UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ x ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarter Ended: June 30, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______________ to ______________
Commission File Number: 000-18464
EMCLAIRE FINANCIAL CORP.
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(Exact name of small business issuer as specified in its charter)
Pennsylvania 25-1606091
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(State or other jurisdiction of incorporation or organization) (IRS Employer
Identification No.)
612 Main Street, Emlenton, PA 16373
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(Address of principal executive offices)
(724) 867-2311
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(Issuer's telephone number)
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(Former name, former address and former fiscal year,
if changed since last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by the court. Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
Number of shares of issuer's common stock outstanding as of July 31, 2003:
Common Stock, $1.25 par value 1,282,835
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(Class) (Outstanding)
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Transitional Small Business Disclosure Format (Check one): Yes X No
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EMCLAIRE FINANCIAL CORP.
INDEX TO QUARTERLY REPORT ON FORM 10-QSB
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of
June 30, 2003 and December 31, 2002..............................1
Consolidated Income Statements for the three and six
months ended June 30, 2003 and 2002..............................2
Consolidated Statements of Cash Flows for the six
months ended June 30, 2003 and 2002..............................3
Consolidated Statement of Changes in Stockholders'
Equity for the six months ended June 30, 2003....................4
Notes to Consolidated Financial Statements.......................5
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations.................8
Item 3. Controls and Procedures.........................................17
PART II - OTHER INFORMATION
Item 1. Legal Proceedings...............................................18
Item 2. Changes in Securities...........................................18
Item 3. Defaults Upon Senior Securities.................................18
Item 4. Submission of Matters to a Vote of Security Holders.............18
Item 5. Other Information...............................................18
Item 6. Exhibits and Reports on Form 8-K................................18
Signatures......................................................19
Controls and Procedures Certifications..........................20
PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements
-----------------------------
Emclaire Financial Corp. and Subsidiary
Consolidated Balance Sheets
As of June 30, 2003 (Unaudited) and December 31, 2002
(Dollar amounts in thousands, except share data)
June 30, December 31,
2003 2002
------------ -------------
Assets
------
Cash and due from banks $6,508 $5,495
Interest-earning deposits in banks 541 2,221
------------ -------------
Cash and cash equivalents 7,049 7,716
Securities available for sale 56,299 48,719
Securities held to maturity; fair value of $17 and $29 17 29
Loans receivable, net of allowance for loan losses of $1,698
and $1,587 176,843 169,557
Federal bank stocks, at cost 1,729 1,298
Bank-owned life insurance 4,163 4,054
Accrued interest receivable 1,241 1,325
Premises and equipment 4,683 3,678
Goodwill 1,422 1,422
Core deposit intangibles 96 169
Prepaid expenses and other assets 664 610
------------ -------------
Total assets $254,206 $238,577
============ =============
Liabilities and Stockholders' Equity
------------------------------------
Liabilities:
Deposits:
Noninterest bearing $36,433 $32,762
Interest bearing 177,794 171,663
------------ -------------
Total deposits 214,227 204,425
Borrowed funds 15,225 10,000
Accrued interest payable 468 467
Accrued expenses and other liabilities 1,451 1,005
------------ -------------
Total liabilities 231,371 215,897
------------ -------------
Stockholders' Equity:
Preferred stock, $1.00 par value, 3,000,000 shares authorized;
none issued - -
Common stock, $1.25 par value, 12,000,000 shares authorized;
1,395,852 shares issued; 1,282,835 and 1,332,835 shares
outstanding 1,745 1,745
Additional paid-in capital 10,871 10,871
Treasury stock, at cost; 113,017 and 63,017 shares (2,272) (971)
Retained earnings 10,587 9,978
Accumulated other comprehensive income 1,904 1,057
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Total stockholders' equity 22,835 22,680
------------ -------------
Total liabilities and stockholders' equity $254,206 $238,577
============ =============
See accompanying notes to consolidated financial statements.
1
Emclaire Financial Corp. and Subsidiary
Consolidated Income Statements
For the three and six months ended June 30, 2003 and 2002 (Unaudited)
(Dollar amounts in thousands, except share data)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Interest and dividend income:
Loans receivable $2,973 $3,104 $5,954 $6,247
Securities:
Taxable 361 382 703 751
Exempt from federal income tax 186 138 379 279
Federal bank stocks 11 13 26 28
Deposits with banks and federal funds sold 8 18 22 31
---------- ---------- ---------- ----------
Total interest income 3,539 3,655 7,084 7,336
---------- ---------- ---------- ----------
Interest expense:
Deposits 1,103 1,233 2,213 2,461
Borrowed funds 104 57 211 117
---------- ---------- ---------- ----------
Total interest expense 1,207 1,290 2,424 2,578
---------- ---------- ---------- ----------
Net interest income 2,332 2,365 4,660 4,758
Provision for loan losses 75 90 150 201
---------- ---------- ---------- ----------
Net interest income after provision for loan losses 2,257 2,275 4,510 4,557
---------- ---------- ---------- ----------
Noninterest income:
Service fees 267 232 510 462
Gain on sale of securities available for sale 42 - 55 -
Gain on sale of loans held for sale 18 - 18 -
Earnings on bank-owned life insurance 58 - 117 -
Other 84 110 152 177
---------- ---------- ---------- ----------
Total noninterest income 469 342 852 639
---------- ---------- ---------- ----------
Noninterest expense:
Compensation and employee benefits 1,084 985 2,176 1,999
Premises and equipment, net 254 299 542 588
Intangible amortization expense 36 49 73 98
Other 524 535 1,026 1,098
---------- ---------- ---------- ----------
Total noninterest expense 1,898 1,868 3,817 3,783
---------- ---------- ---------- ----------
Net income before provision for income taxes 828 749 1,545 1,413
Provision for income taxes 203 219 377 400
---------- ---------- ---------- ----------
Net income $625 $530 $1,168 $1,013
========== ========== ========== ==========
Net income per share $0.47 $0.40 $0.88 $0.76
Dividends per share $0.21 $0.19 $0.42 $0.38
Weighted average common shares outstanding 1,326,581 1,332,835 1,329,691 1,332,835
See accompanying notes to consolidated financial statements.
