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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001
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OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934
For the transition period from to
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Commission file Number: 000-18464
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EMCLAIRE FINANCIAL CORP.
(Exact Name of small business issuer as specified in its charter)
PENNSYLVANIA 25-1606091
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
612 Main Street
Emlenton, PA 16373
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (724) 867-2311
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 No X
--- ---
As of August 9, 2001, there were 1,332,835 shares outstanding of the issuer's
common stock, par value $1.25 per share.
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Emclaire Financial Corp.
INDEX TO QUARTERLY REPORT OF FORM 10-QSB
Part I Financial Information Page
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Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheet, June 30, 2001 and
December 31, 2000 3
Consolidated Statement of Income Three and
Six months ended June 30, 2001 and 2000 4
Consolidated Statement of Changes in
Stockholders' Equity 5
Consolidated Statement of Cash Flows
Six months ended June 30, 2001 and 2000 6
Notes to Consolidated Financial Statements 7 - 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 14
Part II Other Information
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Securities Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15-16
Signatures 17
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EMCLAIRE FINANCIAL CORP.
CONSOLIDATED BALANCE SHEET
(Unaudited - dollars in thousands)
June 30, December 31,
2001 2000
--------- ------------
ASSETS
Cash and due from banks $ 6,396 $ 6,770
Federal funds sold 7,960 1,740
Investment securities
Available for sale 26,882 26,469
Held to maturity (estimated market value
of $216 and $213) 216 219
Loans 153,851 151,792
Less allowance for loan losses 1,464 1,460
--------- ---------
Net loans 152,387 150,332
Premises and equipment 3,213 3,333
Accrued interest and other assets 5,085 5,302
--------- ---------
TOTAL ASSETS $ 202,139 $ 194,165
========= =========
LIABILITIES
Deposits
Noninterest bearing demand $ 28,621 $ 27,302
Interest bearing demand 20,750 21,692
Savings 21,196 21,189
Money market 27,334 19,472
Time 82,659 81,470
--------- ---------
Total deposits 180,560 171,125
Borrowed funds -- 2,000
Accrued interest and other liabilities 966 995
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TOTAL LIABILITIES 181,526 174,120
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STOCKHOLDERS' EQUITY
Preferred stock, par value $1.00; 3,000,000 shares authorized;
none issued -- --
Common stock, par value $1.25; 12,000,000 shares authorized;
1,395,852 shares issued 1,745 1,745
Additional paid-in capital 10,871 10,871
Retained earnings 8,679 8,320
Accumulated other comprehensive income 289 80
Treasury stock at cost (63,017 shares) (971) (971)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 20,613 20,045
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 202,139 $ 194,165
========= =========
See accompanying notes to the consolidated financial statements.
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EMCLAIRE FINANCIAL CORP.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited - dollars in thousands, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
----------------------------- -----------------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
INTEREST INCOME
Loans, including fees $ 3,150 $ 3,097 $ 6,324 $ 6,016
Interest bearing deposits in other banks 1 3 2 7
Federal funds sold 88 3 170 11
Investment securities:
Taxable 325 411 634 871
Exempt from federal income tax 92 83 174 167
---------- ---------- ---------- ----------
Total interest income 3,656 3,597 7,304 7,072
---------- ---------- ---------- ----------
INTEREST EXPENSE
Deposits 1,571 1,375 3,132 2,702
Borrowed funds 3 54 32 94
---------- ---------- ---------- ----------
Total interest expense 1,574 1,429 3,164 2,796
---------- ---------- ---------- ----------
NET INTEREST INCOME 2,082 2,168 4,140 4,276
Provision for loan losses 36 51 82 97
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,046 2,117 4,058 4,179
---------- ---------- ---------- ----------
OTHER OPERATING INCOME
Service fees on deposit accounts 247 223 460 366
Other 97 75 193 135
---------- ---------- ---------- ----------
Total other operating income 344 298 653 501
---------- ---------- ---------- ----------
OTHER OPERATING EXPENSE
Salaries and employee benefits 935 867 1,863 1,753
Occupancy, furniture and equipment 268 268 551 512
Other 590 621 1,142 1,202
---------- ---------- ---------- ----------
Total other operating expense 1,793 1,756 3,556 3,467
---------- ---------- ---------- ----------
Income before income taxes 597 659 1,155 1,213
Income taxes 176 199 343 362
---------- ---------- ---------- ----------
NET INCOME $ 421 $ 460 $ 812 $ 851
========== ========== ========== ==========
EARNINGS PER SHARE $ 0.32 $ 0.34 $ 0.61 $ 0.63
DIVIDENDS PER SHARE 0.17 0.15 0.34 0.30
AVERAGE SHARES OUTSTANDING 1,332,835 1,348,245 1,332,835 1,356,662
See accompanying notes to the consolidated financial statements.
