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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------------------
FORM 10-QSB
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission file number 0-21939
Pennwood Bancorp, Inc.
- -------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Pennsylvania 25-1783648
- ---------------------------------------------- ----------------------------
(State or Other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
683 Lincoln Avenue
Pittsburgh, Pennsylvania 15202
- ----------------------------------------------- ----------------------------
(Address of Principal Executive Offices) (Zip Code)
(412) 761-1234
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes x No
--- ---
Pennwood Bancorp, Inc. had 657,524 shares of common stock
outstanding as of November 12, 1998.
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
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PENNWOOD BANCORP, INC.
TABLE OF CONTENTS
<TABLE>
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Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements. 3
Consolidated Balance Sheets as of September 30, 1998
(unaudited) and June 30, 1998 3
Consolidated Statements of Income for the three months
ended September 30, 1998 and 1997 (unaudited) 4
Consolidated Statements of Cash Flows for the three months
ended September 30, 1998 and 1997 (unaudited) 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. 14
Item 2. Changes in Securities. 14
Item 3. Defaults Upon Senior Securities. 14
Item 4. Submission of Matters to a Vote of Security-Holders. 14
Item 5. Other Information. 14
Item 6. Exhibits and Reports on Form 8-K. 14
SIGNATURES
</TABLE>
2
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PENNWOOD BANCORP, INC.
Consolidated Balance Sheets
(Dollars in Thousands Except Share Data)
<TABLE>
<CAPTION>
Sept. 30 June 30,
Assets 1998 1998
------ --------- ---------
(Unaudited)
<S> <C> <C>
Cash and amounts due from depository institutions $476 $527
Money market investments at cost which approximates
market value 2,821 2,026
Investment and mortgage-backed securities:
Available-for-sale (Amortized cost of $5,962 and $7,652) 6,078 7,752
Held-to-maturity (Market value of $216 and $216) 209 210
Loans receivable, net 38,617 33,625
Real estate owned, net 67 11
Federal Home Loan Bank stock 300 284
Premises and equipment, net 1,250 1,044
Accrued interest receivable 356 331
Prepaid expenses and other assets 235 270
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Total assets $50,409 $46,080
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Liabilities and Shareholders' Equity
------------------------------------
Liabilities:
Savings deposits $35,532 $35,754
Advances from borrowers for taxes and insurance 178 392
Accrued interest payable on savings deposits 484 423
Borrowed funds 6,423 1,432
Accrued expenses and other liabilities 162 118
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Total liabilities 42,779 38,119
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Shareholders' Equity:
Common Stock, $.01 par value; 4,000,000 shares authorized;
813,419 issued at September 30, 1998 8 8
Additional paid-in capital 5,652 5,644
Retained earnings, substantially restricted 4,479 4,427
Treasury stock, at cost: 150,895 and 116,025 shares
at September 30, 1998 and June 30, 1998, respectively. (1,957) (1,526)
Unearned Employee Stock Ownership Plan shares (378) (391)
Unearned common stock - Recognition and Retention Plan (250) (267)
Unrealized gain (loss) on securities
available-for-sale, net 76 66
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Total shareholders' equity 7,630 7,961
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Total liabilities and shareholders' equity $50,409 $46,080
</TABLE>
See accompanying notes to unaudited consolidated financial statements
3
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PENNWOOD BANCORP, INC.
