SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 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: 0-25910
LOGANSPORT FINANCIAL CORP.
(Exact name of registrant specified in its charter)
Indiana 35-1945736
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
723 East Broadway
P.O. Box 569
Logansport, Indiana 46947
(Address of principal executive offices
including Zip Code)
(219) 722-3855
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of shares of the Registrant's common stock, without par value, as of
May 1, 1996 was 1,322,500.
<PAGE>
Logansport Financial Corp.
Form 10-Q
Index
Page No.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Consolidated Condensed Statement of
Financial Condition as of March
31, 1996 and December 31, 1995 (Unaudited)
Consolidated Condensed Statement of Income
for the three months ended
March 31, 1996 and 1995 (Unaudited )
Consolidated Condensed Statement of Changes
in Shareholders' Equity
for the three months ended March 31, 1996
and 1995 (Unaudited)
Consolidated Condensed Statement of Cash Flows
for the three months
ended March 31, 1996 and 1995 (Unaudited)
Notes to Consolidated Financial
Statements 8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 9
PART II. OTHER INFORMATION
Item 5. Other information 12
Item 6. Exhibits and Reports of Form 8-K 13
SIGNATURES
-2-
<PAGE>
LOGANSPORT FINANCIAL CORP.
Consolidated Condensed Statement of Financial Condition
(Unaudited)
March 31, March 31,
1996 1995
------------ ------------
Assets
Cash $ 1,007,310 $ 1,267,791
Short-term interest bearing deposits 3,229,229 1,974,788
------------ ------------
Total cash and cash equivalents 4,236,539 3,242,579
Interest bearing deposits 100,000 100,000
Securities available for sale 18,435,056 18,753,096
Loans 51,424,596 49,930,050
Allowance for loan losses (225,888) (222,700)
------------ ------------
Net loans 51,198,708 49,707,350
Premises and equipment 465,794 432,176
Federal Home Loan Bank stock, at cost 348,200 348,200
Cash value of life insurance 1,014,686 1,005,686
Other assets 693,911 1,058,221
------------ ------------
Total assets $ 76,492,894 $ 74,647,308
============ ============
Liabilities
Deposits $ 54,272,350 $ 52,460,980
Federal Home Loan Bank advances 1,000,000 1,000,000
Dividends payable 132,250 132,250
Other liabilities 615,541 599,808
------------ ------------
Total liabilities 56,020,141 54,193,038
------------ ------------
Shareholders' Equity
Common stock 12,670,006 12,670,006
Retained earnings-substantially restricted 7,915,852 7,774,213
Net unrealized gain (loss) on securities
available for sale, net of tax (113,105) 10,051
------------ ------------
Total shareholders' equity 20,472,753 20,454,270
------------ ------------
Total liabilities and shareholders' equity $ 76,492,894 $ 74,647,308
============ ============
-3-
<PAGE>
LOGANSPORT FINANCIAL CORP.
Consolidated Condensed Statement of Income
(Unaudited)
Three Months Ended
March 31,
-------------------------
1996 1995
---------- ----------
Interest Income
Loans $1,031,545 $ 857,347
Investment Securities
Taxable 235,747 144,105
Tax-exempt 30,854 27,593
Other interest and dividend income 40,557 22,278
---------- ----------
Total interest income 1,338,703 1,051,323
---------- ----------
Interest Expense
Deposits 626,932 570,796
Federal Home Loan Bank advances 13,814 15,656
---------- ----------
Total interest expense 640,746 586,452
---------- ----------
Net Interest Income 697,957 464,871
Provision for losses on loans 3,000 3,000
---------- ----------
Net Interest Income After Provision for
Losses on Loans 694,957 461,871
---------- ----------
Other Income
Service charges on deposit accounts 13,338 8,144
Net realized gains on sales of securities 11,240 1,741
Recoveries on previously written-
off securities -- 22,482
Other income 11,247 9,796
---------- ----------
Total other income 35,825 42,163
---------- ----------
Other Expenses
Salaries and employee benefits 140,744 114,546
Net occupancy expenses 11,348 8,140
Equipment expenses 11,074 10,529
Deposit insurance expense 29,721 28,975
Computer processing fees 23,575 21,239
Other expenses 80,774 52,562
---------- ----------
Total other expense 297,236 235,991
---------- ----------
Income Before Income Tax 433,546 268,043
Income tax expense 159,657 89,487
---------- ----------
Net Income $ 273,889 $ 178,556
========== ==========
Net Income per share $ 0.21
==========
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<PAGE>
LOGANSPORT FINANCIAL CORP.
