U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 September 30, 1996
[ ] 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 0-26510
NCF FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Delaware 61-1285330
-------- ----------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
119 E. Stephen Foster Avenue, Bardstown, Kentucky 40004
- ------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (502) 348-9278
--------------
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.
X Yes No
--- ---
Class Outstanding
----- -----------
As of October 28, 1996, there were 770,500 shares of the Registrant's common
stock, par value $0.10 per share, outstanding. The Registrant has no other
classes of common equity outstanding.
<PAGE>
NCF FINANCIAL CORPORATION
AND SUBSIDIARY
Bardstown, Kentucky
Index
PART I.
- -------
FINANCIAL INFORMATION Page(s)
Item I.
Financial Statements
Consolidated Balance Sheets - (Unaudited) as of June 30, 1996
and September 30, 1996 .............................................. 3
Consolidated Statements of Income - (Unaudited) for the three
month periods ended September 30, 1995 and 1996 ..................... 4
Consolidated Statements of Stockholders' Equity (unaudited) .......... 5
Consolidated Statements of Cash Flows - (Unaudited) for the
three months ended September 30, 1995 and 1996 ...................... 6
Notes to Consolidated Financial Statements (Unaudited) ............... 7-11
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations ........................................... 12-14
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 ........................................................... 16
2
<PAGE>
NCF FINANCIAL CORPORATION
AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
June 30, September 30,
1996 1996
------- -------
Assets
------
<S> <C> <C>
Cash and due from banks $ 195 $ 473
Interest-earning deposits 4,968 2,115
Loans receivable, net 28,861 28,459
Investment securities
(market value - $-0- and $2,947) - 2,921
Mortgage-backed securities
(market value - $165 and $162) 143 139
Premises and equipment, net 51 47
Federal Home Loan Bank stock 412 419
Interest receivable 220 268
Deferred tax asset 4 68
Other 51 43
------- -------
Total assets $34,905 $34,952
======= =======
Liabilities and Stockholders' Equity
------------------------------------
Deposits $22,741 $22,584
Accrued expenses and other liabilities 247 298
FDIC special assessment accrual - 153
Income taxes payable:
Current 114 65
Deferred - -
------- -------
Total liabilities 23,102 23,100
Preferred stock ($.01 par value, 100,000 shares
authorized; none issued and outstanding) - -
Common stock ($.10 par value, 1,400,000 shares
authorized; 770,500 shares issued and outstanding) 77 77
Additional paid-in capital 7,270 7,275
Retained earnings, substantially restricted 4,918 4,942
Less unearned compensation:
Employee stock ownership plan (462) (442)
------- -------
Total stockholders' equity 11,803 11,852
------- -------
Total liabilities and stockholders' equity $34,905 $34,952
======= =======
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
3
<PAGE>
NCF FINANCIAL CORPORATION
AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
(in thousands)
Three Months Ended
September 30,
---------------------
1995 1996
------- -------
Interest income:
Loans $544 $575
Investment securities - 26
Mortgage-backed securities 5 4
Interest-earning deposits 40 48
---- ----
Total interest income 589 653
Interest expense:
Deposits 289 269
Federal Home Loan Bank advances 18 -
---- ----
Total interest expense 307 269
Net interest income 282 384
Provision for loan losses 4 4
---- ----
Net interest income after provision
for loan losses 278 380
Non-interest income:
Loan fees and service charges 6 6
Non-interest expenses:
Compensation and employee benefits 76 125
Net occupancy expense 6 7
Deposit insurance premiums 13 167
Data processing 10 11
State franchise and other taxes 7 15
Professional fees 3 19
Other 15 18
---- ----
Total non-interest expenses 130 362
---- ----
Income before income taxes 154 24
Income tax expense 56 -
---- ----
Net income $ 98 $ 24
==== ====
Net income per share n/a $.03
==== ====
Cash dividend per share n/a $.00
==== ====
The accompanying notes are an integral part
of these consolidated financial statements.
