FORM IO-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
--------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-20907
KENWOOOD BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 31-1457996
(State or other jurisdiction or (IRS Employer
incorporation or organization) Identification Number)
7711 Montgomery Road
Cincinnati, Ohio 45236
(Address of principal (Zip Code)
executive office)
Registrant's telephone number, including area code: (513) 791-2834
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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 [ ]
As of May 9, 1997, the latest practicable date, 295,133 shares of the
registrant's common stock, $.01 par value, were issued and outstanding.
Page 1 of 11 pages
<PAGE>
KENWOOD BANCORP, INC.
Index
Page
PART I FINANCIAL INFORMATION
Consolidated Statements of Financial Condition 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
PART II OTHER INFORMATION 12
SIGNATURES 13
- 2 -
<PAGE>
<TABLE>
<CAPTION>
KENWOOD BANCORP INC
STATEMENTS OF FINANCIAL CONDITION
(in Thousands)
ASSETS
March 31, September 30,
1997 1996
(unaudited)
<S> <C> <C>
Cash and due from banks ................................................ $ 300 588
Interest bearing deposits in other financial institutions .............. 1,075 1,558
-------- --------
Cash and cash equivalents ................................ 1,375 2,146
Certificates of deposit in other financial institutions ................ 380 380
Investment securities at amortized cost, approximate market
value of $1,963 and $1,959 as of March 31, 1997
and September 30, 1996 ............................................ 1,995 1,994
Investment securities - available for sale, approximate market
value of $499 and $499 as of March 31, 1997
and September 30, 1996 ............................................ 485 486
Mortgage-backed securities at cost, approximate market
value of $232 and $250 as of March 31, 1997
and September 30, 1996 ............................................ 228 245
Mortgage-backed securities available for sale, amortized cost
cost of $7,331 and $4,499 as of March 31, 1997
and September 30, 1996 ............................................ 7,378 4,529
Loans receivable ....................................................... 33,389 30,009
Loans held for sale - at lower of cost or market ....................... 360 9,322
Property and equipment ................................................. 356 362
Federal Home Loan bank stock - at cost ................................. 445 430
Accrued interest receivable
Loans ............................................................. 163 199
Mortgage-backed securities ........................................ 45 26
Investment securities ............................................. 20 20
Prepaid expenses and other assets ...................................... 68 74
Prepaid federal income taxes ........................................... -- 9
-------- --------
$ 46,688 50,231
======== ========
<PAGE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Deposits ............................................................... $ 40,942 41,636
Advances from the Federal Home Loan Bank ............................... 1,077 3,653
Accounts payable on mortgage loans services for others ................. 41 37
Advances by borrowers for taxes and insurance .......................... 195 215
Other liabilities ...................................................... 77 417
Accrued federal income taxes ........................................... 28 --
Deferred federal income taxes .......................................... 39 34
-------- --------
Total liabilities ........................................ 42,399 45,992
-------- --------
Commitments ............................................................ -- --
Stockholders' equity
Preferred stock - authorized 1,000,000 shares of $.01 par
value, none issued ............................................. -- --
Common stock - authorized 4,000,000 shares of $.01 par
value; 295,133 shares issued and outstanding ................... 3 3
Additional paid in capital ........................................ 1,771 1,771
Retained earnings - substantially restricted ...................... 2,630 2,597
Shares acquired by Management Recognition Plan .................... (18) (18)
Less unearned ESOP shares ......................................... (119) (126)
Unrealized gain on available for sale securities, net of income tax 22 12
-------- --------
Total stockholders' equity ............................... 4,289 4,239
-------- --------
$ 46,688 50,231
======== ========
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
KENWOOD BANCORP INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
Six Months ended Three Months ended
March 31, March 31,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income
Loans ................................. $1,327 1,280 640 640
Mortgage-backed securities ............ 206 233 124 118
Investment securities ................. 89 99 45 52
Interest bearing deposits and other ... 81 71 31 23
------ ----- ---- ----
Total interest income ............. 1,703 1,683 840 833
Interest expense
Deposits .............................. 1,153 1,257 560 617
Borrowings ............................ 49 10 15 7
------ ----- ---- ----
Total interest expense ............ 1,202 1,267 575 624
------ ----- ---- ----
Net interest income ............... 501 416 265 209
