<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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 0-00000
PRESTIGE BANCORP, INC.
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(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1785128
----------------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
710 Old Clairton Road
PLEASANT HILLS, PENNSYLVANIA 15236
---------------------------- --------------------
(Address of principal executive office) (Zip Code)
(412) 655-1190
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes No X
------- ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of June 27, 1996, there
were issued and outstanding 963,023 shares of the registrant's common stock,
par value $1.00 per share.
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<PAGE> 2
PRESTIGE BANCORP, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements
Statements of Financial Condition of Prestige Bank, F.S.B.
as of March 31, 1996 (unaudited) and December 31, 1995 1
Statements of Income of Prestige Bank, F.S.B. for the three months
ended March 31, 1996 and 1995 (unaudited) 2
Statements of Equity of Prestige Bank, F.S.B. for the three months
ended March 31, 1996 and 1995 (unaudited) 3
Statements of Cash Flows of Prestige Bank, F.S.B. for the three
months ended March 31, 1996 and 1995 (unaudited) 4
Notes to Financial Statements (unaudited) 5
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security-Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
</TABLE>
The financial statements of Prestige Bancorp, Inc. have been omitted
because Prestige Bancorp, Inc. has been incorporated, but has not conducted any
business other than of an organizational nature.
<PAGE> 3
PRESTIGE BANK, F.S.B.
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
MARCH 31,
1996 DECEMBER 31,
(UNAUDITED) 1995
----------- ------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 624,386 $ 779,397
Interest-bearing deposits with banks 1,743,549 3,614,270
Investment securities:
Available for sale 11,585,577 7,491,045
Held to maturity (market value $13,515,574 and
$15,193,150, respectively) 13,669,234 15,074,601
Loans 62,736,659 61,737,509
Less- Unearned income 43,990 42,204
Allowance for loan losses 296,100 287,060
----------- -----------
Net loans 62,396,569 61,408,245
----------- -----------
Federal Home Loan Bank stock, at cost 735,400 733,700
Premises and equipment, net 1,872,859 1,868,569
Accrued interest receivable 580,017 573,548
Deferred tax asset 52,524 -
Other assets 452,327 297,280
----------- -----------
Total assets $93,712,443 $91,840,655
=========== ===========
LIABILITIES AND EQUITY
Liabilities:
Noninterest-bearing deposits $ 1,762,670 $ 2,082,444
Interest-bearing deposits 80,076,730 78,648,228
----------- -----------
Total deposits 81,839,400 80,730,672
Payable for purchase of investment securities 997,800 -
Federal Home Loan Bank advances 2,977,000 2,977,000
Advance payments by borrowers for taxes and
insurance 548,560 571,780
Income taxes payable 104,601 71,149
Deferred tax liability - 45,317
Other liabilities 159,654 266,762
----------- -----------
Total liabilities 86,627,015 84,662,680
----------- -----------
Equity:
Retained earnings - substantially restricted 7,303,098 7,245,432
Net unrealized holding gains (losses) on
available for sale securities, net of taxes (217,670) (67,457)
----------- -----------
Total equity 7,085,428 7,177,975
----------- -----------
Total liabilities and equity $93,712,443 $91,840,655
=========== ===========
</TABLE>
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<PAGE> 4
PRESTIGE BANK, F.S.B.
