FORM 10-QSB
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from __________ to ____________.
Commission File Number 0-22223
-------
PEOPLES-SIDNEY FINANCIAL CORPORATION
------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 31-1499862
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
101 E. Court Street, Sidney, Ohio 45365
---------------------------------------
(Address of principal executive offices)
(937) 492-6129
---------------------------
(Issuer's telephone number)
As of May 5, 2000, the latest practicable date, 1,581,391 shares of the issuer's
common shares, $.01 par value, were issued and outstanding.
Transitional Small Business Disclosure Format (Check One):
Yes [ ] No [ X ]
PEOPLES-SIDNEY FINANCIAL CORPORATION
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets...........................................
Consolidated Statements of Income ....................................
Consolidated Statements of Comprehensive Income.......................
Condensed Consolidated Statements of Changes in Shareholders' Equity..
Consolidated Statements of Cash Flows ................................
Notes to Consolidated Financial Statements ...........................
Item 2.Management's Discussion and Analysis...................................
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.....................................................
Item 2. Changes in Securities and Use of Proceeds.............................
Item 3. Defaults Upon Senior Securities.......................................
Item 4. Submission of Matters to a Vote of Security Holders...................
Item 5. Other Information.....................................................
Item 6. Exhibits and Reports on Form 8-K......................................
SIGNATURES .....................................................................
PEOPLES-SIDNEY FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Item 1. Financial Statements
March 31, June 30,
2000 1999
---- ----
ASSETS
Cash and due from banks $ 774,038 1,298,357
Interest-bearing deposits in other financial institutions 846,135 634,621
------- -------
Total cash and cash equivalents 1,620,173 1,932,978
Time deposits in other financial institutions 100,000 400,000
Securities available for sale 8,522,085 7,858,111
Federal Home Loan Bank stock 967,800 907,700
Loans receivable, net 112,815,372 102,802,845
Accrued interest receivable 898,435 759,913
Premises and equipment, net 1,920,461 1,985,608
Other assets 307,578 235,104
------- -------
Total assets $ 127,151,904 116,882,259
=========== ===========
LIABILITIES
Deposits $ 92,016,217 84,310,492
Borrowed funds 18,000,000 14,800,000
Accrued interest payable and other liabilities 191,344 409,550
------- -------
Total liabilities 110,207,561 99,520,042
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value, 500,000 shares
authorized, none issued and outstanding
Common stock, $.01 par value, 3,500,000 shares
authorized, 1,785,375 shares issued 17,854 17,854
Additional paid-in capital 10,760,636 10,779,941
Retained earnings 10,725,514 10,643,040
Treasury stock, 186,453 and 120,753 shares at cost (2,417,461) (1,766,399)
Unearned employee stock ownership plan shares (1,390,893) (1,520,139)
Unearned management recognition plan shares (603,718) (746,692)
Accumulated other comprehensive income (loss) (147,589) (45,388)
-------- -------
Total shareholders' equity 16,944,343 17,362,217
---------- ----------
Total liabilities and shareholders' equity $ 127,151,904 116,882,259
=========== ===========
See accompanying notes to consolidated financial statements.
PEOPLES-SIDNEY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
--------- ---------
2000 1999 2000 1999
---- ---- ---- ----
Interest income
Loans, including fees $ 2,133,063 $ 1,917,451 $ 6,217,853 $ 5,719,497
Securities 149,033 49,287 426,047 170,829
Interest-bearing deposits and
overnight deposits 11,538 24,829 72,295 98,807
Dividends on Federal Home
Loan Bank stock 16,557 15,139 49,451 45,815
------ ------ ------ ------
Total interest income 2,310,191 2,006,706 6,765,646 6,034,948
Interest expense
Deposits 1,085,584 956,098 3,164,062 2,912,512
Other borrowings 262,097 114,437 773,810 334,589
------- ------- ------- -------
Total interest expense 1,347,681 1,070,535 3,937,872 3,247,101
--------- --------- --------- ---------
Net interest income 962,510 936,171 2,827,774 2,787,847
Provision for loan losses 16,042 (12,001) 44,041 40,918
------ ------- ------ ------
Net interest income after
provision for loan losses 946,468 948,172 2,783,733 2,746,929
Noninterest income
Service charges and other fees 20,711 18,495 63,124 52,909
Net realized gain (loss) on sale of
available for sale securities (15,781) -- (15,781) --
------- ------- ------- -------
Total noninterest income 4,930 18,495 47,343 52,909
Noninterest expense
Compensation and benefits 376,664 337,570 1,134,793 1,125,934
Director fees 30,000 30,000 90,000 90,000
Occupancy and equipment 80,600 83,484 234,310 204,134
Computer processing expense 54,927 49,385 152,188 133,570
FDIC premiums 4,774 12,256 29,754 35,590
State franchise taxes 44,726 69,704 194,392 214,160
Professional fees 19,281 25,241 76,700 85,407
Other 75,421 79,230 232,297 263,562
------ ------ ------- -------
Total noninterest expense 686,393 686,870 2,144,434 2,152,357
------- ------- --------- ---------
Income before income tax expense 265,005 279,797 686,642 647,481
Income tax expense 108,844 100,860 283,553 233,657
------- ------- ------- -------
Net income $ 156,161 $ 178,937 $ 403,089 $ 413,824
======= ======= ======= =======
Earnings per common share - basic $ 0.10 $ 0.11 $ 0.27 $ 0.26
==== ==== ==== ====
Earnings per common share - diluted $ 0.10 $ 0.11 $ 0.27 $ 0.26
==== ==== ==== ====
See accompanying notes to consolidated financial statements.
