U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter period ended December 31, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT
For the transition period from to
--------- ---------
Commission File No. 0-28200
Westwood Financial Corporation
------------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-3413572
--------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700-88 Broadway, Westwood, New Jersey 07675
-------------------------------------------
(Address of principal executive offices)
201-666-5002
------------
(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Sections
13 or 15(d) of the Exchange Act during the past 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
----- -----
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date.
Class: Common Stock, par value $0.10 per share
Outstanding shares at February 9, 1998: 645,296
Transitional small business disclosure format:
Yes X No
------ ------
<PAGE>
WESTWOOD FINANCIAL CORPORATION
INDEX TO FORM 10-QSB
<TABLE>
<CAPTION>
Page
<S>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements <C>
Consolidated statements of Financial Condition at December 31,
1997 (unaudited) and March 31, 1997 2
Consolidated Statements of Income for the three and nine
months ended December 31, 1997 and 1996 (unaudited) 3
Consolidated Statements of Cash Flows for the three and nine
months ended December 31, 1997 and 1996 (unaudited) 4
Notes to Consolidated Financial Statements (unaudited) 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Default Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES
</TABLE>
<PAGE>
WESTWOOD FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
(Dollars in Thousands)
<TABLE>
<CAPTION>
DECEMBER 31, 1997 MARCH 31, 1997
----------------- --------------
ASSETS
------
<S> <C> <C>
Cash and cash equivalents $ 7,688 $ 5,408
Loans receivable, net 40,398 40,340
Interest receivable on loans 257 256
FHLB stock, at cost 576 576
Mortgage-backed securities held-to-maturity,
(market value of $17,599 and $19,581, respectively) 17,360 19,728
Investment securities held-to-maturity,
(market value of $43,002 and $38,124, respectively) 42,891 38,903
Investment securities available-for-sale,
(at market value) 2 2
Interest receivable on investments 747 852
Property and equipment, net 694 734
Goodwill 1,061 1,132
Prepaid expenses and other assets 28 50
--------- ---------
TOTAL ASSETS $ 111,702 $ 107,981
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities:
Demand deposits $ 14,908 $ 13,111
Savings deposits 75,897 74,622
Interest payable on deposits 154 124
Loans and advances payable 10,000 10,000
Other liabilities 260 142
Dividends payable 32 32
--------- ---------
Total Liabilities 101,251 98,031
--------- ---------
Commitments and Contingencies (Note 4)
Shareholders' equity:
Common stock ($.10 par value, 747,500
authorized, 645,296 issued and
outstanding at December 31, 1997
and March 31, 1997) 65 65
Paid in capital 3,212 3,212
Retained earnings 7,174 6,753
Unearned stock bonus plan shares (at cost) 0 (80)
--------- ---------
Total Shareholders' Equity 10,451 9,950
--------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 111,702 $ 107,981
========= =========
</TABLE>
2
<PAGE>
WESTWOOD FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Dollars in Thousands)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED DECEMBER 31, ENDED DECEMBER 31,
-------------------- --------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
INTEREST INCOME AND DIVIDEND INCOME
Loans receivable $ 771 $ 773 $ 2,341 $ 2,213
Mortgage-backed securities 290 352 962 801
Investment securities, including overnight deposits 800 614 2,326 1,772
Dividends on FHLB stock 10 8 29 22
-------- -------- -------- --------
Total interest income and dividend income 1,871 1,747 5,658 4,808
-------- -------- -------- --------
INTEREST EXPENSE
Deposits 989 922 2,925 2,638
Borrowings 150 66 449 66
-------- -------- -------- --------
1,139 988 3,374 2,704
-------- -------- -------- --------
