SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1999.
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-26570
Harrodsburg First Financial Bancorp, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 61-1284899
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
104 South Chiles Street, Harrodsburg, Kentucky 40330-1620
- ---------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (606) 734-5452
--------------
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 ninety days. Yes |X| No | |
As of February 10, 2000, 1,663,775 shares of the registrant's common stock were
issued and outstanding.
Page 1 of 16 Pages Exhibit Index at Page N/A
---
<PAGE>
C O N T E N T S
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of December 31, 1999
(unaudited) and September 30, 1999................................ 3
Consolidated Statements of Income for the Three-Month
Periods Ended December 31, 1999 and 1998 (unaudited).............. 4
Consolidated Statements of Changes in Stockholders'
Equity for the Three Month Period Ended December 31,
1999 (unaudited).................................................. 5
Consolidated Statements of Cash Flows for the Three Month
Periods Ended December 31, 1999 and December 31, 1998
(unaudited)....................................................... 6
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 1. Legal Proceedings....................................................15
Item 2. Changes in Securities................................................15
Item 3. Defaults Upon Senior Securities......................................15
Item 4. Submission of Matters to a Vote of Security Holders..................15
Item 5. Other Information....................................................15
Item 6. Exhibits and Reports on Form 8-K.....................................15
SIGNATURES
2
<PAGE>
HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
----------------
<TABLE>
<CAPTION>
As of As of
December 31, September 30,
1999 1999
------------------ ------------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks $ 1,026,643 $ 541,527
Interest Bearing Deposits 4,888,857 7,808,786
Available-for-sale securities 3,627,954 4,008,576
Held-to-maturity securities 6,752,560 7,231,745
Loans receivable, net 92,368,126 89,061,610
Accrued interest receivable 589,376 618,854
Premises and equipment, net 1,375,582 1,055,196
Other assets 53,329 89,837
------------------ ------------------
Total assets $ 110,682,427 $ 110,416,131
================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 83,347,059 $ 82,018,317
Advance payments by borrowers for taxes and insurance 28,695 80,865
Deferred federal income tax 1,266,463 1,395,875
Dividends payable 468,701
Other liabilities 363,743 232,139
------------------ ------------------
Total liabilities 85,005,960 84,195,897
------------------ ------------------
Stockholders' equity
Common stock, $0.10 per value, 5,000,000 shares authorized;
2,182,125 shares issued and outstanding 218,213 218,213
Additional paid-in capital 21,202,267 21,194,168
Retained earnings, substantially restricted 11,104,975 11,187,966
Accumulated other comprehensive income 2,344,631 2,595,842
Treasury stock, 499,950 and 481,250 shares as of December 31,
1999 and September 30, 1999, respectively (7,944,809) (7,698,625)
Unallocated employee stock ownership plan (ESOP) shares (1,248,810) (1,277,330)
------------------ ------------------
Total stockholders' equity 25,676,467 26,220,234
------------------ ------------------
Total liabilities and stockholders' equity $ 110,682,427 $ 110,416,131
================== ==================
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
----------------
<TABLE>
<CAPTION>
For the Three-Month Periods
Ended December 31,
-------------------------------------------------
1999 1998
-------------- -------------
<S> <C> <C>
Interest income:
Interest on loans $ 1,726,259 $ 1,685,549
Interest and dividends on securities 120,951 170,914
Other interest income 73,733 90,519
-------------- -------------
Total interest income 1,920,943 1,946,982
-------------- -------------
Interest expense:
Interest on deposits 953,332 968,563
-------------- -------------
Net interest income 967,611 978,419
Provision for loan losses 10,000
-------------- -------------
Net interest income after provision for loan losses 967,611 968,419
-------------- -------------
Non-interest income:
Loan and other service fees, net 22,251 22,415
Other 3,797 3,366
-------------- -------------
26,048 25,781
-------------- -------------
Non-interest expense:
Compensation and benefits 276,107 227,390
Occupancy expenses, net 38,361 33,312
Federal and other insurance premiums 12,462 11,671
Data processing expenses 36,280 30,689
State franchise tax 35,254 23,819
Other operating expenses 124,821 103,388
-------------- -------------
523,285 430,269
-------------- -------------
Income before income tax expense 470,374 563,931
Income tax expense 159,927 191,736
-------------- -------------
Net income $ 310,447 $ 372,195
============== =============
Earnings per common share $ .20 $ .21