PEOPLES-SIDNEY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
--------- ---------
2000 1999 2000 1999
---- ---- ---- ----
Net income $ 156,161 $ 178,937 $ 403,089 $ 413,824
Other comprehensive income (loss)
Unrealized holding gains and (losses)
on available for sale securities (26,347) (19,112) (170,630) (23,475)
Reclassification adjustments for (gains)
and losses later realized as income 15,781 -- 15,781 --
--------- --------- --------- ---------
Net unrealized gains and (losses) (10,566) (19,112) (154,849) (23,475)
Tax effect 3,592 6,498 52,648 7,982
--------- --------- --------- ---------
Other comprehensive income (loss) (6,974) (12,614) (102,201) (15,493)
--------- --------- --------- ---------
Comprehensive income $ 149,187 $ 166,323 $ 300,888 $ 398,331
========= ========= ========= =========
See accompanying notes to consolidated financial statements.
PEOPLES-SIDNEY FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY
(Unaudited)
Nine Months
Ended March 31,
2000 1999
---- ----
Balance, beginning of period $ 17,362,217 $ 19,626,016
Net income for period 403,089 413,824
Cash dividends, $.21 per share in 2000 and 1999 (320,615) (335,841)
Purchase of 65,700 and 32,141 shares of treasury stock in 2000 and
1999, at cost (651,062) (611,400)
Establish 57,128 shares for management recognition plan -- (953,293)
Commitment to release 8,568 and 9,523 management recognition
plan shares in 2000 and 1999 142,974 158,910
Commitment to release 11,015 and 11,436 employee stock ownership plan
shares in 2000 and 1999, at fair value 109,941 197,725
Change in fair value on securities available for sale, net of tax (102,201) (15,493)
------------ ------------
Balance, end of period $ 16,944,343 $ 18,480,448
============ ============
See accompanying notes to consolidated financial statements.
PEOPLES-SIDNEY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
March 31,
2000 1999
---- ----
Cash flows from operating activities
Net income $ 403,089 $ 413,824
Adjustments to reconcile net income to net cash from
operating activities 116,910 84,844
Depreciation
Provision for loan losses 44,041 40,918
Gain on sale of other real estate owned -- (3,086)
FHLB stock dividends (49,300) (45,700)
Net realized loss on sale of securities 15,781 --
Compensation expense for ESOP shares 109,941 197,725
Compensation expense for MRP shares 142,974 158,910
Change in
Accrued interest receivable and other assets (259,266) (63,245)
Accrued expense and other liabilities (120,068) 53,295
Deferred loan fees 21,718 17,022
------------ ------------
Net cash from operating activities 425,820 854,507
Cash flows from investing activities
Purchases of securities available for sale (2,997,813) (1,999,844)
Maturities of securities available for sale 1,000,000 2,000,000
Proceeds from sale of securities available for sale 984,219 --
Principal repayments on mortgage-backed securities 181,770 --
Purchases of time deposits in other financial institutions (1,000,000) (500,000)
Maturities of time deposits in other financial institutions 1,300,000 500,000
Net increase in loans (10,078,286) (5,977,698)
Premises and equipment expenditures (51,763) (1,134,482)
Purchase of FHLB stock (10,800) --
Proceeds from sale of real estate owned -- 65,530
------------ ------------
Net cash from investing activities (10,672,673) (7,046,494)
Cash flows from financing activities
Net increase in deposits 7,705,725 4,625,918
Net change in short-term borrowing (1,800,000) --
Proceeds from long-term borrowing 5,000,000 --
Cash dividends paid (320,615) (335,841)
Purchase of treasury stock (651,062) (611,400)
Purchase of shares for management recognition plan -- (953,293)
----------- -----------
Net cash from financing activities 9,934,048 2,725,384
----------- -----------
Net change in cash and cash equivalents (312,805) (3,466,603)
Cash and cash equivalents at beginning of period 1,932,978 4,947,253
----------- -----------
Cash and cash equivalents at end of period $ 1,620,173 $ 1,480,650
=========== ===========
Supplemental disclosures of cash flow information
Cash paid during the period for
Interest $ 3,945,813 $ 3,242,250
Income taxes 428,000 91,000
Noncash transactions
Transfer from loans to real estate owned -- 62,444
See accompanying notes to comsolidated financial statements.
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements include accounts of
Peoples-Sidney Financial Corporation ("Peoples") and its wholly-owned
subsidiary, Peoples Federal Savings and Loan Association ("Association"), a
federal stock savings and loan association, together referred to as the
Corporation. All significant intercompany transactions and balances have been
eliminated.
These interim consolidated financial statements are prepared without audit and
reflect all adjustments which, in the opinion of management, are necessary to
present fairly the financial position of the Corporation at March 31, 2000 and
its results of operations and cash flows for the periods presented. All such
adjustments are normal and recurring in nature. The accompanying consolidated
financial statements have been prepared in accordance with the instructions of
Form 10-QSB and, therefore, do not purport to contain all the necessary
financial disclosures required by generally accepted accounting principles that
might otherwise be necessary in the circumstances, and should be read in
conjunction with the consolidated financial statements and notes thereto of the
Corporation for the fiscal year ended June 30, 1999, included in its 1999 Annual
Report. Reference is made to the accounting policies of the Corporation
described in the notes to consolidated financial statements contained in its
1999 Annual Report. The Corporation has consistently followed these policies in
preparing this Form 10-QSB.
The Corporation provides financial services through its main office in Sidney,
Ohio, and branch offices in Anna and Jackson Center, Ohio. Its primary deposit
products are checking, savings and term certificate accounts, and its primary
lending products are residential mortgage, commercial and installment loans.
Substantially all loans are secured by specific items of collateral including
business assets, consumer assets and real estate. Commercial loans are expected
to be repaid from cash flow from operations of businesses. Real estate loans are
secured by both residential and commercial real estate. Substantially all
revenues and services are derived from financial institution products and
services in Shelby County and contiguous counties.
