SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 1997 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: 0-21108
MARION CAPITAL HOLDINGS, INC.
(Exact name of registrant specified in its charter)
Indiana 35-1872393
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
100 West Third Street
P.O. Box 367
Marion, Indiana 46952
(Address of principal executive offices,
including Zip Code)
(317) 664-0556
(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 May 5, 1997 was 1,802,846.
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Marion Capital Holdings, Inc.
Form 10-Q
Index
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Consolidated Condensed Statement of
Financial Condition as of
March 31, 1997 and June 30, 1996 3
Consolidated Condensed Statement of
Income for the three-month
period ended March 31, 1997 and 1996
and for the nine-month
period ended March 31, 1997 and 1996. 4
Consolidated Condensed Statement of
Changes in Shareholders' Equity
for the nine months ended March 31, 1997 5
Consolidated Condensed Statement of
Cash Flows for the nine months
ended March 31, 1997 and 1996 6-7
Notes to Consolidated Condensed
Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
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MARION CAPITAL HOLDINGS, INC.
AND WHOLLY-OWNED SUBSIDIARY
FIRST FEDERAL SAVINGS BANK OF MARION
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL CONDITION
March 31, June 30,
1997 1996
------------- -------------
ASSETS
Cash $ 1,929,349 $ 2,365,805
Short-term interest bearing deposits 3,653,657 5,154,518
------------- -------------
Total cash and cash equivalents 5,583,006 7,520,323
Investment securities available for sale 2,960,625 999,750
Investment securities held to maturity
(market value $4,555,813 and $11,496,535) 4,611,484 11,566,476
Mortgage-backed securities (market value $442,067
and $1,389,232) 445,570 1,491,246
Loans receivable, net 147,399,206 143,164,641
Real estate owned, net 0 182,959
Premises and equipment 1,512,706 1,446,025
Stock in Federal Home Loan Bank (at cost which
approximates market) 988,400 988,400
Other assets 10,914,418 10,406,755
------------- -------------
Total assets $ 174,415,415 $ 177,766,575
============= =============
LIABILITIES
Deposits $ 121,140,153 $ 126,260,010
Advances from FHLB 8,233,390 6,241,474
Advances by borrowers for taxes and
insurance 359,253 392,278
Other liabilities 4,480,876 3,361,739
------------- -------------
Total liabilities 134,213,672 136,255,501
SHAREHOLDERS' EQUITY
Preferred Stock:
Authorized and unissued--2,000,000 shares 0 0
Common stock, without par value:
Authorized--5,000,000 shares
Issued and outstanding--1,828,242 and
1,933,613 shares 11,712,034 13,814,937
Retained earnings 28,716,566 28,128,458
Unrealized gain (loss) on securities available for sale (24,480) (119)
Unearned compensation (202,377) (432,202)
------------- -------------
Total shareholders' equity 40,201,743 41,511,074
------------- -------------
Total liabilities and shareholders' equity $ 174,415,415 $ 177,766,575
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MARION CAPITAL HOLDINGS, INC.
