1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT
For the transition period from ____________ to ____________
Commission File Number 0-23109
--------
Ohio State Financial Services, Inc.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-1529204
- ----------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
435 Main Street, Bridgeport, OH 43912
-----------------------------------------
(Address of principal executive offices)
(614) 635-0764
------------------------------------------
(Registrant's telephone
number, including area code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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 __
As of May 13, 1999, the latest practicable date, 572,337 shares of the
registrant's common stock, without par value, were issued and outstanding.
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OHIO STATE FINANCIAL SERVICES, INC.
INDEX
Page
Number
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statement of Financial Condition (Unaudited) as of
March 31, 1999 and December 31, 1998 3
Consolidated Statement of Operations (Unaudited)
for the Three Months ended March 31, 1999 and 1998 4
Consolidated Statement of Cash Flows (Unaudited)
for the Three Months ended March 31, 1999 and 1998 5
Notes to Unaudited Consolidated Financial Statements 6 - 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Default Upon Senior Securities 12
Item 4. Submissions of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
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OHIO STATE FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION (UNAUDITED)
March 31, December 31,
1999 1998
------------ ------------
ASSETS
Cash and cash equivalents:
Cash and amounts due from banks $ 590,553 $ 907,682
Interest-bearing deposits with other institutions 2,118,597 4,792,090
------------ ------------
Total cash and cash equivalents 2,709,150 5,699,772
Interest bearing time deposits 2,700,000 3,100,000
Investment securities:
Available for sale (cost approximates market value) 394,900 388,500
Held to maturity (market value of $3,932,774 at 3/31/99;
and $1,018,809 at 12/31/98) 3,929,808 967,117
Loans receivable, net 24,235,571 24,594,506
Office properties and equipment, net 468,975 466,335
Accrued interest receivable, loans and investments (net of reserve
for uncollected interest of $-0- at 3/31/99; and $-0- at 12/31/98) 155,545 157,227
Other assets 113,294 63,262
------------ ------------
TOTAL ASSETS $ 34,707,243 $ 35,436,719
============ ============
LIABILITIES
Deposit accounts $ 25,969,021 $ 25,450,404
Short-term notes payable -- 892,543
Advances by borrowers for taxes and insurance 112,778 182,061
Accrued interest payable and other liabilities 138,570 137,798
Deferred federal income taxes 72,264 72,264
------------ ------------
TOTAL LIABILITIES 26,292,633 26,735,070
------------ ------------
STOCKHOLDERS' EQUITY
Common stock, 3,000,000 shares authorized, no par
or stated value; 572,337 shares issued and outstanding
at 3/31/99; 598,460 at 12/31/98 -- --
Additional paid in capital 5,949,459 5,947,185
Treasury stock (61,831 shares at cost as of 3/31/99
and 35,708 shares at cost as of 12/31/98) (821,072) (494,283)
Unearned recognition and retention plan shares (RRP) (354,688) (371,859)
Unearned employee stock ownership plan shares (ESOP) (507,305) (536,735)
Retained earnings - substantially restricted 4,148,216 4,157,341
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 8,414,610 8,701,649
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 34,707,243 $ 35,436,719
============ ============
See accompanying notes to the unaudited consolidated financial statements.
