UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the quarterly period ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from to
--------------- --------------
Commission File Number 0-23164
LANDMARK BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Kansas 48-1142260
(State or other jurisdiction I.R.S. Employer
of incorporation or organization) Identification Number
CENTRAL AND SPRUCE STREETS, DODGE CITY, KANSAS 67801 (Address and Zip
Code of principal executive offices)
(316) 227-8111
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No
The number of shares outstanding of each of the issuer's classes of common
stock, as of December 31, 1996:
$.10 par value common stock 1,835,996 shares
(Class) (Outstanding)
Transitional Small Business Disclosure Format:
Yes No [X]
LANDMARK BANCSHARES, INC.
INDEX
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Financial Condition as of
December 31, 1996 (unaudited) and September 30, 1996 1
Statements of Income for the Three
Months Ended December 31, 1996 and 1995 (unaudited) 2
Statements of Cash Flows for the Three Months Ended
December 31, 1996 and 1995 (unaudited) 3 - 4
Notes to Financial Statements 5 - 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9 - 11
PART II - OTHER INFORMATION
Item 2. Changes in Securities 12
Item 5. Other Information 12
Item 6(b).Reports on Form 8-K 12
SIGNATURES 13
1
LANDMARK BANCSHARES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY,
LANDMARK FEDERAL SAVINGS BANK
Consolidated Statements of Financial Condition
December 31, 1996 September 30, 1996
(Unaudited)
-----------------------------------
ASSETS
Cash and cash equivalents:
Interest bearing $ 2,865,893 $ 3,063
Non-interest bearing 601,892 470,647
Time deposits in other financial institutions 199,379 479,949
Securities held to maturity 27,105,733 29,398,520
Securities available for sale 4,620,176 4,137,637
Mortgage-backed securities held to maturity 43,864,533 45,877,120
Loans receivable, net 138,679,467 128,013,228
Loans held for sale 407,294 1,890,007
Accrued income receivable 1,534,861 1,518,640
Real estate owned or in judgment and other
repossessed property, net 102,748 0
Office properties and equipment, at cost less
accumulated depreciation 954,889 949,786
Prepaid expenses and other assets 1,041,354 973,383
Income taxes receivable - current 0 21,710
-------------------------------
TOTAL ASSETS $221,978,219 $213,733,690
-------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits 142,574,337 143,814,910
Outstanding checks in excess of bank balance 0 143,808
Other Borrowed Money 43,266,668 33,466,668
Advances from borrowers for taxes and
insurance 660,076 1,673,142
Accrued expenses and other Liabilities 2,275,329 2,193,296
Deferred income taxes 48,485 0
Income taxes
Current 444,191 52,691
-------------------------------
TOTAL LIABILITIES $189,269,086 $181,344,515
-------------------------------
Stockholders' Equity
Common Stock 228,131 228,131
$.10 par value; 10,000,000 shares authorized;
2,281,312 shares issued December 31, 1996
Additional Paid-in Capital 21,944,175 21,944,175
Treasury Stock; 445,316 shares and 428,316
shares at December 31, 1996 and
September 30, 1996 of common stock at cost (6,325,956) (6,027,206)
Retained income (substantially restricted) 17,945,376 17,468,325
Employee Stock Ownership Plan (994,695) (994,695)
Management Stock Bonus Plan (434,351) (482,612)
Unrealized Gain on Available for Sale Securities,
Net of Deferred Tax 346,453 253,057
-------------------------------
Total Stockholders' Equity 32,709,133 32,389,175
-------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 221,978,219 $ 213,733,690
-------------------------------
2
LANDMARK BANCSHARES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY,
LANDMARK FEDERAL SAVINGS BANK
Consolidated Statements of Income
Three Months Ended December 31
1995 1996
(unaudited) (unaudited)
-----------------------------
INTEREST INCOME
Interest on loans 2,112,201 2,750,847
Interest and dividends on investment securities 507,579 543,587
Interest on mortgage-backed securities 1,083,975 735,335
-----------------------------
Total interest income 3,703,755 4,029,769
INTEREST EXPENSE
Deposits 1,925,731 1,815,263
Borrowed funds 356,608 517,137
-----------------------------
Total interest expense 2,282,339 2,332,400
Net interest income 1,421,416 1,697,369
PROVISION FOR LOSSES ON LOANS 30,000 45,000
-----------------------------
