SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[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
For the transition period from to
Commission File Number 0-26560
HARDIN BANCORP, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Delaware 43-1719104
- --------------------------------------------------------------------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
201 Northeast Elm Street, Hardin, Missouri 64035
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (660) 398-4312
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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding at December 31, 1999
- --------------------------------------------------------------------------------
Common stock, .01 par value 732,753
<PAGE>
HARDIN BANCORP, INC. AND SUBSIDIARIES
CONTENTS
PART I
FINANCIAL INFORMATION
Item 1.
Unaudited Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Earnings
Consolidated Statements of Stockholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of
Operations
PART II
OTHER INFORMATION
Signatures
<PAGE>
<TABLE>
<CAPTION>
Hardin Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31, 1999 March 31, 1999
------------- -------------
(Unaudited)
<S> <C> <C>
Assets
Cash $ 1,221,624 $ 838,044
Interest bearing deposits 2,333,768 4,156,648
Investment securities available-for-sale 37,402,809 44,519,193
Mortgage-backed securities available-for-sale 11,674,853 12,584,419
Loans receivable, net 75,655,320 69,504,900
Accrued interest receivable:
Investment securities 453,857 501,114
Mortgage-backed securities 82,627 91,008
Loans receivable 528,641 456,003
Real estate owned 93,051 --
Premises and equipment 1,817,822 1,832,311
Stock in Federal Home Loan Bank (FHLB) of Des Moines, at cost 2,015,000 2,000,000
Deferred income taxes receivable 1,014,169 188,000
Prepaid expenses and other assets 332,647 384,481
------------- -------------
Total assets $ 134,626,188 $ 137,056,121
============= =============
Liabilities and Stockholders' Equity
Liabilities:
Deposits $ 85,367,822 $ 83,326,871
Advances from borrowers for property taxes and insurance 195,402 294,424
Advances from FHLB 36,300,000 40,000,000
Accrued interest payable 43,845 40,949
Current income taxes payable 157,481 159,367
Accrued expenses and other liabilities 706,695 674,969
------------- -------------
Total liabilities 122,771,245 124,496,580
------------- -------------
Stockholders' equity:
Serial preferred stock, $.01 par value;
500,000 shares authorized, none issued or outstanding -- --
Common stock, $.01 par value; 3,500,000 shares authorized,
1,058,000 shares issued 10,580 10,580
Additional paid in capital 10,306,031 10,252,604
Retained earnings 8,613,165 8,097,420
Accumulated other comprehensive loss (1,800,757) (394,038)
Unearned employee benefits (481,446) (643,395)
Treasury stock (325,247 and 323,247 shares at cost, respectively) (4,792,630) (4,763,630)
------------- -------------
Total stockholders' equity 11,854,943 12,559,541
------------- -------------
Total liabilities and stockholders' equity $ 134,626,188 $ 137,056,121
============= =============
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
Hardin Bancorp, Inc. and Subsidiaries
Consolidated Statements of Earnings
(Unaudited)
Three months ended Nine months ended
December 31, December 31,
------------------------- -------------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest income:
Loans receivable $1,553,225 $1,360,212 $4,466,300 $4,025,967
Mortgage-backed securities 173,909 242,204 506,493 789,541
Investment securities 665,967 465,084 2,008,297 1,609,782
Other 57,135 150,108 179,933 307,932
---------- ---------- ---------- ----------
Total interest income 2,450,236 2,217,608 7,161,023 6,733,222
---------- ---------- ---------- ----------
Interest expense:
Deposits 939,397 980,127 2,824,791 2,942,508
FHLB advances 488,864 518,990 1,448,085 1,523,891
---------- ---------- ---------- ----------
Total interest expense 1,428,261 1,499,117 4,272,876 4,466,399
---------- ---------- ---------- ----------
Net interest income 1,021,975 718,491 2,888,147 2,266,823
Provision for loan losses -- 18,800 1,297 50,000
---------- ---------- ---------- ----------
Net interest income after provision
for loan losses 1,021,975 699,691 2,886,850 2,216,823
---------- ---------- ---------- ----------
Non-interest income:
Service charges 155,170 129,933 441,389 297,592
Loan servicing fees 6,849 5,571 22,502 21,621