Net interest income 732 759 2,284 2,104
-------- -------- -------- --------
Provision for loan losses 10 4 27 44
-------- -------- -------- --------
Net interest income after
provision for loan losses 722 755 2,257 2,060
-------- -------- -------- --------
NONINTEREST INCOME
Miscellaneous charges and fees 45 37 138 99
Late charges 1 2 5 5
-------- -------- -------- --------
Total noninterest income 46 39 143 104
-------- -------- -------- --------
NONINTEREST EXPENSE
Compensation and employee benefits 162 174 585 504
FDIC insurance and regulatory expenses 22 54 71 154
SAIF Special Assessment 0 0 0 454
Depreciation and amortization 35 34 116 115
Data Processing 39 40 110 109
Occupancy 31 36 95 93
Loss on sale of securities 0 0 0 17
Merger acquisition costs 40 0 109 0
Other 114 113 367 325
-------- -------- -------- --------
Total noninterest expense 443 451 1,453 1,771
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES 325 343 947 393
INCOME TAX EXPENSE 133 128 398 159
-------- -------- -------- --------
NET INCOME (LOSS) $ 192 $ 215 $ 549 $ 234
======== ======== ======== ========
Basic Earnings Per Share $ 0.30 $ 0.33 $ 0.85 $ 0.40
======== ======== ======== ========
Diluted Earnings Per Share $ 0.28 $ 0.32 $ 0.82 $ 0.39
======== ======== ======== ========
Weighted Average Shares Outstanding (Basic) 645,296 646,672 645,269 581,701
======== ======== ======== ========
Weighted Average Shares Outstanding (Diluted) 674,828 665,824 669,764 599,054
======== ======== ======== ========
</TABLE>
3
<PAGE>
WESTWOOD FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in Thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------- ---------------------
1997 1996 1997 1996
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
INTEREST OPERATING ACTIVITIES
NET INCOME $ 192 $ 215 $ 549 $ 234
-------- -------- -------- --------
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation 18 17 53 51
Amortization of goodwill 23 24 70 71
Amortization of stock bonus plan 0 12 80 36
Provision for loan losses 10 4 27 44
Loss on sale of securities 0 0 0 17
(INCREASE) DECREASE IN ASSETS:
Interest receivable 111 (96) 104 (218)
Prepaid income taxes 0 63 0 (18)
Prepaid expenses 28 60 21 247
INCREASE (DECREASE) IN LIABILITIES:
Interest payable 23 25 30 26
Taxes payable 60 0 121 (23)
Accrued expenses 6 (462) (3) (15)
-------- -------- -------- --------
TOTAL ADJUSTMENTS 279 (353) 503 218
-------- -------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 471 (138) 1,052 452
-------- -------- -------- --------
INVESTING ACTIVITIES:
Loans made net of repayments (339) (1,699) (83) (5,728)
Purchase of investments - net of sales 259 (11,549) (1,620) (14,789)
Reduction of goodwill 0 0 0 12
Purchase of office property and equipment (1) (7) (13) (49)
-------- -------- -------- --------
NET CASH PROVIDED (USED BY)
INVESTING ACTIVITIES (81) (13,255) (1,716) (20,554)
-------- -------- -------- --------
FINANCING ACTIVITIES:
Net increase in deposit accounts 1,060 1,690 3,072 4,875
Proceeds from sale of stock and reorganization,
net of conversion costs 0 0 0 3,428
Dividends paid (64) (32) (128) (64)
Loan Proceeds Received 0 10,000 0 10,000
-------- -------- -------- --------
NET CASH PROVIDED
FINANCING ACTIVITIES 996 11,658 2,944 18,239
-------- -------- -------- --------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 1,386 (1,735) 2,280 (1,863)
CASH AND CASH EQUIVALENTS - Beginning of period 6,302 5,080 5,408 5,208
-------- -------- -------- --------
CASH AND CASH EQUIVALENTS - End of period $ 7,688 $ 3,345 $ 7,688 $ 3,345
======== ======== ======== ========
CASH PAID DURING THE PERIOD FOR:
Interest $ 667 $ 963 $ 2,771 $ 2,678
Income taxes $ 73 $ 65 $ 277 $ 200
</TABLE>
4
<PAGE>
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1: BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Westwood Financial
Corporation (the "Corporation") and its a wholly-owned subsidiary, Westwood
Savings Bank. All significant intercompany balances and transactions have been
eliminated in consolidation.
