U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
[ ] 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 0-22587
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SFB BANCORP, INC.
----------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Tennnessee 62-1683732
- --------------------------------------------- ------------------------------
(State or other jurisdiction of incorporation I.R.S. Employer Identification
or organization) Number)
632 East Elk Avenue Elizabethton, Tennessee 7643
- ------------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (423) 543-3518
--------------
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.
X Yes No
--- ---
As of June 30, 1997, there were 767,000 shares of the Registrant's
common stock, par value $0.10 per share, outstanding. The Registrant has no
other classes of common equity outstanding.
Transitional small business disclosure format:
Yes X No
--- ---
1
<PAGE>
SFB BANCORP, INC.
AND SUBSIDIARY
Elizabethton, Tennessee
Index
<TABLE>
<CAPTION>
PART I. Page(s)
- ------- -------
FINANCIAL INFORMATION
<S> <C>
Item 1
Financial Statements
Consolidated Balance Sheets-(Unaudited) as of December 31, 1996 and June 30, 1997 . 3
Consolidated Statements of Income - (Unaudited) for the three and six month periods 4
Consolidated Statements of Cash Flows - (Unaudited) for the six months
ended June 30, 1996 and 1997 .................................................... 5
Notes to (Unaudited) Consolidated Financial Statements ............................ 6-8
Item 2
Management's Discussion and Analysis of Financial Condition
and Results of Operations ....................................................... 9-13
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 ........................................................................ 15
</TABLE>
2
<PAGE>
SFB BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
(in thousands except share information)
<TABLE>
<CAPTION>
December 31, June 30,
----------------------------------------
Assets 1996 1997
------ ---- ----
<S> <C> <C>
Cash on hand $ 396 $ 534
Interest earning deposits in other banks 1,018 5,824
Investment securities:
Held to maturity (market value of $613
in 1996 and $617 in 1997) 715 725
Available for sale (amortized cost of $599
in 1996 and $649 in 1997) 597 648
Loans receivable, net 36,808 38,080
Mortgage-backed securities:
Available for sale (amortized cost of $5,941 in
1996 and $5,577 in 1997) 5,768 5,427
Premises and equipment, net 533 530
Real estate owned 60 -
Federal Home Loan Bank stock 394 409
Accrued interest receivable 257 266
Prepaid expenses and other assets 33 72
----------- ----------
Total assets $ 46,579 $ 52,515
=========== ==========
Liabilities and Stockholders' Equity
------------------------------------
Deposits $ 40,765 $ 40,026
Federal Home Loan Bank advances 800 -
Advance payments by borrowers for taxes and insurance 202 460
Accrued expenses and other liabilities 122 183
Income taxes payable:
Current 13 84
Deferred 1 7
----------- ----------
Total liabilities 41,903 40,760
----------- ----------
Commitments and contingencies
Stockholders' equity:
Preferred stock ($.10 par value, 1,000,000 shares authorized;
none outstanding) - -
Common stock ($.10 par value, 4,000,000 shares authorized;
767,000 shares issued and outstanding at June 30, 1997 ) - 77
Paid-in capital - 7,309
Retained earnings, substantially restricted 4,784 5,068
Unrealized loss on securities available for sale, net
of income taxes (108) (91)
Unearned compensation:
Employee stock ownership plan - (608)
=========== ==========
Total stockholders' equity 4,676 11,755
----------- ----------
Total liabilities and stockholders' equity $ 46,579 $ 52,515
=========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
SFB BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
(in thousands, except per share information)
<TABLE>
<CAPTION>
For Three Months Ended For Six Months Ended
June 30, June 30,
------------------------------------ ------------------------------------
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income:
Loans $ 733 $ 793 $ 1,432 $ 1,572
Mortgage-backed securities 95 79 196 162
Investments 22 26 44 50
Interest earning deposits 20 51 45 60
------- ------ -------- --------
Total interest income 870 949 1,717 1,844
------- ------ -------- --------
Interest expense:
Deposits 486 511 994 1,002
Federal Home Loan Bank advances - - - 3
------- ------ -------- --------
Total interst expense 486 511 994 1,005
------- ------ -------- --------
Net interest income 384 438 723 839
Provision for loan losses 7 - 15 -
------- ------ -------- --------
Net interest income after provision
for loan losses 377 438 708 839
Non-interest income:
Loan fees and service charges 32 35 73 70
Other 3 1 8 6
------- ------ -------- --------