Gain on sale of loans -- 75,063 9,331 90,061
Gain on sale of investments and
mortgage-backed securities -- 318,750 7,164 449,796
Other 65,485 42,488 197,607 97,226
---------- ---------- ---------- ----------
Total non-interest income 227,504 571,805 677,993 956,296
---------- ---------- ---------- ----------
Non-interest expense:
Compensation and benefits 376,393 349,178 1,085,855 1,007,095
Occupancy and equipment 63,287 57,618 196,445 176,398
Federal insurance premiums 12,622 11,507 36,604 35,183
Data processing 52,121 40,298 152,436 124,216
Real estate owned 1,580 -- 2,706 --
Other 211,619 185,169 646,487 532,973
---------- ---------- ---------- ----------
Total non-interest expense 717,622 643,770 2,120,533 1,875,865
---------- ---------- ---------- ----------
Earnings before income taxes 531,857 627,726 1,444,310 1,297,254
Income tax expense 181,203 227,884 488,113 467,663
---------- ---------- ---------- ----------
Net earnings $ 350,654 $ 399,842 $ 956,197 $ 829,591
========== ========== ========== ==========
Net earnings per share:
Basic $ 0.51 $ 0.58 $ 1.39 $ 1.12
========== ========== ========== ==========
Diluted 0.49 0.55 1.34 1.07
========== ========== ========== ==========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
Hardin Bancorp, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
For the Nine Months Ended December 31, 1999
(Unaudited)
Accumulated
Additional Other Unearned
Common Paid-in Retained Comprehensive Employee
Stock Capital Earnings Loss Benefits
-------------- --------------- -------------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1999 $ 10,580 10,252,604 8,097,420 (394,038) (643,395)
Comprehensive income:
Net earnings - - 956,197 - -
Change in net unrealized loss on securities
available for sale, net of tax - - - (1,406,719) -
-------------- --------------- -------------- ------------- -----------------
Total comprehensive income (loss) - - 956,197 (1,406,719) -
-------------- --------------- -------------- ------------- -----------------
Allocation of ESOP shares - 53,427 - - 88,680
Amortization of recognition and retention plan - - - - 73,269
Repurchase of common stock - - - - -
Dividends declared ($.20 per share) - - (440,452) - -
-------------- --------------- -------------- ------------- -----------------
Balance at December 31, 1999 $ 10,580 $ 10,306,031 8,613,165 (1,800,757) (481,446)
============== =============== ============== ============= =================
<CAPTION>
Total
Treasury Shareholders'
Stock Equity
-------------- --------------
<S> <C> <C>
Balance at March 31, 1999 (4,763,630) 12,559,541
Comprehensive income:
Net earnings - 956,197
Change in net unrealized loss on securities
available for sale, net of tax - (1,406,719)
-------------- --------------
Total comprehensive income (loss) - (450,522)
-------------- --------------
Allocation of ESOP shares - 142,107
Amortization of recognition and retention plan - 73,269
Repurchase of common stock (29,000) (29,000)
Dividends declared ($.20 per share) - (440,452)
-------------- --------------
Balance at December 31, 1999 (4,792,630) 11,854,943
============== ==============
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
Hardin Bancorp, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Nine Months Ended December 31, 1999 and 1998
(Unaudited)
1999 1998
------------ -------
<S> <C> <C>
Operating Activities:
Net Earnings $ 956,197 829,591
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Provision for losses on loans 1,297 50,000
Depreciation 105,497 97,819
Premium accretion and amortization
of discounts and deferred loan fees, net 42,969 (171,741)
Net gain on sale of loans and investment and
mortgage-backed securities (16,495) (539,857)
Origination of loans held for sale -- (3,204,865)
Proceeds from sales of loans 674,218 3,485,600
Allocation of ESOP shares 142,107 --
Amortization of deferred Recognition
and Retention Plan (RRP) 73,269 66,457
Changes in asset and liabilities:
Interest receivable (17,000) 84,459
Other assets 51,834 (106,775)
Accrued interest payable 2,896 9,951
Accrued expense and other liabilities 17,431 206,726
Income taxes payable (1,886) (60,538)
------------ ------------
Net cash provided by operating activities 2,032,334 746,827
------------ ------------
Investing Activities:
Net increase in loans receivable (6,591,703) (6,034,725)
Principal payments on mortgage-backed & related securities:
Available-for-sale 5,870,049 4,186,148
Held-to-maturity -- 1,026,694
Proceeds from sales of available-for-sale
mortgage-backed securities 363,166 --
Purchase of available-for-sale investment securities (1,810,904) (32,244,489)
Purchase of loans serviced by other institutions (328,406) --
Proceeds from maturities of available-for-sale
investment securities 340,000 8,000,000
Proceeds from sales of available for sale
investment securities 1,005,400 18,341,167
Purchase of stock in FHLB of Des Moines (15,000) (500,000)
Purchase of office properties and equipment (91,008) (203,560)
------------ ------------
Net cash used in investing activities $ (1,258,406) (7,428,765)
------------ ------------
<PAGE>
<CAPTION>
Hardin Bancorp, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Nine Months Ended December 31, 1999 and 1998
(Unaudited)
1999 1998
------------ -------
<S> <C> <C>
Financing Activities:
Net increase in savings deposits $ 2,040,951 4,675,977
Proceeds from FHLB advances 26,800,000 18,000,000
Repayments of FHLB advances (30,500,000) (12,500,000)
Net decrease in advances from borrowers
for taxes and insurance (99,022) (121,569)
Payment of dividends (426,157) (343,816)
Purchase of treasury stock (29,000) (1,446,854)
------------ ------------
Net cash (used in) provided by financing activities (2,213,228) 8,263,738
------------ ------------
(Decrease) increase in cash (1,439,300) 1,581,800
Cash and equivalents at beginning of period 4,994,692 3,781,801
------------ ------------
Cash and equivalents at end of period $ 3,555,392 5,363,601
============ ============
Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 4,269,980 4,456,448
Income taxes, net of refunds $ 489,999 528,201
Non-cash investing and financing:
Dividends declared and payable $ 146,951 118,319
Loans transferred to real estate owned $ 93,051 --
Transfer of investment and mortgage-backed securities
from held-to-maturity to available-for-sale -- 19,951,798
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
HARDIN BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements of Hardin
Bancorp, Inc. and subsidiaries have been prepared in accordance with
instructions for Form 10-QSB. To the extent that information and
footnotes required by generally accepted accounting principles for
complete financial statements are contained in the audited financial
statements included in the Company's Annual Report for the year ended
March 31, 1999, such information and footnotes have not been duplicated
herein. In the opinion of management, all adjustments, consisting only
of normal recurring accruals, which are necessary for the fair
presentation of the interim financial statements have been included.
The statement of earnings for the nine-month period ended December 31,
1999 is not necessarily indicative of the results, which may be
expected for the entire year. The March 31, 1999 consolidated balance
sheet has been derived from the audited consolidated financial
statements as of that date.
(2) Earnings Per Share
Basic earnings per share excludes dilution and is computed by dividing
income available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted earnings per
share includes the effect of potential dilutive common shares (stock
options) outstanding during the period.
The shares used in the calculation of basic and diluted earnings per
share are shown below:
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
December 31, December 31,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Basic weighted average shares 689,516 691,546 690,093 738,664
Common stock equivalents/stock options 22,024 30,833 24,399 33,059
---------------------------- -----------------------------
Diluted weighted average shares 711,540 722,379 714,492 771,723
============================ =============================
</TABLE>
(3) Comprehensive Income
On April 1, 1998 the Company adopted SFAS No. 130, "Reporting
Comprehensive Income" which requires the reporting of comprehensive
income and its components. Comprehensive income is defined as the
change in equity from transactions and other events and circumstances
from non-owner sources and excludes investments by and distributions to
owners. Comprehensive income includes net income and other items of
comprehensive income meeting the above criteria. The Company's only
component of other comprehensive income is the unrealized holding gains
and losses on available-for-sale securities.
