<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OR THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
----------------------------------------------
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: 0-28700
FIRST HOME BANCORP INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-3423990
- ------------------------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
125 South Broadway, Pennsville, New Jersey 08070
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(609) 678-4400
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, no par value, 2,753,969 shares as of May 13, 1998.
<PAGE>
FIRST HOME BANCORP INC.
AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Page
Number
Part I Financial Information:
Item 1: Financial Statements:
<S> <C> <C>
Consolidated Statements of Financial Condition -
March 31, 1998 and December 31, 1997 (unaudited) 1
Consolidated Statements of Income -
Three Months Ended March 31, 1998
and 1997 (unaudited) 2
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1998
and 1997 (unaudited) 3
Notes to Consolidated Financial Statements
(unaudited) 4
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Item 3: Quantitative and Qualitative Disclosures about Market Risk 18
Part II Other Information:
Item 6: Exhibits and Reports on Form 8-K 19
</TABLE>
<PAGE>
Part I
Item 1.
FIRST HOME BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---- ----
(unaudited)
(in thousands)
ASSETS
<S> <C> <C>
Cash and amounts due from depository institutions $ 4,956 $ 5,450
Interest-earning deposits and short-term funds 508 732
Investment securities held-to-maturity (market value - 1998, $2,183;
1997, $2,233) 2,183 2,233
Investment securities held for trading at market value 65 64
Investment securities available-for-sale at market value 13,622 20,647
Mortgage-backed securities (market value -1998, $121,945;
1997, $130,064) 120,063 127,888
Mortgage-backed securities available-for-sale at market value 113,731 88,008
Loans receivable - net 274,909 275,976
Loans held for sale at market value 189 310
Accrued interest receivable 3,071 3,216
Real estate owned 256 855
Federal Home Loan Bank stock-at cost 7,376 7,376
Office properties and equipment 2,739 2,844
Deposit premium 487 516
Net deferred income taxes 739 653
Prepaid expenses and other assets 881 1,030
-------- --------
TOTAL ASSETS $545,775 $537,798
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits $328,249 $326,043
Borrowings 175,928 171,829
Advances by borrowers for taxes and insurance 389 416
Accrued interest payable on advances 956 844
Accounts payable and accrued expenses 2,077 1,281
-------- --------
Total liabilities 507,599 500,413
-------- --------
Commitments and Contingencies (Note 13)
Shareholders' equity:
Preferred stock - No par value; 1,000,000 shares authorized;
none issued --- ---
Common stock - No par value; 10,000,000 shares authorized;
2,708,426 shares issued and outstanding at 1998 and 1997 --- ---
Paid-in capital in excess of par 8,923 8,923
Retained earnings - partially restricted 29,171 28,235
Unrealized gain on securities available-for-sale 82 227
-------- --------
Total shareholders' equity 38,176 37,385
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $545,775 $537,798
======== ========
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
FIRST HOME BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
1998 1997
---- ----
(unaudited)
(in thousands, except
per share data)
INTEREST INCOME:
<S> <C> <C>
Interest and fees on loans $5,625 $5,474
Interest on mortgage-backed securities 3,861 3,393
Other interest income and dividends 481 574
------ ------
Total interest income 9,967 9,441
------ ------
INTEREST EXPENSE:
Interest on deposits 3,583 3,240
Interest on borrowed money 2,493 2,373
------ ------
Total interest expense 6,076 5,613
------ ------
NET INTEREST INCOME 3,891 3,828
PROVISION FOR CREDIT LOSSES 100 100
------ ------
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES 3,791 3,728
------ ------
OTHER INCOME:
Loan servicing fees 45 49
Service charges and other fees 204 157
Profit relating to:
Loans held for sale 15 3
Investment securities held for trading 56 54
Accretion of excess of fair value over cost --- 62
Other income 37 32
------ ------
Total other income 357 357
------ ------
OPERATING EXPENSES:
General and administrative expense:
Salaries and employee benefits 1,148 1,042
Occupancy and equipment 346 314
Marketing 72 77
Federal insurance premium 48 42
Other expenses 557 600
------ ------
Total general and administrative expenses 2,171 2,075
Amortization of deposit premium 29 28
Real estate operations, net 81 22
Merger costs 21 ---
------ ------
Total operating expenses 2,302 2,125
------ ------
INCOME BEFORE INCOME TAXES 1,846 1,960
INCOME TAX EXPENSE 640 662
------ ------
NET INCOME $1,206 $1,298
====== ======
PER SHARE DATA:
Basic net income per share $ .45 $ .48
Diluted net income per share $ .43 $ .47
Dividends per share $ .10 $ .10
Weighted average number of shares outstanding - Basic 2,708,426 2,708,426
Weighted average number of shares outstanding - Diluted 2,780,681 2,744,855
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
FIRST HOME BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
1998 1997
---- ----
(unaudited)
(in thousands)
OPERATING ACTIVITIES:
<S> <C> <C>
Net Income $ 1,206 $ 1,298
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for losses 100 100
Depreciation 112 92
Accretion of excess fair value over cost --- (62)
Amortization of deposit premium 29 28
Investment security gains (56) (54)
Purchase of investment securities held for trading (1,389) (2,982)
Proceeds from sale of investment securities held for trading 1,445 2,763
Loans originated for sale (2,171) (1,488)
Proceeds from loans sold 2,306 1,833
Net gain on sale of loans (15) (3)
Decrease (increase) in accrued interest receivable 145 (62)
Increase in accrued interest payable 112 68
(Increase) decrease in net deferred tax asset (4) 115
Net other 945 417
-------- --------
Net cash provided by operating activities 2,765 2,063
-------- --------
INVESTMENT ACTIVITIES:
Proceeds from maturities of investment securities 7,084 1,719
Purchase of investment securities --- (499)
Purchase of mortgage-backed securities (27,833) (11,326)
Repayments on mortgage-backed securities 9,700 3,375
Purchase of property and equipment (7) (53)
Decrease in real estate owned 598 231
Principal collected on longer term loans 19,264 11,326
Loans originated or acquired (18,296) (16,206)
-------- --------
Net cash used by investing activities (9,490) (11,433)
-------- --------
FINANCING ACTIVITIES:
Net increase (decrease) in:
Demand deposits, NOW accounts, and savings accounts 1,194 5,471
Certificates of deposit 1,012 (532)
Proceeds from borrowings 15,000 10,682
Cash dividends and cash in lieu of fractional shares (271) (272)
Repayment of borrowings (10,900) (7,138)
Increase (decrease) in advance from borrowers for taxes and insurance (28) 71
-------- --------
Net cash provided by financing activities 6,007 8,282
-------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (718) (1,088)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 6,182 6,435
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,464 $ 5,347
======== ========
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
FIRST HOME BANCORP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
1. BASIS OF PRESENTATION AND SELECTED ACCOUNTING POLICIES
First Home Bancorp Inc. (the Company), a New Jersey corporation, is the
holding company for First Home Savings Bank, F.S.B. (the Bank). The Company
was organized for the purpose of acquiring all of the capital stock of the
Bank in connection with the reorganization of the Bank into the holding
company form of ownership. Each outstanding share of common stock of the Bank
was converted into one share of common stock of the Company. The
reorganization was consummated on May 31, 1996.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly the
Company's financial position as of March 31, 1998 and December 31, 1997, the
results of operations for the three months ended March 31, 1998 and 1997 and
changes in cash flows for the three months then ended. The accompanying
financial statements do not include information or footnotes necessary for a
complete presentation of financial condition, statements of income and cash
flows in conformity with generally accepted accounting principles. Certain
reclassifications have been made to the consolidated financial statements for
1997 to conform to the 1998 presentation. The statements of income for the
three months ended March 31, 1998 and 1997 are not necessarily indicative of
the results which may be expected for the entire year.
