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 June 30, 2000
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 June 30, 2000
--------------------------------------------------------------------------------
Common stock, .01 par value 731,453
<PAGE>
HARDIN BANCORP, INC. AND SUBSIDIARIES
CONTENTS
PART I
FINANCIAL INFORMATION
Item 1.
Unaudited Financial Statements ........................Page
Consolidated Balance Sheets...........................1
Consolidated Statements of Earnings...................2
Consolidated Statements of Stockholders' Equity.......3
Consolidated Statements of Cash Flows...............4-5
Notes to Consolidated Financial Statements............6
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of
Operations..............................................7-9
PART II
OTHER INFORMATION........................................10
Signatures...............................................11
<PAGE>
<TABLE>
<CAPTION>
Hardin Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
June 30, 2000 March 31, 2000
------------- --------------
(Unaudited)
Assets
------
<S> <C> <C>
Cash $ 1,155,709 $ 1,418,308
Interest bearing deposits 3,132,786 3,331,934
Investment securities available-for-sale 36,759,327 37,793,223
Mortgage-backed securities available-for-sale 11,950,032 11,805,699
Loans receivable, net 80,782,741 78,059,195
Accrued interest receivable:
Investment securities 450,718 487,312
Mortgage-backed securities 92,562 84,232
Loans receivable 568,821 548,094
Premises and equipment 1,755,268 1,777,911
Stock in Federal Home Loan Bank (FHLB) of Des Moines, at cost 2,065,000 2,015,000
Deferred income taxes 1,133,153 816,000
Prepaid expenses and other assets 355,554 347,403
------------- -------------
Total assets $ 140,201,671 $ 138,484,311
============= =============
Liabilities and Stockholders' Equity
------------------------------------
Liabilities:
Deposits $ 85,263,057 $ 86,565,365
Advances from borrowers for property taxes and insurance 514,183 359,670
Advances from FHLB 41,300,000 38,300,000
Accrued interest payable 39,890 40,935
Current income taxes payable 254,422 73,601
Accrued expenses and other liabilities 702,898 718,463
------------- -------------
Total liabilities 128,074,450 126,058,034
------------- -------------
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 10,329,414 10,319,573
Retained earnings 9,002,966 8,813,865
Accumulated other comprehensive loss (2,026,231) (1,477,663)
Unearned employee benefits (378,753) (429,323)
Treasury stock of 326,547 shares at cost (4,810,755) (4,810,755)
------------- -------------
Total stockholders' equity 12,127,221 12,426,277
------------- -------------
Total liabilities and stockholders' equity $ 140,201,671 $ 138,484,311
============= =============
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
1
<PAGE>
<TABLE>
<CAPTION>
Hardin Bancorp, Inc. and Subsidiaries
Consolidated Statements of Earnings
For the Three Months Ended
June 30, 2000 and 1999
(Unaudited)
2000 1999
---------- ----------
<S> <C> <C>
Interest income:
Loans receivable $1,637,506 $1,430,390
Mortgage-backed securities 188,020 169,021
Investment securities 656,570 674,607
Other 65,519 61,770
---------- ----------
Total interest income 2,547,615 2,335,788
---------- ----------
Interest expense:
Deposits 961,899 944,336
FHLB advances 589,735 477,435
---------- ----------
Total interest expense 1,551,634 1,421,771
---------- ----------
Net interest income 995,981 914,017
Provision for loan losses 18,590 1,297
---------- ----------
Net interest income after provision for loan losses 977,391 912,720
---------- ----------
Non-interest income:
Service charges 173,074 132,975
Loan servicing fees 7,381 7,072
Gain on sale of real estate owned 9,205 --
Gain on sale of investments and mortgage-backed securities -- 7,164
Other 44,185 39,432
---------- ----------
Total non-interest income 233,845 186,643
---------- ----------
Non-interest expense:
Compensation and benefits 364,439 340,141
Occupancy and equipment 63,388 66,305
Federal insurance premiums 4,444 11,940
Data processing 60,290 49,954
Other 202,502 212,616
---------- ----------
Total non-interest expense 695,063 680,956
---------- ----------
Earnings before income taxes 516,173 418,407
Income tax expense 180,821 148,990
---------- ----------
Net earnings $ 335,352 $ 269,417
========== ==========
Net earnings per share:
Basic $ 0.48 $ 0.39
Diluted 0.47 0.38
========== ==========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
Hardin Bancorp, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
For the Three Months Ended June 30, 2000
(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, 2000 $ 10,580 10,319,573 8,813,865 (1,477,663) (429,323)
Comprehensive income:
Net earnings - - 335,352 - -
Change in net unrealized loss on securities
available for sale, net of tax - - - (548,568) -
-------- ----------- --------- ---------- --------
Total comprehensive income (loss) - - 335,352 (548,568) -