2
Emclaire Financial Corp. and Subsidiary
Consolidated Statements of Cash Flows
For the six months ended June 30, 2003 (Unaudited)
(Dollar amounts in thousands)
For the Six Months Ended
June 30,
--------------------------
2003 2002
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Operating activities:
Net income $1,168 $1,013
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization for premises and equipment 196 241
Provision for loan losses 150 201
Amortization of premiums and accretion of discounts, net 112 119
Net change in loans held for sale - (1,284)
Gain on sale of securities available for sale (55) -
Earnings on bank-owned life insurance, net (109) -
Amortization of intangible assets 73 98
Change in accrued interest receivable 84 (70)
Change in prepaid expenses and other assets (54) (69)
Change in accrued interest payable 1 (3)
Change in accrued expenses and other liabilities 446 178
Other (230) (219)
----------- ----------
Net cash from operating activities 1,782 205
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Lending and Investing Activities:
Loan originations, net of principal collections (7,471) (5,473)
Purchases of securities available for sale (30,725) (12,706)
Purchases of Federal bank stocks (431) (77)
Repayments, maturities and calls of securities available for sale 23,870 12,680
Principal repayments of securities held to maturity 12 10
Proceeds from the sale of securities available for sale 330 -
Purchases of premises and equipment (1,201) (226)
----------- ----------
Net cash from lending and investing activities (15,616) (5,792)
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Deposit and Financing Activities:
Net increase in deposits 9,802 9,729
Increase in overnight borrowed funds 225 -
Proceeds from long term advances 5,000 -
Dividends paid on common stock (559) (505)
Payments to acquire treasury stock (1,301) -
----------- ----------
Net cash from deposit and financing activities 13,167 9,224
----------- ----------
Net (decrease) increase in cash equivalents (667) 3,637
Cash equivalents at beginning of period 7,716 9,157
----------- ----------
Cash equivalents at end of period $7,049 $12,794
=========== ==========
Supplemental information:
Interest paid $2,423 $2,581
Income taxes paid 441 245
See accompanying notes to consolidated financial statements.
3
Emclaire Financial Corp. and Subsidiary
Consolidated Statement of Changes in Stockholders' Equity
For the six months ended June 30, 2003 and 2002 (Unaudited)
(Dollar amounts in thousands)
Accumulated
Additional Other Total
Common Paid-in Treasury Retained Comprehensive Stockholders'
Stock Capital Stock Earnings Income (Loss) Equity
-------- ---------- --------- ---------------------------------------
Balance at December 31, 2002 $1,745 $10,871 $(971) $9,978 $1,057 $22,680
Comprehensive income:
Net income - - - 1,168 - 1,168
Change in net unrealized gain on
securities available for sale, net of
taxes of $464 and reclassification
adjustment for after tax gains of $42 - - - - 847 847
----------------
Comprehensive income 2,015
----------------
Dividends paid - - - (559) - (559)
Purchase of treasury stock (50,000 shares) - - (1,301) - - (1,301)
-------- ---------- --------- --------- ------------ ----------------
Balance at June 30, 2003 $1,745 $10,871 $(2,272) $10,587 $1,904 $22,835
======== ========== ========= ========= ============ ================
See accompanying notes to consolidated financial statements.
4
Emclaire Financial Corp. and Subsidiary
Notes to Consolidated Financial Statements
1. Business and Basis of Presentation
Emclaire Financial Corp. (the Corporation) is a Pennsylvania
corporation and bank holding company that provides a full range of
retail and commercial financial products and services to customers in
western Pennsylvania through its wholly owned subsidiary bank, the
Farmers National Bank of Emlenton (the Bank), a national banking
association. The consolidated financial statements contained herein
include the accounts of the Corporation and the Bank, which operate as
one operating segment. All inter-company amounts have been eliminated.
The accompanying unaudited consolidated financial statements for the
interim periods include all adjustments, consisting of normal recurring
accruals, which are necessary, in the opinion of management, to fairly
reflect the Corporation's financial position and results of operations.
Additionally, these consolidated financial statements for the interim
periods have been prepared in accordance with instructions for the
Securities and Exchange Commission's Form 10-QSB and therefore do not
include all information or footnotes necessary for a complete
presentation of financial condition, results of operations and cash
flows in conformity with accounting principles generally accepted in
the United States of America. For further information, refer to the
audited consolidated financial statements and footnotes thereto for the
year ended December 31, 2002, as contained in the Corporation's 2002
Annual Report to Stockholders.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts in the consolidated financial statements and accompanying
notes. Actual results could differ from those estimates. Material
estimates that are particularly susceptible to significant change in
the near term relate to the determination of the allowance for loan
losses and deferred tax assets. The results of operations for interim
quarterly or year to date periods are not necessarily indicative of the
results that may be expected for the entire year or any other period.
Certain amounts previously reported may have been reclassified to
conform to the current year's financial statement presentation.
2. Net Income Per Share
The Corporation maintains a simple capital structure with no common
stock equivalents. Earnings per share computations are based on the
weighted average number of common shares outstanding for the respective
reporting periods.
