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 December 31, 1998
( ) 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 0-22997
WSB HOLDING COMPANY
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Pennsylvania 23-2908963
- ------------------------------ -------------------------------------
(State or other jurisdiction of I.R.S. Employer Identification Number
incorporation or organization)
807 Middle Street, Pittsburgh, Pennsylvania 15212
- ------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 231-7297
--------------
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 February 1, 1999, there were 322,059 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
--- ---
<PAGE>
WSB HOLDING COMPANY AND SUBSIDIARY
PITTSBURGH, PENNSYLVANIA
TABLE OF CONTENTS
PAGE
-----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - as of December 31, 1998
(Unaudited) and June 30, 1998 3
Consolidated Statements of Income - (Unaudited) for
the six months ended December 31, 1998 and 1997 4
Consolidated Statements of Income - (Unaudited) for the
three months ended December 31, 1998 and 1997 5
Consolidated Statements of Cash Flows - (Unaudited)
for the six months ended December 31, 1998 and 1997 6
Notes to (Unaudited) Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities and use of Proceeds 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
(2)
<PAGE>
WSB HOLDING COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
December 31,
1998 June 30,
(Unaudited) 1998
------------ ------------
<S> <C> <C>
Cash and cash equivalents:
Interest bearing $ 4,658,309 $ 4,750,915
Non-interest bearing 370,552 406,629
Securities held-to-maturity (estimated fair
value of $ 12,711,516 and $ 11,701,996) 12,712,026 11,667,658
Securities available-for-sale, at fair value 4,025,743 3,245,015
Loans and real estate (net of allowance for
loan losses of $ 171,737 and $ 198,168) 16,575,813 16,620,321
Federal Home Loan Bank stock, at cost 153,300 153,300
Accrued interest receivable 225,082 228,175
Premises and equipment, net 1,020,570 1,017,168
Other assets 64,100 106,431
Income taxes receivable - 9,859
Deferred income taxes 9,000 3,001
------------ ------------
TOTAL ASSETS $ 39,814,495 $ 38,208,472
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 33,574,245 $ 31,867,605
Federal Home Loan Bank advances 1,000,000 1,000,000
Advances from borrowers for taxes and insurance 247,867 223,848
Accrued expenses and other liabilities 134,227 327,473
Accrued income taxes 28,294 -
------------ ------------
TOTAL LIABILITIES 34,984,633 33,418,926
------------ ------------
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; 330,600 shares issued and 325,559
shares outstanding at December 31, 1998 and
329,435 shares outstanding at June 30, 1998) 33,060 33,060
Additional paid-in capital 2,993,036 2,989,212
Retained earnings, substantially restricted 2,237,044 2,179,378
Unearned Employee Stock Ownership Plan shares (ESOP) (229,213) (242,438)
Unearned compensation - Restricted Stock Plan (RSP) (177,036) (197,864)
Treasury stock, at cost; 5,041 and 1,165 shares (66,728) (19,431)
Accumulated other comprehensive income, net
of applicable income taxes of $17,013 and $17,360 39,699 47,629
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 4,829,862 4,789,546
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 39,814,495 $ 38,208,472
============ ============
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
(3)
<PAGE>
WSB HOLDING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Six Months Ended
December 31,
1998 1997
---------- ----------
INTEREST AND DIVIDEND INCOME
Loans $ 682,634 $ 640,130
Investments 500,022 497,606
Other interest earning assets 165,094 151,752
---------- ----------
TOTAL INTEREST AND DIVIDEND INCOME 1,347,750 1,289,488
---------- ----------
INTEREST EXPENSE
Deposits 734,289 673,660
Advances from FHLB 28,900 68,147
---------- ----------
TOTAL INTEREST EXPENSE 763,189 741,807
---------- ----------
NET INTEREST INCOME 584,561 547,681
PROVISION FOR LOAN LOSSES - 16,321
---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 584,561 531,360
---------- ----------
NONINTEREST INCOME
Service charges and other fees 43,455 41,275
Net gain on sale of securities
available-for-sale 46,769 -
Gain on sale of foreclosed real estate 20,665 -
Income from real estate rental 3,540 1,900
---------- ----------
TOTAL NONINTEREST INCOME 114,429 43,175
---------- ----------
NONINTEREST EXPENSE
Compensation and benefits 280,612 238,612
Occupancy and equipment expense 80,906 67,884
Insurance premiums 15,424 14,502
Other 215,566 156,562
---------- ----------
TOTAL NONINTEREST EXPENSE 592,508 477,560
---------- ----------
INCOME BEFORE INCOME TAXES 106,482 96,975
INCOME TAX EXPENSE 34,898 34,489
---------- ----------
NET INCOME $ 71,584 $ 62,486
========== ==========
EARNINGS PER COMMON SHARE-BASIC $ .23 $ .11
========== ==========
EARNINGS PER COMMON SHARE-DILUTED $ .23 $ .11
========== ==========
See accompanying notes to the unaudited consolidated financial statements.