Net interest income after provision for losses 1,391,416 1,652,369
NON-INTEREST INCOME
Service charges and late fees 48,465 60,344
Net gain (loss) on available for sale investments 0 108,692
Net gain (loss) on sale of loans 52,365 59,439
Service fees on loans sold 41,548 40,357
Other income 25,916 34,402
-----------------------------
168,294 303,234
NON-INTEREST EXPENSE
Compensation and related expenses 493,530 497,434
Occupancy expense 42,047 40,957
Advertising 15,814 14,449
Federal insurance premium 97,425 99,666
Loss (gain) from real estate operations 2,327 306
Data processing 42,757 43,488
Other expense 154,592 175,399
-----------------------------
848,492 871,699
Income before income taxes 711,218 1,083,904
INCOME TAXES EXPENSES 281,500 431,500
-----------------------------
Net income 429,718 652,404
-----------------------------
Primary earnings per share $ 0.21 $ 0.35
Fully diluted earnings per share $ 0.21 $ 0.35
Dividends per share $ 0.10 $ 0.10
3
LANDMARK BANCSHARES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
LANDMARK FEDERAL SAVINGS BANK
Consolidated Statements of Cash Flows
Three Months Ended December 31
1995 1996
(unaudited) (unaudited)
-------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 429,719 $ 652,404
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 29,711 28,260
Decrease (increase) in accrued interest receivable 347,325 (16,223)
Increase (decrease) in outstanding checks in excess of bank balance (651,052) (143,808)
Increase (decrease) in accrued and deferred income taxes 328,624 461,695
Increase (decrease) in accounts payable and accrued expenses 302,235 82,033
Amortization of premiums and discounts on investments and loans (50,912) 528
Provision for losses on loans and investments 30,000 45,000
Gain/loss on available for sale securities 0 (108,692)
Other non-cash items, net 177,589 (33,734)
Sale of loans held for sale 2,187,052 7,431,144
Gain on sale of loans held for sale (52,365) (59,439)
Origination of loans held for sale (2,424,486) (6,954,041)
Purchase of loans held for sale (201,800) (635,950)
--------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 451,640 $ 749,175
--------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Loan originations and principal payment on loans held for investment (2,561,779) 3,677,235
Principal repayments on mortgage-backed securities 2,877,464 2,003,025
Loans purchased for investment (1,959,625) (12,785,479)
Acquisition of investment securities held to maturity 0 (1,000,000)
Acquisition of investment securities available for sale (697,343) (670,705)
Proceeds from sale of investment securities available for sale 0 351,758
Proceeds from maturities or calls of investment securities 12,062,135 3,300,000
Net (increase) decrease in time deposits 184,931 285,000
Sale of real estate acquired in settlement of loans 18,394 0
Acquisition of fixed assets (20,555) (33,363)
Other investing activity (1,481) 0
--------------------------------
NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES 9,902,141 (4,872,529)
--------------------------------
4
LANDMARK BANCSHARES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY,
LANDMARK FEDERAL SAVINGS BANK
Consolidated Statements of Cash Flows
(Continued)
Three Months Ended December 31
1995 1996
(unaudited) (unaudited)
-------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits $ (3,227,479) $ (1,240,573)
Net increase (decrease) in escrow accounts (1,052,988) (1,013,066)
Proceeds from FHLB advance and other borrowings 9,900,000 31,000,000
Repayment of FHLB advance and other borrowings (15,400,000) (21,200,000)
Acquisition of Treasury Stock (463,780) (298,750)
Other Financing Activities 48,261 45,170
Dividend Payment (197,217) (175,352)
-------------------------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (10,393,203) 7,117,429
-------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (39,422) 2,994,075
BEGINNING CASH AND CASH EQUIVALENTS 462,021 473,710
-------------------------------
ENDING CASH AND CASH EQUIVALENTS 422,599 3,467,785
-------------------------------
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
Interest on deposits, advances, and other borrowings 2,347,111 2,359,117
Income taxes (61,624) 431,500
Transfers from loans to real estate acquired through foreclosure 27,205 0
Transfer of mortgage-backed securities from held to maturity to
available for sale 11,504,406 0
LANDMARK BANCSHARES, INC.