Derivative Financial Instruments - During 1998 and 1997, the Company was a
party to financial instruments with off-balance-sheet risk in the normal
course of business to reduce its exposure to fluctuations in interest rates
(hedging). The off-balance-sheet financial instruments were forward
commitments and interest rate swaps. Those instruments involve, to varying
degrees, elements of credit, interest rate, or liquidity risk in excess of
the amounts recognized in the balance sheets. The contract or notional
amounts of those instruments represent the extent of involvement the Company
has in these financial instruments.
Credit risk is controlled by conducting transactions with major investment
firms and by setting policies for transaction volume limitations and periodic
monitoring. Each dealer was carefully evaluated on the basis of its financial
strength, reputation and expertise. Unless noted otherwise, the Company does
not require collateral or other securities to support derivative financial
instruments with credit risk.
Derivatives are classified as hedges of specific on-balance-sheet items,
off-balance-sheet items or anticipated transactions. In order for derivatives
to qualify for hedge accounting treatment, the following conditions must be
met: 1) the underlying item being hedged by derivatives exposes the Company
to interest rate risk, 2) the derivatives used serves to reduce the Company's
sensitivity to interest rate risk, and 3) the derivative used is designed and
deemed effective in hedging the Company's exposure to interest rate risk. For
derivatives designated as hedges of interest rate exposure, gains or losses
are deferred and included in the carrying amounts of the related item
exposing the Company to interest rate risk and ultimately recognized in
income as part of those carrying amounts. Gains or losses resulting from
early terminations of derivatives are deferred and amortized over the
remaining term of the underlying balance sheet item or the remaining term of
the derivative, as appropriate.
Derivatives not qualifying for hedge accounting treatment would be carried at
market value with realized and unrealized gains and losses included in
noninterest income. During 1998 and 1997, all of the Company's derivatives
qualified as hedges of specific on balance sheet items.
A forward contract is a legal agreement between two parties to purchase or
sell a specific quantity of a financial instrument, at a specified price,
with delivery and settlement at a specified future date. Because forward
contracts lack the liquidity and protection provided by regulated exchanges,
there is a heightened risk of default by the counterparties. At March 31,
1998 and 1997 management believes there was no exposure to credit loss in the
event of non-performance by other parties to forward contracts.
The Company periodically enters into interest rate swap agreements to help
reduce certain interest rate exposure on a portion of its borrowings. An
interest rate swap is a contractual agreements between two
4
<PAGE>
parties to exchange interest payments at particular intervals, computed on
different terms, on a specified notional amount. The notional amount
represents the base on which interest due each counterparty is calculated and
does not represent the potential for gains or losses associated with the
market risk or credit risk of such transactions. At March 31, 1998, the
Company had a $20.0 million notional amount interest rate swap agreement
outstanding on which the Company pays a fixed interest rate of 6.10% and
receives a floating interest rate of three-month LIBOR. At March 31, 1998,
three-month LIBOR was 5.63%. Periodic net cash settlements under the swap
agreement are recorded as an adjustment to interest expense over the life of
the agreement. Included in interest expense for the three months ended March
31, 1998 was $13,000 of expense related to the interest rate swap agreement.
The interest rate swap agreement matures on August 20, 1999. In the event of
liquidation of the liability to which the interest rate swap is linked, the
interest rate swap would be recorded at its fair market value with any change
in such market value recorded in the period such event occurs. No interest
rate swap agreements were outstanding at March 31, 1997.
Net Income Per Share
The Company adopted FAS (Financial Accounting Standards) Statement No. 128,
"Earnings Per Share" (FAS 128), on December 31, 1997. FAS 128 requires dual
presentation of basic and diluted net income per share on the face of the
income statement. The Company's basic net income per share is calculated as
net income divided by the weighted average number of shares outstanding. For
diluted net income per share, net income is divided by the weighted average
number of shares outstanding plus the incremental number of shares added as a
result of common stock equivalents, calculated using the treasury stock
method. The Company's common stock equivalents consist solely of outstanding
stock options.
A reconciliation of the weighted average shares outstanding used to calculate
basic net income per share and diluted net income per share follows:
March 31,
1998 1997
---- ----
Weighted average shares outstanding (basic) 2,708,426 2,708,426
Impact of dilutive common stock equivalents 72,255 36,429
--------- ---------
Weighted average shares outstanding (diluted) 2,780,681 2,744,855
========= =========
Comprehensive Income
The Company adopted the FAS Statement No. 130 "Reporting Comprehensive
Income" on January 1, 1998. The statement requires the company to include all
nonowner changes in equity as components of comprehensive income. Currently,
such nonowner changes in equity include only unrealized gains and losses on
available-for-sale investment securities. The following table shows the
company's comprehensive income for the periods stated.
Three Months Ended March 31,
1998 1997
---- ----
(in thousands)
Net income $1,206 $1,298
Change in unrealized loss on available
for sale investment securities (145) (190)
------ ------
Total comprehensive income $1,061 $1,108
====== ======
Disclosure About Segments
The Company adopted the FAS Statement No. 131 "Disclosure About
Segments of an Enterprise and Related Information" on January 1, 1998.
The statement requires an entity to discuss financial information in a
manner consistent with internally used information and requires more
detailed disclosures of operating and reporting segments. No additional
disclosures are required as a result of the adoption of this statement.
5
<PAGE>
2. INVESTMENT SECURITIES HELD-TO-MATURITY
Investment securities held-to-maturity at March 31, 1998 and December 31,
1997 consisted of tax exempt obligations due in less than one year.
3. INVESTMENT SECURITIES HELD FOR TRADING
Investment securities held for trading at March 31, 1998 and December 31,
1997 consisted of an investment in a mutual fund.
The Company buys and sells debt and equity securities that are classified as
trading securities. At each reporting period, the Company adjusts the value
of these securities to market value.
