UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended December 31, 2002
[ ] 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 January 31, 2003, the latest practicable date, 1,443,302 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 Page
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets.................................................... 3
Consolidated Statements of Income ............................................. 4
Consolidated Statements of Comprehensive Income................................ 5
Condensed Consolidated Statements of Changes in Shareholders' Equity........... 6
Consolidated Statements of Cash Flows ......................................... 7
Notes to Consolidated Financial Statements .................................... 8
Item 2. Management's Discussion and Analysis........................................... 15
Item 3. Controls and Procedures........................................................ 21
Part II - Other Information
Item 1. Legal Proceedings.............................................................. 22
Item 2. Changes in Securities.......................................................... 22
Item 3. Defaults Upon Senior Securities................................................ 22
Item 4. Submission of Matters to a Vote of Security Holders............................ 22
Item 5. Other Information.............................................................. 22
Item 6. Exhibits and Reports on Form 8-K............................................... 22
SIGNATURES .................................................................................. 23
CERTIFICATIONS............................................................................... 24
2
PEOPLES-SIDNEY FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
- --------------------------------------------------------------------------------
Item 1. Financial Statements
--------------------- December 31, June 30,
2002 2002
---- ----
ASSETS
Cash and due from financial institutions $ 1,102,291 $ 1,018,337
Interest-bearing deposits in other financial institutions 3,898,671 3,770,677
Overnight deposits 3,500,000 800,000
------------- ------------
Total cash and cash equivalents 8,500,962 5,589,014
Time deposits in other financial institutions 2,000,000 --
Securities available for sale 5,046,500 3,525,750
Federal Home Loan Bank stock 1,509,100 1,474,600
Loans, net 119,036,302 121,224,773
Accrued interest receivable 828,594 834,744
Premises and equipment, net 1,929,874 2,028,995
Real estate owned 76,537 --
Other assets 114,258 176,432
------------- ------------
Total assets $ 139,042,127 $134,854,308
============= ============
LIABILITIES
Deposits $ 92,752,221 $ 94,786,623
Borrowed funds 28,755,145 22,455,813
Accrued interest payable and other liabilities 339,039 417,664
------------- ------------
Total liabilities 121,846,405 117,660,100
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 10,692,028 10,689,800
Retained earnings 11,446,830 11,371,950
Treasury stock, 342,073 and 321,228 shares, at cost (3,964,185) (3,703,717)
Unearned employee stock ownership plan shares (948,065) (1,023,928)
Unearned management recognition plan shares (79,430) (174,746)
Accumulated other comprehensive income 30,690 16,995
------------- ------------
Total shareholders' equity 17,195,722 17,194,208
------------- ------------
Total liabilities and shareholders' equity $ 139,042,127 $134,854,308
============= ============
See accompanying notes to consolidated financial statements.
3
PEOPLES-SIDNEY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
December 31, December 31,
------------ ------------
2002 2001 2002 2001
---- ---- ---- ----
Interest income
Loans, including fees $ 2,142,893 $ 2,348,028 $ 4,342,161 $ 4,755,571
Securities 37,009 62,514 82,279 112,320
Demand, time and overnight deposits 21,016 23,114 27,423 64,838
Dividends on FHLB Stock 16,925 19,710 34,580 44,362
------------- ------------- ------------- --------------
Total interest income 2,217,843 2,453,366 4,486,443 4,977,091
Interest expense
Deposits 751,825 1,069,271 1,581,228 2,233,573
Borrowed funds 380,852 387,041 712,560 775,619
------------- ------------- ------------- --------------
Total interest expense 1,132,677 1,456,312 2,293,788 3,009,192
------------- ------------- ------------- --------------
Net interest income 1,085,166 997,054 2,192,655 1,967,899
Provision for loan losses 24,508 10,221 40,837 25,683
------------- ------------- ------------- --------------
Net interest income after provision for loan losses 1,060,658 986,833 2,151,818 1,942,216
Noninterest income
Service fees and other charges 35,490 35,480 68,991 68,369
Noninterest expense
Compensation and benefits 425,526 412,765 852,651 819,927
Director fees 24,300 24,300 48,600 48,600
Occupancy and equipment 105,321 105,739 217,332 213,421
Computer processing expense 63,609 62,263 126,597 125,973
State franchise taxes 45,137 47,590 90,275 95,159
Professional fees 27,681 30,346 53,096 54,425
Other 80,008 79,038 169,362 170,621
------------- ------------- ------------- --------------
Total noninterest expense 771,582 762,041 1,557,913 1,528,126
------------- ------------- ------------- --------------
Income before income taxes 324,566 260,272 662,896 482,459
Income tax expense 120,500 99,300 245,900 183,900
------------- ------------- ------------- --------------