3. Comprehensive Income
Comprehensive income was comprised of the following for the periods
ended June 30:
Three months ended June 30, Six months ended June 30,
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In thousands 2003 2002 2003 2002
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Net income $625 $530 $1,168 $1,013
Change in net unrealized gain on securities
available for sale, net of taxes 797 513 889 444
Less reclassification adjustment for gains included
in net income, net of taxes (34) - (42) -
-------------- -------------- -------------- -------------
Other comprehensive income 763 513 847 444
-------------- -------------- -------------- -------------
Comprehensive income $1,388 $1,043 $2,015 $1,457
============== ============== ============== =============
5
4. Securities
The following table summarizes the Corporation's securities as of the
respective dates:
(In thousands) Amortized Unrealized Unrealized Fair
cost gains losses value
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Available for sale:
-------------------
June 30, 2003:
U.S. Government securities $23,608 $285 $(16) $23,877
Municipal securities 15,383 939 - 16,322
Corporate securities 12,919 468 - 13,387
Equity securities 1,504 1,228 (19) 2,713
------------ ------------ ------------- ------------
$53,414 $2,920 $(35) $56,299
============ ============ ============= ============
December 31, 2002:
U.S. Government securities $17,486 $350 $- $17,836
Municipal securities 16,515 391 (99) 16,807
Corporate securities 12,146 421 (5) 12,562
Equity securities 971 543 - 1,514
------------ ------------ ------------- ------------
$47,118 $1,705 $(104) $48,719
============ ============ ============= ============
Held to maturity:
-----------------
June 30, 2003:
Mortgage-backed securities $17 $- $- $17
------------ ------------ ------------- ------------
$17 $- $- $17
============ ============ ============= ============
December 31, 2002:
Mortgage-backed securities $29 $- $- $29
------------ ------------ ------------- ------------
$29 $- $- $29
============ ============ ============= ============
5. Loans Receivable
The Corporation's loans receivable as of the respective dates are
summarized as follows:
----------------------------------------------------------------------
June 30, December 31,
(In thousands) 2003 2002
----------------------------------------------------------------------
Mortgage loans:
Residential first
mortgage $75,818 $82,449
Home equity 27,914 19,136
Commercial real estate 38,032 34,986
------------ ----------------
141,764 136,571
Other loans:
Consumer 12,224 12,660
Commercial business 24,553 21,913
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36,777 34,573
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Total gross loans 178,541 171,144
Less allowance for loan losses 1,698 1,587
------------ ----------------
$176,843 $169,557
============ ================
6
6. Deposits
The Corporation's deposits as of the respective dates are summarized as
follows:
(Dollar amounts in thousands) June 30, 2003 December 31, 2002
-------------------------------- ----------------------------------
Weighted Weighted
average average
Type of accounts rate Amount % rate Amount %
---------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits - $36,433 17.0% - $32,762 16.0%
Interest-bearing demand deposits 0.82% 77,829 36.3% 0.88% 72,637 35.5%
Time deposits 3.78% 99,965 46.7% 3.97% 99,026 48.5%
----------- ---------- ------------- ---------
2.06% $214,227 100.0% 2.24% $204,425 100.0%
=========== ========== ============= =========
7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
--------------------------------------------------------------------------------
This section discusses the consolidated financial condition and results of
operations of Emclaire Financial Corp. (the Corporation) and its wholly owned
subsidiary bank, the Farmers National Bank of Emlenton (the Bank), for the three
and six month periods ended June 30, 2003 and should be read in conjunction with
the accompanying consolidated financial statements and notes presented on pages
1 through 7.
Discussions of certain matters in this Report on Form 10-QSB may constitute
forward-looking statements within the meaning of the Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and as such, may involve risks and
uncertainties. Forward-looking statements, which are based on certain
assumptions and describe future plans, strategies, and expectations, are
generally identifiable by the use of words or phrases such as "believe", "plan",
"expect", "intend", "anticipate", "estimate", "project", "forecast", "may
increase", "may fluctuate", "may improve" and similar expressions of future or
conditional verbs such as "will", "should", "would", and "could". These
forward-looking statements relate to, among other things, expectations of the
business environment in which the Corporation operates, projections of future
performance, potential future credit experience, perceived opportunities in the
market, and statements regarding the Corporation's mission and vision. The
Corporation's actual results, performance, and achievements may differ
materially from the results, performance, and achievements expressed or implied
in such forward-looking statements due to a wide range of factors. These factors
include, but are not limited to, changes in interest rates, general economic
conditions, the demand for the Corporation's products and services, accounting
principles or guidelines, legislative and regulatory changes, monetary and
fiscal policies of the US Government, US Treasury, and Federal Reserve, real
estate markets, competition in the financial services industry, attracting and
retaining key personnel, performance of new employees, regulatory actions,
changes in and utilization of new technologies, and other risks detailed in the
Corporation's reports filed with the Securities and Exchange Commission (SEC)
from time to time, including the Annual Report on Form 10-KSB for the fiscal
year ended December 31, 2002. These factors should be considered in evaluating
the forward-looking statements, and undue reliance should not be placed on such
statements. The Corporation does not undertake, and specifically disclaims any
obligation, to update any forward-looking statements to reflect occurrences or
unanticipated events or circumstances after the date of such statements.
CHANGES IN FINANCIAL CONDITION
General. The Corporation's total assets increased $15.6 million or 6.6% to
$254.2 million at June 30, 2003 from $238.6 million at December 31, 2002. This
net increase was comprised principally of increases in securities, loans, and
premises and equipment of $7.6 million, $7.3 million and $1.0 million,
respectively, partially offset by a decrease in cash and cash equivalents of
$667,000. The increase in total assets reflects a corresponding increase in
total liabilities and total stockholders' equity of $15.5 million or 7.2% and
$155,000 or 0.7%, respectively. The increase in total liabilities was primarily
the result of increases in deposits and borrowed funds of $9.8 million and $5.2
million, respectively. This increase in deposits and borrowed funds provided the
resources for the Corporation's asset growth for the period. The increase in
stockholders' equity was the result of increases in retained earnings and
accumulated other comprehensive income of $609,000 and $847,000, respectively,
offset by an increase in treasury stock of $1.3 million.
Cash and cash equivalents. Cash and cash equivalents decreased $667,000 or 8.6%
to $7.0 million at June 30, 2003 from $7.7 million at December 31, 2002. The net
decrease between June 30, 2003 and December 31, 2002 was primarily the result of
investing deployable funds in loans, U.S. agency securities and commercial
paper.
Securities. The Corporation's securities portfolio increased $7.6 million or
15.5% to $56.3 million at June 30, 2003 from $48.7 million at December 31, 2002.
This net increase was primarily the result of security purchases of $30.7
million, partially offset by security maturities and calls of $23.9 million and
security sales of $330,000, during the six months ended June 30, 2003.
8
Security purchases were comprised of U.S. government agency, corporate and
marketable equity securities of $22.3 million, $7.6 million, and $807,000,
respectively. Security maturities and calls were comprised of U.S. government
agency, tax-free municipal and corporate securities of $16.1 million, $1.1
million and $6.7 million, respectively. Corporate securities that were purchased
and that matured during the period included primarily short-term commercial
paper utilized to manage interest-earned on funds maintained for liquidity
purposes. At June 30, 2003, the Corporation maintained $2.2 million in
commercial paper that is scheduled to mature within three months.