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EMCLAIRE FINANCIAL CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited - dollars in thousands)
Six Months Ended June 30,
--------------------------
2001 2000
-------- --------
OPERATING ACTIVITIES
Net income $ 812 $ 851
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 435 452
Net amortization of investment security
discounts and premiums 1 29
Provision for loan losses 82 97
Decrease (increase) in accrued interest receivable 81 (9)
Increase (decrease) in accrued interest payable (25) 38
Other, net (130) 24
-------- --------
Net cash provided by operating activities 1,256 1,482
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INVESTING ACTIVITIES
Proceeds from maturities and repayments of investment securities:
Available for sale 3,951 4,491
Held to maturity 3 1,502
Purchases of investment securities:
Available for sale (4,049) (319)
Net loan originations (2,228) (10,704)
Purchases of premises and equipment (92) (98)
Proceeds from sales of premises and equipment 2 --
Proceeds from sale of foreclosed assets 21 61
-------- --------
Net cash used for investing activities (2,392) (5,067)
-------- --------
FINANCING ACTIVITIES
Net increase in deposits 9,435 943
Increase (decrease) in short-term borrowings (2,000) 2,170
Acquisition of treasury stock -- (486)
Cash dividends paid, including fractional shares (453) (406)
-------- --------
Net cash provided by provided by financing activities 6,982 2,221
-------- --------
Increase (decrease) in cash and cash equivalents 5,846 (1,364)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 8,510 8,595
-------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 14,356 $ 7,231
======== ========
See accompanying notes to the consolidated financial statements.
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EMCLAIRE FINANCIAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
The accounting and financial reporting polices of Emclaire Financial Corp. and
its wholly-owned subsidiary The Farmers National Bank of Emlenton ("Bank" or
"Farmers"), conform to accounting principles generally accepted in the United
States of America and to general practice within the banking industry. In the
opinion of management, the accompanying unaudited consolidated financial
statements of Emclaire Financial Corp. ("Company" or "Emclaire") contain all
adjustments, consisting of only normal and recurring adjustments, necessary for
the fair presentation of the Company's financial position, results of operations
and cash flows for the periods presented. The results of operations for the
interim periods are not necessarily indicative of the results to be expected for
the full year.
2. EARNINGS PER SHARE
The Company maintains a simple capital structure; therefore there are no
dilutive effects on earnings per share. As such earnings per share computations
are based on the weighted average number of shares outstanding of 1,332,835,
1,348,245, and 1,332,835, 1,356,662, for the three and six month periods in 2001
and 2000, respectively.
3. RECLASSIFICATION
Common stocks of the Federal Home Loan Bank and the Federal Reserve Bank have
been classified as other assets to conform to the current period presentation.
In prior periods these items had been presented as investment securities
available for sale.
4. COMPREHENSIVE INCOME
The components of comprehensive income consist exclusively of unrealized gains
and losses on securities available for sale. For the six months ended June 30,
2001, this activity is shown under the heading Accumulated Other Comprehensive
Income as presented in the Consolidated Statement of Changes in Stockholders'
Equity. For the six months ended June 30, 2000, comprehensive net income totaled
$377,000. For the three months ended June 30, 2001 and 2000, comprehensive
income totaled $414,000 and $514,000, respectively.