These consolidated financial statements were prepared in accordance with
instructions for Form 10-QSB and therefore, do not include all disclosures
necessary for a complete presentation of the statement of the financial
condition, statement of operations, and statement of cash flows in conformity
with generally accepted accounting principles. However, all adjustments which
are, in the opinion of management, necessary for the fair presentation of the
interim financial statements have been included and all such adjustments are of
a normal recurring nature. The results of operations for the nine months ended
December 31, 1997 are not necessarily indicative of the results that may be
expected for the fiscal year March 31, 1998 or any other interim period. The
consolidated financial statements should be read in conjunction with the
consolidated financial statements and related notes which are incorporated by
reference in the Corporation's Annual Report on Form 10-KSB for the year ended
March 31, 1997.
NOTE 2: PROPOSED MERGER
On September 10, 1997, the Corporation and Lakeview Financial Corporation
("Lakeview") the holding company of Lakeview Savings Bank ("Lakeview Savings"),
Paterson, New Jersey, signed a definitive merger agreement providing for the
merger of the Corporation into Lakeview and the merger of the Bank into Lakeview
Savings. Shares of the Corporation will be exchanged for $29.25, payable in the
aggregate in the form of 49.9% cash and 50.1% Lakeview Common Stock. The
transaction is subject to certain contingencies including satisfaction of state
and federal regulatory approvals, approval of the shareholders of the
Corporation and a receipt of a fairness opinion by the Corporation. It is
anticipated that the transaction will occur in the first calendar quarter of
1998. The transaction is expected to be accounted for under the purchase method.
NOTE 3: EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 ("Statement 128), "Earnings Per Share."
As required, the Corporation adopted Statement 128 during the quarter ended
December 31, 1997. This statement redefines the standards of computing earnings
per share (EPS) previously found in Accounting Principles Board Opinion No. 15,
Earnings Per Share. Statement 128 establishes new standards for computing and
presenting EPS and requires dual presentation of "basic" and "diluted" EPS on
the face of income statement for all entities with complex capital structures.
Under Statement 128, basic EPS is to be computed based upon income available to
common shareholders and the weighted average number of common shares outstanding
for the period. Diluted EPS is to reflect the potential dilution exercised or
converted into common stock or resulted in the issuance of common stock that
then shared in the earnings of the Company. Statement 128 also requires the
restatement of all prior-period EPS data presented.
NOTE 4: COMMITMENTS AND CONTINGENCIES
On July 2, 1997, the Savings Bank entered into a contract to purchase a tract of
land for $280,000. The contract is contingent upon receiving all municipal and
government approvals, as required. The land may be used as a possible branch
site.
5
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Westwood Financial Corporation, Inc, (the "Corporation") is a New Jersey
corporation organized in December 1995 at the direction of the Board of
Directors of the Westwood Savings Bank of New Jersey (the "Bank") to facilitate
the conversion of Bergen North Financial, M.H.C. (the Mutual Holding Company")
from the mutual to the stock form of ownership and to acquire and hold all of
the capital stock of the Bank (collectively, the "Conversion and
Reorganization"). Prior to the consummation of the Conversion and
Reorganization, the Mutual Holding Company was the majority stockholder of the
Bank and upon consummation of the Conversion and Reorganization, the Mutual
Holding Company was merged into the Bank. The Corporation acquired the Bank as a
wholly-owned subsidiary upon the consummation of the Conversion and
Reorganization on June 6, 1996.
On September 10, 1997, the Corporation and Lakeview Financial Corp. ("Lakeview")
the holding company of Lakeview Savings Bank ("Lakeview Savings"), Paterson, New
Jersey, signed a definitive merger agreement providing for the merger of the
Corporation into Lakeview and the merger of the Bank into Lakeview Savings.
Shares of the Corporation will be exchanged for $29.25, payable in the aggregate
in the form of 49.9% cash and 50.1% Lakeview Common Stock. The transaction is
subject to certain contingencies including satisfaction of state and federal
regulatory approvals, approval of the shareholders of the Corporation and a
receipt of a fairness opinion by the Corporation. It is anticipated that the
transaction will occur in the first calendar quarter of 1998. The transaction is
expected to be accounted for under the purchase method.
