<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
Commission File Number: 0-21385
-------------------------
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
----------------------------------------
(Exact name of small business issuer as specified in its charter)
INDIANA 31-1463057
- ------------------------ -------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
3002 HARRISON AVENUE, CINCINNATI, OHIO 45211-5789
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (513) 661-5735
---------------------------
Indicate by checkmark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act 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 practical date. Shares outstanding at
June 30, 1999 common stock, $.01 par value: 2,168,818.
<PAGE> 2
CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
Consolidated Statements of Financial Condition as of
June 30, 1999 (Unaudited) and December 31, 1998......................................................1
Consolidated Statements of Income for the Three Months
and Six Months Ended June 30, 1999 and 1998 (Unaudited)..................................................2
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1999 and 1998 (Unaudited)..........................................................3
Notes to Consolidated Financial Statements (Unaudited)...................................................4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................................................................... 5
Item 3. Quantitative and Qualitative Disclosures About Market Risk............................................ 9
PART II. OTHER INFORMATION
-----------------
Item 1. Legal Proceedings.....................................................................................10
Item 2. Changes in Securities.................................................................................10
Item 3. Defaults Upon Senior Securities.......................................................................10
Item 4. Submission of Matters to a Vote of Security-Holders...................................................10
Item 5. Other Information.....................................................................................10
Item 6. Exhibits and Reports on Form 8-K......................................................................10
</TABLE>
SIGNATURES
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
(Unaudited)
June 30, 1999 December 31, 1998
------------- -----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 2,824,133 $ 5,009,850
Mortgage backed securities available for sale 5,986,298 1,529,042
Loans receivable, net 127,791,000 118,926,081
Stock in Federal Home Loan Bank 1,363,700 1,141,400
Accrued interest receivable 722,007 717,818
Premises and equipment, net 2,166,307 2,176,233
Prepaid expenses and other assets 547,214 370,367
------------------ ------------------
Total assets $ 141,400,659 $ 129,870,791
================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 91,079,248 $ 87,335,911
Federal Home Loan Bank advances 26,846,619 17,453,551
Advances from borrowers for taxes and insurance 254,577 789,478
Income taxes 328,518 133,823
Accrued expenses and other liabilities 113,592 181,518
------------------ ------------------
Total liabilities 118,622,554 105,894,281
Stockholders' equity:
Common stock, $.01 par value, 15,000,000 shares
authorized, 2,843,375 shares issued 28,434 28,434
Additional paid in capital 18,801,019 18,811,404
Retained income 15,737,628 15,514,498
Employee Stock Ownership Plan (2,320,220) (2,419,063)
Management recognition plan (1,194,751) (1,323,363)
Treasury Stock, 674,557 and 514,557 shares at cost (8,288,697) (6,647,447)
Accumulated other comprehensive income 14,692 12,047
------------------ ------------------
Total stockholders' equity 22,778,105 23,976,510
------------------ ------------------
Total liabilities and stockholders' equity $ 141,400,659 $ 129,870,791
================== ==================
</TABLE>
See accompanying notes.