(4)
<PAGE>
WSB HOLDING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended
December 31,
1998 1997
-------- --------
INTEREST AND DIVIDEND INCOME
Loans $341,817 $323,864
Investments 263,967 238,127
Other interest earning assets 85,631 81,822
-------- --------
TOTAL INTEREST AND DIVIDEND INCOME 691,415 643,813
-------- --------
INTEREST EXPENSE
Deposits 371,811 340,990
Advances from FHLB 14,450 24,219
-------- --------
TOTAL INTEREST EXPENSE 386,261 365,209
-------- --------
NET INTEREST INCOME 305,154 278,604
PROVISION FOR LOAN LOSSES - 7,621
-------- --------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 305,154 270,983
-------- --------
NONINTEREST INCOME
Service charges and other fees 22,424 20,463
Net gain on sale of securities available-for-sale 17,838 -
Income from real estate rental 1,325 925
-------- --------
TOTAL NONINTEREST INCOME 41,587 21,388
-------- --------
NONINTEREST EXPENSE
Compensation and benefits 142,865 120,732
Occupancy and equipment expense 40,245 33,196
Insurance premiums 7,693 8,254
Other 116,438 87,015
-------- --------
TOTAL NONINTEREST EXPENSE 307,241 249,197
-------- --------
INCOME BEFORE INCOME TAXES 39,500 43,174
INCOME TAX EXPENSE 12,421 29,116
-------- --------
NET INCOME $ 27,079 $ 14,058
======== ========
EARNINGS PER COMMON SHARE-BASIC $ .09 $ .05
======== ========
EARNINGS PER COMMON SHARE-DILUTED $ .09 $ .05
======== ========
See accompanying notes to the unaudited consolidated financial statements.
(5)
<PAGE>
WSB HOLDING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
1998 1997
------------- ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 71,584 $ 62,486
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization of:
Deferred loan origination fees (1,126) (2,005)
Premiums and discounts on loans
and investment securities 28,636 (4,209)
Net gain on sale of securities available-for-sale (46,769) -
Net gain on sale of real estate owned (20,665) -
Unearned ESOP shares 17,049 12,170
Compensation expense related to RSP 20,828 -
Provision for loan losses - 16,321
Depreciation of premises and equipment 25,844 27,224
(Increase) decrease in:
Accrued interest receivable 3,093 112,139
Other assets 42,331 44,302
Deferred income taxes (5,652) 19,920
Increase (decrease) in:
Accrued expenses and other liabilities (1,498) 3,510
Accrued income taxes 38,153 14,569
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 171,808 306,427
------------ ------------
INVESTING ACTIVITIES
Purchases of securities held-to-maturity (11,134,996) (5,900,000)
Proceeds from maturities of and principal
repayments on securities held-to-maturity 10,053,449 4,586,298
Proceeds from sale of securities
available-for-sale 613,167 --
Purchases of securities available-for-sale (1,512,521) (1,000,000)
Proceeds from maturities of and principal
repayments on securities available-for-sale 165,661 413,176
Net loan originations and principal
repayments on loans (154,287) (415,450)
Proceeds from sale of real estate owned 220,586 --
Purchases of premises and equipment (29,246) (1,498)
------------ ------------
NET CASH USED BY INVESTING ACTIVITIES (1,778,187) (2,317,474)
------------ ------------
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
(6)
<PAGE>
WSB HOLDING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
1998 1997
----------- -----------
<S> <C> <C>
FINANCING ACTIVITIES
Net increase (decrease) in deposits 1,706,640 1,468,175
Net increase (decrease) in FHLB advances - (2,000,000)
Proceeds from issuance of common stock - 3,041,520
Payment of conversion costs - (291,622)
Purchase of Treasury Stock (47,297) -
Dividends paid (13,918) -
Net increase in advances from
borrowers for taxes and insurance 24,019 35,335
Contribution to Restricted Stock Plan (RSP)
for the purchase of treasury stock (191,748) -
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,477,696 2,253,408
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (128,683) 242,361
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,157,544 2,804,804
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,028,861 $ 3,047,165
=========== ===========
SUPPLEMENTAL DISCLOSURES Cash paid during the period for:
Interest on deposits, advances,
and other borrowings $ 766,282 $ 641,200
Income taxes $ 2,400 $ 20,000
Transfer from loans to real estate
acquired through foreclosure $ - $ 2,500
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
(7)
<PAGE>
WSB HOLDING COMPANY AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - 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 statements of income for the six month and three
month periods ended December 31, 1998 is not necessarily indicative of the
results which may be expected for the entire year or any other interim period.
