-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KXqIvRpctLXiABxBlulU/I4y8xlyr9MNoUltmNkUJwTj9jbhZ0bxSSFfBn0t0dgv JVz6veZNdkfYruGfRR9URA== 0000950109-97-006951.txt : 19971117 0000950109-97-006951.hdr.sgml : 19971117 ACCESSION NUMBER: 0000950109-97-006951 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST SAVINGS BANCORP INC CENTRAL INDEX KEY: 0000912836 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 560408240 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-27098 FILM NUMBER: 97718512 BUSINESS ADDRESS: STREET 1: P O BOX 1657 CITY: SOUTHERN PINES STATE: NC ZIP: 28388 BUSINESS PHONE: 9106926222 MAIL ADDRESS: STREET 1: P O BOX 1657 CITY: SOUTHERN PINES STATE: NC ZIP: 28388 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC ------ FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended September 30, 1997 Commission File Number 0-27098 FIRST SAVINGS BANCORP, INC. (Exact name of registrant as specified in its charter) North Carolina 56-1842701 -------------- ---------- (State of jurisdiction of (I.R.S. Employer incorporation or organization) Identification number) 205 SE Broad Street, Southern Pines, North Carolina 28387 - --------------------------------------------------- ----- (Address of principal executive offices) (Zip Code) (910) 692-6222 -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_] As of November 10, 1997 there were 3,696,913 shares of the issuer's common stock issued and outstanding. FIRST SAVINGS BANCORP, INC. TABLE OF CONTENTS
PART I FINANCIAL INFORMATION Page Number --------------------- Item 1. Financial Statements Consolidated Statements of Financial Condition 3 Consolidated Statements of Income 4 Consolidated Statements of Cash Flow 5 Notes to Consolidate Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-9 PART II OTHER INFORMATION ----------------- Item 5. Other Information 9 SIGNATURES 10
FIRST SAVINGS BANCORP, INC. - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)
September 30, June 30, ------------------------------------ 1997 1997 ------------------------------------ ($ in thousands) ASSETS Cash and due from banks $ 2,791 $ 2,801 Interest bearing deposits with banks 6,995 6,301 Securities at market value 78,853 82,187 Securities at amortized cost (market values - $6,453 at September 30, 1997; $6,672 at June 30, 1997) 6,394 6,572 Loans receivable (net of allowance for loan losses of $604 at September 30, and June 30, 1997) 196,288 192,238 Premises and equipment 1,973 1,968 Accrued interest receivable 1,555 1,836 Prepaid expenses and other assets 466 314 ------------------------------------ TOTAL $ 295,315 $ 294,217 ==================================== LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES: Deposits 206,438 204,317 Borrowed funds 18,000 20,000 Accrued expenses and other liabilities 2,928 2,705 ------------------------------------ Total liabilities 227,366 227,022 ------------------------------------ SHAREHOLDERS' EQUITY: Preferred stock, no par value, 5,000,000 shares, authorized, none issued and outstanding Common stock, no par value, 20,000,000 shares authorized, 3,686,510 shares issued and outstanding at September 30, 1997; 3,679,185 at June 30, 1997 35,344 35,237 Unearned compensation related to ESOP note payable (261) (293) Net unrealized gain on securities available for sale 425 281 Retained earnings 32,441 31,970 ------------------------------------ Total shareholders' equity 67,949 67,195 ------------------------------------ TOTAL $ 295,315 $ 294,217 ====================================
See notes to consolidated financial statements 3 FIRST SAVINGS BANCORP, INC. - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Three Months Ended September 30, ------------------------------------ 1997 1996 ------------------------------------ ($ in thousands except per share data) INTEREST AND DIVIDEND INCOME: Interest on loans receivable $ 3,947 $ 3,637 Interest on mortgage-backed securities 130 55 Interest on investment securities 1,377 1,016 Dividends on investment securities 35 35 Other 108 52 ------------------------------------ Total interest income 5,597 4,795 ------------------------------------ INTEREST EXPENSE: Interest on deposits 2,488 2,304 Interest on borrowings 305 6 ------------------------------------ Total interest expense 2,793 2,310 ------------------------------------ Net interest income 2,804 2,485 ------------------------------------ Provision for loan losses Net interest income