Total non-interest income 35 36 81 76
------- ------ -------- --------
Non-interest expenses:
Compensation 116 131 218 249
Employee benefits 13 18 26 34
Net occupancy expense 20 18 40 34
Deposit insurance premiums 24 6 47 8
Data processing 16 17 34 36
Other 42 63 88 109
------- ------ -------- --------
Total non-interest expenses 231 253 453 470
------- ------ -------- --------
Income before income taxes 181 221 336 445
Income tax expense 65 82 118 161
------- ------ -------- --------
Net income $ 116 $ 139 $ 218 $ 284
======= ====== ======== ========
Weighted average common equivalent
share outstanding: N/A 706 N/A 706
Net income per share (since inception) N/A $ .19 N/A $ .40
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
SFB BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
---------------------------------------
1996 1997
---- ----
<S> <C> <C>
Operating activities:
Net income $ 218 $ 284
Adjustments to reconcile net income to net cash provided (used) by operating
activities:
Depreciation 27 25
Provision for loan losses 15 -
Increase (decrease) in reserve for uncollected interest - 7
Net increase (decrease) in deferred loan fees 8 (16)
Accretion of discounts on investment securities net (10) (12)
Amortization of premiums on mortgage-backed securities 13 6
Amortization of unearned compensation - 8
FHLB stock dividends (13) (15)
(Increase) decrease in other assets 88 (14)
(Increase) decrease in accrued interest receivable (4) (16)
Increase (decrease) in accrued expenses and other liabilities (11) 61
Increase in current income taxes 21 71
-------- --------
Net cash provided by operating activities 352 389
-------- --------
Investing activities:
Purchase of investment securities held to maturity (1,000) -
Maturity of investment securities held to maturity 1,000 -
Purchase of investment securities available for sale (99) (300)
Maturities of investment securities available for sale 250 250
Principal payments on mortgage-backed securities
available for sale 648 359
Net increase in loans (2,014) (1,221)
Purchase of premises and equipment (8) (22)
-------- --------
Net cash used by investing activities (1,223) (934)
-------- --------
Financing activities:
Net increase (decrease) in deposits (282) (739)
Increase (decrease) in advance payments by borrowers
for taxes and insurance 201 258
Repayment of FHLB advances - (800)
Issuance of common stock - 7,056
Payment of accrued conversion cost - (286)
-------- --------
Net cash provided (used) by financing activities (81) 5,489
-------- --------
Increase (decrease) in cash and cash equivalents (952) 4,944
Cash and cash equivalents at beginning of period 2,729 1,414
-------- --------
Cash and cash equivalents at end of period $ 1,777 $ 6,358
======== ========
Supplemental disclosures of cash flow information: Cash paid during the year
for:
Interest $ 1,025 $ 999
Income taxes 51 81
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
SFB BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
1. SFB Bancorp, Inc.
-----------------
SFB Bancorp, Inc. (the "Company") was incorporated under the laws of the
State of Tennessee for the purpose of becoming the holding company of
Security Federal Bank (the "Bank") in connection with the Bank's conversion
from a federal chartered mutual savings bank to a federal chartered stock
savings bank, pursuant to its Plan of Conversion. The Company commenced on
April 14, 1997, a Subscription Offering of its shares in connection with
the conversion of the Savings Bank (the "Conversion"). On May 29,1997 the
Conversion was complete (see Note 4). The financial statements of the Bank
are presented on a consolidated basis with those of the Company.
The consolidated financial statements included herein are for the Company,
the Bank and the Bank's wholly owned subsidiary, SFS, Inc. (SFS). The
impact of SFS on the consolidated financial statements is insignificant.
SFS has no operating activity other than to own stock in a third-party
service bureau.
2. Basis of Preparation
--------------------
The accompanying unaudited consolidated financial statements were prepared
in accordance with instructions for Form 10-QSB and therefore, do not
include all disclosures necessary for a complete presentation of the
consolidated balance sheets, consolidated statements of income,
consolidated statements of stockholders' equity, and consolidated
statements of cash flows in conformity with generally accepted accounting
principles. However, all adjustments which are, in the opinion of
management, necessary for the fair presentation of the interim financial
statements have been included. All such adjustments are of a normal
recurring nature. The statement of income for the six month period ended
June 30, 1997 is not necessarily indicative of the results which may be
expected for the entire year.
These consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and notes thereto for
the Company for the year ended December 31, 1996 which are included in the
Form SB-2 (file no. 333-23505).
6
<PAGE>
SFB BANCORP, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements,
Continued
- -------------------------------------------------------------------------------
3. Earnings Per Share
------------------
Earnings per share amounts for the three and six month periods ended June
30, 1997 are based on the average number of shares outstanding throughout
the periods, except that the initial issue has been given an effective date
of January 1, 1997. No comparative amounts have been presented for the
three and six month periods ended June 30, 1996 because no shares were
outstanding during that period. Unallocated ESOP shares are not considered
as outstanding for purposes of this calculation.
4. Stockholders' Equity
--------------------
The Company was incorporated under Tennessee law in March 1997 to acquire
and hold all the outstanding common stock of the Bank, as part of the
Bank's conversion from a federally chartered mutual savings bank to a
federally chartered stock savings bank. In connection with the conversion,
which was consummated on May 29, 1997, the Company issued and sold 767,000
shares of common stock at a price of $10.00 per share for total net
proceeds of approximately $7.4 million after conversion expenses of
approximately $286,000. The Company retained approximately $3.1 million of
the proceeds and used the remaining proceeds to purchase the newly issued
capital stock of the Bank in the amount of $3.7 million and a loan to the
ESOP of approximately $614,000.
The Bank may not declare or pay a cash dividend if the effect thereof would
cause its net worth to be reduced below either the amounts required for the
liquidation account discussed below or the regulatory capital requirements
imposed by federal and state regulations.
At the time of conversion, the Bank established a liquidation account in an
amount equal to its retained income as reflected in the latest consolidated
balance sheet used in the final conversion prospectus. The liquidation
account is maintained for the benefit of eligible account holders who
continue to maintain their deposit accounts in the Bank after conversion.
In the event of a complete liquidation of the Bank (and only in such an
event), eligible depositors who continue to maintain accounts shall be
entitled to receive a distribution from the liquidation account before any
liquidation may be made with respect to common stock.
7
<PAGE>
SFB BANCORP, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements,
Continued
- -------------------------------------------------------------------------------
5. Employee Stock Ownership Plan (ESOP)
------------------------------------
As part of the conversion discussed in Note 4, an Employee Stock Ownership
Plan (ESOP) was established for all employees who have attained the age of
21 and have been credited with at least 1,000 hours of service during a
12-month period. The ESOP borrowed approximately $614,000 from the Company
and used the funds to purchase 61,360 shares of common stock of the Company
issued in the offering. The loan will be repaid principally from the Bank's
discretionary contributions to the ESOP over a period of 10 years. On June
30, 1997, the loan had an outstanding balance of approximately $614,000 and
an interest rate of 8.5%. The loan obligation of the ESOP is considered
unearned compensation and, as such, recorded as a reduction of the
Company's stockholders' equity. Both the loan obligation and the unearned
compensation are reduced by an amount of the loan repayments made by the
ESOP. Shares purchased with the loan proceeds are held in a suspense
account for allocation among participants as the loan is repaid.
Contributions to the ESOP and shares released from the suspense account are
allocated among participants on the basis of compensation in the year of
allocation. Benefits become fully vested at the end of seven years of
service under the terms of the ESOP Plan. Benefits may be payable upon
retirement, death, disability, or separation from service. Since the Bank's
annual contributions are discretionary, benefits payable under the ESOP
cannot be estimated. Compensation expenses are recognized to the extent of
the fair value of shares committed to be released.
For the three and six months ending June 30, 1997, compensation from the
ESOP of approximately $8,000 was expensed. Compensation is recognized at
the average fair value of the ratably released shares during the accounting
period as the employees performed services. At June 30, 1997, the ESOP had
approximately 510 allocated shares and 60,850 unallocated shares.
The ESOP administrators will determine whether dividends on allocated and
unallocated shares will be used for debt service. Any allocated dividends
used will be replaced with common stock of equal value. For the purpose of
computing earnings per share, all ESOP shares committed to be released have
been considered outstanding.