To prepare financial statements in conformity with generally accepted accounting
principles, management makes estimates and assumptions based on available
information. These estimates and assumptions affect the amounts reported in the
financial statements and disclosures provided, and future results could differ.
The allowance for loan losses, fair values of financial instruments and status
of contingencies are particularly subject to change.
Income tax expense is based on the effective tax rate expected to be applicable
for the entire year. Income tax expense is the total of the current year income
tax due or refundable and the change in deferred tax assets and liabilities.
Deferred tax assets and liabilities are the expected future tax amounts for the
temporary differences between the carrying amounts and tax bases of assets and
liabilities, computed using enacted tax rates. A valuation allowance, if needed,
reduces deferred tax assets to the amount expected to be realized.
Basic earnings per share ("EPS") is net income divided by the weighted average
number of shares outstanding during the period. Unallocated ESOP shares are not
considered outstanding for this calculation. Management recognition plan ("MRP")
shares are considered outstanding as they become vested. Diluted EPS shows the
dilutive effect of MRP shares and the additional common shares issuable under
stock options.
(Continued)
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
A reconciliation of the numerators and denominators used in the computation of
the basic earnings per common share and diluted earnings per common share is
presented below:
Three Months Ended Nine Months Ended
------------------ -----------------
March 31, March 31,
--------- ---------
2000 1999 2000 1999
---- ---- ---- ----
Basic Earnings Per Common Share
Numerator
Net income $ 156,161 $ 178,937 $ 403,089 $ 413,824
======= ======= ======= =======
Denominator
Weighted average common shares
outstanding 1,628,203 1,755,987 1,652,244 1,788,751
Less: Average unallocated ESOP shares (120,372) (135,269) (124,044) (139,081)
Less: Average nonvested MRP shares (37,607) (49,035) (40,463) (51,891)
------- ------- ------- -------
Weighted average common shares
outstanding for basis earnings per
common share 1,470,224 1,571,683 1,487,737 1,597,779
========= ========= ========= =========
Basic earnings per common share $ 0.10 $ 0.11 $ 0.27 $ 0.26
=========== =========== =========== ===========
Diluted Earnings Per Common Share
Numerator
Net income $ 156,161 $ 178,937 $ 403,089 $ 413,824
=========== =========== =========== ===========
Denominator
Weighted average common shares
outstanding for basic earnings per
common share 1,470,224 1,571,683 1,487,737 1,597,779
Add: Dilutive effects of average
nonvested MRP shares -- -- -- 233
Add: Dilutive effects of assumed
exercises of stock options -- -- -- 5,632
----- ----- ----- -----
Weighted average common shares
and dilutive potential common
shares outstanding 1,470,224 1,571,683 1,487,737 1,603,644
========= ========= ========= =========
Diluted earnings per common share $ 0.10 $ 0.11 $ 0.27 $ 0.26
=========== =========== =========== ===========
Unearned MRP shares and stock options granted did not have a dilutive effect on
EPS for the three and nine months ended March 31, 2000 and the three months
ended March 31, 1999 as the fair value of the MRP shares on the date of grant
and the exercise price of outstanding options was greater than the average
market price for the period.
(Continued)
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities" requires companies to record
derivatives on the balance sheet as assets or liabilities, measured at fair
value. Gains or losses resulting from changes in the values of those derivatives
would be accounted for depending on the use of the derivative and whether it
qualifies for hedge accounting. The key criterion for hedge accounting is that
the hedging relationship must be highly effective in achieving offsetting
changes in fair value or cash flows. SFAS 133 does not allow hedging of a
security which is classified as held to maturity. Accordingly, upon adoption of
SFAS 133, companies may reclassify any security from held to maturity to
available for sale if they wish to be able to hedge the security in the future.
SFAS 133, as amended by SFAS 137, is effective for fiscal years beginning after
June 15, 2000 with early adoption encouraged for any fiscal quarter beginning
July 1, 1998 or later, with no retroactive application. Management does not
expect the adoption SFAS 133 to have a significant impact on the Corporation's
financial statements.
NOTE 2 - SECURITIES
Securities were as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
March 31, 2000
Securities available for sale
U.S. Government agencies $3,996,530 $ -- $ (111,680) $3,884,850
Mortgage-backed securities 4,749,174 -- (111,939) 4,637,235
--------- ----------- ----------- ----------
Total $8,745,704 $ -- $ (223,619) $8,522,085
========== ============ ========== ==========
June 30, 1999
Securities available for sale
U.S. Government agencies $2,998,229 $ -- $ (41,509) $2,956,720
Mortgage-backed securities 4,928,652 -- (27,261) 4,901,391
--------- ----------- ----------- ----------
Total $7,926,881 $ -- $ (68,770) $7,858,111
========== ============ ========== ==========
(Continued)
10.
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 2 - SECURITIES (Continued)
Contractual maturities of securities at March 31, 2000 were as follows. Actual
maturities could differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties. Securities not due at a single maturity, primarily mortgage-backed
securities, are shown separately.
Estimated
Amortized Fair
Cost Value
Securities available for sale
Due after one year through five years $ 2,998,681 $ 2,907,350
Due after five years through ten years 997,849 977,500
Mortgage-backed securities 4,749,174 4,637,235
--------- ---------
$ 8,745,704 $ 8,522,085
============== ===============
Proceeds from the sale of a security during the three and nine months ended
March 31, 2000 were $984,219. A gross loss of $15,781 was realized on the sale.
No securities were sold during the three or nine months ended March 31, 1999. No
securities were pledged as collateral at March 31, 2000 or June 30, 1999.