AND WHOLLY-OWNED SUBSIDIARY
FIRST FEDERAL SAVINGS BANK OF MARION
CONSOLIDATED CONDENSED STATEMENT OF INCOME
Three Months Ended Nine Months Ended
March 31, March 31,
-----------------------------------------------------------
1997 1996 1997 1996
Interest income
Loans $3,243,805 $3,129,882 $9,630,046 $9,356,900
Mortgage-backed securities 7,151 24,577 35,040 85,909
Federal funds sold 0 0 0 0
Interest-bearing deposits 74,853 87,256 217,190 199,855
Investment securities 110,488 183,212 376,827 626,617
Other interest and dividend income 19,131 18,083 58,138 54,746
--------- ------- --------- ---------
Total interest income 3,455,428 3,443,010 10,317,241 10,324,027
Interest expense
Deposits 1,532,083 1,592,905 4,720,537 4,746,469
Advances from FHLB 125,671 114,002 334,768 348,088
Securities sold under agreement to repurchase 0 7,072 0 52,159
--------- ------- --------- ---------
Total interest expense 1,657,754 1,713,979 5,055,305 5,146,716
--------- ------- --------- ---------
Net interest income 1,797,674 1,729,031 5,261,936 5,177,311
Provision for losses on loans 37,250 0 47,199 24,243
--------- ------- --------- ---------
Net interest income after
provision for losses on loans 1,760,424 1,729,031 5,214,737 5,153,068
--------- ------- --------- ---------
Other income
Net loan servicing fees 21,988 20,484 67,081 59,663
Annuity and other commissions 37,573 38,955 127,476 121,550
Equity in losses of limited partnerships (60,000) (53,829) (180,000) (149,482)
Other income 21,663 17,763 110,751 73,573
--------- ------- --------- ---------
Total other income 21,224 23,373 125,308 105,304
--------- ------- --------- ---------
Other expenses
Salaries and employee benefits 329,321 589,196 1,587,865 1,764,926
Occupancy expense 54,460 41,602 135,225 117,917
Equipment expense 16,576 16,260 44,898 43,827
Deposit insurance expense 16,849 82,056 963,629 244,346
Real estate operations, net (27,229) 3,144 (16,238) (15,191)
Other expenses 270,393 195,300 696,876 560,457
--------- ------- --------- ---------
Total other expenses 660,370 927,558 3,412,255 2,716,282
--------- ------- --------- ---------
Income before income taxes 1,121,278 824,846 1,927,790 2,542,090
Income tax expense 217,912 216,346 233,717 690,128
--------- ------- --------- ---------
Net income $903,366 $608,500 $1,694,073 $1,851,962
========= ======= ========= =========
Per Share
Net income $0.48 $0.29 $0.89 $0.89
Dividends $0.20 $0.18 $0.60 $0.54
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MARION CAPITAL HOLDINGS, INC.
AND WHOLLY-OWNED SUBSIDIARY
FIRST FEDERAL SAVINGS BANK OF MARION
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Common Stock Unearned Total
----------------------------- Retained Unrealized gain Compensation Shareholders'
Shares Amount Earnings on Securities RRP Equity
--------- ----------- ----------- -------- --------- -----------
Balances, July 1, 1996 1,933,613 $13,814,937 $28,128,458 ($119) ($432,202) $41,511,074
Stock repurchases (112,680) (2,309,480) (2,309,480)
Exercise of stock options 7,309 73,090 73,090
Amortization of unearned
compensation 229,825 229,825
Net change in unrealized (loss) on
securities available for sale (24,361) (24,361)
Net income for the nine months
ended March 31, 1997 1,694,073 1,694,073
Tax benefit on compensation plans 133,487 133,487
Cash dividends (1,105,965) (1,105,965)
--------- ----------- ----------- -------- --------- -----------
Balances, March 31, 1997 1,828,242 $11,712,034 $28,716,566 ($24,480) ($202,377) $40,201,743
========= =========== =========== ======== ========= ===========
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MARION CAPITAL HOLDINGS, INC.
AND WHOLLY-OWNED SUBSIDIARY
FIRST FEDERAL SAVINGS BANK OF MARION
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
Nine Months Ended
March 31,
---------------------------
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,694,073 $ 1,851,962
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses 47,199 24,243
Provision for real estate owned losses (28,668) (19,136)
Equity in loss of limited partnerships 180,000 149,482
Amortization of net loan origination fees (204,957) (168,474)
Net amortization of investment
securities' premiums and discounts 14,388 15,593
Net amortization of mortgage-
backed securities and CMO premiums 750 5,978
Amortization of unearned compensation 229,825 268,820
Depreciation 61,104 58,035
Deferred income tax (270,309) (142,667)
Origination of loans for sale (3,696,650) (5,350,786)
Proceeds from sale of loans 3,696,650 5,350,786
Change in:
Interest receivable (98) (40,895)
Interest payable and other liabilities 1,119,137 1,034,528
Cash value of insurance (540,337) (85,000)
Prepaid expense and other assets (113,332) 105,520
----------- -----------
Net cash provided by operating
activities 2,188,775 3,057,989
----------- -----------
INVESTING ACTIVITIES
Purchase of investment securities
available for sale (3,002,125) (1,984,528)