============== =============
Earnings per common share assuming dilution $ .20 $ .21
============== =============
Weighted average common shares outstanding 1,566,741 1,735,274
============== =============
Weighted average common shares outstanding
after dilutive effect 1,566,741 1,735,274
============== =============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
for the three month period ended December 31, 1999
(unaudited)
----------------
<TABLE>
<CAPTION>
Accumulated
Additional Other Unearned Total
Common Paid-in Retained Comprehensive Treasury ESOP Stockholders'
Stock Capital Earnings Income Stock Shares Equity
----- ------- -------- ------ ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1999 $218,213 $21,194,168 $11,187,966 $2,595,842 $(7,698,625) $(1,277,330) $26,220,234
Comprehensive income:
Net income 310,447 310,447
Other comprehensive loss,
net of tax unrealized
gains on securities (251,211) (251,211)
-----------
Total comprehensive income 59,236
Dividend declared (393,438) (393,438)
ESOP shares earned 8,099 28,520 36,619
Purchase of common stock,
18,700 shares (246,184) (246,184)
-------- ----------- ----------- ---------- ----------- ----------- -----------
Balance, December 31, 1999 $218,213 $21,202,267 $11,104,975 $2,344,631 $(7,944,809) $(1,248,810) $25,676,467
======== =========== =========== ========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
----------------
<TABLE>
<CAPTION>
For the Three-Month Periods
Ended December 31,
-------------------------------------------------
1999 1998
-------------- -------------
<S> <C> <C>
Operating activities
Net income $ 310,447 $ 372,195
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 10,000
ESOP benefit expense 36,619 41,125
Provision for depreciation 19,272 17,288
Amortization of loan fees (16,928) (18,772)
Accretion/amortization of investment
premium/discount (32) (1,557)
FHLB stock dividend (26,000) (24,300)
Change in:
Interest receivable 29,478 58,376
Interest payable 3,386 1,903
Accrued liabilities 128,218 198,508
Prepaid expense 36,509 43,144
-------------- -------------
Net cash provided by operating activities 520,969 697,910
-------------- -------------
Investing activities
Net (increase) decrease in loans (3,289,588) (244,543)
Maturity of securities held-to-maturity 500,000 2,500,000
Principal repayments - mortgage back securities 5,217 7,676
Purchase of fixed assets (339,658) -
-------------- -------------
Net cash provided (used) by investing activities (3,124,029) 2,263,133
-------------- -------------
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
HARRODSBURG FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued
(Unaudited)
<TABLE>
<CAPTION>
For the Three-Month Periods
Ended December 31,
-------------------------------------------------
1999 1998
-------------- -------------
<S> <C> <C>
Financing activities
Net increase (decrease) in demand deposits,
NOW accounts and savings accounts 667,973 1,433,203
Net increase (decrease) in certificates of deposit 660,767 (68,508)
Net increase (decrease) in custodial accounts (52,170) (42,496)
Purchase of treasury stock (246,184) (1,422,627)
Payment of dividends (862,139) (886,115)
--------------- ---------------
Net cash provided (used) by financing activities 168,247 (986,543)
--------------- ---------------
Increase (decrease) in cash and cash equivalents (2,434,813) 1,974,500
Cash and cash equivalents, beginning of period 8,350,313 8,074,105
--------------- ---------------
Cash and cash equivalents, end of period $ 5,915,500 $ 10,048,605
=============== ===============
Supplemental Disclosures
Cash payments for:
Interest on deposits $ 949,946 $ 966,660
============== ===============
Income taxes $ $
============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE>
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Harrodsburg First Financial Bancorp (the "Company") was formed at the
direction of First Federal Savings Bank of Harrodsburg (the "Bank") to
become the holding company of the Bank upon the conversion of the Bank
from mutual to stock form (the "Conversion"). The Company's sole
business is to serve as a holding company for the Bank. Accordingly, the
financial statements and discussions herein include both the Company and
the Bank. The Company was incorporated at the direction of the Board of
Directors of the Bank in June 1995. On September 29, 1995, the Bank
converted from mutual to stock form as a wholly owned subsidiary of the
Company. In conjunction with the Conversion, the Company issued
2,182,125 shares of its common stock to the public.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
("GAAP") for interim financial information 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 GAAP for
complete financial statements. In the opinion of management, all
adjustments (consisting of only normal recurring accruals) necessary for
fair presentation have been included. The results of operations and
other data for the three-month period ended December 31, 1999 are not
necessarily indicative of results that may be expected for the entire
fiscal year ending September 30, 2000.
