<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________________ to ______________________
Commission File Number 0-27404
PFF BANCORP. INC
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 95-4561623
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
350 SOUTH GAREY AVENUE POMONA. CALIFORNIA 91766
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(909) 623-2323
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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. [X] Yes [ ] No
The registrant had 18,493,125 shares of common stock, par value $.01 per
share, outstanding as of August 14, 1997.
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I FINANCIAL INFORMATION (UNAUDITED)
Item 1 Financial Statements
Consolidated Balance Sheets as of
June 30, l997 and March 3l, 1997 1
Consolidated Statements of Operations for the
Three Months Ended June 30, 1997 and 1996 2
Consolidated Statements of Changes in Stockholders'
Equity for the Three Months Ended June 30, 1997 3
Consolidated Statements of Cash Flows for the
Three Months Ended June 30, 1997 and 1996 4
Notes to Unaudited Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II OTHER INFORMATION
Item 1 Legal Proceedings 18
Item 2 Changes in Securities 18
Item 3 Defaults Upon Senior Securities 18
Item 4 Submission of Matters to a Vote of Security Holders 18
Item 5 Other Information 18
Item 6 Reports on Form 8-K 18
SIGNATURES
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION (UNAUDITED)
ITEM 1. FINANCIAL STATEMENTS.
PFF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, March 31,
1997 1997
----------- -----------
<S> <C> <C>
ASSETS
Cash and cash equivalents................................................. $ 57,123 $ 31,632
Loans held for sale at lower of cost or fair value (net of valuation
allowance)............................................................... 3,069 736
Investment securities held-to-maturity (estimated fair value of $11,011
at June 30, 1997 and $16,2l3 at March 3l, 1997).......................... 11,009 16,190
Investment securities available-for-sale, at fair value................... 113,591 87,647
Mortgage-backed securities held-to-maturity (estimated fair value of
$5,156 at June 30, 1997 and $5,509 at March 31, 1997).................... 5,101 5,490
Mortgage-backed securities available-for-sale, at fair value.............. 488,013 486,009
Loans receivable, net..................................................... 1,863,177 1,819,209
Federal Home Loan Bank (FHLB) stock, at cost.............................. 27,750 27,270
Accrued interest receivable............................................... 16,147 15,879
Real estate, net.......................................................... 10,377 8,858
Property and equipment, net............................................... 26,633 26,521
Prepaid expenses and other assets......................................... 9,423 10,326
---------- ----------
Total assets.......................................................... $2,631,413 $2,535,767
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits................................................................. $1,723,741 $1,711,049
FHLB advances and other borrowings....................................... 605,000 530,000
Accrued expenses and other liabilities................................... 31,055 29,192
---------- ----------
Total liabilities....................................................... 2,359,796 2,270,241
---------- ----------
Commitments and contingencies............................................ - -
Stockholders' equity:
Preferred stock, $.01 par value. Authorized 2,000,000
shares; none issued..................................................... - -
Common stock, $.0l par value. Authorized 59,000,000
shares; issued 19,837,500; outstanding 18,715,625 at June 30,
1997 and 18,845,625 at March 31, 1997................................... 198 198
Additional paid-in capital................................................ 181,717 182,519
Retained earnings, substantially restricted............................... 111,034 108,021
Unearned stock-based compensation......................................... (24,156) (24,711)
Treasury stock............................................................ (11) (10)
Unrealized gains (losses) on securities available-for-sale, net........... 2,835 (491)
---------- ----------
Total stockholders' equity.............................................. 271,617 265,526
---------- ----------
Total liabilities and stockholders' equity............................ $2,631,413 $2,535,767
========== ==========
</TABLE>
See accompanying notes to the consolidated financial statements.
-1-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
For The Three Months Ended
June 30,
--------------------------
1997 1996
----------- ------------
<S> <C> <C>
Interest income:
Mortgage loans......................................................... $ 34,630 $ 30,859
Non-mortgage loans..................................................... 835 545
Mortgage-backed securities............................................. 8,721 3,885
Investment securities and deposits..................................... 2,671 1,930
----------- -----------
Total interest income................................................ 46,857 37,219
----------- -----------
Interest on deposits.................................................... 20,227 19,598
Interest on borrowings.................................................. 8,315 753
----------- -----------
Total interest expense............................................... 28,542 20,351
----------- -----------
Net interest income.................................................. 18,315 16,868
Provision for loan losses............................................... 2,250 4,694
----------- -----------
Net interest income after provision for loan losses.................. 16,065 12,174
----------- -----------
Non-interest income:
Deposit, trust and other fees.......................................... 2,582 2,189
Mortgage loan servicing fees........................................... 219 213
Gain (loss) on sale of loans and securities, net....................... 12 (176)
Other non-interest income.............................................. 394 326
----------- -----------
Total non-interest income............................................ 3,207 2,552
----------- -----------
Non-interest expense:
General and administrative:
Compensation and benefits........................................... 6,186 5,285
Occupancy and equipment expense..................................... 2,743 2,407
Marketing and professional services................................. 784 902
Other non-interest expense.......................................... 2,501 3,018
----------- -----------
Total general and administrative.................................. 12,214 11,612
Real estate operations, net............................................ 591 (1,205)
----------- -----------
Total non-interest expense........................................ 12,805 10,407
----------- -----------
Earnings before income taxes...................................... 6,467 4,319
Income taxes............................................................ 2,784 1,894
----------- -----------
Net earnings...................................................... $ 3,683 $ 2,425
=========== ===========
Earnings per share................................................ $ 0.21 $ 0.13
=========== ===========
Weighted average shares outstanding for earnings per share calculation.. 17,420,141 18,286,869
=========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements.