Loans receivable. Net loans receivable increased $7.3 million or 4.3% to $176.8
million at June 30, 2003 from $169.6 million at December 31, 2002. This increase
was the result of increases in the Bank's mortgage portfolios and commercial
business portfolios of $5.2 million and $2.6 million, respectively, partially
offset by a decrease in non-real estate consumer loans of $436,000. The
composition of the Corporation's mortgage loan portfolio shifted from
residential first mortgages to home equity loan products and commercial
mortgages. The Corporation has continued to experience refinancing of mortgage
loan products, particularly residential first mortgage loans. For the most part,
the Bank has been able to stem residential mortgages exiting the institution,
but during the six months ended June 30, 2003, amortization and refinancing
activity outpaced new production in this portfolio. This $6.6 million or 8.0%
reduction in residential first mortgages has been more than offset by commercial
real estate and home equity loan growth. The commercial real estate loan
portfolio has grown $3.0 million or 8.7% during the first six months of 2003 due
to the retention of several large commercial customers as efforts continue to
expand commercial lending activities in the Bank's existing markets. The $8.9
million or 45.9% increase in home equity loans outstanding is the direct result
of specific home equity loan product development and related marketing campaigns
put forth through the Bank's retail branch network. This campaign has been
directed at retaining consumer mortgage investment in the Bank's market area.
The Corporation's commercial business loan portfolio grew $2.6 million or 12.0%,
directly as the result of $3.0 million in new funding on a tax-free loan with a
municipality in the Bank's market area.
Federal bank stocks. Federal bank stocks increased $431,000 or 33.2% to $1.7
million at June 30, 2003 from $1.3 million at December 31, 2002. This increase
is directly related to the $5.2 million increase in Federal Home Loan Bank of
Pittsburgh (FHLB) borrowed funds during the period - see comments below under
"Borrowed Funds".
Premises and equipment. Premises and equipment increased $1.0 million or 27.3%
to $4.7 million at June 30, 2003 from $3.7 million at December 31, 2002. This
increase can be attributed to capital investments made for the historical
remodeling of the Corporation's headquarters and the Bank's main office to date,
for the Bank's new branch office in Butler County, PA and for various data
processing initiatives undertaken during 2003.
Non-performing assets. Non-performing assets include non-accrual loans and real
estate acquired through foreclosure. Non-performing assets amounted to $1.6
million or 0.63% and $1.2 million or 0.49% of total assets at June 30, 2003 and
December 31, 2002, respectively.
Deposits. Total deposits increased $9.8 million or 4.8% to $214.2 million at
June 30, 2003 from $204.4 million at December 31, 2002. This increase was
comprised of increases in noninterest bearing and interest bearing deposits of
$3.7 million and $6.1 million, respectively. The general increase in deposits
during the period can be attributed primarily to: (1) an overall movement of
funds in the marketplace by customers from mutual fund and stock investments
into FDIC insured bank deposits as a result of recent national economic
instability, and (2) the opening of a new branch banking office in Butler
County, PA in late January 2003.
Borrowed funds. Borrowed funds increased $5.2 million or 52.3% to $15.2 million
at June 30, 2003 from $10.0 million at December 31, 2002. This increase was
primarily the result of a new $5.0 million term borrowing from the FHLB utilized
to fund the aforementioned tax-free loan retained with a municipality in the
Bank's market.
9
Stockholders' equity. Stockholders' equity increased $155,000 or 0.7% to $22.8
million at June 30, 2003 from $22.7 million at December 31, 2002. This increase
was the result of an increase in retained earnings of $609,000, comprised of net
income of $1.2 million offset by dividends paid of $559,000, and an increase in
accumulated other comprehensive income of $847,000. Partially offsetting these
net increases in stockholders' equity was an increase in treasury stock of $1.3
million.
During June 2003, the Corporation received two separate unsolicited offers from
stockholders to buy back shares of the Corporation's common stock held by these
stockholders. These purchases totaled 50,000 shares for a price per share of
$26.02 or a total purchase cost of $1.3 million. Cash on hand was utilized to
facilitate these repurchases and take advantage of this opportunity to manage
the Corporation's capital levels. Pursuant to this repurchase the Corporation
and the Bank remain "well capitalized" for regulatory purposes. These shares
will be held in treasury stock.
RESULTS OF OPERATIONS
Comparison of Results for the Three Month Periods Ended June 30, 2003 and 2002
General. The Corporation reported net income of $625,000 and $530,000 for the
three months ended June 30, 2003 and 2002, respectively. The $95,000 or 17.9%
increase in net income for the three months ended June 30, 2003, as compared to
the three months ended June 30, 2002, was attributable to an increase in
noninterest income of $127,000 and a decrease in the provision for loan losses
and the provision for income taxes of $15,000 and $16,000, respectively.
Partially offsetting these favorable variances was an increase in noninterest
expense of $30,000 and a decrease in net interest income of $33,000.
Net interest income. Net interest income on a tax equivalent basis increased
$8,000 to $2.4 million for the three months ended June 30, 2003. This net
increase can be attributed to a decrease in interest expense of $83,000, offset
by a decrease in interest income of $75,000.
Interest income. Interest income on a tax equivalent basis decreased $75,000 or
2.0% to $3.6 million for the three months ended June 30, 2003, compared to $3.7
million for the same period in the prior year. This decrease in interest income
can be attributed to a 76 basis point decline in the interest rate on average
interest-earning assets to 6.26% during the three months ended June 30, 2003,
compared to 7.02% for the same period in the prior year. The yield on average
loans, securities and interest-earning deposits decreased to 6.86%, 4.61% and
2.19%, respectively, during the three months ended June 30, 2003, compared to
7.46%, 5.78%, and 2.45%, respectively, for the same period in the prior year.
The decrease in interest income due to rate was offset by an increase in the
average balance of interest-earning assets, as average loans receivable and
securities increased to $175.5 million and $54.3 million, respectively, during
the three months ended June 30, 2003, compared to $167.1 million and $40.1
million, respectively, during the same period in the prior year. Offsetting the
increase in average loans receivable and securities was a decrease in the
average balance of interest-earning cash and cash equivalents to $3.5 million
during the three months ended June 30, 2003, compared to $5.1 million during the
same period in the prior year. Increases in average loans and securities between
quarterly periods were funded by deposit growth and, to a lesser extent,
borrowed funds. See comments in the "Changes in Financial Condition" section
above for discussion of security, loan and deposit growth factors.
