UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1998
Commission File Number: 0-27930
Community Federal Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware 64-0869537
(State or other jurisdiction (I.R.S. Employer
Of incorporation or organization) Identification No.)
P.O. Box F
333 Court Street
Tupelo, Mississipi 38802
(Address of principal (Zip Code)
Executive offices)
Registrant's telephone number, including
area code: (601) 842-3981
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 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
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at June 30, 1998
Common Stock, 4,398,250 shares
$.01 par value
COMMUNITY FEDERAL BANCORP, INC.
PART I. FINANCIAL INFORMATION
Page
ITEM 1. FINANCIAL STATEMENTS:
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL 2
CONDITION AS OF JUNE 30, 1998 AND
SEPTEMBER 30, 1997
CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR 3
THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
THE NINE MONTHS ENDED JUNE 30, 1998 AND 1997
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 4
FOR THE NINE MONTHS ENDED JUNE 30, 1998 AND 1997
THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FURNISHED HAVE NOT BEEN AUDITED BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS, BUT REFLECT, IN
THE OPINION OF MANAGEMENT,ALL ADJUSTMENTS
NECESSARY FOR A FAIR PRESENTATION OF FINANCIAL
CONDITION AND THE RESULTS OF OPERATIONS FOR
THE PERIODS PRESENTED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 10
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II. OTHER INFORMATION
OTHER INFORMATION 14
SIGNATURES 15
Part I. Financial Information
Item 1. Financial Statements
COMMUNITY FEDERAL BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
unaudited
ASSETS
June 30, September 30,
1998 1997
CASH AND CASH EQUIVALENTS $2,738,415 $5,437,003
SECURITIES AVAILABLE FOR SALE, at fair value 111,894,153 73,976,278
SECURITIES HELD TO MATURITY,
fair values of $2,966,442 and
$4,122,000 respectively 2,976,011 4,156,732
LOANS RECEIVABLE, net 140,501,171 127,334,958
PREMISES AND EQUIPMENT 2,955,968 3,318,561
OTHER ASSETS 2,180,405 1,714,291
Total assets $263,246,123 $215,937,823
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, September 30,
1998 1997
DEPOSITS $143,096,664 $132,718,390
FEDERAL HOME LOAN BANK ADVANCES 54,591,963 18,282,186
OTHER LIABILITIES 6,922,332 6,374,246
Total liabilities $204,610,959 $157,374,822
STOCKHOLDERS' EQUITY:
Preferred stock, no par, no shares issued,
2,000,000 authorized 0 0
Common stock, par $.01 per share,
4,628,750 issued and outstanding,
10,000,000 authorized 46,288 46,288
Additional paid-in capital 45,281,446 45,113,004
Retained earnings 15,025,814 13,714,336
Treasury Stock at cost, 230,500 and
0, respectively (4,264,576) 0
Unrealized gain on securities
available for sale, net 7,890,320 5,687,696
Unearned Compensation (5,344,128) (5,998,323)
Total stockholders' equity 58,635,164 58,563,001
Total liabilities and stockholders' equity $263,246,123 $215,937,823
The accompanying notes are an integral part of these statements
COMMUNITY FEDERAL BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Nine Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
INTEREST INCOME:
Interest and fees on loans $2,733,348 $2,475,837 $7,958,834 $7,256,593
Interest on securities, HTM 43,654 67,907 155,964 211,514
Interest on securities, AFS 1,518,525 1,081,828 3,968,909 3,363,554
Total interest income 4,295,527 3,625,572 12,083,707 10,831,661
INTEREST EXPENSE:
Interest on deposits 1,821,721 1,660,057 5,298,536 4,953,249
Other interest expense 713,639 101,889 1,542,703 134,708
Total interest expense 2,535,360 1,761,946 6,841,239 5,087,957
PROVISION FOR LOAN LOSSES 30,000 0 55,000 10,000
Net interest income after
provision for loan losses 1,730,167 1,863,626 5,187,468 5,733,704
NONINTEREST INCOME:
Deposit fees 28,002 19,146 68,259 59,511
Loan servicing fees 87,334 57,262 265,243 161,014
Other income 365,298 8,634 581,642 30,472
Total noninterest income 480,634 85,042 915,144 250,997
NONINTEREST EXPENSE:
Compensation and benefits 616,163 663,477 1,795,197 1,359,650
Occupancy and equipment 46,740 36,676 130,688 90,835
Other operating expense 187,924 220,576 667,402 674,079
Total noninterest expense 850,827 920,729 2,593,287 2,124,564