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------------------
1996 1995
------------ -----------
<S> <C> <C>
Interest income:
Interest and fees on loans $1,129,164 $ 1,038,641
Interest on mortgage-backed
securities 246,207 249,410
Interest and dividends on
other investment securities 122,727 79,032
Interest on deposits in other
financial institutions 35,480 9,510
---------- -----------
Total interest income 1,533,578 1,376,593
---------- -----------
Interest expense:
Interest on deposits 859,286 713,889
Advances from Federal Home
Loan Bank 46,269 64,636
---------- -----------
Total interest expense 905,555 778,525
---------- -----------
Net interest income 628,023 598,068
Provision for loan losses 9,000 9,000
---------- -----------
Net interest income
after provision
for loan losses 619,023 589,068
---------- -----------
Other income:
Fees and service charges 60,673 48,599
Other income (loss), net 9,383 (18,510)
---------- -----------
Total other income 70,056 30,089
---------- -----------
Other expenses:
Salaries and employee benefits 284,882 252,002
Premises and occupancy costs 83,616 80,677
Federal deposit insurance
premiums 44,609 42,606
Data processing costs 43,393 42,424
Advertising costs 18,068 23,681
Federal Home Loan Bank deposit and
demand account charges 36,845 33,700
ATM transaction fees 21,559 19,437
Other expenses 62,515 72,479
---------- -----------
Total other expenses 595,487 567,006
---------- -----------
Income before income
tax expense 93,592 52,151
Income tax expense 35,926 18,150
---------- -----------
Net income $ 57,666 $ 34,001
========== ===========
</TABLE>
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<PAGE> 5
PRESTIGE BANK, F.S.B.
STATEMENTS OF EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
NET UNREALIZED
HOLDING LOSSES ON
AVAILABLE FOR SALE
RETAINED SECURITIES,
EARNINGS NET OF TAXES TOTAL
-------- ------------------ ----------
<S> <C> <C> <C>
Balance, December 31, 1995 $7,245,432 $ (67,457) $7,177,975
Net income 57,666 - 57,666
Increase in net unrealized
holding losses on
available for sale
securities - (150,213) (150,213)
---------- --------- ----------
Balance, March 31, 1996 $7,303,098 $(217,670) $7,085,428
========== ========= ==========
Balance, December 31, 1994 $7,084,573 $ (35,463) $7,049,110
Net income 34,001 - 34,001
Increase in net unrealized
holding losses on
available for sale
securities - (5,392) (5,392)
---------- --------- ----------
Balance, March 31, 1995 $7,118,574 $ (40,855) $7,077,719
========== ========= ==========
</TABLE>
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<PAGE> 6
PRESTIGE BANK, F.S.B.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------------------
1996 1995
------------ -----------
<S> <C> <C>
Operating activities:
Net income $ 57,666 $ 34,001
---------- -----------
Adjustments to reconcile net income
to net cash (used) provided by operating
activities-
Depreciation of premises and equipment 41,259 33,299
Amortization of premiums and discounts,
net (1,764) (923)
Loss on sale of premises and equipment - 28,533
Provision for loan losses 9,000 9,000
Deferred income taxes 2,277 (37)
(Decrease) increase in other liabilities (107,108) 6,106
Increase (decrease) in income taxes payable 33,452 (19,251)
(Increase) decrease in accrued
interest receivable (6,469) 4,253
Increase in other assets (36,657) (68,942)
Other, net 1,786 (2,523)
---------- -----------
Total adjustments (64,224) (10,485)
---------- -----------
Net cash (used) provided by
operating activities (6,558) 23,516
---------- -----------
Investing activities:
Loan originations (3,337,921) (2,636,350)
Principal payments on loans 2,338,811 1,932,981
Principal payments on mortgage-backed securities
available for sale 173,585 -
Principal payments on mortgage-backed securities
held to maturity 404,366 312,390
Purchases of-
Mutual fund investments available for sale (16,097) (16,184)
Investment securities available for sale (3,501,787) -
Investment securities held to maturity - (499,219)
Maturities of-
Investment securities held to maturity 1,000,000 500,000
Purchase of premises and equipment (45,549) (332,215)
Proceeds from sale of premises and equipment - 89,162
Purchase of Federal Home Loan Bank stock (1,700) (40,000)
---------- -----------
Net cash used by investing activities (2,986,292) (689,435)
---------- -----------
Financing activities:
Net change in advance payments by
borrowers for taxes and insurance (23,220) (33,546)
Payments on Federal Home Loan Bank advances - (650,000)
Net increase (decrease) in money market,
NOW and passbook savings accounts 777,949 (1,169,961)
Net increase in certificate accounts 330,779 2,670,707
Other (118,390) -
----------- -----------
Net cash provided by financing activities 967,118 817,200
----------- -----------
Net (decrease) increase in cash and
cash equivalents (2,025,732) 151,281
Cash and cash equivalents at beginning
of period 4,393,667 1,540,231
----------- -----------
Cash and cash equivalents at end of period $ 2,367,935 $ 1,691,512
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for
income taxes $ 20,000 $ 10,770
=========== ===========
Cash paid during the period for
interest on deposits and borrowings $ 905,879 $ 778,204
----------- -----------
Supplemental schedule of noncash investing activity:
Loans transferred to real estate
owned $ - $ 31,344
=========== ===========
</TABLE>
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<PAGE> 7
PRESTIGE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION:
Prestige Bancorp, Inc. (the Corporation) was incorporated under
Pennsylvania law in March 1996 by Prestige Bank, F.S.B. (the Bank) in
connection with the Plan of Conversion (see Notes 8 and 9) of the Bank from a
federally chartered mutual savings bank to a federally chartered stock savings
bank, the issuance of the Bank's stock to the Corporation and the offer and
sale of the Corporation's common stock by the Corporation (the Conversion).