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
December 31, December 31,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Unrealized holding gains (losses) (837,496) (129,924) (2,225,724) 154,655
Less: reclassification adjustment
for gains included in net income - 318,750 7,164 449,796
------------------------------ -----------------------------
Net unrealized gains (losses) on securities (837,496) (448,674) (2,232,888) (295,141)
Income tax benefit (expense) 309,873 (163,923) 826,169 (107,116)
------------------------------ -----------------------------
Other comprehensive income (loss) (527,623) (284,751) (1,406,719) (188,025)
============================== =============================
</TABLE>
<PAGE>
HARDIN BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Hardin Bancorp, Inc. (the "Company") was incorporated under the laws of the
state of Delaware to become a savings bank holding company with Hardin Federal
Savings Bank (the "Bank") of Hardin, Missouri, as its subsidiary. The holding
company was incorporated at the direction of the Board of Directors of the Bank,
and on September 28, 1995, acquired all of the capital stock of the Bank upon
its conversion from mutual to stock form (the "conversion"). Prior to the
conversion, the holding company did not engage in any material operations.
Hardin Federal Savings Bank was originally founded in 1888 as a Missouri
chartered savings and loan association located in Hardin, Missouri. On March 21,
1995, the Bank's members voted to convert the Bank to a Federal mutual charter.
The Bank conducts its business through its main office in Hardin, Ray County,
and two full service branch offices located in Richmond, Ray County, and
Excelsior Springs, Clay County, Missouri. Deposits are insured by the Federal
Deposit Insurance Corporation (the "FDIC") to the maximum allowable.
The Bank is principally engaged in the business of attracting retail savings
deposits from the general public and investing those funds in first mortgage
loans on owner occupied, single-family residential loans, commercial real estate
loans, mortgage-backed securities, U.S. Government and agency securities, and
insured interest bearing deposits. The Bank also originates consumer loans for
the purchase of automobiles, home improvement, and home equity lines of credit.
The most significant outside factors influencing the operations of the Bank and
other financial institutions include general economic conditions, competition in
the local market place and the related monetary and fiscal policies of agencies
that regulate financial institutions. More specifically, the cost of funds
primarily consisting of insured deposits is influenced by interest rates on
competing investments and general market rates of interest, while lending
activities are influenced by the demand for real estate financing and other
types of loans, which in turn is affected by the interest rates at which such
loans may be offered and other factors affecting loan demand and funds
availability.
The deposits of the Bank are insured by the Savings Association Insurance Fund
(the "SAIF"), which together with the Bank Insurance Fund (the "BIF"), are the
two insurance funds administered by the FDIC.
FINANCIAL CONDITION
Consolidated assets of Hardin Bancorp, Inc. were $134,626,188 as of December 31,
1999, as compared to $137,056,121, on March 31, 1999, a decrease of $2,429,933.
The decrease was primarily due to a decrease in investment securities and
interest-bearing deposits partially offset by an increase in loans.
Loans receivable, net, increased to $75,655,320 on December 31, 1999 from
$69,504,900 on March 31, 1999, an increase of $6,150,420. Mortgage-backed
securities decreased $909,566 to $11,674,853 on December 31, 1999, from
$12,584,419 on March 31, 1999. The decrease in mortgage-backed securities and
the increase in loans reflect the Bank's plan to increase the loan portfolio and
decrease mortgage-backed securities.
<PAGE>
Cash, interest bearing deposits and investment securities decreased $8,555,684
from $49,513,885 on March 31, 1999, to $40,958,201 on December 31, 1999. The
decrease was due to investment funds being utilized to repay FHLB advances and
originate mortgage and consumer loans.