6. Asset Quality
-------------
At June 30, 1997, the Company had total nonperforming loans (i.e., loans
which are contractually past due 90 days or more) of approximately
$445,000. Nonperforming loans were 1.16% of total loans at June 30, 1997.
Total nonperforming assets as a percent of total assets at June 30, 1997
was .85%.
8
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
The following discussion and analysis is intended to assist in understanding the
financial condition and the results of operations of the Company. References to
the "Company" include SFB Bancorp, Inc. and/or Security Federal Bank as
appropriate.
Comparison of Financial Condition at December 31, 1996 and June 30, 1997
The Company's total consolidated assets increased by approximately $5.9 million
or 12.8% from $46.6 million at December 31, 1996 to $52.5 million at June 30,
1997. The increase in assets for the period was primarily attributable to the
net proceeds received from the initial public offering.
The composition of the Company's balance sheet has not been materially affected
by market conditions between December 31, 1996 and June 30, 1997. Net loans
increased $1.3 million or 3.5%. This increase resulted from the Company's
origination of loans to satisfy increased demand for fixed rate mortgage loans.
Interest earning deposits increased by $4.8 million mainly as a result of the
net proceeds raised in the initial public offering being invested in overnight
accounts and short-term certificates of deposits.
Consistent with its historical lending practices, virtually all of the Company's
loan portfolio at June 30, 1997 consisted primarily of fixed rate loans with
maturities up to fifteen (15) years. Consequently, the Company is exposed to
interest rate risk in a rising interest rate environment. The Company has
historically accepted this risk in light of its high capital levels and
available liquid assets. See "Liquidity and Capital Resources" discussion below.
Deposits decreased approximately $740,000 or 1.8%, from $40.8 million at
December 31, 1996 to $40.0 million at June 30, 1997. The decrease in deposits
was primarily attributable to approximately $1.9 million of withdraws made to
purchase stock in the recent public offering offset by new deposits of
approximately $1.2 million. The Company also repaid $800,000 in Federal Home
Loan Bank advances.
Comparison of Results of Operations for the Three Months Ended June 30, 1996 and
1997
Net Income. Net income increased $23,000 or 19.8% from $116,000 for the three
months ended June 30, 1996 to $139,000 for the three months ended June 30, 1997.
The increase was primarily the result of an increase in net interest income
offset by an increase in non-interest expense. The return on average assets was
1.09% for the three months ended June 30, 1997 compared to 1.02% in 1996.
9
<PAGE>
Net Interest Income. Net interest income increased $54,000 or 14.1% from
$384,000 for the three months ended June 30, 1996 to $438,000 for the three
months ended June 30, 1997. The improvement in net interest income primarily
reflects an increase in average interest-earning assets over average
interest-bearing liabilities for the Company of $2.4 million or 61% for the
three months ended June 30, 1997 as compared to 1996. This was primarily as a
result of the proceeds from the stock offering. The interest rate spread
increased from 2.93% for three months ending June 30, 1996 to 2.95% for the
three months ending June 30, 1997.
Interest Income. Total interest income increased $79,000 from $870,000 for the
three months ended June 30, 1996 to $949,000 for the three months ended June 30,
1996. Interest on loans increased $60,000, or 8.2% and interest on overnight
funds increase by $31,000. Interest on investments and mortgage-backed
securities declined in aggregate by $12,000 as the portfolio declined.
Interest Expense. Interest expense increased $25,000 from $486,000 for the three
months ended June 30, 1996 to $511,000 for the three months ended June 30, 1997.
The increase for the three months ending June 30, 1997 was the result of a $2.6
million increase in the average deposit outstanding offset by a 6 basis point
decrease in the average cost of funds.
Provision for Loan Losses. The provision for loan losses for three month periods
ended June 30, 1996 was $7,000 and no provision was recorded for the period
ending June 30, 1997. For the period ended June 30, 1997, a provision was not
considered necessary as the allowance for loan loss was at a level deemed
adequate by management to provide for losses in the loan portfolio. Management
determined not to increase the level of the allowance for loan losses based on
its analysis of (I) the Comapny's past loan loss experience, (ii) known and
inherent risks in the Company's loan portfolio, (iii) adverse situations that
may affect the borrower's ability to repay, (iv) the estimated value of any
underlying collateral, and (v) current economic conditions. The ratio of the
loss allowance to non-performing loans at June 30, 1997 was 68.3%.
