UNITED STATES
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 SEPTEMBER 30, 2001
----------------------
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 0-12510
------
MARATHON BANCORP
---------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-3770539
- ------------------------------------------ ------------------
(State or other jurisdiction of incorporation) (I.R.S. Employer Identification
No.)
11150 West Olympic Boulevard, Los Angeles, CA 90064
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 996-9100
-----------------
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 ____
---
As of November 1, 2001, there were 3,852,819 shares of no par Common Stock
issued and outstanding.
Consolidated Statements of Financial Condition
SEPTEMBER 30, December 31,
ASSETS 2001 2000
---------------------------------------- ---------------------
Cash and Due From Banks . . . . . . . . . . . . . . . . . . . . . $ 6,421,000 $ 3,675,000
Federal Funds Sold. . . . . . . . . . . . . . . . . . . . . . . . 8,550,000 7,265,000
---------------------------------------- ---------------------
TOTAL CASH AND CASH EQUIVALENTS. . . . . . . . . . . . . . 14,971,000 10,940,000
Investment Securities
Securities Available for Sale. . . . . . . . . . . . . . . . . 17,222,000 9,333,000
Securities Held to Maturity (Approx. market value:
2001 - $11,817,000; 2000 - $15,261,000) 11,378,000 15,207,000
---------------------------------------- ---------------------
TOTAL INVESTMENT SECURITIES. . . . . . . . . . . . . . . . 28,600,000 24,540,000
Federal Home Loan Bank and Federal Reserve Bank Stock, at cost. . 409,000 375,000
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,847,000 52,872,000
Less Allowance for Credit Losses . . . . . . . . . . . . . . . ( 1,071,000) ( 1,066,000)
---------------------------------------- ---------------------
NET LOANS . . . . . . . . . . . . . . . . . . . . . . . . 57,776,000 51,806,000
Premises and Equipment. . . . . . . . . . . . . . . . . . . . . . 244,000 263,000
Accrued Interest and Other Assets . . . . . . . . . . . . . . . . 1,372,000 1,325,000
Cash Surrender Value of Life Insurance. . . . . . . . . . . . . . 3,806,000 3,667,000
---------------------------------------- ---------------------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . $ 107,178,000 $ 92,916,000
======================================== =====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-Bearing Demand . . . . . . . . . . . . . . . . . . $ 30,044,000 $ 29,900,000
Interest-Bearing Demand. . . . . . . . . . . . . . . . . . . . 3,301,000 3,579,000
Money Market and Savings . . . . . . . . . . . . . . . . . . . 36,166,000 27,228,000
Time Deposits Under $100,000 . . . . . . . . . . . . . . . . . 7,661,000 6,703,000
Time Deposits $100,000 and Over. . . . . . . . . . . . . . . . 17,458,000 12,475,000
---------------------------------------- ---------------------
TOTAL DEPOSITS. . . . . . . . . . . . . . . . . . . . . . 94,630,000 79,885,000
Accrued Interest and Other Liabilities. . . . . . . . . . . . . . 949,000 776,000
Federal Home Loan Bank Advance. . . . . . . . . . . . . . . . . . - 1,800,000
---------------------------------------- ---------------------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . 95,579,000 82,461,000
Shareholders' Equity
Preferred Shares - No Par Value, 1,000,000 Shares Authorized,
No Shares Issued and Outstanding. . . . . . . . . . . . . . - -
Common Shares - No Par Value, 9,000,000 Shares Authorized,
Issued and Outstanding: 3,852,819 at September 30, 2001 and
3,838,019 at December 31, 2000. . . . . . . . . . . . . . . 13,713,000 13,675,000
Accumulated Deficit. . . . . . . . . . . . . . . . . . . . . . ( 2,462,000) ( 3,215,000)
Accumulated Other Comprehensive Income - Net Unrealized
Gains (Losses) on Securities Available for Sale. . . . . . 348,000 ( 5,000)