Consolidated Condensed Statement of Shareholders' Equity
(Unaudited)
Three Months Ended
March 31,
---------------------------------
1996 1995
------------ -------------
Beginning balance $ 20,454,270 $ 6,833,494
Dividends (132,250) --
Net change in unrealized gain (loss)
on securities available for sale (123,156) 12,703
Net income 273,889 178,556
------------ ------------
Ending balance $ 20,472,753 $ 7,024,753
============ ============
-5-
<PAGE>
LOGANSPORT FINANCIAL CORP.
Consolidated Condensed Statement of Cash Flows
(Unaudited)
Three Months Ended
March 31,
--------------------------
1996 1995
------------ -----------
Operating Activities
Net income $ 273,889 $ 178,556
Adjustments to reconcile net income to
net cash provided by operating activities
Provision for loan losses 3,000 3,000
Investment securities gains (11,240) (1,741)
Premium and discount amortization, net (1,926) 1,480
Depreciation 9,060 11,002
Change in
Other assets 436,089 (108,567)
Other liabilities 15,733 74,348
----------- -----------
Net cash provided by operating activities 724,605 158,078
----------- -----------
Investing Activities
Purchase of securities available for sale (4,001,005) (297,825)
Proceeds from available for sale maturities 650,000 75,000
Proceeds from available for sale sales 2,091,259 99,566
Proceeds from held to maturity maturities 250,000
Payments on mortgage and asset-backed
securities 1,387,017 249,773
Other net changes in loans (1,494,358) (420,326)
Purchase of premises and equipment (42,678) --
----------- -----------
Net cash used by investing activities (1,409,765) (43,812)
----------- -----------
-6-
<PAGE>
LOGANSPORT FINANCIAL CORP.
Consolidated Condensed Statement of Cash Flows
(Unaudited)
Three Months Ended
March 31,
1996 1995
Financing Activities
Net change in
Noninterest-bearing deposits, NOW,
passbook, and money market savings 969,013 459,304
Certificates of deposit 842,357 (204,603)
Payment of dividends (132,250) --
----------- -----------
Net cash provided by financing
activities 1,679,120 254,701
----------- -----------
Net Change in Cash and Cash Equivalents 993,960 368,967
Cash and Cash Equivalents, Beginning of Period 3,242,579 1,644,880
----------- -----------
Cash and Cash Equivalents, End of Period $ 4,236,539 $ 2,013,847
=========== ===========
Additional Cash Flow and Supplementary
Information
Interest paid $ 630,508 $ 563,070
Income tax paid 90,800 16,000
Dividends payable 132,250 --
-7-
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE A: Basis of Presentation
The unaudited interim consolidated condensed financial statements include the
accounts of Logansport Financial Corp. (the "Company") and its subsidiary,
Logansport Savings Bank, FSB, (the "Bank").
The unaudited interim consolidated condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all information and disclosures required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, the financial statements reflect all adjustments necessary to
present fairly the Company's financial position as of March 31, 1996, results of
operations for the three month periods ending March 31, 1996 and 1995 and cash
flows for the three month periods ending March 31, 1996 and 1995.
NOTE B: Plan of Conversion
Effective June 13, 1995, the Bank completed its conversion from a federally
chartered mutual savings bank to a federally chartered stock savings bank (the
"Conversion"), and became a wholly- owned subsidiary of the Company. In the
Conversion, the Company sold 1,322,500 shares of Common Stock, with no par value
("Common Stock"), for $10.00 per share and used all proceeds except $3,982,500
to acquire complete ownership of the Bank. Net proceeds of the Company's stock
issuance, after costs, were $12,670,006.
At a meeting of the Company's shareholders on April 9, 1996, the Board of
Directors submitted for shareholder approval a stock option plan (the "Stock
Option Plan"), and at that time made certain awards pursuant to the Stock Option
Plan. The plan was approved by the Company's shareholders. Common Stock in an
aggregate amount of 10.0% of the shares issued in the Conversion (132,250
shares) were reserved for issuance upon the exercise of options granted under
the Stock Option Plan. Options were granted under the Stock Option Plan for
108,691 shares of common stock and will have an exercise price per share equal
to $12.50, the fair market value of the shares on the date of grant.