Proceeds from maturity of investment
securities available for sale 1,000,000 2,984,528
Purchase of investment securities
held to maturity (3,000,000) 0
Proceeds from maturity of investment
securities held to maturity 9,937,161 6,000,000
Contribution to limited partnership (130,000) (290,000)
Payments on mortgage-backed securities 1,044,926 689,091
Net changes in loans (3,568,512) (3,182,282)
Proceeds from real estate owned sales 30,722 36,850
Purchases of premises and equipment (127,785) 20,655
Premiums paid on life insurance (860,000) 0
Death benefits received on life insurance 1,052,842 0
----------- -----------
Net cash used by investing
activities 2,377,229 4,274,314
----------- -----------
-6-
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (continued)
Nine Months Ended
March 31,
-----------------------------
1997 1996
FINANCING ACTIVITIES
Net change in:
Noninterest-bearing deposits, NOW
passbook and money market savings
accounts (1,092,860) 745,728
Certificates of deposit (4,026,997) 3,770,610
Proceeds from FHLB advances 5,000,000 3,000,000
Repayment of FHLB advances (3,008,084) (3,221,678)
Proceeds from securities sold under
agreement to repurchase 0 2,771,346
Repayment of securities sold under
agreement to repurchase 0 (2,771,346)
Net change in advances by borrowers for
taxes and insurance (33,025) 122,041
Proceeds from exercise of stock options 73,090 268,820
Stock repurchases (2,309,480) (206,250)
Dividends paid (1,105,965) (1,081,050)
------------ ------------
Net cash provided (used) by
financing activities (6,503,321) 3,398,221
------------ ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS (1,937,317) 10,730,524
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 7,520,323 3,483,184
------------ ------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 5,583,006 $ 14,213,708
============ ============
ADDITIONAL CASH FLOWS AND SUPPLEMENTARY
INFORMATION
Interest paid $ 4,253,247 $ 4,365,542
Income tax paid 470,879 729,958
Loan balances transferred to real
estate owned 124,309 362,001
Loans to finance the sale of real
estate owned 292,000 458,500
-7-
MARION CAPITAL HOLDINGS, INC.
AND WHOLLY-OWNED SUBSIDIARY
FIRST FEDERAL SAVINGS BANK OF MARION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE A: Basis of Presentation
The unaudited interim consolidated condensed financial statements include the
accounts of Marion Capital Holdings, Inc. (the "Company") and its subsidiary
First Federal Savings Bank of Marion (the "Bank").
The unaudited interim consolidated condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all information and disclosures required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, the financial statements reflect all adjustments, comprising only
normal recurring accruals, necessary to present fairly the Company's financial
position as of March 31, 1997, results of operations for the three month and
nine month periods ended March 31, 1997 and 1996, and cash flows for the nine
month periods ended March 31, 1997 and 1996.
NOTE B: Dividends and Earnings Per Share
On February 17, 1997, the Board of Directors declared a quarterly cash dividend
of $.20 per share. This dividend was paid on March 14, 1997 to shareholders of
record as of February 28, 1997.
The per share amounts were computed based on average common and common
equivalent shares outstanding for the three month and nine month periods ended
March 31, 1997 of 1,899,191 and 1,903,864, respectively. For the three month and
nine month periods ended March 31, 1996 average common and common equivalent
shares outstanding amounted to 2,078,977 and 2,074,370, respectively.
NOTE C: Accounting For Mortgage Servicing Rights
The Company adopted Statement of Accounting Standards ("SFAS") No. 122,
Accounting for Mortgage Servicing Rights, on July 1, 1996. Mortgage servicing
rights on originated loans are capitalized by allocating the total cost of the
mortgage loans between the mortgage servicing rights and the loans based on
their relative fair values. Capitalized servicing rights are amortized in
proportion to and over the period of estimated servicing revenues. The adoption
of SFAS No. 122 did not have a material effect on the Company's financial
statements.
-8-
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations.
General:
The Company's total assets were $174.4 million at March 31, 1997 compared to
$177.8 million at June 30, 1996. Cash and cash equivalents decreased $1.9
million or 25.8%, and investment securities decreased $6.0 million or 43.0% from
June 30, 1996 to March 31, 1997. Loans receivable were $147.4 million at March
31, 1997, an increase of $4.2 million, or 3.0%, from June 30, 1996. This
increase is due, in part, to an origination of a $2.5 million long-term loan to
another savings and loan holding company. Real estate owned decreased to $0 at
March 31, 1997, compared to $183,000 at June 30, 1996.