---------------------------------------- ---------------------
TOTAL SHAREHOLDERS' EQUITY. . . . . . . . . . . . . . . . 11,599,000 10,455,000
---------------------------------------- ---------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY. . . . . . . . $ 107,178,000 $ 92,916,000
======================================== =====================
Marathon Bancorp and Subsidiary
Consolidated Statements of Operations
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
---------------- ---------------- ---------------- ----------------
INTEREST INCOME
Interest and Fees on Loans. . . . . . . . . . . . . $ 1,344,000 $ 1,314,000 $ 3,933,000 $ 3,675,000
Interest on Investment Securities - Taxable . . . . 339,000 364,000 1,052,000 993,000
Other Interest Income . . . . . . . . . . . . . . . 93,000 85,000 222,000 278,000
---------------- ---------------- ---------------- ----------------
TOTAL INTEREST INCOME . . . . . . . . . . . . . . 1,776,000 1,763,000 5,207,000 4,946,000
INTEREST EXPENSE
Interest on Demand Deposits . . . . . . . . . . . . 8,000 8,000 24,000 24,000
Interest on Money Market and Savings. . . . . . . . 255,000 301,000 719,000 815,000
Interest on Time Deposits . . . . . . . . . . . . . 272,000 234,000 879,000 729,000
Other Interest Expense. . . . . . . . . . . . . . . - 1,000 2,000 2,000
---------------- ---------------- ---------------- ----------------
TOTAL INTEREST EXPENSE. . . . . . . . . . . . . . 535,000 544,000 1,624,000 1,570,000
---------------- ---------------- ---------------- ----------------
NET INTEREST INCOME . . . . . . . . . . . . . . . . . . 1,241,000 1,219,000 3,583,000 3,376,000
Provision for Credit Losses . . . . . . . . . . . . . . 20,000 30,000 45,000 90,000
---------------- ---------------- ---------------- ----------------
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES. . . . . . . . . . . 1,221,000 1,189,000 3,538,000 3,286,000
NONINTEREST INCOME
Service Charges and Fees on Deposits. . . . . . . . 107,000 63,000 267,000 197,000
Dividends on Cash Surrender Value of Life Insurance 54,000 52,000 159,000 146,000
Gain (Loss) Sale of Securities. . . . . . . . . . . - - 4,000 -
Other Noninterest Income. . . . . . . . . . . . . . 21,000 28,000 86,000 75,000
---------------- ---------------- ---------------- ----------------
TOTAL NONINTEREST INCOME. . . . . . . . . . . . . 182,000 143,000 516,000 418,000
NONINTEREST EXPENSE
Salaries and Employee Benefits. . . . . . . . . . . 546,000 526,000 1,680,000 1,525,000
Occupancy Expenses. . . . . . . . . . . . . . . . . 143,000 143,000 427,000 420,000
Furniture and Equipment . . . . . . . . . . . . . . 22,000 27,000 68,000 77,000
Professional Services . . . . . . . . . . . . . . . 29,000 24,000 88,000 83,000
Business Promotion and Donations. . . . . . . . . . 10,000 11,000 51,000 48,000
Stationery and Supplies . . . . . . . . . . . . . . 15,000 9,000 39,000 34,000
Data Processing Services. . . . . . . . . . . . . . 65,000 67,000 204,000 222,000
Customer Related Expenses . . . . . . . . . . . . . 67,000 83,000 222,000 238,000
Insurance and Assessments . . . . . . . . . . . . . 44,000 42,000 114,000 116,000
Legal Fees and Costs. . . . . . . . . . . . . . . . 101,000 39,000 209,000 89,000
Other Expenses. . . . . . . . . . . . . . . . . . . 70,000 71,000 207,000 202,000
---------------- ---------------- ---------------- ----------------
TOTAL NONINTEREST EXPENSE . . . . . . . . . . . . 1,112,000 1,042,000 3,309,000 3,054,000
INCOME BEFORE INCOME TAXES. . . . . . . . . . . . . . . 291,000 290,000 745,000 650,000
Income Tax Benefit . . . . . . . . . . . . . . . . . ( 3,000) ( 6,000) ( 8,000) ( 9,000)
---------------- ---------------- ---------------- ----------------
NET INCOME. . . . . . . . . . . . . . . . . . . . $ 294,000 $ 296,000 $ 753,000 $ 659,000
================ ================ ================ ================
