UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
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 No. 0-26242
FORT THOMAS FINANCIAL CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 61-1278396
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
25 North Fort Thomas Avenue
Fort Thomas, Kentucky 41075
- ---------------------------------------- ----------
(Address of principal executive officer) (Zip Code)
(606) 441-3302
----------------------------------------------------
(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 reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the last practicable date. As of August 7,
1998, there were issued and outstanding 1,474,321 shares of the Registrant's
Common Stock, par value $.01 per share.
FORT THOMAS FINANCIAL CORPORATION AND SUBSIDIARY
TABLE OF CONTENTS
Part I. Financial Information Page
- ------- --------------------- ----
Item 1. Consolidated Financial Statements
Consolidated Statement of Financial Condition
(As of September 30, 1997 and June 30, 1998
(unaudited)) 1
Consolidated Statements of Income for the three months and
nine months ended June 30, 1998 (unaudited) and June 30, 1997
(unaudited) 2
Consolidated Statements of Cash Flow for the nine months
ended June 30, 1998 (unaudited) and June 30, 1997 (unaudited) 3
Notes to the Unaudited Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition
And Results of Operations 5
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
Part II. Other Information
- -------- -----------------
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
FORT THOMAS FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, Sept. 30
1998 1997
-------- --------
(Dollars In Thousands)
Assets
Cash and Due from Banks $ 1,541 $ 2,186
Investment Securities Held to Maturity - at Amortized Cost 3,860 2,990
Mortgage-Backed Securities - Available for Sale - at Market Value - 798
Loans Receivable, Net 92,248 88,452
Office Properties and Equipment - at Depreciated Cost 535 570
Federal Home Loan Bank Stock (FHLB) - at Cost 855 785
Cash Surrender Value of Life Insurance 1,148 1,114
Accrued Interest Receivable 823 771
Prepaid and Other Assets 102 93
Federal Income Tax Refund Receivable - 29
Deferred Federal Income Tax Asset 240 86
--------------------
Total Assets $101,352 $97,874
====================
Liabilities and Stockholders' Equity
Deposits $ 75,200 $71,858
Borrowed Funds 8,582 8,846
Advances from Borrowers for Taxes and Insurance 211 229
Deferred Compensation 542 504
Accrued Interest Payable 63 59
Accrued Federal Income Tax 4 -
Other Liabilities 458 592
--------------------
Total Liabilities 85,060 82,088
--------------------
Stockholders' Equity
Common Stock, $.01 Par value; 4,000,000 Shares Authorized;
1,573,775 Shares Issued and 1,474,321 and 1,495,086 Shares
Outstanding, Respectively 16 16
Additional Paid-In Capital 9,475 9,436
Unearned ESOP Shares (662) (744)
MRP Trust (581) (672)
Retained Earnings, Substantially Restricted 9,424 8,852
Treasury Stock (99,454 and 78,689 Shares at Cost) (1,380) (1,103)
Unrealized Gain on Investment Securities Available for Sale - 1
--------------------
Total Stockholders' Equity 16,292 15,786
--------------------
Total Liabilities and Stockholders' Equity $101,352 $97,874
====================
FORT THOMAS FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
1998 1997 1998 1997
---- ---- ---- ----
(Dollars in Thousands)
Interest Income
Interest on Loans $2,063 $1,939 $6,047 $5,530
Interest on Investment Securities 47 82 142 211
Interest on Mortgage-Backed Securities 0 15 4 37
Other Interest and Dividends 64 38 177 128
---------------------------------------
Total Interest Income 2,174 2,074 6,370 5,906
---------------------------------------
Interest Expense
Deposits 991 928 2,936 2,655
Borrowed Funds 114 143 409 391
---------------------------------------
Total Interest Expense 1,105 1,071 3,345 3,046
---------------------------------------
Net Interest Income 1,069 1,003 3,025 2,860
Provision for Loan Losses 157 12 181 125
---------------------------------------
Net Interest Income After Provision for Loan
Losses 912 991 2,844 2,735
---------------------------------------
Other Income 88 73 225 166
---------------------------------------