1
<PAGE> 4
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
---------------------------- -----------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income:
Loans receivable $ 2,493,850 2,367,306 $ 4,914,639 4,899,924
Mortgage-backed securities 55,175 32,276 76,307 66,855
Investment securities -- -- -- 10,254
Interest-bearing deposits with banks 79,713 120,850 146,313 190,383
---------------------------- -----------------------------
Total interest income 2,628,738 2,520,432 5,137,259 5,167,416
---------------------------- -----------------------------
Interest expense:
Deposits 1,111,951 1,135,402 2,215,483 2,302,876
Borrowings 330,075 249,211 584,309 481,385
---------------------------- -----------------------------
Total interest expense 1,442,026 1,384,613 2,799,792 2,784,261
---------------------------- -----------------------------
Net interest income 1,186,712 1,135,819 2,337,467 2,383,155
Provision for loan losses 9,257 3,657 23,113 13,711
---------------------------- -----------------------------
Net interest income after provision for loan losses 1,177,455 1,132,162 2,314,354 2,369,444
---------------------------- -----------------------------
Non-interest income:
Gain on loan sales 9,202 289,307 77,351 333,995
Service charges and fees 46,227 40,951 90,456 71,521
---------------------------- -----------------------------
Total non-interest income 55,429 330,258 167,807 405,516
---------------------------- -----------------------------
Non-interest expenses:
Compensation and benefits 451,746 427,216 895,789 924,344
Occupancy costs 80,078 62,462 166,177 114,348
Franchise tax 65,856 113,590 135,061 227,580
Federal deposit insurance premiums 12,863 13,682 25,724 27,098
Data processing 27,417 23,936 57,870 54,069
Legal, accounting and examination fees 17,178 44,043 36,818 78,655
Consulting fees 4,587 22,357 9,772 28,271
Advertising 18,705 11,442 37,241 23,446
Other 87,377 85,011 157,728 164,424
---------------------------- -----------------------------
Total non-interest expenses 765,807 803,739 1,522,180 1,642,235
---------------------------- -----------------------------
Income before income tax expense 467,077 658,681 959,981 1,132,725
Income tax expense 153,000 242,000 316,000 410,000
---------------------------- -----------------------------
Net income $ 314,077 416,681 $ 643,981 722,725
============================ =============================
Earnings per share, basic and diluted $0.16 $0.18 $0.33 $0.30
===== ===== ===== =====
</TABLE>
See accompanying notes.
2
<PAGE> 5
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 643,981 $ 722,725
Adjustments to reconcile net income to net cash provided by
operating activities:
Net amortization of premium and discounts 10,628 7,146
Depreciation of premises and equipment 118,152 80,900
Federal Home Loan Bank stock dividend (41,000) (37,700)
Provision for loan loss 23,113 13,711
Gain on loan sales (77,351) (333,995)
Net loans originated for sale (4,872,964) (5,427,261)
Proceeds from sale of loans 5,238,474 15,655,380
Management Recognition Plan amortization 128,612 129,871
Employee Stock Ownership Plan amortization 88,458 163,881
Change in:
Accrued interest receivable (4,189) 708
Prepaid expenses and other assets (176,847) (511,128)
Accrued expenses (12,615) 35,473
Income taxes 138,000 274,439
----------------- ---------------
Net cash provided by operating activities 1,204,452 10,774,150
----------------- ---------------
Cash flows from investing activities:
Proceeds from maturing investment security -- 1,000,000
Principal payments on mortgage backed securities 530,757 362,569
Purchase mortgage backed securities (4,994,612) --
Purchase of Federal Home Loan Bank Stock (181,300) (40,100)
Net increase in loans receivable (9,176,191) (3,391,019)
Additions to premises and equipment (108,226) (377,665)
----------------- ---------------
Net cash used in investing activities (13,929,572) (2,446,215)
----------------- ---------------
Cash flows from financing activities
Net (decrease) increase in deposits 3,743,337 (4,314,101)
Cash dividends (420,851) (346,001)
Purchase of common stock for treasury (1,641,250) (4,192,791)
Purchase of common stock for MRP -- (607,622)
Proceeds from Federal Home Loan Bank advances 10,400,000 1,000,000
Repayment of Federal Home Loan Bank advance (1,006,932) (4,612)
Net decrease in advances from borrowers for taxes and insurance (534,901) (618,842)
----------------- ---------------
Net cash (used) provided by financing activities 10,539,403 (9,083,969)
----------------- ---------------
Net decrease in cash and cash equivalents (2,185,717) (756,034)
Beginning cash and cash equivalents 5,009,850 10,368,279
----------------- ---------------
Ending cash and cash equivalents $ 2,824,133 $ 9,612,245
================= ===============
</TABLE>
See accompanying notes.
3
<PAGE> 6
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
June 30, 1999 and December 31, 1998
(1) Basis of Presentation
---------------------
The financial statements were prepared in accordance with the
instructions for Form 10-Q and therefore, do not include all
disclosures necessary for a complete presentation of financial
condition, income and cash flows in conformity with generally accepted
accounting principles. However, these financial statements have been
prepared on a basis consistent with the annual financial statements and
include, all adjustments consisting only of normal recurring
adjustments which are, in the opinion of management, necessary for the
fair presentation of the interim financial statements.