Financial Condition at December 31, 1997
- ----------------------------------------
Total assets at December 31, 1997 amounted to $111.7 million, an increase of
$3.7 million, or 3.45% over total assets at March 31, 1997. This increase was
due primarily to a $4.0 million net increase in investment securities an
increase of $2.3 million in cash and cash equivalents offset by a net $2.4
decrease in mortgage-backed securities. Funding of asset growth was provided
from the increase in deposit accounts and the principal collected on
mortgage-backed securities. Total liabilities amounted to $101.3 million at
December 31, 1997, an increase of $3.2 million, or 3.28%, over total liabilities
at March 31, 1997. The increase in liabilities is due primarily to a $3.1
million net increase in deposits, which resulted in the Bank's response to the
general increase in rates offered by other bank's in the market area.
Results of Operations - Comparison For the Three Months Ended December 31, 1997
- --------------------------------------------------------------------------------
and 1996
- --------
Net Interest Income. Net interest income decreased $27,000, or 3.56%, for the
three months ended December 31, 1997 as compared to the same period ended
December 31, 1996. The decrease in net interest income was primarily the result
of the decline in our interest rate spread and net interest margin to 2.36% and
2.70%, respectively, during the three months ended December 31, 1997 as compared
to 2.64% and 2.95%, respectively, for the same period in 1996. The lower
interest rate spread and net interest margin was primarily due to a lower yield
on our average interest earning assets and higher costs of funds in the third
quarter of 1997. For the three months ended December 31, 1997, our average yield
decreased to 6.90% from 6.95%, respectively, and our average cost of funds
increased to 4.54% from 4.31%, respectively, from the comparable 1996 period.
6
<PAGE>
Provision for Loan Losses. At December 31, 1997, the Bank increased its
provision for loan losses by $6,000, from the comparable period in December 1996
due to a potential loss on a consumer loan. The loan was written off in January,
1998 in the amount of $8,300.
Non-Interest Income. Non-interest income increased $7,000, or 17.95% during the
period ended December 31, 1997, as compared to the same period ended December
31, 1996. This increase was primarily due to an increase in fee income from
additional checking account activity, increased ATM fees and increased
prepayment penalties.
Non-Interest Expense. Non-interest expense decreased $8,000 or 1.77% from
$451,000 for the three months ended December 31, 1996 to $443,000 for the three
months ended December 31, 1997. This decrease in expenses was primarily due to
the decrease in FDIC insurance and regulatory expenses of $32,000; a $12,000
decrease in compensation and employee benefits; a decrease in occupancy expense
of $5,000; and an increase of $40,000 in merger expenses relating to legal and
accounting expenses regarding the proposed merger. The decrease in compensation
and employee benefits was primarily due to the elimination of amortizing the
stock bonus plans in the amount of $4,000 per month.
Results of Operations - Comparison of Nine Months Ended December 31, 1997 and
- --------------------------------------------------------------------------------
December 31, 1996
- -----------------
Net Interest Income. Net interest income increased $180,000, or 8.56%, for the
nine months ended December 31, 1997 as compared to the same period ended
December 31, 1996. Our interest rate spread and net interest margin declined to
2.49% and 2.82%, respectively during the nine months ended December 31, 1997
compared to 2.77% and 3.07%, respectively for the same period in 1996. The lower
interest rate spread and net interest margin was primarily due to a lower yield
on earning assets and higher costs of funds for the first nine months of 1997.
For the nine months ended December 31, 1997, our average yield decreased to
6.93% from 7.01%, respectively, and our average cost of funds increased to 4.46%
from 4.25%, respectively, from the comparable 1996 period.
Provision for Loan Losses. At December 31, 1997, the Bank decreased its
provision for loan losses by $17,000 or 38.64%, from the comparable period in
December, 1996. The Bank maintains a provision for losses on loans based upon
management's periodic evaluation of known and inherent risks in the loan
portfolio, the Bank's past loss experience, adverse situations that may affect
the borrower's ability to repay loans, estimated value of the underlying
collateral and current and expected market conditions. Based upon a review of
these factors, management determined that the Bank's allowance for loan losses
was adequate in view of the composition of the Bank's loan portfolio. At
December 31, 1997, the Bank had no non-performing assets and its loan portfolio
consisted of 91.27% of loans secured by one-to-four family residential
properties.
Non-Interest Income. Non-interest income increased $39,000 from $104,000 for the
nine months ended December 31, 1996 to $143,000 for the nine months ended
December 31, 1997, primarily due to a $20,000 increase in checking account fees
and a $16,000 increase in ATM fees.