-2-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Unrealized
gains
(losses)
on
Retained securities
Additional Earnings, Unearned available
Number of Common Paid-in Substantially stock-based Treasury for-
Shares Stock Capital Restricted compensation Stock sale, net Total
---------- ------ ---------- ------------- ------------ -------------------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THREE MONTHS ENDED JUNE 30, 1997
- --------------------------------
Balance at March 31, 1997................. 18,845,625 $198 182,519 108,021 (24,711) (10) (491) 265,526
Net earnings.............................. - - - 3,683 - - - 3,683
Purchase of treasury stock................ (130,000) - (1,299) (670) - (1) - (1,970)
Amortization of shares under stock-based
compensation plan....................... - - 497 - 555 - 1,052
Changes in unrealized gains on
securities available-for-sale, net...... - - - - - - 3,326 3,326
---------- ---- ------- ------- ------- --- ----- -------
Balance at June 30, 1997.................. 18,715,625 $198 181,717 111,034 (24,156) (11) 2,835 271,617
========== ==== ======= ======= ======= === ===== =======
</TABLE>
See accompanying notes to the consolidate financial statements.
-3-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three-months ended
June 30,
-----------------------
1997 1996
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings............................................................ $ 3,683 $ 2,425
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Amortization of premiums (discounts) on loans, investments
and mortgage-backed securities....................................... 411 224
Amortization of deferred loan origination fees......................... (503) (339)
Loan fees collected.................................................... 242 173
Dividends on FHLB stock................................................ (377) (230)
Provisions for losses on:
Loans................................................................ 2,250 4,695
Real estate.......................................................... 380 (1,275)
Net (gain) loss on sales of loans, mortgage-backed securities
available-for-sale, real estate and property and equipment........... (110) (119)
Depreciation and amortization of property and equipment................ 863 752
Loans originated for sale.............................................. (1,785) (4,317)
Proceeds from sale of loans held for sale.............................. 2,466 7,331
Amortization of unearned stock-based compensation...................... 1,052 441
(Increase) decrease in:
Accrued expenses and other liabilities............................... (237) 1,440
Accrued interest receivable.......................................... (268) (1,741)
Prepaid expenses and other assets.................................... 903 6,169
--------- ---------
Net cash provided by operating activities.......................... 8,970 15,629
--------- ---------
Cash flows from investing activities:
Loans originated for investment......................................... (149,324) (158,933)
Increase (decrease) in construction loans-in-process.................... 8,436 9,338
Purchases of loans held for investment.................................. - (18,231)
Principal payments on loans............................................. 88,722 55,406
Principal payments on mortgage-backed securities held-to-maturity....... 389 593
Principal payments on mortgage-backed securities
available-for-sale.................................................... 23,164 11,594
Purchases of investment securities held-to-maturity..................... - -
Purchases of investment securities available-for-sale................... (33,525) (30,914)
Purchases of mortgage-backed securities available-for-sale.............. (20,942) (175,930)
Proceeds from maturities of investment securities....................... 5,181 15,353
Proceeds from maturities of investment
securities available-for-sale......................................... 8,383 623
</TABLE>
-4-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three-months ended
June 30,
------------------------
1997 1996
---------- ----------
<S> <C> <C>
Investment in real estate............................................. (350) (250)
Proceeds from sale of real estate..................................... 1,638 4,114
Purchases of property and equipment................................... (975) (722)
Proceeds from sale of property and equipment.......................... - 4
--------- ---------
Net cash used in investing activities............................... (62,203) (287,955)
--------- ---------
Cash flows from financing activities:
Proceeds from FHLB advances and other borrowings...................... 605,000 177,500
Repayment of FHLB advances and other borrowings....................... (530,000) (19,722)
Net change in deposits................................................ 12,692 (21,419)
Purchase of treasury stock............................................ (1,968) -
--------- ---------
Net cash provided by financing activities......................... 85,724 136,359
--------- ---------
Net (decrease) increase in cash and cash equivalents.............. 25,491 (135,967)
Cash and cash equivalents, beginning of period......................... 31,632 175,904
--------- ---------
Cash and cash equivalents, end of period............................... $ 57,123 $ 39,937
========= =========
Supplemental information:
Interest paid, including interest credited............................. $ 29,950 $ 19,945
Income taxes paid...................................................... - 526
Non-cash investing and financing activities:
Change in unrealized gain (loss) on securities
available-for-sale.................................................. 5,787 2,511
Net transfers from loans receivable to real estate.................... 3,154 1,293
========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
-5-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Consolidation
Effective March 28, 1996, pursuant to a plan of conversion, Pomona First Federal
Savings and Loan Association (the Association) reorganized from a federally
chartered mutual savings and loan association to PFF Bank & Trust (the Bank), a
federally chartered stock savings bank. PFF Bancorp, Inc. (the Bancorp) was
incorporated under Delaware law in October 1995 for the purpose of acquiring and
holding all of the outstanding capital stock of the Bank as a part of the Bank's
conversion. Any references to financial information for periods before March 28,
1996, refer to the Association prior to conversion.
The accompanying consolidated financial statements include the accounts of PFF
Bancorp, Inc. and subsidiary, PFF Bank & Trust (the Company). The Company's
business is conducted primarily through PFF Bank & Trust and subsidiary, Pomona
Financial Services, Inc. Pomona Financial Services, Inc. includes the accounts
of Diversified Services, Inc. and PFF Insurance Services. All material
intercompany balances and transactions have been eliminated in consolidation.