Additionally, at a meeting of the Company's shareholders held on April 9, 1996,
the Board of Directors submitted for shareholder approval a Management
Recognition and Retention Plan and Trust (the "RRP"). The RRP was approved by
the shareholders. The Bank will contribute funds to the RRP to enable it to
acquire an aggregate amount of Common Stock equal to up to 4.0% of the shares
issued in the Conversion, (52,900 shares) either directly from the Company or in
the open market. Shares awarded under the RRP will vest at a rate of 20% at the
end of each full twelve months of service with the Bank after the date of grant.
As of April 9, 1996, the number of shares awarded under the RRP was 46,675.
-8-
<PAGE>
NOTE C: Cash Dividends
A cash dividend of $.10 per common share was declared on March 13, 1996, payable
on April 10, 1996, to stockholders of record as of March 20, 1996.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
On June 13, 1995, as part of a completed subscription and community offering,
the Company sold 1,322,500 shares of Common Stock in connection with the
Conversion.
Financial Condition
Total assets were $76.5 million at March 31, 1996 compared to $74.6 million at
December 31, 1995, an increase of $1.9 million or 2.5%. This increase resulted
primarily from a growth in deposits. Cash and cash equivalents increased
approximately $1.0 million, or 30.7%, from $3.2 million at December 31, 1995 to
$4.2 million at March 31, 1996. Efforts to reinvest the growth of deposits in
new loans and investments are on-going; however, the interest rate environment
contributed to the time required to obtain quality investments and resulted in
the increase in cash equivalents. Securities decreased slightly from $18.8
million at December 31, 1995 to $18.4 million at March 31, 1996. This decrease
was due to investment maturities, securities calls, and mortgage-backed
securities pay-downs. In addition, $1.0 million of structured notes were sold
and generally reinvested in mortgage-backed securities.
Loans increased $1.5 million, or 3.0%, from $49.9 million at December 31, 1995
to $51.4 million at March 31, 1996. Loan demand continues to be excellent. Of
the $51.4 million in the loan portfolio at March 31, 1996, $0.5 million is
commercial paper.
Deposits were $54.3 million at March 31, 1996 compared to $52.5 million at
December 31, 1995, or an increase of $1.8 million in the first quarter of 1996.
During the three months ended March 31, 1996, Federal Home Loan Bank advances in
the amount of $1.0 million were converted to a fixed rate with a one year term,
from a variable rate with a three month maturity.
Shareholders' equity was $20.5 million at March 31, 1996 and at December 31,
1995. The payment of dividends and a change in the unrealized gain (loss) on
securities available for sale, from a gain of $10,051 at December 31, 1995 to a
loss of $113,105 at March 31, 1996, combined to result in no change in
shareholders' equity for the quarter.
-9-
<PAGE>
Results of Operations
Comparison of the Three Months Ended March 31, 1996 and March 31, 1995
Net income for the Company for the three months ended March 31, 1996 was
$273,889 compared with $178,556 for the Bank for three months ended March 31,
1995. This is an increase of $95,333 or 53.4%. Net interest income increased
$233, 086 while other expenses increased $61,245 and taxes increased $70,170.
The major contributor to the increase in interest income was the investment of
Conversion proceeds. The Conversion was completed on June 13, 1995 and the
proceeds were invested in new loans and investment securities resulting in a
higher volume of interest-earning assets. In addition, increasing interest rates
have resulted in ARM loans repricing at higher rates and thus increasing
mortgage loan income.
The provision for loan losses was $3,000 for the three months ended March 31,
1996 and 1995. No properties were taken into real estate owned in the period
ended March 31, 1996 or March 31, 1995. Non-performing loans decreased to
$283,000, or 0.55% of loans at March 31, 1996 from $311,000, or 0.63% of loans
at December 31, 1995. Non-performing loans at March 31, 1995 were $307,000. Loan
loss reserves amounted to $225,888, or 0.44% of total loans at March 31, 1996
compared to $222,700, or 0.45% at December 31, 1995.
Other income decreased by $6,338, primarily because of the $22,482 nonrecurring
recovery on securities previously written off recorded in the period ending
March 31, 1995. Service charges on deposit accounts increased by $5,194 or 63.8%
from March 31, 1996 over March 31, 1995.
Other expenses increased $61,245 or 26.0% in the period ending March 31, 1996
compared to March 31, 1995. Salaries and employee benefits increase $26,198 or
22.9%. This increase is a result of general and merit pay increases and the
inclusion of additional employees in various benefit plans due to length of
service. Other operating expenses experienced an increase of $28,212 or 53.7%.