NOTE 3 - LOANS RECEIVABLE
Loans receivable were as follows:
March 31, June 30,
2000 1999
---- ----
Mortgage loans:
1-4 family residential $ 90,801,663 $ 84,165,483
Multi-family residential 1,314,746 1,358,906
Commercial real estate 9,967,294 9,407,998
Real estate construction and
development 7,690,812 5,930,241
Land 968,604 866,988
------- -------
Total mortgage loans 110,743,119 101,729,616
Consumer and other loans 5,319,693 4,131,469
--------- ---------
Total loans receivable 116,062,812 105,861,085
Less:
Allowance for loan losses (573,519) (528,898)
Loans in process (2,434,230) (2,311,369)
Deferred loan fees (239,691) (217,973)
-------- --------
$ 112,815,372 $ 102,802,845
=============== ================
(Continued)
11.
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 - LOANS RECEIVABLE (Continued)
Activity in the allowance for loan losses was as follows:
Three Months Ended Nine Months Ended
March 31, March 31,
--------- ---------
2000 1999 2000 1999
---- ---- ---- ----
Balance at beginning of period $ 557,407 $ 456,502 $ 528,898 $ 425,642
Provision for losses 16,042 (12,001) 44,041 40,918
Charge-offs -- -- -- (22,621)
Recoveries 70 19,561 580 20,123
------------ ------------ ------------ ------------
Balance at end of period $ 573,519 $ 464,062 $ 573,519 $ 464,062
============ ============ ============ ============
As of and for the three and nine months ended March 31, 2000 and 1999, loans
considered impaired within the scope of SFAS No. 114 were not material.
NOTE 4 - BORROWED FUNDS
At March 31, 2000 and June 30, 1999, the Association had a cash management line
of credit enabling it to borrow up to $8,000,000 and $5,360,000 from the Federal
Home Loan Bank of Cincinnati (FHLB). All cash management advances have an
original maturity of 90 days. The line of credit must be renewed on an annual
basis. $1,000,000 borrowings were outstanding on this line of credit at March
31, 2000, with an interest rate of 6.28%. Borrowings outstanding on this line of
credit at June 30, 1999 were $2,800,000 with interest rates of 4.90% and 6.02%.
As a member of the FHLB system, the Association has the ability to obtain
borrowings up to a maximum total of $19,356,000 at March 31, 2000, including the
cash management line-of-credit. Advances from the Federal Home Loan Bank at
March 31, 2000 and June 30, 1999 were as follows:
March 31, June 30,
2000 1999
---- ----
4.90% FHLB cash management advance,
due September 17, 1999 $ -- $ 2,300,000
4.90% FHLB cash management advance,
due September 22, 1999 -- 300,000
6.02% FHLB cash management advance,
due September 28, 1999 -- 200,000
Variable-rate FHLB cash management advances,
6.28% at March 31, 2000 1,000,000 --
5.84% FHLB advance, due April 4, 2000 5,000,000 --
6.13% FHLB advance, due June 25, 2008 7,000,000 7,000,000
6.00% FHLB advance, due June 11, 2009 5,000,000 5,000,000
--------- ---------
$ 18,000,000 $ 14,800,000
============= =============
Advances under the borrowing agreements are collateralized by a blanket pledge
of the Association's residential mortgage loan portfolio and its FHLB stock.
(Continued)
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5 - COMMITMENTS, CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH
OFF-BALANCE-SHEET RISK
Various contingent liabilities are not reflected in the financial statements,
including claims and legal actions arising in the ordinary course of business.
In the opinion of management, the ultimate disposition of these matters is not
expected to have a material effect on financial condition or results of
operations.
Some financial instruments are used in the normal course of business to meet
financing needs of customers and reduce exposure to interest rate changes. These
financial instruments include commitments to extend credit, standby letters of
credit and financial guarantees. These involve, to varying degrees, credit and
interest rate risk in excess of amounts reported in the financial statements.
Exposure to credit loss if the other party does not perform is represented by
the contractual amount for commitments to extend credit, standby letters of
credit and financial guarantees written. The same credit policies are used for
commitments and conditional obligations as are used for loans. The amount of
collateral obtained, if deemed necessary, on extension of credit is based on
management's credit evaluation and generally consists of residential or
commercial real estate.
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the commitment.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected to
expire without being used, the total commitments do not necessarily represent
future cash requirements.
As of March 31, 2000 and June 30, 1999, the Corporation had commitments to make
fixed-rate commercial and residential real estate mortgage loans at current
market rates approximating $518,000 and $375,000, and variable-rate commercial
and residential real estate mortgage loans at current market rates approximating
$847,000 and $394,000. Loan commitments are generally for 30 days. The interest
rates on fixed-rate commitments ranged from 8.50% to 8.75% at March 31, 2000 and
7.00% to 7.75% at June 30, 1999. The interest rates on variable-rate commitments
ranged from 8.00% to 10.00% at March 31, 2000 and 7.00% to 7.75% at June 30,
1999.
The Corporation also had unused lines of credit approximating $2,095,000 and
$1,434,000 at March 31, 2000 and June 30, 1999.
At March 31, 2000 and June 30, 1999, the Association was required to have
$408,000 and $532,000 on deposit with its correspondent banks as a compensating
clearing requirement.
The Association entered into employment agreements with certain officers of the
Corporation. The agreements provide for a term of one to three years and a
salary and performance review by the Board of Directors not less often than
annually, as well as inclusion of the employee in any formally established
employee benefit, bonus, pension and profit-sharing plans for which management
personnel are eligible. The agreements provide for extensions for a period of
one year on each annual anniversary date, subject to review and approval of the
extension by disinterested members of the Board of Directors of the Association.
The employment agreements also provide for vacation and sick leave.
(Continued)
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 6 - EMPLOYEE STOCK OWNERSHIP PLAN
The Corporation offers an employee stock ownership plan (ESOP) for the benefit
of substantially all employees of the Corporation. During July 1997, the ESOP
received a favorable determination letter from the Internal Revenue Service on
the qualified status of the ESOP under applicable provisions of the Internal
Revenue Code.