Non-Interest Expenses
Salaries and Employee Benefits 295 280 880 846
Franchise and Other Taxes 44 25 116 85
Federal Insurance Premium 11 11 33 60
Expenses of Premises and Fixed Assets 41 46 125 132
Data Processing and Related Contract Services 35 29 114 101
Other Operating Expense 121 168 477 462
---------------------------------------
Total Non-Interest Expenses 547 559 1,745 1,686
---------------------------------------
Income Before Income Tax 453 505 1,321 1,215
Federal Income Tax Expense 158 174 471 401
---------------------------------------
Net Income $ 295 $ 331 $ 850 $ 814
=======================================
Earnings Per Share
Basic $ 0.21 $ 0.23 $ 0.61 $ 0.56
=======================================
Fully Diluted $ 0.20 $ 0.22 $ 0.57 $ 0.53
=======================================
FORT THOMAS FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
June 30,
----------------------
1998 1997
---- ----
(Dollars in Thousands)
Cash Flows from Operating Activities
Net Income $ 850 $ 814
Reconciliation of Net Income with Cash Flows from
Operations:
Provision for Loan Losses 181 125
Depreciation 49 59
Deferred Income Taxes (153) 91
Amortization (208) (217)
FHLB Stock Dividends (44) (37)
ESOP and Stock Compensation 116 130
Changes In:
Accrued Interest Receivable (53) (70)
Prepaid and Other Assets (9) 25
Cash Surrender Value of Life Insurance (34) (35)
Deferred Compensation 38 94
Accrued Interest Payable 4 4
Accrued Income Tax 33 67
Other Liabilities (135) (440)
--------------------
Net Cash Provided by Operating Activities 635 610
--------------------
Cash Flows from Investing Activities
Purchase of Investment Securities (2,861) (1,987)
Purchase of FHLB Stock (26) (34)
Maturity of Investment Securities 2,790 1,500
Loan Originations and Repayments, Net (3,937) (8,816)
Principal Received on Mortgage-Backed Security (5) 19
REO Expenses (19) 0
Proceeds from Sale of REO 203 28
Purchase of Office Properties and Equipment (14) (4)
--------------------
Net Cash Used in Investing Activities (3,869) (9,294)
--------------------
Cash Flows from Financing Activities
Net Increase in Deposits 3,342 6,646
Dividends Paid (276) (284)
ESOP Shares Released 82 78
Common Stock Shares Purchased for Treasury (277) (1,102)
Advance from Borrowers for Taxes and Insurance (18) 27
Repayments of Borrowings (10,964) (1,155)
Proceeds of Borrowings 10,700 4,050
--------------------
Net Cash Provided by Financing Activities 2,589 8,260
--------------------
Changes in Cash and Cash Equivalents (645) (424)
Cash and Cash Equivalents, Beginning of Period 2,186 1,785
--------------------
Cash and Cash Equivalents, End of Period $ 1,541 $ 1,361
====================
FORT THOMAS FINANCIAL CORPORATION
AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
Note 1 - Basis of Presentation
---------------------
Fort Thomas Financial Corporation (the "Corporation") was incorporated under
Ohio law in March 1995 by Fort Thomas Federal Savings and Loan Association
(the "Association") in connection with the conversion of the Association
from a federally chartered mutual savings and loan association to a
federally chartered stock savings bank, known as Fort Thomas Savings Bank,
F.S.B. (the "Bank"), the issuance of the Bank's stock by the Corporation and
the offer and sale of the Corporation's common stock by the corporation (the
"Conversion"). Upon consummation of the Conversion on June 27, 1995, the
Corporation became the unitary holding company for the Bank.
The accompanying unaudited consolidated financial statements of the
Corporation have been prepared in accordance with instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. However, such information reflects all adjustments (consisting
solely of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of results for the interim
periods.
The results of operations for the three and nine months ended June 30, 1998
are not necessarily indicative of the results to be expected for the year
ending September 30, 1998. The unaudited consolidated financial statements
and notes thereto should be read in conjunction with the audited financial
statements and notes thereto for the year ended September 30, 1997 contained
in the Corporation's 1997 Annual Report.
