CUSIP No. 81424D109 Page 1 of 24 Pages
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
SECURITY FINANCIAL BANCORP, INC.
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
81424D109
(CUSIP Number)
Phillip M. Goldberg
Foley & Lardner
One IBM Plaza
330 North Wabash Avenue
Suite 3300
Chicago, Illinois 60611
(312) 755-1900
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 8, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
<PAGE>
CUSIP No. 81424D109 Page 2 of 24 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Financial Edge Fund, L.P.
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 166,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
166,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
166,900 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
8.6%
14 Type of Reporting Person
PN
<PAGE>
CUSIP No. 81424D109 Page 3 of 24 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Financial Edge - Strategic Fund, L.P.
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 166,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
166,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
166,900 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
8.6%
14 Type of Reporting Person
PN
<PAGE>
CUSIP No. 81424D109 Page 4 of 24 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
PL Capital, LLC
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 166,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
166,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
166,900 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
8.6%
14 Type of Reporting Person
PN
<PAGE>
CUSIP No. 81424D109 Page 5 of 24 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
John Wm. Palmer
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: PF
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States of America
7 Sole Voting Power
100 shares
Number of
Shares 8 Shared Voting Power
Beneficially 166,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 100 shares
10 Shared Dispositive Power
166,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
167,000 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
8.6%
14 Type of Reporting Person
IN
<PAGE>
CUSIP No. 81424D109 Page 6 of 24 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Richard J. Lashley
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds:
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States of America
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 167,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
167,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
167,900 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
8.7%
14 Type of Reporting Person
IN
<PAGE>
CUSIP No. 81424D109 Page 7 of 24 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Beth R. Lashley
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: PF
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States of America
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 1,000 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
1,000 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,000 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
0.1%
14 Type of Reporting Person
IN
<PAGE>
CUSIP No. 81424D109 Page 8 of 24 Pages
This is Amendment No. 2 to a Schedule 13D filed jointly by Financial
Edge Fund, L.P., a Delaware limited partnership ("Financial Edge Fund"),
Financial Edge - Strategic Fund, L.P., a Delaware limited partnership
("Financial Edge Strategic"), PL Capital, LLC ("PL Capital"), John W. Palmer,
Richard J. Lashley and Beth Lashley (as earlier amended, the "Original 13D").
This Schedule 13D relates to the common stock, $.01 par value of
Security Financial Bancorp, Inc. (the "Company"). The address of the principal
executive offices of the Company is 9321 Wicker Avenue, St. John, Indiana 46373.
The joint filing agreement of the members of the Group is attached as Exhibit 1.
The following items in the Original 13D are amended to read in their entirety as
follows:
Item 3. Source and Amount of Funds or Other Consideration
The amount of funds expended to date by Financial Edge Fund to acquire
the 156,900 shares of Common Stock it holds in its name is $1,718,920. Such
funds were provided in part from Financial Edge Fund's available capital and,
from time to time, in part by margin account loans from subsidiaries of The Bear
Stearns Companies, Inc. ("Bear Stearns"), extended in the ordinary course of
business.
The amount of funds expended to date by Financial Edge Strategic to
acquire the 10,000 shares of Common Stock it holds in its name is $108,150. Such
funds were provided in part from Financial Edge Strategic's available capital
and, from time to time, in part by margin account loans from subsidiaries of
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), extended in the
ordinary course of business.
The amount of funds expended to date by Beth Lashley to acquire the
1,000 shares of Common Stock she holds in her name is $12,810. The stock is held
in Ms. Lashley's IRA account at Bear Stearns. Mr. Lashley shares with Ms.
Lashley the power to direct the disposition of the shares of Common Stock
beneficially owned by Ms. Lashley in the account at Bear Stearns, pursuant to a
trading authorization granted by Ms. Lashley to Mr. Lashley, under that firm's
usual terms and conditions.
The amount of funds expended to date by John Palmer to acquire the 100
shares of Common Stock he holds in his name is $1,289.
All purchases of Common Stock made by members of the Group using funds
borrowed from Bear Stearns or DLJ, if any, were made in margin transactions on
those firms' usual terms and conditions. All or part of the shares of Common
Stock owned by members of the Group may from time to time be pledged with one or
more banking institutions or brokerage firms as collateral for loans made by
such entities to members of the Group. Such loans generally bear interest at a
rate based upon the broker's call rate from time to time in effect. Such
indebtedness, if any, may be refinanced with other banks or broker-dealers.
<PAGE>
CUSIP No. 81424D109 Page 9 of 24 Pages
Item 4. Purpose of Transaction
The purpose of the acquisition of the shares of Common Stock by
members of the PL Capital Group is to profit from the appreciation in the market
price of the Common Stock through the assertion of stockholder rights. The Group
expects to actively assert stockholder rights, in the manner described below,
with the intent to influence the policies of the Company. Beginning in March,
2000, on several occasions, members of the Group met with and had discussions
with John Hyland, CEO of the Company, and other members of the Company's
management to suggest ways for the Company to maximize short and long-term value
for all stockholders.