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 June 30, 1998 which are included in the Form 10KSB (file no.
0-22997).
As of July 1, 1998, the Corporation adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income." This statement establishes
standards for reporting and presentation of comprehensive income and its
components (revenues, expenses, gains and losses) in a full set of general
purpose financial statements. It requires that all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is presented with the same prominence as
other financial statements. Statement No. 130 requires that companies (I)
classify items of other comprehensive income by their nature in a financial
statement and (ii) display the accumulated balance of other comprehensive income
separately from retained earnings and additional paid-in capital in the equity
section of the statement of financial condition. Reclassification of financial
statements for earlier periods provided for comprehensive purposes is required.
Total comprehensive income for the six month periods ended December 31, 1998 and
1997 was $ 63,654 and $ 90,976, respectively. Total comprehensive income for the
three month periods ended December 31, 1998 and 1997 was $82,946 and $23,243,
respectively.
NOTE B - EARNINGS PER SHARE
The following data shows the amounts used in computing earnings per share and
the effect on income and the weighted average number of shares of dilutive
potential common stock in accordance with SFAS 128.
(8)
<PAGE>
WSB HOLDING COMPANY AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Six Months Ended
December 31,
1998 1997
--------- ---------
Net income $ 71,584 $ 62,486
Less income attributable to pre-stock
conversion (7/1/97 - 8/26/97) - (30,004)
--------- ---------
Income available to common
stockholders used in basic and
diluted EPS $ 71,584 $ 32,482
========= =========
Weighted average number of shares
used in basic EPS 305,170 304,593
Effect of dilutive securities:
Stock options - -
Restricted Stock Plan - -
--------- ---------
Weighted number of shares and
dilutive potential common stock
used in diluted EPS 305,170 304,593
========= =========
NOTE C - EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)
For the six months ended December 31, 1998 and 1997, compensation from the ESOP
of $ 17,049 and $12,170 was expensed. For the three months ended December 31,
1998 and 1997, compensation from the ESOP of $ 7,522 and $ 2,915 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
December 31, 1998, the ESOP had 3,521 allocated shares and 22,927 unallocated
shares. For the purpose of computing earnings per share, all ESOP shares
committed to be released have been considered outstanding.
NOTE D - RESTRICTED STOCK PLAN
The Company applies Accounting Principles Board (APB) Opinion No. 25 in
accounting for the RSP. Aggregate compensation expense with respect to the
foregoing RSP awards was $ 20,828 for the six month period ended December 31,
1998, and $ 10,414 for the three month period ended December 31, 1998.
NOTE E - ASSET QUALITY
At December 31, 1998 and June 30, 1998, the Company had total nonperforming
loans (i.e., loans which are contractually past due 90 days or more) of
approximately $ 16,000 and $ 301,000, respectively. Nonperforming loans were
.10% of total loans at December 31, 1998. Total nonperforming assets as a
percent of total assets at December 31, 1998 was .30%.
(9)
<PAGE>
MANAGEMENTS 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
"We" and "Our" include WSB Holding Company and/or Workingmens Bank as
appropriate.
Comparison of Financial Condition at December 31, 1998 and June 30, 1998.
Total consolidated assets increased by approximately $ 1,606,000, or 4.2% to $
39.8 million at December 31, 1998 from $ 38.2 million at June 30, 1998. The
increase in total assets occurred in our investment portfolio by increasing $1.8
million which was funded by an increase in our deposits of $1.7 million.
Comparison of Results of Operations for the Six Months Ended December 31, 1998
and 1997.