2. Dividends
A special cash dividend of $0.25 per share was paid on October 15, 1999
to stockholders of record as of October 1, 1999. The regular semi-annual
cash dividend of $.30 per share was paid on October 14, 1999 to
stockholders of record as of September 30, 1999. The total dividends
paid by the Company for the three months ended December 31, 1999
amounted to $862,139.
3. Treasury stock
The Company repurchased a total of 18,700 shares at a total price of
$246,184 during the three months ended December 31, 1999.
4. Subsequent Event
The Company received approval from the Office of Thrift Supervision to
change the name of the Bank to First Financial Bank effective January 1,
2000.
8
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Financial Condition
The Company's consolidated assets increased approximately $266,000, or .24% to
$110.7 million at December 31, 1999 compared to $110.4 million at September 30,
1999. The net increase of $266,000 was due primarily to a $3.3 increase in loans
receivable and a $320,000 increase in premises and equipment offset in part by a
decrease of $2.4 million in cash and interest-bearing deposits, and a decrease
of $860,000 million in investment securities.
The Company's investment portfolio decreased approximately $860,000. Securities
classified as available-for-sale and recorded at market value per SFAS No. 115
decreased $381,000 due solely to the decrease in market value of such
securities. Securities held-to-maturity decreased $479,000 million primarily due
to the call of one $500,000 FHLB bond.
Under SFAS No. 115, unrealized gains or losses on securities available-for-sale
are recorded net of deferred income tax as a separate component of retained
earnings. At December 31, 1999, the Company included net unrealized gains of
approximately $2,345,000 in retained earnings. At September 30, 1999, the
Company included net unrealized gains of approximately $2,596,000 in retained
earnings. Per SFAS No. 115, such gains or losses will not be reflected as a
charge or credit to earnings until the underlying gains or loss, if any, is
actually realized at the time of sale.
Loans receivable increased by $3.3 million, or 3.7% from 89.1 million at
September 30, 1999 to $92.4 at December 31, 1999 as management continued its
efforts to be competitive in meeting the loan demand in the Bank's market area.
Deposits increased $1.3 million, or 1.6% from $82.0 million at September 30,
1999 to $83.3 million at December 31, 1999. This increase reflects the Company's
competitively priced product line within the local market area.
Stockholders' equity decreased by $544,000 to $25.7 million for the quarter
ended December 31, 1999. The net decrease of $544,000 is due to decreases of
$246,000 from the purchase of the Company's stock, the declaration of dividends
totaling $393,000, and a decrease of $251,000 in net unrealized appreciation on
investments held-for-sale, offset in part by an increase from net income of
$310,000, plus an increase of $36,000 related to the release of ESOP shares from
collateral during the quarter ended December 31, 1999.
Results of Operations for the Three Months Ended December 31, 1999 and 1998
Net Income
Net income decreased by $61,000, or 16.6%, for the three month period ended
December 31, 1999 as compared to the same period in 1998. The net decrease of
$61,000 was due to a $93,000 increase in non interest expense, offset by a
$32,000 decrease in income tax expense for 1999 compared to 1998.