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5. LOANS
Major classifications of loans are summarized as follows (in thousands):
June 30, December 31,
2001 2000
-------- ------------
Commercial, industrial and other $ 20,923 $ 20,084
Real estate mortgages
Residential 93,986 92,429
Commercial and other 24,561 24,661
Consumer 14,381 14,618
-------- --------
153,851 151,792
Less allowance for loan losses 1,464 1,460
-------- --------
$152,387 $150,332
======== ========
The Bank's primary business activity is with customers located within Venango,
Clarion, Butler, Elk, Clearfield and Jefferson Counties. Commercial,
residential, personal, and agricultural loans are granted. Although the Bank has
a diversified loan portfolio at June 30, 2001 and December 31, 2000, loans
outstanding to individuals and businesses are dependent upon the local economic
conditions within the immediate trade area.
NOTE 6 - RECENT ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 141, Business Combinations, effective for
all business combinations initiated after June 30, 2001, as well as all business
combinations accounted for by the purchase method that are completed after June
30, 2001. The new statement requires that the purchase method of accounting be
used for all business combinations and prohibits the use of the
pooling-of-interests method. The adoption of Statement No. 141 is not expected
to have a material affect on the Company's financial position or results of
operations.
In July 2001, the FASB issued Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets, effective for fiscal years beginning
after December 15, 2001. The new statement changes the accounting for goodwill
from an amortization method to an impairment-only approach. Thus, amortization
of goodwill, including goodwill recorded in past business combinations, will
cease upon adoption of this Statement. At June 30, 2001, the Company had
approximately $1,487,000 of identified goodwill from business combinations and
branch acquisitions that is currently being amortized on a straight-line basis
of $135,000 per year over 13 years. Management is currently reviewing the effect
this Statement will have on the Company's financial position and results of
operations.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Emclaire Financial Corp. ("Emclaire" or the "Company") is the parent holding
company for the Farmers National Bank of Emlenton ("Farmers" or the "Bank"). The
following discussion and analysis is intended to provide information about the
financial condition and results of operation of the Company and should be read
in conjunction with the consolidated financial statements and the related notes
thereto appearing elsewhere in this quarterly report.
Certain information presented in this report and other statements concerning
future performance, developments or events, and expectations for growth and
market forecasts constitute forward-looking statements which are subject to a
number of risks and uncertainties, including interest rate fluctuations, changes
in local or national economic conditions, and government and regulatory actions
which might cause actual results to differ materially from stated expectations
or estimates. The Company 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.
Comparison of the Three Months Ended June 30, 2001 and 2000
Net Income - Net income for the three months ended June 30, 2001 totaled
$421,000 or $.32 per share, as compared to $460,000 or $.34 per share during the
same period in 2000. The 2001 quarterly earnings represented a decrease of
$39,000 or 8% from the same period in 2000. A decline in net interest income of
$86,000 combined with an increase in operating costs, which rose $37,000, was
offset by improved fee income of $46,000, resulted in the net earnings decrease.
On a per share basis, net income declined 6% to $.32 due to the reduced net
earnings for the period.
The net income reported resulted in annualized returns on average assets and
average equity of .85% and 8.25% for the quarter ended June 30, 2001, as
compared to returns of .95% and 8.96% for the same period in 2000.
Net Interest Income - Tax-equivalent net interest income decreased $89,000 or 4%
during the second quarter of 2001 as compared to the same period in 2000. The
increase in the volume and rate paid on interest bearing liabilities,
particularly certificates of deposit caused interest expense to increase
$145,000 or 10% during the second quarter of 2001 as compared to the same period
in 2000, as the average cost of funds increased 21 basis points to 4.20%. The
increased interest cost exceeded the $56,000 or 2% increase in tax equivalent
interest income. Tax equivalent interest income on loans increased $46,000 due
largely to the $4.1 million increase in average loan volume, as the average
balance on loans totaled $152.6 million for the second quarter of 2001. Deposit
growth and maturities of investment securities funded this growth in loan
volume. Investment maturities caused tax equivalent investment interest income
to fall $73,000 or 14%. Additional liquidity provided by the growth in deposits
caused the average volume of federal funds to rise $7.8 million, increasing
interest income on federal funds from $85,000 to $88,000. The net tax-equivalent
yield on earning assets for the quarter was 4.53%, a 37 basis point decline from
the 4.90% yield earned during the same period in 2000.