Net income $ 204,066 $ 160,972 $ 416,996 $ 298,559
============= ============= ============= ==============
Earnings per common share - basic $ 0.15 $ 0.12 $ 0.31 $ 0.22
============= ============= ============= ==============
Earnings per common share - diluted $ 0.15 $ 0.12 $ 0.31 $ 0.22
============= ============= ============= ==============
4
PEOPLES-SIDNEY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
- ----------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
December 31, December 31,
------------ ------------
2002 2001 2002 2001
---- ---- ---- ----
Net income $ 204,066 $ 160,972 $ 416,996 $ 298,559
Other comprehensive income (loss)
Unrealized holding gains and (losses) on
available-for-sale securities 2,180 (57,755) 20,750 (4,295)
Tax effect (741) 19,637 (7,055) 1,461
--------- ----------- ---------- -----------
Other comprehensive income (loss) 1,439 (38,118) 13,695 (2,834)
--------- ----------- ---------- -----------
Comprehensive income $ 205,505 $ 122,854 $ 430,691 $ 295,725
========= =========== ========== ===========
5
PEOPLES-SIDNEY FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
December 31, December 31,
------------ ------------
2002 2001 2002 2001
---- ---- ---- ----
Balance, beginning of period $ 17,321,920 $ 17,171,128 $ 17,194,208 $ 17,149,613
Net income for period 204,066 160,972 416,996 298,559
Cash dividends, $.16 and $.09 per share for
the three months ended December 31, 2002
and 2001, $.25 and $.17 per share for the six
months ended December 31, 2002 and 2001 (218,646) (125,574) (342,116) (238,196)
Purchase of 15,845 and 20,508 shares of
treasury stock for the three months
ended December 31, 2002 and 2001; and
20,845 and 32,508 shares of treasury
stock for the six months ended December 31,
2002 and 2001, at cost (200,468) (215,707) (260,468) (335,057)
Commitment to release 2,856 management
recognition plan shares for the three
months ended December 31, 2002 and 2001
and 5,712 management recognition plan
shares for the six months ended December 31,
2002 and 2001 47,658 47,658 95,316 95,316
Commitment to release 3,233 and 3,378
employee stock ownership plan shares for
the three months ended December 31, 2002
and 2001 and 6,466 and 6,756 employee
stock ownership plan shares for the six months
ended December 31, 2002 and 2001, at fair value 39,753 35,136 78,091 68,094
Change in fair value on securities available for
sale, net of tax 1,439 (38,118) 13,695 (2,834)
------------- ------------- ------------- --------------
Balance, end of period $ 17,195,722 $ 17,035,945 $ 17,195,722 $ 17,035,495
============= ============= ============= ==============
6
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended
December 31,
------------
2002 2001
---- ----
Cash flows from operating activities
Net income $ 416,996 $ 298,559
Adjustments to reconcile net income to net cash from
operating activities
Depreciation 103,479 104,341
Provision for loan losses 40,837 25,683
FHLB stock dividends (34,500) (44,300)
Compensation expense for ESOP shares 78,091 68,094
Compensation expense for MRP shares 95,316 95,316
Change in
Accrued interest receivable and other assets 68,324 87,941
Accrued expense and other liabilities (85,680) (21,944)
Deferred loan fees 16,503 34,016
---------- ---------------
Net cash from operating activities 699,366 647,706
Cash flows from investing activities
Purchases of time deposits in other financial institutions (2,000,000) (300,000)
Proceeds from maturities/calls of securities available for sale 2,500,000 500,000
Purchases of securities available for sale (4,000,000) (2,500,000)
Net change in loans 2,054,594 202,478
Premises and equipment expenditures (4,358) (225,062)
---------- ---------------
Net cash from investing activities (1,449,764) (2,322,584)
Cash flows from financing activities
Net change in deposits (2,034,402) 3,256,293
Repayments of long-term FHLB advances (200,668) (230,955)
Net change in short-term FHLB advances (500,000) --
Proceeds from long-term FHLB advances 7,000,000 --
Cash dividends paid (342,116) (238,196)
Purchase of treasury stock (260,468) (335,057)
---------- ---------------
Net cash from financing activities 3,662,346 2,452,085
---------- ---------------
Net change in cash and cash equivalents 2,911,948 777,207
Cash and cash equivalents at beginning of period 5,589,014 6,350,895
---------- ---------------
Cash and cash equivalents at end of period $8,500,962 $ 7,128,102
========== ===============
Supplemental disclosures of cash flow information
Cash paid during the period for
Interest $2,344,502 $ 2,992,088
Income taxes 316,000 181,000
Noncash transactions
Transfer from loans to other real estate owned $ 76,537 $ --
7
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation: 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 December 31, 2002
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 accounting principles generally accepted in
the United States of America 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, 2002, included in the Corporation's 2002 Annual Report on Form 10-KSB for
the fiscal year ended June 30, 2002. Reference is made to the accounting
policies of the Corporation described in the notes to consolidated financial
statements contained in such report. The Corporation has consistently followed
these policies in preparing this Form 10-QSB.