Deposits totaled $85,367,822 on December 31, 1999, an increase of $2,040,951
from $83,326,871 on March 31, 1999. The increase in deposits was primarily due
to a successful special certificate of deposit promotion and the Bank's high
performance checking account program.
Stockholders' equity was $11,854,943 on December 31, 1999, compared to
$12,559,541 on March 31, 1999. The decrease in stockholders' equity was the
result of an increase in the unrealized loss on investment securities offset by
the increase in retained earnings and by a reduction in unearned employee
benefits.
RESULTS OF OPERATIONS
Net earnings for the Company's quarter ended December 31, 1999 were $350,654
compared to $399,842 for the comparable quarter in 1998. The relatively small
decrease in earnings was primarily due to a reduction in the gain on sales of
loans, investments and mortgage-backed securities, offset by an increase in net
interest income after provision for loan losses.
Basic earnings per share for the quarter ended December 31, 1999 were $0.51
while diluted earnings per share were $0.49. Basic earnings per share for the
quarter ended December 31, 1999 were calculated based on 689,516 average shares
outstanding and diluted earnings per share were calculated based on 711,540
average shares outstanding. Basic earnings per share for the comparable quarter
ended December 31, 1998 were $0.58 while diluted earnings per share were $0.55.
Basic earnings per share for the quarter ended December 31, 1998 were calculated
based on 691,546 average shares outstanding and diluted earnings per share were
calculated based on 722,379 average shares outstanding.
Net interest income after provision for loan losses was $1,021,975 for the
quarter ended December 31, 1999 compared to $699,691 for the quarter ended
December 31, 1998, an increase of $322,284. This increase was a result of total
interest income increasing $232,628 from $2,217,608 in 1998 to $2,450,236 in
1999 while total interest expense decreased $70,856 from $1,499,117 in 1998 to
$1,428,261 in 1999. The increase in total interest income was due to an increase
in the average yield on interest earning assets while the decrease in total
interest expense was a result of a decrease in the average cost of deposits.
Total non-interest income decreased from $571,805 for the quarter ended December
31, 1998 to $227,504 for the quarter ended December 31, 1999. The decrease was
primarily due to a reduction in gains on the sale of loans, investments and
mortgage-backed securities.
The Company's total non-interest expense for the three months ended December 31,
1999 was $717,622 compared to $643,770 for the comparable quarter in 1998. The
increase was primarily due to increases in compensation and benefits expense,
occupancy and equipment expense, data processing expense, and other expense
related to Year 2000 compliance issues.
<PAGE>
Net earnings for the nine months ended December 31, 1999, were $956,197 compared
to $829,591 for the nine months ended December 31, 1998, an increase of
$126,606. The increase was primarily due to an increase in net interest income,
partially offset by a reduction in the gain on sale of loans, investments and
mortgage-backed securities and by an increase in total non-interest expense.
Basic earnings per share for the nine months ended December 31, 1999 were $1.39
while diluted earnings per share were $1.34. Basic earnings per share for nine
months ended December 31, 1999 were calculated based on 690,093 average shares
outstanding and diluted earnings per share were calculated based on 714,492
average shares outstanding. Basic earnings per share for the nine months ended
December 31, 1998 were $1.12 while diluted earnings per share were $1.07. Basic
earnings per share for the similar period ended December 31, 1998 were
calculated based on 738,664 average shares outstanding and diluted earnings per
share were calculated based on 771,723 average shares outstanding.
Net interest income after provision for loan losses for the nine month period
ended December 31, 1999 was $2,886,650 compared to $2,216,823 for the nine month
period ended December 31, 1998, an increase of $670,027. The increase was due to
an increase in the Bank's net interest margin as total interest income increased
$427,801, while total interest expense decreased $193,523. The increase in total
interest income was due to an increase in loans receivable, net and an increase
in the average yield on investments, while the decrease in total interest
expense was a result of growth in lower costing transaction accounts.