Non-Interest Expense. Non-interest expense decreased $318,000 from $1.8 million
to $1.5 million during the comparable periods ending December 31, 1996 and 1997,
respectively. This decrease was primarily due to the one-time SAIF special
assessment of $454,000 made in 1996 and a decrease in FDIC insurance and
regulatory expenses totalling $83,000. These were offset by an $81,000 increase
in compensation and employee benefits, $109,000 in merger expenses relating to
legal and accounting expenses of the proposed merger and $42,000 in other
expenses. The increase in compensation and employee benefits
7
<PAGE>
was primarily due to amortization of the stock bonus plans and the hiring of
additional staff. In regard to the increase in other expenses, there was no
expense included in the category that increased materially.
Liquidity Resources
- -------------------
The Bank's liquidity is a measure of its ability to fund loans, pay withdrawals
of deposits, and other cash outflows in an efficient, cost effective manner. The
Bank's primary sources of funds are deposits and scheduled amortization and
prepayment of loans and mortgage-backed securities. During the past several
years, the Bank has used such funds primarily to fund maturing time deposits,
pay savings withdrawals, fund lending commitments, purchase new investments, and
increase liquidity. The Bank is currently able to fund its operations
internally. Additionally, sources of funds include the ability to utilize
Federal Home Loan Bank of New York advances and the ability to borrow against
mortgage-backed and investment securities. As of December 31, 1997, the Bank had
$10 million in borrowed funds.
The Bank anticipates that it will have sufficient funds available to meet its
current commitments. As of December 31, 1997, the Bank had mortgage commitments
to fund loans of $418,000. Also, at December 31, 1997, there were commitments on
unused lines of credit relating to home equity loans of $2.6 million.
Certificates of deposit scheduled to mature in one year or less at December 31,
1997 totaled $51.5 million. Based on historical deposit withdrawals and
outflows, and on internal monthly deposit reports monitored by management,
management believes that a majority of such deposits will remain with the Bank.
As a result, no adverse liquidity effects are expected. At December 31, 1997,
the Bank's total liquidity was 55.60%.
8
<PAGE>
Capital Compliance
- ------------------
The following table sets forth the institution's capital position at December
31, 1997 as compared to the minimum regulatory capital requirements imposed on
the institution by the FDIC at that date. The Bank also met the capital
requirements of the New Jersey Department of Banking.
At December 31, 1997
-----------------------------
Amount of Assets
------- ---------
GAAP Capital: $10,451 9.36%
======= =====
Leverage Capital:(1)(2)
Actual Leverage Capital $ 7,989 7.36%
Leverage Capital Requirement 3,258 3.00%
------- -----
Excess $ 4,731 4.36%
======= =====
Tier 1 Capital: (1)(3)
Actual Tier 1 Capital $ 7,989 20.00%
Tier 1 Capital Requirement 1,598 4.00%
------- -----
Excess $ 6,391 16.00%
======= =====
Total Risk-Based Capital:(1)(3)
Actual Risk-Based Capital $ 8,234 20.62%
Risk-Based Capital Requirement 3,195 8.00%
------- -----
Excess $ 5,039 12.62%
======= =====
(1) Regulatory capital reflects modifications from GAAP capital due to
identifiable intangible assets and constraints on allowance for loan and
lease losses.
(2) Leverage Capital is computed as a percentage of Average Total Assets of
$108,598.
(3) Tier 1 Capital and Total Risk-Based Capital are computed as a percentage
of Total Risk-Weighted Assets of $39,941.
9
<PAGE>
Key Operating Ratios
- --------------------
THE TABLE BELOW SETS FORTH CERTAIN RATIOS OF THE COMPANY FOR THE PERIODS
INDICATED.