Nature of Operations: The Corporation provides financial services through its
- ---------------------
main office in Sidney, Ohio, and branch offices in Sidney, 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
commercial and residential real estate. Commercial loans are expected to be
repaid from cash flow from operations of businesses. Substantially all revenues
and services are derived from financial institution products and services in
Shelby County and contiguous counties. Management considers the Corporation to
operate primarily in one segment, banking.
Use of Estimates: To prepare financial statements in conformity with accounting
- -----------------
principles generally accepted in the United States of America, 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 and fair values of financial instruments are particularly subject to
change.
Income Taxes: 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 basis
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.
Earnings Per Common Share: Basic earnings per common share ("EPS") is net income
- -------------------------
divided by the weighted average number of common shares outstanding during the
period. Employee stock ownership plan ("ESOP") shares are considered outstanding
for this calculation unless unearned. 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)
8
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
New Accounting Pronouncements: SFAS No. 148, "Accounting for Stock Based
- --------------------------------
Compensation - Transition and Disclosure," was issued in December 2002. SFAS No.
148 amends SFAS No. 123 to provide alternative methods of a voluntary change to
the fair value based method of accounting for stock-based employee compensation.
It also amends the disclosure requirements of SFAS No. 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the offset of the method
used on reported results. The provisions of this statement are effective for
annual financial statements for fiscal years ending and interim periods
beginning after December 15, 2002. The adoption of this statement will result in
more prominent disclosure of the Corporation's stock option plan.
NOTE 2 - SECURITIES AVAILABLE FOR SALE
Securities available for sale were as follows.
Gross Gross
Fair Unrealized Unrealized
Value Gains Losses
----- ----- ------
December 31, 2002
U.S. Government agencies $ 5,046,500 $ 46,500 $ --
============ ========== ==========
June 30, 2002
U.S. Government agencies $ 3,525,750 $ 28,080 $ (2,330)
============ ========== ==========
Contractual maturities of securities available for sale at December 31, 2002
were as follows. Actual maturities may differ from contractual maturities
because borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties.
Fair
Value
-----
Due after one year through five years $3,041,410
Due after five years through ten years 2,005,090
----------
$5,046,500
==========
No securities were sold during the three or six-month periods ended December 31,
2002 and 2001. No securities were pledged as collateral at December 31, 2002 or
June 30, 2002.
- --------------------------------------------------------------------------------
(Continued)
9
NOTE 3 - LOANS
Loans were as follows.
December 31, June 30,
2002 2002
---- ----
Mortgage loans:
1-4 family residential $ 92,170,673 $ 96,006,970
Multi-family residential 1,879,834 1,913,649
Commercial real estate 10,166,046 10,111,114
Real estate construction and
development 8,723,415 7,096,855
Land 1,328,945 1,309,677
------------- -------------
Total mortgage loans 114,268,913 116,438,265
Consumer loans 4,360,683 4,625,413
Commercial loans 4,062,756 3,716,760
------------- -------------
Total loans 122,692,352 124,780,438
Less:
Allowance for loan losses (740,000) (708,000)
Loans in process (2,568,013) (2,516,131)
Deferred loan fees (348,037) (331,534)
------------- -------------
$ 119,036,302 $ 121,224,773
============= =============
Activity in the allowance for loan losses is summarized as follows.
Three Months Ended Six Months Ended
December 31, December 31,
2002 2001 2002 2001
Balance at beginning of period $ 719,000 $ 676,500 $708,000 $660,800
Provision for losses 24,508 10,221 40,837 25,683
Charge-offs (3,508) (1,801) (9,078) (1,801)
Recoveries -- 80 241 318
--------- --------- --------- --------
Balance at end of period $ 740,000 $ 685,000 $740,000 $685,000
========= ========= ========= ========
Nonperforming loans were as follows.
December 31, June 30,
2002 2002
---------- ----------
Loans past due over 90 days still on accrual $ 516,000 $ 472,000
Nonaccrual loans 1,345,000 598,000
Nonperforming loans include smaller balance homogeneous loans, such as
residential mortgage and consumer loans that are collectively evaluated for
impairment.
As of December 31, 2002 and June 30, 2002 and for the three months and six
months ended December 31, 2002 and 2001, impaired loans were not material.
- --------------------------------------------------------------------------------
(Continued)
10.
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- --------------------------------------------------------------------------------
NOTE 4 - BORROWED FUNDS
At December 31, 2002 and June 30, 2002, the Association had a cash management
line of credit enabling it to borrow up to $8,000,000 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.