4
<PAGE>
NCF FINANCIAL CORPORATION
AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Additional
Common Paid-in Retained Unearned
Stock Capital Earnings Compensation Total
----- ------- -------- ------------ -----
<S> <C> <C> <C> <C> <C>
Balance, June 30, 1995 $- $ - $4,636 $ - $ 4,636
Net income - - 398 - 398
Net proceeds from sale
of common stock 77 7,259 - (500) 6,836
Fair value of shares committed
to be released from ESOP plan - 11 - 38 49
Cash dividend paid - - (116) - (116)
--- ------ ------ ----- -------
Balance, June 30, 1996 77 7,270 4,918 (462) 11,803
Net income three months ended
September 30, 1996 - - 24 - 24
Fair value of shares committed
to be released from ESOP plan - 5 - 20 25
--- ------ ------ ----- -------
Balance, September 30, 1996 $77 $7,275 $4,942 $(442) $11,852
=== ====== ====== ===== =======
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
5
<PAGE>
NCF FINANCIAL CORPORATION
AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Three Months Ended
September 30,
------------------
1995 1996
---- ----
Operating Activities:
Net income $ 98 $ 24
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 3 4
Provision for loan losses 4 4
Deferred income taxes (benefit) - (64)
FHLB dividends received in stock (7) (7)
Amortization of deferred loan origination fees, net - -
Accretion of discounts on mortgage-backed securities - -
(Decrease) increase in allowance for uncollectible
interest (1) 14
Increase in interest receivable (41) (62)
Decrease in other assets 20 8
(Decrease) increase in accrued expenses and other
liabilities (10) 204
Increase (decrease) in current income taxes payable 56 (49)
ESOP plan expense - 25
------- -------
Net Cash Provided By Operating Activities 122 101
Investing Activities:
Principal payments on mortgage-backed securities 5 4
Purchase of investment securities held-to-maturity - (2,921)
Net (increase) decrease in loans originated (1,052) 398
Acquisition of premises and equipment - -
------- -------
Net Cash Used In Investing Activities (1,047) (2,519)
Financing Activities:
Net increase (decrease) in deposits 9,060 (157)
(Repayments) advances from FHLB (700) -
Stock conversion cost (92) -
------- -------
Net Cash Provided By (Used In) Financing Activities 8,268 (157)
------- -------
Increase (Decrease) In Cash and Cash Equivalents 7,343 (2,575)
Cash and Cash Equivalents, beginning of period 1,201 5,163
------- -------
Cash and Cash Equivalents, end of period $ 8,544 $ 2,588
======= =======
Supplemental Disclosures:
Noncash investing and financing activities:
Cash paid during the period for:
Interest $ 236 $ 311
======= =======
Income taxes $ 114 $ -
======= =======
The accompanying notes are an integral part of
these consolidated financial statements.
6
<PAGE>
NCF FINANCIAL CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
1. NCF Financial Corporation
-------------------------
NCF Financial Corporation (the "Company") was incorporated under the laws
of the State of Delaware for the purpose of becoming the savings and loan
holding company of Nelson County Federal Savings and Loan Association (the
"Association") in connection with the Association's conversion from a
federally-chartered mutual savings and loan association to a
federally-chartered stock savings and loan association, pursuant to its
Plan of Conversion. The Company commenced on August 24, 1995, a
Subscription Offering of its shares in connection with the conversion of
the Association (the "Conversion"). At October 12, 1995, the Conversion was
complete. The financial statements of the Association are presented on a
consolidated basis with those of the Company. In July, 1996, the
Association changed its name to Nelson County Federal Savings Bank (the
"Bank").
The consolidated financial statements included herein are for the Company,
the Bank and the Bank's wholly owned subsidiary, Nelson Service
Corporation. The impact of Nelson Service Corporation (NSC) on the
consolidated financial statements is insignificant. NSC has no operating
activity other than to own stock in the third-party service bureau.
2. Basis of Preparation
--------------------
The accompanying unaudited consolidated financial statements were prepared
in accordance with instructions for Form 10-QSB and therefore, do not
include all disclosures necessary for a complete presentation of the
consolidated statements of financial condition, consolidated statements of
income, consolidated statements of stockholders' equity, and consolidated
statements of cash flows in conformity with generally accepted accounting
principles. However, all adjustments which are, in the opinion of
management, necessary for the fair presentation of the interim financial
statements have been included. The statement of income for the three month
period ended September 30, 1996 is not necessarily indicative of the
results which may be expected for the entire year.
