UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 5TH STREET, N.W.
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 June 30, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to Commission File No. 0-27154
JOACHIM BANCORP, INC.
(Exact name of registrant as specified in its charter)
Missouri 43-1721475
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
De Soto Plaza, De Soto, Missouri 63020
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (314) 586-8821
Not applicable
(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 Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X . No .
Indicate the number of shares outstanding of the issuer's classes of common stock, as of the
latest practicable date.
Class Outstanding July 23, 1997
Common Stock, par value $.01 per share 722,415 Shares
JOACHIM BANCORP, INC. AND SUBSIDIARY
FORM 10-QSB
FOR THE QUARTER ENDED JUNE 30, 1997
INDEX
PAGE NO.
PART I - Financial Information (Unaudited)
Consolidated Balance Sheets 1
Consolidated Statements of Earnings 2
Consolidated Statements of Cash Flows 3
Note to Consolidated Financial Statements 4
Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
PART II - Other Information 8
JOACHIM BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
June 30, March 31,
Assets 1997 1997
Cash and cash equivalents $ 2,156,917 2,091,535
Certificates of deposit 1,903,584 3,052,899
Securities held to maturity, at amortized cost
(market value of $4,776,023 and $4,746,611,
respectively) 4,791,738 4,793,178
Stock in Federal Home Loan Bank of Des Moines 288,500 288,500
Mortgage-backed and related securities held to
maturity, at amortized cost (market value of
$830,634 and $820,499, respectively) 837,419 840,127
Loans receivable, net 24,235,820 23,771,636
Premises and equipment, net 431,072 358,133
Foreclosed real estate held for sale, net - 126,104
Accrued interest receivable:
Securities and certificates of deposit 124,867 170,483
Mortgage-backed securities 4,636 4,651
Loans receivable 144,603 132,476
Other assets 18,442 26,624
Total assets $ 34,937,598 35,656,346
Liabilities and Stockholders' Equity
Deposits $ 24,605,676 24,825,297
Accrued interest on deposits 21,096 25,137
Advances from borrowers for taxes and insurance 178,178 122,711
Other liabilities 67,554 143,890
Income taxes payable 227,144 204,842
Total liabilities 25,099,648 25,321,877
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 1,000,000
shares authorized; none issued and outstanding - -
Common stock, $.01 par value; 5,000,000 shares
authorized; 760,437 shares issued 7,604 7,604
Additional paid-in capital 7,057,638 7,047,500
Common stock acquired by ESOP (426,017) (448,440)
Common stock acquired by MRDP (287,826) (305,615)
Treasury stock, at cost, 38,022 shares (544,190) -
Retained earnings - substantially restricted 4,030,741 4,033,420
Total stockholders' equity 9,837,950 10,334,469
Total liabilities and stockholders' equity $ 34,937,598 35,656,346
See accompanying note to consolidated financial statements.
1
JOACHIM BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Earnings
(Unaudited)
Three Months Ended
June 30,
1997 1996
Interest income:
Loans receivable $ 492,389 468,224
Mortgage-backed and related securities 13,531 14,126
Securities 70,914 74,269
Other interest-earning assets 58,046 84,454
Total interest income 634,880 641,073
Interest expense on deposits 269,135 274,783
Net interest income 365,745 366,290
Provision for loan losses 3,141 1,500
Net interest income after provision
for loan losses 362,604 364,790
Noninterest income:
Loan service charges 4,765 9,784
NOW service charges 4,691 6,689
Rental income (expense) from foreclosed
real estate (311) -
Gain on investment in data center 12,668
Other 984 1,276
Total noninterest income 10,129 30,417
Noninterest expense:
Compensation and benefits 182,812 157,433
Occupancy expense 4,879 4,407
Equipment and data processing expense 18,297 20,341
Loss (gain) on foreclosed real estate, net (7,387) -
SAIF deposit insurance premium 3,885 14,485
Professional services 18,776 14,764
Other 19,553 26,564
Total noninterest expense 240,815 237,994
Earnings before income taxes 131,918 157,213
Income taxes 49,900 56,260
Net earnings $ 82,018 100,953
Net earnings per common share $ .11 .14
Weighted-average shares outstanding 721,741 707,745
Dividends per share $ .125 .125
See accompanying note to consolidated financial statements.