There were no outstanding borrowings on this line of credit at December 31, 2002
and $500,000 in outstanding borrowings at June 30, 2002.
As a member of the FHLB system, the Association has the ability to obtain
borrowings up to a maximum total of $65,451,000 including the cash management
line of credit. Advances from the Federal Home Loan Bank were as follows.
December 31, June 30,
2002 2002
---- ----
Cash management advance, variable rate
2.15% at June 30, 2002 $ -- $ 500,000
6.13% FHLB fixed-rate advance, due June 25, 2008 7,000,000 7,000,000
6.00% FHLB convertible advance, fixed-rate until
June 2004, due June 11, 2009 5,000,000 5,000,000
6.27% FHLB convertible advance, fixed-rate until
September 2003, due September 8, 2010 5,000,000 5,000,000
5.30% select pay mortgage-matched advance, final
maturity May 1, 2011 1,574,436 1,635,638
5.35% select pay mortgage-matched advance, final
maturity July 1, 2011 3,199,101 3,320,175
3.92% select pay mortgage-matched advance, final
maturity November 1, 2012 993,180 --
4.09% select pay mortgage-matched advance, final
maturity November 1, 2017 995,966 --
4.72% select pay mortgage-matched advance, final
maturity November 1, 2022 2,992,462 --
4.38% select pay mortgage-matched advance, final
maturity December 1, 2022 1,000,000 --
3.92% select pay mortgage-matched advance, final
maturity December 1, 2022 1,000,000 --
--------------- ----------------
$ 28,755,145 $ 22,455,813
=============== ================
Advances under the borrowing agreements are collateralized by a blanket pledge
of the Association's residential mortgage loan portfolio and its FHLB stock.
The interest rates on the convertible advances are fixed for a specified number
of years, then convertible to a variable rate at the option of the FHLB. If the
convertible option is exercised, the advance may be prepaid without penalty. The
select pay mortgage-matched advances require monthly principal and interest
payments and annual additional principal payments.
- --------------------------------------------------------------------------------
(Continued)
11.
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- --------------------------------------------------------------------------------
NOTE 4 - BORROWED FUNDS (Continued)
Maturities of FHLB advances for the next fives years and thereafter were as
follows.
Year ended December 31,
2003 $ 1,607,862
2004 1,442,383
2005 1,293,625
2006 1,159,903
2007 1,039,703
Thereafter 22,211,669
--------------
$ 28,755,145
==============
- --------------------------------------------------------------------------------
(Continued)
12.
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- --------------------------------------------------------------------------------
NOTE 5 - OFF-BALANCE-SHEET ACTIVITIES
Loss contingencies, including claims and legal actions arising in the ordinary
course of business, are recorded as liabilities when the likelihood of loss is
probable and an amount or range of loss can be reasonably estimated. Management
does not believe there now are such matters that will have a material effect on
the financial statements.
Some financial instruments, such as loan commitments, credit lines, letters of
credit and overdraft protection, are issued to meet customer financing needs.
These are agreements to provide credit or to support the credit of others, as
long as conditions established in the contract are met, and usually have
expiration dates. Commitments may expire without being used. Off-balance-sheet
risk to credit loss exists up to the face amount of these instruments, although
material losses are not anticipated. The same credit policies are used to make
such commitments as are used for loans, including obtaining collateral at
exercise of the commitment.
The contractual amount of financial instruments with off-balance-sheet risk was
as follows.
December 31, June 30,
2002 2002
---- ----
Fixed Variable Fixed Variable
Rate Rate Rate Rate
---- ---- ---- ----
Nonresidential $ 250,000 $ -- $ 696,000 $ --
Residential real estate 771,000 507,000 400,000 --
Interest rates 6.00-6.75% 6.00-6.25% 6.75-7.00% --
Commitments to make loans are generally made for a period of 30 days or less.
The maximum maturity for fixed-rate loan commitments was 20 years.
The Corporation also had unused commercial and home equity lines of credit
approximating $3,382,000 and $3,156,000 at December 31, 2002 and June 30, 2002.
At December 31, 2002 and June 30, 2002, the Corporation was required to have
$2,058,000 and $1,700,000 on deposit with its correspondent banks as a
compensating clearing requirement.
The Corporation entered into employment agreements with certain of its officers.
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)
13.