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OHIO STATE FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
For the Three Months
Ended March 31,
1999 1998
-------- --------
INTEREST AND DIVIDEND INCOME
Loans $465,748 $486,792
Mortgage-backed securities 14,974 19,553
Interest-bearing deposits and investment securities 104,991 149,413
Dividends on Federal Home Loan Bank stock 6,447 6,221
-------- --------
Total interest and dividend income 592,160 661,979
-------- --------
INTEREST EXPENSE
Savings deposits 247,518 257,484
Federal Home Loan Bank advances and notes payable 8,539 --
-------- --------
Total interest expense 256,057 257,484
-------- --------
NET INTEREST INCOME 336,103 404,495
PROVISION FOR LOAN LOSSES -- --
-------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 336,103 404,495
-------- --------
NONINTEREST INCOME
Service charges 1,753 1,698
Other income and fees 4,381 4,063
-------- --------
Total noninterest income 6,134 5,761
-------- --------
NONINTEREST EXPENSE
Salaries and benefits 130,762 118,379
Occupancy expense 14,855 15,805
Furniture and equipment expense 6,901 4,807
Federal insurance premium 6,831 8,015
Legal and accounting fees 27,245 20,926
Advertising and public relations 9,169 10,258
Franchise, payroll and other taxes 39,455 40,168
Stationery, printing and office expenses 15,437 12,487
Service bureau expense 16,652 13,945
Other operating expenses 24,859 29,897
-------- --------
Total noninterest expense 292,166 274,687
-------- --------
INCOME BEFORE INCOME TAXES 50,071 135,569
PROVISION FOR INCOME TAXES 18,846 48,169
-------- --------
NET INCOME $ 31,225 $ 87,400
======== ========
PER SHARE DATA
Basic $ .06 $ .15
======== ========
Diluted $ .06 $ .15
======== ========
AVERAGE SHARES OUTSTANDING 512,135 585,415
======== ========
See accompanying notes to the unaudited consolidated financial statements.
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OHIO STATE FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31,
1999 1998
----------- -----------
CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 31,225 $ 87,400
Adjustments:
Depreciation 9,503 9,203
Investment accretion and amortization, net 279 190
ESOP and RRP amortization 48,875 20,894
Federal Home Loan Bank stock dividends (6,400) (6,200)
Accrued interest receivable and other assets (48,350) (45,777)
Accrued interest payable and other liabilities 772 (71,643)
----------- -----------
Net cash provided by (used for) operating activities 35,904 (5,933)
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES
Term deposits, net 400,000 (2,900,000)
Proceeds from maturities of held to maturity securities -- 2,000,000
Purchase of held to maturity securities (2,997,557) --
Proceeds from redemptions of mortgage-backed certificates 34,587 15,318
Net change in loans 358,935 (566,174)
Acquisition of office properties and equipment (12,143) (5,123)
----------- -----------
Net cash used for investing activities (2,216,178) (1,455,979)
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Payment of dividends (40,350) (29,176)
Short-term borrowings, net (892,543) --
Purchase of treasury stock (326,789) --
Change in deposits, net 518,617 (22,881)
Change in mortgage escrow funds, net (69,283) (68,499)
----------- -----------
Net cash used for financing activities (810,348) (120,556)
----------- -----------
Change in cash and cash equivalents (2,990,622) (1,582,468)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,699,772 3,177,832
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,709,150 $ 1,595,364
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period
for:
Interest on deposits and borrowings $ 255,435 $ 257,275
Income taxes -- 77,378
Loans transferred to real estate acquired in settlement -- --
See accompanying notes to the unaudited consolidated financial statements.
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OHIO STATE FINANCIAL SERVICES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements of Ohio State Financial Services, Inc.
(the "Company"), includes its wholly-owned subsidiary, Bridgeport Savings and
Loan Association (the "Association"). All significant inter-company balances and
transactions have been eliminated.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-QSB and, therefore, do not
necessarily include all information that would be included in audited financial
statements. The information furnished reflects all adjustments which are, in the
opinion of management, necessary for a fair statement of the results of
operations. All such adjustments are of a normal recurring nature. The results
of operations for the interim periods are not necessarily indicative of the
results to be expected for the full year.
These statements should be read in conjunction with the consolidated statements
as of and for the year ended December 31, 1998, and related notes which are
included on Form 10-KSB (file no. 0-23109).
NOTE 2 - CONVERSION TO A STOCK FORM OF OWNERSHIP AND FORMATION OF HOLDING
COMPANY
On March 24, 1997, the Board of Directors of the Association approved a plan of
conversion (the "Plan") providing for the conversion of the Association from a
mutual savings and loan association to a capital stock savings and loan
association incorporated under Ohio law (the "Conversion") and the simultaneous
issuance of all of its outstanding stock to a newly-formed holding company, Ohio
State Financial Services, Inc. After approval by the regulatory authorities and
the Association's members, the Conversion was completed on September 26, 1997.