3. Earnings Per Share
------------------
Earnings per share amounts for the three month period ended September 30,
1996 is based on the average number of shares outstanding throughout the
period. No comparative amounts have been presented for the three month
period ended September 30, 1995 because no shares were outstanding during
that period. Unallocated ESOP shares are not considered as outstanding for
this calculation.
7
<PAGE>
NCF FINANCIAL CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
4. New Accounting Standards
------------------------
The FASB has issued SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," which requires, during an employee's active
years of service, accrual of the expected costs of providing postretirement
benefits, principally health care and life insurance, to employees and
their beneficiaries and dependents. SFAS No. 106 is effective for fiscal
years beginning after December 15, 1994. At September 30, 1996, the
statement has no material impact on the consolidated financial statements.
In November, 1992, FASB issued SFAS No. 112 "Employers' Accounting for
Postemployment Benefits." SFAS No. 112 requires recognition of the
obligations to provide postemployment benefits to former or inactive
employees after employment, but before retirement. The effective date for
this statement is for fiscal years beginning after December 15, 1993. At
September 30, 1996, the statement has no material impact on the
consolidated financial statements.
In November, 1993, the American Institute of Certified Public Accountants
issued Statement of Position 93-6 "Employers' Accounting for Employee Stock
Ownership Plans." This statement is effective for fiscal years beginning
after December 15, 1993. This statement changes the way employers report
transactions with a leveraged employee stock ownership plan ("ESOP"). It
requires, among other things, that: (1) for ESOP shares committed to be
released in a period to compensate employees directly, employers should
recognize compensation cost equal to the fair value of the shares committed
to be released, and (2) for earnings-per-share computations, ESOP shares
that have been committed to be released should be considered outstanding.
ESOP shares that have not been committed to be released should not be
considered outstanding.
In November, 1995, the FASB's Emerging Issues Task Force (EITF) issued EITF
D-47 concerning the accounting for special assessments of FDIC insurance
premiums for SAIF member institutions. This opinion requires recognition of
an accrual for the FDIC special assessment in the period when legislation
was enacted to provide for such assessment. This opinion does not allow the
charge to earnings to be recorded as an extraordinary item and should be
recorded as a component of operating income. This opinion also requires
deferred tax accounting if the timing of payment of the assessment is in a
period different than that of the accrual. See further discussion in note 6
as to the impact on these financial statements.
8
<PAGE>
NCF FINANCIAL CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
5. Plan of Conversion
------------------
On April 27, 1995, the Bank's Board of Directors formally approved a plan
("Plan") to convert from a federally-chartered mutual savings and loan to a
federally-chartered stock savings and loan which was approved by the Bank's
members on July 31, 1995. The Plan, which includes formation of a holding
company, was approved by the Office of Thrift Supervision (OTS) and
included the filing of a registration statement with the Securities and
Exchange Commission.
NCF Financial Corporation was formed on June 19, 1995, as the holding
company for Nelson County Federal Savings and Loan Association in
connection with Association's conversion from a federally-chartered mutual
savings and loan association to a federally-chartered stock savings and
loan association ("Conversion").
On October 12, 1995, the Company issued and sold 770,500 shares of common
stock at $10 per share in its initial public offering, including 50,000
shares to the Bank's ESOP. The net proceeds to the Company after
recognizing approximately $374,000 of expenses and underwriting costs and
$500,000 of employee compensation plans were approximately $6.8 million.
The Company used $3.7 million of the net proceeds to purchase all of the
outstanding capital stock of the Bank and invested virtually all of the
remaining proceeds in short-term investments (after loaning $500,000 to the
Bank's ESOP).
The Bank may not declare or pay a cash dividend if the effect thereof would
cause its net worth to be reduced below either the amounts required for the
liquidation account discussed below or the regulatory capital requirements
imposed by the OTS.
At the time of conversion, the Bank established a liquidation account in an
amount equal to its retained earnings as reflected in the latest
consolidated balance sheet used in the final conversion prospectus. The
liquidation account will be maintained for the benefit of eligible account
holders who continue to maintain their deposit accounts in the Bank after
conversion. In the event of a complete liquidation of the Bank (and only in
such an event), eligible depositors who continue to maintain accounts shall
be entitled to receive a distribution from the liquidation account before
any liquidation may be made with respect to common stock.
