<PAGE> 1
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, 1999
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)
<TABLE>
<S> <C>
Pennsylvania 25-1783648
- ------------------------------------------- -------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
683 Lincoln Avenue
Pittsburgh, Pennsylvania 15202
- ------------------------------------------- -------------------------
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
(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 555,539 shares of common stock
outstanding as of November 10, 1999.
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
<PAGE> 2
<TABLE>
<CAPTION>
PENNWOOD BANCORP, INC.
TABLE OF CONTENTS
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
- ------- ---------------------
ITEM 1. FINANCIAL STATEMENTS. 3
Consolidated Balance Sheets as of September 30, 1999
(unaudited) and June 30, 1999 3
Consolidated Statements of Income for the three months
ended September 30, 1999 and 1998 (unaudited) 4
Consolidated Statements of Cash Flows for the three months
ended September 30, 1999 and 1998 (unaudited) 5
Notes to Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. 9
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
</TABLE>
SIGNATURES
2
<PAGE> 3
PENNWOOD BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands Except Share Data)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
SEPT. 30 JUNE 30,
ASSETS 1999 1999
------ ---- ----
<S> <C> <C>
Cash and amounts due from depository institutions $844 $1,054
Money market investments at cost which approximates
market value 1,114 1,667
Investment and mortgage-backed securities:
Available-for-sale (Amortized cost of $4,544 and $3,514) 4,494 3,515
Held-to-maturity (Market value of $206 and $210) 206 207
Loans receivable, net 44,134 42,715
Real estate owned, net 96 86
Federal Home Loan Bank stock 550 400
Premises and equipment, net 1,666 1,340
Accrued interest receivable 349 299
Prepaid expenses and other assets 418 413
--- ---
Total assets $53,871 $51,696
------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities:
Savings deposits $34,953 $35,529
Advances from borrowers for taxes and insurance 163 463
Accrued interest payable on savings deposits 466 425
Borrowed funds 11,384 8,394
Accrued expenses and other liabilities 329 278
--- ---
Total liabilities 47,295 45,089
Shareholders' Equity:
Common Stock, $.01 par value; 4,000,000 shares authorized;
813,419 issued at September 30, 1999 8 8
Additional paid-in capital 5,667 5,665
Retained earnings, substantially restricted 4,518 4,516
Treasury stock, at cost: 256,280 and 252,780 shares at September 30, 1999
and June 30, 1999, respectively. (3,076) (3,045)
Unearned Employee Stock Ownership Plan shares (330) (342)
Unearned common stock - Recognition and Retention Plan (178) (196)
Accumulated other comprehensive income (33) 1
---- -
Total shareholders' equity 6,576 6,607
Total liabilities and shareholders' equity $53,871 $51,696
------- -------
</TABLE>
See accompanying notes to unaudited consolidated financial statements
3
<PAGE> 4
PENNWOOD BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
--------------------------
1999 1998
---- ----
<S> <C> <C>
Interest income:
Loans $887 $804
Investment securities 57 110
Mortgage-backed securities 20 29
Federal funds sold & other investments 8 5
Money market investments 18 25
-- --
Total interest income 990 973
Interest expense:
Interest on savings deposits 384 407
Interest on borrowed funds 131 51
--- --
Total interest expense 515 458
Net interest income 475 515
Provision for loan losses 3 13
- --
Net interest income after provision
for loan losses 472 502
Other income:
Service charges 18 16
Other 27 19
-- --
Total other income 45 35
Other expenses:
Compensation and employee benefits 218 206
Premises and occupancy costs 71 54
Federal insurance premiums 5 5
Data processing expense 32 19
Other operating expenses 111 93
--- --
Total other expenses 437 377
Income before income taxes 80 160
Provision for income taxes 36 61
-- --
Net income $44 $99
--- ---
Basic earnings per share $.09 $.16
Diluted earnings per share $.09 $.16
Dividend declared per share $.075 $.07
</TABLE>
See accompanying notes to unaudited consolidated financial statements
4
<PAGE> 5
PENNWOOD BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