Non-Interest Income. Non-interest income continues to be an insignificant source
of income for the Company. The income is produced by fees on new loan production
and service fees on other products and services.
Non-Interest Expense. Non-interest expense increased by $22,000 from $231,000
for the three months ending June 30, 1996 to $253,000 for 1997. The primary
reason for the increase was as a result of additional compensation cost and
other non-interest expenses offset by reduced deposit insurance premiums.
Additional operating expense as a public company and the effect of increased
compensation from the recognition of allocated ESOP shares at fair market value
were recognized during the quarter ending June 30, 1997. The Company recognized
$8,000 of compensation expense related to the Employee Stock Ownership Plan. Net
occupancy and data processing
10
<PAGE>
remained relatively stable. Non-interest expense could increase in future
periods if certain contemplated benefit plans are adopted by the board of
directors and approved by the stockholders.
Income Taxes. Income tax expense for the three months ending June 30, 1997 was
$82,000 compared to $65,000 for the same period in 1996. The increase was the
result of pre-tax income increasing by $40,000.
Comparison of Results of Operations for the Six Months Ended June 30, 1996 and
1997
Net Income. Net income increased $66,000 or 30.3% from $218,000 for the six
months ended June 30, 1996 to $284,000 for the six months ended June 30, 1997.
Net Interest Income. Net interest income increased $116,000 or 16.0% from
$723,000 for the six months ended June 30, 1996 to $839,000 for the six months
ended June 30, 1997. The improvement in net interest income primarily reflects
an increase in average interest-earning assets over average interest-bearing
liabilities for the Company of $1.5 million or 39% for the six months ended June
30, 1997 as compared to 1996. The interest rate spread increased from 2.79% for
six months ending June 30, 1996 to 3.02% for the six months ending June 30,
1997.
Interest Income. Total interest income increased $127,000 or 7.4% from
$1,717,000 for the six months ended June 30, 1996 to $1,844,000 for the six
months ended June 30, 1997. Interest on loans increased $140,000, or 9.8%.
Interest on overnight funds invested by the Company also increased by $15,000.
Interest on investments and mortgage-backed securities in aggregate decreased by
$28,000 as the portfolio matured and principal payments were received.
Interest Expense. Interest expense increased $11,000 from $994,000 for the six
months ended June 30, 1996 to $1,005,000 for the six months ended June 30, 1997.
The increase for the six months ending June 30, 1997 was the result of a $1.6
million increase in average deposits outstanding offset by a 15 basis point
decrease in the average cost of funds. Interest expense also increase by $3,000
for advances from the Federal Home Loan Bank which were utilized in the six
months ending June 30, 1997.
Provision for Loan Losses. The provision for loan losss for the six month
periods ended June 30, 1996 was $15,000 and no provision for 1997 was recorded.
For the period ended June 30, 1997, a provision was not considered necessary as
the allowance for loan loss was at a level deemed adequate by management to
provide for losses in the loan portfolio. Management determined not to increase
the level of the allowance for loan losses based on its analysis of (I) the
Comapny's past loan loss experience, (ii) known and inherent risks in the
Company's loan portfolio, (iii) adverse situations that may affect the
borrower's ability to repay, (iv) the estimated value of any underlying
collateral, and (v) current economic conditions.
11
<PAGE>
Non-Interest Expense. Non-interest expense increased by $17,000 from $453,000
for the six months ending June 30, 1996 to $470,000 for 1997. This increase was
the direct result of additional compensation, employee benefits, and other
non-interest expense during the six months of 1997 and was offset by reduced
deposit insurance premiums. Increased compensation was the result of
inflationary increases and the recognition of allocated ESOP shares at fair
market value. During the six month period ending June 30, 1997, the Company
recognized $8,000 of compensation expense related to the Employee Stock
Ownership Plan. Net occupancy cost and data processing remained relatively
stable as compared with the same period in 1996. Non-interest expense could
increase in future periods if certain contemplated benefit plans are adopted by
the board of directors and approved by the stockholders.
Income Taxes. Income tax expense for the six months ending June 30, 1997 was
$161,000 compared to $118,000 for the same period in 1996. The inrease was the
result of pre-tax income increasing by $109,000 for the six months in 1997.