9
<PAGE>
NCF FINANCIAL CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
6. Deposit Insurance Premiums
--------------------------
The Bank currently pays an insurance premium to the Federal Deposit
Insurance Corporation (FDIC) equal to .23% of its total deposits as a
member of the Savings Association Insurance Fund (SAIF). Effective January
1, 1996, the FDIC lowered the annual insurance premium for members of the
Bank Insurance Fund (BIF) to $2,000 minimum. The disparity in insurance
premiums between BIF and SAIF could create a competitive disadvantage for
SAIF members by enabling BIF members to attract and retain deposits at a
lower effective cost than that possible for the Bank and put competitive
pressure on the Bank to raise its interest rates paid on deposits, thus
increasing its cost of funds and possibly reducing net interest income. The
resultant competitive disadvantage could result in the Bank losing deposits
to BIF members who have a lower cost of funds and are therefore able to pay
higher rates of interest on deposits. Although the Bank has other sources
of funds, these other sources may have higher costs than those of deposits.
In order to allow SAIF members to enjoy the same premium levels as BIF
members, legislation was enacted on September 30, 1996. This legislation
requires a special one-time premium assessment of 65.7 cents per $100 of
deposits. Under FASB EITF D-47, the Company has established an accrual at
September 30, 1996 of approximately $153,000 and has recorded this charge
to normal operating expense. This charge to earnings is offset by
approximately $52,000 in deferred tax benefits from the timing of payment
of the special assessment which is anticipated to take place in the quarter
ended December 31, 1996.
Beginning January 1, 1997, deposit insurance assessments for SAIF members
are expected to be reduced to approximately .064% of deposits on an annual
basis through the end of 1999. During this same period, BIF members are
expected to be assessed approximately .013% of deposits. Thereafter,
assessments for BIF and SAIF members should be the same and SAIF and BIF
may be merged. It is expected that these continuing assessments for both
SAIF and BIF members will be used to repay outstanding Financing
Corporation bond obligations. As a result of these changes, beginning
January 1, 1997, the rate of deposit insurance assessed the Bank will
decline by approximately 70%. In addition, there is certain legislation
that allows for the conversion of the thrift charter into a bank charter.
The tax impact of elimination of the thrift charter could have resulted in
recapture of existing bad debt reserves for income tax purposes in excess
of those allowed for banks. However, this potential tax implication has
generally been eliminated.
10
<PAGE>
NCF FINANCIAL CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
7. Employee Stock Ownership Plan (ESOP)
------------------------------------
The Bank has established for eligible employees an Employee Stock Ownership
Plan ("ESOP"). The ESOP borrowed $500,000 from the Holding Company and
purchased 50,000 common shares issued in the offering. The Bank is expected
to make scheduled cash contributions to the ESOP sufficient to service the
amount borrowed. The $500,000 in stock issued by the Holding Company is
reflected in the accompanying consolidated financial statements as a charge
to unearned compensation and a credit to common stock and paid-in capital.
In accordance with GAAP, the unpaid balance of the ESOP loan has been
eliminated in consolidation and the unamortized balance of unearned
compensation is shown as a deduction of stockholders' equity.
For the three months ending September 30, 1996, compensation from the ESOP
of approximately $25,105 was expensed. Compensation is recognized at the
average fair value of the ratably released shares during the accounting
period as the employees performed services. At September 30, 1996, the ESOP
had approximately 5,750 allocated shares and 44,250 unallocated shares. The
fair value of the unallocated shares at September 30, 1996, was
approximately $591,844.
The Plan administrators will determine whether dividends on allocated and
unallocated shares will be used for debt service. Any allocated dividends
used will be replaced with common stock of equal value. For the purpose of
computing earnings per share, all ESOP shares committed to be released have
been considered outstanding.
11
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
The following discussion and analysis is intended to assist in understanding the
financial condition and the results of operations of the Company. References to
the "Company" include NCF Financial Corporation and/or Nelson County Federal
Savings Bank, as appropriate.