As a result of this transaction, the Company was formed and the Association
became a wholly-owned subsidiary of the Company.
In connection with the conversion on September 26, 1997, the Company completed
the sale of 634,168 shares of common stock at $10.00 per share. From the
proceeds, $5,916,081 was allocated to additional paid in capital , which is net
of conversion costs of $425,599. The common shares of the Company have no par or
stated value per share. Included in the 634,168 shares were 50,653 acquired by
the ESOP.
NOTE 3 - RECENT ACCOUNTING STANDARDS
In June, 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income," which establishes standards for reporting and displaying
comprehensive income and its components (revenues, expenses, gains, and losses)
in a full set of general-purpose financial statements. SFAS No. 130 requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. It does not
require a specific format for the financial statement but requires an enterprise
display an amount representing total comprehensive income for the period in that
financial statement. SFAS No. 130 requires that an enterprise (a) classify items
of other comprehensive income by their nature in a financial statement and (b)
display the accumulated balance of other comprehensive income separately from
retained earnings and additional paid-in capital in the equity section of the
Statement of Financial Position. Under existing accounting standards, other
comprehensive income shall be classified separately into foreign currency items,
minimum pension liability adjustments, and unrealized gains
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and losses on certain investments in debt and equity securities. The provisions
of SFAS No. 130 became effective for fiscal years beginning after December 15,
1997. The Company's equity securities classified as available for sale consist
of Federal Home Loan Bank stock and stock in the Company's data processing
servicer and reflect no unrealized gain or loss due to their restricted nature.
The adoption of SFAS No. 130 did not have a material impact on the disclosure
requirements of the Company due to the absence of any items of comprehensive
income.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 provides accounting and
reporting standards for derivatives instruments, including certain derivative
instruments embedded in other contracts, by requiring the recognition of those
items as assets or liabilities in the statement of financial position, recorded
at fair value. SFAS No. 133 precludes a held-to-maturity security from being
designated as a hedge item. However, at the date of initial application of SFAS
No. 133, an entity is permitted to transfer any held-to-maturity security into
the available-for-sale or trading categories. The unrealized holding gain or
loss on such transferred securities shall be reported consistent with the
requirements of SFAS No. 115, "Accounting for Certain Investment in Debt and
Equity Securities." Such transfers do not raise an issue regarding an entity's
intent to hold other debt securities to maturity in the future. SFAS No. 133
applies prospectively for all fiscal quarters of all years beginning after June
15, 1999. Earlier adoption is permitted for any fiscal quarter that begins after
the issue date of SFAS No. 133. Management does not believe the adoption of SFAS
No. 133 will have a material impact on the Company.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 1999 AND DECEMBER 31, 1998
At March 31, 1999, the Company's assets decreased by approximately $729,000, or
2.1%, to $34.7 million from $35.4 million at December 31, 1998. Total cash and
cash equivalents decreased by $3.0 million to $2.7 million at March 31, 1999,
from $5.7 million at December 31, 1998. This decrease represented the outflow of
cash associated with the payment of dividends, principal payments of short-term
borrowing and purchases of held to maturity securities and treasury stock. This
decrease in cash and cash equivalents was offset by the maturity of term
deposits, decreased loan production, and depositors' investment of funds.
Interest-bearing time deposits decreased $400,000, or 12.9%, to $2.7 million at
March 31, 1999, from $3.1 million at December 31, 1998, as a result of $400,000
in matured time deposits. Held to maturity securities increased by approximately
$3.0 million to $3.9 million at March 31, 1999, from $967,000 at December 31,
1998. The increase reflected the purchase of $3.0 million in United States
Government and Agency obligations offset by the principal reduction of $35,000
in mortgage-backed certificates. Net loans receivable decreased $359,000 to
$24.2 million at March 31, 1999, from $24.6 million at December 31, 1998. The
decrease was primarily attributable to the $301,000 decrease in consumer loans
and the $394,000 decrease in one- to four-family residential mortgage loans
which were offset by a $328,000 increase in construction loans.