-------- ----------- --------- ---------- --------
Allocation of ESOP shares - 9,841 - - 26,909
Amortization of recognition and retention plan - - - - 23,661
Dividends declared ($.20 per share) - - (146,251) - -
-------- ----------- --------- ---------- --------
Balance at June 30, 2000 $ 10,580 $10,329,414 9,002,966 (2,026,231) (378,753)
======== ============ ========= ========== ========
<CAPTION>
Total
Treasury Shareholders'
Stock Equity
---------- ----------
<S> <C> <C>
Balance at March 31, 2000 (4,810,755) 12,426,277
Comprehensive income:
Net earnings - 335,352
Change in net unrealized loss on securities
available for sale, net of tax - (548,568)
---------- ----------
Total comprehensive income (loss) - (213,216)
---------- ----------
Allocation of ESOP shares - 36,750
Amortization of recognition and retention plan - 23,661
Dividends declared ($.20 per share) - (146,251)
---------- ----------
Balance at June 30, 2000 (4,810,755) 12,127,221
========== ==========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
Hardin Bancorp, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Three Months Ended June 30, 2000 and 1999
(Unaudited)
2000 1999
----------- -----------
<S> <C> <C>
Operating Activities:
Net earnings $ 335,352 269,417
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Provision for losses on loans 18,590 1,297
Depreciation 32,020 35,586
Premium accretion and amortization
of discounts and deferred loan fees, net 7,677 16,205
Net gain on sale of loans and investment and
mortgage-backed securities -- (7,164)
Allocation of ESOP shares 36,750 --
Amortization of deferred recognition
and retention plan 23,661 22,349
Changes in asset and liabilities:
Interest receivable 7,537 14,210
Other assets (15,057) 5,017
Accrued interest payable (1,045) (1,019)
Accrued expense and other liabilities (15,523) 276,492
Income taxes payable 180,821 138,991
----------- -----------
Net cash provided by operating activities 610,783 771,381
----------- -----------
Investing Activities:
Net increase in loans receivable (2,459,785) (3,243,821)
Principal payments on available-for-sale
mortgage-backed & related securities 761,701 3,020,060
Proceeds from sales of available-for-sale
mortgage-backed securities -- 363,166
Purchase of mortgage-backed securities (741,388) --
Purchase of loans serviced by other institutions (286,500) --
Proceeds from sales of available-for-sale
investment securities -- 1,005,400
Proceeds from sales of other repossessed assets 6,906 --
Purchase of stock in FHLB of Des Moines (50,000) --
Purchase of office properties and equipment (9,377) (37,810)
----------- -----------
Net cash (used in) provided by investing activities $(2,778,443) 1,106,995
----------- -----------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Hardin Bancorp, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Three Months Ended June 30, 2000 and 1999
(Unaudited)
2000 1999
----------- -----------
<S> <C> <C>
Financing Activities:
Net (decrease) increase in savings deposits $(1,302,309) 1,853,997
Proceeds from FHLB advances 3,000,000 6,000,000
Repayments of FHLB advances -- (11,000,000)
Net decrease in advances from borrowers
for taxes and insurance 154,473 167,387
Payment of dividends (146,251) (132,256)
----------- -----------
Net cash provided by (used in) financing activities 1,705,913 (3,110,872)
----------- -----------
Decrease in cash (461,747) (1,232,496)
Cash and equivalents at beginning of period 4,750,242 4,994,692
----------- -----------
Cash and equivalents at end of period $ 4,288,495 3,762,196
=========== ===========
Supplemental disclosure of cash flow information: Cash paid for:
Interest $ 1,552,679 1,422,790
Income taxes, net of refunds $ -- 9,999
Non-cash investing and financing:
Dividends declared and payable $ 146,291 146,951
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<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, 2000, 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 three-month period ended June 30,
2000 is not necessarily indicative of the results, which may be
expected for the entire year. The March 31, 2000 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:
For the three months ended
June 30,
2000 1999
---- ----
Basic weighted average shares 702,648 690,886
Common stock equivalents/stock options 11,248 26,912
--------------------------------
Diluted weighted average shares 713,896 717,798
================================
6
<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 $140,201,671 as of June 30,
2000, as compared to $138,484,311, on March 31, 2000, an increase of $1,717,360.
The increase was primarily due to an increase in loans receivable, net,
partially offset by a decrease in investment securities.
Loans receivable, net, increased to $80,782,741 on June 30, 2000 from
$78,059,195 on March 31, 2000, an increase of $2,723,546. Mortgage-backed
securities increased $144,333 to $11,950,032 on June 30, 2000 from $11,805,699
on March 31, 2000.