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 of
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 (consisting
principally of normal recurring accruals) necessary for a fair presentation have
been included.
The results of operations for the three months ended June 30, 1997 are not
necessarily indicative of results that may be expected for the entire fiscal
year ending March 31, 1998.
(2) Recent Accounting Pronouncements
In February 1997, FASB issued Statement of Financial Accounting Standards
No. 128 "Earnings per Share" (SFAS 128). SFAS 128 supersedes APB Opinion No 15,
"Earnings per Share" (APB 15) and specifies the computation, presentation, and
disclosure requirements for earnings per share (EPS) for entities with publicly
held common stock or potential common stock. SFAS 128 replace the presentation
of primary EPS with a presentation of basic EPS, and fully diluted EPS with
diluted EPS. SFAS 128 will also require dual presentation of basic and diluted
EPS on the face of the income statement for all entities with complex capital
structures and requires a reconciliation of the numerator and denominator of the
basic EPS computation to the numerator of the diluted EPS computation. This
statement shall be effective for financial statements for both interim and
annual periods ending after December 15, 1997. Earlier application is not
permitted. The Company has determined that this statement will have no
significant impact on the financial condition, results of operations, or
earnings per share.
In February 1997, the FASB issued Statement of Financial Standards, "Disclosure
of Information about Capital Structure" (SFAS 129). This statement shall be
effective for the financial statements for both interim and annual periods
ending after December 15, 1997. It is not expected that the issuance of FASB
No. 129 will require significant revision of prior disclosures since the
Statement lists required disclosures that had been included in a number of
previously existing separate statements and opinions.
-6-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income."
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components (revenue, expenses, gains, and losses) in full set of
general purpose financial statements. SFAS No. 130 requires that all items that
are required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. SFAS No. 130 requires that an
enterprise (a) classify items of other comprehensive income by their nature in a
financial statement and (b) display the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of a statement of financial position. SFAS No. 130
is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods provided for
comparative purposes is required. Management is in the process of determining
the impact, if any, this statement will have on the Company.
In June 1997, the FASB also issued Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related Information"
(FAS No. 131). FAS No. 131 establishes standards for the way that public
enterprises report information about operating segments in annual financial
statements and requires that selected information about those operating segments
be reported in interim financial statements. This Statement supersedes Statement
of Financial Accounting Standards No. 14, "Financial Reporting for Segments of a
Business Enterprise". FAS No. 131 requires that all public enterprises report
financial and descriptive information about their reportable operating segments.
Operating segments are defined as components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and in
assessing performance. This Statement is effective for fiscal years beginning
after December 15, 1997. In the initial year of application, comparative
information for earlier years should be restated. This Statement need not be
applied to interim financial statements in the year of application, but
comparative information for earlier years should be restated. This Statement
need not be applied to interim financial statements in the year of application,
but comparative information for interim periods in the initial year of
application shall be reported in financial statements for interim periods in the
second year of application. Early application is encouraged. Management is in
the process of determining the impact, if any, this statement will have on the
Company.
The Security and Exchange Commission has approved rule amendments to clarify and
expand existing disclosure requirements for derivative financial instruments.
The amendments require enhanced disclosure of accounting policies for derivative
financial instruments in the footnotes to the financial statements. In addition,
the amendments expand existing disclosure requirements to include quantitative
and qualitative information about market risk inherent in market risk sensitive
instruments. The required quantitative and qualitative information should be
disclosed outside the financial statements and related notes thereto. The
enhanced accounting policy disclosure requirements are effective for the
quarterly period ended June 30, 1997. As the Company believes that the
derivative financial instrument disclosures contained within the notes to the
financial statements of its 1997 Form 10-K substantially conform with the
accounting policy requirements of these amendments, no further interim period
disclosure has been provided. The rule amendments that required expanded
disclosure of quantitative and qualitative information about market risk are
effective with the 1998 Form 10-K.
-7-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
AVERAGE BALANCE SHEETS
The following table sets forth certain information relating to the Company for
the three months ended June 30, 1997 and 1996. The yields and costs are derived
by dividing annualized income or expense by the average balance of assets
or liabilities, respectively, for the period shown. Average balances are derived
from average daily balances. The yields and costs include fees which are
considered adjustments to yields.