Provision for losses on loans
Net interest income after provision -- 5 -- 2
for losses on loans ............ 501 411 265 207
Other income
Gain on sale of mortgage loans ........ 137 106 21 61
Gain on sale of investments ........... -- 13 -- --
Other operating ....................... 10 8 5 5
------ ----- ---- ----
147 127 26 66
------ ----- ---- ----
<PAGE>
General, administrative and other expenses
Employee compensation and benefits .... 261 217 135 112
Occupancy and equipment ............... 67 60 33 32
Federal deposit insurance premiums .... 32 50 10 25
Franchise taxes ....................... 29 21 18 11
Other ................................. 148 118 85 67
------ ----- ---- ----
Total general, administrative and
other expenses ................. 527 466 281 247
------ ----- ---- ----
Income before income taxes ........ 111 72 10 26
Federal income taxes
Current ............................... 36 18 7 9
Deferred .............................. -- -- -- 3
------ ----- ---- ----
36 18 7 12
------ ----- ---- ----
Net income ........................ $ 75 54 3 14
====== ==== ==== ====
Earnings per share ................ $ 0.27 0.19 0.01 0.05
====== ==== ==== ====
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
KENWOOD BANCORP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended December 31,
(In thousands)
(Unaudited)
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income for the period ............................................ $ 75 54
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization ................................. 15 16
Amortization of ESOP .......................................... 7 --
Loans disbursed for sale in the secondary market .............. (3,851) (7,611)
Proceeds form sale of loans in the secondary market ........... 4,675 6,851
Gain on sale mortgage loans ................................... (137) (106)
Gain on sale of investments ................................... -- (13)
Federal Home Loan Bank dividends .............................. (15) (14)
Amortization of deferred loan origination (fees) costs ........ 9 (7)
Provision for loan losses ..................................... -- 5
Increase (decrease) in cash due to changes in:
Accrued interest receivable ................................ 16 (2)
Prepaid expenses and other assets .......................... 15 (26)
Accounts payable on mortgage loans serviced for loans ...... 4 77
Other liabilities .......................................... (340) (20)
Accrued federal income taxes ............................... 28 4
------- -------
Net cash provided by (used in) operating activities ..... 501 (792)
------- -------
Cash flows provided by (used in) investing activities:
Principal payments on loans and mortgage-backed securities ........... 1,995 5,303
Loan disbursements ................................................... (4,954) (6,890)
Proceeds from sale of loans .......................................... 8,322 --
Purchased of investment securities ................................... -- (500)
Purchase of mortgage-backed securities - available for sale .......... (3,293) (513)
Proceeds from sale of investments - available for sale ............... -- 513
Purchase of office premises and equipment ............................ (10) (6)
Decrease in certificates of deposit in other financial institutions .. -- 950
------- -------
Net cash provided by (used in) investing activities ..... 2,060 (1,143)
------- -------
Cash flows provided by (used in) financing activities:
Net decrease in despots .............................................. (694) (894)
Borrowings from FHLB ................................................. 500 1,000
Repayment of FHLB advances ........................................... (3,076) (12)
Advances by borrowers for taxes and insurance ........................ (20) 29
Dividends paid on common stock ....................................... (42) (31)
------- -------
Net cash provided by (used in) financing activities ..... (3,332) 92
------- -------
<PAGE>
Net decrease in cash and cash equivalents ................................ (771) (1,843)
Cash and cash equivalents - beginning of period .......................... 2,146 2,808
------- -------
Cash and cash equivalents - end of period ................................ 1,375 965
======= =======
Supplemental disclosure of cash flow information
Cash paid during the period for:
Federal income taxes ............................................. -- --
======= =======
Interest on deposits and borrowings .............................. 1,202 1,269
======= =======
Supplemental disclosure of non-cash investing activities
Transfer of investment securities to available for sale classification $ -- 7,253
======= =======
</TABLE>
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<PAGE>
KENWOOD BANCORP, INC.
Notes to Consolidated Financial Statements
1. Organizational Summary:
Kenwood Bancorp, Inc. (the "Company" or "Bancorp") is a holding company
formed in March 1996, in conjunction with the second step conversion of
Kenwood Savings and Loan Association from a mutual holding company format
to a stock holding company format. The second step conversion was
completed on June 28, 1996, with all the stock of the Association canceled
and converted into stock of Bancorp. Bancorp's financial statements
include the accounts of its wholly owned subsidiary, Kenwood Savings Bank
(formerly Kenwood Savings and Loan Association).