(2) Comprehensive Income
--------------------
Comprehensive income includes net income and other comprehensive
income, which for the Company includes unrealized gains and losses on
securities available for sale.
<TABLE>
<CAPTION>
Six months ended June 30
---------------------------------------
1999 1998
---- ----
<S> <C> <C>
Net Income $ 643,981 $ 722,725
Other comprehensive income, net of tax:
Unrealized holding losses arising during the period 2,645 (6,528)
-------------- ---------------
Comprehensive income $ 646,626 $ 716,197
============== ===============
</TABLE>
(3) Earnings Per Share
------------------
The following table presents the numerators (net income) and
denominators (average shares outstanding) for the basic and diluted net
income per share computations for the three months ended June 30:
<TABLE>
<CAPTION>
Three month ended Six months ended
June 30 June 30
------------------------------ ------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income, basic and diluted $ 314,077 416,681 $ 643,981 722,725
Average shares outstanding 1,921,195 2,384,864 1,964,116 2,460,674
Effect of dilutive securities 2,238 1,463 1,351 9,459
Average shares outstanding
------------------------------ ------------------------------
including dilutive shares 1,923,433 2,386,327 1,965,467 2,470,133
============================== ==============================
Net income per share, basic $0.16 $0.18 $0.33 $0.30
============================== ==============================
Net income per share, diluted $0.16 $0.18 $0.33 $0.30
============================== ==============================
</TABLE>
4
<PAGE> 7
(4) Consolidated Statement of Changes in Stockholders' Equity (Unaudited)
----------------------------------------------------------------------
<TABLE>
<CAPTION>
Six months ended June 30,
----------------------------------
1999 1998
----------------------------------
<S> <C> <C>
Balance, January 1 23,976,510 30,145,712
Net Income 643,981 722,726
Dividends on common stock (420,851) (346,001)
Purchase of shares by management recognition plan -- (607,622)
Amortization of management recognition plan 128,612 129,871
Amortization of employee stock ownership plan 88,458 163,879
Purchase of treasury stock (1,641,250) (4,192,791)
Unrealized loss on securities available for sale, net of tax 2,645 (6,528)
----------------------------------
Balance, end of period 22,778,105 26,009,246
==================================
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RECENT DEVELOPMENTS
On August 6,1999 Westwood Homestead Financial Corporation announced the
signing of a definitive agreement for a strategic alliance with Camco Financial
Corporation. Westwood Homestead Savings Bank will continue independent
operations as a member of Camco's family of community banks. The merger will be
accounted for as a purchase and is expected to close in the first quarter of
2000. Westwood Homestead shareholders will receive 0.611 shares of Camco common
stock and $5.20 cash for each Westwood Homestead share.
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 1999 AND DECEMBER 31, 1998
Total assets increased $11.5 million, or 8.9% from $129.9 million at
December 31, 1998 to $141.4 million at June 30, 1999. Loans receivable increased
$8.9 million, or 7.5% from $118.9 million at December 31, 1998 to $127.8 million
at June 30, 1999. To help manage interest rate risk, $5.0 million of adjustable
rate mortgage backed securities were purchased increasing the investment
portfolio to $6.0 million at June 30, 1999.
Total liabilities increased $12.7 million from $105.9 million at
December 31, 1998 to $118.6 million at June 30, 1999. Deposits increased $3.7
million during the six month period while Federal Home Loan Bank advances
increased $9.4 million to $26.8 million at June 30, 1999.
Stockholders' equity decreased $1.2 million as a result of the 160,000
shares of Company stock repurchased during the six month period at a cost of
$1.6 million. This repurchase program combined with the special dividend paid on
December 22, 1997 and the quarterly dividends reflects management's commitment
to increasing shareholder value. The Company's equity to asset ratio has been
reduced from 33.3% at September 30, 1996 to 16.1% at June 30, 1999.