-------------------------
<S> <C> <C>
OPERATING ACTIVITIES: 1999 1998
- --------------------- ---- ----
Net Income $44 $99
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense 12 14
Provision for loan losses 3 13
(Increase) in accrued interest receivable (50) (25)
(Increase) decrease in prepaid expenses and other assets (5) 35
Increase in accrued interest payable on deposits 41 61
Other, net (35) (17)
---- ----
Total adjustments (34) 81
Net cash provided by operating activities 10 180
INVESTING ACTIVITIES:
- ---------------------
Purchases of premises and equipment (338) (220)
Purchases of investment and mortgage-backed securities
available-for-sale (1,112) (910)
Proceeds from maturities of investment and mortgage-backed
securities held-to-maturity 1 1
Proceeds from maturities and principal repayments of
investment and mortgage-backed securities available-
for-sale 81 2,682
Net (increase) in loans receivable (1,362) (5,005)
(Increase) in FHLB Stock (150) (16)
Other, net 45 (48)
-- ----
Net cash (used) by investing activities (2,835) (3,516)
FINANCING ACTIVITIES:
- ---------------------
Net increase (decrease) in passbook, club, money market and
NOW accounts 146 (189)
Net (decrease) in certificates of deposit accounts (722) (33)
Net (decrease) in advances from borrowers for
taxes and insurance (300) (214)
Repayment of ESOP loan (10) (9)
Purchase of Treasury Stock (31) (431)
Increase of FHLB Advances 3,000 5,000
Dividends paid (42) (47)
Other 21 3
-- -
Net cash provided by financing activities 2,062 4,080
Net (decrease) increase in cash and cash equivalents (763) 744
Cash and cash equivalents, beginning of period 2,721 2,553
----- -----
Cash and cash equivalents, end of period $1,958 $3,297
------ ------
</TABLE>
See accompanying notes to unaudited consolidated financial statements
5
<PAGE> 6
PENNWOOD BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
-------------------------
1999 1998
---- ----
<S> <C> <C>
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest on savings deposits $343 $346
---- ----
Income taxes 18 11
-- --
</TABLE>
See accompanying notes to unaudited consolidated financial statements
6
<PAGE> 7
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, 1999 are not
necessarily indicative of the results to be expected for the year ending June
30, 2000. 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, 1999.
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 and Reorganization
The Savings Bank converted from a Pennsylvania mutual savings bank to a
Pennsylvania stock savings bank on July 12, 1996. In connection with the
conversion, the Savings Bank issued 610,128 shares of common stock. 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., a
Pennsylvania corporation.
7
<PAGE> 8
Note 4 - Earnings Per Share
The following weighted average shares and share equivalents are used to
calculate Basic and Diluted EPS for the three months ended September 30, 1999
and 1998:
<TABLE>
<CAPTION>
Three months ended
Sept. 30, 1999 Sept. 30, 1998
-------------- --------------
<S> <C> <C>
Weighted average number of shares
outstanding used to calculate Basic EPS 513,921 607,294
Dilutive securities 0 6,745
------- -------
Weighted average number of
shares and share equivalents
outstanding used to calculate
Diluted EPS 513,921 614,039
</TABLE>
Note 5 - Payment of Dividends
On September 15, 1999, the Company declared a quarterly dividend of $.075 per
share, payable on October 15, 1999, to shareholders of record of September 30,
1999.
Note 6 - Adoption of New Accounting Principles
In October 1998, the FASB issued SFAS No. 134 "Accounting for Mortgage-Backed
Securities Retained After the Securitization of Mortgage Loans Held for sale by
a Mortgage-Banking Enterprise," which amends SFAS No. 65, "Accounting for
Certain Mortgage Banking Activities." This statement conforms the subsequent
accounting for securities retained after the securitization of mortgage loans by
a mortgage banking enterprise with the accounting for such securities by a
nonmortgage banking enterprise. This statement is effective for the first
quarter beginning January 1, 1999, and will not have any impact on the Company's
financial position or results of operation as the Company does not currently
securitize mortgage loans.