Other expenses were $80,774 for the three months ended March 31, 1996 compared
to $52,562 for the three months ended March 31, 1995. Approximately $6,000 of
the increase was related to the cost of the additional volume of checking
accounts. This was partially offset by the corresponding increase in service
charges on deposit accounts discussed above. The additional costs were related
to offering an ATM card. This service was started in the first quarter of 1995
and no charges were recorded in the quarter ended March 31, 1995. The Bank had
no ATM machines, and customers are allowed six free transactions per month which
the Bank is charged for. The Bank provides this service rather than offering
banking hours on weekends.
The remaining increase in other operating expenses of approximately $22,000
related to increases in advertising, legal expenses, accounting fees, exam fees,
stock market listing fees, and printing expenses.
-10-
<PAGE>
The Company's effective tax rate for the three months ended March 31, 1996 was
36.8% compared to 33.4% for the three months ended March 31, 1995.
Capital Resources
Pursuant to OTS capital regulations, savings associations must currently meet a
1.5% tangible capital requirement, a 3% leverage ratio (or core capital)
requirement, and total risk-based capital to risk-weighted assets ratio of 8%.
At March 31, 1996, the Bank's tangible capital ratio was 23.3%, its leverage
ratio was 23.3%, and its risk-based capital to risk-weighted assets ratio was
44.0%. Therefore, the Bank's capital significantly exceeded all of the capital
requirements currently in effect. The following table provides the minimum
regulatory capital requirements and the Bank's capital ratios as of March 31,
1996
Capital Standard Required Bank's Excess
- - ---------------- -------- ----- ------ -----------
Tangible (1.5%) $1,092,000 $16,922,000 $15,830,000
Core (3.0%) 2,183,000 16,922,000 14,739,000
Risk-based (8.0%) 3,118,000 17,148,000 14,030,000
Liquidity
The standard measure of liquidity for savings associations is the ratio of cash
and eligible investments to a certain percentage of net withdrawable savings
account and borrowings due within one year. The minimum required ratio is
currently set by the Office of Thrift Supervision at 5%, of which 1% must be
comprised of short-term investments. At March 31, 1996 the Company's ratio was
25.3%, of which 10.7% was comprised of short-term investments.
-11-
<PAGE>
Item 1. Legal Proceedings
Neither the Bank nor the Company were during the three-month period ended March
31, 1996 or are as of the date hereof involved in any legal proceeding of a
material nature. From time to time, the Bank is a party to legal proceedings
wherein it enforces its security interests in connection with its mortgage and
other loans.
Part II. OTHER INFORMATION
Item 5. Other Information
On October 11, 1994 the Board of Directors of the Bank adopted a Plan of
Conversion (the "Plan"), which was amended on February 14, 1995, providing for
the Conversion of the Bank from a federal mutual savings bank to a federal stock
savings bank, all the outstanding shares of which would be held by the Company.
The Plan was approved by the Office of Thrift Supervision, subject to approval
by the Bank's members. A special meeting was held on May 31, 1995, and the
members of the Bank approved the Plan by a vote of 364,854 votes for approval of
the Plan and 9,947 votes against approval of the Plan.
In a subscription offering, the Company sold 1,322,500 shares of Common Stock,
without par value, for $10.00 per share. The Company realized net proceeds of
approximately $12.7 million in connection with the Bank's Conversion and the
sale of 1,322,500 shares of the Common Stock. Of those proceeds, $3,982,500 were
retained at the holding company level by the Company. The remaining net proceeds
were used to acquire all of the capital stock of the Bank.
The Company's shares began trading on the National Association of Securities
Dealers Automated Quotation System, Small Cap Market, under the symbol "LOGN" on
June 14, 1995.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
The following exhibits are attached to this report on Form 10-Q
(27) Financial Data Schedule
(b) Reports on Form 8-K.
The Registrant filed no reports on Form 8-K during the fiscal quarter
ended March 31, 1996.
-12-
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on behalf of the
undersigned thereto duly authorized.
Logansport Financial Corp.
Date: May 13, 1996 By: /s/ Thomas G. Williams
---------------------- ----------------------
Thomas G. Williams, President and
Chief Executive Officer
Date: May 13, 1996 By: /s/ Dottye Robeson
---------------------- ------------------
Dottye Robeson, Secretary and
Treasurer
-13-
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS
ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000939928
<NAME> Logansport Financial Corp.
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