Upon consummation of the Conversion, the Corporation will become the unitary
bank holding company for the Bank. For purposes of this Form 10-Q, the
financial statements and management's discussion and analysis of financial
condition and results of operations are presented for the Bank since the
Corporation was not active during any of the periods presented. No pro forma
effect has been given to the sale of the Corporation's common stock under the
Plan of Conversion.
The following unaudited financial statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to those rules and regulations,
although the Bank believes that the disclosures made are adequate to make the
information presented not misleading. However, such interim information
reflects all adjustments (consisting solely of normal recurring adjustments)
which are, in the opinion of management, necessary for a fair presentation of
financial position and results of operations for the periods presented. The
results of operations for the three months ended March 31, 1996, are not
necessarily indicative of the results to be expected for the year ending
December 31, 1996.
The unaudited financial statements and notes hereto should be read in
conjunction with the audited financial statements and notes thereto for the
year ended December 31, 1995, contained in the Corporation's prospectus dated
May 13, 1996, included in the Form S-1 Registration Statement (No. 333-2692).
- 5 -
<PAGE> 8
2. INVESTMENT SECURITIES:
The cost and market values of investment securities are summarized as follows:
Investment securities held to maturity:
<TABLE>
<CAPTION>
MARCH 31, 1996
--------------------------------
AMORTIZED MARKET
COST VALUE
------------- ------------
<S> <C> <C>
U.S. government and government
agency obligations due within one year $ 500,202 $ 497,031
U.S. government and government
agency obligations due within five years 2,002,069 1,987,341
Federal Home Loan Mortgage
Corporation (FHLMC) certificates 9,495,799 9,333,209
Government National Mortgage
Association (GNMA) certificates 1,524,172 1,545,818
Federal National Mortgage Association
(FNMA) certificates 146,992 152,175
----------- -----------
$13,669,234 $13,515,574
=========== ===========
</TABLE>
Investment securities available for sale:
<TABLE>
<CAPTION>
MARCH 31, 1996
--------------------------------
MARKET
COST VALUE
------------- ------------
<S> <C> <C>
U.S government and government
agency obligations due within five years $ 1,999,271 1,939,688
U.S. government and government
agency obligations due within 10 years 1,503,132 1,445,316
U.S. government and government
agency obligations due within 15 years 2,997,800 2,915,560
Federal Home Loan Mortgage Corporation
(FHLMC) certificates 2,766,772 2,709,426
Federal National Mortgage Association
(FNMA) certificates 1,378,388 1,302,027
Mutual fund investment 1,302,935 1,273,560
----------- -----------
$11,948,298 $11,585,577
=========== ===========
</TABLE>
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<PAGE> 9
3. LOANS RECEIVABLE:
Loans receivable are summarized as follows:
<TABLE>
<CAPTION>
MARCH 31,
1996
----------
<S> <C>
Commercial, including commercial secured by real estate $ 700,865
-----------
Real estate loans:
1-4 family 55,916,216
Construction -
-----------
55,916,216
Less-Undisbursed loan proceeds -
Deferred loan fees 43,990
-----------
55,872,226
-----------
Consumer loans:
Share 496,689
Automobile 858,044
Home equity 2,247,105
Student 2,235,556
Credit cards 281,612
Other 572
-----------
6,119,578
-----------
62,692,669
Less-Allowance for loan losses 296,100
-----------
$62,396,569
===========
4. ALLOWANCE FOR LOAN LOSSES:
Activity with respect to the allowance for loan losses is summarized as
follows:
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1996 1995
-------- -------
<S> <C> <C>
Balance at beginning of period $287,060 $303,312
Provision for loan losses 9,000 9,000
Charge-offs - (9,429)
Recoveries 40 319