Interest expense. Interest expense decreased $83,000 or 6.4% to $1.2 million for
the three months ended June 30, 2003, compared to $1.3 million for the same
period in the prior year. This decrease in interest expense can be attributed to
a 49 basis point decline in the interest rate on average interest-bearing
liabilities to 2.57% during the three months ended June 30, 2003, compared to
3.06% for the same period in the prior year. The average cost of deposits
decreased to 2.15% during the three months ended June 30, 2003, compared to
2.57% for the same period in the prior year. The decrease in interest expense
due to rate was partially offset by an increase in the average balance of
interest-bearing liabilities, as average interest-bearing deposits and borrowed
funds increased to $177.1 million and $11.4 million, respectively, during the
three months ended June 30, 2003, compared to $164.1 million and $5.0 million,
respectively, during the same period in the prior year.
10
Average Balance Sheet and Yield/Rate Analysis. The following table sets forth,
for periods indicated, information concerning the total dollar amounts of
interest income from interest-earning assets and the resulting average yields,
the total dollar amounts of interest expense on interest-bearing liabilities and
the resulting average costs, net interest income, interest rate spread and the
net interest margin earned on average interest-earning assets. For purposes of
this table, average loan balances include non-accrual loans and exclude the
allowance for loan losses, and interest income includes accretion of net
deferred loan costs. Interest and yields on tax-exempt loans and securities
(tax-exempt for federal income tax purposes) are shown on a fully tax equivalent
basis.
(Dollar amounts in thousands) Three months ended June 30,
2003 2002
------------------------------- ---------------------------------
Average Yield / Average Yield /
Balance Interest Rate Balance Interest Rate
------------------------------------------------------------------------------------------------------------------
Interest-earning assets:
------------------------
Loans, taxable $170,019 $2,910 6.87% $164,315 $3,089 7.54%
Loans, tax exempt 5,467 89 6.55% 2,820 20 2.79%
---------- ---------- --------- ----------- ----------- ---------
175,486 2,999 6.86% 167,135 3,109 7.46%
---------- ---------- --------- ----------- ----------- ---------
Securities, taxable 37,793 361 3.83% 28,422 382 5.39%
Securities, tax exempt 16,469 263 6.41% 11,685 196 6.72%
---------- ---------- --------- ----------- ----------- ---------
54,262 624 4.61% 40,107 578 5.78%
---------- ---------- --------- ----------- ----------- ---------
Interest-earning cash equivalents 1,913 8 1.68% 3,747 18 1.93%
Federal bank stocks 1,559 11 2.83% 1,325 13 3.94%
---------- ---------- --------- ----------- ----------- ---------
3,472 19 2.19% 5,072 31 2.45%
---------- ---------- --------- ----------- ----------- ---------
Total interest-earning assets 233,220 3,642 6.26% 212,314 3,717 7.02%
Cash and due from banks 6,421 6,842
Other noninterest-earning assets 10,348 5,662
---------- ---------- --------- ----------- ----------- ---------
Total assets $249,989 $3,642 5.84% $224,818 $3,717 6.63%
========== ========== ========= =========== =========== =========
Interest-bearing liabilities:
-----------------------------
Interest-bearing demand deposits $77,287 $158 0.82% $72,144 $202 1.12%
Time deposits 99,853 945 3.80% 91,910 1,031 4.50%
---------- ---------- --------- ----------- ----------- ---------
177,140 1,103 2.50% 164,054 1,233 3.01%
---------- ---------- --------- ----------- ----------- ---------
Borrowed funds, term 10,833 102 3.78% 5,000 57 4.57%
Borrowed funds, overnight 544 2 1.47% - - 0.00%
---------- ---------- --------- ----------- ----------- ---------
11,377 104 3.67% 5,000 57 4.57%
---------- ---------- --------- ----------- ----------- ---------
Total interest-bearing liabilities 188,517 1,207 2.57% 169,054 1,290 3.06%
Noninterest-bearing demand deposits 36,159 - - 32,235 -
---------- ---------- --------- ----------- ----------- ---------
Funding and cost of funds 224,676 1,207 2.15% 201,289 1,290 2.57%
Other noninterest-bearing liabilities 1,868 1,335
---------- -----------
Total liabilities 226,544 202,624
Stockholders' equity 23,445 21,794
---------- ---------- --------- ----------- ----------- ---------
Total liabilities and stockholders' equity $249,989 $1,207 2.15% $224,418 $1,290 2.57%
========== ========== ========= =========== =========== =========
Net interest income $2,435 $2,427
========== ===========
Interest rate spread (difference between 3.70% 3.96%
========= =========
weighted average rate on interest-earning
assets and interest-bearing liabilities)
Net interest margin (net interest 4.19% 4.59%
========= =========
income as a percentage of average
interest-earning assets)
11
Analysis of Changes in Net Interest Income. The following table analyzes the
changes in interest income and interest expense in terms of: (1) changes in
volume of interest-earning assets and interest-bearing liabilities and (2)
changes in yields and rates. The table reflects the extent to which changes in
the Corporation's interest income and interest expense are attributable to
changes in rate (change in rate multiplied by prior year volume), changes in
volume (changes in volume multiplied by prior year rate) and changes
attributable to the combined impact of volume/rate (change in rate multiplied by
change in volume). The changes attributable to the combined impact of
volume/rate are allocated on a consistent basis between the volume and rate
variances. Changes in interest income on loans and securities reflect the
changes in interest income on a fully tax equivalent basis.