PEOPLES-SIDNEY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- --------------------------------------------------------------------------------
NOTE 6 - EARNINGS PER SHARE
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 Six Months Ended
December 31, December 31,
------------ ------------
2002 2001 2002 2001
---- ---- ---- ----
Basic Earnings Per Common Share
Net income $ 204,066 $ 160,972 $ 416,996 $ 298,559
=========== =========== =========== ===========
Weighted average common shares
outstanding 1,451,242 1,490,783 1,455,602 1,498,817
Less: Average unallocated ESOP shares (82,413) (95,707) (84,029) (97,396)
Less: Average unearned MRP shares (6,188) (17,613) (7,616) (19,041)
----------- ---------- --------- ---------
Weighted average common shares
outstanding for basic earnings
per common share 1,362,641 1,377,463 1,363,957 1,382,380
=========== =========== =========== ==========
Basic earnings per common share $ 0.15 $ 0.12 $ 0.31 $ 0.22
=========== =========== =========== ===========
Diluted Earnings Per Common Share
Net income $ 204,066 $ 160,972 $ 416,996 $ 298,559
=========== =========== =========== ===========
Weighted average common shares
outstanding for basic earnings
per common share 1,362,641 1,377,463 1,363,957 1,382,380
Add: Dilutive effects of average
unearned MRP shares -- -- -- --
Add: Dilutive effects of assumed
exercises of stock options -- -- -- --
Weighted average common shares
and dilutive potential common
shares outstanding 1,362,641 1,377,463 1,363,957 1,382,380
=========== =========== =========== ===========
Diluted earnings per common share $ 0.15 $ 0.12 $ 0.31 $ 0.22
=========== =========== =========== ===========
Unearned MRP shares and stock options granted did not have a dilutive effect on
EPS for the three and six months ended December 31, 2002 and 2001 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. As
of December 31, 2002 and 2001, there were 140,824 options outstanding that were
not dilutive.
- --------------------------------------------------------------------------------
14.
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 December 31, 2002, compared to June
30, 2002, and results of operations for the three and six months ended December
31, 2002, compared with the same periods in 2001. 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 that 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 December 31, 2002 were $139.0 million compared to $134.9 million
at June 30, 2002, an increase of $4.1 million, or 3.1%. The increase in total
assets was due to an increase in cash and cash equivalents, time deposits and
securities funded by an increase in borrowed funds.
Cash and cash equivalents increased $2.9 million, time deposits increased $2.0
million and securities increased $1.5 million as a temporary earning source
until loan growth utilizes the funds provided from the increase in borrowed
funds.
Loans decreased $2.2 million from $121.2 million at June 30, 2002 to $119.0
million at December 31, 2002. The decrease in loans was primarily in one- to
four-family residential loans, which decreased $3.8 million partially offset by
an increase of $1.6 million in real estate construction and development loans.
Other mortgage loan categories had nominal changes. The overall net decrease in
total loans is reflective of the low interest rate environment which has
encouraged mortgage customers to shop for 30 year fixed rate products not
currently offered by the Corporation.
- --------------------------------------------------------------------------------
15.
PEOPLES-SIDNEY FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
The Corporation's consumer and commercial loan portfolio remained relatively
unchanged between June 30, 2002 and December 31, 2002. Non-mortgage loans remain
a small portion of the entire loan portfolio and represented 6.9% and 6.7% of
gross loans at December 31, 2002 and June 30, 2002.
Total deposits decreased $2.0 million from $94.8 million at June 30, 2002 to
$92.8 million at December 31, 2002. The largest decrease was in certificate
accounts which decreased $3.4 million. The Corporation also had decreases in
other deposit categories as NOW accounts decreased $333,000 and
noninterest-bearing demand accounts decreased $107,000, while savings accounts
increased $1.2 million and money market accounts increased $600,000. The overall
decrease in deposit accounts is reflective of the low interest rate environment
and economic conditions as customers search for higher rates or elect to spend
rather than save.
Borrowed funds increased $6.3 million from $22.5 million at June 30, 2002
compared to $28.8 million at December 31, 2002. The Corporation borrowed an
additional $7.0 million in select pay mortgage-matched advances to take
advantage of the low interest rate environment and as a hedge in a rising rate
scenario. These borrowings have been temporarily invested in overnight deposits,
time deposits and securities until loan demand utilizes the funds. Borrowings at
December 31, 2002 consisted of long-term fixed-rate advances, convertible
fixed-rate advances and select pay mortgage-matched advances. Based on the FHLB
stock owned by the Corporation at December 31, 2002, the Corporation had the
ability to obtain borrowings up to a maximum total of $65.5 million.
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 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 December 31, 2002 Compared to the Three Months Ended December
31, 2001
Net Income. The Corporation earned net income of $204,000 for the three months
ended December 31, 2002 compared to $161,000 for the three months ended December
31, 2001. The increase of $43,000, or 26.8% in net income was primarily due to
an increase in net interest income partially offset by a slight increase in
noninterest expense and provision for loan losses.
Net Interest Income. Net interest income totaled $1,085,000 for the three months
ended December 31, 2002 compared to $997,000 for the three months ended December
31, 2001 representing an increase of $88,000, or 8.8%. The increase was the
result of a larger decrease in interest expense on deposits and borrowed funds
than interest income on loans and other sources of interest income.