-------- --------
Balance at end of period $296,100 $303,202
======== ========
</TABLE>
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<PAGE> 10
5. DEPOSITS:
Deposits are summarized as follows:
<TABLE>
<CAPTION>
MARCH 31,
1996
-------------
<S> <C>
Total noninterest-bearing deposits $ 1,762,670
===========
Interest-bearing deposits:
Money market demand accounts $ 9,659,942
NOW accounts 7,774,466
Passbook and club accounts 16,469,848
-----------
33,904,256
-----------
Certificate accounts:
Due within one year 29,106,474
Due after one but within three years 11,716,000
Thereafter 5,350,000
-----------
46,172,474
-----------
Total interest-bearing deposits $80,076,730
===========
Deposits of $100,000 or more $ 6,673,174
===========
</TABLE>
6. INCOME TAXES:
The provision for income taxes is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------
1996 1995
----------- -----------
<S> <C>
Federal $29,294 $ 14,240
State 6,632 3,910
------- -------
$35,926 $18,150
Total income tax expense ======= =======
</TABLE>
7. RELATED PARTY TRANSACTIONS:
Certain directors and executive officers of the Bank, including their
immediate families and companies in which they are principal owners, are loan
customers of the Bank. In management's opinion, such loans are made in the
normal course of business and were granted on substantially the same terms and
conditions as loans to other individuals and businesses of comparable
creditworthiness at the time. Total loans to these persons at March 31, 1996,
and December 31, 1995, amounted to $185,206 and $192,018, respectively.
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<PAGE> 11
8. PLAN OF CONVERSION:
On February 14, 1996, the Bank's Board of Directors adopted a Plan of
Conversion (the Plan) from a federally chartered mutual savings bank to a
federally chartered stock savings bank and the issuance of its stock to a to-
be-formed holding company, Prestige Bancorp, Inc., a Pennsylvania corporation.
The Plan provides that the holding company will offer nontransferable
subscription rights to purchase common stock of the holding company. The rights
will be offered first to eligible account holders of record, a tax-qualified
employee stock ownership plan to be adopted by the Bank, supplemental eligible
account holders, certain other depositors and borrowers, and directors,
officers and employees. Rights remaining unsold after the subscription
offering, if any, will be offered for sale to the public. The costs of issuing
the common stock will be deducted from the proceeds of the stock offering. If
the offering is unsuccessful for any reason, such costs will be charged to
operations.
At the date of the conversion, the Bank will establish a liquidation
account in an amount equal to retained earnings reflected in the statement of
financial condition appearing in the final prospectus. The liquidation account
will be maintained for the benefit of eligible savings account holders and
supplemental eligible account holders who continue to maintain their accounts
at the 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. Except for the repurchase of
stock and payment of dividends by the Bank, the existence of the liquidation
account will not restrict the use or further application of such retained
earnings.
The Bank may not declare or pay a cash dividend on, or repurchase any of
its common shares if the effect thereof would cause the Bank's equity to be
reduced below either the amount required for the liquidation account or the
regulatory capital requirements for insured institutions.
The Bank will continue to be regulated by the Office of Thrift Supervision
and by the Federal Deposit Insurance Corporation (FDIC), which insures the
Bank's deposits. In addition, the Bank will continue to be a member of the
Federal Home Loan Bank System and all insured savings deposits will continue to
be insured by the FDIC up to the maximum provided by law.