Income before income taxes 1,359,974 1,027,939 3,509,325 3,860,137
PROVISION FOR INCOME TAXES 474,379 378,433 1,229,292 1,438,223
NET INCOME $885,595 $649,506 $2,280,033 $2,421,914
EARNINGS PER SHARE
BASIC $0.22 $0.15 $0.56 $0.57
DILUTED $0.21 $0.14 $0.53 $0.54
The accompanying notes are an integral part of these statements
COMMUNITY FEDERAL BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1998 AND 1997
(unaudited)
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,280,033 $2,421,914
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 88,128 57,481
Amortization of premium / discounts, net 94,973 (27,073)
Amortization of Unearned Compensation 836,111 594,139
Provision for loan losses 55,000 10,000
Gain on sale of securities AFS, net (611,836) 28,685
Changes in assets and liabilities:
Increase (Decrease) in other assets (466,115) 407,595
Decrease (Increase)in other liabilities (1,048,438) (1,404,617)
Total adjustments (1,052,177) (333,790)
Net cash provided by operating
activities 1,227,856 2,088,124
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities and principal
payments on securities, AFS 27,320,693 8,635,811
Proceeds from maturities and principal
payments on securities, HTM 1,171,736 319,281
Proceeds from sale of securities, AFS 683,605 5,397,466
(Purchase of) sale of property and
equipment 274,465 (1,610,681)
Loan (originations) and principal
repayments, net (13,221,213) (7,988,349)
Purchase of securities, AFS (61,597,176) (4,984,675)
Net cash used by investing activities (45,367,890) (231,148)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in customer deposits, net 10,378,274 1,191,797
Dividends paid (968,555) (12,563,365)
Purchase of Treasury Stock (4,264,576) 0
Purchase of Stock for stock plan trusts (13,474) (3,009,456)
Proceeds(repayments) from FHLB advances 36,309,777 14,000,000
Net cash provided by financing
activities 41,441,446 (381,024)
Net increase in cash and cash
equivalents (2,698,588) 1,475,952
CASH AND CASH EQUIVALENTS, beginning of year 5,437,003 4,205,679
CASH AND CASH EQUIVALENTS, end of period $2,738,415 $5,681,631
The accompanying notes are an integral part of these statements
COMMUNITY FEDERAL BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
Community Federal Bancorp, Inc. (The "Company") was incorporated
in the State of Delaware on November 22, 1995, for the purpose of
becoming a holding company to own all of the outstanding capital
stock of Community Federal Savings Bank (the "Bank"), an existing
Stock Bank which was 100% owned by Community Federal Mutual
Holding Company (the "MHC"). Upon the conversion from a
federally chartered mutual holding company form of organization
to a federally chartered stock savings association (the
"Conversion"), the MHC was dissolved.
The accompanying unaudited condensed consolidated financial
statements as of June 30, 1998, and for the three and nine month
periods then ended, include the accounts of the Company and the
Bank. All significant intercompany transactions and accounts
have been eliminated in consolidation.
The condensed consolidated financial statements were prepared by
the company without an audit, but in the opinion of management,
reflect all adjustments necessary for the fair presentation of
financial position and results of operations for the three and
nine month periods ended June 30, 1998 and 1997. Results of
operations for the current interim period are not necessarily
indicative of results expected for the fiscal year ended
September 30, 1998. While certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange commission, management believes
that the disclosures herein are adequate to make the information
presented not misleading. These condensed consolidated financial
statements should be read in conjunction with the consolidated
financial statements and notes thereto for the year ended
September 30, 1997. The accounting policies followed by the Bank
are set forth in the summary of significant accounting policies
in the Bank's September 30, 1997 consolidated financial
statements.
2. STOCK CONVERSION
On March 14, 1996, the Conversion to a federally chartered stock
savings bank through amendment of its charter, dissolution of the
MHC, and issuance of common stock to the company was completed.