Per Share Data:
Net Income - Basic . . . . . . . . . . . . . . . . $ 0.08 $ 0.08 $ 0.20 $ 0.17
Net Income - Diluted . . . . . . . . . . . . . . . $ 0.08 $ 0.08 $ 0.19 $ 0.17
Book Value . . . . . . . . . . . . . . . . . . . . $ 3.01 $ 2.57
Return on Average Assets. . . . . . . . . . . . . . . . 1.13% 1.33% 1.05% 1.00%
Return on Average Equity. . . . . . . . . . . . . . . . 10.62% 12.13% 9.31% 9.32%
Marathon Bancorp and Subsidiary
Consolidated Statements of Cash Flows
Marathon Bancorp and Subsidiary
2001 2000
---------------- ----------------
OPERATING ACTIVITIES
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 753,000 $ 659,000
Adjustments to Reconcile Net Loss to Net Cash Provided
by Operating Activities:
Depreciation and Amortization . . . . . . . . . . . . . . . . 87,000 92,000
Provision for Credit Losses . . . . . . . . . . . . . . . . . 45,000 90,000
Net Amortization of Premiums and Discounts
on Investment Securities . . . . . . . . . . . . . . . . . 32,000 3,000
Net Change in Deferred Loan Origination Fees. . . . . . . . . ( 163,000) 229,000
Net Increase in Cash Surrender Value of Life Insurance. . . . ( 139,000) ( 128,000)
Net Change in Accrued Interest, Other Assets
and Other Liabilities . . . . . . . . . . . . . . . . . . 126,000 37,000
---------------- ----------------
NET CASH PROVIDED BY OPERATING ACTIVITIES. . . . . . . . . . . 741,000 982,000
INVESTING ACTIVITIES
Net Change in Interest-Bearing Deposits with Financial Institutions - 100,000
Purchases of Available for Sale Securities . . . . . . . . . . . . (18,574,000) ( 7,054,000)
Purchases of Held to Maturity Securities. . . . . . . . . . . . . . ( 3,733,000) ( 4,502,000)
Proceeds from Maturities of Available for Sale Securities . . . . . 11,512,000 8,000,000
Proceeds from the Sale of Available for Sale Securities . . . . . . - 2,000,000
Proceeds from Maturities of Held to Maturity Securities . . . . . . 7,055,000 860,000
Purchase of Federal Home Loan & Federal Reserve Bank Stock. . . . . ( 34,000) 108,000
Net Change in Loans . . . . . . . . . . . . . . . . . . . . . . . . ( 5,852,000) ( 4,566,000)
Purchase of Life Insurance. . . . . . . . . . . . . . . . . . . . . - ( 1,935,000)
Purchases of Furniture, Fixtures and Equipment. . . . . . . . . . . ( 68,000) ( 39,000)
---------------- ----------------
NET CASH (USED) BY INVESTING ACTIVITIES. . . . . . . . . . . . ( 9,694,000) ( 7,028,000)
FINANCING ACTIVITIES
Net Change in Demand Deposits, Money Market and Savings . . . . . . 8,804,000 5,333,000
Net Change in Time Deposits . . . . . . . . . . . . . . . . . . . . 5,941,000 496,000
Net Change in Federal Home Loan Bank Advance. . . . . . . . . . . . ( 1,800,000) ( 75,000)
Proceeds from Exercise of Stock Options . . . . . . . . . . . . . . 39,000 21,000
---------------- ----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES. . . . . . . . . . . 12,984,000 5,775,000
---------------- ----------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . 4,031,000 ( 271,000)
Cash and Cash Equivalents at Beginning of Year. . . . . . . . . . . 10,940,000 8,891,000
---------------- ----------------
CASH AND CASH EQUIVALENTS AT END OF YEAR . . . . . . . . . . . . . . . $ 14,971,000 $ 8,620,000
================ ================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,646,000 $ 1,636,000
Income Taxes Paid . . . . . . . . . . . . . . . . . . . . . . . . . $ 74,000 $ 13,000
Consolidated Statement of Equity
Marathon Bancorp and Subsidiary
Accumulated
Common shares Other
------------------------- Comprehensive Accumulated Comprehensive
Shares Amount Income Deficit Income Total
------------ ----------- --------------- ---------------- -------------- --------------
BALANCE, JANUARY 1, 2001. . 3,838,019 $13,675,000 $( 3,215,000) $( 5,000) $ 10,455,000
Exercise of Stock Options. . 14,800 38,000 38,000
COMPREHENSIVE INCOME:
Net Income . . . . . . . . . $ 753,000 753,000 753,000
Net Changes in Unrealized
Gain (Loss) on Available
for Sale Securities. . . . 353,000 353,000 353,000
------------
TOTAL COMPREHENSIVE INCOME . $ 1,106,000
============
BALANCE, SEPTEMBER 30, 2001 3,852,819 $13,713,000 $ ( 2,462,000) $ 348,000 $ 11,599,000
============ =========== =============== ================ ==============
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION AND MANAGEMENT REPRESENTATIONS
The unaudited consolidated financial statements have been prepared in accordance
with the instructions to Form 10-QSB and, therefore, do not include all
footnotes normally required for complete financial disclosure. While the
Company believes that the disclosures presented are sufficient to make the
information not misleading, reference may be made to the consolidated financial
statements and notes thereto included in the Company's 2000 Annual Report on
Form 10-KSB.
The accompanying consolidated statements of financial condition and the related
consolidated statements of operations and cash flows reflect, in the opinion of
management, all material adjustments necessary for fair presentation of the
Company's financial position as of September 30, 2001 and December 31, 2000,
results of operations and changes in cash flows for the nine-month period ended
September 30, 2001 and 2000. The results of operations for the three-month
period and nine-month period ended September 30, 2001 are not necessarily
indicative of what the results of operations will be for the full year ending
December 31, 2001.
(2) EARNINGS PER SHARE (EPS)
Basic EPS excludes dilution and is computed by dividing income available to
common stockholders by the weighted-average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the entity.
Accordingly, the weighted average number of shares used to compute the net
income per share were as shown in the following table:
<s> <c> <c> <c> <c>
Third Quarter Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
--------- --------- --------- ---------
Average Shares Outstanding
Basic 3,852,232 3,837,954 3,848,101 3,836,110
Diluted 3,905,901 3,837,954 3,870,140 3,836,110
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion is intended to provide additional information about
Marathon Bancorp (the Company), its financial condition and results of
operations, which is not otherwise apparent from the consolidated financial
statements. Since Marathon National Bank (the Bank) represents a substantial
portion of the Company's activities and investments, the following relates
primarily to the financial condition and operations of the Bank. It should be
read in conjunction with the Company's 2000 Annual Report on Form 10-KSB.
FINANCIAL HIGHLIGHTS OVERVIEW
The Company's third quarter was highlighted by very good asset and deposit
growth. Assets increased by 8.5% for the quarter and are up 15.4% for the year.
Deposit grew 15.0% for the quarter and 18.5% for the year. Earnings remained
strong increasing to $294,000 for the third quarter, which is a 42.7% increase
over the second quarter this year and only $2,000 less than last year's third
quarter. The nine-month earnings increased to $753,000 a 14% improvement over
last year.
Results of Operations
Net Interest Income
Net interest income posted an increase for the quarter rising over both
last year and last quarter. Net interest income was 4.5% greater than second
quarter 2001 and 1.8% better than third quarter 2000. This was due primarily to
an increased asset base compared to yearend and last year third quarter. Net
interest margin for the third quarter was 5.18% compared to 5.88% for the third
quarter of 2000. The drop in rates by the Federal Reserve Board of 350 basis
points has put pressure on the margin, due to the fact that the Company has 32%
of its deposits in non-interest bearing accounts.