Consolidated Statements of Income
(Unaudited)
(Dollars in Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1998 1997
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<S> <C> <C>
Interest income:
Loans $804 $644
Investment securities 110 259
Mortgage-backed securities 29 34
Federal funds sold & other investments 5 9
Money market investments 25 21
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Total interest income 973 967
Interest expense:
Interest on savings deposits 407 422
Interest on borrowed funds 51 43
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Total interest expense 458 465
Net interest income 515 502
Provision for loan losses 13 15
-------- --------
Net interest income after provision
for loan losses 502 487
Other income:
Service charges 16 16
Other 19 21
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Total other income 35 37
Other expenses:
Compensation and employee benefits 206 176
Premises and occupancy costs 54 59
Federal insurance premiums 5 6
Data processing expense 19 20
Other operating expenses 93 86
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Total other expenses 377 347
Income before income taxes 160 177
Provision for income taxes 61 49
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Net income $99 $128
-------- --------
Basic earnings per share $0.16 $0.18
Diluted earnings per share $0.16 $0.18
Dividend declared per share $0.07 $0.08
</TABLE>
See accompanying notes to unaudited consolidated financial statements
4
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Pennwood Bancorp, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
------------------
Operating Activities: 1998 1997
- --------------------- -------- --------
<S> <C> <C>
Net Income $99 $128
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation expense 14 18
Provision for loan and real estate owned losses 13 15
(Increase) decrease in accrued interest receivable (25) 134
Decrease (increase) in prepaid expenses and other assets 35 (18)
Increase in accrued interest payable on deposits 61 67
Other, net (30) 47
-------- --------
Total adjustments 68 263
Net cash provided by operating activities 167 391
Investing Activities:
- ---------------------
Purchases of premises and equipment (220) (11)
Purchases of investment and mortgage-backed securities
available-for-sale (910) 0
Proceeds from maturities of investment and mortgage-
backed securities held-to-maturity 1 200
Proceeds from maturities and principal repayments of
investment and mortgage-backed securities available-
for-sale 2,682 5,700
Increase in federal funds 0 (500)
Net (increase) in loans receivable (5,005) (1,696)
(Increase) decrease in FHLB Stock (16) 155
Other, net (48) (28)
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Net cash (used) provided by investing activities (3,516) 3,820
Financing Activities:
- ---------------------
Net decrease in passbook, club, money market and
NOW accounts (189) (289)
Net (decrease) increase in certificates of deposit accounts (33) 1,009
Net decrease in advances from borrowers for
taxes and insurance (214) (135)
Repayment of ESOP loan (9) (15)
Release of ESOP shares 13 12
Purchase of Treasury Stock (431) (163)
Increase (decrease) of FHLB Advances 5,000 (3,000)
Dividends paid (47) (47)
Other 3 (17)
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Net cash (used) provided by financing activities 4,093 (2,645)
Net increase in cash and cash equivalents 744 1,566
Cash and cash equivalents, beginning of period 2,553 1,804
-------- --------
Cash and cash equivalents, end of period $3,297 $3,370
-------- --------
</TABLE>
See accompanying notes to unaudited consolidated financial statements
5
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Pennwood Bancorp, Inc.
Consolidated Statements of Cash Flows, Continued
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
------------------
Operating Activities: 1998 1997
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Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest on savings deposits $346 $363
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Income taxes 11 25
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</TABLE>
See accompanying notes to unaudited consolidated financial statements
6
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PENNWOOD BANCORP, INC.
Notes to Unaudited Consolidated Financial Statements
Note 1 - Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with instructions to Form 10-QSB. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complex financial statements. However, such
information presented reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management, necessary for
a fair statement of results for the interim periods.
The results of operations for the three months ended September 30, 1998 are
not necessarily indicative of the results to be expected for the year ending
June 30, 1999. The unaudited consolidated financial statements and notes
thereto should be read in conjunction with the audited financial statements
and notes thereto contained in Pennwood Bancorp, Inc.'s Form 10-KSB for the
year ended June 30, 1998.
Note 2 - Principles of Consolidation
The accompanying unaudited financial statements of Pennwood Bancorp, Inc.
(the "Company") include the accounts of the Company and its wholly-owned
subsidiary, Pennwood Savings Bank (the "Savings Bank"). All significant
inter-company transactions have been eliminated in consolidation.
Note 3 - Conversion to Stock Form of Ownership
On February 20, 1996, as amended on April 6, 1996, the Board of Trustees
adopted a plan of conversion whereby the Savings Bank would be converted from
a Pennsylvania mutual savings bank to a Pennsylvania stock savings bank. The
conversion was completed on July 12, 1996, and the Savings Bank issued
610,128 shares of common stock resulting in $6,101,280 in gross proceeds to
the Savings Bank. Costs of the common stock offering of approximately
$477,000 were deducted from the offering proceeds.