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Average earning assets totaled $188.9 million for the second quarter of 2001
representing 94.0% of total average assets. For the same period in 2000, average
earning assets totaled $182.4 million or 93.4% of total average assets.
Tax equivalent interest income rose $56,000 or 1.5% during the second quarter of
2001, as compared to the same period in 2000, due to the increased loan volume
that was offset by slightly lower interest rates. The tax-equivalent yield on
the loan portfolio for the second quarter of 2001 declined 13 basis points to
8.29%, as compared to the same quarter of 2000. This decrease was due to the
trend of rising interest rates during the first half of 2000. This trend ended
in 2001 as the Federal Reserve Board has adopted a policy of aggressive interest
rate reduction, lowering the federal funds rate 270 basis points since the
beginning of 2001. It is reasonable to expect this trend to continue for at
least the short-term. This shift in interest rates is expected to have an
adverse impact on the yield on earning assets in relation to prior comparative
periods during the remainder of 2001.
Interest expense increased $145,000 or 10.1% to $1.57 million during the second
quarter of 2001, as compared to the same period in 2000. Increased rates
accounted for $55,000 of the increase as the cost of these funds rose to 4.20%.
The remainder of the increase resulted from an increase in the volume of average
interest-bearing liabilities, which rose $6.1 million to $150.3 million due
largely to the increase in time certificates of deposit as deposits were
attracted during 2000 through the use of promotional certificates of deposits.
The impact of these fixed rate certificates of deposit will remain, in varying
degrees, for the next four quarters. During the first quarter of 2001 a premium
money market deposit account was introduced, offering a market based interest
rate on balances over a specified amount. This product will allow for the
downward adjustment of interest rates during periods of declining interest
rates.
Provision for Loan Losses - Based upon management's ongoing assessment of the
quality of the loan portfolio, the provision for loan losses for the second
quarter of 2001 totaled $36,000 as compared to $51,000 during the same period
ended in 2000.
Other operating income - Other operating income increased $46,000 or 15% for the
second quarter of 2001, due to an increase of approximately $24,000 in overdraft
and service fees due to the restructuring of service charges in the second half
of 2000. In addition, ATM convenience fees and fees generated from the
MasterMoney(TM) debit card increased due to increased customer usage. Combined,
these fees accounted for $35,000 of the total increase in other operating
income. The cumulative effect of increases in other fees, commissions on
accident health and life insurance and other income accounted for the remainder
of the increase.
Other Operating Expense - Total other operating expense for the second quarter
of 2001 increased $37,000 or 2.1% as compared to the same period in 2000.
Increases in employee costs offset a decrease in other operating expense.
Due to the impact of normal, recurring annual salary adjustments, and several
staff additions, salaries and employee benefits increased $68,000 or 8% for the
second quarter of 2001 as compared to the same period in 2000. For the remainder
of 2001 in
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comparison to 2000 the increase in salaries and benefits is expected to rise due
to the Company converting its health care coverage to a health maintenance
organization during the second quarter of 2000.
Other operating expense totaled $590,000 for the second quarter of 2001, a
decrease of $31,000 or 5%, as compared to the same period of 2000. Intangible
asset amortization declined $11,000 in the comparative quarters due to the
revaluation of intangible assets during the fourth quarter of 2000 and the
resulting reduction in monthly amortization. Combined with this reduction were
savings of $6,000 related to customer check losses incurred in 2000 that were
not repeated in the current quarter.
Income Taxes - Applicable income taxes for the second quarter of 2001 totaled
$176,000 and represented 29.5% of pre-tax earnings. This comparable to the
$199,000 recorded during the same period in 2000.
Comparison of the Six Months Ended June 30, 2001 and 2000
Net Income - Net income for the six months ended June 30, 2001 totaled $812,000,
a decrease of $39,000 or 5% as compared to the first six months of 2000. On a
per share basis earnings were $.61 per share, a 3% decrease from the $.63
reported in 2000. A decline in net interest income of $136,000 combined with an
increase in operating costs of $89,000, was offset by improved fee income of
$152,000, resulting in the net earnings decrease.