Both quarterly and nine-month interest income on loans increased. This was
accomplished by a $5,975,000 increase in the loan portfolio since the
beginning of the year which offset the large decrease in prime rate. We
were also helped by the fact that we have floor rates on most of our commercial
floating rate loans. Interest income on loans increased by $109,000 or 9.0%
for the third quarter as compared to the third quarter of 2000, and has
increased for the year-to-date $228,000 or 9.7% over the first nine months of
2000. Interest on investment securities declined for the third quarter of 2001
by 7.2% as compared to the third quarter of 2000, but continues to show an
increase for the nine-month period of 13.4% over 2000. The purchase of
securities with higher rates in the latter part of 2000 and the beginning of
2001 has helped to mitigate the drop in rates in the bond market. As would be
expected, other interest income, which is almost entirely derived from the
interest on fed funds sold, declined $58,000 for the third quarter and
$64,000 for the nine-months.
Interest expense has declined for the third quarter by $9,000 or 1.7% while
still showing an increase of $54,000 or 3.4% for the year-to-date over last
year. For the quarter, the volume of interest-bearing time deposits and money
market deposits was significantly higher in 2001 versus 2000 but the large drop
in interest rates offset the volume increase. The average cost of
interest-bearing deposits for the third quarter 2001 was 3.4% versus 4.4% for
the same period of 2000. Interest expense year-to-date increased as the drop in
average rate paid for the first nine months of 2001 did not offset the large
increase in average interest-bearing deposits for 2001.
Noninterest Income
Total noninterest income for the third quarter of 2001 increased by $39,000 or
27.3% over the amount reported for the third quarter of 2000 and increased
$98,000 or 23.4% for the first nine-months of 2001 as compared to 2000. The
quarterly increase came from a 69.8% increase in service charges on deposit
accounts. This occurred from the additional analysis service charge income
earned on commercial accounts whose earnings credits for deposits, which are
based on current market interest rates, have not offset the cost of services.
This has also been the case for the service charge income generated for the
nine-month period.
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the nine-month period of 2001 we also have realized additional dividends
from our investment in life insurance which increased 8.9% over 2000. Other
noninterest income increased due to additional income generated from bankcard
merchant discount earnings that we participate in with our third party vendor.
Noninterest Expense
Noninterest expense for the third quarter of 2001 increased $70,000 or 6.7% over
the same period last year. Equipment costs, customer related expense, marketing
and data processing cost showed declines, while salaries and employee benefits,
insurance, and legal costs increased for the quarter. The real estate loan in
process of foreclosure continues to keep up our legal costs and rising rates for
workmen's compensation insurance has increased insurance costs.
For the nine-month period, noninterest expenses increased $255,000 or 8.4% over
the prior year. The increased costs were in, occupancy, salaries and employee
benefits, marketing, office supplies and legal fees. Equipment costs, data
processing, insurance and customer related expenses decreased from last year.
Salaries and employee benefits increased from the cost of rising health
insurance premiums and a reduction in FASB 91 related loan credits.
Provision for Credit Losses:
Loans the Bank classified as substandard or doubtful as of the end of the
second quarter totaled $1,402,000 compared to $2,173,000 at December 31, 2000.
Nonperforming loans, which consist of loans past due over 90 days plus loans on
nonaccural, totaled $1,029,000 at September 30, 2001 compared to $1,000,000 at
December 31, 2000. The Company does not currently have any other real estate
owned but is in the process of foreclosure on a $1,000,000 loan that is in the
nonaccrual total and well collateralized.
During the first nine-months of 2001, the Bank charged-off $66,000 and collected
loan recoveries of $26,000. The Company made a provision to the reserve for
credit losses of $45,000. The net change to the reserve for credit losses for
the quarter was an increase of $9,000 while the net change for the nine-months
was an increase of $5,000. Management did an assessment of the loan portfolio,
reviewed current economic conditions and looked at its historic losses and
determined that the current level of the reserve was adequate. The current
reserve is $1,071,000, or 1.82% of outstanding loans.
ASSETS AND LIABILITIES
There was a substantial increase in assets during the third quarter. The third
quarter saw loans decrease while investment in fed funds and investment
securities increased. During the third quarter commercial loan demand in our
market has slowed and is now showing the effects of the recessionary economy.
The Company has had payoffs in excess of new loans generated for the third
quarter but continues to show an 11.3% increase over the yearend loan totals.
