SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A-1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 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: 000-23543
UNION COMMUNITY BANCORP
(Exact name of registrant specified in its charter)
Indiana 35-2025237
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
221 East Main Street
Crawfordsville, Indiana 47933
(Address of principal executive offices,
including Zip Code)
(765) 362-2400
(Registrant's telephone number, including area code)
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 report), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
The number of shares of the Registrant's common stock, without par value,
outstanding as of June 30, 2001 was 2,270,000.
Union Community Bancorp
Form 10-Q/A
Index
Page No.
FORWARD LOOKING STATEMENT 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheet 4
Consolidated Condensed Statement of Income 5
Consolidated Condensed Statement of Shareholders' Equity 6
Consolidated Condensed Statement of Cash Flows 7
Notes to Unaudited Consolidated Condensed Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
FORWARD LOOKING STATEMENT
This Quarterly Report on Form 10-Q/A ("Form 10-Q/A") contains statements which
constitute forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements appear in a number of
places in this Form 10-Q/A and include statements regarding the intent, belief,
outlook, estimate or expectations of the Company (as defined in the notes to the
consolidated condensed financial statements), its directors or its officers
primarily with respect to future events and the future financial performance of
the Company. Readers of this Form 10-Q/A are cautioned that any such forward
looking statements are not guarantees of future events or performance and
involve risks and uncertainties, and that actual results may differ materially
from those in the forward looking statements as a result of various factors. The
accompanying information contained in this Form 10-Q/A identifies important
factors that could cause such differences. These factors include changes in
interest rates; loss of deposits and loan demand to other financial
institutions; substantial changes in financial markets; changes in real estate
values and the real estate market; or regulatory changes.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
UNION COMMUNITY BANCORP AND SUBSIDIARY
Consolidated Condensed Balance Sheet
(Unaudited)
June 30, December 31,
2001 2000
------------------------ -------------------------
Assets
Cash $ 296,459 $ 210,601
Interest-bearing demand deposits 2,660,136 4,544,085
------------------------ -------------------------
Cash and cash equivalents 2,956,595 4,754,686
Investment securities held to maturity 5,100,695 7,567,432
Loans, net of allowance for loan losses of $509,554 and $479,554 115,822,151 109,505,174
Premises and equipment 419,339 373,986
Federal Home Loan Bank stock 1,180,700 1,043,700
Investment in limited partnership 876,609 911,609
Interest receivable 785,210 958,450
Other assets 213,235 238,453
------------------------ -------------------------
Total assets $ 127,354,534 $ 125,383,490
======================== =========================
Liabilities
Deposits
Noninterest-bearing $ 1,543,631 $ 1,769,103
Interest-bearing 76,173,123 71,047,357
------------------------ -------------------------
Total deposits 77,716,754 72,816,460
Federal Home Loan Bank advances 12,405,633 14,534,893
Note payable 477,142 654,542
Interest payable 155,619 196,223
Dividends payable 317,683 326,783
Other liabilities 640,301 666,655
------------------------ -------------------------
Total liabilities 91,713,132 89,195,556
------------------------ -------------------------
Commitments and Contingent Liabilities
Shareholders' Equity
Preferred stock, no par value
Authorized and unissued - 2,000,000 shares
Common stock, no-par value
Authorized - 5,000,000 shares
Issued and outstanding - 2,270,000 and 2,341,000 shares 22,191,349 22,868,943
Retained earnings 15,992,459 16,025,304
Unearned employee stock ownership plan (ESOP) shares (1,470,951) (1,521,125)
Unearned recognition and retention plan (RRP) shares (1,071,455) (1,185,188)
------------------------ -------------------------
Total shareholders' equity 35,641,402 36,187,934
------------------------ -------------------------
Total liabilities and shareholders' equity $ 127,354,534 $ 125,383,490
======================== =========================
See notes to consolidated condensed financial statements.