Deposits decreased to $121.1 million at March 31, 1997 compared to $126.3
million at June 30, 1996, a 4.1% decrease. This $5.1 million decrease
represented a $1.1 million decrease in passbook and transaction accounts and an
approximate $4 million decrease in certificate of deposit accounts. This
decrease in total deposits results primarily from an outflow of existing
accounts to different market alternatives.
Other liabilities increased from $3.4 million at June 30, 1996 to $4.5 million
at March 31, 1997 as a result of normal operational increases. The increase
consists primarily in an increase of $797,000 in accrued interest payable on
deposits since a majority of the certificates of deposit compound semi-annually
at June 30 and December 31.
Shareholders' equity was $40.2 million at March 31, 1997, compared to $41.5
million at June 30, 1996. This decrease was the result of repurchasing common
stock on the open market during the nine months ended March 31, 1997. During
this period 112,680 shares were repurchased at a total cost of $2.3 million, or
an average cost of $20.50 per share. As of March 31, 1997, the Company was in
the process of repurchasing an additional 5% of its outstanding shares. The
current repurchase program was announced in February 1997 totaling 92,207 shares
of which 16,000 had been repurchased by March 31, 1997, leaving an additional
76,207 to be repurchased under the current program.
Net income for the nine months ended March 31, 1997 of $1,694,073 represents a
8.5% decrease in income reported for the same period in the prior year. This
decrease in earnings is attributable directly to the signing of the omnibus
appropriations bill on September 30, 1996, which imposed a FDIC special
assessment for all institutions with SAIF-insured deposits. This assessment
amounted to $776,717 and is included in deposit insurance expense for the nine
months ended March 31, 1997. The assessment was payable November 27, 1996. The
after-tax effect on net income was $469,059 for the nine months ended March 31,
1997. SAIF-insured institutions have experienced a reduction of FDIC premiums
beginning January 1, 1997, which have had a positive effect on earnings since
that time. For the nine months ended March 31, 1997, the Bank made a provision
of $47,199 for general loan losses compared to $24,243 in loss provisions for
the same period in the prior year.
-9-
Management continues to review its current portfolio to ensure that total loss
reserves remain adequate.
In April 1997, the Company announced that it would open its second Grant County
office in the new Wal-Mart SuperCenter currently under construction in Marion,
Indiana. The other branch office is located in Decatur, Indiana. This second
Marion, Indiana location will be a full-service branch and the area's first
seven-day-a-week banking facility. The high volume shopping traffic and repeat
weekly visits of customers, makes this an attractive location to provide
financial services. The branch, scheduled to open in October 1997, will operate
approximately 57 hours per week with an expected staff of 6-7 individuals. The
Company believes that the long-term prospects for growth from this new branch
location are excellent.
Results of Operations Comparison of Three Months Ended March 31, 1997 and March
31, 1996.
Net income for the three months ended March 31, 1997 was $903,366 compared with
$608,500 for the three months ended March 31, 1996, an increase of $294,866 or
48.5%. During the quarter ended March 31, 1997, proceeds from key man insurance
resulted in additional income of $283,000. Interest income for the three months
ended March 31, 1997 increased $12,418 or 0.4% compared to the same period in
the prior year, while interest expense for the three months ended March 31, 1997
decreased $56,225 or 3.3% compared to the same period in the prior year. As a
result, net interest income for the three months ended March 31, 1997 amounted
to $1,797,674 an increase of $68,643 or 4.0% compared to the same period in the
prior year.
A provision of $37,250 for losses on loans was made for the three months ended
March 31, 1997. No provision was made in the same period last year.
Total other income decreased by $2,149 for the three months ended March 31,
1997, compared to the same period in the prior year. This decrease was
attributed to the increased loss from investments in a limited partnership.
Total other expenses decreased by $267,188, or 28.8% for the three months ended
March 31, 1997, compared to the same period in the prior year. Salaries and
employee benefits decreased $259,875, or 44.1 %, as the result of the key man
life insurance proceeds of $283,000 being applied as a credit to employee
benefits expense.