Note 7 - Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standard Board (FASB) issued Statement of
Financial Accounting Standard ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Liabilities." This statement requires that all
derivatives be recognized as either assets or liabilities in the balance sheet
and that those instruments be measured at fair value. The accounting for changes
in the fair value of a derivative (that is, gains or losses) depends on the
intended use of the derivative and resulting designation. This statement is
effective for fiscal years beginning after June 15, 1999, although earlier
adoption is permitted. In June 1999, the FASB issued SFAS No.
8
<PAGE> 9
137 "Accounting for Derivative Instruments and Hedging Activities - Deferral of
the Effective Date of FASB Statement No. 133 - and Amendment of FASB Statement
No. 133," which delays the adoption of SFAS No. 133 until June 15, 2000.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
GENERAL
Pennwood Bancorp, Inc. is the holding company for Pennwood 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.
CHANGES IN FINANCIAL CONDITION
The Company's total assets increased by $2.2 million or 4.3% from
$51.7 million at June 30, 1999 to $53.9 million at September 30, 1999. During
the three months ended September 30, 1999, the Company's investment and
mortgage-backed securities (classified as available-for-sale) increased by $1
million or 28.8% from $3.5 million at June 30, 1999 to $4.5 million at September
30, 1999 while money market investments (consisting of interest-bearing deposits
with other financial institutions) decreased by $553,000 or 33.2%. Investment
and mortgage-backed securities (classified as held-to-maturity) decreased by
$1,000 and cash and amounts due from depository institutions decreased by
$210,000 at the quarter ending September 30, 1999. The Company's net loans
receivable increased $1.4 million or 3.3% from $42.7 million at June 30, 1999 to
$44.1 at September 30, 1999. This was due to an increase in loans on single
family homes, funded by the proceeds of FHLB advances. During the quarter, the
Company's premises and equipment increased by $326,000 or 24.3%. This was due to
the expansion of the Company's main office which is scheduled for completion by
the end of the fiscal year. During the quarter, the Company's total liabilities
increased by $2.2 million or 4.9% from $45.1 million at June 30, 1999 to $47.3
million at September 30, 1999. Borrowed money increased by $3.0 million or
35.7%, which was offset by a decrease in deposit liabilities of $576,000 or
1.6%. Shareholders' equity decreased by $31,000 or 0.5% during the three months
ended September 30, 1999, as a result of the purchase of Treasury Stock of
$31,000 and by the market value adjustment on investments classified as
available for sale of $34,000 which was offset by $32,000 in employee benefit
plan shares earned and the year to date net income of $44,000 less dividends
declared of $42,000.
9
<PAGE> 10
RESULTS OF OPERATIONS
NET INCOME. The Company reported net income of $44,000 for the three
months ended September 30, 1999 compared to $99,000 during the three months
ended September 30, 1998. The $55,000 decrease in net income during such period
as compared to the 1998 period was the result of a $40,000 decrease in net
interest income and a $60,000 increase in non-interest expenses which was offset
by a $10,000 increase in non interest income, a $25,000 decrease in income taxes
and a $10,000 decrease in loan loss provisions. For the three months ended
September 30, 1999, the Company's net interest margin decreased by 65 basis
points to 3.82% from 4.47% for the three months ended September 30, 1998.
NET INTEREST INCOME. Net interest income decreased by $40,000 or
7.8% during the three months ended September 30, 1999, as compared to the 1998
quarter. This decrease was attributable to a 49 basis point decrease in the
average yield earned on interest earning assets while the average rate paid on
interest bearing liabilities remained relatively unchanged.
During the three months ended September 30, 1999, total interest
income increased by $17,000 or 1.7%, as compared to the same period in 1998,
primarily due to a $83,000 or 10.3% increase in interest earned on loans and a
$3,000 or 60.0% increase in interest earned on federal funds and other
investments which were offset by a $53,000 or 48.2% decrease in interest earned
on investment securities, a $9,000 or 31.0% decrease in interest earned on
mortgage backed securities and a $7,000 or 28.0% decrease in interest earned on
money market investments. The increase in interest earned on loans was due
primarily to a $7.1 million or 19.4% increase in the average balance of loans
outstanding, which was partially offset by a 67 basis point decrease in the
average yield earned thereon. The decrease in interest earned on investment
securities was due primarily to a $2.7 million or 38.0% decrease in the average
balance of investment securities and a 79 basis point decrease in the average
yield earned thereon. The decrease in interest earned on money market
investments was primarily due to a $930,000 or 40.9% decrease in the average
balance of money market investments. The increase in interest earned on federal
funds sold was due primarily to a $194,000 or 67.1% increase in the average
balance of federal funds and other investments. The decrease in the average
yield earned on the Company's investment securities resulted from calls and
maturities of higher yielding U.S. Government and agency obligations.