<TABLE>
<CAPTION>
Three Months Ended June 30,
------------------------------------------
1997
------------------------------------------
Average Avg. Yield/
Balance Interest Cost
---------- ---------- -----------
(Dollars in thousands)
<S> <C> <C> <C>
ASSETS:
Interest-earning assets
Interest-earning deposits and short-term investments $ 24,380 $ 352 5.79%
Investment securities, net(1)(2) 114,565 1,942 6.80
Loans receivable, net(3)(4) 1,851,278 35,465 7.66
Mortgage-backed securities, net(1)(5) 498,450 8,721 7.00
FHLB stock 27,576 377 5.47
---------- ----------
Total interest-earning assets 2,516,249 46,857 7.45
Non-interest-earning assets 75,345 ----------
----------
Total assets 2,591,594
==========
LIABILITIES AND STOCKHOLDER'S EQUITY:
Interest-bearing liabilities
Money market savings accounts 165,280 1,687 4.09
Passbook accounts 173,266 1,181 2.73
NOW accounts and other demand deposits accounts 148,253 298 0.81
Certificate accounts 1,231,778 17,061 5.56
---------- ----------
Total 1,718,577 20,227 4.72
FHLB advances and other borrowings 566,655 8,298 5.87
Other 2,660 17 2.56
---------- ----------
Total interest-bearing liabilities 2,287,892 28,542 5.00
Non-interest-bearing liabilities 34,513 ---------- ----
----------
Total liabilities 2,322,405
Stockholders' equity 269,189
----------
Total liabilities and stockholders' equity $2,591,594
==========
Net interest income before provision for loan losses $ 18,315
==========
Net interest rate spread(6) 2.44
Net interest margin(7) 2.91
Ratio of interst-earning assets to interest-bearing liabilities 109.98%
<CAPTION>
Three Months Ended June 30,
------------------------------------------
1996
------------------------------------------
Average Avg. Yield/
Balance Interest Cost
---------- ---------- -----------
(Dollars in thousands)
<S> <C> <C> <C>
ASSETS:
Interest-earning assets
Interest-earning deposits and short-term investments $ 70,915 $ 848 4.78%
Investment securities, net(1)(2) 44,710 852 7.10
Loans receivable, net(3)(4) 1,618,470 31,404 7.76
Mortgage-backed securities, net(1)(5) 219,558 3,885 7.08
FHLB stock 16,034 230 5.74
---------- ----------
Total interest-earning assets 1,969,687 37,219 7.56
Non-interest-earning assets 80,276 ----------
----------
Total assets 2,049,963
==========
LIABILITIES AND STOCKHOLDER'S EQUITY:
Interest-bearing liabilities
Money market savings accounts 93,226 594 2.56
Passbook accounts 196,114 1,392 2.85
NOW accounts and other demand deposits accounts 132,355 280 0.85
Certificate accounts 1,241,809 17,332 5.59
---------- ----------
Total 1,663,504 19,598 4.73
FHLB advances and other borrowings 49,494 720 5.83
Other 1,888 33 6.80
---------- ----------
Total interest-bearing liabilities 1,714,886 20,351 4.76
Non-interest-bearing liabilities 44,912 ---------- ----
----------
Total liabilities 1,759,798
Stockholders' equity 290,165
----------
Total liabilities and stockholders' equity $2,049,963
==========
Net interest income before provision for loan losses $ 16,868
==========
Net interest rate spread(6) 2.80
Net interest margin(7) 3.43
Ratio of interst-earning assets to interest-bearing liabilities 114.86%
</TABLE>
-8-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
_________________
(1) Includes assets available-for-sale and held-to-maturity and unamortized
discounts and premiums and certificates of deposits.
(2) Included in the average balance of investment securities for the three
months ended June 30, 1997 and 1996 are average investment securities
held-to-maturity of $11.1 million and $17.8 million, respectively. Interest
income recognized on investment securities held-to-maturity during these
periods was $160,000 and $255,000, respectively, resulting in average
yields of 5.82% and 5.71%, respectively. Yields on average investment
securities have been calculated based upon the historical cost bases of the
underlying securities.
(3) Amount is net of deferred loan origination fees, undisbursed loan funds,
unamortized discounts and allowance for loan losses and includes loan held
for sale and non-performing loans.
(4) Included in the average balance of loans receivable, net for three months
ended June 30, 1997 and 1996, are average loans held for sale of
$1.5 million and $7.2 million, respectively. Interest income recognized on
loans held for sale during these periods was $37,000 and $131,000,
respectively, resulting in average yields of 9.59% and 7.23%, respectively.
(5) Included in the average balance of mortgage-backed securities, net for the
three months ended June 30, 1997 and 1996 are average mortgage-backed
securities held-to-maturity of $5.3 million and $6.8 million, respectively.
Interest income recognized on mortgage-backed securities held-to-maturity
during the three months ended June 30, 1997 and 1996 was $96,000 and
$124,000 resulting in an average yield of 7.29% and 7.23%, respectively.
(6) Net interest rate spread represents the difference between the yield on
interest-earnings assets and the cost of interest-bearing liabilities.
(7) Net interest margin represents net interest income divided by average
interest-earning assets.
-9-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
RATE/VOLUME ANALYSIS
The following table presents the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing
liabilities have affected the Company's interest income and interest expense
during the periods indicated. Information is provided in each category with
respect to: (i) changes attributable to changes in volume (changes in volume
multiplied by prior rate); (ii) changes attributable to changes in rate (changes
in rate multiplied by prior volume); and (iii) the net change. The changes
attributable to the combined impact of volume and rate have been allocated
proportionately to the changes due to volume and the changes due to rate.
<TABLE>
<CAPTION>
Three Months Ended June 30, 1997
Compared to June 30, 1996
Increase (Decrease)
---------------------------------
Volume Rate Net
------ ---- ---
<S> <C> <C> <C>
(Dollars in thousands)
INTEREST-EARNING ASSETS:
Interest-earning deposits and short-term investments $ (556) 60 (496)
Investment securities(1)(2) 1,331 (241) 1,090
Loans receivable, net(3) 4,517 (456) 4,061
Mortgage-backed securities(1)(4) 4,935 (99) 4,836
FHLB stock 166 (19) 147
------- ------- -----
Total interest-earning assets 10,393 (755) 9,638
------- ------- -----
INTEREST-BEARING LIABILITIES:
Money market savings accounts 457 634 1,091
Passbook accounts (162) (48) (210)
NOW and other demand deposit accounts 34 (15) 19
Certificate accounts (171) (100) (271)
FHLB advances and other borrowings 7,522 55 7,577
Other 13 (28) (15)
------- ------- -----
Total interest-bearing liabilities 7,693 498 8,191
------- ------- -----
Change in net interest income $2,690 (1,253) 1,447
======= ======= =====
</TABLE>
- --------------------------------
(1) Includes assets held-to-maturity.