Related thereto, the Company sold 4,628,750 shares of common
stock, par value $.01 per share, at an initial price of $10 per
share in subscription and community offerings. Costs associated
with the Conversion were approximately $1,300,000 including
underwriting fees. These conversion costs were deducted from the
gross proceeds of the sale of the common stock.
In connection with the Conversion, the Company has established an
employee stock ownership plan (the "ESOP"). The ESOP purchased
approximately 8%, or 363,200 shares, of the total shares of
common stock sold. The company lent $3,632,000 to the ESOP for
the purchase of the shares of common stock. Unearned
compensation for the ESOP was charged to stockholders' equity and
is reduced ratably in connection with principal payments under
the terms of the Plan.
The Management Recognition and Retention Plan Trust and the Stock
Option Plan (the "Plans") were approved by shareholders and was
effective April 1, 1997. Under the Management Recognition and
Retention Plan ("MRP"), employees and directors could be awarded
an aggregate amount of shares of common stock equal to 4% of the
shares issued in the Conversion (185,150 shares of common stock).
The aggregate fair market value of the shares purchased by the
MRP is considered unearned compensation at the time of purchase
and compensation is earned ratably over the stipulated vesting
period. Under the Company's Stock Option Plan, employees and
directors could be granted options to purchase an aggregate
amount of shares of common stock equal to 10% of the shares
issued in the Conversion (462,875 shares of common stock) at
exercise prices equal to the market price of the common stock on
the date of grant. The Company accounts for the Stock Option
Plan under the provisions of Accounting Principles Board Opinion
No 25, Accounting for Stock Issued to Employees.
3. EARNINGS PER SHARE
Basic earning per share were computed by dividing net income by
the weighted average number of shares of common stock outstanding
during the three and nine months ended June 30, 1998 and 1997.
Common stock outstanding consists of issued shares less treasury
stock, unallocated ESOP shares, and shares owned by the MRP and
Stock option plan trust. Diluted earnings per share for the
three and nine months ended June 30, 1998 and 1997, were computed
by dividing net income by the weighted average number of shares
of common stock and the dilutive effect of the shares awarded
under the MRP and Stock Option plans, based on the treasury stock
method using an average fair market value of the stock during the
respective periods.
In 1997, the Company adopted SFAS No. 128, "Earnings Per Share,"
effective December 15, 1997. As a result, the Company's reported
earnings per share for 1997 were restated. The following table
represents the earnings per share calculations for the three and
nine months ended June 30, 1998 and 1997, accompanied by the
effect of this accounting change on previously reported earnings
per share:
Per Share
For the Three Months Ended Income Shares Amount
June 30, 1998
Net Income $885,595
Basic earnings per share:
Income available to
common shareholders $885,595 3,957,574 $0.22
Dilutive Securities
Management recognition
plan shares 140,120
Stock option plan shares 61,369
Diluted earning per share:
Income available to
common shareholders
plus assumed conversions $885,595 4,159,063 $0.21
Per Share
For the Three Months Ended Income Shares Amount
June 30, 1997
Net Income $649,506
Basic earnings per share:
Income available to
common shareholders $649,506 4,180,358 $0.16
Dilutive Securities:
Management recognition
plan shares 174,545
Stock option plan shares 63,124
Diluted earnings per share:
Income available to
common shareholders
plus assumed conversion $649,506 4,418,027 $0.15
Per Share
For the Nine Months Ended Income Shares Amount
June 30, 1998
Net income $2,280,033
Basic earnings per share:
Income available to
common shareholders $2,280,033 4,057,863 $0.56
Dilutive Securities:
Management recognition
plan shares 140,120
Stock option plan shares 68,993
Diluted earning per share:
Income available to
common shareholders
plus assumed conversions $2,280,033 4,266,976 $0.53
June 30, 1997
Net income $2,421,914
Basic earnings per share:
Income available to
common shareholders $2,421,921 4,251,494 $0.57
Dilutive Securities:
Management recognition
plan shares 174,545
Stock option plan shares 53,497
Diluted earning per share:
Income available to
common shareholders
plus assumed conversions $2,421,914 4,479,535 $0.54
Changes in previously
reported EPS:
For the Period ended June 30, 1997
Three Months Nine Months
Earnings per share,
as reported: $0.15 $0.56
Earnings per share,
as restated:
Basic $0.16 $0.57
Diluted $0.15 $0.54
4. PENDING ACCOUNTING PRONOUNCEMENTS
The AICPA has issue Statements of Position 98-1, Accounting for
the cost of Computer Software Developed or Obtained for Internal
Use. This statement requires capitalization of external direct
cost of materials and services; payroll and payroll-related cost
for employees directly associated; and interest cost during
development of computer software for internal use (planning and
preliminary cost should be expensed). Also, capitalization cost
of computer software developed or obtained for internal use
should be amortized on a straight-line basis unless another
systematic and rational basis is more representative of the
software's use.