after provision for loan losses 2,804 2,485 ------------------------------------ NONINTEREST INCOME: Fees and service charges 118 88 Income from real estate operations 2 3 Rent on safe deposit boxes 2 2 Other, net 1 1 ------------------------------------ Total noninterest income, net 123 94 ------------------------------------ GENERAL AND ADMINISTRATIVE EXPENSES: Compensation and fringe benefits 522 552 Occupancy and building 49 56 Federal insurance premiums 33 1,265 Computer services 105 68 Other 198 164 ------------------------------------ Total general and administrative expenses 907 2,105 ------------------------------------ INCOME BEFORE INCOME TAXES 2,020 474 INCOME TAXES 744 173 ------------------------------------ NET INCOME $ 1,276 $ 301 ==================================== EARNINGS PER SHARE DATA: NET INCOME $ 0.32 $ 0.08 ==================================== AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 3,984,737 3,974,368 ====================================
See notes to consolidated financial statements. 4 FIRST SAVINGS BANCORP, INC. - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended September 30, ------------------------------------ ($ in thousands) 1997 1996 ------------------------------------ OPERATING ACTIVITIES: Net income $ 1,276 $ 301 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 24 32 Issuance of ESOP shares 69 61 Net amortization on investments 48 126 Loan origination fees and costs deferred, net of current amortization (14) Changes in: Other assets 129 570 Other liabilities 83 1,115 ------------------------------------ Net cash provided by operating activities 1,615 2,205 ------------------------------------ INVESTING ACTIVITIES: Net increase in interest-bearing deposits with banks 3,510 Proceeds from maturities of investments 5,500 1,700 Purchase of investment securities (2,000) Principal repayments on mortgage-backed securities 182 271 Loan originations net of principal repayments (4,036) (4,972) Purchase of premises and equipment (29) (17) ------------------------------------ Net cash used in investing activities 3,127 (3,018) ------------------------------------ FINANCING ACTIVITIES: Net increase in deposits 2,121 4,966 Net decrease in borrowed funds (2,000) (18) Cash dividends paid (740) (936) Exercise of stock options 71 ------------------------------------ Net cash (used in) provided by financing activities (548) 4,012 ------------------------------------ INCREASE IN CASH AND DUE FROM BANKS 4,194 3,199 CASH AND DUE FROM BANKS, BEGINNING OF PERIOD 2,801 4,718 ------------------------------------ CASH AND DUE FROM BANKS, END OF PERIOD $ 6,995 $ 7,917 ==================================== SUPPLEMENTAL DISCLOSURES: - ------------------------- Cash paid for: Interest on deposits $ 2,468 $ 2,617 Interest on borrowed funds 332 6 Income taxes 310 27
See notes to consolidated financial statements. 5 FIRST SAVINGS BANCORP, INC. - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation and Accounting Policies: The accompanying ---------------------------------------------- consolidated financial statements include the accounts of First Savings Bancorp, Inc., ("First Savings"), First Savings Bank of Moore County, Inc., SSB (the "Bank") and its wholly-owned subsidiary (the "Bank"). All significant intercompany balances and transactions have been eliminated in consolidation. 2. Accounting Policies: The significant accounting policies followed by -------------------- First Savings for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 or Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (none of which were other than normal accruals) necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. The results of operations for the three month period ended September 30, 1997 is not necessarily indicative of the results of operations that may be expected for the year ending June 30, 1998. For further information, refer to the consolidated financial statements and footnotes thereto included in the annual report on Form 10-K for the year ended June 30, 1997. 3. Earnings Per Common Share: Earnings per common share is calculated by -------------------------- dividing net income by the weighted average number of common and common equivalent shares outstanding. Common stock equivalents consist of stock options. In determining the number of common stock equivalent shares outstanding, the number of shares issuable upon exercise of stock options has been reduced by the number of common shares assumed purchased with a portion of the proceeds from the assumed exercise of the common stock equivalents. The weighted average number of common shares given effect to options outstanding during the three month period ended September 30, 1997 and 1996 were 3,984,737 and 3,974,368, respectively. 