(2) Included in the increases in interest income on investment securities
for the three months ended June 30, 1997 compared to 1996 are
increases/(decreases) in interest income on investment securities held-to-
maturity attributable to volume and rate of $(96,000) and $3,000,
respectively.
(3) Included in the increases in interest income on loans receivable, net for
the three months ended June 30, 1997 compared to 1996 are
increases/(decreases) in interest income on loans held for sale
attributable to volume and rate of $(103,000) and $9,000, respectively.
(4) Included in the increase in interest income on mortgage-backed securities
for the three months ended June 30, 1997 compared to 1996 are
increases/(decreases) in interest income on mortgage-backed securities
held-to-maturity attributable to volume and rate of ($28,000) and $1,000,
respectively.
-10-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND
- ----------------------------------------------------------------------------
1996
- ----
GENERAL
- -------
The Company recorded net earnings of $3.7 million or $0.21 per share for the
three months ended June 30, 1997 compared to net earnings of $2.4 million or
$.13 per share for the comparable period of 1996. The increase in net earnings
between the three months ended June 30, 1997 and 1996 was attributable
principally to a decline in the provision for loan losses and an increase in net
interest income.
Net interest income was $18.3 million for the three months ended June 30, 1997
compared to $16.9 million for the comparable period of 1996. The increase
resulted from the growth in average interest-earning assets. The Company's ratio
of average interest-earning assets to average interest-bearing liabilities was
109.98% for the three months ended June 30, 1997 compared to 114.86% for the
comparable period of 1996. Average interest rate spread was 2.44% for the three
months ended June 30, 1997 compared to 2.80% for the comparable period of 1996.
Net interest margin was 2.91% for the three months ended June 30, 1997 compared
to 3.43% for the comparable period of 1996.
Provision for loan losses was $2.3 million for the three months ended June 30,
1997 compared to $4.7 million for the comparable period of 1996.
Total non-interest income was $3.2 million for the three months ended June 30,
1997 compared to $2.6 million for the comparable period of 1996. Total
non-interest expense increased from $10.4 million for the three months ended
June 30, 1996 to $12.8 million for the comparable period of 1997 due principally
to a $1.4 million reduction in allowance for real estate losses recorded during
the three month period ended June 30, 1996.
INTEREST INCOME
- ---------------
Interest income was $46.9 million for the three months ended June 30, 1997
compared to $37.2 million for the comparable period of 1996. The increase was
attributable to a $546.6 million increase in average interest-earning assets
from $1.97 billion for the three months ended June 30, 1996 to $2.52 billion for
the comparable period of 1997. The yield on average interest-earning assets
decreased from 7.56% for the three months ended June 30, 1996 to 7.45% for the
comparable period of 1997. The increase in average interest-earning assets was
due principally to a $232.8 million increase in the average balance of loans
receivable from $1.62 billion for the three months ended June 30, 1996 to $1.85
billion for the comparable period of 1997 and a $278.9 million increase in
mortgage-backed securities (MBS) from $219.6 million for the three months ended
June 30, 1996 to $498.5 million for the comparable period of 1997.
-11-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
The yield on loans receivable decreased from 7.76% for the three months ended
June 30, 1996 to 7.66% for the comparable period of 1997 reflecting the impact
of changes in the Federal Home Loan Bank (FHLB) Eleventh District Cost of Funds
Index (COFI) on the Company's portfolio of adjustable-rate loans indexed to
COFI. COFI in effect for the six months ended June 30, 1997 averaged 4.81%
compared to 4.93% for the comparable period of 1996. In an effort to diversify
the sensitivity of the Bank's loan portfolio away from COFI, the Bank has placed
emphasis on originating construction, consumer, commercial business and
commercial real estate loans, the majority of which are indexed to the prime
lending rate. For the three months ended June 30, 1997, originations of these
loans totaled $63.4 million compared to $39.2 million for the comparable period
of 1996.
The average balance of investment securities increased from $44.7 million for
the three months ended June 30, 1996 to $114.6 million for the comparable period
of 1997 creating a positive volume variance of $1.3 million. The weighted
average yield on investment securities decreased from 7.10% for the three months
ended June 30, 1996 to 6.80% for the comparable period of 1997. The decrease in
the yield on investment securities reflects an adjustment recorded in May, 1996
of $158,000; without this adjustment, the yield would have been 6.58%.
INTEREST EXPENSE
- ----------------
Interest expense was $28.5 million for the three months ended June 30, 1997
compared to $20.4 million for the comparable period of 1996. The increase was
attributable to a $573.0 million increase in the average balance of interest-
bearing liabilities from $1.71 billion for the three months ended June 30, 1996
to $2.29 billion for the comparable period of 1997 coupled with an increase in
the cost of average interest-bearing liabilities from 4.76% for the three months
ended June 30, 1996 to 5.00% for the comparable period of 1997. The increase in
average interest-bearing liabilities was due principally to a $517.2 million
increase in the average balance of FHLB advances and other borrowings from
$49.5 million for the three months ended June 30, 1996 to $566.7 million for the
comparable period of 1997. The increase in FHLB advances and other borrowings
was due to the Company's strategy of utilizing both wholesale and retail sources
of funding to achieve its strategic growth objectives. The weighted average
cost of FHLB advances and other borrowings increased from 5.83% for the three
months ended June 30, 1996 to 5.87% for the comparable period of 1997 reflecting
an increase in the general level of interest rates. The average balance of
deposits was $1.72 billion for the three months ended June 30, 1997 compared to
$1.66 billion for the comparable period of 1996, an increase of $55.1 million.