5
<PAGE> 8
COMPARISON OF OPERATING RESULTS FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30,
1999 AND 1998
Net Income. Net income for the quarter ended June 30, 1999 was
$314,000, or 16 cents per share, as compared with $417,000, or 18 cents per
share, for the quarter ended June 30, 1998. Return on average equity and return
on average assets were 5.39% and 0.92%, respectively, for the quarter ended June
30, 1999 compared to 5.93% and 1.30%, respectively, for the same quarter in
1998. Net income for the six months ended June 30, 1999 was $644,000, or 33
cents per share, as compared with $723,000, or 30 cents per share, for the six
months ended June 30, 1998.
Net Interest Income. Net interest income increased $51,000 to
$1,187,000 for the quarter ended June 30, 1999 from $1,136,000 for the quarter
ended June 30, 1998. This increase was achieved despite a $4.8 million decrease
in average equity. Average net interest rate spread increased 33 basis points to
2.82% for the quarter ended June 30, 1999 as compared to 2.49% for the same
quarter in 1998. Net interest income for the six months ended June 30, 1999
decreased $46,000 to $2,337,000 from $2,383,000 for the six months ended June
30, 1997 as a $5.1 million decrease in average equity was partially offset by a
25 basis point increase in the net interest rate spread.
Interest Income. Interest income increased $109,000 to $2.6 million for
the quarter ended June 30, 1999. The average balance of interest earning assets
increased $6.5 million from the same quarter in 1998 while the average yield
decreased 7 basis points to 7.99%. Interest income on loans receivable increased
$127,000, or 5.4%, to $2,494,000 for the quarter ended June 30, 1999 from
$2,367,000 for the quarter ended June 30, 1998. The average balance of loans
receivable increased$6.7 million to $121.4 million for the quarter ended June
30, 1999 from the same quarter a year ago while the average yield decreased 4
basis points to 8.22%. The average balance of investments and other earning
assets decreased $216,000 from the year ago quarter and a 59 basis point
decrease in yield resulted in $18,000 less in other interest income. Interest
income decreased $30,000 to $5.1 million for the six months ended June 30, 1999
from $5.2 million for the six months ended June 30, 1998. As of June 30, 1999
loans receivable represented 90.4% of total assets as compared to 88.0% at June
30, 1997.
Interest Expense. Interest expense increased $57,000 to $1,442,000 for
the quarter ended June 30, 1999 from $1,385,000 for the quarter ended June 30,
1998. This increase is due to a $12.3 million increase in average interest
bearing liabilities and a decrease in the average cost to 5.17% for the quarter
ended June 30, 1999 from 5.57% for the quarter ended June 30, 1998. The decrease
in cost was primarily the result of maturing high rate long term C.Ds and lower
rate advances. Interest expense increased $16,000 on $8.8 million more in
interest bearing liabilities for the six months ended June 30, 1999 as the
average cost decreased 42 basis points.
Provision for Loan Losses. The Bank recorded provisions for loan losses
of $9,000 and $4,000 during the quarters ended June 30, 1999 and 1998,
respectively. The loan portfolio is regularly reviewed by management, including
problem loans, and changes in the relative makeup to determine whether any loans
require classification or the establishment of additional reserves.
Non-Interest Income. Non-interest income decreased $275,000 to $55,000
for the quarter ended June 30, 1999 from $330,000 for the quarter ended June 30,
1998. Included in that 1998 quarter is a nonrecurring pretax gain of $217,000
from the sale of $9.1 million of fixed rate mortgages. A shift in Westwood
Homestead's business plan to reduce loan sales and grow the balance sheet will
likely result in lower gains from loan sales going forward. Service charges and
fees increased $5,000 to $46,000 for the quarter ended June 30, 1999 from
$41,000 for the quarter ended June 30, 1998. This 12.2% increase reflects the
Bank's emphasis on attracting new checking accounts in the last year.
Non-interest income decreased $238,000 to $168,000 for the six months ended June
30, 1999 from $406,000 for the six months ended June 30, 1998 due to the
$217,000 nonrecurring gain on loan sales recorded during the six months ended
June 30, 1998.