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
LANDMARK FEDERAL SAVINGS BANK
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements were prepared in
accordance with the instructions for form 10-QSB and , accordingly, do not
include all information and disclosures necessary to present financial
condition, results of operations and cash flows of Landmark Bancshares, Inc.
(the "Company") and its wholly-owned subsidiary Landmark Federal Savings Bank
(the "Bank") in conformity with generally accepted accounting principles.
However, all normal recurring adjustments have been made which, in the opinion
of management, are necessary for the fair presentation of the financial
statements.
The results of operation for the three months ending December 31, 1996, are not
necessarily indicative of the results which may be expected for the fiscal year
ending September 30, 1997.
2. On March 28, 1994, the Bank segregated and restricted $15,144,357 of retained
earnings in a liquidation account for the benefit of eligible savings account
holders who continue to maintain their accounts at the bank after the conversion
of the bank from mutual to stock form. In the event of a complete liquidation of
the Bank, each eligible account holder will be entitled to receive a
distribution from the liquidation account in an amount proportionate to the
current adjusted balances of all qualifying deposits then held. The liquidation
account will be reduced annually at September 30th to the extent that eligible
account holders have reduced their qualifying deposits.
3. INVESTMENTS AND MORTGAGE - BACKED SECURITIES
A summary of the Bank's carrying value of investment and mortgage - backed
securities as of December 31, 1996 and September 30, 1996, is as follows:
Investment Securities December 31, 1996 September 30, 1996
------------------------------------
Held to maturity:
Government Agency Securities $ 24,975,733 $ 27,168,520
Municipal Obligations 2,130,000 2,230,000
-------------------------------
$ 27,105,733 $ 29,398,520
Available for sale:
Common Stock 2,416,576 2,396,237
Stock in Federal Home Loan Bank 2,193,600 1,731,400
Other 10,000 10,000
-------------------------------
$ 4,620,176 $ 4,137,637
6
Mortgage - Backed Securities held to maturity:
FNMA - Arms 14,880,213 15,425,620
FHLMC -Arms 5,902,794 6,215,951
FHLMC -Fixed Rate 313,569 399,854
CMO Government Agency 16,091,991 16,659,609
CMO Private Issue 5,274,013 5,636,850
FNMA - Fixed Rate 824,946 876,016
GNMA - Fixed Rate 474,996 551,646
Unamortized Premiums 238,160 268,015
Unearned Discounts (136,149) (156,441)
-------------------------------
$ 43,864,533 $ 45,877,120
4. LOAN RECEIVABLE, NET
A summary of the Bank's loans receivable at December 31, 1996 and
September 30, 1996, is as follows:
December 31, 1996 September 30, 1996
------------------------------------
Mortgage Loans Secured by
One to Four Family Residences 108,969,719 99,579,583
Secured by Other Properties 3,676,285 3,726,333
Construction Loans 981,853 1,129,915
Other 1,796,331 1,852,243
-----------------------------------
115,424,188 106,288,074
Plus (Less):
Unamortized Premium on Loan Purchase 38,159 46,617
Unearned Discount and Loan Fees (373,487) (304,237)
Undisbursed Loan Proceeds 1,227 0
Allowance for Loan Losses (541,497) (531,749)
-----------------------------------
Total Mortgage Loans 114,548,590 105,498,705
-----------------------------------
Consumer and Other Loans:
Automobile 10,578,792 9,783,677
Commercial 3,636,744 3,600,888
Loans on Deposits 545,797 554,550
Home Equity and Second Mortgage 8,731,588 8,139,668
Mobile Home 45,359 27,791
Other 831,194 616,546
-----------------------------------
24,369,474 22,723,120
Less:
Allowance for Loan Losses (238,597) (208,597)
-----------------------------------
Total Consumer and Other Loans 24,130,877 22,514,523
-----------------------------------
Net Loans Receivable $ 138,679,467 $ 128,013,228
7
A summary of the Bank's allowance for loan losses for the 3 months ended
December 31, 1996 and 1995, are as follows:
Three Months Ended
December 31
1995 1996
----------------------
Balance Beginning $ 643,547 $ 740,346
Provisions Charged to Operations 30,000 45,000
Loans Charged Off Net of Recoveries (11,458) (5,251)
----------------------
Balance Ending $ 662,089 $ 780,095
There has been no significant change in the level of non performing loans from
September 30, 1996 to December 31, 1996.