2. Basis of Presentation:
The accompanying unaudited financial statements were prepared in
accordance with instructions for Form 10-QSB and, therefore, do not
include information or footnotes necessary for a complete presentation of
financial position, results of operations and cash flows in conformity
with generally accepted accounting principles. However, all adjustments
(consisting only of normal recurring accruals) which, in the opinion of
management, are necessary for a fair presentation of the financial
statements have been included. The results of operations for the six month
period ended March 31, 1997, are not necessarily indicative of the results
which may be expected for the entire fiscal year.
3. Earnings Per Share:
Earnings per share for three month period ended March 31, 1997, is
computed based on 282,521 weighted average shares outstanding for Bancorp.
Earnings per share for the six month period ended March 31, 1997, is
computed based on 282,521 weighted average shares outstanding as adjusted
for the reorganization from the mutual holding company to the stock
holding company form for Kenwood Savings and Loan Association.
Weighted average shares for the six months ended March 31, 1997, include
the effect of the issuance of 295,133 shares on June 28, 1996, of Kenwood
Bancorp, Inc. These shares were sold or converted pursuant to a plan of
conversion and agreement and plan of reorganization whereby, in addition
to newly issued shares, each share of common stock of Kenwood Savings and
Loan Association held by Kenwood Federal Mutual Holding Company were
canceled and each share of the Association common stock held by the
Association's public stockholders were converted into shares of Bancorp.
4. Effects of Recent Accounting Pronouncements:
In May 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 122, "Accounting
for Mortgage Servicing Rights". This statement requires that a mortgage
banking enterprise recognize as separate assets rights to service mortgage
loans for others, however those servicing rights are acquired. A mortgage
banking enterprise that acquires mortgage
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<PAGE>
servicing rights through either the purchase or origination of mortgage
loans and sells or securitizes those loans with servicing rights retained
would allocate the total cost of the mortgage loans to the mortgage
servicing rights and the loans based on their relative fair value.
Statement No. 122 is effective for fiscal years beginning after December
15, 1995. Management has implemented the standard as of October 1, 1996,
with no material effect on the consolidated financial statements.
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation," establishing financial accounting and reporting standards
for stock-based employee compensation plans. SFAS No. 123 encourages all
entities to adopt a new method of accounting to measure compensation cost
of all employee stock compensation plans based on the estimated fair value
of the award at the date it is granted. Companies are, however, allowed to
continue to measure compensation cost of those plans using the intrinsic
value based method of accounting, which generally does not result in
compensation expense recognition for most plans. Companies that elect to
remain with the existing accounting are required to disclose in a footnote
to the financial statements pro forma net income and if presented,
earnings per share, as if SFAS No. 123 had been adopted. The accounting
requirements of SFAS No. 123 are effective for transactions entered into
during fiscal years that begin after December 15, 1995. Companies are
required, however, to disclose information for awards granted in their
first fiscal year ending after December 15, 1994. SFAS No. 123 had no
effect on the consolidated financial statements for the periods presented.
In June 1996, the FASB issued SFAS No. 125 "Accounting for Transfers and
Servicing of Financial Assets and Entinguishments of Liabilities" which
established accounting and reporting standards for transfers and servicing
of financial assets and extinguishments of liabilities. The standards are
based on a consistent application of a financial components approach that
focuses on control. Under that approach, after a transfer of financial
assets, an entity recognizes the financial and servicing assets it
controls and the liabilities it has incurred, derecognizes financial
assets when control has been surrendered, and derecognizes liabilities
when extinguished. SFAS No. 125 provides consistent standards for
distinguishing transfers of financial assets that are sales from transfers
that are secured borrowings. SFAS No. 125 supersedes SFAS No. 122. SFAS
No. 125 is effective for transactions occurring after December 31, 1996.
Management does not expect a material effect on its consolidated financial
statements.
In March 1997, the FASB issued SFAS No. 128, "Earnings per Share" which
will replace the current presentation on "primary" and "full diluted"
earnings per share with newly defined "basic" and "diluted" earnings per
share. "Basic" earnings per share will not include the dilutive effect of
certain common stock equivalents on earnings. Diluted earnings per share
will reflect the potential dilution of securities that could share in an
enterprises earnings. The statements will require dual presentation of
basic and diluted earnings per share on the income statements for all
entities having complex capital structures and will be effective for
financial statements issued for periods ending after December 15, 1997.