6
<PAGE> 9
Non-Interest Expense. Non-interest expense decreased $38,000 to
$766,000 for the quarter ended June 30, 1999 from $804,000 for the quarter ended
June 30, 1998. The reduction in capital levels resulted in a decreased in state
franchise tax of $48,000 from the previous year. Legal and accounting fees
decreased $27,000 compared to the same quarter last year. Compensation and
benefits increased $25,000 during the quarter ended June 30, 1999 as compared to
the quarter ended June 30, 1998 primarily due to increased staffing. The ratio
of non-interest expense to average assets was 2.25% for the quarter ended June
30, 1999 as compared to 2.50% for the same quarter a year ago. Non-interest
expense decreased $120,000 to $1,522,000 for the six months ended June 30, 1999
from $1,642,000 for the six months ended June 30, 1998.
Income Taxes. The Company recorded income tax expense of $316,000 and
$410,000 for the six months ended June 30, 1999 and 1998, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents totaled $2.8 million at June 30, 1999 which
consisted primarily of overnight federal funds. In order for the Company to
enhance shareholder returns and generate a competitive return on equity,
management plans to continue to expand the Bank's lending and investment
activities and pursue other capital management measures.
The Company will also attempt to pursue growth externally through the
selective acquisition of other financial institutions. Due to the highly
competitive market for financial institution acquisitions in the Bank's market
areas, however, there can be no assurance that the Company will be successful in
identifying attractive acquisition candidates or in acquiring such candidates on
favorable terms. Management believes that current liquidity levels are adequate
to fund daily operations.
The Bank is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory - and possibly additional
discretionary - actions by regulators that, if undertaken, could have a direct
material effect on the Company's consolidated financial statements. Quantitative
measures established by regulation to ensure capital adequacy require the Bank
to maintain minimum amounts and ratios ( set forth in the table below ) of
Tangible, Tier I/Core and Risk-based capital (as defined in the regulations).
Management believes, as of June 30, 1999, that the Bank meets all capital
adequacy requirements to which it is subject.
<TABLE>
<CAPTION>
To Be Well Capitalized
For Capital Under Prompt Corrective
Actual Adequacy Purposes Action Provision
------------------------------ ---------------------------- ---------------------------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Tangible Capital $ 21,872,621 16.22% 2,023,065 1.50% 6,743,550 5.00%
Tier I/Core Capital 21,872,621 16.22% 4,046,130 3.00% 8,092,260 6.00%
Risk-based Capital 22,189,420 26.53% 6,691,360 8.00% 8,364,200 10.00%
</TABLE>
7
<PAGE> 10
YEAR 2000 READINESS DISCLOSURE
The paragraphs of this section constitute a "Year 2000 Readiness Disclosure" as
defined in the Year 2000 Information and Readiness Disclosure Act (Pub. L. No.
105-271). The Company faces risks associated with the Year 2000 date change
similar to those faced by other financial institutions. Assessing, remediating,
and testing information technology systems for Year 2000 compliance is a top
priority for the Company. A Year 2000 plan has been approved by the Board of
Directors which includes multiple phases, tasks to be completed, and target
dates for completion. Issues addressed therein include awareness, assessment,
renovation, validation, implementation, testing, and contingency planning.
The Company has assigned the Manager of Information Systems to oversee the Year
2000 project. The Company has completed its awareness, assessment and renovation
phases. Most of the material data processing that could be affected by this
problem is provided by the third party service bureau, Fiserv. Fiserv has
represented to management that all of the core data processing code has been
renovated to address the Year 2000 issue. At the present time, the Company has
completed the testing phase with satisfactory results in all areas.