During the three months ended September 30, 1999, total interest
expense increased by $57,000 or 12.4%, as compared to the same period in 1998,
due to a $5.7 million or 129.5% increase in the average balance of borrowed
money which was offset by a $468,000 or 1.3% decrease in savings deposits and a
20 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 and other factors related to
the
10
<PAGE> 11
collectibility of the Company's loan portfolio. During the three months ended
September 30, 1999, the Company established provisions for loan losses of $3,000
compared to $13,000 for the prior 1998 period.
OTHER INCOME. Total other income increased by $10,000 or 28.6%
during the three months ended September 30, 1999 as compared to the same quarter
in 1998 which was primarily due to an increase of $8,000 or 42.1% in other
income (which consists primarily of rental income earned on real estate owned,
late charges, and other miscellaneous fees).
OTHER EXPENSES. Total other expenses increased by $60,000 during the
three months ended September 30, 1999 as compared to the same quarter in 1998
primarily due to a $12,000 or 5.8% increase in compensation and employee
benefits, a $18,000 or 19.3% increase in other miscellaneous expenses, a $13,000
or 68.4% increase in data processing expenses and a $17,000 or 31.5% increase in
office occupancy expenses.
PROVISION FOR INCOME TAXES. The provision for income taxes decreased
by $25,000 or 41.0% during the three months ended September 30, 1999, as
compared to the 1998 quarter, due to the decrease in income.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources 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 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, 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 ("FHLB") of Pittsburgh. At September
30, 1999, the Company had $11.0 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 obligations. 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, 1999, the total commitments
outstanding (excluding undisbursed portions of loans in process) amounted to
$4.1 million in mortgage loans and
11
<PAGE> 12
$497,000 in unused lines of credit. At the same date, the unadvanced portion of
loans in process approximated $3.9 million. Certificates of deposit scheduled to
mature in three months or less at September 30, 1999, totaled $4.1 million.
Management of the Company believes that the Company has adequate resources,
including principal payments and repayments of loans and 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, 1999, the Company has regulatory capital, which
was in excess of required amounts.
YEAR 2000 COMPLIANCE
Many computer programs were developed recognizing only the last two
digits of a year (e.g."99" for "1999"). A question exists as to whether certain
computer programs will recognize the year 2000 accurately. It is possible that
since many programs will key on the "00" in the date, the year 2000 will be
recognized as 1900. This issue has been popularly named the "Y2K" problem.
The Company is aware of the issues relating to Y2K. They are
pervasive and complex. The failure of computer systems to properly recognize the
year 2000 could result in the generation of erroneous data or be the cause of a
system failure.
The Securities and Exchange Commission, The Federal Financial
Institution's Examination Council ("FFIEC") and the other federal banking
regulators have issued guidelines to assure that insured depository institutions
appropriately address Y2K issues. Of primary concern is the ability of computer
hardware and software to recognize the year 2000. The FFIEC determined that the
Y2K management process should consist of five phases (Awareness, Assessment,
Renovation, Validation and Implementation) and that a timeline for the
completion of each phase should be established.
The Company outsources substantially all of its critical data
processing needs. As a result, the Company is largely dependent on vendor
cooperation for systems used in its day-to-day business. The Company is working
closely with its vendors to ensure that Y2K issues will not adversely affect its
operational and financial systems.