2
JOACHIM BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
June 30,
1997 1996
Cash flows from operating activities:
Net earnings $ 82,018 100,953
Adjustments to reconcile net earnings to net cash
provided by (used for) operating activities:
Depreciation 5,749 8,376
ESOP expense 32,561 28,028
MRDP expense 17,789 -
Amortization of premiums, net on securities and
mortgage-backed securities 1,440 1,476
Provision for loan losses 3,141 1,500
Loss (gain) on foreclosed real estate, net (7,387) -
Decrease (increase) in:
Accrued interest receivable 33,504 (185)
Other assets 8,182 55,210
Increase (decrease) in:
Accrued interest on deposits (4,041) (2,824)
Other liabilities (76,336) (13,106)
Income taxes payable 22,302 25,333
Other, net (685) (649)
Net cash provided by (used for) operating activities 118,237 204,112
Cash flows from investing activities:
Loans receivable:
Originated (1,482,779) (1,423,016)
Principal collections 986,622 1,564,198
Principal collections on mortgage-backed
securities held to maturity 2,708 2,465
Securities held to maturity:
Proceeds from maturity - 250,000
Certificates of deposit:
Purchased (600,000) (1,750,000)
Proceeds from maturity 1,750,000 500,000
Proceeds from sale of foreclosed real estate, net 162,323 -
Purchases of premises and equipment (78,688) (2,122)
Net cash provided by (used for) investing activities 740,186 (858,475)
Cash flows from financing activities:
Net increase (decrease) in:
Deposits (219,621) (401,868)
Advances from borrowers for taxes and insurance 55,467 64,609
Purchase of treasury stock (544,190) -
Cash dividends (84,697) (88,328)
Net cash provided by (used for) financing activities (793,041) (425,587)
Net increase (decrease) in cash and cash equivalents 65,382 (1,079,950)
Cash and cash equivalents at beginning of period 2,091,535 5,384,802
Cash and cash equivalents at end of period $ 2,156,917 4,304,852
Supplemental disclosures of cash flow information:
Cash paid (received) during the year for:
Interest on deposits $ 273,176 277,607
Federal income taxes 27,598 -
State income taxes - -
Real estate acquired in settlement of loans $ 28,832 -
See accompanying note to consolidated financial statements.
3
JOACHIM BANCORP, INC. AND SUBSIDIARY
Note to Consolidated Financial Statements
(1)The information contained in the accompanying consolidated financial statements is unaudited.
In the opinion of management, the financial statements contain all adjustments (none of which
were other than normal recurring entries) necessary for a fair statement of the results of operations
for the interim periods. The results of operations for the interim periods are not necessarily
indicative of the results which may be expected for the entire fiscal year. The accompanying
consolidated financial statements should be read in conjunction with the consolidated financial
statements for the year ended March 31, 1997 contained in the Annual Report to stockholders and
as an exhibit filed with Form 10-KSB.
4
JOACHIM BANCORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis of
Financial Condition and Results of Operations
General
On December 27, 1995, Joachim Federal Savings and Loan Association (Association) converted from
mutual to stock form and became a wholly-owned subsidiary of a newly formed Missouri holding
company, Joachim Bancorp, Inc. (Company).
The Company has no significant assets other than common stock of the Association, the loan to the
ESOP and net proceeds retained by the Company following the conversion. The Company's principal
business is the business of the Association. Therefore, the discussion in the Management's Discussion
and Analysis of Financial Condition and Results of Operations relates to the Association and its
operations.
Certain statements in this report which relate to the Company's plans, objectives or future performance
may be deemed to be forward-looking statements within the meaning of Private Securities Litigation
Act of 1995. Such statements are based on management's current expectations. Actual strategies
and results in future periods may differ materially from those currently expected because of various
risks and uncertainties. Additional discussion of factors affecting the Company's business and
prospects is contained in periodic filings with the Securities and Exchange Commission.
Liquidity and Capital Resources
The Association's principal sources of funds are cash receipts from deposits, loan repayments by
borrowers and net earnings. The Association has an agreement with the Federal Home Loan Bank of
Des Moines to provide cash advances.
For regulatory purposes, liquidity is measured as a ratio of cash and certain investments to
withdrawable deposits. The minimum level of liquidity required by regulation is presently 5%. The
Association's liquidity ratio was approximately 28% at June 30, 1997.
Since the early 1980's, the Association has originated primarily adjustable-rate mortgage loans in order
to reduce interest-rate risk exposure.
During May, 1997, the Company repurchased an additional 38,022 shares of treasury stock at a price
of $14.3125 per share. While the purchase of treasury stock may be beneficial to the Company or
shareholders, the purchase of treasury stock reduces interest-earning assets of the Company. Capital
of the Association may also be reduced to the extent treasury stock purchases are funded by dividends
from the Association to the Company.
The Bank is required to maintain certain minimum capital requirements under OTS regulations. Failure
by a savings institution to meet minimum capital requirements can initiate certain actions by regulators
that, if undertaken, could have a direct material effect on the Bank's financial statements. Under the
capital adequacy guidelines and regulatory framework for prompt corrective action, the Bank must meet
specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain
off-balance sheet items as calculated under regulatory accounting practices.
