-----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, H/Odw8Mp77WZ2ZWvJ1Ay66AUEoTZAfU7qM/kH6rIxCN8vvuBg5IByN/ofN593JT2 TqGs29GoBw4EYm2rIq2NPQ== 0000928385-97-000216.txt : 19970221 0000928385-97-000216.hdr.sgml : 19970221 ACCESSION NUMBER: 0000928385-97-000216 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970211 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: 1934 Act SEC FILE NUMBER: 000-27098 FILM NUMBER: 97525016 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 December 31, 1996 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 January 31, 1997, there were 3,689,000 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 10 SIGNATURES 11 FIRST SAVINGS BANCORP, INC. - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
DECEMBER 31, JUNE 30, ------------ -------- 1996 1996 -------- -------- ($ in thousands) ASSETS Cash and cash equivalents (including interest-bearing deposits of $106 at December 31, 1996; $713 at June 30, 1996) $ 7,131 $ 4,718 Certificates of deposit 7,000 Securities available for sale, at market value 61,534 67,998 Securities at amortized cost (market values - $1,626 at December 31, 1996; $3,016 at June 30, 1996) 1,548 2,965 Loans receivable (net of allowance for loan losses of $609 at December 31, and June 30, 1996) 184,600 177,431 Premises and equipment 1,997 2,019 Accrued interest receivable 1,468 1,622 Prepaid expenses and other assets 610 233 -------- -------- TOTAL $265,888 $256,986 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES: Deposits: 196,699 187,424 ESOP note payable 392 422 Accrued expenses and other liabilities 2,299 2,329 -------- -------- Total liabilities 199,390 190,175 -------- -------- 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, 3,689,000 shares issued and outstanding 35,530 36,451 Unearned compensation related to ESOP note payable (356) (422) Net unrealized gain on securities available for sale 328 - Retained earnings 30,996 30,782 Total shareholders' equity 66,498 66,811 -------- -------- TOTAL $265,888 $256,986 ======== ========
See notes to consolidated financial statements 3 FIRST SAVINGS BANCORP, INC. - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, ---------------------- ------------------------ ($ in thousands except per share data) 1996 1995 1996 1995 ---------- --------- ----------- ----------- INTEREST AND DIVIDEND INCOME: Interest on loans receivable $ 3,706 $ 3,341 $ 7.343 $ 6,5577 Interest on mortgage-backed securities 28 78 83 161 Interest on investment securities 982 1,157 1,998 2,353 Dividends on investment securities 35 35 70 71 Other 113 33 165 91 ---------- ---------- ---------- ----------- Total interest income 4,864 4,644 9,659 9,233 ---------- ---------- ---------- ----------- INTEREST EXPENSE: Interest on deposits 2,364 2,335 4,667 4,657 Interest on borrowings 6 9 12 16 ---------- ---------- ---------- ----------- Total interest expense 2,370 2,344 4,679 4,673 ---------- ---------- ---------- ----------- Net interest income 2,494 2,300 4,980 4,560 Provision for loan losses Net interest income after provision for loan losses 2,494 2,300 4,980 4,560 ---------- ---------- ---------- ----------- NONINTEREST INCOME: Fees and service charges 85 71 173 146 Income from real estate operations 2 3 5 5 Rent on safe deposit boxes 7 7 9 9 Other, net 1 1 2 5 ---------- ---------- ---------- ----------- Total noninterest income, net 95 82 189 165 ---------- ---------- ---------- ----------- GENERAL AND ADMINISTRATIVE EXPENSES: Compensation and fringe benefits 509 479 1,061 968 Occupancy and building 51 55 108 113 Federal insurance premiums - 104 1,264 206 Computer services 71 67 139 137 Other 201 184 366 368 ---------- ---------- ---------- ----------- Total general and administrative expenses 832 889 2,938 1,792 ---------- ---------- ---------- ----------- INCOME BEFORE INCOME TAXES 1,757 1,493 2,231 2,933 INCOME TAXES 586 518 759 1,011 ---------- ---------- ---------- ----------- NET INCOME $ 1,171 975 $1,472 1,922 ---------- ---------- ---------- ----------- EARNINGS PER SHARE DATA: NET INCOME $ 0.30 0.24 0.37 0.48 ========== ========== ========== =========== AVERAGE COMMON EQUIVALENT SHARES 3,948,720 3,991,870 3,963,130 3,989,547