4. Stock Repurchase Plan: On September 12, 1996 First Savings' Board of ---------------------- Directors adopted the First Savings Bancorp, Inc. Stock Repurchase Plan. Pursuant to the Plan, First Savings may repurchase shares of its outstanding common stock in the open market or in privately negotiated transactions in accordance with regulatory requirements. On September 27, 1996 First Savings initiated a plan to repurchase 10% or its stock over the next twelve months. As of September 30, 1997, 76,500 shares have been repurchased. 6 FIRST SAVINGS BANCORP, INC. - -------------------------------------------------------------------------------- MANAGEMENT'S DISCUSSION AND ANALYSIS General First Savings Bancorp, Inc., a North Carolina holding company ("First Savings"), was formed on November 1, 1995 to become the parent holding company of First Savings Bank of Moore County, Inc., SSB (the "Bank"), a North Carolina chartered stock savings bank. First Savings engages in no substantial business activities other than the activities related to ownership of the Bank. The Bank is primarily engaged in the business of attracting deposits from the general public and using those funds to originate mortgage loans for the purchase or construction of one-to-four family homes. To a lesser extent, the Bank also originates multi-family residential mortgage loans, nonresidential real estate loans, loans secured by deposits, home equity lines of credit, installment loans and credit card loans. As a savings bank, the Bank's deposit accounts are insured up to applicable limits by the Savings Association Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation ("FDIC"). The Bank conducts its operations through its main office in Southern Pines, North Carolina and 4 branch offices located in Moore County. Financial Condition First Savings had total assets of $295.3 million at September 30, 1997 compared to $294.2 million at June 30, 1997. The increase was primarily related to a 2.1% increase in net loans. Net loans increased from $192.2 million at June 30, 1997 to $196.3 million at September 30, 1997. The favorable rate environment and strong marketing programs continue to fuel the loan growth. First Savings' total securities decreased slightly due primarily to principal repayments on mortgage-backed securities and maturing securities. Increased deposits and maturing investments supported the loan growth. Deposits increased by $2.1 million to $206.4 million at September 30, 1997 from $204.3 million at June 30, 1997 and shareholders' equity increased to $67.9 million at September 30, 1997 from $67.2 million at June 30, 1997. Liquidity Maintaining adequate liquidity while managing interest rate risk is the primary goal of First Savings' asset and liability management strategy. Liquidity is the ability to fund the needs of the Bank's borrowers and depositors, pay operating expenses, and meet regulatory liquidity requirements. Maturing investments, loan and mortgage-backed security principal repayments, deposits and income from operations are the main sources of liquidity. The Bank's primary uses of liquidity are to fund loans and to make investments. As of September 30, 1997, liquid assets (cash and cash equivalents, and marketable investment securities, less pledged investments) were approximately $88.0 million, which represents 42.6% of deposits. As a North Carolina chartered savings bank, First Savings is required to maintain liquid assets equal to at least 10.0% of its total assets. At September 30, 1997, this liquidity ratio, based on North Carolina regulations, was 29.8% Management considers current liquidity levels to be adequate to meet First Savings' foreseeable needs. MANAGEMENT'S DISCUSSION AND ANALYSIS At September 30, 1997, outstanding mortgage loan commitments and available home equity line of credit balances were $19.6 million, available credit card line of credit balances were $3.5 million and the undisbursed portion of construction loans was $8.5 million. Funding for these commitments is expected to be provided from deposits, loan and mortgage-backed securities principal repayments, maturing investments and income generated from operations. 