5. REAL ESTATE OWNED OR IN JUDGMENT
Real Estate owned or in judgment, including in-substance foreclosures and
other repossessed property:
December 31, 1996 September 30, 1996
-----------------------------------------
Real Estate Acquired by Foreclosure $ 0 $ 0
Real Estate Loans in Judgment and
Subject to Redemption 4,260 0
Loans accounted for as In-Substance
Foreclosures 96,521 0
Other Repossessed Assets 1,967 0
------------------------------------------
$102,748 $ 0
6. FINANCIAL INSTRUMENTS
The Bank is a party to financial instruments with off-balance-sheet risk
in the normal course of business to meet the financial needs of its customers
and to reduce its own exposure to fluctuations in interest rates. The financial
instruments include commitments to extend credit and commitments to sell loans.
The instruments involve, to varying degrees, elements of credit and interest
rate risk in excess of the amount recognized in the statement of financial
condition. The contract or notional amounts of those instruments reflect the
extent of involvement the Bank has in particular classes of financial
instruments.
The Bank's exposure to credit loss in the event of non-performance by the other
party to the financial instrument for loan commitments is represented by the
contractual or notional amount of those instruments. The Bank uses the same
credit policies in making commitments as it does for on-balance-sheet
instruments.
At December 31, 1996, the Bank had outstanding commitments to fund real estate
loans of $1,581,360. Of the commitments outstanding, $680,400 are for fixed rate
loans at rates of 7.5% to 8.5%. Commitments for adjustable rate loans amount to
$900,960 with initial rates of 6.5% to 8.5%. Outstanding loan commitments to
sell as of December 31, 1996 were $58,038.
7. EARNINGS PER SHARE
Earnings per share for the three months ending December 31, 1996, was
determined by the weighted average shares outstanding as follows:
8
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
Primary Earnings Per Share
Three months ended
December 31
1995 1996
------------------------
Weighted average common shares outstanding,
Net of Treasury shares 2,069,672 1,850,126
Net effect of dilutive stock options 63,106 92,080
Average unallocated ESOP shares (113,120) (99,432)
------------------------
Common Stock Equivalents 2,019,658 1,842,774
------------------------
Net Earnings 429,719 652,404
------------------------
Per share amount $ 0.21 $ 0.35
Fully Dilutive Earnings Per Share
Three months ended
December 31
1995 1996
------------------------
Weighted average common shares outstanding,
Net of Treasury shares 2,069,672 1,850,126
Net effect of dilutive stock options 62,218 101,392
Average unallocated ESOP shares (113,120) (99,432)
------------------------
Common Stock Equivalents 2,018,770 1,852,086
------------------------
Net Earnings 429,719 652,404
------------------------
Per share amount $ 0.21 $ 0.35
Earnings per share have been computed on the treasury stock method in using
average market price for the common stock equivalents (options).
Beginning with the fiscal year ending September 30, 1995, the Company accounts
for the 136,878 shares acquired by the Employee Stock Ownership Plan ("ESOP") in
accordance with Statement of Position 93-6. In accordance with this statement,
shares controlled by the ESOP are not considered in the weighted average shares
outstanding until the shares are committed for allocation.
8. DIVIDENDS
At a October 1996 board meeting, the Directors of the Company declared a
$0.10 per share dividend. The dividend was payable to all stockholders of record
as of November 1, 1996.
9
LANDMARK BANCSHARES, INC.