Net Interest Income - Net interest income on a tax equivalent basis decreased
$145,000 or 3% for the comparative six-month periods due to the increase in time
deposits volume as discussed in the quarterly earnings section of this report.
For the six months ended June 30, 2001 average time deposits volume was $82.8
million, an increase of $9.3 million or 13% from 2000. During the same period
the volume of interest-earning assets rose $6.1 million or 3% to $187.0 million.
As discussed earlier, increases in time certificates of deposit were attracted
during 2000 through the use of promotional certificates. The net tax equivalent
yield for the first six months of 2001 was 4.58% as compared to 4.88% for the
same period in 2000.
Other operating income - As previously discussed, increases resulted from the
restructuring of service charges in the second half of 2000 and fees generated
from increased customer usage of ATM's and the MasterMoney(TM) debit card. For
the first half of 2001, other operating income rose $152,000 or 30% to $344,000.
Other Operating Expense - Other operating expense for the first half of 2001
totaled $3.6 million, an increase of $89,000 or 3%. The added salaries and
related payroll taxes discussed earlier accounted for $110,000 of the increase.
Offsetting this increase was a decrease in intangible asset amortization of
$24,000 and a savings of $23,000 related to customer check losses incurred in
2000 that were not repeated in the current six-month period.
Financial Condition
At June 30, 2001 consolidated assets totaled $202.1 million an increase of $8.0
million or 4% from December 31, 2000. Deposits increased $9.4 million or 5%
during the first
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half of 2001. This increase, which is similar to that experienced throughout the
industry, increased liquidity as federal funds sold rose
$6.2 million.
The increase in deposits was largely due to the addition of a tiered rate money
market account product introduced in February 2001. This account is designed to
provide depositors a return on their funds at a level approximating that
available from money market accounts offered by brokerages, plus the benefit of
applicable federal deposit insurance. During the first half of 2001 money market
deposits increased $7.9 million or 40% while certificates of deposit rose $1.2
million or 1.5% respectively. These increases more than offset the decline in
NOW accounts of $942,000 or 4% during the first half of the year. A portion of
the decline is due to funds migrating from NOW to the new money market account
product.
Total loans increased $2.1 million to $153.9 million, primarily resulting from
an increase of $1.5 million in other real estate loans and $839,000 in
commercial loans from December 31, 2000. Management attributes the increases in
other real estate loans and commercial loans to a lower interest rate
environment, continued customer referrals and the Company's overall relationship
with its customers.
Retained net earnings of $359,000 combined with a net increase in the
accumulated other comprehensive income resulted in a net increase in
stockholders' equity of $568,000 or 3% during the first half of 2001.
Liquidity
Cash and cash equivalents increased $5.8 million during the first half of 2001
and totaled $14.4 million at June 30, 2001. During the same period in 2000 cash
and cash equivalents declined $1.4 million to $7.2 million.
Operating activities consisting principally of net income, depreciation and
amortization provided $1,256,000 during the first half of 2001 as compared to
$1,482,000 during the same period of 2000. This resulted primarily from a
reduction in net income and intangible asset amortization as previously
discussed.
Investing activities consist primarily of loan originations and repayments, and
investment purchases and maturities. Investing activities during 2001 resulted
in a net use of $2.4 million. Investment purchases and loan originations of $4.0
million and $2.2 million, respectively, were offset somewhat by investment
repayment and maturities of $4.0 million. During the same period in 2000,
investing activities used $5.1 million due largely to $10.7 million in net loan
orginations that was offset by $6.0 million in investment repayment and
maturities.
Financing activities for the first six months of 2001 provided approximately
$7.0 million, due principally to net increase in deposits of $9.4 million that
was offset by repayment of a $2.0 million Federal Home Loan Bank borrowing
originally taken in 1997 and dividend payments of $453,000. During the same
period of 2000, financing activities provided $2.2 million due to principally to
an increase in short-term borrowings of $2.2 million and an increase in net
deposits of $1.0 million that was offset by the use of $486,000 for the
repurchase of common stock and $406,000 for dividend payments.
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Aside from liquidity available from customer deposits or through sales and
maturities of the investment portfolio, the Company has alternative sources of
funds such as a line of credit available from the Federal Home Loan Bank. At
June 30, 2001, this short-term revolving credit facility totaling $10 million
was available.