9. SUBSEQUENT EVENT:
At a special meeting of the eligible depositors and members of the Bank on
June 19, 1996, a vote was held whereby the conversion discussed in the
aforementioned footnote was approved. The subscription proceeds, before any
conversion expenses, and shares (including 77,041 shares acquired by the
Employee Stock Ownership Plan) were $9,630,230 and 963,023, respectively. The
closing is expected by the end of the second quarter.
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<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
At March 31, 1996, the Bank's total assets amounted to $93.7 million
compared with $91.8 million at December 31, 1995. The $1.9 million or 2.1%
increase was primarily due to an increase of $1.0 million or 1.6% in loans
receivable and an increase of $2.7 million or 11.9% in investment securities.
Such increases were offset in part by a $2.0 million or 46.1% decrease in cash
and cash equivalents. Such increase in assets was funded through an increase in
deposits of $1.1 million or 1.4% to $81.8 million at March 31, 1996. Equity
amounted to $7.1 million or 7.6% of total assets at March 31, 1996, compared to
$7.2 million or 7.8% of total assets at December 31, 1995. The decrease in
equity of approximately $100,000, during the three-month period, was due to the
change in market value of securities available for sale, offset by net income
for the period. Such market decline was a result of an increase in interest
rates.
The Bank's nonperforming assets decreased by $39,000 or 11.2% to $309,000
at March 31, 1996, compared to $348,000 at December 31, 1995. Such decrease was
primarily due to collections and payoffs received by the Bank.
RESULTS OF OPERATIONS
GENERAL--The Bank had net income of $58,000 for the three months ended
March 31, 1996, compared to $34,000 for the same period in 1995. The increase in
net income was primarily due to an increase in net interest income of $30,000 or
5.0% to $628,000 for the three months ended March 31, 1996, compared with the
same period in 1995. Such increase was due to an increase of $157,000 or 11.4%
in interest income, which was only partially offset by an increase of $127,000
or 16.3% in interest expense.
INTEREST INCOME--The Bank reported interest income of $1.53 million for the
three months ended March 31, 1996, compared to $1.38 million for the same period
in 1995. The increase in interest income was primarily due to an increase in
interest income on loans as a result of increased origination activity and
increased pricing on adjustable rate loans, as well as an increase in the
average yield earned on interest-earning assets, primarily investment securities
and mortgage-backed securities, from 6.48% for the three months ended March 31,
1995, to 6.85% for the three months ended March 31, 1996.
INTEREST EXPENSE--The increase in interest expense was due to an increase
in deposits and the increase in the average cost of interest-bearing
liabilities from 3.91% for the three months ended March 31, 1995, to 4.30% for
the three months ended March 31, 1996. Such increase was primarily due to an
increase in rates offered by the Bank on certain deposit products to respond to
rates offered by other financial institutions in its market area. In addition,
a portion of the Bank's deposit base shifted from core deposit accounts to
higher interest-bearing certificates of deposit. At March 31, 1996, core
deposit accounts and certificates of deposit accounted for approximately 43.6%
and 56.4% of total deposits, respectively, compared to 47.2% and 52.8% of total
deposits, respectively, at March 31, 1995. The 39 basis point increase
- 10 -
<PAGE> 13
in the average rate paid on interest-bearing liabilities more than offset the 37
basis point increase in average yield earned on interest-earning assets for the
three months ended March 31, 1996, compared to the three months ended March 31,
1995, resulting in a decrease in the average interest rate spread from 2.57% for
the three months ended March 31, 1995, to 2.55% for the comparable 1996 period.
PROVISION FOR LOAN LOSSES--During the three months ended March 31, 1996 and
1995, the Bank recorded a provision for losses on loans of $9,000 and $9,000,
respectively. The Bank recorded such provisions to adjust the Bank's allowance
for loan losses to a level deemed appropriate based upon an assessment of the
volume and type of lending presently being conducted by the Bank, industry
standards and economic conditions in the Bank's market area.
OTHER INCOME--Other income increased to $70,000 for the three months ended
March 31, 1996, compared to $30,000 for the three months ended March 31, 1995.