- --------------------------------------------------------------------------------
(Continued)
16.
PEOPLES-SIDNEY FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
Interest and fees on loans decreased $205,000, or 8.7% from $2,348,000 for the
three months ended December 31, 2001 to $2,143,000 for the three months ended
December 31, 2002. The decrease in interest income was due primarily to a lower
average yield earned on loans due to the lower interest rate environment coupled
with a decrease in the average balance.
Interest on securities decreased $26,000 due to a lower average balance for the
current three month period combined with a decline in interest rates.
Interest paid on deposits decreased $317,000 or 29.7% from $1,069,000 for the
three months ended December 31, 2001 to $752,000 for the three months ended
December 31, 2002. The decrease resulted from a lower average interest rate
coupled with a lower average balance of deposits.
Interest paid on borrowed funds totaled $381,000 for the three months ended
December 31, 2002 compared to $387,000 for the three months ended December 31,
2001. The decrease in interest expense on borrowed funds resulted from a
decrease in the average rate paid for borrowings despite an increase in the
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
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 that is considered adequate
to absorb probable incurred 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 December 31, 2002
totaled $25,000 compared to $10,000 for the three months ended December 31,
2001. The increase in the provision for losses was due to an increase in
nonperforming loans. The allowance for loan losses totaled $740,000, or 0.60% of
gross loans receivable and 39.8% of total nonperforming loans at December 31,
2002, compared with $708,000, or 0.57% of gross loans receivable and 66.2% of
total nonperforming loans at June 30, 2002. Charge-offs experienced by the
Corporation have primarily related to consumer and other non-real estate loans.
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 80% 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.
Noninterest income. Noninterest income includes service fees and other
miscellaneous income and remained unchanged for the three months ended December
31, 2002 and December 31, 2001.
Noninterest expense. Noninterest expense totaled $772,000 for the three months
ended December 31, 2002 compared to $762,000 for the three months ended December
31, 2001, an increase of $10,000. The change was the result of an increase in
compensation and benefits primarily related to an increase in health care costs
and the impact of the Corporation's increased stock price on the ESOP plan.
- --------------------------------------------------------------------------------
17.
PEOPLES-SIDNEY FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
Income Tax Expense. Income tax expense totaled $121,000 for the three months
ended December 31, 2002 compared to $99,000 for the three months ended December
31, 2001, representing an increase of $22,000. The increase in income tax
expense is reflective of the increase in net income before income taxes for the
three months ended December 31, 2002 as compared to the three months ended
September 30. 2001. The effective tax rate was 37.1% and 38.2% for the three
months ended December 31, 2002 and 2001.
Six Months Ended December 31, 2002 Compared to the Six Months Ended December 31,
2001
Net Income. The Corporation earned net income of $417,000 for the six months
ended December 31, 2002 compared to $299,000 for the six months ended December
31, 2001. The increase in net income was primarily due to an increase in net
interest income partially offset by a slight increase in the provision for loan
losses and noninterest expense.
Net Interest Income. Net interest income totaled $2,193,000 for the six months
ended December 31, 2002 compared to $1,968,000 for the six months ended December
31, 2001. The increase of $225,000, or 11.4% was the result of a larger decrease
in interest expense on deposits and borrowed funds than on interest income on
loans and other sources of interest income.
Interest and fees on loans decreased $414,000, or 8.7% from $4,756,000 for the
three months ended December 31, 2001 to $4,342,000 for the three months ended
December 31, 2002. The decrease in interest income was due primarily to a lower
average yield earned on loans due to the lower interest rate environment as well
as a decrease in the average balance of loans.
Interest on securities, demand, time and overnight deposits decreased due to a
decline in the average interest rates for the current three month period.
Interest paid on deposits decreased $653,000 or 29.2% from $2,234,000 for the
six months ended December 31, 2001 to $1,581,000 for the six months ended
December 31, 2002. The decrease resulted from a lower average interest rate
combined with a lower average balance of deposits.
Interest paid on borrowed funds totaled $713,000 for the six months ended
December 31, 2002 compared to $776,000 for the six months ended December 31,
2001. The decrease in interest expense on borrowed funds resulted from a lower
average balance of borrowed funds coupled with a decrease in the average rate
paid for borrowings.
Provision for Loan Losses. The provision for loan losses for the six months
ended December 31, 2002 totaled $41,000 compared to $26,000 for the six months
ended December 31, 2001. The increase in the provision for loan losses was the
result of an increase in nonperforming loans during the current six month
period.
Noninterest income. Noninterest income includes service fees and other
miscellaneous income and totaled $69,000 for the six months ended December 31,
2002 and $68,000 for the six months ended December 31, 2001.