At the completion of the conversion to stock form, the Savings Bank
established a liquidation account in the amount of retained earnings set
forth in the offering circular utilized in the conversion. The liquidation
account will be maintained for the benefit of eligible savings account
holders who maintain deposit accounts in the Savings Bank after the
conversion. In the event of a complete liquidation (and only in such event),
each eligible savings account holder will be entitled to receive a
liquidation distribution from the liquidation account in the amount of the
then current adjusted balance of deposit accounts held, before any
liquidation distribution may be made with respect to the common shares.
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Except for the repurchase of stock and payment of dividends by the Company,
the existence of the liquidation account will not restrict the use or further
application of such retained earnings.
The Company may not declare or pay a cash dividend on, or repurchase any of
its common shares if the effect thereof would cause the Company's
stockholders' equity to be reduced below either the amount required for the
liquidation account or the regulatory capital requirements for insured
institutions.
On January 27, 1997, the Savings Bank completed its reorganization into the
holding company form of ownership. The resulting holding company is Pennwood
Bancorp, Inc.
Note 4 - Adoption of New Accounting Principles
In February 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings
per Share. SFAS No. 128 supersedes APB Opinion No. 15, Earnings per Share
("Opinion No 15") and requires the calculation and dual presentation of Basic
and Diluted earnings per share ("EPS"), replacing the measures of primary and
fully-diluted EPS as reported under Opinion No. 15. SFAS No. 128 is
effective for financial statements issued for periods ending December 31,
1997. Prior year EPS data has been restated to conform with the requirements
of SFAS No. 128.
The following weighted average shares and share equivalents are used to
calculate Basic and Diluted EPS for the three months ended September 30, 1998
and 1997:
<TABLE>
<CAPTION>
Three months ended
September 30, 1998 September 30, 1997
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<S> <C> <C>
Weighted average number of
shares outstanding used to
calculate Basic EPS 607,294 719,452
Dilutive securities: 6,745 6,016
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Weighted average number of
shares and share equivalents
outstanding used to calculate
Diluted EPS 614,039 725,468
</TABLE>
In February 1997, the FASB issued SFAS No. 129, "Disclosure of Information
about Capital Structure." SFAS No. 129 summarizes previously issued
disclosure guidance contained within APB Opinions No. 10 and 15 as well as
SFAS No. 47. There will be no changes to the Company's disclosures pursuant
to the adoption of SFAS No. 129. This statement is effective for financial
statements issued for periods ending after December 15, 1997. Adoption of
SFAS No. 129 had no impact on the Company's financial statements.
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Note 5 - Payment of Dividends
On September 16, 1998, the Company declared a quarterly dividend of $.07 per
share, payable on October 15, 1998, to shareholders of record of September
30, 1998.
Note 6 - Employee Stock Ownership Plan ("ESOP")
In connection with the conversion to stock form of ownership, the Company
formed an ESOP. The ESOP covers employees who have completed at least 1000
hours of service during a twelve month period and have attained the age of
21. The ESOP borrowed $488,000 from an independent third party lender to fund
the purchase of 48,810 shares or 8% of the shares issued in the conversion.
The loan to the ESOP will be repaid from scheduled discretionary cash
contributions from the Company sufficient to service the debt over a ten year
period. Shares are released and allocated to the participants on the basis of
a compensation formula. ESOP compensation expense for the three months
September 30, 1998, was approximately $20,000.
Note 7 - Recent Accounting Pronouncements
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income,"
which establishes standards for reporting and display of comprehensive income
and its components in a full set of general-purpose financial statements.
Comprehensive income is defined as the change in equity of a business
enterprise during a period from transactions and other events and
circumstances from nonowner sources. It includes all changes in equity during
a period except those resulting from investment by owners and distributions
to owners.' Only the impact of unrealized gains or losses on securities
available for sale will be disclosed as an additional component of the
Company's income under the requirements of SFAS No. 130. This statement is
effective for fiscal years beginning after December 15, 1997.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and related Information." SFAS No. 131 establishes standards for
the way public business enterprises are to report information about operating
segments in annual financial statements and requires those enterprises to
report selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for the related
disclosures about products and services, geographic areas, and major
customers. SFAS No. 131 supersedes FASB Statement No. 14, "Financial
Reporting for Segments of a Business Enterprise," but retains the requirement
to report information about major customers. It amends FASB Statement No. 94,
"Consolidation of All Majority-Owned Subsidiaries," to remove the special
disclosure requirements for previously unconsolidated subsidiaries. Adoption
of SFAS No. 131 had no impact on the Company's financial statements. This
statement is effective for financial statements for periods beginning after
December 15, 1997.