5
The Association's regulatory capital and regulatory capital requirements at June 30, 1997 are
summarized as follows:
Minimum Required Minimum Required
for Capital to be "Well
Actual Adequacy Capitalized"
Amount Ratio Amount Ratio Amount Ratio
(Dollars in Thousands)
Consolidated stockholders'
equity $ 9,838
Stockholders' equity of
Company $ (2,156)
Tangible capital $ 7,682 23.1% $ 498 1.5%
General valuation allowance$ 78
Total capital to risk-
weighted assets $ 7,760 46.2% $ 1,345 8.0% $ 1,681 10.0%
Tier 1 capital to risk
weighted-assets $ 7,682 45.7% $ 672 4.0% $ 1,009 6.0%
Tier 1 capital to total
assets $ 7,682 23.1% $ 996 3.0% $ 1,661 5.0%
Commitments to originate adjustable-rate and fixed-rate mortgage loans at June 30, 1997 were
approximately $98,000 and $165,000, respectively.
Financial Condition
Maturing certificates of deposit and principal collections on loans were used to fund purchase of
treasury shares, loan originations and deposit account withdrawals. Premises and equipment increased
due to remodeling costs. Estimated cost to complete the remodeling of the Association's office building
was approximately $50,000 at June 30, 1997. Foreclosed real estate held for sale was sold during
the quarter ended March 31, 1997 at a net gain of $7,387. Advances by borrowers for taxes and
insurance increased due to seasonal factors. Real estate taxes are paid on behalf of borrowers in
December of each year. Other liabilities decreased due to the timing of payment of certain accrual
items.
Asset Quality
Loans are generally placed on a nonaccrual status when contractually delinquent more than ninety days.
Nonaccrual loans amounted to $60,000, or .25% of net loans receivable, at June 30, 1997.
6
JOACHIM BANCORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Net Earnings
Net earnings decreased from $101,000 for the three months ended June 30, 1996 to $87,000 for the
three months ended June 30, 1997. The decrease was due to lower noninterest income, offset by
lower income taxes.
Net Interest Income
Net interest income remained approximately $366,000 at both June 30, 1997 and 1996. Interest on
loans receivable increased as both the average balance and yield increased. The average balance
increased from $23.0 million for the three months ended June 30, 1996 to $24.1 million for the three
months ended June 30, 1997. Interest on other interest-earning assets decreased due primarily to a
decline in the average balance from $6.1 million for 1996 to $4.1 million for 1997. Components of
interest income change from time to time based on the availability, quality and interest rates on
securities, MBSs and other interest-earning assets.
Provision for Loan Losses
Provision for loan losses is based upon management's consideration of economic conditions which may
affect the ability of borrowers to repay the loans. Management also reviews individual loans for which
full collectibility may not be reasonably assured and considers, among other matters, the risks inherent
in the Association's portfolio and the estimated fair value of the underlying collateral. This evaluation
is ongoing and results in variations in the Association's provision for loan losses. As a result of this
evaluation, the Association's provision for loan losses amounted to $1,500 for the three month period
ended June 30, 1996, as compared to $3,141 for the three month period ended June 30, 1997.
Noninterest Income
Noninterest income decreased from $30,000 for the three months ended June 30, 1996 to $10,000
for the three months ended June 30, 1997. During the three months ended June 30, 1996 the
Association recognized income of $13,000 as a result of the sale of assets of the Association's data
processing service bureau to its successor. In addition, the Association recognized prepayment penalty
income of $4,500 on a participation loan.
Noninterest Expense
Noninterest expense increased from $238,000 for the three months ended June 30, 1996 to $241,000
for the three months ended June 30, 1997. Compensation and benefits expense increased for the three
months ended June 30, 1997 primarily due to the implementation of the Association's Management
Recognition and Development Plan (MRDP) in July, 1996. MRDP expense for the three months ended
June 30, 1997 was $18,000 compared to none in the 1996 period. ESOP plan expense was $28,000
for the three months ended June 30, 1996 and $33,000 for the 1997 period. Under generally accepted
accounting principles, expense of the ESOP is affected by changes in the market price of the
Company's stock. The Association sold two foreclosed properties held for sale in the three months
ended June 30, 1997 at a net gain of $7,000. There were no sales in the comparable 1996 period.
Subsequent to the September 30, 1996 one-time special SAIF assessment, the Association's recurring
SAIF premiums are assessable at a lower rate.
Income Taxes
Income taxes decreased due to the level of earnings before income taxes.
7
JOACHIM BANCORP, INC. AND SUBSIDIARY
PART II - Other Information
Item 1 - Legal Proceeding
There are no material legal proceedings to which the Holding Company or the Association is a party
or of which any of their property is subject. From time to time, the Association is a party to
various legal proceedings incident to its business.
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
None.
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits: none
(b) Reports on Form 8-K: No reports on Form 8-K have been filed during the quarter for which
this report is filed.
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.
JOACHIM BANCORP, INC.
(Registrant)
DATE: July 30, 1997 BY: Bernard R. Westhoff
Bernard R. Westhoff, President and
Duly Authorized Officer
BY: Lee Ellen Hogan
Lee Ellen Hogan, Treasurer and
Chief Financial Officer
8