The ESOP borrowed funds from Peoples in order to acquire common shares of
Peoples. The loan is secured by the shares purchased with the loan proceeds and
will be repaid by the ESOP with funds from the Association's discretionary
contributions to the ESOP and earnings on ESOP assets. All dividends on
unallocated shares received by the ESOP are used to pay debt service. When loan
payments are made, ESOP shares are allocated to participants based on relative
compensation.
During fiscal 1998, the Corporation declared and paid a $4.00 per share
distribution of which $3.99 was a tax-free return of capital distribution. The
ESOP received approximately $539,000 on 134,262 unallocated shares from the
return of capital distribution. The ESOP used the proceeds to purchase 26,000
additional shares. The additional shares are held in suspense and allocated to
participants in a manner similar to the shares originally in the ESOP.
Shares pledged as collateral are reported as unearned ESOP shares in the
Consolidated Balance Sheets. As shares are released from collateral, the
Corporation reports compensation expense equal to the current market price of
the shares and the shares become outstanding for earnings-per-share
computations. Dividends on allocated ESOP shares are recorded as a reduction of
retained earnings; dividends on unallocated ESOP shares are recorded as a
reduction of debt and accrued interest. ESOP compensation expense was $35,950
and $109,941 for the three and nine months ended March 31, 2000. ESOP
compensation expense was $57,246 and $197,725 for the three and nine months
ended March 31, 1999.
ESOP shares as of March 31, 2000 and June 30, 1999 were as follows:
March 31, June 30,
2000 1999
---- ----
Allocated shares 39,279 39,279
Shares committed to be released for allocation 11,015 --
Unreleased shares 118,536 129,551
------- -------
Total ESOP shares 168,830 168,830
============ ============
Fair value of unreleased shares $ 1,274,262 $ 1,295,510
============ ============
(Continued)
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 7 - STOCK OPTION AND INCENTIVE PLAN
The Stock Option and Incentive Plan was approved by the shareholders of the
Corporation on May 22, 1998. The Board of Directors has granted options to
purchase shares of common stock at exercise prices ranging from $16.01 to $18.75
to certain employees, officers and directors of the Corporation. The exercise
price for options granted prior to June 10, 1998, were reduced by the $3.99
return of capital distribution. One-fifth of the options awarded become first
exercisable on each of the first five anniversaries of the date of grant. The
option period expires 10 years from the date of grant. 140,824 and 141,824 stock
options were outstanding at March 31, 2000 and June 30, 1999. 1,000 stock
options were forfeited during the nine months ended March 31, 2000. 28,165 and
28,365 stock options were exercisable at March 31, 2000 and June 30, 1999. In
addition, 37,714 and 36,714 stock options to purchase common stock were reserved
for future grants at March 31, 2000 and June 30, 1999.
NOTE 8 - MANAGEMENT RECOGNITION PLAN
A Management Recognition Plan (MRP) was adopted by the Board of Directors and
approved by the shareholders of the Corporation on May 22, 1998 to purchase
71,415 common shares, which is equal to 4% of the common shares sold in
connection with the conversion. The MRP will be used as a means of providing
directors and certain key employees of the Corporation with an ownership
interest in the Corporation in a manner designed to compensate such directors
and key employees for services to the Corporation.
In conjunction with the adoption of the MRP on May 22, 1998, the Board of
Directors awarded 57,128 shares to certain directors, officers and employees of
the Corporation. No shares had been previously awarded. One-fifth of such shares
will be earned and nonforfeitable on each of the first five anniversaries of the
date of the award. At March 31, 2000 and June 30, 1999, 11,429 shares have
vested. In the event of the death or disability of a participant or a change in
control of the Corporation, the participant's shares will be deemed earned and
nonforfeitable upon such date. At June 30, 1999, there were 14,287 shares
reserved for future awards and held as treasury stock. Compensation expense
related to MRP shares is based upon the cost of the shares, which approximates
fair value at the date of grant. For the three and nine months ended March 31,
2000, compensation expense totaled $47,658 and $142,974. For the three and nine
months ended March 31, 1999, compensation expense totaled $18,910 and $138,910.
PEOPLES-SIDNEY FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 2. Management's Discussion and Analysis
Introduction
In the following pages, management presents an analysis of the consolidated
financial condition of the Corporation as of March 31, 2000, compared to June
30, 1999, and results of operations for the three and nine months ended March
31, 2000, compared with the same periods in 1999. This discussion is designed to
provide a more comprehensive review of operating results and financial position
than could be obtained from an examination of the financial statements alone.
This analysis should be read in conjunction with the interim financial
statements and related footnotes included herein.
When used in this discussion or future filings by the Corporation with the
Securities and Exchange Commission, or other public or shareholder
communications, or in oral statements made with the approval of an authorized
executive officer, the words or phrases "will likely result," "are expected to,"
"will continue," "is anticipated," "estimate," "project," "believe" or similar
expressions are intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The Corporation
wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made, and to advise
readers that various factors, including regional and national economic
conditions, changes in levels of market interest rates, credit risks of lending
activities and competitive and regulatory factors, could affect the
Corporation's financial performance and could cause the Corporation's actual
results for future periods to differ materially from those anticipated or
projected.
The Corporation is not aware of any trends, events or uncertainties that will
have or are reasonably likely to have a material effect on its liquidity,
capital resources or operations except as discussed herein. The Corporation is
not aware of any current recommendations by regulatory authorities that would
have such effect if implemented.
The Corporation does not undertake, and specifically disclaims, any obligation
to publicly release the result of any revisions which may be made to any
forward-looking statements to reflect occurrence of anticipated or unanticipated
events or circumstances after the date of such statements.