Such increase was primarily due to additional mortgage applications and,
conversely, during the first quarter of 1995, the Bank recognized a loss of
$28,000 on the sale of its previous Mt. Oliver branch building.
OTHER EXPENSES--Other expenses increased $28,000 to $595,000 for the three
months ended March 31, 1996, compared to $567,000 for the same period in 1995.
Such increase was primarily due to the expenses related to increased employees,
increases in salary and increases in benefit costs.
INCOME TAXES--The Bank incurred a provision for income taxes of $36,000 and
$18,000 for the three months ended March 31, 1996 and 1995, respectively. Such
increase was primarily due to increased income.
LIQUIDITY AND CAPITAL RESOURCES
The Bank's primary sources of funds are deposits, repayments, prepayments
and maturities of outstanding loans and mortgage-backed securities, maturities
of investment securities and other short-term investments, and funds provided
from operations. While scheduled loan and mortgage-backed securities 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 in general, economic conditions and
competition. The Bank manages the pricing of its deposits to maintain a deposit
balance deemed appropriate and desirable by its Board of Directors. In addition,
the Bank invests in short-term, interest-earning assets which provides liquidity
to meet lending requirements. At March 31, 1996, the Bank had $3.0 million of
outstanding advances from the Federal Home Loan Bank (FHLB) of Pittsburgh.
Additionally, the Bank has a revised revolving credit commitment from the FHLB
of Pittsburgh of $6.5 million, all of which remained available for borrowing at
March 31, 1996.
During the three months ended March 31, 1996 and 1995, the Bank's operating
activities used net cash of approximately $7,000 and provided net cash of
approximately $24,000, respectively. The primary reason for this change was the
decrease in other liabilities of approximately $113, 000 offset by an increase
in income taxes payable and net income of approximately $53,000 and $24,000,
respectively.
- 11 -
<PAGE> 14
Net cash used by investing activities was approximately $2.3 million more
between years for the first quarter. During the first quarter of 1996, the Bank
originated approximately $1.0 million in new loans in excess of principal
payments received on existing loans. This was approximately $300,000 greater
than in 1995. Also during the first quarter of 1996, the Bank purchased $3.5
million of investment securities available for sale while $1.0 million of held
to maturity investment securities matured. Conversely, during the first quarter
of 1995, the Bank's purchase of securities nearly equaled its proceeds from
maturities of securities.
Net cash provided by financing activities for the first quarter was
approximately $1.0 million, attributable to increases in both core deposits and
certificates of deposit, offset by expenses paid relating to the conversion.
During the same period last year, the Bank experienced a $1.2 million decrease
in core deposits and a $2.7 million increase in certificates of deposit, which
was in part due to a shifting among deposit products.
The increase in deposits, as well as some of the existing cash held in
interest-bearing accounts as of the beginning of the year, was the primary
source of funds for the Bank's additional investments in available for sale
securities and net new loans. While the Bank was able to fund these loans with
available cash, during the second quarter, as loan commitments are funded along
with other loan applications received during the second quarter, which may be
approved, borrowings will probably be necessary from the FHLB of Pittsburgh.
As of March 31, 1996, the Bank's regulatory capital was in excess of all
applicable regulatory requirements. At March 31, 1996, the Bank's tangible,
core and risk-based capital ratios amounted to 7.76%, 7.76% and 18.93%,
respectively, compared to regulatory requirements of 1.50%, 4.00% and 8.00%,
respectively.
- 12 -
<PAGE> 15
PRESTIGE BANCORP, INC.
PART II
Item 1. LEGAL PROCEEDINGS
Neither the Corporation nor the Bank is involved in any pending
legal proceedings other than nonmaterial legal proceedings
occurring in the ordinary course of business.
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
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
None.
- 13 -
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PRESTIGE BANCORP, INC.
Dated: June 27, 1996 By: /S/ ROBERT S. ZYLA
-----------------------------
Robert S. Zyla, President
Dated: June 27, 1996 By: /S/ JAMES M. HEIN
-----------------------------
James M. Hein, Controller
- 14 -
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