UNION COMMUNITY BANCORP AND SUBSIDIARY
Consolidated Condensed Statement of Income
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
------------------ ---------------- ----------------- ---------------
2001 2000 2001 2000
------------------ ---------------- ----------------- ---------------
Interest and Dividend Income
Loans $ 2,221,355 $ 2,108,416 $ 4,393,124 $4,214,690
Investment securities 93,114 133,735 212,310 265,226
Dividends on Federal Home Loan Bank stock 22,814 20,760 45,804 41,520
Deposits with financial institutions 42,410 13,659 120,287 36,955
---------------- ----------------- ----------------- ---------------
Total interest and dividend income 2,379,693 2,276,570 4,771,525 4,558,431
---------------- ----------------- ----------------- ---------------
Interest Expense
Deposits 1,028,747 933,270 2,060,096 1,830,652
Federal Home Loan Bank advances 161,444 173,614 380,466 344,794
---------------- ----------------- ----------------- ---------------
Total interest expense 1,190,191 1,106,884 2,440,562 2,175,446
---------------- ----------------- ----------------- ---------------
Net Interest Income 1,189,502 1,169,686 2,330,963 2,382,985
Provision for loan losses 15,000 15,000 30,000 30,000
---------------- ----------------- ----------------- ---------------
Net Interest Income After Provision for Loan Losses 1,174,502 1,154,686 2,300,963 2,352,985
---------------- ----------------- ----------------- ---------------
Other Income (Losses)
Equity in losses of limited partnerships (10,000) (25,000) (35,000) (55,000)
Net realized gains on sales of available for sale
securities 8,331
Other income 40,036 28,767 84,184 61,863
---------------- ----------------- ----------------- ---------------
Total other income (losses) 30,036 3,767 49,184 15,194
---------------- ----------------- ----------------- ---------------
Other Expenses
Salaries and employee benefits 307,531 266,848 618,061 532,954
Net occupancy expenses 18,340 10,495 29,878 16,409
Equipment expenses 9,364 5,119 15,836 10,097
Legal and professional fees 49,440 48,521 80,815 71,326
Data processing fees 30,241 19,538 48,530 39,040
Other expenses 116,458 85,952 234,989 159,262
---------------- ----------------- ----------------- ---------------
Total other expenses 531,374 436,473 1,028,109 829,088
---------------- ----------------- ----------------- ---------------
Income Before Income Tax 673,164 721,980 1,322,038 1,539,091
Income tax expense 223,430 227,584 436,458 509,473
---------------- ----------------- ----------------- ---------------
Net Income $ 449,734 $ 494,396 $ 885,580 $1,029,618
================ ================= ================= ===============
Basic Earnings per Share $ .22 $ .22 $ .43 $ .45
================ ================= ================= ===============
Diluted Earnings per Share $ .22 $ .22 $ .43 $ .45
================ ================= ================= ===============
See notes to consolidated condensed financial statements.
UNION COMMUNITY BANCORP AND SUBSIDIARY
Consolidated Condensed Statement of Shareholders' Equity
For the Six Months Ended June 30, 2001
(Unaudited)
Common Stock Unearned
------------------------------
Shares Retained ESOP Unearned
Outstanding Amount Earnings Shares Compensation Total
-------------- ----------------- --------------- ---------------- ---------------- -----------
Balances, January 1, 2001 2,341,000 $22,868,943 $ 16,025,304 $(1,521,125) $(1,185,188) $36,187,934
Net income for the period 885,580 885,580
Cash dividends ($.30 per share) (635,367) (635,367)
Purchase of common stock (71,000) (693,717) (283,058) (976,775)
Amortization of unearned
compensation expense 113,733 113,733
ESOP shares earned 16,123 50,174 66,297
-------------- --------------- ---------------- ---------------- ---------------- ------------
Balances, June 30, 2001 2,270,000 $22,191,349 15,992,459 $(1,470,951) $(1,071,455) $ 5,641,402
============== =============== ================ ================ ================ ============
See notes to consolidated condensed financial statements.