Non-interest income for the nine months ended December 31, 1999, was $677,993
compared to $956,296 for the nine month period a year earlier, a decrease of
$278,303. The decrease was primarily due to a reduction in gains on sales of
loans, investments and mortgage-backed securities. Other non-interest income
increased by $100,381 primarily due as a result of increased income generated by
the Bank's service corporation and a life insurance benefit.
The Company's non-interest expense for the nine months ended December 31, 1999
was $2,120,533, compared to $1,875,865 for the nine months ended December 31,
1998, an increase of $244,668. The increase was due to an increase in
compensation and benefits, occupancy and equipment expense, data processing
expense and other non-interest expense related to Year 2000 issues. The
approximate cost incurred by the Company to date for Year 2000 compliance was
$83,000.
PROVISION FOR LOAN LOSSES
For the three months ended December 31, 1999 the Company did not record a
provision for loan losses in accordance with its classification of assets
policy. The Company's loan portfolio consists primarily of one to four family
loans, and has experienced minimal charge-offs in the past two years.
At December 31, 1999, the Bank's allowance for loan losses was $306,859, or 141%
of non-performing assets compared to $311,196, or 135% at March 31, 1999. The
allowance for loan losses was .41% of total loans at December 31, 1999, compared
to .45% at March 31, 1999.
At December 31, 1999, non-performing assets were $217,668 compared to $231,000
at March 31, 1999. Loans are considered non-performing when the collection of
principal and/or interest is not probable, or in the event payments are more
than 90 days delinquent.
<PAGE>
Management will continue to monitor its allowance for loan losses and make
additions to the allowance through the provision for loan losses as economic
conditions dictate. Although the Company maintains its allowance for loan losses
at a level considered to be adequate, there can be no assurance that future
losses will not exceed estimated amounts or that additional provisions for loan
losses will not be required in the future.
CAPITAL RESOURCES
The Bank is subject to three capital to asset requirements in accordance with
Office of Thrift Supervision (the "OTS") regulations. The following table is a
summary of the Bank's regulatory capital requirements versus actual capital at
December 31, 1999.
<TABLE>
<CAPTION>
Actual Required Excess
Amount/Percent Amount/Percent Amount/Percent
-------------- -------------- --------------
(Dollars in Thousands)
<S> <C> <C> <C>
Tangible Capital $12,805/ 9.43% $2,038/ 1.50% $10,767/ 7.93%
Core Leverage Capital $12,805/ 9.43% $4,076/ 3.00% $8,729/ 6.43%
Risk-based Capital $13,106/18.77% $5,586/ 8.00% $7,520/10.77%
</TABLE>
LIQUIDITY
The Bank's principal sources of funds are deposits, principal and interest
payments on loans, deposits in other insured institutions, and investment
securities. While scheduled loan repayments and maturing investments are
relatively predictable, deposit flows and early loan payments are more
influenced by interest rates, general economic conditions and competition.
Additional sources of funds may be obtained from the FHLB by utilizing numerous
available products to meet funding needs.
The Bank is required to maintain minimum levels of liquid assets as defined by
regulations. The required percentage is currently four percent of net
withdrawable savings deposits and borrowings payable on demand or in one year or
less. The Bank has maintained its liquidity ratio at levels exceeding the
minimum requirement. The eligible liquidity ratio at December 31, 1999 was
27.13%.
In light of the competition for deposits, the Bank may utilize the funding
sources of the FHLB to meet loan demand in accordance with the Bank's growth
plans. The wholesale funding sources may allow the Bank to obtain a lower cost
of funding and create a more efficient liability match to the respective assets
being funded.
For purposes of the cash flows, all short-term investments with a maturity of
three months or less at the date of purchase are considered cash equivalents.
Cash and cash equivalents for the periods ended December 31, 1999 and 1998 were
$3,555,392 and $5,363,601, respectively. The decrease was primarily due to an
increase in net cash used in financing activities.
<PAGE>
Net cash provided by financing activities decreased from $8,263,738 for the nine
months ended December 31, 1998 compared to ($2,213,228) for the nine months
ended December 31, 1999. The decrease in net cash provided by financing
activities was due to repayments of FHLB advances and a reduction in
available-for-sale securities.