PART I - FINANCIAL INFORMATION
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General:
Landmark Bancshares, Inc. ("Company") is the holding company for Landmark
Federal Savings Bank ("Bank"). Apart from the operations of the Bank, the
Company did not engage in any significant operations during the quarter ended
December 31, 1996. The Bank is primarily engaged in the business of accepting
deposit accounts from the general public, using such funds to originate mortgage
loans for the purchase and refinancing of single-family homes located in Central
and Southwestern Kansas and for the purchase of mortgage-backed and investment
securities. In addition, the Bank also offers and purchases loans through
correspondent lending relationships in Wichita, Kansas City, and other cities in
Kansas and in Albuquerque and Santa Fe, New Mexico. To a lesser extent, the Bank
will purchase adjustable rate mortgages loans, to manage its interest rate risk
as deemed necessary. The Bank also makes automobile loans, second mortgage
loans, home equity loans and savings deposit loans.
Changes in financial condition between December 31, 1996 and September 30, 1996:
Total assets increased by $8,244,529, or approximately 3.85% between
September 30, 1996 and December 31, 1996. This increase is largely attributed to
a $10,666,239 increase in loan receivables.
Management Strategy:
Management's strategy has been to maintain profitability and increase
capital. The Bank's lending strategy has historically focused on the origination
of traditional, conforming one to four-family mortgage loans with the primary
emphasis on single-family residences. The Bank's secondary focus has been on
consumer loans, second mortgage loans, home equity loans and savings deposit
loans. This focus, and the application of strict underwriting standards, are
designed to reduce the risk of loss on the Bank's loan portfolio. However, this
lack of diversification in its portfolio structure does increase the Bank's
portfolio concentration risk by making the value of the portfolio more
susceptible to declines in real estate values in its market area. This has been
mitigated in recent years, through the increased acquisition of mortgage-backed
securities and the increased level of sales of loans in the secondary market.
Certain risks are inherent in the increase level of sales of loans in the
secondary market. There is a risk that the Bank will not be able to sell all the
loans that it has originated, or conversely, will be unable to fulfill its
commitment to deliver loans pursuant to a firm commitment to sell loans. In
addition, in periods of rising interest rates, loans originated by the bank may
decline in value. Exposure to market and interest rate risk is significant
during the period between the time the interest rate on a customer's mortgage
loan application is established and the time the mortgage loan closes, and also
during the period between the time the interest rate is established and the time
the Bank commits to sell the loan. If interest rates change in an unanticipated
fashion, the actual percentage of loans that close may differ from projected
percentages. The resultant mismatching of commitments to closed loans and
commitments to deliver sold loans may have an adverse effect on the
profitability of loan originations.
A sudden increase in interest rates can cause a higher percentage of loans
to close than projected. To the degree that this was not anticipated, the Bank
will not have made commitments to sell these loans and may incur significant
mark to market losses, adversely affecting results of operations.
The Bank historically sold 30 year fixed rate mortgages in the secondary
market, however the Bank is keeping all 15 year or shorter mortgages with fixed
rates at or above 7.0% for investment and selling all other fixed rate loans.
10
During fiscal 1994 market interest rates increased and through fiscal 1996
remained higher than those experienced by the Bank during the declining interest
rate environment experienced between 1991 and 1993. As a result of lower volumes
and reduced margins on loans sold, the Bank realized reduced net profits from
the sale of loans. Recent downward interest rate movements have resulted in
increased mortgage lending activity and an increase in the gain on sale of loans
for the quarter ended December, 1996. Sustained levels of gain on sale of loans
is dependent on continued stable or downward interest rate movement and would
likely be adversely affected by a rise in interest rates.
Effective October 1, 1994, the Bank adopted the Financial Accounting
Standards Board SFAS Statement No. 115, "accounting for certain investments in
debt and equity securities". This statement is not retroactively applied. In
conjunction with the adoption of SFAS No. 115, investment securities as of
October 1, 1994, are designated as held-to-maturity and available-for-sale. The
effect of classifying securities as available-for-sale was to reflect an
unrealized gain net of tax effect, as a component of stockholders' equity of
$346,453 as of December 31, 1996.