Financial Condition
Total assets at March 31, 2000 were $127.2 million compared to $116.9 million at
June 30, 1999, an increase of $10.3 million, or 8.8%. The increase in total
assets was due to increases in loans and securities available for sale funded by
proceeds from increased deposits and borrowings.
Loans receivable increased $10.0 million from $102.8 million at June 30, 1999 to
$112.8 million at March 31, 2000. The increase was primarily in real estate
construction and development loans which increased $1.8 million and one- to
four-family residential loans which increased $6.6 million. Changes in other
types of mortgage loans were not significant. The overall increase in total
mortgage loans is reflective of a strong local economy coupled with attractive
loan rates and products compared to local competition. Expansion into new market
areas through the Association's two new branch banking facilities also
contributed to the growth.
The Corporation's consumer and other loan portfolio increased $1.2 between June
30, 1999 and March 31, 2000. The increase was primarily related to new auto
loans and commercial business loans. Even with the increase, consumer and other
loans remain a small portion of the entire loan portfolio and represented only
4.6% and 3.9% of gross loans at March 31, 2000 and June 30, 1999.
Securities available for sale increased $664,000 primarily as temporary earning
sources until loan growth utilizes all the funds provided from deposit growth.
Total deposits increased $7.7 million from $84.3 million at June 30, 1999 to
$92.0 million at March 31, 2000. The deposit growth was the result of a new
15-month certificate of deposit. This product totaled $15.6 million at March 31,
2000. Other certificates of deposit accounts declined $8.0 million. Changes in
other deposit categories offset each other. NOW accounts increased $817,000,
savings accounts declined $687,000 and money market accounts declined $274,000
since June 30, 1999. Noninterest-bearing demand deposits increased $225,000
since June 30, 1999.
PEOPLES-SIDNEY FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
Borrowed funds were $18.0 million at March 31, 2000 compared to $14.8 million at
June 30, 1999. Borrowings at March 31, 2000 consisted primarily of long-term
fixed-rate advances. Borrowings were increased to accelerate the Corporation's
growth and leverage the Corporation's capital position.
Results of Operations
The operating results of the Corporation are affected by general economic
conditions, monetary and fiscal policies of federal agencies and regulatory
policies of agencies that regulate financial institutions. The Corporation's
cost of funds is influenced by interest rates on competing investments and
general market rates of interest. Lending activities are influenced by demand
for real estate loans and other types of loans, which in turn is affected by
interest rates at which such loans are made, general economic conditions and
availability of funds for lending activities.
The Corporation's net income primarily depends on its net interest income, which
is the difference between interest income earned on interest-earning assets,
such as loans and securities and interest expense incurred on interest-bearing
liabilities, such as deposits and other borrowings. The level of net interest
income is dependent on the interest rate environment and volume and composition
of interest-earning assets and interest-bearing liabilities. Net income is also
affected by provisions for loan losses, service charges, gains on the sale of
assets and other income, noninterest expense and income taxes.
Three Months Ended March 31, 2000 Compared to Three Months Ended March 31, 1999
Net Income. Income before income taxes was $265,000 for the quarter ending March
31, 2000, compared to $280,000 for the same period in 1999, a 5.3% decrease. Net
income for the three months ended March 31, 2000 was $156,000 compared to
$179,000 in 1999. The decrease in net income for the quarter primarily resulted
from a loss on the sale of an available for sale security during the current
quarter coupled with a negative provision for loan losses during the same
quarter a year ago. The Corporation received a significant recovery of a
previously charged-off loan which positively impacted management's allowance for
loan losses analysis in the prior quarter.
Net Interest Income. Net interest income totaled $963,000 for the three months
ended March 31, 2000 compared to $936,000 for the three months ended March 31,
1999. The slight increase was due to an increase in average earning assets
offset by a decrease in the net interest margin.
Interest and fees on loans increased $216,000, or 11.2% from $1,917,000 for the
three months ended March 31, 1999 to $2,133,000 for the three months ended March
31, 2000. The increase in interest income was due to a higher average balance of
loans partially offset by a decline in the yield earned on loans.
Interest earned on securities increased $100,000 for the three months ended
March 31, 2000 as compared to the same period in the prior year. The increase
was the result of having a higher balance in securities than a year ago.
Securities were increased and funded with borrowings to leverage the
Corporation's capital position.
Interest earned on interest-bearing demand, time and overnight deposits
decreased $13,000 due to lower average balances.
Interest paid on deposits increased $129,000 for the three months ended March
31, 2000 compared to the three months ended March 31, 1999. The average rate
paid on deposits increased slightly. However, the change was more influenced by
an increase in the average balance of deposits.
Interest paid on borrowed funds totaled $262,000 for the three months ended
March 31, 2000 compared to $114,000 for the three months ended March 31, 1999.
The increase in interest expense on borrowed funds resulted from a higher
average balance of borrowed funds.
Provision for Loan Losses. The Corporation maintains an allowance for loan
losses in an amount that, in management's judgment, is adequate to absorb
probable losses in the loan portfolio. While management utilizes its best
judgment and information available, the ultimate adequacy of the allowance is
dependent upon a variety of factors, including the performance of the
Corporation's loan portfolio, the economy, changes in real estate values and
PEOPLES-SIDNEY FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
interest rates and the view of the regulatory authorities toward loan
classifications. The provision for loan losses is determined by management as
the amount to be added to the allowance for loan losses after net charge-offs
have been deducted to bring the allowance to a level which is considered
adequate to absorb probable losses in the loan portfolio. The amount of the
provision is based on management's monthly review of the loan portfolio and
consideration of such factors as historical loss experience, general prevailing
economic conditions, changes in the size and composition of the loan portfolio
and specific borrower considerations, including the ability of the borrower to
repay the loan and the estimated value of the underlying collateral.