Deposits increased $519,000, or 2.0%, from $25.5 million at December 31, 1998,
to $26.0 million at March 31, 1999, as a result of the stability of deposit
account interest rates at the Company, compared to a reduction in deposit
interest rates for alternative investment products available. Short-term notes
payable in the amount of $892,543 at December 31, 1998 were paid off as of March
31, 1999.
Shareholders' equity decreased $287,000, or 3.3%, to $8.4 million at March 31,
1999, compared to $8.7 million at December 31, 1998. The decrease was
attributable to the use of $327,000 to repurchase shares for treasury and the
issuance of dividends in the amount of $40,000. Future dividend policies will be
determined by the Board of Directors in light of earnings and financial
condition of the Company, including applicable governmental regulations and
policies. The decrease in shareholders' equity was offset by net income of
$31,000, the recognition of shares in the Employee Stock Ownership Plan (the
"ESOP") amounting to $32,000 and the recognition of shares in the Recognition
and Retention Plan (the "RRP") in the amount of $17,000.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1999
AND 1998
NET INCOME. Net income decreased $56,000, or 64.3%, from net income of $87,000
for the three months ended March 31, 1998, compared to net income of $31,000 for
the same period in 1999. The decrease in net income was primarily the result of
a decrease in net interest income of $68,000 or, 16.9% and an increase in
non-interest expenses of $17,000, or 6.4% offset by a decrease in the provision
for income taxes of $29,000, or 60.9%.
NET INTEREST INCOME. Net interest income decreased $68,000, or 16.9%, from
$404,000 for the three months ended March 31, 1998, to $336,000 for the three
months ended March 31, 1999. The Company's net yield on interest-earning assets
decreased from 4.49% for the three months ended March 31, 1998, to 4.02% for the
same period in 1999. Interest and dividend income decreased $70,000, or 10.5%,
from $662,000 for the three months ended March 31, 1998, to $592,000 for the
three months ended March 31, 1999, while interest expense decreased $1,000, or
.6%, from $257,000 for the 1998 period to $256,000 for the 1999 period.
INTEREST AND DIVIDEND INCOME. Total interest and dividend income decreased
$70,000, or 10.5%, for the three months ended March 31, 1999, compared to the
same period in 1998. Interest income on loans decreased $21,000, or 4.3%, from
$487,000 for the three months ended March 31, 1998, to $466,000 for the three
months ended March 31, 1999. The decrease in interest income on loans was
primarily the result of a decline in higher interest earning consumer loans with
an overall decrease in the average balance of loans in the amount of
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$225,000. Interest income on investments, including interest-bearing deposits,
decreased $44,000, or 29.7%, to $105,000, for the three months ended March 31,
1999, compared to $149,000 for the 1998 period. The decrease in interest income
on investments was directly attributable to the $2.2 million decrease in the
average balance of investments for the three months ended March 31, 1998,
compared to the 1999 period.
INTEREST EXPENSE. Total interest expense decreased by $1,000, or .5%, from the
1998 period to the 1999 period. Interest expense on deposit accounts decreased
$10,000, or 3.9%, from $257,000 for the three months ended March 31, 1998 to
$247,000 for the three months ended March 31, 1999. The Association's cost of
deposit funds decreased from 3.90% for the three months ended March 31, 1998,
to 3.86% for the 1999 period, while average outstanding deposits declined
$721,000, or 2.7%, from $26.3 million for the period ended March 31, 1998 to
$25.6 million for the same period ended March 31, 1999. The decrease in the
average balance of deposits was the result of customers electing not to renew
maturing certificates of deposit at prevailing interest rates. This decrease
was offset by an increase in interest expense on notes payable in the amount of
$9,000. The interest was paid during the three months ended March 31, 1999 on
the outstanding note payable balance existing at December 31, 1998. Interest
expense on notes payable was not incurred during the three months ended March
31, 1998 since there were no borrowed funds during the period.