During such discussions the Group suggested that the Company has a
significant opportunity to create stockholder value over a reasonable time frame
by:
(1) Aggressively repurchasing its Common Stock in the open market,
beginning at the earliest possible opportunity permitted by its
banking regulators (i.e., six months after the IPO date, in the
Company's instance, July 2000), regardless of whether or not the
stock option and MRP plans have been approved by stockholders;
(2) Aggressively reducing overhead expense ratios, which, despite
some progress, are still currently well in excess of its peer
groups;
(3) Prudently leveraging the capital raised, being careful to
preserve the Company's flexibility to repurchase the maximum
number of shares of Common Stock permitted by its banking
regulators; and
(4) Constantly monitoring the opportunities available to the Company
to maximize stockholder value through sale of the Company, if
such a strategy provides a demonstrable increase in stockholder
value over a strategy of remaining independent.
By letter dated May 19, 2000, in compliance with the Company's
By-Laws, Mr. Palmer notified the Company of his intention to nominate himself
and Mr. Lashley for election to the Board of Directors of the Company at its
2000 Annual Meeting of Stockholders (the time and date of which have not yet
been announced by the Company). A copy of that letter is attached as Exhibit 2.
By letter dated May 19, 2000, Mr. Palmer requested a copy of the Company's most
recent stockholder list and other related items. A copy of that letter is
attached as Exhibit 3.
On August 29, 2000, the Group filed preliminary proxy materials with
the United States Securities and Exchange Commission (the "SEC") for the
solicitation of proxies for the election of Messrs. Palmer and Lashley to the
Board of Directors of the Company at the 2000 Annual Meeting. On August 30,
2000, the Group filed additional soliciting material with the SEC and sent
copies of that material to stockholders of the Company. Copies of both the
<PAGE>
CUSIP No. 81424D109 Page 10 of 24 Pages
preliminary proxy and the additional soliciting material are available for free
at the SEC's web site at www.sec.gov.
On September 8, 2000, the Group executed a Standstill Agreement with
the Company whereby Messrs. Palmer and Lashley were appointed to the Board of
Directors of the Company and certain other agreements were made between the
Group and the Company. A copy of that Standstill Agreement is attached as
Exhibit 4. Also on September 8, 2000, in accordance with the Standstill
Agreement the Group withdrew its preliminary proxy materials from review by the
SEC. A copy of that letter is attached at Exhibit 5.
Members of the Group may make further purchases of shares of Common
Stock. Members of the Group may dispose of any or all the shares of Common Stock
held by them, although they have no current intention to do so. Except as noted
in this Schedule 13D, no member of the Group has any plans or proposals which
relate to, or could result in, any of the matters referred to in paragraphs (b)
through (j), inclusive, of Item (4) of Schedule 13D. Members of the Group may,
at any time and from time to time, review or reconsider their positions and
formulate plans or proposals with respect thereto.
Item 5. Interest in Securities of the Company
The percentages used in this Schedule 13D are calculated based upon
the number of outstanding shares of Common Stock, 1,938,460, reported as the
number of outstanding shares as of May 1, 2000, on a Form 10-QSB filed on May
12, 2000. All purchases and sales of Common Stock reported herein were made in
open market transactions on the Nasdaq National Market System. Members of the
Group collectively beneficially own an aggregate of 168,000 shares of the
Company.
(A) Financial Edge Fund
(a) Aggregate number of shares beneficially owned: 166,900
Percentage: 8.6%
(b) 1. Sole power to vote or to direct vote: 0
2. Shared power to vote or to direct vote: 166,900
3. Sole power to dispose or to direct the disposition: 0
4. Shared power to dispose or to direct disposition: 166,900
(c) The Financial Edge Fund has made the following sales of Common Stock
in the last 60 days:
--------------------------------------------------------------------------------
Date Number of Shares Price Per Share($) Total Proceeds($)
--------------------------------------------------------------------------------
7/28/00 10,000 14.75 147,470
--------------------------------------------------------------------------------
(d) Because they are the Managing Members of PL Capital, the general
partner of Financial Edge Fund, Mr. Palmer and Mr. Lashley have the
power to direct the
<PAGE>
CUSIP No. 81424D109 Page 11 of 24 Pages
affairs of Financial Edge Fund, including the voting and disposition
of shares of Common Stock held in the name of Financial Edge Fund.
Therefore, Mr. Palmer and Mr. Lashley are deemed to share voting and
disposition power with Financial Edge Fund with regard to those shares
of Common Stock.