The Company's vendors and suppliers have been contacted for written confirmation
of their product readiness for Year 2000 compliance. Negative or deficient
responses are analyzed and periodically reviewed to prescribe timely actions
within the Company's contingency planning. The Company's main service provider
has completed testing of its mission critical application software and item
processing software; the test results, which have been documented and validated,
indicate the software to be Year 2000 compliant. The Company has authorized the
acceptance of proxy testing by selected data exchange service providers. Federal
Financial Institution Examination Council ("FFIEC") guidance on testing Year
2000 compliance of service providers states that proxy tests are acceptable
compliance tests. In proxy testing, the service provider tests with a
representative sample of financial institutions that use a particular service,
with the results of such testing shared with all similarly situated clients of
the service providers. since the proxy tests have been conducted with financial
institutions that are similar in type and complexity to its own, using the same
version of the Year 2000 ready software and the same hardware and operating
systems. The test results, which have been documented and validated indicate the
data exchange software and item processing activities to be Year 2000 compliant.
The Company also recognizes the importance of determining that its borrowers are
facing the Year 2000 problem in a timely manner to avoid deterioration of the
loan portfolio solely due to this issue. All material relationships have been
identified and questionnaires have been sent to assess the inherent risks. The
Company plans to work on a one-on-one basis with any borrower who has been
identified as having high Year 2000 risk exposure.
Accordingly, management does not believe that the Company has incurred or will
incur material costs associated with the Year 2000 issue since it routinely
upgrades and purchases technologically advanced software and hardware on a
continual basis. However, some reallocation of internal resources and will be
required. There can be no assurances that all hardware and software that the
Company will use will be Year 2000 compliant. Management cannot predict the
amount of financial difficulties it may incur due to customers and vendors
inability to perform according to their agreements with the Company or the
effects that other third parties may cause as a result of this issue. Therefore,
there can be no assurance that the failure or delay of others to address the
issue or that the costs involved in such process will not have a material
adverse effect on the Company's business, financial condition, and results of
operations.
Based on testing results to date, the Company's mission critical systems have
been deemed to be Year 2000 compliant. Therefore, the Company's contingency plan
is focused on business continuity issues affected by service outages not
directly related to Year 2000 date processing activities. With regards to
non-mission critical systems, the Company's contingency plans are to replace
those systems that test as being noncompliant.
8
<PAGE> 11
Alternatively, some systems could be handled manually on an interim basis. It is
anticipated that the Company's deposit customers will have increased demands for
cash in the latter part of 1999 and correspondingly the Company will maintain
higher liquidity levels.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Bank's June 30, 1999 analysis of the impact of changes in interest
rates on net interest income over the next 12 months indicate no significant
changes in the Bank's exposure to interest rate changes since December 31, 1998.
The table below illustrates the simulation analysis of the impact of a 100 or
200 basis point upward or downward movement in interest rates. The impact of the
rate movement was simulated as if rates change immediately from June 30, 1999
levels, and remained constant at those levels thereafter.
<TABLE>
<CAPTION>
Movement in June 30, 1999 interest rates
-------------------------------------------------------------
+100 bps +200 bps -100 bps -200 bps
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net interest income change ($344,000) ($689,000) $278,000 $557,000
Net income per share change ($0.12) ($0.24) $0.10 $0.19
</TABLE>
9
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Although the Bank, from time to time, is involved in various legal
proceedings in the normal course of business, there are no material legal
proceedings to which the Bank is a party or to which any of its property is
subject.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS. The following exhibits are being filed with this
report.
Exhibit Description
------- -----------
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K. None
10
<PAGE> 13
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 HOMESTEAD FINANCIAL CORPORATION
Date: August 13, 1999 By: /s/ Michael P. Brennan
----------------------------------
Michael P. Brennan
(Principal Executive Officer)
Date: August 13, 1999 By: /s/ John E. Essen
----------------------------------
John E. Essen
(Principal Financial Officer)
11
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,198
<INT-BEARING-DEPOSITS> 889
<FED-FUNDS-SOLD> 737
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 5,986
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 128,108
<ALLOWANCE> 317
<TOTAL-ASSETS> 141,401
<DEPOSITS> 91,079
<SHORT-TERM> 0
<LIABILITIES-OTHER> 697
<LONG-TERM> 26,847
0
0
<COMMON> 28
<OTHER-SE> 22,750
<TOTAL-LIABILITIES-AND-EQUITY> 141,401
<INTEREST-LOAN> 4,915
<INTEREST-INVEST> 76
<INTEREST-OTHER> 146
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</TABLE>