PROVISION FOR LOAN LOSSES. No provisions for losses on loans were made for the
three months ended March 31, 1999 and 1998. Management judges the adequacy of
the allowance for loan losses and any additions to it based on a level which is
deemed adequate to absorb credit losses inherent in the loan portfolio. The
amount of the allowance is based on management's evaluation of the
collectibility of the loan portfolio, including the nature of the portfolio,
credit concentrations, trends in historical loss experience, known and inherent
risks in the portfolio, adverse situations that may affect the borrower's
ability to repay, the estimated value of any underlying collateral, and current
economic conditions. Based on management's evaluation, the amount of the
allowance was deemed adequate with no additional provision necessary. Although
management believes that its loan loss allowance at March 31, 1999, is adequate
based upon the available facts and circumstances, there can be no assurance that
additions to such allowance will not be necessary in future periods, which could
adversely affect the Company's results of operations.
NONINTEREST INCOME. Noninterest income totaled $6,000 for the three months ended
March 31, 1999 and 1998.
NONINTEREST EXPENSE. Noninterest expenses increased $17,000, or 6.4%, from
$275,000 for the three months ended March 31, 1998, to $292,000 for the 1999
period. The increase in noninterest expense was partly attributable to a $12,000
increase in salaries and benefits from the 1998 to the 1999 period resulting
from the $17,000 increase in costs associated with RRP and merit base pay
increases, which were offset by a $5,000 decrease in costs associated with the
ESOP. Legal and accounting fees increased $6,000, or 30.2%, from $21,000 for
March 31, 1998 to $27,000 for March 31, 1999, due to expenses related to public
filings.
INCOME TAXES. The provision for income taxes totaled $19,000 for the three
months ended March 31, 1999, a decrease of $29,000, or 60.9%, from the $48,000
in the same 1998 period due to a decrease in pretax income.
YEAR 2000
Rapid and accurate data processing is essential to the Association's operations.
Many computer programs that can only distinguish the final two digits of the
year entered (a common programming practice in earlier years) are expected to
read entries for the Year 2000 as the year 1900 or as zero and incorrectly
attempt to compute payment, interest, delinquency, and other data. The
Association has been evaluating both information technology (computer systems)
and non-information technology systems (e.g., vault timers and electronic door
lock). Based upon such evaluations, management has determined that the
Association has Year 2000 risk in three areas: (1) the Association's own
computers (2) the computers of others used by the Association's borrowers, and
(3) the computers of others who provide the Association with data processing.
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ASSOCIATION'S OWN COMPUTERS. The Association has upgraded its computer system to
eliminate the Year 2000 risk. The Association does not expect to have material
additional costs to address this risk. The upgrade costs were approximately
$17,000.
COMPUTERS OF OTHERS USED BY THE ASSOCIATION'S BORROWERS. The Association has
evaluated most of their borrowers and does not believe the Year 2000 problem
should, on an aggregate basis, impact their ability to make payments to the
Association. The Association believes that most of its residential borrowers are
not dependent on their home computers for income and that none of its commercial
borrowers are so large that a Year 2000 problem would render them unable to
collect revenue or rent and, in turn, continue to make loan payments to the
Association. The Association does not expect any material costs to address this
risk area and believes it is Year 2000 compliant in this risk area.
COMPUTERS OF OTHERS WHO PROVIDE THE ASSOCIATION WITH DATA PROCESSING. This risk
is primarily focused on one third-party service bureau that provides virtually
all of the Association's data processing. This service bureau has advised the
Association that it has completed the upgrades necessary for Year 2000
readiness. The service bureau is in the process of testing these upgrades which
it believes will be finished by June 30, 1999. Testing to date has experienced
no substantial problems.