(in thousands) Three months ended June 30,
2003 versus 2002
Increase (decrease) due to
----------------------------------------
Volume Rate Total
----------------------------------------------------------------------------
Interest income:
Loans $ 151 $ (260) $ (109)
Securities 178 (132) 46
Interest-earning cash equivalents (8) (2) (10)
Federal bank stocks 2 (4) (2)
-------- --------- -----------
Total interest-earning assets 323 (398) (75)
-------- --------- -----------
Interest expense:
Deposits 93 (223) (130)
Borrowed funds 60 (13) 47
-------- --------- -----------
Total interest-bearing liabilities $ 170 $ (162) $ 8
-------- --------- -----------
Net interest income $ 282 $ (313) $ (31)
======== ========= ===========
Provision for loan losses. The Corporation records provisions for loan losses to
bring the total allowance for loan losses to a level deemed adequate to cover
probable losses inherent in the loan portfolio. In determining the appropriate
level of allowance for loan losses, management considers historical loss
experience, the present and prospective financial condition of borrowers,
current and prospective economic conditions (particularly as they relate to
markets where the Corporation originates loans), the status of non-performing
assets, the estimated underlying value of the collateral and other factors
related to the collectibility of the loan portfolio. The $15,000 decrease in the
Corporation's provision for loans losses between the three-month periods ended
June 30, 2003 and 2002 can be attributed to management's assessment of the
overall adequacy of the Corporation's allowance for loan losses at June 30,
2003, as well as the lower volume of loan charge-offs during the second quarter
2003 versus the same quarter in 2002.
Noninterest income. Noninterest income increased $127,000 or 37.1% to $469,000
during the three months ended June 30, 2003, compared to $342,000 during the
same period in the prior year. This increase can be attributed to the increase
in customer service fees earned, gains on sales of marketable equity securities
and loans held for sale and earnings on bank-owned life insurance of $35,000,
$42,000, $18,000, and $58,000, respectively,
Noninterest expense. Noninterest expense increased $30,000 to $1.9 million
during the three months ended June 30, 2003. This increase in noninterest
expense can be attributed to an increase in compensation and employee benefits
expense of $99,000, offset by decreases in premises and equipment expense,
intangible amortization expense and other noninterest expenses of $45,000,
$13,000, and $11,000, respectively. Increased noninterest expenses as a result
of opening the Bank's new branch office in Butler, PA in January 2003 were, for
the most part, offset by cost savings through the consolidation of two offices
into one office in the Clarion, PA market in March 2003.
Compensation and employee benefits expense increased $99,000 or 10.1% to $1.1
million during the three months ended June 30, 2003, compared to $985,000 for
the same period in the prior year. This increase can be attributed primarily to
normal and expected salary and benefit cost increases and increased management
and employee incentive costs between the two periods.
12
Premises and equipment expense decreased $45,000 or 15.1% to $254,000 during the
three months ended June 30, 2003, compared to $299,000 for the same period in
the prior year. This decrease can be primarily attributed to lower depreciation
expenses of $25,000, which was a result of the cessation of depreciation on
certain equipment at the end of 2002.
Other noninterest expense decreased $11,000 or 2.1% to $524,000 during the three
months ended June 30, 2003, compared to $535,000 for the same period in the
prior year. This decrease can primarily be attributed to decreased telephone
cost expenses, software depreciation, and travel and entertainment expenses
between the two periods. Partially offsetting this favorable variance was an
increase in printing and office supplies and marketing expenses associated with
the promotion of the aforementioned home equity products.
Provision for income taxes. The provision for income taxes decreased $16,000 or
7.3% to $203,000 for the three months ended June 30, 2003, compared to $219,000
for the same period in the prior year. This decrease is a direct result of the
decrease in the Corporation's effective tax rate as a result of the investment
in bank owned life insurance, and increased investment in tax-free municipal
securities and loans, as well as historic tax credits attributable to the
remodeling of the Corporation's headquarters. Partially offsetting this decrease
was an increase in the Corporation's pre-tax earnings base between the second
quarter 2003 and 2002.
13
Comparison of Results for the Six month Periods Ended June 30, 2003 and 2002
General. The Corporation reported net income of $1.2 million and $1.0 million
for the six months ended June 30, 2003 and 2002, respectively. The $155,000 or
15.3% increase in net income for the six months ended June 30, 2003, as compared
to the six months ended June 30, 2002, was attributable to an increase in
noninterest income of $213,000 and decreases in the provision for loan losses
and income taxes of $51,000 and $23,000, respectively. Partially offsetting this
favorable variance was a decrease in net interest income of $98,000 and an
increase in noninterest expense of $34,000.
Average Balance Sheet and Yield/Rate Analysis.
(Dollar amounts in thousands) Six months ended June 30,
2003 2002
---------------------------------- --------------------------------
Average Yield / Average Yield /
Balance Interest Rate Balance Interest Rate
--------------------------------------------------------------------------------------------------------------------
Interest-earning assets:
------------------------
Loans, taxable $168,474 $5,847 7.00% $162,718 $6,201 7.68%
Loans, tax exempt 4,802 151 6.35% 2,820 63 4.53%
------------ ----------- --------- ---------- ---------- ----------
$173,276 $5,998 6.98% $165,538 $6,264 7.63%
------------ ----------- --------- ---------- ---------- ----------
Securities, taxable 34,075 703 4.16% 28,152 751 5.38%
Securities, tax exempt 16,615 537 6.52% 11,486 397 6.97%
------------ ----------- --------- ---------- ---------- ----------
50,690 1,240 4.93% 39,638 1,148 5.84%
------------ ----------- --------- ---------- ---------- ----------
Interest-earning cash equivalents 3,128 22 1.42% 2,656 31 2.35%
Federal bank stocks 1,523 26 3.44% 1,923 28 2.94%
------------ ----------- --------- ---------- ---------- ----------
4,651 48 2.08% 4,579 59 2.60%
------------ ----------- --------- ---------- ---------- ----------
Total interest-earning assets 228,617 7,286 6.43% 209,755 7,471 7.18%
Cash and due from banks 6,250 6,547
Other noninterest-earning assets 10,100 4,953
------------ ----------- --------- ---------- ---------- ----------
Total assets $244,967 $7,286 6.00% $221,255 $7,471 6.81%
============ =========== ========= ========== ========== ==========
Interest-bearing liabilities:
-----------------------------
Interest-bearing demand deposits $75,336 $315 0.84% $71,182 $405 1.15%
Time deposits 99,546 1,898 3.84% 91,039 2,056 4.55%
------------ ----------- --------- ---------- ---------- ----------
174,882 2,213 2.55% 162,221 2,461 3.06%
------------ ----------- --------- ---------- ---------- ----------
Borrowed funds, term 10,417 209 4.05% 5,000 116 4.68%
Borrowed funds, overnight 272 2 1.48% 342 1 0.59%
------------ ----------- --------- ---------- ---------- ----------
10,689 211 3.98% 5,342 117 4.42%
------------ ----------- --------- ---------- ---------- ----------
Total interest-bearing liabilities 185,571 2,424 2.63% 167,563 2,578 3.10%
Noninterest-bearing demand deposits 34,549 - - 30,643 -
------------ ----------- --------- ---------- ---------- ----------
Funding and cost of funds 220,120 2,424 2.22% 198,206 2,578 2.62%
Other noninterest-bearing liabilities 1,658 1,443
------------ ----------
Total liabilities 221,778 199,649
Stockholders' equity 23,189 21,606
------------ ----------- --------- ---------- ---------- ----------
Total liabilities and stockholders' equity $244,967 $2,424 2.22% $221,255 $2,578 2.62%
============ =========== ========= ========== ========== ==========
Net interest income $4,862 $4,893
=========== ==========
Interest rate spread (difference between 3.79% 4.08%
========= ==========
weighted average rate on interest-earning
assets and interest-bearing liabilities)
Net interest margin (net interest 4.29% 4.70%
========= ==========
income as a percentage of average
interest-earning assets)
14
Analysis of Changes in Net Interest Income.