Note 2 - Earnings Per Share
------------------
The average number of common shares used to calculate earnings per share
were as follows:
Three Months Ended June 30, Nine Months Ended June 30,
--------------------------- --------------------------
1998 1997 1998 1997
---- ---- ---- ----
Basic Weighted -
Average Shares 1,405,511 1,415,586 1,404,667 1,448,968
Diluted Weighted -
Average Shares 1,485,771 1,492,798 1,483,859 1,530,049
Note 3 - Impact of Recent Accounting Standards
-------------------------------------
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," which establishes standards for reporting and displaying
comprehensive income and its components (revenues, expenses, gains and
losses) in a full set of general-purpose financial statements. SFAS No. 130
requires that all items that are required to be recognized under accounting
standards as components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as other financial
statements and requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and (b)
display the accumulated balance of other comprehensive income separately
from retained earnings and additional paid-in capital in the equity section
of the statement of financial position. Under existing accounting
standards, other comprehensive income shall be classified separately into
foreign currency items, minimum pension liability adjustments and unrealized
gains and losses on certain investments in debt and equity securities. The
provisions of SFAS No. 130 are effective for fiscal years beginning after
December 15, 1997. Management does not believe the adoption of SFAS No. 130
will have a material impact on the disclosure requirements of the
Corporation.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Condition
At June 30, 1998, the Corporation's total assets amounted to $101.4 million
as compared to $97.9 million at September 30, 1997. The $3.5 million or
3.6% increase was primarily due to an increase in loans receivable, net.
Such increase was funded primarily by an increase in deposits.
Stockholders' equity amounted to $16.3 million or 16.1% of total assets at
June 30, 1998 compared to $15.8 million or 16.1% at September 30, 1997. The
increase in stockholders' equity was primarily due to continued profitable
operations partially offset by cash dividends.
Asset Quality
Loans are placed on nonaccrual status when, in the judgment of management,
the probability of collection of interest is deemed to be insufficient to
warrant further accrual. When a loan is placed on nonaccrual status,
previously accrued but unpaid interest is deducted from interest income.
The Bank does not accrue interest on real estate loans past due 90 days or
more. Loans may be reinstated to accrual status when payments are brought
current and, in the opinion of management, collection of the remaining
balance can be reasonably expected.
Delinquent Loans
The following table sets forth information concerning delinquent loans in
dollar amounts and as a percentage of each category of the Bank's loan
portfolio at June 30, 1998. The amounts presented represent the total
outstanding principal balances of the related loans, rather than the actual
payment amounts that are past due.
Percent of Corresponding
Loans Delinquent For Loan Categories
---------------------------- --------------------------
30-89 90 Days 30-89 90 Days
Days And Over Total Days And Over Total
----- -------- ----- ----- -------- -----
(Dollars in Thousands)
One-to-four family
residential $2,701 $1,612 $4,313 3.56% 2.12% 5.68%
Multi-family and
nonresidential 54 340 394 0.48% 3.00% 3.48%
Construction and land 229 - 229 4.64% - 4.64%
Consumer - 8 8 - 0.63% 0.63%
----------------------------
Total delinquent loans $2,984 $1,960 $4,944
============================
The following table sets forth the amounts and categories of the Bank's non-
performing assets at the dates indicated.
June 30, September 30,
----------------- -------------
1998 1997 1997
---- ---- ----
Non-accruing loans:
One-to-four family residential(1) $1,612 $1,065 $1,266
Multi-family and non-residential
real estate 340 - 360
Construction and land - 276 309
Consumer - 53 -
Accruing consumer loans greater
than 90 days delinquent: 8 - 2
-------------------------------
Total non-performing loans 1,960 1,394 1,937
-------------------------------
Real estate acquired through
foreclosure - 36 -
-------------------------------
Total non-performing assets $1,960 $1,430 $1,937
===============================
Total non-performing assets as a
percentage of total loans 2.10% 1.60% 1.98%
===============================
Total non-performing assets as a
percentage of total assets 1.93% 1.48% 1.98%
===============================
- --------------------
<F1> Includes second mortgage loans.