RECENT ACCOUNTING DEVELOPMENTS
In June 1999, the Financial Accounting Standards board issued SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133." This statement amends SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities, " to defer its
effective date. SFAS No. 137 is effective for all fiscal quarters beginning
after June 15, 2000, however the Company adopted the provisions of SFAS No. 133
at July 1, 1998 and utilized an option to transfer its held-to-maturity
investment security portfolio to available-for-sale. Accordingly, all unrealized
gains and losses were recorded at that date. The Company does not have any
financial instruments considered to be derivatives under the provisions of SFAS
No. 133.
YEAR 2000 COMPLIANCE
Hardin Bancorp, Inc. had a successful transition to year 2000 processing. The
Company will continue to monitor all processing to ensure that no Y2K issues
arise in the future. The Company has taken the necessary steps to validate and
test its contingency/business resumption plan in order to minimize the impact on
operations should there be system failures in the future.
FORWARD LOOKING STATEMENT
This Quarterly Report on Form 10-Q may contain certain forward-looking
statements consisting of estimates with respect to the financial condition,
results of operations and business of the Company that are subject to various
factors which could cause actual results to differ materially from these
estimates. These factors include, but are not limited to, general economic
conditions, changes in interest rates, deposit flows, loan demand, real estate
values and competition; changes in accounting principles, policies or
guidelines; changes in legislation or regulation; and other economic,
competitive, governmental, regulatory and technological factors affecting the
Company's operations, pricing, products and services.
<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
On November 1, 1999, the Bank formed a new subsidiary, Hardin
Investment Limited Liability Company. The purpose of the formation
of this new subsidiary is to hold certain investment securities.
As of December 31, 1999, the Company held 325,247 shares of its
common stock as treasury stock at an aggregate purchase price of
$4,792,630.
On December 16, 1999 the Board of Directors declared a $.20 per
share cash dividend to all stockholders of record on January 7,
2000, payable on January 21, 2000.
Item 6. Exhibits and Reports on Form 8-K
Exhibits:
27 - Financial Data Schedule
Reports on Form 8-K:
None.
<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.
HARDIN BANCORP, INC.
Registrant
Date: February 14, 2000 /s/ Robert W. King
----------------- ------------------
Robert W. King, President and Chief
Executive Officer (Duly Authorized
Officer)
Date: February 14, 2000 /s/ Karen K. Blankenship
----------------- ------------------------
Karen K. Blankenship, Senior Vice
President and Secretary (Principal
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> DEC-31-1999
<CASH> 1,222
<INT-BEARING-DEPOSITS> 2,334
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 49,078
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 49,078
<LOANS> 75,962
<ALLOWANCE> 307
<TOTAL-ASSETS> 134,626
<DEPOSITS> 85,368
<SHORT-TERM> 14,000
<LIABILITIES-OTHER> 1,103
<LONG-TERM> 22,300
0
0
<COMMON> 11
<OTHER-SE> 11,844
<TOTAL-LIABILITIES-AND-EQUITY> 11,855
<INTEREST-LOAN> 4,466
<INTEREST-INVEST> 2,515
<INTEREST-OTHER> 180
<INTEREST-TOTAL> 7,161
<INTEREST-DEPOSIT> 2,825
<INTEREST-EXPENSE> 4,273
<INTEREST-INCOME-NET> 2,888
<LOAN-LOSSES> 1
<SECURITIES-GAINS> 7
<EXPENSE-OTHER> 2,121
<INCOME-PRETAX> 1,444
<INCOME-PRE-EXTRAORDINARY> 1,444
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 956
<EPS-BASIC> 1.39
<EPS-DILUTED> 1.34
<YIELD-ACTUAL> 7.20
<LOANS-NON> 218
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 605
<ALLOWANCE-OPEN> 311
<CHARGE-OFFS> 5
<RECOVERIES> 1
<ALLOWANCE-CLOSE> 307
<ALLOWANCE-DOMESTIC> 281
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 26
</TABLE>