UNION COMMUNITY BANCORP AND SUBSIDIARY
Consolidated Condensed Statement of Cash Flows
(Unaudited)
Six Months Ended
June 30,
---------------- ---------------
2001 2000
---------------- ---------------
Operating Activities
Net income $ 885,580 $ 1,029,618
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan losses 30,000 30,000
Depreciation and amortization 17,624 17,568
Investment securities accretion, net (1,664) (14,090)
Gain on sale of investment securities available for sale (8,331)
Equity in losses of limited partnerships 35,000 55,000
Amortization of unearned compensation expense 113,733 113,733
ESOP shares earned 66,297 55,663
Net change in:
Interest receivable 173,240 82,123
Interest payable (40,604) 45,754
Other assets 25,218 52,931
Other liabilities (48,627) 13,633
---------------- ---------------
Net cash provided by operating activities 1,255,797 1,473,622
---------------- ---------------
Investing Activities
Purchase of securities held to maturity (300,000)
Purchase of FHLB stock (137,000)
Proceeds from sales of investment securities available for sale 87,997
Proceeds from maturities of securities held to maturity and paydowns of mortgage-
backed securities 2,498,401 121,476
Net changes in loans (6,346,977) (1,880,090)
Purchases of property and equipment (62,977) (15,116)
---------------- ---------------
Net cash used by investing activities (4,048,553) (1,985,733)
---------------- ---------------
Financing Activities
Net change in
Interest-bearing demand and savings deposits 3,232,372 1,076,981
Certificates of deposit 1,667,922 652,776
Proceeds from borrowings 4,000,000 9,000,000
Repayment of borrowings (6,306,660) (9,306,533)
Cash dividends (644,467) (652,473)
Repurchase of common stock (976,775) (1,240,031)
Net change in advances by borrowers for taxes and insurance 22,273 6,696
---------------- ---------------
Net cash provided (used) by financing activities 994,665 (462,584)
---------------- ---------------
Net Change in Cash and Cash Equivalents (1,798,091) (974,695)
Cash and Cash Equivalents, Beginning of Period 4,754,686 3,117,025
---------------- ---------------
Cash and Cash Equivalents, End of Period $ 2,956,595 $ 2,142,330
================ ===============
Additional Cash Flows Information
Interest paid $ 2,481,166 $ 2,129,692
Income tax paid 524,000 517,025
Transfers from loans to foreclosed assets 85,320
See notes to consolidated condensed financial statements.
UNION COMMUNITY BANCORP AND SUBSIDIARY
Notes to Unaudited Consolidated Condensed Financial Statements
Note 1: Basis of Presentation
The consolidated financial statements include the accounts of Union Community
Bancorp (Company) and its wholly owned subsidiary, Union Federal Savings and
Loan Association, a federally chartered savings and loan association (Union
Federal). A summary of significant accounting policies is set forth in Note 1 of
Notes to Financial Statements included in the December 31, 2000 Annual Report to
Shareholders. All significant intercompany accounts and transactions have been
eliminated in consolidation.
The interim consolidated financial statements have been prepared in accordance
with instructions to Form 10-Q/A, and therefore do not include all information
and footnotes necessary for a fair presentation of financial position, results
of operations and cash flows in conformity with generally accepted accounting
principles.
The interim consolidated financial statements at June 30, 2001, and for the
three and six months ended June 30, 2001 and 2000, have not been audited by
independent accountants, but reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows for
such periods.
Note 2: Earnings Per Share
Earnings per share have been computed based upon the weighted-average common
shares outstanding. Unearned Employee Stock Ownership Plan shares have been
excluded from the computation of average common shares outstanding.
Three Months Ended Three Months Ended
June 30, 2001 June 30, 2000
------------- -------------
Weighted Weighted
Average Per Share Average Per Share
Income Shares Amount Income Shares Amount
------ ------ ------ ------ ------ ------
Basic earnings per share
Income available to common
shareholders $449,734 2,031,714 $ .22 $494,396 2,260,870 $ .22
===== =====
Effect of dilutive RRP awards
and stock options
--------- --------- -------- ----------
Diluted earnings per share
Income available to common
shareholders and assumed
conversions $449,734 2,031,614 $ .22 $494,396 2,260,870 $ .22
======== ========= ===== ======== ========= =====
Six Months Ended Six Months Ended
June 30, 2001 June 30, 2000
------------- -------------
Weighted Weighted
Average Per Share Average Per Share
Income Shares Amount Income Shares Amount
------ ------ ------ ------ ------ ------
Basic earnings per share
Income available to common
shareholders $ 885,580 2,054,427 $ .43 $1,029,618 2,292,573 $ .45
===== ======
Effect of dilutive RRP awards
and stock options
---------- --------- ---------- ---------
Diluted earnings per share
Income available to common
shareholders and assumed
conversions $ 885,580 2,054,427 $ .43 $1,029,618 2,292,573 $ .45
========== ========= ===== ========== ========= =====
Note 3: Business Combinations
On July 23, 2001, the Company signed a definitive agreement to acquire
Montgomery Financial Corporation ("Montgomery"), Crawfordsville, Indiana. The
acquisition will be accounted for under the purchase method of accounting. Under
the terms of the agreement, shareholders of Montgomery would have the right to
elect to receive either 1.1244 shares of the Company's common stock or $15.00 in
cash. However, fifty percent of the aggregate consideration must be paid in
shares of common stock and there may be pro rata allocations of cash or stock
made to shareholders to ensure that this requirement is satisfied. The
transaction is subject to approval by shareholders of the Company and Montgomery
and appropriate regulatory agencies. As of March 31, 2001, Montgomery had total
assets and shareholders' equity of $142.9 million and $16.9 million,
respectively.
