ý
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30,
2007
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934 FOR THE TRANSITION PERIOD FROM ______ TO
______
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Indiana
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20-0857725
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(State
or other jurisdiction of
incorporation
or organization)
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(I.R.S.
Employer
Identification
Number)
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Page
No.
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3
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3
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4
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5
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6
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7
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9
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15
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15
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15
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15
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15
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16
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16
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16
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17
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E-1
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PART
I.
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FINANCIAL
INFORMATION
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Item
1.
|
Financial
Statements
|
As
of
|
As
of
|
|||||||
June
30, 2007
(Unaudited)
|
December
31, 2006
|
|||||||
Assets
|
(in
thousands)
|
|||||||
Cash
and due from
banks
|
$ |
520
|
$ |
620
|
||||
Interest-earning
demand
deposits
|
9,492
|
8,872
|
||||||
Cash
and cash
equivalents
|
10,012
|
9,492
|
||||||
Held
to maturity
securities
|
7,807
|
5,209
|
||||||
Loans,
net of allowance for
loan losses of $881 and $936
|
111,268
|
111,937
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||||||
Premises
and
equipment
|
4,265
|
4,328
|
||||||
Federal
Home Loan Bank
stock
|
1,255
|
1,255
|
||||||
Interest
receivable
|
655
|
643
|
||||||
Other
assets
|
658
|
639
|
||||||
Total
assets
|
$ |
135,920
|
$ |
133,503
|
||||
Liabilities
|
||||||||
Deposits
|
||||||||
Demand
|
$ |
10,272
|
$ |
9,590
|
||||
Savings,
NOW and money
market
|
41,878
|
40,085
|
||||||
Time
|
39,343
|
38,893
|
||||||
Total
deposits
|
91,493
|
88,568
|
||||||
Federal
Home Loan Bank
advances
|
24,600
|
24,600
|
||||||
Other
liabilities
|
613
|
585
|
||||||
Total
liabilities
|
116,706
|
113,753
|
||||||
Commitments
and Contingencies
|
|
|
||||||
Equity
Contributed by ESOP
|
383
|
324
|
||||||
Stockholders'
Equity
|
||||||||
Preferred
stock, without par
value, authorized and unissued
2,000,000
shares
|
|
|
||||||
Common
stock, without par
value
|
||||||||
Authorized -
20,000,000 shares
|
||||||||
Issued
and outstanding –
1,596,896 and 1,653,125 shares
|
13,096
|
13,685
|
||||||
Retained
earnings
|
5,735
|
5,741
|
||||||
Total
stockholders'
equity
|
18,831
|
19,426
|
||||||
Total
liabilities and
stockholders’ equity
|
$ |
135,920
|
$ |
133,503
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
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|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(dollars
in thousands, except share and per share amounts)
|
||||||||||||||||
Interest
Income
|
||||||||||||||||
Loans
receivable
|
$ |
1,905
|
$ |
1,814
|
$ |
3,796
|
$ |
3,496
|
||||||||
Investment
securities
|
84
|
79
|
142
|
171
|
||||||||||||
Federal
Home Loan Bank stock
|
18
|
13
|
31
|
27
|
||||||||||||
Interest-earning
deposits
|
129
|
33
|
221
|
80
|
||||||||||||
Total
interest income
|
2,136
|
1,939
|
4,190
|
3,774
|
||||||||||||
Interest
expense
|
||||||||||||||||
Deposits
|
687
|
519
|
1,341
|
999
|
||||||||||||
Federal
Home Loan Bank advances
|
287
|
224
|
571
|
384
|
||||||||||||
Total
interest expense
|
974
|
743
|
1,912
|
1,383
|
||||||||||||
Net
interest income
|
1,162
|
1,196
|
2,278
|
2,391
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||||||||||||
Provision
for loan losses
|
15
|
15
|
30
|
30
|
||||||||||||
Net
interest income after provision for loan losses
|
1,147
|
1,181
|
2,248
|
2,361
|
||||||||||||
Other
income
|
||||||||||||||||
Service
charges on deposit accounts
|
67
|
71
|
133
|
145
|
||||||||||||
Other
service charges and fees
|
84
|
87
|
151
|
157
|
||||||||||||
Net
gains on loan sales
|
24
|
26
|