4. INVESTMENT SECURITIES AVAILABLE-FOR-SALE
Investment securities available-for-sale at March 31, 1998 and December 31,
1997 consisted of the following:
<TABLE>
<CAPTION>
March 31, 1998
--------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(in thousands)
U.S. Government Agencies
<S> <C> <C> <C> <C>
Due after one year through five years $ 7,998 $ 10 $(1) $ 8,007
Corporate Notes
Due in one year or less 1,499 2 --- 1,501
Due after one year through five years 631 24 --- 655
Common stock 791 126 --- 917
Preferred stock 2,473 69 --- 2,542
------- ---- ---- -------
Total $13,392 $231 $(1) $13,622
======= ==== ==== =======
December 31, 1997
-----------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(in thousands)
U.S. Government Agencies
Due in one year through five years $13,459 $ 55 $--- $13,514
Corporate Notes
Due in one year or less 2,996 9 --- 3,005
Due after one year through five years 633 27 --- 660
Common stock 791 74 --- 865
Preferred stock 2,548 56 (1) 2,603
------- ---- ---- -------
Total $20,427 $221 $ (1) $20,647
======= ==== ==== =======
</TABLE>
6
<PAGE>
5. MORTGAGE-BACKED SECURITIES
A summary of mortgage-backed securities at March 31, 1998 and December 31,
1997 consisted of the following:
<TABLE>
<CAPTION>
March 31, 1998
--------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(in thousands)
<S> <C> <C> <C> <C>
Mortgage-backed Securities
Available-for-sale
FNMA pass-through certificates $ 1,371 $ 31 $ --- $ 1,402
FHLMC pass-through certificates 2,836 185 --- 3,021
GNMA pass-through certificates 4,579 391 --- 4,970
Real estate mortgage investment
conduit obligations 105,046 528 (1,236) 104,338
--------- ------- -------- --------
Total mortgage-backed securities
available-for-sale $ 113,832 $ 1,135 $(1,236) $113,731
========= ======= ======== ========
Mortgage-Backed Securities
Held to Maturity
Non-agency pass through certificates $ 5,298 $ 36 $--- $ 5,334
FNMA pass-through certificates 8,734 143 --- 8,877
FHLMC pass-through certificates 8,297 133 --- 8,430
Real estate mortgage investment
conduit obligations 97,734 1,635 (65) 99,304
-------- ------- ----- --------
Total mortgage-backed securities
held to maturity $120,063 $ 1,947 $(65) $121,945
======== ======= ==== ========
December 31,1997
----------------
Gross Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(in thousands)
Mortgage-backed Securities
Available-for-sale
FNMA pass-through certificates $ 1,482 $ 19 $ (2) $ 1,499
FHLMC pass-through certificates 2,997 212 --- 3,209
GNMA pass-through certificates 4,875 407 --- 5,282
Real estate mortgage investment
conduit obligations 78,520 834 (1,336) 78,018
-------- ------- ------- --------
Total mortgage-backed securities
available-for-sale $ 87,874 $ 1,472 $(1,338) $ 88,008
======== ======= ======= ========
Mortgage-Backed Securities
Held to Maturity
Non-agency pass through certificates $ 5,444 $ 36 $--- $ 5,480
FNMA pass-through certificates 9,672 149 --- 9,821
FHLMC pass-through certificates 8,771 96 --- 8,867
Real estate mortgage investment
conduit obligations 104,001 1,926 (31) 105,896
-------- ------- ---- --------
Total mortgage-backed securities
held to maturity $127,888 $ 2,207 $(31) $130,064
======== ======= ==== ========
</TABLE>
7
<PAGE>
Mortgage-backed securities with amortized costs of $95,064,000 and
$80,773,000 and market values of approximately $95,568,000 and $81,389,000
were pledged as collateral for securities sold under agreements to repurchase
at March 31, 1998 and December 31, 1997, respectively.
6. LOANS RECEIVABLE
Loans receivable at March 31, 1998 and December 31, 1997 consisted of the
following:
March 31, December 31,
1998 1997
---- ----
(in thousands)
Residential mortgages on existing property $209,723 $210,483
Construction mortgages 5,501 5,486
Commercial real estate loans 17,632 17,715
Commercial business loans 2,421 2,348
Consumer loans:
Home equity loans 30,227 29,497
Mobile home loans 5,399 5,651
Equity lines of credit 3,775 4,194
Automobile loans 4,429 4,720
Other loans 3,573 4,161
-------- --------
Total 282,680 284,255
Undisbursed portion of loans in process (2,579) (3,045)
Net deferred loan fees, discounts and premiums (1,566) (1,618)
Allowance for possible credit losses (3,626) (3,616)
-------- --------
Total $274,909 $275,976
======== ========
The total amount of loans serviced for the benefit of others was
approximately $65,000,000 and $65,200,000 at March 31, 1998 and December 31,
1997, respectively.
Following is a summary of changes in allowance for possible credit losses:
March 31, December 31,
1998 1997
---- ----
in thousands)
Balance, beginning of period $3,616 $3,760
Provision for credit losses 100 400
Charge-offs (115) (708)
Recoveries 25 164
------ ------
Total $3,626 $3,616
====== ======
7. LOANS HELD FOR SALE
Loans held for sale at March 31, 1998 and December 31, 1997 amounted to
$189,000 and $310,000, respectively. Loans held for sale consist of 30 year
fixed-rate residential mortgage loans which qualify for sale in the secondary
market. These loans are recorded at the lower of cost or market value
determined on an aggregate basis.
8. ACCRUED INTEREST RECEIVABLE
March 31, December 31,
1998 1997
---- ----
(in thousands)
Loans $1,517 $1,606
Mortgage-backed securities 1,249 1,170
Investment securities 305 440
------ ------
Total $3,071 $3,216
====== ======
8
<PAGE>
9. OFFICE PROPERTIES AND EQUIPMENT
Office properties and equipment at March 31, 1998 and December 31, 1997 are
summarized by major classifications as follows:
March 31, December 31,
1998 1997
(in thousands)
Land, buildings and improvements $3,730 $3,730
Furniture and equipment 1,601 1,604
------ ------
Total 5,331 5,334
Less accumulated depreciation (2,592) (2,490)
------ ------
Total $2,739 $2,844
====== ======
10. DEPOSITS
Deposits at March 31, 1998 and December 31, 1997 consisted of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---- ----
(in thousands)
<S> <C> <C>
NOW accounts $ 28,921 $ 27,595
Non-interest bearing accounts 8,364 7,847
Money market, municipal deposits, and other accounts 70,956 72,274
Savings and club accounts 32,666 32,185
Certificates of deposits 186,980 185,846
-------- --------
Total 327,887 325,747
Accrued interest payable 362 296
-------- --------
Total $328,249 $326,043
======== ========
</TABLE>
The Bank has pledged mortgage loans and mortgage-backed securities
aggregating approximately $12,352,000 for public fund deposits as required
by the New Jersey Department of Banking's Govern mental Unit Deposit
Protection Act.
11. BORROWINGS
Borrowings include Federal Home Loan Bank advances due at various dates
through 2002. At March 31, 1998 borrowings totaled $84,660,000 with interest
rates ranging between 5.31% and 7.52%. At December 31, 1997 borrowings
totaled $95,561,000 with interest rates ranging between 5.31% and 7.52%. The
borrowings from the Federal Home Loan Bank are collateralized by Federal
Home Loan Bank stock and substantially all first mortgage loans.
Borrowings at March 31, 1998 and December 31, 1997 also consisted of
securities sold under agreements to repurchase due at various dates through
2001. At March 31, 1998 the borrowings totaled $91,268,000 with interest
rates ranging between 5.38% to 6.11%. At December 31, 1997 these borrowings
totaled $76,268,000 with interest rates ranging between 5.74% and 6.11%. Of
the total outstanding agreements at March 31, 1998, $20,000,000 is callable
in 1998, $42,000,000 is callable in 1999, and $15,000,000 is callable in
2000. The remaining $14,268,000 is due within 30 days. Such agreements are
treated as financings and the obligations to repurchase securities sold are
reflected as a liability in the statements of financial condition.
Securities sold under agreement to repurchase were collateralized by
mortgage-backed securities with amortized costs of $95,064,000 and
$80,773,000 and market values of approximately $95,568,000 and $81,389,000
at March 31, 1998 and December 31, 1997, respectively. The securities
underlying the agreements were delivered to, and are held by, the dealers
who arranged the transactions.