See notes to consolidated financial statements. 4 FIRST SAVINGS BANCORP, INC. - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED DECEMBER 31, ------------------------ ($ IN THOUSANDS) 1996 1995 -------- -------- OPERATING ACTIVITIES: Net income $ 1,472 $ 1,922 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 57 60 Issuance of ESOP shares 118 119 Net amortization on investments 276 360 Loan origination fees and costs deferred, net of current amortization 14 37 Changes in: Other assets (223) 50 Other liabilities 116 (120) ------- ------- Net cash provided by operating activities 1,830 2,428 ------- ------- INVESTING ACTIVITIES: Purchase of certificates of deposits (7,000) Proceeds from maturities of investments 6,700 3,000 Principal repayments on mortgage-backed securities 1,404 595 Loan originations net of principal repayments (7,183) (9,999) Purchase of premises and equipment (35) (63) ------- ------- Net cash used in investing activities (6,114) (6,467) ------- ------- FINANCING ACTIVITIES: Net increase (decrease) in deposits 9,275 2,417 Net increase (decrease) in borrowed funds (30) 2,470 Cash dividends paid (1,572) (1,513) Repurchase of common stock (976) - ------- ------- Net cash provided by financing activities 6,697 3,374 ------- ------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,413 (665) ------- ------- CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD 4,718 3,210 ------- ------- CASH AND CASH EQUIVALENTS END OF PERIOD $7,131 $2,545 ======= ======= SUPPLEMENTAL DISCLOSURES: Cash paid for: Interest on deposits $4,650 $4,635 Interest on borrowed funds 13 11 Income taxes 946 970
See notes to consolidated financial statements. 5 FIRST SAVINGS BANCORP, INC. - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation: The accompanying consolidated financial statements ---------------------- are presented for First Savings Bancorp, Inc., ("First Savings"), First Savings Bank of Moore county, Inc., SSB (the "Bank") and its wholly-owned subsidiary, Moore Service Corporation. All significant intercompany balances and transactions have been eliminated. 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 and six month periods ended December 31, 1996 is not necessarily indicative of the results of operations that may be expected for the year ending June 30, 1997. 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, 1996. 3. Holding Company Reorganization: On November 1, 1995, First Savings ------------------------------- Bancorp, Inc. (First Savings) completed the acquisition of First Savings Bank of Moore County, Inc., SSB. (the "Bank") pursuant to an Agreement and Plan of Reorganization in which the Bank became a wholly-owned subsidiary of First Savings. Under the terms of the Agreement and Plan of Reorganization, each outstanding share of the common stock, no par value per share, of the Bank was exchanged for one share of the common stock, no par value per share, of First Savings and the former holders of the Bank's common stock were now the holders of all First Savings' outstanding common stock. Prior to the acquisition of the Bank on November 1, 1995, First Savings had not issued any stock, had no assets or liabilities, and had not engaged in any business activities other than of an organizational nature. Accordingly, the financial statements included herein as of dates or for periods ended prior to November 1, 1995 do not reflect the operations of First Savings. 4. 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 and six month periods ended December 31, 1996 and 1995 were 3,948,720 and 3,991,870, respectively and 3,963,130 and 3,989,547, respectively. 5. 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 December 31, 1996 55,000 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 $265.9 million at December 31, 1996 compared to $257.0 million at June 30, 1996. The increase was primarily related to a 4.0% increase in net loans. Net loans increased from $177.4 million at June 30, 1996 to $184.6 million at December 31, 1996. The increase in loans is attributable to a slowing of refinancing, a favorable rate environment, and strong marketing programs. In addition to loans, cash and cash equivalents and certificates of deposit had a combined increase of $9.4 million. First Savings' securities decreased $7.9 million or 11.1% to $63.1 million at December 31, 1996 from $71.0 million at June 30, 1995. The decrease in securities was related to maturing securities and principal repayments on mortgage-backed securities. Supporting the asset growth was an increase in deposits of 4.9% from $187.4 million at June 30, 1996 to $196.7 million at December 31, 1996. 