Real estate operation expense decreased by $30,373 for the three months ended
March 31, 1997, compared to the same period in the prior year. Deposit insurance
expense decreased by $65,207 as a result of the lower FDIC premium effective
January 1, 1997. Other expense increases were normal operational increases.
Income tax expense for the three months ended March 31, 1997 amounted to
$217,912, an increase of $1,566 over the three months ended March 31, 1996, as
the result of increased income. The Company's effective tax rate for the three
months ended March 31, 1997 was 19.4% compared to
-10-
26.2% for the comparable period in 1996. The lower effective rate for 1997 is
directly attributable to receiving the tax-free key man insurance proceeds.
Results of Operations Comparison of Nine Months Ended March 31, 1997 and March
31, 1996.
Net income for the nine months ended March 31, 1997 was $1,694,073 compared with
$1,851,962 for the nine months ended March 31, 1996, a decrease of $157,889 or
8.5%. This decrease is the direct result of the FDIC special assessment
previously described. Interest income for the nine months ended March 31, 1997
decreased $6,786 or .1% compared to the same period in the prior year, while
interest expense for the nine months ended March 31, 1997 decreased $91,411 or
1.8% compared to the same period in the prior year. These decreases reflect the
repricing of assets and liabilities to lower rates and a decrease in deposit
balances outstanding. As a result, net interest income for the nine months ended
March 31, 1997 amounted to $5,261,936, an increase of $84,625 or 1.6% compared
to the same period in the prior year.
A $47,199 provision for loss on loans for the nine months ended March 31, 1997
was made compared to a $24,243 provision reported in the same period last year.
Total other income increased by $20,004 for the nine months ended March 31,
1997, compared to the same period in the prior year, in part as the result of
increased sales of annuity and security products. Annuity and security product
sales commissions were up $5,926, or 4.9% for the nine months ended March 31,
1997, compared to the same period in the prior year. Limited partnership losses
also increased by $30,518 over the prior year.
Total other expenses increased by $695,973 or 25.6% for the nine months ended
March 31, 1997, compared to the same period in the prior year. The FDIC special
assessment accounts for $776,717 of the increase. Salaries and employee benefits
decreased $177,061, or 10.0%, also as a result of crediting the $283,000 key man
insurance proceeds against employee benefits. Real estate operation expense
decreased by $1,047 for the nine months ended March 31, 1997, compared to the
same period in the prior year. Other expense increases were normal operational
increases.
Income tax expense for the nine months ended March 31, 1997, amounted to
$233,717, a decrease of $456,411 from the nine months ended March 31, 1996 as a
result of reduced income due to the FDIC special assessment and as a result of
the tax-free key man insurance proceeds of $283,000 and other tax-free income.
Allowance for loan losses amounted to $2.0 million at March 31, 1997, which was
unchanged from June 30, 1996 after adjusting for charge-offs and recoveries.
Management considered the allowances for loan and real estate losses at March
31, 1997, to be adequate to cover estimated losses inherent in those portfolios
at that date, and its consideration included probable losses that could be
reasonably estimated. Such belief is based upon an analysis of loans currently
outstanding, real estate owned, past loss experience, current economic
conditions and other factors and estimates which are subject
-11-
to change over time. The following table illustrates the changes affecting the
allowance accounts for the nine months ended March 31, 1997.
Allowance For Allowance For Total
Loan Losses REO Losses Allowances
Balances at July 1, 1996............................ $2,009,250 $16,118 $2,025,368
Provision for losses................................ 47,199 (28,669) 18,530
Recoveries.......................................... 0 37,773 37,773
Loans and REO charged off........................... (35,871) (25,222) (61,093)
----------- -------- -----------
Balances at March 31, 1997.......................... $2,020,578 $ 0 $2,020,578
========== ======== ==========
The loan loss reserves to total loans at March 31, 1997 equaled 1.35% of total
loans outstanding, compared to 1.38% of total loans outstanding at June 30,
1996. Total non-performing assets decreased during the nine months ended March
31, 1997, from $1.9 million at June 30, 1996 to $1.3 million at March 31, 1997.
Non-performing assets at March 31, 1997 consisted entirely of loans delinquent
greater than 90 days.
Total non-performing loans totaled .88% of total loans outstanding at March 31,
1997 compared to 1.18% of total loans at June 30, 1996.