Liquidity and Capital Resources. The Company's primary sources of funds are new
deposits, proceeds from principal and interest payments on loans, and repayments
on mortgage-backed securities. While maturities and scheduled amortization of
loans are a predictable source of funds, deposit flows and mortgage prepayments
are greatly influenced by general interest rates, economic conditions and
competition. The Company's primary investing activity is loan originations. The
Company maintains liquidity levels adequate to fund loan commitments, investment
opportunities, deposit withdrawals and other financial commitments. At June 30,
1997, there were no material commitments for capital expenditures. Obligations
to fund outstanding loan commitments at June 30, 1997 were approximately
$136,000.
At June 30, 1997, management had no knowledge of any trends, events or
uncertainties that will have or are reasonably likely to have material effects
on the liquidity, capital resources or operations of the Company. Further at
June 30, 1997, management was not aware of any current recommendations by the
regulatory authorities which, if implemented, would have such an effect.
12
<PAGE>
The Bank exceeded all of its capital requirements at June 30, 1997. The Bank had
the following capital ratios at June 30, 1997:
<TABLE>
<CAPTION>
For Capital Categorized as
Actual Adequacy Purposes "Well Capitalized"(1)
---------------------------- ----------------------------- -----------------------------
Amount Ratio Amount Ratio Amount Ratio
---------------------------- ----------------------------- -----------------------------
As of June 30, 1997:
<S> <C> <C> <C> <C> <C> <C>
Total Capital
(To risk weighted assets) $ 8,358 31.3% $ 2,137 8.00% $ 2,671 10.0%
Tier I Capital
(To risk weighted assets) $ 8,058 30.2% $ 1,069 4.00% $ 1,602 6.0%
Tier I Capital
(To total assets) $ 8,058 16.3% $ 1,482 3.00% $ 2,472 5.0%
Tangible Capital
(To total assets) $ 8,058 16.3% $ 741 1.50% $ 2,472 5.0%
</TABLE>
(1) As categorized under the Prompt Corrective Action Provisions.
13
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
From time to time, the Company and its subsidiaries may be a party
to various legal proceedings incident to its or their business. At
June 30, 1997, there were no legal proceedings to which the Company
or any subsidiary was a party, or to which of any of their property
was subject, which were expected by management to result in a
material loss.
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) 3(i) Charter of SFB Bancorp, Inc. (incorporated by reference to the
Registration Statement on Form SB-2, File No. 333-23505).
3(ii) Bylaws of SFB Bancorp, Inc. (incorporated by reference to the
Registration Statement on Form SB-2, File No. 333-23505).
10 Employment Agreement with Peter W. Hampton ( incorporated by
reference to the Registration Statement on Form SB-2,
File No. 333-23505).
27 Financial Data Schedule ( Electronic filing only)
(b) Reports on Form 8-K
None.
14
<PAGE>
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.
SFB Bancorp, Inc.
Date: August 7, 1997 By /s/ Peter W. Hampton
--------------------- ----------------------------------
Peter W. Hampton
(President and Chief Executive
Officer)
Date: August 7, 1997 By /s/ Bobby Hyatt
--------------------- ----------------------------------
Bobby Hyatt
(Principal Accounting Officer)
15
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 534
<INT-BEARING-DEPOSITS> 5,824
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 6,075
<INVESTMENTS-CARRYING> 6,951
<INVESTMENTS-MARKET> 6,692
<LOANS> 38,384
<ALLOWANCE> (304)
<TOTAL-ASSETS> 52,515
<DEPOSITS> 40,026
<SHORT-TERM> 0
<LIABILITIES-OTHER> 734
<LONG-TERM> 0
0
0
<COMMON> 77
<OTHER-SE> 11,678
<TOTAL-LIABILITIES-AND-EQUITY> 52,515
<INTEREST-LOAN> 1,572
<INTEREST-INVEST> 212
<INTEREST-OTHER> 60
<INTEREST-TOTAL> 1,844
<INTEREST-DEPOSIT> 1,002
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 839
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 470
<INCOME-PRETAX> 445
<INCOME-PRE-EXTRAORDINARY> 445
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 284
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
<YIELD-ACTUAL> 3.02
<LOANS-NON> 445
<LOANS-PAST> 445
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 304
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 304
<ALLOWANCE-DOMESTIC> 304
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