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
Union Community Bancorp, an Indiana corporation (the "Company"), was organized
in September, 1997. On December 29, 1997, it acquired the common stock of Union
Federal Savings and Loan Association ("Union Federal") upon the conversion of
Union Federal from a federal mutual savings and loan association to a federal
stock savings and loan association.
Union Federal was organized as a state-chartered savings and loan association in
1913. Since then, Union Federal has conducted its business from its full-service
office located in Crawfordsville, Indiana. Union Federal opened its first branch
office in Crawfordsville on April 2, 2001. Union Federal's principal business
consists of attracting deposits from the general public and originating
fixed-rate and adjustable-rate loans secured primarily by first mortgage liens
on one- to four-family residential real estate. Union Federal's deposit accounts
are insured up to applicable limits by the Savings Association Insurance Fund
("SAIF") of the Federal Deposit Insurance Corporation ("FDIC"). Union Federal
offers a number of financial services, including: (i) residential real estate
loans; (ii) multi-family loans; (iii) commercial real estate loans; (iv)
construction loans; (v) home improvement loans and consumer loans, including
single-pay loans, loans secured by deposits, installment loans and commercial
loans; (vi) money market demand accounts ("MMDAs"); (vii) passbook savings
accounts; and (viii) certificates of deposit.
Union Federal currently owns one subsidiary, UFS Service Corp. ("UFS"), whose
sole asset is its investment in Pedcor Investments 1993-XVI, L.P. ("Pedcor"),
which is an Indiana limited partnership that was established to organize, build,
own, operate and lease a 48-unit apartment complex in Crawfordsville, Indiana
known as Shady Knoll II Apartments (the "Project"). Union Federal owns the
limited partner interest in Pedcor. The general partner is Pedcor Investments
LLC. The Project, operated as a multi-family, low- and moderate-income housing
project, is completed and is performing as planned. Because UFS engages
exclusively in activities that are permissible for a national bank, OTS
regulations permit Union Federal to include its investment in UFS in its
calculation of regulatory capital.
Union Federal's results of operations depend primarily upon the level of net
interest income, which is the difference between the interest income earned on
interest-earning assets, such as loans and investments, and costs incurred with
respect to interest-bearing liabilities, primarily deposits and borrowings.
Results of operations also depend upon the level of Union Federal's non-interest
income, including fee income and service charges, and the level of its
non-interest expenses, including general and administrative expenses.
Financial Condition
Total assets increased approximately $2.0 million, or 1.6%, to $127.4 million at
June 30, 2001, from $125.4 million at December 31, 2000. The increase was
primarily due to loan growth of $6.3 million offset by decreases in cash and
cash equivalents and investment securities held to maturity. Net loans increased
by 5.8% to $115.8 million due to an increase in customer demand and an increased
focus by the Company in the areas of commercial and consumer lending. Cash and
cash equivalents decreased by $1.8 million from December 31, 2000 to June 30,
2001. Investment securities held to maturity decreased $2.5 million during the
six months ended June 30, 2001 primarily due to $2.3 million received on
investment securities that were called prior to their scheduled maturity dates.
Deposits increased by $4.9 million to $77.7 million during the six months ended
June 30, 2001. The increase in deposits was primarily used to fund loan growth.
Borrowed funds decreased by $2.3 million, or 15.2%, from December 31, 2000 to
June 30, 2001. The decrease in total borrowed funds resulted from a decrease in
FHLB advances of $2.1 million and a decrease in the note payable to a limited
partnership of $178,000.
Shareholders' equity decreased approximately $547,000 to $35.6 million at June
30, 2001. The decrease was primarily due to stock repurchases of $977,000 and
cash dividends of $636,000. These decreases were offset by net income for six
months ended June 30, 2001 of $886,000, Employee Stock Ownership Plan shares
earned of $66,000 and unearned compensation amortization of $114,000.
Comparison of Operating Results for the Three Months Ended June 31, 2001 and
2000
Net income decreased approximately $44,000 from $494,000 for the three months
ended June 30, 2000 to $450,000 for the three months ended June 30, 2001. The
return on average assets was 1.43% and 1.63% for the three months ended June 30,
2001 and 2000, respectively.
Interest income increased $103,000, or 4.5%, from $2,277,000 for the three
months ended June 30, 2000 to $2,380,000 for the comparable period in 2001.
Interest expense increased approximately $83,000, or 7.5%, from $1,107,000 for
the three months ended June 30, 2000 to $1,190,000 for the same period in 2001.