Management is currently assessing the impact of this statement on the
Company's financial statements.
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<PAGE>
KENWOOD BANCORP INC.
Management's Discussion And Analysis Of Financial
Condition And Results Of Operations
Discussion of Financial Condition Changes from September 30, 1996, to March 31,
1997
At March 31, 1997, the Company had total assets $46.7 million, a decrease of
approximately $3.5 million or 7.1% from September 30, 1996. The reduction in
assets was due primarily to the sale of $8.2 million in adjustable rate loans
with the proceeds from the sale being used to repay FHLB advances of $3 million
and to purchase $3.2 million of mortgage-backed securities.
Cash and cash equivalents decreased $771,000 or 35.9% during the six months
ended March 31, 1997, as the cash and cash equivalents were used to fund loan
demand.
Loans receivable (including loans held for sale) decreased $5.6 million or 14.2%
to $33.7 million at March 31, 1997, as compared to $39.3 million at September
30, 1996. As noted, the Company sold during the six months ended March 31, 1997,
$8.2 million of adjustable rate single family loans to a third party. The
Company sold the loans to fund the repayment of FHLB advances which had funded
the past loan growth and to reinvest the additional proceeds from the loan sale
in mortgage-backed securities. The FHLB advances were short term advances which
for the most part repriced daily and had a negative impact on the Company's
interest rate risk. The Company also sold an additional $4.7 million of fixed
rate single family loans in the secondary market during the six months ended
March 31, 1997. The Company continues to sell the majority of fixed rate
one-to-four family residential loan originations. Not withstanding the above
loan sale the Company has added approximately $2.6 million to the loan
portfolio, net.
The Company's investment portfolio consists of certificates of deposits,
investment securities, and mortgage-backed securities (held to maturity and
available for sale). The investment portfolio increased $2.8 million or 37.1%
over the level maintained at September 30, 1996. The increase in the investment
portfolio was due to the purchase of mortgage-backed securities with the funds
from the aforementioned loan sale.
Deposits totaled $40.9 million at March 31, 1997, a decrease of $694,000 or 1.7%
from the $41.6 million of deposits at September 30, 1996. The reduction in
deposits is due to the decrease in certificates of deposit, as consumers
continue to look for alternative savings vehicles. The Company does not offer
special rates or terms to attract deposits unless the terms and rates are
favorable for the Company for the long term. The current local market for
certificates of deposit remains competitive and the Company has priced its
certificates of deposit to remain competitive with the market. Demand accounts
have increased during the six months ended March 31, 1997, as the Company's new
demand account products are generating new or increased accounts.
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<PAGE>
The Company is required to meet each of three minimum capital standards
promulgated by the Office of Thrift Supervision. The capital standards require
the maintenance of regulatory capital standards sufficient to meet a tangible,
core, and risk-based capital requirement. At March 31, 1997, the Company's
tangible and core capital totaled $4.1 million or 8.7% of adjusted total assets,
which exceeded the respective minimum requirements at that date of 1.5% and 3.0%
by $3.4 million and $2.7 million respectively. The Company's risk-based capital
totaled $4.2 million at March 31, 1997, or 21.5% of risk weighted assets, which
exceeded the 8% requirement by $2.6 million.
Comparison of Operating Results for the Six Months Ended March 31, 1997 and 1996
General
Net income for the six months ended March 31, 1997 totaled $75,000, an increase
of $21,000 or 38.9% from the $54,000 recorded for the six months ended March 31,
1996. The increase in met income resulted primarily from higher gains on sale of
loans and higher net interest income, which was partially offset by an increase
in operating expenses and income taxes.
Net Interest Income
Interest income on loans for the six months ended March 31, 1997, increased
$47,000 or 3.7% due to an increase in the average balance of loans outstanding
period-to-period. The Company sold in late November 1996, $8.2 million of
adjustable rate loans. The effect of this sale on interest income impacted
interest income for the current quarter as the increase in interest income on
loans has remained the same as the increase for the three months ended December
31, 1996. Interest income on mortgage-backed securities decreased $27,000 or
11.6%, due primarily to a lower average balance outstanding during the six
months ended March 31, 1997. The Company purchased $3.3 million of
mortgage-backed securities in December 1996, with the proceeds from the sale of
loans mentioned above. Interest income on investment securities and interest
bearing deposits have remained relatively stable.