9
<PAGE>
Net Interest
Net interest income for the three months ended December 31, 1999 was $968,000
compared to $978,000 for the same period in 1998. The decrease in net interest
income in 1999 of $10,000 was due to a decrease in interest income of $26,000
offset by a decrease in interest expense of $16,000.
Interest Income
Interest income was $1.9 million, or 7.14% of average interest-earning assets,
for the quarter ended December 31, 1999 as compared to $1.9 million, or 7.24% of
average interest-earning assets, for the quarter ended December 31, 1998.
Interest income decreased $26,000 or 1.3% from 1999 to 1998. The change was
primarily due a 10 basis point decrease in the average rate earned on
interest-earning assets during the quarter ended December 31, 1999 compared to
the quarter ended December 31, 1998.
Interest Expense
Interest expense was $953,000, or 4.62% of average interest-bearing deposits,
for the quarter ended December 31, 1999 as compared to $969,000, or 4.88% of
average interest-bearing deposits, for the corresponding period in 1998.
Interest expense decreased by $16,000 due primarily to a 26 basis point decrease
in the average rate paid on average interest bearing liabilities during the
quarter ended December 31, 1999 compared to the quarter ended December 31, 1998
offset by an increase of $3.2 million in the average balance of interest-bearing
deposits.
Provision for Loan Losses
There was no provision for loan losses during the quarter ended December 31,
1999, as compared to $10,000 for the corresponding period in 1998. Management
considered many factors in determining the necessary levels of the allowance for
loan losses, including an analysis of specific loans in the portfolio, estimated
value of the underlying collateral, assessment of general trends in the real
estate market, delinquency trends, prospective economic and regulatory
conditions, inherent loss in the loan portfolio, and the relationship of the
allowance for loan losses to outstanding loans. At December 31, 1999 and 1998,
the allowance for loan losses represented .40% of total loans. The allowance for
loan losses was at a level consistent with management's analysis of the loan
portfolio.
Non Interest Income
Non-interest income amounted to $26,000 for both quarters ended December 31,
1999 and 1998. The largest item in non interest income is service fees on loan
and deposit accounts, which amounted to $22,000 for 1999 and 1998.
Non Interest Expense
Non-interest expense increased approximately $93,000, or 21.6% to $523,000 for
the quarter ended December 31, 1999 compared to $430,000 for the comparable
period in 1998. Non-interest expense was 1.9% and 1.6% of average assets for the
quarters ended December 31, 1999 and 1998, respectively. The increase of $93,000
was due primarily to an increase of $49,000 in compensation and benefits, an
increase of $21,000 in other operating expenses, and an $11,000 increase in
state franchise taxes plus a net decrease of $12,000 in all other non interest
expense classifications. The increase of $49,000 in compensation and benefits is
primarily due to the addition of a new chief executive officer effective October
1, 1999, four
10
<PAGE>
additional employees hired in preparation for opening of new branch, and normal
salary increases. The increase of $20,000 in other operating expenses is
primarily due to increases in advertising and professional fees related to
changing the name of the Bank effective January 1, 2000.
Income Taxes
The provision for income tax expense amounted to approximately $160,000 and
$192,000 for the quarters ended December 31, 1999 and 1998, respectively, which
as a percentage of income before income tax expenses amounted to 34.0% for 1999
and 1998.
Year 2000
Like many financial institutions, the Bank relies on computers to conduct its
business and information systems processing. Industry experts were concerned
that on January 1, 2000, some computers might not be able to interpret the new
year properly, causing computer malfunctions. Some banking industry experts
remain concerned that some computers may not be able to interpret additional
data in the year 2000 properly. The Bank has operated and evaluated its computer
operating systems following January 1, 2000 and has not identified any errors or
experienced any computer system malfunctions. The Bank will continue to monitor
information systems to assess whether its systems are at risk of misinterpreting
any future dates and will develop appropriate contingency plans to prevent any
potential system malfunction or correct any system failures. The Bank has not
been informed of any such problem experienced by its vendors or its customers,
nor by any of the municipal agencies that provide services to the Bank.
Nevertheless, it is too soon to conclude that there will not be any problems
arising from the Year 2000 problem, particularly at some of the Bank's vendors.