This statement is effective for financial statements for fiscal
years beginning after December 15, 1998 and is should not be
applied retroactively to Financial Statements of prior periods.
Statements of Financial Accounting Standards ("SFAS") No. 132,
"Employers' Disclosures about Pensions and Other Postretirement
Benefits," revises employers' disclosures about pension and other
postretirement benefit plans. It does no change the measurement
or recognition of those plans. It standardizes the disclosure
requirements for pensions and other postretirement benefits to
the extent practicable, requires additional information on
changes in the benefit obligations and fair values of plan assets
that will facilitate financial analysis, and eliminates certain
disclosures that are no longer as useful. The Statement suggest
combined formats for presentation of pension and other
postretirement benefit disclosures.
This Statement is effective for fiscal years beginning after
December 15, 1997. Earlier application is encouraged Restatement
of disclosures for earlier periods provided for comparative
purposes is required unless the information is no readily
available, in which case the notes to the financial statements
should include all available information and a description of the
information not available.
SFAS No 133, "Accounting for Derivatives Instruments and Hedge
Activities," establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments
embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities, It requires that an
entity recognize all derivatives as either assets or liabilities
in the statement of financial position and measure those
instruments at fain value.
This Statement is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. Initial application of this
Statement should be as of the beginning of an entity's fiscal
quarter, on that date, hedging relationships must be designated
anew and documented pursuant to the provisions of this Statement.
Earlier application of all of the provisions of this Statement is
encouraged, but it is permitted only as of the beginning of any
fiscal quarter that begins after issuance of this Statement.
This Statement should not be applied retroactively to financial
statements of prior periods.
Management believes there will be no material effect on the
consolidated financial statements from the adoption of these
pronouncements.
Part 1
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
OPERATIONS
On March 25, 1996, Community Federal Bancorp, Inc. (The
"Company") completed the sale of 4,628,750 shares of its common
stock in an initial public offering at a price of $10.00 and
simultaneously acquired the shares of common stock of Community
Federal Savings Bank (the "Bank") in connection with the mutual
to stock conversion (the "Conversion"). Costs associated with
the conversion were approximately $1,300,000. Prior to March 25,
1996, the Company 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
data for periods prior to March 24, 1996 included herein reflect
the operations of the Bank only.
Comparisons of Financial Conditions at June 30, 1998 and
September 30, 1997
Total assets increased by $47.3 million, or 21.9%, from $215.9
million at September 30, 1997 to $263.2 million at June 30, 1998.
The increase in total assets was primarily attributed to a $37.9
million increase in securities available for sale and $13.1
million increase in loans receivable.
Equity increased $72,000 since September 30, 1997, which was
primarily attributed to a $2.2 million increase in the unrealized
gain on securities available for sale, the $2.3 million in net
income for the nine month period, and the $800,000 net change in
unearned compensation related to the benefit plans which were
partially offset by the purchase of $4.3 million in treasury
stock, the declaration of dividends of $970,000.
Comparison of Results of Operations for the Three Months Ended
June 30, 1998 and 1997
The company reported net income for the three months ended June
30, 1998 of $886,000 as compared to $650,000 for the three months
ended June 30, 1997. The $236,000 or 36.3% increase in income
for the three months ended June 30, 1998 was primarily an
increase in non-interest income of $396,000 and a decrease of
non-interest expense of $70,000 offset by a $133,000 decrease in
net interest income after provision for loan loss and an increase
of $96,000 in provision for income tax expense.