9
<PAGE>
12. INTEREST RATE SWAP
In August 1997 the Company entered into an interest rate swap as a component
of managing interest rate risk. The swap agreement is held for purposes
other than trading. Periodic net cash settlements under the swap agreement
are accrued as an adjustment to interest expense over the life of the
agreement. The Company pays a fixed rate of 6.10% for two years on a
notional amount of $20,000,000 and receives three month London Interbank
Offered Rates (LIBOR) adjusted every three months (at March 31, 1998 -
5.63%). The swap was entered into to hedge the Company's short-term
borrowings. There were no outstanding interest rate swap agreements at March
31, 1997.
13. COMMITMENTS AND CONTINGENCIES
Commitments at March 31, 1998 and December 31, 1997 consisted of the
following:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---- ----
(in thousands)
<S> <C> <C>
Fixed rate mortgage loans (current market rates) $ 5,913 $ 3,741
Adjustable rate mortgage loans 888 651
Unused lines of credit 6,635 6,520
Letters of credit 237 305
Consumer loans 665 294
Loans in process 2,579 3,045
------- -------
Total $16,917 $14,556
======= =======
</TABLE>
At March 31, 1998 all commitments are expected to be funded within one year.
14. MERGER
On December 18, 1997, the Company entered into an Agreement and Plan of
Merger with and into Sovereign Bancorp. The Merger is anticipated to be
consummated with an exchange of stock and is intended to constitute a tax
free reorganization under the Internal Revenue Code and be accounted for as
a pooling-of-interest under GAAP. Regulatory approvals, the approval of the
Company's shareholders, and other conditions are required before the merger
can be consummated.
10
<PAGE>
FIRST HOME BANCORP INC.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
First Home Bancorp Inc. (the Company) is the sole stockholder of First
Home Savings Bank, F.S.B. (the Bank). Substantially all of the Company's
consolidated revenues are derived from the operations of the Bank, and the Bank
represented substantially all of the Company's consolidated assets and
liabilities at March 31, 1998. The Bank's business is that of a financial
intermediary and consists primarily of attracting deposits from the general
public and using such deposits, together with borrowings and other funds, to
make mortgage loans secured by residential real estate primarily located in New
Jersey and Delaware. The Bank provides consumer banking services through eight
retail banking offices in New Jersey and two retail banking offices in Delaware.
The Bank is subject to significant competition from other financial
institutions, and is also subject to regulation by the Office of Thrift
Supervision (OTS) and the Federal Deposit Insurance Corporation and undergoes
periodic examinations by these regulatory agencies.
Forward-looking Statements
The information contained in the Quarterly Report on Form 10-Q for the
three month period ended March 31, 1998 contains forward-looking statements (as
such term is defined under Section 21E of the Securities Exchange Act of 1934
and the regulations thereunder), including without limitation, statements as to
trends, management's beliefs, expectations or opinions, which are based upon a
number of assumptions concerning future conditions that may ultimately prove to
be inaccurate.
Such forward-looking statements are subject to risks and uncertainties
and may be affected by various factors which may cause actual results to differ
materially from those in the forward-looking statements. Certain of these risks,
uncertainties and other factors, are discussed in the Company's Form 10-K for
the year ended December 31, 1997.
Impact of the Year 2000
The Year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. The Company's
computer programs that have time sensitive software may recognize a date using
"00" as the year 1900 rather that the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including the
inability to process transactions or engage in other normal business activities.
The Company determined that the third party vendors with which the
Company contracts will be required to modify or replace portions of software and
hardware so that the Company's computer systems will function properly with
respect to dates in the year 2000 and thereafter. The Company believes that with
modifications or replacements to existing software and hardware and conversions
to new software and hardware, the Year 2000 Issue will not pose significant
operational problems for its computer systems. However, if such modifications
and conversions are not made, or are not completed timely, the Year 2000 Issue
could have a material impact on operations.
The Company developed a comprehensive list of software and hardware
used by the Company. Every vendor was contacted regarding the Year 2000 Issue.
The Company was tracking the progress each vendor was making in resolving the
problems associated with the Year 2000 Issue. The Company's primary vendor
developed a plan for all its customers to participate.
The Company planned to utilize internal and external sources to
identify, test, reprogram or replace software for year 2000 modifications.
However, in anticipation of the merger with Sovereign, the year 2000 project was
suspended. After the merger with Sovereign, existing loan and deposit processing
functions will be
11
<PAGE>
processed within Sovereign's processing systems. Sovereign plans to make changes
to the Company's loan and deposit processing during the first quarter of 1999.
There can be no guarantee that the merger will be approved and the data
processing conversion will be completed as planned. It is not certain that the
systems on which Sovereign rely will be timely converted for year 2000 and that
there will be no adverse effect on operations.
If the merger is not completed as planned, the Company believes that
there is sufficient time remaining to address the year 2000 Issue as a stand
alone company. The costs associated with modifying existing systems applications
would be expensed as incurred. The Company does not expect costs associated with
application modifications for year 2000 compliance to be material. Since the
remaining time period is limited, availability and cost of personnel trained in
the area is unknown, and the full extent of the Year 2000 Issue may not have
been identified, the current estimate of cost could increase.
Net Income
The Company earned $1,206,000, or $.45 per share, for the three month
period ended March 31, 1998 compared to $1,298,000, or $.48 per share, for the
three month period ended March 31, 1997. Net income decreased $92,000, or 7.1%,
for the three months ended March 31, 1998 as compared to the same period in
1997. The decrease was attributable to increases in total operating expenses of
$177,000 offset by an increase in net interest income of $63,000. The increases
in total operating expense were primarily the result of increases related to
salaries and employee benefits, real estate operations and merger costs of
$106,000, $59,000 and $21,000, respectively.
Net Interest Income
Net interest income for the three month period ended March 31, 1998
totaled $3,891,000 compared to $3,828,000 for the three month period ended March
31, 1997, a $63,000, or 1.6%, increase. The increase in net interest income for
the three months ended March 31, 1998 was attributable to growth in net
interest-earning assets of $5,747,000 and was offset by a decline in net
interest margin. Average interest-earning assets increased by $35,107,000 for
the three month period ended March 31, 1998 as compared to the prior year.
Average interest-bearing liabilities increased by $29,360,000 for the three
month period ended March 31, 1998 as compared to the prior year. The increase in
average interest-earning assets was primarily attributable to the purchase of
mortgaged-backed securities which increased by $31,939,000 from the prior year.
The increase in average interest-bearing liabilities was attributable to an
increase in deposits of $29,967,000 from the prior year. The increase in net
interest income resulting from the increase in net interest-earning assets was
offset by a decline in interest rate margin of .16% to 2.97% in March 1998 from
3.13% in March 1997.
The following table sets forth information for the three month periods
ended March 31, 1998 and March 31, 1997 regarding the Company's (1) average
balance of interest-earning assets and the resultant interest income and average
yields; (2) average balance of interest-bearing liabilities and the resultant
interest expense and average costs; (3) net interest income; (4) interest rate
spread; (5) and net yield earned on weighted average interest-earning assets.
The table is not presented on a tax equivalent basis because the Company's
investment in tax-free obligations is insignificant.