(in thousands) Six months ended June 30,
2003 versus 2002
Increase (decrease) due to
----------------------------------------
Volume Rate Total
----------------------------------------------------------------------------
Interest income:
Loans $ 284 $ (550) $ (266)
Securities 288 (196) 92
Interest-earning cash equivalents 5 (14) (9)
Federal bank stocks (6) 4 (2)
-------- --------- -----------
Total interest-earning assets 571 (756) (185)
-------- --------- -----------
Interest expense:
Deposits 182 (430) (248)
Borrowed funds 107 (13) 94
-------- --------- -----------
Total interest-bearing liabilities $ 289 $ (443) $ (154)
-------- --------- -----------
Net interest income $ 282 $ (313) $ (31)
======== ========= ===========
Net interest income. Net interest income on a tax equivalent basis decreased
$31,000 or 0.6% to $4.9 million for the six months ended June 30, 2003. This
decrease can be attributed to a decrease in interest income of $185,000
partially offset by a decrease in interest expense of $154,000.
Interest income. Interest income on a tax equivalent basis decreased $185,000 or
2.5% to $7.3 million for the six months ended June 30, 2003, compared to $7.5
million for the same period in the prior year. This net decrease in interest
income can be attributed to decreases in interest earned on loans and
interest-earning cash equivalents and federal bank stocks of $266,000 and
$11,000, respectively, partially offset by an increase in interest earned on
securities of $92,000.
Contributing to the decrease in interest income was a decrease in the yield on
interest-earning assets of 75 basis points to 6.43% for the six months ended
June 30, 2003, compared to 7.18% for the same period in the prior year. The
yield on average loans, securities and interest-earning cash equivalents
decreased to 6.98%, 4.93%, and 2.08%, respectively, during the six months ended
June 30, 2003, compared to 7.63%, 5.84%, and 2.60%, respectively, for the same
period in the prior year. Partially offsetting the decrease in the yield on
interest-earning assets was an increase in average interest-earning assets of
$18.9 million or 9.0% to $228.6 million for the six months ended June 30, 2003,
compared to $209.8 million for the same period in the prior year. The increase
in average interest-earning assets can be attributed to increases in average
loans receivable, securities and interest-earning cash equivalents of $7.7
million, $11.1 million, and $72,000, respectively. Average loans receivable
increased to $173.3 million and average securities increased to $50.7 million
during the six months ended June 30, 2003, compared to $165.5 million and $39.6
million, respectively, during the same period in the prior year. See comments in
the "Changes in Financial Condition" section above for discussion of security,
loan and deposit growth factors.
Aside from changes in the volume and rates of interest-earning assets and
interest-bearing liabilities discussed herein, $93,000 of the decrease in net
interest income between the year to date periods can be attributed to the payoff
of a previously non-performing commercial real estate loan in March 2002 that
had been on non-accrual status. In connection with the loan payoff, the
Corporation received all principal and interest due under the contractual terms
of the loan agreement and therefore interest collected was appropriately
recorded as loan interest income during the quarter ended March 31, 2002.
Interest expense. Interest expense decreased $154,000 or 6.0% to $2.424 million
for the six months ended June 30, 2003, compared to $2.578 million for the same
period in the prior year. This decrease in interest expense can be attributed to
a 47 basis point decline in the interest rate on average interest-bearing
liabilities to 2.63% during the six months ended June 30, 2003, compared to
3.10% for the same period in the prior year. The average cost of deposits and
borrowed funds decreased to 2.55% and 3.98%, respectively, during the six months
ended June 30, 2003, compared to 3.06% and 4.42%, respectively, for the same
period in the prior year. The decrease in interest expense due to rate was
partially offset by an increase in the average balance of interest-bearing
liabilities as average interest-bearing deposits and borrowed funds increased to
$174.9 million and $10.7 million, respectively, during the six months ended June
30, 2003, compared to $162.2 million and $5.3 million, respectively, during the
same period in the prior year.
15
Provision for loan losses. The $51,000 decrease in the Corporation's provision
for loans losses between the six month periods ended June 30, 2003 and 2002 was
primarily the result management's assessment of the overall adequacy of the
Corporation's allowance for loan losses at June 30, 2003, as well as the lower
volume of loan charge-offs during the six month period ending June 30, 2003
versus the same period in the prior year.
Noninterest income. Noninterest income increased $213,000 or 33.3% to $852,000
for the six months ended June 30, 2003 compared to $639,000 for the same period
in the prior year. This increase can principally be attributed to the increase
in service fees, gains on sales of marketable equity securities and loans held
for sale and earnings on bank-owned life insurance of $48,000, $55,000, $18,000
and $117,000, respectively.
Noninterest expense. Noninterest expense increased $34,000 or 1.0% to $3.8
million during the six months ended June 30, 2003. This increase in noninterest
expense can be attributed to an increase in compensation and employee benefits
expense of $177,000, partially offset by decreases in premises and equipment
expense, intangible amortization expense and other expenses of $46,000, $25,000
and $72,000, respectively. Increased noninterest expenses as a result of opening
the Bank's new branch office in Butler, PA in January 2003 were, for the most
part, offset by cost savings through the consolidation of two offices into one
office in the Clarion, PA market in March 2003.