CONTINGENCY PLAN. The Association is monitoring its service bureau and is being
provided with periodic updates on the status of testing and upgrades being made
by the service bureau. If the Association's service bureau testing fails, the
Association will attempt to locate an alternative service bureau that is Year
2000 compliant. If the Association is unsuccessful, the Association will enter
deposit balances and interest with its existing computer system. If this labor
intensive approach is necessary, management and employees will become much less
efficient. However, the Association believes that it would be able to operate in
this manner indefinitely, until its existing service bureau, or its replacement,
is able to again provide data processing services. If very few financial
institution service bureaus were operating in the Year 2000, the Association's
replacement costs, assuming the Association could negotiate an agreement, could
be material.
LIQUIDITY AND CASH FLOWS
The Association's primary sources of funds are deposits, amortization and
prepayment of loans, maturities of investment securities, and funds provided
from operations. While scheduled loan repayments are a relatively predictable
source of funds, deposit flows and loan prepayments are greatly influenced by
general interest rates, economic conditions, and competition. In addition, the
Association invests excess funds in overnight deposits which provide liquidity
to meet lending requirements.
The Association has other sources of liquidity if a need for additional funds
arises. Additional sources of funds include Federal Home Loan Bank ("FHLB") of
Cincinnati advances. At March 31, 1999, the Association's total borrowing
capacity from the FHLB totaled approximately $7.6 million, of which there were
no advances outstanding.
As of March 31, 1999, the Association had $1.1 million in outstanding mortgage
and construction loan commitments. Management believes that it has adequate
sources to meet the actual funding requirements.
Management monitors the Association's tangible, core, and risk-based capital
ratios in order to assess compliance with the Office of Thrift Supervision (the
"OTS") relations. At March 31, 1999, the Association exceeded the minimum
capital ratio requirements imposed by the OTS.
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At March 31, 1999, the Association's capital ratios were as follows:
Association
Requirement Actual
----------- ------
Tangible capital 1.50% 18.11%
Core capital 3.00% 18.11%
Risk-based capital 8.00% 36.44%
RISK ELEMENTS
Nonperforming assets include nonaccrual loans, renegotiated loans, loans 90 days
or more past due, other real estate loans, and repossessed assets. A loan is
classified as nonaccrual when, in the opinion of management, there are serious
doubts about collectibility of interest and principal. Once the accrual of
interest is discontinued, future income is recognized only when cash is
received. Renegotiated loans are those loans which terms have been renegotiated
to provide a reduction or deferral of principal or interest as a result of the
deterioration of the financial condition of the borrower. There were no
nonperforming loans nor nonperforming assets outstanding as of March 31, 1999
and December 31, 1998.
Nonperforming loans are primarily made up of one- to four-family residential
mortgages. The collateral requirements on loans reduce the risk of potential
losses to an acceptable level in management's opinion.
Management believes the level of the allowance for loan losses at March 31,
1999, is sufficient; however, there can be no assurance that the current
allowance for loan losses will be adequate to absorb all future loan losses. The
relationship between the allowance for loan losses and outstanding loans is a
function of the credit quality and known risk attributed to the loan portfolio.
The on-going loan review program and the credit approval process is used to
determine the adequacy of the allowance for loan losses.
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PART II - OTHER INFORMATION
Item 1 - Legal proceedings
NONE
Item 2 - Changes in securities
NONE
Item 3 - Defaults upon senior securities
NONE
Item 4 - Submission of matters to a vote of security holders
NONE
Item 5 - Other information
NONE
Item 6 - Exhibits and reports on Form 8-K
Financial Data Schedule
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused the report to be signed on its behalf by the
undersigned, thereunto duly authorized.
OHIO STATE FINANCIAL SERVICES, INC.
Date: May 14, 1999 By: /s/ Jon W. Letzkus
------------------
Jon W. Letzkus
President and Chief Executive Officer
(Principal Executive Officer)
Signature Title Date
--------- ----- ----
/s/ Jon W. Letzkus
- -------------------
Jon W. Letzkus President and CEO May 14, 1999
/s/ Michael P. Eddy Treasurer and
- ------------------- Chief Financial Officer May 14, 1999
Michael P. Eddy
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