12
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1998 March 31, 1997
-------------- --------------
(dollars in thousands)
Average Average
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ----
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C>
Loans $275,154 $5,625 8.18% $263,843 $5,474 8.30%
Mortgage-backed securities 222,641 3,861 6.94 190,702 3,393 7.12
Other (1) 26,073 481 7.39 34,216 574 6.71
------- ------ ---- -------- ------ ----
Total interest-earning assets 523,868 9,967 7.61 488,761 9,441 7.73
------- ------ ---- -------- ------ ----
Non-interest earning assets 13,075 14,679
------- --------
Total assets $536,943 $503,440
======== ========
Interest bearing liabilities:
Deposits $325,925 3,583 4.40 $295,958 3,240 4.38
Borrowings 171,049 2,493 5.83 171,656 2,373 5.53
------- ------ ---- -------- ------ ----
Total interest-bearing liabilities 496,974 6,076 4.89 467,614 5,613 4.80
------- ------ ---- -------- ------ ----
Non-interest-bearing liabilities 2,390 2,476
------- --------
Total liabilities 499,364 470,090
------- --------
Shareholders' equity 37,579 33,350
------- --------
Total liabilities and
shareholders' equity $536,943 $503,440
======== ========
Net interest income $3,891 $3,828
====== ======
Interest rate spread 2.72% 2.93%
==== ====
Net yield on weighted average
interest-earning assets 2.97% 3.13%
==== ====
</TABLE>
(1) Consists of interest-earning deposits, short-term funds, investment
securities, and Federal Home Loan Bank stock.
Provision for Credit Losses
The provision for credit losses were $100,000 for the three month
periods ended March 31, 1998 and 1997. As of March 31, 1998, the allowance for
credit losses totaled $3,626,000, or 1.30%, of total loans including loans held
for sale compared to $3,757,000, or 1.41%, of total loans at March 31, 1997.
Other Income
Other income remained constant for the three months ended March 31,
1998 from the comparable period of 1997. The elimination of the accretion of
excess of fair value over cost of $62,000 was offset by increases in service
charges and other fees of $47,000 and an increase in profits relating to the
sale of investment securities held for trading and loans held for sale to
$71,000 for the three months ended March 31, 1998 from $57,000 during the
comparable period in the prior year.
Operating Expenses
General and Administrative Expense - General and administrative expenses
increased $96,000, or 4.6%, for the three months ended March 31, 1998 from the
comparable period of 1997. The increase in general and administrative expenses
for the three months ended March 31, 1998 was attributable to an increase of
$106,000 in salaries and benefits and $32,000 in occupancy and equipment costs
associated with the operation and administration of customer services. These
increases were offset by a decrease of $43,000 in miscellaneous operating
expenses for the three month period ended March 31, 1998 to $557,000 from
$600,000 for the three month period ended March 31, 1997.
13
<PAGE>
Real Estate Operations, Net - Net real estate operations expense increased
$59,000 for the three months ended March 31, 1998 from the comparable period of
1997. This increase resulted from the net losses of $50,000 and costs of $31,000
associated with the liquidation of real estate owned properties. During the
three months ended March 31, 1997 profits of $9,000 and costs of $31,000 were
incurred.
Merger Costs - Merger costs of $26,000 were incurred for the three months ended
March 31, 1998 in connection with the pending acquisition of the company by
Sovereign Bancorp. See note 14 of the accompanying financial statements for
additional information.
Amortization of Deposit Premium - In January 1995, the Bank acquired two branch
offices with deposits of approximately $15,900,000. The premium paid for these
deposits is amortized over a period not exceeding the estimated average
remaining life of the customer base acquired. During the three month periods
ended March 31, 1998 and March 31, 1997 amortization was $29,000 and $28,000,
respectively.
Income Tax Expense
Income tax expense decreased $22,000, or 3.3%, for the three months
ended March 31, 1998 as compared to the same period in 1997. Pre-tax income
decreased $114,000, or 5.8%, from the comparable period of 1997.
Financial Condition
Total assets increased to $545,775,000 on March 31, 1998 from
$537,798,000 as of December 31, 1997, an increase of 5.9% on an annualized
basis. This increase was mainly attributable to an increase in mortgage-backed
securities. From December 31, 1997 to March 31, 1998 mortgage-backed securities
increased by $17,898,000. This increase was partially offset by a decrease in
investment securities of $7,074,000.
Total liabilities increased to $507,599,000 on March 31, 1998 from
$500,413,000 as of December 31, 1997, an increase of 5.7% on an annualized
basis. Deposits increased to $328,249,000 on March 31, 1998 from $326,043,000 on
December 31, 1997. This increase was due to increases in now accounts and
certificates of deposit. From December 31, 1997 to March 31, 1998, NOW accounts
increased by $1,326,000 and certificates of deposits increased by $1,134,000.
Borrowings increased to $175,928,000 on March 31, 1998 from $171,829,000 on
December 31, 1997. This increase was primarily used to fund the increase in
mortgage-backed securities.
Shareholders' equity increased to $38,176,000 on March 31, 1998 from
$37,385,000 as of December 31, 1997. This increase was primarily the result of
net income of $1,206,000 for the three months ended March 31, 1998, less cash
dividends of $270,000 declared during the period. In addition, investments
classified as available- for-sale in accordance with the FAS Statement No. 115
"Accounting for Certain Investments in Debt and Equity Securities" are required
to be marked to market on an after-tax basis and unrealized gains or losses are
reflected as an adjustment to shareholders' equity. The Company had net
unrealized gains of $82,000 on March 31, 1998 and net unrealized gains of
$227,000 on December 31, 1997 or a net decrease in unrealized gains of $145,000.
14
<PAGE>
Asset Quality
The Company's non-performing assets consist of non-accrual loans and
real estate owned. The following table sets forth information regarding
non-performing assets. At March 31, 1998 two past due loans of more than 90 days
with balances totaling $197,000 were accruing interest. These loans are in the
process of being refinanced by another financial institution. These loans are
anticipated to be repaid during the second quarter of 1998.
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------ ------
(in thousands)
<S> <C> <C>
Non-accrual loans
Residential loans $2,845 $2,471
Commercial loans 678 577
Consumer loans 413 310
------ ------
Total non-accrual loans 3,936 3,358
Real estate owned 256 855
------ ------
Total non-performing assets $4,192 $4,213
====== ======
Total non-performing assets as a percent of total assets .77% .78%
====== ======
</TABLE>
The Company's level of non-performing assets is affected by adverse
situations that may affect a borrower's ability to repay and other conditions
beyond the Company's control. The Company's management monitors the quality of
assets on a regular basis.
Liquidity and Committed Resources
Liquidity is maintained at a sufficient level to generate cash to fund
current loan demand and pay operating expenses. Sources of funds are obtained
from increases in deposits, loan principal repayments, sales of loans and
investments, increases in borrowed money and from operations. While loan
principal repayments are a relatively stable source of funds, deposit flows are
greatly influenced by general interest rates, economic conditions and
competition. As a member of the Federal Home Loan Bank (FHLB) system, the
Company may borrow from the FHLB of New York. The Company may also utilize
reverse repurchase agreements collateralized by mortgage-backed securities or
other securities. Management believes that the Company has sufficient borrowing
capacity to compensate for reductions in other sources of funds such as
deposits.
The overall liquidity percentage requirement is currently 4% of certain
net withdrawable deposits and borrowings payable in one year or less. The
Company exceeded its liquidity requirement at March 31, 1998.
At March 31, 1998, the Company had approximately $16,917,000 in
outstanding commitments. It is anticipated that these commitments will fund
within the next year and funds will be available from normal cash flows.