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 December 31, 1996, liquid assets (cash and cash equivalents, and marketable investment securities) were approximately $77.2 million, which represents 39.2% 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. For purposes of this requirement, liquid assets consist of cash and readily marketable investments and mortgage-backed securities. At December 31, 1996, this liquidity ratio, based on North Carolina regulations, was 29.0% Management considers current liquidity levels to be adequate to meet First Savings' foreseeable needs. MANAGEMENT'S DISCUSSION AND ANALYSIS At December 31, 1996, outstanding mortgage loan commitments and available home equity line of credit balances were $15.5 million, available credit card line of credit balances were $2.8 million and the undisbursed portion of construction loans was $4.4 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 PUPROSES ACTION PROVISIONS AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO ------ ----- ------- ----- ------ ----- (GREATER OR (GREATER OR EQUAL TO) EQUAL TO) AS OF DECEMBER 31, 1996 Total Capital (to Risk Weighted Assets: Consolidated $66,779 56.45% $ 9,463 8.0% n/a n/a First Savings Bank of Moore Co., Inc., SSB $47,318 40.60% $ 9,324 8.0% $11,655 10.0% Tier 1 Capital (to Risk Weighted Assets): Consolidated $66,170 55.94% $ 4,731 4.0% n/a n/a First Savings Bank of Moore Co., Inc., SSB $46,709 40.08% $ 4,662 4.0% $ 6,993 6.0% Tier 1 Capital (to Average Assets): Consolidated $66,170 25.01% $10,582 4.0% n/a n/a First Savings Bank of Moore Co., Inc., SSB $46,709 18.81% $ 9,932 4.0% $12,415 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, 1996, the Bank's capital ratio under the North Carolina requirements was 19.09%. At December 31, 1996, 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 DEC. 31, 1996 AND 1995 Net income for the three months ended December 31, 1996 was $1,171,000 or $0.30 per share, compared with $975,000 or $0.24 per share for the same period in 1995. Increases in the net interest margin and noninterest income and a reduction in general and administrative expenses were the primary factors for the increase in earnings. Net interest income for the quarter ended December 31, 1996 increased $194,000 representing an increase of 8.4% for the corresponding period of the prior year. Fueling the 15.8% increase in noninterest income was an increase in fees and service charges of $14,000. General and administrative expenses decreased from $889,000 for the quarter ended December 31, 1995 to $832,000 for the quarter ended December 31, 1996 due primarily to a refund of federal insurance premiums totaling $109,000. COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995 Net income for the six months ended December 31, 1996 was $1,472,000 or $0.37 per share, compared to $1,922,000 or $0.48 per share for the same period in 1995. The decrease in earnings of $450,000 was primarily due to an increase in general and administrative expenses. Net interest income increased $420,000 from $4,560,000 for the six months ended December 31, 1995 to $4,980,000 for the same period of the current year: The increase was primarily due to lower costs of funds and higher yields on interest-earning assets. Led by fees and service charges, noninterest income increased $24,000 or 14.5% from $165,000 for the six month period ended December 31, 1995 to $189,000 for the same period of the current year. General and administrative expenses for the six month period ended December 31, 1996 was $2,938,000 compared to $1,792,000 for the same period of the prior year. The increase was primarily due to a nonrecurring SAIF Assessment of $1,159,000 in 1996. 9 FIRST SAVINGS BANCORP, INC. - -------------------------------------------------------------------------------- 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 three and six month periods ended December 31, 1996 First Savings recorded a charge to earnings of approximately $1,159,000 relating to the special SAIF assessment. 10 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. February 10, 1997 /s/ William E. Samuels, Jr. ----------------- ------------------------------ Date William E. Samuels, Jr. President February 10, 1997 /s/ Timothy S. Maples ----------------- ------------------------------ Date Timothy S. Maples Controller/Principal Financial Officer 11 EX-27 2 FINANCIAL DATA STATEMENT
9 1,000 3-MOS 6-MOS JUN-30-1997 JUN-30-1997 OCT-01-1996 JUL-01-1996 DEC-31-1996 DEC-31-1996 7,025 7,025 7,106 7,106 0 0 0 0 61,534 61,534 1,548 1,548 1,626 1,626 185,209 185,209 609 609 265,888 265,888 196,699 196,699 392 392 2,299 2,299 0 0 0 0 0 0 35,530 35,530 30,968 30,968 265,888 265,888 3,706 7,343 1,045 2,151 113 165 4,864 9,659 2,364 4,667 2,370 4,679 2,494 4,980 0 0 0 0 832 2,938 1,757 2,231 1,757 2,231 0 0 0 0 1,171 1,472 0.30 0.37 0.30 0.37 3.96 3.97 222 222 21 21 0 0 222 222 609 609 0 0 0 0 165 165 165 165 0 0 444 444
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