The $2.0 million of nonaccruing loans at June 30, 1998 consisted of 37 loans
with an average balance of approximately $54,000. Interest that would have
been earned on these loans, if they had been accounted for on an accruing
basis during the quarter would have been approximately $40,000.
Substantially, all of the loans are extended to separate borrowers.
Classified Assets
Federal regulations require that each insured savings association classify
its assets on a regular basis. In addition, in connection with examinations
of insured institutions, federal examiners have authority to identify
problem assets and, if appropriate, classify them. There are three
classifications for problem assets: "substandard", "doubtful" and "loss".
Substandard assets have one or more defined weaknesses and are characterized
by the distinct possibility that the insured institution will sustain some
loss if the deficiencies are not corrected. Doubtful assets have the
weaknesses of substandard assets with the additional characteristic that the
weaknesses make collection or liquidation in full on the basis of currently
existing facts, conditions and values questionable, and there is a high
possibility of loss. An asset classified loss is considered uncollectable
and of such little value that continuance as an asset of the institution is
not warranted. At June 30, 1998, the Bank had $3.9 million of loans that
were classified as substandard, $20,000 of loans classified as doubtful and
$7,000 of loans classified as loss. The difference between the $3.9 million
of assets classified for regulatory purposes and the delinquent loans of
$2.0 million was approximately $1.9 million. This amount represents loans
that were required to be classified for regulatory purposes due to certain
quantitative factors regarding collateral, delinquency periods, and loan
terms.
Allowance for Loan Losses
It is management's policy to maintain an allowance for estimated losses
based on the perceived risk of loss in the loan portfolio. In assessing
risk, management considers historical loss experience, the volume and type
of lending conducted by the Bank, industry standards, past due loans,
general economic conditions and other factors related to the collectability
of the loan portfolio. Provisions for loan losses that are charged against
income increase the allowance.
Although management uses the best information available to make
determinations with respect to the provisions of loan losses, additional
provisions for loan losses may be required to be established in the future
should economic or other conditions change substantially. In addition, the
OTS and the FDIC, as an integral part of their examination process,
periodically review the Bank's allowance for possible loan losses. Such
agencies may require the Bank to recognize additions to such allowance based
on their judgments about information available to them at the time of their
examination.
The following table summarizes the activity in the allowance for loan losses
and other selected statistics for the periods presented.
Nine Months Ended Year Ended
June 30, September 30,
----------------- -------------
1998 1997 1997
---- ---- ----
(Dollars in Thousands)
Average Loans Receivable, Net $91,114 $82,653 $83,912
================================
Allowance for Loan Losses
Balance at Beginning of Period $ 476 $ 366 $ 366
Net (Charge-Offs) Recoveries (45) (23) (27)
Provision for Loan Losses 169 125 137
--------------------------------
Balance at End of Period $ 600 $ 468 $ 476
================================
Net Loans (Charged-Off) Recovered to Average
Loans (0.05)% (0.03)% (0.03)%
================================
Allowance for Loan Losses to Total Loans 0.69 % 0.52 % 0.32 %
================================
Allowance for Loan Losses to Total Non-Performing
Loans 30.61 % 33.57 % 19.20 %
================================
Net Loans (Charged-Off) Recovered to Allowance for
Loan Losses (7.50)% (4.91)% (7.95)%
================================
The following table presents the allocation of the allowance for loan losses
to the total amount of loans in each category listed at the dates indicated.
June 30, 1998
---------------------------
Percent of Loans
In Each Category
Amount To Total Loans
------ ----------------
(Dollars in Thousands)
One-to-Four Family Residential $367 81.24%
Multi-Family Residential 125 12.12%
Land and Construction 100 5.28%
Consumer Loans 8 1.36%
---------------------
Total $600 100.00%
=====================
Results of Operations for the Three Months Ended June 30, 1998 and 1997
General. The Corporation reported net income of $295,000 during the
three months ended June 30, 1998 compared to $332,000 during the three
months ended June 30, 1997. The decrease in net income during the three
months ended June 30, 1998 compared to the same period in 1997 was due
primarily to an increase in the allowance for loan losses of $145,000 which
was partially offset by increases in net interest income and total other
income and a decrease in total non-interest expenses.