Interest Rate Risk Management
The Company has a program to control interest rate risk. The strategy
includes the origination and purchase of adjustable rate mortgage (ARM) loans,
the purchase of short-term mortgage-backed securities (MBS) and the origination
of short-term consumer loans. The Board of Directors has instructed management
to maintain interest rate risk within prescribed limits. An internal
asset/liability modeling system monitors the effect on income of changing market
interest rates.
The difference between the amount of interest-earning assets maturing
or repricing within a specific time period and the amount of interest-bearing
liabilities maturing or repricing within that time period (gap) is also
monitored. A gap is considered positive when the amount of interest rate
sensitive assets exceeds the amount of
15
<PAGE>
interest rate sensitive liabilities. When interest rate sensitive liabilities
exceed interest rate sensitive assets, the gap is considered negative. However,
because all interest rates and yields do not adjust at the same velocity, the
gap is only a general indicator of interest rate sensitivity.
During a period of rising interest rates, a negative gap tends to
adversely affect net interest income while a positive gap tends to increase net
interest income. During a period of declining interest rates, a negative gap
tends to increase net interest income while a positive gap tends to adversely
affect net interest income.
The Company's net interest income tends to increase in periods of
declining interest rates because its interest-bearing liabilities generally
reprice faster than its interest-earning assets. The Company's net interest
income tends to decrease in periods of rising interest rates. Therefore, rising
interest rates, particularly when combined with a flattening yield curve, could
have a negative impact on net interest income in future periods.
The following table summarizes the amounts of interest-earning assets
and interest-bearing liabilities outstanding as of March 31, 1998 which are
anticipated to mature, prepay or reprice in each of the future time periods
shown. Adjustable and floating rate assets are included in the period in which
interest rates are next scheduled to adjust rather than in the period in which
they are due. Loans and mortgage-backed securities are included in the periods
in which they are anticipated to be repaid, based on internal assumptions.
Non-performing loans have been excluded from interest-earning assets. Money
market deposit accounts (MMDA) and other accounts, NOW and savings accounts
which are subject to immediate withdrawal and repricing are classified at decay
rates based upon assumptions provided by the OTS.
16
<PAGE>
<TABLE>
<CAPTION>
Twelve
Months 1-3 3-5 5-10 10-20 Over 20
or less Years Years Years Years Years Total
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Residential mortgage loans
Adjustable rate $ 48,916 $ 22,777 $ 581 $ --- $ --- $ --- $ 72,274
Fixed rate 27,699 39,763 26,681 31,984 11,151 176 137,454
Mortgage-backed securities
Adjustable rate 95,907 14,394 --- --- --- --- 110,301
Fixed rate 21,022 32,480 22,841 31,299 16,320 1,458 125,420
Consumer and commercial loans
Adjustable rate 9,682 1,862 --- --- --- --- 11,544
Fixed rate 22,792 20,339 7,342 3,950 470 --- 54,893
Loans held for sale 189 --- --- --- --- --- 189
Investment securities 7,455 1,000 7,605 --- --- 7,376 23,436
Investment securities held-for-trading 65 --- --- --- --- --- 65
-------- -------- -------- -------- ------- ------- --------
Total 233,727 132,615 65,050 67,233 27,941 9,010 535,576
-------- -------- -------- -------- ------- ------- --------
Interest-bearing liabilities:
Deposits
Savings accounts 4,573 7,315 5,410 8,138 5,629 1,601 32,666
NOW and non-interest
bearing demand accounts 6,338 9,627 6,632 8,902 4,888 898 37,285
MMDA and other accounts 21,996 25,650 12,212 9,362 1,693 43 70,956
Certificates of deposit 122,893 54,600 9,487 --- --- --- 186,980
Borrowings 100,196 73,132 2,600 --- --- --- 175,928
Interest rate swaps
(pay fixed, receive floating) (20,000) 20,000 --- --- --- --- ---
-------- -------- -------- -------- ------- ------- --------
Total 235,996 190,324 36,341 26,402 12,210 2,542 503,815
-------- -------- -------- -------- ------- ------- --------
Excess int.-earning assets (liabilities) $ (2,269) $(57,709) $ 28,709 $ 40,831 $15,731 $ 6,468 $ 31,761
-------- -------- -------- -------- ------- ------- --------
Cumulative excess interest-earning
assets (liabilities) $ (2,269) $(59,978) $(31,269) $ 9,562 $25,293 $31,761
======== ======== ======== ======= ======= =======
Ratio of GAP during the period
to total assets (.42)% (10.57)% 5.26% 7.48% 2.88% 1.19%
==== ====== ==== ==== ==== ====
Ratio of cumulative GAP
to total assets (.42)% (10.99)% (5.73)% 1.75% 4.63% 5.82%
===== ====== ===== ==== ==== ====
</TABLE>
Interest Rate Sensitivity
In evaluating the Company's exposure to interest rate sensitivity,
certain limitations inherent in the method of analysis must be considered. For
example, although certain assets and liabilities may have similar maturities or
periods for repricing, they may react in different degrees to changes in market
interest rates. Also, the interest rates on certain types of assets and
liabilities may fluctuate in advance of changes in market interest rates, while
interest rates on other types may lag behind changes in market rates.
Additionally, certain assets, such as adjustable rate mortgage loans, have
features which restrict changes in interest rates in the short-term and over the
life of the asset. Further, in the event of a change in interest rates,
prepayment on loans and early withdrawals on certificates of deposit may deviate
significantly from those assumed. Finally, the ability of many borrowers to
service their debt may decrease in the event of an interest rate increase. The
Company considers these factors in monitoring its exposure to interest rate
sensitivity. The Company believes no material changes occurred in the three
month period ended March 31, 1998 from the information presented in the
Company's 10-K for the year ended December 31, 1997.
17
<PAGE>
Capital
The Bank is in full compliance with its capital requirements. Management
believes that, under current regulations, the Bank will continue to meet its
minimum capital requirements in the foreseeable future. The table below presents
the Bank's actual and regulatory required capital amounts for core, tangible,
tier 1 risk-based and total risk-based capital at March 31, 1998.
<TABLE>
<CAPTION>
Required to be
Required for Well Capitalized
Capital Adequacy Under Prompt
Actual Purposes Corrective Action
-------------------- ----------------- -----------------
Amount Percentage Amount Percentage Amount Percentage
-------------------- ----------------- -----------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Tier 1 (Core) capital $36,403 6.69% $21,789 4.0% $27,209 5.0%
Tangible $36,403 6.69% $ 8,163 1.5% N/A N/A
Tier 1 risk-based $36,403 15.92% $ 9,230 4.0% 13,719 6.0%
Total risk-based $39,271 17.18% $18,292 8.0% 22,865 10.0
</TABLE>
Selected Financial and Other Data
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Three Months Ended
March 31,
1998 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest rate spread 2.72% 2.93%
Net yield on interest-earning assets 2.97% 3.13%
Return on average assets .90% 1.03%
Return on average equity 12.83% 15.57%
General and administrative expenses to average assets 1.62% 1.65%
Ratio of interest-earning assets to interest-bearing liabilities 1.05x 1.05x
Ratio of non-performing assets to total assets at end of period .77% .79%
Dividends per common share $.10 $.10
Book value per share at end of period $14.10 $12.36
</TABLE>
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Information required by this Item 3 is included in Item 2 of Part I of
this Form 10-Q, entitled " Management's Discussion and Analysis - Interest Rate
Sensitivity."