In February 1998, the FASB issued SFAS No. 132, "Employer's Disclosures About
Pensions and Other Post-Retirement Benefits." This statement standardized the
disclosure requirements
9
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for pensions and other post-retirement benefits and is effective for fiscal
years beginning after December 15, 1997. Management does not expect SFAS No.
132 to have a significant impact on the consolidated financial statements of
the Company.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General
Pennwood Bancorp, Inc. (the "Company") is the holding company for the
Pennwood Savings Bank (the "Savings Bank"). The operating results of the
Savings Bank depend primarily upon its net interest income, which is
determined by the difference between interest income on interest-earning
assets, which consist principally of loans, investment securities and other
investments, and interest expense on interest-bearing liabilities, which
consist principally of deposits and borrowed money. The Savings Bank's net
income also is affected by its provision for loan losses, as well as the
level of its other income, including loan fees and service charges and
miscellaneous items, and its other expenses, including compensation and other
employee benefits, premises and occupancy costs, federal deposit insurance
premiums, data processing expense, net loss on real estate owned and other
miscellaneous expenses, and income taxes.
On July 12, 1996, the Savings Bank completed its conversion from the
mutual to the stock form (the "Conversion"). In the Conversion, the Savings
Bank issued 610,128 shares of common stock, which resulted in net proceeds to
the Savings Bank of approximately $5.7 million. On January 27, 1997, the
Savings Bank completed its Reorganization into the holding company form of
ownership (the "Reorganization"), whereby each outstanding share of common
stock of the Savings Bank was converted into common stock of the Company and
the Company acquired all the capital stock of the Savings Bank.
Changes In Financial Condition
The Company's total assets increased by $4.3 million or 9.3% from $46.1
million at June 30, 1998 to $50.4 million at September 30, 1998. During the
three months ended September 30, 1998, the Company's money market investments
(consisting of interest-bearing deposits with other financial institutions)
increased by $795,000 or 39.2% while investment and mortgage-backed
securities (classified as available for sale) decreased by $1.7 million or
21.8% from $7.8 million at June 30, 1998 to $6.1 million at September 30,
1998. This was primarily due to maturities and calls of investment securities
as a result of declining market interest rates. Investment and
mortgage-backed securities (classified as held-to-maturity) decreased by
$1,000 and cash and amounts due from depository institutions decreased by
$51,000 at the quarter ending September 30, 1998. The Company's net loans
receivable increased $5.0 million or 14.9% from $33.6 million at June 30,
1998 to $38.6 at September 30, 1998. This was due to an increase in loans on
single family homes, funded by the proceeds from maturing and called
investment securities and by FHLB advances. During the quarter, the Company's
premises and
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equipment increased by $206,000 or 19.7%. This was due to the purchase of
property, adjacent to the Company's main office, for expansion in the coming
year. During the quarter, the Company's total liabilities increased by $4.7
million or 12.3% from $38.1 million at June 30, 1998 to $42.8 million at
September 30, 1998. Borrowed money increased by $5.0 million or 347.1%, which
was offset by a decrease in deposit liabilities of $222,000 or 0.6%.
Shareholders equity decreased by $331,000 or 0.7% during the three months
ended September 30, 1998, as a result of the purchase of Treasury Stock of
$431,000 which was partially offset by the market value adjustment on
investments classified as available for sale of $10,000, $37,000 in employee
benefit plan shares earned and the year to date net income of $99,000 less
dividends paid of $46,000.
Results of Operations
Net Income. The Company reported net income of $99,000 for the three
months ended September 30, 1998 compared to $128,000 during the three months
ended September 30, 1997. The $29,000 decrease in net income during such
period as compared to the 1997 period was the result of a $30,000 increase in
non interest expenses, a $2,000 decrease in non interest income and a $12,000
increase in income taxes, which was partially offset by a $13,000 increase in
net interest income and a $2,000 decrease in loan loss provisions. For the
three months ended September 30, 1998, the Company's net interest margin
increased by 5 basis points to 4.47% from 4.42% for the three months ended
September 30, 1997. The average yield earned on the Company's
interest-earning assets decreased by 7 basis points, which was offset by a 27
basis point decrease in the average rate paid on the Company's
interest-bearing liabilities.