Net Income. Net income increased $ 9,100 to $ 71,600 for the six months ended
December 31, 1998 from $ 62,500 for the six months ended December 31, 1997. The
change was primarily the result of a $ 37,000 increase in net interest income, a
$16,000 reduction in our provision for loan losses, and a $ 67,000 increase in
net gains on sales of investments and foreclosed real estate, offset by an
increase of $42,000 in compensation expense and $37,000 in additional
expenditures of being a publicly held company.
Net Interest Income. Net interest income increased $ 37,000 or 6.7% to $ 585,000
for the six months ended December 31, 1998 from $ 548,000 for the six months
ended December 31, 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 for the six months
ended December 31, 1998 as compared to 1997. The interest rate spread decreased
to 2.70% for six months ended December 31, 1998 as compared to 2.96% for the six
months ended December 31, 1997, primarily due to an increase in our cost of
funds and a reduction in our yield of our investment portfolio.
Provision for Loan Losses. At December 31, 1998, our non-performing loans were $
16,000. No provision for loan losses was necessary due to adequate loss reserves
booked at December 31, 1998.
Historically, we have emphasized our loss experience over other factors in
establishing the provision for loan losses. We review the allowance for loan
losses in relation to (I) our past loan loss experience, (ii) known and inherent
risks in our 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. Because of the increased coverage of the allowances
for loan losses to total loans, management believes the allowance for loan
losses is a level that is considered to be adequate to provide for estimated
losses; however, there can be no assurance that further additions will not be
made to the allowance and that such losses will not exceed the estimated amount.
(10)
<PAGE>
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Noninterest Income. Our noninterest income increased by $ 71,000 or 165% to
$114,000 for the six months ended December 31, 1998 from $ 43,000 for the six
months ended December 31, 1997. This increase was attributable to our decision
to sell securities available-for-sale which provided us with a gain of $ 47,000
and our sale of various foreclosed real estate properties which resulted in a $
21,000 gain.
Noninterest Expense. Our non-interest expense increased by $ 115,000 or 24.1% to
$ 593,000 for the six months ended December 31, 1998 from $ 478,000 for the six
months ended December 31, 1997, primarily as a result of anticipated expenses
related to compensation increases and the implementation of the ESOP and the RSP
totaling $ 42,000 for the six months ended December 31, 1998. Legal, accounting
and other fees increased $ 37,000 due to activities relating to being a public
company. The remainder of the increase in non-interest expenses was associated
with increased loan expenses, advertising and upgrades associated with the
Bank's technology.
Comparison of Results of Operations for the Three Months Ended December 31, 1998
and 1997.
Net Income. Net income increased $13,000 to $ 27,000 for the three months ended
December 31, 1998 from $ 14,000 for the three months ended December 31, 1997.
The change was primarily the result of increases in net interest income after
provision for loan losses and gains realized on sales of securities, offset by
increases in compensation expenses and additional expenditures of being a
publicly held Company.
Net Interest Income. Net interest income increased $ 26,000 or 9.5% to $ 305,000
for the three months ended December 31, 1998 from $ 279,000 for the three months
ended December 31, 1997. The improvement in net interest income primarily was a
result of collecting previously nonaccrual status loan interest of approximately
$ 24,500 during the three months ended December 31, 1998.
Noninterest Income. Our noninterest income increased by $ 20,200 or 94% to
$41,600 for the three months ended December 31, 1998 from $21,400 for the three
months ended December 31, 1997. This increase was primarily attributable to the
sale of securities available-for-sale which provided us with a gain of $ 17,800.
Noninterest Expense. Our non-interest expense increased by $ 58,000 or 23.3% to
$ 307,000 for the three months ended December 31, 1998 from $ 249,000 for the
three months ended December 31, 1997, primarily as a result of increases to
compensation of $ 12,000 and RSP expenses of $ 10,000 for the three months ended
December 31, 1998. Legal, accounting and other fees increased $ 15,000 due to
activities relating to being a public company. The remainder of the increase in
non-interest expenses was associated with increased loan expenses, advertising
and upgrades associated with the Bank's technology.
(11)
<PAGE>
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Year 2000 Compliance
In July 1998, the Company adopted a Year 2000 compliance plan and established a
Year 2000 compliance committee. The objectives of the plan and the committee are
to prepare the Company for the Year 2000. As recommended by the Federal
Financial Institutions Examination Council, the plan encompasses the following
phases: awareness, assessment, renovation, validation and implementation. These
phases will enable the Company to identify risks, develop an action plan,
perform adequate testing and complete certification that its processing systems
will be Year 2000 ready. Execution of the plan is currently on schedule. The
Company is currently in the validation stage, which includes testing of changes
to hardware and software, accompanied by monitoring and testing with vendors.