Interest expense on deposits decreased $104,000 or 8.3% during the six months
ended March 31, 1997, as compared to the prior six month period. This decrease
was due to a decrease in the average balance outstanding and a change in the mix
of deposits to a higher percentage of demand accounts. Interest expense on
borrowings increased $39,000 as the Company has utilized FHLB advances as an
alternative source of funding for loan growth. The Company repaid in December
1996, $3 million of the outstanding FHLB advances with the proceeds from the
aforementioned loan sale.
As a result of the foregoing changes in interest income and interest expense,
net interest income increased $85,000 or 20.4% during the six months ended March
31, 1997, as compared to the six months ended March 31, 1996.
Provision for Losses on Loans
The Company did not record a provision for losses on loans for the six month
period ended March 31, 1997. The provision for losses on loans for the six
months ended March 31, 1996, was the result of loan portfolio growth during the
period and management's assessment of the inherent risk in lending.
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<PAGE>
Other Income
Other income increased by $20,000 or 15.7% during the six months ended March 31,
1997, as compared to the six months ended March 31, 1996. This increase was due
to the $31,000 increase in gain on sale of mortgage loans. The Company, as
discussed, sold $8.2 million of loans to a third party during the first quarter
of the fiscal year generating a gain of approximately $72,000. The Company has
continued to sell loans in the secondary market as consumer demand for fixed
rate loans has continued. The Company had no sales of investments during the six
months as compared to a gain of $13,000 to the same period in 1996.
General, Administrative and Other Expenses
General, administrative and other expenses increased by $61,000 or 13.1% during
the six months ended March 31, 1997, as compared to the same period in 1996.
This increase was due primarily an increase of $44,000 or 20.3% in compensation
and benefits and a $30,000 increase in other operating expenses. The increase in
compensation and benefits related directly to the Company's mortgage loan
origination office. The increase in other operating expenses was due to higher
professional services fees in connection with securities and regulatory filing.
Federal Income Taxes
The provision for federal income taxes increased $18,000 during the six months
ended March 31, 1997, as compared to the same period in 1996. The increase in
federal income taxes was due to the higher level of taxable income during the
current period. The Company's effective tax rates amounted to 32.4% and 25.0%
during the six months ended March 31, 1997 and 1996, respectively.
Comparison of Operating Results for the Three Month Period Ended March 31, 1997
and 1996
General
Net income for the three months ended March 31, 1997 totaled $3,000, a decrease
of $11,000 from the $14,000 in net income for the three months ended March 31,
1996. The decrease was due primarily to a decrease in other income of $40,000
and an increase in general, administrative and other expenses of $34,000 which
was partially offset by a decrease in the provision for income taxes of $5,000
and higher net interest income of $56,000.
Net Interest Income
Interest income on loans for the three months ended March 31, 1997 was $640,000
which is the same amount as for the three month period ended March 31, 1996. The
Company's average loans for the two periods are relatively the same, and the
flat interest rate environment which allowed for the comparable income amounts.
Interest income on mortgage-backed securities increased $6,000 due to a higher
level of average mortgage-backed securities during the period from $7.5 million
for the three months ended March 31, 1996, to $7.8 million for the three months
ended March 31, 1997. Interest income on investment securities and interest
bearing deposits have remained stable between the two periods.
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<PAGE>
Interest expense on deposits totaled $560,000 for the three months ended March
31, 1997, a decrease of $57,000 or 9.2% as compared to the three months ended
March 31, 1996. The decrease was due primarily to lower average balance on
deposits and to the change in the mix from certificates of deposit to demand
accounts which offer lower rates. The Company had recently offered new demand
deposit accounts which have attracted new or increased demand deposit accounts.
Interest expense on FHLB advances totaled $15,000 for the three months ended
March 31, 1997, an increase of $8,000 over the same period for 1996. This
increase was due to higher level of advances period to period. The Company has
used FHLB advances to fund loan growth.
As a result of the above changes in interest income and interest expense, net
interest income increased $56,000 or 26.8% during the three months ended March
31, 1997, as compared to the three months ended March 31, 1996.