Net Interest Income. Net interest income increased by $13,000 or 2.6%
during the three months ended September 30, 1998, as compared to the 1997
quarter, due to a $680,000 or 1.5% increase in the average balance of
interest-bearing assets, which had a 7 basis point decrease in the average
yield earned thereon, which was offset by a $1.6 million or 4.2% increase in
the average balance of interest-bearing liabilities and a 27 basis point
decrease in the average rate paid thereon.
During the three months ended September 30, 1998, total interest income
increased by $6,000 or 0.6%, as compared to the same period in 1997,
primarily due to a $160,000 or 24.8% increase in interest earned on loans and
a $4,000 or 19.0% increase in interest earned on money market investments
which were offset by a $149,000 or 57.5% decrease in interest earned on
investment securities, a $5,000 or 14.7% decrease in interest earned on
mortgage backed securities and a $4,000 or 44.4% decrease in interest earned
on federal funds and other investments. The increase in interest earned on
loans was due primarily to a $8.3 million or 29.4% increase in the average
balance of loans outstanding, which was partially offset by a 33 basis point
decrease in the average yield earned thereon. The decrease in interest earned
on investment securities was due primarily to a $7.8 million or 52.3%
decrease in the average balance of investment securities. The increase in
interest earned on money market investments was primarily due to a $322,000
or 16.5% increase in the average balance of money market
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investments. The decrease in interest earned on federal funds sold was due
primarily to a $128,000 or 30.7% decrease in the average balance of federal
funds and other investments and a 171 basis point decrease in the average
yield earned thereon. The decrease in the average yield earned on the
Company's investment securities reflected calls and maturities of a portion
of its U.S. Government and agency obligations as a result of declining
interest rates.
During the three months ended September 30, 1998, total interest expense
decreased by $7,000 or 1.5%, as compared to the same period in 1997, due to a
decrease of $151,000 or 0.6% in the average balance of certificates of
deposit and a 5 basis point decrease on the average rate paid thereon, and a
$2.1 million or 91.3% increase in the average balance of borrowed money which
was offset by a 289 basis point decrease in the average rate paid thereon.
Provision for Loan Losses. The Company establishes provisions for losses
on loans, which are charged to operations, in order to maintain the allowance
for loan losses at a level which is deemed to be appropriate based upon an
assessment of prior loss experience, the volume and type of lending presently
being conducted by the Company, industry standards, past due loans, economic
conditions in the Company's market area generally and other factors related
to the collectibility of the Company's loan portfolio. During the three
months ended September 30, 1998, the Company established provisions for loan
losses of $13,000 compared to $15,000 for the prior 1997 period.
Other Income. Total other income decreased by $2,000 or 5.4% during the
three months ended September 30, 1998 as compared to the same quarter in
1997. The decrease was primarily due to a decrease of $2,000 or 9.5% in other
miscellaneous income (which consists primarily of rental income earned on
real estate owned, late charges, service charges and other miscellaneous
fees).
Other Expenses. Total other expenses increased by $30,000 during the
three months ended September 30, 1998 as compared to the same quarter in 1997
primarily due to a $30,000 or 17.0% increase in compensation and employee
benefits and a $7,000 or 8.1% increase in other miscellaneous expenses, which
were offset by a $1,000 or 16.7% decrease in federal insurance premiums, a
$1,000 or 5.0% decrease in data processing expenses and a $5,000 or 8.5%
decrease in office occupancy expenses.
Provision for Income Taxes. The Company incurred an increase of $12,000
or 24.5% in income tax expense for the three months ended September 30, 1998,
as compared to the 1997 quarter, partially due to the maturity and call of
tax exempt investment securities.