37
|
45
|
||||||||||||
Other
income
|
57
|
69
|
102
|
127
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||||||||||||
Total
other income
|
232
|
253
|
423
|
474
|
||||||||||||
Other
expenses
|
||||||||||||||||
Salaries
and employee benefits
|
706
|
732
|
1,426
|
1,465
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||||||||||||
Net
occupancy and equipment expenses
|
138
|
128
|
280
|
238
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||||||||||||
Data
processing fees
|
100
|
105
|
203
|
210
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||||||||||||
Professional
Services
|
52
|
27
|
90
|
53
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||||||||||||
ATM
Expense
|
35
|
30
|
69
|
59
|
||||||||||||
Other
expenses
|
211
|
181
|
387
|
345
|
||||||||||||
Total
other expenses
|
1,242
|
1,203
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2,455
|
2,370
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||||||||||||
Income
before income tax
|
137
|
231
|
216
|
465
|
||||||||||||
Income
tax expense
|
64
|
93
|
103
|
184
|
||||||||||||
Net
income
|
$ |
73
|
$ |
138
|
$ |
113
|
$ |
281
|
||||||||
Weighted
average common shares - basic
|
1,457
|
1,475
|
1,469
|
1,473
|
||||||||||||
Weighted
average common shares- diluted
|
1,463
|
1,475
|
1,475
|
1,473
|
||||||||||||
Earnings
per share - basic
|
$ |
0.05
|
$ |
0.09
|
$ |
0.08
|
$ |
0.19
|
||||||||
Earnings
per share - diluted
|
$ |
0.05
|
$ |
0.09
|
$ |
0.08
|
$ |
0.19
|
||||||||
Dividends
declared per share
|
$ |
0.04
|
$ |
0.04
|
$ |
0.08
|
$ |
0.08
|
||||||||
Return
of capital declared per share
|
--
|
--
|
--
|
$ |
2.00
|
Common
Stock
|
||||||||||||||||
Shares
|
Retained
|
|||||||||||||||
Outstanding
|
Amount
|
Earnings
|
Total
|
|||||||||||||
Balances,
January 1, 2007
|
1,653,125
|
$ |
13,685
|
$ |
5,741
|
$ |
19,426
|
|||||||||
Net
and comprehensive income
|
–
|
–
|
113
|
113
|
||||||||||||
Repurchase
of stock
|
(61,684 | ) | (729 | ) |
–
|
(729 | ) | |||||||||
Exercised
options
|
5,455
|
60
|
–
|
60
|
||||||||||||
RRP
Shares Earned
|
–
|
80
|
–
|
80
|
||||||||||||
Dividends
paid ($0.08 per share outstanding)
|
–
|
–
|
(119 | ) | (119 | ) | ||||||||||
Balances, June
30, 2007
|
1,596,896
|
$ |
13,096
|
$ |
5,735
|
$ |
18,831
|
Six
Months Ended June 30,
|
||||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Operating
Activities
|
||||||||
Net
income
|
$ |
113
|
$ |
281
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||||||
Provision
for loan losses
|
30
|
30
|
||||||
Depreciation
|
106
|
92
|
||||||
Investment
securities (accretion) amortization, net
|
(47 | ) | (8 | ) | ||||
Amortization
of mortgage servicing rights
|
24
|
20
|
||||||
Gain
on sale of loans
|
(37 | ) | (45 | ) | ||||
Loans
originated for sale in the secondary market
|
(1,754 | ) | (2,453 | ) | ||||
Proceeds
from sale of loans in the secondary market
|
1,791
|
2,498
|
||||||
RRP
compensation expense
|
80
|
79
|
||||||
ESOP
compensation expense
|
60
|
64
|
||||||
Net
change in
|
||||||||
Interest
receivable
|
(13 | ) | (11 | ) | ||||
Other
assets
|
(18 | ) |
6
|
|||||
Other
liabilities
|
27
|
(21 | ) | |||||
Net
cash provided by operating activities
|
362
|
532
|
||||||
Investing
Activities
|
||||||||
Purchases
of securities held to maturity
|
(5,204 | ) | (1,400 | ) | ||||
Proceeds
from maturities of securities held to maturity
|
2,653
|
4,019
|
||||||
Proceeds
from maturities of interest-bearing time deposits
|
–
|
200
|
||||||
Purchases
of FHLB stock
|
–
|
(164 | ) | |||||
Net
changes in loans
|
614
|
(5,820 | ) | |||||
Purchases
of premises and equipment
|
(43 | ) | (923 | ) | ||||
Net
cash used by investing activities
|
(1,980 | ) | (4,088 | ) | ||||
Financing
Activities
|
||||||||
Net
change in
|
||||||||
Demand
and savings deposits
|
2,476
|
(1,830 | ) | |||||
Certificate
of deposits
|
450
|
(709 | ) | |||||
Cash
dividend on common stock
|
(119 | ) | (125 | ) | ||||
Return
of capital dividend on common stock
|
–
|
(3,306 | ) | |||||
Repurchase
shares of common stock
|
(729 | ) |
–
|
|||||
Exercised
stock options
|
60
|
–
|
||||||
Proceeds
from FHLB advances
|
–
|
9,600
|
||||||
Payments
on FHLB advances
|
–
|
(2,000 | ) | |||||
Net
cash provided by financing activities
|
2,138
|
1,630
|
||||||
Net
Change in Cash and Equivalents
|
520
|
(1,926 | ) | |||||
Cash
and Cash Equivalents, Beginning of Period
|
9,492
|
7,853
|
||||||
Cash
and Cash Equivalents, End of Period
|
$ |
10,012
|
$ |
5,927
|
||||
Additional
Cash Flows Information
|
||||||||
Interest
paid
|
$ |
1,914
|
$ |
1,355
|
||||
Income
tax paid (net of refunds)
|
$ |
102
|
$ |
210
|
||||
See
notes to consolidated condensed financial statements.