Provision for Losses on Loans
The Company had no provision for losses on loans for the three months ended
March 31, 1997, as compared to $2,000 for the three months ended March 31, 1996.
The provision for losses on loans is based on the loan portfolio characteristics
and the inherent risk in lending.
Other Income
Other income decreased by $40,000 during the three months ended March 31, 1997,
as compared to the same period in 1996. This decrease was due to a decrease in
gains on sales of mortgage loans. The Company's secondary market activities have
decreased during the current period versus the prior period, primarily as a
result of the current interest rate environment and consumer demand.
General, Administrative and Other Expenses
General, administrative and other expenses increased by $34,000 or 13.8% to
$281,000 for the three month period ended March 31, 1997, as compared to
$247,000 for the three month period ended March 31, 1996. The increase was due
primarily to a $23,000 increase in compensation and benefits due to higher
salaries relating to the Company's loan origination office, increased health
insurance costs and the compensation expense for the Company's employee stock
ownership plan. The increase was also due to an increase in other expenses to
$85,000 for the three months ended March 31, 1997, as compared to $67,000 for
the three months ended March 31, 1997, an increase of $18,000 or 26.9%. The
increase was due to higher professional services fees relating to various
securities and regulatory filings. The increase was partially offset by a
decrease in FDIC insurance premiums of $15,000 to $10,000 for the three months
ended March 31, 1997, as compared to $25,000 for the three months ended March
31, 1996, due to the reduction in insurance rates after the SAIF
recapitalization.
Federal Income Taxes
The provision for federal income taxes decreased by $5,000 during the three
months ended March 31, 1997, as compared to the same period in 1996, due
primarily to a decrease in income before taxes of $16,000.
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<PAGE>
KENWOOD BANCORP, INC.
PART II
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
On January 30, 1997, the Company held its 1997 Annual Meeting of
Stockholders. At the annual meeting, stockholders of the Company
elected two directors of the Company, approved the adoption of the
Company's 1996 Stock Option Plan, approved the adoption of the
Company's Management Recognition Plan and Trust and ratified the
appointment of the Company's independent auditors for the year
ending September 30, 1997. The votes received on such proposals
were as follows:
<TABLE>
<CAPTION>
For Against Abstain Not Vote
--- ------- ------- --------
<S> <C> <C> <C> <C>
1. Election of P. Lincoln Mitchell 224,134 - 6,115 64,884
2. Election of James N. Murphy 223,245 - 7,004 64,884
3. Approval of 1996 Stock Option Plan 188,122 16,994 5,973 84,044
4. Approval of Management Recognition
Plan and Trust 185,716 15,888 9,385 84,144
5. Ratification of independent auditors 221,984 3,573 4,692 64,884
</TABLE>
ITEM 5. Other Information
Not applicable
ITEM 6. Exhibits and Reports on Form 8-K
Not applicable
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: May 8, 1997 By: /s/ THOMAS W. BURNS
-------------------
Thomas W. Burns
Executive Vice President,
Chief Executive Officer and
Chief Financial Officer
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<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 300
<INT-BEARING-DEPOSITS> 1,075
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 7,863
<INVESTMENTS-CARRYING> 2,223
<INVESTMENTS-MARKET> 2,195
<LOANS> 33,749
<ALLOWANCE> 95
<TOTAL-ASSETS> 46,688
<DEPOSITS> 40,942
<SHORT-TERM> 1,077
<LIABILITIES-OTHER> 380
<LONG-TERM> 0
0
0
<COMMON> 3
<OTHER-SE> 4,286
<TOTAL-LIABILITIES-AND-EQUITY> 46,688
<INTEREST-LOAN> 1,327
<INTEREST-INVEST> 295
<INTEREST-OTHER> 81
<INTEREST-TOTAL> 1,703
<INTEREST-DEPOSIT> 1,153
<INTEREST-EXPENSE> 1,202
<INTEREST-INCOME-NET> 501
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 537
<INCOME-PRETAX> 111
<INCOME-PRE-EXTRAORDINARY> 111
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36
<EPS-PRIMARY> .27
<EPS-DILUTED> .27
<YIELD-ACTUAL> 2.12
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 95
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 95
<ALLOWANCE-DOMESTIC> 95
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 95
</TABLE>