The provision for loan losses for the three months ended March 31, 2000 totaled
$16,000 compared to $(12,000) for the three months ended March 31, 1999. The
provision for loan losses for the three months ended March 31, 2000 was fairly
consistent with prior quarters. The negative provision for loan losses in the
prior year was due to a recovery of $16,000 during March 1999 quarter from a
previously charged-off loan account. Past charge- offs experienced by the
Corporation have primarily related to consumer and other non-real estate loans.
As indicated previously, such loans make up an insignificant portion of the
Corporation's total loan portfolio. The Corporation's low historical charge-off
history is the product of a variety of factors, including the Corporation's
underwriting guidelines, which generally require a loan-to-value or projected
completed value ratio of 90% for purchase or construction of one- to four-family
residential properties and 75% for commercial real estate and land loans,
established income information and defined ratios of debt to income. The
allowance for loan losses totaled $574,000, or .50% of loans receivable, net of
loans in process, at March 31, 2000 compared to $529,000, or .51% of loans
receivable, net of loan in process, at June 30, 1999.
Noninterest income. Noninterest income includes service fees and other
miscellaneous income and totaled $5,000 for the three months ended March 31,
2000 and $18,000 for the three months ended March 31, 1999. The decrease of
$13,000 is primarily the result of a $16,000 loss on the sale of an available
for sale security during the current quarter. Management elected to sell a
security and replace it with a higher yielding security to improve future
interest earned on the security portfolio.
Noninterest expense. Noninterest expense totaled $686,000 for the three months
ended March 31, 2000 compared to $687,000 for the three months ended March 31,
1999. Increases in salaries and
benefits were offset by decreases in FDIC premiums and state franchise taxes.
Salaries and benefits increased as a result of the MRP. Management had estimated
the expense associated with the MRP during the first half of fiscal 1999 based
upon what they anticipated the cost of the shares to be that they purchased for
the plan. The accrual was adjusted in the third quarter after the shares were
purchased which resulted in expense being $18,910 for the three months ended
March 31, 1999. MRP expense of $47,658 for the quarter ended March 31, 2000 is
consistent with prior quarters. FDIC premiums declined due to lower premiums
which started January 1, 2000. State franchise tax expense declined due to the
lower capital levels maintained at the Association as of June 30, 1999 compared
to June 30, 1998. The Association pays state franchise taxes based upon its net
worth as of its last fiscal year end for each calendar year.
Income Tax Expense. The volatility of income tax expense is primarily
attributable to the change in income before income taxes. Income tax expense
totaled $109,000 for the three months ended March 31, 2000 compared to $101,000
for the three months ended March 31, 1999, representing an increase of $8,000,
or 7.9%. This increase is due to an increase in the effective tax rate primarily
relating to the Corporation's stock-based benefit plans. The effective tax rate
was 41.1% and 36.0% for the three months ended March 31, 2000 and 1999.
Nine Months Ended March 31, 2000 Compared to Nine Months Ended March 31, 1999
Net Income. Income before income taxes was $687,000 for the nine months ending
March 31, 2000, compared to $647,000 for the same period in 1999, a 6.0%
increase. Net income for the nine months ended March 31, 2000 was $403,000
compared to $414,000 in 1999. The decrease in net income for the nine months
represents an increase in federal income tax expense due to an increase in the
effective tax rate primarily relating to the Corporation's stock- based benefit
plans.
Net Interest Income. Net interest income totaled $2,828,000 for the nine months
ended March 31, 2000 compared to $2,788,000 for the nine months ended March 31,
1999. The slight increase was due to an increase in average earning assets
offset by a decrease in the net interest margin.
Interest and fees on loans increased $498,000, or 8.7% from $5,719,000 for the
nine months ended March 31, 1999 to $6,218,000 for the nine months ended March
31, 2000. The increase in interest income was due to a higher average balance of
loans partially offset by a decline in the yield earned on loans.
Interest earned on securities increased $255,000 for the nine months ended March
31, 2000 as compared to the same period in the prior year. The increase was the
result of having a much higher balance in securities than a year ago. Securities
were increased and funded with borrowings to leverage the Corporation's capital
position.
Interest earned on interest-bearing demand, time and overnight deposits
decreased $27,000 due to lower average balances.
PEOPLES-SIDNEY FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
Interest paid on deposits increased $252,000 for the nine months ended March 31,
2000 compared to the nine months ended March 31, 1999. The average rate paid on
deposits declined. However, the effect of an increase in the average balance of
deposits offset the decrease in the average cost.
Interest paid on borrowed funds totaled $774,000 for the nine months ended March
31, 2000 compared to $335,000 for the nine months ended March 31, 1999. The
increase in interest expense on borrowed funds resulted from a higher average
balance of borrowed funds.
Provision for Loan Losses. The provision for loan losses for the nine months
ended March 31, 2000 totaled $44,000 compared to $41,000 for the nine months
ended March 31, 1999.
Noninterest income. Noninterest income includes service fees and other
miscellaneous income and totaled $47,000 for the nine months ended March 31,
2000 and $53,000 for the nine months ended March 31, 1999.
Noninterest expense. Noninterest expense totaled $2,144,000 for the nine months
ended March 31, 2000 compared to $2,152,000 for the nine months ended March 31,
1999. Increases in occupancy and equipment expense and computer processing
expense were offset by decreases in state franchise taxes and other expenses.
Occupancy and equipment expense and computer processing expense increased due
the opening of two new branches in the early part of fiscal 1999. The decrease
in state franchise taxes was discussed previously. Other expenses decreased due
to lower advertising and office supplies. These two items were higher in the
prior year due to the costs associated with the start-up of the two new
branches.