Compensation and employee benefits expense increased $177,000 or 8.9% to $2.2
million during the six months ended June 30, 2003, compared to $2.0 million for
the same period in the prior year. This increase can be attributed primarily to
normal and expected salary and benefit cost increases and increased management
and employee incentive costs between the two periods.
Premises and equipment expense decreased $46,000 or 7.8% to $542,000 during the
six months ended June 30, 2003, compared to $588,000 for the same period in the
prior year. This decrease can be primarily attributed to lower depreciation
expenses of $45,000, which was principally a result of the cessation of
depreciation on certain equipment at the end of 2002.
Other noninterest expense decreased $72,000 or 6.6% to $1.0 million during the
six months ended June 30, 2003, compared to $1.1 million for the same period in
the prior year. This decrease can primarily be attributed to decreased telephone
cost expenses, software depreciation, and travel and entertainment expenses
between the two periods. Partially offsetting this favorable variance was an
increase in printing and office supplies, postage, and marketing expenses
associated with the introduction of the Bank's internet banking product and the
promotion of home equity products.
Provision for income taxes. The provision for income taxes decreased $23,000 or
5.8% to $377,000 for the six months ended June 30, 2003, compared to $400,000
for the same period in the prior year. This decrease is a direct result of the
decrease in the Corporation's effective tax rate as a result of increased
investments in tax-free instruments and tax credits - see also comments in
quarterly analysis section.
16
LIQUIDITY
The Corporation's primary sources of funds generally have been deposits obtained
through the offices of the Bank, borrowings from the FHLB, and amortization and
prepayments of outstanding loans and maturing securities. During the six months
ended June 30, 2003, the Corporation used its sources of funds primarily to fund
loan commitments and, to a lesser extent, purchase securities. As of such date,
the Corporation had outstanding loan commitments, including undisbursed loans
and amounts available under credit lines, totaling $12.2 million, and standby
letters of credit totaling $561,000.
At June 30, 2003, time deposits amounted to $100.0 million or 46.7% of the
Corporation's total consolidated deposits, including approximately $31.2
million, which were scheduled to mature within the next year. Management of the
Corporation believes that it has adequate resources to fund all of its
commitments, that all of its commitments will be funded as required by related
maturity dates and that, based upon past experience and current pricing
policies, it can adjust the rates of time deposits to retain a substantial
portion of maturing liabilities.
Aside from liquidity available from customer deposits or through sales and
maturities of securities, the Corporation has alternative sources of funds such
as a line of credit and term borrowing capacity from the FHLB and, to a limited
and rare extent, the sale of loans. At June 30, 2003, the Corporation's
borrowing capacity with the FHLB, net of funds borrowed, was $101.7 million.
Management is not aware of any conditions, including any regulatory
recommendations or requirements, which would adversely impact its liquidity or
its ability to meet funding needs in the ordinary course of business.
Item 3. Controls and Procedures
(a) The Corporation maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in the
Corporation's Exchange Act reports is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms,
and that such information is accumulated and communicated to the
Corporation's management, including its Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure based closely on the definition of "disclosure
controls and procedures" in Rule 13a-14(c).
As of the quarter ended June 30, 3003, the Corporation carried out an
evaluation, under the supervision and with the participation of the
Corporation's management, including the Corporation's Chief Executive
Officer and the Corporation's Chief Financial Officer, of the
effectiveness of the design and operation of the Corporation's disclosure
controls and procedures. Based on the foregoing, the Corporation's Chief
Executive Officer and Chief Financial Officer concluded that the
Corporation's disclosure controls and procedures were effective.
(b) There have been no significant changes in the Corporation's internal
controls or in other factors that could significantly affect the internal
controls subsequent to the date the Corporation completed its evaluation
17
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
--------------------------
The Corporation is involved in various legal proceedings occurring in the
ordinary course of business. It is the opinion of management, after consultation
with legal counsel, that these matters will not materially effect the
Corporation's consolidated financial position or results of operations.
Item 2. Changes in Securities
------------------------------
None.
Item 3. Defaults Upon Senior Securities
----------------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
(a) The annual meeting of stockholders of the Corporation was held April
29, 2003. Of 1,332,835 common shares eligible to vote, 1,065,477 or
79.9% were voted in person or by proxy.
(b) The following Class C directors were elected for a three year term
expiring in 2006:
Name Shares For Shares Withheld
---- ---------- ---------------
Ronald L. Ashbaugh 1,059,284 6,192
George W. Freeman 1,063,552 1,925
Brian C. McCarrier 1,037,141 28,336
In addition to the above listed individuals, the following persons
continue to serve as directors: David L. Cox, Bernadette H. Crooks,
Rodney C. Heeter, Robert L. Hunter, J. Michael King and John B. Mason.
(c) The recommendation of the Board of Directors to ratify the appointment
of Crowe Chizek and Company LLC as the Corporation's independent
auditors, as described in the proxy statement for the annual meeting,
was approved with 1,062,659 shares in favor, 556 shares against, and
2,262 shares abstained.
Item 5. Other Information
--------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
(a) Exhibits
Exhibit 31.1 Rule 13a-14(a) Certification of Chief Executive Officer
Exhibit 31.2 Rule 13a-14(a) Certification of Chief Financial Officer
Exhibit 32.1 CEO Certification Pursuant to 18 U.S.C. Section 1350
Exhibit 32.2 CFO Certification Pursuant to 18 U.S.C. Section 1350
(b) Reports on Form 8-K
The Corporation filed a Form 8-K dated April 17, 2003 to announce first
quarter 2003 earnings.
18
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.
EMCLAIRE FINANCIAL CORP.
Date: August 8, 2003 By: /s/ David L. Cox
--------------------------------------------
David L. Cox
Chairman of the Board,
President and Chief Executive Officer
Date: August 8, 2003 By: /s/ William C. Marsh
--------------------------------------------
William C. Marsh
Treasurer/Secretary
(Principal Financial and Accounting Officer)
19