The Company has developed a Year 2000 Action Plan that addresses all
systems, hardware, software and data processing applications provided by
third-party vendors and any proprietary programs. The Awareness and Assessment
phases of the plan are complete. These phases focused on understanding the Y2K
problem and identifying all hardware, software, networks, processing platforms,
vendor interdependencies and budget requirements affected by the Y2K date
change. The Renovation phase entailed assessing the need for hardware and
12
<PAGE> 13
software upgrades, system replacements and related changes. The Company
completed the Renovation phase during fiscal 1999.
The Validation and Implementation phases involve determining the Y2K
status of the Company's mission critical systems and vendors through testing and
certification. Testing has been completed on mission critical hardware and
software systems and vendors and the tests have indicated compliance for all
critical areas. Validation and Implementation phases were completed as of June
30, 1999.
The Company has formulated a Contingency Plan for its major
functions in the event that system interruptions or failures due to Y2K problems
occur that are beyond the Company's control. Integral to the Contingency Plan is
a liquidity plan, which outlines the Company's efforts to insure adequate cash
reserves through the Y2K dilemma. The Contingency Plan also involves, among
other things, additional equipment and supplies, additional staff and training
and hard copy records of critical information.
Management has estimated that expenses related to Y2K will not
exceed $15,000, of which $12,000 has already been incurred. This amount covers
testing, upgrades and customer communication. Direct and indirect costs
associated with Year 2000 issues have not had a material impact on the Company's
consolidated financial statements to date and management does not anticipate any
future costs to be significant.
The cost to address Y2K issues is based on management's best
estimates, which are derived utilizing a number of assumptions of future events
including the continued availability of internal and external resources, third
party modifications and other factors. There can be no guarantee, however, that
these statements will be achieved and actual results could differ. Moreover,
although management believes it is effectively addressing its Y2K issues, no
assurances can be given that the Company will not be affected by the Y2K
problem. In the event the Company is affected, including disruptions in the
economy generally resulting from Y2K problems, the Company's business, financial
condition and results of operations could be materially adversely affected, the
extent to which cannot be reasonably estimated at this time.
FORWARD-LOOKING STATEMENTS
In addition to the historical information contained herein, this
report contains forward-looking statements that involve risks and uncertainties,
including, but not limited to, the cost and potential impact of the Year 2000 on
the Company's data processing systems. Economic circumstances, the Company's
operations, and actual results could differ significantly from those discussed
in the forward-looking statements. The major factors that could cause or
contribute to such differences include, but are not limited to, changes in the
local economy as well as fluctuations in prevailing interest rates.
13
<PAGE> 14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
Not applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
-----------------------------------------
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
<PAGE> 15
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 12, 1999 By:/s/ Paul S. Pieffer
-------------------
Paul S. Pieffer, President and
Chief Executive Officer
Date: November 12, 1999 By:/s/ James W. Kihm
-----------------
James W. Kihm, Vice President and
Secretary
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> SEP-30-1999
<CASH> 844
<INT-BEARING-DEPOSITS> 1,114
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 4,494
<INVESTMENTS-CARRYING> 4,544
<INVESTMENTS-MARKET> 206
<LOANS> 44,134
<ALLOWANCE> 250
<TOTAL-ASSETS> 53,871
<DEPOSITS> 34,953
<SHORT-TERM> 7,000
<LIABILITIES-OTHER> 958
<LONG-TERM> 4,384
0
0
<COMMON> 8
<OTHER-SE> 6,568
<TOTAL-LIABILITIES-AND-EQUITY> 53,871
<INTEREST-LOAN> 887
<INTEREST-INVEST> 77
<INTEREST-OTHER> 26
<INTEREST-TOTAL> 990
<INTEREST-DEPOSIT> 384
<INTEREST-EXPENSE> 515
<INTEREST-INCOME-NET> 475
<LOAN-LOSSES> 3
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 437
<INCOME-PRETAX> 80
<INCOME-PRE-EXTRAORDINARY> 80
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44
<EPS-BASIC> .09
<EPS-DILUTED> .09
<YIELD-ACTUAL> 7.95
<LOANS-NON> 218
<LOANS-PAST> 163
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 309
<CHARGE-OFFS> 68
<RECOVERIES> 6
<ALLOWANCE-CLOSE> 250
<ALLOWANCE-DOMESTIC> 250
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