Liquidity and Capital Resources
The Company's primary source of funds are deposits, repayments,
prepayments and maturities of outstanding loans, maturities of investment
securities and other short-term investments, and funds provided from
operations. While scheduled loan repayments and
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maturing investment securities and short-term investments are relatively
predictable sources of funds, deposit flows and loan prepayments are greatly
influenced by the movement of interest rates in general, economic conditions
and competition. The Company manages the pricing of its deposits to maintain
a deposit balance deemed appropriate and desirable. In addition, the Company
invests in short-term investment securities and other interest-earning assets
which provide liquidity to meet lending requirements. Although the Company
has been able to generate enough cash through the retail deposit market, its
traditional funding source, the Company may, to the extent deemed necessary,
utilize other borrowing sources, consisting primarily of advances from the
Federal Home Loan Bank of Pittsburgh. At September 30, 1998, the Company had
$6.0 million of outstanding advances from the FHLB of Pittsburgh.
Liquidity management is both a daily and long-term function. Excess
liquidity is generally invested in short-term investments such as cash and
cash equivalents, including money market investments and federal funds sold,
and U.S. Government and agency obligation. On a longer-term basis, the
Company invests in various lending products and investment securities. The
Company uses its sources of funds primarily to meet its ongoing commitments
to pay maturing savings certificates and savings withdrawals, fund loan
commitments and maintain an investment securities portfolio. At September 30,
1998, the total commitments outstanding (excluding undisbursed portions of
loans in process) amounted to $4.0 million in mortgage loans and $693,000 in
unused lines of credit. At the same date, the unadvanced portion of loans in
process approximated $1.9 million. Certificates of deposit scheduled to
mature in three months or less at September 30, 1998, totaled $3.1 million.
Management of the Company believes that the Company has adequate resources,
including principal payments and repayments of loans an maturing investments,
to fund all of its commitments to the extent required. Based upon its
historical run-off experience, management believes that a significant portion
of maturing deposits will remain with the Company.
As of September 30, 1998, the Company has regulatory capital, which was
in excess of required amounts.
Year 2000 Compliance
The Company has developed a plan of action to help insure that its
operational and financial systems will not be adversely affected by year 2000
software/hardware failures due to processing errors arising from calculations
using the year 2000 date. While the Company believes it is doing everything
technologically and operationally possible to assure year 2000 compliance, it
is to a large extent dependent upon vendor cooperation. The Company is
requiring its computer systems and software vendors to represent that the
products provided are or will be year 2000 compliant. Any year 2000
compliance failures could result in additional expenses or business
disruptions to the Company which are currently unknown and are believed to be
immaterial. The Company does not itself internally program any major
operating system of the Company; therefore, the Company does not expect to
incur material costs for remediation efforts. Testing of all critical systems
is expected to be completed by the end of the Company's fiscal year. To date,
no significant problems have been encountered.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security-Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
27 Financial Data Schedule
b) Reports on Form 8-K
None
14
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PENNWOOD BANCORP, INC.
Date: November 13, 1998 By: /s/ Paul S. Pieffer
----------------------------------
Paul S. Pieffer, President and
Chief Executive Officer
Date: November 13, 1998 By: /s/ James W. Kihm
----------------------------------
James W. Kihm, Vice President and
Secretary (principal financial
officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> SEP-30-1998
<CASH> 476
<INT-BEARING-DEPOSITS> 2821
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 6078
<INVESTMENTS-CARRYING> 209
<INVESTMENTS-MARKET> 216
<LOANS> 38617
<ALLOWANCE> 381
<TOTAL-ASSETS> 50409
<DEPOSITS> 35532
<SHORT-TERM> 2178
<LIABILITIES-OTHER> 646
<LONG-TERM> 4423
0
0
<COMMON> 8
<OTHER-SE> 7622
<TOTAL-LIABILITIES-AND-EQUITY> 50409
<INTEREST-LOAN> 804
<INTEREST-INVEST> 139
<INTEREST-OTHER> 30
<INTEREST-TOTAL> 973
<INTEREST-DEPOSIT> 407
<INTEREST-EXPENSE> 458
<INTEREST-INCOME-NET> 515
<LOAN-LOSSES> 13
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 377
<INCOME-PRETAX> 160
<INCOME-PRE-EXTRAORDINARY> 160
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 99
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.16
<YIELD-ACTUAL> 8.44
<LOANS-NON> 327
<LOANS-PAST> 317
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 394
<CHARGE-OFFS> 30
<RECOVERIES> 4
<ALLOWANCE-CLOSE> 381
<ALLOWANCE-DOMESTIC> 381
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