Results of operations: comparison between the three months ended December 31,
1996 and 1995:
Net income for the three-month period ended December 31, 1996 of $652,404
represents an increase of $222,686 from the net income reported for the
three-month period ended December 31, 1995. The increase was primarily due to an
increase of $326,014 on interest income from increased volume on loans and a
$108,692 gain on sale of investments.
Net interest income after provision for losses on loans for the
three-month period ended December 31, 1996 increased $260,953 or approximately
18.75% to $1,652,369 as compared with $1,391,417 for the same period ended
December 31, 1995. This increase is associated with the increased interest
received on the mortgage loan portfolio. Provision for loan loss has been
increased primarily due to increased consumer lending. This net interest income
increase is a result of an increase in the volume of net invested loans.
Non interest income for the three-month period ended December 31, 1996
increased $134,940 or 80.18% to $303,234 as compared with $168,294 for the same
period ended December 31, 1995. This increase was due to the increase of
$108,652 on net gains from sale of investments.
Other expenses for the three-month period ended December 31, 1996
increased $23,207 or 0.03% to $871,699 as compared with $848,492 for the same
period ended December 31, 1995. This increase is due to other expenses
increasing $20,807 for the same quarter ending December 31, 1996. Income taxes
increased due to an increase in pre tax income.
Liquidity and Capital Resources:
The Bank is required to maintain minimum levels of liquid assets, as defined by
the Office of Thrift Supervision ("OTS") regulations. This requirement, which
may be varied from time to time depending upon economic conditions and deposit
flows, is based upon a percentage of deposits and short-term borrowing. The
required minimum ratio is currently 5 percent. The Bank's liquidity ratio
averaged 4.96% during December 1996. The Bank manages its liquidity ratio to
meet its funding needs, including: deposit outflows, disbursement of payments
collected from borrowers for taxes and insurance, and loan principal
disbursements. The Bank also manages its liquidity ratio to meet its
asset/liability management objectives.
In addition to funds provided from operations, the Bank's primary sources of
funds are: savings deposits, principal repayments on loans and mortgage-backed
securities, and matured or called investment securities. In addition, the Bank
may borrow funds from time to time from the Federal Home Loan Bank of Topeka.
Scheduled loan repayments and maturing investment securities are a relatively
predictable source of funds. However, savings deposit flows and prepayments on
loans and mortgage-backed securities are significantly influenced by changes in
market interest rates, economic conditions and competition. The Bank strives to
manage the pricing of its deposits to maintain a balanced stream of cash flows
commensurate with its loan commitments.
11
When applicable, cash in excess of immediate funding needs is invested into
longer-term investments and mortgage-backed securities which typically earn a
higher yield than overnight deposits, some of which may also qualify as liquid
investments under current OTS regulations.
As required by the financial institutions reform, recovery and enforcement act
of 1989 ("FIRREA"), OTS prescribed three separate standards of capital adequacy.
The regulations require financial institutions to have minimum regulatory
capital equal to 1.50 percent of tangible assets; minimum core capital equal to
3.00 percent of adjusted tangible assets; and risk-based capital equal to 8.00
percent of risk-based assets.
The Bank's capital requirements and actual capital under the OTS regulations are
as follows at December 31, 1996:
Amount (Thousands) Percent of Assets
GAAP Capital $26,239 11.97%
Tangible Capital:
Actual 26,239 11.97%
Required 3,288 1.50%
Excess 22,951 10.47%
Core Capital:
Actual 26,239 11.97%
Required 6,576 3.00%
Excess 19,663 8.97%
Risk-Based Capital:
Actual 27,020 27.49%
Required 7,864 8.00%
Excess $19,156 19.49%
12
LANDMARK BANCSHARES, INC.
PART II - OTHER INFORMATION
Item 2. - Changes in Securities
NONE
Item 5. - Other Information
Item 6(b). - Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date February 4, 1997 LANDMARK BANCSHARES, INC.
----------------
By /S/Larry Schugart
-----------------
LARRY SCHUGART
President and Chief Executive Officer
(Duly Authorized Representative)
By /S/James F. Strovas
-------------------
JAMES F. STROVAS
Senior Vice President and
Chief Financial Officer
(Duly Authorized Representative)