Comparison of Financial Condition at June 30, 1996 and September 30, 1996
Total consolidated assets of the Company at September 30, 1996 remained
consistent with a small increase of approximately $47,000 since June 30, 1996.
Total consolidated assets were approximately $34.95 million and $34.9 million at
September 30, 1996 and June 30, 1996, respectively.
The primary change in the balance sheet is the Company's efforts to maximize
interest earnings on liquid assets by repositioning interest-earning deposits
into Investment Securities consisting of FHLB Discount Notes of approximately $3
million. The Company also experienced some prepayment of mortgage loans which
resulted in a decline in Loans Receivable of approximately $402,000 from June
30, 1996 to September 30, 1996.
There was a decrease in deposits of approximately $157,000 or .7% from
$22,741,000 at June 30, 1996 to $22,584,000 at September 30, 1996. Although this
is only a small decline due to normal customer balance maintenance, management
is looking at expanding customer account services to provide future deposit
growth. Included in total liabilities is an accrual for the FDIC special
assessment of approximately $153,000 which is recorded at September 30, 1996
under the guidance of FASB's Emerging Issues Task Force (EITF D-47, November
1995).
Comparison of Results of Operations for the Three Months Ended September 30,
1995 and 1996
Net Income. Net income decreased $74,000 for the three months ended September
30, 1996 when compared to the same period for September 30, 1995. However, this
decrease is primarily attributed to the accrual for the FDIC special assessment
of approximately $101,000 (net of tax). Without this special assessment accrual,
net income would have increased by approximately $27,000 or 27.5% for the three
month period as compared to last year. Net income of $24,000 for the three
months ended September 30, 1996 resulted in earnings per share of .03 cents.
Net Interest Income. Net interest income increased $102,000 or 36.7% from
$282,000 for the three months ended September 30, 1995 to $384,000 for the three
months ended September 30, 1996. The improvement in net interest income
primarily reflects an increase in average interest-earning assets over average
interest-bearing liabilities for the Bank of $1.9 million or 19.31% for the
three months ended September 30, 1996 as compared to 1995, enhanced by an
increase in the interest rate spread from 2.8% for the three months ended
September 30, 1995 to 2.85% for the three months ended September 30, 1996. One
of the factors contributing to the increase in the interest rate spread is the
repayment of FHLB advances.
12
<PAGE>
Interest Income. Total interest income increased $64,000 from $589,000 for the
three months ended September 30, 1995 to $653,000 for the three months ended
September 30, 1996. Interest on loans increased $31,000 or 5.7%. An increase of
$26,000 was attributable to a 2% rise in the average balance of loans
outstanding and $5,000 of the increase was due to the average yield on the loan
portfolio increasing from 8.00% during the three months ended September 30, 1995
to 8.03% during the three months ended September 30, 1996.
Interest income on mortgage-backed securities decreased $1,000 from $5,000 for
the three months ended September 30, 1995 to $4,000 for the three months ended
September 30, 1996. This decrease was solely due to the principal repayments on
the existing portfolio.
Interest income from other interest-earning assets increased $34,000 from
$40,000 for the three months ended September 30, 1995 to $74,000 for the three
months ended September 30, 1996. The average balance of other interest-earning
assets for the Bank increased $609,000 or 12.5% for the three months ended
September 30, 1996. In addition, the average yield continued to increase for the
three months ended September 30, 1996 from 5.27% to 5.38% which in combination
with the volume increase resulted in the overall increase.
Interest Expense. Interest expense decreased $38,000 from $307,000 for the three
months ended September 30, 1995 to $269,000 for the three months ended September
30, 1996. The decrease for the three months ended September 30, 1996 was the
result of a $18,000 decrease in interest on advances that were outstanding in
1995 but not in 1996. Between the three months ended September 30, 1995 and
three months ended September 30, 1996, the average balance of deposits decreased
by $743,000, and average rates decreased from 4.82% to 4.78%. Both of these
factors attributed to the decrease in interest expense.
Provision for Loan Losses. The provision for loan losses for the three months
ended September 30, 1995 was $4,000 compared to $4,000 for the three months
ended September 30, 1996. Historically, management has emphasized the Company's
loss experience over other factors in establishing provisions for loan losses.