Noninterest expense. Noninterest expense totaled $1,558,000 for the six months
ended December 31, 2002 compared to $1,528,000 for the six months ended December
31, 2001, an increase of $30,000. The change was the result of an increase in
compensation and benefits primarily related to an increase in health care costs
and the impact of the Corporation's increased stock price on the ESOP plan.
- --------------------------------------------------------------------------------
18.
PEOPLES-SIDNEY FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
Income Tax Expense. Income tax expense totaled $246,000 for the six months ended
December 31, 2002 compared to $184,000 for the six months ended December 31,
2001, representing an increase of $62,000. The increase in income tax expense is
reflective of the increase in net income before income taxes for the six months
ended December 31, 2002 as compared to the six months ended December 31, 2001.
The effective tax rate was 37.1% and 38.1% for the six months ended December 31,
2002 and 2001.
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 six months ended December 31, 2002 and 2001.
Six Months
Ended December 31,
------------------
2002 2001
---- ----
(Dollars in thousands)
Net income $ 417 $ 299
Adjustments to reconcile net income to net cash from --------- ---------
operating activities 282 349
Net cash from operating activities 699 648
Net cash from investing activities (1,449) (2,323)
Net cash from financing activities 3,662 2,452
--------- ---------
Net change in cash and cash equivalents 2,912 777
Cash and cash equivalents at beginning of period 5,589 6,351
--------- ---------
Cash and cash equivalents at end of period $ 8,501 $ 7,128
========= ===========
The Corporation's principal sources of funds are deposits, loan repayments,
maturities of securities and other funds provided by operations. 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 Corporation 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.
The Corporation also has the ability to borrow from the FHLB up to a maximum
total of $65,451,000 including the cash management line of credit. See Note 4 of
the Notes to Consolidated Financial Statements for a detail of the Corporation's
borrowings from the FHLB at December 31, 2002.
At December 31, 2002, the Corporation had commitments to originate fixed-rate
commercial and residential real estate loans totaling $1,021,000 and
variable-rate nonresidential and residential real estate mortgage loans totaling
$507,000. Loan commitments are generally for 30 days. See Note 5 of the Notes to
Consolidated Financial Statements for a detail of the Corporation's loan
commitments at December 31, 2002. The Office of Thrift Supervision regulations
require the Corporation's insured subsidiary to maintain a safe and sound level
of liquid assets. The Corporation considers its liquidity and capital reserves
sufficient to meet its outstanding short and long-term needs, and believes it is
in compliance with regulatory requirements.
- --------------------------------------------------------------------------------
(Continued)
19.
PEOPLES-SIDNEY FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
The Association is also 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 December 31, 2002 and June 30, 2002,
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 December 31, 2002 and June 30, 2002. No conditions or events have
occurred subsequent to the last notification by regulators that management
believes would have changed the Association's category.
At December 31, 2002 and June 30, 2002, the Association's actual capital levels,
minimum required levels and levels to be considered "well capitalized" were as
follows.
To Be
Well Capitalized
For Capital Under Prompt Corrective
Actual Adequacy Purposes Action Regulations
------ ----------------- ------------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
(Dollars in Thousands)
December 31, 2002
Total capital (to risk-
weighted assets) $ 15,714 17.3% $ 7,277 8.0% $ 9,096 10.0%
Tier 1 (core) capital (to
risk-weighted assets) 14,989 16.5 3,638 4.0 5,457 6.0
Tier 1 (core) capital (to
adjusted total assets) 14,989 10.8 5,562 4.0 6,952 5.0
Tangible capital (to
adjusted total assets) 14,989 10.8 2,086 1.5 N/A
June 30, 2002
Total capital (to risk-
weighted assets) $ 15,073 17.1% $ 7,049 8.0% $ 8,811 10.0%
Tier 1 (core) capital (to
risk-weighted assets) 14,365 16.3 3,524 4.0 5,287 6.0
Tier 1 (core) capital (to
adjusted total assets) 14,365 10.6 5,396 4.0 6,745 5.0
Tangible capital (to
adjusted total assets) 14,365 10.6 2,023 1.5 N/A
- --------------------------------------------------------------------------------
20.
PEOPLES-SIDNEY FINANCIAL CORPORATION
CONTROLS AND PROCEDURES
- --------------------------------------------------------------------------------
Item 3. Controls and Procedures
With the participation and under the supervision of the Corporation's
management, including the Corporation's Chief Executive Officer and Chief
Financial Officer, and within 90 days of the filing date of this quarterly
report, the Corporation's Chief Executive Officer and Chief Financial Officer
have evaluated the effectiveness of the design and operation of the
Corporation's disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14(c) and 15(d)-14(c)) and, based on their evaluation, have concluded
that the disclosure controls and procedures are effective. There were no
significant changes in the Corporation's internal controls or in other factors
that could significantly affect these controls subsequent to the date of their
evaluation, including any corrective action with regard to significant
deficiencies and material weaknesses.