The Bank will continue to monitor its significant vendors of goods and services
with respect to Year 2000 problems they may encounter as those issues may effect
the Bank's ability to continue operations, or might adversely affect the Bank's
financial position, results of operations, and cash flows. The Bank does not
believe at this time that these potential problems will materially impact the
ability of the Company to continue its operations; however, no assurance can be
given that this will be the case.
The expectations of the Bank contained in this section on Year 2000 are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and involve substantial risks and uncertainties
that may cause results to differ materially from those indicated by the forward
looking statements. All forward looking statements in this section are based on
information available to the Bank on the date of this document, and the Bank
assumes no obligation to update such forward looking statements.
11
<PAGE>
Non-Performing Assets
The following table sets forth information with respect to the Bank's
non-performing assets at the dates indicated. No loans were recorded as
restructured loans within the meaning of SFAS No. 15 at the dates indicated.
<TABLE>
<CAPTION>
December 31, September 30,
1999 1999
--------------- --------
(amounts in thousands)
<S> <C> <C>
Loans accounted for on a non-accrual basis:1 Real Estate:
Residential............................................... $ - $ -
-------------- --------------
Total .................................................... - -
-------------- --------------
Accruing loans which are contractually past due 90 days or more:
Real Estate:
Residential............................................... 451 214
Other .................................................... 18 23
Consumer.................................................. 55 44
--------------- ---------------
Total .................................................... 524 281
--------------- ---------------
Total of non-accrual and 90 day past due loans.................. $ 524 $ 281
=============== ===============
Percentage of net loans......................................... .57% .32%
=============== ===============
Other non-performing assets2.................................... $ - $ -
=============== ===============
</TABLE>
At December 31, 1999, the Bank did not have any loans in non-accrual status.
Accordingly, all income earned for the three months ended December 31, 1999 on
the loans in the table above, has been included in income.
At December 31, 1999, there were no loans identified by management, which were
not reflected in the preceding table, but as to which known information about
possible credit problems of borrowers caused management to have serious doubts
as to the ability of the borrowers to comply with present loan repayment terms.
- --------
1 Non-accrual status denotes any loan past due 90 days and whose loan balance,
plus accrued interest exceeds 90% of the estimated loan collateral value.
Payments received on a non-accrual loan are either applied to the
outstanding principal balance or recorded as interest income, or both,
depending on assessment of the collectibility of the loan.
2 Other non-performing assets represent property acquired by the Bank through
foreclosure or repossessions accounted for as a foreclosure in-substance.
This property is carried at the fair market of the property value, net of
selling expenses.
12
<PAGE>
The Bank's actual capital and its statutory required capital levels based on the
consolidated financial statements accompanying these notes are as follows (in
thousands):
<TABLE>
<CAPTION>
December 31, 1999
--------------------------------------------------------------------------------
For Capital To be Well
Adequacy Purposes Capitalized Under
Prompt Corrective
Action Provisions
------------------------ ------------------------ -------------------------
Actual Required Required
------------------------ ------------------------ -------------------------
Amount % Amount % Amount %
------------------------ ------------------------ -------------------------
<S> <C> <C> <C> <C> <C> <C>
Core capital $22,916 21.4% $4,286 4.0% $6,428 6.0%
Tangible capital $22,916 21.4% $1,607 1.5% N/A N/A
Total Risk based capital $23,266 23.7% $7,844 8.0% $9,806 10.0%
Leverage $22,916 21.4% N/A N/A $5,357 5.0%
<CAPTION>
September 30, 1999
--------------------------------------------------------------------------------
For Capital To be Well
Adequacy Purposes Capitalized Under
Prompt Corrective
Action Provisions
------------------------ ------------------------ -------------------------
Actual Required Required
------------------------ ------------------------ -------------------------
Amount % Amount % Amount %
------------------------ ------------------------ -------------------------
<S> <C> <C> <C> <C> <C> <C>
Core capital $22,556 21.2% $4,260 4.0% $6,390 6.0%
Tangible capital $22,556 21.2% $1,598 1.5% N/A N/A
Total Risk based capital $22,906 36.9% $4,961 8.0% $6,201 10.0%
Leverage $22,556 21.2% N/A N/A $5,325 5.0%
</TABLE>
The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
required each federal banking agency to implement prompt corrective actions for
institutions that it regulates. In response to this requirement, OTS adopted
final rules based upon FDICIA's five capital tiers. The rules provide that a
savings bank is "well capitalized" if its total risk-based capital ratio is 10%
or greater, its Tier 1 risk-based capital ratio is 6% or greater, its leverage
is 5% or greater and the institution is not subject to a capital directive.