The average balance of money market, passbook and demand accounts increased
$65.1 million from $421.7 million for the three months ended June 30, 1996 to
$486.8 million for the comparable period of 1997 while the average balance of
certificate accounts decreased $10.0 million from $1.24 billion for the three
months ended June 30, 1996 to $1.23 billion for the comparable period of 1997.
The weighted average cost of deposits was 4.72% for the three months ended
June 30, 1997 compared to 4.73% for the comparable period of 1996.
-12-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
PROVISION FOR LOAN LOSSES
- -------------------------
The provision for loan losses was $4.7 million for the three months ended June
30, 1996 compared to $2.3 million for the three months ended 1997. The provision
for loan losses for the three months ended 1996 included $2.5 million applicable
to the establishment of specific allowances on several loans based upon updated
reviews.
NON-INTEREST INCOME
- -------------------
Non-interest income was $3.2 million or .50% of average assets for the quarter
ended June 30, 1997 compared to $2.6 million or .50% of average assets for the
comparable period of 1996. Savings fees and charges were $1.6 million for the
three months ended June 30, 1997 compared to $1.1 million for the comparable
period of 1996. Sales of non-deposit investment products generated $478,000 of
fee income during the three months ended June 30, 1997 compared to $449,000 in
the comparable period of 1996. Trust fees were $427,000 for the three months
ended June 30, 1997 compared to $375,000 for the comparable period of 1996.
NON-INTEREST EXPENSE
- --------------------
Non-interest expense was $12.8 million for the three months ended June 30, 1997
compared to $10.4 million for the comparable period of 1996. General and
administrative expense was $12.2 million or 1.89% of average assets for the
three months ended June 30, 1997 compared to $11.6 million or 2.21% of average
assets for the three months ended 1996. Compensation and benefits expense
increased from $5.3 million for the three months ended June 30, 1996 to
$6.2 million for the comparable period of 1997, due principally to the expenses
associated with the 1996 Incentive Plan under which stock has been granted to
key officers and directors, subject to the Company achieving certain performance
goals, and an increase in staff to support the addition of a Telebanking Center
on April 1, 1997 and the Bank's transition into business banking products and
services. Other non-interest expense was $2.5 million for the three months ended
June 30, 1997 compared to $3.0 million for the three months ended 1996. The
decrease was due principally to the inclusion of a $350,000 non-recurring legal
judgement in the three months ended June 30, 1996.
Real estate operations, net reflects expense of $591,000 for the three months
ended June 30, 1997 compared to income of $1.2 million for the comparable period
of 1996. The results for the three months ended June 30, 1996 reflect a
$1.4 million reduction in the allowance for real estate losses based upon
updated property valuations. The results for the three months ended June 30,
1997 reflect a provision of $325,000 on a single family residential development
project.
-13-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
INCOME TAXES
- ------------
Income tax expense was $2.8 million for the three months ended June 30, 1997
compared to $1.9 million for the comparable period of 1996. The increase in
income tax expense was primarily the result of an increase in earnings before
income taxes from $4.3 million for the three months ended June 30, 1996 to $6.4
million for the comparable period of 1997.
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 1997 AND MARCH 31, 1997
- ---------------------------------------------------------------------
Total assets increased $95.6 million or 3.8% from $2.54 billion at March 31,
1997 to $2.63 billion at June 30, 1997. Loans receivable, net increased $44.0
million from $1.82 billion at March 31, 1997 to $1.86 billion at June 30, 1997.
MBS increased $2.0 million from $486.0 million at March 31, 1997 to $488.0
million at June 30, 1997 and cash and cash equivalents increased $25.5 million
from $31.6 million at March 31, 1997 to $57.1 million at June 30, 1997.
Investment securities available-for-sale increased $25.9 million from $87.6
million at March 31, 1997 to $113.6 million at June 30, 1997.
Loan originations for the three months ended June 30, 1996 were $162.7 million,
compared to $151.1 million for the comparable period of 1997. Non-performing
loans declined from $23.4 million or 1.24% of gross loans at March 31, 1997 to
$22.0 million or 1.13% of gross loans at June 30, 1997. Non-performing assets,
which includes foreclosed real estate, net of specific allowances and
restructured loans, declined from $45.7 million or 1.80% of total assets at
March 31, 1997 to $45.6 million or 1.73% of total assets at June 30, 1997.
Troubled-debt restructured loans were stable at $14.8 million at June 30, 1997
to $14.6 million at March 31, 1997.
The allowance for loan losses is maintained at an amount management considers
adequate to cover future losses on loans receivable which are deemed probable
and estimable. The allowance is based upon a number of factors, including
current economic conditions, actual loss experience and industry trends. In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review the Bank's allowance for loan losses. Such agencies
may require the Bank to make additional provisions for loan losses based upon
information available at the time of the review. At June 30, 1997, the Bank's
allowance for loan losses was $27.6 million or 1.42% of gross loans compared to
$27.7 million or 1.47% of gross loans at March 31, 1997. The Bank will continue
to monitor and modify its allowances for loan losses as conditions dictate. The
following table sets forth activity in the Bank's allowance for loan losses for
the three months ended June 30, 1997.