The following table further depicts the amounts and categories of the Bank's
non-performing assets. It is the policy of the Bank that all earned but
uncollected interest on all loans be reviewed monthly to determine if any
portion thereof should be classified as uncollectible for any loan past due in
excess of 90 days.
-12-
March 31, June 30,
1996 1996
(Dollars in Thousands)
Accruing loans delinquent
more than 90 days.............. $ --- $ ---
Non-accruing loans:
Residential.................... 1,243 1,659
Multi-family................... --- ---
Commercial..................... 45 47
Consumer....................... 31 11
Troubled debt restructurings............ --- ---
-------- --------
Total non-performing loans..... 1,319 1,717
Real estate owned, net.................. 0 183
-------- ------
Total non-performing assets.... $1,319 $1,900
====== ======
Non-performing loans to
total loans, net............... .88% 1.18%
Non-performing assets to
total assets................... .76% 1.07%
Average Balances and Interest
The following table presents for the periods indicated the monthly average
balances of the Company's interest-earning assets and interest-bearing
liabilities, the interest earned or paid on such amounts, and the average yields
earned and rates paid. Such yields and costs are determined by dividing income
or expense by the average balance of assets or liabilities for the periods
presented.
Three Months Ended March 31
-------------------------------------------------------------------------------
1997 1996
--------------------------------------- -----------------------------------
(Dollars in thousands)
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Total interest-
earnings assets.............. $163,696 $3,455 8.44% $165,372 $3,443 8.33%
Total interest-
bearing liabilities.......... 129,952 1,658 5.10% 129,413 1,714 5.30%
Net interest income/
Interest rate spread............ 1,797 3.34% 1,729 3.03%
===== =====
-13-
Nine Months Ended March 31
------------------------------------------------------------------------------
1997 1996
--------------------------------------- ---------------------------------
(Dollars in thousands)
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Total interest-
earnings assets.............. $164,107 $10,317 8.38% $164,717 $10,324 8.36%
Total interest-
bearing liabilities.......... 129,931 5,055 5.19% 128,673 5,147 5.33%
Net interest income/
Interest rate spread............ 5,262 3.19% 5,177 3.03%
Financial Condition
Shareholders' equity at March 31, 1997 was $40,201,743, a decrease of $1,309,331
or 3.2% from June 30, 1996. The Company's equity to asset ratio was 23.05% at
March 31, 1997 compared to 23.35% at June 30, 1996. All fully phased-in capital
requirements are currently met. The following table depicts the amounts and
ratios of the Bank's capital as of March 31, 1997, under each of the three
regulatory capital requirements (tangible, core, and fully phased-in risk
based):
Tangible Core Risk-Based
Capital Capital Capital
(Dollars in thousands)
Amount........................................... $34,191 $ 34,191 $35,606
As a percent of assets, as defined............... 20.3% 20.3% 31.6%
Required amount.................................. 2,528 5,057 9,009
As a percent of assets, as defined............... 1.5% 3.0% 8.0%
Capital in excess of
required amount.............................. $ 31,663 $ 29,134 $ 26,597
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 5%, of which 1%
must be comprised of short-term investments. At March 31, 1997, the Bank's
liquidity ratio was 9.4% of which 4.4% was comprised of short-term investments.
-14-
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Neither the Company nor the Bank were during the quarter ended March 31, 1997,
or are as of the date hereof involved in any legal proceeding of a material
nature. From time to time, the Bank is a party to legal proceedings wherein it
enforces its security interests in connection with its mortgage loans.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
3(1) The Articles of Incorporation of the Registrant is
incorporated by reference to Exhibit 3(1) to the Registration
Statement on Form S-1 (Registration No. 33-55052).
3(2) The Code of By-Laws of the Registrant is incorporated by
reference to Exhibit 3(2) to Registration Statement on Form
S-1 (Registration No. 33-55052).
11 Statement re computation of per share earnings
27 Financial Data Schedule
b) The Company filed no reports on Form 8-K during the quarter ended March
31, 1997.
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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.
MARION CAPITAL HOLDINGS, INC.
Date: May 7, 1997 By: /s/ John M. Dalton
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John M. Dalton,
President
Date: May 7, 1997 By: /s/ Larry G. Phillips
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Larry G. Phillips, Vice President,
Secretary and Treasurer
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