However, management has reviewed the allowance for loan losses in relation to
the Company's composition of its loan portfolio and observations of the general
economic climate and loan loss expectations.
Non-Interest Income. Fee income and other service charges of $6,000 for the
three months ended September 30, 1995 remained relatively stable when compared
to the three months ended September 30, 1996.
Non-Interest Expense. Non-interest expense increased by $232,000 from $130,000
for the three months ending September 30, 1995 to $362,000 for 1996. These
increases are the direct result of the special one-time FDIC assessment accrual,
additional operating expense as a public company and the effect of increased
compensation from the recognition of allocated ESOP shares at fair market value
and increased compensation from the recognition of the Directors Consultation
and Retirement Plan (Directors Plan) agreement. During the three month period
ended September 30, 1996, the Company recognized a $153,000 expense accrual for
the FDIC special assessment. During the three month period ending September 30,
1996, the Company recognized $25,000 of compensation expense related to the
Employee Stock Ownership Plan. During the three month period ending September
30, 1996, the Company recognized approximately $22,000 of compensation expense
related to the Directors Plan agreement. Other non-interest expense items
remained relatively stable with minor percentage changes.
13
<PAGE>
Income Taxes. The effective tax rate for the three months ending September 30,
1995 was approximately 34%. For the three month period ending September 30,
1996, cuent income tax provisions of $52,000 were offset by the recording of a
deferred tax benefit of $52,000 as a result of the timing of payment of the FDIC
special assessment.
Liquidity and Capital Resources. The Company's primary sources of funds are
deposits and proceeds from principal and interest payments on loans and
investment securities. While maturities and scheduled amortization of loans and
investment securities are a predictable source of funds, deposit flows and
mortgage prepayments are greatly influenced by general interest rates, economic
conditions and competition. The Company's primary investing activity is loan
originations. The Company maintains liquidity levels adequate to fund loan
commitments, investment opportunities, deposit withdrawals and other financial
commitments. At September 30, 1996, there were no material commitments for
capital expenditures, however, the construction of a new bank location is in the
planning phase with an anticipated cost of approximately $500,000. Management
has no knowledge of any trends, events or uncertainties that will have or are
reasonably likely to have material effects on the liquidity, capital resources
or operations of the Company. Further, management is not aware of any current
recommendations by the regulatory authorities which, if implemented, would have
such an effect.
14
<PAGE>
Part II
OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
From time to time, the Company and any subsidiaries may be a party to
various legal proceedings incident to its or their business. At
September 30, 1996, there were no legal proceedings to which the
Company or any subsidiary was a party, or to which of any of their
property was subject, which were expected by management to result in a
material loss.
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
--------------------------------
(a) Exhibits: Exhibit 27 (financial data schedule)
(b) Reports on Form 8-K: On July 5, 1996, the Company filed Amendment
Number 1 to a Form 8-K (items 5 and 7) concerning the change in
accountants
15
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
NCF FINANCIAL CORPORATION
Date: November 11, 1996 By /s/ Dan R. Biggs
----------------- -------------------------------
Dan R. Biggs
(Vice President and Principal
Financial Officer and duly
authorized representative)
16
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 473
<INT-BEARING-DEPOSITS> 2,115
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 2,921
<INVESTMENTS-MARKET> 2,947
<LOANS> 28,624
<ALLOWANCE> 165
<TOTAL-ASSETS> 34,952
<DEPOSITS> 22,584
<SHORT-TERM> 0
<LIABILITIES-OTHER> 361
<LONG-TERM> 0
0
0
<COMMON> 77
<OTHER-SE> 11,775
<TOTAL-LIABILITIES-AND-EQUITY> 34,952
<INTEREST-LOAN> 575
<INTEREST-INVEST> 26
<INTEREST-OTHER> 52
<INTEREST-TOTAL> 653
<INTEREST-DEPOSIT> 269
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 384
<LOAN-LOSSES> 4
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 362
<INCOME-PRETAX> 24
<INCOME-PRE-EXTRAORDINARY> 24
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.03
<YIELD-ACTUAL> 4.48
<LOANS-NON> 695
<LOANS-PAST> 273
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 272
<ALLOWANCE-OPEN> 161
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 165
<ALLOWANCE-DOMESTIC> 165
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