Net Interest Income
Net interest income after provision for loan losses for the three
months ended June 30, 1998 amounted to $1.7 million as compared
to $1.9 million for the three months ended June 30, 1997. Total
interest income increased $670,000 during the quarter ended June
30, 1998 as compared to the same three month period of the prior
year. This increase resulted primarily from increased interest
and fees on the higher average balance in interest earning assets
discussed above. Total interest expense increased $773,000
during the second quarter 1998 compared to the same three month
period of the previous year. The above resulted from the
increase in FHLB advances to help fund the $12.4 million growth
in Securities and the $4.8 million growth in loans receivable for
the quarter ended June 30, 1998.
Provision for Loan Losses
A $30,000 provision for loan losses was made during the third
quarter of 1998 to correspond with the volume in the mortgage
and consumer loan portfolio. There was no provision made for
loan loss reserve during the third quarter of 1997. This
adjustment reflects management's estimates which took into
account historical experience, the amount of nonperforming
assets, and general economic condition. Total nonperforming
assets at June 30, 1998 were $736,000, compared to $633,000 at
June 30, 1997.
Noninterest Income
Noninterest income increased $396,000 from $85,000 for the three
months ended June 30, 1997 to $481,000 for the three months ended
June 30, 1998. This increase was primarily attributable to
increased fee income and gains on sales of securities, which are
included in other income.
Noninterest Expense
Noninterest expense decreased $70,000 from $920,000 for the three
months ended June 30, 1997 to $850,000 for the three months ended
June 30, 1998. Chief reasons for the decrease were the decrease
in compensation expense associated with the benefit plans and a
decrease in other expense which was mainly training expense
associated with the new branch.
Provision for Income Tax
Income tax expense for the three months ended June 30, 1998
increased $96,000 to $474,000 as compared to income tax expense
of $378,000 for the three months ended June 30, 1997. This
increase is the result of the increase in income before income
taxes.
Comparisons of Results of Operations for the Nine Months Ended
June 30, 1998 and 1997.
The Company reported net income for the nine months ended June
30, 1998 of $2.3 million as compared to $2.4 million for the nine
months ended June 30, 1997. The decrease in income for the nine
months ended June 30, 1998 was due mainly to an increase in
interest expense related to the increase in FHLB advances used to
fund the special dividend paid in May 1997 as well as the
Company's loan growth offset by an increase in non-interest
income relating to increase fee income and gain on sale of
securities.
Net Interest Income
Net interest income after provision for loan losses for the nine
months ended June 30, 1998 amounted to $5.2 million as compared
to $5.7 million for the nine months ended June 30, 1997. Total
interest income increased $1.3 million during the nine months
ended June 30, 1998 as compared to the same nine month period of
the prior year. This increase resulted primarily from
increased interest and fees on the higher average balance in
interest earning assets. Total interest expense for the nine
month period ended June 30, 1998 increased $1.8 million compared
to the same nine month period of the prior year. The above
resulted from the increase in FHLB advances to fund the strong
growth in interest earning assets.
Provisions for Loan Losses
A $55,000 provision for loan losses was made during the nine
months ended June 30, 1998, to correspond with the volume in the
mortgage and consumer loan portfolio, compared to the $10,000
provision made during the nine months ended June 30, 1997. This
adjustment reflects management's estimates which took into
account historical experience, the amount of nonperforming
assets, and general economic conditions. Charge offs , net of
recoveries for the nine month period ended June 30, 1998 were
$69,000. The allowance for loan losses at June 30, 1998 was
$576.000 compared to $580,000 at June 30, 1997.
Noninterest Income
Non-interest income increased $664,000 from $251,000 for the nine
months ended June 30, 1997 to $915,000 for the nine months ended
June 30, 1998. This increase was attributable to increased fee
income and the gain on the sale of securities available for sale.
Noninterest Expense
Noninterest expense increased by $469,000 from $2.1 million for
the nine months ended June 30, 1997 to $2.6 million for the nine
months ended June 30, 1998. The increase was primarily due to an
increase in compensation expense associated with the
establishment of the benefit plans approved by the shareholders
at the 1996 annual meeting, adding loan officers, and raising
personnel levels to staff the Company's new Branch, as well as
operational costs associated with the new Branch.
Provision for Income Tax
Income tax expense for the nine months ended June 30, 1998
decreased by $209,000 to $1.2 million as compared to the income
tax expense of $1.4 million for the nine months ended June 30,
1997. This decrease was due to the overall decrease in income
before income taxes.