- --------------------------------------------------------------------------------
21.
PEOPLES-SIDNEY FINANCIAL CORPORATION
PART II - OTHER INFORMATION
- --------------------------------------------------------------------------------
Item 1. Legal Proceedings
-----------------
None.
Item 2. Changes in Securities
---------------------
None.
Item 3. Defaults Upon Senior Securities
-------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
On October 11, 2002 the Annual Meeting of Shareholders of the
Corporation was held. The following member of the Board of
Directors of the Corporation was re-elected by the votes set
forth below for the term expiring in 2005.
Richard T. Martin FOR: 1,193,169 WITHHELD: 8,676
One other matter was submitted to the Shareholders, for which the
following votes were cast:
Ratification of the selection of Crowe, Chizek and Company LLP as
the auditors of the Corporation for the fiscal year ending June
30, 2003.
FOR: 1,198,464 AGAINST: 781 ABSTAIN: 2,600
Item 5. Other Information
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Form 8-K was filed on October 17, 2002. Under Item 5, Other
Events, the Corporation reported the issuance of a press release
to announce the quarterly earnings and declare a regular and
special dividend for the period ending December 31, 2002. The
Corporation also announced the extension of the current stock
buyback program.
- --------------------------------------------------------------------------------
22.
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: February 12, 2003 /s/ Douglas Stewart
------------------ --------------------------------------
Douglas Stewart
President and Chief Executive Officer
Date: February 12, 2003 /s/ Debra Geuy
----------------- --------------------------------------
Debra Geuy
Chief Financial Officer
- --------------------------------------------------------------------------------
23
PEOPLES-SIDNEY FINANCIAL CORPORATION
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Douglas Stewart, certify that:
1) I have reviewed this quarterly report on Form 10-QSB of Peoples-Sidney
Financial Corporation;
2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6) The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: February 12, 2003
--------------------
/s/ Douglas Stewart
- --------------------------
Douglas Stewart
President and Chief Executive Officer
- --------------------------------------------------------------------------------
24
PEOPLES-SIDNEY FINANCIAL CORPORATION
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Debra A. Geuy, certify that:
1) I have reviewed this quarterly report on Form 10-QSB of Peoples-Sidney
Financial Corporation;
2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6) The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: February 12, 2003
- --------------------------
/s/ Debra A. Geuy
- --------------------------
Debra A. Geuy
Chief Financial Officer and Treasurer
- --------------------------------------------------------------------------------
25
PEOPLES-SIDNEY FINANCIAL CORPORATION
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- ------------
3.1 Articles of Incorporation of Incorporated by reference to the Registration Statement
Peoples-Sidney Financial on Form S-1 filed by Peoples-Sidney Financial Corporation
Corporation on January 27, 1997 (the "S-1") with the Securities and
Exchange Commission (the "SEC"), Exhibit 3.1.
3.2 Bylaws of Peoples-Sidney Incorporated by reference to the S-1, Exhibit 3.2.
Financial Corporation
10.1 Employee Stock Ownership Plan Incorporated by reference to the S-1, Exhibit 10.1
10.2 Form of Employment Incorporated by Pre-Effective Amendment No. 1 to the S-1
Agreement with Douglas Stewart filed with the SEC on March 12, 1997, Exhibit 10.2
10.3 Form of Employment Agreements with Incorporated by Pre-Effective Amendment No. 1 to the S-1
David R. Fogt, Gary N. Fullenkamp and filed with the SEC on March 12, 1997, Exhibit 10.3
Debra A. Geuy
10.4 Form of Severance Agreement with Incorporated by Pre-Effective Amendment No. 1 to the S-1
Steve Goins filed with the SEC on March 12, 1997, Exhibit 10.4
10.5 401 (k) Plan Incorporated by Pre-Effective Amendment No. 1 to the S-1
filed with the SEC on March 12, 1997, Exhibit 10.5
10.6 Peoples-Sidney Financial Corporation Filed as an exhibit to the Registrant's Annual Report on
Amended and Restated 1998 Stock Form 10-KSB for the fiscal year ended June 30, 1999 (File
Option and Incentive Plan No. 0-22223) and incorporate herein by reference.
10.7 Peoples-Sidney Financial Corporation Filed as an exhibit to the Registrant's Annual Report on
Amended and Restated 1998 Management Form 10-KSB for the fiscal year ended June 30, 1999 (File
Recognition Plan No. 0-22223) and incorporate herein by reference.
11 Statement Regarding Computation of See Note 6 to the consolidated financial statements.
Earnings per Share
99.1 Certification of the Chief Executive
Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
99.2 Certification of the Chief Financial
Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
- --------------------------------------------------------------------------------
26