|
Three
Months
Ended
June
30,
|
Three
Months
Ended
June
30,
|
Six
Months
Ended
June
30,
|
Six
Months
Ended
June
30,
|
|||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Basic:
|
||||||||||||||||
Net
income
|
$ |
73
|
$ |
138
|
$ |
113
|
$ |
281
|
||||||||
Weighted
average common shares outstanding
|
1,457
|
1,475
|
1,469
|
1,473
|
||||||||||||
Basic
earnings per common share
|
$ |
0.05
|
$ |
0.09
|
$ |
0.08
|
$ |
0.19
|
||||||||
Diluted:
|
||||||||||||||||
Net
income
|
$ |
73
|
$ |
138
|
$ |
113
|
$ |
281
|
||||||||
Weighted
average common shares outstanding
|
1,457
|
1,475
|
1,469
|
1,473
|
||||||||||||
Add: Dilutive
effects of assumed exercises of stock options
|
6
|
–
|
6
|
–
|
||||||||||||
Average
shares and dilutive potential common shares
|
1,463
|
1,475
|
1,475
|
1,473
|
||||||||||||
Diluted
earnings per common share
|
$ |
0.05
|
$ |
0.09
|
$ |
0.08
|
$ |
0.19
|
Item
2.
|
Management’s
Discussion and Analysis or Plan of
Operation
|
Item
3.
|
Controls
and Procedures
|
PART
II.
|
OTHER
INFORMATION
|
Item
1.
|
Legal
Proceedings
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
Month
of
Purchase
|
Total
Shares
Purchased
|
Weighted
Average
Price
Per
Share
|
Total
Number of
Shares
Purchased As
Part
Of A Publicly
Announced
Plan
|
Maximum
Number
of
Shares That May
Yet
Be Purchased
Under
The Plan
|
||||||||||||
April
|
17,650
|
$
|
12.02
|
42,932
|
39,724
|
|||||||||||
May
|
2,016
|
$
|
11.66
|
44,948
|
37,708
|
|||||||||||
June
|
16,736
|
$
|
11.76
|
61,684
|
20,972
|
|||||||||||
Total
|
36,402
|
$
|
11.88
|
61,684
|
20,972
|
Item
3.
|
Defaults
Upon Senior Securities
|
Item
4.
|
Submission
of Matters to a Vote of Security
Holders
|
|
a)
|
Election
of Directors. The following persons were elected as members
of the Board of Directors, for the terms set forth
below:
|
Term
Expires
|
Votes
For
|
Votes
Withheld
|
|
Robert
D. Heuchan
|
2009
|
1,232,412
|
183,588
|
|
b)
|
That
by a vote of 1,415,670 votes (99.97%) in favor, 300 votes (.02%)
withheld,
30 votes abstained (.01%), the following resolution was adopted by
the
Company's shareholders:
|
Item
5.
|
Other
Information
|
Item
6.
|
Exhibits
|
THIRD
CENTURY BANCORP
|
|||
Date: August
10, 2007
|
By:
|
/s/
Robert D. Heuchan
|
|
Robert
D. Heuchan
President
and Chief Executive Officer
|
|||
By:
|
/s/
Debra K. Harlow
|
||
Debra
K. Harlow
Chief
Financial Officer
|
|||
Exhibit
No.
|
Description
|
|
Rule
13a-14(a) Certification of Robert D. Heuchan, President and Chief
Executive Officer
|
||
Rule
13a-14(a) Certification of Debra K. Harlow, Vice President and Chief
Financial Officer
|
||
Section
1350 Certification of Robert D. Heuchan
|
||
Section
1350 Certification of Debra K. Harlow
|