As a result, net interest income for the three months ended June 30, 2001
amounted to $1,190,000, a $20,000 increase from the second quarter of 2000.
The provisions for loan losses made for the three months ended June 30, 2001 and
2000 were $15,000. The 2001 provision and the allowance for loan losses were
considered adequate, based on size, condition and components of the loan
portfolio. While management estimates loan losses using the best available
information, no assurance can be given that future addition to the allowance
will not be necessary based on changes in economic and real estate market
conditions, further information obtained regarding problem loans, identification
of additional problem loans and other factors, both within and outside of
management's control.
Other income (losses) was $30,000 for the three months ended June 30, 2001
compared to $4,000 for the same period in 2000. Other income (losses) includes
the equity in losses of the Company's investment in a limited partnership,
Pedcor. The Company recorded $10,000 in equity losses during the 2nd quarter of
2001 as compared to $25,000 during the same period in 2000. In addition to
recording the equity in the losses of Pedcor, a benefit of low-income housing
income tax credits in the amount of $45,000 was recorded for the three months
ended June 30, 2001 and 2000. Other income also increased during the three
months ended June 30, 2001 as compared to the same period in 2000 due to nominal
increases in a variety of income categories.
Other expenses increased approximately $95,000 from $437,000 for the three
months ended June 30, 2000 to $532,000 for the comparable period in 2001. The
increase was primarily due to the opening of the Association's branch office in
Crawfordsville, Indiana on April 2, 2001.
Income tax expense decreased $5,000, or 2.2%, for the three months ended June
30, 2001 compared to the same period in 2000. The effective tax rates for the
three months ended June 30, 2001 and 2000 were approximately 33% and 32%,
respectively.
Comparison of Operating Results for the Six Months Ended June 31, 2001 and 2000
Net income decreased $144,000, or 14.0%, from $1,030,000 for the six months
ended June 30, 2000 to $886,000 for the six months ended June 30, 2001. The
return on average assets was 1.40% and 1.70 % for the six months ended June 30,
2001 and 2000, respectively.
Interest income increased $214,000, or 4.7%, from $4,558,000 for the six months
ended June 30, 2000 as compared to $4,772,000 for the six months ended June 30,
2001. Interest expense increased $266,000, or 12.2%, from $2,175,000 for the six
months ended June 30, 2000 to $2,441,000 for the same period in 2001. As a
result, net interest income for the six months ended June 30, 2001 amounted to
$2,331,000, a 2.2% decrease from six months ended June 30, 2000.
The provisions for loan losses made for the six months ended June 30, 2001 and
2000 were $30,000. The 2001 provision and the allowance for loan losses were
considered adequate, based on size, condition and components of the loan
portfolio. While management estimates loan losses using the best available
information, no assurance can be given that future addition to the allowance
will not be necessary based on changes in economic and real estate market
conditions, further information obtained regarding problem loans, identification
of additional problem loans and other factors, both within and outside of
management's control.
Other income (losses) were $49,000 for the six months ended June 30, 2001
compared to $15,000 for the same period in 2000. Other income (losses) includes
the equity in losses of the Company's investment in a limited partnership,
Pedcor. The Company recorded $35,000 in equity losses during the six months
ended 2001 as compared to $55,000 during the same period in 2001. In addition to
recording the equity in the losses of Pedcor, a benefit of low-income housing
income tax credits in the amount of $89,000 was recorded for the six months
ended June 30, 2001 and 2000. Other income also increased during the six months
ended June 30, 2001 as compared to the same period in 2000 due to nominal
increases in a variety of income categories.
Other expenses increased $199,000 from $829,000 for the six months ended June
30, 2000 to $1,028,000 for the comparable period in 2001. The increase was
primarily due to the opening of the Association's branch office as mentioned
above.
Income tax expense decreased approximately $73,000, or 14.3%, for the six months
ended June 30, 2001 compared to the same period in 2000. The effective tax rate
was 33% for both six-month periods ended June 30, 2001 and 2000.
Asset Quality
Union Federal currently classifies loans as special mention, substandard,
doubtful and loss to assist management in addressing collection risks and
pursuant to regulatory requirements which are not necessarily consistent with
generally accepted accounting principles. Special mention loans represent
credits that have potential weaknesses that deserve management's close
attention. If left uncorrected, these potential weaknesses may result in
deterioration of the repayment prospects or Union Federal's credit position at
some future date. Substandard loans represent credits characterized by the
distinct possibility that some loss will be sustained if deficiencies are not
corrected. Doubtful loans possess the characteristics of substandard loans, but
collection or liquidation in full is doubtful based upon existing facts,
conditions and values. A loan classified as a loss is considered uncollectible.