18
<PAGE>
FIRST HOME BANCORP INC.
AND SUBSIDIARY
Part II: Other Information
Item 6: Exhibits and Reports on Form 8-K
(a) *3.1 Certificate of Incorporation.
*3.2 Bylaws.
*10.1(1) Employee Stock Compensation Program.
*10.2(1) 1996 Employee Stock Option Plan.
*10.3(1) 1994 Stock Option Plan for Non-Employee Directors.
*10.4(1) Employment Agreement between First Home Savings Bank, F.S.B. and
Stephen D. Miller, as amended.
*10.5(1) Employment Agreement between First Home Savings Bank, F.S.B. and
Robert A. DiValerio, as amended.
*10.6(1) Employment Agreement between First Home Savings Bank, F.S.B. and
Duff P. O'Connor, as amended.
*10.7(1) Employment Agreement between First Home Savings Bank, F.S.B. and
Stephen R. Selverian, as amended.
**10.8 Agreement and Plan of Merger, dated as of December 18, 1997,
between Sovereign Bancorp and First Home Bancorp Inc.
27 Financial Data Schedules
27.1 Three months ended March 31, 1998
27.2 Nine months ended September 30, 1997 - Restated
27.3 Six months ended June 30, 1997 - Restated
27.4 Three months ended March 31, 1997 - Restated
27.5 Twelve months ended December 31, 1996 - Restated
27.6 Nine months ended September 30, 1996 - Restated
27.7 Six months ended June 30, 1996 - Restated
(b) The following report on Form 8-K was filed during the quarter for which this
report is filed.
1. Form 8-K/A dated January 16, 1998 relating to additional
information regarding the Agreement and Plan of Merger into
Sovereign Bancorp.
- ----------------------------
(1) Executive Compensation Plans and Arrangements.
* Incorporated by reference to the Company's Form 10-K for the year ended
December 31, 1996.
** Incorporated by reference to the Company's Form 8-K/A filed
January 16, 1998.
19
<PAGE>
FIRST HOME 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.
FIRST HOME BANCORP INC.
(Registrant)
/s/ Stephen D. Miller
---------------------------------------
Date: May 14, 1998 Stephen D. Miller
President/Chief Executive Officer
/s/ Robert A. DiValerio
---------------------------------------
Date: May 14, 1998 Robert A. DiValerio
Senior Executive Vice-President/
Chief Financial Officer
20
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
The schedule contains summary financial information extracted from the
statements of consolidated financial condition as of March 31, 1998 and the
consolidated statements of income for the three months ended March 31, 1998 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001009195
<NAME> FIRST HOME BANCORP, INC.
<MULTIPLIER> 1,000
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 4,956
<INT-BEARING-DEPOSITS> 508
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 65
<INVESTMENTS-HELD-FOR-SALE> 127,353
<INVESTMENTS-CARRYING> 122,246
<INVESTMENTS-MARKET> 124,128
<LOANS> 275,098
<ALLOWANCE> 3,626
<TOTAL-ASSETS> 545,775
<DEPOSITS> 328,249
<SHORT-TERM> 75,732
<LIABILITIES-OTHER> 3,422
<LONG-TERM> 100,196
0
0
<COMMON> 0
<OTHER-SE> 38,176
<TOTAL-LIABILITIES-AND-EQUITY> 545,249
<INTEREST-LOAN> 5,625
<INTEREST-INVEST> 4,342
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 9,967
<INTEREST-DEPOSIT> 3,583
<INTEREST-EXPENSE> 6,076
<INTEREST-INCOME-NET> 3,891
<LOAN-LOSSES> 100
<SECURITIES-GAINS> 71
<EXPENSE-OTHER> 2,302
<INCOME-PRETAX> 1,846
<INCOME-PRE-EXTRAORDINARY> 1,846
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,206
<EPS-PRIMARY> .45
<EPS-DILUTED> .43
<YIELD-ACTUAL> 7.61
<LOANS-NON> 3,936
<LOANS-PAST> 197
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,616
<CHARGE-OFFS> 115
<RECOVERIES> 25
<ALLOWANCE-CLOSE> 3,626
<ALLOWANCE-DOMESTIC> 3,626
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
The schedule contains summary financial information extracted from the
statements of consolidated financial condition as of September 30, 1997 and the
consolidated statements of income for the nine months ended September 30, 1997
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001009195
<NAME> FIRST HOME BANCORP,INC
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<RESTATED>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 4,722
<INT-BEARING-DEPOSITS> 988
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 592
<INVESTMENTS-HELD-FOR-SALE> 108,878
<INVESTMENTS-CARRYING> 115,030
<INVESTMENTS-MARKET> 116,660
<LOANS> 278,648
<ALLOWANCE> 3,848
<TOTAL-ASSETS> 525,092
<DEPOSITS> 323,607
<SHORT-TERM> 100,899
<LIABILITIES-OTHER> 2,214
<LONG-TERM> 62,333
0
0
<COMMON> 0
<OTHER-SE> 36,039
<TOTAL-LIABILITIES-AND-EQUITY> 525,092
<INTEREST-LOAN> 16,720
<INTEREST-INVEST> 12,235
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 28,955
<INTEREST-DEPOSIT> 10,103
<INTEREST-EXPENSE> 17,538
<INTEREST-INCOME-NET> 11,417
<LOAN-LOSSES> 300
<SECURITIES-GAINS> 143
<EXPENSE-OTHER> 6,697
<INCOME-PRETAX> 5,384
<INCOME-PRE-EXTRAORDINARY> 5,384
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,572
<EPS-PRIMARY> 1.32
<EPS-DILUTED> 1.29
<YIELD-ACTUAL> 7.78
<LOANS-NON> 3,144
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,760
<CHARGE-OFFS> 306
<RECOVERIES> 94
<ALLOWANCE-CLOSE> 3,848
<ALLOWANCE-DOMESTIC> 3,848
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION AS OF JUNE 30, 1997 AND THE
CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001009195
<NAME> FIRST HOME BANCORP, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S.DOLLARS
<RESTATED>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 5,439
<INT-BEARING-DEPOSITS> 912
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 62
<INVESTMENTS-HELD-FOR-SALE> 113,662
<INVESTMENTS-CARRYING> 115,631
<INVESTMENTS-MARKET> 116,584
<LOANS> 270,309
<ALLOWANCE> 3,797
<TOTAL-ASSETS> 522,396
<DEPOSITS> 309,039
<SHORT-TERM> 109,793
<LIABILITIES-OTHER> 2,323
<LONG-TERM> 66,349
0
0
<COMMON> 0
<OTHER-SE> 34,802
<TOTAL-LIABILITIES-AND-EQUITY> 522,396
<INTEREST-LOAN> 11,001
<INTEREST-INVEST> 8,137
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 19,138
<INTEREST-DEPOSIT> 6,549
<INTEREST-EXPENSE> 11,506
<INTEREST-INCOME-NET> 7,632
<LOAN-LOSSES> 200
<SECURITIES-GAINS> 98
<EXPENSE-OTHER> 4,460
<INCOME-PRETAX> 3,657
<INCOME-PRE-EXTRAORDINARY> 3,657
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,420
<EPS-PRIMARY> .89
<EPS-DILUTED> .87
<YIELD-ACTUAL> 7.79
<LOANS-NON> 2,620
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,760
<CHARGE-OFFS> 232
<RECOVERIES> 69
<ALLOWANCE-CLOSE> 3,797
<ALLOWANCE-DOMESTIC> 3,797
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
The schedule contains summary financial information extracted from the
statements of consolidated financial condition as of March 31, 1997 and the
consolidated statements of income for the three months ended March 31, 1997 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001009195
<NAME> FIRST HOME BANCORP, INC.