(B) Financial Edge Strategic
(a) Aggregate number of shares beneficially owned: 166,900
Percentage: 8.6%
(b) 1. Sole power to vote or to direct vote: 0
2. Shared power to vote or to direct vote: 166,900
3. Sole power to dispose or to direct the disposition: 0
4. Shared power to dispose or to direct disposition: 166,900
(c) Financial Edge Strategic has made no purchases or sales of Common
Stock in the last 60 days.
(d) Because they are the Managing Members of PL Capital, the general
partner of Financial Edge Strategic, Mr. Palmer and Mr. Lashley have
the power to direct the affairs of Financial Edge Strategic, including
the voting and disposition of shares of Common Stock held in the name
of Financial Edge Strategic. Therefore, Mr. Palmer and Mr. Lashley are
deemed to share voting and disposition power with Financial Edge
Strategic with regard to those shares of Common Stock.
(C) PL Capital
(a) Aggregate number of shares beneficially owned: 166,900
Percentage: 8.6%
(b) 1. Sole power to vote or to direct vote: 0
2. Shared power to vote or to direct vote: 166,900
3. Sole power to dispose or to direct the disposition: 0
4. Shared power to dispose or to direct disposition: 166,900
(c) PL Capital has made no purchases or sales of Common Stock.
(d) Because they are the Managing Members of PL Capital, Mr. Palmer and
Mr. Lashley have the power to direct the affairs of PL Capital. PL
Capital is the general partner of Financial Edge Fund and Financial
Edge Strategic. Therefore, PL Capital may be deemed to share with Mr.
Palmer and Mr. Lashley voting and disposition power with regard to the
shares of Common Stock held by Financial Edge Fund and Financial Edge
Strategic.
<PAGE>
CUSIP No. 81424D109 Page 12 of 24 Pages
(D) Mr. John Palmer
(a) Aggregate number of shares beneficially owned: 167,000
Percentage: 8.6%
(b) 1. Sole power to vote or to direct vote: 100
2. Shared power to vote or to direct vote: 166,900
3. Sole power to dispose or to direct the disposition: 100
4. Shared power to dispose or to direct disposition: 166,900
(c) Mr. Palmer has made no purchases or sales of Common Stock in the last
60 days.
(E) Mr. Richard Lashley
(a) Aggregate number of shares beneficially owned: 167,900
Percentage: 8.7%
(b) 1. Sole power to vote or to direct vote: 0
2. Shared power to vote or to direct vote: 167,900
3. Sole power to dispose or to direct the disposition: 0
4. Shared power to dispose or to direct disposition: 167,900
(c) Mr. Lashley has made no purchases or sales of Common Stock.
(F) Ms. Beth Lashley
(a) Aggregate number of shares beneficially owned: 1,000
Percentage: 0.1%
(b) 1. Sole power to vote or to direct vote: 0
2. Shared power to vote or to direct vote: 1,000
3. Sole power to dispose or to direct the disposition: 0
4. Shared power to dispose or to direct disposition: 1,000
(c) Ms. Lashley has made no purchases or sales of Common Stock within
the last 60 days.
(d) Mr. Lashley shares with Ms. Lashley the power to direct the
disposition of the shares of Common Stock beneficially owned by Ms.
Lashley in her IRA account held at Bear Stearns, pursuant to a trading
authorization granted by Ms. Lashley to Mr. Lashley, under that firm's
usual terms and conditions.
<PAGE>
CUSIP No. 81424D109 Page 13 of 24 Pages
Item 7. Material to be Filed as Exhibits
No. Description
--- -----------
1 Joint Filing Agreement.*
2 Letter from John Palmer to the Company, dated May 19, 2000.*
3 Letter from John Palmer to the Company, dated May 19, 2000.*
4 Standstill Agreement between the Company and the Group, dated
September 8, 2000.
5 Letter from Phillip M. Goldberg, counsel to the Group, to the SEC,
dated September 8, 2000.
*Filed as part of the Original 13D.
<PAGE>
CUSIP No. 81424D109 Page 14 of 24 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: September 12, 2000
FINANCIAL EDGE FUND, L.P.
By: PL CAPITAL, LLC
General Partner
By: /s/ John Palmer /s/ Richard Lashley
John Palmer Richard Lashley
Managing Member Managing Member
FINANCIAL EDGE - STRATEGIC FUND, L.P.
By: PL CAPITAL, LLC
General Partner
By: /s/ John Palmer /s/ Richard Lashley
John Palmer Richard Lashley
Managing Member Managing Member
By: /s/ John Palmer By: /s/ Richard Lashley
John Palmer Richard Lashley
By: /s/ Beth Lashley
Beth Lashley
PL CAPITAL, LLC
By: /s/ John Palmer /s/ Richard Lashley
John Palmer Richard Lashley
Managing Member Managing Member