Interest Income. Interest income increased $100,000 or 4.8% to $2.2
million for the three months ended June 30, 1998 compared to the same period
in 1997. The increase during the 1998 period was primarily due to an
increase in the average outstanding balance of the Corporation's loan
portfolio. Such increase was primarily due to increased loan demand.
Yields on interest earning assets remained relatively constant.
Interest Expense. Interest expense increased $30,000 or 3.2% to $1.1
million for the three months ended June 30, 1998, compared to the same
period in 1997. Such increase was primarily due to an increase in the
average outstanding balance of the Corporation's time deposits. Costs of
funds remained relatively constant.
Net Interest Income. Net interest income amounted to $1.1 million for
the three months ended June 30, 1998, an increase of $66,000 over the
comparable period in 1997. The interest rate spread amounted to 3.5% for
both the three months ended June 30, 1998 and 1997 and the ratio of average
interest-earning assets to average interest-bearing liabilities was 118.0%
and 118.5% for the same respective periods.
Provision for Losses on Loans. The provision for losses on loans
amounted to $157,000 and $12,000 for the three months ended June 30, 1998
and 1997, respectively. The increase in the provision for losses on loans
was due to an increase in the level of classified loans.
Other Income. Other income increased $15,000 or 20% during the three
months ended June 30, 1998, compared to the same period in 1997 due
primarily to an increase in fees and charges relating to loans.
Non-Interest Expenses. Non-interest expenses for three months ended
June 30, 1998 decreased $12,000 or 2.1% to $547,000 over the same period in
1997. This decrease was primarily due to a decrease in other operating
expenses of $47,000 offset by increases in salaries and employee benefits,
franchise and other taxes, and data processing expenses. The decrease in
other operating expenses was a result of lower expenses for legal,
accounting and filing fees. The increase in salaries and employee benefits
was due to normal merit increases and the increases in franchise taxes and
data processing expenses were a result of increased volume of the
Association.
Results of Operations for the Nine Months Ended June 30, 1998 and 1997
General. The Corporation reported net income of $850,000 for the nine
months ended June 30, 1998, an increase of $37,000 or 4.6% compared to
$813,000 during the nine months ended June 30, 1997. Such increase was
primarily due to increases in net interest income and other income,
partially offset by an increase in the provision for loan losses and an
increase in non-interest expenses.
Interest Income. Interest income increased $461,000 or 7.8% to $6.4
million for the nine months ended June 30, 1998 compared to the same period
in fiscal 1997. The increase during the fiscal 1998 period was due to an
increase in the average outstanding balance of the Corporation's loan
portfolio. The increase in the average balance of the loan portfolio was
due to continued loan demand and portfolio growth. The average yield on the
Corporation's interest-earning assets was 8.6% for the nine months ended
June 30, 1998 compared to 8.7% for the same period in 1997.
Interest Expense. Interest expense increased $299,000 or 9.8% to $3.3
million for the nine months ended June 30, 1998 compared to $3.0 million for
the nine months ended June 30, 1997. Such increase was primarily due to an
increase in the average outstanding balance of time deposits. The increase
in the average balance of deposits reflects the increase in certificate of
deposit accounts. The average rate paid on the Corporation's interest-
bearing liabilities was 5.4% for both the nine months ended June 30, 1998
and the same period in 1997.
Provision for Losses on Loans. The provision for losses on loans
amounted to $181,000 and $125,000 for the nine months ended June 30, 1998
and 1997, respectively. The increase in the provision for losses on loans
was due to an increase in the level of classified loans.
Other Income. Other income increased $59,000 or 35.5% to $225,000
during the nine months ended June 30, 1998 compared to the nine months ended
June 30, 1997 due to an increase in fees and charges relating to loans.