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<RESTATED>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 4,477
<INT-BEARING-DEPOSITS> 870
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 334
<INVESTMENTS-HELD-FOR-SALE> 113,051
<INVESTMENTS-CARRYING> 109,287
<INVESTMENTS-MARKET> 109,725
<LOANS> 263,348
<ALLOWANCE> 3,757
<TOTAL-ASSETS> 508,243
<DEPOSITS> 295,237
<SHORT-TERM> 116,132
<LIABILITIES-OTHER> 2,832
<LONG-TERM> 60,560
0
0
<COMMON> 0
<OTHER-SE> 33,482
<TOTAL-LIABILITIES-AND-EQUITY> 508,243
<INTEREST-LOAN> 5,474
<INTEREST-INVEST> 3,967
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 9,441
<INTEREST-DEPOSIT> 3,240
<INTEREST-EXPENSE> 5,613
<INTEREST-INCOME-NET> 3,828
<LOAN-LOSSES> 100
<SECURITIES-GAINS> 57
<EXPENSE-OTHER> 2,126
<INCOME-PRETAX> 1,960
<INCOME-PRE-EXTRAORDINARY> 1,960
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,298
<EPS-PRIMARY> .48
<EPS-DILUTED> .47
<YIELD-ACTUAL> 7.73
<LOANS-NON> 3,306
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,760
<CHARGE-OFFS> 132
<RECOVERIES> 29
<ALLOWANCE-CLOSE> 3,757
<ALLOWANCE-DOMESTIC> 3,757
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION AS OF DECEMBER 31, 1996 AND THE
CONSOLIDATED STATEMENTS OF INCOME FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001009195
<NAME> FIRST HOME BANCORP, INC.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<RESTATED>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 5,133,348
<INT-BEARING-DEPOSITS> 1,302,081
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 60,396
<INVESTMENTS-HELD-FOR-SALE> 116,191,296
<INVESTMENTS-CARRYING> 99,711,465
<INVESTMENTS-MARKET> 100,738,233
<LOANS> 258,909,155
<ALLOWANCE> 3,760,485
<TOTAL-ASSETS> 498,398,562
<DEPOSITS> 290,297,687
<SHORT-TERM> 110,587,750
<LIABILITIES-OTHER> 2,307,813
<LONG-TERM> 62,560,550
0
0
<COMMON> 0
<OTHER-SE> 32,644,762
<TOTAL-LIABILITIES-AND-EQUITY> 498,398,562
<INTEREST-LOAN> 21,711,657
<INTEREST-INVEST> 14,737,927
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 36,449,584
<INTEREST-DEPOSIT> 12,120,820
<INTEREST-EXPENSE> 21,363,626
<INTEREST-INCOME-NET> 15,085,958
<LOAN-LOSSES> 400,000
<SECURITIES-GAINS> 247,574
<EXPENSE-OTHER> 10,752,741
<INCOME-PRETAX> 5,320,420
<INCOME-PRE-EXTRAORDINARY> 5,320,420
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,285,420
<EPS-PRIMARY> 1.58
<EPS-DILUTED> 1.57
<YIELD-ACTUAL> 7.88
<LOANS-NON> 3,213,053
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,562,330
<CHARGE-OFFS> 357,530
<RECOVERIES> 155,685
<ALLOWANCE-CLOSE> 3,760,485
<ALLOWANCE-DOMESTIC> 3,760,485
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE QUARTERLY
REPORT ON FORM 10-Q FOR THE FISCAL QUARTER ENDED JUNE 30, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> US
<RESTATED>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 4,961,084
<INT-BEARING-DEPOSITS> 1,055,126
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 59,375
<INVESTMENTS-HELD-FOR-SALE> 112,779,633
<INVESTMENTS-CARRYING> 90,420,889
<INVESTMENTS-MARKET> 90,966,364
<LOANS> 260,206,616
<ALLOWANCE> 3,760,177
<TOTAL-ASSETS> 487,208,683
<DEPOSITS> 275,239,930
<SHORT-TERM> 133,926,000
<LIABILITIES-OTHER> 3,501,727
<LONG-TERM> 43,085,300
0
0
<COMMON> 0
<OTHER-SE> 31,455,726
<TOTAL-LIABILITIES-AND-EQUITY> 487,208,683
<INTEREST-LOAN> 16,251,328
<INTEREST-INVEST> 10,805,212
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 27,056,540
<INTEREST-DEPOSIT> 9,010,117
<INTEREST-EXPENSE> 15,753,289
<INTEREST-INCOME-NET> 11,303,251
<LOAN-LOSSES> 300,000
<SECURITIES-GAINS> 207,417
<EXPENSE-OTHER> 8,342,877
<INCOME-PRETAX> 3,711,980
<INCOME-PRE-EXTRAORDINARY> 3,711,980
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,139,379
<EPS-PRIMARY> 1.16
<EPS-DILUTED> 1.15
<YIELD-ACTUAL> 7.89
<LOANS-NON> 3,161,111
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,562,330
<CHARGE-OFFS> 234,629
<RECOVERIES> 132,476
<ALLOWANCE-CLOSE> 3,760,177
<ALLOWANCE-DOMESTIC> 3,760,177
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE QUARTERLY
REPORT ON FORM 10-Q FOR THE FISCAL QUARTER ENDED JUNE 30, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001009195
<NAME> FIRST HOME BANCORP INC.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<RESTATED>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 5,769,808
<INT-BEARING-DEPOSITS> 627,575
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 913,430
<INVESTMENTS-HELD-FOR-SALE> 113,493,211
<INVESTMENTS-CARRYING> 87,702,756
<INVESTMENTS-MARKET> 88,435,806
<LOANS> 255,319,678
<ALLOWANCE> 3,664,416
<TOTAL-ASSETS> 479,313,725
<DEPOSITS> 277,134,338
<SHORT-TERM> 126,179,000
<LIABILITIES-OTHER> 2,178,938
<LONG-TERM> 42,985,300
0
0
<COMMON> 0
<OTHER-SE> 30,836,149
<TOTAL-LIABILITIES-AND-EQUITY> 479,313,725
<INTEREST-LOAN> 10,768,779
<INTEREST-INVEST> 7,093,155
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 17,861,934
<INTEREST-DEPOSIT> 6,010,355
<INTEREST-EXPENSE> 10,355,420
<INTEREST-INCOME-NET> 7,506,514
<LOAN-LOSSES> 200,000
<SECURITIES-GAINS> 113,172
<EXPENSE-OTHER> 4,405,215
<INCOME-PRETAX> 3,529,977
<INCOME-PRE-EXTRAORDINARY> 3,529,977
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,274,877
<EPS-PRIMARY> .84
<EPS-DILUTED> .83
<YIELD-ACTUAL> 7.90
<LOANS-NON> 3,201,776
<LOANS-PAST> 108,281
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,562,330
<CHARGE-OFFS> 182,805
<RECOVERIES> 84,891
<ALLOWANCE-CLOSE> 3,664,416
<ALLOWANCE-DOMESTIC> 3,664,416
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