Income Tax Expense. The volatility of income tax expense is primarily
attributable to the change in income before income taxes. Income tax expense
totaled $284,000 for the nine months ended March 31, 2000 compared to $234,000
for the nine months ended March 31, 1999, representing an increase of $50,000,
or 21.4%. This increase is due to an increase in the effective tax rate
primarily relating to the Corporation's stock-based benefit plans. The effective
tax rate was 41.3% and 36.1% for the nine months ended March 31, 2000 and 1999.
Liquidity and Capital Resources
The Corporation's liquidity, primarily represented by cash and cash equivalents,
is a result of operating, investing and financing activities. These activities
are summarized below for the nine months ended March 31, 2000 and 1999.
Nine Months
Ended March 31,
2000 1999
---- ----
Dollars in thousands)
Net income 403 $ 414
Adjustments to reconcile net income to net cash from
operating activities 23 441
-------- ---------
Net cash from operating activities 426 855
Net cash from investing activities (10,673) (7,046)
Net cash from financing activities 9,934 2,725
-------- ---------
Net change in cash and cash equivalents (313) (3,466)
Cash and cash equivalents at beginning of period 1,933 4,947
-------- --------
Cash and cash equivalents at end of period $ 1,620 $ 1,481
======== ========
The Corporation's principal sources of funds are deposits, loan repayments,
maturities of securities and other funds provided by operations. The Association
also has the ability to borrow from the FHLB. While scheduled loan repayments
and maturing investments are relatively predictable, deposit flows and early
loan prepayments are more influenced by interest rates, general economic
conditions and competition. The Association maintains investments in liquid
assets based on management's assessment of the (1) need for funds, (2) expected
deposit flows, (3) yields available on short-term liquid assets and (4)
objectives of the asset/liability management program.
PEOPLES-SIDNEY FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OTS regulations presently require the Association to maintain an average daily
balance of investments in United States Treasury, federal agency obligations and
other investments in an amount equal to 4% of the sum of the Association's
average daily balance of net withdrawable deposit accounts and borrowings
payable in one year or less. The liquidity requirement, which may be changed
from time to time by the OTS to reflect changing economic conditions, is
intended to provide a source of relatively liquid funds on which the Association
may rely, if necessary, to fund deposit withdrawals or other short-term funding
needs. At March 31, 2000, the Association's regulatory liquidity was 11.8%. At
such date, the Corporation had commitments to originate fixed-rate commercial
and residential real estate loans totaling $518,000 and variable-rate commercial
and residential real estate mortgage loans totaling $847,000. Loan commitments
are generally for 30 days. The Corporation considers its liquidity and capital
reserves sufficient to meet its outstanding short and long-term needs. See Note
5 of the Notes to Consolidated Financial Statements.
The Association is subject to various regulatory capital requirements
administered by the federal regulatory agencies. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the
Association must meet specific capital guidelines that involve quantitative
measures of the Association's assets, liabilities and certain off-balance-sheet
items as calculated under regulatory accounting practices. The Association's
capital amounts and classifications are also subject to qualitative judgments by
the regulators about the Association's components, risk weightings and other
factors. Failure to meet minimum capital requirements can initiate certain
mandatory actions that, if undertaken, could have a direct material effect on
the Corporation's financial statements. At March 31, 2000 and June 30, 1999,
management believes the Association complies with all regulatory capital
requirements. Based on the Association's computed regulatory capital ratios, the
Association is considered well capitalized under the Federal Deposit Insurance
Act at March 31, 2000 and June 30, 1999. No conditions or events have occurred
subsequent to the last notification by regulators that management believes would
have changed the Association's category.
At March 31, 2000 and June 30, 1999, the Association's actual capital levels and
minimum required levels were:
Minimum Minimum
Required To Be Required To Be
Adequately Capitalized Well Capitalized
Under Prompt Corrective Under Prompt Corrective
Actual Action Regulations Action Regulations
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
(Dollars in Thousands)
March 31, 2000
Total capital (to risk-
weighted assets) $ 14,428 17.1% $ 6,755 8.0% $ 8,443 10.0%
Tier 1 (core) capital (to
risk-weighted assets) 13,856 16.4 3,377 4.0 5,066 6.0
Tier 1 (core) capital (to
adjusted total assets) 13,856 10.9 5,097 4.0 6,371 5.0
Tangible capital (to
adjusted total assets) 13,856 10.9 1,911 1.5 N/A
June 30, 1999
Total capital (to risk-
weighted assets) $ 13,634 18.0% $ 6,069 8.0% $ 7,586 10.0%
Tier 1 (core) capital (to
risk-weighted assets) 13,152 17.3 3,035 4.0 4,552 6.0
Tier 1 (core) capital (to
adjusted total assets) 13,152 11.2 4,677 4.0 5,847 5.0
Tangible capital (to
adjusted total assets) 13,152 11.2 1,754 1.5 N/A
PEOPLES-SIDNEY FINANCIAL CORPORATION
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
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were brought before the shareholders for a vote during the
quarter.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit No. 11. Statement regarding Computation of Earnings Per
Share
(b) Exhibit No. 27: Financial Data Schedule
(c) 8-K was filed on January 27, 2000. Under Item 5, Other Events,
the Corporation issued a press release announcing the
Corporation's second quarter earnings for the fiscal year ending
June 30, 2000 and the declaration of a cash dividend.
PEOPLES-SIDNEY FINANCIAL CORPORATION
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the small
business issuer has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 12, 2000 /s/ Douglas Stewart
-------------------
Douglas Stewart
President
Date: May 12, 2000 /s/ Debra Geuy
-----------------
Debra Geuy
Chief Financial Officer
PEOPLES-SIDNEY FINANCIAL CORPORATION
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION PAGE NUMBER
- ------ ----------- -----------
11 Statement regarding Computation of Earnings Per Share Refer to Note 1 of the Notes to
Consolidated Financial Statements for
computation of earnings per share.
27 Financial Data Schedule 25