7 FIRST SAVINGS BANCORP, INC. - -------------------------------------------------------------------------------- Regulatory Capital Requirements Federal banking regulations require that bank holding companies and their bank subsidiaries meet various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on First Savings' financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, First Savings must meet specific capital guidelines that involve quantitative measures of First Savings assets, liabilities, and certain off-balance- sheet items as calculated under regulatory accounting practices. First Savings' capital amounts and classification are also subject to qualitative judgements by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require First Savings to maintain minimum amounts and ratios of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. As of May 10, 1996, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the category. Actual capital amounts and ratios for First Savings and the Bank are presented in the table below:
To Be Well Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio --------------------------------------------------------------------------------- As of September 30, 1997 Total Capital (to Risk Weighted Assets: (greater than Consolidated $68,128 50.88% $10,712 or equal to) 8.0% n/a n/a (greater than (greater than First Savings Bank of Moore Co., Inc., SSB $51,317 38.07% $10,706 or equal to) 8.0% $13,382 or equal to) 10.0% Tier 1 Capital (to Risk Weighted Assets): (greater than Consolidated $67,524 50.43% $5,356 or equal to) 4.0% n/a n/a (greater than (greater than First Savings Bank of Moore Co., Inc., SSB $50,349 37.62% $5,353 or equal to) 4.0% $8,030 or equal to) 6.0% Tier 1 Capital (to Average Assets): (greater than Consolidated $67,524 22.95% $11,796 or equal to) 4.0% n/a n/a (greater than (greater than First Savings Bank of Moore Co., Inc., SSB $50,349 17.77% $11,334 or equal to) 4.0% $14,168 or equal to) 5.0%
In addition to federal regulatory requirements, the Bank is subject to a North Carolina savings bank capital requirement of at least 5% of total assets. At September 30, 1997, the Bank's capital ratio under the North Carolina requirements was 17.92%. At September 30, 1997, First Savings and the Bank exceeded all capital requirements. 8 FIRST SAVINGS BANCORP, INC. - -------------------------------------------------------------------------------- MANAGEMENT'S DISCUSSION AND ANALYSIS Comparison of Operating Results for the Three Months Ended Sept.30, 1997 and 1996 Net income was $1,276,000 for the three month period ended September 30, 1997, representing an increase of $975,000 from the same period of the prior year. Excluding the nonrecurring charge associated with the special SAIF assessment in fiscal 1996, the increase in core earnings was approximately $269,000 or 27%. The increase in core earnings was primarily a result of a 13% increase in net interest income and higher levels of noninterest income. General and administrative expenses decreased significantly from $2.1 million for the quarter ended September 30, 1996 to $907,000 for the quarter ended September 30, 1997. The decrease was due primarily to the special SAIF assessment of approximately $1.2 million in 1996. OTHER INFORMATION As of September 30, 1996, legislation was passed requiring financial institutions insured by the Savings Association Insurance Fund ("SAIF") to pay a one time special assessment of 0.657% based on the March 31, 1995 deposit base. For the quarter ended September 30, 1996, First Savings recorded a charge to earnings of approximately $1,159,000 relating to the special SAIF assessment. 9 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. FIRST SAVINGS BANCORP, INC. /s/ William E. Samuels, Jr. - ----------------- ------------------------------- Date William E. Samuels, Jr. President /s/ Timothy S. Maples - ----------------- ------------------------------- Date Timothy S. Maples Controller/ Principal Financial Officer 10 EX-27 2 FINANCIAL DATA SCHEDULE
9 1,000 3-MOS JUN-30-1998 JUL-01-1997 SEP-30-1997 2,791 6,995 0 0 78,853 6,394 6,453 195,684 604 295,315 206,438 8,000 2,928 10,000 0 0 35,344 32,605 295,315 3,947 1,542 108 5,597 2,488 2,793 2,804 0 0 907 2,020 2,020 0 0 1,276 0.32 0.32 3.85 861 0 0 861 604 0 0 604 203 0 401
-----END PRIVACY-ENHANCED MESSAGE-----