-14-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
<TABLE>
<S> <C>
Balance at March 31, 1997 $27,721
Provision for loan losses 2,250
Charge-offs (2,324)
Recoveries -
-------
Balance at June 30, 1997 $27,647
=======
</TABLE>
Total liabilities increased $89.6 million or 3.9% to $2.36 billion at June 30,
1997 from $2.27 billion at March 31, 1997. Deposits increased $12.7 million from
$1.71 billion at March 31, 1997 to $1.72 billion at June 30, 1997. FHLB advances
and other borrowings increased $75.0 million to $605.0 million at June 30, 1997
from $530.0 million at March 31, 1997. FHLB advances were utilized to fund the
growth in loans receivable and the increase in investment securities.
Total stockholders' equity was $271.6 million at June 30, 1997 compared to
$265.5 million at March 31, 1997. The $6.1 million increase in stockholders'
equity is comprised of a $3.7 million increase representing net earnings for the
three months ended June 30, 1997, a $3.3 million increase representing the
change in the unrealized gains on securities available-for-sale, a $1.1 million
increase representing the amortization of shares under stock-based compensation
plans, and a $2.0 million decrease representing the repurchase of Treasury
Stock. On April 24, 1997, the Office of Thrift Supervision approved the
Company's application to repurchase an additional 5% (942,281 shares) of its
outstanding common stock. As of June 30, 1997, 130,000 shares had been
repurchased and an additional 222,500 shares were repurchased through August 11,
1997.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's primary sources of funds are deposits, principal and interest
payments on loans and securities, FHLB advances and other borrowings, proceeds
from the maturation of securities and, to a lesser extent, proceeds from the
sale of loans. While maturities and scheduled amortization of loans and
securities are predictable sources of funds, deposit flows and mortgage
prepayments are greatly influenced by general interest rates, economic
conditions and competition. The Bank is subject to minimum regulatory liquidity
requirements. The Bank has maintained the required minimum levels of liquid
assets as defined by OTS regulations. These requirements, which may be varied at
the direction of the OTS depending upon economic conditions and deposit flows,
are based upon a percentage of deposits and short-term borrowings. The required
ratios are currently 5% for total qualifying liquidity and 1% for short-term
qualifying liquidity (generally those investments having maturities of one year
or less). The Bank's average total and short-term liquidity ratios were 5.16%
and 2.48%, respectively for the three months ended June 30, 1997.
The Company's cash flows are comprised of three primary classifications: cash
flows from operating activities, investing activities and financing activities.
Cash flows provided by operating activities
-15-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
were $9.0 million and $15.6 million for the three months ended June 30, 1997 and
1996 respectively.
Net cash provided by (used in) investing activities consisted primarily of
disbursements for loan originations and purchases of mortgage-backed and other
investment securities, offset by principal collections on loans and proceeds
from maturation of investments and paydowns on mortgage-backed securities.
Principal payments on loans were $88.7 million and $55.4 million for the three
months ended June 30, 1997 and 1996, respectively. Disbursements on loans
originated and purchased, excluding loans originated for sale, were $151.1
million and $172.1 million for the three months ended June 30, 1997 and 1996,
respectively. Disbursements for purchases of mortgage-backed and other
investment securities were $54.5 million and $206.8 million for the three months
ended June 30, 1997 and 1996, respectively. Proceeds from the maturation of
investment securities and paydowns of mortgage-backed securities were $37.1
million and $28.2 million for the three months ended June 30, 1997 and 1996,
respectively. Net cash provided by (used in) financing activities consisted
primarily of net activity in deposit accounts and FHLB advances and other
borrowings. The net increases/(decreases) in deposits were $12.7 million and
$(21.4) million for the three months ended June 30, 1997 and 1996,
respectively. The net increases in FHLB advances and other borrowings were $75.0
million and $157.8 million for the three months ended June 30, 1997 and 1996,
respectively.
At June 30, 1997, on a consolidated basis, the Company had total capital of
$271.6 million or 10.32% of total assets. At June 30, 1997, the Bank exceeded
all of its regulatory capital requirements with a tangible capital level of
$213.7 million, or 8.29% of adjusted total assets, which is above the required
level of $38.6 million, or 1.5%; core capital of $213.7 million, or 8.29% of
adjusted total assets, which is above the required level of $77.4 million, or
3%, and total risk based capital of $230.9 million or 16.26% of risk weighted
assets, which is above the required level of $113.6 million or 8%.
The Company's most liquid assets are cash and short-term investments. The level
of these assets are dependent on the Company's operating, financing, lending and
investing activities during any given period. At June 30, 1997, cash and cash
equivalents totaled $57.1 million. The Company has other sources of liquidity if
a need for additional funds arises, including the utilization of reverse
repurchase agreements and FHLB advances and collateralized borrowings. At
June 30, 1997, the Company had $555.0 million in FHLB advances and $50.0 million
in reverse repurchase agreements outstanding. Other sources of liquidity include
MBS and other investment securities available-for-sale or maturing within one
year.
At June 30, 1997, the Bank had outstanding commitments to originate mortgage
loans of $17.4 million and no outstanding commitments to purchase mortgage-
backed securities or other investment securities. The Bank anticipates that it
will have sufficient funds available to meet these
-16-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
commitments. Certificate accounts which are scheduled to mature in less than one
year from June 30, 1997 totaled $1.07 billion. The Bank expects that a
substantial portion of the maturing certificate accounts will be retained by the
Bank at maturity.