Under this regulation, the Bank was deemed to be "well capitalized" as of
December 31, 1999 and September 30, 1999. There are no conditions or events
since those notifications that management believes would change its
classifications.
Liquidity
The liquidity of the Company depends primarily on the dividends paid to it as
the sole shareholder of the Bank. At December 31, 1999, the Bank could pay
common stock dividends of approximately $11.8 million.
The Bank's primary sources of funds are deposits and proceeds from principal and
interest payments of loans. Additional sources of liquidity are advances from
the FHLB of Cincinnati and other borrowings. At December 31, 1999, the Bank had
no outstanding borrowings. The Bank has utilized and may in the future, utilize
FHLB of Cincinnati borrowings during periods when management of the Bank
believes that such borrowings provide a lower cost source of funds than deposit
accounts and the Bank desires liquidity in order to help expand its lending
operations.
13
<PAGE>
The Company's operating activities produced positive cash flows for the quarters
ended December 31, 1999 and 1998.
The Bank's most liquid assets are cash and cash-equivalents, which include
investments in highly liquid, short-term investments. At December 31, 1999 and
September 30, 1999, cash and cash equivalents totaled $5.9 million and $8.4
million, respectively.
At December 31, 1999, the Bank had $48.9 million in certificates of deposits due
within one year and $13.5 million due between one and three years. Management
believes, based on past experience, that the Bank will retain much of the
deposits or replace them with new deposits. At December 31, 1999, the Bank had
$1.1 million in outstanding commitments to originate mortgages, excluding $1.5
million in approved but unused home equity lines of credit and $1.1 million in
approved but unused lines of credit and letters of credit. The Bank intends to
fund these commitments with short-term investments and proceeds from loan
repayments.
OTS regulations require that the Bank maintain specified levels of liquidity.
Liquidity is measured as a ratio of cash and certain investments to withdrawable
savings. The minimum level of liquidity required by regulation is presently
4.0%. During the first quarter of fiscal year 2000, the Bank satisfied all
regulatory liquidity requirements, and management believes that the liquidity
levels maintained are adequate to meet potential deposit outflows, loan demand,
and normal operations.
Impact of Inflation and Changing Prices
The consolidated financial statements and notes thereto presented herein have
been prepared in accordance with generally accepted accounting principles, which
require the measurement of financial position and operating results in terms of
historical dollars without considering the change in the relative purchasing
power of money over time and due to inflation. The impact of inflation is
reflected in the increased cost of the Company's operations. Unlike most
industrial companies, nearly all the assets and liabilities of the Company are
monetary in nature. As a result, interest rates have a greater impact on the
Company's performance than do the effects of general levels of inflation.
Interest rates do not necessarily move in the same direction or to the same
extent as the price of goods and services.
14
<PAGE>
PART II.OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Changes in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders None
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K None
There were no Form 8-Ks filed during the quarter ended
December 31, 1999.
The following exhibits are filed herewith:
Exhibit 27.....................................Financial Data Schedule
15
<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 its behalf by the
undersigned thereunto duly authorized.
Harrodsburg First Financial Bancorp, Inc.
Date: February 10, 2000 ------------------------------
Jack Hood, President
Date: February 10, 2000 ------------------------------
Teresa W. Noel, Treasurer
16
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000946738
<NAME> Harrodsburg First Financial Bancorp, Inc.
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1.000
<CASH> 1,027
<INT-BEARING-DEPOSITS> 4,889
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0
0
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</TABLE>