Capital Resources
The Bank's primary sources of funds are customer deposits,
repayments of loan principal, and interest from loans and
investments. While scheduled principal repayments on loans and
mortgage-backed securities are relatively predictable source of
funds, deposit flows and loan prepayments are greatly influenced
by general interest rates, economic conditions, and competition.
The Bank manages the pricing of its deposits to maintain a
desired deposit balance. In addition, the Bank invests in short
term interest-earning assets which provide liquidity to meet
lending requirements.
The Bank is required to maintain certain levels of regulatory
capital. At June 30, 1998, the Bank was in compliance with all
regulatory capital requirements.
Year 2000 Issue
The Year 2000 Problem ( the "Y2K") is the programming problem
caused by some computer software programs and hardware systems
using only two digits to indicate a year and assuming that the
first two digits of any year are "19". Risks to the Company if
its computer systems are not Y2K compliant include the inability
to process customer deposits or checks drawn on the Bank,
inaccurate interest accruals and maturity dates of loans and time
deposits, and the inability to update accounts for daily
transactions. Other risks to the Company exist if certain of its
vendors', suppliers', and customers' computer systems are not Y2K
compliant. These risks include the inability for the Banks to
communicate with its data processing center if phone systems are
not working, the interruption of business in the event of power
outrages, the inability of loan customers to comply with
repayment terms if their business is interrupted, and the
inability to make payment for checks drawn on the Bank, receive
payment for checks deposited by the Banks's customers or invest
excess funds if the Federal Reserve Bank's or correspondent
banks' are not Y2K.
The Company's most important mission critical system is the
software and hardware responsible for maintaining and processing
general ledger, deposits, and loan accounts. The Vendors of this
software and hardware have had independent confirmation that
their products are Y2K compliant. The Bank will be involved in a
test of their systems in the forth quarter of 1998. Testing of
all systems is scheduled to be complete by the end of 1998. The
Company is in the process of contacting its key vendors,
suppliers and customers to determine their Y2K compliance. The
Company is also in the process of establishing a contingency
plan, which is scheduled to be completed by the end of 1998.
The Company estimates that the cost of testing and updating its
systems for Y2K compliance to be less than $50 thousand.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, the Company and any subsidiaries may be a
party to various legal proceedings incident to its or their
business. At June 30, 1998, there were no legal proceedings to
which the Company or any subsidiary was a party, or to which any
of their property was subject, which were expected by management
to result in a material loss.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K during the quarter ended June 30,
1998
1. On June 10, 1998 the Company filed a current
report on Form 8-K announcing H. Lewis Whitfield
had been named as the new President for the
Company and it's subsidiary, the Bank.
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.
COMMUNITY FEDERAL BANCORP, INC.
Date: August 14, 1998 (S) Jim Ingram
Jim Ingram,
Chief Executive Officer
Date: August 14, 1998 (S) Sherry McCarty
Sherry McCarty,
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 302
<INT-BEARING-DEPOSITS> 2436
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 111894
<INVESTMENTS-CARRYING> 2976
<INVESTMENTS-MARKET> 2966
<LOANS> 141077
<ALLOWANCE> 576
<TOTAL-ASSETS> 263246
<DEPOSITS> 143097
<SHORT-TERM> 38070
<LIABILITIES-OTHER> 6922
<LONG-TERM> 16522
0
0
<COMMON> 46
<OTHER-SE> 58635
<TOTAL-LIABILITIES-AND-EQUITY> 263246
<INTEREST-LOAN> 7959
<INTEREST-INVEST> 3845
<INTEREST-OTHER> 280
<INTEREST-TOTAL> 12084
<INTEREST-DEPOSIT> 5299
<INTEREST-EXPENSE> 6841
<INTEREST-INCOME-NET> 5242
<LOAN-LOSSES> 55
<SECURITIES-GAINS> 612
<EXPENSE-OTHER> 1981
<INCOME-PRETAX> 3509
<INCOME-PRE-EXTRAORDINARY> 3509
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2280
<EPS-PRIMARY> .56
<EPS-DILUTED> .53
<YIELD-ACTUAL> 7.41
<LOANS-NON> 591
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 932
<ALLOWANCE-OPEN> 590
<CHARGE-OFFS> 69
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 576
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 576
</TABLE>