Cash, interest bearing deposits and investment securities decreased $1,495,643
from $42,543,465 on March 31, 2000, to $41,047,822 on June 30, 2000. The
decrease was due to investment funds being utilized to originate mortgage and
consumer loans.
Deposits totaled $85,263,057 on June 30, 2000, a decrease of $1,302,308 from
$86,565,365 on March 31, 2000. The decrease in deposits was primarily due to
seasonal deposit outflow and intense competition from local as well as national
depository institutions.
FHLB advances increased $3,000,000 to $41,300,000 on June 30, 2000, compared to
$38,300,000 on March 31, 2000. The increase partially offset the outflow of
deposits and was utilized to fund loan growth.
Stockholders' equity was $12,127,221 on June 30, 2000, compared to $12,426,277
on March 31, 2000. The decrease in stockholders' equity was primarily the result
of an increase in the unrealized loss on investment securities, partially offset
by net earnings during the three months ended June 30, 2000.
7
<PAGE>
RESULTS OF OPERATIONS
---------------------
Net earnings for the Company's quarter ended June 30, 2000 were $335,352
compared to $269,417 for the comparable quarter in 1999. The increase in
earnings was primarily due to an increase in net interest income after provision
for loan losses and an increase in total non-interest income, offset by a slight
increase in non-interest expense.
Basic earnings per share for the quarter ended June 30, 2000 were $0.48 while
diluted earnings per share were $0.47. Basic earnings per share for the quarter
ended June 30, 2000 were calculated based on 702,648 average shares outstanding
and diluted earnings per share were calculated based on 713,896 average shares
outstanding. Basic earnings per share for the comparable quarter ended June 30,
1999 were $0.39 while diluted earnings per share were $0.38. Basic earnings per
share for the quarter ended June 30, 1999 were calculated based on 690,886
average shares outstanding and diluted earnings per share were calculated based
on 717,798 average shares outstanding.
Net interest income after provision for loan losses was $977,391 for the quarter
ended June 30, 2000 compared to $912,720 for the quarter ended June 30, 1999, an
increase of $64,671. This increase was a result of total interest income
increasing $211,827 from $2,335,788 in 1999 to $2,547,615 in 2000 partially
offset by an increase in total interest expense of $129,863 from $1,421,771 in
1999 to $1,551,634 in 2000. The increase in total interest income was due to an
increase in the average yield on interest earning assets while the increase in
total interest expense was primarily a result of an increase in the average cost
of FHLB advances.
Total non-interest income increased from $186,643 for the quarter ended June 30,
1999 to $233,845 for the quarter ended June 30, 2000. The increase was due to an
increase in service charge income and gains on sale of real estate owned.
The Company's total non-interest expense for the three months ended June 30,
2000 was $695,063 compared to $680,956 for the comparable quarter in 1999. The
increase was primarily due to increases in compensation and benefits expense and
data processing expense, offset by reductions in occupancy and equipment
expense, FDIC insurance premiums and other non-interest expense.
PROVISION FOR LOAN LOSSES
-------------------------
For the three months ended June 30, 2000 the Company recorded $18,590 in
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 June 30, 2000, the Bank's allowance for loan losses was $316,751, or 252% of
non-performing assets compared to $304,422, or 128% at March 31, 2000. The
allowance for loan losses was .39% of total loans at June 30, 2000 and at March
31, 2000.
At June 30, 2000, non-performing assets were $125,806 compared to $237,000 at
March 31, 2000. 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.
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.
8
<PAGE>
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
June 30, 2000.
<TABLE>
<CAPTION>
Actual Required Excess
Amount/Percent Amount/Percent Amount/Percent
-------------- -------------- --------------
(Dollars in Thousands)
<S> <C> <C> <C>
Tangible Capital $13,585/ 9.58% $2,127/ 1.50% $11,458/ 8.08%
Core Leverage Capital $13,585/ 9.58% $5,671/ 4.00% $7,914/ 5.58%
Risk-based Capital $13,898/21.09% $5,271/ 8.00% $8,627/13.09%
</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 June 30, 2000 was 33.08%.
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 June 30, 2000 and 1999 were
$4,288,495 and $3,762,196, respectively. The increase was primarily due to an
increase in net cash provided by financing activities.
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-QSB 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.
9
<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 June 22, 2000 the Board of Directors declared a $.20 per share
cash dividend to all stockholders of record on July 7, 2000, payable
on July 21, 2000.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
Exhibits:
27 - Financial Data Schedule
Reports on Form 8-K:
None.
10
<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: August 14, 2000 /s/ Robert W. King
--------------- ------------------
Robert W. King, President and Chief
Executive Officer (Duly Authorized
Officer)
Date: August 14, 2000 /s/ Karen K. Blankenship
--------------- ------------------------
Karen K. Blankenship, Senior Vice
President and Secretary (Principal
Accounting Officer)
11