Non-Interest Expenses. Non-interest expenses increased $59,000 or
3.5% to $1.7 million for the nine months ended June 30, 1998 compared to the
same period in fiscal 1997. Such increase was primarily due to increases in
salaries and employee benefits and franchise and other taxes. The increase
in salaries and employee benefits was due to normal merit increases. The
increase in franchise and other taxes was a result of increased volume of
the Association.
Liquidity and Capital Resources
The Bank's liquidity, represented by cash and cash equivalents, is a product
of its operating, investing and financing activities. The Bank's primary
sources of funds are deposits, borrowings, amortization, prepayments and
maturities of outstanding loans, sales of loans, maturities of investment
securities and other short-term investments and funds provided from
operations. While scheduled loan amortization and maturing investment
securities and short-term investments are relatively predictable sources of
funds, deposit flows and loan prepayments are greatly influenced by general
interest rates, economic conditions and competition. The Bank manages the
pricing of its deposits to maintain a steady deposit balance. In addition,
the Bank invests excess funds in overnight deposits and other short-term
interest-earning assets that provide liquidity to meet lending requirements.
The Bank has generally been able to generate enough cash through the retail
deposit market, its traditional funding source, to offset the cash utilized
in investing activities. As an additional source of funds, the Bank may
borrow from the FHLB of Cincinnati and has access to the Federal Reserve
discount window. At June 30, 1998, the Bank had $8.6 million of outstanding
advances from the FHLB of Cincinnati.
As of June 30, 1998, the Bank's regulatory capital was well in excess of all
applicable regulatory requirements. At June 30, 1998, the Bank's tangible,
core and risk-based capital ratios amounted to 15.4%, 15.4% and 24.4%,
respectively, compared to regulatory requirements of 1.5%, 3.0% and 8%,
respectively.
Year 2000. The Corporation outsources its primary data processing
functions. A challenging problem exists as the millennium ("year 2000")
approaches as many computer systems worldwide do not have the capability of
recognizing the year 2000 or years thereafter. To date, the Company has
received confirmations from its primary vendors that plans have been
developed by them to address and correct the issues associated with the year
2000 problem.
Forward-Looking Statements
This Form 10-Q contains certain forward-looking statements and
information relating to the Corporation that is based on the beliefs of
management as well as assumptions made by and information currently
available to management. In addition, in those and other portions of this
document, the words "anticipate", "believe", "estimate", "except", "intend",
"should" and similar expressions, or the negative thereof, as they relate to
the Corporation or the Corporation's management, are intended to identify
forward-looking statements. Such statements reflect the current views of
the Corporation with respect to future looking events and are subject to
certain risks, uncertainties and assumptions. Should one or more of these
risks or uncertainties materialize or should underlying assumptions prove
incorrect, actual results may vary materially from those described herein as
anticipated, believed, estimated, expected or intended. The Corporation
does not intend to update these forward-looking statements.
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
For a discussion of the Corporation's asset and liability management
policies as well as the potential impact of interest rate changes upon the
market value of the Bank's portfolio equity, see "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the
Corporation's 1997 Annual Report to the Stockholders. There has been no
material change in the Corporation's asset and liability position or the
market value of the Bank's portfolio equity since September 30, 1997.
FORT THOMAS FINANCIAL CORPORATION AND SUBSIDIARY
Part II
Item 1. Legal Proceedings
-----------------
Neither the Corporation nor the Bank is involved in any pending
legal proceedings other than non-material legal proceedings
occurring in the ordinary course of business.
Item 2. Changes in Securities
---------------------
Not applicable.
Item 3. Defaults Upon Senior Securities
-------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable - previously reported
Item 5. Other Information
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
None.
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.
FORT THOMAS FINANCIAL CORPORATION
Date: August 14, 1998 By: /s/ Larry N. Hatfield
------------------ ------------------------------------
Larry N. Hatfield
President and Chief
Executive Officer
Date: August 14, 1998 By: /s/ J. Michael Lonnemann
------------------ ------------------------------------
J. Michael Lonnemann
Vice President, Secretary and
Principal Financial Officer