Union Federal had $455,000 and $461,000 of loans classified as special mention
as of June 30, 2001 and December 31, 2000 respectively. In addition, Union
Federal had $1.3 million and $1.4 million of loans classified as substandard at
June 30, 2001 and December 31, 2000, respectively. At June 30, 2001 and December
31, 2000, no loans were classified as doubtful or loss. At June 30, 2001, and
December 31, 2000, respectively, $326,000 and $406,000 of the substandard loans
were non-accrual loans. The allowance for loan losses was $510,000 or .44% of
loans at June 30, 2001 as compared to $480,000 or .44% of loans at December 31,
2000.
Liquidity and Capital Resources
The standard measure of liquidity for savings associations is the ratio of cash
and eligible investments to a certain percentage of net withdrawable savings
accounts and borrowings due within one year. The minimum required ratio is
currently set by the Office of Thrift Supervision regulation at 4%. As of June
30, 2001, Union Federal had liquid assets of $8.1 million and a liquidity ratio
of 9.8%.
Other
The Securities and Exchange Commission maintains a Web site that contains
reports, proxy information statements, and other information regarding
registrants that file electronically with the Commission, including the Company.
The address is http://www.sec.gov.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Presented below, as of June 30, 2001 and 2000, is an analysis performed by the
OTS of Union Federal's interest rate risk as measured by changes in Union
Federal's net portfolio value ("NPV") for instantaneous and sustained parallel
shifts in the yield curve, in 100 basis point increments, up and down 300 basis
points.
June 30, 2001
-------------
Net Portfolio Value NPV as % of PV of Assets
Changes
In Rates $ Amount $ Change % Change NPV Ratio Change
-------- -------- --------- -------- --------- ------
+300 bp 27,880 -8,003 -22% 23.09% -417 bp
+200 bp 30,519 -5,364 -15% 24.56% -271 bp
+100 bp 33,289 -2,594 -7% 26.00% -126 bp
0 bp 35,883 27.26%
-100 bp 37,739 1,856 5% 28.05% +79 bp
-200 bp 38,881 2,998 8% 28.41% +115 bp
-300 bp 39,972 4,089 11% 28.73% +147 bp
June 30, 2000
-------------
Net Portfolio Value NPV as % of PV of Assets
Changes
In Rates $ Amount $ Change % Change NPV Ratio Change
-------- -------- --------- -------- --------- ------
+300 bp 24,872 -8,852 -26% 22.57% -545 bp
+200 bp 27,789 -5,935 -18% 24.47% -354 bp
+100 bp 30,765 -2,959 -9% 26.30% -172 bp
0 bp 33,724 28.01%
-100 bp 36,386 2,663 8% 29.46% +145 bp
-200 bp 38,297 4,573 14% 30.43% +242 bp
-300 bp 40,081 6,358 19% 31.30% +329 bp
The analysis at June 30, 2001 indicates that there have been no material changes
in market interest rates or in the Company's interest rate sensitive instruments
which would cause a material change in the market risk exposures which affect
the quantitative and qualitative risk disclosures as presented in Item 7A of the
Company's Annual Report on Form 10-K for the period ended December 31, 2000.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to Vote of Security Holders.
On April 18, 2001, Union Community Bancorp held its Annual Meeting
of Shareholders. Two directors were elected to terms expiring in
2004 by the following votes:
Philip L. Boots For: 2,054,398 Withheld: 109,460
John M. Horner For: 2,050,717 Withheld: 113,141
The terms of office of the following directors of Union Community
Bancorp continued after the Annual Shareholder Meeting:
Name Term Expires In
---- ---------------
Marvin L. Burkett 2002
Phillip E. Grush 2002
Joseph E. Timmons 2002
Samuel H. Hildebrand 2003
Harry A. Siamas 2003
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) On July 24, 2001, the Company filed a current report on
Form 8-K disclosing the merger between Union Community
Bancorp and Montgomery Financial Corporation the
Agreement and Plan of Reorganization attached to which
is an exhibit thereto.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNION COMMUNITY BANCORP
Date: October 5, 2001 By: /s/ Joseph E. Timmons
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Joseph E. Timmons
President and
Chief Executive Officer
Date: October 5, 2001 By: /s/ Denise E. Swearingen
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Denise E. Swearingen
Treasurer