<TABLE>
<CAPTION>
AT OR FOR THE AT OR FOR THE
THREE MONTHS NINE MONTHS
ENDED DECEMBER 31, ENDED DECEMBER 31,
------------------ ------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
RETURN ON AVERAGE ASSETS (net income
divided by average total assets) (1) 0.69% 0.84% 0.66% 0.33%
RETURN ON AVERAGE EQUITY (net income
divided by average equity) (1) 7.42% 8.91% 7.14% 3.51%
INTEREST RATE SPREAD (1) (2) 2.36% 2.61% 2.50% 2.76%
NET INTEREST MARGIN (net yield on average
interest-earning assets) 2.70% 3.22% 2.82% 3.17%
AVERAGE INTEREST-EARNING ASSETS TO
AVERAGE INTEREST-BEARING LIABILITIES 108.06% 116.40% 107.91% 110.55%
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES TO NON-INTEREST EXPENSE 125.53% 130.39% 121.93% 106.73%
NON-INTEREST EXPENSE TO AVERAGE ASSETS (1) 1.59% 1.77% 1.75% 2.50%
BOOK VALUE PER SHARE $ 16.20 $ 15.06 $ 16.20 $ 15.06
AVERAGE EQUITY TO AVERAGE ASSETS (average
equity dividend by average total assets) 9.34% 9.50% 9.26% 9.43%
EQUITY TO ASSETS AT PERIOD END 9.36% 9.27% 9.36% 9.27%
</TABLE>
(1) ANNUALIZED.
(2) INTEREST RATE SPREAD REPRESENTS THE DIFFERENCE BETWEEN THE WEIGHTED
AVERAGE YIELD ON INTEREST-EARNING ASSETS AND THE WEIGHTED AVERAGE RATE ON
INTEREST-BEARING LIABILITIES. COMPUTED ON THE BASIS OF AVERAGE MONTHLY
VALUES.
10
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
-----------------
The Corporation was not involved in any material legal proceedings
at December 31, 1997. The Bank, from time to time, is a party to
litigation, which arises in the ordinary course of business, such as
claims to enforce liens, claims involving the making and servicing
of loans, claims relating to the hiring or termination of employees,
and other issues incident to the business of the Bank. In the
opinion of management, the resolution of these lawsuits would not
have a material adverse effect on the financial condition or results
of operations of the Bank or the Corporation.
Item 2. Changes in Securities
---------------------
Not applicable.
Item 3. Defaults Upon Senior Securities
-------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable.
Item 5. Other Information
-----------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
---------------------------------
(a) List of Exhibits
3.1 Articles of Incorporation of Westwood Financial Corporation*
3.2 Bylaws of Westwood Financial Corporation*
4 Specimen Stock Certificate*
27 Financial Data Schedule (electronic filing only)
- -----------------------------
* Incorporated by reference to Registrant's Registration Statement on Form
S-1 initially filed with the SEC on December 20, 1995 (File No. 33-28200).
(b) Not applicable.
11
<PAGE>
WESTWOOD FINANCIAL CORPORATION
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.
Westwood Financial Corporation
Date: 2/10/98 By: /s/ William J. Woods
---------------- -----------------------------------------
William J. Woods
Chief Executive Officer
(Principal Executive Officer)
Date: 2/10/98 By: /s/ George E. Niemczyk
----------------- -----------------------------------------
George E. Niemczyk
Controller
(Principal Accounting and Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<CASH> 567
<INT-BEARING-DEPOSITS> 6,721
<FED-FUNDS-SOLD> 1,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2
<INVESTMENTS-CARRYING> 60,829
<INVESTMENTS-MARKET> 61,179
<LOANS> 40,398
<ALLOWANCE> 245
<TOTAL-ASSETS> 111,702
<DEPOSITS> 90,805
<SHORT-TERM> 0
<LIABILITIES-OTHER> 10,446
<LONG-TERM> 0
0
0
<COMMON> 65
<OTHER-SE> 10,386
<TOTAL-LIABILITIES-AND-EQUITY> 111,702
<INTEREST-LOAN> 2,341
<INTEREST-INVEST> 3,288
<INTEREST-OTHER> 29
<INTEREST-TOTAL> 5,658
<INTEREST-DEPOSIT> 2,925
<INTEREST-EXPENSE> 449
<INTEREST-INCOME-NET> 2,284
<LOAN-LOSSES> 27
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,453
<INCOME-PRETAX> 947
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 549
<EPS-PRIMARY> .85
<EPS-DILUTED> .82
<YIELD-ACTUAL> 2.82
<LOANS-NON> 0
<LOANS-PAST> 165
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 245
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 245
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