LEGISLATIVE MATTERS
- -------------------
Thrift Rechartering Legislation. The Deposit Insurance Funds Act of 1996
provides that the BIF and SAIF will merge on January 1, 1999 if there are no
more savings associations as of that date. Various proposals to eliminate the
federal thrift charter, create a uniform financial institutions charter and
abolish the OTS have been introduced in Congress. The House Banking Committee
reported a bill in July 1997 that would require federal savings institutions to
convert to a national or state bank charter within two years of enactment. The
bill would allow banks resulting from the conversion of a savings association to
continue to engage in activities (and hold assets) in which it was lawfully
engaged on the day before enactment. State chartered thrifts would become
subject to the same federal regulation as applies to state commercial banks.
Holding companies for savings institutions would become subject to the same
regulation as holding companies that control commercial banks, with a limited
grandfather provision for unitary savings and loan holding company activities.
The OTS would be merged with the Office of the Comptroller of the Currency, the
agency that regulates national banks. The Bank is unable to predict whether such
legislation would be enacted, the extent to which the legislation would restrict
or disrupt its operations or whether the BIF and SAIF funds will eventually
merge. No assurance can be given as to whether this legislation will be enacted
or, if enacted, what the terms of such legislation would be.
Legislation regarding bad debt recapture has been passed. The legislation
requires recapture of reserves accumulated after 1987. The recapture tax on post
1987 reserves must be paid over a six year period starting in 1996. The payment
of the tax can be deferred in each of 1996 and 1997 if an institution originates
at least the same average annual principal amount of mortgage loans that it
originated in the six years prior to 1996. In the opinion of management, this
legislation will not have a material impact on the financial condition or
operations of the Company.
-17-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
PART II-OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company and subsidiaries have been named as defendants in various
lawsuits arising in the normal course of business. The outcome of the lawsuits
cannot be predicted, but the Company intends to vigorously defend the actions
and is of the opinion that the lawsuits will not have a material effect on the
Company.
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.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit 3(i) - Certificate of Incorporation of PFF Bancorp, Inc.*
Exhibit 3(ii) - Bylaws of PFF Bancorp, Inc.*
Exhibit 11 - Statement Re: Computation of Earnings Per Share.
Exhibit 27.0 - Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K
None.
- ------------------------
*Incorporated herein by reference to Form S-l, Registration Statement, as
amended, filed on December 8, 1995, SEC Registration Number 33-94860.
-18-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
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.
PFF BANCORP, INC.
August 14, 1997 /s/ LARRY M. RINEHART
- ---------------------- ------------------------------
Date Larry M. Rinehart
President, Chief Executive Officer
and Director
August 14, 1997 /s/ GREGORY C. TALBOTT
- ---------------------- ------------------------------
Date Gregory C. Talbot
Senior Vice President, Chief Finacial
Officer and Treasurer
-19-
<PAGE>
PFF BANCORP, INC. AND SUBSIDIARY
EXHIBIT 11. STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Primary Fully Diluted
Three Months Ended Three Months Ended
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
------------- ------------- ------------- -------------
(Dollars in thousands except share data)
<S> <C> <C> <C> <C>
Net Earnings............................. $ 3,683 $ 2,425 $ 3,683 $ 2,425
=========== =========== =========== ===========
Weighted average number of common shares
and equivalents outstanding:
Issued and outstanding................... 19,837,500 19,837,500 19,837,500 19,837,500
Less:
Unearned ESOP shares and shares held
by benefit plans....................... (2,705,059) (1,550,631) (2,705,059) (1,550,631)
Add:
Common stock equivalents due to dilutive
effect of stock options(1)............ 287,699 - 598,355 -
----------- ----------- ----------- -----------
Weighted average number of common shares
and equivalents outstanding........... 17,420,141 18,286,869 17,730,796 18,286,869
=========== =========== =========== ===========
Earnings per share....................... $ 0.21 $ 0.13 $ 0.21 $ 0.13
=========== =========== =========== ===========
</TABLE>
(1) The PFF Bancorp, Inc. 1996 Incentive Plan was adopted and approved by the
stockholders on October 23, 1996.
-20-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JUNE 30,
1997 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 57,123
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 601,604
<INVESTMENTS-CARRYING> 16,110
<INVESTMENTS-MARKET> 16,167
<LOANS> 1,863,177
<ALLOWANCE> 27,647
<TOTAL-ASSETS> 2,631,413
<DEPOSITS> 1,723,741
<SHORT-TERM> 0
<LIABILITIES-OTHER> 636,055
<LONG-TERM> 0
0
0
<COMMON> 198
<OTHER-SE> 271,419
<TOTAL-LIABILITIES-AND-EQUITY> 2,631,413
<INTEREST-LOAN> 35,465
<INTEREST-INVEST> 11,392
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 46,857
<INTEREST-DEPOSIT> 20,227
<INTEREST-EXPENSE> 8,315
<INTEREST-INCOME-NET> 18,315
<LOAN-LOSSES> 2,250
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 12,805
<INCOME-PRETAX> 6,467
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,683
<EPS-PRIMARY> 0.21
<EPS-DILUTED> 0.21
<YIELD-ACTUAL> 7.45
<LOANS-NON> 21,966
<LOANS-PAST> 0
<LOANS-TROUBLED> 14,828
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 27,721
<CHARGE-OFFS> 2,324
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 27,647
<ALLOWANCE-DOMESTIC> 27,647
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