Prioritization of the most critical applications has been addressed, along with
contract and service agreements. The primary operating software for the Company
is provided and maintained by an external service bureau. The Company has
maintained ongoing contact with the service bureau to ensure that testing and
monitoring of the system is progressing. In September 1998, the Company tested
their software with the external service bureau and the results of the testing
showed that there were minimal problems in submitting information on
transactions from the Company to the external service bureau using January 2000
dates for all transactions tested. Final testing is scheduled to be completed by
March 31, 1999.
The Company has contacted all other material vendors and suppliers as well as
all material customers and noninformation technology supplies regarding their
year 2000 state of readiness. Each of these third parties has delivered written
assurance to the Company that they expect to be Year 2000 compliant prior to the
Year 2000. The validation phase is targeted for completion by March 31, 1999.
The implementation phase is to certify that systems are Year 2000 ready, along
with assurances that any new systems are compliant on a going-forward basis. The
implementation phase is scheduled for completion by June 30, 1999.
Costs have been and will be incurred due to enhancements made to non-compliant
teller software and fees incurred from our external service bureau. The Company
does not anticipate that the related overall costs will be material in any
single year. In total, the Company estimates that its cost for compliance will
amount to approximately $ 15,000 over the two year period from 1998-1999, of
which approximately $ 11,000 was incurred as of December 31, 1998. No assurance
can be given that the Year 2000 compliance plan will be completed successfully
by the year 2000, in which event the Company could incur significant costs. If
the external service bureau is unable to resolve the potential problem in time,
the Company would likely experience significant data processing delays, mistakes
or failures. These delays, mistakes or failures could have a significant adverse
impact on the financial statements of the Company. However, the Company has a
contingency plan whereby daily transactions normally processed by external
service bureau would be processed by the Company and stored electronically for
future processing by the external service bureau.
Successful and timely completion of the Year 2000 project is based on
management's best estimates derived from various assumptions of future events
which are inherently uncertain, including the progress and results of the
Company's external service bureau, testing plans, and all vendors, suppliers and
customer readiness.
(12)
<PAGE>
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Company's primary sources of funds are new deposits, proceeds from principal
and interest payments of 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 maintains
liquidity levels adequate to fund loan commitments, investment opportunities,
deposit withdrawals and other financial commitments. At December 31, 1998, the
Bank had obligations to fund outstanding loan commitments of approximately
$316,000.
At December 31, 1998, 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
December 31, 1998, management was not aware of any current recommendations by
the regulatory authorities which, if implemented, would have such an effect.
(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
December 31, 1998, 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 and Use of Proceeds
-----------------------------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other Information
-----------------
On October 19, 1998, the Company declared a cash dividend of $ .04 per
share to stockholders of record as of November 2, 1998. Such dividend
was paid on November 16, 1998.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a)
(3)(I) Restated Articles of Incorporation of WSB Holding Company*
(3)(ii) Bylaws of WSB Holding Company**
(4) Specimen Stock Certificate of WSB Holding Company**
(10) Employment Agreement between Workingmens Bank and Robert
Neudorfer ***
(10.1) 1998 Stock Option Plan ****
(10.2) Workingmens Bank Restricted Stock Plan and Trust
Agreement ****
(27) Financial Data Schedule (electronic filing only)
(b) Reports on Form 8-K
None
- ------------------------------------
* Incorporated by reference to the registration statement on Form 8-A
(0-22997).
** Incorporated by reference to the registration statement on Form SB-2
(333-29389).
*** Incorporated by reference to the Form 10QSB for December 31, 1997
(0-22997).
**** Incorporated by reference to the Definitive Proxy Statement filed February
6, 1998 (0-22997).
(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.
WSB Holding Company
Date: February 4, 1999 By /s/Robert D. Neudorfer
---------------- ---------------------------------
Robert D. Neudorfer, President
(Principal Financial Officer)
Date: February 4, 1999 By /s/Ronald W. Moreschi
---------------- ---------------------------------
Ronald W. Moreschi
Vice President and Treasurer
(Principal Accounting Officer)
(15)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION DERIVED FROM THE
QUARTERLY REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1
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