Management is not aware of any conditions, including any regulatory
recommendations or requirements, which would adversely affect its liquidity or
its ability to meet funding needs in the ordinary course of business.
Risk Elements
At June 30, 2001, non-performing loans, including those past due ninety days or
more, and loans on non-accrual status totaled approximately $1,154,000.
Of the non-performing loan total, $490,000 is considered to be impaired for
financial reporting purposes. These impaired loans consist of four commercial
loans to a single borrower, secured by real estate. The borrower continues
operating under Chapter 11 bankruptcy protection. As part of management's
ongoing assessment of the loan portfolio, $40,000 of the allowance for loan
losses at June 30, 2001, has been allocated for these loans. During April 2001,
a previous loan to this borrower totaling $50,000 was repaid in full, including
non-accrual interest of $16,000. During the first half of 2001, the borrower
made payments on the remaining loans totaling $29,000, of which $15,000 was
recorded against principal and $14,000 was recorded as interest income.
Management believes the underlying collateral, supporting the remaining loans,
adequately secures the Company.
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The following table presents the components of non-performing loans and other
non-performing assets as of the five most recent quarters ended:
2001 2000
---------------------- ------------------------------------------------------
June 30, March 31, December 31, September 30, June 30, March 31,
-------- --------- ------------ ------------- -------- ---------
Non-performing loans
Loans past due 90 days or more $ 172 $ 215 $ 158 $ 159 $ 115 $ 84
Non-accrual loans 982 698 742 909 656 609
------ ------ ------ ------ ------ ------
Total non-performing loans 1,154 913 900 1,068 771 693
Other non-performing assets:
Real estate acquired through
foreclosure 62 65 33 40 45 113
------ ------ ------ ------ ------ ------
Total other non-performing assets 62 65 33 40 45 113
------ ------ ------ ------ ------ ------
Total non-performing assets $1,216 $ 978 $ 933 $1,108 $ 816 $ 806
====== ====== ====== ====== ====== ======
Non-performing loans as a percentage
of total loans .75% .60% .59% .70% .51% .47%
Non-performing assets to assets .60 .49 .48 .56 .42 .41
At June 30, 2001, based on the ongoing quarterly review and assessment of credit
quality, management is not aware of any trends or uncertainties related to any
accounts which might have a material adverse impact on future earnings,
liquidity or capital resources. Based on the results of the quarterly internal
loan review process, and considering the trend of past loan losses and
recoveries, and current risk elements in the loan portfolio, management believes
the allowance for loan losses at June 30, 2001 is adequate.
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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
(a) The annual meeting of stockholders was held May 16, 2000. Of 1,332,835
shares eligible to vote, 1,120,628 or 84.1% were voted in person or by
proxy.
(b) The following Class C directors were elected to a three year term
expiring in 2003:
NAME SHARES FOR SHARES WITHHELD BROKER NO VOTES
---- ---------- --------------- ---------------
Rodney C. Heeter 1,049,734 70,894 100
J. Michael King 1,027,042 93,586 100
David L. Cox 1,119,380 1,248 100
In addition, to the above listed individuals, the following persons continue to
serve as directors:
Ronald L. Ashbaugh Robert L. Hunter
Bernadette H. Crooks Brian C. McCarrier
George W. Freeman John B. Mason
Elizabeth C. Smith
(c) The recommendation of the Board of Directors to ratify the appointment of
S. R. Snodgrass, A.C. as the Company's independent auditors, as described
in the Proxy Statement for the Annual Meeting, was approved with 1,116,268
shares in favor, and 4,360 shares against, and 100 shares abstaining.
Item 5. Other Information
On August 6, 2001, the Company hired William Marsh as the new
Chief Financial Officer.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(None)
(b) Reports on Form 8-K
On June 5, 2001, a Form 8-K (Item 5) was filed with the Securities and
Exchange Commission to disclose the resignation of the Company's
Secretary/Treasurer and Principal Accounting Officer.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Emclaire Financial Corp.
(Registrant)
Date: August 10, 2001 By: /s/ David L. Cox
--------------- -----------------------
David L. Cox
President and CEO
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