The Company increased the investment portfolio during the third quarter by
$7,878,000 or 38.0%. The increase in deposits was invested in medium term
securities that have kept up the overall yield in the investment portfolio
during this declining rate environment.
Deposits have done well for both the quarter and the year increasing $14,745,000
or 18.5% over December 31, 2000. The major growth has come in interest-bearing
deposits as both business and consumers try to increase their yield on cash
held in the bank. The largest growth has been in our Investors Money Market
accounts that pays an interest rate close to that earned in money market
investment funds.
MANAGEMENT'S DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL
Asset/Liability Management
Managing the risks associated with changing interest rates and their impact on
earnings, as well as, the liquidity needs of the Company is the responsibility
of the Asset/Liability Committee of the Bank.
Management continually monitors liquidity in relation to current and anticipated
levels of loans and deposits, and relates the data to short and long term
expectations. In order to serve customers effectively, funds need to be
available to meet their credit needs as well as their withdrawals of deposited
funds. Assets that are normally considered liquid are federal funds sold,
available for sale investment securities, cash and due from banks, and
securities purchased under agreements to resell. The ratio of short-term assets
to deposits was 31% at September 30, 2001 up from the 21% at June 30th and the
loan to deposit ratio was 62% down from the 71% reported at the end of the
second quarter. The Bank has not had to borrow during the quarter to meet the
loan funding needs.
Interest rate risk management focuses on the maturity and repricing of interest
earning assets in relationship to the interest bearing liabilities that fund
them. Net interest income can be vulnerable to fluctuations arising from a
change in the general level of interest rates to the extent that the average
yield on earning assets responds differently to such a change than does the
average cost of funds. The Company feels that we may still see a further drop
in the short-term interest rates before the year is over or at the beginning of
2002 and it will effect the net interest margin in the near term.
The Company measures interest rate sensitivity by distributing the maturities
and repricing periods of assets and supporting funding liabilities into interest
sensitivity periods, summarizing interest rate risk in terms of the resulting
interest sensitivity gaps. A positive gap indicates that more interest
sensitive assets than interest sensitive liabilities will be repriced during a
specified period, while a negative gap indicates the opposite condition.
It is the Bank's policy to maintain an adequate balance of rate sensitive assets
to rate sensitive liabilities. Due to the fact that the Bank has a large
portfolio of noninterest bearing demand deposits the Company has historically
been asset sensitive with a positive gap. The Company's asset sensitivity has
been decreased by lengthening the maturities in the investment portfolio,
removing the short-term callable securities and implementing interest rate
floors on a large portion of the loan portfolio. The Company's cumulative gap as
a percent of total assets at September 30, 2001 was 9% down from the 21%
reported at December 31, 2000.
Capital
For the first nine months of 2001 shareholders' equity increased $1,144,000 or
10.9%. Stock options exercised by employees accounted for $38,000 of the
increase, earnings for $753,000 and a gain in the value of available for sale
securities of $353,000.
The Bank is required to meet certain minimum risk-based capital guidelines and
leverage ratios promulgated by the bank regulatory authorities. The risk based
capital standards establish capital requirements that are more sensitive to risk
differences between various assets, consider off balance sheet activities in
assessing capital adequacy, and minimize the disincentives to holding liquid,
low risk assets. The leverage ratio consists of tangible Tier 1 capital divided
by average total assets.
The adequately capitalized total risk-based capital ratio required by the
federal regulators is 8.0 percent and the well-capitalized ratio is 10.0
percent. The Tier I capital to average assets (leverage ratio) required by the
federal regulators for adequately capitalized is 4.0 percent and 5.0 percent is
required to be well-capitalized. At September 30, 2001, the Bank had a risk
based capital ratio of 14.6 percent, and a Tier 1 capital leverage ratio of 10.8
percent.
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.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MARATHON BANCORP
Date: November 13, 2001. . . . Craig D. Collette
-----------------
Craig D. Collette
President and Chief Executive
Officer
Howard J. Stanke
-----------------
Howard J. Stanke
Executive Vice President and
Chief Financial Officer