby the Company's earnings due to diminished loan demand. As part of its
interest rate risk strategy, Cornerstone has attempted to utilize adjustable
rate and short term duration loans and investments.
-15-
<PAGE>
PART II
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a) Western Ohio Financial Corporation ("Corporation") held its Annual
Stockholder's Meeting on April 28, 1999.
b) The stockholders approved the appointment of directors Aristides G.
Gianakopoulos and Jeffrey L. Levine for terms of three years. Other
directors with terms of office continuing after the meeting are:
David L. Dillahunt, John W. Raisbeck, Howard V. Dodds, John E. Field,
and William N. Scarf.
c) In addition to the election of directors in Item 4b) above, Crowe,
Chizek and Company was elected as the auditors for 1999. The following
table summarizes the results of the elections:
Description For Withheld Against Abstain
- ----------- -------- -------- ------- -------
Jeffrey L. Levine as 1,715,531 90,556 0 0
Director
Aristides G. 1,716,970 89,117 0 0
Gianakopoulos as
Director
Crowe, Chizek and 1,766,981 0 29,681 9,424
Company as auditors
d) None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits - Exhibit 27 - Financial Data Schedule.
b) Reports on Form 8-K - None.
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<PAGE>
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.
WESTERN OHIO FINANCIAL CORPORATION
REGISTRANT
Date: May 14, 1999 /s/ John W. Raisbeck
-------------------- ----------------------------------------
John W. Raisbeck, President
and Chief Executive Officer
(DULY AUTHORIZED OFFICER)
Date: May 14, 1999 /s/ Craig F. Fortin
-------------------- ---------------------------------------
Craig F. Fortin, Senior Vice President,
Treasurer and Chief Financial Officer
(PRINCIPAL FINANCIAL AND ACCOUNTING
OFFICER)
-17-
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM WYMAN PARK
BANCORPORATION AND SUBSIDIARIES QUARTERLY REPORT ON FORM 10-QSB FOR THE PERIOD
ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-01-1999
<PERIOD-END> Mar-31-1999
<CASH> 3,192
<INT-BEARING-DEPOSITS> 2,412
<FED-FUNDS-SOLD> 4,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 9,575
<INVESTMENTS-CARRYING> 9,575
<INVESTMENTS-MARKET> 9,575
<LOANS> 253,373
<ALLOWANCE> (3,160)
<TOTAL-ASSETS> 317,701
<DEPOSITS> 198,401
<SHORT-TERM> 16,600
<LIABILITIES-OTHER> 2,163
<LONG-TERM> 54,414
0
0
<COMMON> 26
<OTHER-SE> 46,097
<TOTAL-LIABILITIES-AND-EQUITY> 317,701
<INTEREST-LOAN> 4,620
<INTEREST-INVEST> 765
<INTEREST-OTHER> 458
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<EPS-PRIMARY> 0.22
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</TABLE>
